Document:

EX-4.15

 Exhibit 4.15 

RULES OF THE 
 BT GROUP
PLC RESTRICTED SHARE PLAN 
 Authorised by shareholders on [●] 2020 

Adopted by the Board on [●] 2020 

Allen & Overy LLP 

 CONTENTS 
  

							
	 Clause
	 	 	  	Page	 
	 1.
	 	 Definitions and interpretation
	  	 	1	 
	 2.
	 	 Grant of Awards
	  	 	1	 
	 3.
	 	 Plan limits
	  	 	4	 
	 4.
	 	 Individual limit
	  	 	5	 
	 5.
	 	 Rights in relation to Shares before Vesting or exercise of an Award
	  	 	5	 
	 6.
	 	 Vesting of Awards
	  	 	5	 
	 7.
	 	 Exercise and lapse of Awards
	  	 	11	 
	 8.
	 	 Vesting and exercise of Awards and delivery of Shares
	  	 	12	 
	 9.
	 	 Adjustment of Awards
	  	 	14	 
	 10.
	 	 Administration
	  	 	14	 
	 11.
	 	 Amendment
	  	 	15	 
	 12.
	 	 General
	  	 	17	 
	 13.
	 	 Governing law
	  	 	19	 
		
	 Appendix
	  			
			
	 1.
	 	 Definitions
	  	 	20	 
	 2.
	 	 U.S.
	  	 	26	 

	 1.
	 DEFINITIONS AND INTERPRETATION 

 

	 1.1
	 Definitions 

The words and expressions used in the Rules which have initial capital letters have the meanings set out in Appendix 1. 

 

	 1.2
	 Interpretation 

The headings in the Rules are for convenience and should be ignored when construing the Rules. Unless the context otherwise
requires, words in the singular include the plural and vice versa and words implying either gender include both genders. 

Reference in the Rules to any statutory provisions are to those provisions as amended or
re-enacted from time to time, and include any regulations or other subordinate legislation made under them. 
  

	 2.
	 GRANT OF AWARDS 

 

	 2.1
	 Operation of the Plan 

The Remuneration Committee may, from time to time, set the policies for the Company’s operation and administration of the
Plan within the terms of the Rules. The policies may include the determination of: 
  

	 	 (a)
	 the Eligible Employees who may be granted Awards; 

 

	 	 (b)
	 the Market Value of Shares which may be put under an Eligible Employee’s Award; 

 

	 	 (c)
	 what condition(s) (if any) will apply to the Vesting of an Award, how the condition(s) will be measured and
whether or not a condition has been met; 

  

	 	 (d)
	 the Restricted Period(s) of an Award; 

 

	 	 (e)
	 whether any dividend equivalents will be payable under Rule 6.15, and, if so, on what basis;

  

	 	 (f)
	 whether an Award will be granted as a Conditional Award or a
Nil-Cost Option; and 

  

	 	 (g)
	 how Awards are granted. 

 

	 2.2
	 How Awards are granted 

The Remuneration Committee may, at its discretion, grant to any Eligible Employee an Award over the whole number of Shares it
determines in accordance with the Rules. An Award can be granted on the basis that it will Vest in one tranche at the end of a Restricted Period or in tranches over more than one Restricted Period. 

  
 1 

 The grant of an Award to an Eligible Employee on a particular basis does not
create the right or expectation of the grant of an Award on the same basis, or at all, in the future. 
 An Award will be
granted so that it constitutes a binding agreement between the Company and the Participant. A single deed of grant may be executed in favour of any number of Participants. There will be no payment for the grant of an Award. 

Any Award granted to an executive director of the Company will be granted so that it complies with the directors’
remuneration policy of the Company as approved by shareholders of the Company from time to time. 
  

	 2.3
	 When Awards can be granted 

Awards may usually only be granted during the period of 42 days commencing on the day: 

 

	 	 (a)
	 after the date on which the Company releases its results for any financial period; 

 

	 	 (b)
	 immediately following any general meeting of the Company; or 

 

	 	 (c)
	 following the lifting of any restrictions imposed by statute, order, regulation or the provisions of the
Market Abuse Regulation. 

 Awards may also be granted at other times if the Remuneration Committee
resolves that exceptional circumstances exist which justify the grant of Awards at that time. 
 No Award can be granted
during a Closed Period or after the Plan Period. 
  

	 2.4
	 Conditions (including performance conditions and underpins) 

The Vesting of an Award may be subject to a performance condition selected by the Remuneration Committee or any other terms and
conditions which would normally have to be met before the Award can Vest. Different conditions can apply to different Participants. 

Awards will normally be subject to one or more underpins determined by the Remuneration Committee over a period of three
financial years (or any other period determined by the Remuneration Committee from time to time) commencing with the financial year in which the Award is granted. 

Any performance condition or other term or condition and any underpin must be stated in writing at the Date of Grant. 

The Remuneration Committee will decide whether and to what extent a performance condition or any other term or condition or
underpin to which an Award is subject has been met. 
 If an event occurs which causes the Remuneration Committee to consider
that a performance condition or underpin to which an Award is subject is no longer appropriate, the Remuneration Committee may substitute or vary the performance 

  
 2 

 
condition or underpin in a manner that is reasonable in the circumstances, in the case of a performance condition produces a fairer measure of performance and is neither materially more nor less
difficult to satisfy. 
 The Remuneration Committee will have discretion to determine that an Award will Vest to a lesser
extent despite a performance condition or underpin being satisfied in whole or part, if it considers that the overall performance of the Company does not warrant the Award Vesting in full. 

 

	 2.5
	 Holding Period 

Following the Vesting of an Award or part of an Award the Shares acquired on Vesting or exercise may be subject to a Holding
Period determined by the Remuneration Committee at the time of grant. The requirement to hold Shares will be net of any Tax Liability arising on Vesting or exercise of the Award. 

During a Holding Period, the Shares will be held: 
  

	 	 (a)
	 by a nominee (as chosen from time to time by the Remuneration Committee) for the Participant; or

  

	 	 (b)
	 in any other manner the Remuneration Committee determines to enable it to monitor ownership of the Shares.

  

	 2.6
	 Approvals and consents 

The grant of an Award will be subject to obtaining any approval or consent required under any applicable regulations or
enactments. 
  

	 2.7
	 Notification of grant 

A Participant will be notified of the grant of an Award and will be issued with a document (which may be in electronic form)
specifying: 
  

	 	 (a)
	 the Date of Grant; 

 

	 	 (b)
	 the number of Shares under the Award; 

 

	 	 (c)
	 any performance condition and any other term or condition and the underpin(s) to which the Award is subject;

  

	 	 (d)
	 whether dividend equivalents will be payable under Rule 6.15, and, if so, on what basis;

  

	 	 (e)
	 the Restricted Period(s) of the Award; and 

 

	 	 (f)
	 any Holding Period(s) that will apply. 

 

	 2.8
	 Awards personal to Participants and not pensionable 

An Award cannot, nor can any rights in respect of it, be transferred, assigned, charged or otherwise disposed of to any person
except that, on the death of a 

  
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Participant, an Award may be transmitted to the Participant’s personal representatives. 

No pension benefits will accrue on the value of Awards. 

 

	 2.9
	 Disclaimer of Awards 

A Participant may disclaim all or part of an Award by notice in writing to the Company within 30 days after the Date of Grant.
No consideration will be paid for the disclaimer of the Award. To the extent that an Award is disclaimed, it will be treated for all purposes as never having been granted. 
  

	 2.10
	 National Insurance elections and agreements 

The Company may require a Participant resident for tax purposes in the UK to enter into an agreement under paragraph 3A of
Schedule 1 to the Social Security Contributions and Benefits Act 1992 (the SSCBA) or to make an election under paragraph 3B of Schedule 1 to the SSCBA in relation to any secondary Class 1 National Insurance contributions arising on the
vesting of the Award. 
  

	 3.
	 PLAN LIMITS 

 

	 3.1
	 The 10 per cent. limit over 10 years 

The number of Shares that may be allocated under the Plan on any day cannot, when added to the number of Shares allocated in
the previous 10 years under the Plan and any other Employees’ Share Plan adopted by the Company, exceed the number of Shares that is equal to 10 per cent. of the ordinary share capital of the Company in issue on the last Dealing Day before
that day. 
  

	 3.2
	 The 5 per cent. limit over 10 years 

The number of Shares that may be allocated under the Plan on any day cannot, when added to the aggregate of the number of
Shares allocated in the previous 10 years under the Plan and any other Discretionary Share Plan adopted by the Company, exceed the number of Shares that is equal to 5 per cent. of the ordinary share capital of the Company in issue on the
last Dealing Day before that day. 
  

	 3.3
	 Exclusions from the limits in this Rule 3 

In calculating the limits in this Rule 3, any Shares where the right to acquire them was released, cancelled or lapsed without
Vesting or being exercised, as appropriate, will be disregarded. 
  

	 3.4
	 Meaning of allocation 

References in this Rule 3 to the allocation of Shares mean, in the case of a share award or option plan, the placing of
unissued Shares or Shares held in treasury under award or option and, in relation to other types of Employees’ Share Plan, mean the issue and allotment of Shares or the transfer of Shares out of treasury. The placing of Shares held in treasury
under award or option or the transfer of Shares 

  
 4 

 
out of treasury may be disregarded if the share incentive scheme guidelines of the Investment Association are amended to permit the use of Shares held in treasury to be disregarded. 

 

	 3.5
	 Adjustment to Shares to be taken into account 

Where Shares transferred out of treasury or Shares issued under the Plan or any other Employees’ Share Plan of the Company
are to be taken into account for the purposes of the limits in this Rule 3 and a Variation has taken place between the date of transfer or issue of those Shares and the date on which the limit is to be calculated, then the number of Shares taken
into account for the purposes of the limit will be adjusted in the manner the Board considers appropriate to take account of the Variation. 
  

	 4.
	 INDIVIDUAL LIMIT 

The Remuneration Committee will, from time to time, set an individual limit on the Market Value (at the Date of Grant) of the
Shares that are subject to an Award granted to a Participant. This limit cannot be exceeded without the prior approval of the Remuneration Committee. 
  

	 5.
	 RIGHTS IN RELATION TO SHARES BEFORE VESTING OR EXERCISE OF AN AWARD 

A Participant has no voting rights, rights to any dividends or any other rights attaching to the Shares the subject of an Award
before the Vesting of a Conditional Award or the exercise of a Nil-Cost Option. 
  

	 6.
	 VESTING OF AWARDS 

 

	 6.1
	 General rule for Vesting 

Subject to Rule 6.12, and except as otherwise provided in this Rule 6 and in Rule 7, an Award will Vest at the end of the
Restricted Period(s) provided that the Participant is then in Employment. 
  

	 6.2
	 Vesting in a Closed Period 

Unless the Vesting of a Conditional Award and the subsequent delivery of Shares is permitted under the Dealing Code, a
Conditional Award will not Vest on a day which is in a Closed Period. If a Conditional Award would, but for this Rule 6.2, have Vested on a day which is in a Closed Period, the Conditional Award will Vest on the first Dealing Day following the end
of the Closed Period. 
  

	 6.3
	 Vesting following ceasing to be in Employment (Good Leaver) 

Subject to Rules 6.12, 6.13 and 7, if a Participant ceases to be in Employment before the end of the Restricted Period(s) due
to: 
  

	 	 (a)
	 their injury, ill-health, disability (each as evidenced to the
satisfaction of the Remuneration Committee) or Redundancy; 

  

	 	 (b)
	 the company which employs the Participant ceasing to be under the Control of the Company;

  
 5 

	 	 (c)
	 the transfer or sale of the undertaking or part-undertaking in which the Participant is employed to a person
who is not a Group Company; or 

  

	 	 (d)
	 any other reason (except for dishonesty, fraud, misconduct or any other circumstances justifying summary
dismissal) the Remuneration Committee determines appropriate in a particular case, 

 then, unless the
Remuneration Committee determines otherwise, a Participant’s Award(s) will continue to be held by the Participant and will Vest at the end of the Restricted Period(s) or, if the Remuneration Committee so determines, will Vest as soon as
possible following the cessation of the Participant’s employment. 
  

	 6.4
	 Lapse following cessation of Employment in other circumstances 

If a Participant ceases to be in Employment before the end of any Restricted Period(s) in any circumstances other than those
referred to in Rule 6.3 or 6.7, the Participant’s Award(s) will lapse immediately on the date the Participant gives or is given notice of cessation of Employment or ceases to be in Employment without any notice being given. 

 

	 6.5
	 Disciplinary procedures 

Unless the Remuneration Committee determines otherwise, a Participant’s Award(s) will not Vest and a Nil-Cost Option cannot be exercised under this Rule 6 if, at the time it would otherwise have Vested or been exercised, as appropriate, the Participant is under investigation under the disciplinary procedures
applicable to the Participant. The Award may Vest and Nil-Cost Option be exercised, subject to the Rules, following the resolution and dependent on the outcome of the disciplinary procedures. 

 

	 6.6
	 Approved leave of absence 

For the purposes of this Rule 6 and Rule 7, a Participant who leaves Employment while on an approved leave of absence will
cease Employment on the date on which the Participant indicates either that the Participant does not intend to return to work or will not be returning to work. If the Participant gives no indication, the Participant will cease Employment on the day
after the date on which the Participant was due to return to work. 
  

	 6.7
	 Death 

Subject to Rules 6.12 6.13 and 7, any Award held by a Participant who dies will Vest on the date of death and will be
transferred to the Participant’s personal representatives as soon as practicable. Any applicable Holding Period will no longer apply. The value of the Award may be delivered in cash in accordance with Rule 8.5. 

 

	 6.8
	 Transfer overseas 

If a Participant transfers from one jurisdiction to another and continues or will continue to hold an office or employment with
a Group Company as a result of that transfer and will either: 

  
 6 

	 	 (a)
	 become subject to tax in the country to which the Participant is transferred so that the Participant will
suffer a tax disadvantage on the Vesting or exercise of an Award following the transfer; or 

  

	 	 (b)
	 become subject to restrictions on acquiring Shares on the Vesting or exercise of an Award or dealing in the
Shares that may be acquired on the Vesting or exercise of an Award because of the laws of the country to which the Participant is transferred, 

the Remuneration Committee may, at its discretion and subject to Rules 6.12 and 6.13, allow any Award held by that Participant
to Vest during the period beginning three months before and ending three months after the transfer of the Participant. The Remuneration Committee will determine the period during which any Nil-Cost Option can
be exercised in these circumstances. 
  

	 6.9
	 Corporate transactions 

Subject to Rules 6.12, 6.13 and 7, and provided the Award is not to be exchanged under Rule 6.10 an Award will Vest (and,
unless the Remuneration Committee (as constituted before the relevant event) determines otherwise, no Holding Period(s) will apply) on the date on which: 
  

	 	 (a)
	 Takeover: an offeror (either alone or together with others, if any, acting in concert with the
offeror) obtains Control of the Company as a result of making a general offer to acquire all of the issued ordinary shares of the Company or all of the shares of the Company which are of the same class as the Shares and which, in either case, are
not at the time owned by the offeror or any company Controlled by the offeror and/or persons acting in concert with the offeror; 

  

	 	 (b)
	 Section 979 notice: a person first becomes bound or entitled to acquire Shares
under sections 979 to 982 of the Companies Act 2006, or would be so entitled but for the fact that there were no dissenting shareholders; and 

  

	 	 (c)
	 Compromise or arrangement under section 899: the court sanctions a compromise or arrangement between
the Company and its shareholders under section 899 of the Companies Act 2006. 

  

	 6.10
	 Reorganisation 

If a company (the Successor Company) has obtained Control of the Company, and either: 

 

	 	 (a)
	 the shareholders of the Successor Company immediately after it has obtained Control are substantially the
same as the shareholders of the Company immediately before that event; or 

  

	 	 (b)
	 the Remuneration Committee (as constituted before the relevant event) decides and the Successor Company
consents to the exchange of Awards under this Rule 6.10, 

  
 7 

 Awards will not Vest pursuant to Rule 6.9 but will be exchanged for equivalent
awards (as determined by the Remuneration Committee as constituted before the relevant event) in respect of shares in the Successor Company or another company within the Successor Company’s group. 

 

	 6.11
	 Winding-up 

Subject to Rules 6.12, 6.13 and 7, an Award will Vest: 

 

	 	 (a)
	 immediately before the passing of a resolution for the voluntary
winding-up of the Company; or 

  

	 	 (b)
	 on the Court making an order for the winding-up of the Company.

 This Rule 6.11 will not apply where the winding-up in either
case is for the purpose of a reorganisation within Rule 6.10. 
  

	 6.12
	 Performance conditions 

An Award will only Vest under Rules 6.1, 6.3, 6.7, 6.8, 6.9 or 6.11 if, and to the extent that, any conditions imposed under
Rule 2.4 have been satisfied at the date of the relevant event, or any other date determined by the Remuneration Committee. In determining the extent to which an Award Vests the Remuneration Committee can adjust the Vesting level if: (a) the
formulaic outcome does not reflect the underlying financial or non-financial performance of the Company; (b) the Vesting level is not appropriate in the context of circumstances that were unexpected or
unforeseen at the Date of Grant of the Award; or (c) there exists any other reason why an adjustment to the level of Vesting of the Award is appropriate, taking into account any factors the Remuneration Committee considers relevant. Where the
Remuneration Committee is required to determine the extent of Vesting of an Award following the occurrence of an event under which the Award Vests before the end of the Restricted Period(s), the Remuneration Committee will be as constituted before
the occurrence of the relevant event. 
  

	 6.13
	 Pro rata reduction 

The number of Shares in respect of which an Award will Vest pursuant to Rules 6.3, 6.7, 6.8, 6.9 and 6.11 will be reduced on a
pro rata basis to take account of the time that has elapsed between the Date of Grant and the date of the relevant event as a proportion of the period between the Date of Grant and the third anniversary of the Date of Grant, or the end of the
applicable Restricted Period(s), if earlier. However, the Remuneration Committee will have discretion to determine that an Award will Vest as to either a greater or lesser number of Shares than it would otherwise have done pursuant to this Rule 6.13
if it believes that there are circumstances that warrant such a determination. 
  

	 6.14
	 Cessation of employment following a change of Control 

If, at any time within the period of twelve months following the date of any change of Control of the Company (other than a
change of Control as a consequence of a scheme of arrangement under section 899 of the Companies Act 2006 the effect of which was to create a new holding company for the Company, where such 

  
 8 

 
holding company had, following the scheme of arrangement, substantially the same shareholders as those of the Company immediately before the scheme of arrangement), a Participant’s
Employment: 
  

	 	 (a)
	 is terminated by the Participant’s employer for a reason other than misconduct or poor performance; or

  

	 	 (b)
	 ceases following the Participant’s resignation because the nature of the Participant’s duties are
such that the Participant reasonably believes that the Participant has lesser duties and responsibilities than before the change of Control which constitute a material breach of the Participant’s employment contract, 

the Participant will be entitled to receive, net of any Tax Liability due in respect of it and within thirty days after the
cessation of Employment concerned, an amount which is equal in value to the difference between the aggregate Market Value of the Shares the Participant received when the Participant’s Award Vested or was exercised, as appropriate, under Rule
6.9 and the aggregate Market Value of the Shares the Participant would have received had the Award Vested or been exercised at that time in full. For the purpose of this Rule 6.14, the Market Value used will be the Market Value of a Share as at the
date the Participant’s Award Vested or was exercised, as appropriate. 
  

	 6.15
	 Dividend equivalents 

A Participant may, at the discretion of the Remuneration Committee, receive cash or further Shares equal in value, so far as
possible, to any dividends paid or payable on the Shares in relation to which a Conditional Award Vests or a Nil-Cost Option is exercised, by reference to record dates from the Date of Grant until the date of
Vesting or date of exercise or expiry of any Holding Period, as appropriate. The dividend equivalent entitlement may be operated on any basis the Remuneration Committee determines is appropriate. Any payment due under this Rule 6.15 will be made net
of any Tax Liability due in respect of it. 
  

	 6.16
	 Reduction of number of Shares subject to an Award – Malus 

If a Relevant Event occurs before the Vesting of an Award or part of an Award or the exercise of a Nil-Cost Option, the Remuneration Committee may, in its absolute discretion, determine that a reduction in the number of Shares subject to the Award is justified and /or that the Vesting or exercise of the Award is
made subject to further conditions. In such circumstances, the Remuneration Committee may reduce (including to zero) the number of Shares subject to the Award to take account of the relevant circumstances. If the Remuneration Committee exercises its
discretion under this Rule 6.16, it will confirm this in writing to the affected Participant as soon as is reasonably practicable, the Award will be deemed to have been granted over the lower number of Shares and the Vesting of the Award or the
exercise of the Nil-Cost Option in accordance with the Rules will be by reference to the reduced number of Shares and any further conditions imposed by the Remuneration Committee. 

  
 9 

	 6.17
	 Clawback 

If a Relevant Event occurs at any time within the Clawback Period, the Remuneration Committee may, in its absolute discretion,
require a Participant to repay, in the manner it determines, such number of Shares (or cash amount) received in respect of the Award (or such cash amount representing the value of the Shares) as the Remuneration Committee considers appropriate. The
Remuneration Committee will determine whether the Clawback is to be net or gross of any Tax Liability met by the Participant in respect of the Award. 

To satisfy any clawback, the Remuneration Committee may reduce (including, if appropriate, to zero) any of the following
elements of the remuneration of the Participant: 
  

	 	 (a)
	 the amount of any future bonus which would, but for the operation of clawback, be payable to the Participant
under any bonus plan operated by any Group Company; and/or 

  

	 	 (b)
	 the number of Shares subject to any subsisting award held by the Participant under any deferred bonus plan
operated by any Group Member; and/or 

  

	 	 (c)
	 the number of Shares subject to any subsisting Award and/or other award held by the relevant individual
under the Plan or any other employees’ share plan or share award arrangement (except for any award which is tax-advantaged pursuant to Schedules 2 to 5 inclusive of the Income Tax (Earnings and Pensions)
Act 2003) notwithstanding the extent to which any performance condition and/or any other condition imposed on any such Award and/or other award (as relevant) has been satisfied; and/or 

 

	 	 (d)
	 require the Participant to pay to the Group Company the Remuneration Committee directs, and on the terms the
Remuneration Committee directs (including, without limitation, on terms that the amount is to be deducted or withheld from the Participant’s salary or from any other payment to be made to the Participant by any Group Company), the amount
required for the clawback to be satisfied in full. 

 Any reduction made pursuant to this Rule 6.17 will be
made at the time or times the Remuneration Committee determines appropriate and which, in the case of unvested awards, will be at the time they would otherwise ordinarily vest, unless the Remuneration Committee decides otherwise. 

The Remuneration Committee may decide, at any time, that an Award will lapse in respect of a number of Shares to give effect to
a clawback provision of any form contained in any other employees’ share or incentive plan (other than this Plan) or bonus plan operated by any Group Company. The extent to which an Award will lapse will be in accordance with the terms of the
clawback provision in the relevant plan or, in the absence of any such term, on the basis the Remuneration Committee considers appropriate. 

  
 10 

	 7.
	 EXERCISE AND LAPSE OF AWARDS 

 

	 7.1
	 Period of exercise 

Subject to Rule 7.2, a Vested Nil-Cost Option may be exercised until the tenth
anniversary of its Date of Grant. However, if an event referred to in Rule 6 occurs, a Nil-Cost Option will be exercisable, to the extent permitted by the Dealing Code, during the period of: 

 

	 	 (a)
	 twelve months from the date of Vesting under Rule 6.3; 

 

	 	 (b)
	 twelve months from the date on which the Participant ceased to be in Employment under Rule 6.3 and the
cessation occurred after Vesting of the Nil-Cost Option; 

  

	 	 (c)
	 twelve months from the death of a Participant; 

 

	 	 (d)
	 six months from the occurrence of any of the circumstances permitting the vesting of Nil-Cost Options under Rule 6.9(a) or (c); 

  

	 	 (e)
	 six weeks from the date referred to in Rule 6.9(b); 

 

	 	 (f)
	 one month following the making of an order by the court for the
winding-up of the Company (except where the winding-up is for the purpose of a reconstruction or amalgamation). 

 

	 7.2
	 Lapse of Awards 

An Award will lapse on the earliest of: 
  

	 	 (a)
	 in the case of Nil-Cost Options, the expiry of any of the periods
referred to in Rule 7.1; 

  

	 	 (b)
	 the date on which a Participant ceases to be in Employment before the end of the Restricted Period in any
circumstances other than those referred to in Rule 6.3 or Rule 6.7 and to the extent that the Remuneration Committee determined to preserve all or part of an Award under those Rules; 

 

	 	 (c)
	 the Participant being deprived of the legal or beneficial ownership of the Award by operation of law, or
doing or omitting to do anything which causes the Participant to be so deprived or being declared bankrupt; 

  

	 	 (d)
	 the Participant attempting to breach Rule 2.8; and 

 

	 	 (e)
	 as soon as any condition imposed under Rule 2.4 can, in the opinion of the Remuneration Committee, no longer
be met. 

  

	 7.3
	 Lapse where no or partial Vesting 

Where, as a result of the application of Rule 6.12 or 6.13, an Award has not Vested or has only Vested in part, the part of the
Award that has not Vested will lapse immediately. 

  
 11 

	 8.
	 VESTING AND EXERCISE OF AWARDS AND DELIVERY OF SHARES 

 

	 8.1
	 Consequences of Vesting of Conditional Awards 

The Shares subject to a Conditional Award in respect of which it has Vested will, subject to the other provisions of this Rule
8 and Rule 12.7, be delivered to the Participant (or the Participant’s nominee) within 30 days following the date of Vesting of the Award. 

Where a Holding Period applies, the Shares will be delivered to a nominee for the Participant, or into such other arrangement,
as the Remuneration Committee may direct in accordance with Rule 2.5. 
  

	 8.2
	 Consequences of exercise of Nil-Cost Options

 A Nil-Cost Option may be exercised over the number of Shares
in respect of which it has Vested. The Shares in respect of which a Nil-Cost Option is exercised will, subject to the other provisions of this Rule 8 and Rule 12.7, be delivered to the Participant (or the
Participant’s nominee) within 30 days of the Option Exercise Date. 
 Where a Holding Period applies, the Shares will be
delivered to a nominee for the Participant, or into any other arrangement the Remuneration Committee directs in accordance with Rule 2.5. 
  

	 8.3
	 Procedure for exercise of Nil-Cost Options

 To exercise a Nil-Cost Option, a Participant must complete
and deliver a notice of exercise in the form prescribed by the Remuneration Committee properly completed by the Participant (or by the Participant’s duly authorised agent). 

 

	 8.4
	 Nominal value of Shares 

The Remuneration Committee may require as a condition of Vesting of a Conditional Award or exercise of a Nil-Cost Option that the Participant pay up the nominal value of the Shares subject to the Award in the manner the Remuneration Committee determines. 

 

	 8.5
	 Satisfaction of Awards in cash 

Subject to Rule 12.7, the Company may, in lieu of the Participant’s right to receive Shares pursuant to Rule 8.1 or 8.2
following the Vesting of a Conditional Award or part of a Conditional Award or exercise of a Nil-Cost Option, make a cash payment equal to the Market Value of the Shares in respect of which the Conditional
Award had Vested or Nil-Cost Option been exercised. This Rule 8.5 will not apply to Awards made in any jurisdiction where it would cause: 

 

	 	 (a)
	 the grant of the Award to be unlawful or for it to fall outside any applicable securities law exemption; or

  

	 	 (b)
	 adverse tax or accounting consequences for the Participant and/or any Group Company. 

  
 12 

	 8.6
	 Delivery of net number of Shares 

 

	 	 (a)
	 The Company may, in lieu of the Participant’s right to receive the full number of Shares pursuant to
Rule 8.1 determine, either: 

  

	 	 (i)
	 to reduce the number of Shares in respect of which that Award will Vest by a number of Shares that have a
value at least (in its estimation) equal to the Tax Liability of the Participant that would have arisen in connection with the Vesting of the Award, so that the Award becomes an entitlement to receive both the reduced number of Shares and a cash
amount (the Cash Amount) equal to the value of the number of shares by which the Award is reduced (the Adjusted Award) and procure that the relevant Group Company applies such of the Cash Amount as is necessary in making a payment
directly to the relevant tax authority to discharge the Tax Liability of the Participant that arises as a result of the Vesting of the Adjusted Award (with any surplus cash being returned to the Participant); or 

 

	 	 (ii)
	 that the Award will only Vest in respect of the number of Shares subject to it in respect of which the
Participant has provided to the relevant Group Company the funds sufficient to meet the Tax Liability arising, with the remainder of the Shares subject to the Award Vesting subsequently when Vesting would not occur in a Closed Period.

  

	 	 (b)
	 This Rule 8.6 will not apply to Awards made in any jurisdiction where it would cause: (i) the grant of
the Award to be unlawful or for it to fall outside any applicable securities law exemption; or (ii) adverse tax or accounting consequences for the Participant and/or any Group Company. 

 

	 8.7
	 Consents 

The delivery of any Shares or cash under the Plan will be subject to obtaining any necessary approval or consent required under
any applicable regulations or enactment. 
  

	 8.8
	 Ranking of Shares 

Shares acquired by a Participant under the Plan will rank equally in all respects with the Shares then in issue, except that
they will not be entitled to any rights attaching to Shares by reference to a record date falling before the day on which the Participant is entered on the Company’s register of shareholders in respect of those Shares. 

 

	 8.9
	 Listing 

While the Shares are Listed, the Company will apply for the Listing of any Shares issued pursuant to the Plan as soon as
practicable after their allotment. 

  
 13 

	 9.
	 ADJUSTMENT OF AWARDS 

 

	 9.1
	 Variation in equity share capital 

If there is a Variation, or any other corporate event, which in the reasonable opinion of the Remuneration Committee justifies
an adjustment, the number and/or type of Shares over which an Award is granted may be adjusted in the manner the Remuneration Committee determines but so that the underlying economic value of the Award remains unchanged. 

 

	 9.2
	 Notifying Participants 

The Remuneration Committee will take any steps it considers necessary to notify Participants of any adjustments made under this
Rule 9. 
  

	 10.
	 ADMINISTRATION 

 

	 10.1
	 Administration of the Plan 

The Plan will be administered by the Remuneration Committee. The Remuneration Committee has full authority, consistent with the
Rules, to administer the Plan, including authority to interpret and construe any provision of the Plan and to adopt any regulations for administering the Plan and any documents it thinks necessary or appropriate. The Remuneration Committee’s
decision on any matter concerning the Plan will be final and binding. The Remuneration Committee may delegate its authority under this Rule 10.1. 
  

	 10.2
	 Costs 

The Company will bear the costs of introducing and operating the Plan (including, but not limited to, stamp duty, stamp duty
reserve tax and any other costs relating to the issue or transfer of Shares on the Vesting or exercise of Awards). The Company may require any Group Company to enter into an agreement which obliges that company to reimburse the Company for any costs
borne by the Company, directly or indirectly, in respect of the Group Company’s officers or employees. 
  

	 10.3
	 Shares to cover Awards 

The Company will ensure that sufficient Shares are available to satisfy all outstanding Awards. 

 

	 10.4
	 Notices 

Any notice or other communication in connection with the Plan will be in writing and may be given: 

 

	 	 (a)
	 by personal delivery; or 

 

	 	 (b)
	 by sending it by post: 

 

	 	 (i)
	 in the case of a company, to its registered office or other address that it notifies in writing; and

  
 14 

	 	 (ii)
	 in the case of an individual, to the individual’s last known address or, where the individual is a
director or employee of a Group Company, either to the individual’s last known address or to the address of the place of business at which the individual performs the whole or substantially the whole of the duties of the individual’s
office or employment; or 

  

	 	 (c)
	 by sending it by email or any form of electronic transfer acceptable to the Remuneration Committee:

  

	 	 (i)
	 in the case of a company, to the email address or other address that the company notifies; and

  

	 	 (ii)
	 in the case of an individual, to the individual’s last known email address or, where the individual is
a director or employee of a Group Company, to the individual’s email address. 

  

	 10.5
	 Time of service of notice 

Any notice under Rule 10.4 will be given: 
  

	 	 (a)
	 if delivered, at the time of delivery; 

 

	 	 (b)
	 if posted, at 10.00am on the second business day after it was put into the post; or 

 

	 	 (c)
	 if sent by email or any other form of electronic transfer, at the time of despatch. 

In proving service of notice, it will be sufficient to prove that delivery was made or that the envelope containing it was
properly addressed, prepaid and posted or that the email or other form of electronic transfer was properly addressed and despatched, as appropriate. 
  

	 10.6
	 Documents sent to shareholders 

Participants may, but are not entitled to, receive copies of any notice or document sent by the Company to the holders of
Shares. 
  

	 10.7
	 Local currency equivalent 

The Remuneration Committee may determine, for any relevant jurisdiction, the exchange rate between pounds sterling and the
relevant currency to be applied where it is necessary to convert from pounds sterling to that currency or vice versa for the purposes of the Plan. 
  

	 11.
	 AMENDMENT 

  

	 11.1
	 Remuneration Committee’s power to amend the Plan 

Subject to the provisions of this Rule 11, the Remuneration Committee can at any time amend any of the Rules of the Plan in any
respect. 

  
 15 

	 11.2
	 Shareholder approval 

Subject to Rule 11.4, no amendment can be made to the advantage of Participants or Eligible Employees to the: 

 

	 	 (a)
	 persons to whom Awards may be granted; 

 

	 	 (b)
	 limit on the number of Shares which may be allocated under the Plan; 

 

	 	 (c)
	 maximum entitlement for individual Participants; 

 

	 	 (d)
	 rights attaching to Awards and Shares; 

 

	 	 (e)
	 rights of Participants in the event of a Variation; or 

 

	 	 (f)
	 terms of this Rule 11.2, 

without prior approval by ordinary resolution of the members of the Company in general meeting. 

 

	 11.3
	 Participants’ approval 

No amendment will be made under Rule 11.1 which would abrogate or materially affect adversely the subsisting rights of a
Participant unless it is made: 
  

	 	 (a)
	 with the written consent of Participants who hold Awards under the Plan to acquire 75 per cent. of the
Shares which would be delivered if all of the Awards granted and subsisting under the Plan Vested and in the case of Nil-Cost options were exercised in full; or 

 

	 	 (b)
	 by a resolution of a meeting of Participants passed by not less than 75 per cent. of the Participants
who attend and vote either in person or by proxy, 

 and, for the purposes of this Rule 11.3, the
provisions of the articles of association of the Company and of the Companies Act 2006 relating to shareholder meetings will apply with the necessary changes. 
  

	 11.4
	 Permitted amendments 

Rule 11.2 will not apply to any amendment which is: 
  

	 	 (a)
	 minor and to benefit the administration of the Plan; 

 

	 	 (b)
	 to take account of any changes in legislation; or 

 

	 	 (c)
	 to obtain or maintain favourable tax, exchange control or regulatory treatment for the Company, any Group
Company or any present or future Participant. 

  

	 11.5
	 Additional schedules 

The Board may adopt additional schedules to the Plan applicable in any jurisdiction, under which Awards may be subject to
additional and/or modified 

  
 16 

 
terms and conditions, having regard to any securities, exchange control or taxation laws, regulations or practice which may apply to the Participant, the Company or any Group Company. Any
additional schedule must conform to the basic principles of the Plan and must not enlarge to the benefit of Participants the limits in Rule 3 or 4. Any additional schedule and all Awards granted under that schedule will be governed by and construed
in accordance with the laws of England. 
  

	 11.6
	 Notice of amendments 

Participants will be given written notice of any material amendments to the Plan made under this Rule 11 which affect them as
soon as reasonably practicable after they have been made. 
  

	 11.7
	 Prohibited amendment 

No amendment will be made to the Plan if, as a result of the amendment, it would cease to be an Employees’ Share Plan.

  

	 12.
	 GENERAL 

  

	 12.1
	 Termination of the Plan 

The Plan will terminate at the end of the Plan Period or at any earlier time determined by the Board. Termination of the Plan
will not affect Awards granted before termination. 
  

	 12.2
	 Funding the Plan 

The Company and any Group Company may provide money to the Trustees or any other person to enable them to acquire Shares to be
held for the purposes of the Plan, or enter into any guarantee or indemnity for those purposes, to the extent permitted by any applicable law. 
  

	 12.3
	 Rights of Participants and Eligible Employees 

Nothing in the Plan will give any officer or employee of any Group Company any right to participate in the Plan. Participation
in one grant does not imply a right to participate or be considered for participation in a later grant. The rights and obligations of any individual under the terms of the individual’s office or employment with a Group Company will not be
affected by the individual’s participation in the Plan nor any right which the individual may have to participate under it. A Participant holding an Award will not have any rights of a shareholder of the Company with respect to that Award or
the Shares subject to it. 
  

	 12.4
	 No rights to compensation or damages 

A Participant waives all and any rights to compensation or damages for the termination of the Participant’s office or
employment with a Group Company for any reason whatsoever (including unlawful termination of employment) insofar as those rights arise or may arise from the Participant ceasing to have rights under the Plan as a result of that termination or from
the loss or diminution in value of such rights or entitlements. Nothing in the Plan or in any document executed under it will 

  
 17 

 
give any person any right to continue in employment or will affect the right of any Group Company to terminate the employment of any Participant or Eligible Employee or any other person without
liability at any time, with or without cause, or will impose on the Company, any Group Company, the Board or the Trustees or their respective agents and employees any liability in connection with the loss of a Participant’s benefits or rights
under the Plan or as a result of the exercise of a discretion under the Plan for any reason as a result of the termination of the Participant’s employment. 
  

	 12.5
	 The benefits of Rules 12.3 and 12.4 

The benefit of Rules 12.3 and 12.4 is given for the Company, for itself and as trustee and agent of all the Group Companies.
The Company will hold the benefit of these Rules on trust and as agent for each of them and may assign the benefit of this Rule 12.5 to any of them. 
  

	 12.6
	 Articles of association 

Any Shares acquired on the Vesting or exercise of Awards will be subject to the articles of association of the Company from
time to time. 
  

	 12.7
	 Withholding for Tax Liability 

Any Group Company, former Group Company or Trustee may withhold such amounts and/or make such arrangements as it considers
necessary to meet any Tax Liability for which it or any other Group Company or former Group Company is liable to account in connection with the Vesting or exercise of Awards, including the delivery of a reduced number of Shares pursuant to Rule 8.6
or the sale of Shares on behalf of a Participant, unless the Participant discharges the Tax Liability. 
  

	 12.8
	 Severability 

The invalidity or non-enforceability of one or more provisions of the Plan will not
affect the validity or enforceability of the other provisions of the Plan. 
  

	 12.9
	 Third parties 

The Plan confers no benefit, right or expectation on an individual who is not a Participant. No third party has any rights
under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan. Any other right or remedy which a third party may have is unaffected by this Rule 12.9. 

 

	 12.10
	 Data protection 

Eligible Employees acknowledge that personal data in relation to them may be collected, held and processed by the Company, a
Group Company and/or the Trustees, and may be passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for the operation or administration of the Plan. 

Further information about how the Company processes personal data of Eligible Employees is set out in the Company’s BT
Shareplan and Shareholder Privacy Notice 

  
 18 

 
and Employee Privacy Notice, available on the Company’s intranet on the BT’s Privacy Policies webpage at:
https://intra.bt.com/bt/lgc/compliance/data/dg_what/dp/Pages/policies.aspx 
 As a condition of their participation in the Plan, Eligible
Employees acknowledge and agree that the processing of personal data as described in this Rule 12.10 is necessary for the operation and administration of the Plan, including where such processing may fall outside the scope of EU data protection laws
(e.g. in respect of Eligible Employees who are not citizens, or applicable residents, of the European Union). 
  

	 13.
	 GOVERNING LAW 

These Rules will be governed by and construed in accordance with the laws of England. All Participants, the Company and any
other Group Company will submit to the jurisdiction of the English courts in relation to any dispute (including non-contractual disputes) arising under the Plan. 

  
 19 

 APPENDIX 1 

DEFINITIONS 
  

			
	 Appendix 1
	  	 this Appendix 1 which forms part of the Rules;

		
	 Award
	  	 a Conditional Award or a Nil-Cost Option;

		
	 Board
	  	 the board of directors for the time being of the Company or a duly authorised committee of the board, which may include the
Remuneration Committee;

		
	 Clawback Period
	  	 the period commencing on the Vesting of an Award determined by the Remuneration Committee at the Date of Grant and which
will normally be a period of two years;

		
	 Closed Period
	  	 a period when a Participant is prohibited from dealing in Shares under the Criminal Justice Act 1993, the Market Abuse
Regulation or the Dealing Code, or under any other statute, regulation or similar code to which the Company is subject;

		
	 Company
	  	 BT Group plc, registered in England and Wales under no. 4190816;

		
	 Conditional Award
	  	 a conditional right to acquire Shares granted or proposed to be granted under the Plan;

		
	 Control
	  	 in relation to a body corporate, the power of a person to secure:

 

(a)   by means of the holding of shares or the possession of voting power in or in
relation to that or any other body corporate; or
  

(b)   by virtue of any power conferred by the articles of association or other
document regulating that or any other body corporate,
  

that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person,
and

  
 20 

			
		
		  	 Controlled will be construed accordingly;

		
	 Date of Grant
	  	 with respect to an Award, the date on which it is granted;

		
	 Dealing Code
	  	 the share dealing code adopted by the Company, as amended from time to time;

		
	 Dealing Day
	  	 any day on which the London Stock Exchange is open for the transaction of business;

		
	 Discretionary Share Plan
	  	 any Employees’ Share Plan in which participation is solely at the discretion of the Board or the
Company;

		
	 Eligible Employee
	  	 any person who, at the Date of Grant is an employee of a Group Company;

		
	 Employees’ Share Plan
	  	 has the meaning given to it in section 1166 of the Companies Act 2006;

		
	 Employment
	  	 employment as an employee of a Group Company;

		
	 Group Company
	  	 the Company, and any company which is either a subsidiary of the Company or a subsidiary of the Company’s holding
company (subsidiary and holding company having the meanings given to them in section 1159 Companies Act 2006);

		
	 Holding Period
	  	 the period following the Vesting of an Award during which Shares (acquired during that period on the Vesting of a
Conditional Award or exercise of a Nil-Cost Option) may not be transferred, assigned, charged or otherwise disposed of except with the consent of the Remuneration Committee;

		
	 Listed
	  	 admitted to trading on the London Stock Exchange or any other recognised stock exchange, and Listing will be
construed accordingly;

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

		
	 Market Abuse Regulation
	  	 Regulation (EU) No 596/2014 of the European Parliament and the Council
of

  
 21 

			
		
		  	 16 April 2014 on market abuse;

		
	 Market Value
	  	 in relation to a Share on any day:
  

(a)   if the Shares are Listed, an amount equal to its middle market quotation as
derived from the Daily Official List of the London Stock Exchange on the Dealing Day immediately before that day or on any other day or days agreed by the Remuneration Committee; or

 

(b)   if the Shares are not Listed, an amount equal to its market value, determined
in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992;

		
	 Nil-Cost Option
	  	 a conditional right to acquire Shares for no or a nominal payment granted or proposed to be granted under the
Plan;

		
	 Option Exercise Date
	  	 the date when the exercise of a Nil-Cost Option is effective because it complies
with Rule 8.3;

		
	 Participant
	  	 any individual who holds an Award including, if relevant, the Participant’s personal representatives;

		
	 Plan
	  	 the BT Group plc Restricted Share Plan, as amended from time to time in accordance with the Rules;

		
	 Plan Period
	  	 the period starting on the date the Plan is approved by the Company in general meeting and ending on the tenth anniversary
of that date;

		
	 Redundancy
	  	 the termination of a Participant’s Employment attributable wholly or mainly to the fact that:

 

(a)   the employer has ceased or intends to cease:

 
 (i)  to
carry on the business for the purpose of which the employee was employed; or
  

(ii)  to carry out that business
on

  
 22 

			
		
		  	 the place the employee was employed; or

		
		  	 (b)   the requirements of that business:

 
 (i)  for
employees to carry out work of a particular kind; or
  

(ii)  to carry out that work in the place where the employee was employed,

 
 have ceased or diminished or are expected to cease or
diminish;

		
	 Relevant Event
	  	 a circumstance including (but without limitation):

 

(a)   behaviour by a Participant which fails to reflect the Company’s
governance and business values;
  

(b)   the extent to which any condition was satisfied was based on an error, or on
inaccurate or misleading information or assumptions which resulted either directly or indirectly in an Award being granted or Vesting to a greater extent than would have been the case had that error not been made;

 

(c)   material adverse change in the financial performance of the Company or any
division in which the Participant works and/or worked;
  

(d)   a material financial misstatement of the Company’s audited financial
accounts (other than as a result of a change in accounting practice);
  

(e)   any action which results in or is reasonably likely to result in reputational
damage to the Company;
  

(f)   a material failure in risk management;

 

(g)   corporate
failure;

  
 23 

			
		
		  	 (h)   negligence or gross misconduct of a Participant; and/or

 

(i)  fraud effected by or with the knowledge of a Participant;

		
	 Remuneration Committee
	  	 the remuneration committee of the Board or a duly authorised committee of the Remuneration Committee;

		
	 Restricted Period
	  	 in relation to an Award, the period or periods specified at the Date of Grant and at the end of which all or part of an
Award may Vest, which will normally be a period of three years but may be more or less, at the discretion of the Remuneration Committee;

		
	 Rules
	  	 the rules of the Plan as amended from time to time;

		
	 Share
	  	 a fully paid ordinary share in the capital of the Company;

		
	 Tax Liability
	  	 any amount of tax or social security contributions for which a Participant would or may be liable and for which any Group
Company or former Group Company would or may be obliged to (or would or may suffer a disadvantage if it were not to) account to any relevant authority;

		
	 Trustees
	  	 the trustee or trustees of any employee benefit trust which operates in conjunction with the Plan;

		
	 Variation
	  	 in relation to the equity share capital of the Company, a capitalisation issue, an offer or invitation made by way of
rights, a subdivision, consolidation, reduction, demerger, or distribution in specie or any other variation in share capital; and

		
	 Vest
	  	 in relation to:
  

(a) a Conditional Award, the point at which a Participant becomes absolutely entitled to all or some of the Shares the subject of that
Conditional Award; or

		
		  	 (b)_a Nil-Cost Option, the point at which the
Nil-Cost Option may be exercised in

  
 24 

			
		
		  	 respect of all or some of the Shares the subject of that Nil-Cost Option,

 
 and Vested and Vesting will be construed
accordingly.

  
 25 

 APPENDIX 2 

U.S. 
 The provisions of
paragraphs 1 and 2 of this Appendix 2 modify the Rules of the Plan in respect of any Awards granted under it to Eligible Employees who are resident in the United States. 
  

	 1.
	 The following will be inserted as new Rule 6.18: 

“A Participant may be required, as a condition of the Vesting of the Participant’s Award, to represent and agree
that, in relation to Shares the Participant acquires under the Plan: 
  

	 	 (a)
	 the Participant understands that the Shares are deemed to be restricted securities within the meaning of
Rule 144 under the United States Securities Act of 1933 (the Securities Act), which may not be resold in the United States or to a U.S. person except pursuant to an effective registration statement under the Securities Act or an exemption
from the registration requirements of the Securities Act; 

  

	 	 (b)
	 the Participant is acquiring the Shares for investment and not with a view to distribution; and

  

	 	 (c)
	 the Participant will not resell the Shares at any time, except to
non-U.S. persons in transactions effected in accordance with Rule 904 of Regulation S under the Securities Act (or any successor section to Rule 904) and only after the expiration of any holding period the
Remuneration Committee may require. 

 The Company may endorse on certificates representing Shares issued
or transferred on the Vesting of an Award such legend referring to the above representations or restrictions or any other applicable restrictions on resale that the Company, in its discretion, deems appropriate.” 

 

	 2.
	 Where the term “subsidiary” is used in the definition of Group Company, subsidiary will be defined
as follows: 

 “Subsidiary means a company in which the Company owns, directly or indirectly, a
majority of the voting rights.” 
 The provisions of paragraphs 3 and 4 of this Appendix 2 modify the Rules of the Plan
in respect of any Awards granted under it to Eligible Employees who are U.S. taxpayers (whether or not they are also resident in the United States). 
  

	 3.
	 The following will be inserted at the end of Rule 6.1: 

“In any event, the latest day by which an Award will be paid is 15 March after the calendar year in which the Award
becomes Vested and the Company may adjust how the Award is paid to ensure this. Notwithstanding any provision of the Plan to the contrary, no Award which becomes subject to accelerated Vesting at the

  
 26 

 
discretion of the Remuneration Committee (as provided in Rule 5 of the Plan) will be paid earlier than the end of the Restricted Period if the Remuneration Committee then determines that the
payment on such earlier date would subject the Award to the penalty tax imposed under Section 409A of the U.S. Internal Revenue Code of 1986, as amended (Section 409A).” 

 

	 4.
	 The Remuneration Committee will endeavour not to take any action that would cause an Award that is otherwise
exempt from taxation under Section 409A to become subject to taxation under Section 409A, or that would cause an Award that is subject to taxation under Section 409A to fail to satisfy the requirements of Section 409A.

 Although the Remuneration Committee intends to administer the Plan so that Awards granted under this
Schedule will be exempt from taxation under Section 409A, or will comply with Section 409A, neither the Remuneration Committee nor the Company warrants that any Award under the Plan will qualify for favourable tax treatment under
Section 409A or any other provision of federal, state, local, or non-U.S. law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result
of the grant, holding, Vesting or payment of any Award under the Plan. 

  
 27onct-ex41_7.htm

EXHIBIT 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

COMMON STOCK PURCHASE WARRANT

 

ONCTERNAL THERAPEUTICS, INC.

Warrant Shares: _______Issue Date: May 21, 2020

Initial Exercise Date: May 21, 2020

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date set forth above (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on November 21, 2025 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Oncternal Therapeutics, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).  

Section 1.Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated May 19, 2020, among the Company and the purchasers signatory thereto. 

Section 2.Exercise.

a)Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).  Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the 

1

US-DOCS\116024356.4

Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.  No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b)Exercise Price.  The exercise price per share of Common Stock under this Warrant shall be $2.51, subject to adjustment hereunder (the “Exercise Price”).

c)Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours 

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thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and 

 

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

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If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant.  The Company agrees not to take any position contrary to this Section 2(c).

Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

 

d)Mechanics of Exercise. 

i.Delivery of Warrant Shares Upon Exercise.  The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant Share Delivery Date.  If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer 

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agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

ii.Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii.Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date (subject to receipt of the aggregate exercise price for the applicable exercise (other than in the case of a cashless exercise)), then the Holder will have the right to rescind such exercise.

iv.Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (subject to receipt of the aggregate exercise price for the applicable exercise (other than in the case of a cashless exercise)), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase 

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price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

v.No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

vi.Charges, Taxes and Expenses.  Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

vii.Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

e)Holder’s Exercise Limitations.    The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together 

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with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.   In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be [4.99%/9.99%] of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), 

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provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

Section 3.Certain Adjustments.

a)Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

b)Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, 

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that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). 

c)Pro Rata Distributions.  During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).  To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.

d)Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, exclusive license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, 

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directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date 

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of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. 

e)Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

f)Notice to Holder.  

i.Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment. 

ii.Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their 

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shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4.Transfer of Warrant.

a)Transferability.  Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.  

b)New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto. 

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c)Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

d)Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.

e)Representation by the Holder.  The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

Section 5.Miscellaneous.

a)No Rights as Stockholder Until Exercise; No Settlement in Cash.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.  Without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 2(d)(i) and 2(d)(iv), in no event will the Company be required to net cash settle an exercise of this Warrant.  

b)Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c)Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.

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d)Authorized Shares.  

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).  

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e)Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.  

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f)Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

g)Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrant terminates on the Termination Date.  Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h)Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

i)Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j)Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k)Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l)Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder of this Warrant, on the other hand.

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m)Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n)Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

 

(Signature Page Follows)

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

  

	
	
Oncternal Therapeutics, Inc.

 

 

	
By:__________________________________________

     Name:

     Title:

 

 

 

 

17

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NOTICE OF EXERCISE

 

To:Oncternal Therapeutics, Inc.

 

(1)The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2)Payment shall take the form of (check applicable box):

[  ] in lawful money of the United States; or

[  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3)Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

 

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4)Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

 

 

 

US-DOCS\116024356.4

 

EXHIBIT B

 

 

ASSIGNMENT FORM

 (To assign the foregoing Warrant, execute this form and supply required information.  Do not use this form to exercise the Warrant to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

		
	
Name:
	
 

	
 
	
(Please Print)

	
Address:
	
 

	
 

Phone Number:

Email Address: 
	
(Please Print)

______________________________________

______________________________________

	
Dated: _______________ __, ______
	
 

	
Holder’s Signature:
	
 

	
Holder’s Address:
	
 

 

 

US-DOCS\116024356.4

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