Document:

usws-ex46_107.htm

 

Exhibit 4.6

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12
OF THE SECURITIES EXCHANGE ACT OF 1934

The following description sets forth certain material terms and provisions of the securities of U.S. Well Services, Inc. that are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which securities include the Class A Common Stock (as defined below) and the Public and Private Placement Warrants (as defined below). This description also summarizes relevant provisions of the General Corporation Law of the State of Delaware (the “DGCL”). The following description is a summary and does not purport to be complete. It is subject to, and qualified in its entirety by reference to, the applicable provisions of the DGCL, our Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), our Amended and Restated Bylaws (the “Bylaws”), our Certificate of Designations with respect to our Series A Redeemable Convertible Preferred Stock (the “Certificate of Designations”), the Amended and Restated Limited Liability Company Agreement of USWS Holdings LLC, dated as of November 9, 2018, as amended by Amendment No. 1 to Amended and Restated Limited Liability Company Agreement of USWS Holdings LLC, dated May 24, 2019 (collectively, the “A&R USWS Holdings LLC Agreement”), the Warrant Agreement, dated March 9, 2017 (the “2017 Warrant Agreement”), by and between Continental Stock Transfer & Trust Company and Matlin & Partners Acquisition Corporation, and the Warrant Agreement, dated May 24, 2019 (the “2019 Warrant Agreement”), by and between Continental Stock Transfer & Trust Company and the Company. The Certificate of Incorporation, Bylaws, Certificate of Designations, A&R USWS Holdings LLC Agreement, 2017 Warrant Agreement and 2019 Warrant Agreement, which are filed as Exhibit 3.1, Exhibit 3.2, Exhibit 3.3, Exhibit 10.1, Exhibit 10.2, Exhibit 4.2 and Exhibit 4.5, respectively, to the Annual Report on Form 10-K of which this Exhibit 4.6 is a part, are incorporated by reference herein. We encourage you to read the Certificate of Incorporation, Bylaws, Certificate of Designations, A&R USWS Holdings LLC Agreement, 2017 Warrant Agreement, 2019 Warrant Agreement and the applicable provisions of the DGCL for additional information. Unless the context requires otherwise, all references to “we,” “us,” “our” and the “Company” in this Exhibit 4.6 refer solely to U.S. Well Services, Inc. and not to our subsidiaries.

Description of Capital Stock

General

The Certificate of Incorporation provides that the total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Company is authorized to issue is 440,000,000 shares, consisting of (a) 430,000,000 shares of common stock (the “Common Stock”), including (i) 400,000,000 shares of Class A Common Stock (the “Class A Common Stock”), (ii) 20,000,000 shares of Class B Common Stock (the “Class B Common Stock”), and (iii) 10,000,000 shares of Class F Common Stock (the “Class F Common Stock”), and (b) 10,000,000 shares of preferred stock (the “Preferred Stock”), including 55,000 shares of Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”). As of March 2, 2020, 62,857,624 shares of Class A Common Stock, 5,500,692 shares of Class B Common Stock and 55,000 shares of Series A Preferred Stock were issued and outstanding. All of the shares of the Class F Common Stock that were not forfeited in connection with our November 9, 2018 business combination (the “Business Combination”) with USWS Holdings LLC, a Delaware limited liability company (“USWS Holdings”), were converted into shares of Class A Common Stock on a one-for-one basis at the closing of the Business Combination.

Class A Common Stock

Holders of the Class A Common Stock are entitled to one vote for each share held on all matters to be voted on by the Company’s stockholders. Holders of the Class A Common Stock and holders of the Class B Common Stock will vote together as a single class on all matters submitted to a vote of the Company’s stockholders, except as required by law. Unless specified in the Certificate of Incorporation (including any certificate of designation of preferred stock) or the Bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of the Company’s shares of Common Stock that are voted is required to approve any such matter voted on by the Company’s stockholders. In the case of an election of directors, where a quorum is present, a plurality of the votes cast will be sufficient to elect each director.

1

 

In the event of a liquidation, dissolution or winding up of the Company, the holders of the Class A Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the Class A Common Stock. The holders of the Class A Common Stock have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the Class A Common Stock.

Holders of the Class A Common Stock are entitled to receive dividends from the Company when, as and if declared by the board of directors of the Company (the “Board”), subject to the consent of the holders of shares of Series A Preferred Stock.

Class B Common Stock

In connection with the Business Combination, and pursuant to the Merger and Contribution Agreement, dated as of July 13, 2018, and amended on August 9, 2018, and further amended on November 2, 2018, with MPAC Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, USWS Holdings, certain owners of equity interests in USWS Holdings (the “Blocker Companies”) and, solely for purposes described therein, the seller representative named therein, the Company issued 14,546,755 shares of Class B Common Stock to certain owners of equity interests in USWS Holdings other than the Blocker Companies (the “Non-Blocker USWS Members”). Non-Blocker USWS Members were issued units of USWS Holdings (“USWS Units”) and an equal number of shares of Class B Common Stock. The Non-Blocker USWS Members collectively own all of our outstanding shares of Class B Common Stock. We expect to maintain a one-to-one ratio between the number of outstanding shares of Class B Common Stock and the number of USWS Units held by persons other than the Company, so holders of USWS Units (other than the Company) will have a voting interest in the Company that is proportionate to their economic interest in USWS Holdings. Class B Common Stock represents a non-economic interest in the Company.

Shares of Class B Common Stock (i) may be issued only in connection with the issuance by USWS Holdings of a corresponding number of USWS Units and only to the person or entity to whom such USWS Units are issued and (ii) may be registered only in the name of (1) a person or entity to whom shares of Class B Common Stock are issued as described above, (2) its successors and assigns, (3) their respective permitted transferees or (4) any subsequent successors, assigns and permitted transferees. A holder of shares of Class B Common Stock may transfer shares of Class B Common Stock to any transferee (other than the Company) only if, and only to the extent permitted by the A&R USWS Holdings LLC Agreement, such holder also simultaneously transfers an equal number of such holder’s USWS Units to the same transferee in compliance with the A&R USWS Holdings LLC Agreement. Shares of Class B Common Stock (together with the same number of USWS Units) may be exchanged for shares of Class A Common Stock as provided in the A&R USWS Holdings LLC Agreement.

Holders of shares of the Class B Common Stock will vote together as a single class with holders of shares of the Class A Common Stock on all matters properly submitted to a vote of the stockholders. In addition, holders of shares of Class B Common Stock, voting as a separate class, will be entitled to approve any amendment, alteration or repeal of any provision of the Certificate of Incorporation that would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B Common Stock.

Holders of Class B Common Stock will not be entitled to any dividends from the Company and will not be entitled to receive any of our assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs. The holders of the Class B Common Stock have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the Class B Common Stock.

Preferred Stock

The Certificate of Incorporation provides that shares of Preferred Stock may be issued from time to time in one or more series. Our Board is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our Board is able to, without stockholder approval, issue Preferred Stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Common Stock and could have antitakeover effects. The ability of our Board to issue Preferred Stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management.

2

 

Series A Preferred Stock

The Series A Preferred Stock ranks senior to the Class A Common Stock and Class B Common Stock with respect to distributions and upon a liquidation, winding-up or dissolution of our affairs. The Series A Preferred Stock have only specified voting rights, including with respect to the issuance or creation of senior securities, amendments to the Certificate of Incorporation that negatively impact the rights of the holders of Series A Preferred Stock and the payment of dividends on, repurchase or redemption of Class A Common Stock.

Holders of Series A Preferred Stock will receive distributions of 12.00% per annum on the then-applicable liquidation preference for the first two years after issuance and 16.00% per annum on the liquidation preference thereafter. Distributions are not required to be paid in cash and, if not paid in cash, will automatically accrue and be added to the liquidation preference.

We have the option, but no obligation, to redeem the Series A Preferred Stock for cash. If we notify the holders that we have elected to redeem shares of Series A Preferred Stock, the holder may instead elect to convert such shares into shares of Class A Common Stock. If we fund the redemption with proceeds of an equity offering within one year of May 24, 2019 (the “Initial Closing Date”), then any converting shares will convert at a ratio that is based on the higher of the price to the public in the offering and the ordinary conversion price, which initially was $6.67. Otherwise, such converting shares will convert by reference to the ordinary conversion price. In any event, shares of Series A Preferred Stock converting in response to a redemption notice will net settle for a combination of cash and Class A Common Stock.

Following the first anniversary of the Initial Closing Date, each holder of Series A Preferred Stock may convert all or any portion of its shares of Series A Preferred Stock into Class A Common Stock based on the then-applicable liquidation preference, subject to anti-dilution adjustments, at any time, but not more than once per quarter, so long as any conversion is for at least $1 million based on the liquidation preference on the date of the conversion notice.

Following the third anniversary of the Initial Closing Date, we may cause the conversion of all or any portion of the Series A Preferred Stock into Class A Common Stock if (i) the closing price of the Class A Common Stock is greater than 130% of the conversion price for 20 days over any 30-day trading period; (ii) the average daily trading volume of the Class A Common Stock exceeded 250,000 for 20 days over any 30-day trading period; and (iii) we have an effective registration statement on file with the U.S. Securities and Exchange Commission covering resales of the underlying Class A Common Stock to be received upon such conversion.

Holders of shares of Series A Preferred Stock are entitled to receive cumulative dividends, compounding quarterly and payable in arrears, from the Initial Closing Date until the second anniversary of the Initial Closing Date, at an annual rate of 12.0% on the then-applicable liquidation preference, and thereafter, 16% of the liquidation preference. Dividends are payable, at our option, in cash from legally available funds or in kind by increasing the liquidation preference of the outstanding Series A Preferred Stock by the amount per share of the dividend on February 24, May 24, August 24, and November 24 of each year, commencing on August 24, 2019 

Election of Directors

Our Board is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors.

3

 

Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws

Certain Anti-Takeover Provisions of Delaware Law

We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

	
 
	
•
	
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);

	
 
	
•
	
an affiliate of an interested stockholder; or

	
 
	
•
	
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:

	
 
	
•
	
our Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;

	
 
	
•
	
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Common Stock; or

	
 
	
•
	
on or subsequent to the date of the transaction, the business combination is approved by our Board and authorized at a meeting of its stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Anti-Takeover Effects of Our Certificate of Incorporation and Bylaws

Staggered Board; Removal of Directors. The Certificate of Incorporation divides our Board into three classes with staggered three-year terms. In addition, the Certificate of Incorporation provides that directors may be removed only for cause and only by the affirmative vote of the holders of 66 2/3% of the voting power of all then outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class. Under the Certificate of Incorporation, any vacancy on our Board, including a vacancy resulting from an enlargement of our Board, may be filled only by vote of a majority of our directors then in office. Furthermore, the Certificate of Incorporation provides that the authorized number of directors may be changed only by the resolution of our Board. The classification of our Board and the limitations on the ability of our stockholders to remove directors, change the authorized number of directors and fill vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of us.

4

 

Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations. The Certificate of Incorporation and Bylaws provide that any action required or permitted to be taken by our stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders other than with respect to the Class B Common Stock and the Class F Common Stock, with respect to which action may be taken by written consent. The Certificate of Incorporation and Bylaws also provide that, except as otherwise required by law, special meetings of the stockholders can only be called by the Chairman of the Board, Chief Executive Officer, or the Board. In addition, the Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to our Board. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our Board, or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities. These provisions also could discourage a third party from making a tender offer for our Common Stock because even if the third party acquired a majority of our outstanding voting stock, it would be able to take action as a stockholder, such as electing new directors or approving a merger, only at a duly called stockholders meeting and not by written consent.

Super-Majority Voting. The DGCL provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage. The Bylaws may be amended or repealed by a majority vote of our Board or the affirmative vote of the holders of at least 66 2/3% of the voting power of all then outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class. In addition, the affirmative vote of the holders of at least 66 2/3% of the voting power of the then outstanding shares of capital stock entitled to vote is required to amend or repeal or to adopt any provisions inconsistent certain provisions of the Certificate of Incorporation described above.

Exclusive Forum Selection. The Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to us or our stockholders, (iii) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws, or (iv) any action asserting a claim against the Company, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. Although the Certificate of Incorporation contains the choice of forum provision described above, we do not expect this choice of forum provision will apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, or any other claim for which federal courts have exclusive jurisdiction.

Authorized but Unissued Capital Stock.  Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of Nasdaq, which would apply so long as the Class A Common Stock remains listed on Nasdaq, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of Class A Common Stock. Authorized shares may be issued for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

One of the effects of the existence of unissued and unreserved Class A Common Stock or Preferred Stock may be to enable our Board to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of Class A Common Stock at prices higher than prevailing market prices.

5

 

Description of Warrants

General

As of March 2, 2020, there were outstanding warrants exercisable for 12,747,318 shares of the Class A Common Stock, consisting of (i) Public Warrants (as defined below) exercisable for an aggregate of 4,997,318 shares of the Class A Common Stock issued pursuant to the 2017 Warrant Agreement entered into in connection with our initial public offering; (ii) Private Placement Warrants (as defined below) exercisable for an aggregate of 7,750,000 shares of the Class A Common Stock issued in a private placement that closed simultaneously with the closing of our initial public offering; and (iii) warrants exercisable for an aggregate of 2,933,333 shares of the Class A Common Stock issued pursuant to the Purchase Agreement dated as of May 23, 2019 (the “Series A Purchase Agreement”), between the Company and the purchasers of the Series A Preferred Stock. Subject to there being shares of Series A Preferred Stock outstanding, the Company will issue an aggregate of 488,888 additional warrants in quarterly installments beginning nine months after the Initial Closing Date pursuant to the Series A Purchase Agreement. As of March 2, 2020, there were 9,994,635 Public Warrants and 15,500,000 Private Placement Warrants outstanding, which are exercisable for an aggregate of 12,747,318 shares of Class A Common Stock and 2,933,333 warrants issued pursuant to the Series A Purchase Agreement, which are exercisable for 2,933,333 shares of Class A Common Stock.

Public and Private Placement Warrants

We issued (i) an aggregate of 32,500,000 warrants to purchase shares of the Class A Common Stock pursuant to the 2017 Warrant Agreement entered into in connection with our initial public offering (the “Public Warrants”) and (ii) an aggregate of 15,500,000 warrants to purchase shares of the Class A Common Stock issued in a private placement that closed simultaneously with the closing of our initial public offering (the “Private Placement Warrants,” and, together with the Public Warrants, the “Public and Private Placement Warrants”). 

Each outstanding Public or Private Placement Warrant entitles the registered holder to purchase one-half of one share of the Class A Common Stock at a price of $5.75 per half share, subject to adjustment. The outstanding Public and Private Placement Warrants will expire five years after the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. We may call the outstanding Public and Private Placement Warrants for redemption:

	
 
	
•
	
in whole and not in part;

	
 
	
•
	
at a price of $0.01 per warrant;

	
 
	
•
	
upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and

	
 
	
•
	
if, and only if, the last sale price of the Class A Common Stock equals or exceeds $24.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders

If we call the Public and Private Placement Warrants for redemption as described above, we will have the option to require all holders that wish to exercise Public or Private Placement Warrants to do so on a “cashless basis.” If we take advantage of this option, each holder would pay the exercise price by surrendering the Public or Private Placement Warrants for that number of shares of the Class A Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of the Class A Common Stock underlying such warrants, multiplied by the difference between the exercise price of such warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. If we take advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of Class A Common Stock to be received upon exercise of the Public and Private Placement Warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will 

6

 

reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. If we call the Public and Private Placement Warrants for redemption and we do not take advantage of this option, Matlin & Partners Acquisition Sponsor LLC and its permitted transferees would still be entitled to exercise their Public or Private Placement Warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their Public or Private Placement Warrants on a cashless basis. The Private Placement Warrants will not be redeemable by us so long as they are held by the initial holders or their permitted transferees. If holders of such Private Placement Warrants elect to exercise them on a cashless basis, they would pay the exercise price using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis.

The exercise price, the redemption price and number of shares of Class A Common Stock issuable on exercise of the outstanding Public and Private Placement Warrants may be adjusted in certain circumstances including in the event of a stock dividend, stock split, extraordinary dividend, or recapitalization, reorganization, merger or consolidation. However, the exercise price and number of Class A Common Stock issuable on exercise of the Public and Private Placement Warrants will not be adjusted for issuances of Class A Common Stock at a price below the warrant exercise price.

The outstanding Public and Private Placement Warrants were issued in registered form under the 2017 Warrant Agreement. The Public and Private Placement Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of Public and Private Placement Warrants being exercised. The warrant holders do not have the rights or privileges of holders of Class A Common Stock and any voting rights until they exercise their Public or Private Placement Warrants and receive shares of Class A Common Stock. After the issuance of shares of Class A Common Stock upon exercise of the Public and Private Placement Warrants, each holder will be entitled to one vote for each share of Class A Common Stock held of record on all matters to be voted on by our stockholders.

No outstanding Public and Private Placement Warrants will be exercisable unless at the time of exercise a prospectus relating to Class A Common Stock issuable upon exercise of the Public and Private Placement Warrants is current and available throughout the 30-day redemption period and the Class A Common Stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants.

Public and Private Placement Warrants may be exercised only for a whole number of shares of Class A Common Stock. No fractional shares of Class A Common Stock will be issued upon exercise of the outstanding Public and Private Placement Warrants. If, upon exercise of the Public and Private Placement Warrants, a holder would be entitled to receive a fractional interest in a share of Class A Common Stock, we will, upon exercise, round up to the nearest whole number the number of shares of Class A Common Stock to be issued to the warrant holder.

Purchase Agreement Warrants

Each warrant issued pursuant to the Series A Purchase Agreement entitles the registered holder to purchase the number of shares of the Class A Common Stock stated in such warrant at a price of $7.66 per share, subject to adjustment as discussed below, at any time commencing on the date that is six months and one day after the Initial Closing (the “Exercisable Date”). Warrants must be exercised for a whole share. The warrants will expire on the sixth anniversary of the Exercisable Date, at 5:00 p.m., New York City time.

No warrant will be exercisable, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares of Class A Common Stock upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.

7

 

If the number of outstanding shares of Class A Common Stock is increased by a stock dividend payable in shares of Class A Common Stock, or by a split-up of shares of Class A Common Stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Class A Common Stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Class A Common Stock. A rights offering to holders of Class A Common Stock entitling holders to purchase shares of Class A Common Stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of Class A Common Stock equal to the product of (i) the number of shares of Class A Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A Common Stock) multiplied by (ii) one minus the quotient of (x) the price per share of Class A Common Stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A Common Stock, in determining the price payable for Class A Common Stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A Common Stock as reported during the ten trading day period ending on the trading day prior to the first date on which the shares of Class A Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of Class A Common Stock on account of such shares of Class A Common Stock (or other shares of our capital stock into which the warrants are convertible), other than as described above, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Class A Common Stock in respect of such event.

If the number of outstanding shares of the Class A Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Class A Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Class A Common Stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Class A Common Stock.

Whenever the number of shares of Class A Common Stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Class A Common Stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Class A Common Stock so purchasable immediately thereafter.

In case of any reclassification or reorganization of the outstanding shares of Class A Common Stock (other than those described above or that solely affects the par value of such shares of Class A Common Stock), or in the case of any merger or consolidation of us with or into another entity (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of Class A Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of the Class A Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had held a number of shares of Class A Common Stock equal to the aggregate of the shares of Class A Common Stock purchasable upon exercise of their warrants immediately prior to such event (the “Alternative Issuance”). However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger, and if a tender, exchange or redemption offer has been made to and accepted by such holders under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of 

8

 

the outstanding shares of Class A Common Stock, (i) the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had held a number of shares of Class A Common Stock equal to the aggregate of the shares of Class A Common Stock purchasable upon exercise of their warrants prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the 2019 Warrant Agreement and (ii) if we are not the issuer of the securities constituting the Alternative Issuance, then we and such issuer(s) will take such action so as to ensure the availability of Section 3(a)(9) under the Securities Act for any issuance of such securities upon the exercise of the warrants and the tacking of the “holding period” under Rule 144 under the Securities Act for the warrants to such securities. Additionally, if less than 70% of the consideration receivable by the holders of Class A Common Stock in such a transaction is payable in the form of Class A Common Stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the 2019 Warrant Agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the 2019 Warrant Agreement) of the warrant.

The warrants were issued in registered form under the 2019 Warrant Agreement. The 2019 Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 75% of the then outstanding warrants issued pursuant to the Series A Purchase Agreement to make any change that adversely affects the interests of the registered holders of warrants.

The warrants may be exercised upon the surrender of the certificate evidencing such warrant on or before the expiration date at the offices of the warrant agent, with the subscription form, as set forth in the warrants, duly executed, for that number of shares of Class A Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A Common Stock underlying the warrants to be exercised, multiplied by the difference between the exercise price of the warrants per share and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” means the volume weighted average price of the Class A Common Stock as reported during the ten (10) trading day period ending on the second trading day prior to the date on which the notice of warrant exercise or redemption is sent.

The warrant holders do not have the rights or privileges of holders of Class A Common Stock and any voting rights until they exercise their warrants and receive shares of Class A Common Stock. After the issuance of shares of Class A Common Stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Warrants may be exercised only for a whole number of shares of Class A Common Stock. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Class A Common Stock to be issued to the warrant holder.

 

9EX-4.2

 Exhibit 4.2 

BARCLAYS PLC 
  

 
 RULES OF THE

 BARCLAYS GROUP DEFERRED SHARE VALUE PLAN 
  

 
 Adopted by the
Board Remuneration Committee of Barclays PLC on 8 February 2017 
 and amended by the Barclays Group Share Schemes Committee on
22 May 2018 and by 
 the Board Remuneration Committee of Barclays PLC on 4 February 2020 

 CONTENTS 
  

							
	Rule	 	 	  	Page	 
			
	 1.
	 	Definitions and Interpretation	  	 	1	 
			
	 2.
	 	Grant of Awards	  	 	3	 
			
	 3.
	 	Vesting of Awards	  	 	4	 
			
	 4.
	 	Consequences of Vesting	  	 	6	 
			
	 5.
	 	Vesting After Cessation of Employment	  	 	7	 
			
	 6.
	 	Take-over and Liquidation	  	 	8	 
			
	 7.
	 	Variations in the Share Capital of the Company	  	 	9	 
			
	 8.
	 	Administration of the Plan	  	 	9	 
			
	 9.
	 	Amendment of the Plan	  	 	9	 
			
	 10.
	 	Forfeitable Securities	  	 	9	 
			
	 11.
	 	Cash Alternative	  	 	10	 
			
	 12.
	 	General Provisions	  	 	10	 
		
	 Schedule 1 – Special Provisions Schedule
	  	 	18	 
		
	 Schedule 2 Cash Awards
	  	 	21	 

	1.	 DEFINITIONS AND INTERPRETATION 

 

	1.1	 In the Plan, unless the context otherwise requires: 

“Adoption Date” means 8 February 2017 being the date on which the Plan was adopted by the Committee; 

“Award” means a Conditional Award, a Forfeitable Award, an Option, a Provisional Allocation or such other form of award as
determined by the Committee on or before the Award Date which may relate to Shares or to Capital Instruments; 
 “Award
Date” means in relation to an Award the date specified as such by the Committee in the Award Letter; 
 “Award
Letter” means a letter containing the information specified in Rule 2.2 in such form as may be prescribed from time to time by the Committee provided to a Participant informing the Participant of the grant of an Award to him; 

“Board” means the board of directors for the time being of the Company or a duly authorised committee of the Board or a duly
authorised person; 
 “Capital Instrument” means a capital instrument or security issued by a member of the Group from time
to time; 
 “Cash Award” means an Award which relates to a cash sum granted under Schedule 2 to the Plan; 

“Committee” means the remuneration committee for the time being of the Board (or a duly authorised committee thereof or person
or persons duly authorised by the remuneration committee to exercise any of its powers or duties under the Plan) empowered to act on behalf of the Company for all purposes in connection with the Plan or, if there is no such committee in existence at
the relevant time, the Board, save that, should any person obtain Control of the Company, the Committee shall mean the members of the Committee immediately before such Control is obtained; 

“Company” means Barclays PLC (registered no. 48839); 

“Conditional Award” means a conditional right to acquire Securities granted under the Plan; 

“Control” means control within the meaning of section 995 of the Income Tax Act 2007; 

“Coupon” means an amount paid as interest or a similar payment in respect of Capital Instruments subject to an Award over all
or part of the Vesting Period; 
 “Coupon Equivalent” means an amount that the Committee may determine to add to a Vesting
Portion on a Vesting Date which is equal to the value of any Coupons paid on the Capital Instruments subject to an Award which would have been paid to the Participant in respect of the Capital Instruments acquired on the exercise of an Option or
Vesting of a Conditional Award or Provisional Allocation between the Award Date and the date on which the Option first became exercisable or the Conditional Award or Provisional Allocation Vested as the case may be, had those Capital Instruments
been beneficially owned by the Participant during that period; 
 “Dividend Shares” means a number of Shares equal to the
value of dividends paid on the Shares subject to an Award over all or any part of the Vesting Period and which may be added to a Vesting Portion on a Vesting Date as determined by the Committee; 

“Eligible Employee” means any person who is an employee or former employee of any member of the Group and who is deemed to be
eligible to participate by the Committee PROVIDED THAT a person shall not be eligible to participate in the Plan if he is a director of the Company; 

  
 - 1 - 

 “Employer” means the employing company of an Eligible Employee or a
Participant, as the context so requires; 
 “Forfeitable Award” means the transfer of the beneficial interest in Forfeitable
Securities to a Participant and the subsequent holding of that interest in accordance with the Plan; 
 “Forfeitable
Securities” means Securities comprised in a Forfeitable Award which are subject to certain restrictions and forfeiture under the Plan; 

“Group” means the Company and all of its Subsidiaries and the expression “member of the Group” shall be
construed accordingly; 
 “Involved in an Investigation” means: 

 

	 	(a)	 where a current or former employee: 

 

	 	(i)	 is suspended from employment or placed on paid leave in connection with a disciplinary or regulatory matter
(whether internal or external); or 

  

	 	(ii)	 is the subject of, undergoing or involved in an investigation in connection with a disciplinary or regulatory
matter (whether internal or external); or 

  

	 	(iii)	 by virtue of his or her line management responsibilities could become the subject of, undergo or become
involved in an investigation in connection with a disciplinary or regulatory matter (whether internal or external); or 

  

	 	(b)	 any other category of employee or former employee as determined by the Committee from time to time in its
discretion; 

 “Option” means a right to acquire Securities granted under the Plan which is designated as
an option by the Committee under Rule 2.2; 
 “Option Price” means the amount, if any, payable on the exercise of an Option;

 “Participant” means an Eligible Employee who has been granted an Award or, where applicable, his personal representative;

 “Participating Companies” means the Company and other members of the Group which have been nominated by the Committee to
participate in the Plan; 
 “Performance Condition” means a condition related to performance which is specified by the
Committee under Rule 2.2; 
 “Plan” means the Barclays Group Deferred Share Value Plan as constituted by these rules and as
amended from time to time in accordance with the provisions hereof; 
 “Provisional Allocation” means a provisional award of
Securities which does not constitute the acquisition by a Participant of an interest in the Securities awarded to him or the acquisition of a right to acquire those Securities; 

“Risk Committee” means the Barclays Group Risk Committee (or a duly authorised committee thereof or a duly authorised person);

 “Rules” means the rules of the Plan as set out in this document and “Rule” shall be construed
accordingly; 
 “Securities” means Shares or Capital Instruments as the context so requires; 

  
 - 2 - 

 “Shares” means ordinary shares in the capital of the Company or such other
class of shares as may represent the same as a result of any reorganisation, reconstruction or other variation of the share capital of the Company to which the provisions of the Plan may apply from time to time PROVIDED THAT if a corporate
event described in Rule 6 occurs, references to “Shares” in Rules 3 to 6 inclusive shall include any consideration received for any such shares under an Award which may otherwise have Vested; 

“Special Provisions Schedule” means Schedule 1 to the Plan; 

“Subsidiary” means any company which is a subsidiary of the Company within the meaning of section 1159 of the Companies Act
2006; 
 “US Participant” means a Participant who (i) is resident in, or a citizen or green card holder of, the United
States of America on the Award Date, (ii) is otherwise subject to US taxation on the Award Date or (iii) becomes subject to US taxation prior to exercise or Vesting of an Award; 

“Vest” means: 
  

	 	(a)	 in relation to a Conditional Award, a Participant becoming entitled to have Securities transferred to him (or
his nominee account) subject to the Rules; 

  

	 	(b)	 in relation to an Option, it becoming exercisable; 

 

	 	(c)	 in relation to a Forfeitable Award, the restrictions imposed on the Forfeitable Securities under the Plan
ceasing to apply; 

  

	 	(d)	 in relation to a Provisional Allocation, the Committee determining in its absolute discretion to release some
or all of the Securities subject to the Provisional Allocation, 

 and “Vesting” shall be construed
accordingly; 
 “Vesting Date” means such date as the Committee shall in its absolute discretion determine in relation to a
Vesting Portion of an Award; 
 “Vesting Period” means the period from the Award Date to the final Vesting Date specified in
the Award Letter; and 
 “Vesting Portion” means such percentage of the Securities subject to an Award (rounded down to the
nearest whole Security) as may Vest on or about any Vesting Date as set out in the Award Letter. 
  

	1.2	 Any reference in the Plan to a statutory provision shall include a reference to that provision as amended or re-enacted from time to time. Where the context permits the singular shall include the plural and vice versa and the masculine gender shall include the feminine. 

 

	2.	 GRANT OF AWARDS 

 

	2.1	 Subject to the limitations specified in this Rule 2, the Committee may in its absolute discretion grant any
Eligible Employee an Award in accordance with the Rules and if relevant modified by the Special Provisions Schedule and on such additional terms as the Committee may specify at the time of grant. For the avoidance of doubt, an Award may not be
granted to a person who is not an Eligible Employee. 

  

	2.2	 The Committee shall as soon as reasonably practicable on or after the Award Date notify the Eligible Employee
of the grant of the Award in writing in an Award Letter. The Award Letter shall specify (without limitation): 

  

	 	(a)	 the form of the Award; 

  
 - 3 - 

	 	(b)	 the number of Securities in respect of which the Award is granted or the formula by which such number may be
found; 

  

	 	(c)	 the Award Date; 

  

	 	(d)	 whether the Award is subject to any Performance Condition(s); and 

 

	 	(e)	 details of the applicable Vesting Date(s) and Vesting Portion(s). 

 

	2.3	 The number of Securities in respect of which an Award is to be granted shall be calculated by the Committee.

  

	2.4	 There shall be no consideration payable for the grant of an Award. 

 

	2.5	 The grant of any Award shall be subject to obtaining any approval or consent required under the United Kingdom
Listing Authority Listing Rules, any relevant securities dealing code of the Company, the City Code on Takeovers and Mergers and any other relevant UK or overseas regulation or enactment. 

 

	2.6	 An Award may be granted: 

 

	 	(a)	 in the 6 weeks beginning with: 

 

	 	(i)	 the date on which the Plan is adopted by the Committee; or 

 

	 	(ii)	 the dealing day after the date on which the Company announces its results for any period; or

  

	 	(iii)	 the removal of any restrictions imposed on the Committee or the Company which prevented an Award from being
granted in the period mentioned in (ii); or 

  

	 	(iv)	 the date on which changes to any legislation or regulations affecting the Plan are announced or made; or

  

	 	(b)	 at any other time when the Committee so decides, provided that it is not restricted from granting Awards at
that time by law or regulation 

 but an Award may not be granted after [●] 2027 (that is, the expiry of the period
of 10 years beginning with the date on which the Plan is adopted by the Committee). 
  

	2.7	 Any Award granted to a Participant is personal to him and shall not be capable of being transferred or
otherwise disposed of by a Participant. Any such Award shall lapse immediately if it is so transferred, purported to be transferred or otherwise disposed of or if the Participant is adjudged bankrupt. 

 

	2.8	 Except in the case of Forfeitable Awards, until an Award Vests, a Participant shall not be entitled to any
dividends or other distributions made in respect of the Securities awarded to him and shall have no right to vote in respect of the Securities subject to his Award. 

 

	2.9	 An Award of Shares may only be satisfied by the transfer of Shares (other than the transfer of treasury
Shares). 

  

	2.10	 An Award of Capital Instruments may only be satisfied by the transfer of Capital Instruments.

  

	3.	 VESTING OF AWARDS 

 

	3.1	 Subject to the remainder of Rule 3 and Rules 5 and 6 and to the satisfaction of any Performance Condition
attaching to an Award, the relevant Vesting Portion of an Award (provided it is not a Provisional Allocation) and any Dividend Shares or Coupon Equivalent (if applicable) shall Vest in

  
 - 4 - 

	 	
accordance with Rule 4 on the Vesting Date. In the case of a Provisional Allocation, the Committee shall, in its absolute discretion, determine whether the Vesting Portion shall Vest on the
Vesting Date in accordance with Rule 4. 

  

	3.2	 Subject to Rules 3.3, 3.4, 3.6 and 5 and to the satisfaction of any Performance Condition attaching to an
Award, if on any Vesting Date the Participant is not an employee of the Group, the Committee may in its absolute discretion and in accordance with Rule 4 allow: 

 

	 	(a)	 the relevant Vesting Portion and any Dividend Shares or Coupon Equivalent (if applicable) to Vest on its
Vesting Date; or 

  

	 	(b)	 a lower number of such Securities and any Dividend Shares or Coupon Equivalent (if applicable) to Vest; or

  

	 	(c)	 no Securities, Dividend Shares or Coupon Equivalent at all to Vest. 

 

	3.3	 Notwithstanding any other provision of the Plan, and irrespective of whether any Performance Condition attached
to an Award has been satisfied, if the Committee determines in its absolute discretion that the underlying financial health of the Group has significantly deteriorated over the whole or any part of the Vesting Period, such that there are severe
financial constraints on the Group which preclude or limit the Group’s ability to facilitate funding of Awards then: 

  

	 	(a)	 the Committee may at its absolute discretion determine that any Vesting Portion and/or Dividend Shares or
Coupon Equivalent (if any) that may otherwise Vest may be limited, reduced (to nil if appropriate) and/or made subject to any other condition as the Committee considers at its absolute discretion appropriate; and 

 

	 	(b)	 in the absence of any determination by the Committee under Rule 3.3(a), the Vesting of any Vesting Portion
and/or Dividend Shares or Coupon Equivalent (if any) that may otherwise Vest (including any Securities not released as the result of the exercise of discretion by the Committee under Rule 3.3 (a)) shall be suspended until such time as the Committee
lifts such suspension or exercises its discretion under Rule 3.3(a) PROVIDED THAT to the extent that the Committee has not lifted such suspension or exercised its discretion under Rule 3.3(a) within 3 years from the date specified at the
Award Date as the final Vesting Date of an Award which remains outstanding and in respect of which Vesting of any Vesting Portion and/or Dividend Shares or Coupon Equivalent (if any) remains suspended under this Rule 3.3(b), all such Awards shall be
forfeited and lapse in their entirety, unless the Committee, in exceptional circumstances, determines otherwise. 

  

	3.4	 Notwithstanding any other provision of the Plan, and irrespective of whether any Performance Condition attached
to an Award has been satisfied, the Committee may, in its absolute discretion, determine that any Vesting Portion and/or Dividend Shares or Coupon Equivalent (if any) may be reduced (to nil if appropriate) at any time at its discretion, including
(but without limitation) as a result of: 

  

	 	(a)	 the Group or any Subsidiary’s financial statements having been materially restated at any time whether
before or during the Vesting Period other than restatement due to a change in accounting policy or to rectify a minor error; 

  

	 	(b)	 the Group or any business unit having suffered a material downturn in its financial performance at any time
whether before or during the Vesting Period; 

  

	 	(c)	 the Participant having, in the reasonable opinion of the Committee, following consultation with his Employer,
deliberately misled the management of the Company, the market and/or the Company’s shareholders regarding the financial performance of the Group or of any Subsidiary at any time whether before or during the Vesting Period;

  
 - 5 - 

	 	(d)	 the Participant’s actions at any time whether before or during the Vesting Period having, in the
reasonable opinion of the Committee, following consultation with his Employer, caused harm to the reputation of the Group and/or the Participant’s business unit; 

 

	 	(e)	 the Participant’s actions at any time whether before or during the Vesting Period having, in the
reasonable opinion of the Committee, following consultation with his Employer, amounted to misconduct or a material error; 

  

	 	(f)	 the Group or the business in which the Participant works having, in the reasonable opinion of the Committee,
following consultation with the Risk Committee, suffered a material failure of risk management whether before or during the Vesting Period; 

  

	 	(g)	 the Participant’s actions having, in the reasonable opinion of the Committee, following consultation with
his Employer, amounted to negligence, incompetence or poor performance at any time whether before or during the Vesting Period; or 

  

	 	(h)	 any other matter which, in the reasonable opinion of the Committee, is required to be taken into account to
comply with prevailing legal and / or regulatory requirements, which for the avoidance of doubt, includes any regulations or guidance published by a regulator from time to time. 

For the purposes of this Rule 3.4, the determination of what constitutes “negligence”, “incompetence”, “poor
performance” and “misconduct” shall be determined by the Committee acting in good faith, following consultation with the Employer. 
  

	3.5	 If a Participant relocates to another jurisdiction before his Award Vests and, as a result of the relocation,
the Participant or any member of the Group would be subject to additional tax or social security on the Vesting of the Award or the Vesting of the Award in that other jurisdiction would be subject to any regulatory restriction, approval or consent,
the Committee may determine that the Award may: 

  

	 	(a)	 vest on such terms and during such period preceding the date on which the Participant relocates as the
Committee may determine; or 

  

	 	(b)	 lapse and be replaced by the grant of such other form of Award as the Committee may specify.

  

	3.6	 Notwithstanding any other provision of the Plan, and irrespective of whether any Performance Condition attached
to an Award has been satisfied, if, at the time that an Award is due to Vest, a Participant is Involved in an Investigation then the Committee in its absolute discretion, following consultation with his Employer, may determine that any Vesting of
any Vesting Portion and/or Dividend Shares or Coupon Equivalent (if any) shall be suspended until such time as the Committee lifts such suspension and exercises its discretion to allow the Award to Vest or otherwise reduces the Award (to nil, if
appropriate) in accordance with Rule 3.4 PROVIDED THAT if a Participant ceases to be employed by the Group in accordance with Rule 5.4 then the Award shall lapse in its entirety unless the Committee, in exceptional circumstances,
determines otherwise as permitted by Rule 5.4 and/or PROVIDED FURTHER THAT to the extent that the Committee has not lifted such suspension or exercised its discretion under this Rule 3.6 within 5 years from the date of any such suspension,
then all such Awards shall be forfeited and lapse in their entirety, unless the Committee, in exceptional circumstances, determines otherwise. 

  

	4.	 CONSEQUENCES OF VESTING 

 

	4.1	 In the case of a Conditional Award, the Committee shall, subject to the remainder of this Rule 4, transfer or
procure the transfer of the Vesting Portion of the Award to the Participant or his nominee account on or as soon as reasonably practicable after the relevant Vesting Date. 

 

	4.2	 In the case of an Option, the Option shall, subject to the remainder of this Rule 4, be exercisable in respect
of Securities subject to the Vesting Portion for a period determined by the Committee at the 

  
 - 6 - 

	 	
Award Date in its absolute discretion, but being a period of no longer than 10 years from the Award Date, starting with the relevant Vesting Date unless it lapses earlier under Rules 5 or 6. If
an Option is not exercised during the last 30 days of that period because of any regulatory restrictions, the Committee may extend the period during which the Option may be exercised so as to permit the Option to be exercised as soon as those
restrictions cease to apply. 

  

	4.3	 In the case of a Forfeitable Award, the Vesting Portion of the Forfeitable Securities shall cease to be subject
to the restrictions imposed on those Forfeitable Securities under the Plan and the Committee shall, subject to the remainder of this Rule 4, transfer or procure the transfer of the legal title to those Forfeitable Securities and/or any documents of
title relating to those Forfeitable Securities to the Participant or his nominee account on or as soon as reasonably practicable on or around the relevant Vesting Date. 

 

	4.4	 In the case of a Provisional Allocation, if the Committee determines that any Securities under an Award shall
Vest pursuant to Rules 3, 5 or 6, the Committee shall as soon as reasonably practicable on or around the relevant Vesting Date transfer or procure the transfer to the Participant or his nominee account of the Vesting Portion in such form and manner
as the Committee shall from time to time prescribe in which case: 

  

	 	(a)	 the Committee shall inform the Participant of the release of Securities to him within 28 days of Vesting; and

  

	 	(b)	 the Participant shall from the date of such determination become beneficially entitled to such Securities and
shall have the right to receive all dividends or Coupons, as the case may be, paid on such Securities on or after their Vesting (net of any tax payable on such dividends or Coupon) and the right to vote or direct the voting in respect of such
Securities (where such Securities are Shares and those Shares are held by the trustees of an employee benefit trust established by the Company or any member of the Group and the trustees shall vote in accordance with any such instructions).

  

	4.5	 An Award shall not Vest unless and until the following conditions are satisfied: 

 

	 	(a)	 if the Committee so requires, the Participant shall enter into an election to be made jointly with his Employer
pursuant to section 431 of the Income Tax (Earnings and Pensions) Act 2003 for the Securities to be treated as if they are not restricted securities for the purposes of Chapter 2, Part 7, Income Tax (Earnings and Pensions) Act 2003;

  

	 	(b)	 subject to Rule 4.6, the Participant shall pay in such manner as the Committee may from time to time prescribe
any such additional amount of which the Committee may notify the Participant in respect of any deduction on account of tax or similar liabilities as may be required by law which may arise on the release of Securities to him; and

  

	 	(c)	 the Vesting of the Award or exercise of the Option and the transfer of Securities after such Vesting or
exercise would be lawful in all relevant jurisdictions and in compliance with the United Kingdom Listing Authority Listing Rules, any relevant securities dealing code of the Company, the City Code on Takeovers and Mergers and any other relevant UK
or overseas regulation or enactment. 

  

	4.6	 The Committee may sell, or procure the sale of, such number of Securities which have Vested to meet any
obligation of the Committee, any member of the Group or any other person to deduct tax or employees’ social security contributions or other tax withholding which may be required by law in any jurisdiction or which the Committee and/or the
Employer reasonably considers to be necessary or desirable in respect of the Vesting of an Award. 

  

	4.7	 An Award shall lapse in accordance with the Plan or to the extent that it does not Vest under the Plan. On the
lapse of all or any part of a Forfeitable Award, the beneficial interest (and, if appropriate, the legal interest) of the Forfeitable Securities in respect of which such Award has lapsed shall be transferred for no (or nominal) consideration to any
person specified by the Committee. 

  
 - 7 - 

	5.	 VESTING AFTER CESSATION OF EMPLOYMENT 

 

	5.1	 Subject to Rules 3.3, 3.4 and 3.6 and unless a Vesting Portion may Vest before its Vesting Date under Rules
5.2, 5.3, 5.4 and 6, a Vesting Portion may not Vest before the relevant Vesting Date. Any Vesting Portion which does not Vest shall lapse. 

  

	5.2	 Subject to Rules 3.3, 3.4 and 3.6, if a Participant dies his Award (provided it is not a Provisional
Allocation) shall, unless the Committee decides otherwise in exceptional circumstances, Vest on the earlier of its applicable Vesting Date and the date on which the Committee is notified of the death in accordance with Rule 4. In the case of a
Provisional Allocation, the Committee shall, in its absolute discretion, decide whether the Award should Vest. 

  

	5.3	 Subject to Rules 3.3, 3.4, 3.6 and 5.4, if a Participant ceases to be employed by the Group by reason of:

  

	 	(a)	 injury, disability or ill health; 

 

	 	(b)	 redundancy after the third anniversary of the Award Date; 

 

	 	(c)	 retirement with the agreement of his Employer; 

 

	 	(d)	 the company by which he is employed ceasing to be a member of the Group or the undertaking in which he is
employed being transferred to a transferee which is not a member of the Group; 

  

	 	(e)	 resignation after the third anniversary of the Award Date; or 

 

	 	(f)	 any other reason, and subject to any conditions as the Committee may, in its discretion, decide

 his Award (provided it is not a Provisional Allocation) shall, unless the Committee decides otherwise in exceptional
circumstances, Vest on the applicable Vesting Date for each Vesting Portion as set out in the Award Letter and in accordance with Rule 4 PROVIDED THAT if a Participant ceases to be employed by the Group before the Vesting Date of any Vesting
Portion the Committee may allow such unvested Vesting Portions as the Committee so decides to Vest on the date of such cessation. In the case of a Provisional Allocation, the Committee shall, in its absolute discretion, decide whether each Vesting
Portion should Vest. Any Vesting Portion which does not Vest shall lapse. 
  

	5.4	 If a Participant ceases to be employed by the Group due to resignation on or before the third anniversary of
the Award Date, dismissal for cause or gross misconduct or for any reason other than one of the events specified in Rules 5.2 or 5.3, his Award shall lapse unless the Committee in its absolute discretion in exceptional circumstances determines
otherwise in which case the Committee may release to the Participant each Vesting Portion on or after the applicable Vesting Date for each Vesting Portion as set out in the Award Letter and in accordance with Rule 4 PROVIDED THAT if a
Participant ceases to be employed by the Group before the Vesting Date for any Vesting Portion, the Committee may allow such unvested Vesting Portions as the Committee so decides to Vest on the date of such cessation. Any Vesting Portion which does
not Vest shall lapse. 

  

	5.5	 For the purposes of this Rule 5, a Participant shall be deemed to have ceased to be employed by a member of the
Group on the earlier of the day on which (i) the Participant gives notice of resignation or (ii) his employment terminates, unless the Committee decides otherwise in its absolute discretion. 

  
 - 8 - 

	6.	 TAKE-OVER AND LIQUIDATION 

 

	6.1	 Rule 6.2 shall apply if: 

 

	 	(a)	 any person obtains Control of the Company as a result of making: 

 

	 	(i)	 a general offer to acquire the whole of the issued share capital of the Company (other than that which is
already owned by such person) made on a condition such that if it is satisfied the person making the offer will have Control of the Company; or 

  

	 	(ii)	 a general offer to acquire all the Company’s ordinary shares (or such of those shares as are not already
owned by such person); or 

  

	 	(b)	 under section 899 of the Companies Act 2006 the Court sanctions a compromise or arrangement between the Company
and its creditors or its members which, if it becomes effective, will result in a person obtaining Control of the Company. 

  

	6.2	 Subject to Rules 3.3, 3.4 and 3.6, the Committee shall have absolute discretion to determine whether:

  

	 	(a)	 any Performance Condition should be waived or deemed to be satisfied; and/or 

 

	 	(b)	 any Awards should Vest early before their relevant Vesting Dates; and/or 

 

	 	(c)	 Awards should continue in the same or a revised form following the change of Control. 

 

	6.3	 Subject to Rules 3.3, 3.4 and 3.6, if the Company gives notice of a general meeting to consider a resolution
for the voluntary winding up of the Company (the “resolution”) the Committee shall allow Awards to Vest PROVIDED THAT any Vesting pursuant to this Rule 6.3 shall be conditional upon the resolution being duly passed. If the
resolution is defeated or withdrawn, the Award shall be unaffected. If the Committee allows Awards to Vest pursuant to this Rule 6.3, the Participant shall be entitled to share in the assets of the Company with existing holders of the Securities in
the same manner as if the Securities had been registered in his name before the resolution was passed. 

  

	6.4	 Subject to Rules 3.3, 3.4 and 3.6, if, in the opinion of the Committee, the Company will be affected by any
demerger, dividend in specie, special dividend or other transaction which will adversely affect the current or future value of any Award, the Committee may depending on the form of the Award, acting fairly, reasonably and objectively, allow all
unvested Awards to Vest on such event happening. 

  

	6.5	 On the commencement of any liquidation of the Company (subject to Rule 6.3 and otherwise than in connection
with a compromise or arrangement as referred to in paragraph (b) of Rule 6.1) the Award shall lapse. 

  

	6.6	 If any company (“Acquiring Company”) obtains Control of the Company as a result of making an
offer referred to in Rule 6.1 or a compromise or arrangement referred to in Rule 6.1 any Participant may, by agreement with the Acquiring Company, release any Award (“Old Award”) in consideration of the grant to him of an Award
(“New Award”) which is equivalent to the Old Award except that it will be over securities in the Acquiring Company or some other company. 

The Rules will apply to any New Award granted under this Rule 6.6 as if references to Securities were references to securities over which the
New Award is granted and references to the Company were references to the company whose securities are subject to the New Award. 
  

	7.	 VARIATIONS IN THE SHARE CAPITAL OF THE COMPANY 

 

	7.1	 In the event of any variation of the share capital of the Company or a demerger, special dividend or other
similar event which affects the market price of Securities to a material extent, the Committee may make such adjustment as it considers appropriate to the number of Securities subject to any Award and, in the case of an Option over Securities, the
Option Price. 

  
 - 9 - 

	8.	 ADMINISTRATION OF THE PLAN 

 

	8.1	 The Plan shall be administered by the Committee whose decision on any matter connected with the Plan shall be
final and binding. 

  

	8.2	 The Committee shall determine any dispute about the rights and obligations of any person under the Plan or any
question concerning the construction or interpretation or effect of the Plan or any other question in connection with the Plan and its determination shall be final, binding and conclusive on all persons. 

 

	9.	 AMENDMENT OF THE PLAN 

 

	9.1	 Notwithstanding any other provision of the Plan the Committee may at any time and from time to time in its
absolute discretion and without notice modify or amend, in whole or in part, any or all of the provisions of this Plan or suspend or terminate the Plan entirely, provided that no such modification or amendment may be made that would materially
adversely affect existing Awards, save in circumstances in which such amendment, modification, suspension or termination is deemed necessary to ensure consistency with Barclays remuneration policy and / or practices (as amended from time to time) or
to ensure the Group’s compliance with prevailing legal and / or regulatory requirements, which for the avoidance of doubt, includes any regulations or guidance published by a regulator from time to time. 

 

	10.	 FORFEITABLE SECURITIES 

On or before the grant of a Forfeitable Award, each Eligible Employee selected for such an Award must enter into an agreement with the Company
under the terms of which the Eligible Employee agrees: 
  

	10.1	 to have full beneficial ownership of the Securities; 

 

	10.2	 unless the Committee decides otherwise, to waive his right to all Coupons, cash and scrip dividends on his
Forfeitable Securities until Vesting; 

  

	10.3	 that he will not assign, transfer, charge or otherwise dispose of any Forfeitable Securities or any interest in
them until Vesting save as otherwise required by the Plan; 

  

	10.4	 if required by the Committee, to enter into any elections under Part 7 of ITEPA and any election to transfer or
any agreement to pay secondary Class 1 National Insurance Contributions (or their equivalents in any jurisdiction) in relation to his Forfeitable Securities; and 

 

	10.5	 to sign any documentation to give effect to the terms of the Forfeitable Award. 

 

	11.	 CASH ALTERNATIVE 

 

	11.1	 Where a Conditional Award or a Provisional Allocation Vests or where an Option has been exercised and Vested
Securities have not yet been transferred to the Participant (or his nominee account), the Committee may determine that, instead of acquiring such number of Vested Securities as the Committee may decide (but in full and final satisfaction of his
right (if any) to acquire those Securities), he shall be paid by way of additional employment income a sum equal to the cash equivalent (as defined in Rule 11.3) of that number of Securities in accordance with the following provisions of this Rule
11. 

  

	11.2	 Rule 11.1 shall not apply in relation to an Award made to a Participant in any jurisdiction where the presence
of Rule 11.1 would cause the grant of the Award to be unlawful or for it to fall outside any applicable securities law exclusion or exemption or adverse tax or social security contributions consequences for the Participant or any member of the Group
as determined by the Board provided that this Rule 11.2 shall apply only if its application would prevent the occurrence of a consequence referred to in this Rule 11.2. 

  
 - 10 - 

	11.3	 For the purpose of this Rule 11, the cash equivalent of a Security is: 

 

	 	(a)	 in the case of a Conditional Award or a Provisional Allocation, the market value of a Security on the day when
the Award Vests; and 

  

	 	(b)	 in the case of an Option, the market value of a Security on the day when the Option is exercised reduced by the
Option Price in respect of that Security. 

 Market value on any day shall be such value of a Security as the Committee
reasonably determines. 
  

	11.4	 As soon as reasonably practicable after the Committee has determined under Rule 11.1 that a Participant shall
be paid a sum in substitution for his right (if any) to acquire any number of Vested Securities the Company shall pay to him or procure the payment to him of that sum in cash and if he has already paid the Company for those Securities, the Company
shall return to him the amount so paid by him. 

  

	11.5	 There shall be deducted from any payment under this Rule 11 such amounts (on account of tax or similar
liabilities) as may be required by law or as the Committee may reasonably consider to be necessary or desirable. 

  

	12.	 GENERAL PROVISIONS 

 

	12.1	 Terms of employment 

The rights and obligations of any Participant under the terms of his employment with any member of the Group shall not be affected by his
participation in the Plan or any right which he may have to participate in it. Participants shall waive any and all rights to compensation or damages in consequence of the termination of employment for any reason whatsoever (and regardless of
whether such termination is lawful or unlawful) insofar as such rights arise or may arise from his ceasing to have rights under the Plan as a result of such termination. Participation in the Plan shall not confer a right to continued employment upon
any individual who participates in it. The grant of any Award under the Plan does not imply that any further Award will be granted nor that a Participant has any right to receive any further Award. The terms of the Plan are separate from and do not
form a term of or any part of or create any obligations or rights pursuant to an individual’s contract of employment. 
  

	12.2	 Tax and other similar liabilities 

Any liability of a Participant to taxation or social security contributions or similar liabilities in respect of an Award shall be for the
account of the relevant Participant. The Committee may make an Award and the release of Securities under it conditional on the Participant complying with arrangements specified by the Committee for the payment of any taxation, employees’ social
security contributions or employer’s social security obligations (including, without limitation, the deduction of taxation at source). 
  

	12.3	 Notices 

Any notice or other communication under or in connection with the Plan may be given by personal delivery, electronically or by sending the same
by post in the case of a company to its registered office, in the case of the Committee, to the registered office of the Company and in the case of an individual to his last known address, or, where he is an employee of any member of the Group,
either to his last known address or to the address of the place of business at which he performs the whole or substantially the whole of the duties of his employment. Where a notice or other communication is given by
first-class post, it shall be deemed to have been received 48 hours after it was put into the post properly addressed and stamped. 

  
 - 11 - 

	12.4	 Data Protection provisions 

If a Participant is employed outside the European Economic Area and consent is needed for the collection, processing or transfer of their
personal data under applicable local law, by participating in the Plan, the Participant gives their consent for the purposes of the Plan. 

For the purposes of compliance with the General Data Protection Regulation (EU) 2016/679, the Company will separately provide a Participant
with information on the collection, processing and transfer of their personal data, including the grounds for processing. 
  

	12.5	 Severability of Provisions 

If any provision in this Plan is for any reason held by any Court or other competent authority of any jurisdiction to be illegal, invalid or
unenforceable in whole or in part, the remaining provisions of this Plan shall continue to be valid and, if appropriate, the affected provision and the legality, validity or enforceability of such provision in any other jurisdiction shall be
unaffected. 
  

	12.6	 Third Parties 

No third party has any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan. 

 

	12.7	 Awards not Pensionable 

Awards, Securities and any other benefits provided under the Plan shall not be pensionable. 

 

	12.8	 Resolution of disputes 

Any dispute arising out of or in connection with the Plan, including any question regarding its existence, validity or termination, shall be
referred to and finally resolved by arbitration under the LCIA Rules, which rules are deemed to be incorporated by reference into this Rule. In the event of arbitration: 
  

	 	(a)	 the number of arbitrators shall be one; 

 

	 	(b)	 the seat, or legal place, of arbitration shall be London; 

 

	 	(c)	 the language to be used in arbitral proceedings shall be English. 

The Committee and, by accepting the Award, any Participant waive any right of application to determine a preliminary point of law or appeal on
a point of law under Sections 45 and 69 of the Arbitration Act 1996. 
  

	12.9	 Governing Law 

This Plan shall be construed, administered and governed in all respects under and by the law of England and Wales. 

  
 - 12 - 

 SCHEDULE 1: SPECIAL PROVISIONS SCHEDULE 

The Special Provisions Schedule takes effect as if the Rules were set out in it incorporating the following modifications. 

Words or phrases in this Schedule 1 shall have the same meaning as in Rule 1.1 except as provided below. Except as noted in this Schedule 1, the Rules apply
to Awards granted under this Schedule 1. 
  

	A.	 AWARDS FOR NEW JOINERS 

For Eligible Employees who are New Joiners and who are granted an Award under the Plan, the Rules are modified by deleting: 

 

	(a)	 Rule 5.3(e); and 

  

	(b)	 The words “on or before the third anniversary of the Award Date” in Rule 5.4. 

For the purposes of this Schedule 1, “New Joiners” means any person who on the relevant Award Date is an Eligible Employee by
reason of his having commenced employment within the Group in the six months (or such period as determined by the Committee) preceding the Award Date and who is determined to be a New Joiner by the Committee. 

 

	B.	 AWARDS TO OVERSEAS ELIGIBLE EMPLOYEES (NON-US)

  

	1.	 Brazil 

For Eligible Employees resident in Brazil, the Rules are modified by the deletion of the definition of “Award” in Rule 1.1 and its
replacement with the following: 
 ““Award” means a Conditional Award of Securities to Vest on the Vesting Dates applicable to
the Award or an Option to acquire Securities for no payment which shall become exercisable in respect of each Vesting Portion on its applicable Vesting Date for a period of 90 days following which any unexercised Vesting Portion shall lapse.”

  

	2.	 Spain 

For Eligible Employees resident in Spain, the Rules are modified so that Rule 5.3(e) shall not apply. 

 

	C.	 UNITED STATES SPECIAL PROVISIONS1

 The following shall apply for all US Participants who are Eligible Employees. Where a Participant becomes a US
Participant after the grant of an Award, such Award is modified in a manner consistent with these provisions. 
 Notwithstanding anything in
the Plan to the contrary, Awards granted to a US Participant shall be subject to the following provisions, as applicable: 
  

	(a)	 The Award Letter provided for Conditional Awards and Awards otherwise subject to section 409A of the United
States Internal Revenue Code of 1988, as amended (“Section 409A”) shall include the scheduled payment/settlement date(s) for such Award. 

  

	(b)	 The grant of Dividend Shares and Coupon Equivalents shall not apply to Options. 

 

	(c)	 Rule 3.2 (b) shall not apply unless the payment delay described in Rule 3.2(b) is legally required under
applicable law (within the meaning of US Treasury Regulation Section 1.409A-2(b)(7)(ii)) or the payment would otherwise would jeopardize the Company’s ability to continue as a “going
concern” (within the meaning of US Treasury Regulation Section 1.409A-3(d)). 

 

	1 	 No Awards in the form of nil-cost Options over Securities or other Options over Capital Instruments shall be
granted to US Participants. 

  
 - 13 - 

	(d)	 Notwithstanding anything to the contrary in Rule 3.5, if, at the time that an Award to a US Participant that is
subject to Section 409A (other than an Award under which a Participant is determined not to have a “legally binding right” within the meaning of Section 409A) is due to Vest, a Participant is Involved in an Investigation, then
the Committee may decide at its discretion to lapse any such Award. Thereafter, the Committee, at its absolute discretion, following consultation with the Participant’s Employer, may determine, within 5 years from the date of any such lapse,
whether to grant such Participant a new Award on terms as determined by the Committee. 

  

	(e)	 Notwithstanding anything to the contrary in the Rules, payment/settlement with respect to any:

  

	 	(i)	 Provisional Allocation or other Award that is exempt from Section 409A or any Dividend Shares or Coupon
Equivalents shall be made no later than 21⁄2 months following the end of the calendar year in which such Award or amount Vests; and 

 

	 	(ii)	 Conditional Award or any other Award that is subject to Section 409A shall be made as soon as practicable
following the scheduled payment/settlement date but in no event more than 30 days thereafter, except as otherwise permitted under Section 409A; provided, however, that to the extent a Participant dies before the scheduled Vesting Date(s), such
Participant’s Awards shall be paid/settled as soon as practicable following the date of death, but only to the extent then Vested. 

  

	(f)	 Notwithstanding anything in Rule 5.3 or Rule 6 to the contrary, in the case of a Conditional Award or other
Award that is subject to Section 409A, the provisions of Rule 5.3 or 6, as the case maybe, may be invoked to accelerate the Vesting of such Award but not the payment or settlement of such Award. Such Award shall be paid or settled on the
originally-scheduled payment/settlement date, unless otherwise permitted under Section 409A. 

  

	(g)	 Adjustments made pursuant to Rule 7 with respect to any Award granted to a US Participant shall be made in
accordance with US Treasury Regulation Section 1.409A-1(b)(5). 

  

	(h)	 To the extent that a Participant who has been granted an Option becomes subject to US taxation and his Option
is determined to have been granted with an option price less than “fair market value” on the Award Date as defined in US Treasury Regulation Section 1.409A-1(b)(5), his Option shall be
exercisable only as follows: (i) if the Option is Vested in the year that the Participant becomes subject to US taxation, the Option shall be exercisable only in the first calendar year after the year in which the Participant becomes subject to
US taxation; and (ii) if the Option is not Vested in the year that the Participant becomes subject to US taxation, the Option shall be exercisable only in the first calendar year after the year in which the substantial risk of forfeiture
(within the meaning of Section 409A) lapses. 

  

	(i)	 These provisions shall also apply to Cash Awards granted under Schedule 2 to the Plan to the same extent that
these provisions apply to other Conditional Awards, Provisional Allocations or Options. 

  

	(j)	 In the event that a Participant is a “specified employee” (within the meaning of US Treasury
Regulation Section 1.409A-1(i)) as of the date of the Participant’s “separation from service” (within the meaning of US Treasury Regulation
Section 1.409A-1(h)) and if any Award both (i) constitutes a “deferral of compensation” within the meaning of Section 409A and (ii) cannot be paid or provided in the manner
otherwise provided without subjecting the Participant to “additional tax”, interest or penalties under Section 409A, then, to the extent necessary to avoid penalties under Section 409A, no Award that is a deferral of compensation
shall be paid or settled prior to the first day of the seventh month following the Participant’s separation from service. 

  
 - 14 - 

 SCHEDULE 2: CASH AWARDS 

The Rules of the Plan shall apply to a Cash Award granted or to be granted under this Schedule as if it was a Conditional Award, an Option or a Provisional
Allocation over Securities as determined by the Committee, except as set out in this Schedule. References in the Rules of the Plan to Securities shall be read as references to a cash sum where the context so requires. Where there is any conflict
between the Rules and this Schedule, the terms of this Schedule shall prevail. 
  

	(a)	 The Committee may grant or procure the grant of a Cash Award. 

 

	(b)	 The Committee shall determine the form of a Cash Award (Conditional Award, Option or Provisional Allocation) on
or before the Award Date of that Cash Award. 

  

	(c)	 Each Cash Award shall relate to a given number of notional Securities. 

 

	(d)	 On or as soon as reasonably practicable after the Vesting of a Cash Award structured as a Conditional Award or
a Provisional Allocation, the holder of that Award shall be entitled to a cash sum which shall be equal to the “Cash Value” of the notional Vested Securities. 

 

	(e)	 A Cash Award structured as an Option shall be exercisable in respect of notional Vested Securities for a period
determined by the Committee at the Award Date in its absolute discretion (being a period of no longer than 10 years from the Award Date) beginning with the date on which the Cash Award Vests (unless it lapses earlier under Rule 5.4 or Rule 6).
Following the exercise of a Cash Award structured as an Option, the holder of that Award shall be entitled to a cash sum which shall be equal to the “Cash Value” of the notional Vested Securities less the Option Price (if any).

  

	(f)	 For the purposes of this Schedule: 

 

	 	(i)	 the Cash Value of a notional Security is the Market Value of a Security on the date of Vesting of a Cash
Award structured as a Conditional Award or a Provisional Allocation and on the date of exercise of a Cash Award structured as an Option; and 

  

	 	(ii)	 the Market Value of a Security on any day shall be determined in accordance with Rule 11.3.

  

	(g)	 Any cash sum payable under paragraphs (d) or (e) above shall be paid by the Employer as soon as
practicable after the Vesting of the Cash Award under paragraph (d) or its exercise under paragraph (e), net of any deductions (on account of any tax or social security or similar liabilities) as may be required by law. 

 

	(h)	 For the avoidance of doubt, a Cash Award shall not confer any right on the holder of such an Award to receive
Securities or any interest in Securities. 

  
 - 15 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}]]