Document:

EX-10.14

 Exhibit 10.14 

MEREO BIOPHARMA GROUP LIMITED 

SHARE OPTION SCHEME 

SCHEME RULES 
 (Adopted
by the Board on 8 July 2015) 

 RULES OF THE MEREO BIOPHARMA GROUP LIMITED 

SHARE OPTION SCHEME 

CONTENTS 
  

							
	 Rule
	 	 	  	 	 
	 1.
	 	 Definitions and Interpretation
	  	 	3	 
			
	 2.
	 	 Grant of Options
	  	 	6	 
			
	 3.
	 	 Vesting of Options
	  	 	7	 
			
	 4.
	 	 Scheme limits
	  	 	7	 
			
	 5.
	 	 Rights to Exercise Vested Options and Lapse of Options
	  	 	8	 
			
	 6.
	 	 Exercise of Vested Options – Takeover
	  	 	10	 
			
	 7.
	 	 Exercise of Vested Options - Admission
	  	 	11	 
			
	 8.
	 	 Exercise of Vested Options – Trade Sale
	  	 	11	 
			
	 9.
	 	 Winding up of Company
	  	 	11	 
			
	 10.
	 	 Exercise Price, Taxation etc.
	  	 	12	 
			
	 11.
	 	 Variation of Share Capital
	  	 	13	 
			
	 12.
	 	 Administration
	  	 	13	 
			
	 13.
	 	 Amendments
	  	 	14	 
			
	 14.
	 	 General
	  	 	14	 

  
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 RULES OF THE MEREO BIOPHARMA GROUP LIMITED 

SHARE OPTION SCHEME 
  

	1.	DEFINITIONS AND INTERPRETATION 

 In this
Scheme, the following words and expressions shall, where the context so permits, have the following meanings: 
  

			
	“Admission”	  	The admission of the Shares to the Official List of the United Kingdom Listing Authority or the granting of permission for the Shares to be dealt in on the Alternative Investment Market or any other recognised investment exchange
(as defined in Section 285 of the Financial Services and Markets Act 2000);
		
	“the Agreement”	  	the agreement in writing granting an Option pursuant to this Scheme entered into by an Employee and the Grantor in such form as the Board shall from time to time determine;
		
	“Board”	  	the board of directors for the time being of the Company or, if applicable, a duly authorised Committee thereof;
		
	“City Code”	  	the City Code on Takeovers and Mergers;
		
	“the Company”	  	Mereo BioPharma Group Limited registered in England under number 09481161;
		
	“Connected Person”	  	the meaning given by Section 993 of the Income Tax Act 2007;
		
	“Control” and cognate expressions	  	the meaning given by Section 995 of the Income Tax Act 2007;
		
	“Date of Grant”	  	the date on which an Option is granted as evidenced by the Agreement;
		
	“Employee”	  	an individual who is a bona fide employee of a Group Company
		
	“Exercise Price”	  	the price determined by the Board at which each Share subject to an Option may be acquired (subject to Rule 11 - variation of share capital) and either:
		
		  	 (a)    specified at the Date of Grant;
or

  
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		  	 (b)    to be determined at a later date by reference to a formula specified
at the Date of Grant,

		
		  	provided that if Shares are to be subscribed, it may not be less than the nominal value of a Share;
		
	“Good Leaver”	  	an Optionholder who ceases to be a director or Employee of a Group Company and does not continue or thereupon become a director or Employee with a Group Company where such cessation occurs for one of the following
reasons:
		
		  	 a)      injury, ill health or disability (evidenced to the
satisfaction of the Board);

		
		  	 b)      redundancy (within the meaning of Part XI of the
Employment Rights Act 1996;

		
		  	 c)      the transfer of the undertaking or part-undertaking in
which the Optionholder is  employed to a person other than a Group Company; or

		
		  	 d)      the Company by which the Optionholder is employed ceasing
to be a Group  Company; or

		
		  	 e)      any other reason which the Board considers justifies such
cessation to be a “good  leaver” reason;

		
	“Grantor”	  	the Company or such other person who grants an Option under this Scheme;
		
	“Group Company”	  	the Company or any Subsidiary of the Company;
		
	“ITEP Act”	  	the Income Tax (Earnings and Pensions) Act 2003;
		
	“Option”	  	a right to acquire Shares pursuant to this Scheme;
		
	“Optionholder”	  	An individual to whom an Option has been granted which has neither lapsed nor been surrendered or exercised;
		
	“Personal Data”	  	any personal information which could identify an Optionholder including Options held under this Scheme or options held under any other employees’ share scheme operated by the Company or any other Group
Company.

  
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	“Personal Representatives”	  	in relation to the Optionholder the legal personal representatives of the Optionholder (being either the executors of the Optionholder’s will to whom a valid grant of probate has been made or if the Optionholder dies
intestate the duly appointed administrator(s) of the Optionholder’s estate) who have provided to the Board satisfactory evidence of their appointment as such;
		
	“Rules”	  	the rules of this Scheme as amended from time to time;
		
	“this Scheme”	  	the Mereo BioPharma Group Limited Share Option Scheme, as amended from time to time;
		
	“Shares”	  	fully paid Ordinary Shares of £0.001 each in the capital of the Company and the expression “Share” shall be construed accordingly;
		
	“Subsidiary”	  	any company which the Company Controls (on its own or together with any Connected Person);
		
	“Takeover”	  	means:-
		
		  	 a)      a person obtaining Control of the Company;

		
		  	 b)      a person becoming bound or entitled to acquire Shares
under Sections 979 to 985 of  the Companies Act 2006; or

		
		  	 c)      a Court, under section 899 of the Companies Act 2006,
sanctioning a compromise  or arrangement proposed for the purposes of or in connection with a scheme for the  reconstruction of the Company or its amalgamation with any other company or  companies,

		
		  	provided that, for the purposes of (a) above, a person shall be deemed to have obtained Control of the Company if he and others acting in concert with him have together obtained Control of it;
		
	“Taxes Act”	  	the Income and Corporation Taxes Act 1988;
		
	“Trade Sale”	  	the sale by the Company to a person, or to persons who in relation to each other are Connected Persons (other than a Subsidiary) or acting in concert within the meaning of the City Code, of assets or part of the undertaking of
the Company representing 51% or more of the assets or turnover or gross profits of the Company, other than as part of a scheme of reconstruction of the Company;

  
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	“Vest”	  	means in relation to an Option, and subject to the satisfaction (or waiver) of any conditions imposed pursuant to Rule 3.5, the crystallisation of the Optionholder’s right to exercise such Option (or part thereof) (and
“Vests”, “Vesting” and “Vested” shall be construed accordingly);
		
	“Vested Option”	  	an Option or part thereof which has Vested;
		
	“Vesting Schedule”	  	the Vesting Schedule attached to the Agreement.

 The Interpretation Act 1978 shall apply hereto as it does to an Act of Parliament. Any references to any
statutory provision are to that provision as amended or re-enacted from time to time. Unless the context otherwise requires, words in the singular shall include the plural and vice versa, and words importing
the masculine gender shall include the feminine and vice versa and the headings set out below are for guidance only and shall not be used as an aid to the construction of these provisions. 

 

	2.	GRANT OF OPTIONS 

  

	 	2.1	Subject to Rule 2.5, the Grantor may grant an Option to an Employee, director of any Group Company or consultant to the Group at any time. 

 

	 	2.2	The right to exercise an Option may be subject to conditions imposed by the Grantor in accordance with Rule 3.5. 

  

	 	2.3	As soon as practicable after the Grantor decides to grant an Option to an Employee the Grantor and the Employee shall enter into an enforceable agreement which shall state: 

 

	 	(a)	the Date of Grant of the Option; 

  

	 	(b)	the number, or maximum number, of Shares that may be acquired; 

  

	 	(c)	whether the Option is over issued or unissued shares or a combination; 

  

	 	(d)	the Exercise Price payable for each Share subject to the Option or the method by which that price is to be determined; 

  

	 	(e)	any conditions of exercise imposed by the Grantor pursuant to Rule 3.5; and 

  

	 	(f)	when and how the Option may be exercised. 

  

	 	2.4	Subject to the right of a deceased Optionholder’s Personal Representatives to exercise an Option in accordance with Rule 5.5, every Option shall be personal to the Employee to whom it is granted and shall not be
capable of being transferred, assigned or charged. 

  
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	 	2.5	An Option shall not be granted unless the Grantor is satisfied at the relevant time (if then applicable) that such grant would not be in breach of any applicable laws, codes or regulations relating to the acquisition of
securities by Employees including any internal code of the Company. 

  

	3.	VESTING OF OPTIONS 

  

	 	3.1	When granting an Option, the Grantor may, if in its discretion it thinks fit determine any date or dates prior to the day before the tenth anniversary of its Date of Grant on which the Option Vests in whole or in part,
and, where on any date only part Vests, the number of Shares in respect of which it so Vests. Such date or dates being set out in a Vesting Schedule attached to the relevant Agreement. 

 

	 	3.2	Subject to Rules 6 (Takeovers) and 8 (Trade Sale), no Option shall Vest or Vest further (as the case may be) following the date on which the Optionholder ceases to hold any office or employment with a Group Company.

  

	 	3.3	The Board may, if in its discretion it thinks fit, accelerate the Vesting of an Option under the Scheme. 

  

	 	3.4	Where in relation to any Option no Vesting Schedule has been imposed pursuant to Rule 3.1 that Option shall Vest in full at the Date of Grant. 

 

	 	3.5	In addition, the right to exercise an option may be conditional upon the satisfaction of an objective performance condition imposed by the Grantor at the Date of Grant as set out in the Option Agreement. At the
discretion of the Board, any such performance condition shall cease to apply in any of the circumstances set out in Rule 5.5 (Death), Rule 5.6 (leavers), Rule 6 (Takeovers) and Rule 8 (Trade Sale). 

 

	 	3.6	If, after the Grantor has imposed any performance condition pursuant to Rule 3.5, events occur which cause the Board to consider that such performance condition has become unreasonable, unfair or impractical, the
Grantor may in its discretion (provided that such discretion is exercised fairly and reasonably) amend, relax or waive such performance condition provided that any performance condition which is amended or relaxed will be no more difficult to
satisfy than when it was originally imposed or last amended or relaxed. 

  

	 	3.7	The Grantor shall notify all relevant Optionholders in writing of any amendment, relaxation or waiver of any performance condition made pursuant to Rule 3.6. 

 

	4.	SCHEME LIMITS 

 4.1    The maximum
number of Shares which may be placed under Option for subscription under this Scheme, when added to the number of Shares allocated for subscription under this or any other employee share scheme adopted by the Company, shall not exceed the limit set
out in the Subscription and Shareholders’ Agreement relating to the Company dated 28 July 2015. 

  
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	5.	RIGHTS TO EXERCISE AND LAPSE OF OPTIONS 

Time for exercise 
  

	 	5.1	No Option may be exercised unless and until it Vests and any performance condition specified in the Agreement pursuant to Rule 3.5 (as amended or relaxed or waived pursuant to Rule 3.6) has been satisfied and then, save
as provided in Rule 9, only on the occurrence of any of the following:- 

  

	 	5.1.1.	a Takeover (in accordance with Rule 6); or 

  

	 	5.1.2.	an Admission (in accordance with Rule 7); or 

  

	 	5.1.3.	a Trade Sale (in accordance with Rule 8). 

  

	 	5.2	In the event of an Admission, those Options which have not Vested at the time of the Admission shall continue to Vest in accordance with Rule 3.1 above. 

 

	 	5.3	The proportion of an Option which becomes exercisable in accordance with Rule 5.1 shall be exercisable in whole or in part on one or more occasions. 

 

	 	5.4	Save as provided in Rules 5.5, 5.6 and 9, a Vested Option may be exercised by an Optionholder only while he is an Employee. 

Death of the Optionholder 
  

	 	5.5.1	In the event that the Optionholder ceases to hold any office or employment with a Group Company by reason of his death, the Option may be exercised by the Personal Representatives of an Optionholder to the extent that
the Option has Vested at the date of death in accordance with Rule 5.1 during the period of one year from and including the date of death of the Optionholder and if not then exercised shall lapse and cease to be exercisable at the end of that period
of one year. 

  

	 	5.5.2	In the event that the Optionholder dies having ceased to hold any office or employment with a Group Company but before the Option has lapsed, the Option may be exercised by the Personal Representatives of the
Optionholder to the extent that the Option has Vested at the date of death in accordance with Rule 5.1 during the period of one year from and including the date of death of the Optionholder and if not then exercised shall lapse and cease to be
exercisable at the end of that period of one year. 

  
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 Cessation of Employment 

 

	 	5.6	If an Optionholder ceases to hold any office or employment with a Group Company and does not continue or thereupon become an employee or director with a Group Company the whole of the Option shall lapse (whether or not
Vested) unless the Optionholder is a Good Leaver in which event the Option to the extent that the Option has Vested at the date of cessation may be exercised in accordance with Rule 5.1 during such period as the Board shall determine and communicate
in writing to the Optionholder, following the expiration of which the Option shall lapse. 

 Lapse of Options 

 

	 	5.7	An Option (whether or not Vested) shall lapse on the occurrence of the earliest of the following:- 

  

	 	(a)	the day before the tenth anniversary of the Date of Grant; 

  

	 	(b)	the expiry of the period (if any) allowed for the satisfaction of any performance condition pursuant to Rule 3.5 and set out in the Agreement without such performance condition having been satisfied or the date on which
it comes apparent to the Board that any such performance condition has become incapable of being satisfied; 

  

	 	(c)	the expiry of the applicable period specified in Rules 5.5.1 and 5.5.2 (Death); 

  

	 	(d)	the date on which the Optionholder ceases to hold any office or employment with a Group Company or, if a director, ceases to be a director of any Group Company for any reason other than his death unless the Optionholder
is a Good Leaver in which event only Options that have not Vested at the date of cessation of employment shall lapse on the date of cessation of employment; 

  

	 	(e)	the end of the period which is the shorter of 40 days immediately following the completion of a Takeover or a Trade Sale or any compulsory acquisition period; 

 

	 	(f)	the expiry of the applicable periods specified in Rule 9 (Winding Up of the Company); 

  

	 	(g)	the date on which a resolution is passed, or an order is made by the Court, for the compulsory winding up of the Company; and 

  

	 	(h)	the date on which the Optionholder becomes bankrupt or does or omits to do anything as a result of which he is deprived of the legal or beneficial ownership of the Option. 

  
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 Miscellaneous Provisions 

 

	 	5.8.1	For the purposes of this Rule 5 the Optionholder ceases to hold office or employment with a Group Company: 

  

	 	(a)	if by reason of his resignation, on the date the Optionholder gives such notice of resignation; 

  

	 	(b)	if by reason of dismissal for cause, on the date the Optionholder receives such notice of dismissal; or 

  

	 	(c)	in any other case, on the date that the Optionholder no longer holds any office or employment with the Company or any Subsidiary. 

  

	 	5.8.2	A female Optionholder who is absent from her office or employment because of her pregnancy and who is entitled by contract or by virtue of Chapter I of Part VII of the Employment Rights Act 1996 to return to work, shall
be deemed for the purposes of these Rules not to have ceased to hold office or be employed by any Group Company until such time as the female Optionholder is no longer entitled to return to work. 

 

	 	5.8.3	An Optionholder who is absent from their office or employment because of any entitlement to parental leave either by contract or by virtue of Chapter II of Part VIII of the Employment Rights Act 1996 to return to work
shall be deemed for the purposes of these Rules not to have ceased to hold office or be employed by any Group Company until such time as the Optionholder is no longer entitled to return to work. 

 

	 	5.8.4	In their absolute discretion the Board may extend any period of 40 days referred to above (but not so as to exceed the day before the tenth anniversary of the Date of Grant and/or to extend the period specified in Rule
5.5 (Death)). 

  

	6.	EXERCISE OF VESTED OPTIONS - TAKEOVER 

  

	 	6.1.	In the event of a Takeover, all valid Options shall, to the extent not already Vested, immediately Vest in full and the Grantor shall give such notice, as it shall deem reasonable in the circumstances, to each
Optionholder who holds unexercised Options. Each such Optionholder shall be entitled, until the end of the period of 40 days immediately following the completion of a Takeover, to exercise any such Option by notice in writing (in the form prescribed
by the Grantor from time to time) given by the Optionholder (or his Personal Representatives as the case may be) to the Grantor. Any such acceleration of Vesting and the exercise of Options that have Vested shall be: 

 

	 	6.1.1	conditional upon the Takeover becoming unconditional in all respects (save for any condition relating to the transfer of Shares pursuant to the exercise of the Options); and 

 

	 	6.1.2	subject to the relevant Optionholders unconditionally accepting the terms of the Takeover on the same terms as the holders of other Shares. 

 

	 	6.2	Prior to the completion of the Takeover (but subject to Rules 10.1, 10.2 and 10.3) the Grantor shall allot or procure the transfer of the Shares in respect of which any Options have been validly exercised to the
relevant Optionholder and the Company shall issue a definitive certificate or such other acknowledgement of shareholding as is from time to time permitted by the Company. 

  
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	7.	EXERCISE OF VESTED OPTIONS – ADMISSION 

At any time after an Admission, any Option that has Vested may be exercised by notice in writing (in the form prescribed by the Grantor from
time to time) given by the Optionholder (or his Personal Representatives as the case may be) to the Grantor. Subject to Rules 10.1, 10.2 and 10.3, within 30 days of the exercise of an Option pursuant to this Rule, the Grantor shall allot or procure
the transfer of the Shares in respect of which the Option has been validly exercised and the Company shall issue a definitive certificate or such other acknowledgement of shareholding as is from time to time permitted by the Company. 

 

	8.	EXERCISE OF VESTED OPTIONS – TRADE SALE 

In the event of a Trade Sale, all valid Options shall, to the extent not already Vested, immediately Vest in full and the Grantor shall give
such notice, as it shall deem reasonable in the circumstances, to each Optionholder who holds valid unexercised Options. Each such Optionholder shall be entitled, at the end of the period of 40 days immediately following the completion of a Trade
Sale, to exercise any such Option by notice in writing (in the form prescribed by the Grantor from time to time) given by the Optionholder (or his Personal Representatives as the case may be) to the Grantor. Any such acceleration of Vesting and the
exercise of Options that have Vested shall be conditional upon the Trade Sale becoming unconditional in all respects. Prior to the completion of the Trade Sale (but subject to Rules 10.1, 10.2 and 10.3), the Grantor shall allot or procure the
transfer of the Shares in respect of which any Options have been validly exercised to the relevant Optionholder and the Company shall issue a definitive certificate or such other acknowledgement of shareholding as is from time to time permitted by
the Company. 
  

	9.	WINDING UP OF THE COMPANY 

  

	 	9.1	If either: 

  

	 	9.1.1	the Company passes a resolution for its voluntary winding up; or 

  

	 	9.1.2	a winding up order is made by the court in relation to the Company 

 the Grantor shall
immediately give notice to the Optionholder, such notice to include the date the resolution was passed or the winding up order made (in either case the “Operative Date”) such that the Optionholder has the opportunity to exercise any Option
which has Vested; 
  

	 	9.2	In the event the Optionholder exercised any Option under Rule 9.1 he will be entitled to rank in the winding up of the Company to the same extent to which he would have been so entitled to rank if he had been the holder
of all such Shares (ignoring fractions); 

  

	 	9.3	There shall be deducted from the amounts (if any) due to the Optionholder on the winding up the aggregate of the Exercise Prices payable for such Shares. 

  
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	10.	EXERCISE PRICE, TAXATION ETC 

  

	 	10.1	Unless and to the extent the Board decide otherwise, the notice of exercise of the Option shall be accompanied by a remittance in cleared funds for the aggregate of the Exercise Prices payable. 

 

	 	10.2	An Option may be granted subject to the condition that the Optionholder shall meet the Company’s, or such Group Company’s (if not the Company’s), or Grantor’s Secondary Class 1 National
Insurance Contributions due, if any, on the exercise, cancellation or release of the Option. For this purpose, the Optionholder may be required, if requested by the Company, or the Employer Company (if not the Company) or Grantor at any time before
the exercise, cancellation or release of the Option, to enter into an agreement to reimburse or an election to transfer liability for such Secondary Class I National Insurance Contributions in a form approved by HM Revenue & Customs
and acceptable to the Company, Employer Company (if not the Company) or Grantor and to enter into such arrangements as may be approved by HM Revenue & Customs in order to secure that the payment of such liabilities is made on a timely
basis. 

  

	 	10.3	If any Group Company or Grantor is liable to account for tax or social security contributions (in any jurisdiction) for which an Optionholder is liable by virtue of the exercise of the Option that or any other Group
Company or the Grantor or the trustee of any trust which is intended to be an employees’ share scheme pursuant to Section 1166 of the Companies Act 2006 may: 

 

	 	(a)	withhold the appropriate amount of tax or social security from the Optionholder’s remuneration; or 

  

	 	(b)	make such other arrangements as it considers necessary (including the sale of Shares on behalf of the Optionholder) to finance the amounts in (a) above, 

unless the Optionholder discharges the liability himself at the date of exercise of the Option. 

 

	 	10.4	Shares allotted under this Scheme shall rank pari passu in all respects with the Shares of the same class for the time being in issue save as regards any rights attaching to such Shares by reference to a record date
prior to the date of allotment and in the case of a transfer of existing Shares the transferee shall not acquire any rights attaching to such Shares by reference to a record date prior to the date of such transfer. 

 

	 	10.5	The exercise of any Option (in whole or in part) shall not be permitted at a time when (if then applicable) such exercise would be in breach of any applicable laws, codes or regulations relating to the acquisition of
securities, including any internal code of the Company. 

  
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	11.	VARIATION OF SHARE CAPITAL 

  

	 	11.1	In the event of any capitalisation, rights issue, consolidation, subdivision, reduction or other variation of the share capital of the Company: 

 

	 	(a)	the number of Shares comprised in an Option; 

  

	 	(b)	the Exercise Price in respect of such Shares; 

  

	 	(c)	where an Option has been exercised pursuant to the provisions of these Rules but no Shares have been allotted or transferred in satisfaction of such exercise, the number of Shares to be so allotted or transferred and
the Exercise Price in respect of such Shares, 

 may be varied in such manner as the Board shall determine to be in their
opinion fair and reasonable, provided that, except as provided in Rules 11.2 and 11.3, no variation shall be made which would result in the Exercise Price for an allotted Share being less than its nominal value. 

 

	 	11.2	Any adjustment made to the Exercise Price of unissued Shares which would have the effect of reducing the Exercise Price to less than the nominal value of the Shares shall only be made if and to the extent that the Board
are authorised to capitalise from the reserves of the Company a sum equal to the amount by which the nominal value of the Shares in respect of which the Option is exercisable exceeds the adjusted Exercise Price. The Board may apply such sum in
paying up such amount on such Shares so that on the exercise of any Option in respect of which such a reduction shall have been made, the Board shall capitalise such sum (if any) and apply the same in paying up such amount as aforesaid.

  

	 	11.3	Where an Option subsists over both issued and unissued Shares, an adjustment may only be made under Rule 11.2 if the reduction of the Exercise Price in relation to Options over both issued and unissued Shares can be
made to the same extent. 

  

	 	11.4	The Board may take such steps as they consider necessary to notify Optionholders of any adjustment made under this Rule 11 and to call in, cancel, endorse, issue or re-issue any
Agreement consequent upon such adjustment. 

  

	12.	ADMINISTRATION 

  

	 	12.1	The Board shall have power from time to time to make and vary such regulations (not being inconsistent with this Scheme) for the implementation and administration of this Scheme and/or the Agreement as they think fit.

  

	 	12.2	The decision of the Board shall be final and binding in all matters relating to this. 

  

	 	12.3	The costs of establishing and administering this Scheme shall be borne by the Company. 

  
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	 	12.4	The Company may, but shall not be obliged to, provide Optionholders with copies of any notices circulars or other documents sent to shareholders of the Company. 

 

	13.	AMENDMENTS 

  

	 	13.1	The Board may alter or add to all or any of the Rules of this Scheme in any respect with effect from a current, future or past date by a resolution of the Board provided that where any alteration would abrogate or
adversely affect the subsisting rights of an Optionholder it will not be effective unless such alteration is made with the consent in writing of holders of more than 50% of the Shares which would be issued if all the Options affected by the
alteration were exercised in full. 

  

	 	13.2	Notwithstanding Rule 13.1, the Board may alter or add to all or any of the provisions of this Scheme and/or Agreement and the terms of any Options as they consider necessary or desirable in order to: 

 

	 	(a)	make the administration of this Scheme more effective or easier; 

  

	 	(b)	comply with or take account of the provisions of any proposed or existing legislation; 

  

	 	(c)	take account of any of the events mentioned in Rules 6, 7 and 8; or 

  

	 	(d)	obtain or maintain favourable tax or regulatory treatment for the Company or any Group Company or any Optionholder, 

without the need for the consent of Optionholders provided that such amendments or additions do not affect the basic principles of this Scheme
and/or Agreements. 
  

	 	13.3	Written notice of any amendment to this Scheme shall be given to all Optionholders affected thereby. 

  

	14.	GENERAL 

  

	 	14.1	This Scheme shall commence upon the date the Board adopt this Scheme and shall (unless previously terminated by a resolution of the Board) terminate on the expiry of the period of ten years from such date. On
termination no further Options may be granted but such termination shall be without prejudice to any accrued rights in existence at the date thereof. 

  

	 	14.2	The Company will at all times keep available sufficient authorised and unissued Shares, or shall ensure that sufficient Shares will be available, to satisfy the exercise to the full extent still possible of all Options
not lapsed pursuant to the provisions of these Rules, taking account of any other obligations of the Company to issue Shares. 

  
 14 

	 	14.3	Notwithstanding any other provision of this Scheme: 

  

	 	(a)	this Scheme shall not form part of any contract of employment between any Group Company and any Employee of any such company and the rights and obligations of any individual under the terms of his office or employment
with any Group Company shall not be affected by his participation in this Scheme or any right which he may have to participate in it and this Scheme shall afford such an individual no additional rights to compensation or damages in consequence of
the termination of such office or employment for any reason whatsoever, including if such termination of employment was lawful or unlawful; 

  

	 	(b)	no Optionholder shall be entitled to any compensation or damages for any loss or potential loss which he may suffer by reason of being unable to exercise an Option in consequence of the loss or termination of his office
or employment with any Group Company for any reason whatsoever including if such termination of employment was lawful or unlawful; 

  

	 	(c)	this Scheme shall not confer on any person any legal or equitable rights (other than those constituting the Options themselves) against any Group Company directly or indirectly, or give rise to any cause of action at
law or in equity against any Group Company. 

  

	 	14.4	Save as otherwise provided in this Scheme any notice or communication to be given by the Company to any Optionholder may be personally delivered or sent by email or by ordinary post to his last known address. Where a
notice or communication is sent by post it shall be deemed to have been received 48 hours after the same was put into the post properly addressed and stamped and where a notice or communication is sent by email it shall be deemed to have been
received on receipt of a delivery receipt confirmation email. Share certificates and other communications sent by post will be sent at the risk of the Optionholder concerned and the Company shall have no liability whatsoever to any such person in
respect of any notification, document, share certificate or other communication so given, sent or made. 

  

	 	14.5	Any notice to be given to the Company shall be delivered or sent by either post or email to the Company at its registered office and shall be effective upon receipt. 

 

	 	14.6	This Scheme and all Options granted under it shall be governed by and construed in accordance with English law. 

  

	15.	DATA PROTECTION 

  

	 	15.1	In accepting the grant of an Option each Optionholder consents to the collection, holding, processing and transfer of his Personal Data by the Company or any Grantor for all purposes connected with the operation of this
Scheme. 

  
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	 	15.2	The purposes connected with the operation of this Scheme referred to in Rule 15.1 include, but are not limited to: 

  

	 	(a)	holding and maintaining details of the Optionholder’s Options; 

  

	 	(b)	transferring the Optionholder’s Personal Data to the trustee of an employee benefit trust, the Company’s registrars or brokers or any administrators of the Scheme; and 

 

	 	(c)	transferring the Optionholder’s Personal Data to a bona fide prospective buyer of the Company or the prospective buyer’s advisers, provided that the prospective buyer, and its advisers, irrevocably agree to
use the Optionholder’s Personal Data only in connection with the proposed transaction and in accordance with the data protection principles set out in the Data Protection Act 1998; and 

 

	 	(d)	transferring the Optionholder’s Personal Data under rule 15.2(b) or rule 15.2(c) to a person who is resident in a country or territory outside the European Economic Area that may not provide the same statutory
protection for the information as countries within the European Economic Area. 

  
 16EX-10.15

 Exhibit 10.15 
  

 
 Rules of the Mereo BioPharma Group 

plc Long Term Incentive Plan 
 Adopted by the board of
directors of Mereo BioPharma Group plc on 4 March 2016 
 Amended by the board of directors of Mereo BioPharma Group plc on 20 March 2018 

Expiry date: 9 June 2026 

  
 1 

 Contents 
  

							
	1	  	 DEFINITIONSAND INTERPRETATION
	  	 	1	 
			
	2	  	 GRANTOF AWARDS
	  	 	3	 
			
	3	  	 PERFORMANCECONDITION
	  	 	3	 
			
	4	  	 RESTRICTIONSON TRANSFER AND BANKRUPTCY
	  	 	3	 
			
	5	  	 DIVIDENDEQUIVALENTS
	  	 	3	 
			
	6	  	 INDIVIDUALLIMIT
	  	 	3	 
			
	7	  	 REDUCTIONOF AWARDS AND CLAWBACK
	  	 	4	 
			
	8	  	 VESTINGAND EXERCISE
	  	 	5	 
			
	9	  	 TAXATIONAND REGULATORY ISSUES
	  	 	5	 
			
	10	  	 CASHEQUIVALENT
	  	 	5	 
			
	11	  	 CESSATIONOF EMPLOYMENT
	  	 	6	 
			
	12	  	 CORPORATEEVENTS
	  	 	7	 
			
	13	  	 ADJUSTMENTS
	  	 	8	 
			
	14	  	 AMENDMENTS
	  	 	9	 
			
	15	  	 LEGALENTITLEMENT
	  	 	9	 
			
	16	  	 GENERAL
	  	 	9	 
		
	SCHEDULE	  	 	11	 
			
	1	  	 CASHAWARDS
	  	 	11	 

 THE MEREO BIOPHARMA GROUP PLC LONG TERM INCENTIVE PLAN 

 

	1	DEFINITIONS AND INTERPRETATION 

  

	1.1	In this Plan, unless otherwise stated, the words and expressions below have the following meanings: 

  

			
	“Admission Date”	  	the day on which the Shares are admitted to the Official List of the UKLA and to trading on AIM;
		
	“AIM”	  	the Alternative Investment Market of the London Stock Exchange;
		
	“AIM Rules”	  	the rules of AIM, as amended from time to time;
		
	“Award”	  	a Conditional Award or a Nil-Cost Option (or a Cash Conditional Award or Cash Option granted under the Schedule to the Plan);
		
	“Board”	  	subject to rule 12.9, the board of the Company or any duly authorised committee of the board;
		
	“Company”	  	Mereo BioPharma Group Plc, registered in England and Wales under number 9481161;
		
	“Conditional Award”	  	a right to acquire Shares in accordance with the rules of the Plan with no Exercise Period;
		
	“Control”	  	the meaning given by section 995 of the Income Tax Act 2007;
		
	“Dealing Day”	  	any day on which the London Stock Exchange is open for business;
		
	“Dealing Restrictions”	  	restrictions imposed by the Company’s share dealing code, the AIM Rules or any applicable laws or regulations which impose restrictions on share dealing;
		
	“Eligible Employee”	  	an employee (including an executive director) of the Company or any of its Subsidiaries;
		
	“Exercise Period”	  	the period during which a Nil-Cost Option may be exercised;
		
	“Grant Date”	  	the date on which an Award is granted;
		
	“Group Member”	  	the Company, any Subsidiary of the Company, any company which is (within the meaning of section 1159 of the Companies Act 2006) the Company’s holding company or a Subsidiary of the Company’s holding company or, if the
Board so determines, any body corporate in relation to which the Company is able to exercise at least 20% of the equity voting rights and “Group” will be construed accordingly;
		
	“Internal Reorganisation”	  	where immediately after a change of Control of the Company, all or substantially all of the issued share capital of the acquiring company is owned directly or indirectly by the persons who were shareholders in the Company
immediately before the change of Control;
		
	“Market Value”	  	the market value as determined by the Board on the relevant date;

					
	“Nil-Cost Option”
	  	a right to acquire Shares in accordance with the rules of the Plan during an Exercise Period;
		
	“Normal Vesting Date”	  	the date on which the Board determines, on or prior to the Grant Date that an Award will normally Vest, or to the extent that the Award is subject to a Vesting Schedule, the date determined by the Board on or prior to
the Grant Date for the relevant tranche of the Award as set out in the Vesting Schedule;
		
	“Participant”	  	any person who holds an Award (or, in respect of rules 7.4 and 7.6, any person to whom Shares have been issued or transferred or to whom cash is paid in respect of an Award) or following his death, his personal
representatives;
		
	“Performance Condition”	  	a condition or conditions imposed under rule 3.1 which relates to performance;
		
	“Performance Period”	  	the period over which a Performance Condition will be measured which, unless the Board determines otherwise, will be at least three years;
		
	“Plan”	  	the Mereo BioPharma Group Plc Long Term Incentive Plan in its present form or as from time to time amended;
		
	“Share”	  	a fully paid ordinary share in the capital of the Company;
		
	“Subsidiary”	  	the meaning given by section 1159 of the Companies Act 2006;
		
	“Tax Liability”	  	any tax or social security contributions liability in connection with an Award for which the Participant is liable and for which any Group Member or former Group Member is obliged to account to any relevant
authority;
		
	“Trustee”	  	the trustee or trustees for the time being of any employee benefit trust, the beneficiaries of which include Eligible Employees;
		
	“UKLA”	  	the United Kingdom Listing Authority or any successor body;
		
	“Vest”	  	 i)   in relation to a Conditional Award, the point at which a
Participant becomes entitled to receive the Shares; and

		
		  	 ii)  in relation to a Nil-Cost
Option, the point at which it becomes capable of exercise,

		
		  	and “Vesting”, “Vested” and “Vesting Date” will be construed accordingly; and
		
	“Vesting Schedule”	  	in relation to an Award that is divided into tranches, the series of Normal Vesting Dates on which the Board determines on the Grant Date that those tranches will usually normally Vest.

  

	1.2	References in the Plan to: 

  

	 	1.2.1	any statutory provisions are to those provisions as amended or re-enacted from time to time; 

  
 2 

	 	1.2.2	the singular include the plural and vice versa; and 

  

	 	1.2.3	the masculine include the feminine and vice versa. 

  

	1.3	Headings do not form part of the Plan. 

  

	2	GRANT OF AWARDS 

  

	2.1	Subject to rule 2.2, the Board may grant an Award to an Eligible Employee in its discretion subject to the rules of the Plan and upon such additional terms as the Board may determine. 

 

	2.2	The grant of an Award will be subject to obtaining any approval or consent required by AIM (or other relevant authority), any Dealing Restrictions and any other applicable laws or regulations (whether in the UK or
overseas). 

  

	2.3	Awards must be granted by deed and, as soon as reasonably practicable after the Grant Date, Participants must be notified of the terms of their Award, including any Performance Condition. 

 

	2.4	No Award may be granted under the Plan after the tenth anniversary of the Admission Date. 

  

	3	PERFORMANCE CONDITION 

  

	3.1	Unless the Board determines otherwise, the Vesting of Awards will be subject to the satisfaction of a Performance Condition, provided that an Award granted to an executive director of the Company must be subject to the
satisfaction of a Performance Condition. Subject to rules 11 and 12, the Performance Condition will be measured over the Performance Period. 

  

	3.2	The Board may amend or substitute a Performance Condition if one or more events occur which cause the Board to consider that a substituted or amended Performance Condition would be more appropriate and would not be
materially less difficult to satisfy. 

  

	4	RESTRICTIONS ON TRANSFER AND BANKRUPTCY 

  

	4.1	An Award must not be transferred, assigned, charged or otherwise disposed of in any way (except in the event of the Participant’s death, to his personal representatives) and will lapse immediately on any attempt to
do so. 

  

	4.2	An Award will lapse immediately if the Participant is declared bankrupt or, if the Participant is outside the UK, any analogous event occurs. 

 

	5	DIVIDEND EQUIVALENTS 

  

	5.1	The Board may decide at any time prior to the issue or transfer of the Shares in respect of which an Award Vests that the Participant will receive an amount (in cash and/or additional Shares) equal in value to any
dividends that would have been paid on those Shares on such terms and over such period (ending no later than the Vesting Date) as the Board may determine. This amount may assume the reinvestment of dividends (on such basis as the Board may
determine) and may exclude or include special dividends. 

  

	5.2	Any such amount will be payable as soon as reasonably practicable after Vesting or, in the case of a Nil-Cost Option, exercise, of the relevant Award. 

 

	6	INDIVIDUAL LIMIT 

  

	6.1	No Eligible Employee may be granted Awards which would, at the time they are granted, cause the Market Value of all the Shares subject to Awards granted to that Eligible Employee in respect of a particular financial
year of the Company to exceed 300 per cent. of salary, and to the extent any Award exceeds this limit it will be scaled back accordingly. 

  
 3 

	7	REDUCTION OF AWARDS AND CLAWBACK 

  

	7.1	Notwithstanding any other rule of the Plan, this rule 7 applies to any Award and will continue to apply after the termination of a Participant’s office or employment with a Group Member for any reason whether or
not the termination is lawful. 

  

	7.2	The circumstances in which rules 7.3 and 7.4 may apply are: 

  

	 	7.2.1	a material misstatement of the Company’s accounts; 

  

	 	7.2.2	an error in assessing a Performance Condition applicable to the Award or in the information or assumptions by reference to which the Award Vests, such that the Award Vested to a greater extent than it would have Vested
should the circumstances not have occurred; or 

  

	 	7.2.3	fraudulent or material misconduct on the part of the Participant 

 occurring, unless rule 7.5
applies, within the period ending on the second anniversary of the last day of the Performance Period applying to an Award. 
  

	7.3	The Board may, in its discretion, determine at any time prior to the earlier of the delivery of cash or Shares comprised in an Award and unless rule 7.5 applies, the second anniversary of the last day of the Performance
Period applying to an Award, to: 

  

	 	7.3.1	reduce (including to zero) the number of Shares to which an Award relates; and/or 

  

	 	7.3.2	impose further conditions on an Award. 

  

	7.4	The Board may, in its discretion, determine at any time after the delivery of cash or Shares comprised in an Award, and unless rule 7.5 applies, prior to the second anniversary of the last day of the Performance Period
applying to an Award, to: 

  

	 	7.4.1	require a Participant to make a cash payment to the Company in respect of some or all of the Shares or cash delivered to him under the Award; and/or 

 

	 	7.4.2	require a Participant to transfer for nil consideration some or all of the Shares delivered to him under the Award 

and the Board will have the discretion to determine the basis on which the amount of cash or Shares is calculated, including whether and if so
to what extent to take account of any tax or social security liability applicable to the Award. 
  

	7.5	If the action or conduct of any Participant, Group Member or relevant business unit is under investigation prior to the second anniversary of the last day of the Performance Period applying to an Award pursuant to this
rule 7 and such investigation has not yet been concluded by that date, the period referred to in rules 7.2, 7.3 and 7.4 will end on such later date as the Board considers appropriate to allow such investigation to be concluded. 

 

	7.6	The Board may decide to: 

  

	 	7.6.1	reduce (including to zero) the number of Shares to which an Award relates; 

  

	 	7.6.2	impose further conditions on an Award; and/or 

  
 4 

	 	7.6.3	require a Participant to transfer for nil consideration some or all of the Shares delivered to him under an Award or make a cash payment to the Company in respect of some or all of the Shares delivered to him under an
Award 

 to effect the recovery of sums paid or Shares delivered under any provisions similar to this rule 7 which are included
in any bonus plan or share plan (other than the Plan) operated by any Group Member and if the Board decides to apply rule 7.6.3, the Board will have the discretion to determine the basis on which the amount of cash or Shares is calculated, including
whether and if so to what extent to take account of any tax or social security liability applicable to the Award. 
  

	7.7	For the purposes of this rule 7, references to Group Member or a relevant business unit include references to any former Group Member or former business unit. 

 

	7.8	If the Board exercises its discretion in accordance with this rule 7, it will confirm this in writing to each Participant and, if necessary, the Trustee. 

 

	8	VESTING AND EXERCISE 

  

	8.1	As soon as reasonably practicable after the end of any Performance Period relating to an Award, the Board will determine if and to what extent the Performance Condition has been satisfied. To the extent that it has not
been satisfied in full, the remainder of the Award will lapse immediately. 

  

	8.2	Subject to rules 9.2, 11 and 12, an Award will Vest: 

  

	 	8.2.1	on the Normal Vesting Date; or 

  

	 	8.2.2	if on the Normal Vesting Date (or on any other date on which an Award is due to Vest under rule 11 or 12) a Dealing Restriction applies to the Award, on the date on which such Dealing Restriction lifts; and

 a Nil-Cost Option may then be exercised during the period ending on the first
anniversary of the date on which it Vested (or such shorter period as the Board may determine on or prior to the Grant Date) in such manner as the Board determines, after which time it will lapse. 

 

	8.3	Subject to rules 9 and 10, where a Conditional Award has Vested or a Nil-Cost Option has been exercised, the number of Shares in respect of which the Award has Vested or been
exercised together with any additional Shares or cash to which a Participant becomes entitled under rule 5 will be issued, transferred or paid (as applicable) to the Participant as soon as reasonably practicable thereafter. 

 

	9	TAXATION AND REGULATORY ISSUES 

  

	9.1	A Participant will be responsible for and indemnifies each relevant Group Member and the Trustee against any Tax Liability relating to his Award. Any Group Member and/or the Trustee may withhold an amount equal to such
Tax Liability from any amounts due to the Participant (to the extent such withholding is lawful) and/or make any other arrangements as it considers appropriate to ensure recovery of such Tax Liability including, without limitation, the sale of
sufficient Shares acquired subject to the Award to realise an amount equal to the Tax Liability. 

  

	9.2	The Vesting of a Conditional Award, the exercise of a Nil-Cost Option and the issue or transfer of Shares under the Plan will be subject to obtaining any approval or consent
required by AIM (or any other relevant authority), any Dealing Restrictions, or any other applicable laws or regulations (whether in the UK or overseas). 

  

	10	CASH EQUIVALENT 

  

	10.1	Subject to rule 10.2, at any time prior to the date on which Shares in respect of which an Award has Vested or, in the case of a Nil-Cost Option, has been exercised and, in both
cases, Shares have been issued or 

  
 5 

 transferred to a Participant, the Board may determine that, in substitution for his right to
acquire some or all of the Shares to which his Award relates, the Participant will instead receive a cash sum. The cash sum will be equal to the Market Value of that number of the Shares which would otherwise have been issued or transferred and for
these purposes: 
  

	 	10.1.1	in the case of a Conditional Award, Market Value will be determined on the date of Vesting; 

  

	 	10.1.2	in the case of a Nil-Cost Option, Market Value will be determined on the date of exercise; and 

 

	 	10.1.3	in either case the cash sum will be paid to the Participant as soon as reasonably practicable after the Vesting of the Conditional Award or the exercise of the Nil-Cost Option,
net of any deductions (including but not limited to any Tax Liability or similar liabilities) as may be required by law. 

  

	10.2	The Board may determine that this rule 10 will not apply to an Award or any part of it. 

  

	11	CESSATION OF EMPLOYMENT 

  

	11.1	If a Participant ceases to hold office or employment with a Group Member for a reason other than one of the reasons set out in rule 12.2, Awards (whether or not Vested) will lapse at that time. 

 

	11.2	If a Participant ceases to hold office or employment with a Group Member as a result of: 

  

	 	11.2.1	death; 

  

	 	11.2.2	ill-health, injury or disability evidenced to the satisfaction of the Board; 

  

	 	11.2.3	the Participant’s employing company ceasing to be a Group Member or the transfer of an undertaking or part of an undertaking (in which the Participant is employed) to a person who is not a Group Member; or

  

	 	11.2.4	any other reason at the Board’s discretion, except where a Participant is summarily dismissed 

unless the Board determines that an Award will Vest in accordance with rule 11.3, an Award which has not yet Vested as at the date of cessation
will continue and, subject to rule 12 Vest, in accordance with rule 11.4 on the Normal Vesting Date. 
  

	11.3	If the Board determines that an Award which has not yet Vested at the date of cessation will Vest in accordance with this rule 11.3, it will Vest as soon as reasonably practicable following the date of cessation in
accordance with rule 11.4. 

  

	11.4	The number of Shares in respect of which the Award Vests pursuant to rule 11.2 or 11.3 will be determined by the Board, taking into account: 

 

	 	11.4.1	the extent to which any Performance Condition has been satisfied at the end of the Performance Period (if rule 11.2 applies) or at the date of cessation of office or employment (if rule 11.3 applies); and

  

	 	11.4.2	unless the Board determines otherwise, the period of time that has elapsed from the Grant Date to the date of cessation of office or employment, 

and to the extent that an Award does not Vest in full, the remainder will lapse immediately. A Nil-Cost
Option may, subject to rule 12, be exercised for a period of 12 months (or such other period as the Board may determine) from the date of Vesting, after which time it will lapse. 

  
 6 

	11.5	If a Participant ceases to hold office or employment with a Group Member for one of the reasons set out in rule 11.2, a Nil-Cost Option which has Vested prior to the date of
cessation may, subject to rule 12, be exercised during the remainder of the original Exercise Period, after which time it will lapse. 

  

	11.6	For the purposes of the Plan, no person will be treated as ceasing to hold office or employment with a Group Member until that person no longer holds: 

 

	 	11.6.1	an office or employment; or 

  

	 	11.6.2	a right to return to work 

 with any Group Member. 

 

	12	CORPORATE EVENTS 

  

	12.1	Where any of the events described in rule 12.3 occur, then subject to rules 12.6 and 12.8, all Awards which have not yet Vested will Vest in accordance with rule 12.2 at the time of such event. Nil-Cost Options (whether Vested pursuant to this rule or otherwise) will be exercisable for one month (or such other period as the Board may determine) from the date of the relevant event, after which time all Nil-Cost Options will lapse. 

  

	12.2	An Award will Vest pursuant to rule 12.2 to the extent determined by the Board, taking into account the extent to which any Performance Condition has been satisfied, unless the Board determines otherwise, the period of
time from the Grant Date to the date of the relevant event. To the extent that an Award does not Vest, or is not exchanged in accordance with rule 12.6, it will lapse immediately. 

 

	12.3	The events referred to in rule 12.1 are: 

  

	 	12.3.1	General offer 

 If any person (either alone or together with any person acting in concert with
him): 
  

	 	(i)	obtains Control of the Company as a result of making a general offer to acquire Shares; or 

  

	 	(ii)	already having Control of the Company, makes an offer to acquire all of the Shares other than those which are already owned by him 

and such offer becomes wholly unconditional. 
  

	 	12.3.2	Scheme of arrangement 

 A compromise or arrangement in accordance with section 899 of the
Companies Act 2006 (or any similar legislation or rules in a jurisdiction outside the United Kingdom) for the purposes of a change of Control of the Company which is sanctioned by the Court. 

 

	12.4	Winding-up 

 On the passing of a resolution for the
voluntary winding-up or the making of an order for the compulsory winding-up of the Company, the Board will determine: 

 

	 	12.4.1	whether and to what extent Awards which have not yet Vested will Vest, taking into account the extent to which any Performance Condition has been satisfied and, unless the Board determines otherwise, the period of time
from the Grant Date to the date of the relevant event; and 

  

	 	12.4.2	the period of time during which any Vested Nil-Cost Option may be exercised, after which time it will lapse. 

  
 7 

 To the extent that an Award does not Vest it will lapse immediately. 

 

	12.5	Other events 

 If the Company is or may be affected by a demerger, delisting, special dividend
or other event which in the opinion of the Board, may affect the current or future value of Shares, the Board will determine: 
  

	 	12.5.1	whether and to what extent Awards which have not yet Vested will Vest, taking into account the extent to which any Performance Condition has been satisfied and, unless the Board determines otherwise, the period of time
from the Grant Date to the date of the relevant event; and 

  

	 	12.5.2	the period of time during which any Vested Nil-Cost Option may be exercised, after which time it will lapse. 

To the extent that an Award does not Vest it will lapse immediately. 
  

	12.6	Exchange - unvested Awards 

 An unvested Award will not Vest under rule 12.1 but will be
exchanged on the terms set out in rule 12.8 to the extent that: 
  

	 	12.6.1	an offer to exchange the Award is made and accepted by a Participant; or 

  

	 	12.6.2	there is an Internal Reorganisation. 

  

	12.7	Exchange - Vested Nil-Cost Options 

 To the extent that
there is an Internal Reorganisation, a Vested Nil-Cost Option will be exchanged on the terms set out in rule 12.8. 
  

	12.8	Exchange terms 

 If this rule 12.8 applies, the Award will be released in consideration of the
grant of a new award (“New Award”) which, in the opinion of the Board, is equivalent to the Award, but relates to shares in a different company (whether the acquiring company or a different company). Unless the Board determines otherwise,
the rules of this Plan will be construed in relation to the New Award as if: 
  

	 	12.8.1	the New Award were an Award granted under the Plan at the same time as the Award; 

  

	 	12.8.2	references to the Company were references to the company whose shares are subject to the New Award; and 

  

	 	12.8.3	references to Shares were references to shares in the company whose shares are subject to the New Award. 

  

	12.9	Meaning of Board 

 Any reference to the Board in this rule 12 means the members of the Board
immediately prior to the relevant event. 
  

	13	ADJUSTMENTS 

  

	13.1	The number of Shares subject to an Award may be adjusted in such manner as the Board determines, in the event of: 

  

	 	13.1.1	any variation of the share capital of the Company; or 

  
 8 

	 	13.1.2	a demerger, delisting, special dividend, rights issue or other event which may, in the opinion of the Board, affect the current or future value of Shares. 

 

	13.2	The Board may also adjust any Performance Condition. 

  

	14	AMENDMENTS 

  

	14.1	Except as described in this rule 14, the Board may at any time amend the rules of the Plan or the terms of any Award. 

  

	14.2	No amendment to the material disadvantage of existing rights of Participants (except in respect of the Performance Condition) will be made under rule 14.1 unless: 

 

	 	14.2.1	every Participant who may be affected by such amendment has been invited to indicate whether or not he approves the amendment; and 

  

	 	14.2.2	the amendment is approved by a majority of those Participants who have so indicated. 

  

	14.3	No amendment will be made under this rule 14 if it would prevent the Plan from being an employees’ share scheme in accordance with section 1166 of the Companies Act 2006. 

 

	15	LEGAL ENTITLEMENT 

  

	15.1	This rule 15 applies during a Participant’s employment with any Group Member and after the termination of such employment, whether or not the termination is lawful. 

 

	15.2	Nothing in the Plan or its operation forms part of the terms of employment of a Participant and the rights and obligations arising from a Participant’s employment with any Group Member are separate from, and are
not affected by, his participation in the Plan. Participation in the Plan does not create any right to continued employment with a Group Member for any Participant. 

 

	15.3	The grant of any Award to a Participant does not create any right for that Participant to be granted any further Awards or to be granted Awards on any particular terms, including the number of Shares to which Awards
relate. 

  

	15.4	By participating in the Plan, a Participant waives all rights to compensation for any loss in relation to the Plan, including: 

  

	 	15.4.1	any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of the Participant’s employment); 

 

	 	15.4.2	any exercise of a discretion or a decision taken in relation to an Award or to the Plan, or any failure to exercise a discretion or take a decision; and 

 

	 	15.4.3	the operation, suspension, termination or amendment of the Plan. 

  

	16	GENERAL 

  

	16.1	The Plan will terminate upon the date stated in rule 2.4, or at any earlier time by the passing of a resolution by the Board or an ordinary resolution of the Company in general meeting. Termination of the Plan will be
without prejudice to the existing rights of Participants. 

  

	16.2	Shares issued or transferred from treasury under the Plan will rank equally in all respects with the Shares then in issue, except that they will not rank for any voting, dividend or other rights attaching to Shares by
reference to a record date preceding the date of issue or transfer from treasury. 

  
 9 

	16.3	By participating in the Plan, Participants resident outside of the European Economic Area consent to the collection, holding, processing and transfer of his personal data by any Group Member or any third party for all
purposes relating to the operation of the Plan, including but not limited to, the administration and maintenance of Participant records, providing information to future purchasers of the Company or any business in which the Participant works and to
the transfer of information about the Participant to a country or territory outside the European Economic Area or elsewhere. 

  

	16.4	The Plan will be administered by the Board. The Board will have full authority, consistent with the Plan, to administer the Plan, including authority to interpret and construe any provision of the Plan and to adopt
regulations for administering the Plan. Decisions of the Board will be final and binding on all parties. 

  

	16.5	Any notice or other communication in connection with the Plan may be delivered personally or sent by electronic means or post, in the case of a company to its registered office (for the attention of the company
secretary), and in the case of an individual to his last known address, or, where he is a director or employee of a Group Member, 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 office or employment. Where a notice or other communication is given by post, it will be deemed to have been received 72 hours after it was put into the post properly addressed and stamped, and if by
electronic means, when the sender receives electronic confirmation of delivery or if not available, 24 hours after sending the notice. 

  

	16.6	No third party will have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan (without prejudice to any right of a third party which exists other than under that Act).

  

	16.7	The rules of the Plan will be governed by and construed in accordance with the laws of England and Wales. Any person referred to in the Plan submits to the exclusive jurisdiction of the Courts of England and Wales.

  
 10 

 SCHEDULE 
  

	1	CASH AWARDS 

 The rules of the Mereo BioPharma Group Plc Long Term Incentive Plan will apply to a right to
receive a cash sum granted under this Schedule as if it was either a Conditional Award (a “Cash Conditional Award”) or a Nil-Cost Option 

(a “Cash Option”), except as set out in this Schedule. Where there is any conflict between the rules of the Plan and this Schedule, the terms of this
Schedule will prevail. 
  

	1.1	Each Cash Conditional Award or Cash Option will relate to a certain number of notional Shares. 

  

	1.2	On the Vesting of a Cash Conditional Award or the exercise of a Cash Option the Participant will be entitled to receive a cash sum, calculated by reference to the value of the number of notional Shares to which the Cash
Conditional Award or the Cash Option relates, on the following basis: 

  

	 	1.2.1	in the case of a Cash Conditional Award the cash sum will be equal to the Market Value of the notional Shares to which the Cash Conditional Award relates on the date of Vesting; and 

 

	 	1.2.2	in the case of a Cash Option the cash sum will be equal to the Market Value of the notional Shares to which the Cash Option relates on the date of exercise. 

 

	1.3	The cash sum payable under paragraph 1.2 above will be paid to the Participant as soon as reasonably practicable after the Vesting of the Cash Conditional Award or the exercise of the Cash Option, net of any deductions
(including, but not limited to, any Tax Liability or similar liabilities) as may be required by law. 

  

	1.4	For the avoidance of doubt, a Cash Conditional Award or Cash Option will not confer any right on the holder to receive Shares or any interest in Shares. 

  
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