Document:

EX-10.13

 Exhibit 10.13 

MEREO BIOPHARMA GROUP LIMITED 
 15
STRATTON STREET 
 LONDONW1J 8LQ 
 PRIVATE
AND CONFIDENTIAL 
 Kunal Kashyap 
 [XXXXXX] 

[XXXXXX] 
 [XXXXXX] 

29 July 2015 
 Dear Kunal, 

Letter of appointment 
 Following the recommendation of
the nomination committee, the board of directors (Board) of Mereo BioPharma Group Limited (Company) is pleased to hear that you have accepted our offer to join the Board as a non executive director. Your appointment will formally
commence on the date of closing of the financing the Company. 
 This letter sets out the main terms of your appointment. By accepting this appointment, you
agree that this letter is a contract for services and is not a contract of employment and you confirm that you are not subject to any restrictions which prevent you from holding office as a director. 

 

	1.	 FEES AND EXPENSES 

 

	1.1	 You shall be paid an annual fee of £35,000 gross (current at the date of this letter), which shall be
paid in equal instalments monthly in arrears through PAYE after deduction of any taxes and other amounts that are required by law, which shall be subject to periodic review by the Board. This fee covers all duties, including service on any Board
committee or Company subsidiary, with the exception of committee chairmanships and certain additional responsibilities, such as taking on the role of senior independent director. 

 

	1.2	 The Company will reserve sufficient ordinary shares following issuance of the Company’s ordinary shares
(the Option Pool) of which you shall be entitled to 81,284 shares pursuant to the terms of the Company’s proposed equity incentive plan. 

	1.3	 The Company shall reimburse you for all reasonable and properly documented expenses that you incur in
performing the duties of your office including travel and sundry expenses. 

  

	1.4	 On termination of your appointment, you shall only be entitled to such fees as may have accrued to the date of
termination, together with reimbursement in the normal way of any expenses properly incurred before that date. 

  

	2.	 ROLE AND DUTIES 

 

	2.1	 The Board as a whole is collectively responsible for the success of the Company. The Board’s role is to:

  

	 	(a)	 provide entrepreneurial leadership of the Company within a framework of prudent and effective controls which
enable risk to be assessed and managed; 

  

	 	(b)	 set the Company’s strategic aims, ensure that the necessary financial and human resources are in place for
the Company to meet its objectives, and review management performance; and 

  

	 	(c)	 set the Company’s values and standards and ensure that its obligations to its shareholders and others are
understood and met. 

  

	2.2	 You shall have the same general legal responsibilities to the Company as any other director. You are expected
to perform your duties (whether statutory, fiduciary or common law) faithfully, diligently and to a standard commensurate with the functions of your role and your knowledge, skills and experience. 

 

	2.3	 You shall exercise your powers in your role as a non-executive director
having regard to relevant obligations under prevailing law and regulation, including the Companies Act 2006 and, where applicable, the UK Corporate Governance Code and associated guidance or the AIM Rules for Companies, the UK Listing
Authority’s Listing, Prospectus, and Disclosure and Transparency Rules. 

  

	2.4	 You shall have particular regard to the general duties of directors in Part 10 of the Companies Act 2006,
including the duty to promote the success of the Company under which all directors must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so,
as a director, you must have regard (among other matters) to: 

  

	 	(a)	 the likely consequences of any decision in the long term; 

 

	 	(b)	 the interests of the Company’s employees; 

 

	 	(c)	 the need to foster the Company’s business relationships with suppliers, customers and others;

  

	 	(d)	 the impact of the Company’s operations on the community and the environment; 

  
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	 	(e)	 the desirability of the Company maintaining a reputation for high standards of business conduct; and

  

	 	(f)	 the need to act fairly as between the members of the Company. 

 

	2.5	 If and when applicable, you shall have particular regard to the Financial Reporting Council’s UK Corporate
Governance Code and associated Guidance on Board Effectiveness in respect of the role of the Board and the role of the non-executive director. 

 

	2.6	 In your role as a non-executive director, you shall also be required
to: 

  

	 	(a)	 constructively challenge and help develop proposals on strategy including, where applicable, the Company’s
corporate development activity to secure additional products, the clinical development plans for the current product portfolio and the financing and IPO strategy; 

 

	 	(b)	 monitor the performance of senior management in meeting agreed goals and objectives and monitor the reporting
of performance; 

  

	 	(c)	 satisfy yourself on the integrity of financial information and that financial controls and systems of risk
management are robust and defensible; 

  

	 	(d)	 be responsible for determining appropriate levels of remuneration of executive directors and have a prime role
in appointing and, where necessary, removing senior management and in succession planning; 

  

	 	(e)	 uphold high standards of integrity and probity and support the executive directors in instilling the
appropriate culture, values and behaviours in the boardroom and beyond; 

  

	 	(f)	 insist on receiving high-quality information sufficiently in advance of Board meetings; 

 

	 	(g)	 take into account the views of shareholders and other stakeholders where appropriate; 

 

	 	(h)	 make sufficient time available to discharge your responsibilities effectively; 

 

	 	(i)	 exercise relevant powers under, and abide by, the Articles; 

 

	 	(j)	 disclose the nature and extent of any direct or indirect interest you may have in any matter being considered
at a Board or committee meeting and, except as permitted under the Articles you will not vote on any resolution of the Board, or of one of its committees, on any matter where you have any direct or indirect interest; 

 

	 	(k)	 immediately report your own wrongdoing or the wrongdoing or proposed wrongdoing of any employee or other
director of the Company of which you become aware to the Chair of the Audit Committee.; 

  

	 	(l)	 exercise your powers as a director in accordance with the Company’s policies and procedures and the
Bribery Act 2010; and 

  
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	 	(m)	 not do anything that would cause you to be disqualified from acting as a director. 

 

	2.7	 Unless the Board specifically authorises you to do so, you shall not enter into any legal or other commitment
or contract on behalf of the Company. 

  

	2.8	 You shall be entitled to request all relevant information about the Company’s affairs as is reasonably
necessary to enable you to discharge your duties as a non-executive director. 

  

	2.9	 If you are required to register yourself or your personal service company with HM Revenue and Customs as a
“Trust or Company Service Provider” under the Money Laundering Regulations 2007, you will be responsible for effecting such registration and for compliance with other requirements of the Money Laundering Regulations 2007 and applicable
legislation. 

  

	3.	 CONFIDENTIALITY 

 

	3.1	 You acknowledge that all information acquired during your appointment is confidential to the Company and should
not be released, communicated or disclosed to third parties or used for any reason other than in the interests of the Company, either during your appointment or following termination (by whatever means), without prior clearance from the Chief
Executive. This restriction shall cease to apply to any confidential information which may (other than by reason of your breach) become available to the public generally. 

 

	3.2	 You acknowledge the need to hold and retain Company information (in whatever format you may receive it) under
appropriately secure conditions. 

  

	3.3	 Nothing in this paragraph 3 shall prevent you from disclosing information which you are entitled to disclose
under the Public Interest Disclosure Act 1998, provided that the disclosure is made in accordance with the provisions of that Act and you have complied with the Company’s policy from time to time in force regarding such disclosures.

  

	4.	 TIME COMMITMENT 

 

	4.1	 You will be expected to devote such time as is necessary for the proper performance of your duties. Overall we
anticipate that you will spend a minimum of two days a month on work for the Company. This will include attendance at six annual Board meetings, the AGM, one annual Board away day a year, meetings with the
non-executive directors, meetings with shareholders, meetings forming part of the Board evaluation process and updating and training meetings. Some of these meetings may involve overseas travel. In addition,
you will be required to consider all relevant papers before each meeting. You will be provided with a schedule and proposed location of the first six annual board meetings at the date of completion of the

  
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Company’s initial financing round and for subsequent board meetings at least six months in advance of each board meeting. Unless urgent and unavoidable circumstances prevent you from doing
so, it is expected that you will attend the meetings outlined in this paragraph. 

  

	4.2	 The nature of the role makes it impossible to be specific about the maximum time commitment. You may be
required to devote additional time to the Company in respect of preparation time and ad hoc matters which may arise and particularly when the Company is undergoing a period of increased activity. At certain times it may be necessary to convene
additional Board, committee or shareholder meetings. 

  

	4.3	 The overall time commitment stated in paragraph 4.1 will increase if you become a committee member or chair, or
if you are given additional responsibilities such as being appointed the senior independent director, or non-executive director on the boards of any of the Company’s subsidiaries. Details of the expected
increase in time commitment will be covered in any relevant communication confirming the additional responsibility and any proposed changes in remuneration. 

  

	4.4	 By accepting this appointment, you confirm that, taking into account all of your other commitments, you are
able to allocate sufficient time to the Company to discharge your responsibilities effectively. You should obtain the agreement of the Chief Executive or Chairman (who may determine that Board approval is required) before accepting additional
commitments that might affect the time you are able to devote to your role as a non-executive director of the Company. 

 

	5.	 APPOINTMENT 

 

	5.1	 Subject to the remaining provisions of this letter, your appointment shall be for an initial term of three
years commencing on the date of completion of the Company’s initial financing until the conclusion of the Company’s annual general meeting (AGM) occurring approximately three years from that date unless terminated earlier by either
party giving to the other three months’ prior written notice. 

  

	5.2	 Your appointment is subject to the Company’s articles of association, as amended from time to time
(Articles). Nothing in this letter shall be taken to exclude or vary the terms of the Articles as they apply to you as a director of the Company. 

  

	5.3	 Continuation of your appointment is contingent on your continued satisfactory performance and re-election by the shareholders and any relevant statutory provisions relating to removal of a director. If the shareholders do not re-elect you as a director, or you are
retired from office under the Articles, your appointment shall terminate automatically, with immediate effect and without compensation. 

  
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	5.4	 Non-executive directors are typically expected to serve two three-year
terms but may be invited by the Board to serve for an additional period. Any term renewal is subject to Board review and AGM re-election. Notwithstanding any mutual expectation, there is no right to re-nomination by the Board, either annually or after any three-year period. 

  

	5.5	 You may be required to serve on one or more Board committees. You will be provided with the relevant terms of
reference on your appointment to such a committee. You may be required to serve as a non-executive director on the board of any of the Company’s subsidiaries and will be provided with the relevant terms
of reference on your appointment to such board(s). 

  

	5.6	 Notwithstanding paragraph 5.1 to paragraph 5.5, the Company may terminate your appointment with immediate
effect if you have: 

  

	 	(a)	 committed a material breach of your obligations under this letter; 

 

	 	(b)	 committed any serious or repeated breach or non-observance of your
obligations to the Company (which include an obligation not to breach your statutory, fiduciary or common-law duties); 

 

	 	(c)	 been guilty of any fraud or dishonesty or acted in any manner which, in the Company’s opinion, brings or
is likely to bring you or the Company into disrepute or is materially adverse to the Company’s interests; 

  

	 	(d)	 been convicted of an arrestable criminal offence other than a road traffic offence for which a fine or non-custodial penalty is imposed; 

  

	 	(e)	 been declared bankrupt or have made an arrangement with or for the benefit of your creditors, or if you have a
county court administration order made against you under the County Court Act 1984; 

  

	 	(f)	 been disqualified from acting as a director; or 

 

	 	(g)	 not complied with the Company’s anti-corruption and bribery policy and procedures. 

 

	5.7	 On termination of your appointment, you shall, at the Company’s request, resign from your office as non-executive director of the Company and any offices you hold in any of the Company’s subsidiary companies. 

  

	5.8	 If matters arise which cause you concern about your role, you should discuss these matters with the Chief
Executive and Chairman. If you have any concerns which cannot be resolved, and you choose to resign for that, or any other, reason, you should provide an appropriate written statement to the Chief Executive and Chairman for circulation to the Board.

  
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	6.	 INDEPENDENT PROFESSIONAL ADVICE 

In some circumstances you may consider that you need professional advice in the furtherance of your duties as a
non-executive director and it may be appropriate for you to seek advice from independent advisers at the Company’s expense. A copy of the Board’s agreed procedure under which directors may obtain
such independent advice is available from the Company’s General Counsel. The Company shall reimburse the reasonable cost of expenditure incurred by you in accordance with its policy. 

 

	7.	 OUTSIDE INTERESTS 

 

	7.1	 You have already disclosed to the Board the significant commitments you have outside your role in the Company.
You must inform the Chairman or the Nomination Committee in advance of any changes to these commitments. In certain circumstances, you may have to seek the Board’s agreement before accepting further commitments which either might give rise to a
conflict of interest or a conflict with any of your duties to the Company, or which might impact on the time that you are able to devote to your role at the Company. 

 

	7.2	 It is accepted and acknowledged that you have business interests other than those of the Company and have
declared any conflicts that are apparent at present. If you become aware of any further potential or actual conflicts of interest, these should be disclosed to the Chairman as soon as you become aware of them and again you may have to seek the
agreement of the Board. 

  

	8.	 INSIDE INFORMATION AND DEALING IN
THE COMPANY’S SHARES 

  

	8.1	 Your attention is drawn to the requirements under both law and regulation as to the disclosure of inside
information, in particular to the Disclosure and Transparency Rules of the UK Listing Authority and section 52 of the Criminal Justice Act 1993 on insider dealing. You should avoid making any statements that might risk a breach of these
requirements. If in doubt, please contact the Chief Executive or General Counsel. 

  

	8.2	 During your period of appointment you are required to comply, where applicable, with the Model Code (as annexed
to the Listing Rules of the UK Listing Authority) or AIM Rules for Companies in relation to dealing in the Company’s publicly traded or quoted securities, and any other code as the Company may adopt from time to time which sets out the terms
for dealings by directors in the Company’s securities. A copy of the current share dealing code adopted by the Company will be provided to you separately. 

  
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	9.	 TRAINING 

On an ongoing basis, and further to the annual evaluation process, the Company will arrange for you to develop and refresh your skills and
knowledge in areas which are mutually identified as being likely to be required, or of benefit to you, in carrying out your duties effectively. You should try to make yourself available for any relevant training sessions which may be organised for
the Board. 
  

	10.	 REVIEW PROCESS 

The performance of individual directors and the whole Board and its committees is evaluated annually. If, in the interim, there are any matters
which cause you concern about your role you should discuss them with the Chief Executive or the Nomination Committee as soon as you can. 
  

	11.	 INSURANCE AND INDEMNITY 

 

	11.1	 The Company has directors’ and officers’ liability insurance and it intends to maintain such cover
for the full term of your appointment. The indemnity limit is £10 million (current at the date of this letter). A copy of the policy document is available from the Company’s General Counsel. 

 

	11.2	 The Company shall grant you a deed of indemnity against certain liabilities that may be incurred as a result of
your office to the extent permitted by section 234 of the Companies Act 2006. 

  

	12.	 CHANGES TO PERSONAL DETAILS

 You shall advise the General Counsel promptly of any change in your address or other personal contact details. 

 

	13.	 RETURN OF PROPERTY 

On termination of your appointment with the Company however arising, or at any time at the Board’s request, you shall immediately return
to the Company any property of the Company in your possession or under your control including any electrical or electronic equipment and any security pass and keys and deliver to the Company all documents, records, papers (in electronic or hard copy
form) or other property belonging to the Company or any company in the Company’s group which may be in your possession or under your control, and which relate in any way to the Company’s or a group company’s business affairs and you
shall not retain any copies thereof. If you have any information relating to the Company or work carried out for the Company which is stored on a computer that does not belong to the Company, this must be disclosed to the Company and the Company
shall be entitled to download the information or work and/or supervise its deletion from the computer concerned. 

  
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	14.	 MORAL RIGHTS 

You hereby irrevocably waive any moral rights in all works prepared by you, in the provision of your services to the Company, to which you are
now or may at any future time be entitled under Chapter IV of the Copyright Designs and Patents Act 1988 or any similar provisions of law in any jurisdiction, including (but without limitation) the right to be identified, the right of integrity and
the right against false attribution, and agree not to institute, support, maintain or permit any action or claim to the effect that any treatment, exploitation or use of such works or other materials, infringes your moral rights. 

 

	15.	 DATA PROTECTION 

 

	15.1	 By signing this letter you consent to the Company holding and processing data about you for legal, personnel,
administrative and management purposes and in particular to the processing of any sensitive personal data (as defined in the Data Protection Act 1998) relating to you including, as appropriate: 

 

	 	(a)	 information about your physical or mental health or condition in order to monitor sick leave and take decisions
as to your fitness to perform your duties; or 

  

	 	(b)	 your racial or ethnic origin or religious or similar beliefs in order to monitor compliance with equal
opportunities legislation; or 

  

	 	(c)	 information relating to any criminal proceedings in which you have been involved for insurance purposes and in
order to comply with legal requirements and obligations to third parties. 

  

	15.2	 You consent to the Company making such information available to any of its group companies, those who provide
products or services to the Company or any company in the Company’s group (such as advisers and payroll administrators), regulatory authorities, potential or future employers, governmental or quasi-governmental organisations and potential
purchasers of the Company or the business in which you work. 

  

	15.3	 You also consent to the transfer of such information to the Company’s or any group company’s business
contacts outside the European Economic Area in order to further their business interests even where the country or territory in question does not maintain adequate data protection standards. 

 

	15.4	 You shall comply with the Company’s data protection policy, a copy of which is available from the
Company’s General Counsel. 

  
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	15.5	 The Company may change its data protection policy at any time and will notify you in writing of any changes.

  

	16.	 THIRD PARTY RIGHTS 

No one other than you and the Company shall have any rights to enforce the terms of this letter. 

 

	17.	 ENTIRE AGREEMENT 

 

	17.1	 This letter and any document referred to in it constitutes the entire terms and conditions of your appointment
and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between you and the Company, whether written or oral, relating to its subject matter. 

 

	17.2	 You agree that you shall have no remedies in respect of any representation, , assurance or warranty (whether
made innocently or negligently) that is not set out in this letter and you shall not have any claim for innocent or negligent misrepresentation based on any statement in this letter. 

 

	18.	 VARIATION 

No variation of this letter shall be effective unless it is in writing and signed by you and the Company (or respective authorised
representatives). 
  

	19.	 GOVERNING LAW AND JURISDICTION

 Your appointment with the Company and any dispute or claim arising out of or in connection with it or its subject
matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales and you and the Company irrevocably agree that the courts
of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this appointment or its subject matter or formation (including non-contractual
disputes or claims). 

  
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 Please indicate your acceptance of these terms by signing and returning to the attached copy of this letter to
Denise Pollard-Knight, Chief Executive, Mereo BioPharma Group Limited. 
 Yours sincerely 

 

	
	 /s/ Denise Pollard-Knight

 For and on behalf of Mereo BioPharma Group Limited 

I agree to the above terms of my appointment as a non-executive director of Mereo BioPharma Group Limited as set out
in this letter. 
 Signed on 29 July 2015 
  

	
	 /s/ Kunal Kashyap

	Kunal Kashyap

  
 11EX-10.14

 Exhibit 10.14 
 

 
 Rules of the Mereo BioPharma Group 

plc Share Option Scheme 
 Adopted by the board of
directors of Mereo BioPharma Group 
 plc on 9 June 2016 

Amended by the board of directors of Mereo BioPharma Group 
 plc
on 4 April 2017 
 Amended by the board of directors of Mereo BioPharma Group 

plc on 20 March 2018 
 Expiry date: 9 June 2026 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

CONTENTS 
  

							
	 RULES OF THE MEREO BIOPHARMA GROUP PLC SHARE OPTION SCHEME
	  	 	3	 
			
	 1.
	 	 DEFINITIONS AND INTERPRETATION
	  	 	3	 
			
	 2.
	 	 GRANT OF OPTIONS
	  	 	5	 
			
	 3.
	 	 PERFORMANCE CONDITIONS
	  	 	5	 
			
	 4.
	 	 RESTRICTIONS ON TRANSFER AND BANKRUPTCY
	  	 	5	 
			
	 5.
	 	 INDIVIDUAL LIMIT
	  	 	5	 
			
	 6.
	 	 VESTING AND EXERCISE
	  	 	5	 
			
	 7.
	 	 TAXATION AND REGULATORY ISSUES
	  	 	6	 
			
	 8.
	 	 CASH EQUIVALENT/NET SETTLEMENT
	  	 	6	 
			
	 9.
	 	 CESSATION OF EMPLOYMENT
	  	 	7	 
			
	 10.
	 	 CORPORATE EVENTS
	  	 	7	 
			
	 11.
	 	 ADJUSTMENTS
	  	 	9	 
			
	 12.
	 	 AMENDMENTS
	  	 	9	 
			
	 13.
	 	 LEGAL ENTITLEMENT
	  	 	9	 
			
	 14.
	 	 GENERAL
	  	 	10	 
		
	 APPENDIX
	  	 	11	 

  
 2 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

RULES OF THE MEREO BIOPHARMA GROUP PLC SHARE OPTION SCHEME 
  

	1.	 DEFINITIONS AND INTERPRETATION 

 

	1.1	 In this Scheme, 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;
		
	“Board”	 	subject to rule 10.9, the board of directors of the Company or any duly authorised committee of the board;
		
	“Company”	 	Mereo BioPharma Group Plc registered in England and Wales under number 9481161;
		
	“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 an Option may be exercised;
		
	“Exercise Price”	 	the price per Share payable to exercise an Option as determined by the Board in accordance with rule 2.5, as adjusted from time to time in accordance with the rules of the Scheme;
		
	“Grant Date”	 	the date on which an Option 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;
		
	“HMRC”	 	HM Revenue & Customs;
		
	“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;

  
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 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

			
	“Market Value”	  	the market value determined by the Board on the relevant date;
		
	“Normal Vesting Date”	  	the date on which the Board determines, on or prior to the Grant Date that an Option will normally Vest, or to the extent that the Option 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 Option as set out in the Vesting Schedule;
		
	“Option”	  	a right to acquire Shares in accordance with the rules of the Scheme during an Exercise Period;
		
	“Participant”	  	any person who holds an Option or following his death, his personal representatives;
		
	“Performance Period”	  	the period over which a Performance Condition will be measured which, unless the Board determines otherwise, will be at least three years;
		
	“Performance Condition”	  	a condition or conditions imposed under rule 3.1 which relates to performance;
		
	“Scheme”	  	the Mereo BioPharma Group Plc Share Option Scheme in its present form or as from time to time amended;
		
	“Share”	  	a fully paid ordinary share in the capital of the Company or an American Depository Share representing such a share or a number of such shares;
		
	“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 Option 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”	  	the point at which an Option becomes capable of exercise and “Vesting”, “Vested” and “Vesting Date” will be construed accordingly; and
		
	“Vesting Schedule”	  	in relation to an Option 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 Scheme to: 

 

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

  

	 	1.2.2	 the singular include the plural and vice versa; and 

 

	 	1.2.3	 the masculine include the feminine and vice versa. 

  
 4 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

	1.3	 Headings do not form part of the Scheme. 

 

	2.	 GRANT OF OPTIONS 

 

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

  

	2.2	 The grant of an Option 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	 Options must be granted by deed and, as soon as practicable after the Grant Date, Participants must be notified
of the terms of their Option, including any Performance Condition. 

  

	2.4	 No Option may be granted under the Scheme after the tenth anniversary of the Admission Date.

  

	2.5	 On the grant of an Option, the Board will determine the Exercise Price which applies to that Option which may
not be less than the greater of: 

  

	 	2.5.1	 the Market Value of a Share on the Grant Date; and 

 

	 	2.5.2	 if the Shares are to be subscribed, the nominal value of a Share. 

 

	2.6	 The Exercise Price applying to an Option may be adjusted in accordance with rule 11. 

 

	3.	 PERFORMANCE CONDITIONS 

 

	3.1	 The Board may determine that the Vesting of Options will be subject to the satisfaction of a Performance
Condition. Subject to rules 9 and 10, the Performance Condition will be measured over the Performance Period. 

  

	3.2	 The Board may amend or substitute any 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	 Unless the Board determines otherwise, an Option 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 Option will lapse immediately if the Participant is declared bankrupt, or if the Participant is outside the
UK, any analogous event occurs. 

  

	5.	 INDIVIDUAL LIMIT 

 

	5.1	 No Eligible Employee may be granted Options which would, at the time they are granted, cause the Market Value
of all the Shares subject to Options granted to that Eligible Employee in respect of a particular financial year of the Company to exceed 400% of salary, and to the extent any Option exceeds this limit it will be scaled back accordingly.

  

	6.	 VESTING AND EXERCISE 

 

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

 

	6.2	 Subject to rules 7.2, 9 and 10, an Option will Vest: 

 

	 	6.2.1	 on the Normal Vesting Date; or 

  
 5 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

	 	6.2.2	 if on the Normal Vesting Date (or on any other date on which an Option is due to Vest under rule 9 or 10) a
Dealing Restriction applies to the Option, on the date on which such Dealing Restriction lifts; and 

 and an Option may
then be exercised during the period ending on the tenth anniversary of the Grant Date (or such shorter period as the Board may determine on or prior to the Grant Date), after which time it will lapse. 

 

	6.3	 Subject to rules 7 and 8, an Option may be exercised pursuant to this rule 6 or rules 9 and 10 in such form and
manner as the Board may determine, provided that exercise of an Option will not take effect until the Company receives: 

  

	 	6.3.1	 notice of exercise of the Option; and 

 

	 	6.3.2	 payment of the aggregate Exercise Price (or an undertaking to pay that amount). 

 

	6.4	 Subject to rules 7 and 8, where an Option has been exercised, the number of Shares in respect of which it has
been exercised will be issued, transferred or paid (as applicable) to the Participant as soon as reasonably practicable thereafter. 

  

	7.	 TAXATION AND REGULATORY ISSUES 

 

	7.1	 A Participant will be responsible for and indemnifies each relevant Group Member and the Trustee against any
Tax Liability relating to his Option. 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 Option to realise an amount equal to the Tax Liability. 

 

	7.2	 The exercise of an Option and the issue or transfer of Shares under the Scheme will be subject to obtaining any
approval or consent required by AIM (or other relevant authority), any Dealing Restrictions, or any other applicable laws or regulations (whether in the UK or overseas). 

 

	8.	 CASH EQUIVALENT/NET SETTLEMENT 

 

	8.1	 Subject to rule 8.5, at any time prior to the date on which Shares in respect of which an Option has been
exercised have been issued or 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 Option relates, the Participant will instead receive a cash sum in accordance
with rule 8.2 or a reduced number of Shares in accordance with rule 8.3. 

  

	8.2	 A cash sum to which a Participant becomes entitled under this rule 8.2 will be equal to the Market Value of
that number of the Shares which would otherwise have been issued or transferred, less the aggregate Exercise Price payable in respect of the exercise of the Option in relation to those Shares and for these purposes: 

 

	 	8.2.1	 Market Value will be determined on the date of exercise; and 

 

	 	8.2.2	 the cash sum will be paid to the Participant as soon as reasonably practicable after exercise of the Option,
net of any deductions (including, but not limited to, any Tax Liability or similar liabilities) as may be required by law. 

  

	8.3	 The number of Shares to which a Participant becomes entitled under this rule 8.3 will be such number of Shares
as have a Market Value equal to the amount by which the Market Value of that number of the Shares which would otherwise have been issued or transferred exceeds the aggregate Exercise Price and/or Tax Liability payable in respect of the exercise of
the Option in relation to those Shares. For these purposes Market Value will be determined on the date of exercise. 

  

	8.4	 Any Exercise Price paid by a Participant will be refunded to him to the extent an Option he has exercised is
settled by a payment of cash in accordance with rule 8.2 or delivery of Shares in accordance with rule 8.3. 

  
 6 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

	8.5	 The Board may determine that this rule 8 will not apply to an Option, or any part of it. 

 

	9.	 CESSATION OF EMPLOYMENT 

Bad leavers 
  

	9.1	 If a Participant ceases to hold office or employment with a Group Member as a result his termination for gross
misconduct, any Option that he holds (whether or not Vested) will lapse at that time. 

 Good leavers 

 

	9.2	 If a Participant ceases to hold office or employment with a Group Member for any reason other than as a result
of his termination for gross misconduct: 

  

	 	9.2.1	 to the extent that his Option has Vested on the date of such cessation, it will be exercisable from the date of
cessation in accordance with rule 9.3; and 

  

	 	9.2.2	 to the extent that his Option has not Vested on the date of such cessation, it will become exercisable on the
Normal Vesting Date (unless the Board determines that it will be exercisable on the date of cessation) in accordance with rule 9.3 to the extent determined by the Board (taking into account the extent to which any Performance Condition has been
satisfied and, unless the Board determines otherwise, the period of time that has elapsed from the Grant Date to the date of cessation). 

To the extent that an Option does not Vest, the remainder will lapse immediately. 

 

	9.3	 An Option may, subject to rule 8, then be exercised for a period of six months or, in the case of the
Participant’s death, 12 months (or such other period as the Board may determine) from the date of cessation (where rule 9.2.1 applies or where the Board has determined that it will be exercisable on the date of cessation pursuant to rule 9.2.2)
or the Normal Vesting Date (where rule 9.2.2 applies) after which time it will lapse. 

  

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

  

	 	9.4.1	 an office or employment; or 

 

	 	9.4.2	 a right to return to work 

with any Group Member. 
  

	10.	 CORPORATE EVENTS 

 

	10.1	 Where any of the events described in rule 10.3 occur, then subject to rules 10.6 and 10.8, all Options which
have not yet Vested will Vest in accordance with rule 10.2 at the time of such event. Options (whether Vested pursuant to this rule or otherwise) will be exercisable for one month (or such longer period as the Board may determine, not exceeding six
months) from the date of the relevant event, after which time all Options will lapse. 

  

	10.2	 The number of Shares in respect of which an Option will Vest pursuant to rule 10.1 will be determined by the
Board 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. To the extent that an Option does not
Vest or is not exchanged in accordance with rules 10.6 and 10.8, the remainder will lapse immediately. 

  

	10.3	 The events referred to in rule 10.1 are: 

 

	 	10.3.1	 General offer 

  
 7 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

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. 

 

	 	10.3.2	 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. 
  

	10.4	 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: 
  

	 	10.4.1	 whether and to what extent Options 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 

 

	 	10.4.2	 the period during which a Vested Option may be exercised, after which time it will lapse.

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

 

	10.5	 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 may determine: 
  

	 	10.5.1	 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 

 

	 	10.5.2	 the period of time during which any Vested Option may be exercised, after which time it will lapse.

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

 

	10.6	 Exchange – unvested Options 

An unvested Option will not Vest under rule 10.1 but will be exchanged on the terms set out in rule 10.8 to the extent that: 

 

	 	10.6.1	 an offer to exchange the Option is made and accepted by a Participant; or 

 

	 	10.6.2	 there is an Internal Reorganisation. 

 

	10.7	 Exchange – Vested Options 

Where there is an Internal Reorganisation, unless the Board determines otherwise, a Vested Option will not lapse under rule 10.1 but will be
exchanged on the terms set out in rule 10.8. 
  

	10.8	 Exchange terms 

If this rule 10.8 applies, the Option will be released in consideration of the grant of a new option (“New Option”) which, in the
opinion of the Board, is equivalent to the Option, 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 Scheme will be construed in relation to
the New Option as if: 

  
 8 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

company (whether the acquiring company or a different company). Unless the Board determines otherwise, the rules of this Scheme will be
construed in relation to the New Option as if: 
  

	 	10.8.1	 the New Option were an Option granted under the Scheme at the same time as the Option; 

 

	 	10.8.2	 references to the Company were references to the company whose shares are subject to the New Option; and

  

	 	10.8.3	 references to Shares were references to shares in the company whose shares are subject to the New Option.

  

	10.9	 Meaning of Board 

Any reference to the Board in this rule 10 means the members of the Board immediately prior to the relevant event.     

 

	11.	 ADJUSTMENTS 

  

	11.1	 The number of Shares subject to an Option and/or the Exercise Price may be adjusted in such manner as the Board
determines, in the event of: 

  

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

 

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

 The Board may also adjust any Performance Condition. 

 

	12.	 AMENDMENTS 

  

	12.1	 Except as described in this rule 12 the Board may at any time amend the rules of the Scheme.

  

	12.2	 No amendment to the material disadvantage of existing rights of Participants (except in respect of the
Performance Condition) will be made under rule 12.1 unless: 

  

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

  

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

 

	12.3	 No amendment will be made under this rule 12 if it would prevent the Scheme from being an employees’ share
scheme in accordance with section 1166 of the Companies Act 2006. 

  

	13.	 LEGAL ENTITLEMENT 

 

	13.1This	 rule 13 applies during a Participant’s employment with any Group Member and after the termination of such
employment, whether or not the termination is lawful. 

  

	13.2	 Nothing in the Scheme 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 Scheme. Participation in the Scheme does not create any right to continued employment with a
Group Member for any Participant. 

  

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

  

	13.4	 By Participating in the Scheme, a Participant waives all rights to compensation for any loss in relation to the
Scheme, including: 

  
 9 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

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

  

	 	13.4.2	 any exercise of a discretion or a decision taken in relation to an Option or to the Scheme, or any failure to
exercise a discretion or take a decision; and 

  

	 	13.4.3	 the operation, suspension, termination or amendment of the Scheme. 

 

	14.	 GENERAL 

  

	14.1	 The Scheme 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 Scheme will be without prejudice to the existing rights of Participants. 

 

	14.2	 Shares issued or transferred from treasury under the Scheme 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. 

 

	14.3	 By participating in the Scheme, 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 Scheme, 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.

  

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

 

	14.5	 Any notice or other communication in connection with the Scheme 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.

  

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

  

	14.7	 These rules will be governed by and construed in accordance with the laws of England and Wales. Any person
referred to in this Scheme submits to the exclusive jurisdiction of the Courts of England and Wales. 

  
 10 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

APPENDIX 
 APPROVED
OPTIONS 
 This Appendix sets out the terms on which the Board may grant Approved Options. 

 

	1.	 INTERPRETATION 

 

	1.1	 The rules of the Scheme apply to Approved Options except as modified below and references in the rules of the
Scheme to an Option will be interpreted as references to an Approved Option for the purposes of this Appendix. 

  

	1.2	 References in this Appendix to ‘rules’ are to rules of the Scheme and references to
‘sections’ are to the sections of this Appendix. 

  

	1.3	 In the event of any conflict between the rules of the Scheme and the sections of this Appendix, this Appendix
will take precedence.  

  

	2.	 DEFINITIONS 

  

	2.1	 In this Appendix, unless otherwise stated, the words and expressions below have the following meanings

  

					
	      	 	“Approved Option”	 	an Option granted under this Appendix;
			
		 	“Associated Company”	 	has the meaning given to it in paragraph 35(1) of Schedule 4;
			
		 	“Market Value”	 	the market value determined in accordance with the applicable provisions of Part VIII of the Taxation of Chargeable Gains Act 1992, and any relevant published HMRC guidance on the relevant date ;
			
		 	“Restriction”	 	has the meaning given by paragraph 36(3) of Schedule 4;
			
		 	“Schedule 4”	 	Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003; and
			
		 	“Variation of Capital”	 	in relation to the equity share capital of the Company, a capitalisation issue, an offer or invitation made by way of rights, a subdivision, consolidation, reduction or any other variation in respect of which Approved Options may be
adjusted in accordance with rule 11 as applied by this Approved Appendix and the requirements of Schedule 4.

  

	3.	 ELIGIBILITY TO BE GRANTED AN APPROVED OPTION 

 

	3.1	 An Approved Option may only be granted to an Eligible Employee who is a director of the Company or any of its
Subsidiaries if he is obliged to devote not less than 25 hours a week (excluding meal breaks) to the performance of the duties of his office or employment with the Company or any Subsidiary. 

 

	3.2	 An Approved Option may not be granted to an Eligible Employee who is excluded from participation by virtue of
paragraph 9 of Schedule 4 (material interest in a close company). 

  

	4.	 GRANT OF AN APPROVED OPTION 

 

	4.1	 No Approved Option may be granted unless and until this Appendix meets the requirements of Schedule 4.

  

	4.2	 Approved Options must be granted by deed and, as soon as reasonably practicable after the Grant Date,
Participants must be notified of the terms of their Approved Options, including the terms set out in paragraph 21A(1) of Schedule 4. 

  
 11 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

	4.3	 The Board must not grant an Approved Option to an Eligible Employee which would on the Grant Date cause the
aggregate Market Value of the shares which he may acquire by exercising that Approved Option, and any other option which is to be taken into account for the purposes of the limit specified in paragraph 6(1) of Schedule 4, to exceed that limit.

  

	4.4	 For the purposes of this section 4, the Market Value of a share: 

 

	 	4.4.1	 will be determined at the time the relevant option is granted; and 

 

	 	4.4.2	 in the case of a share subject to a Restriction, will be determined as if the Restriction did not apply.

  

	4.5	 If the Company purports to grant an Approved Option in breach of the limit in section 4.3, that Approved Option
will take effect from the Grant Date over the maximum number of Shares over which it may be granted within that limit and any excess will be treated as an Option under the Scheme. 

 

	4.6	 Any Performance Condition applied to an Approved Option will be objective. Any substituted or amended
Performance Condition applied to an Approved Option in accordance with rule 3.2 will not be materially more or less difficult to satisfy than the original Performance Condition when originally set. 

 

	5.	 SHARES SUBJECT TO AN APPROVED OPTION 

 

	5.1	 The Shares subject to an Approved Option must satisfy Part 4 of Schedule 4. 

 

	5.2	 If the Shares subject to an Approved Option are subject to a Restriction, the details of the Restriction will
be included in the notification given under rule 2.3. 

  

	6.	 RESTRICTIONS ON TRANSFER AND BANKRUPTCY 

 

	6.1	 In its application to Approved Options, there shall be deleted from rule 4.1 the words: “Unless the Board
determines otherwise,” 

  

	7.	 EXERCISE OF APPROVED OPTIONS 

 

	7.1	 A Participant may not exercise an Approved Option while he is excluded from being granted an Approved Option
under paragraph 9 of Schedule 4 (material interest in a close company). 

  

	7.2	 The following rule 7.1 will apply to Approved Options in substitution for rule 7.1: 

 

	“7.1	 A Participant will be responsible for and indemnifies each relevant Group Member and the Trustee against any
Tax Liability arising as a result of the exercise of an Option and will reimburse the Group Member and/or the Trustee (as relevant) for the Tax Liability within thirty days of it arising. An Option may only be exercised if there are arrangements in
place acceptable to the Board to provide for the reimbursement of any Tax Liability arising as a result of the exercise of the Option, which may include: 

  

	 	7.8.1	 the Participant making a payment to the Group Member and/or the Trustee; 

 

	 	7.1.2	 the Group Member withholding the Tax Liability from the Participant’s remuneration (to the extent
permitted by law); or 

  

	 	7.1.3	 with the Participant’s agreement, any other arrangement acceptable to the Group Member and/or the Trustee
to reimburse the Tax Liability, including authorising the sale of sufficient of the Shares on the Participant’s behalf.” 

  

	7.3	 Rule 8 of the Scheme will not apply to Approved Options. 

 

	8.	 CESSATION OF EMPLOYMENT 

 

	8.1	 The following rules 9.1 – 9.3 will apply to Approved Options in substitution for rules 9.1 – 9.3:

  

  
 12 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

“Bad leavers  
  

	 	9.1	 If a Participant ceases to hold office or employment with a Group Member as a result his termination for gross
misconduct, any Option that he holds (whether or not Vested) will lapse at that time. 

 Good leavers 

 

	 	9.2	 If a Participant ceases to hold office or employment with a Group Member for any reason other than as a result
of his termination for gross misconduct: 

  

	 	9.2.1	 to the extent that his Option has Vested on the date of such cessation, it will be exercisable from the date of
cessation in accordance with rule 9.3; and 

  

	 	9.2.2	 to the extent that his Option has not Vested on the date of such cessation, it will become exercisable on the
Normal Vesting Date in accordance with rule 9.3 to the extent determined by the Board (taking into account the extent to which any Performance Condition has been satisfied at the end of the Performance Period and the period of time that has elapsed
from the Grant Date to the date of cessation). 

 To the extent that an Option does not Vest, the remainder will lapse
immediately. 
  

	 	9.3	 An Option may, subject to rule 8, then be exercised for a period of six months or, in the case of the
Participant’s death, 12 months from the date of cessation (where rule 9.2.1 applies) or the Normal Vesting Date (where rule 9.2.2 applies) after which time it will lapse.” 

 

	9.	 CORPORATE EVENTS 

 

	9.1	 The following rules 10.1 –10.3A will apply to Approved Options in substitution for rules 10.1 – 10.3:

  

	“10.1.	 Where any of the events described in rule 10.3 occur, then subject to rules 10.7 – 10.8A, all Options
which have not yet Vested will Vest in accordance with rule 10.2 at the time of such event. Vested Options will be exercisable for one month (or such longer period not exceeding six months as the Board may permit) from the date of the relevant
event, after which all Options will lapse.     

  

	10.2	 An Option will Vest pursuant to rule 10.1 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. To the extent that an Option does not Vest or is not exchanged in accordance with rules 10.7– 10.8A, it will
lapse immediately. 

  

	10.3	 The events referred to in rule 10.1 are: 

 

	 	10.3.1	 General offer 

  

	 	(a)	 If a person (including any person acting in concert with him as referred to in paragraph 25A(8) of Schedule 4)
has obtained Control of the Company as a result of an offer falling within paragraph 25A(3) of Schedule 4 and any condition subject to which the offer is made has been satisfied. 

 

	 	(b)	 If any person (either alone or together with any person acting in concert with him) other than in a case
falling within rule 10.3.1(i): 

  

	 	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. 

 

  
 13 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

	9.1.2	 Compromise or arrangement 

 

	 	(a)	 The sanction by the Court under section 899 of the Companies Act 2006 of a compromise or arrangement of a sort
referred to in paragraph 25A(6) of Schedule 4 which is proposed for the purposes of a change of Control of the Company. 

  

	 	(b)	 A compromise or arrangement in accordance with section 899 of the Companies Act 2006 for the purposes of a
change of Control of the Company not falling within rule 10.3.2(a) is sanctioned by the Court. 

  

	11.3A	 If a person becomes bound or entitled to acquire Shares under sections 979 to 982 or 983 to 985 of the
Companies Act 2006 (takeover offers: right of offeror to buy out minority shareholder etc), any Option which has not already been exercised or lapsed may be exercised while that person remains so bound or entitled. All unexercised Options will lapse
when that person ceases to be so bound or entitled.”     

  

	10.	 CORPORATE EVENTS – EXCHANGE OF OPTIONS 

 

	10.1	 The following rules 10.7 – 10.8A will apply to Approved Options in substitution for rules 10.7– 10.9:

  

	 	“10.7	 If another company (the “acquiring company”): 

 

	 	10.7.1	 obtains Control of the Company as a result of making: 

 

	 	(i)	 a general offer (disregarding, if relevant, the fact that the general offer may be made to different
shareholders by different means) to acquire the whole of the issued ordinary share capital of the Company (construed in accordance with paragraph 26(2A) of Schedule 4) which is made on a condition such that, if it is met, the person making the offer
will have Control of the Company; or 

  

	 	(ii)	 a general offer (disregarding, if relevant, the fact that the general offer may be made to different
shareholders by different means) to acquire all the shares in the Company (construed in accordance with paragraph 26(2A) of Schedule 4) which are of the same class as the shares which may be acquired by the exercise of Approved Options;

  

	 	10.7.2	 obtains Control of the Company as a result of a compromise or arrangement sanctioned by the court under section
899 of the Companies Act 2006; or 

  

	 	10.7.3	 becomes bound or entitled to acquire shares in the Company under sections 979 to 982 or 983 to 985 of the
Companies Act 2006, 

 an Option may be released in consideration of the grant to the holder of that Option of a new share
option in accordance with rule 10.8. 
  

	 	10.8	 If an ‘Option (the “Old Option”) is to be released in consideration of the grant of a new share
option (a “New Option”) in accordance with this rule 10.8: 

  

	 	10.8.1	 that must be done with the agreement of the acquiring company and the Participant; 

	 	

	 	10.8.2	 such agreement must be made in the relevant period determined in accordance with paragraph 26 of
Schedule 4 and before the Old Option lapses in accordance with rule 10.1; 

	 	

	 	10.8.3	 any New Option granted in consideration of the release of an Old Option in accordance with this rule 10.8 must
satisfy the requirements of paragraph 27 of Schedule 4; and 

	 	

	 	10.8.4	 the New Option will be treated as if it was an Option granted under the Scheme at the same time as the Old
Option, except that: 

  

	 	(i)	 other than in the definition of “Board”, in rule 10.2 and in rule 14.1, the defined term
“Company” will mean the company whose shares are subject to the New Option; and 

  

	 	(ii)	 rule 10.10 will not apply to the New Option. 

  
 14 

 Rules of the Mereo BioPharma Group plc Share Option Scheme 

 

	 	10.8A	 If there is an Internal Reorganisation, an unvested Approved Option will not Vest under rule 10.1 and any
Vested Approved Option may not be released if the acquiring company offers to grant a new share option in consideration of the release of the Option (whether in accordance with rules 10.7 – 10.8 or otherwise). To the extent the Participant does
not agree to the release of the Option in accordance with rules 10.7 – 10.8 or otherwise, the Option will lapse one month after the date of the Internal Reorganisation.” 

 

	10.2	 Following the grant of any New Option in accordance with rule 10.8, no Approved Options may be granted under
the Scheme other than New Options granted in accordance with rule 10.8. 

  

	11.	 ADJUSTMENTS 

  

	11.1	 The following rule 11 will apply to Approved Options in substitution for rule 11: 

 

	 	11.1	 The number of Shares subject to an Option and/or the Exercise Price thereof may be adjusted in such manner as
the Board determines in the event of a Variation of Capital.     

  

	 	11.2	 No adjustment may be made to an Approved Option under this rule 11 that does not meet the requirements of
Schedule 4. 

  

	 	11.3	 The Board may also adjust any Performance Condition.” 

 

	12.	 AMENDMENTS 

  

	12.1	 If an amendment is made to this Appendix which will result in this Appendix ceasing to meet the requirements of
Schedule 4, the amendment will not have effect unless and until the Board has determined that the amendment will take effect even if this causes this Appendix to cease to meet the requirements of Schedule 4. 

 

	13.	 BOARD DISCRETION 

 

	13.1	 Any discretion exercisable or action or determination to be undertaken by the Board under this Appendix will be
exercised or undertaken fairly and reasonably. 

  
 15 

 © 2018 Deloitte LLP. All rights reserved.

 Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street
Square, London EC4A 3BZ, United Kingdom. 
 Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK
private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. 

 THE MEREO BIOPHARMA GROUP PLC SHARE OPTION SCHEME 

(THE “OPTION SCHEME”) 

GLOBAL DEED OF GRANT 
 On the date of this
deed (“Grant Date”), Mereo BioPharma Group Plc (the “Company”) hereby grants options (“2018 Options”) over such number of ordinary shares in the Company (“Shares”) as
specified in the Appendix, to the individuals (“Participants”) named therein, subject to the rules of the Option Scheme and the terms of this deed. 

Unless otherwise defined, capitalised terms used in this deed have the same meaning as in the rules of the Option Scheme. 

TERMS OF THE 2018 OPTIONS 
 Subject to the rules of the
Option Scheme, the following Vesting Schedule will apply to the 2018 Options (each vesting date a “Normal Vesting Date”): 
  

	 	a)	 one-third of the Shares subject to the 2018 Option, rounding down to
the nearest whole Share will Vest on the first anniversary of the Grant Date; 

  

	 	b)	 one-third of the Shares subject to the 2018 Option, rounding down to
the nearest whole Share will Vest on the second anniversary of the Grant Date; and 

  

	 	c)	 the remaining Shares subject to the 2018 Option will Vest on the third anniversary of the Grant Date.

 Each tranche of the 2018 Option will normally then be exercisable from the relevant Normal Vesting Date until the tenth anniversary of
the Grant Date after which, subject to the rules of the Option Scheme, the 2018 Option will lapse. 
 In accordance with rule 5 of the Option Scheme, the
Board has determined that the Market Value of a Share used to determine the number of Shares comprised in the 2018 Option is £[ • ]. 
 The 2018
Option is personal to the Participant and is not transferable except as permitted by the rules of the Option Scheme. Subject to the rules of the Option Scheme, Shares in respect of a 2018 Option which has been exercised will be delivered to the
Participant as soon as reasonably practicable thereafter, subject to payment of any Tax Liability relating to the 2018 Option. 
  

	
	 Executed as a deed on [Insert date] by
  

Mereo BioPharma Group Plc
  

acting by [Name] a director,
  

	  
 [Name]

 
 in the presence of:

  

	
	

  

			
	  
	 	 
	[SIGNATURE OF WITNESS]	 	
	  
	 	
	  
	 	
	  
	 	
	  
	 	
	  
	 	
	[NAME, ADDRESS AND OCCUPATION OF WITNESS]

 Appendix 
  

					
	 Name of Participant
	  	Value of 2018 Option	 	Number of Shares subject
to 2018 Option
			
	[ ● ]	  	£[ ● ]	 	[ ● ]
			
	[ ● ]	  	£[ ● ]	 	[ ● ]
			
	[ ● ]	  	£[ ● ]	 	[ ● ]
			
	[ ● ]	  	£[ ● ]	 	[ ● ]

  

 MEREO BIOPHARMA GROUP PLC SHARE OPTION SCHEME (THE “OPTION SCHEME”) 

2018 OPTION CERTIFICATE 
 This is to
certify that on [ ● ] 2018 (the “Grant Date”), [name] (the “Participant”) was granted an option (“2018 Option”) under the rules of the Option Scheme over such number of ordinary shares
in Mereo BioPharma Group plc (“Shares”) as specified in the table below. 
  

			
	 Value of 2018 Option
	  	 Number of Shares subject to 2018 Option

	£[ ● ]	  	[ ● ]

 Subject to the rules of the Option Scheme, the following Vesting Schedule will apply to the 2018 Option (each vesting date a
“Normal Vesting Date”): 
  

	 	a)	 one-third of the Shares subject to the 2018 Option, rounding down to
the nearest whole Share will Vest on the first anniversary of the Grant Date; 

  

	 	b)	 one-third of the Shares subject to the 2018 Option, rounding down to
the nearest whole Share will Vest on the second anniversary of the Grant Date; and 

  

	 	c)	 the remaining Shares subject to the 2018 Option will Vest on the third anniversary of the Grant Date.

 Each tranche of the 2018 Option will normally then be exercisable from the relevant Normal Vesting Date until the tenth anniversary of
the Grant Date after which, subject to the rules of the Option Scheme, the 2018 Option will lapse. 
 In accordance with rule 5 of the Option Scheme, the
Board has determined that the Market Value of a Share used to determine the number of Shares comprised in the 2018 Option is £[ • ]. 
 The 2018
Option is personal to the Participant and is not transferable except as permitted by the rules of the Option Scheme. Subject to the rules of the Option Scheme, Shares in respect of a 2018 Option which has been exercised will be delivered to the
Participant as soon as reasonably practicable thereafter, subject to payment of any Tax Liability relating to the 2018 Option. 
 Unless otherwise defined,
capitalised terms used in this 2018 Option Certificate have the same meaning as in the rules of the Option Scheme. In the event of a conflict with this 2018 Option Certificate, the rules of the Option Scheme prevail. 

PLEASE KEEP THIS CERTIFICATE IN A SAFE PLACE

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