Document:

Exhibit 10.3.2

 

	

    	
Online Office   Agreement
    

 

	
English (UK)
    	
 
    
	
 
    	
 
    
	
Agreement   Date : 26 October 2016
    	
Reference   No : 24576-1024712
    

 

	
Business Centre Details
    	
Client   Details
    	
 
    
	
 
    	
 
    	
 
    
	
LONDON, London Bridge - More London
    	
Company   Name
    	
VERONA PHARMA PLC
    
	
 
    	
 
    	
 
    	
 
    
	
Address
    	
3 More London Riverside
    	
Contact   Name
    	
Morgan Piers
    
	
 
    	
London
    	
 
    	
 
    
	
 
    	
Greater London
    	
Address
    	
One Central Sq
    
	
 
    	
SE1 2RE
    	
 
    	
Cardiff
    
	
 
    	
United Kingdom
    	
 
    	
CF10 1FS
    
	
 
    	
 
    	
 
    	
United Kingdom
    
	
Sales   Manager
    	
Max Chapman
    	
 
    	
 
    
	
 
    	
 
    	
Phone
    	
+ () 07775730370
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Email
    	
XXXX@veronapharma.com
    

 

Office Payment Details (exc.VAT and exc. services)

 

	
Office Number
    	
 
    	
Number of people
    	
 
    	
 
    	
 
    	
Price per Office
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
144
    	
 
    	
6
    	
 
    	
 
    	
 
    	
£
    	
5,620.28
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Initial   Payment :
    	
 
    	
 
    	
 
    	
First month’s fee :
    	
 
    	
£
    	
5,620.28
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Service Deposit :
    	
 
    	
£
    	
11,240.56
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Total Initial Payment :
    	
 
    	
£
    	
16,860.84
    	
 
    

 

	
Service   Provision :
    	
Start   Date
    	
1   December 2016
    	
End   Date
    	
30   November 2017
    

 

All agreements end on the last calendar day of the month.

 

Comments:

 

* Additional Office Fee Discount - Total Savings of £ 5,864.64

 

Terms and Conditions

 

We are Regus Management (UK) Limited, the “Provider”. This Agreement incorporates our terms of business set out on attached Terms and Conditions, attached House Rules and Service Price Guide (where available) which you confirm you have read and understood. We both agree to comply with those terms and our obligations as set out in them. This agreement is binding from the agreement date and may not be terminated once it is made, except in accordance with its terms. Note that the Agreement does not come to an end automatically. See “Cancellation” section of your terms and conditions

 

	
Name (printed):
    	
/s/ PJ Morgan
    	
 
    
	
 
    	
 
    	
 
    
	
Title (printed):
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
26 October 2016
    	
 
    
	
 
    	
 
    
	
SIGNED   on your behalf (Client)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

o            We and our preferred partners would like to keep you informed of the latest product news, special offers and other marketing information. If you would like to receive this information then select this box.

 

 

Copyright ©Regus Group Companies 2009. All rights reserved.

Reproduction in whole or in part in any form or medium without express written permission of Regus plc is prohibited.

 

 

1.         This Agreement

 

1.1            Nature of this agreement: This agreement is the commercial equivalent of an agreement for accommodation(s) in a hotel. The whole of the Centre remains in the Provider’s possession and control. THE CLIENT ACCEPTS THAT THIS AGREEMENT CREATES NO TENANCY INTEREST, LEASEHOLD ESTATE OR OTHER REAL PROPERTY INTEREST IN THE CLIENT’S FAVOUR WITH RESPECT TO THE ACCOMMODATION(S). The Provider is giving the Client the right to share with the Provider the use of the Centre on these terms and conditions, as supplemented by the House Rules, so that the Provider can provide the services to the Client. This Agreement is personal to the Client and cannot be transferred to anyone else without prior consent from the Provider unless such transfer is required by law. The Provider will not unreasonably withhold its consent to assignment to a parent, subsidiary or affiliate of Client provided that Client and assignee execute the Provider’s form of Assignment of License Agreement which will require assignee to assume all Client obligations and will not release the Client. This agreement is composed of the front page describing the accommodation(s), the present terms and conditions, the House Rules and the Service Price Guide (where available).

 

1.2            Comply with House Rules: The Client must comply with any House Rules which the Provider imposes generally on users of the Centre. The House Rules vary from country to country and from Centre to Centre and these can be requested locally.

 

1.3            AUTOMATIC RENEWAL: THIS AGREEMENT LASTS FOR THE PERIOD STATED IN IT AND THEN WILL BE EXTENDED AUTOMATICALLY FOR SUCCESSIVE PERIODS EQUAL TO THE CURRENT TERM BUT NO LESS THAN 3 MONTHS (UNLESS LEGAL RENEWAL TERM LIMITS APPLY) UNTIL TERMINATED BY THE CLIENT OR BY THE PROVIDER PERSUANT TO SECTION 1.4. ALL PERIODS SHALL RUN TO THE LAST DAY OF THE MONTH IN WHICH THEY WOULD OTHERWISE EXPIRE. THE FEES ON ANY RENEWAL WILL BE AT THE THEN PREVAILING MARKET RATE. THIS CLAUSE DOES NOT APPLY TO MONTH TO MONTH AGREEMENTS.

 

1.4            CANCELLATION: EITHER THE PROVIDER OR THE CLIENT CAN TERMINATE THIS AGREEMENT AT THE END DATE STATED IN IT, OR AT THE END OF ANY EXTENSION OR RENEWAL PERIOD, BY GIVING AT LEAST THREE MONTHS WRITTEN NOTICE TO THE OTHER. HOWEVER, IF THIS AGREEMENT, EXTENSION OR RENEWAL IS FOR THREE MONTHS OR LESS AND EITHER THE PROVIDER OR THE CLIENT WISHES TO TERMINATE IT, THE NOTICE PERIOD IS TWO MONTHS OR (IF TWO MONTHS OR SHORTER) ONE WEEK LESS THAN THE PERIOD STATED IN THIS AGREEMENT. IF THE CLIENT IS ON A MONTH TO MONTH AGREEMENT EITHER PARTY MAY TERMINATE THIS AGREEMENT BY GIVING NO LESS THAN ONE MONTHS’ NOTICE TO THE OTHER (EFFECTIVE FROM THE START OF ANY CALENDAR MONTH).

 

1.5            Ending this agreement immediately: To the maximum extent permitted by applicable law, the Provider may put an end to this agreement immediately by giving the Client notice and without need to follow any additional procedure if (a) the Client becomes insolvent, bankrupt, goes into liquidation or becomes unable to pay its debts as they fall due, or (b) the Client is in breach of one of its obligations which cannot be put right or which the Provider have given the Client notice to put right and which the Client has failed to put right within fourteen (14) days of that notice, or (c) its conduct, or that of someone at the Centre with its permission or invitation, is incompatible with ordinary office use and (i) such conduct is repeated despite the Client having been given a warning or (ii) such conduct is material enough (in the Provider’s opinion) to warrant immediate termination.

 

If the Provider puts an end to this agreement for any of these reasons it does not put an end to any outstanding obligations, including additional services used, requested or required under the agreement and the monthly office fee for the remainder of the period for which this agreement would have lasted if the Provider had not ended it.

 

1.6            If the Centre is no longer available: In the event that the Provider is permanently unable to provide the services and accommodation(s) at the Centre stated in this agreement then this agreement will end and the Client will only have to pay monthly office fees up to the date it ends and for the additional services the Client has used. The Provider will try to find suitable alternative accommodation(s) for the Client at another Provider Centre.

 

1.7            When this agreement ends the Client is to vacate the accommodation(s) immediately, leaving the accommodation(s) in the same condition as it was when the Client took it. Upon the Client’s departure or if the Client, at its option, chooses to relocate to different rooms within the Centre, the Provider will charge an Office Restoration Service fee to cover normal cleaning and testing and to return the accommodation(s) to its original state. This fee will differ by country and is listed in the House Rules. The Provider reserves the right to charge additional reasonable fees for any repairs needed above and beyond normal wear and tear. If the Client leaves any property in the Centre the Provider may dispose of it at the Client’s cost in any way the Provider chooses without owing the Client any responsibility for it or any proceeds of sale. If the Client continues to use the accommodation(s) when this agreement has ended the Client is responsible for any loss, claim or liability the Provider incurs as a result of the Client’s failure to vacate on time. The Provider may, at its discretion, permit the Client an extension subject to a surcharge on the monthly office fee.

 

1.8            Employees: While this agreement is in force and for a period of six months after it ends, neither the Provider nor the Client may knowingly solicit or offer employment to any of the other’s staff employed in the Centre. This obligation applies to any employee employed at the Centre up to that employee’s termination of employment, and for three months thereafter. It is stipulated that the breaching party shall pay the non-breaching party the equivalent of six months’ salary for any employee concerned. Nothing in this clause shall prevent either party from employing an individual who responds in good faith and independently to an advertisement which is made to the public at large.

 

1.9            Notices: All formal notices must be in writing, which may include by email, to the address first written above.

 

1.10     Confidentiality: The terms of this agreement are confidential. Neither the Provider nor the Client must disclose them without the other’s consent unless required to do so by law or an official authority. This obligation continues for a period of 3 years after this agreement ends.

 

1.11          Applicable law: This agreement is interpreted and enforced in accordance with the law of the place where the relevant Centre is located. All dispute resolution proceedings will be conducted in the country, state or province where the Centre is located. If any provision of these terms and conditions is held void or unenforceable under the applicable law, the other provisions shall remain in force. In the case of Japan all agreements will be interpreted and enforced by the Tokyo District Court, and in the case of France, any dispute regarding this agreement will be settled by the relevant courts of the Paris jurisdiction.

 

2.         Services and Obligations

 

2.1            Office accommodation(s): The Provider is to provide the number of serviced office accommodation(s) for which the Client has agreed to pay in the Centre stated in this agreement. This agreement lists the accommodation(s) the Provider has initially allocated for the Client’s use. The Client will have a non-exclusive right to the rooms allocated to it. Occasionally the Provider may need to allocate different accommodation(s), but these accommodation(s) will be of reasonably equivalent size and the Provider will notify the Client with respect to such different accommodation(s) in advance.

 

2.2            Office Services: The Provider is to provide during normal opening hours the services, if requested, described in the relevant service description (which is available on request). If the Provider decides that a request for any particular service is excessive, it reserves the right to charge an additional fee.

 

2.3            THE PROVIDER’S IT: WHILST THE PROVIDER HAS INTERNET SECURITY PROTOCOLS, THE PROVIDER DOES NOT MAKE ANY REPRESENTATIONS AS TO THE SECURITY OF THE PROVIDER’S NETWORK (OR THE INTERNET) OR OF ANY INFORMATION THAT THE CLIENT PLACES ON IT. The Client should adopt whatever security measures (such as encryption) it believes are appropriate to its circumstances. The Provider cannot guarantee that a particular degree of availability will be attained in connection with the Client’s use of the Provider’s network (or the internet). The Client’s sole and exclusive remedy shall be the remedy of such failure by the Provider within a reasonable time after written notice.

 

3.         Providing the Services

 

3.1            Access to the accommodation(s): The Provider may need to enter the Client’s accommodation(s) and may do so at any time. However, unless there is an emergency or the Client has given notice to terminate, the Provider will attempt to notify the Client verbally or electronically in advance when the Provider needs access to carry out testing, repair or works other than routine inspection, cleaning and maintenance. The Provider will also endeavour to respect reasonable security procedures to protect the confidentiality of the Client’s business.

 

3.2            Availability at the start of this agreement: If for any reason the Provider cannot provide the accommodation(s) stated in this agreement by the date when this agreement is due to start it has no liability to the Client for any loss or damages but the Client may cancel this agreement without penalty. The Provider will not charge the Client the monthly office fee for accommodation(s) the Client cannot use until it becomes available. The Provider may delay the start date of this agreement provided it provides to the Client alternative accommodation(s) that shall be at least of equivalent size to the accommodation(s) stated in this agreement.

 

 

4.         Accommodation(s)

 

4.1            The Client must not alter any part of its accommodation and must take good care of all parts of the centre, its equipment, fixtures, fittings and furnishings which the Client uses. The Client is liable for any damage caused by it or those in the Centre with the Client’s permission or at the Client’s invitation whether express or implied, including but not limited to all employees, contractors, agents or other persons present on the premises.

 

4.2            Office equipment: The Client must not install any cabling, IT or telecom connections without the Provider’s consent, which the Provider may refuse at its absolute discretion.

 

As a condition to the Provider’s consent, the Client must permit the Provider to oversee any installations (for example IT or electrical systems) and to verify that such installations do not interfere with the use of the accommodation(s) by other Clients or the Provider or any landlord of the building.

 

4.3            Insurance: It is the Client’s responsibility to arrange insurance for its own property which it brings in to the Centre and for its own liability to its employees and to third parties. The Provider strongly recommends that the Client put such insurance in place.

 

5.         Use

 

5.1            The Client must only use the accommodation(s) for office purposes. Office use of a “retail” or “medical” nature, involving frequent visits by members of the public, is not permitted.

 

5.2            The Client must not carry on a business that competes with the Provider’s business of providing serviced office accommodation(s) or its ancillary services.

 

5.3            The Client’s name and address: The Client may only carry on that business in its name or some other name that the Provider previously agrees.

 

5.4            Use of the Centre Address: The Client may use the Centre address as its business address. Any other uses are prohibited without the Provider’s prior written consent.

 

6.         Compliance

 

6.1            Comply with the law: The Client and the Provider must comply with all relevant laws and regulations in the conduct of its business in relation to this agreement. The Client must do nothing illegal in connection with its use of the Business Centre. The Client must not do anything that may interfere with the use of the Centre by the Provider or by others, (including but not limited to political campaigning or immoral activity), cause any nuisance or annoyance, increase the insurance premiums the Provider has to pay, or cause loss or damage to the Provider (including damage to reputation) or to the owner of any interest in the building which contains the Centre the Client is using. Both the Client and the Provider shall comply at all times with all relevant anti-bribery and anti-corruption laws.6.2 If the Provider has been advised by any government authority or other legislative body that it has reasonable suspicion that the Client is conducting criminal activities from the Centre then the Provider shall be entitled to terminate this agreement with immediate effect.

 

6.3            The Client acknowledges that (a) the terms of this clause are a material inducement in the Provider’s execution of this agreement and (b) any violation by the Client of this clause shall constitute a material default by the Client hereunder, entitling the Provider to terminate this agreement, without further notice or procedure.

 

6.4            The Client acknowledges and accepts that its personal data may be transferred or made accessible to all entities of the Provider, wherever located, for the purposes of providing the services herein.

 

7.         The Provider’s Liability

 

7.1.         The extent of the Provider’s liability: To the maximum extent permitted by applicable law, the Provider is not liable to the Client in respect of any loss or damage the Client suffers in connection with this agreement, with the services or with the Client’s accommodation(s) unless the Provider has acted deliberately or negligently in causing that loss or damage. the Provider is not liable for any loss as a result of the Provider’s failure to provide a service as a result of mechanical breakdown, strike, termination of the Provider’s interest in the building containing the Centre or otherwise unless the Provider does so deliberately or is negligent. In no event shall the Provider be liable for any loss or damage until the Client provides the Provider written notice and gives the Provider a reasonable time to put it right. If the Provider is liable for failing to provide the Client with any service under this agreement then subject to the exclusions and limits set out immediately below the Provider will pay any actual and reasonable expenses the Client has incurred in obtaining that service from an alternative source. If the Client believes the Provider has failed to deliver a service consistent with these terms and conditions the Client shall provide the Provider written notice of such failure and give the Provider a reasonable period to put it right.

 

7.2.         EXCLUSION OF CONSEQUENTIAL LOSSES, ETC.: THE PROVIDER WILL NOT IN ANY CIRCUMSTANCES HAVE ANY LIABILITY FOR LOSS OF BUSINESS, LOSS OF PROFITS, LOSS OF ANTICIPATED SAVINGS, LOSS OF OR DAMAGE TO DATA, THIRD PARTY CLAIMS OR ANY CONSEQUENTIAL LOSS UNLESS the Provider OTHERWISE AGREES IN WRITING. THE PROVIDER STRONGLY ADVISES THE CLIENT TO INSURE AGAINST ALL SUCH POTENTIAL LOSS, DAMAGE, EXPENSE OR LIABILITY.

 

7.3.         Financial limits to the Provider’s liability: In all cases, the Provider’s liability to the Client is subject to the following limits:

 

·          Without limit for personal injury or death;

 

·          Up to a maximum of £1 million / USD$2 million / €1.3 million (or local equivalent) for any one event or series of connected events for damage to the Client’s personal property except in Turkey where it will be up to a maximum of the monthly office fee over the current term;

 

·          Up to a maximum equal to 125% of the total fees paid between the date the Client moved into its accommodation(s) and the date on which the claim in question arises or £50,000 / USD$100,000 / €66,000 (or local equivalent) whichever is the higher, in respect of any other loss or damage except in Turkey where it will be up to a maximum of the monthly office fee over the current term.

 

8.         Fees

 

8.1            Taxes and duty charges: The Client agrees to pay promptly (i) all sales, use, excise, consumption and any other taxes and license fees which it is required to pay to any governmental authority (and, at the Provider’s request, will provide to the Provider evidence of such payment) and (ii) any taxes paid by the Provider to any governmental authority that are attributable to the accommodation(s), including, without limitation, any gross receipts, rent and occupancy taxes, tangible personal property taxes, stamp tax or other documentary taxes and fees.

 

8.2            Service Retainer/Deposit: The Client will be required to pay a service retainer/deposit equivalent to two months’ of the monthly office fee (plus VAT/Tax where applicable) upon entering into this agreement unless a different amount is specified on the front of this agreement. This will be held by the Provider without generating interest as security for performance of all the Client’s obligations under this agreement. The service retainer/deposit or any balance will be returned to the Client when the Client has settled its account which includes deducting outstanding fees and other costs due to the Provider.

 

8.3            The Provider may require the Client to pay an increased retainer if outstanding fees exceed the service retainer/deposit held and/or the Client frequently fails to pay the Provider when due.

 

8.4            Payment: The Provider is continually striving to reduce its environmental impact and supports its clients in doing the same. Therefore the Provider will send all invoices electronically (where allowed by law) and the Client will make payments via an automated method such as Direct Debit or Credit Card, wherever local banking systems permit unless another form of payment is offered to the Client as a qualified and current Key Account.

 

8.5            Late payment: If the Client does not pay fees when due, a fee will be charged on all overdue balances. This fee will differ by country and is listed in the House Rules. If the Client disputes any part of an invoice the Client must pay the amount not in dispute by the due date or be subject to late fees. The Provider also reserves the right to withhold services (including for the avoidance of doubt, denying the Client access to its accommodation(s)) while there are any outstanding fees and/or interest or the Client is in breach of this agreement.

 

8.6            Insufficient Funds: The Client will pay a fee for any returned cheque or any other declined payments due to insufficient funds. This fee will differ by country and is listed in the House Rules.

 

8.7            If this agreement is for a term of more than 12 months, the Provider will increase the monthly office fee on each anniversary of the start date. This increase will be by the local Consumer Price Index or such other broadly equivalent index where a consumer price index is not available locally. If there is a negative index rate, prices will not be decreased. Renewals are calculated separately from annual indexation increases. Month to Month agreements will use the above stated index or the current month to month office price, whichever is the greater.

 

8.8            Standard services: The monthly office fee and any recurring services requested by the Client are payable monthly in advance. Unless otherwise agreed in writing, these recurring services will be provided by the Provider at the specified rates for the duration of this Agreement (including any renewal). Specific due dates will differ by country and are listed in the House Rules. Where a daily rate applies,

 

 

the charge for any such month will be 30 times the daily fee. For a period of less than a month the fee will be applied on a daily basis.

 

8.9            Pay-as-you-use and Additional Variable Services: Fees for pay-as-you-use services, plus applicable taxes, in accordance with the Provider’s published rates which may change from time to time, are invoiced in arrears and payable the month following the calendar month in which the additional services were provided. Specific due dates will differ by country and are listed in the House Rules.

 

8.10     Discounts, Promotions and Offers: If the Client benefited from a special discount, promotion or offer, the Provider may discontinue that discount, promotion or offer without notice if the Client materially breaches these terms and conditions.

 

Global Terms & Conditions, lveber, Feb-16

 

 

HOUSE RULES | UNITED KINGDOM

 

These are The Providers’ House Rules which may change from time to time and which apply between The Provider and the Customer in relation to a Business Centre.

 

Accommodation

 

1.              Upon move in: The Provider will ask the Customer to sign an inventory of all accommodation, furniture and equipment the Customer is permitted to use, together with a note of its condition, and details of the keys or entry cards issued to the Customer.

 

2.              The Customer may not put up any signs on the doors of their accommodation or anywhere else that is visible from outside the rooms the Customer is using without written approval from the local Business Centre team. The Provider reserves the right to charge a fee for any signage and to specify its design to ensure it remains in keeping with the Centre’s design.

 

3.              Taking care of the Provider’s property: the Customer must take good care of all parts of the Business Centre, its equipment, fittings and furnishings that they use. The Customer must not alter any part of it.

 

4.              Keys and security: Any keys or entry cards which The Provider allows the Customer use remain the Provider’s property at all times. The Customer must not make any copies of the keys and/or entry cards or allow anyone else to use them without the Provider’s consent. Any loss must be reported to The Provider immediately and the Customer must pay a reasonable fee for replacement keys or cards and of changing locks, if required. This rule improves security levels of the Business Centre. If the Customer is permitted to use the Business Centre outside normal working hours it is the Customer’s responsibility to lock the doors to their accommodation and to the Business Centre when they leave. This is to ensure the safety of individuals and property at the Business Centre.

 

Use

 

5.              The Customer shall not leave open any corridor doors, exit doors or door connecting corridors during or after business hours. For security purposes and if the Customer does so, it will be at the Customer’s own risk. All corridors, halls, elevators and stairways shall not be obstructed by the Customer or used for any purpose other than egress and ingress. The Customer can only use public areas with the consent of the Provider and those areas must be kept neat and attractive at all times.

 

6.              The Customer’s name and address: At the Customer’s request and cost, the Provider is happy to include the Customer’s name in the house directory at the Business Centre, where this facility is available. The Customer must not use the name of the Provider in any way in connection with their business. The Customer may not use the Business Centre as the Customer’s registered address for service-of-process.

 

7.              The Customer’s employees and guests shall conduct themselves in a businesslike manner; proper business attire shall be worn at all times; the noise level will be kept to a level so as not to interfere with or annoy other Customers and the Customer will abide by the Provider’s directives regarding security, keys, parking and other such matters common to all occupants.

 

8.              The Customer shall not, without the Provider prior written consent, store or operate in their office(s) or the Business Centre(s), any computer (excepting a personal computer) or any other large business machine, reproduction equipment, heating equipment, stove, radio, stereo equipment or other mechanical amplification equipment, vending or coin operated machine, refrigerator, boiler or coffee equipment. Additionally, the Customer must not conduct a mechanical business therein, do any cooking therein, or use or allow to be used in the building where the Business Centre is located, oil burning fluids, gasoline, kerosene for heating, warming or lighting. No article deemed hazardous on account of fire or any explosives shall be brought into the Business Centre. No offensive gases, odours or liquids shall be permitted. No firearms shall be permitted. The Business Centre is intended to be used solely for office use. The Provider may in it absolute discretion give prior approval to an alternative use of the Customer’s accommodation (such approval to be in writing) and in the event that it does so references to “office” shall be construed accordingly.

 

9.              The electrical current shall be used for ordinary lighting, powering personal computers and small appliances only unless written permission to do otherwise shall first have been obtained from the Provider at an agreed cost to the Customer. If the Customer requires any special installation or wiring for electrical use, telephone equipment or otherwise, such wiring shall be done at the Customer’s expense by the personnel designated by the Provider.

 

10.       The Customer may not conduct business in the hallways, reception area or any other area except in the Customer’s designated office without the prior written consent of the Provider.

 

11.        The Customer shall bring no animals into the building other than certified assistance animals.

 

12.        Kitchen amenities / Beverage fee: allows the Customer and visitors access to self-service coffee and tea.

 

13.       Businessworld membership: Your complimentary Businessworld membership can be used in any the Provider location outside of your home centre where your office/virtual office is located. Use of the Lounges will be governed by the Businessworld Terms and Conditions which are conveniently located on www.regus.co.uk.

 

House Rules UK, May 15, MV

 

1

 

14.       The Customer shall not use the Business Centre for manufacturing or storage of merchandise except as such storage may be incidental to general office purposes. The Customer shall not occupy or permit any portion of the Business Centre to be occupied or used for the manufacture, sale, gift or use of liquor, narcotics or tobacco in any form.

 

15.       No additional locks or bolts of any kind shall be placed upon any of the doors or windows of the Business Centre by the Customer nor shall any changes be made to existing locks or the mechanisms thereof.

 

16.       Canvassing, soliciting and peddling in the building are prohibited and the Customer shall not solicit other Customers for any business or other purpose without the prior written approval of the Provider.

 

17.       All property belonging to the Customer or any of the Customer’s employee, agent or invitee shall be at the risk of such person only and the Provider shall not be liable for damages thereto or for theft or misappropriation thereof.

 

18.       Smoking shall be prohibited in all public areas, including conference and training rooms. No smoking shall be permitted at any time in any area of the Business Centre (including open offices).

 

19.       The Customer or the Customer’s officers, directors, employees, shareholders, partners, agents, representatives, contractors, customers, or invitees shall be prohibited from participating in any type of harassing, discriminatory or abusive behaviour to the Provider’s team members, other Customers or invitees, verbal or physical in the Business Centre for any reason. Any breach of this rule is a material breach of your agreement (not capable of remedy) and your agreement may be terminated immediately and services will be suspended without further notice.

 

20.       For Jersey only: Regus Jersey takes its legal and regulatory responsibilities seriously. All Clients are required to maintain a real physical presence at the Centre and must keep a valid licence held under the Regulation of Undertakings and Development (Jersey) Law 1973 (unless written confirmation is received from the Population Office that a licence is not required). In the event that either of these requirements (or other local legal and regulatory requirements) are, in the Provider’s opinion, not met then your agreement will be deemed to be breached and may be terminated without further notice per the terms and conditions.

 

Services and Obligations

 

21.       Furnished office accommodation: The Customer shall not affix anything to the windows, walls or any other part of the office or the Business Centre or make alterations or additions to the office or the Business Centre without the prior written consent of the Provider.

 

22.       Office services: The Provider is happy to discuss special arrangements for the use of the facilities outside the Business Centre normal opening hours or, the normal working days where the Business Centre is located. There may be an additional charge for such special arrangements. This can be discussed at the time of arrangement.

 

23.       All of the pay-as-you-use services are subject to the availability of the Business Centre staff at the time of any service request. The Provider will endeavour to deal with a service request at the earliest opportunity and provide the additional service the Customer requires, but the Provider will not be held responsible for any delay.

 

24.       If in the Provider’s opinion, the Provider decides that a request for any pay-as-you-use service is excessive; the Provider reserves the right to charge an additional fee at the Provider’s usual published rates based on the time taken to complete the service. This will be discussed and agreed between the Provider and the Customer at the time the Customer makes such request.

 

25.       Services will be available during normal opening hours. Internet access and phone lines are available after hours and weekends.

 

The Provider’ Services Agreement

 

26.       Nature of the Provider’ Services Agreement: The Provider may assign the Services Agreement at any time without the Customer’s consent. This clause reflects the fact that the Customer is taking a serviced office agreement and not a lease and that the Provider retains overall control of the Business Centre. The Customer has no real-property or commercial property interest of any kind in the building where the Business Centre is located. Where the Customer is a company and it merges with another or the Customer needs to allow an affiliate to use the services provided under the Services Agreement, the Customer will explain the need for any change to the Provider and the Provider will give careful consideration in each case. The Provider needs to be sure it knows, and is satisfied with, the identity of each occupant of the Business Centre.

 

27.       Data protection: The Provider requests that the Customer provides, as and when requested by the Provider, documentation and personnel information as the Provider may reasonably require enabling the provision of the services. Such personal data will be used by the Provider in accordance with the law

 

28.       Subordination: This agreement is subordinate to the Provider lease with the Provider landlord and to any other agreements to which the Provider’s lease with the landlord is subordinate.

 

29.       Annual indexation: For all agreements with a term greater than 12 months, the indexation applied of the All Items Retail Prices Index + 2% will be substituted by CPI or 2.8% whichever is the greater.

 

2

 

30.       Cross default : The Customer agrees that, if they are in default under a service agreement with the Provider at a different business centre (“Different Location Agreement”) to the one specified in this Agreement, that the Provider may recover any unpaid sums due under a Different Location Agreement from the Customer under this Agreement and that the Provider may, in particular (but not limited to), withhold services under this Agreement or deduct sums from the retainer held under this Agreement in respect of such unpaid sums.

 

31.       Company Name Change: If there is a need to change the name of your company, requests must be made in writing and addressed to the Centre Manager. Please note that these requests will be processed 60 days from the beginning of the next calendar month. Any invoices prior will be in the current company name and cannot be changed.

 

Fees

 

32.       Standard services: The standard fee and any fixed, recurring services requested by the Customer are billed in advance and payable upon receipt of invoice. Where a daily rate applies, the charge for any such month will be 30 times the standard fee. For a period of less than a month the standard fee will be applied on a daily basis. Recurring services will be provided by the Provider at the specified rates for the duration of your Agreement (including any renewal). If a Customer has a need to cancel a recurring service they may request this at any time up to the notification due date of the agreement. The cancellation will be applied from the first day of the renewal start.

 

33.       Pay-as-you-use and additional variable services: Fees for pay-as-you-use services, plus applicable taxes, in accordance with our published rates which may change from time to time, are billed in arrears and payable upon receipt of invoice.

 

34.         Office set up: An office set up fee of £55 will be charged for each occupant.

 

35.       Office restoration fee: A fee of £20 per sqm for each occupied office will be charged upon the Customer’s departure or if the Customer, at the Customer’s option, chooses to relocate to different rooms within the Centre. The Provider reserves the right to charge additional reasonable fees for any repairs needed above and beyond normal wear and tear.

 

36.       Business continuity service: All Customers will be automatically entered into a standard Virtual Office Agreement for 3 months upon departure from The Provider, to cover the management and redirection of mail, fax, calls and visitors. (Upon departure to comply with current money laundering regulations 2007, personal identification will be required in order to continue utilising your the Provider address and mail handling services).

 

37.        This fee will be charged at the current market rate. Prices can be obtained upon request.

 

38.       Late payment and penalty: All invoices are due upon receipt. Late fee dates will vary based on the type of service/invoice that is provided. At any time, the Customer may ask the centre team on what date a late fee will be assessed. If the Customer does not pay fees when due, a service fee of £25 plus 5% penalty will be charged on all overdue balances under £500. For balances equal to or greater than £500 a fee of £50 plus 5% penalty will apply. If the Customer disputes any part of an invoice, the Customer must pay the amount not in dispute by the due date or be subject to such late fee and penalty. The Provider also reserves the right to withhold services (including for the avoidance of doubt, denying the Customer access to the Customer’s accommodation) while there are any outstanding fees, penalties and interest or the Customer is in breach of the Service Agreement which, for the avoidance of doubt, includes these House Rules.

 

39.       Insufficient funds: The Customer will pay a fee of £35 or the maximum amount permitted by law for any returned payments due to insufficient funds. Furthermore, should any change be made from a direct debit payment process, a £35 fee will apply.

 

40.       Taxes: The Customer will pay all current taxes paid by the Provider to any government authority. This currently applies to the Carbon Levy and VAT.

 

Liability

 

41.       Mail: The Customer releases the Provider from any liability arising out of or incurred in connection with any mail or packages received on the Customer’s behalf.

 

Force Majeure

 

42.       The Provider shall have no liability to the Customer under this agreement if it is prevented from, or delayed in, performing its obligations under this agreement or from carrying on its business by acts, events, omissions or accidents beyond its reasonable control, including (without limitation) strikes, failure of a utility service or transport network, act of God, war, riot, civil commotion, malicious damage, disease or quarantine restrictions compliance with any law or governmental order, rule, regulation or direction, accident, fire, flood, storm or default of suppliers or subcontractors. The Provider’s obligation to perform its obligations shall be suspended during the period required to remove such force majeure event.

 

The Provider shall notify the Customer as soon as reasonably possible of the force majeure event and propose a suitable alternative accommodation (if any) in the same Business Centre or in another available business centre.

 

3

 

IT and technology policy

 

43.        Introduction

 

This Policy forms part of the The Provider’s Internet IT & Connectivity order and applies where the Customer wishes to use The Provider’s Telecommunication and Internet connectivity services and equipment.

 

The Provider is considered a Downstream Service Provider (DSP), which means The Provider provides a personalised connection to the Internet which is managed and protected via a firewall.

 

·          The Provider’s Internet service provides the Customer with an Internet connection that provides regular business activity such as web browsing, the ability to send and receive electronic communications, access to business applications and like.

·          The Provider’s Internet service is based on a symmetrical leased line connection or similar technology that is shared with other individual Provider’s Customers within the same Provider’s office building.

 

·          The Provider can provide the Customer with dedicated leased line connectivity various capacities subject to availability. This provides an uncontended, symmetrical connection of the selected Customer bandwidth. The service provides one (1) public IP address with the facility to purchase and deploy additional IP addresses.

·          The service provides the Customer with the following capability:

·                     The ability to deploy public IP addressing.

·                     The option to run server based solutions that require inbound connectivity (e.g. an FTP, web or mail server).

·                     The option to run “site to site” VPN connections.

·                     The Customer is also able to deploy its own “firewall” to manage its own LAN and VPN connections should the Customer wishes to do so.

 

44.        The Provider’s Internet and Telecommunications Policy

 

a.              Content. The Customer acknowledges that the Provider does not monitor the content of information transmitted through the Provider’s telecommunications lines or equipment, which includes, but is not limited to, Internet access, telephone, fax lines and data lines (“Telecommunications Lines”). The Customer further acknowledges that the Provider is merely providing a conduit for Customer’s Internet transmissions, similar to a telephone company, and that the Provider accepts no liability for the content of transmissions by the Customer.

 

b.              Restrictions. The Provider’s Internet service may be used only for lawful purposes and shall not be used in connection with any criminal or civil violations of state, federal, or international laws, regulations, or other government requirements. Such violations include without limitation theft or infringement of copyrights, trademarks, trade secrets, or other types of intellectual property; fraud; forgery; theft or misappropriation of funds, credit cards, or personal information; violation of export control laws or regulations; libel or defamation; threats of physical harm or harassment; or any conduct that constitutes a criminal offence or gives rise to civil liability. The Customer is responsible for maintaining the basic security and virus protection of the Customer’s systems to prevent their use by others in a manner that violates the Service Agreement. The Customer is responsible for taking corrective actions on vulnerable or exploited systems to prevent continued abuse.

 

c.               The Provider’s Internet access - Per user basis. The Provider grants the Customer access to the the Provider’s Internet service on a per user access basis. In the event of the Customer increasing the number of users by utilising a gateway device (router, firewall etc) or by other means, the Customer agrees to pay the The Provider’s fee for each user who accesses the Internet, either directly or through a gateway device.

 

d.              Unauthorised access. In no event may the Customer increase its authorised access points to the Telecommunications/Data lines by means of wire splitting or any other method including wireless devices. In the event of the Customer breaching paragraph 44.c (the Provider’s Internet Access — Per User Basis), above, or this paragraph, the Provider may disconnect all of the Customer’s access to the Telecommunications/Data lines upon three (3) business days prior written notice to the Customer. The Customer shall pay all the Provider’s fees for any unauthorised Telecommunications/Data Lines use upon invoice from the Provider. The Provider shall have no obligation to reconnect the Customer to the Telecommunications/Data Lines until such fees have been paid in full and the Customer has ceased to make unauthorised access.

 

e.               Customer installed telecommunications lines. It is part of the The Provider business model to provide Telecommunications Lines to its Customers. The Customer may not bypass the use of the The Provider Telecommunications Lines by installing its own direct Telecommunications Lines. On a case by case basis, The Provider may grant the Customer authorisation to install direct Telecommunications Lines upon written request by the Customer. This permission will only be granted on the agreement of the Customer, to make a monthly payment of a direct access fee as set by the Provider which will be equal to the monthly Provider’s Internet fee, the telecoms package fee or both.

 

f.                Security violations. The Customer is prohibited from engaging in any violations of system or network security. The Provider’s Internet service may not be used in connection with attempts - whether or not successful - to violate the security of a network, service, or other system. Examples of prohibited activities include, without limitation, hacking, cracking into, monitoring, or using systems without authorization; scanning ports; conducting denial of service attacks; and distributing viruses or other harmful software. The Provider reserves the right to suspend the Internet access upon notification from a recognized Internet authority or ISP regarding such abuse. The Provider may disconnect the Customer’s equipment and withhold services if the Provider

 

4

 

considers that the Customer’s hardware or software is, or has become, inappropriate for connection to the Provider’s network. The Customer is responsible for the Customer’s own virus protection on the Customer’s systems and hardware.

 

g.               The Provider’s Internet services are only available at the Provider locations and connection to the Provider’s network is only permitted at those locations or via the Provider’s provided services. The Customer must not create any links between the Provider’s network and any other network or any telecommunications service without the Provider’s consent.

 

h.              Revisions to this policy. The Provider may modify this Policy at any time, with or without notice.

 

i.                  Special requirements:

 

·             Where the Customer is using its own wireless access points, the Customer requires written approval from The Provider, prior to implementation. The use of the Customer’s own wireless router will result in a service charge based upon the total number of contracted work stations in the Customer’s designated office space.

·             It is to note that the following ports are blocked through the Provider’s firewall for outbound traffic: H323, Napster_8888, Nbdatagram, Nbname, RealPlayer-grp, TCP-135, TCP-139, TCP-1433, TCP-1434, UDP-1434.

·             Video conferencing services are not allowed on the Provider’s Data Network without written approval from the Provider’s IT Director. If approval is gained then the Customer will be required to take Reserved Bandwidth to support the solution.

·             The Provider’s Mail relay server is limited to 128 recipients / 32MB per message. It cannot be used as a smarthost.

 

j.                 DISCLAIMER OF LIABILITY FOR THIRD PARTY PRODUCTS. As part of its services to the Customer, the Provider may provide third party Internet access and computer hardware and software (“Third Party Services”). THE PROVIDER DISCLAIMS ANY AND ALL LIABILITY, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES, WHETHER ORAL OR WRITTEN, FOR SUCH THIRD PARTY SERVICES. THE CUSTOMER ACKNOWLEDGES THAT NO REPRESENTATION HAS BEEN MADE BY THE PROVIDER AS TO THE FITNESS OF THE THIRD PARTY SERVICES FOR THE CUSTOMER’S INTENDED PURPOSE.

 

k.              DISCLAIMER OF LIABILITY FOR THE CUSTOMER’S EQUIPMENT. ALL CUSTOMER EQUIPMENT STORED IN THE PROVIDER’s TELECOMMUNICATIONS ROOM IS STORED AT CUSTOMER’S OWN RISK. THE PROVIDER DISCLAIMS ANY AND ALL LIABILITY FOR SUCH EQUIPMENT AND SHALL NOT BE LIABLE FOR ANY LOSSES OR DAMAGE TO SUCH EQUIPMENT.

 

l.                  DISCLAIMER OF INDIRECT DAMAGES FROM LOSS OF SERVICE. The Provider does not provide any service level agreement to the Customer in regard to provision or loss of service for its Internet services. The Provider shall not be liable for any indirect damages, including lost profits, arising out or resulting from any loss of service or degradation of connectivity/access to the Internet with the Service Agreement, even if the other party has been advised of the possibility of such damages. The foregoing shall apply, to the fullest extent permitted by law, regardless of the negligence or other fault of either party.

 

m.          DISCLAIMER OF INDIRECT DAMAGES. The Provider shall not be liable for any indirect damages, including lost profits, arising out or resulting from the Service Agreement even if the other party has been advised of the possibility of such damages. The foregoing shall apply, to the fullest extent permitted by law, regardless of the negligence or other fault of either party.

 

5Exhibit 10.4

 

FINAL & BOARD APPROVED

 

Verona Pharma plc
 EMI Option Scheme

 

Adopted on 24 July 2012

 

Amended 29 January 2015

 

Verona Pharma plc - EMI option scheme rules

 

 

Contents

 

	
1.
    	
Definitions and interpretation
    	
1
    
	
2.
    	
Purpose
    	
3
    
	
3.
    	
Qualification requirements
    	
3
    
	
4.
    	
Grant of Option
    	
4
    
	
5.
    	
Share capital limits on Options
    	
6
    
	
6.
    	
Rights to exercise Options
    	
6
    
	
7.
    	
Procedures to exercise Options
    	
9
    
	
8.
    	
Release of Options
    	
10
    
	
9.
    	
Adjustment of Options
    	
10
    
	
10.
    	
Taxation
    	
10
    
	
11.
    	
Administration and amendment
    	
11
    
	
12.
    	
General
    	
12
    
	
Letter Notifying   Grant
    	
14
    
	
Share Option   Certificate
    	
16
    
	
Form of   Exercise
    	
18
    

 

 

Rules of the Verona Pharma plc
 EMI Option Scheme

 

1.              Definitions and interpretation

 

1.1                               In this Scheme, unless the context otherwise requires, the following definitions shall apply:

 

“AIM” means the Alternative Investment Market of the London Stock Exchange.

 

“AIM Rules” means the AIM Rules for Companies published by the London Stock Exchange from time to time.

 

“Associated Company” has the meaning set out in section 449 Corporation Tax Act 2010.

 

“Board” means the board of directors of the Company or a duly authorised committee of the board.

 

“Business Day” means a day on which the London Stock Exchange is open for business.

 

“Committee” means the remuneration committee of the Board.

 

“CSOP Option” means a right to acquire shares under a scheme approved under Schedule 4 to the Taxes Act.

 

“Company” means Verona Pharma plc registered in England and Wales with company number 05375156.

 

“Company Reorganisation” has the meaning set out in paragraph 39, Schedule 5.

 

“Control” has the meaning set out in section 995 Income Tax Act.

 

“Date of Grant” means the date on which an Option is granted pursuant to rule 4.5.

 

“EMI Option” means an enterprise management incentive option which is a qualifying option for the purposes of Schedule 5.

 

“Eligible Employee” means an individual:

 

(a)                                 who is an employee of the Company or any Qualifying Subsidiary;

 

(b)                                 whose committed time amounts to:

 

(i)                                     at least 25 hours a week, or

 

(ii)                                  if less, 75% of his working time; and

 

(c)                                  does not have a material interest in the Company or any Qualifying Subsidiary;

 

provided that “committed time”, “working time” and “material interest” shall be as defined in paragraphs 26, 27 and 29, Schedule 5.

 

“Employee’s Contributions” means an employee’s primary Class 1 national insurance contribution or any equivalent social security liability in any jurisdiction outside England and Wales.

 

“Employees’ Share Scheme” has the meaning set out in section 1166 Companies Act 2006.

 

1

 

“Employer’s Contributions” means an employer’s secondary Class 1 national insurance contributions or any equivalent social security liability in any jurisdiction outside England and Wales.

 

“Exercise Date” has the meaning set out in rule 7.2.

 

“Exercise Price” means the price payable per Share on the exercise of an Option, not being less than the nominal value of a Share.

 

“Group Company” means any company within the group of companies comprising the Company and its Qualifying Subsidiaries.

 

“Income Tax Act” means the Income Tax Act 2007.

 

“Income Tax Liability” means any income tax in respect of PAYE income for the purposes of section 683 Taxes Act (or the equivalent in any jurisdiction outside England & Wales).

 

“the London Stock Exchange” means the London Stock Exchange plc.

 

“Market Value” means in relation to a Share, its market value for the purposes of paragraphs 55 and 56, Schedule 5.

 

“National Insurance Contribution Liability” means any national insurance contributions which fall to be paid to HM Revenue & Customs by the Company (or the relevant employing Group Company or former Group Company) under the modified PAYE system as it applies for national insurance purposes under the Social Security Contributions and Benefits Act 1992 and regulations referred to in it (or the equivalent in any jurisdiction outside England and Wales).

 

“Option” means a right granted under this Scheme to acquire Shares or where applicable, a replacement option as defined in paragraph 41, Schedule 5.

 

“Option Holder” means a person to whom an Option has been granted under the Scheme or, where applicable, the legal personal representatives of such a person.

 

“Ordinary Shares” means shares comprising the ordinary share capital of the Company as defined in section 989 Income Tax Act.

 

“Qualifying Subsidiary” means any company which is a qualifying 51% subsidiary in relation to the Company according to the requirements of paragraph 11, Schedule 5.

 

“Rules” means the rules of this Scheme.

 

“Schedule 5” means Schedule 5 to the Taxes Act.

 

“Scheme” means this scheme being the Verona Pharma plc EMI Option Scheme approved by a resolution of the Board dated 24 July 2012 and subsequently amended by a resolution of the Board dated 29 January 2015 and as subsequently amended in accordance with rule 11.

 

“Scheme of Arrangement” means as defined in rule 6.6.

 

“Shares” means ordinary shares of £0.001 each in the capital of the Company which satisfy the requirements of paragraph 35, Schedule 5 and which, where applicable, includes replacement shares as defined in Part 4, Schedule 7D of TCGA 1992.

 

“Taxes Act” means the Income Tax (Earnings and Pensions) Act 2003.

 

“Tax Liabilities” has the meaning contained in rule 10.4.

 

“TCGA” means the Taxation of Chargeable Gains Act 1992.

 

2

 

“Unvested Option” means, on any date, that part of an Option that has not vested in accordance with these Rules and the Vesting Schedule.

 

“Vests” means a right to exercise has arisen and “Vesting” shall be construed accordingly.

 

“Vested Option” means, on any date, that part of an Option that has vested in accordance with these Rules and the Vesting Schedule.

 

“Vesting Schedule” means the dates on which an Option Vests and the corresponding numbers of Shares over which the Option may then be exercised as determined by the Committee pursuant to rule 6.2.

 

1.2                               In this Scheme, unless the context otherwise requires:

 

(a)                                words in the singular include the plural and vice versa and words in one gender include any other gender;

 

(b)                                a reference to a statute or statutory provision includes:

 

(i)                                     any subordinate legislation (as defined in section 21(1), of the Interpretation Act 1978) made under it;

 

(ii)                                  any repealed statute or statutory provision which it re-enacts (with or without modification); and

 

(iii)                               any statute or statutory provision which modifies, consolidates, re-enacts or supersedes it;

 

(c)                                  a reference to rules is to rules in these Rules and references to sub-rules are to sub-rules in which they appear; and

 

(d)                                 the table of contents and headings are inserted for convenience only and shall not affect the interpretation of these Rules.

 

2.                                      Purpose

 

2.1                               These Rules set out the terms by which the Committee may grant Options which are intended to take effect as EMI Options, being Options that shall be granted:

 

(a)                                 to selected Option Holders for the purpose of retaining their services;

 

(b)                                 for genuine commercial reasons; and

 

(c)                                  not as part of a scheme or arrangement the main purpose, or one of the main purposes of which, is the avoidance of tax.

 

2.2                               While an Option is intended to take effect as an EMI Option, no warranty is given by the Company that it will in fact qualify as an EMI Option.

 

3.                                      Qualification requirements

 

3.1                               An Option Holder shall be an Eligible Employee at the Date of Grant of an Option.

 

3.2                               The statutory maximum entitlement requirement set out in paragraph 5, Schedule 5 (being £250,000 or such other amount as may be specified by Schedule 5 from time to time) shall apply to the grant of an Option. If the aggregate Market Value of the Shares granted to an Option Holder under an Option (together with the sum of the Market Values referred to in rule 3.3 where applicable) exceeds the maximum entitlement such Option shall take effect so that:

 

3

 

(a)                                 it is a qualifying option under Schedule 5 in respect of such number of Shares as does not cause the maximum entitlement requirement to be exceeded; and

 

(b)                                 it is a non tax-advantaged option for the purposes of section 476, Taxes Act in respect of the balance of the Shares.

 

3.3                               The amounts referred to in rule 3.2 are:

 

(a)                                 the Market Value, measured at the time the option was granted, of all shares under option held by the Option Holder under any unexercised EMI Option; and

 

(b)                                 the market value calculated in accordance with paragraph 5, Schedule 5 and measured at the time the CSOP Option was granted, of all shares under option held by the Option Holder under any unexercised CSOP Option,

 

provided that any options that have been released, lapsed or have become incapable of exercise shall be disregarded.

 

3.4                               The 3 year maximum entitlement requirement set out in paragraph 6, Schedule 5 shall apply to the grant of an Option.  If an Option Holder has been granted EMI Options over Shares with a total Market Value of £250,000 (or such other amount as may be specified by paragraph 5, Schedule 5), whether or not those EMI Options have been exercised or released, any further Option granted to the Option Holder shall not be an EMI Option (but shall be anon tax-advantaged option liable to income tax on exercise under section 476 Taxes Act) if the Date of Grant of that Option is less than three years after the date of grant of the last EMI Option that falls within this rule 3.4.

 

3.5                               Paragraph 7, Schedule 5 (maximum value of shares over which unexercised options exist must not exceed £3 million, or such other amount as may be specified by Schedule 5) shall apply to the grant of an Option.  If the grant of an Option under this Scheme causes that limit to be exceeded, that Option shall take effect so that:

 

(a)                                 it is a qualifying option under Schedule 5 in respect of such number of Shares as does not cause the limit to be exceeded; and

 

(b)                                 it is a non tax-advantaged option for the purposes of section 476, Taxes Act in respect of the balance of the Shares.

 

3.6                               If any of the qualification requirements as set out in Schedule 5 are not met at the Date of Grant or on the occurrence of a disqualifying event under sections 533 to 539 Taxes Act, the Option shall continue as a legally valid option contract between the Company and the Option Holder subject to the provisions of these Rules, including in particular the provisions as to taxation in rules 10.2 to 10.5.

 

4.                                      Grant of Option

 

4.1                               Subject to the AIM Rules and these Rules, the Committee may at any time grant Options to such Eligible Employees as it, in its absolute discretion, thinks fit, provided that Options may only be granted within the period of 42 days starting on:

 

(a)                                 the Business Day following the day on which the Scheme is approved by the Company;

 

(b)                                 the Business Day following the day on which the Company makes an announcement of its results for the last preceding financial year, half-year or other period or on which listing particulars or a document containing equivalent information relating to Scheme Shares is issued.

 

If the Committee considers there are exceptional circumstances which justify the grant of Options outside any of the periods set out above, the Committee may determine that Options may be granted

 

4

 

at another time.

 

4.2                               When granting an Option the Committee may specify conditions which, unless otherwise stated in these Rules, must be satisfied prior to the exercise of the Option.  The Committee may in its absolute discretion amend or waive the conditions relating to a particular Option or part of an Option if events happen which cause the Committee reasonably to consider that it would be fairer so to amend or waive the conditions to ensure that they achieve their original purpose, provided that any amended conditions are neither no more nor no less difficult to achieve than those previously imposed.

 

4.3                               Within 60 days of the Date of Grant of an Option, the Company shall issue to the Option Holder a letter enclosing a certificate evidencing the grant of the Option (which forms the written agreement between the Company and the Option Holder for the purposes of Schedule 5) in such form as the Committee may determine provided that it shall specify:

 

(a)                                 the number of Shares subject to the Option;

 

(b)                                 the Exercise Price;

 

(c)                                  the Date of Grant;

 

(d)                                 when the Option ordinarily Vests and the number of shares over which the Option may then be exercised;

 

(e)                                  whether the Option Holder is required either to bear some or all of the cost of any Employer’s Contributions arising from the exercise of the Option or jointly to elect with the Company to transfer some or all of such liability to the Option Holder;

 

(f)                                   whether the Shares are restricted shares as defined in paragraph 37(5), Schedule 5; and

 

(g)                                  any performance conditions attaching to the exercise of the Option pursuant to rule 4.2 and the period over which any such conditions shall be measured.

 

4.4                               If the Option Holder does not execute the Option certificate as a deed and return it to the Company within the period of 30 days after receiving the letter evidencing the grant of the Option under rule 4.3 (or such longer period as the Committee may determine), the Option shall automatically lapse at the end of such period.

 

4.5                               For the avoidance of doubt, the Date of Grant shall be taken to be the day on which the execution of the option certificate as a deed is completed.

 

4.6                               An Option shall be personal to the Option Holder and may not be transferred, assigned or charged.  Any purported transfer (except a transfer to the Option Holder’s personal representatives on death), assignment, charge, disposal or dealing of the Option shall render the Option void and cause it to lapse.  Each Option certificate shall carry a statement to this effect.

 

4.7                               An Option shall be granted by way of deed or otherwise as the Committee may determine.  No cash payment shall be required in consideration of such grant.

 

4.8                               No Option may be granted more than 10 years after the date on which the Scheme is adopted by a resolution of the Board.

 

4.9                               Any Options granted under the Scheme shall be limited and take effect so that any limit in rule 5 is not exceeded.

 

4.10                        On granting an Option, the Company shall procure that the company which is the employer of an Option Holder at the relevant Date of Grant shall give to HM Revenue & Customs within 92 days of such date a notice complying with the requirements of paragraph 44, Schedule 5,

 

5

 

which should include:

 

(a)                                 a declaration by a director or secretary of that company confirming that in that person’s opinion the requirements of Schedule 5 are met in relation to the Option; and

 

(b)                                 a declaration by the Option Holder that the commitment of working time requirement in paragraph 26, Schedule 5 is satisfied in relation to the Option.

 

5.                                      Share capital limits on Options

 

5.1                               No Option may be granted on any date if the number of Shares to be issued on its exercise in full, when aggregated with the number of:

 

(a)                                 Shares issued on the exercise of, or remaining capable of being issued on the exercise of, Options granted during the period of 10 years ending on that date; and

 

(b)                                 Ordinary Shares issued on the exercise of, or remaining capable of being issued on the exercise of, options or other rights granted during the period of 10 years ending on that date under any other Employees’ Share Scheme or equity incentive plan adopted by the Company for the benefit of its officers, employees or consultants,

 

would exceed 10% of the number of Ordinary Shares in issue on that date.

 

5.2                               For the purposes of applying the limit in rule 5.1, any options which were surrendered, released or lapsed without being exercised shall not be taken into account.

 

6.                                      Rights to exercise Options

 

6.1                               Options may be exercised in accordance with the following provisions of this rule 6 and rule 7.

 

6.2                               Except as provided elsewhere in this rule 6, or as the Committee may at any time in its absolute discretion determine in exceptional circumstances, an Option may only be exercised:

 

(a)                                 if any conditions which apply to the Option under rule 4.2 have been fulfilled to the satisfaction of the Committee or waived;

 

(b)                                 at a time when the Option Holder holds an office or employment with a Group Company; and

 

in accordance with the Vesting Schedule specified by the Committee in its absolute discretion, and set out in, or attached in the form of a schedule to, the option certificate.

 

General offer and compulsory acquisition

 

6.3                               If an Acquirer:

 

(a)                                 obtains Control of the Company as a result of making a general offer to:

 

(i)                                     acquire all of the issued ordinary share capital of the Company (other than that already held by the Acquirer) which is made on a condition such that if it is satisfied the Acquirer will have Control of the Company; or

 

(ii)                                  acquire all of the shares in the Company of the same class as the Shares; or

 

(b)                                 becomes bound or entitled to acquire shares in the Company under sections 979-982 of the Companies Act 2006

 

any Option Holder may, notwithstanding rule 6.2 but subject to rule 8, exercise any Option of his in whole or in part within whichever of the periods set out in rules 6.4 applies after which, unless the Option Holder has released his Option according to rule 8 and to the extent unexercised the Option shall lapse.

 

6

 

6.4                               The periods referred in rule 6.3 are:

 

(a)                                 in a case falling within rule 6.3(a), the period of 6 months beginning with the date when the Acquirer has obtained Control of the Company unless the Committee determines that in connection with the event referred to in rule 6.3(a) Options should become capable of exercise prior to this date; and

 

(b)                                 in a case falling within rule 6.3(b), the period of one month from the first date on which the Acquirer becomes bound or entitled to give a notice to acquire Shares in the Company under section 979-982 of the Companies Act 2006 (notwithstanding any other provisions as to exercise in these Rules).

 

Scheme of Arrangement

 

6.5                               Subject to rule 8, if under section 899 of the Companies Act 2006 the Court sanctions a compromise or arrangement in relation to the Company (a “Scheme of Arrangement”) and its shareholders in connection with the acquisition of Control by the Acquirer, the Option Holder may, notwithstanding rule 6.2, exercise any Option of his in full within the period of 6 months beginning with when the Court sanctions the Scheme of Arrangement, after which unless the Option Holder has released his Option according to rule 8 and to the extent unexercised the Option shall lapse.

 

Demerger

 

6.6                               If the Company is or is expected to be the subject of a demerger, merger within the Companies (Cross Border Merger) Regulations 2007, dividend-in-specie or other transaction which the Committee determines in its discretion would materially affect the value of any Option, the Committee may determine on a fair and reasonable basis that any Option Holder may, notwithstanding rule 6.2, exercise any Option of his in whole or in part during such period as the Committee shall specify and notify to the affected Option Holders.

 

Voluntary winding up

 

6.7                               If notice is duly given to members of a resolution at a general meeting for the voluntary winding up of the Company, except for the purposes of a reconstruction or amalgamation, any Option Holder may, notwithstanding rule 6.2, exercise any Option of his in whole or in part (but so that any exercise hereunder shall be conditional upon such resolution being passed) at any time thereafter until the resolution is duly passed or defeated or the general meeting adjourned sine die, whichever shall first occur.  If such resolution is passed an Option shall, to the extent unexercised, lapse.

 

Early cessation of employment

 

6.8                               Where an Option Holder ceases to hold any office or employment with a Group Company by reason of:

 

(a)                                 injury, disability or ill-health (such determination to be made by the Board); or

 

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

 

(c)                                  a Group Company ceasing to be under the Control of the Company or a business or part of a business being transferred to a company which is neither an Associated Company nor a company of which the Company has control,

 

an Option Holder may exercise notwithstanding rule 6.2 any Option held by him in full during the period of 90 days after the date of cessation (or such longer period as the Board may allow), after which it shall lapse.

 

Cessation of employment for other reasons

 

7

 

6.9                               Where an Option Holder ceases to hold any office or employment with a Group Company in circumstances different to those provided for in rule 6.8 notwithstanding rule 6.2 but subject to rule 6.11 (death) a Vested Option shall remain exercisable during the period of 60 days after the date of cessation (or such longer period as the Board may allow) after which it shall lapse provided that if the cessation derives from dismissal of the Option Holder for gross misconduct or other disciplinary or other reasons giving rise to the termination of the Option Holder’s employment by the Company or otherwise constituting a breach of the Option Holder’s contract of employment (as determined in the absolute discretion of the Board) a Vested Option shall lapse on the date of cessation or, if earlier, the date that notice of termination is given.  Rule 6.10 shall apply to any Unvested Options.

 

Unvested Options

 

6.10                        An Unvested Option shall lapse on a cessation of employment within rule 6.9 unless the Board, prior to the date of cessation, gives notice to an Option Holder inviting that Option Holder to exercise their Unvested Option within such period and to such extent as the Board may in its absolute discretion determine.  If such notice is given, to the extent that any Unvested Option is not exercised within such period, it will lapse immediately thereafter.

 

Death

 

6.11                        Where the Option Holder dies:

 

(a)                                 any Option held by him that is a Vested Option at the date of death may be exercised by his personal representatives during the period of 12 months following such date after which it shall lapse; and

 

(b)                                 any Unvested Option shall lapse 12 months after the date of death unless the Board in its absolute discretion determines that it may be exercised in whole or in part before the expiry of that period.

 

Lapse of Options

 

6.12                        Notwithstanding any other provisions in these Rules, an Option will lapse to the extent it has not been exercised on the earliest to occur of the following:

 

(a)                                 the 10th anniversary of the Date of Grant;

 

(b)                                 the passing of a resolution by the shareholders in respect of a creditor’s voluntary liquidation, the making by the Court of a winding up order, or the appointment of an administrator or receiver in respect of the Company;

 

(c)                                  the Option Holder being adjudicated bankrupt, making or proposing a voluntary arrangement under the Insolvency Act 1986 or otherwise being deprived (except on death) of the legal or beneficial ownership of the Option;

 

(d)                                 if applicable, the expiry of the relevant period referred to in rule 4.4;

 

(e)                                  the expiry of the relevant period referred to in this rule 6 and where more than one such period applies, the earliest to expire of those periods.

 

Meaning of ceasing employment

 

6.13                        For the purposes of rules 6.8 and 6.9:

 

(a)                                 an Option Holder (including an Option Holder who is absent from work on paternity or parental leave) shall not be treated as ceasing to hold any office or employment until he no longer holds any office or employment with the Company or any Group Company or any Associated Company; and

 

8

 

(b)                                 a female Option Holder who is absent from work on maternity leave shall not be deemed to have ceased holding any office or employment until she ceases to be entitled to exercise any statutory or contractual right to return to work.

 

7.                                      Procedures to exercise Options

 

7.1                               An Option shall be exercised by notice in writing (in the form prescribed by the Committee) given by the Option Holder to the Company in respect of all or some of the Shares comprised in the Option, and such notice shall be accompanied by:

 

(a)                                 the relevant option certificate (or an indemnity in respect of a lost option certificate);

 

(b)                                 if required by the Committee, an election to transfer liability for Employer’s Contributions to the Option Holder (in the form prescribed by the Committee and approved by HM Revenue & Customs); and

 

(c)                                  if required by the Committee, if the Shares to be acquired on exercise of the Option are considered to be restricted securities as defined in Part 7, Chapter 2, Taxes Act (such determination to be in the sole discretion of the Committee), a joint section 431, Taxes Act election (electing that the Market Value of the Shares acquired on exercise of the Option be calculated as if the Shares were not restricted securities),

 

together with a remittance for the aggregate Exercise Price payable, unless the Company and the Option Holder agree that an alternative arrangement can be used to satisfy the Exercise Price.

 

7.2                               Provided the conditions for exercise are satisfied, exercise of the Option shall be effective on the date of receipt or deemed receipt by the Company (as determined by rule 12.2) (the “Exercise Date”) of the documents referred to in rule 7.1.

 

7.3                               The Company has established a cashless exercise facility to enable Option Holders to provide funds to pay the aggregate Exercise Price by:

 

(a)                                 authorising the deduction of the necessary amount from their salary payment next following delivery of the option certificate and the notice of exercise to the Company or its duly appointed agent; or

 

(b)                                 executing a letter of instruction authorising a representative to act as the Option Holder’s agent and to sell on his behalf either all of the Shares acquired on exercise of the Option or such number of them (rounded up to the nearest whole Share) as will be required to cover the aggregate Exercise Price, the payment of any Tax Liabilities (as defined in rule 10.4), together with any fees and commissions arising in connection with the exercise of the Option and the sale of the Shares acquired.  Once the requisite number of Shares has been sold and these requirements met in full, the Option Holder will receive a share certificate in respect of the balance of the Shares remaining (if any) and/or a cheque or bank transfer in respect of the balance of monies (if any) left after sale of all or the requisite number of Shares as aforesaid; or

 

(c)                                  implementing any other arrangements from time to time determined by the Committee and agreed between the Company and the Option Holder.

 

7.4                               As soon as reasonably practicable after the Exercise Date the Company shall:

 

(a)                                 allot and issue such Shares which are to be issued pursuant to the exercise of the Option; or

 

(b)                                 procure the transfer of such Shares which are to be transferred pursuant to the exercise of the Option,

 

9

 

to the Option Holder (or his nominee) and, subject to rule 7.5, cause to be registered in his name (or the name of his nominee) the number of Shares specified in the notice of exercise (as reduced in accordance with any alternative arrangement applicable under rule 7.1).

 

7.5                               The Option Holder shall be responsible for any stamp duty arising on the transfer of Shares.

 

7.6                               An Option may only be exercised in respect of a whole number of Shares, not a fraction of a Share.

 

7.7                               No Option may be exercised unless such exercise, and the issue or transfer of Shares after such exercise, would be lawful in all relevant jurisdictions and in compliance with the Listing Rules of the London Stock Exchange, the AIM Rules or any other relevant share dealing code of the Company, the City Code on Takeovers and Mergers and any other relevant UK or overseas regulation or enactment.

 

7.8                               An Option may not be exercised for fewer than 50,000 Shares at any one time.

 

7.9                               When an Option is exercised only in part, the balance shall remain exercisable on the same terms as originally applied to the whole Option and an endorsement to that effect shall be noted on the Option Certificate as soon as reasonably practicable after the partial exercise.

 

7.10                        Save for any right determined by reference to a date preceding the date on which Shares are issued, Shares issued on the exercise of an Option shall rank equally with the Shares then in issue.  Shares transferred on the exercise of an Option will be transferred without the benefit of any rights attaching to them by reference to a record date preceding the date of exercise.

 

7.11                        An Option Holder to whom Shares are issued or transferred on the exercise of an Option shall be bound by the Company’s articles of association as they apply to such Shares and if required to do so by the Board, shall enter into a deed of adherence pursuant to any shareholders’ agreement relating to the Company. Where any such Shares are issued to or transferred to a nominee, the Option Holder shall ensure that similar obligations apply to that nominee as required by the Board.

 

8.                                      Release of Options

 

8.1                               The provisions of Part 6, Schedule 5 shall apply in relation to Company Reorganisations.

 

8.2                               If a Company Reorganisation occurs the Option Holder may, by an agreement in writing with the acquiring company, release his rights under the Option in consideration of the grant to the Option Holder of rights which are equivalent but relate to the acquiring company’s shares, such rights to be comprised in a replacement option in relation to which the following conditions must be satisfied:

 

(a)                                 it is granted within the appropriate period under paragraph 42, Schedule 5; and

 

(b)                                 the qualifying requirements under paragraph 43, Schedule 5 are satisfied.

 

8.3                               If the rights under the Option are released by the Option Holder under rule 8.2 the occurrence of the Company Reorganisation shall not be an event triggering the Option becoming exercisable under rule 6.3.

 

9.                                      Adjustment of Options

 

9.1                               In the event of any capitalisation or offer by way of rights (including an open offer) or on any consolidation, sub-division, reduction or other variation of the capital of the Company, the number of Shares subject to the Option and the Exercise Price may be adjusted in such manner as the Committee, on a fair and reasonable basis, may deem appropriate.  Notice of any such adjustments shall be given to the Option Holder by the Company.

 

10.                               Taxation

 

10

 

10.1                        It is intended that the provisions of Taxes Act shall apply to give relief from income tax in respect of the grant or exercise of an Option (except to the extent that it is a non tax-advantaged Option by virtue of the operation of rule 3.2(b) or rule 3.5(b)).

 

10.2                        Subject to rule 10.1, if a disqualifying event (within the meaning of sections 533 to 539, Taxes Act) occurs before an Option is exercised, and the Option is not exercised within 40 days of that event, the gain realised by the subsequent exercise of the Option shall be subject to tax in accordance with section 532, Taxes Act.

 

10.3                        An Option Holder shall be accountable for any Income Tax Liability and National Insurance Contribution Liability which is chargeable on any assessable income deriving from:

 

(a)                                 the grant or exercise of, or other dealing in, any Option held by him,

 

(b)                                 the acquisition, holding or disposal of any Shares acquired on exercise of any Option held by him; and

 

(c)                                  any action, event or thing done or omitted to be done following the Option Holder’s acquisition of the Shares acquired on exercise of any Option held by him which directly or indirectly gives rise to a liability under the Taxes Act in respect of the Shares (including the entering into of an election under section 431 of the Taxes Act).

 

10.4                        In respect of such assessable income the Option Holder shall indemnify the Company and (at the direction of the Company) any Group Company which is or may be treated as the employer of the Option Holder in respect of the following (together, the “Tax Liabilities”):

 

(a)                                 any Income Tax Liability; and

 

(b)                                 any National Insurance Contribution Liability being the aggregate of:

 

(i)                                     all the Employee’s Contributions; and

 

(ii)                                  all the Employer’s Contributions (unless otherwise determined by the Committee and notified to the Option Holder) .

 

10.5                        Pursuant to the indemnity referred to in rule 10.4, the Option Holder shall make such arrangements as the Company requires to meet the cost of the Tax Liabilities, including at the direction of the Company any of the following:

 

(a)                                 making a cash payment of an appropriate amount to the relevant Group Company whether by way of cheque, banker’s draft or deduction from salary in time to enable that Group Company to remit such amount to HM Revenue & Customs before the 14th day following the end of the month in which the event giving rise to the relevant Tax Liabilities occurs;

 

(b)                                 appointing the Company as agent and/or attorney for the sale of sufficient of the Shares acquired pursuant to the exercise of the Option to cover the Tax Liabilities and authorising the payment to the relevant Group Company of the appropriate amount (including all reasonable fees, commissions and expenses incurred by the relevant Company in relation to such Sale) out of the net proceeds of sale of the Shares; and

 

(c)                                  entering into an election whereby the employer’s liability for Employer’s Contributions is transferred to the Option Holder on terms set out in the election and approved by HM Revenue & Customs.

 

10.6                        For the purposes of this rule 10, Group Companies includes former Group Employees.

 

11.                               Administration and amendment

 

11.1                        The Scheme shall be administered by the Committee acting on behalf of the Company and 

 

11

 

the Committee’s decision on all disputes shall be final.

 

11.2                        Subject to rule 11.3, the Committee may at any time amend these Rules in any way it thinks fit.

 

11.3                        No amendment may be made to these Rules if, or to the extent that, in the reasonable opinion of the Committee it would materially abrogate or adversely affect the subsisting rights of an Option Holder as regards an Option granted prior to the amendment being made unless it is made:

 

(a)                                 with the written consent of the number of Option Holders that hold Options under the Scheme to acquire more than 50% of the Shares which would be delivered if all Options granted and subsisting under the Scheme were exercised (ignoring any conditions which may be attached to their exercise); or

 

(b)                                 by a resolution at a meeting of Option Holders passed by not less than 50% of the Option Holders who attend and vote either in person or by proxy.

 

11.4                        The Committee shall have power from time to time to make and vary such rules (not being inconsistent with these rules) for the implementation and administration of this Scheme as it may think fit.

 

12.                               General

 

12.1                        The Company shall at all times keep available sufficient authorised and unissued Shares to satisfy the exercise to the full extent still possible of any Options (excluding those the exercise of which is to be satisfied by the transfer of existing Shares) taking account of any other obligations of the Company to issue new Ordinary Shares or shall otherwise ensure that Shares are available for transfer to satisfy the exercise of any Option.

 

12.2                        Any notice or other communication under or in connection with these Rules may be given to the Option Holder either personally or by electronic mail or post and/or to the Company either personally or by electronic mail (with a report of receipt), post or by fax.  Items sent by electronic mail shall be deemed to have been received at the time specified in the report of receipt returned to the sender. Items sent by post should be first class prepaid and shall be deemed to have been received 48 hours after posting.  Items sent by fax shall be deemed to have been received on the day that they are sent.

 

12.3                        The terms of employment of an Option Holder shall not be affected in any way by his participation in the Scheme which shall not form part of such terms (either expressly or impliedly) nor in any way entitle him to take into account such participation in calculating any compensation or damages on the termination of his employment for whatever reason (whether lawful or unlawful) which might otherwise be payable to him, and the Option Holder’s terms of employment shall be deemed to be varied accordingly.

 

12.4                        This Scheme is entirely discretionary and may be suspended or terminated by the Company at any time.  Such suspension or termination will not affect any Options granted under the Scheme to the extent that they are subsisting at the date of such suspension or termination. The grant of an Option is likewise entirely discretionary and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options.  All determinations with respect to future grants will be at the sole discretion of the Company.  Rights under the Scheme are not pensionable

 

12.5                        The costs of introducing and administering this Scheme shall be borne by the Company.

 

12.6                        Subject to applicable law, the Company and any Group Company may enter into arrangements (including the payment of money or making of loans) with any person on such terms as it thinks fit whereby, on the exercise of an Option, existing Shares may be transferred to an Option Holder in satisfaction of his rights under this Scheme.

 

12

 

12.7                        Nothing in these Rules shall be taken to impose any restriction or limitation on the exercise by the members of the Company of their rights to make any alteration to the articles of association of the Company or the share capital of the Company.

 

12.8                        At any time whilst Shares are listed on the Alternative Investment Market or the Official List of the London Stock Exchange, the Company shall apply to the London Stock Exchange for any shares issued on the exercise of any Option to be listed on the Alternative Investment Market or the Official List as appropriate.

 

12.9                        The Option Holder shall have no recourse of any kind against the Company (or any Group Company or former Group Company) if the incentives and tax reliefs provided by the Taxes Act and/or Part 4, Schedule 7D to TCGA are not available in respect of any EMI Option for whatever reason.

 

12.10                 The Committee may adopt appendices to this Scheme which shall provide for the grant of non tax-advantaged options to employees who are not at the relevant time eligible to participate in the EMI scheme or who are not resident for tax purposes in the United Kingdom, subject to such modifications as the Committee considers appropriate to take account of local tax, exchange control, securities laws or other regulatory requirements.

 

12.11                 The Option Holder, by accepting the Option, consents to the collection, use and transfer, in electronic or other form, of personal data (“Data”) that is necessary to facilitate the implementation, administration and management of the Scheme.  The Company may, for the purpose of implementing, administering and managing the Scheme, hold certain personal information about the Option Holder, including, but not limited to, the Option Holder’s name, home address and telephone number, date of birth, national insurance number or other identification number, salary, nationality, job title and details of all awards or entitlement to options that may be granted under the Scheme.  The Option Holder further consents to the transfer of the Data to any third parties assisting in the implementation, administration and management of the Scheme, including any broker with whom the Shares that may be issued on exercise of the Option may be deposited, and that these recipients may be located in the UK or elsewhere. The Option Holder, by accepting the Option, waives any data privacy rights he may have with respect to the Data and authorises the Company and its agents to store and transmit such information in electronic form

 

12.12                 The Scheme and any dispute, claim or obligation arising out of or in connection with it, its subject matter or formation shall be governed by English law. The Option Holder and the Company irrevocably agree that the English courts shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Scheme, its subject matter or formation.

 

13

 

Letter Notifying Grant

 

[to be typed onto Company letterhead]

 

·[Date]

 

·[Name]

·[Address]

 

Dear · [Name]

 

Verona Pharma plc EMI Option Scheme

 

I am pleased to inform you that the Board has granted you an option over · ordinary shares in the capital of Verona Pharma plc (the “Company”) (the “Option”) in accordance with the Verona Pharma plc EMI Option Scheme (the “Scheme”).

 

You will find enclosed with this letter:

 

·                                          A copy of the rules of the Scheme;

 

·                                          An option certificate for execution and return;

 

·                                          HM Revenue & Customs EMI1 Form (containing a working hours declaration) for signature and return; and

 

·                                          A form of exercise.

 

The option certificate is the written agreement between the Company and you in relation to the Option.  Unless you do not wish to accept the Option, please execute the option certificate and return it to me by [·]

 

By executing the option certificate you are agreeing to be bound by the rules of the Scheme so please read them carefully.  Your attention is drawn in particular to rule 6 which sets out the dates upon which your Option vests and the other situations in which you will be able to exercise it.

 

You should also please sign the working time declaration on the enclosed form EMI 1 which I must send to HM Revenue & Customs.  Please return this to me as soon as possible as it must be filed by HM Revenue & Customs shortly after the grant of your Option.

 

When you wish to exercise your Option you must do so by completing and returning the form of exercise (attached to the option certificate).

 

Taxation

 

Your Option has been granted under an Enterprise Management Incentive (EMI) Scheme which meets certain conditions set down by HM Revenue & Customs.  This means that when you exercise your Option you will not have to pay income tax and/or national insurance contributions unless the Option does not comply with the EMI rules.  While we do not anticipate there will be any such failure to meet the EMI conditions (except to any extent that the Option is granted over a number of Shares that exceed the EMI limits), if this is the case your employer may have to account to HM Revenue & Customs on your behalf through the PAYE system for any income tax and national insurance contributions that become payable.  You will be required to make arrangements to reimburse your

 

14

 

employer for the payment of these amounts on your behalf.

 

As a condition of grant/exercise you are required to agree to bear any employer’s secondary national insurance that your employer may become liable to pay to HM Revenue & Customs. In order to secure the payment of any such employers’ secondary national insurance you may be required to enter into an election whereby such liability is transferred to you on terms set out in the election, the form of which has been approved by HM Revenue & Customs.

 

In certain circumstances, exercise of your Option will be conditional on your entering into an election pursuant to section 431, Income Tax (Earnings and Pensions) Act 2003 jointly with your employer (electing that the market value of the shares acquired on exercise of the Option be calculated as if the  shares were not restricted securities).  You will be asked to sign this form if it is necessary.

 

When you sell the shares you acquire on exercise of your Option, any gain may be subject to capital gains tax.  It will be your responsibility to report and pay any capital gains tax to HM Revenue & Customs as required.

 

Yours sincerely

 

	
 
    	
 
    
	
For and on behalf of
    	
 
    
	
Verona Pharma plc
    	
 
    

 

15

 

Share Option Certificate

 

Verona Pharma plc EMI Option Scheme

 

 

	
Date of Grant
    	
 
    	
Exercise Price per Share
    	
 
    	
Number of Shares
    	
 
    
	
·
    	
 
    	
·
    	
 
    	
·
    	
 
    

 

This is to certify that                                                                                                                                   

of                                                                                                                                                                    

                                                                                                                                                                        

 

has been granted an option to acquire • ordinary shares in the Company at the exercise price shown above (the “Option”) under the rules of the Verona Pharma plc EMI Option Scheme (the “Scheme Rules”).

 

The Option is granted as an enterprise management incentive (EMI) option under the provisions of Schedule 5, Income Tax (Earnings and Pensions) Act 2003.

 

The Option is exercisable in accordance with the Scheme Rules.  In particular, the right to exercise the Option shall Vest in normal circumstances according to the Vesting Schedule below.

 

	
Normal Vesting Date
    	
 
    	
Vesting proportion
    	
 
    
	
·
    	
 
    	
·
    	
 
    
	
·
    	
 
    	
·
    	
 
    
	
·
    	
 
    	
[Balance of   Shares under Option]
    	
 
    

 

In this Vesting Schedule the phrase “Shares under Option” shall refer to the total number of Shares under Option at the Date of Grant. The number of Shares comprised in any tranche, other than the tranche that Vests on the latest date shall be rounded down to a whole number.

 

The tax treatment of the Option will depend on a number of factors, and if you are unsure about such treatment you are advised to take your own independent financial advice from an appropriately qualified professional adviser.  You should be aware that if the rules for EMI options are not met, the gain made on the exercise of the Option may be liable to income tax and national insurance contributions.

 

Where any income tax and national insurance contributions are payable through the PAYE system, you will be required to indemnify the Company and other Group Companies (and former Group Companies) for such liabilities under the Scheme Rules.  Capital gains tax (CGT) may also become payable on eventual disposal of the ordinary shares acquired and any such CGT liability will be for your own account.

 

16

 

This Agreement is executed by the Company and the Option Holder as a deed and delivered on the date shown above

 

	
Executed as a Deed by
    	
)
    	
 
    	
 
    
	
Verona Pharma plc acting by
    	
)
    	
 
    	
 
    
	
                     , a director
    	
)
    	
 
    	
 
    
	
in the presence of:
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signature of witness:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Occupation:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Executed as a Deed   by
    	
 
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
)
    	
 
    	
 
    
	
in the presence of
    	
 
    	
)
    	
 
    	
 
    

 

Signature of witness:

 

Name:

 

Address:

 

Occupation:

 

Notes

 

(1)              The Option is not transferable, and will lapse on any transfer, assignment, charge or other disposal.

(2)              A copy of the rules of the Scheme is available from the Company Secretary.

 

THIS CERTIFICATE IS IMPORTANT AND SHOULD BE KEPT IN A SAFE PLACE

 

17

 

Form of Exercise

 

Verona Pharma plc EMI Option Scheme
 (the “Scheme”)

 

	
To:
    	
The Directors
    
	
 
    	
Verona Pharma plc
    

 

I wish to exercise the option comprised in the enclosed option certificate (the “Option”) in respect of · ordinary shares of £0.001 each in the capital of the Company (the “Shares”).

 

I [enclose a cheque for £· in favour of Verona Pharma plc] or [have arranged payment in accordance with rule 7.3 of the Scheme Rules] as payment in full of the exercise price of £· per Share.

 

I apply for the number of Shares specified above and request you to arrange the registration of them in my name subject to the memorandum and articles of association of Verona Pharma plc.

 

I agree:

 

(a)                                 to indemnify Verona Pharma plc and other Group Companies (for former Group Companies)  in respect of any Tax Liabilities (as defined in rule 10.4 of the Scheme); and

 

(b)                                 that the issue of these Shares to me is conditional on my first making arrangements to the satisfaction of Verona Pharma plc to discharge the Tax Liabilities pursuant to such indemnity and, if required by the board of directors, entering into a section 431 election.

 

	
Signed:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Postcode:
    	
 
    

 

Note:

 

If you are signing as a personal representative you should lodge a copy of the Grant of Probate or Letters of Administration as evidence of your appointment.  In the event of there being more than one personal representative each must sign the form.

 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}]]