As filed with the Securities and Exchange Commission on September 11, 2024
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INNATE PHARMA S.A.
(Exact name of registrant as specified in its charter)
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| France | | Not applicable |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
Innate Pharma S.A.
117, Avenue de Luminy
13009 Marseille, France
+33 4 30 30 30 30
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
2024 Stock Option Plan
2024 Performance Free Share Allocation Plan
2024 Free Share Plan
(Full title of the plans)
Innate Pharma, Inc.
2273 Research Boulevard, Suite 350
Rockville, Maryland 20850
+33 4 30 30 30 30
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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| | Linda Hesse | |
| Jones Day | |
| | 2, rue Saint-Florentin | |
| | 75001 Paris, France | |
| | +33 1 56 59 38 72 | |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | | ☐ | | Accelerated filer | | ☒ |
Non-accelerated filer | | ☐ | | Smaller reporting company | | ☐ |
| | | | Emerging growth company | | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information specified in Part I of Form S-8 is omitted from this Registration Statement in accordance with the provisions of Rule 428 under the Securities Act and the introductory note to Part I of Form S-8. The documents containing the information specified in Part I of Form S-8 will be delivered to the participants in the plans covered by this Registration Statement as specified by Rule 428(b)(1) under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
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| ITEM 3. | INCORPORATION OF DOCUMENTS BY REFERENCE |
The following documents of Innate Pharma S.A. (the “Registrant”), which are on file with the U.S. Securities and Exchange Commission (the “Commission”), are incorporated by reference into this Registration Statement:
(a) The Registrant’s annual report on Form 20-F for the fiscal year ended December 31, 2023, filed with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the ”Exchange Act”) on April 4, 2024 (File No. 001-39084), which contains audited financial statements for the Registrant’s latest fiscal year for which such statements have been filed; (b) The Registrant’s Reports of Foreign Private Issuer on Form 6-K furnished to the Commission on April 15, 2024 and its Exhibit 99.1, and May 14, 2024 and its Exhibit 99.1 (other than the quote from Hervé Brailly, Interim Chief Executive Officer of Innate Pharma S.A., the text and references in the box containing the webcast information, and the Company contact details for additional information), and all other reports on Form 6-K that are furnished to the Commission and that are identified in such form as being incorporated in this Registration Statement by reference, since the end of the fiscal year covered by the Registrant’s annual report on Form 20-F referred to in (a) above; and (c) The description of the Registrant’s Ordinary Shares and American Depositary Shares contained in the Registrant’s Registration Statement on Form 8-A filed on October 10, 2019 (File No. 001-39084) under the Exchange Act, including any amendment or report filed for the purpose of updating such description, including the description of our securities included as Exhibit 2.3 to the Company’s Annual Report on Form 20-F filed with the Commission on April 4, 2024. All other reports and documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act on or after the date of this Registration Statement and prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part of this Registration Statement from the date of the filing of such reports and documents.
Any statement contained in this Registration Statement, in an amendment hereto or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed amendment to this Registration Statement or in any document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
Under no circumstances shall any information subsequently furnished on Form 6-K be deemed incorporated herein by reference unless such Form 6-K expressly provides to the contrary.
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| ITEM 4. | DESCRIPTION OF SECURITIES |
Not applicable.
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| ITEM 5. | INTERESTS OF NAMED EXPERTS AND COUNSEL |
Not applicable.
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| ITEM 6. | INDEMNIFICATION OF DIRECTORS AND OFFICERS |
Under French law, provisions of by-laws that limit the liability of the members of the Executive and Supervisory Boards are prohibited. However, French law allows sociétés anonymes to contract for and maintain liability insurance against civil liabilities incurred by any member of the Executive and Supervisory Boards involved in a third-party action, provided that they acted in good faith and within their capacities as members of such boards of the company. Criminal liability cannot be indemnified under French law, whether directly by a company or through liability insurance.
The Company has a liability insurance for its Executive and Supervisory Board members, and insurance coverage for liability under the Securities Act. The Company also entered into agreements with its Executive and Supervisory Board members to provide contractual indemnification. With certain exceptions and subject to limitations on indemnification under French law, these agreements provide for indemnification for damages and expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any Executive or Supervisory Board member in any action or proceeding arising out of his or her actions in that capacity. The Company believes that this insurance and these agreements are necessary to attract qualified Executive and Supervisory Board members.
These agreements may discourage shareholders from bringing a lawsuit against the Executive and Supervisory Board members for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against the Executive and Supervisory Board members, even though such an action, if successful, might otherwise benefit the Company and its shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent the Company pays the costs of settlement and damages awards against its Executive and Supervisory Board members pursuant to these insurance agreements.
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| ITEM 7. | EXEMPTION FROM REGISTRATION CLAIMED |
Not applicable.
See the Exhibit Index on the page immediately preceding the signature page for a list of exhibits filed as part of this Registration Statement, which Exhibit Index is incorporated herein by reference.
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| 1. | The undersigned Registrant hereby undertakes: |
(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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| 2. | The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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| 3. | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
EXHIBIT INDEX
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Exhibit
Number | | Description |
| 4.1(1) | | |
| 4.2 | | |
| 4.3 | | |
| 4.4 | | |
| 5.1 | | |
| 23.1 | | |
| 23.2 | | |
| 24.1 | | Power of Attorney (included on signature page to this Registration Statement on Form S-8) |
| 107 | | |
| | |
| (1) To be subsequently filed, if applicable, by an amendment to this registration statement or from documents filed or to be filed with the SEC under the Exchange Act and incorporated herein by reference. |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Marseille, France on September 11, 2024.
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| INNATE PHARMA S.A. |
| |
| By: | | /s/ Hervé Brailly |
| | Hervé Brailly |
| | Chairman of the Executive Board |
POWER OF ATTORNEY
We, the undersigned directors, officers and/or authorized representatives in the United States of Innate Pharma S.A., hereby severally constitute and appoint Dr. Hervé Brailly and Frédérick Lombard, and each of them singly, our true and lawful attorneys, with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-8 filed herewith, and any and all pre-effective and post-effective amendments to said registration statement, under the Securities Act of 1933, as amended, in connection with the registration under the Securities Act of 1933, as amended, of equity securities of Innate Pharma S.A., and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as each of them might or could do in person, and hereby ratifying and confirming all that said attorneys, and each of them, or their substitute or substitutes, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on September 11, 2024.
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| Signature | | Title | | |
/s/ Hervé Brailly | | |
| Hervé Brailly | | Chairman of the Executive Board (Principal Executive Officer) | | |
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/s/ Frédéric Lombard Frédéric Lombard | |
Chief Financial Officer (Principal Financial and Accounting Officer) | | |
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/s/ Irina Staatz-Granzer Irina Staatz-Granzer | |
Chairwoman of the Supervisory Board | |
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| /s/ Pascale Boissel | |
Vice Chairwoman of the Supervisory Board | | |
| Pascale Boissel | | | |
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Jean-Yves Blay | | Member of the Supervisory Board | | |
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Gilles Brisson | |
Member of the Supervisory Board | | |
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/s/ Véronique Chabernaud Véronique Chabernaud | |
Member of the Supervisory Board | | |
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/s/ Olivier Martinez Olivier Martinez | |
Member of the Supervisory Board | | |
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/s/ Sally Bennett Sally Bennett | |
Member of the Supervisory Board | |
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| Innate Pharma, Inc., Authorized Representative in the United States |
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| By: | | /s/ Hervé Brailly | | |
| | Hervé Brailly | | |
| | President | | |
Exhibit 107
Calculation of Filing Fee Tables
Form S-8
(Form Type)
Innate Pharma S.A.
(Exact Name of Registrant as Specified in its Charter)
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| Security Type | Security Class Title(1) | Fee Calculation Rule | Amount Registered(2)(3) | Proposed Maximum Offering Price Per Share(3) | Maximum Aggregate Offering Price(3) | Fee Rate | Amount of Registration Fee | |
| Equity | Ordinary Shares, €0.05 nominal value per share, reserved for future issuance upon the exercise of stock options issuable under the 2024 Stock Option Plan | 457(c) and 457(h) | 150,000 | $2.31 | $346,500 | $147.60 per $1,000,000 | $51.14 | |
| Equity | Ordinary Shares, €0.05 nominal value per share, reserved for future issuance upon the exercise of free shares on the basis of performance criteria issuable under the 2024 Performance Free Shares Allocation Program | 457(c) and 457(h) | 2,625,000 | $2.31 | $6,063,750 | $147.60 per $1,000,000 | $895.01 | |
| Equity | Ordinary Shares, €0.05 nominal value per share, reserved for future issuance upon the exercise of free shares issuable under the 2024 Free Shares Grant Program | 457(c) and 457(h) | 300,000 | $2.31 | $693,000 | $147.60 per $1,000,000 | $102.29 | |
| Total Offering Amounts | | $7,103,250 | | $1,048.44 |
| Total Fee Offsets | | | | — |
| Net Fees Due | | | | $1,048.44 |
(1) These shares may be represented by the Registrant’s American Depositary Shares, or ADSs. Each ADS represents one Ordinary Share. ADSs issuable upon deposit of the Ordinary Shares registered hereby were registered pursuant to a separate Registration Statement on Form F-6 (File No. 333-234063).
(2) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement shall also cover any additional shares of the Registrant’s Ordinary Shares that become issuable under the Registrant’s 2024 Stock Option Plan, 2024 Free Share Plan or 2024 Performance Free Share Allocation Plan or by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without receipt of consideration that increases the number of the Registrant’s outstanding Ordinary Shares.
(3) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) and Rule 457(h) of the Securities Act based upon the price of $2.31 per ADS, which was the average of the high and low prices of the ADS as reported on NASDAQ for September 5, 2024.
TRANSLATION FOR INFORMATION PURPOSES
INNATE PHARMA SA
A corporation with executive board and supervisory board with a share capital of EUR 4,049,171.60
Registered Office: 117, avenue de Luminy, 13009 Marseille
424 365 336 Registry of Trade and Companies of Marseille
ARTICLES OF ASSOCIATION (BY-LAWS)
TRANSLATION FOR INFORMATION PURPOSES
TITLE I
FORM – NAME – REGISTERED OFFICE – OBJECT - DURATION
ARTICLE 1 - Form
The Company was incorporated in the form of a Simplified Share Company governed by applicable statutory provisions and by these articles of association.
The Company was transformed into a Corporation with a Executive Board and a Supervisory Board by a decision of the Mixed Meeting of Shareholders of 13 June 2005. It is governed by the statutory and regulatory provisions in force and by these articles of association.
ARTICLE 2 – Corporate Name
The name of the Company is INNATE PHARMA.
On any instruments or documents issued by the Company, the name of the Company must be immediately preceded or followed by the words “Corporation with Executive Board and Supervisory Board” and a statement of the share capital.
ARTICLE 3 - Registered Office
The registered office is at 117, avenue de Luminy, 13009 Marseille.
It may be transferred within the same administrative department or to a neighbouring administrative department by a decision of the Supervisory Board subject to ratification by the Ordinary Meeting of Shareholders.
ARTICLE 4 - Purpose
The purpose of the Company is, directly or indirectly, in France and abroad, to:
•carry out, on its own behalf or on behalf of third parties, any research, development, studies and development of manufacturing or marketing procedures for pharmaceutical products;
•register or grant any patent or licence directly or indirectly connected with its activity; and
•more generally, carry out any transactions of any kind whatsoever including economic, legal, financial, civil or commercial transactions which may be directly or indirectly related to the corporate purposes or to any similar, related or complementary objects.
ARTICLE 5 - Duration
Unless it is extended or wound up early, the Company shall have a duration of 99 years which starts from the day of its registration at the Registry of Trade and Companies.
Decisions to extend the duration of the Company or to wind it up early shall be taken collectively by the shareholders.
TRANSLATION FOR INFORMATION PURPOSES
TITLE II
CONTRIBUTION - SHARE CAPITAL – FORM OF SHARES - RIGHTS AND OBLIGATIONS ATTACHED TO SHARES
ARTICLE 6 – Share Capital
The share capital is set at €4,049,171.60 (Four Million Forty-nine Thousand One Hundred Seventy-one euros and sixty cents). It is divided into 80 967 407 (eighty million nine hundred and sixty-seven thousand four hundred and seven) ordinary shares with a par value of zero point zero five (0.05) euros each, 6,494 (six thousand four hundred ninety-four) preference shares with a par value of zero point zero five (0, 05 each (hereinafter the "2016 Preference Shares") and 7,581 (seven thousand five hundred eighty-one) preference shares with a par value of zero point zero five (0.05) euro each (hereinafter the "2017 Preference Shares"), fully subscribed and paid up in cash for their full amount.
ARTICLE 7 – Modifications of the Share Capital
I. The share capital may be increased by either the issue of new shares or an increase of the nominal value of existing shares.
New shares are paid up either in cash, by a contribution in kind, by set-off against due and payable receivables, by incorporation of profit, reserves or issue premiums into the share capital, as a result of a merger or demerger, or further to the exercise of a right attached to securities entitling their holder to capital, including, as the case may be, the payment of the corresponding amounts.
New shares are issued at either their nominal amount or at such amount increased by an issue premium.
A share capital increase can only be decided by an Extraordinary Meeting of Shareholders, following a report by the Executive Board containing the information required by law.
An Extraordinary Meeting of Shareholders may, however, delegate such competence to the Executive Board pursuant to the conditions provided by law. Within the limit of the powers so granted by an Extraordinary Meeting of Shareholders, the Executive Board shall have the powers required to increase the share capital in one or several steps, to determine the terms and conditions thereof, to officially acknowledge the completion thereof and to make the corresponding amendments to the articles of association.
If a share capital increase is decided by a Meeting of Shareholders, it may delegate all the powers required for the completion of the operation to the Executive Board.
If the Executive Board is acting by virtue of a delegation of power or competence, it shall prepare a supplementary report to the Ordinary Meeting of Shareholders held following the meeting of the Executive Board at which such action is taken.
If the share capital is increased by the incorporation of profits, reserves or issue premiums, the Extraordinary Meeting of Shareholders shall deliberate pursuant to the conditions of quorum and majority required for Ordinary Meeting of Shareholders. In such case, the Meeting of Shareholders may decide that rights constituting fractional shares shall be neither negotiable nor transferable and that the corresponding securities should be sold. The proceeds of sale shall be allocated to the holders in proportion to their rights.
An increase in share capital by increasing the nominal amount of shares may only be decided by a unanimous decision of the shareholders, unless it is the result of an incorporation of profits, reserves or issue premiums into the share capital.
TRANSLATION FOR INFORMATION PURPOSES
Shareholders have a preferential right of subscription, in proportion to their shareholdings, to shares issued by way of cash contribution in order to increase the share capital. Shares acquired pursuant to the exercise of this right shall be of the same category as that of the share from which the aforesaid right arises. This also applies to shares resulting from the acquisition of securities other than shares.
Shareholders may dispose of all or part of their subscription rights during the subscription period. Such rights are negotiable if they are detached from shares which are themselves negotiable. If this is not the case, then such subscription rights may be disposed of on the same terms as the shares themselves.
Shareholders may waive their preferential right on an individual basis.
The Extraordinary Meeting of Shareholders which decides to increase the share capital may cancel the preferential right to subscription pursuant to the conditions and within the limits set by law, and shall make such decision following the issuance of reports of the Executive Board and the Statutory Auditors, in accordance with the conditions determined by the law and regulations in force.
Shares which have not been subscribed for on an irreducible basis may be allocated to shareholders who may have subscribed on a reducible basis for a greater number of shares than that to which they could have subscribed on a preferential basis, in proportion to their subscription rights, and in any event, within the limit of their request, if the Extraordinary Meeting of Shareholders, or, in the case of delegation, the Executive Board, expressly so decides.
If the subscriptions have not, in any respect whatsoever, covered the entire share capital increase, the Executive Board may exercise any one or more of the options provided below, in the order it sees fit:
(i) limit the share capital increase to the amount of the subscriptions on the dual condition that such subscriptions cover at least three quarters of the amount of the originally determined increase, and that such option has not been expressly prohibited by the Extraordinary Meeting of Shareholders at the time of issue;
(ii) allocate the remaining shares unless the Extraordinary Meeting of Shareholders has decided otherwise; and
(iii) opening the subscription to the public if this has been expressly authorised by the Extraordinary Meeting of Shareholders.
If the subscriptions have not covered the entire share capital increase, or three quarters of this increase in the case of (i) above, after such options have been exercised, the share capital increase shall not be carried out.
However, the Executive Board may in any case automatically limit the share capital increase to the amount covered by subscriptions, if unsubscribed shares represent less than 3% of the share capital increase.
In the case of a share capital increase with or without a preferential right of subscription, the Extraordinary Meeting of Shareholders may provide that the number of shares may be increased within thirty days of the closure of subscriptions by up to 15% of, and at the same price as for, the original issue.
If the share capital increase produces fractional shares, shareholders with insufficient subscription or allocation rights shall be required personally to acquire or dispose of the subscription rights necessary to obtain delivery of a whole number of new shares.
II. An Extraordinary Meeting of Shareholders (or, in the case of delegation, the Executive Board) may also (subject to the rights of creditors if relevant) authorise or decide upon a reduction of share
TRANSLATION FOR INFORMATION PURPOSES
capital for any reason and by any procedure whatsoever. A reduction in share capital may not, in any event, derogate from the principle of equality between shareholders.
The reduction of share capital to an amount below the legal minimum can only be decided subject to the condition precedent of a share capital increase to at least the statutory minimum, unless the Company is transformed into a company having a different corporate form. In the event that the foregoing principle is not complied with, any interested party may ask the courts to dissolve the Company, provided however that the dissolution of the Company cannot be ordered if, as of the date on which the court rules on the merits, the situation has been rectified.
Subject to the legal and regulatory provisions in force, the Company may not either subscribe to or purchase its own shares. However, if an Extraordinary Meeting of Shareholders has decided on a reduction of share capital for reasons other than due to losses, it can authorise the Executive Board to purchase a fixed number of shares in order to cancel them.
ARTICLE 8 – Paying Up Shares
At least one quarter of the nominal value of shares subscribed for cash must be paid up on subscription together with the full amount of the issue premium, if relevant.
The remainder must be paid up in one or more instalments, upon calls made by the Executive Board, within five years of the day on which the share capital increase was completed.
Subscribers will be informed of calls for funds by registered letter with confirmation of receipt sent at least fifteen days prior to the date set for each payment.
If a shareholder does not pay the amounts due with respect to the shares for which he has subscribed, on the dates determined by the Executive Board, interest will automatically accrue on such amounts in favour of the Company at the statutory rate defined in Article L. 313-2 of the Monetary and Financial Code, as of the expiry of the month following the date on which they fall due and without the need for a court petition or formal notice. Moreover, when due payments in respect of shares have not been made within thirty days of formal notice sent to the defaulting shareholder, such shares will no longer entitle the holder to admission to shareholders’ meeting and the right to vote in shareholders’ meetings, and shall be deducted for the calculation of the quorum. The right to dividends and the preferential right of subscription to share capital increases attached to these shares shall be suspended. These rights shall be regained on payment of the principal and interest due in respect of the amounts due. A shareholder can then request the payment of dividends that are not time-barred and exercise his preferential right of subscription if the exercise period for such right has not expired.
The share capital must be fully paid up prior to any issue of additional shares to be paid up in cash.
ARTICLE 9 – Form of Shares – Administration of the Share Accounts
Ordinary shares are either in registered form or, if allowed by law, in bearer form, at the shareholder’s discretion. Fully paid-up 2016 Preference Shares are in registered form. Fully paid-up 2017 Preference Shares are in registered form.
Ordinary shares, 2016 Preference Shares and 2017 Preference Shares are registered in individual accounts opened by the Company or any authorised intermediary, in the name of each shareholder and kept according to the conditions and procedures provided by legal and regulatory provisions.
The Company is authorised to rely on statutory provisions, in particular Article L. 228-2 of the Commercial Code, with respect to the identification of the holders of bearer shares and for such purpose it may at any time request the central depositary who administers the share account, to provide the information referred to in Article L. 228-2 of the Commercial Code, in exchange for
TRANSLATION FOR INFORMATION PURPOSES
payment. The Company is therefore, in particular, entitled at any time to request the name and year of birth, or concerning a legal person, the corporate name and year of incorporation, the nationality and the post address and, if applicable, email address of holders of securities which give the right to vote in Meeting of Shareholders, either immediately or in the future, as well as the number of shares held by each of them and, as the case may be, any restrictions which may apply to the shares.
ARTICLE 10 - Transfer of Shares
Registered shares may be transferred by transfer from one account to another.
Ordinary shares paid up in cash are freely transferable as from the completion of the share capital increase. Ordinary shares received in exchange for contribution in kind are freely transferable as from the completion of the share capital increase, i.e. on the date of the Meeting of Shareholders or meeting of the Executive Board, acting under delegation, which approved the contribution, in the case of an in-kind contribution during the life of the company.
Title to ordinary shares is transferred by registration in the buyer’s account, on the date and in accordance with the conditions provided by applicable law and, as the case may be, regulations.
Ordinary shares are freely transferable subject to legislative provisions. 2016 Preference Shares and 2017 Preference Shares are transferable under the conditions set forth in Article 12 of these by-laws.
ARTICLE 11 – Crossing of Thresholds
Any natural person or legal entity referred to under Articles L. 233-7, L. 233-9 and L. 223-10 of the Commercial Code who gains possession, directly or indirectly, alone or in concert, of a number of shares which represent a portion of the share capital or voting rights of the Company equal to or greater than 1% or a multiple of such percentage, must inform the Company of the total number of shares, voting rights and securities granting an interest in capital or voting rights which it owns immediately or would own in the future, by registered mail with confirmation of receipt sent to the registered office of the Company within five trading days starting from the date that the aforesaid threshold(s) were crossed.
The obligation of information provided above also applies in the same conditions when the aforesaid thresholds are crossed downwards.
Shares or voting rights in excess of the portion which should have been declared but which have not been declared pursuant to the aforesaid conditions, are stripped of their rights to vote at shareholders’ meetings for any meeting held within two years following the date of the regularisation of the declaration in accordance with Article L. 233-14 of the Commercial Code, if failure to make the declaration has been observed and if one or more shareholders holding an interest of at least 5% of the share capital of the Company make such request, recorded in the minutes of the Meeting of Shareholders.
The foregoing obligations to declare apply in addition to the threshold crossing declarations provided by legal or regulatory provisions in force.
ARTICLE 12 - Rights and Obligations attached to Shares
The share capital of the Company is divided between ordinary shares, 2016 Preference Shares and 2017 Preference Shares.
I. Rights attached to ordinary shares, 2016 Preference Shares and 2017 Preference Shares
Without prejudice to the rights attached to 2016 Preference Shares and 2017 Preference Shares, each ordinary share entitles to a portion of the corporate profits and assets in proportion to the portion of share capital that it represents.
In addition, each ordinary share gives the right to vote and be represented at General Meetings of Shareholders pursuant to the conditions provided by law and in these articles of association. Ordinary
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shares, 2016 Preference Shares and 2017 Preference Shares (including shares of the Company that might be allocated for free in the framework of a capital increase through the incorporation of reserves, issue premiums or profits) do not grant a double voting right pursuant to Article L. 22-10-46 of the French Commercial Code.
Shareholders holding ordinary shares, 2016 Preference Shares and 2017 Preference Shares are only liable up to the nominal amount of the shares which they hold and any request for funds beyond that amount is prohibited.
Ownership of ordinary shares, 2016 Preference Shares and 2017 Preference Shares automatically implies agreement to be bound by the Company’s by-laws and the decisions of the General Meeting of Shareholders.
The heirs, creditors, successors or other representatives of the shareholder holding ordinary shares, 2016 Preference Shares or 2017 Preference Shares cannot request seals to be placed on the Company’s assets and securities or request their distribution or sale by public auction, or to interfere with its management. In order to exercise their rights, they should rely on company records and the decisions of the General Meeting of Shareholders.
Whenever it is necessary to hold several ordinary shares, 2016 Preference Shares or 2017 Preference Shares in order to exercise a right of any kind, in the case of an exchange, regrouping or allocation of securities, or further to a share capital increase or decrease, merger or other corporate transaction, holders of single shares or of less than the number of shares so required will only be able to exercise such right if they themselves collect and, as the case may be, purchase or sell, the required number of securities.
However, the Company may, in the case of an exchange of securities further to a merger or demerger, a share capital reduction, the regrouping or division and mandatory conversion of bearer into registered shares, or the distribution of securities deducted from reserves or in connection with a share capital reduction, or the distribution or allocation of free shares, pursuant to a decision of the Executive Board, sell any securities in respect of which the persons entitled thereto have not requested delivery subject to having carried out the publicity formalities provided by regulations at least two years beforehand.
As from the date of such sale, the prior securities or rights to distribution or allocation shall be cancelled as and when required, and their holders shall only be entitled to the allocation of the net proceeds of sale of unclaimed securities.
II. 2016 Preference Shares
A. Rights attached to 2016 Preference Shares
2016 Preference Shares and the rights of holders thereof are governed by the applicable provisions of the French Commercial Code, in particular Articles 228-11 et seq. thereof.
The maximum number of 2016 Preference Shares that may be allocated is 7,500 shares.
Only the 2016 Preference Shares convertible into ordinary shares pursuant to the terms and conditions specified below benefit from a dividend and are entitled to the reserves, applicable only from the date at which they become convertible. The 2016 Preference Shares that have become convertible will bear rights as from the first day of the financial year preceding the financial year during which they become convertible. The amount of the dividend (and, if applicable, of the portion of the reserves) to which each 2016 Preference Shares entitles is equal to the amount due in respect of an ordinary share, multiplied by the number of ordinary share that can be received from the conversion of each 2016 Preference Shares.
2016 Preference Shares give no preferential subscription right to any capital increase or any operation granting a right on ordinary shares.
In the event of an operation taking place before the 2016 Preference Shares are converted pursuant to paragraph II.B below, the conversion ratio will be adjusted pursuant to the provisions of Article L. 228-99, Paragraph 2, 3° and Paragraph 5 of the French Commercial Code.
With regards to the ownership of corporate assets, a 2016 Preference Shares gives right to a portion of the liquidation surplus in proportion to the portion of share capital that it represents.
Only the 2016 Preference Shares convertible into ordinary shares pursuant to the terms and conditions specified below grant the right to vote in the ordinary and extraordinary general meetings of holders of ordinary shares, applicable only from the date at which they become convertible. The
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number of voting rights granted by each 2016 Preference Share is equal to the number of ordinary shares that can be received from the conversion of each 2016 Preference Share.
2016 Preference Shares grant the right to vote in the special meetings of holders of 2016 Preference Shares. Holders of 2016 Preference Shares are grouped into a special meeting for any proposed modification of the rights attached to 2016 Preference Shares. In addition, pursuant to the provisions of Article L. 228-17 of the French Commercial Code, any proposed merger or demerger of the Company in which 2016 Preference Shares cannot be exchanged for shares with equivalent particular rights will be subject to the approval of any relevant special meeting.
Special meetings can only make valid decisions if the holders of 2016 Preference Shares that are present or represented hold at least, when convened for the first time, one third, and when convened for the second time, one fifth of the 2016 Preference Shares carrying the right to vote. If the capital is modified or adjusted, the rights of holders of 2016 Preference Shares are adjusted so that their rights may be maintained pursuant to Article L. 228-99 of the French Commercial Code. The other rights attached to 2016 Preference Shares are specified in the next paragraph.
B. Conversion of 2016 Preference Shares into ordinary shares
The issuance of 2016 Preference Shares may only be decided in the framework of an allocation of free shares in favour of the employees and/or executive officers of the Company, pursuant to the provisions of Articles L. 225-97-1 and L. 22-10-59 and seq. of the French Commercial Code.
2016 Preference Shares will be definitively acquired by the beneficiaries after an acquisition period of one year from their allocation by the Executive Board and subject to the beneficiary’s presence in the Company or its consolidated subsidiaries as an employee, executive officer or member of an executive or supervisory body or, if applicable, of the equivalent thereof in foreign law. The “Acquisition Date” is defined as the end of the acquisition period of the Preference Shares.
However, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4 of the French Social Security Code (or the equivalent thereof in an applicable foreign law), the 2016 Preference Shares will be allocated definitively prior to the Acquisition Date.
The 2016 Preference Shares become convertible in ordinary shares, either new or existing at the Company’s option, after the above-mentioned one-year vesting period from their allocation by the Executive Board, followed by a two-year retention period from the definitive allocation (the “Retention Period”), under the conditions set forth in Paragraphs 2 to 10 below. The “Expiry Date of the Retention Period” is defined as the end of the Retention Period.
However, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4 of the French Social Security Code (or the equivalent thereof in an applicable foreign law), the 2016 Preference Shares will be allocated definitively prior to the Acquisition Date.
1.As from the first anniversary date of the Acquisition Date, 2016 Preference Shares will be freely transferable to a credit institution in the framework of a pledge agreement.
Pursuant to the provisions set forth in the Article L. 225-197-1 I., Paragraph 6 of the French Commercial Code, the 2016 Preference Shares will be freely transferable in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4 of the French Social Security Code, regardless of whether such invalidity occurs before or after the Acquisition Date.
2.2016 Preference Shares may only be converted for a conversion period of six years and six months from the Expiry Date of the Retention Period (the “Conversion Period”).
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3.During the Conversion Period, each holder of 2016 Preference Shares will have the right to convert each of his 2016 Preference Shares in ordinary shares, either new or existing (at the Company’s option). The number of ordinary shares to which the conversion of one 2016 Preference Share will entitle will be equal to the sum of (i) a number of ordinary shares determined according to the fulfilment of an internal condition (the “Internal Condition”) and a market condition as defined below ((the “Market Condition”) (together the “Performance Criteria”).
The fulfilment of the Performance Criteria will give the right to convert each 2016 Preference Share in a maximum of 200 ordinary shares, i.e. a maximum of 100 ordinary shares under the Internal Condition and a maximum of 100 ordinary shares under the Market Condition.
It is specified that this conversion ratio thus determined will be adjusted in order to take into account the shares to be issued to preserve the rights of holders of securities or other rights giving access to the share capital and holders of 2016 Preference Shares under legal and statutory requirements and Paragraph II. above.
4.The Internal Condition in order to calculate the number of 2016 Preference Shares that can be converted will be determined as a function of the highest of the following two alternative criteria:
a)The first criterion is a function of the consolidated collected turnover of the Company relating to a present or future partnership or licensing agreement, cumulated over the period from 1 July 2016 to 30 June 2019 (the “Cash Revenues”):
(i)If the Turnover is strictly inferior to 50 million euros, the conversion ratio under the Internal Condition will be equal to 0;
(ii)If the Turnover is superior or equal to 50 million euros and inferior to 150 million euros, the conversion ratio under the Price Condition will be equal to :
[(Turnover-50)/100]×100
(iii)If the Cash Revenues are equal or superior to 150 million Euros, the conversion ratio under the Internal Condition will be equal to 100;
b)The second criterion is a function of the maturity of the portfolio of drug candidates developed by the Company during the three years before the Expiry Date of the Retention Period. “Drug candidates developed by the Company” mean Lirilumab, Monalizumab and IPH4102. For each of these products:
(iv)In the event of the authorization by the competent regulatory authority the United States or in Europe for the Company or one of its partners to carry out a Phase III trial or a clinical trial with a view to register a product, the conversion ratio under the Internal Condition will be equal to 50;
(v)In the event of the authorization by the competent regulatory authority in the United States or in Europe for the Company or one of its partners to carry out two Phases III trials or clinical trials with a view to register two products and/or two different indications for one product, the conversion ratio under the Internal Condition will be equal to 75;
(vi)In the event of an acceptance from the European Medicines Agency (EMA) in Europe or the Food and Drug Administration (FDA) in the United States to examine a filing by the Company or one of its partners of a marketing authorization request, the conversion ratio under the Internal Condition will be equal to 100.
5.The Market Condition in order to calculate the conversion ratio of 2016 Preference Shares into ordinary shares will be determined depending on the stock market price of the Innate Pharma share:
The terms “Initial Price” mean the average closing price of the Innate Pharma share on Euronext Paris for the sixty trading days prior to the Allocation Date by the Executive Board.
The terms “Final Price” mean the highest average closing price of the Innate Pharma share on Euronext Paris over a period of sixty consecutive days calculated at any time during the three years prior to the Expiry Date of the Retention Period.
The terms “High Price” means the Initial Price multiplied by two.
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a)If the Final Price is strictly inferior to the Initial Price, the conversion ratio under the Market Condition will be equal to 0;
b)If the Final Price is between (i) a value equal or superior to the Initial Price and (ii) a value inferior to the High Price, the conversion ratio under the Market Condition will be equal to:
[(Final Price / Initial Price) –1/ ] x 100
c)If the Final Price is equal or superior to the High Price, the conversion ratio under the Market Condition will be equal to 100.
6.The right to convert 2016 Preference Shares into ordinary shares, as well as the right to vote in the general meetings of ordinary shares holders and the right to the dividend and to a portion of the reserves attached to 2016 Preference Shares that have become convertible pursuant to Paragraph II. above, are subject to the condition of the beneficiary’s presence in the Company or its consolidated subsidiaries as an employee, an executive officer or a member of an executive or supervisory body or, if applicable, of the equivalent thereof in foreign law as at the Expiry Date of the Retention Period. In the event that such condition ceases to be fulfilled, the Company may proceed at any moment to the redemption of 2016 Preference Shares in the conditions set forth in Paragraph 8. below. It is specified that the provisions of this paragraph do not apply if the presence of the beneficiary in the Company or its consolidated subsidiaries ceases due to death, invalidity or retirement.
7.The fulfilment of the Performance Criteria will be recorded in a meeting of the Executive Board as soon as practicable after the Expiry Date of the Retention Period.
8.2016 Preference Shares that cannot be converted into ordinary shares depending on the extent to which the Performance Criteria are fulfilled or if the presence condition as at the Expiry Date of the Retention Period is not fulfilled, and 2016 Preference Shares that can be but will not have been converted at the end of the Conversion Period, may be bought at any time by the Company (which is under no obligation to do so) at their nominal value.
9.At the end of the Conversion Period, the Company will have the possibility to proceed, pursuant to applicable legal and regulatory provisions, to the cancellation of 2016 Preference Shares that will have not been converted, including those that it will have bought. The share capital will then be reduced accordingly, and creditors will have the right to oppose such reduction in the conditions set forth in Article L. 225-205 of the French Commercial Code.
10.New ordinary shares resulting from the conversion of 2016 Preference Shares will be assimilated to existing ordinary shares, will bear rights as from the first day of the financial year preceding the financial year during which they become convertible, and will grant to their holders, starting from their delivery, all the rights attached to ordinary shares. They will be subject to a request for listing on the regulated market of Euronext Paris on the same listing line as ordinary shares.
By way of derogation to the above, the allocation of 2016 Preference Shares can take place after the date of their allocation by the Executive Board and prior to the Acquisition Date, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4 of the French Social Security Code, at the beneficiary’s request.
The Executive Board will record the conversion into ordinary shares of the 2016 Preference Shares for which the conversion fulfils the conditions set forth above, as well as the number of ordinary shares resulting from the conversions of 2016 Preference Shares that have taken place, and will modify the by-laws accordingly, in particular with regards to the breakdown of shares by category. This competence may be delegated to the Chairman of the Executive Board under the conditions set forth by law.
If the conversion of 2016 Preference Shares into ordinary shares results in a capital increase, such increase will be fully paid up at issue through the incorporation of reserves, profits or issue premiums for the corresponding amount.
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Shareholders will be informed of the conversions having taken place by the reports of the Executive Board and Statutory Auditors pursuant to Article R. 228-18 of the French Commercial Code. These supplementary reports will be made available to the shareholders at the Company’s registered office as from the date on which each meeting is convened.
III. 2017 Preference Shares
A. Rights attached to 2017 Preference Shares
2017 Preference Shares and the rights of holders thereof are governed by the applicable provisions of the French Commercial Code, in particular Articles 228-11 et seq. thereof.
The maximum number of 2017 Preference Shares that may be allocated is 12,500 shares.
From their definitive acquisition until the date at which they become convertible, the 2017 Preference Shares grant the right to vote in the ordinary and extraordinary general meetings of holders of ordinary shares on the basis of one voting right per 2017 Preference Share. As from the date on which they become convertible, the number of voting rights to which each 2017 Preferred Share entitles the holder becomes equal to the number of ordinary shares to which the conversion of each 2017 Preferred Share entitles the holder.
2017 Preference Shares grant the right to vote in the special meetings of holders of 2017 Preference Shares. Holders of 2017 Preference Shares are grouped into a special meeting for any proposed modification of the rights attached to 2017 Preference Shares. In addition, pursuant to the provisions of Article L. 228-17 of the French Commercial Code, any proposed merger or demerger of the Company in which 2017 Preference Shares cannot be exchanged for shares with equivalent particular rights will be subject to the approval of any relevant special meeting.
Special meetings can only make valid decisions if the holders of 2017 Preference Shares that are present or represented hold at least, when convened for the first time, one third, and when convened for the second time, one fifth of the 2017 Preference Shares carrying the right to vote.
From their definitive acquisition until the date at which they become convertible, the 2017 Preference Shares benefit from a dividend and are entitled to the reserves. The amount of the dividend (and, if applicable, of the portion of the reserves) to which each 2017 Preference Shares entitles is equal to the amount due in respect of an ordinary share. To this end, the 2017 Preference Shares will bear rights as from the first day of the financial year preceding the financial year during which they are definitively acquired. As from the date at which they become convertible, the amount of the dividend (and, if applicable, of the portion of the reserves) to which each 2017 Preference Shares entitles is equal to the amount due in respect of an ordinary share, multiplied by the number of ordinary share that can be received from the conversion of each 2017 Preference Shares.
With regards to the ownership of corporate assets, a 2017 Preference Shares gives right to a portion of the liquidation surplus in proportion to the portion of share capital that it represents.
2017 Preference Shares give preferential subscription rights to any capital increase or any operation granting a right on ordinary shares, on the basis of one preferential subscription right per 2017 Preferred Share.
In the event of a capital depreciation or reduction, a change in the distribution of profits, an allocation of free shares, or the incorporation into the capital of reserves, profits or share premiums, distribution of reserves or any issue of capital securities or securities giving the right to the allocation of capital securities with a subscription right reserved for shareholders before the 2017 Preferred Shares are convertible under the conditions provided below, the conversion ratio will be adjusted to take into account this operation pursuant to the provisions of Article L. 228-99, Paragraph 2, 3° and Paragraph 5 of the French Commercial Code.
B. Conversion of 2017 Preference Shares into ordinary shares
The issuance of 2017 Preference Shares may only be decided in the framework of an allocation of free shares in favour of the employees and/or executive officers of the Company, pursuant to the provisions of Articles L. 225-97-1 and L. 22-10-59 and seq. of the French Commercial Code.
2017 Preference Shares will be definitively acquired by the beneficiaries after an acquisition period of one year from their allocation by the Executive Board and subject to the beneficiary’s presence in the Company or its consolidated subsidiaries as an employee, executive officer or member of an
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executive or supervisory body or, if applicable, of the equivalent thereof in foreign law. The “Acquisition Date” is defined as the end of the acquisition period of the 2017 Preference Shares.
However, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4 of the French Social Security Code (or the equivalent thereof in an applicable foreign law), the 2017 Preference Shares will be allocated definitively prior to the Acquisition Date. In the event of the death of the beneficiary, in accordance with the provisions of Article L. 225-197-3 of the French Commercial Code, the heirs or successors of the beneficiary may, if they so wish, request the definitive allocation of the 2017 Preferred Shares to them within six months of the date of death. In the event of retirement, the beneficiaries will retain their right to the definitive allocation of the 2017 Preferred Shares although they are no longer bound by an employment contract.
1.The 2017 Preference Shares become convertible in ordinary shares, either new or existing at the Company’s option, after the above-mentioned one-year vesting period from their allocation by the Executive Board, followed by a two-year retention period from the definitive allocation (the “Retention Period”), under the conditions set forth in Paragraphs 2 to 13 below. The “Expiry Date of the Retention Period” is defined as the end of the Retention Period.
As an exception to the above, in the event of a public tender or exchange offer, the final results of which are announced no later than the Expiry Date of the Retention Period as defined above, the 2017 Preferred Shares will become convertible no later than (i) the first anniversary of the Definitive Allocation (if such an offer occurs before such anniversary and in such a way that the Retention Period lasts at least one year), or (ii) the date of announcement of the final results of such an offer (if such an offer occurs after the anniversary) (the "Amended Expiry Date of the Retention Period").
2.As from the first anniversary date of the Acquisition Date, 2017 Preference Shares will be freely transferable to a credit institution in the framework of a pledge agreement.
Pursuant to the provisions set forth in the Article L. 225-197-1 I., Paragraph 6 of the French Commercial Code, the 2017 Preference Shares will be freely transferable in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4 of the French Social Security Code, regardless of whether such invalidity occurs before or after the Acquisition Date.
In the event of the beneficiary's death, whether during the vesting period or the Retention Period, his heirs will no longer be required to comply with this non-transferability commitment, so that the 2017 Preferred Shares for which they have requested the definitive allocation will freely become transferable.
3.2017 Preference Shares may only be converted for a conversion period of six years and six months from the Expiry Date of the Retention Period (the “Conversion Period”), provided however that in the event of a public tender or exchange offer whose final results are announced no later than the Expiry Date of the Retention Period, the Conversion Period shall commence from the Amended Expiry Date of the Retention Period for such a period that, together with the Retention Period, it represents a total duration of eight years and six months from the Acquisition Date.
4.During the Conversion Period, each holder of 2017 Preference Shares will have the right to convert each of his 2017 Preference Shares in ordinary shares, either new or existing (at the Company’s option). The number of ordinary shares to which the conversion of one 2017 Preference Share will entitle will be equal to a number of ordinary shares determined according to the fulfilment of a market condition as defined below (the “Market Condition”).
5.The Market Condition in order to calculate the conversion ratio of 2017 Preference Shares into ordinary shares will be determined based on the relative performance of the Innate pharma share.
The term “Initial Price” means the average closing price of the Innate Pharma share on Euronext Paris for the sixty trading days prior to the date of the General Meeting.
The term “Final Price” means (i) the highest average closing price of the Innate Pharma share on Euronext Paris over a period of sixty consecutive days, calculated at any time during the twelve months prior to the Expiry Date of the Retention Period, or (ii) in the event of a public tender or exchange offer whose final results are announced no later than the Expiry Date of the Retention Period, the price at which this public tender offer is made (or, in the case of a public exchange offer only, the price by transparency by applying the exchange ratio to the closing price of the bidder's share on the day before the Amended Expiry Date of the Retention Period).
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a)If the Final Price is inferior or equal to the Initial Price, the conversion ratio will be equal to 0;
b)If the Final Price is comprised between the Initial Price and € 30, the conversion ratio will be equal to:
100 x [(Final Price – Initial Price) / (30 – Initial Price)], rounded up to the nearest whole number
c)If the Final Price is equal or superior to € 30, the conversion ratio will be equal to 100.
However, if between the date of the General Meeting and the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period), one of the Reference Indexes (as defined below) were to experience a Significant Variation (as defined below), then the Executive Board will have the possibility to adjust the Initial Price and/or the Final Price to neutralize the exogenous impact of such a Significant Variation. The Executive Board shall, in this case, appoint a recognized independent expert to assist the Executive Board in the determination of such adjustments.
The term “Reference Indexes” means the following stock market indexes: SBF 120, CAC 40, Next Biotech and NBI (NASDAQ Biotechnology Index). If one of these indexes were to be no longer available, the Executive Board can choose a replacement index.
The term “Significant Variation” means one or the other of the following events for the relevant index:
-the average of the closing value for the index over the sixty consecutive trading days prior to the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period) is inferior or equal to 90% of the average of the closing value for the index over the sixty consecutive trading days prior to the General Meeting ;
-the average of the closing value for the index over a sixty consecutive trading days period at any time between the date of the General Meeting and the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period), is inferior or equal to 80% of the average of the closing value for the index over another sixty consecutive trading days period at any time between the date of the General Meeting and the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period).
6.The right to convert 2017 Preference Shares into ordinary shares, as well as the right to vote in the general meetings of ordinary shares holders and the right to the dividend and to a portion of the reserves attached to 2017 Preference Shares that have become convertible pursuant to Paragraph III A. above, are subject to the condition of the beneficiary’s presence in the Company or its consolidated subsidiaries as an employee, an executive officer or a member of an executive or supervisory body or, if applicable, of the equivalent thereof in foreign law as at the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period). In the event that such condition ceases to be fulfilled, the Company may proceed at any moment to the redemption of 2017 Preference Shares in the conditions set forth in Paragraph 8. below. It is specified that the provisions of this paragraph do not apply if the presence of the beneficiary in the Company or its consolidated subsidiaries ceases due to death, invalidity or retirement.
7.The fulfilment of the Market Condition will be recorded in a meeting of the Executive Board as soon as practicable after the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period).
8.2017 Preference Shares that cannot be converted into ordinary shares depending on the extent to which the Market Condition is fulfilled or if the presence condition as at the Expiry Date of the Retention Period (or, as the case may be, the Amended Expiry Date of the Retention Period) is not fulfilled, and 2017 Preference Shares that can be but will not have been converted at the end of the Conversion Period, may be bought at any time by the Company (which is under no obligation to do so) at their nominal value.
9.At the end of the Conversion Period, the Company will have the possibility to proceed, pursuant to applicable legal and regulatory provisions, to the cancellation of 2017 Preference Shares that will have not been converted, including those that it will have bought. The share capital will then be reduced accordingly, and creditors will have the right to oppose such reduction in the conditions set forth in Article L. 225-205 of the French Commercial Code.
10.New ordinary shares resulting from the conversion of 2017 Preference Shares will be assimilated to existing ordinary shares, will bear rights as from the first day of the financial year preceding the financial year during which they will be converted, and will grant to their holders,
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starting from their delivery, all the rights attached to ordinary shares. They will be subject to a request for listing on the regulated market of Euronext Paris on the same listing line as ordinary shares.
By way of derogation to the above, the allocation of 2017 Preference Shares can take place after the date of their allocation by the Executive Board and prior to the Acquisition Date, in the event of invalidity of the beneficiary corresponding to classification in the second or third categories set forth by Article L. 341-4 of the French Social Security Code, at the beneficiary’s request.
11.The Executive Board will record the conversion into ordinary shares of the 2017 Preference Shares for which the conversion fulfils the conditions set forth above, as well as the number of ordinary shares resulting from the conversions of 2017 Preference Shares that have taken place, and will modify the by-laws accordingly, in particular with regards to the breakdown of shares by category. This competence may be delegated to the Chairman of the Executive Board under the conditions set forth by law.
12.If the conversion of 2017 Preference Shares into ordinary shares results in a capital increase, such increase will be fully paid up at issue through the incorporation of reserves, profits or issue premiums for the corresponding amount.
13.Shareholders will be informed of the conversions having taken place by the reports of the Executive Board and Statutory Auditors pursuant to Article R. 228-18 of the French Commercial Code. These supplementary reports will be made available to the shareholders at the Company’s registered office as from the date on which each general meeting is convened.
ARTICLE 13 – Usufruct / Bare Ownership
The shares are not divisible with respect to the Company.
Co-owners of shares must arrange to be represented vis-a-vis the Company by one of them only, who will be considered as the sole holder, or by a sole agent. In the case of disagreement, a sole agent may be appointed by the courts at the request of the most diligent co-owner.
Unless the Company has been notified of an agreement to the contrary, usufruct shareholders validly represent bare owners vis-à-vis the Company. The right to vote is held by the usufruct shareholder in Ordinary Meeting of Shareholders and by the bare owner in Extraordinary Meeting of Shareholders.
Unless otherwise agreed by the parties, where shares are encumbered by a usufruct interest, the preferential right to subscription attached thereto is held by the bare owner.
TITLE III
COMPANY MANAGEMENT AND SUPERVISION
ARTICLE 14 – Management Structure
The Company is managed by an Executive Board which exercises its duties under the supervision of a Supervisory Board.
ARTICLE 15 – Composition of the Executive Board
I. The Executive Board consists of at least two members and seven members at most.
II. Members of the Executive Board are appointed by the Supervisory Board.
The members of the Supervisory Board appoint one of the members of the Executive Board as Chairman of the Executive Board for the duration of his term of office as a member of the Executive Board. The Chairman of the Executive may be dismissed by the Supervisory Board.
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Members of the Executive Board must be natural persons, failing which the appointment shall be null and void. They may be chosen from non-shareholders. They may be French nationals or of foreign nationality.
Members of the Executive Board may be dismissed by the Supervisory Board of the Meeting of Shareholders. They may resign at any time.
Each member of the Executive Board shall be less than seventy years of age. If during their term of office this age limit is reached, the duties of the member concerned shall end at the Ordinary General Meeting following their birthday.
If a member of the Executive Board has entered into an employment contract with the Company, his dismissal, resignation or the expiry of his term of office as a member of the Executive Board will not cause such contract to be terminated.
The Executive Board is appointed for a term of three years. If a post is vacant, the Supervisory Board must make an appointment to fill the post within two months.
The replacement is appointed for the remaining term until the renewal of the Executive Board. Members of the Executive Board may be reappointed.
The procedure for and amount of the remuneration of each of the members of the Executive Board is set out in the instrument appointing them, where applicable.
III. No member of the Executive Board may be a member of the Supervisory Board, the Sole Chief Executive Officer or the Chairman of the Executive Board of more than one other corporation whose registered office is in metropolitan France.
Executive Board membership may only be combined with another corporate office in another company in accordance with the statutory and regulatory restrictions in force.
IV. The Executive Board meets as often as necessary in the interests of the Company and at least once a quarter, convened by its Chairman or an Executive Board member delegated to such effect, at the place decided by the person convening the meeting.
In order for deliberations to be valid, the three-quarters of the members of the Executive Board must be present or represented.Members of the Executive Board who attend Executive Board meetings by video-conference or any other means of telecommunication in compliance with the statutory and regulatory provisions applicable are deemed to be present.
Any member of the Executive Board may be represented by another member of the Executive Board at the meetings of the Executive Board or take part in an Executive Board meeting by video-conference or any other means of telecommunication as referred to above. Each member of the Executive Board may receive only one proxy.
Decisions are made by a majority of those present and represented. Each member has one vote. In case of equality of expressed votes either in favour or against a decision (abstention are not took into account), the Chairman of the Executive Board has a casting vote.
At each meeting, the Executive Board may appoint a secretary who may be chosen from outside the members of the Executive Board.
V. The deliberations of the Executive Board are recorded in minutes placed or bound in a special registry.
The records are signed by the Chairman of the Executive Board and by a member of the Executive Board who is present at the meeting, or by two of the members present.
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When the Executive Board has to provide evidence of its deliberations, copies of extracts of the minutes to be submitted in evidence shall be certified by the Chairman of the Executive Board or by a member of the Executive Board delegated for this purpose. Following dissolution of the Company, they are certified by one of the liquidators or the sole liquidator.
ARTICLE 16 - Powers of the Executive Board
I. The Executive Board has the widest of powers to act in all circumstances in the name of the Company. It exercises its powers within the scope of the corporate purposes, subject to the powers which are expressly granted by law to the Supervisory Board and the Meeting of Shareholders, and, as the case may be, within the limit of the restrictions on powers decided by the Supervisory Board.
In its relations with third parties, the Company is bound by the actions of the Executive Board even where these are outside of the scope of the corporate purposes, unless it proves that the third party was aware that the actions exceeded such purposes or if it could not have failed to be aware of this in view of the circumstances; publication of the articles of association not in itself constituting sufficient evidence thereof.
The Chairman of the Executive Board, or, as the case may be, the Chief Executive Officer, represents the Company in its relations with third parties. The Supervisory Board may grant the same authority to represent the Company to one or more other Executive Board members, who in that case will be referred to as managing directors. The Chairman of the Executive Board and the managing director (s), if any, may designate any agent which they choose to exercise specific powers.
II. The Executive Board presents a report to the Supervisory Board at least once every quarter.
The Executive Board presents the annual financial statements to the Supervisory Board within three months of the end of each financial year, for the purposes of verification and supervision.
It must also provide the Supervisory Board with the management report which it will present to the Annual Meeting of Shareholders.
III. The Chairman of the Executive Board represents the Company in its relations with third parties.
IV. Members of the Executive Board may allocate corporate management tasks among themselves, with the approval of the Supervisory Board. However, such distribution may not, under any circumstances, cause the Executive Board to lose its collegial nature with respect to the management of the Company.
ARTICLE 17 – Composition of the Supervisory Board
I. The Executive Board is supervised by a Supervisory Board composed of a minimum of three members and a maximum of eighteen members, subject to the exceptions provided by law in such respect in the event of a merger.
Members of the Supervisory Board may be appointed from among natural persons or legal entities; that are shareholders or not, appointed by the Ordinary Meeting of Shareholders, which may dismiss them at any time. However, in the case of a merger or demerger, an Extraordinary Meeting of Shareholders may appoint the members of the Supervisory Board.
No member of the Supervisory Board may be a member of the Executive Board.
The number of the members of the Supervisory Board who have reached seventy (70) years of age may not be greater than one third of the members of the Supervisory Board in office. Where such
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limitation concerning the age of members of the Supervisory Board is exceeded, the most elderly member of the Supervisory Board is deemed to have automatically resigned.
II. The duration of the terms of office of the members of the Supervisory Board is two years. It expires at the close of the Meeting of Shareholders called to decide on the financial statements for the preceding year and which is held during the year in which their appointment expires.
Members of the Supervisory Board may be reappointed.
They may be dismissed at any time by an Ordinary Meeting of Shareholders.
III. Members of the Supervisory Board may be natural persons or legal entities. Legal entities must, at the time of their appointment, designate a permanent representative who will be subject to the same conditions and obligations and who will incur the same liabilities provided by law as if he were a member of the Council in his own name, without prejudice to the joint and several liability of the legal entity he represents.
If a legal entity dismisses its representative, it must appoint a replacement at the same time. This rule also applies in the case of the death, resignation or long-term prevention of the permanent representative from exercising his duties.
A natural person who accepts an appointment and exercises as a member of the Supervisory Board thereby has the obligation to confirm at any time on oath, that he satisfies the limitation required by law with respect to the combining the post of member of the Supervisory Board and member of the Executive Board of corporations.
IV. In the event of a vacancy arising from the death or resignation of one or more members of the Supervisory Board, the Board may, between two Shareholders’ Meetings, make provisional appointments. Appointments which are made by the Supervisory Board in accordance with the foregoing are subject to ratification by the next following Ordinary Meeting of Shareholders. If such appointments are not ratified, the deliberations made and actions previously carried out by the Supervisory Board nevertheless remain valid.
If the number of the members of the Council becomes less than the statutory minimum, the Executive Board must immediately convene an Ordinary Meeting of Shareholders to appoint members to complete the Council.
A member of the Supervisory Board appointed to replace another member shall only remain in office for the remaining term of office of his predecessor.
V. Each member of the Supervisory Board must own one share in the Company.
If a member of the Supervisory Board does not own the required number of shares on the date of his appointment or if, during his term of office he ceases to own such number, he shall be deemed to have automatically resigned if he has not rectified this situation within six months.
ARTICLE 18 – Chairman and Vice-Chairman of the Supervisory Board
The Supervisory Board appoints, from among its natural person members, a Chairman and a Vice-Chairman, who are responsible for convening the Council and chairing the proceedings of the Council.
In compliance with the conditions provided by Articles L. 225-68 paragraph 6 and L. 22-10-20 of the Commercial Code, the Supervisory Board also prepares a report on corporate governance attached to the management report referred to in the same article, that is submitted during the annual Ordinary Meeting of Shareholders.. This report includes the information referred to in Article L. 225-37-4, which
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may be adapted for companies with a Supervisory Board, as well as the Supervisory Board's observations on the Executive Board's report and on the financial statements for the year.
The Chairman and Vice-Chairman exercise their duties during their term of office as members of the Supervisory Board. They may be re-elected.
The Council may also appoint a secretary who may be selected from outside the members of the Council and determine the duration of his term of office.
ARTICLE 19 – Deliberations of the Supervisory Board
I. The Supervisory Board meets as often as necessary in the interests of the Company and at least once every quarter to review the Executive Board' report. The meeting is convened by its Chairman or Vice-Chairman either at the registered office or at any place indicated in the notice of meeting. A member of the Executive Board, or at least one third of the members of the Supervisory Board, may submit a reasoned request for a Council meeting to the Chairman of the Supervisory Board by registered mail. The Chairman must convene a Council meeting not later than fifteen days from receipt of such request. If the meeting has not been convened within this time period, the persons who made the request may convene the meeting themselves, indicating the agenda of the meeting.
Members of the Supervisory Board may participate and vote at Council meetings by video-conference or other means of telecommunication in accordance with the statutory and regulatory provisions applicable thereto.
In accordance with Article L. 225-82 of the French Commercial Code, the decisions falling within the scope of the Supervisory Board’s own powers provided by the second paragraph of Article L.225-65, the second paragraph of Article L.225-68, Article L. 225-78 and the III of Article L.225-103 of the French Commercial Code as well as the decisions relating to the transfer the registered office in the same department may be adopted by written consultation of the supervisory Board’s members.
Any member of the Supervisory Board may be represented by another member of the Supervisory Board at Supervisory Board deliberations. Each member of the Supervisory Board may receive only one proxy.
The Supervisory Board can only validly deliberate if at least half of its members are present (or deemed present in the event of videoconferencing or other means of telecommunication).
Supervisory Board meetings are chaired by the Chairman and, in the Chairman's absence, by the Vice-Chairman. In the absence of the Chairman and Vice-Chairman, the Supervisory Board appoints one of its members to chair each meeting.
Decisions are made by a majority of those present (or deemed as such if videoconferencing or other means of telecommunication are used) or represented, and each member has one vote.
In the event of a tie, the chairman of the meeting has the tiebreaking vote.
Evidence of the number of members of the Supervisory Board in office and their appointment may be validly provided with respect to third parties on the simple basis of the statement in the minutes of each meeting of the names of the members that are in attendance, represented or absent.
II. The deliberations of the Supervisory Board are recorded in minutes kept in a special register.
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Such minutes are signed by the chairman of the meeting and by at least one member of the Supervisory Board. If the chairman of the meeting is unable to do so, the minutes are signed by at least two members of the Supervisory Board.
Copies or extracts of such minutes are validly certified by the Chairman of Vice-Chairman of the Supervisory Board, a member of the Executive Board or an agent duly appointed for the purpose thereof.
After the Company is wound up, copies or extracts shall be certified by one of the liquidators of by the sole liquidator.
ARTICLE 20 – Powers of the Supervisory Board
I. The Supervisory Board exercises constant supervision of the management of the Company by the Executive Board.
II. The Supervisory Board may carry out verifications or supervision which it considers suitable at any time during the year, and may request documents to be provided to it which it considers useful for the carrying out of its duties.
It receives a report from the Executive Board at least once every quarter.
The Executive Board presents the annual financial statements and a written management report to the Supervisory Board within three months of the end of each financial year, for the purposes of verification and supervision.
The Supervisory Board presents the Ordinary Annual Meeting of Shareholders with its comments on the report of the Executive Board and the financial statements for the year.
The Supervisory Board also exercises the attributions expressly granted to it by statute.
The Supervisory Board may appoint one or more of its members as special agents for one or more determined purposes.
The Supervisory Board may create committees in charge of reviewing issues on which it or its Chairman wish an opinion.
Upon delegation of the Shareholder’s Extraordinary Meeting, the Supervisory Board makes the necessary changes to the Articles of Association to bring them into compliance with the legal and regulatory provisions, subject to the approval of such changes by the next Shareholders’ Extraordinary Meeting.
ARTICLE 21 – Remuneration of Members of the Supervisory Board
I. The Meeting of Shareholders may allocate a fixed annual amount in directors' fees to members of the Supervisory Board in remuneration for their duties. The Supervisory Board may distribute such remuneration among its members as it sees fit.
II. The Supervisory Board may also allocate exceptional remuneration for missions entrusted to its members. In such case, the remuneration is subject to the provisions of Article 22 hereafter.
III. Members of the Supervisory Board may not receive any other fixed or exceptional remuneration other than those referred to in paragraphs I and II above.
ARTICLE 22 – Regulated Agreements
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I. Any agreement entered into between the Company and any of the members of the Executive Board or Supervisory Board, a shareholder with more than 10% of the voting rights or, in the case of a corporate shareholder, the company controlling it within the meaning of Article L. 233-3 of the Commercial Code with more than 10% of the voting rights, is subject to the prior approval of the Supervisory Board.
The same rule applies to agreements in which one of the persons referred to in the previous paragraph has an indirect interest or for which it has dealt with the Company through an intermediary.
Agreements between the Company and an enterprise are also subject to prior approval if one of the members of the Executive Board or the Supervisory Board of the Company is the owner, a partner with unlimited liability, a manager, director, director general, member of the Executive Board or Supervisory Board of such enterprise, or more generally is in charge of managing such enterprise.
The prior approval of the Supervisory Board is substantiated by justifying of the interest of entering the agreement for the Company, in particular by specifying the financial conditions that apply thereto.
The preceding provisions do not apply to agreements entered into in the ordinary course of business and under normal conditions, nor to agreements entered into between two companies, one of which holds, directly or indirectly, the entire share capital of the other company, excluding if applicable the minimum number of shares necessary to comply with the requirements of Article 1832 of the French Civil Code or Articles L. 225-1, L. 22-10-2 and L. 226-1 of the French Commercial Code.
The member of the Executive Board or Supervisory Board concerned must inform the Supervisory Board as soon as he or she becomes aware of an agreement subject to approval. If he is a member of the Supervisory Board, he or she may neither take part in the deliberations, nor vote on the authorization sought.
The Chairman of the Supervisory Board must inform the statutory auditor of all authorised agreements to and submit them for approval to the Meeting of Shareholders.
II. The statutory auditors present a special report on such agreements to the Meeting of Shareholders which will decide on these agreements.
The person concerned cannot take part in the vote and the shares he holds are not included in the calculation of the quorum or the majority.
The agreements entered into and authorized in previous years and which have continued during the last year shall be reviewed annually by our Supervisory Board and must be reported to our statutory auditors for the purpose of establishing their report.
ARTICLE 23 – Panel of Observers
An Ordinary Meeting of Shareholders may appoint one or more observers at its discretion, who may be natural persons or legal entities, and may be shareholders or non-shareholders, for a term of office expiring at the shareholders meeting convened to decide on the financial statements for the preceding financial year after the first anniversary date of their appointment. This appointment may be renewed an unlimited number of times.
Observers that are legal entities are represented by their legal representatives or by any natural person duly authorised for this purpose.
Observers are convened to and take part in all the meetings of the Supervisory Board and have a consultative vote, according to the same methods as those that apply to members of the Supervisory Board. They are entitled to the same information and communication as members of the Supervisory Board and are bound by the same obligations of confidentiality and discretion.
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ARTICLE 24 - Obligation of Confidentiality and Liability
I. Members of the Executive Board and the Supervisory Board, as well as any person convened to attend the meetings of these bodies, are bound by complete discretion with respect to confidential information and provided as such by the Chairman of the Executive Board or as the case may be, the Supervisory Board.
II. Members of the Executive Board and the Supervisory Board are liable towards the Company or third parties, in accordance with their respective attributions, for breaches of statutory provisions governing limited liability companies, breaches of these articles of association and faults committed in the exercise of their duties, subject to the conditions and the sanctions provided by the legislation in force.
TITLE IV
STATUTORY AUDITORS
ARTICLE 25 - Statutory Auditors
One or more statutory auditors perform an audit of the Company, in the accordance with statutory requirements.
The Statutory Auditors are appointed by the Ordinary Meeting of Shareholders on proposal by the Supervisory Board, for six financial years. They may always be re-appointed. They may be dismissed by the aforesaid Meeting of Shareholders in the event that they commit a fault or are prevented from carrying out their duties.
If the Meeting of Shareholders does not appoint the Statutory Auditor(s) or if one or more appointed Statutory Auditors are prevented or refuse to carry out their duties, they, or their replacement(s), are appointed by an order of the Commercial Court with jurisdiction over the area in which the Company is based on petition of any interested person, with the Executive Board duly convened.
The Statutory Auditor appointed by the Meeting of Shareholders to replace another shall only remain in office for the remaining term of office of his predecessor. If the Meeting of Shareholders appoints several Statutory Auditors, they may act together or separately but they must draft a joint report.
One or more shareholder(s) with a shareholding of at least 5% may apply to the courts to dismiss one or more of the Statutory Auditors appointed by the Meeting of Shareholders and request the appointment of one or more Statutory Auditors who will exercise their duties instead of them. If their request is granted, the Statutory Auditors so appointed shall exercise their duties until the Statutory Auditors appointed by the Meeting of Shareholders take up their posts.
The Statutory Auditors certify that the annual financial statements are in due form and give a true and fair view of the result of the operations of the preceding financial year, and of the financial situation and assets and liabilities of the Company at the end of that financial year.
Their permanent role, without exercising any interference with management, is to verify the company's worth and financial documents and to ensure that its accounting is in compliance with the rules in force. They also verify that the information contained in Executive Board management report and in the documents provided to shareholders on the financial situation and annual accounts is fair and consistent with the annual accounts. The Statutory Auditors ensure that equality among shareholders has been complied with.
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The Statutory Auditors may, at any time during the year, carry out any verification or supervision they consider suitable and collect any information from third parties who have carried out assignments on behalf of the Company.
The Statutory Auditors prepare a report for the Meeting of Shareholders on the performance of their assignment. The Statutory Auditors attach a report to the aforesaid report, presenting their comments on the report referred to in Article L. 225-68 paragraph 6 of the Commercial Code with respect to internal supervision procedures relating to the preparation and treatment of accounting and financial information. They also prepare a special report on the agreements referred to in Article 22 of these Articles of Association.
The Statutory Auditors are invited to attend the Executive Board meeting at which the financial statements for the preceding financial year are approved, as well as to all Meeting of Shareholders. They may convene a Meeting of Shareholders under the conditions provided by statute.
TITLE V
SHAREHOLDERS’ MEETINGS
A –Provisions Applying
to all Meetings of Shareholders
ARTICLE 26 - Meetings
A duly constituted Meeting of Shareholders represents all the shareholders.
Its deliberations effected in accordance with the law and the articles of association are binding on all the shareholders, even those who were absent, dissenting or without legal standing.
There are three kinds of meeting, depending on the purpose of the proposed resolutions:
- Ordinary Meeting of Shareholders,
- Extraordinary Meeting of Shareholders,
- Special Meeting of Shareholders of holders of a specific category of share.
ARTICLE 27 – Convening Meetings
Shareholders’ Meetings are convened by the Executive Board, or failing that, the Supervisory Board. They may also be convened by the Statutory Auditor(s) or by an agent appointed by the court in accordance with the procedures and conditions provided by statute.
During liquidation, Shareholders’ Meetings are convened by the liquidator.
Shareholders’ Meetings are held at the registered office, in any other place of the same department indicated in the convocation notice or in Paris.
Notice of the meeting is published in the Bulletin des Annonces Légales Obligatoires (BALO) (Mandatory Legal Notice Bulletin) at least thirty-five days prior to which a meeting is held. In addition to the information relating to the Company, it also, in particular, sets out the agenda of the Meeting and the draft text of the resolutions which will be proposed. Subject to particular legal requirements, requests for the inclusion of draft resolutions on the agenda must be sent at the latest on the publication date of the notice of the meeting and up to twenty-five days prior to the Shareholders’ Meeting; but may not be sent more than twenty days after the date of the notice.
TRANSLATION FOR INFORMATION PURPOSES
Subject to particular legal requirements, invitations to meetings are made at least fifteen days prior to the date of the meeting by a notice published in both the legal notice journal of the administrative department in which the registered office is located and in the Bulletin des Annonces Légales Obligatoires (BALO).
However, holders of registered shares having held shares for at least one month as at the date of the last of the published notices must be convened individually by ordinary letter (or by registered letter if they have requested this and advanced the costs) sent to their last known address. Such notice may also be sent by electronic communication instead of such postal dispatch, to any shareholder who has so requested beforehand by registered mail return receipt requested, in accordance with statutory and regulatory requirements, indicating his email address. Such shareholder may send a request to the Company at any time by registered letter with acknowledgement of receipt for the aforementioned method of telecommunication to be replaced by postal dispatch in the future.
The invitation should contain the following information:
-the identity of the Company;
-the date, time and place of the meeting;
-the nature of the meeting; and
-the agenda of the meeting.
It must also state the conditions in which shareholders may vote by correspondence and the place and conditions pursuant to which they may procure forms for voting by correspondence.
The invitation may be sent, as the case may be, together with proxy form and a correspondence voting form, pursuant to the conditions set out in Article 30. I of these Articles of Association, or with a correspondence voting form only, pursuant to the conditions set out in Article 30. II of these Articles of Association.
If a Shareholders’ Meeting has not been able to deliberate due to the required quorum not being reached, a second Shareholders’ Meeting is convened with at least ten days’ advance notice, in the same manner as the first meeting. The invitation notice or letters for such second Shareholders’ Meeting state the date and agenda of the first meeting.
ARTICLE 28 - Agenda
The agenda of a Meeting of Shareholders is decided by the person convening the meeting.
One or more shareholders representing at least the percentage of share capital determined by statute and acting pursuant to statutory conditions and within statutory time periods, may request items or draft resolutions to be included on the agenda of the Meeting by registered mail with confirmation of receipt.
The Meeting of Shareholders cannot deliberate on an issue which has not been included on the agenda and such agenda cannot be modified on second convocation of a Meeting of Shareholders. The Meeting of Shareholders may, however, in any circumstances, dismiss one or several members of the Supervisory Board and effect their replacement.
ARTICLE 29 – Participation of Shareholders in Meeting of Shareholders
All shareholders are entitled to attend Shareholders’ Meetings and take part in deliberations:
(i) either personally; or
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(ii) by giving a proxy to another shareholder or to his spouse; or
(iii) by sending a blank proxy to the Company; or
(iv) by voting by correspondence; or
(v) by videoconference or by another means of telecommunication in accordance with the applicable statutory and regulatory provisions.
Participation in shareholders’ meetings in any manner is dependent on the registration or inscription of shares under the conditions and within the deadlines set in the current regulations.
If a shareholder is present at a Shareholders’ Meeting, any prior vote by correspondence will have no effect for the purposes of the aforesaid Shareholders’ Meeting.
If both a proxy form and a correspondence voting form are returned, the proxy form will be taken into account, subject to the votes expressed in the correspondence voting form.
ARTICLE 30 – Representation of Shareholders
I. Any shareholder may be represented at Meeting of Shareholders by another shareholder, his spouse, his partner in a civil union or any other natural or legal person of his choice through a proxy form sent to the shareholder by the Company:
- either at his request, sent to the Company by any means. This request must have been received at the registered office at least five days prior to the Meeting of Shareholders; or
- at the initiative of the Company.
The following must be attached to any proxy form sent to shareholders by the Company, for each Meeting of Shareholders:
- the agenda of the Meeting;
- the draft resolutions presented by the Executive Board and, as the case may be, by shareholders pursuant to statutory conditions;
- a brief summary of the Company’s situation during the preceding financial year together with a table indicating the results of the Company over the past five financial years, presented in accordance with regulatory provisions;
- a form requesting the documents to be sent as provided by the regulations in force; and
- a form for correspondence voting.
A proxy given by a shareholder is only valid for one Meeting of Shareholders or for Meetings of Shareholders convened successively with the same agenda. A proxy may also be given for two Meeting of Shareholders, one Ordinary and the other Extraordinary, which are held on the same day or within fifteen days.
II. Any shareholder may vote by correspondence through a voting form sent to him by the Company:
- at his request, sent to the Company by registered mail with confirmation of receipt. This request must have been received at the registered office at least six days prior to the Meeting of Shareholders; or
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- at the initiative of the Company; or
- in an appendix to the proxy form in the conditions set out in Article 30. I above.
The following must be attached to any correspondence voting form sent to shareholders by the Company:
- the draft resolutions proposed together with a summary of the reasons and an indication of the author of the resolutions;
- a form for sending the documents as provided by the regulations in force; and
- a brief summary of the Company’s situation during the preceding financial year together with a table indicating the results of the Company over the past five financial years, presented in accordance with regulatory provisions, in the case of an Ordinary Meeting of Shareholders deciding on the accounts.
A correspondence voting form sent by a shareholder is only valid for one Meeting of Shareholders or for Meeting of Shareholders convened successively with the same agenda.
ARTICLE 31 – Attendance Register
An attendance register is kept for each Meeting of Shareholders containing the information required by law.
This attendance register, duly signed by the shareholders that are present, the agents and shareholders participating by video-conference or by another means of telecommunication in compliance with statutory and regulatory requirements, and to which are attached the powers of attorney granted to each agent and, as the case may be, the correspondence voting forms, is certified by the secretariat of the Meeting of Shareholders.
Meeting of Shareholders are chaired by the Chairman of the Supervisory Board, the Vice-Chairman or a member of the Supervisory Board delegated for such purpose by the aforesaid Council. Failing that, the Meeting of Shareholders elects its Chairman itself.
The two shareholders present with the greatest number of votes both on in their own right and as agents, and who accept such assignment, shall act as vote tellers.
The secretariat composed as such appoints a Secretary, who may be selected from outside of the shareholders.
ARTICLE 32 – Quorum
In Ordinary and Extraordinary Meeting of Shareholders, the quorum is calculated on the basis of all the shares making up the share capital and, in Special Meeting of Shareholders, all the shares of the relevant category, less shares stripped of their voting rights pursuant to statutory provisions.
The voting rights attached to shares are proportional to the portion of share capital which they represent. Each share entitling its holder to an interest in the capital or to beneficial enjoyment carries one vote.
In the case of a vote by correspondence, only completed forms received by the Company at least three days prior the Meeting of Shareholders shall be taken into account for the calculation of the quorum.
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Forms which do not indicate which way to vote, or which indicate an abstention, are not considered as votes cast.
ARTICLE 33 - Minutes
The deliberations of the Meeting of Shareholders are recorded in minutes drafted in a special register held at the registered office and signed by the members of the secretariat.
Copies or extracts of such minutes are certified either by the Chairman of Vice-Chairman of the Supervisory Board or by a member of the Executive Board or by the Secretary of the Meeting. If the Company is wound up, they may be validly certified by the liquidator(s).
ARTICLE 34 – Communication of Documents
Any shareholder is entitled to receive, and the Executive Board is bound to send or provide him with the documents he requires to come to an informed decision and have an informed judgement on the management and running of the Company.
The nature of these documents and the conditions in which they are sent or provided to shareholders are determined by regulations in force.
In exercising its right to receive documents, each shareholder or his agent may be assisted by a court-registered expert.
The exercise of the right to receive documents includes the right to make copies, except with respect to inventories.
B – Provisions Specific to
Ordinary Meetings of Shareholders
ARTICLE 35 – Ordinary Meeting of Shareholders
An Ordinary Meeting of Shareholders may make any decision other than one which directly or indirectly modifies the Articles of Association.
Ordinary Meetings of Shareholders are held at least once a year, within six months of the end of each financial year, to decide on the financial statements for such financial year, subject to the extension of such period by an order of the President of the Commercial Court on petition from the Executive Board.
They are called on an extraordinary basis every time it may be in interests of the Company to do so.
When convened for the first time, Ordinary Meetings of Shareholders can only make valid decisions if the shareholders that are present, represented or voting by correspondence hold at least one fifth of the shares carrying the right to vote.
When convened for the second time, there is no quorum requirement if the original agenda has not been modified.
Ordinary Meetings of Shareholders make decisions on the basis of the majority of the votes of the shareholders that are present, represented or voting by correspondence.
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C - Provisions Specific to
Extraordinary Meetings of Shareholders
ARTICLE 36 – Extraordinary Meetings of Shareholders
An amendment to any provision of the Articles of Association and, in particular, the transformation of the Company into another form of company may only be decided by an Extraordinary Meeting of Shareholders. An Extraordinary Meeting of Shareholders cannot, however, increase the undertakings of shareholders, subject to operations as a result of regrouping shares in a due and proper manner.
When convened for the first time, Extraordinary Meeting of Shareholders can only make valid decisions if the shareholders that are present, represented or voting by correspondence hold at least a quarter of the shares carrying the right to vote, and when convened for the second time, one fifth of the shares carrying the right to vote. If the latter quorum is not obtained, the second Meeting may be adjourned for a maximum of two months from the date at which it was convened.
An Extraordinary Meeting of Shareholders makes decisions on the basis of a majority of two-thirds of the votes held by shareholders that are present, represented or voting by correspondence or participating in the Meeting by video-conference or another method of telecommunication in accordance with statutory and regulatory provisions.
By statutory derogation from the preceding provisions, if the share capital is increased by the incorporation of profits, reserves or issue premiums, the Extraordinary Meeting of Shareholders may make decisions at the quorum and majority required for Ordinary Meeting of Shareholders.
Moreover, where an Extraordinary Meeting of Shareholders is convened to deliberate on the approval of a contribution in kind or the grant of a specific benefit, the shares of the contributing party or beneficiary shall not be taken into account in calculating the majority. The contributing party or beneficiary cannot vote either in his own right or as an agent.
D - Provisions Specific to
Special Meetings of Holders of a Category of Shares
ARTICLE 37 – Special Meeting
If there are several categories of shares, the rights attached to shares of any such category cannot be modified in any way without having been duly voted upon by an Extraordinary Meeting of Shareholders open to all shareholders and also having been voted upon by a Special Meeting open only to holders of the relevant category of shares.
When convened for the first time, Special Meetings of Shareholders can only make valid decisions if the shareholders that are present, represented, voting by correspondence or taking part in the Meeting by video-conference or any other means of telecommunication in accordance with statutory or regulatory provisions, hold at least a third of the shares carrying the right to vote, and when convened for the second time, one fifth of the shares carrying the right to vote and for which a modification of the attached rights is being proposed. Failing that, the second meeting may be adjourned by a maximum of two months from the date at which it was convened.
Special Meetings of Shareholders make decisions at a two-thirds majority of the votes of shareholders that are present or represented.
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TITLE VI
FINANCIAL YEAR – ANNUAL FINANCIAL STATEMENTS
APPROPRIATION AND DISTRIBUTION OF PROFITS
ARTICLE 38 – Financial Year
The financial year begins on 1st January of each year and ends on 31st December.
ARTICLE 39 - Accounts
Accounts of corporate operations are kept in due form in accordance with the law and usual business practice.
At the end of each financial year, the Executive Board shall draw up an inventory of the various assets and liabilities as at such date. It shall also prepare the balance sheet describing the assets and liabilities, the income statement summarising the income and charges for the financial year and the notes to the financial statements which complete and comment on the information provided in the balance sheet and income statement.
The Executive Board shall present such documents to the Supervisory Board within three months of the end of the financial year, for the purposes of verification and supervision.
It shall prepare the management report on the situation of the Company during the preceding financial year.
All such documents shall be made available to the Statutory Auditors pursuant to the conditions specified by law.
ARTICLE 40 – Appropriation of Profits
The income statement which summarises the income and charges for the financial year, after depreciation and provisions have been deducted, indicates the profit or loss of the financial year by setting forth the difference between these two amounts.
Five per cent. of the year's profit less previous losses, as the case may be, is allocated to the statutory reserve. Such allocation shall no longer be necessary once the aforesaid reserve reaches one tenth of the share capital, but will become necessary again if for any reason whatsoever the reserve falls below one tenth.
Distributable earnings consist of the net income of the financial year, less previous losses and amounts added to the reserve in accordance with the law or the Articles of Association, plus retained earnings.
Moreover, the Meeting of Shareholders may decide to distribute amounts deducted from the reserves which are available to it, expressly indicating the reserves from which the withdrawals are to be made. However, dividend is paid out in priority from the distributable income of the financial year.
Except in the case of a reduction in share capital, no distribution may be made to shareholders if shareholders’ equity is, or would become as a result of such distribution, less than the share capital plus the reserves which the law or the Articles of Incorporation do not allow to be distributed.
After the financial statements have been approved and the existence of distributable income has been acknowledged, the Meeting of Shareholders shall determine the part to be allocated to shareholders as dividends, in proportion to the number of shares held by each.
TRANSLATION FOR INFORMATION PURPOSES
However, after the allocation of the amounts required by law to the reserve, the Meeting of Shareholders may decide to allocate all or part of the distributable income to a retained earnings account or to any general or special reserve account.
Any losses are deducted from profits from previous years until such losses are extinguished or they are carried over.
The Executive Board may decide to distribute interim dividends prior to the approval of the financial statements of the financial year, pursuant to the conditions determined or authorised by law. The amount of such instalments cannot exceed the amount of earnings as defined by law.
ARTICLE 41 - Dividends
I. The procedure for the payment of dividends is determined by the Meeting of Shareholders or, failing that, by the Executive Board. However, payment must be made within a maximum of nine months after the end of the financial year, unless such period is extended by court decision.
Shareholders may not be required to reimburse any amount of dividends unless the distribution of dividends was in violation of law.
Claims for dividends made more than five years after they have been made available for payment shall time-barred.
II. The Meeting of Shareholders convened to approve the financial statements for the financial year may grant shareholders the option of dividends or interim dividends being paid in cash or in shares issued by Company, in whole or in part, in accordance with the conditions set out or authorised by law.
TITLE VII
SHAREHOLDERS’ EQUITY FALLING BELOW ONE-HALF OF THE SHARE CAPITAL
ARTICLE 42 – Early Winding Up
If the Company's shareholders' equity falls below one-half of the share capital as a result of losses recorded in the financial statements, the Executive Board must convene an Extraordinary Meeting of Shareholders within four months of the approval of the financial statements which recorded such loss to decide whether to wind up the Company.
If it is not decided to wind up the Company, the Company is required, no later than the end of the second financial year following that in which the losses were recognized, to reconstitute its shareholders' equity in accordance with the legal and regulatory conditions in force.
In either case, the decision of the Meeting of Shareholders shall be published according to regulatory conditions.
The reduction of share capital to an amount below the statutory minimum can only be decided subject to the condition precedent of a share capital increase to at least the statutory minimum.
If the provisions of one or more of the foregoing paragraphs are not complied with, any interested party may apply to the courts for the Company to be wound up. This rule also applies if the shareholders are unable to deliberate validly.
TRANSLATION FOR INFORMATION PURPOSES
However, the court may not wind up the Company if on the day of issue of a judgment on the substance of the matter the situation has been rectified.
TITLE VIII
WINDING-UP – LIQUIDATION
ARTICLE 43 – Winding Up
The Company shall be wound up on expiry of the term determined in the Articles of association, unless this is extended, or pursuant to a decision of an Extraordinary Meeting of Shareholders.
The Company may also be wound up at the request of any interested party, where the number of shareholders has dropped to under seven for more than one year. In such case, the court may grant the Company a maximum of six months in which to rectify the situation. It cannot wind up the Company if on the day it issued judgment on the substance of the matter, the situation has been rectified.
The Company shall be in liquidation as from the date on which it is wound up, for any reason whatsoever.
Winding up will cause the terms of office of members of the Executive Board to terminate. The Supervisory Board and Statutory Auditors shall continue to operate.
Meeting of Shareholders shall retain the same powers as during the life of the company.
The Meeting of Shareholders which decides to wind up the company shall determine the procedure for liquidation and appoint one or more liquidators and determine their powers. The liquidator(s) shall exercise their duties in accordance with the law in force.
The Company shall continue to have legal personality for the purposes of and until the completion of its liquidation. However, its corporate name should be followed by the words "Company in liquidation" as well as the name(s) of the liquidator(s) on any instruments or documents issued by the Company to third parties.
Shares remain negotiable until the completion of liquidation.
After liabilities have been cleared, the net proceeds of liquidation are applied to the full repayment of paid up non-depreciated shares.
Any surplus shall be distributed among the shareholders in proportion to the number of shares held by each of them.
TRANSLATION FOR INFORMATION PURPOSES
TITLE IX
DISPUTES
ARTCLE 44 - Disputes
Any dispute which may arise during the life or liquidation of the Company, either between shareholders and the Company or between the shareholders themselves, concerning corporate matters, shall be resolved in accordance with the law and submitted to the jurisdiction of the competent courts at the registered office.
To this effect, in the case of a dispute, any shareholder is bound to designate an address for service of process within the area of jurisdiction of the court of the Company's registered office, any writs or notifications shall be validly issued to that address.
If an address for service of process is not designated, writs or notifications shall be validly issued to the Public Prosecutor of the Court of First Instance in the area of the registered office.
INNATE PHARMA S.A.
French société anonyme organized with a Supervisory Board and an Executive Board
With a share capital of EUR 4,049,171.60
Registered office: 117, Avenue de Luminy
13009 Marseille
France
THE TERMS AND CONDITIONS OF THE 2024 STOCK OPTION PLAN
US Salaried Directors & Officers
By decision of the Executive Board dated September 11, 2024
1Framework of the allocation of grant of stock options
1.1Context and general principles of the allocation of grant of stock options
These terms and conditions (the “Terms and Conditions”) govern the stock options granted under the 2024 Stock Option Plan (the “Plan") for the benefit of certain employees, directors and officers of Innate Pharma S.A. (the “Company”) or the companies or organizations referred to in Article L. 225-180 of the French Code de commerce (together, the “Innate Group”) that are residents in the United States or otherwise subject to the United States’ laws, regulations or taxation.
The Terms and Conditions allow the grantees designated by the Executive Board (the "Grantees”) to receive one or more options to subscribe for new or existing ordinary shares (the “Stock Options”) of the Company (the “Allocation”). The Stock Options will give the Grantees the right to subscribe, or purchase, pursuant to and subject to the conditions described in these Terms and Conditions, new or existing ordinary shares of the Company at the ratio of one share for one Stock Option.
The Terms and Conditions have been adopted by the Executive Board during its meeting held on September 11, 2024 which also decided the Allocation.
The Stock Options are intended to be non-qualified stock options for U.S. tax purposes and are not intended to be “incentive stock options” under Section 422 of the United States Code of 1986, as amended (the “Code”). The Stock Options shall comply in all respects with all applicable legal requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws and the Code.
At the time the Allocation is made, the Executive Board shall fix the period within which the Stock Options may be exercised and shall determine in the Allocation Letter (as defined herein) any conditions which must be satisfied before the Stock Options may be exercised, in addition to the conditions included in these Terms and Conditions. The “Vesting Period” is the period of time starting from (i) the date of the Allocation to (ii) the date (or the last date of several dates) on which the Stock Options become exercisable pursuant to these Terms and Conditions and the Allocation Letter (as defined herein) (each date in limb (ii) on which the Stock Options become exercisable, the “Vesting Date”). “Vesting,” “Vested” or to “Vest” means for a Stock Option, that such Stock Option becomes exercisable.
Upon expiration of the Vesting Period, the Stock Options can be exercised until the date that is the tenth anniversary of the date of Allocation (such period, the “Exercise Period”) after which the Stock Options that shall not have been exercised shall lapse.
The Grantees shall be entitled to dispose of or transfer their new or existing ordinary shares transferred upon the exercise of the Stock Options, subject to Article 3.2 of these Terms and Conditions.
The purposes of these Terms and Conditions are:
•to attract and retain the best available personnel for positions of substantial responsibility;
•to provide additional incentive to the Grantees; and
•to promote the success of the Company’s business.
The Allocation is an offer that is made only to the Grantees specifically designated by the Executive Board and does not constitute an offer to the public (“offre publique”).
Each Grantee acknowledges that any Stock Option and any share transferred upon exercise of any Stock Option are securities, the transfer of which by the Company requires compliance with the U.S. federal and state securities laws.
Each Grantee acknowledges that the Stock Options and the new or existing ordinary shares transferred upon exercise of such Stock Option are transferred to the Grantee on the condition that the Grantee represents that the Grantee has made a reasonable investigation into the affairs of the Company sufficient to be well informed as to the rights and the value of the Stock Options and the new or existing ordinary shares transferred upon exercise of such Stock Option.
None of the provisions of these Terms and Conditions or Allocation Letter (defined herein) constitute an element of a Grantee’s employment contract. The rights and obligations resulting from the working relationship between a Grantee and the Company cannot in any case be affected by the Terms and Conditions, from which they are totally separate. Therefore, participation in the Plan shall not confer any right regarding the continuation of a working relationship.
1.2Legal framework
These Terms and Conditions shall be subject in all respects to the applicable laws and regulations governing stock option plans, in particular Articles L. 225-177 and seq. of the French Code de commerce (the “Applicable Laws”).
1.3Authorization by the shareholders’ general meeting of the Company dated May 23, 2024
Pursuant to the Applicable Laws, the shareholders’ general meeting of the Company held on May 23, 2024 has authorized under its 24th resolution the Executive Board to proceed, for the benefit of employees, executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers, with the allocation of subscription or purchase stock options, which, if exercised, grant the right to subscribe for a maximum number of 150,000 new or existing ordinary shares in the aggregate.
1.4Allocation decisions of the Executive Board
The Executive Board will decide to allocate the Stock Options to Grantees in accordance with these Terms and Conditions in one of more allocation decisions (the “Allocation Decisions”).
Each Allocation Decision will duly allocate the options to subscribe for new or to purchase existing ordinary shares and set the exercise price pursuant to the Applicable Laws and the limits determined at the shareholders’ general meeting held on May 23, 2024 (the “Exercise Price”). For the avoidance of doubt, the Exercise Price will not be less than the fair market value of the ordinary shares (which is equal to the last available closing sales price of a share as reported on Euronext Paris, or, if the ordinary shares are not listed on an exchange, the value as determined by the Executive Board, consistent with the requirements of Section 409A of the Code and the French Code de commerce) on the date of the Allocation Decision.
The Grantees of the Allocation made pursuant to these Terms and Conditions shall not be required to make any payment to the Company prior to the exercise of their Stock Options, at which point they shall fully pay the Exercise Price in cash to the Company, which shall
be equal to the Exercise Price, multiplied by the number of Stock Options being so exercised.
Pursuant to the provisions of the Article L. 225-182 paragraph 2 of the French Code de commerce, no Stock Option may be allocated to an employee or an officer holding more than 10% of the Company’s share capital. The Stock Options shall not give the right to subscribe for or purchase a number of ordinary shares exceeding one-third of the Company’s share capital in the aggregate.
1.5Maximum number of Stock Options to be allocated
The maximum number of Stock Options that may be allocated to all Grantees under the Plan is 150,000 Stock Options in the aggregate.
1.6Allocation of Stock Options and acceptance by the Grantees
1.6.1Allocation of Stock Options
The Allocation Decision made by the Executive Board constitutes an irrevocable commitment by the Company for the benefit of the Grantees.
Each Grantee shall be individually notified of the Allocation by the Executive Board.
Each Grantee shall be informed of the specific conditions applicable to its Allocation of the Stock Options by letter in the form attached in Annex 1 (the “Allocation Letter”), which shall be sent to his or her residence or delivered by hand, and include inter alia:
the number of Stock Options allocated to him or her;
the nature of the Stock Options: i.e., options to subscribe for new or existing ordinary shares and the designation that they are nonqualified stock options for U.S. tax purposes;
the Exercise Price of the allocated Stock Options;
the bank account to which, unless notified otherwise by the Company, the Grantee shall pay the Exercise Price;
the Vesting Date(s) and vesting schedule set forth in the Allocation Letter;
any other of his or her obligations; and
a statement confirming his or her right to accept or waive the Allocation of the Stock Options under the terms set forth at Article 1.6.2 of these Terms and Conditions.
A copy of these Terms and Conditions shall be attached to the Allocation Letter.
1.6.2Acceptance of the Allocation by the Grantees
The Grantee shall acknowledge receipt of the Allocation Letter and, if he or she accepts the Allocation, and thereby agrees in writing to be bound by and to comply with the terms of these Terms and Conditions.
The Grantee shall notify the Company in writing of his or her decision to accept or waive the Allocation of the Stock Options within 1 month following the date of the Allocation Decision.
In the absence of any written notice whereby the Grantee elects to accept or waive the Allocation within such timeframe, the Grantee shall be deemed to have waived the Allocation.
1.6.3Exercise of the Stock Options by the Grantees
A Stock Option is exercisable by delivery of (i) an exercise notice, in the form attached hereto as Annex 3 (the “Exercise Notice”), stating the election to exercise the Stock Option, the number of Shares (as defined therein) in respect of which the Stock Option is being exercised, and such other representations and agreements as may be required by the Company pursuant to the provisions of the Terms and Conditions and (ii) a completed and signed copy of the SGSS exercise of stock option form attached hereto as Annex 4 (the “SGSS Form”). The Exercise Notice and the SGSS Form shall be signed by the Grantee and shall be delivered in person or by mail to the Company or its designated representative, by facsimile message to be immediately confirmed by mail to the Company or by electronic mail provided that delivery of such electronic mail is confirmed by written confirmation of receipt by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price pursuant to Article 2.3 of these Terms and Conditions. A Stock Option shall be deemed to be exercised upon receipt by the Company or by a third party designated by the Company of (a) such fully executed Exercise Notice accompanied by the proof of payment of such aggregate Exercise Price and (b) such fully executed SGSS Form.
2Conditions of the Allocation of the Stock Options and Grantees’ rights during the Vesting Period
2.1Duration of the Vesting Period
The Vesting Period of each Allocation shall be determined by the Executive Board and set forth in the Allocation Letter. Subject to the terms and conditions of these Terms and Conditions and the Allocation Letter, the Grantees may exercise their Stock Options starting from the Vesting Date(s).
2.2General conditions and criteria of the Vesting
2.2.1Presence Condition on the Vesting Date(s)
(a)The Allocation of any Stock Options is made in consideration of the services rendered by the Grantees as employees or officers of the Innate Group, as applicable.
(b)Subject to Article 2.2.2 of these Terms and Conditions, the Vesting of any Stock Option is subject to the Grantee maintaining his or her employment contract or corporate mandate (“mandat social”), as applicable, on and before the Vesting Date(s) (the “Presence Condition”). The Presence Condition will not be satisfied in the case of resignation, dismissal revocation or termination as set out below:
(I)In the event of resignation of any Grantee, whether such Grantee is an employee or an officer, effective prior to the Vesting Date(s), such Grantee shall lose the right for his or her unvested Stock Options to Vest and such unvested Stock
Options shall immediately lapse on the date such Grantee’s resignation becomes effective, unless otherwise determined by the Executive Board.
(II)In the event of termination of the employment contract or the corporate mandate (“mandat social”) of any Grantee, for any other reason (but subject to Article 2.2.2), effective prior to the Vesting Date, such Grantee shall lose the right for his or her unvested Stock Options to Vest and such unvested Stock Options shall immediately lapse on such termination date, subject to Article 2.2.2 of these Terms and Conditions and unless otherwise determined by the Executive Board.
2.2.2Exceptions to the Presence Condition
(a)As an exception to Article 2.2.1 of these Terms and Conditions, if the Grantee ceases to comply with the Presence Condition prior to the Vesting Date for any of the following reasons, the Stock Options shall be treated as follows, unless otherwise determined by the Executive Board:
(I)In the event of death of any Grantee, pursuant to the provisions of Article L. 225-183 paragraph 3 of the French Code de Commerce, all unvested Stock Options shall immediately Vest and such Grantee’s heirs or assignees may, if they so desire, exercise some or all of such Grantee’s Stock Options for their own benefit within 6 months of the date of such Grantee’s death. If the Grantee’s heirs or assignees do not exercise the Stock Options by the expiration of such 6-month period, such Grantee’s heirs or assignees shall permanently lose the right to exercise such Grantee’s Stock Options and they shall lapse.
(II)In the event of the retirement of any Grantee ( as determined by the Executive Board with the prior written consent of the applicable entity of the Innate Group), such Grantee shall continue to benefit from the Stock Options (whether such Stock Options have Vested or not at the date of his or her retirement) which may be exercised according to the vesting schedule set forth in the Allocation Letter (or earlier, in the event of the Grantee’s death after the Grantee’s retirement or upon the occurrence of a corporate event described in Article 2.2.3), even though such Grantee does not comply with the Presence Condition, as long as such Grantee continues to comply with these Terms and Conditions, except for provisions relating to such Grantee’s duties as employee or officer of the Innate Group.
(III)In the event that the entity of the Innate Group of which any Grantee is an employee or officer ceases to be part of the Innate Group, such Grantee shall continue to benefit from the Stock Options (whether such Stock Options have Vested or
not at the date on which such entity ceases to be part of the Innate Group) which may be exercised according to the vesting schedule set forth in the Allocation Letter (or earlier, in the event of the Grantee’s death after the Grantee ceases to be a part of the Innate Group or upon the occurrence of a corporate event described in Article 2.2.3), as long as such Grantee continues to comply with these Terms and Conditions, except for provisions relating to such Grantee’s duties as employee or officer of the Innate Group.
(IV)In the event of the disability of a Grantee corresponding to the second or third of the categories provided by Article L. 341-4 of the French Social Security Code (a “Disability”), the Stock Options shall become fully Vested on the date of cessation of the Presence Condition due to Disability and may be exercised according to the vesting schedule set forth in the Allocation Letter. For participants subject to tax in the US, Disability shall have the meaning set forth in Section 22(e)(3) of the Code. For the avoidance of doubt, no such exception to the Presence Condition shall be available to U.S. Beneficiaries if their “Disability” does not meet the criteria of Article L. 314-4 of the French Social Security Code, even if it meets those of Section 22(e)(3) of the Code.
2.2.3Company merger
In the event of a merger of the Company, the Vesting Period shall expire prior to the completion date of the merger and the Vesting of all Stock Options outstanding on that date shall be accelerated to immediately prior to completion of the merger, whether the Presence Condition has been fulfilled or not as of that date. If exercised by any Grantee, the Stock Options of such Grantee shall be exercisable as ordinary shares of the Company (and not the successor entity). The number of ordinary shares issued upon exercise of the Stock Options shall be adjusted by applying the exchange ratio of the merger and rounding up to the nearest whole number of ordinary shares.
In the event of a mandatory public tender or exchange offer, the Vesting Period shall expire prior to the commencement of the period during which shares can be tendered and the Vesting of all Stock Options outstanding on that date shall be accelerated to immediately prior to the commencement of the period during which shares can be tendered, whether the Presence Condition has been fulfilled or not as of that date. Upon Vesting, the Grantees shall be entitled to exercise their Stock Options and tender the ordinary shares issued upon exercise of their Stock Options in the public offer, if applicable.
In the event of a merger or other similar corporate transaction, any outstanding unexercised Stock Options may be substituted for a new option or assumed without substitution, provided that the substitution, assumption or modification shall be done in accordance with Sections 409A and 424 of the Code and the regulations thereunder.
In the event of a takeover of the Company (within the meaning of Article L. 233-3 of the French Code de commerce) by one or several persons acting in concert (pursuant to Article L. 233-10 of the French Code de commerce), the Vesting Period shall expire immediately prior to the takeover date and the Vesting of all Stock Options outstanding on that date shall be accelerated to such date, whether the Presence Condition has been fulfilled or not as of that date.
2.3Payment of the Exercise Price and settlement of the ordinary shares upon the exercise of the Stock Options
Subject to Vesting, if a Grantee desires to exercise the Grantee’s Stock Options, such Grantee shall provide the Company prior written notice in the form of the Exercise Notice pursuant to Article 1.6.3 of these Terms and Conditions and pay the total full amount equal to the Exercise Price multiplied by the number of Stock Options being exercised to the bank account set out in the Allocation Letter (or such other bank account as specified by the Company, including at the exercise time).
The Grantee’s right to exercise the Grantee’s Stock Options is subject to his or her compliance in all respects with all applicable laws and regulations, including the French Code monétaire et financier, the general regulation of the Autorité des marchés financiers, the European Regulation No 596/2014 on market abuse, as amended, with respect to inside information, and the U.S. federal and state securities laws.
Upon exercise of its Stock Options by any Grantee, and subject to compliance with this Article 2.3, (i) the Executive Board shall decide whether the ordinary shares to be transferred are new or existing ordinary shares and (ii) the Company shall transfer to the Grantees by registration in a pure registered securities account the applicable number of new or existing ordinary shares.
2.4Additional conditions to the exercise of Stock Options held by US Beneficiaries
2.4.1Legal Compliance
The ordinary shares of the Company transferable to a Grantee residing in the United States or otherwise subject to United States’ laws, regulations or taxation shall not be sold or issued pursuant to the exercise of Stock Options unless the exercise of such Stock Options, and the transfer and delivery of such ordinary shares comply with applicable laws in all respects including, without limitation, the French Code de Commerce, the U.S. Securities Act of 1933, as amended, the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and regulations promulgated thereunder, Applicable Laws and the requirements of any stock exchange or quotation system upon which the ordinary shares of the Company may then be listed or quoted.
2.4.2Investment Representations
As a condition to the exercise of a Stock Option held by a Grantee residing in the United States or otherwise subject to United States’ laws, regulations or taxation, the Company may require the person exercising such Stock Option to represent and warrant at the time of any such exercise that the ordinary shares issuable upon exercise of such Stock Option are being subscribed or purchased only for investment and without any present intention to sell or distribute such ordinary shares if, in the opinion of counsel for the Company, such a representation is required.
3Rights and obligations attached to the new or existing ordinary shares transferred upon exercise of the Stock Options
3.1Nature and category of the new or existing ordinary shares transferred
The new or existing ordinary shares transferred upon exercise of the Stock Options shall, as of their settlement date, have the same rights as the rights attached to ordinary shares of the Company’s share capital.
In particular, the new ordinary shares transferred upon the exercise of the Stock Options shall accrue rights from January 1 of the preceding fiscal year of transfer and, as a consequence, shall be fully fungible with the Company’s existing ordinary shares starting on the date of transfer.
3.2Officers’ obligation to hold the ordinary shares in registered form
Pursuant to Article L. 225-185 of the French Code de commerce, any officer of the Company or any entity of the Innate Group receiving Stock Options under these Terms and Conditions shall retain at least 15% of the number of new ordinary shares received upon exercise of their Stock Options in registered form until the termination of their duties as officers of the Company.
4Adjustment of the Exercise Price in the event of certain transactions
In the event of certain transactions as described in Annex 2 of these Terms and Conditions, the Exercise Price of the Stock Options shall be adjusted to reflect the impact of such transaction pursuant to the provisions of the Articles L. 225-181 and R. 225-137 and seq. of the French Code de commerce and Annex 2 of these Terms and Conditions and in accordance with Sections 409A and 424 of the Code.
For purposes of any adjustment made pursuant to Annex 2, the Executive Board shall determine the new exercise price of the Stock Options and notify the Grantees of the new exercise price.
5Binding nature of the Terms and Conditions
These Terms and Conditions shall be binding upon and inure to the benefit of the Company and the Grantees.
By accepting any Stock Option allocated to a Grantee under these Terms and Conditions, such Grantee agrees to comply with any applicable laws and regulations and the terms of these Terms and Conditions and the Allocation Letter. Any violation of any applicable laws or regulations by any Grantee shall trigger the lapse of the Stock Options of such Grantee which have not Vested on the date of such violation or, if such Stock Options have Vested, which have not been exercised on such date, without any right to compensation or indemnity whatsoever.
Any dispute or legal proceedings (a) between any subsidiary of the Innate Group and any Grantee or (b) relating to any Grantee’s Stock Options or his or her obligations under these Terms and Conditions shall suspend the Vesting of such Grantee’s Stock Options and the right to exercise the Stock Options held by such Grantee until the resolution of such dispute or legal proceedings, as the case may be, by a final, binding and non-appealable court decision. In case such final, binding and non-appealable court decision determines that the Grantee breached any of its obligations under these Terms and Conditions or the
Allocation Letter, the Stock Options held by such Grantee which have not Vested on the date of such violation or, if such Stock Options have Vested, which have not been exercised on such date shall lapse without any right to compensation or indemnity whatsoever.
6Notices
Any notice under these Terms and Conditions shall be in written form, in English or in French language, and, if addressed to the Company, sent to the registered office of the Company (or any other address mentioned by the Company or any representative on its behalf in writing) and, if addressed to the Grantee, be personally handed to him or her at his or her usual place of work or sent to the address communicated in writing by him or her to the Company for this purpose, or by any other means of communication authorized by applicable law. If such notice is sent by way of registered letter with acknowledgement of receipt, the notice shall be deemed received on the day of delivery.
7Entry into force of the Terms and Conditions – Amendment – Interpretation - Compliance
7.1Entry into force of the Terms and Conditions
These Terms and Conditions shall become effective upon and on the date of their adoption by the Executive Board. For the avoidance of doubt, these Terms and Conditions have been adopted by the Executive Board on September 11, 2024 (the “Effective Date”).
7.2Amendments to the Terms and Conditions
7.2.1These Terms and Conditions may be amended by the Executive Board (a) without the consent of the Grantees, if the Executive Board determines in its sole discretion that such amendment does not materially adversely affect the rights of the Grantees under these Terms and Conditions or (b) by mutual agreement between the Company and any Grantee whose rights are affected by such amendment.
7.2.2Notwithstanding anything to contrary in Article 7.2.1 of these Terms and Conditions, in the event of any change in law, regulation or accounting standards, or change in the interpretation thereof, adversely affecting the Company, any subsidiary of the Innate Group or the Grantee, including, for the avoidance of doubt, any change to or interpretation of the tax treatment of the Stock Options allocated pursuant to these Terms and Conditions, these Terms and Conditions may be amended by the Executive Board, in its sole discretion and without the consent of the Grantees, if such amendment is desirable to the Company in light of such change in law, regulation or accounting standards, or change in the interpretation thereof and without regard to adverse effects or potential adverse effects on the Grantees (to the extent such amendment does not violate Section 409A of the Code). For example, the Executive Board may decide to (a) shorten or extend the Vesting Period, (b) implement a holding period, and/or (c) delete, amend or add any condition to the Vesting.
7.2.3No amendment to these Terms and Conditions shall give any Grantee any right to compensation whatsoever, even if such amendment adversely affects the rights of the Grantees in general or any Grantee in particular. The Company shall notify the Grantees as soon as reasonably possible, individually and in writing, or by any
other means as reasonably determined by the Executive Board, of any amendment to these Terms and Conditions which affects their rights under these Terms and Conditions.
7.3Interpretation of the Terms and Conditions
The Executive Board shall interpret the provisions of these Terms and Conditions pursuant to the Applicable Laws applicable on the Effective Date.
In case of a conflict between these Terms and Conditions and any other document, these Terms and Conditions shall prevail.
If any provision of these Terms and Conditions, including any phrase, sentence or Article is inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of these Terms and Conditions contained invalid, inoperative, or unenforceable to any extent whatsoever.
7.4 Compliance with the Terms and Conditions
These Terms and Conditions shall be subject in all respects to the Applicable Laws. The right of the Executive Board to (a) waive certain conditions of these Terms and Conditions, (b) amend these Terms and Conditions pursuant to Article 7.2 of these Terms and Conditions, and (c) interpret these Terms and Conditions pursuant to Article 7.3 of these Terms and Conditions shall not be exercised in a way that would render such Applicable Laws inapplicable or to dispute the tax treatment of the Stock Options for the Grantees, the Company or any subsidiary of the Innate Group.
7.5Duration
These Terms and Conditions shall remain in force until the expiration of the Exercise Period of any Stock Option granted under the Plan, on which date these Terms and Conditions shall terminate with respect to such Stock Options.
8Taxation
To the extent that the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a Grantee or other person under the Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Grantee or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements (in the discretion of the Executive Board) may include relinquishment of a portion of such benefit, including withholding ordinary shares having a value equal to the amount required to be withheld.
9Clawback
Any Allocation Letter may reference a clawback policy of the Company or provide for the cancellation or forfeiture of Stock Options or the forfeiture and repayment to the Company of any gain related to such award, or include other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Executive Board from time to time or as required by applicable law or any applicable rules or regulations
promulgated by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the ordinary shares may be traded. In addition, notwithstanding anything in these Terms and Conditions to the contrary, any Allocation Letter or clawback policy may also provide for the cancellation or forfeiture of Stock Options or the forfeiture and repayment to the Company of any ordinary shares issued under and/or any other benefit related to such award, or include other provisions intended to have a similar effect, including upon such terms and conditions as may be required by the Executive Board or under Section 10D of the U.S. Securities Exchange Act and/or any applicable rules or regulations promulgated by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the ordinary shares may be traded.
10Applicable law – Jurisdiction - Language
The Terms and Conditions are governed by French law.
Any dispute relating to the validity, the construction or the performance of the Terms and Conditions shall be submitted to the exclusive jurisdiction of the competent courts within the jurisdiction of the Court of Appeal of Aix-en-Provence.
Annex 1
Template Allocation Letter addressed to each Grantee to inform them of the Allocation of the Stock Options
INNATE PHARMA S.A.
French société anonyme organized with a Supervisory Board and an Executive Board
With a share capital of EUR 4,049,171.60
Registered office: 117, Avenue de Luminy
13009 Marseille
France
(The “Company”)
[name of the Grantee]
[address of the Grantee]
Marseille, _______ [•]
Registered mail with acknowledgment of receipt or personally handed letter
Subject: The Company’s Stock Option allocation plan
Dear [Mrs./Mr.],
We are pleased to inform you that, pursuant to the shareholders’ general meeting held on May 23, 2024, the Executive Board decided on September 11, 2024 to freely allocate an aggregate of 150,000 stock options (the “Stock Options”) for the benefit of certain officers and employees of the Company. On that same date, the Executive Board approved an allocation to you of [•] Stock Options, each giving you the right to subscribe for one new or existing ordinary share of the Company, subject to the terms and conditions of the 2024 Stock Option Plan adopted by the Executive Board on that date (the “Terms and Conditions”) and this Allocation Letter. All Stock Options granted to you are non-qualified stock options under U.S. law and are not intended to qualify as “incentive stock options” under Section 422 of the Code.
Terms and Conditions The Stock Options are governed by Articles L. 225-177 and following of the French Code de Commerce. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Terms and Conditions.
Date of Allocation Decision: [●]
Vesting Date: [●]
Total Number of Options allocated: [●]
Exercise Price: [EUR ●]
Type of Options: Non-qualified stock options
Vesting Schedule:
Unless otherwise determined by the Board, if you accept this Allocation, you may exercise the Stock Options on the basis of the following initial vesting schedule, subject to the Terms and Conditions and this Allocation Letter:
•All [●] Stock Options granted hereby, as from the second anniversary of the date of Allocation Decision, i.e., from [●],
•at the latest within 10 years as from the date of the Allocation Decision, unless otherwise provided in the Terms and Conditions.
All unexercised Stock Options shall immediately lapse upon a termination of this 10 year period.
Note that the vesting of the Stock Options is subject to a Presence Condition, as further described in the Terms and Conditions.
Unless subsequently notified, upon exercise of any Stock Options, you must pay the full amount, in cash, equal to the Exercise Price multiplied by the number of Stock Option being so exercised, to the bank account of the Company set forth on the SGSS Form attached as Annex 4 to the Terms and Conditions and provide written notice in the form of the Exercise Notice attached as Annex 3 to the Terms and Conditions.
Please find attached to this Allocation Letter:
-the Company’s shareholders’ general meeting resolutions dated May 23, 2024 as Exhibit A;
-the decision of the Executive Board dated [●] relating to this Allocation of Stock Options as Exhibit B;
-the Terms and Conditions as Exhibit C;
-the Exercise Notice as Exhibit D; and
-the SGSS Form as Exhibit E.
Please read the Terms and Conditions carefully as they set out the terms and conditions of the Allocation of the Stock Options and their exercise and will apply to you, should you wish to accept the Allocation.
Tax Obligations
In addition to the provisions of the Terms and Conditions and in particular Articles 7.2 and 8:
Regardless of any action the Company or your employer (“Employer”) takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or your Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Stock Option grant, including the grant, vesting or exercise of the Stock
Options, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends; and (b) do not commit to structure the terms of the grant or any aspect of the Stock Options to reduce or eliminate your liability for Tax-Related Items.
Prior to exercise of any Stock Options, you will pay or make adequate arrangements satisfactory to the Company and/or your Employer to satisfy all withholding obligations of the Company and/or your Employer, if any. In this regard, you authorize the Company and/or your Employer to withhold all applicable Tax-Related Items legally payable by you from your compensation paid to you by the Company and/or your Employer or from proceeds of the sale of shares. Alternatively, or in addition, if permissible under local law, the Company may sell or arrange for the sale of shares that you acquire to meet the withholding obligation for Tax-Related Items. Finally, you will pay to the Company or your Employer any amount of Tax-Related Items that the Company or your Employer may be required to withhold as a result of your participation in the Plan or your purchase of shares that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise and refuse to deliver the shares issuable upon exercise of the Stock Options if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.
Transferability
Stock Options granted to you may not be transferred, other than by will or the laws of descent and distribution.
As a grantee of Stock Options, we inform you that you have the option to either accept this Allocation or waive it. Consequently, we would be grateful if you could inform us of your decision by ticking the corresponding box below and return a countersigned copy of this Allocation Letter at the Company’s registered office before [●]. If we do not receive your response before that date, you will be deemed to have waived the Allocation of Stock Options and will forfeit your right to receive such Stock Options. We thank you in advance and send our warmest greetings.
Clawback
Notwithstanding anything in this Allocation Letter to the contrary, you acknowledge and agree that this Allocation Letter and any compensation described herein (including any ordinary shares issued under the Stock Options) and any other compensation received from the Company or a member of the Innate Pharma Group are subject to the terms and conditions of the Company’s (or an affiliate’s) clawback policies (if any) as may be in effect from time to time, including specifically as required to implement Section 10D of the U.S. Securities Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable stock exchange listing standards or rules and regulations).
________________________________
[●]
Chairman of the Executive Board of the Company
FORM
As Stock Options grantee:
I accept the Allocation. I declare that I have reviewed the Terms and Conditions and this Allocation Letter in their entirety, have had the opportunity to obtain advice of counsel prior to executing this Allocation Letter and fully understands all provisions of the Terms and Conditions and this Allocation Letter. I expressly acknowledge and agree that the provisions of the Terms and Conditions and this Allocation Letter apply to me.
I expressly waive the allocation of Stock Options offered to me.
________________________________
[Identity of the Grantee]
Exhibit A
The Resolutions
[See attached]
Exhibit B
The Decision of the Executive Board
[See attached]
Exhibit C
The Terms and Conditions
[See attached]
Exhibit D
The Exercise Notice
[See attached]
Exhibit E
The SGSS Form
[See attached]
Annex 2: Adjustment Rules
Pursuant to Articles L. 225-181 and R. 225-137 of the French Code de commerce and subject to the terms and conditions of the 2024 Stock Options Plan adopted by the Executive Board (the “Terms and Conditions”), the Company shall take the measures required by law to ensure the protection of the Grantees of the Stock Options within the conditions set forth in Article L. 228-99 of the French Code de commerce. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Terms and Conditions. In particular, upon consummation of the following transactions (the “Covered Transactions”) for which the Record Date (as defined below) is set on any date preceding the exercise date of the Stock Options, the exercise price of the Stock Options that have not been exercised shall be adjusted as described in this Annex 2. Covered Transactions include in particular:
•grant of listed subscription preferential rights or free allocation of listed warrants;
•free allocation of shares to the shareholders, consolidation or division of shares;
•incorporation of reserves, profit or premiums through an increase in the nominal amount of the shares;
•distribution of reserves or premiums in cash or in kind;
•free allocation to the shareholders of any securities other than the Company’s shares;
•change in the distribution of profits and/or creation of preference shares;
•share capital amortization; and
•purchase by the Company of its own shares listed on a regulated market at a price higher than the then market price.
The “Record Date” is the date on which the ownership of the shares of the Company is set in order to determine the beneficiary shareholders of the transaction.
In case of adjustments to the Exercise Price (as defined in the Terms and Conditions) of the Stock Options made pursuant to paragraphs 1.1 to 1.7 below, and, as the case may be, adjustments to the number of shares to be issued upon exercise of the Stock Options made pursuant to paragraph 2 below, the adjusted exercise price shall be rounded up to one hundredth of a euro and the adjusted number of shares shall be rounded up to the nearest whole number of shares to be issued upon exercise of the Stock Options.
Pursuant to Article R. 225-141 of the French Code de commerce, any adjustment to the Exercise Price shall not result in a reduction of such exercise price below the nominal amount of the share. Furthermore, any adjustments as described on this Annex 2 must be made in compliance with Sections 409A and 424 of the Code.
For purposes of this Annex 2, “Pre-Adjustment Exercise Price” means the Exercise Price of the Stock Options before giving effect to the adjustment arising from a Covered Transaction and “Post-Adjustment Exercise Price” means the exercise price of the Stock Options immediately after giving effect to the adjustment arising from a Covered Transaction.
1Grant of listed preferential subscription rights or free allocation of listed warrants;
10.1Grant of listed preferential subscription rights:
The Post-Adjustment Exercise Price shall be equal to the Pre-Adjustment Exercise Price, multiplied by the inverse of the following ratio:
| | |
| Value of the share after detachment of the preferential subscription right + Value of the preferential subscription right |
| Value of the share after detachment of the preferential subscription right |
For purposes of calculating this ratio, “value of the share after detachment of the preferential subscription right” and “value of the preferential subscription right” shall be equal to the arithmetic average of the opening market prices of the share or the preferential subscription right, as applicable, quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar on which the shares of the Company or the preferential subscription rights are listed) on each trading day within the subscription period.
10.2Free allocation of listed warrants to shareholders granting such shareholders the right to participate in a placement of securities issued through the exercise of the warrants not exercised by their owners subsequent to the subscription period open to them:
10.2.1The Post-Adjustment Exercise Price shall be equal to the Pre-Adjustment Exercise Price, multiplied by the inverse of the following ratio:
| | |
Value of the share after the detachment of the warrant
+ Value of the warrant |
| Value of the share after detachment of the warrant |
10.2.2For purposes of calculating this ratio:
(i)“value of the share after detachment of the warrant” shall be equal to the daily volume-weighted average of (i) the prices of the shares of the Company quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar on which such shares are listed) during all of the trading days within the subscription period and, (ii) (a) if such shares are fungible with the existing ordinary shares, the sale price of the shares sold in connection with the offering, applying the volume of shares sold in the placement to the sale price, or (b) if such shares are not fungible with the existing ordinary shares, the trading prices of the shares on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which such shares are listed) on the date the sale price of the shares sold in the placement is set; and
(ii)“value of the warrant” shall be equal to the daily volume-weighted average of (i) the price of the warrant quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar on which such warrant is listed) during all the trading days within the subscription period and, (ii) the warrant’s implicit value as derived from the
sale price of the shares sold in the placement, which shall be equal to the difference (if positive), adjusted for the exercise ratio of the warrants, between the sale price of the shares sold in the placement and the subscription price of the shares through exercise of the warrants, applying to this amount the corresponding number of warrants exercised in respect of the shares sold in the placement.
10.3Free allocation of shares to the shareholders and division or consolidation of shares:
10.3.1The Post-Adjustment Exercise Price shall be equal to the Pre-Adjustment Exercise Price, multiplied by the inverse of the following ratio:
| | |
| Number of shares constituting the share capital after the transaction |
| Number of shares constituting the share capital before the transaction |
|
10.4Distribution of reserves or cash premiums in cash or in kind:
10.4.1The Post-Adjustment Exercise Price shall be equal to the Pre-Adjustment Exercise Price, multiplied by the inverse of the following ratio:
| | |
| Value of the share before the distribution |
| Value of the share before the distribution – Amount of the distribution per share or value of the securities or value of the assets delivered per share |
For purposes of calculating this ratio:
(i)“value of the share before the distribution” shall mean the daily volume-weighted average of the prices of the shares of the Company quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar on which such shares are listed) of the last 3 trading days preceding the date of the distribution; and
(ii)“amount of the distribution per share or value of the securities or value of the assets delivered per share” shall mean :
(a) if the distribution is made in cash, the amount of such distribution
(b)If the distribution is made in kind:
(I)in the case of distribution of listed securities on a regulated market or similar, the value of the distributed securities will be determined in the same manner as the value of the share before the distribution as provided above ;
(II)in the case of distribution of securities which are not listed on a regulated market or similar, the value of the distributed securities will be equal, if they are expected to be listed on a regulated market or similar within the 10 trading days’ period starting on the 1st trading day on which the shares are quoted ex-distribution, to the volume-weighted average price of such securities over the period comprising the first 3 trading days included in such period during which such securities are listed; and
(III)in the other cases (distributed securities not listed on a regulated market or similar or listed for less than 3 trading days within the 10 trading days period mentioned above or in the case of the distribution of assets), the value of the securities or the assets distributed per share shall be determined by an internationally-renowned independent adviser to be selected by the Company.
10.5Free allocation of securities other than the Company’s shares:
The Post-Adjustment Exercise Price shall be equal to the Pre-Adjustment Exercise Price, multiplied by the inverse of the applicable following ratio:
10.5.1If the right to free allocation of securities is listed on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar):
| | |
Value of the ex-right share subject to the free allocation + Value of the free allocation right |
| Value of the ex-right share subject to the free allocation |
For purposes of calculating this ratio:
(i)“value of the ex-right share subject to the free allocation” shall be equal to the daily volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar on which the ex-right share subject to the free allocation is listed) of the ex-right share subject to the free allocation for the first 3 trading days beginning on the date on which the Company’s ex-right share subject to the free allocation is listed; and
(ii)If the ex-right share is not listed on any of the first 3 trading days, “value of the ex-right share subject to the free allocation” shall be determined by an internationally-renowned independent adviser appointed by the Company in its sole discretion.
10.5.2If the right to free allocation of securities is not listed on Euronext Paris (or on another regulated market or similar):
| | |
Value of the ex-right share subject to the free allocation + Value of the security(ies) allocated per share |
| Value of the ex-right share subject to the free allocation |
For purposes of calculating this ratio:
(i)“value of the ex-right share subject to the free allocation” shall be determined in accordance with paragraph 1.5.1 above; and
(ii)if the allocated securities are listed or are expected to be listed on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar) within 10 trading days of the listing date of the ex-distribution shares, “value of the security(ies) allocated per share” shall be equal to the daily volume-weighted average of the price of such securities quoted on such market for the first 3 trading days following the
listing of such securities. If the allocated securities are not listed on any of the first 3 trading days, “value of the allocated security(ies) allocated per share” shall be determined by an internationally-renowned independent adviser appointed by the Company in its sole discretion.
10.6Change by the Company in the distribution of profits and/or the creation or issuance of preference shares:
10.6.1The Post-Adjustment Exercise Price shall be equal to the Pre-Adjustment Exercise price, multiplied by the inverse of the following ratio:
| | |
Value of the share before the change |
Value of the share before the change - Reduction per share of the right to profits |
For purposes of calculating this ratio:
(i)“value of the share before the change” shall be equal to the daily volume-weighted average of the price of the shares of the Company quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar on which such shares are listed) for the last 3 trading days preceding the date of the change; and
(ii)“reduction per share of the right to profits” shall be determined by an internationally-renowned independent adviser appointed by the Company in its sole discretion.
Notwithstanding the above, if preference shares are issued with preferential subscription rights or through free allocation to shareholders of warrants on such preference shares, the Post-Adjustment Exercise Price shall be calculated in accordance with paragraphs 1.1 or 1.5 above.
10.7Amortization of share capital:
10.7.1The Post-Adjustment Exercise Price shall be equal to the Pre-Adjustment Exercise Price, multiplied by the inverse of the following ratio:
| | |
| Value of the share before the amortization |
| Value of the share before the amortization - Value of the amortization per share |
For purposes of calculating this ratio, “value of the share before the amortization” shall be equal to the daily volume-weighted average of the price of the shares of the Company quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar on which such shares are listed) for the last 3 trading days preceding the date on which the ex-amortization shares are listed.
11Purchase by the Company of its shares listed on a regulated market at a higher price than the then market price:
The adjusted number of shares to be transferred upon exercise of the Stock Options that may be allocated to each Grantee shall be equal to the unadjusted number of shares to be transferred upon exercise of the Stock Options, multiplied by the following ratio:
| | |
| Percentage of share capital purchased by the Company * (Purchase price per share paid by the Company – Value of the share before the purchase) |
| Value of the share before the purchase |
For purposes of calculating this ratio, “value of the share before the purchase” shall be equal to the daily volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or on similar market on which the share is listed) for the last 3 trading days preceding the date on which the ex-purchase shares are listed.
Annex 3: Exercise Notice
Innate Pharma S.A.
Société Anonyme having a share capital of EUR [●]
Registered office:
117, Avenue de Luminy
13009 Marseille
France
SIREN 424 365 336 RCS Marseille
RULES OF THE 2024 STOCK OPTION PLAN
EXERCISE NOTICE
(Share Subscription Form)
INNATE PHARMA S.A.
117, Avenue de Luminy
13009 Marseille
France [ ], [ ]
Attention: [ ]
1. Exercise of Options. Effective as of today, ___________, ____________, the undersigned (“Grantee”) hereby elects to purchase _________________ ( ) ordinary shares (the “Shares”) of the share capital of Innate Pharma S.A. (the “Company”) under and pursuant to the Company’s Terms and Conditions of the 2024 Stock Option Plan (the “Terms and Conditions”) adopted by the Executive Board on September 11, 2024. The Exercise Price for the Shares shall be EUR [●] as required by the Terms and Conditions.
2. Delivery of Payment. The Grantee herewith delivers to the Company the full Exercise Price for the Shares. The Grantee acknowledges that the Shares being delivered to him or her may be, upon decision of the Executive Board of the Company, new or existing Shares.
3. Representations of Grantee. The Grantee acknowledges that the Grantee has received, read and understood the Terms and Conditions and agrees to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the transfer (as evidenced by the appropriate entry on the books of the Company) of the Shares, the Grantee shall have, as a Grantee, no right to vote or receive dividends or any other rights as a shareholder with respect to the Shares. No adjustment will be made for rights in respect of which the record date is prior to the issuance date for the Shares.
5. Tax Consultation. The Grantee understands that the Grantee may suffer adverse tax consequences as a result of Grantee’s subscription or disposition of the Shares. Furthermore, the Grantee acknowledges and agrees that the Company may withhold any tax amounts in connection with the exercise of the Stock Options to the extent acquired by applicable law. The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection with the subscription or disposition of the Shares. The Grantee is not relying on the Company for any tax advice.
6. Entire Agreement - Governing Law. The Terms and Conditions are incorporated herein by reference. This Exercise Notice, the Terms and Conditions and the Grant Letter constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and Grantee. This agreement is governed by the laws of the Republic of France.
This Exercise Notice is delivered in two originals copies, one of which shall be returned
to the Grantee.
| | | | | | | | |
Submitted by:
GRANTEE1 | | Accepted by:
Innate Pharma S.A. |
Signature | |
Signature |
| | |
| | Its: |
| Print Name | | |
Address:
| | |
1 The signature of the Optionee must be preceded by the following manuscript mention “accepted for formal and irrevocable subscription of [ ] ordinary shares”.
Annex 4: SGSS Form
[See attached.]
The below is a free translation prepared by the Company. This document is being provided to you for information purposes only. In case of any inconsistency between the below and the French version of the Terms and Conditions, the latter shall prevail.
INNATE PHARMA
A limited liability company in société anonyme form, with an Executive Board and Supervisory Board, with share capital of 4,049,171.60 euros
Registered offices: 117, Avenue de Luminy, 13009 Marseille
424 365 336 R.C.S. Marseille
TERMS AND CONDITIONS FOR THE
2024 PERFORMANCE FREE SHARES ALLOCATION PROGRAM OF
INNATE PHARMA
In a decision by the Executive Board dated September 11, 2024
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
1Framework of the Performance Free Shares Allocation Operation
1.1Framework and general principle for of the Performance Free Shares Allocation Operation
The purpose of these terms and conditions (the “Terms and Conditions”) is to govern the Performance Free Shares Allocation Plan (the “Allocation Plan” or the “Allocation”) put in place to the benefit of employees, executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the company, Innate Pharma (the “Company”) as well as entities linked to the Company within the meaning of Article L. 225-197-2 of the Code of Commerce (together, “Innate Pharma Group”).
The Terms and Conditions were finalized by the Executive Board in its meeting on September 11, 2024.
The Terms and Conditions enable the beneficiaries designated by the Executive Board (the “Beneficiaries”) to receive free of charge one or more performance free shares (the “Performance Free Shares”) of the Company (the “Allocation”).
Except in the individual cases provided for by the Terms and Conditions, the Performance Free Shares will not be fully vested until (i) the end of a period equal to three years starting from the date of the decision by the Executive Board to allocate the Performance Free Shares (the “Allocation Decision”), subject to compliance with the terms and conditions and criteria provided for in Article 3 of the Terms and Conditions or (ii) the end of the Modified Vesting Period, as that term is defined in Article 3.1 of the Terms and Conditions (the “Vesting Period”). During the Vesting Period, the Beneficiaries shall not be the owners of the Performance Free Shares and the rights resulting from such shares are non-transferable. The Beneficiaries eventually become the owners of the Performance Free Shares on the full vesting of the shares at the end of the Vesting Period (the “Definitive Vesting” and the “Definitive Vesting Date”).
The Allocation will not become final (i.e., fully vest) until the Definitive Vesting Date, subject to compliance with the presence condition as an employee and/or corporate officer and/or member of an administration or supervisory body (Board of Directors or Supervisory board or, where applicable, their equivalent under foreign law) of the Innate Pharma Group referred to in Article 3.2.1 of the Terms and Conditions (the “Presence Condition”).
The number of Performance Free Shares vested as of the Definitive Vesting Date depends on the fulfillment of the Performance Conditions, as that term is defined in Article 3.2.2 of the Terms and Conditions.
Starting from the Definitive Vesting date, the fully vested Performance Free Shares will become freely transferable.
The financial benefit obtained due to the Allocation is subject to a specific regime regarding fiscal and social security contributions. The Beneficiary should make his own inquiries about the fiscal and social security regime applicable to him or her on the relevant date.
As needed, it is specified that the Allocation is an offer reserved for the Beneficiaries designated by the Executive Board on a limited basis, and that it does not represent a public offer.
None of the provisions of the Terms and Conditions constitute an element of a Beneficiary’s employment contract. The rights and obligations resulting from the working relationship
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
between the Beneficiary and the Company cannot in any case be affected by the Terms and Conditions, from which they are totally separate. Therefore, participation in the Allocation Plan shall not confer any right regarding the continuation of a working relationship.
1.2Legal Framework
These Terms and Conditions are subject to the current French legal and regulatory provisions in effect as of the date of the Terms and Conditions governing free shares allocation plans, particularly Articles L. 225-197-1 et seq. and L. 22-10-59 et seq. of the Code of Commerce.
1.3Authorisation of the Shareholders’ General Meeting of May 23, 2024
In accordance with the aforementioned legal provisions, the Company Shareholders’ General Meeting held on May 23, 2024 authorized, in its 25th and 26th resolutions (together the “Allocation Authorization”), the Executive Board to proceed, within the meaning of Article L. 225-197-2 et seq. of the Code of Commerce, to an allocation of a maximum of (i) 1,425,000 Performance Free Shares, with a nominal value of 0.05 euro each, to the benefit of executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the Company and its eligible consolidated subsidiaries in accordance with applicable laws, and (ii) 1,200,000 Performance Free Shares with a nominal value of 0.05 euro each to the Company’s employees and those of its eligible consolidated affiliates in accordance with applicable laws.
1.4Allocation decision by the Executive Board
The Executive Board will decide to allocate the Performance Free Shares to the Beneficiaries under the terms and conditions laid out in these Terms and Conditions (the “Allocation Decision”). The Allocation Decision represents the starting point of the Vesting Period.
The Beneficiaries of the Allocation carried out in accordance with the Terms and Conditions are not required to make any payment to the Company.
No Performance Free Share may be allocated to an employee or executive officer holding more than 10% of the Company share capital or for whom the Allocation would have the effect of increasing his or her ownership stake beyond 10% of the Company share capital. Only shares held directly by an employee or corporate officer for less than seven years are included in this percentage.
Upon Definitive Vesting, the Executive Board will specify whether the Performance Free Shares allocated are existing shares or new shares to be issued by the Company which may only be issued as part of the Allocation. If all of the Performance Free Shares fully vested are newly issued shares, the issuance of the Performance Free Shares will be the effected through a Company share capital increase through the special incorporation of all or part of the available reserve accounts, particularly the “issuance premium” account.
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
2Characteristics of the Performance Free Shares Allocation
2.1Maximum number of Performance Free Shares to be allocated
Without prejudice to the provisions of Article 1.3 of the Terms and Conditions, the maximum number of Performance Free Shares allocated to the Beneficiaries is, pursuant to the Allocation Authorization, set at (i) 1,425,000 Performance Free Shares to be allocated under the 25th resolution of the Shareholders’ General Meeting of May 23, 2024 (the “Executives’ Performance Free Shares”) and (ii) 1,200,000 Performance Free Shares to be allocated under the 26th resolution of the Shareholders’ General Meeting of May 23, 2024 (the “General Performance Free Shares”).
2.2Performance Free Shares Allocation and acceptance by the Beneficiaries
2.2.1Performance Free Shares Allocation
The Allocation Decision by the Executive Board regarding the Performance Free Shares represents an irrevocable commitment made by the Company to the Beneficiaries.
The Allocation is notified individually to each Beneficiary by the Executive Board acting by delegation from the Company Shareholders’ General Meeting held on May 23, 2024.
Each eligible Beneficiary will be informed of the special terms and conditions applicable to the Performance Free Shares Allocation by letter, a template of which is available in Appendix 1 (the “Allocation Letter”), sent by email, to their home or delivered by hand, specifying:
the number of Performance Free Shares allocated to him or her;
the Definitive Vesting Date as well as the Definitive Vesting conditions;
any other obligation applicable to the Beneficiary; and
the Beneficiary’s right to accept or reject the Performance Free Shares Allocation according to the Terms and Conditions.
The Statement of Performance Conditions (as this term is defined in Article 3.2.2) will also be distributed with the Allocation Letter. A copy of the Terms and Conditions is also sent by email to each of the Beneficiaries. Each Beneficiary must acknowledge receipt of that letter and agree to comply with the Terms and Conditions.
2.2.2Acceptance of the Allocation by the Beneficiaries
The Beneficiary shall declare his or her choice (acceptance or rejection) regarding the Performance Free Shares Allocation by returning to the Company, within 30 days of the Allocation Decision, depending on his or her choice:
the acknowledgement of receipt form, expressly accepting the Allocation as well as all of the Terms and Conditions (which he will have received by email) duly filled out and signed; or
the Allocation refusal form, duly filled out and signed.
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
If no response is received within this time period, his or her acceptance of the Performance Free Shares Allocation and the provisions of the Terms and Conditions will be assumed.
3Definitive Vesting Conditions of the Performance Free Shares and rights acquired by the Beneficiaries during the Vesting Period.
The Performance Free Shares Allocation to the Beneficiaries will not become final until the end of the Vesting Period and (i) subject to compliance with the Presence Condition at the Definitive Vesting Date and (ii) in proportion to the fulfillment of the Performance Conditions as defined below in Article 3.2.2.
3.1Duration of the Vesting Period
The Beneficiaries will be allocated the Performance Free Shares free of charge and definitively, and will become the owner of the shares, at the time of the Definitive Vesting upon the expiration of the Vesting Period (subject to compliance with the Terms and Conditions), which is three years starting from the Allocation Decision date unless otherwise set forth in the Allocation Letter.
As an exception to the preceding, in the event of a public takeover or exchange offer (the “Offer”) whose final results are announced on or before the Definitive Vesting date, the Performance Free Shares will be vested (based on the fulfillment of the Performance Conditions as of the date of the announcement of the final results of such Offer), at the later of (i) two years after the Allocation Decision (if such an Offer is made before this anniversary date so that the Vesting Period is at least two years) or (ii) on the date of the announcement of the final results of such offer (if such Offer occurs after that second anniversary date) (each vesting date in prong (i) or (ii), the “Modified Vesting Period”); provided, however, that with respect to any Beneficiary who is a U.S. taxpayer (“U.S. Beneficiary”), the U.S. Beneficiary must satisfy the Presence Condition through the end of the Modified Vesting Period.
3.2Vesting general terms and conditions
3.2.1Presence Condition
3.2.1.1 Presence Condition at the Definitive Vesting Date
The Performance Free Shares Allocation by the Company to the Beneficiaries is directly tied to compliance with the Presence Condition at the Definitive Vesting Date.
If, for any reason whatsoever, the Presence Condition at the Definitive Vesting Date is not met before the end of the Vesting Period, the Beneficiary shall lose all right to the Definitive Vesting of the Performance Free Shares, subject to the cases provided for in Article 3.2.1.2 of the Terms and Conditions below and to any decision to the contrary made by the Executive Board.
In the event of the Beneficiary’s effective resignation before the end of the Vesting Period, the loss of entitlement to the Definitive Vesting will take effect on the date the Beneficiary’s effective resignation takes effect, subject to any decision to the contrary made by the Executive Board.
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In the event of the Beneficiary’s termination and/or dismissal before the end of the Vesting Period, the loss of entitlement to the Definitive Vesting will take effect on the notification date of the Beneficiary’s termination or dismissal from corporate office, subject to any decision to the contrary made by the Executive Board.
For the purposes of these provisions, any contractual termination of the employment contract within the meaning of Articles L. 1237-11 et seq. of the French Labour Code is the same as a resignation.
3.2.1.2 Exceptions to the Presence Condition at the Definitive Vesting Date
As an exception to the provisions of Article 3.2.1.1 of the Terms and Conditions above, if the Presence Condition at the Definitive Vesting Date is no longer met during the Vesting Period for any of the following reasons, the Performance Free Shares shall be treated as follows, unless an extraordinary decision is made by the Executive Board, and will be delivered to the Beneficiary in such instances in accordance with Article 3.3:
(i)Retirement: (either at the normal retirement age, or at an earlier or later date with the approval of the Innate Pharma Group company concerned), the Beneficiaries will retain their entitlement to the Definitive Vesting on the Definitive Vesting Date despite not meeting the Presence Condition at the Definitive Vesting Date, but will remain subject to the other provisions of the Terms and Conditions, excluding those tied to the Presence Condition at the Definitive Vesting Date; provided, however, that this treatment shall not apply to U.S. Beneficiaries who shall lose their entitlement to the Definitive Vesting as of the date on which the U.S. Beneficiary’s retirement occurs.
(ii)Death: In accordance with the provisions of Article L. 225-197-3 of the Code of Commerce, the Definitive Vesting of the Performance Free Shares will occur and the heirs or assignees of the Beneficiaries may, if they so desire, claim the Definitive Vesting of the Performance Free Shares to their benefit within six months of the date of death. Upon the expiration of that six-month period, if not claimed by such date, the Beneficiary’s heirs or assignees will definitively lose the option of claiming the Definitive Vesting of the Performance Free Shares.
(iii)Disability: if the Presence Condition at the Definitive Vesting Date is no longer met as a result of the Beneficiary being declared an invalid of the second or third category within the meaning of Article L. 341-4 of the French Social Security Code, the Performance Free Shares will be fully vested for the Beneficiary before the end of the remaining Vesting Period as of the date of the termination of the Beneficiary’s Presence Condition; provided, however, that for U.S. Beneficiaries, “Disability” will have the meaning set forth in Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “U.S. Code”). For the avoidance of doubt, no such exception to the Presence Condition shall be available to U.S. Beneficiaries if their “Disability” does not meet the criteria of Article L. 314-4 of the Social Security Code, even if it meets those of Section 409A of the U.S. Code.
(iv) Divestiture: if the Innate Pharma Group company for whom the Presence Condition at the Definitive Vesting Date is met no longer belongs to the
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Innate Pharma Group, the Beneficiary will retain his or her entitlement to the Allocation, but will remain subject to all provisions of the Terms and Conditions (including achievement of the Performance Conditions)– excluding those tied to the Presence Condition at the Definitive Vesting Date.
If one of the exceptions set forth in (i), (ii) or (iii) above occurs, the number of Performance Free Shares definitely vested shall be determined based on the achievement of the Performance Conditions (as defined below in Article 3.2.2) as of the date, depending on the case, of the retirement, death, or Disability as observed by the Caisse Primaire d’Assurance Maladie or any independent body. In the event the Performance Conditions are not met as of the date of determination of the number of Performance Free Shares, no Performance Free Shares shall be vested.
3.2.2Performance Conditions for the Vesting of the Performance Free Shares Grant
Subject to Article 3.2.1, at the end of the Vesting Period, the number of Performance Free Shares vested will depend on (i) compliance with the Presence Condition at the Definitive Vesting Date and (ii) the level of fulfillment of one or more performance conditions (the “Performance Conditions”). The Performance Conditions will be established and approved by the Executive Board on the date of the Allocation Decision and communicated to each Beneficiary on a statement of performance conditions (the “Statement of Performance Conditions”).Subject to the last paragraph of Article 3.2.1.2, the general observation period for the achievement of the Performance Conditions will run for three calendar years starting in the year of the Allocation Decision, unless otherwise determined by the Executive Board, in which case this will be set out in the Allocation Letter.
3.2.1.1 Determination of the fulfillment of the Performance Conditions
The determination of the fulfillment of the Performance Conditions will be determined by the Executive Board in accordance with the Statement of Performance Conditions. The percentage of Performance Free Shares allocated that may be earned will range from 0% to 100%.
3.2.1.2 Determination of the fulfillment of the Performance Conditions
The fulfillment of the Performance Conditions will be determined by a meeting held by the Executive Board as soon as possible after the Definitive Vesting date (which includes any earlier date that applies pursuant to Article 3.1 or the last paragraph of Article 3.2.1.2). However, if at the end of the Vesting Period (which, for the avoidance of doubt, excludes any earlier date that applies pursuant to Article 3.1 or the last paragraph of Article 3.2.1.2 with respect to any U.S. Beneficiary), the Supervisory Board has objective elements allowing it to reasonably assess that one or more Performance Conditions will be achieved within three months after the end of the Vesting Period, to the extent it does not violate Section 409A of the U.S. Code with respect to a U.S. Beneficiary, the Supervisory Board will then have the possibility to postpone the end date of the Vesting Period by a maximum of three months. The Performance Conditions will then be assessed on the Modified Vesting Period end date.
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The Executive Board shall determine, based on the fulfillment of the Performance Conditions, the number of Performance Free Shares definitely vested for each Beneficiary (the “Determination Decision”) and will make, if necessary, the necessary changes to the by-laws of the Company. This power may be delegated to the Chairman of the Executive Board under the terms and conditions established by law.
Share capital increases resulting from the Definitive Vesting of the Performance Free Shares will be conducted through the incorporation of all or part of the available reserve accounts, particularly the “share premium” account.
3.3Delivery of the Performance Free Shares
3.3.1 At the end of the Vesting Period
Within 30 days following the end of the Vesting Period (and in no event later than March 15 of the year following the year in which the end of the Vesting Period occurs), the Company shall transfer to the Beneficiaries, by registering in a registered account the number of Performance Free Shares determined by the Executive Board in the Determination Decision (including, for the avoidance of doubt, those Performance Free Shares for which the Performance Conditions were deemed met following a Beneficiary’s death or Disability pursuant to Article 3.2.1.2); provided, however, that with respect to a U.S. Beneficiary whose Performance Free Shares vest pursuant to Article 3.2.1.2, the Company shall transfer to such U.S. Beneficiary the number of Performance Free Shares that have vested within 30 days following the date of the U.S. Beneficiary’s death or the cessation of the U.S. Beneficiary’s Presence Condition due to the U.S. Beneficiary’s Disability (and in no event later than March 15 of the year following the year in which the death or cessation of the Presence Condition due to Disability occurs).
3.3.2 After a Public Takeover or Exchange Offer
Within 30 days following the end of the Modified Vesting Period (as defined in Article 3.1) and in no event later than March 15 of the year following the year in which the Performance Free Shares vest), the Company shall transfer to the Beneficiaries, by registering in a registered account, the number of Performance Free Shares determined by the Executive Board based on achievement of the Performance Conditions as of the date of the announcement of the final results of such public takeover or exchange offer.
4Rights and obligations attached to the fully vested Performance Free Shares
4.1Type and category of the Performance Free Shares allocated
The Performance Free Shares will enjoy, starting from the Definitive Vesting (which includes any vesting on an earlier date that applies pursuant to Article 3.1 or the last paragraph of Article 3.2.1.2), all the rights attached to the ordinary shares composing the share capital of the Company.
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4.2Rights and obligations attached to the Performance Free Shares
4.2.1Rights and obligations attached to Performance Free Shares during the Vesting Period
During the Vesting Period, the Beneficiaries are not the owners of the Performance Free Shares and have no rights resulting from such shares.
4.2.2Rights and obligations attached to the Performance Free Shares following the Definitive Vesting
The Beneficiaries become the owners of the Performance Free Shares as of the Definitive Vesting date (which includes any earlier date that applies pursuant to Article 3.1 or the last paragraph of Article 3.2.1.2). The ownership of a Performance Free Share shall rightfully include the adherence to the Company’s by-laws and the decisions of the Company Shareholders’ General Meetings.
The Performance Free Shares will be subject to all provisions of the Company’s by-laws applicable to ordinary shares of the Company.
The Performance Free Shares which will be new shares will be entitled to dividends as from the first day of the financial year preceding that in which the Definitive Vesting occurs and will therefore be immediately fungible with the existing shares and negotiated on the same trading line starting from their issuance.
The Performance Free Shares and the rights of their holders are governed by applicable provisions of the Code of Commerce, particularly Articles L. 228-11 et seq.
4.3Disposal of the Performance Free Shares
In accordance with Article L. 22-10-59 II of the Code of Commerce, at the end of the Vesting Period referred to Article 4.4 of the Terms and Conditions, the Performance Free Shares may not be disposed of:
•1° Within 30 calendar days before the announcement of an interim financial report or an end-of-year report that the issuer is required to make public;
•2° By the members of the supervisory board, by the members of the executive board (or the corporate bodies or corporate officers succeeding them) and by employees with knowledge of inside information1 that has not been made public.
4.4Holding obligation of corporate officers
In accordance with Article L. 225-197-1 II, paragraph 4 of the Code of Commerce, the Company’s corporate officers, to whom Performance Free Shares have been allocated shall hold in registered form, until the termination of their duties as executive officers, 15% of the number of common shares allocated to them following the Definitive Vesting of the Performance Free Shares.
1 within the meaning of Article 7 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC,
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4.5Form of the Performance Free Shares allocated
The new ordinary shares resulting from the Definitive Vesting of the Performance Free Shares shall be the subject of a direct registration in a registered account opened in the name of their owner, on the Company’s share ledgers, with the registration being carried out in accordance with applicable legal and regulatory provisions.
5Adjustments of the number of Performance Free Shares vested upon the Definitive Vesting date
Before the Definitive Vesting of the Performance Free Shares, in the event of financial transactions described in Appendix 2, or of a merger, demerger or reverse stock split, the maximum number of Performance Free Shares which may be vested will be adjusted in order to take into account that transaction in accordance with the provisions of Article L. 228-99, paragraph 2, 3° and paragraph 5, and L. 225-197-1 III of the Code of Commerce, Section 409A of the U.S. Code, and the provisions of Appendix 2 of the Terms and Conditions.
For the purposes of that adjustment, the Executive Board will calculate, as of the time of Definitive Vesting, the new number of Performance Free Shares for all transactions occurring beforehand, in accordance with the provisions above. This adjustment will be conducted so that it equalises, down to the hundredth of a share, the value of the Performance Free Shares that will be granted after the completion of the planned transaction and the value of the Performance Free Shares that would have been granted before the completion of the transaction. In order to obtain a whole number of Performance Free Shares, they will be rounded down to the nearest lower number.
Each Beneficiary will be informed of this adjustment and its consequences on the Definitive Vesting of the Performance Free Shares.
6Fiscal and Social Security regime applicable to Beneficiaries who are French residents
The financial benefit obtained due to the Allocation and the Definitive Vesting falls under a specific regime regarding fiscal and social contributions. The Beneficiary should make his own inquiries about the fiscal and social security regime applicable to him or her on the relevant date.
The Beneficiary will personally pay, without the Company being asked to reimburse or compensate him or her in any way, all taxes and social security charges he or she may be declared liable for by any tax or social security administration, including those not known at the time of his or her acceptance of the Free Shares, and which are the result of a change in applicable law or regulations, or a change in the Beneficiary’s fiscal or social status (including residence).
Furthermore, to the extent that the Allocation of the right to receive the Performance Free Shares, their Definitive Vesting, their delivery or the assignment thereof results in a payment or withholding obligation with regard to taxes, social security charges, or any other taxes, by an Innate Pharma Group company on behalf of the Beneficiary (or by the company of which the Beneficiary is an officer), the latter accepts from this point forward that the Company may (i) delay the delivery of the Performance Free Shares and/or (ii)
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impose a delivery-sale of all or part of the Performance Free Shares and withhold from the proceeds of said disposals the amounts owed to pay the taxes and/or (iii) block the assignment until the Beneficiary has paid these sums and/or (iv) withhold from the Beneficiary’s compensation the amount of taxes and charges owed related to the delivery of the Performance Free Shares.
7Enforceability of the Terms and Conditions
The Terms and Conditions are binding upon the Company as well as the Beneficiaries.
A copy of the Terms and Conditions is sent by email to each Beneficiary, with it being recalled that the acceptance of the Performance Free Shares Allocation implies the total adherence to the Terms and Conditions, without reservation.
The Beneficiary agrees to comply with the applicable laws and regulations and the provisions of the Terms and Conditions. Any violation of those laws, regulations, or provisions will result in the invalidity of the Performance Free Shares not yet fully vested for the Beneficiary without him or her being able to claim any compensation or indemnity of any sort whatsoever.
Any dispute or legal proceeding between an entity of the Innate Pharma Group and the Beneficiary and any dispute or legal proceeding against the Beneficiary due to the performance of his or her duties or in relation to the Performance Free Shares will suspend the right to the Definitive Vesting to the Beneficiary until the resolution of the dispute or legal proceedings, where applicable by a final court decision not subject to appeal, without the Beneficiary being able to claim any compensation or indemnity of any sort whatsoever. If this dispute or legal proceeding is resolved, where applicable by a final court decision not subject to appeal, against the Beneficiary, the Performance Free Shares not yet vested to the Beneficiary shall become invalid, without the Beneficiary being able to claim any compensation or indemnity of any sort whatsoever.
8Notifications
All notifications made under these Terms and Conditions shall be sent in writing and, if they are sent to the Company, shall be sent to the Company’s registered office (or any other address indicated by the Company or any other proxy designated by and representing it) and, if they are sent to the Beneficiary, they shall be hand delivered at his workplace or sent to the address indicated by the Beneficiary in writing to the Company for that purpose, or by any other means of communication authorised by current legislation in force. When made by registered letter with acknowledgement of receipt, notifications are considered received on the day of their first presentation.
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9Effective date of the Terms and Conditions - Changes - Interpretation - Compliance
9.1Effective date of the Terms and Conditions
The Terms and Conditions take effect starting from the date they are adopted by the Executive Board, i.e., September 11, 2024.
9.2Changes to the Terms and Conditions
The Terms and Conditions may be amended by the Executive Board (a) if it decides that the amendment is appropriate and will have no significant negative effect on the interests of the Beneficiaries or (b) by mutual consent between the Company and the Beneficiaries.
Furthermore, in the event of a legal, regulatory, or accounting change or a change in the interpretation of such a provision, particularly regarding the fiscal or social security treatment of the rights or Performance Free Shares allocated under the Terms and Conditions, affecting the Company, a company of the Innate Pharma Group, or the Beneficiary, the Terms and Conditions may be amended by the Executive Board at its discretion in order to respond to that change in a manner it deems appropriate. As an illustration, the Executive Board may decide to reduce or extend the Vesting Period, and/or delete, modify, or introduce conditions to the Definitive Vesting, if that proves necessary or desirable.
The amendments thus made to the Terms and Conditions will not result in any right to compensation for the Beneficiaries, even if those amendments are unfavourable to them, generally or personally. Furthermore, any amendment must be made in accordance with Section 409A of the U.S. Code with respect to any U.S. Beneficiary.
The Beneficiaries will be informed, individually or by any other mean deemed appropriate by the Company, of any amendment to the Terms and Conditions that affects their rights under the Terms and Conditions. Such information may be provided by individual notification, information at the workplace, or any other means the Executive Board deems appropriate.
9.3Interpretation of the Terms and Conditions
It will be up to the Company’s Executive Board to interpret the provisions of the Terms and Conditions in accordance with current legislation in force in France as of the day on which the Terms and Conditions are finalised.
The Terms and Conditions will prevail in the event of a question of interpretation between any other document and the Terms and Conditions themselves.
If any of the clauses is potentially or totally considered null and void, the other provisions of the Terms and Conditions will remain in full effect.
9.4Compliance with the Terms and Conditions
None of the Executive Board’s options to lift certain terms and conditions of the Terms and Conditions, none of the amendments to the Terms and Conditions that may be made by the Executive Board as provided for above in Article 9.2 of the Terms and Conditions, and no interpretation of the Terms and Conditions as provided for above in Article 9.3 may have the effect of making an exception to the legal and regulatory provisions in force and
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governing free shares allocation plans, particularly Articles L. 225-197-1 et seq. and L. 22-10-59 et seq. of the Code of Commerce and call into question the fiscal treatment and social security contributions related to the Performance Free Shares, whether for the Beneficiary or for the Company, or for the Innate Pharma Group entity to which the Beneficiary belongs.
9.5Duration
The Terms and Conditions will remain in effect as long as the Performance Free Shares are outstanding.
10Clawback
Any Allocation Letter may reference a clawback policy of the Company or provide for the cancellation or forfeiture of a Performance Free Shares award or the forfeiture and repayment to the Company of any gain related to such award, or include other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Executive Board from time to time or as required by applicable law or any applicable rules or regulations promulgated by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the ordinary shares may be traded. In addition, notwithstanding anything in these Terms and Conditions to the contrary, any Allocation Letter or clawback policy may also provide for the cancellation or forfeiture of a Performance Free Shares award or the forfeiture and repayment to the Company of any ordinary shares issued under and/or any other benefit related to such award, or include other provisions intended to have a similar effect, including upon such terms and conditions as may be required by the Executive Board or under Section 10D of the U.S. Securities Exchange Act and/or any applicable rules or regulations promulgated by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the ordinary shares may be traded.
11Applicable Law - Competent Courts - Language
The Terms and Conditions are governed by French law.
Any difficulties that may arise regarding the interpretation or application of the Terms and Conditions will be subject to the exclusive jurisdiction of the competent courts within the jurisdiction of the Court of Appeal of Aix-en-Provence.
In case of translation of the Terms and Conditions, only the French version shall prevail.
To the extent applicable, it is intended that these Terms and Conditions and any grants made hereunder comply with the provisions of Section 409A of the U.S. Code, so that the income inclusion provisions of Section 409A(a)(1) of the U.S. Code do not apply to the U.S. Beneficiaries. These Terms and Conditions and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in these Terms and Conditions to Section 409A of the U.S. Code will also include any regulations or any other formal guidance promulgated with respect to such section by the U.S. Department of the Treasury or the Internal Revenue Service.
If, at the time of a U.S. Beneficiary’s separation from service (within the meaning of Section 409A of the U.S. Code), (i) the U.S. Beneficiary will be a specified employee (within the
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meaning of Section 409A of the U.S. Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes nonqualified deferred compensation (within the meaning of Section 409A of the U.S. Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the U.S. Code in order to avoid taxes or penalties under Section 409A of the U.S. Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the fifth business day of the seventh month after such separation from service.
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Appendix 1
Template of the letter that will be sent to each Beneficiary to inform him/her of the allocation of Performance Free Shares
INNATE PHARMA
A limited liability company in société anonyme form, with an Executive Board and a Supervisory Board, with a share capital of 4,049,171.60 euros
Registered offices: 117, Avenue de Luminy, 13009 Marseille
424 365 336 R.C.S. Marseille
(the “Company”)
[Beneficiary’s name]
Marseille, date: [__]
[Email / Delivered by hand]
Re: Performance Free Shares allocation plan of the Company
[Dear Sir or Madam]
We are pleased to inform you that, pursuant to the Shareholders’ General Meeting held on May 23, 2024, the Executive Board decided on September 11, 2024 an allocation of 2,625,000 performance free shares (the “Performance Free Shares”) to employees, employed managers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the Company or of its subsidiaries.
On [●], the Executive Board approved an allocation to you of [●] Performance Free Shares.
The Vesting date for your Performance Free Shares is [●]. The number of Performance Free Shares that will be definitely vested at the end of the Vesting Period (i) will be subject to compliance with the Presence Condition at the Definitive Vesting Date (as that term is defined in Article 1.1 of the Terms and Conditions that were sent to you via email) and (ii) will depend on the fulfilment of the Performance Conditions (as that term is defined in Article 3.2.2 of the Terms and Conditions that were sent to you via email).
The Initial Market Capitalization is [●] euros.
Furthermore, the following documents have been sent to you on your professional email address on [●]
-the resolutions of the Company Shareholders’ General Meeting of May 23, 2024;
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-the decision of the Company’s Executive Board to allocate [●] Performance Free Shares dated [●];
-the terms and conditions of the Performance Free Shares plan adopted by the Executive Board on September 11, 2024, (the “Terms and Conditions”); and
-the Performance Conditions (as this term is defined in the Terms and Conditions) established and approved by the Executive Board on a statement of performance conditions (the “Statement of Performance Conditions”).
Please read the Terms and Conditions carefully, as they set forth the general terms and conditions of the Performance Free Shares, which must be complied with. However, if you are a U.S Beneficiary (as defined in the Terms and Conditions), for the avoidance of doubt, the treatment set forth in Article 3.2.1.2(i) of the Terms and Conditions relating to retirement will not apply to your Performance Free Shares. Similarly, Article 3.1 regarding the acceleration of the Vesting Period in case of a tender offer and/or an exchange offer contains provisions that are specific to U.S. Beneficiaries.
Tax Obligations
In addition to the provisions of the Terms and Conditions and in particular Article 9.2:
Regardless of any action the Company or your employer (“Employer”) takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or your Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Free Shares grant, including the grant or vesting of the Performance Free Shares, the subsequent sale of shares acquired pursuant to such vesting and the receipt of any dividends; and (b) do not commit to structure the terms of the grant or any aspect of the Performance Free Shares to reduce or eliminate your liability for Tax-Related Items.
Prior to the vesting of the Performance Free Shares, you will pay or make adequate arrangements satisfactory to the Company and/or your Employer to satisfy all withholding obligations of the Company and/or your Employer, if any. In this regard, you authorize the Company and/or your Employer to withhold all applicable Tax-Related Items legally payable by you from your compensation paid to you by the Company and/or your Employer or from proceeds of the sale of shares. Alternatively, or in addition, if permissible under local law, the Company may sell or arrange for the sale of shares that you acquire to meet the withholding obligation for Tax-Related Items. Finally, you will pay to the Company or your Employer any amount of Tax-Related Items that the Company or your Employer may be required to withhold as a result of your receipt of the Free Shares that cannot be satisfied by the means previously described. The Company may refuse to deliver the shares issuable upon vesting of the Performance Free Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.
Section 409A of the Code
To the extent applicable, it is intended that this letter and the Terms and Conditions comply with or be exempt from the provisions of Section 409A of the U.S. Code. This letter and the Terms and Conditions shall be administered in a manner consistent with this intent, and any provision that would cause this letter or the Terms and Conditions to fail to satisfy Section 409A of the U.S. Code shall have no force or effect until amended to comply with or be exempt from Section 409A of the
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U.S. Code (which amendment may be retroactive to the extent permitted by Section 409A of the U.S. Code and may be made by the Company without your consent).
Clawback
Notwithstanding anything in this letter to the contrary, you acknowledge and agree that this letter and any compensation described herein (including any Performance Free Shares) and any other compensation received from the Company or a member of the Innate Pharma Group are subject to the terms and conditions of the Company’s (or an affiliate’s) clawback policies (if any) as may be in effect from time to time, including specifically as required to implement Section 10D of the U.S. Securities Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable stock exchange listing standards or rules and regulations).
As a beneficiary of the allocation of Performance Free Shares, we hereby inform you that you have the option to either accept or reject this allocation. In this respect, please indicate your choice by ticking the corresponding box below.
We would also be grateful if you could countersign this letter and return it to the Company at its registered office before [__], failing which your acceptance will be presumed.
We thank you in advance for your time.
Sincerely,
________________________________
[●]
Chairman of the Executive Board of the Company
* *
*
FORM
As a beneficiary of the Performance Free Shares:
I hereby expressly accept the Allocation as well as all the Terms and Conditions (which have been sent to me by email).
I hereby expressly reject the Allocation of [●] Performance Free Shares proposed to me.
________________________________
[Beneficiary’s name]
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Appendix 2
Adjustment rules
Pursuant to Article L. 228-98 of the French Commercial Code,
(i)the Company will have the right to change its legal form or its object without prior approval of the Beneficiaries;
(ii)the Company will have the right, without prior approval of the Beneficiaries, to modify the rules for distributing its profits, amortize its capital or create preference shares leading to such a change or write-off, subject to having taken the necessary steps to maintain his or her rights in accordance with Article L. 228-98 3° of the French Commercial Code; and
(iii)in the event of its capital being reduced, on account of losses, through a reduction in the nominal value or the number of the shares comprising the capital, the rights of the Beneficiaries will consequently be reduced, as if his or her Free Shares had been definitely allocated to him or her before the date on which the reduction of capital became final. In the event of the capital being reduced through a reduction in the number of the shares, the new number of Free Shares that may be definitely allocated to each Beneficiary will be equal to the previous number multiplied by the following ratio:
| | |
| Number of shares composing the share capital after the operation |
| Number of shares composing the share capital before the operation |
Furthermore, at the end of the following operations:
financial operations with listed subscription preferential right or free allocation of listed warrants;
free allocation of shares to the shareholders, consolidation or division of shares;
incorporation of reserves, profit or premiums through an increase in the nominal amount of the shares;
distribution of reserves or premiums in cash or in kind;
free allocation to the shareholders of any securities other than the Company’s shares;
change in the distribution of profits and/or creation of preference shares;
share capital amortisation;
that the Company may carry out after the Allocation, when the Inscription Date (as defined below) is fixed on a date preceding the date of the Definitive Vesting, the rights of the Beneficiaries will be maintained by adjusting the number of Free Shares which may be definitely allocated to each Beneficiary in accordance with the terms below.
The “Inscription Date” is the date on which the ownership of the shares of the Company is fixed in order to determine which shareholders will benefit from the operation.
In case of adjustments to be carried out pursuant to paragraphs below, the new number of Free Shares shall be rounded down to the nearest whole number of Free Shares. The potential following adjustments will be carried out on the basis of such new number of Free Shares so
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
determined and rounded. Furthermore, any adjustments carried out pursuant to this Appendix 2 must comply with Section 409A of the U.S. Code.
1In the event of financial operations with listed preferential subscription right:
The new number of Free Shares which may be definitely allocated to each Beneficiary shall be equal to the former number, multiplied by the following ratio:
| | |
Value of the share after detachment of the preferential subscription right
+ Value of the preferential subscription right |
| Value of the share after detachment of the preferential subscription right |
For the purposes of calculating this ratio, the values of the share after detachment of the preferential subscription right and of the preferential subscription right shall be equal to the arithmetic average of their first trading prices quoted on the regulated market of Euronext in Paris (“Euronext Paris”) (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares of the Company or the preferential subscription rights are listed) for the all trading days within the subscription period.
2In the event of financial operations realised by free allocation of listed warrants to the benefit of the shareholders with the right to participate in a placement of securities created through the exercise of the warrants not exercised by their owners subsequent to the subscription period open to them:
The new number of Free Shares which may be definitely allocated to each Beneficiary shall be equal to the former number, multiplied by following ratio:
| | |
Value of the share after the detachment of the warrant
+ Value of the warrant |
| Value of the share after detachment of the warrant |
For the purposes of calculating this ratio:
the value of the share after detachment of the warrant shall be equal to the volume-weighted average of (i) the prices of the Company’s shares quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) during all the trading days within the subscription period and, (ii) (a) the disposal price for the securities disposed in connection with the placement, if these are shares equivalent to the existing shares of the Company, allocating to the disposal price the volume of shares disposed in connection with the placement or (b) the prices of the Company’s shares quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) at the date on which the disposal price for the securities disposed in connection with the placement is determined if these are not shares equivalent to the existing shares of the Company;
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
the value of the warrant shall be equal to the volume-weighted average of (i) the price of the warrants quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the warrants are listed) during all the trading days within the subscription period and, (ii) the implied value of the warrants resulting from the disposal price for the securities disposed in connection with the placement, which is the difference (if positive), adjusted by the exercise parity of the warrant, between the disposal price for the securities disposed in connection with the placement and the subscription price of the securities upon exercise of the warrants, by allocating to this value the corresponding volume of the warrants exercised to allocate the securities disposed in connection with the placement.
3In the event of free allocation of shares to the shareholders, and in case of division or consolidation of the shares:
The new number of Free Shares which may be definitely allocated to each Beneficiary shall be equal to the former number, multiplied by the following ratio:
| | |
| Number of shares composing the share capital after the operation |
| Number of shares composing the share capital before the operation |
|
4In the event of distribution of reserves or premiums in cash or in kind:
The new number of Free Shares which may be definitely allocated to each Beneficiary shall be equal to that former number, multiplied by the following ratio:
| | |
| Value of the share before the distribution |
| Value of the share before the distribution – Amount of the distribution per share or value of the securities or value of the assets delivered per share |
For the purposes of calculating this ratio:
the value of the share before the distribution shall be equal to the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed ) for the last three trading days preceding the date on which the shares are quoted ex-distribution;
if the distribution is made in kind:
•in the case of distribution of listed securities on a regulated market or similar market, the value of the distributed securities will be determined as mentioned above;
•in the case of distribution of securities not listed on a regulated market or similar market, the value of the delivered securities shall be equal, if they were to be listed on a regulated market or similar market during the ten trading days beginning on the date on which the shares are quoted ex-distribution, to the volume-weighted average of the prices quoted on such
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
market for the first three trading days on which the securities are listed during such period; and
•in the other cases (distributed securities not listed on a regulated market or similar market or listed for less than three trading days within the ten trading days period mentioned above or in the case of the distribution of assets), the value per share of the securities or the assets distributed will be determined by an internationally-renowned independent adviser to be appointed by the Company.
5In the event of free allocation of securities other than the Company’s shares:
The new number of Free Shares which may be definitely allocated to each Beneficiary shall be equal to the former number, multiplied by the following ratio:
11.1If the right to free allocation of securities is listed on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market):
| | |
Value of the share ex-free allocation right + Value of the free allocation right |
| Value of the share ex-free allocation right |
For the purposes of calculating this ratio:
•the value of the share ex-free allocation right shall be equal to the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares ex-free allocation right are listed) of the share ex-free allocation right for the first three trading days beginning on the date on which the Company’s shares are listed ex-free allocation right;
•the value of free allocation right shall be determined as indicated in the paragraph above. If the free allocation right is not listed for each of the three trading days, its value will be determined by an internationally-renowned independent adviser to be appointed by the Company.
11.2If the right to free allocation of securities is not listed on Euronext Paris (or on another regulated market or similar market):
| | |
Value of the share ex-free allocation right + Value of the securities allocated per share |
| Value of the share ex-free allocation right |
For the purposes of calculating this ratio:
•the value of the share ex-free allocation right will be determined in accordance with paragraph 5.1 above;
•if the allocated securities are listed or are expected to be listed on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market) within a ten trading days period beginning on the date on which the shares are quoted ex-distribution, the value per share of the securities allocated
UNOFFICIAL TRANSLATION FOR INFORMATION PURPOSES ONLY
shall be equal to the volume-weighted average of the such securities prices quoted on such market for the first three trading days on which the securities are listed during such period. If the allocated securities are not listed during each of the three trading days, the value per share of the allocated securities shall be determined by an internationally-renowned independent adviser to be appointed by the Company.
6In the event of a change by the Company in the distribution of profits and/or the creation of preference shares:
The new number of Free Shares which may be definitely allocated to each Beneficiary shall be equal to the former number, multiplied by the following ratio:
| | |
Value of the share before the change |
Value of the share before the change – Reduction of the right to profits per share |
For the purposes of calculating this ratio:
•the value of the share before the change will be determined by using the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) for the last three trading days preceding the date of the change;
•the reduction of the right to profits per share will be determined by an independent adviser appointed by the Company.
Notwithstanding the above, if such preference shares are issued with preferential subscription rights or through a free allocation to shareholders of warrants for such preference shares, the new exercise parity shall be adjusted in accordance with paragraphs 1 or 5 above.
7In the case of an amortisation of share capital:
The new number of Free Shares which may be definitely allocated to each Beneficiary shall be equal to the former number, multiplied by the following ratio:
| | |
| Value of the share before the amortisation |
| Value of the share before the amortisation – Value of the amortisation per share |
For the purposes of calculating this ratio, the share value before the amortisation shall be equal to the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) for the last three trading days preceding the date on which the shares are listed ex-amortisation.
The below is a free translation prepared by the Company. This document is being provided to you for information purposes only. In case of any inconsistency between the below and the French version of the Terms and Conditions, the latter shall prevail.
INNATE PHARMA
French société anonyme organized with a Supervisory Board and an Executive Board
Share capital of 4,049,171.60 euros
Headquarters: 117, Avenue de Luminy, 13009 Marseille
424 365 336 R.C.S. Marseille
TERMS AND CONDITIONS FOR THE
2024 FREE SHARES GRANT PROGRAM OF
INNATE PHARMA
AGA 2024
By decision of the Executive Board dated September 11, 2024
1Framework for the free shares allocation operation
1.1Framework and general principle for the free shares allocation operation
The purpose of these terms and conditions (the “Terms and Conditions”) is to govern the 2024 free shares allocation plan (the “Allocation Plan”) put in place to the benefit of the executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the company, Innate Pharma (the “Company”), as well as entities linked to the Company within the meaning of Article L. 225-197-2 of the French Commercial Code (together, “Innate Pharma Group”).
The Terms and Conditions were approved by the Executive Board on September 11, 2024.
The Terms and Conditions enable the Beneficiaries designated by the Executive Board (the “Beneficiaries ”) to receive, free of charge, one or more existing or new ordinary shares (the “Free Shares”) of the Company (the “Allocation”).
Except in the individual cases provided for by the Terms and Conditions, the Free Shares will not be fully vested until the end of a period equal to three years starting from the date of the decision of the Executive Board to allocate the Free Shares (the “Allocation Decision”), subject to compliance with the conditions and criteria provided for in Article 2.2 of the Terms and Conditions (the “Vesting Period”). During the Vesting Period, the Beneficiaries shall not be the owner of the Free Shares, and the rights resulting from such shares are non-transferable. The Beneficiaries eventually become the owner of the Free Shares on the full vesting of the shares at the end of the Vesting Period (the “Definitive Vesting” and the “Definitive Vesting Date”), as defined in Article 2.1 of the Terms and Conditions.
The Allocation will not become final (i.e., fully vested) until the Definitive Vesting Date, subject to compliance with the condition of presence as an employee and/or corporate officer and/or member of an administration or supervisory body (Board of Directors or Supervisory board or, where applicable, their equivalent under foreign law) of the Innate Pharma Group referred to in Article 2.2.1 of the Terms and Conditions (the “Presence Condition”).
Starting from the Definitive Vesting Date, the fully vested Free Shares will become freely transferable.
The financial benefit obtained due to the Allocation and the Definitive Vesting is subject to a specific regime regarding fiscal and social security contributions. Each Beneficiary should make his or her own inquiries about the fiscal and social security regime applicable to him or her on the relevant date.
As needed, it is specified that the Allocation is an offer reserved for the Beneficiaries designated by the Executive Board on a limited basis, and that it does not represent a public offer.
None of the provisions of the Terms and Conditions or Allocation Letter (defined herein) constitute an element of a Beneficiary’s employment contract. The rights and obligations resulting from the working relationship between a Beneficiary and the Company cannot in any case be affected by the Terms and Conditions, from which they are totally separate.
Therefore, participation in the Allocation Plan shall not confer any right regarding the continuation of a working relationship.
1.2Legal Framework
These Terms and Conditions are subject to the current French legal and regulatory provisions in effect as of the date of the Terms and Conditions governing free shares allocation plans, particularly Articles L. 225-197-1 et seq. of the French Commercial Code.
1.3Authorisation of the Shareholders’ General Meeting of May 23, 2024
In accordance with the aforementioned legal provisions, the Company Shareholders’ General Meeting held on May 23, 2024 authorised in its 27th resolution the Executive Board to proceed, to the benefit of executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the Company and its consolidated subsidiaries within the meaning of Article L. 225-197-1 of the French Commercial Code, to the allocation of a maximum of 300,000 new or existing Free Shares.
1.4Allocation decision by the Executive Board
The Executive Board will decide to allocate the Free Shares to the Beneficiaries under the terms and conditions laid out in these Terms and Conditions (the “Allocation Decision”). The Allocation Decision represents the starting point of the Vesting Period.
The Beneficiaries of the Allocation carried out in accordance with the Terms and Conditions are not required to make any payment to the Company.
No Free Share may be allocated to a salaried staff member or executive officer holding more than 10% of the Company share capital or for whom the Allocation would have the effect of increasing his or her ownership stake beyond 10% of the Company share capital. Only shares held directly by an employee or corporate officer for less than seven years are included in this percentage.
Upon Definitive Vesting, the Executive Board will specify whether the Free Shares granted are existing shares or new shares to be issued by the Company which may only be issued as part of the Allocation. If the fully vested Free Shares are newly issued shares, the issuance of the Free Shares will be the effected through a Company share capital increase through the special incorporation of all or part of the available reserve accounts, particularly the “issuance premium” account.
1.5Maximum number of Free Shares “AGA 2024” to be allocated
The maximum number of Free Shares “AGA 2024” allocated to the Beneficiaries under the Allocation Plan is set at 300,000 Free Shares.
1.6Allocation of the Free Shares and acceptance by the Beneficiaries
1.6.1Allocation of Free Shares
The Allocation Decision of the Free Shares by the Executive Board represents an irrevocable commitment made by the Company to the Beneficiaries.
The Allocation is notified individually to the Beneficiaries by the Executive Board acting by delegation from the Company Shareholders’ General Meeting held on May 23, 2024.
The Beneficiaries are informed of the special terms and conditions applicable to the Free Shares Allocation by letter, a template of which is available in Appendix 1 (the “Allocation Letter”), sent to their home or delivered by hand, specifying:
the number of Free Shares “AGA 2024” allocated;
the Definitive Vesting Date;
any other obligation applicable to the Beneficiaries; and
each Beneficiary’s right to accept or reject the Free Shares Allocation according to the Terms and Conditions.
A copy of the Terms and Conditions is also sent by email to the Beneficiaries. The Beneficiaries must acknowledge receipt of that letter and agree to comply with the Terms and Conditions.
1.6.2Acceptance of the Allocation by the Beneficiaries
The Beneficiary shall declare his or her choice (acceptance or rejection) regarding the Free Shares Allocation by returning to the Company, within 30 days of the Allocation Decision, depending on his or her choice:
the acknowledgement of receipt form, expressly accepting the Allocation as well as all of the Terms and Conditions (which he will have received by email), duly filled out and signed; or
the Allocation refusal form, duly filled out and signed.
If no response is received within this time period, his or her acceptance of the Free Shares Allocation and the provisions of the Terms and Conditions will be assumed.
2Definitive Vesting conditions of the Free Shares and rights acquired by the Beneficiaries during the Vesting Period
2.1Duration of the Vesting Period
The Beneficiaries will be allocated the Free Shares free of charge and definitively, and will become the owner of the shares at the time of the Definitive Vesting upon the expiration of the Vesting Period (subject to compliance with the Terms and Conditions), which is three years starting from the Allocation Decision date unless otherwise set forth in the Allocation Letter.
2.2General conditions and criteria for Definitive Vesting
The Free Shares Allocation to the Beneficiaries will not become final until the end of the Vesting Period subject to compliance with the Presence Condition (as defined below) within the Innate Pharma Group on this date.
2.2.1Presence Condition on the Definitive Vesting Date
The Company’s Free Shares Allocation to the Beneficiaries is directly tied to the status of employee and/or corporate officer and/or member of an administration or supervisory body (Board of Directors or Supervisory board or, where applicable,
their equivalent under foreign law) of the Innate Pharma Group on the Definitive Vesting Date (the “Presence Condition”).
If, for any reason whatsoever, the Presence Condition is no longer met before the end of the Vesting Period, the Beneficiary shall lose all rights to the Definitive Vesting of the Free Shares, subject to the cases provided for in Article 2.2.2 of the Terms and Conditions below and to any decision to the contrary made by the Executive Board.
In the event of the Beneficiary’s effective resignation before the end of the Vesting Period, the loss of entitlement to the Definitive Vesting will take effect on the date the Beneficiary’s’ effective resignation takes effect, subject to any decision to the contrary made by the Executive Board.
In the event of the Beneficiary’s dismissal and/or revocation before the end of the Vesting Period, the loss of entitlement to the Definitive Vesting will take effect on the notification date of the Beneficiary’s dismissal or on the date of the revocation decision by the relevant corporate body, subject to any decision to the contrary made by the Executive Board.
For the purposes of these provisions, any contractual termination of the employment contract within the meaning of Articles L. 1237-11 et seq. of the French Labour Code (or within the meaning of the provisions of equivalent foreign law) is the same as a resignation.
2.2.2Exceptions to the Presence Condition
As an exception to the provisions of Article 2.2.1 of the Terms and Conditions above, if the Presence Condition is no longer met during the Vesting Period for any of the following reasons, the Free Shares shall be treated as follows, except as otherwise decided by the Executive Board, and will be delivered to the Beneficiary in such instances in accordance with Article 2.3:
(i)Retirement: (either at the normal retirement age, or at an earlier or later date with the approval of the Innate Pharma Group company concerned), the Beneficiary will retain his or her entitlement to the Definitive Vesting on the Definitive Vesting Date despite not meeting the Presence Condition, but will remain subject to the other provisions of the Terms and Conditions, excluding those tied to the Presence Condition; provided, however, that if the Beneficiary is a U.S. taxpayer (“U.S. Beneficiary”), this treatment shall not apply and the Beneficiary shall lose his or her entitlement to the Definitive Vesting as of the date of the U.S. Beneficiary’s retirement.
(ii)Death: In accordance with the provisions of Article L. 225-197-3 of the French Commercial Code, Definitive Vesting of the Free Shares will occur and the heirs or assignees of the Beneficiary may, if they so desire, claim the Definitive Vesting of the Free Shares to their benefit within six months of the date of death. Upon the expiration of that six month period, the Beneficiary's heirs or assignees will definitively lose the option of claiming the Definitive Vesting of the Free Shares; the Definitive Vesting of the Free Shares will take place as of the claim date.
(iii)Disability: if the Presence Condition is no longer met as a result of the Beneficiary being declared an invalid of the second or third category of Article L. 341-4 of the French Social Security Code, the Free Shares will be fully vested for the Beneficiaries before the end of the Vesting Period as of the date of the termination of the Beneficiary’s Presence Condition; provided, however, that for U.S. Beneficiaries, “Disability” will have the meaning set forth in Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “U.S. Code”). For the avoidance of doubt, no such exception to the Presence Condition shall be available to U.S. Beneficiaries if their “Disability” does not meet the criteria of Article L. 314-4 of the French Social Security Code, even if it meets those of Section 409A of the U.S. Code.
(iv) Divestiture: if the Innate Pharma Group Company for whom the Presence Condition is met no longer belongs to the Innate Pharma Group, the Beneficiary will retain his or her entitlement to the Allocation, but will remain subject to all provisions of the Terms and Conditions – excluding those tied to the Presence Condition; provided, however, that this treatment shall not apply to U.S. Beneficiaries and the Free Shares will be forfeited as of the date on which the Innate Pharma Group Company is no longer a member of the Innate Pharma Group.
2.2.3Public takeover and/or exchange offer
In the event of a public takeover or exchange offer, the final results of which are announced before the Definitive Vesting Date, the Free Shares will be definitively allocated to the Beneficiaries on the date of the Definitive Vesting, regardless of whether or not the Presence Condition is met; provided, however, that this treatment shall not apply to U.S. Beneficiaries who shall lose their entitlement to the Definitive Vesting unless they meet the Presence Condition on the Definitive Vesting Date. If the U.S. Beneficiary does not meet the Presence Condition on the Definitive Vesting Date, the Free Shares will be forfeited as of the date on which the Presence Condition is no longer met.
2.3Delivery of the Free Shares
The Executive Board will acknowledge the Definitive Vesting of the Free Shares, under the conditions provided for above, acknowledging the number of Free Shares thus acquired and will make the necessary changes to the by-laws of the Company.
Except with respect to Definitive Vesting that occurs pursuant to Article 2.2.2(ii) or (iii) for U.S. Beneficiaries, at the end of the Vesting Period, and in no event later than 30 days following the end of the Vesting Period, the Company will transfer to the Beneficiaries, by registering in a registered account the number of Free Shares determined by the Executive Board in the Allocation Decision, subject to each Beneficiary’s compliance with the Definitive Vesting conditions. Notwithstanding the foregoing, in the event Definitive Vesting occurs pursuant to Article 2.2.2(ii) or (iii) with respect to U.S. Beneficiaries, the Company will transfer the vested number of Free Shares to the Beneficiary (or, as applicable, his or her heirs or assignees) within 30 days of the date on which the Beneficiary’s heirs or assignees accept the vested Free Shares, in the case of death, or within 30 days of the date of the cessation of the Presence Condition due to Disability.
3Rights and obligations attached to the fully vested Free Shares
3.1Type and category of the Free Shares
The Free Shares will enjoy, starting from the Definitive Vesting (which includes any earlier date of delivery of Free Shares for U.S. Beneficiaries pursuant to Article 2.3), all the rights attached to the ordinary shares comprising the share capital of the Company.
3.2Rights and obligations attached to the Free Shares
3.2.1Rights and obligations attached to Free Shares during the Vesting Period
During the Vesting Period, the Beneficiaries are not the owner of the Free Shares and have no rights resulting from such shares.
3.2.2Rights and obligations attached to the Free Shares following the Definitive Vesting
The Beneficiaries become the owner of the Free Shares as of the Definitive Vesting date (which includes any earlier date of delivery of Free Shares for U.S. Beneficiaries pursuant to Article 2.3). The ownership of a Free Share entails the adherence to the Company’s by-laws and the decisions of the Company Shareholders’ General Meetings.
The Free Shares will be subject to all provisions of the Company’s by-laws applicable to ordinary shares of the Company.
The Free Shares which will be new shares will be entitled to dividends as from the first day of the financial year preceding that in which the Definitive Vesting occurs and will therefore be immediately fungible with the existing shares and negotiated on the same trading line starting from their issuance.
3.3Disposal of the Free Shares
In accordance with Article L. 22-10-59 II of the French Commercial Code, at the end of the Vesting Period referred to Article 4.4 of the Terms and Conditions, the Free Shares may not be disposed of:
•1° Within 30 calendar days before the announcement of an interim financial report or an end-of-year report that the issuer is required to make public;
•2° By the members of the Supervisory Board, by the members of the Executive Board (or the corporate bodies or corporate officers succeeding them) and by employees with knowledge of inside information1 that has not been made public.
3.4Form of the Free Shares allocated
The existing or new ordinary shares resulting from the Definitive Vesting of the Free Shares shall be the subject of a direct registration in a registered account opened in the name of their owner, on the Company’s share ledgers, with the registration being carried out in accordance with the then applicable legal and regulatory provisions.
1 within the meaning of Article 7 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC,
4Adjustments in the event of financial transactions during the Vesting Period
During the Vesting Period, in the event of financial transactions described in Appendix 2, or of a merger, demerger or reverse stock split, the maximum number of Free Shares which may be fully vested will be adjusted in order to take into account that transaction in accordance with the provisions of Article L. 228-99, paragraph 2, 3° and paragraph 5, and L. 225-197-1 III of the French Commercial Code, Section 409A of the U.S. Code, and the provisions of Appendix 2.
For the purposes of that adjustment, the Executive Board will calculate, as of the time of Definitive Vesting, the new number of Free Shares for all transactions occurring beforehand, in accordance with the provisions above. This adjustment will be conducted so that it equalises, down to the hundredth of a share, the value of the Free Shares that will be granted after the completion of the planned transaction and the value of the Free Shares that would have been granted before the completion of the transaction. Failing to obtain a whole number of Free Shares, they will be rounded down to the nearest whole number.
The Beneficiaries will be informed of this adjustment and its consequences on the Definitive Vesting of the Free Shares.
5Fiscal and Social Security regime applicable to Beneficiaries who are French residents
The financial benefit obtained due to the Allocation and the Definitive Vesting falls under a specific regime regarding fiscal and social contributions. The Beneficiary should make their own inquiries about the fiscal and social security regime applicable to him or her on the relevant date.
The Beneficiary will personally pay, without the Company being asked to reimburse or compensate him or her in any way, all taxes and social security charges he or she may be declared liable for by any tax or social security administration, including those not known at the time of his or her acceptance of the Free Shares, and which are the result of a change in applicable law or regulations, or a change in the Beneficiary’s fiscal or social status (including residence).
Furthermore, to the extent that the Allocation of the right to receive the Free Shares, their Definitive Vesting, their delivery or the assignment thereof results in a payment or withholding obligation with regard to taxes, social security charges, or any other taxes, by an Innate Pharma Group company on behalf of the Beneficiaries (or by the company of which the Beneficiaries is an officer), the latter accepts from this point forward that the Company may (i) delay the delivery of the Free Shares and/or (ii) impose a delivery-sale of all or part of Free Shares and withhold from the proceeds of said disposals the amounts owed to pay the taxes and/or (iii) block the assignment until the Beneficiary has paid these sums and/or (iv) withhold from the Beneficiary’s compensation the amount of taxes and charges owed related to the delivery of the Free Shares.
6Enforceability of the Terms and Conditions
The Terms and Conditions are binding upon the Company as well as the Beneficiaries .
A copy of the Terms and Conditions is sent by email to each Beneficiary, with it being recalled that the acceptance of the Free Shares Allocation implies the total adherence to the Terms and Conditions, without reservation.
The Beneficiaries agree to comply with the applicable laws and regulations and the provisions of the Terms and Conditions. Any violation of those laws, regulations, or provisions will result in the invalidity of the Free Shares not yet fully vested for the Beneficiary without him or her being able to claim any compensation or indemnity of any sort whatsoever.
Any dispute or legal proceeding between an entity of the Innate Pharma Group and the Beneficiaries and any dispute or legal proceeding against the Beneficiaries due to the performance of his or her duties or in relation to the Free Shares will suspend the right to the Definitive Vesting to the Beneficiaries until the resolution of the dispute or legal proceedings, where applicable by a final court decision not subject to appeal, without the Beneficiaries being able to claim any compensation or indemnity of any sort whatsoever. If this dispute or legal proceeding is resolved, where applicable by a final court decision not subject to appeal, against the Beneficiaries, the Free Shares not yet fully vested to the Beneficiaries shall become invalid, without the Beneficiaries being able to claim any compensation or indemnity of any sort whatsoever.
7Notifications
All notifications made under these Terms and Conditions shall be sent in writing and, if they are sent to the Company, shall be sent to the Company’s registered office (or any other address indicated by the Company or any other proxy designated by and representing it) and, if they are sent to the Beneficiaries, they shall be hand delivered at his workplace or sent to the address indicated by the Beneficiaries in writing to the Company for that purpose, or by any other means of communication authorised by current legislation in force. When made by registered letter with acknowledgement of receipt, notifications are considered received on the day of their first presentation.
8Entry into force of the Terms and Conditions - Changes - Interpretation – Compliance - Duration
8.1Entry into force of the Terms and Conditions
The Terms and Conditions take effect starting from the date they are adopted by the Executive Board, i.e., September 11, 2024.
8.2Changes to the Terms and Conditions
The Terms and Conditions may be amended by the Executive Board (a) if it decides that the amendment is appropriate and will have no significant negative effect on the interests of the Beneficiaries or (b) by mutual consent between the Company and the Beneficiaries .
Furthermore, in the event of a legal, regulatory, or accounting change or a change in the interpretation of such a provision, particularly regarding the fiscal or social security treatment of the rights or Free Shares granted under the Terms and Conditions, affecting the Company, a company of the Innate Pharma Group, or the Beneficiaries, the Terms and Conditions may be amended by the Executive Board at its discretion in order to respond to
that change in a manner it deems appropriate. As an illustration, the Executive Board may decide to reduce or extend the Vesting Period, and/or delete, modify, or introduce conditions to the Definitive Vesting, if that proves necessary or desirable.
The amendments thus made to the Terms and Conditions will not result in any right to compensation for the Beneficiaries, even if those amendments are unfavourable to him or her, generally or personally. Furthermore, any amendment must be made in accordance with Section 409A of the U.S. Code with respect to any U.S. Beneficiary.
The Beneficiaries will be informed of any amendments to the Terms and Conditions that affect his or her rights under the Terms and Conditions. Such information may be provided by individual notification, information at the workplace, or any other means the Executive Board deems appropriate.
8.3Interpretation of the Terms and Conditions
It will be up to the Company’s Executive Board to interpret the provisions of the Terms and Conditions in accordance with current legislation in force in France as of the day on which the Terms and Conditions are finalised.
The Terms and Conditions will prevail in the event of a question of interpretation between any other document and the Terms and Conditions themselves.
If any of the clauses is potentially or totally considered null and void, the other provisions of the Terms and Conditions will remain in full effect.
8.4Compliance with the Terms and Conditions
None of the Executive Board’s options to lift certain terms and conditions of the Terms and Conditions, none of the amendments to the Terms and Conditions that may be made by the Executive Board as provided for above in Article 8.2 of the Terms and Conditions, and no interpretation of the Terms and Conditions as provided for above in Article 8.3 may have the effect of making an exception to the legal and regulatory provisions in force and governing free shares plans, particularly Articles L. 225-197-1 et seq. of the French Commercial Code and call into question the fiscal treatment and social security contributions related to the Free Shares, whether for the Beneficiaries or for the Company, or for the Innate Pharma Group entity to which the Beneficiaries belongs.
8.5Duration
The Terms and Conditions will remain in effect until the expiry of the Vesting Period applicable to the Free Shares allocated under the Terms and Conditions.
9Clawback
Any Allocation Letter may reference a clawback policy of the Company or provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any gain related to a Free Shares award, or include other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Executive Board from time to time or as required by applicable law or any applicable rules or regulations promulgated by the U.S. Securities and Exchange Commission or any national
securities exchange or national securities association on which the ordinary shares may be traded. In addition, notwithstanding anything in these Terms and Conditions to the contrary, any Allocation Letter or clawback policy may also provide for the cancellation or forfeiture of a Free Shares award or the forfeiture and repayment to the Company of any ordinary shares issued under and/or any other benefit related to such award, or include other provisions intended to have a similar effect, including upon such terms and conditions as may be required by the Executive Board or under Section 10D of the U.S. Securities Exchange Act and/or any applicable rules or regulations promulgated by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the ordinary shares may be traded.
10Applicable Law - Competent Courts - Language
The Terms and Conditions are governed by French law.
Any difficulties that may arise regarding the interpretation or application of the Terms and Conditions will be subject to the exclusive jurisdiction of the competent courts within the jurisdiction of the Court of Appeal of Aix-en-Provence.
In case of translation of the Terms and Conditions, only the French version shall prevail.
To the extent applicable, it is intended that these Terms and Conditions and any grants made hereunder comply with the provisions of Section 409A of the U.S. Code, so that the income inclusion provisions of Section 409A(a)(1) of the U.S. Code do not apply to the U.S. Beneficiaries. These Terms and Conditions and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in these Terms and Conditions to Section 409A of the U.S. Code will also include any regulations or any other formal guidance promulgated with respect to such section by the U.S. Department of the Treasury or the Internal Revenue Service.
If, at the time of a U.S. Beneficiary’s separation from service (within the meaning of Section 409A of the U.S. Code), (i) the U.S. Beneficiary is a specified employee (within the meaning of Section 409A of the U.S. Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes nonqualified deferred compensation (within the meaning of Section 409A of the U.S. Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the U.S. Code in order to avoid taxes or penalties under Section 409A of the U.S. Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the fifth business day of the seventh month after such separation from service.
Appendix 1
Template of the letter that will be sent to the Beneficiaries to inform him of the Free Shares Allocation
INNATE PHARMA
French société anonyme organized with an Executive Board and a Supervisory Board
With a share capital of €4,049,171.60 euros
Headquarters: 117, avenue de Luminy, 13009 Marseille
424 365 336 R.C.S Marseille
(the “Company”)
[Beneficiary address]
Marseille, date: X [•]
By email with an acknowledgement of receipt
Re: Plan for the allocation of free shares of the Company
Dear Sir or Madam,
We are pleased to inform you that, pursuant to the General Meeting of Shareholders of the Company held on May 23, 2024, the Executive Board decided on September 11, 2024 a free allocation of 300,000 “AGA 2024” (the “Free Shares") to executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers and employees of the Company or its subsidiaries.
On [•], the Executive Board approved an allocation to you of [•] Free Shares.
The Definitive Vesting Date of your Free Shares is [•].
In addition, the following documents have been sent to you by e-mail to your professional e-mail address on [•]:
-the minutes of the General meeting of the shareholders of the Company dated May 23, 2024,
-the decision of the Executive Board to allocate the Free Shares on [•]; and
-the terms and conditions of the plan for the allocation of Free Shares adopted by the Executive Board on September 11, 2024 (the "Terms and Conditions").
Please read carefully the Terms and Conditions which will set out the general terms and conditions of the Free Shares that must be complied with. However, for the avoidance of doubt, if you are a U.S. Beneficiary (as defined in the Terms and Conditions), please note that the treatment set forth in Article 2.2.2(i) of the Terms and Conditions relating to retirement and the treatment set forth in Article 2.2.2(iv) relating to transfers from the Innate Pharma Group will not apply to your Free Shares. Similarly, Article 2.2.3 of the Terms and Conditions, on the consequences of a tender offer and/or exchange offer, contain certain provisions that are specific to U.S. Beneficiaries.
Tax Obligations
In addition to the provisions of the Terms and Conditions and in particular Article 8.2:
Regardless of any action the Company or your employer (“Employer”) takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or your Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Free Shares grant, including the grant or vesting of the Free Shares, the subsequent sale of shares acquired pursuant to such vesting and the receipt of any dividends; and (b) do not commit to structure the terms of the grant or any aspect of the Free Shares to reduce or eliminate your liability for Tax-Related Items.
Prior to the vesting of the Free Shares, you will pay or make adequate arrangements satisfactory to the Company and/or your Employer to satisfy all withholding obligations of the Company and/or your Employer, if any. In this regard, you authorize the Company and/or your Employer to withhold all applicable Tax-Related Items legally payable by you from your compensation paid to you by the Company and/or your Employer or from proceeds of the sale of shares. Alternatively, or in addition, if permissible under local law, the Company may sell or arrange for the sale of shares that you acquire to meet the withholding obligation for Tax-Related Items. Finally, you will pay to the Company or your Employer any amount of Tax-Related Items that the Company or your Employer may be required to withhold as a result of your receipt of the Free Shares that cannot be satisfied by the means previously described. The Company may refuse to deliver the shares issuable upon vesting of the Free Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.
Section 409A of the Code
To the extent applicable, it is intended that this letter and the Terms and Conditions comply with or be exempt from the provisions of Section 409A of the U.S. Code. This letter and the Terms and Conditions shall be administered in a manner consistent with this intent, and any provision that would cause this letter or the Terms and Conditions to fail to satisfy Section 409A of the U.S. Code shall have no force or effect until amended to comply with or be exempt from Section 409A of the U.S. Code (which amendment may be retroactive to the extent permitted by Section 409A of the U.S. Code and may be made by the Company without your consent).
Clawback
Notwithstanding anything in this letter to the contrary, you acknowledge and agree that this letter and any compensation described herein (including any Free Shares) and any other compensation received from the Company or a member of the Innate Pharma Group are subject to the terms and conditions of the Company’s (or an affiliate’s) clawback policies (if any) as may be in effect from
time to time, including specifically as required to implement Section 10D of the U.S. Securities Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable stock exchange listing standards or rules and regulations).
As Beneficiary of the Free Shares, we inform you that you have the option to either accept or refuse this allocation. To this extent, we would be grateful if you could specify your choice by ticking the appropriate box in the form below.
We also ask you to countersign this letter and return it to the Company at its registered office before [•], failing which your acceptance of the [•] Free Shares and the Terms and Conditions will be deemed to have been accepted.
We thank you in advance for your time.
Best regards,
________________________________
[•]
Chairman of the Executive Board
* *
*
FORM
As a Beneficiary of the Free Shares:
I expressly accept the Allocation and all the Terms and Conditions (which have been communicated to me by e-mail).
I expressly waive the allocation of the [•] Free Shares offered to me.
________________________________
[•]
Appendix 2
Adjustment rules
Pursuant to Article L. 228-98 of the French Commercial Code,
(i)the Company will have the right to change its legal form or its object without prior approval of the Beneficiaries;
(ii)the Company will have the right, without prior approval of the Beneficiaries, to modify the rules for distributing its profits, amortize its capital or create preference shares leading to such a change or write-off, subject to having taken the necessary steps to maintain his or her rights in accordance with Article L. 228-98 3° of the French Commercial Code; and
(iii)in the event of its capital being reduced, on account of losses, through a reduction in the nominal value or the number of the shares comprising the capital, the rights of the Beneficiaries will consequently be reduced, as if his or her Free Shares had been definitely allocated to him or her before the date on which the reduction of capital became final. In the event of the capital being reduced through a reduction in the number of the shares, the new number of Free Shares that may be definitely allocated to the Beneficiaries will be equal to the previous number multiplied by the following ratio:
| | |
| Number of shares composing the share capital after the operation |
| Number of shares composing the share capital before the operation |
Furthermore, at the end of the following operations:
financial operations with listed subscription preferential right or free allocation of listed warrants;
free allocation of shares to the shareholders, consolidation or division of shares;
incorporation of reserves, profit or premiums through an increase in the nominal amount of the shares;
distribution of reserves or premiums in cash or in kind;
free allocation to the shareholders of any securities other than the Company’s shares;
change in the distribution of profits and/or creation of preference shares;
share capital amortisation;
that the Company may carry out after the Allocation, when the Inscription Date (as defined below) is fixed on a date preceding the date of the Definitive Vesting, the rights of the Beneficiaries will be maintained by adjusting the number of Free Shares which may be definitely allocated to the Beneficiaries in accordance with the terms below.
The “Inscription Date” is the date on which the ownership of the shares of the Company is fixed in order to determine which shareholders will benefit from the operation.
In case of adjustments to be carried out pursuant to paragraphs below, the new number of Free Shares shall be rounded down to the nearest whole number of Free Shares. The potential
following adjustments will be carried out on the basis of such new number of Free Shares so determined and rounded. Furthermore, any adjustments carried out pursuant to this Appendix 2 must comply with Section 409A of the U.S. Code.
1In the event of financial operations with listed preferential subscription right:
The new number of Free Shares which may be definitely allocated to the Beneficiaries shall be equal to the former number, multiplied by the following ratio:
| | |
Value of the share after detachment of the preferential subscription right
+ Value of the preferential subscription right |
| Value of the share after detachment of the preferential subscription right |
For the purposes of calculating this ratio, the values of the share after detachment of the preferential subscription right and of the preferential subscription right shall be equal to the arithmetic average of their first trading prices quoted on the regulated market of Euronext in Paris (“Euronext Paris”) (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares of the Company or the preferential subscription rights are listed) for the all trading days within the subscription period.
2In the event of financial operations realised by free allocation of listed warrants to the benefit of the shareholders with the right to participate in a placement of securities created through the exercise of the warrants not exercised by their owners subsequent to the subscription period open to them:
The new number of Free Shares which may be definitely allocated to the Beneficiaries shall be equal to the former number, multiplied by following ratio:
| | |
Value of the share after the detachment of the warrant
+ Value of the warrant |
| Value of the share after detachment of the warrant |
For the purposes of calculating this ratio:
the value of the share after detachment of the warrant shall be equal to the volume-weighted average of (i) the prices of the Company’s shares quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) during all the trading days within the subscription period and, (ii) (a) the disposal price for the securities disposed in connection with the placement, if these are shares equivalent to the existing shares of the Company, allocating to the disposal price the volume of shares disposed in connection with the placement or (b) the prices of the Company’s shares quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) at the date on which the disposal price for the securities disposed in connection with the placement is determined if these are not shares equivalent to the existing shares of the Company;
the value of the warrant shall be equal to the volume-weighted average of (i) the price of the warrants quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the warrants are listed) during all the trading days within the subscription period and, (ii) the implied value of the warrants resulting from the disposal price for the securities disposed in connection with the placement, which is the difference (if positive), adjusted by the exercise parity of the warrant, between the disposal price for the securities disposed in connection with the placement and the subscription price of the securities upon exercise of the warrants, by allocating to this value the corresponding volume of the warrants exercised to allocate the securities disposed in connection with the placement.
3In the event of free allocation of shares to the shareholders, and in case of division or consolidation of the shares:
The new number of Free Shares which may be definitely allocated to the Beneficiaries shall be equal to the former number, multiplied by the following ratio:
| | |
| Number of shares composing the share capital after the operation |
| Number of shares composing the share capital before the operation |
|
4In the event of distribution of reserves or premiums in cash or in kind:
The new number of Free Shares which may be definitely allocated to the Beneficiaries shall be equal to that former number, multiplied by the following ratio:
| | |
| Value of the share before the distribution |
| Value of the share before the distribution – Amount of the distribution per share or value of the securities or value of the assets delivered per share |
For the purposes of calculating this ratio:
the value of the share before the distribution shall be equal to the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed ) for the last three trading days preceding the date on which the shares are quoted ex-distribution;
if the distribution is made in kind:
•in the case of distribution of listed securities on a regulated market or similar market, the value of the distributed securities will be determined as mentioned above;
•in the case of distribution of securities not listed on a regulated market or similar market, the value of the delivered securities shall be equal, if they were to be listed on a regulated market or similar market during the ten trading days beginning on the date on which the shares are quoted ex-distribution, to the volume-weighted average of the prices quoted on such
market for the first three trading days on which the securities are listed during such period; and
•in the other cases (distributed securities not listed on a regulated market or similar market or listed for less than three trading days within the ten trading days period mentioned above or in the case of the distribution of assets), the value per share of the securities or the assets distributed will be determined by an internationally-renowned independent adviser to be appointed by the Company.
5In the event of free allocation of securities other than the Company’s shares:
The new number of Free Shares which may be definitely allocated to the Beneficiaries shall be equal to the former number, multiplied by the following ratio:
10.1If the right to free allocation of securities is listed on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market):
| | |
Value of the share ex-free allocation right + Value of the free allocation right |
| Value of the share ex-free allocation right |
For the purposes of calculating this ratio:
•the value of the share ex-free allocation right shall be equal to the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares ex-free allocation right are listed) of the share ex-free allocation right for the first three trading days beginning on the date on which the Company’s shares are listed ex-free allocation right;
•the value of free allocation right shall be determined as indicated in the paragraph above. If the free allocation right is not listed for each of the three trading days, its value will be determined by an internationally-renowned independent adviser to be appointed by the Company.
10.2If the right to free allocation of securities is not listed on Euronext Paris (or on another regulated market or similar market):
| | |
Value of the share ex-free allocation right + Value of the securities allocated per share |
| Value of the share ex-free allocation right |
For the purposes of calculating this ratio:
•the value of the share ex-free allocation right will be determined in accordance with paragraph 5.1 above;
•if the allocated securities are listed or are expected to be listed on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market) within a ten trading days period beginning on the date on which the
shares are quoted ex-distribution, the value per share of the securities allocated shall be equal to the volume-weighted average of the such securities prices quoted on such market for the first three trading days on which the securities are listed during such period. If the allocated securities are not listed during each of the three trading days, the value per share of the allocated securities shall be determined by an internationally-renowned independent adviser to be appointed by the Company.
6In the event of a change by the Company in the distribution of profits and/or the creation of preference shares:
The new number of Free Shares which may be definitely allocated to the Beneficiaries shall be equal to the former number, multiplied by the following ratio:
| | |
Value of the share before the change |
Value of the share before the change – Reduction of the right to profits per share |
For the purposes of calculating this ratio:
•the value of the share before the change will be determined by using the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) for the last three trading days preceding the date of the change;
•the reduction of the right to profits per share will be determined by an independent adviser appointed by the Company.
Notwithstanding the above, if such preference shares are issued with preferential subscription rights or through a free allocation to shareholders of warrants for such preference shares, the new exercise parity shall be adjusted in accordance with paragraphs 1 or 5 above.
7In the case of an amortisation of share capital:
The new number of Free Shares which may be definitely allocated to the Beneficiaries shall be equal to the former number, multiplied by the following ratio:
| | |
| Value of the share before the amortisation |
| Value of the share before the amortisation – Value of the amortisation per share |
For the purposes of calculating this ratio, the share value before the amortisation shall be equal to the volume-weighted average of the prices quoted on Euronext Paris (or, in the absence of trading on Euronext Paris, on another regulated market or similar market on which the shares are listed) for the last three trading days preceding the date on which the shares are listed ex-amortisation.
| | |
11 September 2024 To: Innate Pharma S.A. a société anonyme à Directoire et Conseil de Surveillance organised under the laws of France Registered office: 117, avenue de Luminy – 13009 Marseille – France 424 365 336 RCS Marseille (the "Company") |
CMS Francis Lefebvre Avocats 2, rue Ancelle 92522 Neuilly-sur-Seine Cedex France T: +33 1 47 38 55 00 cms.law/fl |
Re. Registration Statement on Form S-8 of Innate Pharma S.A. (the "Registration Statement")
OPINION LETTER
We have acted as legal advisers (avocats) to the Company for the preparation and filing by the Company with the U.S. Securities and Exchange Commission (the "Commission") of the Registration Statement under the Securities Act of 1933, as amended (the "Securities Act").
The Registration Statement provides for the registration by the Company of up to 3,075,000 of the Company's ordinary shares, €0.05 nominal value per share (the "Ordinary Shares"), including Ordinary Shares that may be issued and/or delivered in the form of American Depositary Shares (together with the Ordinary Shares, the "Securities"), pursuant to the "2024 Stock Option Plan", the "2024 Performance Free Shares Allocation Program" and the "2024 Free Shares Grant Program", as such plans are further described in the Registration Statement (together, the "Plans").
In connection with the preparation and filing of the Registration Statement, we have been asked to provide opinions on certain matters, as set out below. We have taken instructions solely from the Company.
For the purpose of this opinion letter:
(a)(Defined terms) except as otherwise defined herein, capitalised terms used in this opinion letter shall have the meaning ascribed to such terms in the Registration Statement;
(b)(Language) concepts of French law expressed in this opinion letter in English terms may not be identical to the concepts described by such English terms as they exist under the laws of
CMS Francis Lefebvre Avocats is a member of CMS Legal Services EEIG, a European Economic Interest Grouping that coordinates an organisation of independent law firms.
CMS locations: Aberdeen, Abu Dhabi, Amsterdam, Antwerp, Barcelona, Beijing, Belgrade, Bergen, Berlin, Bogotá, Bratislava, Brisbane, Bristol, Brussels, Bucharest, Budapest, Casablanca, Cologne, Cúcuta, Dubai, Dublin, Duesseldorf, Edinburgh, Frankfurt, Funchal, Geneva, Glasgow, Gothenburg, Hamburg, Hong Kong, Istanbul, Johannesburg, Kyiv, Leipzig, Lima, Lisbon, Liverpool, Ljubljana, London, Luanda, Luxembourg, Lyon, Madrid, Manchester, Maputo, Mexico City, Milan, Mombasa, Monaco, Munich, Muscat, Nairobi, Oslo, Paris, Podgorica, Poznań, Prague, Reading, Rio de Janeiro, Riyadh, Rome, Santiago de Chile, São Paulo, Sarajevo, Shanghai, Sheffield, Singapore, Skopje, Sofia, Stavanger, Stockholm, Strasbourg, Stuttgart, Tel Aviv, Tirana, Vienna, Warsaw, Zagreb and Zurich. cms.law/fl
Head Office: CMS Francis Lefebvre Avocats – Avocats au Barreau des Hauts-de-Seine – 2 rue Ancelle, 92522 Neuilly-sur-Seine Cedex. S.E.L.A.F.A. à Directoire et Conseil de Surveillance au capital de 39 180 € – 722 047 164 R.C.S. Nanterre – Ident. TVA FR 69 722 047 164
jurisdictions other than France. In this opinion letter, those concepts have the meaning which French law ascribes to them, irrespective of their translation into English; and
(c)(Formal statement) this opinion letter is a formal statement of opinion as to French law as set out in section 4 of this opinion letter. It shall not be treated as a substitute for comprehensive legal advice in connection with the Corporate Documents (as defined and listed in the Schedule hereto) and/or the Registration Statement and the transactions contemplated thereby.
1.EXAMINED DOCUMENTS
For the purposes of the opinions set out in section 4 of this opinion letter, we have relied, without independent investigation, solely on the Corporate Documents and the Registration Statement.
1.SCOPE OF OPINION
(a)(Express matters) This opinion letter is strictly limited to the matters expressly referred to in section 4 of this opinion letter, subject to the assumptions expressed in section 3 of this opinion letter and as qualified by the qualifications and reservations set out in section 5 of this opinion letter and shall not be construed as extending to any other matters whatsoever in connection with the transactions referred to in the Corporate Documents, the Registration Statement, the Company or otherwise;
(b)(French law and legal matters) this opinion letter:
(i)is strictly limited to French law as applied and interpreted by the case law of the French constitutional court (Conseil constitutionnel), French supreme civil court (Cour de cassation), or French supreme administrative court (Conseil d'Etat) in force and published as of the date hereof; and
(ii)relates to questions of law only;
(c)(Data and calculation) we express no opinion as to any data, information, calculation and details of a factual, accountancy, economic, financial or statistical nature contained in the Corporate Documents and/or the Registration Statement;
(d)(No due diligence) we have not carried out any due diligence in relation to any contract, agreement or other document referred to in the Corporate Documents and/or the Registration Statement;
(e)(Tax issues) we express no opinion as to any matter relating to any tax issues, or more generally any matter of tax law, except as expressly stated hereunder; and
(f)(Sanctions) we express no opinion as to the effect of any sanctions or other similar restrictive measures in relation to the Plans and the subsequent issuance of Securities.
2.ASSUMPTIONS
This opinion letter is based on the following assumptions:
(a)(Corporate Documents) the Corporate Documents examined by us are and, at the time of the issue of the Ordinary Shares, will remain, complete and up-to-date;
(b)(Authorizations) the resolutions authorizing the Company to issue and/or deliver the Securities, as they have been adopted, or will be adopted, as the case may be, by the extraordinary
shareholders' meeting of the Company, the Supervisory Board (Conseil de surveillance) of the Company and the Executive Board (Directoire) of the Company, will be in full force and effect at all times at which the Securities are issued by the Company;
(c)(Issuance of Securities) the definitive terms of the issuance of the Securities will have been established in accordance with the resolutions adopted by the extraordinary shareholders' meeting of the Company, the Supervisory Board (Conseil de surveillance) of the Company and the Executive Board (Directoire) of the Company, the Company's by-laws (statuts) and applicable law;
(d)(Issuance limits) the Company will issue and/or deliver the Securities in the manner contemplated in the Registration Statement and the amount of Securities will remain within then applicable limits set forth in the applicable resolutions adopted by the extraordinary shareholders' meeting of the Company, the Supervisory Board (Conseil de surveillance) of the Company and the Executive Board (Directoire);
(e)(Agreement) any agreement or undertaking relating to the Securities will constitute legally binding, valid and enforceable obligations of each party thereto under all applicable laws; and
(f)(Compliance with laws) all Securities will be issued and/or delivered in compliance with applicable securities and corporate law.
3.OPINION
Based on the foregoing, the Corporate Documents and the Registration Statement and subject to qualifications and reservations set out below and to any matters not disclosed to us, we are of the opinion that:
(a)the issuance and delivery of the new Ordinary Shares and the delivery of existing Ordinary Shares, as applicable, that may be issued and/or delivered pursuant to, as applicable, the 2024 Stock Option Plan, the 2024 Performance Free Shares Allocation Program and the 2024 Free Shares Grant Program, have been duly authorized by the extraordinary shareholders' meeting of the Company and the Supervisory Board (Conseil de surveillance) of the Company; and
(b)such new Ordinary Shares and existing Ordinary Shares will be validly issued, fully paid, non-assessable and/or delivered (as applicable):
(w) when the Executive Board (Directoire) of the Company will have duly (i) adopted the terms and conditions of, as applicable, the 2024 Stock Option Plan, the 2024 Performance Free Shares Allocation Program and the 2024 Free Shares Grant Program, and (ii) decided the grant of the corresponding awards thereunder in accordance with the resolutions and decisions referred to in paragraphs (iv)(a), (iv)(b) and (iv)(c) of Schedule 2 and French law;
(x) subject to the beneficiaries of the corresponding awards having accepted such awards;
(y) subject to being definitively vested in accordance with the terms and conditions of, as applicable, the 2024 Stock Option Plan, the 2024 Performance Free Shares Allocation Program and the 2024 Free Shares Grant Program; and
(z) only with respect to the Ordinary Shares to be issued and/or delivered (as applicable) pursuant to the 2024 Stock Option Plan, subject to the stock options being exercised and the exercise price paid.
4.QUALIFICATIONS AND RESERVATIONS
This opinion letter is subject to the following qualifications and reservations:
(a)(Facts) without limiting the generality of the foregoing, we have made no investigation as to the accuracy and exhaustiveness of the facts (including statements of foreign law) contained in any of the Corporate Documents and/or the Registration Statement;
(b)(Insolvency proceedings) this opinion is subject to any limitation arising from ad hoc mandate (mandat ad hoc), conciliation (conciliation), accelerated safeguard (sauvegarde accélérée), safeguard (sauvegarde), judicial reorganisation (redressement judiciaire), judicial liquidation (liquidation judiciaire) (including a provision that creditors' proofs of debts denominated in foreign currencies would be converted into euros at the rate applicable on the date of the court decision instituting the accelerated safeguard (sauvegarde accélérée), the safeguard (sauvegarde), the judicial reorganisation (redressement judiciaire) and the judicial liquidation (liquidation judiciaire) proceedings), insolvency, moratorium and other laws of general application affecting the rights of creditors;
(c)(Accuracy of official documents) K-bis extracts (extraits K-bis) from a trade and companies registry (registre du commerce et des sociétés) issued on a given date in relation to a given company may not reveal with certainty any change affecting the status of the Company as, in practice, the recording of such changes may not be carried out immediately and, even if such recording has been carried out, such information is not necessarily immediately reflected in the relevant K-bis extract (extrait K-bis); it should also be noted that the opening of ad hoc mandate (mandat ad hoc) or conciliation (conciliation) proceedings never appears on such document;
(d)(Admissibility as evidence) for any document which is not originally written, issued and executed in the French language, the document must be translated into the French language by a sworn translator (traducteur assermenté) of the Court of Appeal in order to be filed or submitted as evidence before a French court;
(e)(Jurisdiction) a French court may remove a case to another court in the event that a dispute has been raised before courts having concurrent jurisdiction (litispendance) or in the event of a relationship existing between the two cases before the two distinct jurisdictions; and
(f)(Certificates) a calculation, certification, determination, notification, or opinion to be made by a party may be held by French courts to be inconclusive if not supported by other evidence provided independently or if it could be shown to have an unreasonable or arbitrary basis or in the event of manifest error despite any provision in any document to the contrary and any provision providing that such calculation, certification, determination, notification, or opinion is conclusive and binding will not be enforceable if it is fraudulent, unreasonable, arbitrary or not made in good faith.
5.RELIANCE
This opinion letter is addressed to the Company solely for its own benefit in connection with the Registration Statement and, except with our prior written consent, is not to be transmitted or disclosed
to or used or relied upon by any other person or used or relied upon by the Company for any other purpose or quoted or referred to in any public document (other than the Registration Statement) or filed with anyone other than with the Commission as an exhibit to the Registration Statement.
By way of exception to the foregoing, we hereby consent to the filing with the Commission of this opinion as Exhibit 5.1 to the Registration Statement. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.
6.DISPUTES
This opinion letter shall be governed by French law as in force on the date hereof and any dispute relating to, without limitation, the interpretation of this opinion letter shall be subject to the jurisdiction of the competent courts (tribunaux) of Paris.
Yours sincerely,
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/s/ Bertrand Sénéchal
Bertrand Sénéchal Avocat Associé CMS Francis Lefebvre |
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SCHEDULE - LIST OF CORPORATE DOCUMENTS
For the purposes of the present opinion letter the "Corporate Documents" are:
(i)an electronic version of a K-bis extract (extrait K-bis) from the registre du commerce et des sociétés (Infogreffe) of Marseille up-to-date as of 10 September 2024 relating to the Company;
(ii)a copy of the by-laws (statuts) of the Company dated 10 June 2024;
(iii)an electronic version of a certificate of insolvency (certificat en matière de procédure collective) from the registre du commerce et des sociétés (Infogreffe) of Marseille up-to-date as of 10 September 2024 relating to the Company; and
(iv)copies of the minutes of corporate approvals of the Company authorising the Plans, and with respect to:
(a)2024 Stock Option Plan:
(x) the twenty-fourth resolution of the Combined General Meeting of shareholders (Assemblée Générale Mixte des actionnaires) of the Company passed on 23 May 2024, authorising the allocation of stock options for the benefit of employees, executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the Company or its subsidiaries; and
(y) the decision of the Supervisory Board (Conseil de Surveillance) of the Company passed on 23 May 2024 authorizing the Executive Board (Directoire) to make use of the aforementioned twenty-fourth resolution of the Combined General Meeting of shareholders (Assemblée Générale Mixte des actionnaires) of the Company passed on 23 May 2024;
(b)2024 Performance Free Shares Allocation Program:
(x) the twenty-fifth and twenty-sixth resolutions of the Combined General Meeting of shareholders (Assemblée Générale Mixte des actionnaires) of the Company passed on 23 May 2024, authorising the allocation of (i) existing or new free shares on the basis of performance criteria for the benefit of executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the Company or its subsidiaries, and (ii) existing or new free shares on the basis of performance criteria for the benefit of employees of the Company or its subsidiaries; and
(y) the decision of the Supervisory Board (Conseil de Surveillance) of the Company passed on 23 May 2024 authorizing the Executive Board (Directoire) to make use of the aforementioned twenty-fifth and twenty-sixth resolutions of the Combined General Meeting of shareholders (Assemblée Générale Mixte des actionnaires) of the Company passed on 23 May 2024;
(c)2024 Free Shares Grant Program:
(x) the twenty-seventh resolution of the Combined General Meeting of shareholders (Assemblée Générale Mixte des actionnaires) of the Company passed on 23 May 2024, authorising the allocation of existing or new free shares for the
benefit of executive officers, employed members of the Executive Committee, employed senior executives and/or corporate officers of the Company or its subsidiaries; and
(y) the decision of the Supervisory Board (Conseil de Surveillance) of the Company passed on 23 May 2024 authorizing the Executive Board (Directoire) to make use of the aforementioned twenty-seventh resolution of the Combined General Meeting of shareholders (Assemblée Générale Mixte des actionnaires) of the Company passed on 23 May 2024; and
(v)draft terms and conditions of the 2024 Stock Option Plan, the 2024 Performance Free Shares Allocation Program and the 2024 Free Shares Grant Program.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-8, of our report dated April 3, 2024, relating to the consolidated financial statements of Innate Pharma and its subsidiary (the “Company”) appearing in the Annual Report on Form 20-F of the Company for the year ended December 31, 2023.
/s/ Deloitte & Associés
Paris - La Défense, France
September 11, 2024
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