| Share capital and share based payments | Share capital and share based payments a) Share capital The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. The Company has never declared or paid any dividends on its ordinary shares. The Company does not anticipate paying cash dividends on its equity securities in the foreseeable future and intend to retain all available funds and any future earnings for use in the operation and expansion of its business, given our state of development. As of December 31, 2022, the Company’s share capital amounted to €4,011,308 divided into (i) 79,542,627 ordinary shares, each with a nominal value of €0.05, (ii) 6,881 “2016” free preferred shares, each with a nominal value of €0.05 and (iii) 7,581 “2017” free preferred shares, each with a nominal value of €0.05, respectively fully paid up. Share capital does not include BSAs, BSAAR,AGAs and AGAPs that have been granted to certain investors or natural persons, both employees and non-employees of the Company, but not yet exercised. In October 21, 2019 and December 30, 2019, the retention period for the “2016 free preferred shares” has ended. The number of ordinary shares to which the conversion of one preferred share entitle has been determined according to the fulfillment of the performance criteria. Holders of “2016” preferred shares” are entitled to vote at our shareholders’ meetings, to dividends and to preferential subscription rights, on the basis of the number of ordinary shares to which they are entitled if they convert their preferred shares. In April 3, 2021, the retention period for the "2017 free preferred shares" has ended. The number of ordinary shares to which the conversion of one preferred share entitle has been determined according to the fulfillment of the performance criteria. According to these same performance criteria, the Executive Board of April 7, 2021 noted that the "2017 preferred shares" did not give right to any ordinary shares. The “2017 preferred shares” will not be redeemed by the Company and will remain incorporated into the capital, unless subsequently decided by the Executive Board. As the conversion is void, the "2017 preferred shares" no longer give the right to vote at our general meetings, nor to receive dividends. The table below presents the historical changes in the share capital of the Company as of December 31, 2020, 2021 and 2022, respectively: Number of Date Nature of the Transactions Share Capital Share premium Common shares Preferred shares Nominal value Balance as of January 1, 2020 3,941,281 369,617,017 78,811,114 14,507 €0.05 January 15, 2020 Capital increase by issuance of common shares (exercise of share warrants) 75 2,985 1,500 €0.05 January 27, 2020 Capital increase by issuance of common shares (definitive acquisition of free shares ) 4,283 (4,283) 85,650 €0.05 July 7, 2020 Capital increase by issuance of common shares (exercise of share warrants) 1,250 43,000 25,000 €0.05 July 13, 2020 Capital increase by issuance of common shares (definitive acquisition of free shares ) 2,869 (2,869) 57,376 €0.05 September 11, 2020 Capital increase by issuance of common shares (conversion of preferred shares in common shares) 32 (32) 650 (5) €0.05 September 24, 2020 Capital increase by issuance of common shares (conversion of preferred shares in common shares) 226 (226) 4,550 (35) — December 31, 2020 Capital increase by issuance of common shares (conversion of preferred shares in common shares) 32 (32) 650 (5) €0.05 December 31, 2020 Share based payments — 2,475,422 — €0.05 December 31, 2020 3,950,048 372,130,982 78,986,490 14,462 €0.05 (1) Share issuance costs representing incremental expenses directly attributable to the offering of new shares in the IPO on the Nasdaq and in the European Private Placement (together the “Global Offering”) were recorded through equity for an amount of €621 thousand. They consist mainly of legal, financial, accounting and printing fees associated with drafting and filing the registration statement of Innate Pharma. The other incremental costs incurred in the Global Offering were expensed for an amount of €2,150 thousand. Number of Date Nature of the Transactions Share Capital Share premium Common shares Preferred shares Nominal value Balance as of January 1, 2021 3,950,048 372,130,982 78,986,490 14,462 €0.05 June 4, 2021 Capital increase by issuance of common shares (exercise of share warrants) 1,500 59,700 30,000 — €0.05 July 7, 2021 Capital increase by issuance of common shares (exercise of share warrants) 222 7,637 4,440 — €0.05 July 19, 2021 Capital increase by issuance of common shares (conversion of preferred shares in common shares) 548 (548) 11,050 (85) €0.05 July 22, 2021 Capital increase by issuance of common shares (definitive acquisition of free shares ) 2,418 (2,418) 48,362 — €0.05 July 22, 2021 Capital increase by issuance of common shares (exercise of share warrants) 625 21,500 12,500 — €0.05 August 6, 2021 Capital increase by issuance of common shares (exercise of share warrants) 10,000 398,000 200,000 — €0.05 December 31, 2021 Capital increase by issuance of common shares (conversion of preferred shares in common shares) 1,819 (1,819) 36,660 (282) €0.05 December 31, 2021 Capital increase by issuance of common shares (definitive acquisition of free shares ) 10,656 (10,656) 213,125 — €0.05 December 31, 2021 Share based payments — 2,617,289 — — December 31, 2021 3,977,836 375,219,667 79,542,627 14,095 €0.05 Number of Date Nature of the Transactions Share Capital Share premium Common shares Preferred shares Nominal value Balance as of January 1, 2022 3,977,836 375,219,667 79,542,627 14,095 €0.05 February 14, 2022 Capital increase by issuance of common shares (exercise of share warrants) 38 1,493 750 — €0.05 February 14, 2022 Capital increase by issuance of common shares 2,316 187,596 46,320 — €0.05 February 14, 2022 Capital increase by issuance of common shares (definitive acquisition of free shares ) 6,948 (6,948) 138,960 — €0.05 April 22, 2022 Capital increase by issuance of common shares (definitive acquisition of free shares ) 1,250 (1,250) 25,000 — €0.05 July 13, 2022 Capital increase by issuance of common shares (definitive acquisition of free shares ) 681 (681) 13,614 — €0.05 July 25, 2022 Capital increase by issuance of common shares (exercise of share warrants) 6,287 (6,287) 125,748 — €0.05 December 16, 2022 Subsciption of share warrants — 9,995 — — €— November 7, 2022 Capital increase by issuance of common shares (conversion of preferred shares in common shares) 15,953 (15,953) 319,050 — €0.05 December 31, 2022 Share based payments — 4,249,113 — — — December 31, 2022 4,011,308 379,636,744 80,212,069 14,095 €0.05 Holding by the Company of its own shares The Company held 18,575 of its own shares as of December 31, 2022. b) Share based payments The Company has issued BSAs, BSAARs, stock options, AGAs and AGAPs as follows as of December 31, 2020, 2021 and 2022, respectively: : Date Types Number of warrants issued as of 12/31/2020 Number of warrants void as of 12/31/2020 Number of warrants exercised as of 12/31/2020 Number of warrants outstanding as of 12/31/2020 Maximum number of shares to be issued as of 12/31/2020 Exercise price per share (in €) Sept. 9, 2011 BSAAR 2011 650,000 — 395,000 255,000 255,000 €2.04 May 27, 2013 BSAAR 2012 146,050 — 85,950 60,100 60,100 €2.04 July 1, 2015 BSAAR 2015 1,050,382 2,720 1,940 1,045,722 1,045,722 €7.20 October 21, 2016 AGAP Management 2016-1 2,000 550 — 1,450 188,500 €— October 21, 2016 AGAP Employees 2016-1 2,486 251 50 2,185 284,050 €— October 21, 2016 AGA Management 2016-1 50,000 — 50,000 — — €— December 30, 2016 AGAP Management 2016-2 3,000 — — 3,000 333,000 €— December 30, 2016 AGA Management 2016-2 250,000 — 250,000 — — — April 3, 2018 AGAP Employees 2017-1 5,725 833 — 4,892 489,200 — April 3, 2018 AGAP Management 2017-1 2,400 800 — 1,600 160,000 — April 3, 2018 AGA Employees 2017 114,500 4,000 110,500 — — — July 3, 2018 AGA Bonus 2018-1 67,028 469 66,559 — — — November 20, 2018 AGAP Perf Employees 2018-1 327,500 85,000 — 242,500 242,500 — November 20, 2018 AGAP Perf Management 2018-1 260,000 60,000 — 200,000 200,000 — January 14, 2019 AGA Employees 2018 90,650 5,000 85,650 — — — April 29, 2019 AGA New Members 2017-1 25,000 — — 25,000 25,000 — July 3, 2019 AGA Bonus 2019-1 57,376 — 57,376 — — — November 4, 2019 AGAP 2019 Employees 2019 546,700 86,100 — 460,600 460,600 — November 4, 2019 AGAP 2019 Management 2019 355,000 30,000 — 325,000 325,000 — July 13, 2020 AGA Bonus 2020-1 79,861 — — 79,861 79,861 — August 5, 2020 AGA Perf Employees 2020-1 766,650 70,540 — 696,110 696,110 — August 5, 2020 AGA Perf Management 2020-1 710,000 — — 710,000 710,000 — July 21, 2020 Stock Options 2020-1 102,000 72,000 — 30,000 30,000 — July 29, 2011 BSA 2011-2 225,000 — 183,060 41,940 41,940 €1.77 July 17, 2013 BSA 2013 237,500 — 191,140 46,360 46,360 €2.36 July 16, 2014 BSA 2014 150,000 — 75,000 75,000 75,000 €8.65 April 27, 2015 BSA 2015-1 70,000 — — 70,000 70,000 €9.59 July 1, 2015 BSA 2015-2 14,200 — — 14,200 14,200 €14.05 September 20, 2017 BSA 2017 37,000 — — 37,000 37,000 €11.00 Total as of December 31, 2020 6,398,008 418,263 1,552,225 4,427,520 5,869,143 Date Types Number of warrants issued as of 12/31/2021 Number of warrants void as of 12/31/2021 Number of warrants exercised as of 12/31/2021 Number of warrants outstanding as of 12/31/2021 Maximum number of shares to be issued as of 12/31/2021 Exercise price per share (in €) Sept. 9, 2011 BSAAR 2011 650,000 25,000 625,000 — — €2.04 May 27, 2013 BSAAR 2012 146,050 — 85,950 60,100 60,100 €2.04 July 1, 2015 BSAAR 2015 1,050,382 2,720 1,940 1,045,722 1,045,722 €7.20 October 21, 2016 AGAP Management 2016-1 2,000 550 250 1,200 156,000 €— October 21, 2016 AGAP Employees 2016-1 2,486 251 167 2,068 268,840 €— October 21, 2016 AGA Management 2016-1 50,000 — 50,000 — — €— December 30, 2016 AGAP Management 2016-2 3,000 — — 3,000 333,000 €— December 30, 2016 AGA Management 2016-2 250,000 — 250,000 — — — April 3, 2018 AGAP Employees 2017-1 5,725 5,725 — — — — April 3, 2018 AGAP Management 2017-1 2,400 2,400 — — — — April 3, 2018 AGA Employees 2017 114,500 4,000 110,500 — — — July 3, 2018 AGA Bonus 2018-1 67,028 469 66,559 — — — November 20, 2018 AGAP Perf Employees 2018-1 327,500 224,375 103,125 — — — November 20, 2018 AGAP Perf Management 2018-1 260,000 150,000 110,000 — — — January 14, 2019 AGA Employees 2018 90,650 5,000 85,650 — — — April 29, 2019 AGA New Members 2017-1 25,000 — — 25,000 25,000 — July 3, 2019 AGA Bonus 2019-1 57,376 — 57,376 — — — November 4, 2019 AGAP 2019 Employees 2019 546,700 189,900 — 356,800 356,800 — November 4, 2019 AGAP 2019 Management 2019 355,000 30,000 — 325,000 325,000 — July 13, 2020 AGA Bonus 2020-1 79,861 17,885 48,362 13,614 13,614 — August 5, 2020 AGA Perf Employees 2020-1 766,650 249,826 — 516,824 516,824 — August 5, 2020 AGA Perf Management 2020-1 710,000 30,000 — 680,000 680,000 — July 22, 2021 AGA Bonus 2021-1 125,748 — — 125,748 125,748 — October 1, 2021 AGA Perf Employees 2021-1 1,066,600 17,500 — 1,049,100 1,049,100 — October 1, 2021 AGA Perf Management 2021-1 610,000 30,000 — 580,000 580,000 — July 21, 2020 Stock Options 2020-1 102,000 102,000 — — — — July 29, 2011 BSA 2011-2 225,000 25,000 200,000 — — €1.77 July 17, 2013 BSA 2013 237,500 — 191,140 46,360 46,360 €2.36 July 16, 2014 BSA 2014 150,000 — 75,000 75,000 75,000 €8.65 April 27, 2015 BSA 2015-1 70,000 — — 70,000 70,000 €9.59 July 1, 2015 BSA 2015-2 14,200 — — 14,200 14,200 €14.05 September 20, 2017 BSA 2017 37,000 — — 37,000 37,000 €11.00 Total as of December 31, 2021 8,200,356 1,112,601 2,061,019 5,026,736 5,778,308 Date Types Number of warrants issued as of 12/31/2022 Number of warrants void as of 12/31/2022 Number of warrants exercised as of 12/31/2022 Number of warrants outstanding as of 12/31/2022 Maximum number of shares to be issued as of 12/31/2022 Exercise price per share (in €) Sept. 9, 2011 BSAAR 2011 650,000 25,000 625,000 — — €2.04 May 27, 2013 BSAAR 2012 146,050 — 86,700 59,350 59,350 €2.04 July 1, 2015 BSAAR 2015 1,050,382 2,720 1,940 1,045,722 1,045,722 €7.20 October 21, 2016 AGAP Management 2016-1 2,000 550 250 1,200 156,000 €— October 21, 2016 AGAP Employees 2016-1 2,486 251 167 2,068 268,840 €— October 21, 2016 AGA Management 2016-1 50,000 — 50,000 — — €— December 30, 2016 AGAP Management 2016-2 3,000 — — 3,000 333,000 €— December 30, 2016 AGA Management 2016-2 250,000 — 250,000 — — — April 3, 2018 AGAP Employees 2017-1 5,725 5,725 — — — — April 3, 2018 AGAP Management 2017-1 2,400 2,400 — — — — April 3, 2018 AGA Employees 2017 114,500 4,000 110,500 — — — July 3, 2018 AGA Bonus 2018-1 67,028 469 66,559 — — — November 20, 2018 AGAP Perf Employees 2018-1 327,500 224,375 103,125 — — — November 20, 2018 AGAP Perf Management 2018-1 260,000 150,000 110,000 — — — January 14, 2019 AGA Employees 2018 90,650 5,000 85,650 — — — April 29, 2019 AGA New Members 2017-1 25,000 — 25,000 — — — July 3, 2019 AGA Bonus 2019-1 57,376 — 57,376 — — — November 4, 2019 AGAP 2019 Employees 2019 546,700 375,150 171,550 — — — November 4, 2019 AGAP 2019 Management 2019 355,000 207,500 147,500 — — — July 13, 2020 AGA Bonus 2020-1 & 2 79,861 17,885 61,976 — — — August 5, 2020 AGA Perf Employees 2020-1 766,650 286,306 — 480,344 480,344 — August 5, 2020 AGA Perf Management 2020-1 710,000 60,000 — 650,000 650,000 — July 22, 2021 AGA Bonus 2021-1 125,748 — 125,748 — — — October 1, 2021 AGA Perf Employees 2021-1 1,066,600 95,600 — 971,000 971,000 — October 1, 2021 AGA Perf Management 2021-1 610,000 90,000 — 520,000 520,000 — February 12, 2022 AGA "Plan Epargne Entreprise" 2022 138,960 — 138,960 — — — October 3, 2022 AGA Bonus 2022-1 128,061 — — 128,061 128,061 €— December 12, 2022 AGA Perf Employees 2022-1 1,371,500 — — 1,371,500 1,371,500 €— December 12, 2022 AGA Perf Management 2022-1 550,000 — — 550,000 550,000 €— July 21, 2020 Stock Options 2020-1 102,000 102,000 — — — €— July 29, 2011 BSA 2011-2 225,000 25,000 200,000 — — €1.77 July 17, 2013 BSA 2013 237,500 — 191,140 46,360 46,360 €2.36 July 16, 2014 BSA 2014 150,000 — 75,000 75,000 75,000 €8.65 April 27, 2015 BSA 2015-1 70,000 — — 70,000 70,000 €9.59 July 1, 2015 BSA 2015-2 14,200 — — 14,200 14,200 €14.05 September 20, 2017 BSA 2017 37,000 — — 37,000 37,000 €11.00 December 16, 2022 BSA 2022-1 40,000 31,740 — 8,260 8,260 €2.31 Total as of December 31, 2022 10,428,877 1,711,671 2,684,141 6,033,065 6,784,637 AGA Details of AGA AGAP Management 2016-1 AGAP Employees 2016-1 AGA Management 2016-1 AGA Employees 2016-1 AGAP Management 2016-2 Date of grant (Board of Directors) October 21, 2016 October 21, 2016 October 21, 2016 October 21, 2016 October 21, 2016 Vesting period (years) 1 year 1 year 3 years 1 year 1 year Non transferability period 2 years after the vesting period end 2 years after the vesting period end None 2 years after the vesting period end 2 years after the vesting period end Number of free shares granted 2,000 2,486 50,000 99,932 3,000 Share entitlement per free share 130 (1) 130 (1) 1 1 111 Grant date share fair value €10.87 €10.87 €10.87 €10.87 €12.73 Expected dividends None None None None None Performance conditions Yes Yes None None Yes Expected turnover (yearly basis) 5 % 5 % — 5 % 9 % Volatility 40 % 40 % — — 40 % Fair value per AGA €911 €911 €10.55 €10.55 €956 In October 21, 2019 and December 30, 2019, the retention period for the “2016 free preferred shares” has ended. The number of ordinary shares to which the conversion of one preferred share entitle has been determined according to the fulfilment of the performance criteria. Holders of “2016” preferred shares” are entitled to vote at our shareholders’ meetings, to dividends and to preferential subscription rights, on the basis of the number of ordinary shares to which they are entitled if they convert their preferred shares. AGA Management 2016-2 AGA Employees 2016-2 AGA Bonus 2017 AGA Employee 2017 AGAP Employees 2017-1 Date of grant (Board of Directors) December 30, 2016 December 30, 2016 September 20, 2017 April 3, 2018 April 3, 2018 Vesting period (years) 3 years 1 year 1 year 1 year 1 year Non transferability period None 2 years after the vesting period end 1 year after the vesting period end 1 year after the vesting period end 2 years after the vesting period end Number of free shares granted 250,000 149,943 114,500 28,556 5,725 Share entitlement per free share 1 1 1 1 100 Grant date share fair value €12.73 €12.73 €5.52 €10.90 €5.52 Expected dividends None None None None None Performance conditions None None Yes None Yes Expected turnover (yearly basis) — 5 % 4 — % 5 % Volatility — — 55 — % 55 % Fair value per AGA €14.61 €10.55 €5.83 €10.30 €90 AGAP Management 2017 AGA Bonus 2018 AGA Perf Employees 2018 AGA Perf Management 2018 AGA New Members 2017-1 Date of grant (Board of Directors) April 3, 2018 July 3, 2018 November 20, 2018 November 20, 2018 April 29, 2019 Vesting period (years) 1 year 1 year 3 years 3 years 3 years Non transferability period 2 years after the vesting period end 1 year after the vesting period end None None None Number of free shares granted 2,400 67,028 327,500 260,000 25,000 Share entitlement per free share 100 1 1 1 1 Grant date share fair value €5.52 €5.06 €8.00 €8.00 €5.74 Expected dividends None None None None None Performance conditions Yes Yes Yes Yes No Expected turnover (yearly basis) 11 % — 4 % 10 % 10 % Volatility 55 % — 45 % 45 % — Fair value per AGA €90 €4.69 €3.81 €3.81 €5.74 AGA Employees 2018 AGA Bonus 2019-1 AGA Perf Employees 2019 AGA Perf Management 2019 AGA Bonus 2020 Date of grant (Board of Directors) January 14, 2019 July 3, 2019 November 4, 2019 November 4, 2019 July 13, 2020 Vesting period (years) 1 year 1 year 3 years 3 years 1 year Non transferability period 1 year after the vesting period end 1 year after the vesting period end None None 1 year after the vesting period end Number of free shares granted 90,650 57,376 546,700 355,000 79,861 Share entitlement per free share 1 1 1 1 1 Grant date share fair value €7.31 €5.90 €3.13 €3.13 €6.40 Expected dividends None None None None None Performance conditions No No Yes Yes No Expected turnover (yearly basis) 4.03 % — 10 % 10 % — % Volatility N/A — 45 % 45 % — % Fair value per AGA €7.31 €5.72 €3.13 €3.13 €6.40 AGA Perf Employees 2020-1 AGA Perf Management 2020-1 AGA Bonus 2021-1 AGA Perf Employees 2021-1 AGA Perf Management 2021-1 Date of grant (Board of Directors) August 5, 2020 August 5, 2020 July 22, 2021 October 1, 2021 October 1, 2021 Vesting period (years) 3.5 years 3.5 years 1 year 3.5 years 3.5 years Non transferability period None None 1 year None None Number of free shares granted 769,202 710,000 125,748 1,066,600 610,000 Share entitlement per free share 1 1 1 1 1 Grant date share fair value €2.94 €2.94 €3.43 €1.76 €1.76 Expected dividends None None None None None Performance conditions Yes Yes No Yes Yes Expected turnover (yearly basis) 10.00 % 10.00 — 13.32 13.32 Volatility 45.00 % 45.00 — 50.00 50.00 Fair value per AGA €2.94 €2.94 €3.43 €1.76 €1.76 AGA "Plan Epargne Entreprise" 2022 AGA Bonus 2022-1 AGA Perf Employees 2022-1 AGA Perf Management 2022-1 Date of grant (Board of Directors) February 12, 2022 October 3, 2022 December 12, 2022 December 12, 2022 Vesting period (years) None 1 year 3.1 years 3.1 years Non transferability period None None None None Number of free shares granted 138,960 128,061 1,371,500 550,000 Share entitlement per free share 1 1 1 1 Grant date share fair value €4.10 €3.89 €1.39 €1.39 Expected dividends None None None None Performance conditions No No Yes Yes Expected turnover (yearly basis) — % — 10.50 10.50 Volatility — % — 50.00 50.00 Fair value per AGA €4.10 €3.89 €1.39 €1.39 Change in Number of AGAs Outstanding Year ended December 31, Number of AGAs 2020 2021 2022 Balance at beginning of period 1,607,345 2,752,198 3,678,354 Granted during the period 1,556,511 1,802,348 2,188,521 Forfeited during the period (268,587) (614,338) (567,330) Exercised during the period (143,071) (261,854) (622,372) Expired during the period — — — Balance at end of period 2,752,198 3,678,354 4,677,173 Breakdown of the Closing Balance Year ended December 31, 2020 2021 2022 Number of AGAs Outstanding Outstanding Outstanding AGAP Management 2016-1 1,450 1,200 1,200 AGAP Employees 2016-1 2,185 2,068 2,068 AGAP 2016-2 3,000 3,000 3,000 AGAP Management 2017 1,600 — — AGAP Perf Employees 2018 242,500 — — AGAP Perf Management 2018 200,000 — — AGA New Members 2017-1 25,000 25,000 — AGA Perf Employees 2019-1 460,600 356,800 — AGA Perf Management 2019-1 325,000 325,000 — AGA Bonus 2020-1 79,861 13,614 — AGA Perf Employees 2020-1 696,110 516,824 480,344 AGA Perf Management 2020-1 710,000 680,000 650,000 AGA Bonus 2021-1 — 125,748 — AGA Perf Employees 2021-1 — 1,049,100 971,000 AGA Perf Management 2021-1 — 580,000 520,000 AGA Bonus 2022-1 — — 128,061 AGA Perf Employees 2022-1 — — 1,371,500 AGA Perf Management 2022-1 — — 550,000 TOTAL 2,752,198 3,678,354 4,677,173 The fair value of granted free shares is based on the closing price of the Company’s share at grant date, reduced when necessary by an estimated turn-over rate. This estimated fair value is recognized as operating expenses on a straight-line basis over the vesting period. Free performance shares 2018 (AGA Perf Employees 2018-1 and AGA Perf Management 2018-1) Free performance shares granted in 2018 are subject to share price conditions and a vesting kicker triggered by the performance of an internal condition, which is the success of certain clinical trials. The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of these free performance shares is presented below: • Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the share price using a Monte Carlo approach; • Adjustment of the estimation by applying expected turnover rates. Changes in internal conditions are taken into account in the revision of the estimated number of free performance shares expected to vest during the vesting period. On January 3, 2022, the Executive Board determined the achievement of the performance conditions and the final vesting of the free performance shares 2018 as of November 20, 2021. The underlying performance conditions were thus achieved at 55%, noting on November 20, 2021 the final acquisition of 103,125 “AGA Perf Employees 2018-1” as well as 110,000 “AGA Perf Management 2018-1”. Expenses were €618 thousand, €(232) thousand (income) the financial years ended December 31, 2020, and 2021 respectively. These instruments were definitively acquired during the 2021 financial year. Consequently, no expense relating to these plans was recognized during the financial year ended December 31, 2022. AGA 2018-1 (Employees) Expenses were €23 thousand for the financial year ended December 31, 2020, and respectively. These instruments were definitively acquired during the 2020 financial year. Consequently, no expense relating to these plans was recognized during the financial year ended December 31, 2021 and 2022, respectively. AGA 2017-1 Management (New Members) Expenses were €43 thousand, €71 thousand and nil for the financial years ended December 31, 2020 2021 and 2022, respectively. Free performance shares 2019 (AGA Perf Employees 2019-1 / AGA Perf Management 2019) Free performance shares granted in 2019 are subject to share price conditions and a vesting kicker triggered by the performance of an internal condition, which is Lumoxiti's market penetration rate in the United States. The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of these free performance shares is presented below: • Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the share price using a Monte Carlo approach; • Adjustment of the estimation by applying expected turnover rates. On November 7, 2022, the Executive Board determined the achievement of the performance conditions and the final vesting of the 2019 free performance shares as of November 4, 2022. The underlying performance conditions were thus achieved at 50%. Consequently, on November 7, 2022, the Executive Board carried out the definitive acquisition of 171,550 free performance shares under the "AGA Perf Management 2019-1" plans. . Expenses were €867 thousand, €649 thousand and €(181) thousand (income) for the financial years ended December 31, 2020, 2021 and 2022, respectively. Income relating to the 2022 financial year is explained by the review of the performance conditions during the 2022 financial year with regard to the definitive achievement of the vesting. Free performance shares 2020 (AGA Perf Employees 2020-1 / AGA Perf Management 2020) Free performance shares granted in 2020 are subject to share price conditions and two vesting kickers triggered by the performance of internal conditions, which are : • A commercial break-even point for Lumoxiti in the U.S. reached at the end of fiscal year 2023 (this criterion will not be met given the return of the commercial rights notified to AstraZeneca in December 2020). • Revenue from collaborative and licensing agreements accrued between the attribution and definitive acquisition date (excluding payment by AstraZeneca for the first patient in Phase 3 for monalizumab), reaching $100 million. The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of these free performance shares is presented below: • Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the share price using a Monte Carlo approach; • Adjustment of the estimation by applying expected turnover rates. Expenses were €502 thousand, €1,253 thousand and €1,738 thousand for the financial year ended December 31, 2020 2021 and 2022, respectively AGA Bonus 2020-1 AGA Bonus 2020 were granted to the Executive members Committee who opted for these compensation plans. For each recipient, the number of shares definitely acquired is equal to the cash equivalent of 50% of the annual variable compensation increased by a 30% premium. In the event of an over-performance (i.e. achieved target above 100%), the surplus is paid in cash. Expenses were €394 thousand for the financial year ended December 31, 2020. These instruments were definitively acquired during the 2021 financial year. Consequently, no expense relating to these plans were recognized during the financial years ended December 31, 2021 and 2022, respectively. Free performance shares 2021 (AGA Perf Employees 2021-1 / AGA Perf Management 2021-1) Free performance shares granted in 2021 are subject to share price conditions and two vesting kickers triggered by the performance of internal conditions, which are : • An interim analysis demonstrates a predefined threshold of clinical activity in the INTERLINK-1 study (phase 3 study evaluating monalizumab in combination with cetuximab in patients with squamous cell carcinoma of the head and neck and previously treated with chemotherapy). • Obtaining positive Phase 2 results for a product in the Company's portfolio. • The start of a first clinical trial for a product in the Company's portfolio The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of these free performance shares is presented below: • Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the share price using a Monte Carlo approach; • Adjustment of the estimation by applying expected turnover rates. Expenses were €473 thousand and €1,577 thousand for the financial years ended December 31, 2021 and 2022, respectively. AGA Bonus 2021-1 AGA Bonus 2021 were granted to the Executive members Committee who opted for these compensation plans. For each recipient, the number of shares definitely acquired is equal to the cash equivalent of 50% of the annual variable compensation increased by a 50% premium. In the event of an over-performance (i.e. achieved target above 100%), the surplus is paid in cash. Expenses were €432 thousand for the financial year ended December 31, 2021. Free performance shares 2022 (AGA Perf Employees 2022-1 / AGA Perf Management 2022-1) Free performance shares granted in 2022 are subject to share market capitalization and three vesting kickers triggered by the performance of internal conditions, which are : • The filing and approval of a BLA (Biologic License Application) application filed with the Food and Drug Administration ("FDA") in the United States or the European Medicine Agency ("EMEA") in Europe for one of the Company's products. • The start of a first clinical trial for a product from the Company's portfolio. • The conclusion of a collaboration or license agreement. The fair value of these free performance shares is based on a third-party valuation report. The valuation method used to estimate the fair value of these free performance shares is presented below: • Estimation of the expectation of gain associated with internal and share price conditions, made on the basis of a CAPM model of the share price using a Monte Carlo approach; • Adjustment of the estimation by applying expected turnover rates. Expenses were €46 thousand for the financial year ended December 31, 2022. AGA Bonus 2022-1 AGA Bonus 2022 were granted to the Executive members Committee who opted for these compensation plans. For each recipient, the number of shares definitely acquired is equal to the cash equivalent of 50% of the annual variable compensation increased by a 50% premium. In the event of an over-performance (i.e. achieved target above 100%), the surplus is paid in cash. Expenses were €499 thousand for the financial year ended December 31, 2022. BSA Details of BSA BSA 2013 BSA 2014 BSA 2015-1 BSA 2015-2 BSA 2017 Date of grant (Board of directors) July 17, 2013 July 16, 2014 April 27, 2015 July 1, 2015 September 20, 2017 Vesting period (years) 2 years 2 years 2 years 2 years 2 years Plan expiration date July 17, 2023 July 16, 2024 April 26, 2025 June 30, 2025 September 20, 2027 Number of BSA granted 237,500 150,000 70,000 14,200 37,000 Share entitlement per BSA 1 1 1 1 1 Exercise price €2.36 €8.65 €9.59 €14.05 €11.00 Valuation method used Black & Scholes Black & Scholes Black & Scholes Black & Scholes Black & Scholes Grant date share fair value €2.45 €6.85 €13.65 €13.64 €10.41 Expected volatility 31.83 % 46.72 % 54.08 % 47.83 % 61.74 % Average life of BSA 5.5 years 5.5 years 5.5 years 5.5 years 6 years Risk-free interest rate 2.42 % 1.00 % 0.25 % 0.25 % 0.20 % Expected dividends None None None None None Performance conditions None None None None None Fair value per BSA €0.87 €2.51 €6.59 €4.73 €0.57 BSA 2022-1 Date of grant (Board of directors) December 16, 2022 Vesting period (years) 2 years Plan expiration date October 3, 2032 Number of BSA granted 40,000 Share entitlement per BSA 1 Exercise price €2.31 Valuation method used Black & Scholes Grant date share fair value €1.31 Expected volatility 50.00 % Average life of BSA 5.5 years Risk-free interest rate 2.40 % Expected dividends None Performance conditions None Fair value per BSA €1.21 Change in Number of BSA Outstanding Year ended December 31, Number of BSA 2020 2021 2022 Balance at beginning of period 309,500 284,500 242,560 Granted during the period — — 40,000 Forfeited during the period — — (31,740) Exercised during the period (25,000) (16,940) — Expired during the period — (25,000) — Balance at end of period 284,500 242,560 250,820 Breakdown of the Closing Balance Year ended December 31, 2020 2021 2022 Number of BSA Outstanding Exercisable Outstanding Exercisable Outstanding Exercisable BSA 2011-2 41,940 41,940 — — — — BSA 2013 46,360 46,360 46,360 46,360 46,360 46,360 BSA 2014 75,000 75,000 75,000 75,000 75,000 75,000 BSA 2015-1 70,000 70,000 70,000 70,000 70,000 70,000 BSA 2015-2 14,200 14,200 14,200 14,200 14,200 14,200 BSA 2017 37,000 37,000 37,000 37,000 37,000 37,000 BSA 2022-1 — — — — 8,260 8,260 TOTAL 284,500 284,500 242,560 242,560 250,820 250,820 BSAAR BSAAR are securities whose subscription price and exercise price are fixed at their fair value as determined by an expert. The BSAAR subscription therefore represents an invest |
