Exhibit 10.6
RULES OF THE
OBSEVA SA (OBSEVA LTD)
INCENTIVE PLAN
ARTICLE 1 – DEFINITIONS
In these rules, except where the context otherwise requires:
| 1.1 “ObsEva” or “the Company” | means ObsEva SA (ObsEva Ltd), a company incorporated in the Canton of Geneva, Switzerland; | |
| 1.2 “Issuance” | means the issuance ofNon-Voting Shares of the Company to Beneficiaries; | |
| 1.3 “Directors” | means the Board of Directors of the Company or a duly authorized committee thereof; | |
| 1.4 “Beneficiaries” | means any Beneficiary ofNon-Voting Shares eligible for awards under the Plan such as Directors, employees, advisors (including scientific consultants) and agents of the Company; | |
| 1.5 “Service” | means service as a Director, an employee, an advisor (including scientific consultant) or as an agent of the Company; | |
| 1.6 “Issuance Agreement” | means an agreement issued pursuant to Article 3 of this Plan; | |
| 1.7 “Issuance Date” | means the date on whichNon-Voting Shares are issued to Beneficiaries pursuant to Article 4 of the Plan; | |
| 1.8 “Par value” | means face value as stated in the Articles of association of the Company; | |
| 1.9 “Restriction Period” | means the period during whichNon-Voting Shares are blocked and cannot be transferred in accordance with the terms of this Plan and the terms of the Issuance Agreement; | |
| 1.10“Non-Voting Shares” | means the registeredNon-Voting Shares with a par value of CHF 1.- issued by the Company; | |
| 1.11 “this Plan” | means the incentive plan contemplated by these Rules in its present form or as from time to time amended in accordance with the provisions of Article 15; | |
| 1.12 “Termination for cause” | means (i) the termination by the Company of aNon-Voting Shareholder’s employment by an immediate dismissal within the meaning of Article 337 of the Swiss Federal Code of Obligations, as the case may be recognized by competent courts, including the Swiss Federal Tribunal, as well as (ii) any other termination by the Company of aNon-Voting Shareholder’s Service for reasons including but not restricted to (a) a Beneficiary’s unauthorized use or disclosure of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company, (b) a Beneficiary’s material breach of any agreement between such Beneficiary and the Company, (c) a Beneficiary’s material failure to comply with the Company’s written policies or rules, which causes material harm to the Company, (d) a Beneficiary’s gross negligence or willful misconduct, (e) a | |
| Beneficiary’s continuing and material failure to perform assigned and achievable duties after receiving written notification of the failure from the Directors or (1) a Beneficiary’s failure to cooperate in good faith with a governmental or internal investigation of the Company or its Directors, officers or employees, if the Company has requested such Beneficiary’s cooperation; | ||
| 1.13 “Changes in Control” | means (i) the consummation of a reorganization, merger, share exchange, consolidation, or sale or disposition of all or substantially all of the assets or of the main and most economically important asset(s) of the Company leading to a transfer of the ownership of the voting securities in which a person or an entity obtains more than 50% voting rights in the Company, and
ii) in any case, when a person further to the aforementioned transaction beneficially owns more than 50% of the voting rights of the Company, directly or indirectly, and
iii) in any case, when a corporation or other entity resulting from or surviving the aforementioned transaction owns, as a result of the transaction, more than 50% of the voting rights of the Company or all or substantially all assets or the main or most economically important asset(s) of the Company, either directly, or indirectly through one or more subsidiaries.
For the sake of clarity, a change in the beneficial ownership of the securities of the Company as a result of a private financing of the Company that is approved by the Directors shall not be deemed to constitute a Change of control.
For the avoidance of doubt, an Initial Public Offering (“IPO”) or any subsequent public offering is not deemed to constitute a Change in Control. | |
| 1.14 “Fair Market Value” | means the fair market value of aNon-Voting Share, as determined by the Directors in accordance with common practice on the basis of the last statutory financial statements such as approved by the General Meeting of the Shareholders. Such determination shall be conclusive and binding on all persons; | |
| 1.15“Non-Voting Shareholder” | means the holder ofNon-Voting Shares. | |
1.16 Words or expressions:
1.16.1. when denoting masculine gender include the feminine;
1.16.2. when denoting the singular include the plural and vice versa.
ARTICLE 2 — GRANT OFNON-VOTING SHARES
Subject to the Rules of this Plan and to the approval of the Directors, the Company may at any time and at its absolute discretion determine:
3.
| • | The Beneficiaries to whomNon-Voting Shares may be granted; |
| • | The time or times at whichNon-Voting Shares may be granted, and |
| • | The number ofNon-Voting Shares which may be granted. |
ARTICLE 3 — ISSUANCE AGREEMENT
Each issuance shall be evidenced by an Issuance Agreement signed by the Company and the relevant Beneficiary in such form and with such terms and conditions as the Directors shall determine.
The Issuance Agreement shall include by reference the terms of this Plan as a condition under whichNon-Voting Shares are issued.
In case of any conflicts or inconsistencies between the terms of this Plan and the terms of the Issuance Agreement, the terms of the Issuance Agreement shall prevail to the extent of any such conflicts or inconsistencies.
ARTICLE 4 — ACCEPTANCE OF ISSUANCE
The Beneficiary shall have ten (10) days from the date on which the Issuance Agreement is issued to notify the Company, by signing and returning a copy of the original Issuance Agreement, that he accepts the grant ofNon-Voting Shares. Failure to return such copy Issuance Agreement, duly signed, within such ten (10) day period shall be deemed to constitute the Beneficiary’snon-acceptance of such grant, in which case theNon-Voting Shares shall, for all purposes, be deemed never to have been granted.
By accepting the grant ofNon-Voting Shares, the Beneficiary is deemed to have accepted theNon-Voting Shares subject to the terms and conditions contained in the Rules of this Plan.
ARTICLE 5 — ISSUE PRICE
The Issuance Agreement shall provide thatNon-Voting Shares shall be issued to the Beneficiaries against payment of the par value ofNon-Voting Shares.
The respective Issuance Agreement may also provide thatNon-Voting Shares shall be issued to the Beneficiaries against payment of a higher amount (as the case may be against payment of the fiscal value of theNon-Voting Shares at the time of the Issuance of the latter).
ARTICLE 6 — DELIVERY OFNON-VOTING SHARES
The Company shall deliver the number ofNon-Voting Shares specified in the Issuance Agreement no later than fourteen (14) days after receipt of the fully payment of the amount set out in Article 6.
At the Company’s absolute discretion, the delivery of theNon-Voting Shares shall be deemed to be accomplished by the sole record of theNon-Voting Shares in any appropriate Registry ofNon-Voting Shares as determined by the Company.
ARTICLE 7 —NON-VOTING SHARES ESCROW
In the event that theNon-Voting Shares are being physically issued and delivered to the Beneficiaries, they may, upon discretion of the Directors, be held in escrow by the Company.
4.
ARTICLE 8 —RESTRICTION PERIOD
Save as otherwise provided by other Rules of this Plan,Non-Voting Shares issued to the Beneficiaries under this Plan shall be subject to the following Restriction Periods:
| • | 1/4 of the total number ofNon-Voting Shares issued under this Plan shall vest after a period of twelve (12) months following the Issuance Date.; |
| • | 1/36 of 3⁄4 of the total number ofNon-Voting Shares shall vest on the 25th of every month starting from the first anniversary of the Issuance Date and over a further period ofthirty-six (36) months. |
The Directors may at their absolute discretion provide for a different restriction period in the Issuance Agreement, in particular to take into account the work performed by the Beneficiaries until the issuance of theNon-Voting Shares.
Save as otherwise provided by other Rules of this Plan or as otherwise determined by the Directors at their absolute discretion in the Issuance Agreement, noNon-Voting Shares issued under this Plan shall be transferred, assigned, charged, or otherwise alienated during the Restriction Periods, provided always that on the death of a Beneficiary, theNon-Voting Shares may be transferred to his heirs.
After the expiration of the relevant Restriction Periods, anyNon-Voting Share shall be subject to the restrictions of transferability such as provided for by the Swiss Federal Code of Obligations and by the articles of association of the Company.
ARTICLE 9 — RETRANSFER OBLIGATION IN CASE OF TERMINATION OF SERVICE
In case of termination of Service, the following Rules apply:
Article 9.1. — In general
Save as otherwise determined by the Directors at their absolute discretion in the Issuance Agreement, if aNon-Voting Shareholder is subject to notice to terminate his Service within the Company (irrespective of whether such notice is given by the Company or theNon-Voting Shareholder), then the Company shall have the right, but not the obligation, tore-acquire, and the Beneficiary hereby agrees to sell and retransfer to the Company upon request of the Company, allNon-Voting Shares issued to the Beneficiary and still subject to a Restriction Period as at the day when such notice is given at the issue price perNon-Voting Share as set forth in Article 5, respectively in the respective Issuance Agreement.
The Beneficiary shall have no furtherNon-Voting Shareholder rights with respect to those retransferredNon-Voting Shares.
Any right of the Company to repurchaseNon-Voting Shares as per this Article shall be exercised within 90 days following the effective date of termination of the services.
Article 9.2. — In case of Termination for cause by the Company
Save as otherwise determined by the Directors at their absolute discretion in the Issuance Agreement, if aNon-Voting Shareholder is subject to notice to terminate his Service within
5.
the Company for cause (such notice being given by the Company), the Company shall have the right, but not the obligation, tore-acquire, and the Beneficiary hereby agrees to sell and retransfer to the Company upon request of the Company, allNon-Voting Shares (whether restricted or not) issued to the Beneficiary, at the par value of theNon-Voting Share at the time of retransfer of theNon-Voting Shares. For the avoidance of doubt, the retransfer shall occur at the par value of theNon-Voting Shares at the time of the retransfer of theNon-Voting Shares, even if this par value is lower than the issue price as set forth in the respective Issuance Agreement.
Article 9.3. — In case of death, invalidity or retirement of theNon-Voting Shareholder
Save as otherwise determined by the Directors at their absolute discretion in the Issuance Agreement, if aNon-Voting Shareholder’s Service has ceased for cause of death, invalidity or retirement, then the Company shall have the right, but not the obligation, tore-acquire, and the Beneficiary (or his legal representative) hereby agrees to sell and retransfer to the Company upon request of the Company, allNon-Voting Shares issued to the Beneficiary and still subject to a Restriction Period as at his last day of Service before the death, invalidity or retirement occurs at least at the Fair Market Value of theNon-Voting Share at the time of the retransfer of theNon-Voting Shares.
ARTICLE 10 — RETRANSFER OBLIGATION IN CASE OF CHANGE IN CONTROL
If a Change in Control occurs, then allNon-Voting Shares issued to the Beneficiary (whether or not subject to a Restriction Period) shall be immediately retransferred to the Company. The Company shall repay to the Beneficiary a price perNon-Voting Share at least equivalent to the Fair Market Value of theNon-Voting Share as determined at the time of the Change in Control and for the purpose of the Change in Control.
The Beneficiary shall have no furtherNon-Voting Shareholder rights with respect to thoseNon-Voting Shares.
ARTICLE 11 —NON-VOTING SHAREHOLDER RIGHTS
Subject to the provisions of this Plan, the Beneficiary shall have fullNon-Voting Shareholder rights with respect to anyNon-Voting Shares issued to him under this Plan, regardless whether theseNon-Voting Shares are still subject to any Restriction Period.
Accordingly, theNon-Voting Shareholder shall receive any regular cash dividends paid on suchNon-Voting Shares.
However, any new, substituted or additional securities distributed by the Company by reason of anyNon-Voting Share dividend,Non-Voting Share split,re-capitalization, combination ofNon-Voting Shares or exchange ofNon-Voting Shares (as the case may be against Shares before any Initial Public Offering (“IPO”) or any subsequent public offering) shall be subject to the same Restriction Period as the restrictedNon-Voting Share.
ARTICLE 12 — TAXATION AND SOCIAL SECURITY
Any liability to taxation and social security contributions as may be incurred by theNon-Voting Shareholder and arising in respect of the grant of the saidNon-Voting Shares or the delivery or sale of the saidNon-Voting Shares or otherwise in connection with this Plan shall
6.
be for the account of theNon-Voting Shareholder. No liability is assumed by the Company in respect thereof. Where, in relation toNon-Voting Shares granted under this Plan, the Company is liable, or in accordance with current practice is believed to be liable, to account to any revenue or other authority for any sum in respect of any tax or social security liability of theNon-Voting shareholder, theNon-Voting Share may not be delivered unless theNon-Voting Shareholder has beforehand either paid to the relevant Company an amount sufficient to discharge the liability or agreed with the relevant Company some other arrangement to ensure that such an amount is available to discharge the liability.
TheNon-Voting Share Issuance duty (if any) shall be paid by the Company.
ARTICLE 13 — PREVENTION OF ACQUIRED RIGHTS/ NO CLAIM FOR COMPENSATION
This Plan shall not form part of any contract of Service between the Company and a Beneficiary.
Any grants or entitlements to additional awards ofNon-Voting Shares under this Plan are absolutely at the Company’s discretion and a Beneficiary shall have no right to be grantedNon-Voting Shares or any entitlement awards ofNon-Voting Shares under this Plan.
Consequently, any value or benefit derived from anyNon-Voting Share shall not be considered as part of the salary or compensation of anyNon-Voting Shareholder for purposes of calculating any severance, resignation, redundancy or otherend-of-service payments, vacation, bonuses, long-term service awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights of any kind.
Nothing in the Rules of this Plan shall be construed as conferring on any Beneficiary the right to continue as a Director, an employee, an advisor (including scientific consultant) or an agent of the Company, nor as preventing the Company from terminating the Service of a Beneficiary.
If anyNon-Voting Shareholder shall cease for any reason to serve the Company, his rights and benefits under this Plan (actual or prospective) or in connection therewith or any loss thereof shall not in any way entitle him to claim for compensation against the Company and shall not be taken into account in assessing any compensation to which he may otherwise be entitled, notwithstanding that he may have been dismissed in breach of his contract of Service.
ARTICLE 14 — AMENDMENTS TO THIS PLAN
The Company may from time to time amend any of the Rules of this Plan, provided that no amendment of this Plan shall be made without the consent of theNon-Voting Shareholders which would have the effect of abrogating or altering adversely any of their rights.
In the event that some but not allNon-Voting Shareholders agree to such proposed amendment, this Plan may be amended to so affect the rights of consentingNon-Voting Shareholders whilst leaving the rights of dissentingNon-Voting Shareholders unchanged.
The Company may also from time to time amend any of the Rules of this Plan, in agreement with its Board of Directors, in its sole discretion, and without the consent of theNon-Voting
7.
Shareholders, to obtain a tax treatment deemed appropriate by the Company in agreement with the Board of Directors.
Written notice of any amendment made or to be made in accordance with this Article shall be given to allNon-Voting Shareholders.
ARTICLE 15 — NOTICES
Any notice or other document required to be given hereunder to any Beneficiary shall be delivered to him personally, distributed to him by electronic mail with a delivery confirmation or sent by registered mail to his home address according to the records of the Company or such other address as may appear to be appropriate.
Any notice, form or other document required to be given to the Company shall be delivered by hand, registered mail, by electronic mail with delivery confirmation or by telefax to either the registered or administrative office of the Company.
Notices sent by mail shall be deemed to have been received on the second day following the date of posting. Notices sent by telefax shall be deemed to have been received at the time of transmission. Notices sent by electronic mail shall be deemed to have been received on the date shown on the delivery confirmation.
ARTICLE 16 — SETTLEMENT OF DISPUTES
The decision of the Company in any dispute or question relating to anyNon-Voting Share or arising in connection with the operation of this Plan shall be final and conclusive, provided that it has been made in accordance with the Rules of this Plan.
Any dispute as to whether any such decision was made in accordance with the Rules of this Plan or any other dispute shall be resolved by the courts of the Canton of Geneva, subject to appeal to the Swiss Federal Tribunal.
The Rules of this Plan shall be governed by, and disputes arising in connection therewith settled in accordance with, Swiss law.
ARTICLE 17 — MISCELLANEOUS
Article 17.1 — Modifications
The Rules of this Plan set the minimum terms. Every time the present Rules of this Plan can be modified or adjusted by the Company or the Board of Directors, such modifications can only be made in favour of the Beneficiary of theNon-Voting Shares.
Article 17.2. — Invalidity
Should any of the Rules of this Plan become, or be held to be, in whole or in part, invalid, ineffective or unenforceable, all other Rules shall remain in full force and effect. Any invalid, ineffective or unenforceable Rules will be deemed to be automatically amended and replaced by valid, effective and enforceable provisions, which accomplish as far as possible the purpose and intent of this Plan with respect to the invalid, ineffective or unenforceable Rules.
Article 17.3. — Data privacy
8.
By participating in this Plan, the Beneficiary authorizes the Company and/or any person or entity authorized by the Company in connection with the implementation or administration of this Plan, as often as the Company or any such other person or entity may deem necessary for the purpose of implementing or administering the Plan, and to the full extent permitted by, and in full compliance with, applicable law, to access, store or process any personal data relevant to the Plan relating to the Beneficiary.
To the extent permitted by applicable law, neither the Company, nor any other person or entity authorized by the Company in connection with the implementation or administration of this Plan, will be liable for any loss or damage, whether direct, indirect or consequential, incurred by the Beneficiary as a result of any use of the Beneficiary’s personal data pursuant to this Article.
Article 17.4. — Compliance with foreign laws
The Company will have the authority to adopt such modifications, procedures and addenda in respective of this Plan as may be necessary or desirable to comply with the provisions of the laws of those countries in which the Company may operate this Plan to assure the viability of the benefits fromnon-Voting Shares issued to Beneficiaries employed in such countries and to meet the objectives of the Plan.
ARTICLE 18 — EFFECTIVE DATE
These Rules are effective as of 26 November 2013.
Adopted in Geneva as of 26 November 2013.
| Annette Clancy, Chair of the Board | Ernest Loumaye, CEO & Member of the Board | |
| /s/ Anette Clancy | /s/ Ernest Loumaye | |
9.
ISSUANCE AGREEMENT
OBSEVA SA INCENTIVE PLAN
This ISSUANCE AGREEMENT is made on by and between ObsEva SA, a Swiss corporation, with its seat inPlan-Ies-Ouates, Switzerland (the “Company”) and (the “Holder of Shares”).
In consideration of the mutual covenants and agreements herein contained and pursuant to the Company’s Incentive Plan of 26 November 2013 (the “Plan”), as amended, the Company and the Holder of Shares agree as follows:
The Company offers to the Holder of Shares the right to acquire the following number ofNon-Voting Shares (“Bons de Participation”) according to the terms and conditions specified below and in the Plan, in particular Article 9 of the Plan:
| Number ofNon-Voting Shares: | [ ] | |
| Purchase Price (per unit): | [ ] | |
Restriction Period:
- [ ].
As per Article 4 of the Plan, this Issuance Agreement (duplicate) shall be returned countersigned and dated to the Company by .
The signature of this Issuance Agreement by the Holder of Shares implies his express and complete acceptance of the terms set forth in the Plan, in this Issuance Agreement or in any other document related hereto.
All notices to the Company shall be delivered to ObsEva SA, 12, chemin des Aulx,Plan-les-Ouates, Switzerland, attn Equity Incentive Plan Administrator, and all notices to the Holder of Shares may be given to the Holder of Shares personally or may be mailed to the Holder of Shares , or at such other address as the Holder of Shares may designate by written notice to the Company.
This Issuance Agreement and any related document shall be governed by and construed according to Swiss law.
1.
Any dispute, controversy or claim arising out of or in relation with this Issuance Agreement shall be resolved by the courts of the Canton of Geneva, subject to appeal to the Swiss Federal Tribunal.
IN WITNESS THEREOF, the parties have executed this Issuance Agreement in duplicate as of the time and place first above written.
|
| |||
| ObsEva SA | [ ] | |||
|
| |||
| Date | Date | |||
2.
