Exhibit 10.21


 





FLAMEL
TECHNOLOGIES


 


SOCIETE ANONYME AU CAPITAL DE 4 636 011 EUROS


 


Siege
Social :


 


Parc
Club du Moulin  A Vent


33,
avenue du Docteur Georges Lévy


69200
VENISSIEUX


 


R.C.S.
LYON 379.001.530





 


 


RULES
GOVERNING THE FREE SHARE PLAN


DECEMBER
2014





 


With respects to the applicable laws and
regulations relating to free shares and under the authorization granted to the Board of Directors of Flamel Technologies (hereinafter
the “Board”) by the Shareholders’ Meeting held on June 24, 2014, the Board, during its meeting held on
December 11, 2014, has caused a plan for grant of free shares for the benefit of some members of the company’s staff and
affiliated companies’ staff as well as their official company representatives, subject to certain terms and conditions as
provided herein.


 


The present allocation rules reproduce
the terms and conditions of the allocation decided by the Board and supplement the letter sent to each beneficiary designated by
the Board.


 


Main characteristics of the grant
of free shares


 





	·    Grant Date	Dec
11, 2014
	·    Continue employment Condition*	Dec 12, 2016 (1)
	·    Effective allocation date  	Dec 12, 2018 (2)
	·    Earliest trading date 	Dec
13, 2018


 


 


 


* provided that the allocation conditions
are satisfied on the said date.


 





		(1)	Effective allocation date for French tax resident beneficiaries



		(2)	Non French tax resident beneficiaries



 






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I
- DEFINITIONS AND LEGAL FRAMEWORK


 





		1.1.	Definition



 


A plan for grant of free shares is a legal
shareholder regime under which a company may offer, subject to certain conditions, to members of its staff or certain categories
of such employees as well as staff of affiliated companies, the possibility of becoming the owner of a given number of shares to
be created by FLAMEL TECHNOLOGIES. Executive officers (“mandataires sociaux”) of those companies are also eligible
under this plan (Article L225-197-1 II of the Commercial Code).


 


		1.2.	Legal
                                         framework



 


The grant of free shares by FLAMEL TECHNOLOGIES
is governed by Articles L.225-197-1 to L.225-197-5 of the French Commercial Code, Articles 80 quaterdecies and 200 A of the General
Tax Code, and Article L.242-1 of the Social Security Code.





 


II
- CHARACTERISTICS OF THE FREE SHARE PLAN ON DECEMBER 2013





 


		2.1.	Beneficiaries



 


The beneficiaries eligible for the 2013
free shares plan (hereinafter the “Beneficiaries”) were determined by the Board meeting held on December
11, 2014(hereinafter the “Grant Date”) from among the following:


 


		·	Employees of FLAMEL TECHNOLOGIES or of any company which is directly or indirectly controlled by
FLAMEL TECHNOLOGIES through at least a fifty ten (10%) ownership of the voting stock or similar (hereinafter “Employees”),
and/or,



 


		·	Executive officers of FLAMEL TECHNOLOGIES (hereinafter “Executive Officers”)



 


		2.2.	Number
                                         of free shares granted



 


For each beneficiary, the Board determined
the number of shares to be freely granted. The specific number is indicated in the notice letter sent to each beneficiary.


 


Since the grants are irrevocable, the specific
number may not be modified during the Vesting Period (as defined in Article 2-4 below), except in the events listed in Article
2.9.


 


Further grant of free shares can only be
made following a Board’s decision.


 


		2.3.	Rights
                                         resulting from the grant



 


Rights resulting from the grant of free
shares are non-transferable, but if the beneficiary dies during the Vesting Period, his inheritors may apply for allocation of
the shares in the six months following the date of his death. After that time, the allocation right shall irrevocably lapse.


 






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		2.4.	Vesting
                                         Period



 


The Vesting Period is the period at the
end of which the Beneficiary definitely owns the shares.


 


For French tax resident beneficiaries at
the time of the initial grant, the Vesting Period is a two-year period starting from the Grant Date and ending on December 12,
2016.


 


For non-French tax resident beneficiaries
at the time of the initial grant, the Vesting Period is a four-year period starting from the Grant Date and ending on December
12, 2018.


 


		2.5.	condition
                                         of continued employment



 


Allocations are conditional. Beneficiary
shall become owner of the shares at the end of the Vesting Period, as defined in Article 2-4, provided that the Beneficiary is
still on continued employment with, or an official company representative of, the Company and/or its affiliated companies, as the
case may be, at the end of the two- year period starting on the Grant Date, i.e. on December 12, 2016.


 


Free shares rights granted to a Beneficiary
who no longer satisfies the condition at the end of a two- year period from the Date of Grant i.e. December 12, 2016 shall
lapse by right and without any formalities (except for the exceptions mentioned below).


 


So, except for the exceptions mentioned
below, any Beneficiary who no longer satisfies the condition of continued employment on December 12, 2016 shall not claim
any benefit from the initial grant, even in the event of later reinstatement into the Company for any reason.


 


It is specified that rights relative to
free shares will lapse as follow:


 


		·	Regarding lay-off and resignation, the day when the employee leaves the staff of the Company,



 


		·	Regarding revocation of an Executive Officer, the day when the Board of Directors takes the decision,
if the beneficiary attends the said meeting, or the day the beneficiary receives the notification if he has not attended the meeting,



 


		·	Regarding non-renewal of the mandate of an Executive Officer, the day when his mandate expires.



 


Exceptions


 


As an exception, although no longer employed
by the company at the end of a two-year period from the grant date, beneficiaries shall be entitled to retain their allocation
right in the event of retirement, disability (2nd or 3rd category), redundancy for economic reasons or transfer of their employment
agreements linked to transfer by the company of its operating business (“cession de fonds de commerce”), in
whole or in part.


 


Notwithstanding the rules laid down above,
the Board of Directors may decide, in certain circumstances, to make an exception to the aforementioned allocation condition and
authorize a beneficiary to retain his rights on departure for reasons other than those covered by the exceptions mentioned above.


 


		2.6.	Preservation
                                         of the beneficiaries’ interests



 


If the Company transmits its assets under
merger during the acquisition period, its obligations to the beneficiaries shall be taken over by the absorbing company and the
number of shares allocated shall be corrected in line with the exchange ratio.


 






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Moreover, a change of control of the Company
during the Retention Period, that is, if a person comes to hold, alone or in concert, directly or indirectly, more than half of
the Company’s capital or voting rights, could bring the possibility to sell shares without respect of the retention period.


 


		2.7.	Date
                                         and procedures regarding definitive grant of shares



 


Shares allocated freely to Beneficiaries
at the end of the Vesting Period will be new ordinary shares (common stock) to be issued by way of a capital increase by incorporation
of reserves.


 


The Board will meet on the date of definitive
grant of the free shares at the latest, in order to:


 


		·	record the compliance with the continued employment condition for definitive grant as per Article
2.5,



 


		·	record the capital increase related to the issue of the new shares allocated freely, paid-up by
incorporation of reserves.



 





III
- Rights oF New shareholders


 


		3.1.	Rights
                                         related to granted shares



 


As of their definitive grant, the shares
will bear dividend rights, thus entitling the holder to all dividends paid starting as of their definitive grant.


 


		3.2.	Form
                                         and registration of the granted shares



 


The free shares definitely granted will
be registered in a pure registered account (“nominatif pur”) by the company acting as custody account keeper.
Each Beneficiary will receive a certificate of registration of shares.


 


Regarding French tax resident beneficiaries
at Grant Date who shall retain the shares (as per the provisions of Article 3.3 below), the custody account keeper will make an
entry in a special account stating the unavailability of the shares, and no request for modification of the said entry may be made
before expiry of the Freeze Period.


 


Moreover, with respect to official company
representatives, the custody account keeper will enforce the restrictions of rights to sell shares decided by the Board of Directors
in accordance with article L.225-197-1 II of the Code de Commerce and stated in article 2-10 below.


 


		3.3.	Retention
                                         Period



 


Regarding French tax resident beneficiaries
at Grant Date, the free shares definitely granted may only be transferred or sold at the end of a two-year “Freeze Period”
following the Vesting Period, i.e. on December 13, 2018.


 


Regarding non-French tax residents at Grant
Date, free shares definitely granted may be disposed of freely on December 13, 2018, being the end of the acquisition period.


 


Hence the Beneficiary shall be entitled
to dispose of the shares starting on December 13, 2018, subject to the conditions set forth in article 3.4.


 






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		3.4.	Sale
                                         and disposal of shares



 


As long as the Beneficiary is still on
continued employment with, or a corporate officer of the Company and/or its affiliated companies, sale and disposal of shares must
comply with the Company’s Insider stock trading policy, and of which a copy was made available to the Beneficiaries.


 





Therefore, the shares may be transferred
only under the following transaction windows:


 


		·	For the first three quarters during which the quarterly earnings are released, the window is defined
as the period beginning two trading days after publication of the quarterly earnings and ending on the fifth day prior to the end
of the last month of each quarter (the transaction windows therefore having a duration of six to seven weeks).



 


		·	For the quarter during which the annual earnings are released, the window is defined as the period
beginning two business days after publication and ending on the fifth day preceding the end of the of the last month of the first
quarter.



 


The transaction windows may be closed from
time to time in the event that, in the opinion of the Chairman, Chief Executive Officer or Chief Financial Officer, there is confidential
information making transfers of the shares undesirable.


 


In addition, and by application of articles
L.225-197-1 II of the Commercial code, during all the term of office in which a beneficiary is an official company representative
(“mandataire social”), he/she will be required to hold 50% of the shares that are definitively acquired.


 





IV
- PLAN MANAGEMENT


 


The plan is managed, for the time being,
by FLAMEL TECHNOLOGIES.


 


The Company reserves the right to assign
the management to a third party. The beneficiaries will be informed in due time and individually of any modification.


 


Each beneficiary receives a copy of the
present rules, and must return a signed copy to the Company with the following marked by hand “lu et approuvé”
[read and approved].


 





V
- RULES MODIFICATIONS


 


Any legislative or regulatory modifications
affecting the present rules, retroactively or for the future, will automatically be binding on all beneficiaries of free shares.


 


Nevertheless, such modifications will be
the object of an amendment that will need to be signed and returned to the company.


 


 








Return one signed copy containing the handwritten
indication “lu et approuvé” [read and approved].


 


 


Beneficiaries Surname/ firstname


 


Fait à ________________________________





 


Le___________________________________


 


 





Signature


 








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