Document:

Exhibit 10.5

 

 

STRICTLY CONFIDENTIAL - LEGAL PRIVILEGE

 

Agreement
on Warrants – U.S.

 

	Between	Zealand Pharma A/S
	 	 
	 	Sydmarken 11
	 	 
	 	DK-2860 Søborg
	 	 
	 	Denmark
	 	 
	and	Frank Sanders
	 	 
	 	(the "Warrant Holder")

 

     

     

    

 

TABLE OF CONTENTS

 

	1	Purpose	3
	 	 	 
	2	Grant of Warrants	3
	 	 	 
	3	Vesting of Warrants	3
	 	 	 
	4	Exercise of the Warrants	4
	 	 	 
	5	value Cap for each grant	4
	 	 	 
	6	Transfer of shares	4
	 	 	 
	7	Transferability of Warrants to another party	5
	 	 	 
	8	Buy Back of Warrants - cash settlement	5
	 	 	 
	9	Conditions for New Shares issued following Exercise of the Warrants	5
	 	 	 
	10	Leaver provisions	5
	 	 	 
	11	Claw-back	6
	 	 	 
	12	Tax Implications	6
	 	 	 
	13	adjustments of the conditions for warrants in case of certain events	6
	 	 	 
	14	Capital increase in connection with the Exercise of the Warrants	8
	 	 	 
	15	Other terms	9
	 	 	 
	16	Data protection	9
	 	 	 
	17	Governing Law and Venue	9
	 	 	 
	18	Acceptance of the terms	9
	 	 	 
	19	Appendix: formulas for Adjustment of the Conditions for Warrants in case of certain Changes in the Company's Capital Structure	10

 

    2 

     

    

 

This Agreement on Warrants (the "Agreement")
is entered into on 14 September 2020 between:

 

		(1)	Zealand Pharma A/S, CVR no. 20 04 50 78, Sydmarken 11, 2860 Søborg Denmark (the "Company")
and

 

		(2)	the person who has accepted this Agreement, thereby becoming a warrant holder (the “Warrant Holder”)

 

- the Company and the Warrant Holder hereinafter
collectively referred to as the "Parties" and separately as a "Party"

 

		1	Purpose

 

		1.1	The purpose of offering warrants is to attract, retain and motivate eligible employees, by creating a
common interest in the Company’s growth and the development of the share price. By offering warrants, the Board of Directors of
the Company (“the Board”) also wants to reward all employees for dedicated and focused results supporting the Company’s
long term development and growth.

 

		2	Grant of Warrants

 

		2.1	The Warrant Holder is granted 43,217 warrants in the Company free of charge (the "Warrants").
Each Warrant entitles the Warrant Holder to subscribe for one share of nominally DKK 1, at a subscription price of DKK 216.80 that is
equal to the market price of the Company's shares at the time of grant (the "Subscription Price"), in accordance with
the terms of this Agreement and the Company's Articles of Association.

 

		2.2	The value of each Warrant is DKK 89.80, and the total value of the Warrants granted is DKK 3,880,887.
(The total value is the value of each Warrant multiplied with the total number of Warrants granted.)

 

		2.3	The Warrant Holder receives a Warrant grant with a value corresponding to a certain percentage of the
Warrant Holder’s annual fixed salary, that may be adjusted upwards or downwards at the Board’s discretion. The value of the
Warrants is determined in accordance with recognized valuation methods such as the Black Scholes formula.

 

		2.4	It is a condition for the grant of Warrants as set out in this Agreement that the Warrant Holder has entered
into an employment contract with the Company or a subsidiary of the Company (the "Employer"), and not under notice, at
the date of this Agreement.

 

		2.5	Participation in the grant under this Agreement does not entitle an employee to future grants or participation
in future reward plans.

 

		3	Vesting of Warrants

 

		3.1	The Warrants vest in equal tranches over three years after the date of grant, with 1/3 of the Warrants
vesting each year. This means that the first 1/3 of the Warrants will vest on 14 September 2021, the second 1/3 will vest on 14 September 2022
and the final 1/3 on 14 September 2023. The date on which Warrants vest is referred to as the "Vesting Date". Warrants
are not subject to any performance targets other than the share price, which must be higher at the time of vesting than at the time of
grant for the Warrants to have any value. The period from the Grant Date until the Vesting Date is referred to as the Vesting Period.

 

		3.2	For the Warrants to vest, the Warrant Holder must be employed by the Employer throughout the Vesting Period.

 

    3 

     

    

 

		4	Exercise of the Warrants

 

		4.1	The Warrants have a total lifetime of 10 years, which means that the Warrants have an exercise period starting from their respective Vesting Date until, and including, 13 September 2030 (the “Exercise Period”). This means that 1/3 of the Warrants have an exercise of period of 9 years, 1/3 have an exercise period of 8 years and the remaining 1/3 have an exercise period of 7 years.

                                                                                 

                                                                                During the Exercise Period, the Warrants may be exercised during specific trading windows following the Company’s publication of quarterly reports (including annual and semi-annual reports). The exact dates for the trading windows will be displayed on the online portal on the Company’s intranet. Warrants not exercised on or before the last day of the Exercise Period will automatically lapse and become void without any further notice or compensation.

 

		4.2	Upon exercise, the Warrant Holder may, for each Warrant, subscribe for 1 share in the Company of a nominal
value of DKK 1.00 at the Subscription Price. The Subscription Price may be regulated due to extraordinary events as set out in this Agreement.

 

		4.3	To exercise his/her Warrants, the Warrant Holder must electronically give notice to the Company, using
the online portal available on the Company's intranet. Practicalities in connection with the exercise of the Warrants may be changed by
the Company. In that case, the Warrant Holder will be notified in writing by the Company.

 

		4.4	The Warrant Holder will pay in cash to the Company an amount equal to the total value of the Warrants
(the "Subscription Amount") at the same time as giving notice of the exercise of the Warrants.

 

		5	value Cap for each grant

 

		5.1	The gross return from the exercise of each grant of Warrants cannot exceed a value of more than five times
the annual base salary (the “Value Cap”) of the individual Warrant Holder.

 

		5.2	The annual base salary is calculated as the annual fixed salary payable by the Employer to the Warrant
Holder at the time of grant, prior to any payment or deduction of any tax or pension obligations, but does not include benefits, bonuses
or any other potential compensation payable by the Employer or the Company, including Warrants or other share-based instruments.

 

		5.3	The gross return means the aggregated and total return of each Warrant grant, available to the Warrant
Holder through the exercise of Warrants during the Exercise Period. The gross return is calculated as the difference between the Subscription
Amount and the average closing price of the Company’s shares on Nasdaq Copenhagen for the five days prior to one or more exercises
of Warrants in a single grant.

 

		5.4	If the aggregated gross return, as defined in Clause 5.3 above, exceeds the Value Cap, any remaining Warrants
for the grant in question which exceeds the Value Cap, will lapse without compensation.

 

		6	Transfer of shares

 

		6.1	It is a precondition for the Company's transfer of shares to the Warrant Holder that he/she opens a securities
account with a bank. Any costs arising from such securities account shall be borne by the Warrant Holder. Once the Company has received
the correct Subscription Amount, the Warrant Holder will receive a transfer of the shares. The shares will be transferred as soon as possible
and in a manner decided by the Company at its sole discretion. Costs related to the transfer of shares to the Warrant Holder’s account
will be borne by the Company.

 

		6.2	Any sale of Company shares by any employee of the Company is subject to the provisions on insider trading
applicable at any time, including the Company's internal rules governing trade in Company-issued securities. This also applies to
shares subscribed for by exercising Warrants.

 

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		7	Transferability of Warrants to another party

 

		7.1	Each Warrant is a non-negotiable instrument. The Warrant Holder must request the Board’s written
consent for any transfer, pledging or other assignment of a Warrant. The request may be granted, denied or conditioned at the Board’s
discretion.

 

		7.2	The Warrants must not be subject to enforcement of any kind and must not be lodged as security towards
a third party.

 

		8	Buy Back of Warrants - cash settlement

 

		8.1	Upon exercise of the Warrants as set forth in Clause 4, the Company
is entitled, at its sole discretion, to make a cash settlement and to buy back the Warrants instead of issuing the shares which have been
subscribed for. If the Company decides to make use of this possibility, the Warrant Holder will be informed of the decision to buy back
the Warrants within 30 days following the receipt of the exercise notice in the online portal. The buy back of the Warrants will happen
automatically.

 

		8.2	A buy back means that the Company will pay the Warrant Holder a cash amount for each Warrant that is equivalent
to (a) the subscription price plus (b) the difference between (i) the average market price per share on the date of the
exercise and (ii) the Subscription Price (a+b= the “Cash Amount”). Where legally required, the Cash Amount shall
be paid after deduction of the necessary tax and other statutory amounts that the Employer is required to withhold. Once the Company has
realised the payments, the relevant Warrants are considered transferred back to the Company.

 

		9	Conditions for New Shares issued following Exercise of the
Warrants

 

		9.1	The issuance of Warrants decided by the Board, including the related capital increase, is done in accordance
with the Clause 8.4 of the Articles of Association of the Company. Consequently, the new shares issued by the exercise of Warrants are
regulated by the following terms and conditions:

 

		(i)	the existing shareholders shall not have any pre-emptive right to the new shares;

 

		(ii)	the new shares are issued in the Warrant Holder's name and registered in his/her name in the Company's
register of shareholders;

 

		(iii)	the new shares are negotiable shares;

 

		(iv)	the new shares are freely transferable;

 

		(v)	the new shareholders will be entitled to the same rights as the existing shareholders;

 

		(vi)	the new shares will carry the same rights as the existing shares at the time of exercise, and going forward
in case of any general change in the rights of the shares in the Company; and

 

		(vii)	the Company shall pay the costs in connection with the issue and exercise of Warrants pursuant to this
Agreement.

 

		10	Leaver provisions

 

		10.1	Bad Leavers

 

		10.1.1	Bad Leavers are not entitled to keep any unexercised Warrants, whether these have vested or not. They
will lapse immediately on the date of termination (date of notice being served by the Warrant Holder or by the Employer) without any compensation
being payable.

 

Warrant Holders are considered Bad Leavers
in scenarios where

 

		·	the Warrant Holder terminates the employment,
and this is not due to the Company’s material breach of the employment relationship

 

		·	the Employer terminates the employment due to
the Warrant Holder's material breach of the employment relationship

 

		·	the Warrant Holder has been summarily dismissed
in a legitimate way due to cause

 

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		10.2	Good Leavers

 

		10.2.1	Good Leavers are entitled to keep any Warrants which are vested (see Clause 3.1) on the date of termination of employment (date of notice being served, or date of the Warrant Holder’s death or retirement). The vested Warrants may be exercised in the relevant trading window as set forth in Clause 4, but no later than 6 months after the date of termination of employment. Warrants not exercised as set out in this Clause 10.2.1 will lapse without any compensation.

                                                                                 

                                                                                For the avoidance of doubt, unvested Warrants on the date of termination of employment lapse without any compensation.

 

Warrant Holders are considered Good
Leavers in scenarios where

 

		·	the Employer terminates the employment and this
is not due to the Warrant Holder's material breach of the employment relationship

 

		·	the Warrant Holder retires

 

		·	the Warrant Holder dies

 

		·	the Warrant Holder terminates the employment
due to a material breach by the Employer

 

		11	Claw-back

 

		11.1	If the Warrants have been granted or vested based on data which turns out to have been falsified, or materially
or manifestly misstated, the Company shall – in exceptional cases as determined by the Board in its sole discretion – be entitled
to:

 

		(i)	cancel Warrants obtained by the Warrant Holder in relation to the incorrect information or figures, and

 

		(ii)	reclaim from the Warrant Holder, in full or in part, any undue value of shares in the Company delivered,
to the extent that the Warrant Holder was or should have been aware of this.

 

		11.2	If any amount reclaimed is not settled within 14 days after the Company's written demand to the Warrant
Holder, the Company may set off any amounts repayable pursuant to Clause 11.1 against any outstanding or future amounts owed by the Company
to the Warrant Holder, including any salary payments or other remuneration.

 

		12	Tax Implications

 

		12.1	The Parties agree that the total value of the Warrants granted is the value set out in Clause 2.2.

 

		12.2	The tax implications related to the Warrants are a personal matter for the Warrant Holder. The Warrant
Holder is encouraged to seek advice from a public accountant or another tax consultant at their own expense.

 

		13	adjustments of the conditions for warrants in case of certain
events

 

		13.1	In case of extraordinary events such as the ones listed below, the Board may, at their sole discretion,
decide that the conditions for Warrants may be adjusted in accordance with Clause 13.2. In these cases, the Company will notify the Warrant
Holder. Within two weeks from the date of the Company’s notification, the Warrant Holder must give notice to the Company if he/she
wishes to exercise the Warrants wholly or partly.

 

		13.2	Adjustments in case of liquidation, merger, public offering, acquisition, delisting

 

		13.2.1	In the event that the Company's general meeting passes a resolution to liquidate the Company, the Board
(at their sole discretion) can decide that Warrants may be exercised as set forth in Clause 4 within a certain timeframe. If the Warrant
Holder does not wish to exercise the Warrants, the Warrants automatically become void without compensation once the Company is finally
liquidated.

 

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		13.2.2	In the event that the general meeting passes a resolution to merge the Company and such merger results
in the Company being discontinued, the Board (at their sole discretion) can decide that Warrants may be exercised within a certain timeframe
as set forth in Clause 4. If the Warrant Holder wishes to exercise the Warrants, the Company will ensure the shares are registered in
the Warrant Holder's depot at least five trading days before the last day of trading of the Company's shares. If the Warrant Holder does
not wish to exercise the Warrants, the Warrants automatically become void without compensation once the Company is finally discontinued.

 

		13.2.3	In the event that a voluntary or mandatory public offer pursuant to Sections 44 - 47 of the Danish Act
on Capital Markets is made, the Board (at their sole discretion) can decide that Warrants may be exercised as set forth in Clause 4 within
a certain timeframe. If the Warrant Holder does not wish to exercise the Warrants, the Warrants and this Agreement will remain in full
effect until the completion of the offer.

Following completion of the offer, the Board can decide that Warrants may be exercised within a four-week period. If the Warrant Holder
then does not wish to exercise the Warrants, the Warrants and this Agreement will lapse.

 

		13.2.4	In the event of a compulsory acquisition of the Company's shares pursuant to the Danish Companies Act
is initiated, the Board (at their sole discretion) can decide that Warrants may be exercised as set forth in Clause 4 within a certain
timeframe. If the Warrant Holder does not wish to exercise the Warrants, the Warrants automatically become void without compensation following
the completion of the acquisition of the Company's shares.

 

		13.2.5	In the event that the Company's general meeting passes a resolution to delist the Company from Nasdaq
Copenhagen, the Board (at their sole discretion) can decide that Warrants may be exercised as set forth in Clause 4 within a certain timeframe.
If the Warrant Holder wishes to exercise the Warrants, the Company will ensure that the shares are registered in the Warrant Holder's
depot at least five trading days before the last day of trading of the Company's shares. If the Warrant Holder does not wish to exercise
the Warrants, the Warrants automatically become void without compensation following the completion of the delisting of the Company.

Following completion of such delisting, the Board can decide that Warrants may be exercised up to two times a year for the remaining part
of the Exercise Period.

 

		13.2.6	In the event that the Company decides to sell the most profitable and material assets of the Company,
the Board (at their sole discretion) can decide that Warrants may be exercised as set forth in Clause 4 within a certain time period.
If the Warrant Holder does not wish to exercise the Warrants, the Warrants and this Agreement will remain in full effect.

 

		13.3	Adjustments in case of certain changes in the Company's capital

 

		13.3.1	In case changes are made in the Company's capital structure which entail a change in the total value of
the Warrants granted, the number or Subscription Price of the Warrants shall be adjusted to avoid affecting the total value of the Warrants,
with the exceptions set forth in this Agreement. Further, the Board must have been granted the necessary authority by the general meeting
to adjust the number of shares that can be subscribed for by exercising the Warrants.

 

		 	13.3.1.1	If the number of new shares that may be subscribed for by exercise of the Warrants is adjusted upwards
in accordance with this Clause 13.3.1, the Company's maximum share capital shall be increased accordingly.

 

		 	13.3.1.2	The Subscription Price shall not be reduced to a price lower than the nominal value of the shares (DKK
1). If an adjustment of the Warrants to preserve their value would result in the price being reduced to below the nominal value, the Warrants
shall lapse, unless the Warrant Holder accepts that the Subscription Price is increased to the nominal value without compensation.

 

		13.3.2	If the total share capital of the Company is reduced in order to cover losses, the number of shares that
the Warrant Holder may subscribe for by exercising the Warrants shall be reduced (rounded down) proportionately.

 

    7 

     

    

 

		13.3.3	Should the competent bodies of the Company make a final decision to issue bonus shares before the Warrant
Holder has exercised his/her Warrants, the Subscription Price shall be multiplied by the factor in Clause 19.1.

 

		13.3.4	Should the competent bodies of the Company make a final decision to increase the Company's share capital
by subscription of new shares at a price below market price before the Warrant Holder has exercised his/her Warrants, the Subscription
Price shall be multiplied by the factor in Clause 19.2.

 

		13.3.5	Should the competent bodies of the Company make a final decision to change the nominal value of the shares
(without any other simultaneous changes of the capital of the Company), e.g. in situations not comprised by Clause 13.4.1, before the
Warrant Holder has exercised his/her Warrants, the Subscription Price shall be multiplied by the factor in Clause 19.3.

 

		13.3.6	Should the Company decide to distribute dividends, the amount will be considered a distribution to the
shareholders, and result in an adjustment of the Subscription Price according to the formula in Clause 19.4.

 

		13.3.7	If the share capital of the Company is reduced by means of payment to the shareholders at a price higher
than the market price, the Subscription Price shall be calculated as in Clause 19.5.

 

		13.3.8	If the share capital of the Company is reduced by payment to the shareholders at a price lower than the
market price, the Subscription Price shall be calculated as in Clause 19.6.

 

		13.3.9	In the event that the general meeting passes a resolution to demerge the Company, the Warrant Holder is
entitled to keep the same potential stake as the exercise of his/her warrants would have resulted in prior to the demerger, adjusted by
the ratio between the values of the different surviving companies. This means that, after the demerger, the Warrant Holder will receive
a number of Warrants allowing them to subscribe to shares in the company they have the closest relation with. Moreover, the terms stipulated
in this Agreement will apply to the surviving Warrants.

 

		13.4	Changes in capital structure leading to no adjustment to Warrants conditions

 

		13.4.1	The following changes in the capital structure of the Company shall not result in any adjustment of the
Subscription Price or the number of shares that the Warrant Holder may subscribe for:

 

		(i)	An increase or reduction of the Company's capital at market price, including issue of shares according
to Clauses 7.1-7.3 of the Articles of Association of the Company;

 

		(ii)	Issue of shares, options, warrants or the like, possibly at a favorable price, to employees of the Company
or to employees of a group-related company, or to some or all Warrant Holders (including Warrant Holder owned companies);

 

		(iii)	Issue of warrants, convertible debt instruments or the like to third parties on usual market terms as
part of mezzanine or similar financing;

 

		(iv)	Should the Company participate in a merger as the continuing company;

 

		(v)	Should the competent bodies of the Company make a final decision to change the nominal value of the shares,
resulting in the share capital of the Company being reduced before the Warrant Holder has exercised his/her Warrants. The Warrant Holder
retains the right to subscribe for the same number of shares at the Subscription Price. However, each Warrant entitles the Warrant Holder
to subscribe for 1 share at the new nominal value.

 

		14	Capital increase in connection with the Exercise of the Warrants

 

		14.1	In the event that the Warrant Holder gives notification in accordance with Clause 4 to the exercise the
Warrants, the Company shall carry out the related increase in capital.

 

		14.2	The maximum increase in capital that may be subscribed to according to this Agreement is calculated on
the basis of Clause 2.2. The maximum amount may be increased or reduced in accordance with the provisions on adjustment(s) set forth
in Clause 13.

 

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		15	Other terms

 

		15.1	The Company's Articles of Association are available at the Company's office for inspection. Any future
amendments to the Company's Articles of Association shall automatically be accepted by the Warrant Holder.

 

		15.2	In connection with the Company’s register of shareholders, a register of all issued Warrants shall
be kept.

 

		15.3	In addition to the specific provisions in this Agreement entitling the Board to make adjustments or changes
to the plan, the Board is entitled to amend the Agreement, effective for all Warrants granted or vested, at the Board’s sole discretion.

 

		16	Data protection

 

		16.1	In accordance with the General Data Protection Regulation, the Warrant Holder is hereby informed that
the personal data relating to the his/her name, contact details, holding of Warrants and shares and salary will be processed to administer
the Warrants, to ensure fulfillment of the Company’s contractual obligations toward the Warrant Holder, and to comply with applicable
laws, regulations and court orders. The personal data will further be transferred from the Employer where the Warrant Holder is employed
to other employers, to the online administration platform provider or to public authorities to the extent required in connection with
the allocation or administration of the Warrants. More comprehensive information about the processing of the Warrant Holder’s personal
data, including the Warrant Holder’s rights with respect to such processing, can be found on the Company’s intranet.

 

		17	Governing Law and Venue

 

		17.1	The construction, validity and performance of this Agreement shall be governed by and construed in accordance
with the laws of Denmark without regard to conflicts of laws principles. Further, the Danish Stock Options Act shall not apply to this
Agreement.

 

		17.2	Any dispute, controversy or claim arising out of or relating to this Agreement, or its breach, termination
or validity shall be settled by the Danish courts according to Danish law, unless the Company decides to settle the dispute by arbitration.
Should the Company decide to do so, such dispute shall be finally settled by arbitration in accordance with the Rules of Procedure
of the Danish Institute of Arbitration. The place of the arbitration shall be Copenhagen, Denmark and the language of the proceedings
shall be English, unless otherwise agreed. If more than one Warrant Holder becomes subject to arbitration proceedings, fully or partly
due to the same set of factual circumstances, such parties agree that the cases can be dealt with jointly by one arbitration tribunal.
The arbitration tribunal shall decide the distribution of costs connected with the arbitration case. The existence of an arbitration case
as well as any ruling made by the arbitration tribunal shall be kept in strict confidence.

 

		18	Acceptance of the terms

 

		18.1	By signing this Agreement electronically, the Warrant Holder agrees, accepts and is aware of the provisions
as set forth in this Agreement.

 

	
     

     

    Signed – Martin Nicklasson

    Title: Chairman of the Board of Directors

     

     

    Signed – Kirsten Drejer

    Title: Vice Chairman of the Board of Directors

 

    9 

     

    

 

		19	Appendix: formulas for Adjustment of the Conditions for Warrants
in case of certain Changes in the Company's Capital Structure

 

		19.1	Should the event mentioned in Clause 13.3.3 happen, the Subscription Price will be multiplied by the following
factor:

 

 

 

and the number of shares by

 

where:

A: is the Company's nominal share capital
before the issue of bonus shares.

B: is the nominal value of the bonus shares
to be issued.

 

		19.2	Should the event mentioned in Clause 13.3.4 happen, the Subscription Price will be multiplied by the following
factor:

 

 

and the number of shares by

 

where:

A: is the Company's nominal share capital
before the capital increase.

B: is the nominal increase of the share
capital.

k: is the market price of the shares
before the capital increase.

t: is the Subscription Price for the new
shares.

 

		19.3	Should the event mentioned in Clause 13.3.5 happen, the Subscription Price will be multiplied by the following
factor:

 

 

and the number of shares by

 

where:

A: is the nominal value of each share
after the nominal value of the shares has been changed.

B: is the nominal value of each share
before the nominal value of the shares has been changed.

 

		19.4	Should the event mentioned in Clause 13.3.6 happen, the Subscription Price will be adjusted according
to the following formula:

 

TK1 = TK -

 

where:

 

TK: is the Subscription Price for the
Warrants before the distribution of dividends.

u: is the total amount of dividends.

D: is the total number of shares in the
Company.

 

    10 

     

    

 

		19.5	Should the event mentioned in Clause 13.3.7 happen, the Subscription Price shall be calculated as follows:

 

TK1 = TK -

 

where:

TK: is the Subscription Price for Warrants
before the reduction of the share capital.

A: is the nominal share capital of the
Company before the reduction of the share capital.

B: is the nominal reduction of the share
capital.

k: is the market price of the shares
before the reduction of capital.

t: is the rate of the shares by which
the share capital is reduced.

 

		19.6	Should the event mentioned in Clause 13.3.8 happen, the Subscription Price shall be calculated as follows:

 

TK1 = TK +

 

where:

TK: is the Subscription Price for Warrants
before the reduction of the share capital.

A: is the nominal share capital of the
Company before the reduction of the share capital.

B: is the nominal reduction of the share
capital.

k: is the market price of the shares
before the reduction of capital.

t: is the rate of the shares by which
the share capital is reduced.

 

    11Exhibit 10.6

 

 

 

STRICTLY CONFIDENTIAL -
LEGAL PRIVILEGE

 

Zealand
Pharma A/S

 

Restricted
share unit PROGRAM 2020

 

     

     

    

 

TABLE OF CONTENTS

 

		1	PURPOSE	3

 

		2	ALLOTMENT OF RSUs	3

 

		3	VESTING Period	3

 

		4	ORDINARY DELIVERY OF SHARES BASED ON RSUs	4

 

		5	EXTRAORDINARY VESTING AND DELIVERY OF SHARES BASED
ON RSUs CONSIDERED VESTED	4

 

		6	TRANSFER OF EMPLOYMENT	4

 

		7	NO INSIDER TRADING	4

 

		8	CHANGES IN THE COMPANY ́S CAPITAL AND DIVIDEND	4

 

		9	CASH SETTLEMENT	5

 

		10	RECLAIM OF RSUs
AND SHARES	5

 

		11	OTHER TERMS AND CONDITIONS	5

 

		12	TAX	5

 

		13	Data protection	6

 

		14	GOVERNING LAW AND VENUE	6

 

		15	DEFINITIONS	6

 

    2 

     

    

 

ZEALAND PHARMA A/S 

(CVR-no. 20045078)

 

RESTRICTED SHARE UNIT PROGRAM 2020-1 (the “RSU
Program 2020-1”)

 

		1	PURPOSE

 

		1.1	The purpose of this RSU Program 2020-1 is to retain and motivate the Participants and to ensure the maximization
of shareholder value of the Company.

 

		2	ALLOTMENT OF RSUs

 

		2.1	Entry by a Participant into this RSU Program 2020-1 is made in accordance with the Entry Letter.

 

		2.2	It is a requirement for participation in the RSU Program 2020-1 that the Entry Letter is electronically
accepted by the Participant within the deadline stated in the Entry Letter.

 

		2.3	Each grant of RESTRICTED SHARE UNITS (“RSUs”) to be allocated under the RSU Program 2020-1
to a Participant shall be determined by the Board of Directors at their sole discretion subject to Clauses 2.7 and 2.8.

 

		2.4	The number of RSUs granted to be allocated under the RSU Program 2020-1 for a forthcoming 3-year period
shall be determined based on the simple average of the closing price of the Company's share on Nasdaq Copenhagen A/S for a period of five
trading days prior to the grant date.

 

		2.5	RSUs are granted to the Participant free of charge.

 

		2.6	Each RSU entitles the Participant to receive one (1) Share provided the vesting condition set out
in this RSU Program 2020-1 Clause 3.1 is met (continued employment during the Vesting Period).

 

		2.7	The total number of RSUs allotted annually to all employees of the Company, including the Participants
under any share based long term incentive program including this RSU Program 2020-1 cannot exceed 10 % of the Shares.

 

		2.8	The aggregated number of share rights/warrants which can be exercised by the executive management and
share-based instruments allotted annually to members of the executive management shall not exceed 10% of the total number of shares in
the Company.

 

		3	VESTING Period

 

		3.1	The RSUs have a three-year vesting period from 14 September 2020 – 13 September 2023 (the
Vesting Period") and are subject to the Participant's continued employment during the Vesting Period.

 

		3.2	If the Participant is not employed on 13 September 2023 the RSUs shall automatically become null
and void notwithstanding the reason for termination of the employment.

 

    3 

     

    

 

		4	ORDINARY DELIVERY OF SHARES BASED ON RSUs

 

		4.1	Shares will automatically be delivered by the Company to the Participant at the latest 10 Danish business
days after release of the Company's annual report or interim report following the vesting date (13 September 2023).

 

		4.2	Shares shall be delivered by the Company into the Participant's custody account as specified by the Participant
no later than 1 August 2023.

 

		4.3	Shares shall be delivered by the Company free of charge.

 

		5	EXTRAORDINARY VESTING AND DELIVERY OF SHARES BASED ON RSUs
CONSIDERED VESTED

 

		5.1	In addition to the ordinary delivery of Shares as set out in Clause 4, the Board of Directors may, at
their sole discretion, at any time during the Vesting Period decide that the Company extraordinarily shall deliver Shares based on RSUs.
The Board of Directors may decide so including, but not limited to, in connection with extraordinary events such as liquidation of the
Company, the general meeting of the Company passes a resolution to merge or demerge the Company, significant divestments, a voluntary
or mandatory public offer is made, a compulsory acquisition of the Company's shares pursuant to the Danish Companies Act, delisting of
the Company etc.

 

		6	TRANSFER OF EMPLOYMENT

 

		6.1	If the Employer ceases to be a company in Zealand Pharma or if the Employer transfers activities and the
Participant accepts that his/her employment relationship is transferred as part of a business transfer, the Company has the following
two options: (a) the right to RSUs is upheld by the Participant on unchanged terms and conditions or (b) the RSUs are considered
as fully or partly vested as decided by the Board of Directors at their sole discretion and the Company delivers Shares to the Participant.
RSUs not considered as vested shall automatically become null and void without the Participant being entitled to any compensation.

 

		6.2	If the Company decides on option (b), the Company must inform the Participant about the extraordinary
delivery of Shares.

 

		6.3	The Board of Directors may at their sole discretion grant an exception to any the above principles based
on individual agreement with the Participant in question.

 

		7	NO INSIDER TRADING

 

		7.1	Sale of Shares received by a Participant is subject to the provisions on insider trading applicable at
any time.

 

		8	CHANGES IN THE COMPANY ́S CAPITAL AND DIVIDEND

 

		8.1	If the Company issues new shares, warrants, convertible bonds etc. that give the holder the right to subscribe
for new shares in the Company; reduces or increases its share capital to any other price than the market price; merges as the surviving
company; changes the nominal value of the shares; issues bonus shares or pays dividend, the number of RSUs shall not be adjusted. However,
the Board of Directors may decide to adjust the number of RSUs. When calculating an adjustment, if any, the amount is to be rounded down
to the next whole number of RSUs.

 

		8.2	If the Board of Directors decides to adjust the number of RSUs, The Company shall ask its auditor or an
independent third party appointed by the Company to calculate whether the number of RSUS shall be adjusted and, if so, the adjustment
to be made. The result of the calculation will be forwarded to the Company and then to the Participants. The auditor's or the other independent
third party's calculation is final and binding on the Company and the Participant. The costs to the auditor or independent third party
shall be paid by the Company.

 

		8.3	If the Company pays any dividend, the number of RSUs is not to be adjusted unless otherwise decided by
the Board of Directors at its sole discretion.

 

    4 

     

    

 

		8.4	During the Vesting Period, the Participants shall not have any right based on the Participants' holding
of RSUs to vote at shareholders' general meetings of the Company, nor any right to receive dividends in respect of the RSUs.

 

		9	CASH SETTLEMENT

 

		9.1	If the Participant acquires the right to receive Shares based on vested RSUs, the Company may decide to
make the settlement in cash instead of delivering Shares.

 

		9.2	If the Company decides to settle in cash, the value of each Share shall shall be determined based on the
average closing share price of the Shares for the three-day trading period following the latest open trading window prior to the latest
date on which Shares should have been delivered to the Participant.

 

		9.3	If the Company decides to make the settlement in cash instead of delivering Shares, the Company must inform
the Employer hereof no later than on the date when the Company was to deliver the Shares.

 

		10	RECLAIM OF RSUs AND
SHARES

 

		10.1	The Company will, under special circumstances, be entitled to reclaim any RSUs and Shares awarded under
this RSU Program 2020-1 on the basis of data that have been misstated.

 

		11	OTHER TERMS AND CONDITIONS

 

		11.1	The RSUs are a personal right that cannot be assigned, pledged or used as payment to the Participant's
creditors.

 

		11.2	The RSUs and the Shares or the value of such shares is not to be included in calculations based on the
Participant's salary, including any pension contributions, severance payment, any other agreed or compulsory compensation or damages etc.,
just as holiday pay or holiday allowance is not to be calculated on the basis of the value of any RSUs or Shares.

 

		11.3	In one or several periods the Company may suspend or change the granting of RSUs and/or the delivery of
Shares if the Company deems it necessary in order for the Company or its subsidiaries to comply with relevant Danish and foreign legislation
and administrative rules and regulations. If due to the suspension, the RSUs and/or the Shares cannot be granted/delivered, the granting/delivery
will take place as soon as possible.

 

		11.4	Should any provision of this RSU Program 2020-1 be or become invalid in whole or in part, this shall not
affect the validity of the remaining provisions of the RSU Program 2020-1. The invalid provision shall be replaced by a provision permitted
by statute which most closely approximates the intended economic result of the invalid provision.

 

		12	TAX

 

		12.1	Any tax and social security contribution implications for the Participants resulting from any grant of
RSUs or Shares are of no concern to the Company or to the Employer.

 

		12.2	In the event that, as a consequence of the allotment of RSUs or the delivery of Shares, the Company or
the Employer becomes obliged to pay any taxes, social security contributions or any other taxes or contributions, the Company reserves
the right to postpone or prohibit delivery of the Shares until such time as such Participant shall have paid to the Company or to the
Employer, the relevant amount of such taxes, social security contributions or any other taxes or contributions. The Company or, as applicable,
the relevant Employer reserves the right to (i) deduct the amount of such taxes, social security contributions or other taxes or
contributions from the salary payable to the Participant, or (ii) to dispose of all or part of the Shares in order to satisfy the
Participant's obligations.

 

    5 

     

    

 

		13	Data protection

 

		13.1	In accordance with the General Data Protection Regulation, the Participant is hereby informed that the
personal data relating to his/her name, contact details, holding of RSUs and shares and salary will be processed to administer the RSUs,
to ensure fulfillment of the Company’s contractual obligations toward the Participant, and to comply with applicable laws, regulations
and court orders. The personal data will further be transferred from the Employer where the Participant is employed to other employers,
to the online administration platform provider or to public authorities to the extent required in connection with the allocation or administration
of the RSUs. More comprehensive information about the processing of the Participant’s personal data, including the Participant’s
rights with respect to such processing, can be found on the Company’s intranet.

 

		14	GOVERNING LAW AND VENUE

 

		14.1	The construction, validity and performance of this RSU Program 2020-1 shall be governed by and construed
in accordance with the laws of Denmark without regard to conflicts of laws principles.

 

		14.2	Any dispute, controversy or claim arising out of or relating to this RSU Program 2020-1, or its breach,
termination or validity shall be settled by the Danish courts according to Danish law, unless the Company decides to settle the dispute
by arbitration. Should the Company decide to do so, such dispute shall be finally settled by arbitration in accordance with the Rules of
Procedure of the Danish Institute of Arbitration. The place of the arbitration shall be Copenhagen, Denmark and the language of the proceedings
shall be English, unless otherwise agreed. If more than one Participant becomes subject to arbitration proceedings, fully or partly due
to the same set of factual circumstances, such parties agree that the cases can be dealt with jointly by one arbitration tribunal. The
arbitration tribunal shall decide the distribution of costs connected with the arbitration case. The existence of an arbitration case
as well as any ruling made by the arbitration tribunal shall be kept in strict confidence.

 

		15	DEFINITIONS

 

		15.1	Definitions used in this RSU Program 2020-1 are set out in Exhibit 1.1.

 

Approved by the Board of Directors of Zealand
Pharma A/S on 14 September 2020.

 

    6 

     

    

 

EXHIBIT 15.1 – DEFINITIONS

 

"Board of Directors" means the
board of directors of the Company

 

"Company" means Zealand Pharma
A/S, CVR. no. 20045078

 

"Employer" means the company
within the Zealand Pharma Group employing the Participant

 

"Entry Letter" means the letter
signed by the Company and co-signed by each Participant (electronically) certifying the participation of the Participant under RSU PROGRAM
2020-1 including specification of the number of RSUs awarded to the Participant

 

"RSU PROGRAM 2020-1" means this
Restricted Share Unit Program 2020 including exhibit 15.1

 

"Zealand Pharma Group" means
the Company and its subsidiaries

 

"Participant" means a member
of the corporate management of the Zealand Pharma Group appointed by the Board of Directors to participate in the RSU Program 2020-1

 

"Restricted Share Unit" means
a conditional right to one (1) Share under this RSU Program 2020-1

 

"Service Agreement" means an
individual service agreement entered into between an Employer and a Participant

 

"Share" means a share of nominal
DKK 1 in the Company

 

"Vesting Period" means 14 September 2020
 – 13 September 2023

 

    7 

     

    

 

 

 

Frank Sanders

 

14 September 2020

 

Entry Letter for Restricted Share Unit Program
2020-1

 

Dear Frank Sanders

 

Reference is made to the Restricted Share Unit
Program 2020 (the "RSU Program 2020-1") attached to this Entry Letter.

 

All capitalised terms used in this Entry Letter
shall have the same meaning as in the RSU Program 2020-1 unless otherwise defined in this Entry Letter.

 

The Company hereby grants you 5,864 RSUs with
a total value of DKK 1,293,129 (USD 206,027) (the "2020 Grant").

 

The RSUs are subject to the terms and conditions
set out in the RSU Program 2020-1.

 

This Entry Letter must be accepted electronically
no later than 17 September 2020.

 

In order to receive the RSUs you must inform the
Company of your Custody bank and account number no later than 1 August 2023.

 

We look forward to a continued fruitful co-operation.

 

Yours sincerely

 

	Zealand Pharma A/S	Zealand Pharma A/S 
	 
	 	 
	Martin Nicklasson	Kirsten Drejer
	Chairman of the Board of Directors	Vice Chairman of the Board of Directors

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