Document:

Exhibit 10.13

 

CONFIDENTIAL

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission.

Confidential Treatment Requested under 17 C.F.R. Sections 200.80(b)(4) and 230.406

 

DATED 28 January 2015

 

(1)                                 IMMUNOCORE LIMITED

 

(2)                                 ADAPTIMMUNE LIMITED

 

 

TARGET COLLABORATION DEED

 

 

 

Penningtons Manches LLP

9400 Garsington Road

Oxford Business Park

Oxford

OX4 2HN

 

Tel: +44 (0)1865 722106

Fax: +44 (0)1865 201012

www.penningtonsmanches.com

 

 

CONFIDENTIAL

 

CONTENTS

 

	
1.
    	
DEFINITIONS   AND INTERPRETATION
    	
3
    
	
2.
    	
CONFIDENTIALITY
    	
6
    
	
3.
    	
TARGET   DATABASE
    	
8
    
	
4.
    	
TARGET   IDENTIFICATION
    	
9
    
	
5.
    	
T-CELL   CLONING
    	
11
    
	
6.
    	
INTELLECTUAL   PROPERTY RIGHTS
    	
13
    
	
7.
    	
PAYMENT   TERMS, EXPENSES AND VAT
    	
14
    
	
8.
    	
PREVIOUS   AGREEMENT
    	
16
    
	
9.
    	
LIABILITY
    	
16
    
	
10.
    	
INSURANCE
    	
16
    
	
11.
    	
TERMINATION
    	
17
    
	
12.
    	
FORCE   MAJEURE
    	
18
    
	
13.
    	
CONFIDENTIALITY   AND ANNOUNCEMENTS
    	
18
    
	
14.
    	
ASSIGNMENT
    	
18
    
	
15.
    	
SEVERANCE
    	
19
    
	
16.
    	
VARIATION   AND WAIVER
    	
19
    
	
17.
    	
NOTICES
    	
19
    
	
18.
    	
WHOLE   AGREEMENT
    	
21
    
	
19.
    	
THIRD   PARTY RIGHTS
    	
21
    
	
20.
    	
COUNTERPARTS
    	
21
    
	
21.
    	
GOVERNING   LAW AND JURISDICTION
    	
21
    

 

2

 

CONFIDENTIAL

 

THIS DEED is dated                                                                                 2015

 

and is made BETWEEN:

 

(1)                                 IMMUNOCORE LIMITED a company incorporated and registered in England and Wales under company number 6456207 whose registered office is at 91 Milton Park, Abingdon, Oxfordshire, OX14 4RY (“Immunocore”); and

 

(2)                                 ADAPTIMMUNE LIMITED a company incorporated and registered in England and Wales under company number 6456741 whose registered office is at 91 Milton Park, Abingdon, Oxfordshire, OX14 4RY (“Adaptimmune”).

 

BACKGROUND:

 

(A)                               Immunocore is engaged in developing and commercialising products containing soluble T-Cell receptors;

 

(B)                               Adaptimmune is engaged in developing and commercialising products that are transfected with genes encoding T-Cell receptors;

 

(C)                               The parties wish to collaborate in relation to certain target identification activities;

 

OPERATIVE PROVISIONS:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                               In this Deed the following words and expressions shall bear the meanings ascribed to them below:

 

	
“Affiliate”
    	
 
    	
means any person   or company or other entity that, directly or indirectly (through one or more   intermediaries) controls, is controlled by, or is under common control with a   party. For the purposes of this Clause “control” means: (i) the direct   or indirect ownership of more than fifty percent (50%) of the voting stock or   other voting interests or interest in the profits of the entity; or (ii) the   power to control the board of directors or equivalent governing body or   management of the entity. For the purposes of this definition Adaptimmune and   Immunocore shall not be considered to be Affiliates of each other;
    
	
 
    	
 
    	
 
    
	
“Assignment   and Exclusive Licence”
    	
 
    	
an Assignment and   Exclusive Licence made between the parties as of [insert date];
    
	
 
    	
 
    	
 
    
	
“Business   Day”
    	
 
    	
a day other than a   Saturday, Sunday or public holiday when clearing banks in London are open for   the transaction of non-automated banking business;
    
	
 
    	
 
    	
 
    
	
“Confidential   Information”
    	
 
    	
(a)                                 all commercial, technical, financial and   other information of whatever nature and in whatever form (whether written,   oral, visual, recorded, graphical, electronic or otherwise) relating to the   business, technology or other affairs of the relevant
    

 

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party; and

 

(b)                                 any systems, ideas, concepts, know-how,   techniques, drawings, specifications, blueprints, tracings, diagrams, models,   functions, designs and capabilities (including computer software, data and   hardware used in conjunction with such software, business procedures,   manufacturing processes or other information embodied in drawings or   specifications) and any other intellectual property of the relevant party;
    
	
 
    	
 
    	
 
    
	
“Effective   Date”
    	
 
    	
28   January 2015;
    
	
 
    	
 
    	
 
    
	
“Force   Majeure Event”
    	
 
    	
any cause   affecting the performance by a party of its obligations under this Deed   arising from acts, events, omissions or non-events beyond its reasonable   control, including:

 

(a)                                 acts of God, including fire, flood, earthquake,   windstorm or other natural disaster;

 

(b)                                 war, threat of or preparation for war, armed   conflict, imposition of sanctions, embargo, breaking off of diplomatic   relations or similar actions;

 

(c)                                  acts of terrorism;

 

(d)                                 adverse weather conditions; or

 

(e)                                  fire, explosion or accidental damage;
    
	
 
    	
 
    	
 
    
	
“FTE   Rate”
    	
 
    	
means a rate per   individual regardless of seniority and as specified in Schedule 1;
    
	
 
    	
 
    	
 
    
	
“Intellectual   Property Rights”
    	
 
    	
patents, rights to   inventions, copyright and related rights, trade marks, trade names and domain   names, rights in designs, rights in computer software, database rights,   rights in confidential information and any other intellectual property   rights, in each case whether registered or unregistered and including all   applications (or rights to apply) for, and renewals or extensions of, such   rights and all similar or equivalent rights or forms of protection which   subsist or will subsist now or in the future in any part of the world;
    
	
 
    	
 
    	
 
    
	
“Joint   Target Identification”
    	
 
    	
any Target   Identification work performed by either Adaptimmune or Immunocore other than   any Partner Target Identification or Other Target Identification;
    

 

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“Materials”
    	
 
    	
the materials   provided by one party to the other party for the performance of a Project   including all constructs, libraries, derivatives, portions, improvements or   components of them or obtained from them or as a result of their use but   excluding Results;
    
	
 
    	
 
    	
 
    
	
“Non-Partner   Materials”
    	
 
    	
Any Materials   other than Partner Materials;
    
	
 
    	
 
    	
 
    
	
“Other   Target Identification”
    	
 
    	
means any Target   Identification carried out by either Adaptimmune or Immunocore on behalf of a   Third Party other than Partner Target Identification;
    
	
 
    	
 
    	
 
    
	
“Partner   Materials”
    	
 
    	
Materials which   are either (a) provided by a Third Party for validation or use by one or   other of Immunocore or Adaptimmune; or (b) in relation to which   Immunocore or Adaptimmune has agreed to provide validation services or other   services for any Third Party (excluding any Targets in the Target Database);
    
	
 
    	
 
    	
 
    
	
“Partner   Target Identification”
    	
 
    	
any Target   Identification work performed by either Adaptimmune or Immunocore on behalf   of a Third Party and in each case following acceptance of a Target Nomination   from a Third Party by the relevant party and including where such work is   performed on Partner Materials. Partner Target Identification excludes any   T-cell Cloning;
    
	
 
    	
 
    	
 
    
	
“Previous   Agreement”
    	
 
    	
Means the   Facilities and Services Agreement between the parties dated 31   July 2014;
    
	
 
    	
 
    	
 
    
	
“Project”
    	
 
    	
any project agreed   between the parties in relation to T-cell cloning and as set out in a Project   Schedule signed by both parties or otherwise agreed in writing between the   parties;
    
	
 
    	
 
    	
 
    
	
“Project   Schedule”
    	
 
    	
A schedule setting   out the scope of any Project and performance obligations of each party and   signed by both parties;
    
	
 
    	
 
    	
 
    
	
“Requesting   Party”
    	
 
    	
has the meaning   set out in clause 5.2;
    
	
 
    	
 
    	
 
    
	
“Results”
    	
 
    	
all results, data,   materials and information generated or created by either party in the   performance of any Project;
    
	
 
    	
 
    	
 
    
	
“Target”
    	
 
    	
means any protein   or other biological molecule from which an HLA-presented antigen is derived   (including all HLA alleles);
    
	
 
    	
 
    	
 
    
	
“Target   Database”
    	
 
    	
A database   comprising all Targets identified, isolated or characterised during Joint   Target Identification and maintained in accordance with clause 3;
    

 

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“Target   Identification”
    	
 
    	
Work performed for   the initial identification and qualification of a Target meaning any or all   of identification of an HLA-presented peptide by mass spectrometry,   quantification of mRNA expression of the parent protein antigen in normal   human tissues and assessment of parent protein antigen frequency in relevant   disease or tumour types together with associated identification and   qualification activities. Target Identification excludes any T-cell cloning;
    
	
 
    	
 
    	
 
    
	
“Target   Nomination”
    	
 
    	
a written   notification from a Third Party in accordance with an agreement between a   party to this Deed and any Third Party, where such written notification   results in or will (following acceptance of notification by the relevant   party) result in the granting of an exclusive licence to such Third Party or   an option for such an exclusive licence to a Third Party. Such notification   will apply in relation to the Target specified in the written notification   from the Third Party;
    
	
 
    	
 
    	
 
    
	
“T-cell   Cloning”
    	
 
    	
any work performed   by either Adaptimmune or Immunocore which is for the identification,   isolation or characterisation of any wild-type T-cell receptor or T-cell   clone comprising such wild-type T-cell receptor directed or intended to be   directed to any Target;
    
	
 
    	
 
    	
 
    
	
“Third   Party”
    	
 
    	
any person,   company or other entity other than Adaptimmune, Immunocore or any   Affiliate of Adaptimmune or Immunocore;
    
	
 
    	
 
    	
 
    
	
“TIC”
    	
 
    	
means the Target   Identification Committee set up pursuant to clause 4.4;
    

 

1.2                               The headings in this deed are inserted for convenience only and shall not affect its construction.

 

1.3                               A reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension, or re-enactment and includes any subordinate legislation for the time being in force made under it.

 

1.4                               Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders.

 

1.5                               Unless the context otherwise requires, words in the singular include the plural and in the plural include the singular.

 

1.6                               The schedules to this Deed form part of (and are incorporated into) this Deed.

 

2.                                      CONFIDENTIALITY

 

2.1                               Immunocore shall:

 

2.1.1                                             keep any Confidential Information of Adaptimmune secret;

 

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2.1.2                                             not use or directly or indirectly disclose any such Confidential Information (or allow it to be used or disclosed), in whole or in part, to any person without the prior written consent of Adaptimmune;

 

2.1.3                                             ensure that no person gets access to such Confidential Information from it, its officers, employees or agents unless authorised to do so by Adaptimmune; and

 

2.1.4                                             inform Adaptimmune immediately on becoming aware, or suspecting, that an unauthorised person has become aware of such Confidential Information.

 

For clarity, Confidential Information of Adaptimmune shall include any results, data, analysis, targets and work product arising from any Partner Target Identification requested by Adaptimmune, any Results owned by Adaptimmune and any Intellectual Property Rights arising or reduced to practice in the performance of any Project or Partner Target Identification and in each case solely owned by Adaptimmune.

 

2.2                               Adaptimmune shall:

 

2.2.1                                             keep any Confidential Information of Immunocore secret;

 

2.2.2                                             not use or directly or indirectly disclose any such Confidential Information (or allow it to be used or disclosed), in whole or in part, to any person without the prior written consent of Immunocore;

 

2.2.3                                             ensure that no person gets access to such Confidential Information from it, its officers, employees or agents unless authorised to do so by Immunocore; and

 

2.2.4                                             inform Immunocore immediately on becoming aware, or suspecting, that an unauthorised person has become aware of such Confidential Information.

 

For clarity, Confidential Information of Immunocore shall include any results, data, analysis, targets and work product arising from any Partner Target Identification requested by Immunocore, any Results owned by Immunocore and any Intellectual Property Rights arising or reduced to practice in the performance of any Project or Partner Target Identification and in each case solely owned by Immunocore.

 

2.3                               The duty of non-disclosure set out in clauses 2.1 and 2.2 shall not apply to any Confidential Information which (a) is or becomes publicly known without the faulty of any party; or (b) is obtained from a third party in circumstances where the party receiving from such third party has no reason to believe that there has been a breach of an obligation of confidentiality; or (c) is approved for release in writing by an authorised representative of the other party.

 

2.4                               Adaptimmune and Immunocore may disclose the Confidential Information of the other party where required to do so in order to comply with any court order or regulatory requirement or other statutory obligation. Any disclosure shall be subject, where possible, to prior notification to the other party and co-operation with the other party to obtain any protective order, obligation of confidence or other protective measure as might be reasonably obtained by the party owning the Confidential Information required to be disclosed and in relation to such Confidential Information. Any disclosure under this clause 2.4 shall only be made

 

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to the extent required by the relevant regulatory requirement, statutory obligation or court order.

 

3.                                      TARGET DATABASE

 

3.1                               The parties shall jointly set up and maintain a Target Database. The Target Database will hold the peptide sequence details identified as potential epitopes from the relevant Targets together with any other relevant and confidential details of any Target resulting from Joint Target Identification. The Target Database shall be maintained by the head of the Joint Target Identification group (“Database Controller”) who shall keep the contents of the Target Database up to date and shall maintain, modify and update the contents of the Target Database on behalf of both of Adaptimmune and Immunocore.  Immunocore shall use all reasonable endeavours to procure that the Database Controller maintains any sequence information of any Target within the Target Database confidential on behalf of both parties despite such individual being an employee of Immunocore. The name of the head of the Joint Target Identification group as at the Effective Date is Dr Emma Hickman and Immunocore shall notify Adaptimmune of any change in identity of individual as soon as reasonably possible after becoming aware of any need for a change in individual, for example as a result of termination of employment. Immunocore shall ensure that there is always at least one Immunocore employee appointed as the Database Controller during the term of this Deed.

 

3.2                              Upon receipt of written notification from Adaptimmune or Immunocore that it wishes to initiate a T-cell Cloning directed to a specified Target, or that it has accepted a Target Nomination from a third party, the Database Controller shall provide the requesting party all contents of the Target Database specific to the Target or as relevant to any peptide sequence identified within such Target (including where such peptide sequence is present within more than one Target). Despite such release of sequence information Adaptimmune or Immunocore as relevant will use all reasonable endeavours to procure and maintain the ongoing confidentiality of the relevant sequence information.

 

3.3                               Both parties may from time to time wish to discuss with Third Parties the practicability of developing products directed to a Target and this may include a requirement to confirm whether peptides from a Target proposed by a Third Party are already present within the sequences of Targets identified in the Target Database.  In order to prevent contamination with Third Party supplied Target information each of Immunocore and Adaptimmune may request in writing that a copy of the Target Database or access to the Target Database be provided to an independent Third Party external to both Immunocore and Adaptimmune (“Independent Expert”) and who would search the Target Database to ascertain whether any Third Party peptides or Target sequences are already comprised within the Target Database.   The Independent Expert shall not be authorised to disclose the sequence of any peptides from a Target within the Target Database to any Third Party but shall be authorised to identify whether any peptides from the Third Party Target are present or absent within the Target Database, and in the case of presence the number of peptides identified as already present within the Target Database, the number of cell lines and experiments the peptide has been detected in within the Target Database and the experimental confidence score of the detected peptide in each experiment. As at the Effective Date the independent external Third Party appointed by the parties to perform such searching of the Target Database is Kilburn and Strode.

 

3.4                               At some point it is intended by the parties that there will be no further requirement for Joint Target Identification. At such time which will be mutually

 

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agreed between the parties or alternatively within 30 days of receipt of a written request from Adaptimmune for provision of a copy of the Target Database in accordance with this clause, one copy of the entire contents of the Target Database will be provided by Immunocore to Adaptimmune and thereafter the provisions of clauses 3.1 — 3.3 shall cease to apply and each party will maintain its own copy of the Target Database independently of the other party. Both parties shall, however, continue to maintain the sequences of any Targets within the Target Database as at the time of copying of Target Database to Adaptimmune as confidential in accordance with the terms of this Deed and at all times subject to the terms of any third party agreements entered into by Adaptimmune or Immunocore as relevant.

 

3.5                               For clarity, no Results generated from any Project and arising from Partner Target Identification or any sequence information resulting from analysis of Partner Materials shall be included in the Target Database and Immunocore (including through the Database Controller) and Adaptimmune shall cooperate to ensure that all Results and sequence information resulting from such Partner Target Identification are stored separately and with reasonable safeguards to ensure confidentiality in such Results or sequence information.

 

4.                                      TARGET IDENTIFICATION

 

4.1                               The parties will cooperate in performing all Joint Target Identification and Partner Target Identification as may be reasonable or necessary for each party including providing reasonable access to employees performing Joint Target Identification and to facilities within which Target Identification is performed. Any access to facilities will be subject to the party being granted such access complying with all reasonable health and safety policies or requirements that may be applicable to such access.

 

4.2                               Each party agrees to comply with the following in performing any Joint Target Identification or Partner Target Identification:

 

4.2.1                                             each party shall use reasonable skill and care to perform Joint Target Identification and Partner Target Identification and will use reasonable endeavours to perform its designated tasks for Joint Target Identification and Partner Target Identification within the timescales set by the TIC or as otherwise requested by any party;

 

4.2.2                                             each party will use reasonable endeavours to ensure that all employees contributing to any Joint Target Identification and Partner Target Identification keep detailed notebooks and comply with any laboratory record keeping protocol agreed between the parties; and

 

4.2.3                                             each party will ensure that all individuals working on or performing the Joint Target Identification and Partner Target Identification are under contracts of employment or service agreements which (to the extent legally possible) assign to the employing party all right, title and interest in any results, data, work product or Intellectual Property Rights resulting from performance of Joint Target Identification and Partner Target Identification.

 

4.3                               Each of the parties may also choose in its sole discretion to carry out any Partner Target Identification using its own employees, consultants or other Third Parties. There shall be no obligation on the party performing such Partner Target Identification to provide copies of or access to any results generated as a result of the performance of such Partner Target Identification.

 

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4.4                               The parties shall set up a management committee to oversee any Joint Target Identification and Partner Target Identification work, the Target Identification Committee (“TIC”). The TIC shall be responsible for:

 

4.4.1                                             Determining the order in which Joint Target Identification and Partner Target Identification will be performed and the resources allocated to any Joint Target Identification and Partner Target Identification (such priorities to reflect any commitments between either party and any Third Party partner);

 

4.4.2                                             The relative priorities of any Joint Target Identification and Partner Target Identification performed and resolution of any competing demands on the resources of the individuals performing Joint Target Identification and Partner Target Identification;

 

4.4.3                                             The timescales for performance of Joint Target Identification and Partner Target Identification; and

 

4.4.4                                             maintaining a record of the individuals assigned to Joint Target Identification and Partner Target Identification on behalf of each party.

 

In making any decision on priority of Joint Target Identification and Partner Target Identification, the parties shall use reasonable endeavours to ensure that the demands of Partner Target Identification do not override and prevent the carrying out of Joint Target Identification subject in each case to any Third Party commitments agreed by either party. In particular, Immunocore will ensure that it has sufficient employees carrying out Target Identification such that taken over any calendar month an average of at least two (2) Immunocore employees are working on Joint Target Identification during such calendar month. Such obligation shall expire on the date two years after the Effective Date.

 

4.5                               The TIC shall comprise three (3) members from each of Immunocore and Adaptimmune. Other employees or consultants of a party may attend meetings of the TIC as observers and each party shall be entitled to permit such other individuals to attend TIC meetings, where they consider such attendance is reasonably necessary or desirable. Where attendees are consultants, any attendance by such consultants will be subject to such consultants agreeing to comply with confidentiality terms equivalent to those set out in this Deed. Each party shall have one vote on the TIC regardless of the number of members attending or other observers attending any TIC meeting. The TIC shall meet on a regular basis, at least once every three months and an agenda will be circulated for each meeting at least five (5) Business Days ahead of each meeting. Minutes will be taken at each meeting and circulated by e-mail within five (5) Business Days of any meeting. The other party will have a further five (5) Business Days to object to or comment on the minutes. Any objections or comments shall be addressed at the next TIC meeting. Organisation of the TIC meetings, circulation of agenda and the taking of minutes shall alternate between the parties, with the first TIC meeting after the Effective Date being organised by Immunocore. Meetings may be in person or by conference call.

 

4.6                               In the event of dispute within the TIC which can not be resolved by the TIC within thirty (30) days of any TIC meeting, either party may refer the matter to the COO, CBO or CEO of each party for resolution. Where the relevant representatives of the party are still unable to resolve the matter within a further seven (7) Business Days, either party may request resolution by arbitration in accordance with the arbitration rules of the International Chamber of Commerce. Arbitration shall be binding on both parties in the absence of fraud or manifest

 

10

 

error on the part of the arbitrator. The number of arbitrators shall be one and the arbitration shall be held in Oxford, England.

 

4.7                               Where either Party wishes to use the resources of the other Party to carry out any Other Target Identification, the scope of such Other Target Identification will be mutually agreed between the parties save that either party shall not unreasonably withhold or refuse to provide its resources to assist with Other Target Identification.

 

4.8                               All results, data, analysis, Targets and work product arising from the performance of Joint Target Identification (excluding Intellectual Property Rights) shall be owned jointly by the parties and each party shall provide ongoing access to such results, data, analysis, Target and work product arising from the performance of Joint Target Identification. Any request for access shall be made in writing or by e-mail (provided in the case of e-mail, receipt is acknowledged) and shall specify the results, data, analysis, Target or work product required with sufficient clarity to enable the receiving party to identify the scope of access being requested. Access shall be provided as soon as reasonably possible and in any event within 10 Business Days of receipt of request for access. Any access shall be provided within business hours and the party providing access shall cooperate fully with the request for access. The access rights will be supervised and the party requesting such access shall comply with all reasonable health and safety requirements of the other party. Such obligation to provide ongoing access shall survive any termination or expiry of this Deed.

 

4.9                               The parties shall each keep any Target sequence information arising from the performance of Joint Target Identification confidential as if such results, data, analysis, Targets and work product were Confidential Information of the other party and such Target sequence information will be added to the Target Database and maintained in accordance with clause 3.

 

4.10                        All results, data, analysis, targets and work product arising from the performance of Partner Target Identification (excluding Intellectual Property Rights) shall be owned by the party required to carry out the Partner Target Identification on behalf of the relevant Third Party (“Relevant Party”). The non-Relevant Party shall maintain such results, data, analysis, targets and work product as confidential and such shall not be incorporated within the Target Database. The non-Relevant Party shall provide access to such results, data, analysis, targets and work product as reasonably required and requested by the Relevant Party including copies and originals of such results, data, analysis, targets and work product.  Access, originals and copies shall be provided as soon as reasonably possible and in any event within ten (10) Business Days of receipt of request for such access, originals or copies. Any access shall be provided within business hours and the party providing access shall cooperate fully with the request for access. The access rights will be supervised and the party requesting such access shall comply with all reasonable health and safety requirements of the other party. Such obligation to provide ongoing access shall survive any termination or expiry of this Deed.

 

5.                                      T-CELL CLONING

 

5.1                               T-cell Cloning will either be carried out for the benefit of Adaptimmune in the case of a Project requested by Adaptimmune pursuant to clause 5.2 or for the benefit of Immunocore in the case of a Project requested by Immunocore pursuant to clause 5.2. The Results will be owned by the party requesting performance of the Project in accordance with clause 5.2. The Results will constitute Confidential Information of the party requesting performance. The other party agrees to

 

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comply with the obligations of confidentiality set out in clause 2 in relation to such Confidential Information.

 

5.2                               Where either party (“Requesting Party”) wishes the other party to carry out any Project it shall notify the other party (“Receiving Party”) in writing (“Project Notification”). The notification shall include details of the Project, required timescales and the details of the HLA-peptide(s) relevant to the Project. The Receiving Party shall acknowledge receipt of the Project Notification in writing within 10 Business Days of receipt and shall state in such acknowledgement if there are any third party restrictions in existence as at the date of Project Notification which would prevent it from performing the Project or restrict the scope of work which can be carried out in relation to such Project, save that confidential details of such third party restriction need not be provided if provision would result in a breach of any third party agreements. Following receipt of acknowledgement by the Notifying Party and to the extent that there are no third party restrictions applicable, the parties shall negotiate and agree the details of a project schedule for the Project set out in the Project Notification as soon as reasonably possible. Once agreed and signed in writing by both parties, such schedule shall become a Project Schedule under this Deed. The Project set out in such Project Schedule shall start on the date set out in the Project Schedule or the date of last signature by a party to the Project Schedule if no start date is specified.

 

5.3                               The parties recognise that each of them will need to have access to the staff that can carry out T-cell Cloning and that there may be competing demands upon the resource represented by such staff.  For example such staff may also be performing T-cell Cloning for a Third Party. The parties shall keep each other informed about their likely demands upon such resource and shall use their respective reasonable endeavours to ensure that, as far as is reasonably practicable, each party has such access to that resource as it needs in order to carry on its business in a timely and efficient manner.

 

5.4                               The following obligations shall apply to any Project:

 

5.4.1                                             each party shall use reasonable skill and care to perform the Project and will use reasonable endeavours to perform its tasks under any Project within the timescales agreed between the parties, as specified in the relevant Project Schedule.

 

5.4.2                                             each party will use reasonable endeavours to ensure that all employees contributing to any Project keep detailed notebooks and comply with any laboratory record keeping protocol agreed between the parties.

 

5.4.3                                             each party will assign a project manager to each Project to manage the day to day performance of the Project.  Each party shall have the right to change its Project manager upon written notice to the other party.

 

5.4.4                                             any Non-Partner Materials or Partner Materials shall remain the property of the providing party (or the relevant Third Party) unless otherwise agreed in writing between the parties.  The party receiving the Non-Partner Materials or Partner Materials shall use reasonable endeavours to:

 

(a)                                 keep the Non-Partner Materials and Partner Materials secure;

 

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(b)                                 use the Non-Partner Materials and Partner Materials only for the performance of the Project and with reasonable skill and care; and

 

(c)                                  ensure compliance with all applicable laws and regulations governing the transportation, keeping and use of the Non-Partner Materials and Partner Materials.

 

5.4.5                                             Each party will ensure that all individuals working on or performing the Project are under contracts of employment or service agreements which (to the extent legally possible) assign to the employing party all right, title and interest in any Results.

 

5.4.6                                             Any T-cell Cloning under any Project will be recorded in a project notebook which is specific to the party requesting such a Project. Such project notebooks will be kept separate from other notebooks of a party and shall be identifiable as containing Project specific information.

 

5.4.7                                             Each party shall procure that those of its employees who carry out T-cell Cloning shall record the time spent by them on such work on a time sheet which allocates such time to a specific Project.

 

5.4.8                                             The Requesting Party may terminate the relevant Project by notice in writing to the other party without cause and with immediate effect.

 

5.5                               On identification, isolation or characterisation of any t-cell clone or t-cell receptor as a result of T-cell Cloning, either party (“Notifying Party”) shall be entitled to serve a written notice on the other party (“Notified Party”) where the identification of any t-cell clone or t-cell receptor causes or results in any Third Party conflict or Third Party restriction arising for the Notifying Party. Any such notice must be served as soon as possible after the conflict or restriction becomes apparent to the Notifying Party and in any event before expiry of a period of one month after completion of any Project. To the extent legally possible (including in accordance with the terms of any Third Party agreement), the Notified Party shall take account of the notified conflict or restriction and where necessary cease any work on or in relation to the relevant t-cell clone or t-cell receptor, including as relevant not disclosing or transferring such t-cell clone or t-cell receptor on to any Third Party.

 

6.                                      INTELLECTUAL PROPERTY RIGHTS

 

6.1                               T-cell cloning Projects: Any Intellectual Property Rights in Results or arising or reduced to practice in the performance of a Project shall be owned by the Requesting Party. Where Immunocore is the Requesting Party, Adaptimmune hereby assigns and agrees to assign such Intellectual Property Rights to Immunocore. Where Adaptimmune is the Requesting Party, Immunocore hereby assigns and agrees to assign such Intellectual Property Rights to Adaptimmune. Such Intellectual Property Rights shall be deemed the confidential information of the party owning such Intellectual Property Rights and shall be maintained as confidential by the other party in accordance with clause 2.

 

6.2                               Partner Target Identification: Any Intellectual Property Rights arising or reduced to practice in the performance of Partner Target Identification shall be owned by the party receiving the relevant Target Nomination and requesting such Partner Target Identification. Where Immunocore is the relevant requesting party, Adaptimmune hereby assigns and agrees to assign such Intellectual Property

 

13

 

Rights to Immunocore. Where Adaptimmune is the relevant requesting party, Immunocore hereby assigns and agrees to assign such Intellectual Property Rights to Adaptimmune. Such Intellectual Property Rights shall be deemed the confidential information of the party owning such Intellectual Property Rights and shall be maintained as confidential by the other party in accordance with clause 2.

 

6.3                               Joint Target Identification: Any Intellectual Property Rights arising from or reduced to practice during the performance of Joint Target Identification, shall be owned jointly in equal undivided shares by Adaptimmune and Immunocore (“Joint Results”). Each party agrees to take all steps as may be necessary to vest ownership of Joint Results in the parties in accordance with this clause 6.3.  The parties shall each keep the Joint Results confidential as if such Joint Results were Confidential Information of the other party save that each party shall be entitled to disclose Joint Results other than the Target peptide sequences in the Target Database to Third Parties and Affiliates as may be reasonably necessary for the business of each party and subject to such Third Parties agreeing to equivalent obligations of confidentiality as set out under this Deed.

 

6.4                               Immunocore and Adaptimmune each agree to licence the Joint Results to the other party as if such Joint Results were “Results” under clause 3 of the Assignment and Exclusive Licence Agreement. Such licence shall take effect on creation or reduction to practice of the Intellectual Property Rights in such Joint Results and shall last for the same duration as the licence granted under clause 3 of the Assignment and Exclusive Licence Agreement. Should either party wish to file a patent application in relation to any Joint Results the provisions of clause 4 of the Assignment and Exclusive Licence Agreement will apply and the Joint Results shall be treated as “Results” under clause 4 of the Assignment and Exclusive Licence Agreement.

 

6.5                               Each party agrees at its cost and expense to execute or to procure the execution of any further document or confirmatory assignment which may be reasonably required to affect ownership in accordance with clauses 6.1 — 6.3.

 

6.6                               Neither party shall intentionally infringe or misappropriate any Third Party intellectual property rights in performing any Project. Should either party become aware of any third party infringement being threatened or alleged in relation to any Results, Joint Results or results of Joint Target Identification, such party shall notify the other party as soon as reasonably possible and the parties shall reasonably cooperate in relation to the defence of any third party infringement.

 

6.7                               Each party hereby irrevocably appoints the other party to be its attorney in its name and on its behalf to execute documents, use a party’s name and do all things which are necessary or desirable for the other party to obtain for itself or its nominee the full benefit of clauses 6.1-6.3.

 

6.8                               Each party shall procure that all employment agreements with individuals performing Joint Target Identification or T-cell Cloning permit ownership of Intellectual Property Rights created, generated or reduced to practice during the performance of Joint Target Identification or T-cell Cloning by such individuals in accordance with this clause 6.

 

14

 

7.                                     PAYMENT TERMS, EXPENSES AND VAT

 

T-cell cloning and Partner Target Validation

 

7.1                               The party for whom any Partner Target Identification is being performed or any Project is being performed shall pay one hundred percent of the cost for the individuals performing the relevant Partner Target Identification or Project. Such cost shall be based on the time incurred in performance of the Partner Target Identification or T-cell cloning by such individuals and as recorded by such individuals against the relevant project code assigned to such work and shall be calculated at the FTE Rate. Such cost shall be calculated on a monthly basis in arrears. A party receiving an invoice in relation to any Partner Target Identification or Project costs shall be entitled to request access to the relevant timesheets to verify the cost set out in the invoice and there shall be no obligation to pay such invoice until the relevant timesheets have been provided to the paying party.

 

7.2                               The party for whom any Partner Target Identification is being performed or any Project is being performed shall also reimburse the other party for any third party expenses necessarily incurred by the other party in the performance of the Partner Target Identification or Project on production of reasonable documentary evidence of such expenses being incurred.

 

Joint Target Identification

 

7.3                               The number of individuals assigned by each party to Joint Target Identification will change from time to time and the TIC shall keep a record of those individuals assigned to Joint Target Identification by each party and the date such individuals are assigned or cease to be assigned to Joint Target Identification. The TIC shall also report on a monthly basis and update the financial controllers (or equivalent individuals) for each party of the level of individuals assigned to Joint Target Identification to enable the financial controllers to adjust Schedule 1 in accordance with clause 7.4.

 

7.4                               Each party shall pay 50 percent of the employment cost of such the individuals performing Joint Target Identification and assigned to Target Identification pursuant to clause 7.3. The employment cost for each individual assigned to Joint Target Identification as at the Effective Date shall be the amounts set out in Schedule 1 and shall be calculated at the appropriate FTE Rate. Schedule 1 shall be adjusted on a monthly basis in line with the record kept by the TIC under clause 7.3 and by mutual agreement between the financial controllers (or equivalent individuals) of each party.

 

General payment provisions

 

7.5                               Schedule 1 sets out the relevant cost position between the parties as at the Effective Date of this Deed. Schedule 1 shall be updated by the financial controllers (or equivalent individual) of both parties on a monthly basis. Any changes to the principles used in calculating the costs set out in Schedule 1 shall be mutually agreed between the parties and in each case shall reflect a fair proportion of the Employment Cost or other expenses incurred by the relevant party in providing services to the other party under this Deed.

 

7.6                               All sums expressed to be payable under this Deed are exclusive of VAT.

 

7.7                               Each party shall deliver to the other at the end of each month a VAT invoice in respect of the services provided by it to that other party during that month and as provided for in Schedule 1 (as amended from time to time) or otherwise required under this Deed.

 

15

 

7.8                               Each party receiving an invoice pursuant to clause 7.7 shall settle such invoice within 30 Business Days of receipt.

 

8.                                      PREVIOUS AGREEMENT

 

8.1                               The parties agree that this Deed amends and supersedes the Previous Agreement in relation to the subject matter of this Deed and where there is any conflict between this Deed and such previous agreement this Deed shall prevail.

 

8.2                               Notwithstanding the provisions of clause 8.1, Adaptimmune shall remain liable to pay to Immunocore any sums which became due or owing to Immunocore under the Previous Agreement prior to the Effective Date.

 

9.                                      LIABILITY

 

9.1                               This clause 9 sets out the entire financial liability of the parties (including any liability for the acts or omissions of their respective employees, agents, and sub-contractors) to each other in respect of any:

 

9.1.1                                             breach of this Deed;

 

9.1.2                                             use made by a party of any facilities or services provided by the other; and

 

9.1.3                                             representation, statement or tortious act or omission (including negligence) arising under, or in connection with, this agreement.

 

9.2                               Except as set out in this Deed, all warranties, conditions and other terms implied by statute or common law are, to the fullest extent permitted by law, excluded from this agreement.

 

9.3                               Nothing in this Deed shall limit or exclude the liability of either party for:-

 

9.3.1                                             death or personal injury resulting from negligence or fraud;

 

9.3.2                                             fraudulent misrepresentation; or

 

9.3.3                                             breach of any obligation in this Deed relating to intellectual property rights or confidentiality.

 

9.4                               Subject to the provisions of clause 9.3 and clause 9.5 the total liability of one party to the other arising under or in connection with this Deed whether in contract, tort for negligence or breach of statutory duty, misrepresentation or otherwise, shall not exceed £5 million.

 

9.5                               Subject to clause 9.3, neither party shall be liable to the other (whether in contract, tort, negligence or otherwise) for any indirect or consequential loss or damage, costs of expenses whatsoever, and howsoever arising out of or in connection with this Deed.

 

10.                               INSURANCE

 

10.1                        Each party shall:

 

10.1.1                                      obtain and maintain policies of insurance with a reputable insurance company in respect of its liabilities and obligations under this Deed; and

 

16

 

10.1.2                                      upon request, provide the other with a copy of the insurance certificates and policies within 10 Business Days of receipt of such request.

 

10.2                        If a party fails to obtain and maintain insurance in accordance with clause 10.1, the other party may, in its sole discretion either:

 

10.2.1                                      obtain the appropriate insurance itself; or

 

10.2.2                                      terminate this Deed in accordance with clause 11.

 

11.                               TERMINATION

 

11.1                        This Deed may be terminated by either party with immediate effect on giving written notice to the other party if:

 

11.1.1                                      the other party fails to pay any undisputed amount due under this agreement on the due date for payment and remains in default not less than 15 Business Days after being notified in writing to make such payment; or

 

11.1.2                                      the other party commits a material breach of a material term of this Deed and (if such breach is remediable) fails to remedy that breach within a period of 90 Business Days after receipt of notice in writing requiring it to do so; or

 

11.1.3                                      the other party commits a series of persistent minor breaches which, when taken together, amount to a material breach; or

 

11.1.4                                      the other party suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or is deemed unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986; or

 

11.1.5                                      the other party commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with its creditors; or

 

11.1.6                                      a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of the other party (other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of the other party); or

 

11.1.7                                      any liquidator, trustee in bankruptcy, receiver, administrative receiver, administrator or similar officer is appointed over or in respect of the other party or any part of its business or assets; or

 

11.1.8                                      a creditor or encumbrancer of the other party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of the other party’s assets and such attachment or process is not discharged within 90 Business Days;

 

11.1.9                                      the other party ceases, or threatens to cease, to carry on all or substantially the whole of its business; or

 

17

 

11.1.10                               the other party fails to obtain or maintain the insurance referred to in clause 10.

 

11.2                        Termination under clause 11.1 shall be without prejudice to any rights, remedies or obligations which have accrued as at termination, and subject to the provisions of clause 11.3, on termination, neither party shall have any obligation to the other under this Deed.

 

11.3                        Adaptimmune shall be entitled to terminate this Deed at any time by not less than six months’ notice in writing to Immunocore.

 

11.4                        Immunocore shall be entitled to terminate this Deed by not less than six months’ notice in writing to Adaptimmune expiring on or at any time after the day preceding the second anniversary of the Effective Date.

 

11.5                        For clarity, termination under this clause 11 by either party can be with respect to provision of Target Identification or T cell Cloning separately or as the entire Deed.

 

11.6                        On termination of this Deed (however arising), the following clauses shall continue in full force and effect [to be inserted once clauses finalised].

 

12.                               FORCE MAJEURE

 

12.1                        A party, provided that it has complied with clause 12.2, shall not be in breach of this Deed, nor liable for any failure or delay in performance of any obligations under this Deed arising from a Force Majeure Event.

 

12.2                       Any party that is subject to a Force Majeure Event shall not be in breach of this Deed provided that:

 

12.2.1                                      it promptly notifies the other party in writing of the nature and extent of the Force Majeure Event causing its failure or delay in performance; and

 

12.2.2                                      it has used reasonable endeavours to mitigate the effect of the Force Majeure Event to carry out its obligations under this Deed in any way that is reasonably practicable and to resume the performance of its obligations as reasonably possible.

 

12.3                        It the Force Majeure Event prevails for a continuous period in excess of three months, either party may terminate this Deed on 14 Business Days’ written notice. Termination under this clause 12.3 shall be without prejudice to the rights of the parties in respect of any breach of this Deed occurring before such termination.

 

13.                               CONFIDENTIALITY AND ANNOUNCEMENTS

 

Each party shall keep, and shall procure that its employees, agents and sub-contractors shall, keep secret and Confidential Information and any other information (whether or not technical) of a confidential nature which has been communicated to them by the other party either before the execution of, or as result of, this Deed, or of which its employees, agents or sub-contractors become aware when on the premises of the other party and shall not, and shall procure that its employees, agents and sub-contractors shall not, disclose the same (or any part of it) to any other person.

 

18

 

14.                               ASSIGNMENT

 

This Deed is personal to the parties and neither party shall, without the prior written consent of the other party assign, transfer, mortgage, charge or deal in any other manner with this agreement or any of its rights and obligations under or arising out of this Deed, or purport to do any of the same. Neither party shall sub-contract or delegate in any manner any or all of its obligations under this Deed to any third party or agent.

 

15.                               SEVERANCE

 

15.1                        If any provision of this Deed (or part of any provision) is found by any court or other authority of competent jurisdiction to be invalid, illegal or unenforceable, that provision or part-provision shall, to the extent required, be deemed not to form part of this Deed, and the validity and enforceability of the other provisions of this Deed shall not be affected.

 

15.2                        If a provision of this Deed (or part of any provision) is found illegal, invalid or unenforceable, the parties shall negotiate in good faith to amend such provision such that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the parties’ original commercial intention.

 

16.                               VARIATION AND WAIVER

 

16.1                        A variation of this Deed shall be in writing and signed by or on behalf of each party.

 

16.2                        Any waiver of any right under this Deed is only effective if it is in writing and signed by the waiving or consenting party and it applies only in the circumstances for which it is given and shall not prevent the party who has given the waiver or consent from subsequently relying on the provision it has waived.

 

16.3                        Failure to exercise, or any delay in exercising, any right or remedy provided under this Deed or by law shall not constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict any further exercise of that or any other right or remedy.

 

16.4                        No single or partial exercise of any right or remedy provided under this Deed or by law shall preclude or restrict the further exercise of that or any other right or remedy.

 

17.                               NOTICES

 

17.1                        A notice or other communication given to a party under or in connection with this Deed:

 

17.1.1                                      shall be in writing and in English;

 

17.1.2                                      shall be signed by or on behalf of the party giving it;

 

17.1.3                                      shall be sent to the party for the attention of the person at the address, or fax number specified in this clause (or to such other person or to such other address or fax number as that party may notify to the others, in accordance with the provisions of this clause 17); and

 

17.1.4                                      may be:

 

(a)                                 delivered personally; or

 

(b)                                 sent by commercial courier; or

 

19

 

(c)                                  sent by pre-paid first-class post or recorded delivery; or

 

(d)                                 sent by fax.

 

17.2                        The addresses for delivery of a notice or other communication are as follows:

 

17.2.1                                      Immunocore:

 

(a)                                 address: 90 Milton Park, Abingdon, Oxfordshire, OX14 4RY

 

(b)                                 for the attention of: the Chief Business Officer;

 

(c)                                  fax number:  01235 438601.

 

17.2.2                                      Adaptimmune:

 

(a)                                 address: 91 Milton Park, Abingdon, Oxfordshire, OX14 4RY

 

(b)                                 for the attention of: the Chief Operating Officer

 

(c)                                  fax number: 01235 430001.

 

17.3                        A notice is deemed to be received:

 

17.3.1                                      if delivered personally, at the time of delivery; or

 

17.3.2                                      if sent by commercial courier, on the date and at the time of signature of the courier’s delivery receipt; or

 

17.3.3                                      if sent by pre-paid first-class post or recorded delivery, 9.00 am on the Business Day after posting; or

 

17.3.4                                      if sent by fax, at the time of transmission.

 

17.4                        For the purposes of this clause 17:

 

17.4.1                                      all times are to be read as local time in the place of deemed receipt; and

 

17.4.2                                      if deemed receipt under this clause is not within business hours (meaning 9.00 am to 5.30 pm on a Business Day), the notice or other communication is deemed to have been received at the opening of business on the next Business Day in the place of receipt.

 

17.5                        To prove delivery, it is sufficient to prove that:

 

17.5.1                                      if sent by pre-paid first-class post, the envelope containing the notice or other communication was properly addressed and posted; or

 

17.5.2                                      if sent by fax, the notice was transmitted by fax to the fax number of the party.

 

17.6                        The provisions of this clause shall not apply to the service of any proceedings or other documents in any legal action.

 

17.7                        A notice required to be given under or in connection with this Deed shall not be validly given if sent by e-mail.

 

20

 

18.                               WHOLE AGREEMENT

 

18.1                        This Deed, and any documents referred to in it, constitute the whole agreement between the parties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter they cover.

 

18.2                        Each party acknowledges that, in entering into this Deed, it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether made negligently or innocently) other than as expressly set out in this Deed, provided always that nothing in this clause shall limit or exclude any liability for fraud.

 

19.                               THIRD PARTY RIGHTS

 

No term of this Deed shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this agreement, but this does not affect any right or remedy of a third party which exists or is available apart from under that Act.

 

20.                               COUNTERPARTS

 

This Deed may be executed in any number of counterparts, each of which when executed and delivered constitutes an original of this Deed and which together have the same effect as if each party had signed the same document

 

21.                               GOVERNING LAW AND JURISDICTION

 

21.1                        This Deed and any dispute or claim arising out of or in connection with it or its subject matter (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

 

21.2                        The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Deed or its subject matter (including non-contractual disputes or claims).

 

[SIGNATURES ON NEXT PAGES]

 

21

 

THIS DEED has been delivered and entered into by the parties on the date stated at the beginning of it.

 

Executed as a deed by Adaptimmune Limited acting by James Noble a director and Margaret Henry, its secretary

 

	
 
    	
/s/ James Noble
    
	
 
    	
 
    
	
 
    	
James   Noble
    
	
 
    	
 
    
	
 
    	
Director
    
	
 
    	
 
    
	
 
    	
/s/ M. Henry
    
	
 
    	
 
    
	
 
    	
Margaret   Henry
    
	
 
    	
 
    
	
 
    	
Secretary
    

 

22

 

Executed as a deed by Immunocore Limited acting by Eva-Lotta Allan, a director and Bent Jakobsen, a director

 

	
 
    	
/s/ Eva-Lotta Allan
    
	
 
    	
 
    
	
 
    	
Eva-Lotta   Allan
    
	
 
    	
 
    
	
 
    	
Director
    
	
 
    	
 
    
	
 
    	
/s/ Bent Jakobsen
    
	
 
    	
 
    
	
 
    	
Bent   Jakobsen
    
	
 
    	
 
    
	
 
    	
Director
    

 

23

 

CONFIDENTIAL

 

SCHEDULE 1 — FEES PAYABLE BY PARTIES UNDER THIS AGREEMENT

 

Fees payable by Adaptimmune to Immunocore

 

	
Service
    	
 
    	
Basis of calculation
    
	
 
    	
 
    	
 
    
	
Scientific   Resource
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
- Joint Target Validation
    	
 
    	
50% of cost-centre   over-headed FTE rate of £*** per annum, calculated at the end of each month   based on actual resources allocated in timesheets
    
	
 
    	
 
    	
 
    
	
- Other Services
    	
 
    	
100% of   cost-centre over-headed FTE rate of £*** per annum, calculated at the end of   each month based on actual resources allocated in timesheets
    

 

***Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission.

 

24Exhibit 10.24

 

 

RULES of the 
 ADAPTIMMUNE THERAPEUTICS PLC 2015 SHARE OPTION SCHEME

 

 

Adopted by the Company on 16 March 2015

 

Amended on 15 April 2015

 

 

CONTENTS

 

	
1.
    	
DEFINITIONS
    	
3
    
	
2.
    	
ELIGIBILITY   FOR EMI OPTIONS
    	
9
    
	
3.
    	
GRANT OF OPTIONS
    	
9
    
	
3A.
    	
SCHEME LIMIT
    	
11
    
	
4.
    	
OPTION PRICE
    	
11
    
	
5.
    	
VESTING SCHEDULE AND PERFORMANCE   TARGETS
    	
11
    
	
6.
    	
LIMITS
    	
13
    
	
7.
    	
EXERCISE AND LAPSE OF OPTIONS
    	
13
    
	
8.
    	
MANNER OF EXERCISE OF OPTIONS
    	
14
    
	
9.
    	
TAX   LIABILITIES
    	
16
    
	
10.
    	
NON-TRANSFERABILITY OF OPTIONS
    	
17
    
	
11.
    	
TAKEOVERS
    	
17
    
	
12.
    	
QUALIFYING EXCHANGE OF SHARES
    	
18
    
	
13.
    	
SALE
    	
18
    
	
14.
    	
LISTING
    	
19
    
	
15.
    	
VARIATION OF SHARE CAPITAL
    	
19
    
	
16.
    	
RELATIONSHIP WITH EMPLOYMENT   CONTRACT
    	
20
    
	
17.
    	
VARIATIONS AND TERMINATION
    	
20
    
	
18.
    	
HMRC REQUESTS
    	
21
    
	
19.
    	
EMI
    	
21
    
	
20.
    	
GENERAL
    	
21
    
	
21.
    	
GOVERNING LAW AND JURISDICTION
    	
22
    

 

2

 

RULES OF THE ADAPTIMMUNE THERAPEUTICS PLC 2015 SHARE OPTION SCHEME (INCORPORATING ENTERPRISE MANAGEMENT INCENTIVE OPTIONS)

 

1.                                      DEFINITIONS

 

1.1                               In these Rules, unless the context otherwise requires, the following words and expressions have the meanings set opposite them:

 

	
“Auditors”
    	
 
    	
the auditors for the time being of the Company or   in the event of there being joint auditors such one of them as the Board   shall select;
    
	
 
    	
 
    	
 
    
	
“Board”
    	
 
    	
the board of directors from time to time of the   Company (or the directors present at a duly convened meeting of such board)   or a duly authorised committee of directors appointed by that board of   directors to carry out any of its functions under this Scheme;
    
	
 
    	
 
    	
 
    
	
“Company”
    	
 
    	
Adaptimmune Therapeutics plc, a company   incorporated and registered in England with number 9338148;
    
	
 
    	
 
    	
 
    
	
“Connected”
    	
 
    	
means that the relevant individual is an employee   or a director of, or a Consultant to, a Group Company;
    
	
 
    	
 
    	
 
    
	
“Consultant”
    	
 
    	
means any person who is providing consultancy   services to a Group Company including, without prejudice to the generality of   the foregoing, any member of any Scientific Advisory Board that may from time   to time be established by the Company;
    
	
 
    	
 
    	
 
    
	
“control”
    	
 
    	
except as otherwise provided, has the meaning   given in Section 719 of ITEPA 2003;
    
	
 
    	
 
    	
 
    
	
“Date of Grant”
    	
 
    	
the date on which an Option is granted as   provided in Rule 3.6;
    
	
 
    	
 
    	
 
    
	
“Disqualifying Event”
    	
 
    	
has the meaning given in sections 533 to 539 of   ITEPA 2003;
    
	
 
    	
 
    	
 
    
	
“Eligible Person”
    	
 
    	
in relation to the grant of an Option which is   not an EMI Option, any employee or director of a Group Company or any   Consultant and in relation to the grant of an EMI Option, any employee of a   Group Company who satisfies the eligibility criteria set out in Rule 2;
    
	
 
    	
 
    	
 
    
	
“EMI Notice”
    	
 
    	
a notice of an option which must be given to HMRC   for that Option to be an EMI Option and which complies with the requirements   of paragraph 44 of Schedule 5 to ITEPA 2003;
    
	
 
    	
 
    	
 
    
	
“EMI Option”
    	
 
    	
an Option which is a “qualifying   option” as defined in paragraph 1(2) of Schedule 5 to ITEPA 
    

 

3

 

	
 
    	
 
    	
2003;
    
	
 
    	
 
    	
 
    
	
“Employer NICs”
    	
 
    	
any secondary class 1 (employer) national   insurance contributions (or any similar liability for social security   contribution in any jurisdiction) that the Option Holder’s Employer is liable   to pay as a result of any Taxable Event (or which such person would be liable   to pay in the absence of an election of the type referred to in   Rule 9.2(b)) and which may be lawfully recovered from the Option Holder.
    
	
 
    	
 
    	
 
    
	
“Existing Share Option”
    	
 
    	
a right to acquire Shares that are already in   issue, at the Option Price, pursuant to and in accordance with the Rules,   which has neither lapsed nor been fully exercised;
    
	
 
    	
 
    	
 
    
	
“Grantor”
    	
 
    	
the person granting an Option pursuant to the   Rules of this Scheme which may be:  

 

(a)           the   Company; or  

 

(b)           the trustees of an employee benefit   trust authorised by the Board to grant Options at the relevant time, subject   to Rule 3.7; or  

 

(c)           any other person authorised by the   Board to grant Options at the relevant time, subject to Rule 3.7;
    
	
 
    	
 
    	
 
    
	
“the Group”
    	
 
    	
the Company and its subsidiaries from time to   time;
    
	
 
    	
 
    	
 
    
	
“Group Company”
    	
 
    	
a company which is a member of the Group and   includes the Company, whether or not it has any subsidiaries at the relevant   time;
    
	
 
    	
 
    	
 
    
	
“HMRC”
    	
 
    	
HM Revenue & Customs;
    
	
 
    	
 
    	
 
    
	
“ITEPA 2003”
    	
 
    	
the Income Tax (Earnings and Pensions) Act 2003;
    
	
 
    	
 
    	
 
    
	
“Listing”
    	
 
    	
the listing of the securities of the Company on   the London Stock Exchange plc (including for the avoidance of doubt the AIM   Market) or any recognised investment exchange (as defined in section 285 of   the Financial Services and Market Act 2000) including NASDAQ and NASDAQ   Europe and their respective share dealing markets and the Listing shall be   treated as occurring on the day on which trading in the securities of the   Company begins;
    
	
 
    	
 
    	
 
    
	
“New Share Option”
    	
 
    	
a right to subscribe for Shares at the Option   Price pursuant to and in accordance with these Rules which has neither   lapsed nor been fully exercised;
    
	
 
    	
 
    	
 
    
	
“N.I. Regulations”
    	
 
    	
the laws, regulations and practices from time to   time in force relating to liability for and the 
    

 

4

 

	
 
    	
 
    	
collection of National Insurance contributions;
    
	
 
    	
 
    	
 
    
	
“Option”
    	
 
    	
a New Share Option or an Existing Share Option;
    
	
 
    	
 
    	
 
    
	
“Option Agreement”
    	
 
    	
a written agreement executed in respect of the   grant of an Option pursuant to Rule 3.4;
    
	
 
    	
 
    	
 
    
	
“Option Holder”
    	
 
    	
a person holding an Option, including, where   applicable, his Personal Representatives;
    
	
 
    	
 
    	
 
    
	
“Option Holder’s Employer”
    	
 
    	
such Group Company as is the Option Holder’s   employer or, if he has ceased to be employed within the Group, was his   employer or such other Group Company, or other person as, under the PAYE   Regulations or, as the case may be, the N.I. Regulations, or any other   statutory or regulatory enactment (whether in the United Kingdom or   otherwise), is obliged to account for any Tax Liability;
    
	
 
    	
 
    	
 
    
	
“Option Price”
    	
 
    	
the price, as from time to time determined by the   Board (with the prior consent of the Grantor, where appropriate), at which   each Share subject to an Option may be acquired on the exercise of that   Option which, if Shares are to be newly issued to satisfy the exercise of the   Option, shall not be less than the nominal value of a Share;
    
	
 
    	
 
    	
 
    
	
“Option Shares”
    	
 
    	
the Shares over which an Option subsists;
    
	
 
    	
 
    	
 
    
	
“ordinary share capital”
    	
 
    	
all the issued share capital (by whatever name   called) of the Company other than capital the holders whereof have a right to   a dividend at a fixed rate but have no other right to share in the profits of   the Company;
    
	
 
    	
 
    	
 
    
	
“PAYE Regulations”
    	
 
    	
the regulations made under section 684 of ITEPA   2003;
    
	
 
    	
 
    	
 
    
	
“Performance Option”
    	
 
    	
an Option the exercise of which is subject to   attainment of a Performance Target;
    
	
 
    	
 
    	
 
    
	
“Performance Period”
    	
 
    	
in relation to a Performance Option, the period   (as determined by the Board) over which the performance of the Company and/or   any other condition is to be measured for the purposes of determining whether   and to what extent the Performance Target is met;
    
	
 
    	
 
    	
 
    
	
“Performance Target”
    	
 
    	
the condition or conditions imposed on the   exercise of an Option pursuant to Rule 5 as amended and varied from time   to time in accordance with these Rules;
    
	
 
    	
 
    	
 
    
	
“Personal Data”
    	
 
    	
any personal information which could identify an   Option Holder, including but not limited to, the 
    

 

5

 

	
 
    	
 
    	
Option Holder’s:  

 

(a)                                 date of   birth;  

 

(b)                                 home   address;  

 

(c)                                  telephone   number;  

 

(d)                                 e-mail   address;  

 

(e)                                  National   Insurance number (or equivalent); or  

 

(f)                                   Options   under the Scheme or any other employee share scheme operated by the Company.
    
	
 
    	
 
    	
 
    
	
“Personal Representatives”
    	
 
    	
in relation to an Option Holder, the personal   representatives of the Option Holder (being either the executors of his will   to whom a valid grant of probate has been made or, if he dies intestate, the   duly appointed administrator(s) of his estate) who have produced to the   Company evidence of their appointment as such;
    
	
 
    	
 
    	
 
    
	
“Qualifying Subsidiary”
    	
 
    	
a subsidiary which satisfies the conditions of   paragraph 11 of Schedule 5 to ITEPA 2003;
    
	
 
    	
 
    	
 
    
	
“Relevant Restriction”
    	
 
    	
a provision included in any contract, agreement,   arrangement or condition (including the articles of association of the   Company) to which any of sections 423(2), 423(3) or 423(4) of ITEPA   2003 would apply if references in them to employment related securities were   references to Shares;
    
	
 
    	
 
    	
 
    
	
“Sale”
    	
 
    	
an unconditional agreement being entered into for   the sale to a person other than a Group Company of the whole, or   substantially the whole, of the business and assets of the Company;
    
	
 
    	
 
    	
 
    
	
“Scheme”
    	
 
    	
this share option scheme as constituted and   governed by these Rules, as from time to time amended in accordance with   these Rules;
    
	
 
    	
 
    	
 
    
	
“Shares”
    	
 
    	
fully paid irredeemable shares in the ordinary   share capital of the Company. For these purposes, shares:  

 

(a)                                 will   not be fully paid-up if there is any undertaking to pay cash to the Company   at a future date for those Shares; and  

 

(b)                                 shall   be treated as redeemable if they may become so at a future date;
    

 

6

 

	
“subsidiary”
    	
 
    	
a company which is a subsidiary of the Company   within the meaning of Section 1159 of the Companies Act 2006, except   that any company that is a subsidiary under section 1159(1)(b) or   section 1159(c) shall not cease to be a subsidiary for the purposes of   these Rules (in particular, the definitions of Group, Group Company,   Qualifying Subsidiary and Eligible Person) when shares in that subsidiary   held by the Company (or by another subsidiary) are registered in the name of:  

 

(a)                                 another   person (or its nominee) solely by way of security or in connection with the   taking of security; or  

 

(b)                                 the   Company’s (or another subsidiary’s) nominee;
    
	
 
    	
 
    	
 
    
	
“Sufficient Shares”
    	
 
    	
the smallest number of Shares which, when sold at   the best price which can reasonably be expected to be obtained at the time of   sale, will produce an amount at least equal to the relevant Tax Liability   (after deduction of brokerage and any other charges or taxes on the sale);
    
	
 
    	
 
    	
 
    
	
“Takeover”
    	
 
    	
the Company coming under the control of a person   or persons as mentioned in Rule 11;
    
	
 
    	
 
    	
 
    
	
“Taxable Event”
    	
 
    	
any event or circumstance that gives rise to a   liability for the Option Holder to pay income tax and National Insurance   contributions or either of them (or their equivalents in any jurisdiction) in   respect of:  

 

(a)                                 the   Option, including its exercise, its assignment or surrender for   consideration, or the receipt of any benefit in connection with it;  

 

(b)                                 any   Shares (or other securities or assets):  

 

(i)                                     earmarked   or held to satisfy the Option;  

 

(ii)                                  acquired   on exercise of the Option;  

 

(iii)                               acquired   as a result of holding the Option; or  

 

(iv)                              acquired   in consideration of the assignment or surrender of the Option; or  

 

(c)                                  any   securities (or other assets) acquired or earmarked as a result of holding   Shares (or other securities or 
    

 

7

 

	
 
    	
 
    	
assets) mentioned in (b); or  

 

(d)                                 any   amount due under PAYE in respect of securities or assets within (a) to   (c) above, including any failure by the Option Holder to make good such   an amount within the time limit specified in section 222 of the ITEPA 2003.
    
	
 
    	
 
    	
 
    
	
“Tax Liability”
    	
 
    	
the total of:  

 

(a)                                 any   income tax and primary class 1 (employee) National Insurance contributions   (or their equivalents in any jurisdiction) for which the Option Holder’s   Employer may be liable to account (or reasonably believes it is or may be   liable to account) as a result of any Taxable Event; and  

 

(b)                                 any   Employer National Insurance contributions that any employer (or former   employer) of the Option Holder is or may be liable to pay (or reasonably   believes it is or may be liable to pay) as a result of any Taxable Event   which can be recovered lawfully from the Option Holder;
    
	
 
    	
 
    	
 
    
	
“Vested Shares”
    	
 
    	
Shares which, subject to the following   rules of this Scheme, may at the relevant time be acquired by the   exercise of an Option in accordance with these Rules in consequence of   the conditions set out in any applicable Vesting Schedule or Performance   Targets being met.
    
	
 
    	
 
    	
 
    
	
“Vesting Schedule”
    	
 
    	
such one or more time-based conditions as may be   specified by the Board in the Option Agreement as mentioned in Rules 5.1   and 5.2.
    

 

1.2                               Where the context so admits or requires, the singular includes the plural and the masculine includes the feminine and neuter and vice versa.

 

1.3                               References to Rules are to Rules of this Scheme as from time to time amended in accordance with their provisions.

 

1.4                               A reference to a statute or statutory provision is a reference to it as in force at the relevant time, taking account of any amendment, extension or re-enactment and includes any subordinate legislation in force and made under it.

 

1.5                               References to “writing” and “written” includes faxes but not email.

 

1.6                               A reference to a “person” includes any individual, firm, body corporate, unincorporated association, partnership, joint venture, government or state or agency of state (whether or not having a separate legal personality).

 

1.7                               Headings shall not affect the interpretation of these Rules.

 

8

 

2.                                      ELIGIBILITY FOR EMI OPTIONS

 

2.1                               A person is eligible to be granted an EMI Option if (and only if) he is an employee of the Company or a Qualifying Subsidiary and his committed time to the relevant company amounts to at least 25 hours a week, or if less, 75% of his “working time” (as that expression is defined by paragraph 27(1) of Schedule 5 to ITEPA 2003), and which includes time which the employee would have been required to so spend but for injury, ill health, disability, pregnancy, childbirth, maternity, paternity or parental leave, reasonable holiday entitlement or not being required to work during a period of notice of termination, in compliance with paragraph 26 of Schedule 5 to ITEPA 2003.

 

2.2                               A person is not eligible to be granted an EMI Option at any time when he is not eligible to participate in the Scheme by virtue of paragraph 28 of Schedule 5 to ITEPA 2003 (no material interest requirement).

 

3.                                     GRANT OF OPTIONS

 

3.1                               Subject to the limitations and conditions of this Scheme, in its absolute discretion, any Grantor may, on such dates as it shall determine, grant Options (whether or not intended to be EMI Options) to such Eligible Persons as it may in its absolute discretion select.

 

3.2                               Options:

 

3.2.1                                             may not be granted at any time when such grant would be prohibited by, or in breach of, any law or regulation with the force of law; or

 

3.2.2                                             which are intended to be EMI Options shall only be granted when the Company is a qualifying company as defined in paragraph 8 of Schedule 5 to ITEPA 2003.

 

3.3                               The Grantor may impose a condition preventing the exercise of an Option unless the Option Holder shall have entered into a Deed of Adherence (in such form as may be required by the Company) with the Company and all persons who at the date of exercise of the Option are holders of shares in the capital of the Company whereby the Option Holder becomes a party to any Shareholders’ Agreement or other document having a similar effect which is in force between the Company and all persons who at the date of exercise of the Option are holders of shares in the capital of the Company.

 

3.4                               An Option shall be granted by the Grantor and the Option Holder executing as a deed an agreement, in such form as the Board may from time to time determine. Each Option Agreement shall:

 

3.4.1                                             if such be the case, specify that the Option is intended to be an EMI Option and is granted in accordance with the provisions of Chapter 9 of Part 7 of and Schedule 5 to ITEPA 2003;

 

3.4.2                                             specify the Date of Grant;

 

3.4.3                                             identify the Grantor;

 

3.4.4                                             specify the number and class of Shares over which the Option is granted;

 

3.4.5                                             specify the Option Price;

 

9

 

3.4.6                                             specify any Performance Target and Performance Period imposed pursuant to Rule 5 (and any restrictions that apply to the variation or waiver of any such Performance Target) and any condition imposed under Rule 3.3;

 

3.4.7                                             specify the Vesting Schedule applicable to the Option;

 

3.4.8                                             specify the last date on which the Option may be exercised (subject to Rule 7.1) and assuming that the Option is not exercised earlier and no event occurs to cause the Option to lapse earlier;

 

3.4.9                                             specify how the Option may be exercised;

 

3.4.10                                      specify details of any Relevant Restrictions attaching to the Option Shares;

 

3.4.11                                      specify that the Option is subject to these Rules;

 

3.4.12                                      include the terms required by Rule 9.1, Rule 9.2 and Rule 9.7;

 

3.4.13                                      include the power of attorney required by Rule 10.8; and

 

3.4.14                                      include a term giving effect to Rule 3.9.

 

3.5                               No amount shall be paid by an Eligible Employee for the grant of an Option.

 

3.6                               The date of the agreement executed pursuant to Rule 3.4 shall be taken for all purposes of this Scheme as the Date of Grant in respect of the relevant Option.

 

3.7                               An Option shall not be granted by any person other than the Company without the prior approval of the Board and such person will only be authorised to grant Options after it has entered into as irrevocable undertaking to the Company for the benefit of the Company and an Option Holder’s Employer that such person will fulfil its obligations as Grantor under these Rules.

 

3.8                               In the case of an EMI Option, within 30 days after the Date of Grant, the Option Holder shall correctly complete, sign and date the relevant EMI Notice and return it to the Option Holder’s Employer.

 

3.9                               If an Option Holder granted an EMI Option does not correctly complete, sign and date the relevant EMI Notice and return it to the Option Holder’s Employer within 60 days after the Date of Grant the relevant Option shall automatically lapse at the end of that period.

 

3.10                        The Option Holder’s Employer shall, in respect of any Option intended to be an EMI Option:

 

3.10.1                                      send an original of the duly completed EMI Notice so as to be received by the Small Company Enterprise Centre of HMRC within the period of 92 days after the relevant Date of Grant (or such other period as may be specified by paragraph 44 of Schedule 5 to ITEPA 2003 at the relevant time); and

 

3.10.2                                      keep each Option Agreement available for inspection by HMRC at any time.

 

3.11                        The Option Agreement shall serve as evidence of the grant of the Option and

 

10

 

accordingly no certificates shall be issued to the Option Holder.

 

3A.                             SCHEME LIMIT

 

3A.1                      In the event of a Listing, no Option may be granted if, immediately following the grant, it would make the aggregate number of Shares subject to awards made following the Listing under the Scheme and any other incentive plans for Connected individuals adopted by a Group Company exceed the Scheme Limit at that time.

 

3A.2                      The “Scheme Limit” at any time shall be 8% of the number of Shares comprised in the Initial Fully Diluted Share Capital plus any Annual Increments by which the Scheme Limit has increased prior to that time in accordance with Rule 3A.4.

 

3A.3                      The “Initial Fully Diluted Share Capital” shall be the issued share capital of the Company immediately following the Listing plus the number of shares which would be issued if all options to acquire Shares granted by the Company to Connected individuals (whether or not still Connected at the time of the Listing) which were outstanding at the time of the Listing were exercised in full and satisfied by the issue of new Shares by the Company.

 

3A.4                      On 1 July in each year, commencing with 1 July 2016, the Scheme Limit shall automatically increase by 4% of the number of shares comprised in the issued share capital of the Company at the end of the immediately preceding 30 June, or, in each case, such lower number as the Board may prior to that 1 July determine.  Each such increase shall be an “Annual Increment”.

 

3A.5                      For the purposes of Rule 3A.1, Shares subject to awards which have been satisfied (in whole or in part) shall be included (to the extent that the relevant award has been satisfied), and Shares subject to awards which (in whole or in part) have lapsed or otherwise become incapable of exercise (other than by reason of the satisfaction thereof) shall not be included (to the extent that the relevant award has lapsed or otherwise become incapable of exercise).

 

3A.6                      In the event that there is more than one Listing in relation to the Company, the term “Listing” in Rules 3A.1 and 3A.3 shall be interpreted as a reference to the first such Listing.

 

4.                                      OPTION PRICE

 

4.1                               Subject to Rule 3.4 and any adjustment being made pursuant to Rule 14, the Option Price shall be determined by the Board (with the prior consent of the Grantor, where appropriate).

 

4.2                               In the case of a New Share Option, the Option Price shall not be less than the nominal value of a Share.

 

5.                                      VESTING SCHEDULE AND PERFORMANCE TARGETS

 

5.1                               An Option may be granted subject to either, or both, a Vesting Schedule and Performance Targets as the Board shall determine.

 

5.2                               An Option may be granted on terms that different proportions of the Option Shares shall respectively become Vested Shares if the Option Holder is continuously Connected throughout such different periods, beginning with the Date of Grant, as the Board shall specify in the Option Agreement.

 

11

 

5.3                               An Option may be granted on terms that the extent to which the Option Shares become Vested Shares shall depend upon the extent to which one or more Performance Targets specified in the Option Agreement is attained (so that if and insofar as any such Performance Target is not attained, the Option shall then lapse and cease to be exercisable in respect of the proportion of Option Shares which does not then become Vested Shares).

 

5.4                               A Performance Target may be specified to apply to the whole or part only of an Option.

 

5.5                               After an Option has been granted the Board may (with the consent of the Grantor, where appropriate) amend a Vesting Schedule so as to bring forward the time at which any Option Shares shall become Vested Shares or vary any Performance Target imposed pursuant to Rule 5.1 PROVIDED THAT no such variation shall be made unless an event has occurred or events have occurred in consequence of which the Board reasonably considers that the terms of the existing Performance Targets should be so varied for the purpose of ensuring that either the objective criteria against which the performance of the Group and/or any Group Company and/or any division and/or the Option Holder will then be measured will be, in the reasonable opinion of the Board, a fairer measure of such performance or that any varied Performance Target will afford a more effective incentive to Option Holders and will be no more difficult to satisfy than was the Performance Target when first set.

 

5.6                               After an Option has been granted the Board may (with the consent of the Grantor, where appropriate), waive in whole or in part any requirement that a Performance Target be met as a condition of exercise of an Option PROVIDED THAT no such waiver shall be made unless an event or events have occurred in consequence of which the Board reasonably considers that the terms of the existing Performance Target no longer afford an effective incentive to the Option Holder.

 

5.7                               The Board shall determine whether, and to what extent, any Performance Targets have been satisfied.

 

5.8                               If an Option is subject to any Performance Target, the Board shall notify the Option Holder (and the Grantor, if not the Company) within a reasonable time after the Board becomes aware of the relevant information:

 

5.8.1                                             whether (and, if relevant, to what extent) the Performance Target has been satisfied and the relevant Option has therefore vested;

 

5.8.2                                             of any subsequent change in whether, or the extent to which, the Performance Target has been satisfied;

 

5.8.3                                             when that Performance Target has become incapable of being satisfied, in whole or in part; and

 

5.8.4                                             of any waiver or variation of that Performance Target under Rule 5.5 or 5.6.

 

5.9                               The number of Shares in respect of which an Option shall become vested on any occasion shall be rounded to the nearest whole number.

 

5.10                        If, in consequence of a Performance Target being met, an Option becomes vested in respect of some but not all of the Option Shares, it shall thereupon lapse and cease to be exercisable in respect of the balance of the Option Shares if such

 

12

 

Performance Target is incapable of being met in respect of the balance of such Option Shares.

 

6.                                      LIMITS

 

6.1                              Unless permitted by Schedule 5 to ITEPA 2003 or such other legislation as may from time to time govern the granting of EMI Options, no person shall be granted EMI Options which would, at the time they are granted, result in that person exceeding the £250,000 maximum entitlement as prescribed in paragraph 5 of Schedule 5 to ITEPA 2003 (or such other amount as may be specified by Schedule 5 to ITEPA 2003 at the relevant time).

 

6.2                               Unless permitted by Schedule 5 to ITEPA 2003 or such other legislation as may from time to time govern the granting of EMI Options, no person shall be granted EMI Options which would, at the time that they are granted, result in the Company exceeding the £3,000,000 maximum value of shares prescribed in paragraph 7 of Schedule 5 to ITEPA 2003 (or such other amount as may be specified by Schedule 5 to ITEPA 2003 at the relevant time).

 

6.3                               A Grantor may only grant EMI Options whilst the requirements of Schedule 5 to ITEPA 2003 are met and if any of the requirements are not met, the Option shall continue to subsist but not as an EMI Option.

 

6.4                               For the avoidance of doubt, the limitations under this Rule 6 do not apply to Options which are not EMI Options.

 

7.                                      EXERCISE AND LAPSE OF OPTIONS

 

7.1                               An Option shall not in any event be exercised later than 5.00 pm GMT on the day immediately preceding the tenth anniversary of the Date of Grant or such earlier date as may be specified in the relevant Option Agreement and shall lapse if not exercised by such date.

 

7.2                               Subject to Rules 11.2 and 13.2 an Option may only ever be exercised in respect of Vested Shares or such greater proportion of the Option Shares as may be notified in writing to the Option Holder by the Board.

 

7.3                               Except as mentioned in Rules 7.4, 11 and 13 or as otherwise provided in the relevant Option Agreement an Option may not be exercised unless the Option Holder is at the time of exercise Connected with a Group Company.

 

7.4                               If an Option Holder ceases to be Connected with any member of the Group then an Option granted to him may only be exercised (if at all) in relation to such proportion of the Option Shares, and (subject to Rule 7.1) within such period, as the Board shall (with the consent of the Grantor, where appropriate) determine and notify to the Option Holder ( or, where appropriate, his Personal Representatives ) and shall otherwise lapse and cease to be exercisable on the date of cessation PROVIDED THAT unless such determinations are made by the Board prior to the expiry of the period of three months beginning with the date on which the Option Holder ceases to be so Connected then such Option may not be exercised and shall be deemed to have lapsed and ceased to be exercisable as from the date of such cessation.

 

7.5                               Save for the express requirements of Rule 7.4 there are absolutely no restrictions (or implied restrictions) under these Rules or otherwise on the Board’s freedom to make whatever decision it wishes (or no decision at all) under Rule 7.4.  In doing so, the Board may take into account (or disregard) whatever factors it wishes.

 

13

 

An Option Holder shall have no entitlement to, and m not claim, compensation or damages (or any other remedy) from any Group Company or any former Group Company in respect of any Board decision under Rule 7.4 (or any failure by the Board to consider making a decision).

 

7.6                               An Option shall immediately lapse and cease to be exercisable:

 

7.6.1                                             if, in the case of an EMI Option, within the period of 60 days commencing on the Date of Grant, the Option Holder does not correctly complete, sign and return the relevant EMI Notice and return it to the Option Holder’s Employer;

 

7.6.2                                             subject to Rules 7.4, 11 and 12, if the Option Holder ceases to be Connected with any member of the Group for any reason (including death);

 

7.6.3                                             if the Board shall have exercised its discretion pursuant to Rule 7.4 and the relevant Option shall not have been validly exercised within the period allowed for exercise and specified by the Board pursuant to Rule 7.4, at the end of that period;

 

7.6.4                                             at 5.00pm GMT on the day preceding the tenth anniversary of the Date of Grant;

 

7.6.5                                             if the Option (or any rights under it) is transferred or assigned (other than to the Personal Representatives of the Option Holder on the death of the Option Holder), mortgaged, charged or any other security interest created over it or otherwise disposed of by the Option Holder or the Option Holder attempts to do any such thing;

 

7.6.6                                             if the Option Holder is adjudged bankrupt under Part IX of the Insolvency Act 1986, or applies for an interim order under Part VIII of the Insolvency Act 1986, or proposes or makes a voluntary arrangement under Part VIII of the Insolvency Act 1986, or takes similar steps, or is similarly affected under the laws of any jurisdiction that correspond to those provisions of the Insolvency Act 1986;

 

7.6.7                                             at the end of the 40 day period referred to in Rule 11.1 or, if earlier, at the end of any period specified by the Board pursuant to Rule 11.2;

 

7.6.8                                             at the end of the 40 day period referred to in Rule 13.1 or, if earlier, at the end of any period specified by the Board pursuant to Rule 13.2;

 

7.6.9                                             if any Performance Target to which the Option is subject becomes incapable of being attained by the end of the relevant Performance Period.

 

8.                                      MANNER OF EXERCISE OF OPTIONS

 

8.1                               An Option shall be exercised in whole or in part by the Option Holder (or, as the case may be, his Personal Representatives) delivering to the Company (acting as agent of the Grantor) a written exercise notice (in such form prescribed by the Board from time to time) specifying the number of Shares in respect of which the Option is being exercised.  Such notice shall be accompanied by the relevant Option Agreement and by payment of an amount equal to the Option Price multiplied by the number of Shares specified in the exercise notice in respect of which the Option is exercised and by any payment required under Rule 9 and/or

 

14

 

any documentation relating to arrangements or agreements required under Rule 9.

 

8.2                               Where an Option is exercised in part only the balance of the Option not thereby exercised shall continue to be exercisable in accordance with these Rules and the relevant Option Agreement and the Grantor shall endorse on the Option Agreement a statement to the effect that the Agreement remains valid in respect of that part of his Option which the Option Holder shall have elected not to exercise.

 

8.3                               Any exercise notice shall be invalid:

 

8.3.1                                             to the extent that it is inconsistent with the Option Holder’s rights under these Rules and/or the Option Agreement; and

 

8.3.2                                             if any of the requirements of Rule 8.1 are not met; or

 

8.3.3                                             if any payment referred to in Rule 8.1 is made by a cheque that is not honoured on first presentation or in any other manner which fails to transfer the expected value to the Company.

 

8.4                               A notice to exercise an Option by an Option Holder will be invalid:

 

8.4.1                                             when any Group Company has begun disciplinary proceedings against the relevant Option Holder which have not been concluded; or

 

8.4.2                                             while any Group Company is investigating the relevant Option Holder’s conduct and may as a result begin disciplinary proceedings; or

 

8.4.3                                             while there is a breach of the relevant Option Holder’s contract of employment which entitles any Group Company to dismiss the Option Holder (whether or not the Group Company is aware of that breach); or

 

8.4.4                                             at any time when the relevant Option Holder is no longer employed by a Group Company but the Option remains capable of exercise, if there was a material breach of the Option Holder’s employment contract:

 

(a)                                 of which no Group Company was aware (or not fully aware) until after:

 

(i)                                     the time when the Option Holder ceased employment; and

 

(ii)                                  the time when the Board decided to permit the exercise of the Option following the Option Holder’s cessation of employment (if such permission has been granted); and

 

(b)                                 which would have prevented the grant or exercise of the Option, had any Group Company been aware (or fully aware) of that breach at the relevant time.

 

8.5                              The Board shall treat Option Holders fairly and reasonably when making decisions or taking steps under Rule 8.4.

 

8.6                               The Company may permit the Option Holder to correct any defect referred to in Rule 8.3.2 or 8.3.3 (but shall not be obliged to do so). The date of any corrected

 

15

 

exercise notice shall be the date of the correction rather than the original notice date for all other purposes of the Scheme.

 

8.7                               The Company shall be entitled to satisfy any New Share Option in whole or in part by procuring that the relevant number of Shares are transferred to the Option Holder upon the exercise of his Option.

 

8.8                               Subject to the other Rules of this Scheme, as soon as practicable and in any event not more than 30 days after receipt by the Company of a valid notice exercising a New Share Option, the Shares in respect of which the New Share Option has been exercised and in respect of which the Company has not exercised its rights pursuant to Rule 8.6 shall be allotted and issued by the Company and the Company shall as soon as possible thereafter issue share certificates in respect of such Shares.

 

8.9                               Subject to the other Rules of this Scheme, as soon as practicable and in any event not more than 30 days after receipt by the Grantor of a notice exercising an Existing Share Option or (where the Company is exercising its rights pursuant to Rule 8.7) by the Company of a valid notice exercising a New Share Option, the person transferring shares to the Option Holder shall lodge with the Company a transfer of the number of Shares which are to be transferred to the Option Holder pursuant to the exercise of his Option together with the share certificate(s) covering such Shares and the Company shall register such transfer and shall as soon as possible thereafter issue share certificates in respect of such Shares. Shares transferred in satisfaction of the exercise of an Option shall be transferred free of any lien, charge or other security interest, and with all rights attaching to them, other than any rights determined by reference to a date before the date of transfer.

 

8.10                        The Company shall be responsible for any stamp duty payable by an Option Holder in respect of the transfer of any Shares to him pursuant to the exercise of an Option.

 

8.11                       Except for any rights determined by reference to a date before the date of allotment, Shares allotted and issued in satisfaction of the exercise of an Option shall rank equally in all respects with the other shares of the same class in issue at the date of allotment.

 

9.                                      TAX LIABILITIES

 

9.1                               Each Option Agreement shall include the Option Holder’s irrevocable agreement to:

 

(a)                                 pay to the Option Holder’s Employer the amount of any Tax Liability; or

 

(b)                                 enter into arrangements to the satisfaction of the Option Holder’s Employer for payment of any Tax Liability.

 

9.2                               Unless the Option Holder’s Employer directs that it shall not, each Option Agreement shall include the Option Holder’s irrevocable agreement that:

 

(a)                                 the Option Holder’s Employer may recover the whole or any part of any Employer NICs from the Option Holder; and

 

(b)                                 at the request of the Option Holder’s Employer, the Option Holder shall elect (using a form approved by HMRC) that the

 

16

 

whole or any part of the liability for Employer NICs shall be transferred to the Option Holder.

 

9.3                               The Option Holder’s Employer may decide to release the Option Holder from, or not to enforce any part of the Option Holder’s obligations in respect of Employer NICs under Rule 9.1 and 9.2.

 

9.4                               If an Option Holder does not fulfil his obligations under either Rule 9.1(a) or Rule 9.1(b) in respect of any Tax Liability arising from the exercise of an Option within seven days after the date of exercise and Shares are readily saleable at that time, the Grantor shall withhold Sufficient Shares from the Shares which would otherwise be delivered to the Option Holder.  From the net proceeds of sale of those withheld  Shares, the Granter shall pay to the Option Holder’s Employer an amount equal to the Tax Liability and shall pay any balance to the Option Holder.  The Option Holder’s obligations under Rule 9.1(a) and Rule 9.1(b) shall not be affected by any failure of the Company to withhold Shares under this Rule 9.4.

 

9.5                               Option Holders shall have no rights to compensation or damages on account of any tax or national insurance contributions liability which arises or is increased (or is claimed to arise or be increased) in whole or in part because of:

 

(a)                                 any decision of HMRC that an Option does not meet the requirements of Schedule 5 ITEPA 2003 and is therefore not an EMI Option, however that decision may arise;

 

(b)                                 any Disqualifying Event, however that event may be caused; or

 

(c)                                  the timing of any decision by the Board to permit the exercise of an Option under Rule 7.4.

 

9.6                               Each Option Agreement shall include the Option Holder’s irrevocable agreement to enter into a joint election, under section 431(1) or section 431(2) of ITEPA 2003, in respect of the Shares to be acquired on exercise of the relevant Option, if required to do so by the Company or Option Holder’s Employer, on or before any date of exercise of the Option.

 

9.7                               Each Option Agreement shall include a power of attorney appointing the Company as the Option Holder’s agent and attorney for the purposes of Rule 9.4 and Rule 9.6.

 

10.                               NON-TRANSFERABILITY OF OPTIONS

 

10.1                        During his lifetime, only the individual to whom an Option is granted may exercise that Option.  Options (and any rights arising under them) may not be transferred or assigned or have any charge or other security interest created over them.

 

11.                               TAKEOVERS

 

11.1                        Subject to Rules 7.1, 11.2, and 12, if any person (“the Controller”) acquires control of the Company as a result of:

 

11.1.1                                      making an offer to acquire the whole of the issued share capital of the Company which is made on a condition such that, if it is satisfied, the Controller will (on its own account or acting together with others) have control of the Company; or

 

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11.1.2                                      making an offer to acquire all the shares in the Company which are of the same class as the Shares (on its own account or acting together with others); or

 

11.1.3                                      entering into a share sale and purchase agreement which will result in the Controller obtaining Control of the Company upon completion (on its own account or acting together with others);

 

the Option Holder shall, whether or not he subsequently or in consequence of the change in control ceases to be Connected with any Group Company for any reason but subject to the provisions of Rules 7.1 and 7.2, be entitled to exercise his Option in whole or in part within the period of 40 days beginning with the date when the Controller has obtained control of the Company and (if relevant) any condition subject to which the offer is made has been satisfied and to the extent that the Option is not exercised within such period it shall lapse and cease to be exercisable.

 

11.2                        Notwithstanding Rule 11.1, if a person makes such an offer as is referred to in Rule 11.1.1 or 11.1.2 or negotiates a share sale and purchase agreement with the shareholders of the Company which will result in a change in control, the Board may, in its absolute discretion and by notice in writing to all Option Holders, declare all outstanding Options to be exercisable in respect of all Option Shares which would become Vested Shares upon such change of control in anticipation of the change in control during a reasonable limited period specified by the Board in the notice (which period shall end immediately before the Controller obtains control of the Company, if it has not already ended).  If the Board so declares, all outstanding Options may be exercised at any time during such period.  If not exercised, the Options shall lapse immediately upon the expiry of such period.

 

12.                               QUALIFYING EXCHANGE OF SHARES

 

12.1                        The provisions of Rule 12.2 shall have effect, and Rule 11.1 shall not apply if another company obtains all the shares of the Company as a result of a “qualifying exchange of shares” (falling within paragraph 40 of Schedule 5 to ITEPA 2003) and the Option Holder is invited to release his rights under his Option in consideration of the grant to him of rights (the “Replacement Option”) which are equivalent but relate to shares in the acquiring company and the requirements of paragraphs 42 and 43 of Schedule 5 to ITEPA 2003 would be met in relation to the Replacement Option.

 

12.2                        If the Option Holder does not agree to release his rights under his Option in consideration of the grant to him of such Replacement Option then his Option shall lapse and cease to be exercisable at the end of the period within which the Option Holder could have accepted such invitation.

 

13.                               SALE

 

13.1                        In the event of a Sale, Options may be exercised in respect of Vested Shares whether or not the relevant Option Holder shall have ceased to be Connected with a Group Company subsequently to or in consequence of that Sale within the period of 40 days beginning with the date of the Sale and shall lapse and cease to be exercisable at the end of that period.

 

13.2                        If the Board anticipates that a Sale may occur, the Board may invite Option Holders to exercise Options in respect of Option Shares which would become Vested Shares upon such Sale within such period preceding such Sale as the Board may specify and, if an Option is not then exercised, it shall, unless the

 

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Board otherwise determines, lapse and cease to be exercisable at the end of that period.

 

14.                               LISTING

 

14.1                        In the event of a Listing, Options may be exercised in respect of Vested Shares within such one or more periods after the Listing as the Board shall determine and notify to Option Holders before the Listing PROVIDED THAT:

 

14.1.1                                      no such period shall be less than 7 days long; and

 

14.1.2                                      the first such period shall begin within the period of 14 days beginning with the date of Listing; and

 

14.1.3                                      if no exercise period has been specified by the Board, Options may be exercised after the Listing; and

 

14.1.4                                      if more than one exercise period has been specified by the Board, Options shall in any event be exercisable in respect of not less than one-third of the Vested Shares at any time within the first such period; and

 

14.1.5                                      the Board shall specify in writing to the Option Holders, at the same time as issuing notice of the first exercise period, the number and dates of any further exercise periods.

 

14.2                        Subject to Rule 14.3 if, pursuant to Rule 14.1 an Option becomes exercisable in consequence of a Listing, then the Company shall have the right not to issue and allot Shares upon the exercise of such Option unless the Option Holder has first agreed with the Company (in such form as the Board shall determine) that the Option Holder shall not sell or otherwise dispose of the Shares acquired upon the exercise of such Option within such period or periods (not extending beyond the second anniversary of the date of Listing) as the Board may specify in a notice in writing to the Option Holder.

 

14.3                        No such agreement as is mentioned in Rule 14.2 shall prevent an Option Holder from immediately disposing of such number of the Shares so acquired (by way of sale for a consideration in cash which is not less than the best consideration which may be obtained at the time of sale) as is sufficient to enable the Option Holder (after deduction of costs and expenses of sale) to recover the cost of the aggregate Option Price paid and any income tax and National Insurance contributions due in consequence of such exercise of such Option.

 

15.                               VARIATION OF SHARE CAPITAL

 

15.1                        If there is any variation of the share capital of the Company (whether that variation is a capitalisation issue (other than a scrip dividend), rights issue, consolidation, subdivision or reduction of capital or otherwise) which affects (or may affect) the value of Options to Option Holders, the Board may adjust the number and description of Shares subject to each Option and/or the Option Price of each Option in a manner which the Board, in its reasonable opinion, considers to be fair and appropriate. However:

 

15.1.1                                      the amendment of any Option granted by a Grantor other than the Company shall require the consent of that Grantor (which shall not be unreasonably withheld);

 

the Board should note that the amendment of an EMI Option:

 

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(a)                                 may be a Disqualifying Event;

 

(b)                                 may be regarded by HMRC as the release of the Option and the grant of a replacement share option which lacks EMI tax advantages; and

 

(c)                                  it is possible to consult the Small Company Enterprise Centre of HMRC before any amendment proposed to be made under this Rule 15 and obtain their informal confirmation that they do not consider that the amendment would fall within either (i) or (ii) above;

 

15.1.2                                      the total amount payable on the exercise of any Option in full shall not be increased; and

 

15.1.3                                      the Option Price for a Share to be newly issued on the exercise of any Option shall not be reduced below its nominal value (unless the Board resolves to capitalise, from reserves, an amount equal to the amount by which the total nominal value of the relevant Shares exceeds the total adjusted Option Price, and to apply such amount to pay-up the relevant Shares in full).

 

16.                               RELATIONSHIP WITH EMPLOYMENT CONTRACT

 

16.1                        This Scheme shall not form part of any contract of employment or letter of appointment between any Eligible Person and any Group Company and shall not confer on any Eligible Person any legal or equitable rights whatsoever against any such company nor give rise to any claim or cause of action at common law under statute or in equity.

 

16.2                        The grant of an option shall not form part of the Option Holder’s entitlement to remuneration or benefits pursuant to his contract of employment or letter of appointment or count as wages or remuneration for pension purposes nor does the existence of a contract of employment or a letter of appointment between any person and any Group Company give such person any right or entitlement to have an Option granted to him in respect of any number of Shares or any expectation that an Option might be granted to him whether subject to any conditions or at all.

 

16.3                        The rights and obligations of an Option Holder under the terms of his contract of employment or letter of appointment shall not be affected by the grant of an Option or his participation in this Scheme.

 

16.4                        The rights granted to an Option Holder upon the grant of an Option shall not afford the Option Holder any rights or additional rights to compensation or damages in consequence of the loss or termination of his office or employment with any Group Company for any reason whatsoever (whether or not in circumstances giving rise to a claim for wrongful or unfair dismissal).

 

17.                               VARIATIONS AND TERMINATION

 

17.1                        The Board may from time to time in its absolute discretion, subject to Rules 17.2 and 17.3, amend, delete or add to the Rules of this Scheme in any respect as they deem desirable.

 

17.2                        No amendment, deletion or addition shall be made which would adversely affect in any way any subsisting rights of Option Holders under the Scheme unless it is

 

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made:

 

17.2.1                                      with the prior written consent of such number of Option Holders as hold Options under the Scheme to acquire 75 per cent of the Shares which would be issued or transferred if all Options granted and subsisting under the Scheme were at that time exercised; or

 

17.2.2                                      by a resolution at a meeting of Option Holders passed by not less than 75 per cent of the Option Holders who attend and vote either in person or by proxy, and for the purposes of this Rule 17.2 the Option Holders shall be treated as a separate class of share capital and the provisions of the Articles of Association of the Company relating to class meetings shall apply mutatis mutandis.

 

17.3                        This Scheme may be terminated at any time by a resolution of the Board or of the Company in general meeting.  On termination, no further Options shall be granted, but Options granted prior to such termination shall continue to be valid and exercisable in accordance with these Rules.

 

18.                               HMRC REQUESTS

 

The Company shall provide to HMRC (within such time limit as the HMRC directs) any information in relation to this Scheme or the grant of Options under it and an Option Holder shall:

 

18.1                        promptly provide to the Company such information as it may reasonably request; and

 

18.2                        consent to the Company providing such information concerning him to HMRC for the purpose of complying with such request from HMRC.

 

19.                               EMI

 

19.1                        Except as described in this Rule, the Rules of this Scheme shall apply to EMI Options in exactly the same way as they apply to other Options.

 

19.2                        No warranty, representation or undertaking of any nature is given to the holder of an EMI Option that the EMI Option is a qualifying option for the purposes of ITEPA 2003 or that a disqualifying event will not occur in relation to an EMI Option.  Neither the Board, the Company nor any other person shall be liable to the Option Holder for any loss of whatsoever nature resulting from the failure for any reason of an Option granted as an EMI Option to meet the conditions of Schedule 5 to ITEPA 2003, whether such failure results from the inadvertent or deliberate act of the Board, the Company or any other person or for any other reason whatsoever.

 

20.                               GENERAL

 

20.1                        Any notice or other communication under or in connection with this Scheme may be given in such manner as the Board determines to be appropriate. Items sent by post shall be sent by pre-paid first-class post and shall be deemed to have been received at 12 noon on the second business day after posting.  This Rule 20.1 shall not apply to the service of any proceedings or other documents in any legal action.

 

20.2                        The Company shall at all times ensure that the Board is authorised to satisfy all rights from time to time subsisting under Options granted pursuant to this Scheme, taking account of any other obligations of the Company to allot and

 

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issue unissued Shares.

 

20.3                        The Board’s decision on any matter relating to this Scheme including any disputes relating to an Option shall be final and binding.

 

20.4                        The costs of introducing and administering this Scheme shall be borne by the Company.

 

20.5                        The Scheme shall be administered by the Board and the Board shall have power from time to time to make or vary regulations for the administration and operation of this Scheme provided that such regulations are not inconsistent with these Rules.

 

20.6                        The Company and any other Grantor shall not be obliged to provide Option Holders with copies of any materials sent to the holders of Shares.

 

20.7                        The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Scheme nor to any Option granted under it and no person other than the parties [referred to in these Rules including, without prejudice to the generality of the foregoing, the relevant Option Holder’s Employer and the parties to an Option Agreement shall have any rights under it nor shall it be enforceable under that Act by any person other than the parties to it.

 

20.8                        No individual shall have any claim against any member of the Group arising out of his not being admitted to participation in the Scheme which is entirely within the discretion of the Board.

 

20.9                        In the case of the partial exercise of an Option, the Board may call in or endorse or cancel and reissue as it thinks fit, any certificate for the balance of Shares over which the Option was granted.

 

20.10                 Neither the Company nor any Grantor shall be obliged to notify any Option Holder if an Option is due to lapse.

 

21.                               GOVERNING LAW AND JURISDICTION

 

21.1                        These Rules and all Options granted hereunder shall be governed by and construed in accordance with English law.

 

21.2                        The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including a non-contractual dispute or claim) that arises out of or in connection with these Rules, the Scheme or its subject matter and any Option or its subject matter or formation.

 

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