Document:

Exhibit 10.7

 

FIRST AMENDMENT TO LEASE

This First Amendment to Lease (this “Amendment”) is made as of [June __], 2018, by and between ARE-East River Science Park, LLC, a Delaware limited liability company (“Landlord”), and Rocket Pharmaceuticals, Ltd., a Cayman Islands corporation (“Tenant”).

RECITALS:

A.            Landlord and Tenant have entered into that certain Lease Agreement dated as of March 31, 2016 (the “Original Lease”).  The Original Lease, as amended by this Amendment, shall sometimes collectively be referred to herein as the “Lease”.

B.            Pursuant to the Original Lease, Landlord leased to Tenant certain premises consisting of approximately 4,420 rentable square feet (the “Premises”) in Suite 1010 (“Suite 1010”) and Suite 1040 (“Suite 1040”) of the building located at 430 East 29th Street, New York, New York, 10016, as more particularly described in the Lease.  Capitalized terms used herein without definition shall have the meanings defined for such terms in the Lease.

C.            Tenant desires to surrender Suite 1040, consisting of approximately 2,475 rentable square feet (Suite 1040 being hereinafter referred to as the “Surrender Premises”).

D.            Landlord and Tenant desire to amend the Lease to, among other things, provide for the anticipated surrender of the Surrender Premises on or before the Surrender Date (as defined below).

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by reference, the mutual promises and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1.             Certain Definitions.  As used in this Amendment:

(a)            “Condition Precedent” shall mean the execution and delivery by a replacement tenant of a lease agreement for the Surrender Premises in form and substance satisfactory to Landlord, in each case, as determined by Landlord in its sole discretion.

(b)           “Condition Precedent Date” shall mean the date on which the Condition Precedent has been satisfied; provided, that Landlord shall provide Tenant with written notice that the Condition Precedent has been satisfied within three (3) days of the occurrence thereof (such notice being hereinafter referred to as the “Surrender Notice”).

(c)            “Surrender Date” shall have the meaning set forth in the Surrender Notice.

2.             Premises.  As of the Surrender Date, the Premises demised under the Lease shall be amended to remove the Surrender Premises, and Exhibit A to the Lease shall be deleted in its entirety and replaced with Exhibit A attached hereto and incorporated herein by this reference.

 

	
 

	

3.             Base Rent.  Tenant shall continue to pay Base Rent for the entire Premises (including the Surrender Premises) as provided for in the Lease through the Condition Precedent Date.  From and after the Condition Precedent Date, Tenant shall (i) no longer be required to pay Base Rent with respect to the Surrender Premises and (ii) continue paying Base Rent (as such term is amended by this Amendment), subject to the adjustments set forth in Section 4 of the Lease, as required under the Lease.

4.             Definitions.

(a)           As of the Condition Precedent Date, the following definitions contained in the Basic Lease Provisions of the Lease shall be amended and restated in their entirety as follows:

		Base Rent:	
$178,940 per annum, payable in advance in equal monthly installments of $14,911.67.

		Base Term:	
Beginning on the Commencement Date and ending seventy five (75) months from the first day of the first full calendar month of the Term (as defined in Section 2 hereof).

		Tenant’s Share:	
0.465%.

		Tenant’s Share (SLA):	
6.396%.

(b)           As of the Surrender Date, the following definitions contained in the Basic Lease Provisions of the Lease shall be amended and restated in their entirety as follows:

		Premises:	
That portion of the Project, containing approximately 1,945 rentable square feet (as determined by Landlord and accepted for all purposes by Tenant), in Suite 1010 on the tenth (10th) floor in the 418,639 rentable square foot West Tower (the “Building”) of the Alexandria Center for Life Science – New York City (collectively, together with the underlying land, related site improvements and the immediately adjacent East Tower, the “Project”), as shown on Exhibit A.

		Security Deposit:	
$89,470.00.

5.             Surrender of the Surrender Premises.  On or before the Surrender Date, Tenant shall vacate the Surrender Premises and deliver exclusive possession thereof to Landlord in broom clean condition, normal wear and tear excepted, and otherwise in the condition required by the terms of the Lease, including, but not limited to, Section 28 of the Lease.

 

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6.             Security Deposit.  Within ten (10) days of the Surrender Date, Tenant shall deposit with Landlord a replacement Letter of Credit in the amount of the Security Deposit set forth in the Basic Lease Provisions (as amended by this Amendment) and otherwise in accordance with Section 6 of the Lease.  Landlord shall return the existing Letter of Credit within ten (10) days of its receipt and acceptance of the replacement Letter of Credit delivered in accordance with the terms and conditions of this Section 6.

7.             Parking.  For the avoidance of doubt, as of the Surrender Date, the Surrender Premises shall not be included for purposes of calculating Tenant’s pro rata share of parking under Section 10(a) of the Lease.

8.             Miscellaneous.

(a)           This Amendment is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions.  This Amendment may be amended only by an agreement in writing, signed by the parties hereto.

(b)           This Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.

(c)            This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.  The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this Amendment attached thereto.

(d)           Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “Broker") in connection with this transaction and that no Broker brought about this transaction.  Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this transaction.

(e)           Except as amended and/or modified by this Amendment, the Lease is hereby ratified and confirmed and all other terms of the Lease shall remain in full force and effect, unaltered and unchanged by this Amendment.  In the event of any conflict between the provisions of this Amendment and the provisions of the Lease, the provisions of this Amendment shall prevail.  Whether or not specifically amended by this Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this Amendment.

[Signatures on Next Page]

 

	
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written.

	 	
TENANT:

	 	 
	 	
ROCKET PHARMACEUTICALS, LTD., a 

Cayman Islands corporation

	 	 
	 	
By: 

	 
	 	 
	 	
Its:  

	 
	 	 
	 	
LANDLORD:

 

	 	
ARE-EAST RIVER SCIENCE PARK, LLC, a Delaware limited liability company

	 	 
	 	
By:

	
Alexandria Real Estate Equities, L.P., a Delaware limited partnership,

managing member

	 	 	 
	 	 	
By:

	
ARE-QRS Corp., a Maryland corporation, general partner

	 	 	 
	 		 	
By:

	 
	 		 	
Its:

	 

 

	
 

	

Exhibit AExhibit 4.4

 

Plan Rules of the AstraZeneca Extended Incentive Plan

Adopted by RemCo on 31 January 2018.  Plan terminates on 30 January 2028

Appendix 2 approved by RemCo on 23 July 2018

 

AstraZeneca Extended Incentive Plan

 

What is an ‘award’ and when do you get shares?

 

An award under the Plan is a contingent right to receive shares in AstraZeneca PLC.  When your award ‘vests’ you receive shares.

 

Your award will normally vest as to 50% on the fifth anniversary of grant and as to the balance on the tenth anniversary of grant.  After your award vests, you will receive a net number of shares after withholdings for tax have been made.  However, you will have no right to sell the shares that you receive following the fifth anniversary of grant until the remainder of your award vests.

 

What happens if you leave?

 

Awards will generally only vest if you are employed on the vesting date.  If you leave AZ within three years after grant, regardless of why you leave, your award will lapse.

 

If within three years after grant, you cease to be in the role in which you were in when you were granted your award, your award will lapse unless you have been requested to change your role by AZ and AZ has approved a successor to take over your role.  In that case, your award will vest on the normal vesting dates, subject to its terms.

 

If you leave AZ between three to five years from grant, your award will lapse unless (i) you end employment for death or incapacity, in which case your award will vest on the date you cease employment, pro-rated for the time you were in employment, or (ii) you are made redundant, in which case your award will vest on the fifth anniversary of grant, subject to its terms, pro-rated for the time you were in employment, or (iii) you retire, in which case your award will vest on the fifth anniversary of grant, subject to its terms, pro-rated for the time you were in employment, but will immediately lapse if you work for a competitor.  Following retirement, your shares will continue to be subject to restrictions on sale up to the tenth anniversary of grant, and will be clawed back if you work for a competitor during that period.

 

If you leave AZ between five to ten years from grant, your award will lapse unless (i) you end employment for death or incapacity, in which case your shares that vested on the fifth anniversary of grant will be released and your unvested award will vest on the date you cease employment, pro-rated for the time between the fifth anniversary of grant and when you leave, or (ii) you are made redundant, in which case your shares that vested on the fifth anniversary of grant will be released on the tenth anniversary of grant and your unvested award will vest on the tenth anniversary of grant, subject to its terms and pro-rated for the time between the fifth anniversary of grant and when you leave, or (iii) you retire, in which case your shares that vested on the fifth anniversary of grant will be released on the tenth anniversary of grant and your unvested award will vest on the tenth anniversary of grant, subject to its terms and pro-rated for the time between the fifth anniversary of grant and when you leave, but will immediately lapse if you work for a competitor.  Following retirement, your shares will continue to be subject to restrictions on sale up to the tenth anniversary of grant, and will be clawed back if you work for a competitor during that period.

 

If you leave for any reason other than death, incapacity or redundancy after the fifth anniversary of grant but before the tenth anniversary of grant and work for a competitor during such period, the shares you received following the fifth anniversary of grant will be clawed back.

 

Change of control of AstraZeneca

 

If there is a change in control of AZ within three years after grant, your award will lapse.

 

If there is a change in control of AZ after three years after grant, your award will vest pro-rata subject to its terms.

 

Dividends

 

After vesting, you will receive additional shares to reflect any dividends that would have been paid to you had you held the shares during the period between grant and vesting of your award.  You will not receive dividends that would otherwise be paid on the shares that you receive following the fifth anniversary of grant until after the tenth anniversary of grant (assuming those shares are not forfeited).

 

General

 

Awards are personal to you and may not be transferred or charged until they vest.  The awards do not form part of your terms and conditions of employment and are not pensionable.

 

This summary does not form part of the Rules of the Plan.  The Rules of the Plan are set out in the following pages and will govern how your awards are treated.  Definitions and interpretation provisions are at Appendix 1.

 

 

Rules of the AstraZeneca Extended Incentive Plan

 

1.                                               Grant of Awards

 

1.1                                        RemCo may approve the grant of Awards to Eligible Employees, subject to the limits in Rule 10.  Awards will not be granted during a Closed Period.  Awards may not be granted to Eligible Employees who are resident in either France or China until such time as the Plan has been approved by RemCo for use in the relevant country.

 

1.2                                        You will be required to accept the grant of your Award within 30 days following notification to you of the grant of your Award.

 

2.                                               Vesting of Awards

 

2.1                                        Vesting of your Award is subject to such terms and conditions as RemCo considers appropriate before grant.

 

2.2                                        Unless your Award vests early under Rules 3 or 7, and subject to Rule 2.4, your Award will vest to the extent that any terms and conditions imposed under Rule 2.1 have been met:

 

2.2.1                                       as to 50 per cent. of the Shares which are subject to Award (rounded down to the nearest whole number) on the fifth anniversary of the Date of Grant, and

 

2.2.2                                       as to the balance of the Shares which are subject to Award on the tenth anniversary of the Date of Grant.

 

2.3                                        Any Shares that you acquire following vesting of part of your Award under Rule 2.2.1 shall remain subject to forfeiture if you end Employment (other than by reason of Redundancy) and work for a competitor (as determined by AZ) before the tenth anniversary of the Date of Grant.

 

2.4                                        Notwithstanding anything else in this Plan, if the fifth or tenth anniversary of the Date of Grant falls within a Closed Period, references to the fifth or tenth anniversary (respectively) of the Date of Grant in this Plan shall be deemed to be references to the first Dealing Day following the end of that Closed Period (unless RemCo has made a determination under Rule 5.6.

 

3.                                               Change of role and end of Employment

 

3.1                                        Subject to the remainder of this Rule 3 if you end Employment before the tenth anniversary of the Date of Grant, your Award will lapse.

 

3.2                                        If you end your Current Role before the third anniversary of the Date of Grant, your Award will lapse, unless you end your Current Role at the request of AZ and either your Current Role has a successor validated by SET or SET has confirmed that no successor is necessary.

 

3.3                                        If you end Employment after the third anniversary of the Date of Grant but before the fifth anniversary of the Date of Grant due to death or incapacity (evidenced to the satisfaction of your employing company, taking into account relevant local legislation), your Award will vest on the date you end Employment and your Award will be reduced pro-rata to the proportion of 3,650 days that has elapsed from the Date of Grant to the end of Employment.

 

3.4                                        If you end Employment as a result of Redundancy after the third anniversary of the Date of Grant but before the fifth anniversary of the Date of Grant, your Award will vest on the fifth anniversary of the Date of Grant, but will be reduced pro-rata to the proportion of 3,650 days that has elapsed from the Date of Grant to the end of Employment.

 

3.5                                        If you end Employment as a result of Retirement after the third anniversary of the Date of Grant but before the fifth anniversary of the Date of Grant:

 

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3.5.1                                       your Award will vest on the fifth anniversary of the Date of Grant, but will be reduced pro-rata to the proportion of 3,650 days that has elapsed from the Date of Grant to the end of Employment, provided that your Award shall immediately lapse if before the fifth anniversary of the Date of Grant you have started working for a competitor to AZ (as determined by AZ); and

 

3.5.2                                       your Shares will be held in the relevant nominee or similar arrangements as set out in Rule 5.2 until the tenth anniversary of the Date of Grant, and if you work for a competitor to AZ (as determined by AZ) before the tenth anniversary of the Date of Grant, you may be required to transfer such Shares (together with any additional Shares acquired pursuant to Rules 5.4 and 5.5) to AZ, or a person that AZ chooses, for nil consideration.

 

3.6                                        If you end Employment after the fifth anniversary of the Date of Grant but before the tenth anniversary of the Date of Grant due to death or incapacity (evidenced to the satisfaction of your employing company, taking into account relevant local legislation):

 

3.6.1                                       the Shares that are subject to the part of the Award that vested on the fifth anniversary of the Date of Grant will be released from any nominee or similar arrangements on the date you end Employment; and

 

3.6.2                                       your Award will vest in relation to the balance of the Shares which are subject to your Award on the date you end Employment reduced pro-rata to the proportion of 1,825 days that has elapsed from the fifth anniversary of the Date of Grant to the end of Employment.

 

3.7                                        If you end Employment as a result of Redundancy after the fifth anniversary of the Date of Grant but before the tenth anniversary of the Date of Grant:

 

3.7.1                                       the Shares that are subject to the part of the Award that vested on the fifth anniversary of the Date of Grant will be released from any nominee or similar arrangements on the tenth anniversary of the Date of Grant; and

 

3.7.2                                       your Award will vest in relation to the balance of the Shares which are subject to your Award on the tenth anniversary of the Date of Grant, reduced pro-rata to the proportion of 1,825 days that has elapsed from the fifth anniversary of the Date of Grant to the end of Employment.

 

3.8                                        If you end Employment as a result of Retirement after the fifth anniversary of the Date of Grant but before the tenth anniversary of the Date of Grant:

 

3.8.1                                       the Shares that are subject to the part of the Award that vested on the fifth anniversary of the Date of Grant will be released from any nominee or similar arrangements on the tenth anniversary of the Date of Grant; and

 

3.8.2                                       your Award will vest in relation to the balance of the Shares which are subject to your Award on the tenth anniversary of the Date of Grant, reduced pro-rata to the proportion of 1,825 days that has elapsed from the fifth anniversary of the Date of Grant to the end of Employment,

 

provided that if you have started working for a competitor to AZ (as determined by AZ), your Award shall immediately lapse and you may be required to transfer such Shares (together with any additional Shares acquired pursuant to Rules 5.4 and 5.5) to AZ, or a person that AZ chooses, for nil consideration.

 

3.9                                        If you end Employment after the fifth anniversary of the Date of Grant but before the tenth anniversary of the Date of Grant other than in the circumstances set out in Rules 3.6 to 3.8:

 

3.9.1                                       to the extent that your Award has not already vested it will lapse; and

 

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3.9.2                                       the Shares that were acquired following vesting of your Award on the fifth anniversary of the Date of Grant will continue to be held in the relevant nominee or similar arrangements until the tenth anniversary of the Date of Grant, and if you work for a competitor (as determined by AZ) before the tenth anniversary of the Date of Grant you may be required to transfer such Shares (together with any additional Shares acquired pursuant to Rules 5.4 and 5.5) to AZ, or a person that AZ chooses, for nil consideration.

 

3.10                                 For the purposes of this Rule 3, if you are on statutory family-related leave, you will not end Employment until the earlier of the date on which you notify your employer of your intention not to return to work or the date on which you cease to have statutory or contractual rights to return to work.

 

4.                                               Lapse of Awards

 

4.1                                        Notwithstanding any other provision of these Rules, your Award will lapse:

 

4.1.1                                       if you are declared bankrupt or are unable to hold your Award by operation of law, or you attempt to transfer, assign, charge or dispose of your Award contrary to Rule 12.1;

 

4.1.2                                       if you fail to accept the grant of your Award within the time limits set out in Rule 1.2; or

 

4.1.3                                       to the extent that: (i) the Award does not vest in full under Rules 3 or 7; or (ii) the number of Shares which are subject to the Award is reduced under Rule 8.

 

5.                                               Consequences of Vesting of an Award

 

5.1                                        After vesting of your Award, the number of Shares in respect of which it has vested will, subject to you complying with any requirements imposed under Rules 5.2 and 6, be transferred to you as soon as practicable.

 

5.2                                        As a condition of vesting of your Award on the fifth anniversary of the Date of Grant and delivery of your Shares, AZ may require the Shares that are to be receivable by you following vesting of your Award on the such date (including any additional Shares acquired pursuant to Rules 5.4 and 5.5) be held in such nominee or other arrangement as it may consider appropriate until the tenth anniversary of the Date of Grant, and can require you to enter into such documentation as it may consider appropriate in relation to these Shares.

 

5.3                                        You will have no right to sell or transfer (or assign, charge or otherwise encumber) any Shares that you acquire following the vesting of your Award on the fifth anniversary of the Date of Grant (including any additional Shares acquired pursuant to Rules 5.4 and 5.5) until the tenth anniversary of the Date of Grant, other than in connection with a change of Control under Rule 7.4.  Any attempt to sell, transfer, assign, charge or otherwise encumber such Shares will result in immediate forfeiture of the Shares for no consideration and you may be required to transfer your Shares to AZ, or a person that AZ chooses, for nil consideration.

 

5.4                                        You will have no voting, dividend or other rights in the Shares under your Award before your Award vests under Rule 2.2.  Shares that you acquire under the Plan will not have the benefit of any rights that attach to those Shares by reference to a record date that is earlier than the date when you acquired them.  During the period from the fifth anniversary of the Date of Grant to the tenth anniversary of the Date of Grant, unless RemCo determines otherwise, any dividends that are declared in relation to Shares that you acquire following the vesting of your Award on the fifth anniversary of the Date of Grant (including any additional Shares acquired pursuant to Rule 5.5) shall be reinvested in the acquisition of further Shares and those further Shares shall be held in the same nominee or other arrangement as set out in Rule 5.2 and will be subject to forfeiture in the same circumstances as the Shares that you acquire following the vesting of your Award on the fifth anniversary of the Date of Grant.  As a condition of vesting of your

 

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Award on the fifth anniversary of the Date of Grant and delivery of your Shares, AZ can require you to enter into such documentation as it may consider appropriate to give effect to this Rule 5.4.

 

5.5                                        On each occasion on which your Award vests, you may, at the discretion of RemCo, receive an amount equivalent to the total dividends paid or which are payable on the number of Shares which are subject to your Award and which vest, by reference to dividend record dates during the period beginning on the Date of Grant and ending on the date of vesting.  This payment will be made in Shares, subject to deductions for Tax Liabilities, after the date of vesting, but no later than 15 March after the calendar year in which vesting has occurred.  Any such Shares acquired following vesting of your Award on the fifth anniversary of the Date of Grant shall be held in the same nominee or other arrangement as set out in Rule 5.2 and will be subject to forfeiture in the same circumstances as the Shares that you acquire following the vesting of your Award on the fifth anniversary of the Date of Grant.

 

5.6                                        Notwithstanding any other provision, RemCo may, at any time, determine that your Award (including any amounts payable under Rules 5.4 and 5.5) shall not be satisfied by the issue or transfer of Shares but will be satisfied by the payment to you of a cash sum equal to the value of the Shares in respect of which your Award vests on the day of vesting (converted into your relevant payroll currency at an appropriate spot rate) less deductions for Tax Liabilities.  In the event of such determination at the fifth anniversary of the Date of Grant, such cash payment may be subject to retention at RemCo’s determination until the tenth anniversary of the Date of Grant and in the event that you end Employment before the tenth anniversary of the Date of Grant, you may be required to forfeit such retained sum.

 

6.                                               Tax

 

By accepting the Award, you indemnify AZ and your employer against any Tax Liabilities that may arise in connection with the benefits delivered under the Plan.  AZ or your employer may withhold any amount and make any arrangements it considers necessary to meet any Tax Liabilities, which may include the sale on your behalf of any Shares acquired by you under the Plan.  As a condition of vesting of your Award on the fifth anniversary of the Date of Grant, AZ or your employer may require you to enter into any elections in respect of tax as it considers necessary or desirable.

 

7.                                               Change of Control of AZ

 

7.1                                        This Rule 7.1 applies if:

 

7.1.1                                       an offeror (alone or with any party acting in concert with the offeror) obtains Control of AZ by making an offer to acquire the whole of the issued ordinary share capital of AZ (or any part of it which is not owned by the offeror and any party acting in concert with the offeror);

 

7.1.2                                       the Court sanctions a compromise or arrangement affecting the Shares under section 899 of the Companies Act 2006; or

 

7.1.3                                       a resolution is passed for the voluntary winding up of AZ.

 

7.2                                        Where Rule 7.1 applies before the third anniversary of the Date of Grant, your Award will immediately lapse in full, unless Rule 7.6 applies.

 

7.3                                        Where Rule 7.1 applies or is likely to apply after the third anniversary of the Date of Grant but before the fifth anniversary of the Date of Grant, unless Rule 7.6 applies, your Award will vest at the time of the relevant event or most practicable earlier date, reduced pro-rata to the time which has elapsed between the Date of Grant of the Award and the date of the relevant event.

 

7.4                                        Where Rule 7.1 applies or is likely to apply between the fifth anniversary of the Date of Grant and tenth anniversary of the Date of Grant, unless Rule 7.6 applies:

 

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7.4.1                                       the Shares that were acquired following vesting of your Award on the fifth anniversary of the Date of Grant (and any additional Shares acquired pursuant to Rules 5.4 and 5.5) will be released from any nominee or similar arrangements at the time of the relevant event or most practicable earlier date; and

 

7.4.2                                       your Award will vest at the time of the relevant event or most practicable earlier date, reduced pro-rata to the proportion of the period from the fifth anniversary of the Date of Grant to the tenth anniversary of the Date of Grant that has elapsed up to the date of the relevant event.

 

7.5                                        RemCo will confirm the extent (if any) to which an Award will vest under Rules 7.3 or 7.4.  Confirmation may be before, but conditional on, the relevant event in Rule 7.1.

 

7.6                                        If a company obtains Control of AZ, but the shareholders of the acquiring company immediately after it has obtained Control of AZ are substantially the same as the shareholders of AZ immediately before that event, and if the acquiring company consents to this Rule 7.6 applying, then your unvested Award will not lapse or vest under Rules 7.2 to 7.4.  Instead, it will be exchanged for a new award in respect of shares having a total Market Value being equal to the Market Value of the Shares that are subject to your Award immediately before the exchange.  The new award will be governed by the Rules, except that references to Shares shall refer to shares in the acquiring company, and references to AZ shall refer to the acquiring company.

 

7.7                                        It shall be a condition of vesting of an Award on the fifth anniversary of the Date of Grant, that if Rule 7.6 applies after the fifth anniversary of the Date of Grant, you shall agree to exchange your Shares acquired following vesting of your Award on the fifth anniversary of the Date of Grant (and any additional Shares acquired pursuant to Rules 5.4 and 5.5), for shares in the acquiring company and that such shares shall be held until the tenth anniversary of the Date of Grant on the same basis as your Shares were held.  If you breach this Rule 7.7, you may be required to transfer your Shares acquired following vesting of your Award on the fifth anniversary of the Date of Grant (including Shares acquired pursuant to Rules 5.4 and 5.5) to AZ, or a person that AZ chooses, for nil consideration.

 

8.                                               Malus and Clawback

 

8.1                                        Notwithstanding any other provision:

 

8.1.1                                       if circumstances occur which, in the reasonable opinion of RemCo, justify a reduction in the number of Shares that are subject to an Award, RemCo may, at any time before an Award vests, determine (acting fairly and reasonably) that the number of Shares over which the Award is granted will be reduced to such amount or number as RemCo considers appropriate in the circumstances (including to nil); or

 

8.1.2                                       if circumstances occur which, in the reasonable opinion of RemCo, would justify a reduction in the number of Shares that are subject to an Award that has already vested, RemCo may, at any time but no later than six years after the date on which that Award vested, determine (acting fairly and reasonably) that you should repay to AZ (whether by transfer of Shares, payment of cash proceeds or deductions from or set off against any amounts owed to you by AZ or any member of the AZ Group) an amount equal to the benefit, calculated on an after-tax basis, received by you from such vesting, provided that RemCo may, at its discretion, determine that a lesser amount should be repaid.

 

8.2                                        The circumstances in which RemCo may consider that it is appropriate to exercise its discretion under Rule 8.1 include (but are not limited to):

 

8.2.1                                       material misstatement or restatement in AZ’s or any member of the AZ Group’s audited financial accounts (other than as a result of a change in accounting practice) (save that RemCo may only consider this circumstance in relation to an Award within 2 years after the date on which that Award vests);

 

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8.2.2                                       serious misconduct by you which results in or is reasonably likely to result in:

 

8.2.2.1                                                significant reputational damage to AZ, any member of the AZ Group or to a relevant business unit;

 

8.2.2.2                                                a material adverse effect on the financial position of AZ, any member of the AZ Group or to a relevant business unit; or

 

8.2.2.3                                                a material adverse effect on the business opportunities and prospects for sustained performance or profitability of AZ, any member of the AZ Group or relevant business unit;

 

8.2.3                                       you being the member of a business unit, or employee of AZ or of a member of the AZ Group, that suffers:

 

8.2.3.1                                                significant reputational damage;

 

8.2.3.2                                                a material adverse effect on its financial position; or

 

8.2.3.3                                                a material adverse effect on its business opportunities and prospects for sustained performance or profitability.

 

(save that RemCo may only consider this circumstance in relation to an Award within 2 years after the date on which that Award vests).

 

8.3                                        If RemCo decides to exercise its discretion under Rule 8, it will confirm this to you in writing.

 

9.                                               Amending the Plan and Awards

 

9.1                                        If there is a Variation in the equity share capital of AZ, the number and/or the nominal value of the Shares over which your Award is granted will be adjusted as RemCo decides.  You will be notified of any adjustment under Rule 9.1.

 

9.2                                        AZ can amend these Rules at any time.

 

9.3                                        AZ can adopt additional sections of these Rules applicable in any jurisdiction under which Awards may be subject to additional and/or modified terms and conditions, taking into account any securities, exchange control or taxation laws, which may apply to you, AZ, or any member of the AZ Group.  Any additional sections must conform to the basic principles of the Plan and must not exceed the limits set out in these Rules.

 

10.                                        Limit on the number of Shares which can be issued

 

10.1                                 Any Shares you receive on vesting will be Shares that are purchased by the Trustee in the market, and will not be Shares that are treasury shares or are newly issued to you or the Trustee.

 

10.2                                 On any day, the maximum Market Value of Shares which may be subject to an Award proposed to be granted to an Eligible Employee, when aggregated with the Market Value of Shares (excluding Shares acquired pursuant to Rules 5.4 and 5.5) already subject to Awards held by that Eligible Employee, will be 900% of the Eligible Employee’s basic salary at that time.  For these purposes, the Market Value of Shares which are subject to an Award or Awards on any day shall be deemed to be the Market Value of such Shares on that day and not the Market Value of the Shares on the Date of Grant of the relevant Award.

 

11.                                        Administration

 

11.1                                 The Plan will be administered by RemCo which will interpret and construe any provision of the Plan and to adopt any regulations for administering the Plan and any documents it

 

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thinks appropriate.  The decision of RemCo on any matter concerning the Plan will be final and binding.

 

11.2                                 Any communication in connection with the Plan (including any award documentation) can be given electronically by e-mail or on an online portal designed for the purpose or by personal delivery or post, (in the case of a company, to its registered office and in the case of an individual to the individual’s last known address) or by any other means which AZ and you use to communicate with each other.

 

11.3                                 Any notice under the Plan will be given: (i) if delivered personally, at the time of delivery; (ii) if posted, at 10.00 a.m. on the third business day after it was put into the post; or (iii) if sent by e-mail or any other form of electronic delivery system, at the time of despatch.

 

12.                                        General

 

12.1                                 Your Award may not be sold, transferred, assigned, charged or otherwise encumbered or disposed of to any person, other than to your personal representatives on your death.

 

12.2                                 Participation in the Plan is not pensionable and does not form part of your employment contract.  Nothing in the Plan or any document under it will give any person any right to participate in the Plan and the grant of an Award does not create any right or expectation to the grant of an Award in the future.  Your rights and obligations under the terms of your office or Employment will not be affected by your participation in the Plan or any right which you may have to participate under it.

 

12.3                                 By accepting and not rejecting an Award under the Plan, you waive all and any rights to compensation or damages under the Plan in consequence of any loss of rights under the Plan as a result of: (i) termination of your office or Employment with a member of the AZ Group for any reason; or (ii) the way in which RemCo or any person to whom RemCo has delegated authority, exercises or does not exercise any discretion under the Plan.  Nothing in the Plan or in any document executed under it will give you any right to continue in Employment or will affect the right of any member of the AZ Group to terminate your Employment without liability at any time with or without cause.

 

12.4                                 The invalidity or non-enforceability of one or more provisions of the Plan will not affect the validity or enforceability of the other provisions of the Plan, which will remain in full force and effect.

 

12.5                                 The Plan was adopted by RemCo on 31 January 2018.  The Plan will terminate on 30 January 2028 or at any earlier time AZ decides. Termination of the Plan will not affect your Awards.

 

12.6                                 Nothing in this Plan confers any benefit, right or expectation on a person who is not an Eligible Employee or member of the AZ Group, and no third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan.  This does not affect any other right or remedy of a third party which may exist.

 

12.7                                 These Rules will be governed by and construed in accordance with the law of England.  You, AZ and any member of the AZ Group submit to the jurisdiction of the English courts in relation to anything arising under the Plan. RemCo may determine that another law will apply to the operation of the Plan outside the United Kingdom.

 

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Appendix 1

 

Definitions and Interpretation

 

ADS means an American Depository Share representing Shares;

 

Award means a contingent right to acquire Shares granted or proposed to be granted under Rule 1;

 

AZ means AstraZeneca PLC (registered number 2723534);

 

AZ Group means AZ and any subsidiary, holding company or subsidiary of a holding company of AZ (as each term is defined in section 1159 Companies Act 2006);

 

Closed Period means a period when you are prohibited from dealing in Shares under the European Union Market Abuse Regulation (596/2014/EU), the Criminal Justice Act 1993, or under any other statute, regulation or similar code to which AZ is subject or other share dealing code adopted by AZ from time to time;

 

Control shall have the meaning given in section 995 Income Tax Act 2007;

 

Current Role means the role in which you are employed by AZ at the Date of Grant of your Award;

 

Date of Grant means with respect to an Award, the date on which the Award is granted;

 

Dealing Day means a day on which the London Stock Exchange plc is open for the transaction of business;

 

Eligible Employee means any person (other than an Excluded Person) who at a Date of Grant is an employee of any member of the AZ Group with a proven track record in AZ of at least a year and good performance in the critical role in which they are employed;

 

Employment means employment as an employee of any member of the AZ Group;

 

Excluded Person means (i) an executive director of AZ or (ii) any person who is a “person discharging managerial responsibilities”, or PDMR, for the purposes of the European Union Market Abuse Regulation (596/2014/EU) or any share dealing code adopted by AZ from time to time or (iii) any person that the RemCo knows will become an executive director of AZ;

 

Market Value means, in relation to a Share on any day, an amount equal to the average of the middle market closing prices of a Share (as derived from the Daily Official List of the London Stock Exchange plc) or, in the case of an ADS, by reference to the average of the equivalent price of an ADS as derived from the New York Stock Exchange, in the three months preceding that day;

 

Plan means the AstraZeneca Extended Incentive Plan constituted by these Rules;

 

RemCo means the duly authorised remuneration committee of the board of directors of AZ;

 

Redundancy means redundancy within the terms of the Employment Rights Act 1996;

 

Retirement means circumstances determined by RemCo, or anyone authorised by RemCo, to be retirement;

 

SET means the senior executive team of AZ from time to time as determined by RemCo;

 

Share means a fully paid ordinary share in the capital of AZ or, where the context requires it, an equivalent number of ADSs;

 

Tax Liabilities means any income tax, employee’s national insurance contributions, social security charges or similar taxes or charges imposed in any jurisdiction for which AZ or any member of the AZ Group is required to account;

 

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Trustee means the trustee for the time being of an employee benefit trust established by AZ;

 

Variation means a capitalisation issue, rights issue, subdivision, consolidation, reduction, or any other variation in the capital of AZ;

 

you means any Eligible Employee to whom an Award has been granted, or (where the context requires) that Eligible Employee’s personal representatives, and “your” shall be construed accordingly.

 

Interpretation

 

Headings are for convenience only.  Words in the singular include the plural and vice versa and words importing gender include both genders.  Reference to statutory provisions include amendments, extensions or re-enactments and equivalent legislation in any country other than England, and include any regulations or subordinate legislation made under them.

 

9

 

Appendix 2

 

Schedule for US Participants

 

The provisions of sections 1 to 2 of this Schedule modify the Rules of the Plan in respect of any Awards granted under it to Eligible Employees who are resident in the United States.

 

1.                                               The following shall be inserted as new Rule 2.5:

 

“You may be required, as a condition of the vesting of your Award, to represent and agree that, in relation to Shares you acquire under the Plan:

 

(a)                                                   you understand that such Shares are deemed to be restricted securities within the meaning of Rule 144 under the United States Securities Act of 1933 (the “Securities Act”), which may not be resold in the United States or to a U.S. person except pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act;

 

(b)                                                   you are acquiring such Shares for investment and not with a view to distribution; and

 

(c)                                                    you will not resell such Shares at any time, except to non-U.S. persons in transactions effected in accordance with Rule 904 of Regulation S under the Securities Act (or any successor section thereto) and only after the expiration of any holding period RemCo may require.

 

AZ may endorse on certificates representing Shares issued or transferred upon the vesting of an Award such legend referring to the foregoing representations or restrictions or any other applicable restrictions on resale as AZ, in its discretion, shall deem appropriate.”

 

In the definition of “AZ Group”, “subsidiary” shall be defined as any company in which AZ owns, directly or indirectly, a majority of the voting rights.

 

2.                                               In Appendix 1 (Definitions) the definitions of “Redundancy” and “Retirement” shall be deleted and the following definitions shall be inserted:

 

“Cause shall have the meaning set out in the relevant severance program adopted by the AZ Group from time to time, which as at the date of adoption of the Plan means:  if you are terminated by the AZ Group, or if you resign in lieu of such termination, on account of dishonesty, insubordination, gross mismanagement, deliberate and premeditated acts against the interests of the AZ Group, gross or repeated violation of AZ policies, procedures, or recognized standards of behavior, commission of a felony, or misconduct related to your employment or if you refuse to make a good faith effort to bring unsatisfactory job performance to a satisfactory level;”

 

“Redundancy means termination without Cause in circumstances in which you are eligible for a severance payment under the relevant severance program adopted by the AZ Group and satisfy all the requirements of such severance program, including the requirement to execute a valid release of claims, but excluding a Termination by Mutual Consent;”

 

“Retirement means:

 

(a)                                                   termination without Cause after having attained age 62 with 5 years of service;

 

(b)                                                   termination without Cause after having attained age 65 with 3 years of service; or

 

(c)                                                    any other meaning as may be notified to you in writing at the time of grant of your Award;”

 

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“Termination by Mutual Consent shall have the meaning set out in the relevant severance program adopted by the AZ Group from time to time, which as at the date of adoption of the Plan means:  termination of employment initiated by the AZ Group where the AZ Group, in its sole discretion, has determined that you have demonstrated an inability to meet and/or perform the technical requirements and/or behavioral expectations of your job satisfactorily;”

 

The remaining provisions of this Schedule modify the Rules of the Plan in respect of any Awards granted under it to Eligible Employees who are US taxpayers (whether or not they are also resident in the United States).

 

3.                                               Rule 2.2 shall be deleted and replaced with the following:

 

“Subject to Rules 2.4, 3, 7 and 8, your Award will vest to the extent that any terms and conditions imposed under Rule 2.1 have been met:

 

2.2.1                              as to 50 per cent. of the Shares which are subject to Award (rounded down to the nearest whole number) on the fifth anniversary of the Date of Grant, and

 

2.2.2                              as to the balance of the Shares which are subject to Award on the tenth anniversary of the Date of Grant.

 

For the avoidance of doubt, you shall have no rights in respect of the Shares the subject of an Award until the Award has vested.  If vesting of an Award would be prohibited by a Closed Period, the day on which the Award vests will be the first Dealing Day on which such prohibition ceases to apply or, if later, the first day on which you are able to trade in the Shares after the Closed Period ceases.  In any event, the latest day by which the Shares subject to an Award will be delivered to you is the US Taxpayer Payment Deadline (as defined in Rule 5.1 (as inserted by paragraph 4 of this Appendix 2)).”

 

4.                                               Rule 5.1 shall be deleted and replaced with the following:

 

“After vesting of your Award, the Shares subject to such an Award in respect to which it has vested will, subject to you complying with any requirements imposed under Rules 5.2 and 6, be delivered to you as soon as practicable following the vesting of the Award, but in no event later than the end of the year in which the applicable vesting date occurs, or, if later, by the 15th day of the third month following the applicable vesting date (collectively, the “US Taxpayer Payment Deadline”).  You will not be permitted, either directly or indirectly, to designate the year of payment.”

 

5.                                               Rule 5.5 shall be deleted and replaced with the following:

 

“On each occasion on which your Award vests, you may, at the discretion of RemCo, receive an amount equivalent to the total dividends paid or which are payable on the number of Shares which are subject to your Award and which vest, by reference to dividend record dates during the period beginning on the Date of Grant and ending on the date of vesting.  This payment will be made in Shares, subject to deductions for Tax Liabilities, after your Award has vested, but in no event later than the US Taxpayer Payment Deadline (as defined in Rule 5.1 (as inserted by paragraph 4 of this Appendix 2)).  Any such Shares acquired following vesting of your Award on the fifth anniversary of the Date of Grant shall be held in the same nominee or other arrangement as set out in Rule 5.2 and will be subject to forfeiture in the same circumstances as the Shares that you acquire following the vesting of your Award on the fifth anniversary of the Date of Grant.”

 

6.                                               The following shall be inserted as a new Rule 7.8:

 

“If an Award vests pursuant to this Rule 7, and the event described in Rule 7 also constitutes a “change in control event” under Section 409A of the US Internal Revenue Code of 1986, as it may be amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder (the “Code”) or the Award is otherwise exempt from Section 409A of the Code, then the Shares subject to it in respect of which it has vested will, subject to Rule 6, be transferred to you as soon as practicable following

 

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the vesting of an Award, but in no event later than the US Taxpayer Payment Deadline.  If such event does not constitute a “change in control event” under Section 409A of the Code and the Award is not exempt from Section 409A of the Code, then the Award will vest on the occurrence of such event described in Rule 7, but shall not be delivered to you until the earlier of the vesting date under Rule 2 or the date on which your Award vests under Rule 3.  For the avoidance of doubt, an Award shall only become payable upon the earlier of the vesting date under Rule 2 or the date upon which your Award vests under Rule 3 or Rule 7.”

 

7.                                               The following shall be inserted as a new Rule 13:

 

“13.                Section 409A of the Code.

 

13.1               The compensation and benefits under the Plan are intended to be exempt from Section 409A of the Code pursuant to the exemption applicable to “short-term deferrals” under Section 1.409A-1(b)(4) of the US Treasury Regulations, and the Plan will be interpreted and administered in a manner consistent with that intent.  To the extent any compensation and benefits are determined not to be exempt from Code Section 409A, then the Plan will be interpreted and administered in respect of such amounts in a manner consistent with the requirements of Section 409A of the Code.  The preceding provisions, however, shall not be construed as a guarantee by AZ of any particular tax effect to you under an Award.  Payment of amounts not exempt from Code Section 409A may only be accelerated or delayed if and to the extent that such accelerated or delayed payment is permitted under Section 409A of the Code.

 

13.2               References to “end of Employment”, “termination of Employment” and similar terms used in the Plan mean, to the extent necessary to comply with Section 409A of the Code, the date that you first incur a “separation from service” within the meaning of Section 409A of the Code.

 

13.3               Notwithstanding anything in the Plan to the contrary, if at the time of your separation from service with AZ you are a “specified employee” as defined in Section 409A of the Code, and any payment payable under the Plan as a result of such separation from service is required to be delayed by six months pursuant to Section 409A of the Code, then AZ will make such payment on the date that is six months following your separation from service with AZ.  The amount of such payment will equal the sum of the payments that would have been paid to you during the six-month period immediately following your separation from service had the payment commenced as of such date and will not include interest.

 

13.4               No Shares issued or payments made in respect of such an Award shall be funded with any assets set aside in a trust or other arrangement in violation of Section 409A(b)(1) of the Code.  To the extent any trust is utilized in administration of the Plan, Awards granted to Eligible Employees who are US taxpayers need not be settled by Shares held in such a trust and such Awards do not form the basis for any claims or rights with respect to such a trust’s assets.

 

13.5               In the first taxable year in which you become a US taxpayer by reason of becoming a resident alien for US federal income tax purposes, the Plan may be amended solely with respect to you such that the compensation and benefits under the Plan are compliant with or exempt from Section 409A of the Code.  Such amendment must be effective not later than the end of the first year in which you become a resident alien and shall only be effective with respect to amounts that were not vested prior to the date that you became a resident alien.  For any year after the first year in which you are classified as a resident alien, this clause shall not apply, provided that a year may again be treated as the first year in which you are classified as a resident alien if you are classified as a resident alien in that year and have not been classified as a resident alien for the three consecutive years immediately preceding that year.  This clause will be interpreted consistent with the requirements of Section 409A of the Code, including Sections 1.409A-2(c) and 1.409A-3(h) of the US Treasury Regulations, as well as any subsequent guidance under Section 409A of the Code.

 

13.6               Awards under the Plan that become vested while you are not subject to US federal income taxation but that are paid at a time when you subsequently have become subject to US federal income taxation are intended to be exempt from Section 409A of the Code.

 

12

 

This clause will be interpreted consistent with the requirements of Section 409A of the Code, including Section 1.409A-1(b)(8)(ii) of the US Treasury Regulations, as well as any subsequent guidance under Section 409A of the Code.”

 

8.                                               Rule 3.10 shall be deleted and replaced with the following:

 

“For the purposes of this Rule 3, if you are on an authorized leave of absence pursuant to an AZ policy or a legal entitlement, you will not cease to be in Employment until the earlier of the date on which you notify your employer of your intention not to return to work or the date on which you cease to have statutory or contractual rights to return to work.”

 

9.                                               The following sentence shall be appended to the end of the existing Rule 8.1.2:

 

“Notwithstanding anything to the contrary, this Rule 8.1.2 shall not apply in any jurisdiction where its enforcement would be prohibited by applicable law.”

 

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