Document:

EX-10.31

  Exhibit 10.31

   

  EMPLOYMENT AGREEMENT

   

  This Employment Agreement (this “Agreement”), effective as of December 6, 2021 (the “Effective Date”), is between Corbus Pharmaceuticals Holdings, Inc. (the “Company”) and Rachael Brake (the “Executive”).

   

  WITNESSETH:

   

  WHEREAS, the Company desires to employ the Executive as its Chief Scientific Officer, and the Executive desires to accept such employment, on the terms and conditions set forth in this Agreement; and

   

  NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

   

  1.	EMPLOYMENT.   Subject to the terms and conditions set forth herein, the Company hereby employs the Executive, and the Executive hereby accepts such employment by the Company commencing on the Effective Date.

   

  2.	SCOPE OF EMPLOYMENT.  During the term of this Agreement, Executive shall hold the position of Chief Scientific Officer and shall have those duties and responsibilities customarily associated with the title of Chief Scientific Officer plus any additional duties as may reasonably be assigned to her from time to time by the Company. The Executive shall report directly to the Chief Executive Officer. The Executive will devote her full time and best efforts to the business and affairs of the Company. The Executive shall be subject to and comply with the Company’s policies, procedures and approval practices as generally in effect at any time and from time to time.

   

  3.	PREVIOUS OBLIGATIONS.   The Executive represents that her employment by the Company and the performance of her duties on behalf of the Company does not, and shall not, breach any agreement that obligates the Executive to keep in confidence any trade secrets or confidential or proprietary information of any other party or to refrain from competing, directly or indirectly, with the business of any other party. The Executive shall not disclose to the Company any trade secrets or confidential or proprietary information of any other party.

   

  4.	COMPENSATION.  As full compensation for all services to be rendered by Executive during the term of this Agreement, the Company will compensate the Executive as follows.

   

  4.1	Base Salary.   The Company shall pay the Executive a base salary (the “Base Salary”) at the annualized rate of $410,000, which shall be subject to customary withholdings and authorized deductions and shall be payable in equal installments in accordance with the Company’s customary payroll practices in place from time to time. The Executive’s Base Salary shall be subject to review on at least an annual basis.

   

   

  

  4.2       Annual Bonus.

   

  (a)       The Executive will be eligible to participate in an annual executive bonus plan pursuant to which she may earn a bonus (“Bonus”) equal to up to 40% of her Base Salary (such maximum bonus may be referred to as the “Target Bonus”).

   

  (b)	Prior to the commencement of each calendar year the Company’s Board of Directors (the “Board”) will establish and approve the Target Bonus for such calendar year. Achievement of the Target Bonus will be based on the Executive meeting individual objectives and the Company meeting Company-wide objectives (collectively, the “Performance Criteria”). For the period between the Effective Date and March 31, 2022, the Company will pay the Executive a performance bonus of $100,000 provided she is actively employed in good standing as of that date.

   

  (c)       The Board may, in its discretion, grant the Executive a Bonus in excess of the Target Bonus in any given year if the Performance Criteria are exceeded.

   

  (d)       Following the close of each calendar year but in no event later than January

  30th, the Board will meet and determine the extent to which the Performance Criteria have been achieved for such year and the amount of the Bonus. Based on that determination, payment of the Bonus (if any) shall be made by March 15th.

   

  (e)       Notwithstanding the foregoing to the contrary (including all Performance Criteria being met), payment of the Bonus shall be at the discretion of the Board based on the financial condition of the Company.

   

  4.3	Stock Option Grants.  Subject to the approval of the Board, the Company will recommend a grant to the Executive of an option to purchase up to 500,000 shares of the Company’s common stock (the “Option”) pursuant to the Corbus Pharmaceuticals Holdings, Inc. 2014 Equity Compensation Plan (the “Plan”). The exercise price per share of the Option will be determined by the Board of Directors or the Compensation Committee when the Option is granted and will be no less than the fair market value per share on the date of grant. The Option will be subject to the terms and conditions of the Plan and the applicable stock option grant agreement.  The Executive will vest in the Option as described in the applicable stock option grant agreement. During the Term, subject to the terms and conditions established within the Plan or any successor equity compensation plan as may be in place from time to time and separate award agreements, the Executive also shall be eligible to receive from time to time additional stock options or other awards (as permitted by the Plan), in amounts, if any, to be approved by the Board or the Compensation Committee in its discretion.

   

  4.4	Benefits.    During  her  employment  and  subject  to  any  contribution  therefore generally required of employees of the Company, the Executive shall be entitled to

   

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  participate in any and all employee benefit plans from time to time in effect for executive employees of the Company generally. Such participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable policies of the Company and (iii) the discretion of the Board or any administrative or other committee provided for in or contemplated by such plan. The Company may alter, modify, add to or delete its employee benefit plans at any time as it, in its sole judgment, deems appropriate.

   

  4.5	Vacations, Sick Time, Holidays, and Other Leave.   During the term of her employment, the Executive shall be entitled to paid time off, including vacation time, sick time, holidays, and other leave time, in accordance with the Company’s policies in force in its  Employee Handbook  as  of the Effective Date of this Agreement or as such policies may be modified from time to time by the Company.

   

  5.	EXPENSES.  The Executive shall be entitled to reimbursement by the Company for all necessary and reasonable travel, entertainment and other business expenses incurred by her in connection with her duties hereunder. The Company shall reimburse the Executive for all such expenses upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies as in effect from time to time.

   

  6.         CONFIDENTIALITY.

   

  6.1	Definition.  During the term of her employment, the Executive will have access to the	Company’s    confidential    business    information    (the    “Confidential Information”). Confidential Information means all trade secrets, know-how, show-how, theories, technical, operating, financial and other business information relating to the Company, its affiliates and each of their respective businesses or potential businesses, whether or not reduced to writing or other medium, and whether or not marked or labeled confidential, proprietary or the like, specifically including, without limitation, the following: inventions (including, without limitation, Work Product (as defined below)), designs, data, computer code, works of authorship, formulas, compounds, indications, techniques, ideas, discoveries, products and services under development, investor, customer and vendor information of any kind, marketing and business plans, pricing and profit margins, memoranda, notes, records, files,  reports  and other documentation, processes, business methods, improvements, modifications and creations, methodology, concepts, research, specifications, data processes, operations procedures, computer systems and software; provided, however, that Confidential Information shall not include information that is or becomes generally available to the public, unless such information has become generally available as a result of the Executive’s direct or indirect act or omission or as a result of the disclosure by any other person in violation of any contractual, legal or fiduciary obligation.

   

  6.2	Use  of  Confidential  Information.    Subject  to  the  other  provisions  of  this Agreement, the Executive shall use Confidential Information only in the performance of the Executive’s duties for the Company.   Subject to the other

   

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  provisions of this Agreement, the Executive shall not use Confidential Information at any time (during or after the Executive’s employment) for the Executive’s personal benefit or in any manner adverse to the interests of the Company, its affiliates, or any of their respective investors and clients.

   

  6.3	Protection and Non-Disclosure of Confidential Information.   The Executive shall safeguard the Confidential Information by all reasonable steps and abide by all policies and procedures of the Company in effect from time to time regarding storage, copying, destroying, publication or posting, and handling of such Confidential Information, in whatever medium or format that Confidential Information takes. At all times during and after her employment by the Company, the Executive shall not disclose Confidential Information at any time except to persons or entities authorized by the Company to receive this information or as otherwise permitted by this Agreement. For the avoidance of doubt, the Executive is permitted, subject to the other provisions of this Agreement, to disclose Confidential Information to third parties with whom or which the Company has entered into confidentiality agreements. Notwithstanding the foregoing, nothing in this Agreement shall be construed to prevent disclosure of Confidential Information when required to do so by a court of law, a governmental agency, or an administrative or legislative body (each with jurisdiction to order the Executive to divulge, disclose or make accessible such information); provided that, the Executive shall give prompt written notice to the Company of such requirement and reasonably cooperate with any attempt by the Company and/or its affiliates to obtain a protective order or similar treatment.   Notwithstanding the foregoing, nothing in this Agreement prohibits, limits, or otherwise interferes with the Executive’s protected rights under federal, state or local law to, without notice to the Company, (i) communicate or file a charge with a government regulator; (ii) participate in an investigation or proceeding conducted by a government regulator; or (iii) receive an award paid by a government regulator for providing information.

   

  6.4	Return of Confidential Information.  Upon request of the Company at any time, the Executive will promptly (i) deliver to the Company all documents and other tangible media in the Executive’s possession or control that evidence, contain or reflect Confidential Information (including all copies, reproductions, digests, abstracts, analyses, and notes) and (ii) destroy any intangible materials that evidence, contain or reflect Confidential Information on equipment or media not owned by the Company.

   

  6.5	Other Agreements.  The Executive shall execute and abide by all confidentiality agreements which the Company reasonably requests the Executive to sign or abide by, whether those agreements are for the benefit of the Company, an affiliate of the Company, or an actual or a potential client thereof.

   

  6.6	Defend Trade Secrets.  The Executive acknowledges that the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret if (i) the Executive makes such disclosure in confidence to a federal, State, or local government official, either directly or indirectly, or to

   

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  an attorney and such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law, or (ii) the Executive makes such disclosure in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal.  Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer's trade secrets to the attorney and use the trade secret information in the court proceeding if the individual: (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.   Nothing contained herein will waive, limit or affect any rights of the Company under any applicable trade secrets laws, including Defend Trade Secrets Act of 2016, which will be enforceable separate and apart from this Agreement.

   

  7.         ASSIGNMENT OF WORK PRODUCT.

   

  7.1	Definitions.  The following capitalized terms shall have the meanings assigned to them below:

   

  “ In tell ectual  Prop erty”  means collectively all Work Product and all Intellectual

  Property Rights relating to all Work Product.

   

  “Intellectual Property Rights” means all copyrights, copyright registrations and copyright applications, trademarks, service marks, trade dress, trade names, trademark registrations and trademark applications, patents and patent applications, trade secret rights, and all other intellectual property rights and intellectual property interests existing, created or protectable under any intellectual property or other law of any nation.

   

  “Work Product” means any and all inventions, discoveries, works of authorship, developments, improvements, formulas, compounds, indications, techniques, concepts, data and ideas (whether or not patentable or registerable under patent, copyright, or similar statute) made, conceived, prepared, created, discovered, or reduced to practice by the Executive, either alone or jointly with others, during the period of her employment, that (i) result or relate to work performed by the Executive for the Company, (ii) are made by use of the equipment, supplies, facilities or Confidential Information of the Company, or are made, conceived or completed, wholly or in part, during hours in which the Executive is working for the Company, or (iii) are related to the business of the Company or the actual or demonstrably anticipated business of the Company.

   

  7.2	Property of the Company.   All Intellectual Property is and will be the sole property of the Company.

   

  7.3	Copyrights; Assignment.  The Executive agrees that all copyrightable materials that fall within the definition of Work Product, will be, to the maximum extent permitted by law, works-made-for-hire for the Company under copyright law, and to the extent not works-made-for-hire, the Executive hereby irrevocably assigns to

   

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  the Company, without royalty or further consideration to the Executive, all right, title, and interest she may have, or may acquire, in and to all Intellectual Property.

   

  7.4	Disclosure.  The Executive will promptly disclose in writing all Work Product to the Company. The Executive agrees to keep adequate and current written records of all such Work Product, in the form of notes, sketches, drawings, electronic records and/or other reports, which records are, and will remain, the sole property of the Company and will be available to the Company at all times.

   

  7.5	Execution of Documents.  Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will promptly sign and deliver to the Company any and all applications, assignments and other documents that the Company considers necessary or desirable in order to: (a) assign, apply for, obtain, and maintain any Intellectual Property Rights in the United States and for other countries relating to any Work Product, (b) assign and convey to the Company or its designee the sole and exclusive right, title, and interest in and to all Intellectual Property, (c) provide evidence regarding the Intellectual Property that the Company considers necessary or desirable, and (d) confirm the Company’s ownership of the Intellectual Property, all without royalty or any other further consideration to the Executive.

   

  7.6	Assistance to the Company.  Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will assist the Company in assigning, obtaining, maintaining, defending, registering and from time to time enforcing, in any and all countries, the Company’s right to the Intellectual Property. This assistance may include, without limitation, testifying in a suit or other proceeding. If the Company requires assistance from the Executive after termination of her employment, other than assistance as set forth in Section

  7.5, the Executive will be compensated for time actually spent in providing assistance at an hourly rate equivalent to her compensation at the time her employment was terminated together with her reasonable, actual out-of-pocket expenses incurred in providing such assistance, to the extent permitted by applicable law and/or court rules.

   

  7.7	Power of Attorney.   For use in the case that the Company cannot obtain the Executive’s signature on any document that the Company considers necessary or desirable in order to assign, apply for, prosecute, obtain, or enforce any Intellectual Property, whether due to the Executive’s non-cooperation, unavailability, or any other reason, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as her agent and attorney-in-fact to act for, and on the Executive’s behalf, to execute and file any such document and to do all other lawfully permitted acts to further the assignment, transfer to the Company, application, registration, prosecution, issuance, and enforcement of all Intellectual Property, with the same force and effect as if executed and delivered by the Executive.

   

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  7.8	Prior Inventions.  The Executive represents that any inventions, prior works of authorship, discoveries, concepts or ideas, if any, to which the Executive presently has any right, title or interest, and which were previously conceived either wholly or in part by the Executive, and that the Executive desires to exclude from the operation of this Agreement are identified on Schedule A of this Agreement (each a “Prior Invention”). The Executive represents that the list contained in Schedule A is complete to the best of her knowledge. If during the Executive’s retention with the Company, the Executive incorporates a Prior Invention into a Company product, process or service or its use, the Executive shall be deemed to have automatically granted to the Company a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, display, perform sell and otherwise use such Prior Invention as part of or in connection with any Company product, process or service. The Executive shall not incorporate a Prior Invention into a Company product, process or service or its use without the Company’s prior written consent.

   

  8.         NON-COMPETITION; NON-SOLICITATION.

   

  8.1	Non-competition.  To protect the Company’s legitimate interests in, among other things, the Company’s Confidential Information, trade secrets, and goodwill, during the Employment Period and the Non-Competition Restricted Period (as defined below), the Executive shall not, in any geographic location where within the two years prior to cessation of employment with the Company the Executive provided services to the Company or had a material presence or influence, directly or indirectly, whether as a partner, principal, shareholder, licensor, licensee, employee,  officer,  director,  manager, agent,  representative,  advisor, promoter, associate, investor, or otherwise, assist in or engage in providing any services that the Executive provided to the Company during the prior two years, to a Competitive Business (as defined below). The geographic limitation as set forth in this Section

  8.1 does not apply during the Employment Period, during which there is no geographic limitation to the restrictions as set forth in this Section 8.1.

   

  In furtherance of the foregoing, the Company will provide the Executive with the following:

   

  (a)      Subject to Sections 11.3 and 11.4, in the event that the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason, during the Term (as defined below) other than during the Change in Control Period (as defined in subsection 8.1(b)), the Company shall pay to the Executive an amount equal to twelve months of her then current Base Salary under Section 4.1 above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, commencing sixty (60) days following the date of termination of employment.

   

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  (b)	Subject  to  Sections  11.3  and  11.4,  in  the  event  that  the  Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, during the Term and within the 3 months immediately preceding or the 12 months immediately following a Change in Control (as defined in Section 11.2) (each, the “Change in Control Period”), then in lieu of the payments set forth in subsection 8.1(a) above, the Company shall pay to the Executive an amount equal to eighteen months of her then current Base Salary under Section 4.1 above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, commencing sixty (60) days following the date of termination of employment.    For avoidance of doubt,  if  such  termination  precedes  a Change in Control and any payments or benefits have commenced pursuant to subsection 8.1(a), such payments or benefits shall be taken into account for purposes of this subsection 8.1(b).

   

  The Executive has the right to consult with counsel prior to signing this Agreement, including this Section 8.1. This Section 8.1 shall not be effective until after ten (10) business days from the date the Executive received notice of this Section 8.1, but in no case earlier than the Effective Date of this Agreement.

   

  The Executive shall not provide any services to any other person, company, entity or firm while the Executive is employed by the Company without the Company’s written consent and may not do anything that may result in an actual or perceived conflict of interest to the Company.

   

  During the Non-Competition Restricted Period, the Executive shall, upon the Company’s request, honestly, accurately, and completely provide the Company with the name of any prospective new employer or hiring entity that follows the Executive’s separation from the Company.  During the Employment Period, the Non-Competition Restricted Period, and the Non-Solicitation Restricted Period (defined below), the Executive shall, upon the Company’s request, provide a copy of this Agreement to any person, company, entity or firm.

   

  8.2	Certain Definitions.   The following capitalized terms shall have the meanings assigned to them below:

   

  “Competitive Business” means any business that is developing or has developed a cannabinoid agonist for the treatment of scleroderma, cystic fibrosis or other inflammatory or fibrotic diseases.

   

  “Employment Period” means the period commencing on the Effective Date and continuing through and including the date of cessation of the Executive’s employment with the Company.

   

  “Non-Competition Restricted Period” means the 6 months from the date of

  cessation of the Executive’s employment with the Company.

   

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  “Non-Solicitation Restricted Period” means the 12 months from the date of cessation of the Executive’s employment with the Company.

   

  8.3	Non-Solicitation.    During  the  Employment  Period  and  the  Non-Solicitation Restricted Period, the Executive shall not, directly or indirectly, whether on behalf of herself or anyone else: (i) induce or attempt to induce a business associate of the Company to refrain from doing business with the Company; or (ii) solicit any of the employees of the Company to leave the employ of the Company or hire anyone who is an employee of the Company or has worked for the Company during the previous 12 months.  The Non-Solicitation Restricted Period shall be extended by the length of any period during which the Executive is in breach of the terms and conditions of this Section 8.3.

   

  8.4	Separate Covenants.  The Executive acknowledges and agrees that the covenants set forth in this Section 8 are an essential element of this Agreement and the transactions contemplated hereby and that, but for the agreement of the Executive to comply with such covenants, the Company would not have entered into this Agreement.

   

  8.5	Blue Pencil Provision. The parties hereby expressly agree that the duration, scope and geographic area of restriction set forth in this Section 8 are reasonable and necessary to protect the legitimate business interests of the Company.   If any provision of this Agreement should be found by any court of competent jurisdiction to be unenforceable for any reason, including but not limited to being too broad as to duration, scope, or area of restriction, then, and in that event, such provision will nonetheless remain valid and fully effective, but will be considered to be amended so that the duration, scope, and/or area of restriction set forth will be changed to be the maximum duration, scope, or area of restriction, as the case may be, that would be found enforceable by such court.

   

  9.	INJUNCTIVE RELIEF.  The Executive acknowledges that the Company shall not have an adequate remedy in the event that the Executive breaches Section 6, 7, 8 or 12 of this Agreement and that the Company will suffer irreparable damage and injury in such event. The Executive agrees that the Company, in addition to any other available rights and remedies, shall be entitled to seek an injunction (without the necessity of posting a bond) restraining the Executive from committing or continuing any violation of Section 6, 7, 8 or

  12 of this Agreement.

   

  10.       TERM; TERMINATION.

   

  10.1     Term.  The Executive shall be employed on an at-will basis.

   

  10.2	Termination by the Executive. The Executive may terminate this Agreement and her employment hereunder with or without Good Reason (as defined below) upon

  30 days prior written notice to the Company.

   

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  10.3	Termination by Company. The Company may terminate this Agreement and the Executive’s employment hereunder (i) without Cause immediately upon written notice to the Executive or (ii) immediately for Cause.

   

  10.4	Certain Definitions.   The following capitalized terms shall have the meanings assigned to them below:

   

  “Cause” means the Company’s determination that: (i) the Executive has failed to perform her material job duties to the Company’s satisfaction after written notice thereof and an opportunity of 30 days to cure (to the extent curable); (ii) the Executive’s gross negligence or misconduct (including but not limited to acts of fraud or theft or the violation of applicable laws) in connection with the performance of her duties; (iii) the Executive’s material breach of Section 6, 7 or 8 above; (iv) the Executive’s commission of an act of moral turpitude; or (v) the Executive’s conviction of or plea of nolo contendere to a felony.

   

  “Good Reason” means the voluntary termination by the Executive within thirty (30) days following: (i) a requirement that the Executive physically relocate to another office that is more than 75 miles from the office location that the Executive reported to on the Effective Date; (ii) a material reduction in the Executive’s rate of compensation, potential incentive compensation, or general benefits (other than general changes, in each case, affecting all similarly situated employees to substantially the same extent); or (iii) a material adverse change in the Executive’s job description or a significant reduction of the scope of the Executive’s authority or responsibilities.

   

  11.       EFFECT OF TERMINATION

   

  11.1	Payments Upon Termination. In the event that the Executive’s employment with the Company is terminated for any reason, the Executive shall have the right to receive (i) the compensation and reimbursable expenses then accrued and/or earned and unpaid under Sections 4.1 and  5 of this  Agreement  through the date of termination, (ii) payment for unused vacation days accrued through the date of termination and (iii) any benefits required by the Consolidated Omnibus Budget Reconciliation Act of 1985.

   

  11.2	No Other Payments or Benefits.  The Executive acknowledges and agrees that upon  the termination  of her employment,  no  other benefits,  compensation  or renumeration of any kind is owed by the Company to the Executive other than as set forth in Sections 8.1 and 11 or as set forth in the agreements pertaining to stock options granted to the Executive by the Company.

   

  11.3     Survival. Notwithstanding anything to the contrary, set forth herein, Sections 6, 7,

  8, 9 and 11, and 19 of this agreement and any remedies for the breach thereof, shall survive the termination of this Agreement under the terms hereof.  Termination of this Agreement shall not relieve or release either party from any rights, liabilities,

   

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  or obligation which it/she has accrued prior to the effective date of such termination.

   

  11.4	Additional Payments.  (a) Subject to Sections 11.3 and 11.4, in the event that the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason, during the Term other than during the Change in Control Period (as defined in subsection 11.4), (A) if the Executive then participates in the Company’s medical, vision and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, the Company shall reimburse the Executive for the cost of health insurance under COBRA for a period of twelve months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), and (B) if the Executive is entitled to a Bonus, subject to the Board’s discretion and approval as set forth in Section 4.2 above, the Company shall pay such Bonus in accordance with the terms of the applicable plan and on the same basis as other participants in the plan except that the Bonus amount shall be prorated (based on the percentage of days the Executive was employed relative to the total number of days in the bonus earning period).

   

  (b)      Subject to Sections 11.5 and 11.6, in the event that the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, during the Term and within the 3 months immediately preceding or the 12 months immediately following a Change in Control (as defined below) (each, the “Change in Control Period”), then in lieu of the payments set forth in subsection 11.4 above, the Company shall (A) if the Executive then participates in the Company’s medical, vision and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, the Company shall reimburse the Executive for the cost of health insurance under COBRA for a period of eighteen (18) months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), (B) pay the current year Bonus at two (2) times the Target Bonus level, which payment shall be made by March 15th of the following calendar year, and (C) fully accelerate vesting of all of the Executive’s outstanding stock options, restricted stock and other equity incentive awards upon the later of  (x) the Change in  Control  or (y)  the Executive’s termination  of employment with the Company.   For avoidance of doubt, if such termination precedes a Change in Control and any payments or benefits have commenced

   

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  pursuant to subsection 11.4, such payments or benefits shall be taken into account for purposes of this subsection 11.4.

   

  As used in this Agreement, “Change in Control” means (x) a change in ownership of the Company under clause (i) below or (y) a change in the ownership of a substantial portion of the assets of the Company under clause (ii) below:

   

  (i)	Change in the Ownership of the Company.  A change in the ownership of the Company shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires ownership of capital stock of the Company that, together with capital stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the capital stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the capital stock of the Company, the acquisition of additional capital stock by the same person or persons shall not be considered to be a change in the ownership of the Company.  An increase in the percentage of capital stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires capital stock in the Company in exchange for property will be treated as an acquisition of stock for purposes of this paragraph.

   

  (ii)        C hange in the Own ership of a S ubst anti al P ortion of the C ompany ’s Ass ets  .

  A change in the ownership of a substantial portion of the Company’s assets shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control under this clause (ii) when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided below in this clause (ii).  A transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to (a) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its capital stock, (b) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (c) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding capital stock of the Company, or (d) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (ii)(c) of this paragraph.   For

   

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  purposes of this clause (ii), a person's status is determined immediately after the transfer of the assets.

   

  (iii)	Persons Acting as a Group.   For purposes of clauses (i) and (ii) above, persons will not be considered to be acting as a group solely because they purchase or own capital stock or purchase assets of the Company at the same time.  However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar business transaction with the Company.  If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. For purposes of this paragraph, the term “corporation” shall have the meaning assigned such term under Treasury Regulation section 1.280G-1, Q&A-45.

   

  (iv)	Each of clauses (i) through (iii) above shall be construed and interpreted consistent with the requirements of Section 409A and any Treasury Regulations or other guidance issued thereunder.

   

  11.5	Release Agreement.  In order to receive the payments and benefits set forth in Sections 8.1 and 11.2, as applicable (collectively referred to herein as the “Severance Payments”), the Executive must timely execute (and not revoke) the Company’s form of separation agreement and general release (the “Release Agreement”).   If the Executive is eligible for Severance Payments pursuant to Sections 8.1 and 11.2, the Company will deliver the Release Agreement to the Executive within seven (7) calendar days following the date of termination of employment. The Severance Payments are subject to the Executive’s execution and delivery of such Release Agreement within 45 days of the Executive’s receipt of the Release Agreement and the Executive’s non-revocation of such Release Agreement.

   

  11.6	Post-Termination Breach. Notwithstanding anything to the contrary contained in this Agreement, the Company’s obligation to provide the Severance Payments will immediately cease if the Executive breaches any of the provisions of Sections 6, 7 or 8, the Release Agreement or any other Agreement the Executive has with the Company.

   

  12.	RETURN OF COMPANY PROPERTY; EXIT INTERVIEW.  Upon termination of the Executive’s employment with the Company for any reason or at any time during employment upon request, the Executive will promptly:

   

  (a)       Deliver to the Company all documents and other tangible media in the Executive's possession or control that evidence, contain or reflect (A) Confidential Information

   

  -13-

  

  or (B) Work Product, in each case whether prepared by the Executive or otherwise

  coming into the Executive’s possession or control;

   

  (b)	Destroy any intangible materials that evidence, contain or reflect Confidential Information or Work Product on equipment or media not owned by the Company, unless otherwise directed by the Company; and

   

  (c)       Return to the Company all equipment, files, software programs and other personal property belonging to the Company.

   

  Upon termination of the Executive’s employment with the Company for any reason, the Executive will attend an exit interview with a representative of the Company to review the Executive’s continuing obligations under this Agreement and to coordinate in the transition of her duties.

   

  13.	ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all contemporaneous and prior agreements and understandings between them as to such subject matter. Except as otherwise expressly provided herein, this Agreement may not be amended except by an instrument in writing executed by the Company and the Executive.  Subject to the other provisions of this Agreement, any subsequent change or changes in the Executive’s duties, salary, or compensation will not affect the validity or scope of this Agreement, including the validity or scope of Section 8.

   

  14.	ASSIGNMENT.  The Executive shall not be permitted to assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company.

   

  15.	GOVERNING  LAW;  JURISDICTION.    This  Agreement  shall  be  construed  and enforced in accordance with and governed by the laws of the Commonwealth of Massachusetts without giving effect to the principles of conflicts of laws thereof. The parties hereby consent and submit to the exclusive jurisdiction and venue of the courts located in Suffolk County, Massachusetts in connection with any actions or proceedings brought against either of them (or each of them) arising out of or relating to this Agreement.

   

  16.	MISCELLANEOUS.    No  waiver  by  either  party  of  any  term  or  condition  of  this Agreement, whether by conduct or otherwise, in any one or more instance, shall be deemed a continuing waiver of any such term or condition, or a waiver of any other term or condition of this Agreement. Headings set forth in this Agreement are solely for the convenience of the parties and have no legal effect. If any provision of this Agreement shall be found to be invalid by any court having competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions hereof. This Agreement shall be (i) binding upon, and will inure to the benefit of, the parties and their permitted respective successors and assigns, (ii) construed without presumption of any rule requiring construction to be made against the party causing it to be drafted and (iii) executed in any number of counterparts, each of which will for all purposes be deemed to be an original, and all of which are identical.

   

  -14-

  

  17.	TAX WITHHOLDING. The Company or other payor is authorized to withhold from any benefit provided or payment due hereunder, the amount of withholding taxes due any federal, state or local authority in respect of such benefit or payment and to take such other action as may be necessary in the opinion of the Board to satisfy all obligations for the payment of such withholding taxes. The Executive will be solely responsible for all taxes assessed against her with respect to the compensation and benefits described in this Agreement, other than typical employer-paid taxes such as FICA, and the Company makes no representations as to the tax treatment of such compensation and benefits.

   

  18.	SECTION 409A COMPLIANCE.  All payments under this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Code and regulations promulgated thereunder (“Section 409A”). As used in this Agreement, the “Code” means the Internal Revenue Code of 1986, as amended. To the extent permitted under applicable regulations and/or other guidance of general applicability issued pursuant to Section 409A, the Company reserves the right to modify this Agreement to conform with any or all relevant provisions regarding compensation and/or benefits so that such compensation and benefits are exempt from the provisions of 409A and/or otherwise comply with such provisions so as to avoid the tax consequences set forth in Section 409A and to assure that no payment or benefit shall be subject to an “additional tax” under Section 409A. To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, or to the extent any provision in this Agreement must be modified to comply with Section 409A, such provision shall be read in such a manner so that no payment due to the Executive shall be subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. If necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” any payment on account of the Executive’s separation from service that would otherwise be due hereunder within six (6) months after such separation shall be delayed until the first business day of the seventh month following the date of termination of employment and the first such payment shall include the cumulative amount of any payments (without interest) that would have been paid prior to such date if not for such restriction. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A. In no event may the Executive, directly or indirectly, designate the calendar year of payment. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of Sections 8.1 and 11.2 unless the Executive would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii). In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by Section 409A or damages for failing to comply with Section 409A.

   

  -15-

  

  19.       280G MODIFIED CUTBACK.

   

  (a)       If any payment, benefit or distribution of any type to or for the benefit of the Executive, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Parachute Payments”) would subject the Executive to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided that the Parachute Payments shall only be reduced to the extent the after-tax value of amounts received by the Executive after application of the above reduction would exceed the after- tax value of the amounts received without application of such reduction. For this purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment and excise taxes applicable to such amount. Unless the Executive shall have given prior written notice to the Company to effectuate a reduction in the Parachute Payments if such a reduction is required, which notice shall be consistent with the requirements of Section 409A to avoid the imputation of any tax, penalty or interest thereunder, then the Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating accelerated vesting of stock options or similar awards, then reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any other remaining Parachute Payments; provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning of Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in a manner that does not comply with Section 409A.

   

  (b)	An initial determination as to whether (x) any of the Parachute Payments received by the Executive in connection with the occurrence of a change in the ownership or control of the Company or in the ownership of a substantial portion of the assets of the Company shall be subject to the Excise Tax, and (y) the amount of any reduction, if any, that may be required pursuant to the previous paragraph, shall be made by an independent accounting firm selected by the Company (the “Accounting Firm”) prior to the consummation of such change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company. The Executive shall be furnished with notice of all determinations made as to the Excise Tax payable with respect to the Executive’s Parachute Payments, together with the related calculations of the Accounting Firm, promptly after such determinations and calculations have been received by the Company.

   

  (c)       For purposes of this Section 19, (i) no portion of the Parachute Payments the receipt or enjoyment of which the Executive shall have effectively waived in writing prior to the date of payment of the Parachute Payments shall be taken into account; (ii) no portion of the Parachute Payments shall be taken into account which in the opinion of the Accounting Firm does not constitute a “parachute payment” within

   

  -16-

  

  the meaning of Section 280G(b)(2) of the Code; (iii) the Parachute Payments shall be reduced only to the extent necessary so that the Parachute Payments (other than those referred to in the immediately preceding clause (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of the auditor or tax counsel referred to in such clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Parachute Payments shall be determined by the Company’s independent auditors based on Sections 280G and 4999 of the Code and the regulations for applying those sections of the Code, or on substantial authority within the meaning of Section 6662 of the Code.

   

  IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement.

   

  CORBUS PHARMACEUTICALS HOLDINGS, INC.

   

  By:      	 	/s/ Sean Moran      	

  Name:  	Sean Moran

  Title:    	Chief Financial Officer

  Dated:  	November 24, 2021

   

   

   

  Brake:

   

  By:       	/s/ Rachael Brake  	

  Name:  	Rachael Brake

  Title:    	Chief Scientific Officer

  Dated:  	November 24, 2021

   

  -17-ex_343277.htm

Exhibit 4.1

 

DESCRIPTION OF CAPITAL STOCK

 

The material provisions of our articles of association and particular provisions of Dutch law relevant to our statutory existence and the Dutch Corporate Governance Code are summarized below. This summary does not restate our articles of association or relevant Dutch law in their entirety. The articles of association, and not this summary, define the rights of holders of shares of our common stock. Our articles of association are registered at the Dutch Trade Register, and an English translation has been filed with the SEC and is incorporated by reference as an exhibit to our Annual Report filed on Form 10-K.

 

Authorized Capital 

 

Our authorized capital amounts to twelve million euro (EUR 12,000,000) and is divided into two hundred million (200,000,000) shares of common stock, each with a nominal value of six eurocent €0.06. No preferred shares are currently authorized by our articles of association.

 

Under Dutch law, our authorized capital stock is the maximum capital that we may issue without amending our articles of association. An amendment of our articles of association would require a resolution from the general meeting of shareholders.

 

Issuance of Capital Stock 

 

Under Dutch law, we may only issue capital stock pursuant to a resolution of the general meeting of shareholders, unless another corporate body has been designated to do so by a resolution of the general meeting of shareholders or by our articles of association.

 

Our Board is designated by the articles of association for a period of five years from May 19, 2017 to issue shares and grant rights to subscribe for shares up to the amount of unissued shares in our authorized capital stock. The designation may be extended from time to time, with periods not exceeding five years, by a resolution of the general meeting of shareholders adopted with a simple majority. If and when said authority is not or no longer delegated to another corporate body, the general meeting of shareholders may only decide to issue shares and grant rights to subscribe for shares at the proposal of the Board. At the upcoming annual general meeting we will ask our shareholders to authorize the Board to issue shares up to 20% of the issued share capital, for any legal purpose, at the stock exchange or in a private purchase transaction, and during a period of 18 months starting from the date of the 2022 annual meeting. It is our intention to propose to renew such authorization at each annual general meeting.

 

Pre-Emptive Rights 

 

Under Dutch law, in the event of an issuance of shares of common stock, each holder of common stock will have a pro rata preemptive right based on the number of shares of common stock held by such shareholder. Preemptive rights do not apply with respect to shares of common stock issued against contributions other than in cash or shares of common stock issued to our employees or the employees of one of our group companies. Our Board is authorized by the articles of association for a period of five years from May 19, 2017 to limit or exclude any pre-emptive rights to which shareholders may be entitled in connection with the issuance of shares. The authority to limit or exclude pre-emptive rights may be extended from time to time, with periods not exceeding five years, by a resolution of the general meeting of shareholders adopted with a simple majority. If authority is not delegated to another corporate body, the general meeting of shareholders may only decide to limit or exclude pre-emptive rights. The proposal to renew the authorization for the Board to issue shares at the upcoming annual meeting also includes the authority to restrict or exclude pre-emptive rights upon an issue of shares. It is our intention to propose to renew such authorization at each annual general meeting.

 

Repurchase of Shares of Capital Stock 

 

Under Dutch law, a public company with limited liability (naamloze vennootschap) may acquire its own fully paid-up shares, subject to certain provisions of Dutch law and the articles of association. We may acquire our own fully paid-up shares either without paying any consideration, or in the event any consideration must be paid only if (i) our shareholders’ equity less the acquisition price is not less than the sum of paid-up and called-up capital and any reserve required to be maintained by law or our articles of association, (ii) we and our subsidiaries would not thereafter hold or hold shares as a pledgee with an aggregate par value exceeding 50% of our issued capital stock and (iii) the general meeting of shareholders has authorized the Board to effect such acquisitions.

 

 

 

 

Our Board is currently authorized, by resolution of the 2021 annual general meeting held on September 10, 2021, to repurchase up to a total of 10% of the issued share capital, at a price between $0.01 and 105% of the market price on the NYSE, for a period of 18 months from said annual general meeting. It is our intention to propose to renew such authorization at each annual general meeting.

 

Capital Reduction 

 

Subject to Dutch law and our articles of association, pursuant to a proposal of the Board, the general meeting of shareholders may resolve to reduce the outstanding capital stock by cancellation of shares or by reducing the nominal value of the shares by means of an amendment to our articles of association. Dutch law requires that this resolution be adopted by an absolute majority of votes cast, or by a two-thirds majority of the votes cast, if less than half of the issued capital stock is present or represented at the meeting.

 

Dividends 

 

Subject to certain exceptions, Dutch law provides that dividends may only be paid out of profits as shown in our annual financial statements as adopted by the general meeting of shareholders. Moreover, dividends may be distributed only to the extent the shareholders’ equity exceeds the sum of the amount of paid-up capital and any reserves that must be maintained under the law. Interim dividends may be declared as provided in the articles of association and may be distributed to the extent that the shareholders’ equity exceeds the amount of the paid-up capital plus any reserves that must be maintained under the law as apparent from an interim statement of assets and liabilities prepared on the basis of generally accepted accounting principles. Interim dividends should be regarded as advances on the final dividend that a company intends to declare with respect to the ongoing financial year or—if the annual accounts have not yet been adopted—the previous financial year.

 

Should it be determined that any distribution made was not permitted, the shareholders or any other person entitled to profits must repay the dividends declared to the extent such shareholder or person was or ought to have been aware that the distribution was not permitted.

 

Pursuant to our articles of association, the Board, decides what portion of our profit is to be held as reserves. Holders of our common stock are not entitled to any dividends unless declared by our Board.

 

General Meeting of Shareholders 

 

Procedures and Admissions 

 

Pursuant to our articles of association, general meetings of shareholders are held in the municipality of Amsterdam, The Netherlands or at Schiphol (Municipality of Haarlemmermeer, The Netherlands). A general meeting of shareholders will be held at least once a year within the period required by Dutch law, which is currently no later than six months after the end of our financial year. Under the temporary coronavirus (COVID-19) outbreak legislation from the Ministry of Justice and Security (the "Emergency Act") it is possible for the Board of the Company to extend the deadline to hold the annual general meeting with another 4 four months (so by October 31). The Emergency Act is now in force until April 1, 2022, but it is expected that anther extension of (at least) 2 months will be provided thereafter.

 

Extraordinary general meetings of shareholders will be held as frequently as needed; however they must be convened by the Board or by shareholders and holders of depositary receipts issued with the cooperation of the Company, together representing at least one-tenth of the issued capital (the “Requesting Shareholders”). The Requesting Shareholders are only authorized to call the extraordinary general meeting themselves if it is evidenced that the Requesting Shareholders have requested the Board to call a general meeting in writing, exactly stating the matters to be discussed, and the Board has not taken the necessary steps so that the general meeting could be held within six weeks after the request. If the Requesting Shareholders represent more than half of the issued capital, however, they shall be authorized to call the general meeting themselves without first having to request the Board to call the general meeting.

 

 

 

 

Our Board must give public notice of a general meeting of shareholders or an extraordinary meeting of shareholders, by at least such number of days prior to the day of the meeting as required by Dutch law, which is currently fifteen days.

 

The agenda for a meeting of shareholders must contain such items as the Board or the person or persons convening the meeting determine. The agenda shall also include any matter, the consideration of which has been requested by one or more shareholders, representing alone or jointly with others at least such percentage of the issued capital stock as determined by Dutch law, which is currently set at three percent. The request to consider such matter should have been received by us no later than on the 60th day prior to the day of the meeting accompanied by a statement containing the reasons for the request.

 

The agenda for the annual general meeting of shareholders shall contain, among other items, items placed on the agenda in accordance with Dutch law and our articles of association, the consideration of the annual report, the discussion and adoption of our annual accounts, our policy regarding dividends and reserves and the proposal to pay a dividend (if applicable), proposals relating to the composition of the Board, including the filling of any vacancies on the Board, the proposals placed on the agenda by the Board, including but not limited to a proposal to grant discharge to the members of the Board from liability in respect of the exercise of their duties during the financial year, together with the items proposed by shareholders in accordance with provisions of Dutch law and our articles of association.

 

Shareholders are entitled to attend our general meeting of shareholders, to address the general meeting of shareholders and to vote, either in person or represented by a person holding a written proxy. The requirement that a proxy must be in written form is also fulfilled when it is recorded electronically.

 

The holder of a right of usufruct or a pledgee with voting rights is entitled to request an item to be placed on the agenda of the general meeting of shareholders, to attend the general meeting of shareholders, to address the general meeting of shareholders and to vote.

 

Under Dutch law, shareholders’ resolutions may be adopted in writing without holding a meeting of shareholders, provided that (i) the articles of association explicitly allow such practice and (ii) all shareholders are in favor of the resolution to be adopted. Our articles of association, however, will not provide for shareholder action by written consent as it is not practicable for a listed company.

 

Members of the Board are authorized to attend general meetings of shareholders. They have an advisory vote. The general meeting shall be chaired by the Chairman of the Board or by another non-executive director appointed for that purpose by the Board.

 

Voting Rights 

 

Under Dutch law and our articles of association, each share of common stock confers the right to cast one vote at the general meeting of shareholders. Resolutions by the general meeting of shareholders must be adopted by an absolute majority of votes cast, unless another standard of votes and / or a quorum is required by virtue of Dutch law or our articles of association. There is no required quorum under Dutch law for shareholder action at a properly convened shareholder meeting, except in specific instances prescribed by Dutch law or our articles of association.

 

Each shareholder has the right to participate in, address and exercise its right to vote at the general meeting of shareholders in person or by written proxy or by electronic means of communication, subject to certain conditions for the use of electronic means of voting set by or pursuant to the articles of association.

 

No votes may be cast at a general meeting of shareholders on the shares held by us or our subsidiaries. Nonetheless, the holders of a right of usufruct and the holders of a right of pledge in respect of the shares held by us or our subsidiaries in our capital stock are not excluded from the right to vote on such shares, if the right of usufruct or the right of pledge was granted prior to the time such shares were acquired by us or any of our subsidiaries. Neither we nor our subsidiaries may cast votes in respect of a share on which we or such subsidiary holds a right of usufruct or a right of pledge.

 

 

 

 

Under Dutch law, our Board is not required to set a record date for a general meeting to determine those shareholders that are entitled to vote at the general meeting. Our Board has selected to adopt a record date. Dutch law requires that the record date be on the 28th day prior to the date of the general meeting. Shareholders as of the record date shall be deemed entitled to attend and to vote at the general meeting. There is no specific provision in Dutch law relating to adjournment of the general meeting of shareholders.

 

Nomination Right 

 

Pursuant to our amended and restated articles of association, our Board consists of one or more executive directors and one or more non-executive directors. The total number of directors, as well as the number of executive directors and non-executive directors, is determined by the Board.

 

Pursuant to the Director Nomination Agreement, T. Rowe Price Associates, Inc. (formerly, Oak Hill Advisors, L.P.) has the right to appoint two directors to the Board provided that it owns at least 20% of the Company’s outstanding common stock (and one director if it owns at least 10%, but less than 20%, of the outstanding common stock). Also, the Mosing Parties (as defined in the Director Nomination Agreement) has the right to appoint one director as long as they own at least 10% of the Company’s outstanding common stock. The remaining directors, including any directors for which the relevant shareholders do not exercise its recommendation right, are appointed on recommendation of the Board. A recommendation submitted on time is binding. However, the general meeting may disregard the recommendation if it adopts a resolution to that effect by a majority of no less than two-thirds of the votes cast, representing over one-half of the issued capital.

 

Shareholder Vote on Certain Reorganizations 

 

Under Dutch law, the approval of our general meeting of shareholders is required for any significant change in the identity of us or our business.

 

Appraisal Rights 

 

Subject to certain exceptions, Dutch law does not recognize the concept of appraisal or dissenters’ rights.

 

Anti-Takeover Provisions 

 

Under Dutch law, protective measures against takeovers are possible and permissible, within the boundaries set by Dutch law and Dutch case law.

 

The following resolutions and provisions of our articles of association may have the effect of making a takeover of our company more difficult or less attractive, including:

 

	 	
			●

				
			our Board, will be designated to issue shares and grant rights to subscribe for shares of common stock, up to the amount of our authorized capital stock and to limit or exclude pre-emptive rights on shares, both for a period of five years from May 19, 2017, whereby it is intended to propose to renew this designation at the 2022 general meeting; and

			

 

	 	
			●

				
			shareholder action by written consent will not be permitted, thereby requiring all shareholder actions to be taken at a general meeting of shareholders.

			

 

Inspection of Books and Records 

 

The Board provides all information required by Dutch law at the general meeting of shareholders and makes the information available to individual shareholders at the office of the company with copies available upon request. The part of our shareholders’ register kept in The Netherlands is available for inspection by the shareholders.

 

Amendment of the Articles of Association 

 

The general meeting of shareholders is able to effect an amendment of the articles of association only upon a proposal of our Board. A proposal to amend the articles of association whereby any change would be made in the rights which vest in the holders of shares in a specific class in their capacity as such, shall require the prior approval of the meeting of the holders of the shares of that specific class.

 

 

 

 

Dissolution, Merger or Demerger 

 

The general meeting of shareholders will only be able to effect a dissolution of the company. The liquidation of the company shall be carried out by the directors, if and to the extent the Board has not appointed one or more other liquidators.

 

Under Dutch law, a resolution for a legal merger (juridische fusie) or legal demerger (juridische splitsing) is adopted in the same manner as a resolution to amend the articles of association. The general meeting of shareholders may, in accordance with the relevant merger proposal by the Board, adopt a resolution for a legal merger or legal demerger by an absolute majority of the votes cast, unless less than half of the issued capital stock is present or represented at the meeting, in which case a two-thirds majority is required.

 

Shareholder Suits 

 

If a third party is liable to a Dutch company, under Dutch law generally shareholders do not have the right to bring an action on behalf of the company or bring an action on their own behalf to recover damages sustained as a result of a decrease in value, or loss of an increase in value, of their stock. Only in the event that the cause for the liability of such third party to the company also constitutes a tortious act directly against such shareholder and the damages sustained are permanent may that shareholder have an individual right of action against such third party on its own behalf to recover such damages. The Dutch Civil Code provides for the possibility to initiate such actions collectively. A foundation or an association whose objective, as stated in its articles of association, is to protect the rights of a group of persons having similar interests may institute a collective action. The collective action cannot result in an order for payment of monetary damages but may result in a declaratory judgment (verklaring voor recht), for example, declaring that a party has acted wrongfully or has breached fiduciary duty. The foundation or association and the defendant are permitted to reach (often on the basis of such declaratory judgment) a settlement, which provides for monetary compensation of damages. A designated Dutch court may declare the settlement agreement binding upon all the injured parties whereby an individual injured party will have the choice to opt-out within the term set by the court (at least three months). Such individual injured party may also individually institute a civil claim for damages within the aforementioned term.

 

Squeeze-Out 

 

Under Dutch law, a shareholder who holds at least 95% of our issued capital for its own account may institute proceedings against the other shareholders jointly for the transfer of their shares to the shareholder. The proceedings are held before the Enterprise Division (Ondernemingskamer) of the Court of Appeal in Amsterdam, which may award the claim for squeeze-out in relation to all minority shareholders and will determine the price to be paid for the shares, if necessary after appointment of one or three experts who will render an opinion to the Enterprise Chamber on the value of the shares. The court shall disallow the proceedings against all other defendants if (i) notwithstanding compensation, a defendant would sustain serious tangible loss by the transfer; (ii) the defendant is the holder of a share in which a special right of control of the company is vested under the articles of association; or (iii) a claimant has, as against a defendant, renounced his power to institute such proceedings. Once the order for transfer has become final, the acquirer must give written notice of the price and the date on which and the place where the price is payable to the minority shareholders whose addresses are known to the acquirer. Unless all addresses are known to the acquirer, it must also publish the same in a daily newspaper with nationwide distribution.

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