Document:

ex_169254.htm

Exhibit 4.5

 

DESCRIPTION OF CAPITAL STOCK

 

The following description of Concrete Pumping Holdings, Inc.’s (the “Company,” “we” or “us”) capital stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the Company’s Amended and Restated Certificate of Incorporation (the “Charter”), the Company’s Amended and Restated Bylaws (the “Bylaws”) and the Certificate of Designations, Preferences and Rights of the Company’s Series A Zero-Dividend Convertible Perpetual Preferred Stock (the “Certificate of Designations”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part. We encourage you to read the Charter, the Bylaws, the Certificate of Designations and the applicable provisions of the Delaware General Corporation Law, for additional information.

 

General

 

Our Charter authorizes us to issue up to 500,000,000 shares of common stock, $0.0001 par value per share, and 10,000,000 shares of preferred stock, $0.0001 par value per share.

 

Common Stock

 

Dividend rights

 

Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our common stock are entitled to receive such dividends, if any, as may be declared from time-to-time by our Board of Directors out of legally available funds.

 

Voting rights

 

Each holder of common stock is entitled to one vote for each share on all matters properly submitted to a vote of the stockholders, including the election of directors. Our stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the voting shares are able to elect all of the directors.

 

Liquidation

 

Subject to applicable law, the rights, if any, of the holders of any outstanding series of the preferred stock, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after payment or provision for payment of the debts and other liabilities of the Company, the holders of shares of our common stock will be entitled to receive all the remaining assets of the Company available for distribution to its stockholders, ratably in proportion to the number of shares of common stock held by them.

 

Rights and preferences

 

Holders of our common stock have no preemptive, conversion, subscription or other rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences, and privileges of the holders of our common stock are subject to and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate in the future.

 

1

 

 

Preferred Stock

 

Our Board has the authority, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, and restrictions thereof. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of our common stock. The issuance of preferred stock could adversely affect the voting power of holders of our common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring, or preventing a change of control of the Company or other corporate action.

 

On December 6, 2018, the closing date (the “Closing”) of the Company’s business combination (the “Business Combination”) with Industrea Acquisition Corp. (“Industrea”), pursuant to that certain subscription agreement, dated as of September 7, 2018, by and between the Company and Nuveen Alternatives Advisors, LLC, on behalf of one or more funds or accounts (“Nuveen”), the Company issued to Nuveen 2,450,980 shares of the Company’s Series A Zero-Dividend Convertible Perpetual Preferred Stock (“Series A Preferred Stock”) at a price of $10.20 per share, for an aggregate cash purchase price of $25.0 million. The Series A Preferred Stock will not pay dividends and will be convertible into shares of our common stock at a 1:1 ratio (subject to customary adjustments) at any time following six months after the Closing. We will have the right to elect to redeem all or a portion of the Series A Preferred Stock at our election after four years for cash at a redemption price equal to the amount of the principal investment plus an additional cumulative amount that will accrue at an annual rate of 7.0% thereon. In addition, if the volume weighted average price of shares of our common stock equals or exceeds $13.00 for 30 consecutive days, then we will have the right to require the holder of the Series A Preferred Stock to convert its Series A Preferred Stock into common stock, at a ratio of 1:1 (subject to customary adjustments). We have also agreed to provide certain registration rights with respect to the shares of common stock underlying the Series A Preferred Stock.

 

Stockholders Agreement

 

In connection with the Business Combination, the Company, the CFLL Sponsor Holdings, LLC (“CFLL Sponsor”), the Argand Investor, certain former holders of the Company’s capital stock (“CPH stockholders”), and Industrea’s former independent directors entered into the Stockholders Agreement, which was amended on April 1, 2019. Pursuant to the Stockholders Agreement:

 

	 	
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			Subject to certain exceptions, the CFLL Sponsor agreed not to transfer 4,403,325 founder shares until (A) March 6, 2020 or (B) earlier if (x) the last sale price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing May 5, 2019 or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of our common stock for cash, securities or other property;

			

 

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			Each CPH Management Holder (as defined therein) has agreed not to transfer any shares of our common stock acquired by such CPH Management Holder in connection with the Business Combination for a period commencing on December 6, 2018 and ending on (a) December 6, 2019 with respect to one-third of such CPH Management Holder’s securities of the Company held as of the date of Closing; (b) December 6, 2020 with respect to one-third of such CPH Management Holder’s securities of the Company held as of the date of Closing; and (c) December 6, 2021 with respect to one-third of such CPH Management Holder’s securities of the Company held as of the date of Closing; and

			

 

	 	
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			Subject to certain exceptions, until March 6, 2020, (i) CFLL Holdings, an affiliate of the Argand Investor, may not transfer 7,784,313 shares of our common stock held by it and (ii) the CFLL Sponsor may not transfer 1,664,500 shares of our common stock held by it.

			

 

In addition, transfers of these securities are permitted in certain limited circumstances as set forth in the Stockholders Agreement, including with the prior written consent of our Board of Directors (with any director who has been designated to serve on our Board by or who is an affiliate of the requesting party abstaining from such vote) and to “affiliates,” as defined in the Stockholders Agreement.

 

In addition, pursuant to the terms of that certain rollover agreement, dated as of September 7, 2018, among the Company, CFLL Sponsor, Peninsula and the other parties thereto, Peninsula has exercised its right to designate three individuals to serve on our Board: one to serve as a Class I director, one to serve as a Class II director, and one to serve as a Class III director. Under the Stockholders Agreement, Peninsula has nomination rights with respect to: (i) one director for as long as Peninsula beneficially owns more than 5% and up to 15% of the issued and outstanding shares of our common stock; (ii) two individuals for as long as Peninsula beneficially owns more than 15% and up to 25% of the issued and outstanding shares of our common stock; and (iii) three directors for as long as Peninsula owns more than 25% of the issued and outstanding shares of our common stock. If Peninsula’s beneficial ownership falls below one of these thresholds, Peninsula’s nomination right in respect of such threshold will permanently expire. On December 9, 2018, Peninsula designated and we appointed each of M. Brent Stevens, Matthew Homme and Raymond Cheesman to serve on our Board.

 

The Stockholders Agreement also provides that these stockholders will have certain demand and/or “piggyback” registration rights with respect to the shares of common stock held by them. We will bear certain expenses incurred in connection with the exercise of such rights.

 

3

 

 

Public Warrants

 

Effective upon the consummation of the Business Combination, each warrant outstanding for the purchase of one share of Industrea’s common stock prior to the consummation of the Business Combination became exercisable for one share of our common stock, with all other terms of such warrants remaining unchanged. The following is a description of the warrants.

 

Each public warrant entitles the registered holder to purchase one whole share of common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on January 5, 2019. The public warrants will expire on December 6, 2023, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. As of October 31, 2019, there were 13,017,777 public warrants outstanding.

 

We will not be obligated to deliver any shares of common stock pursuant to the exercise of a public warrant and will have no obligation to settle such public warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the public warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations described below with respect to registration. No public warrant will be exercisable and we will not be obligated to issue shares of common stock upon exercise of a public warrant unless common stock issuable upon such public warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the public warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a public warrant, the holder of such public warrant will not be entitled to exercise such public warrant and such public warrant may have no value and expire worthless. In no event will we be required to net cash settle any public warrant. In the event that a registration statement is not effective for the exercised public warrants, the purchaser of a unit containing such public warrant will have paid the full purchase price for the unit solely for the share of common stock underlying such unit.

 

We registered the issuance of the shares of common stock issuable upon exercise of the public warrants pursuant to the registration statement of which the proxy statement/prospectus formed. Under the Warrant Agreement, we are required to maintain a current prospectus relating to those shares of common stock until the public warrants expire or are redeemed, as specified in the Warrant Agreement. A registration statement covering the shares of common stock issuable upon exercise of the public warrants was declared effective by the SEC on February 15, 2019. If, at any time, prior to the expiration or redemption of the public warrants, as specified in the Warrant Agreement, we fail to maintain an effective registration statement with respect to such shares, warrant holders may exercise their public warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if our common stock is at the time of any exercise of a public warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will be required to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

4

 

 

Once the public warrants become exercisable, we may call the public warrants for redemption:

 

	 	
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			in whole and not in part;

			

 

	 	
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			at a price of $0.01 per warrant;

			

 

	 	
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			upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and

			

 

	 	
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			if, and only if, the reported closing price of our common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrant holders.

			

 

If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

 

We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the public warrants, each warrant holder will be entitled to exercise his, her or its public warrant prior to the scheduled redemption date. However, the price of our common stock may fall below the $18.00 redemption trigger price as well as the $11.50 warrant exercise price (for whole shares) after the redemption notice is issued.

 

If we call the public warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise his, her or its public warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their public warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of public warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of our public warrants. If our management takes advantage of this option, all holders of public warrants would pay the exercise price by surrendering their public warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the public warrants, multiplied by the difference between the exercise price of the public warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of our common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of public warrants. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of common stock to be received upon exercise of the public warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the public warrants.

 

5

 

 

A holder of a public warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such public warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (as specified by the holder) of the shares of common stock outstanding immediately after giving effect to such exercise.

 

If the number of outstanding shares of common stock is increased by a stock dividend payable in shares of common stock, or by a split-up of shares of common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of common stock issuable on exercise of each public warrant will be increased in proportion to such increase in the outstanding shares of common stock. A rights offering to holders of common stock entitling holders to purchase shares of common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of common stock equal to the product of (i) the number of shares of common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for common stock) multiplied by (ii) one minus the quotient of (x) the price per share of common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for common stock, in determining the price payable for common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of common stock as reported during the ten trading day period ending on the trading day prior to the first date on which the shares of common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

 

In addition, if we, at any time while the public warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of common stock on account of such shares of common stock (or other shares of our capital stock into which the public warrants are convertible), other than (a) as described above, or (b) certain ordinary cash dividends, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of common stock in respect of such event.

 

If the number of outstanding shares of our common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of common stock issuable on exercise of each public warrant will be decreased in proportion to such decrease in outstanding shares of common stock.

 

Whenever the number of shares of common stock purchasable upon the exercise of the public warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of common stock purchasable upon the exercise of the public warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of common stock so purchasable immediately thereafter.

 

6

 

 

In case of any reclassification or reorganization of the outstanding shares of common stock (other than those described above or that solely affects the par value of such shares of common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the public warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the public warrants and in lieu of the shares of our common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the public warrants would have received if such holder had exercised their public warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each public warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of common stock, the holder of a public warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the public warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of our common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the Warrant Agreement. Additionally, if less than 70% of the consideration receivable by the holders of common stock in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the public warrant properly exercises the public warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the Warrant Agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the Warrant Agreement) of the public warrant. The purpose of such exercise price reduction is to provide additional value to holders of the public warrants when an extraordinary transaction occurs during the exercise period of the public warrants pursuant to which the holders of the public warrants otherwise do not receive the full potential value of the public warrants.

 

7

 

 

The warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Industrea, which was assumed by the Company upon the consummation of the Business Combination. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.

 

The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of public warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their public warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the public warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

 

Certain Anti-Takeover Provisions of Delaware Law, Our Charter and Our Bylaws

 

We are currently subject to the provisions of Section 203 of the DGCL (“Section 203”) regulating corporate takeovers. Section 203 prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

 

	 	
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			a stockholder who owns fifteen percent (15%) or more of our outstanding voting stock (otherwise known as an “interested stockholder”);

			

 

	 	
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			an affiliate of an interested stockholder; or

			

 

	 	
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			an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

			

 

A “business combination” includes a merger or sale of more than ten percent (10%) of the Company’s assets. However, the above provisions of Section 203 do not apply if:

 

	 	
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			our Board of Directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;

			

 

	 	
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			after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least eighty-five percent (85%) of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or

			

 

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			on or subsequent to the date of the transaction, the business combination is approved by our Board of Directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

			

 

Our Charter provides that our Board is classified into three classes of directors. As a result, in most circumstances, a person can gain control of our Board only by successfully engaging in a proxy contest at two or more annual meetings.

 

In addition, our Charter does not provide for cumulative voting in the election of directors. Our Board of Directors is empowered to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death, or removal of a director in certain circumstances; and our advance notice provisions require that stockholders must comply with certain procedures in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting.

 

Authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

 

Dividends

 

We have not paid any cash dividends on our common stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our Board at such time. Our Board is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

Exclusive Forum Provision

 

Our Charter provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or its stockholders, (iii) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the DGCL, our Charter or our Bylaws, or (iv) any action asserting a claim against the Company, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of  (i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) arising under the Securities Act or for which the Court of Chancery does not have subject matter jurisdiction including, without limitation, any claim arising under the Exchange Act, both as to which the federal district court for the District of Delaware shall be the sole and exclusive forum.

 

9

 

 

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of our Charter described in the preceding paragraph. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees, which may discourage such lawsuits against the Company and such persons. Alternatively, if a court were to find these provisions of our Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition or results of operations.

 

Limitations of Liability and Indemnification

 

Our Charter and our Bylaws provide that we will indemnify our directors and officers, and may indemnify our employees and other agents, to the fullest extent permitted by the DGCL, which prohibits our Charter from limiting the liability of its directors for the following:

 

	 	
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			any breach of the director’s duty of loyalty to the Company or to its stockholders;

			

 

	 	
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			acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

			

 

	 	
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			unlawful payment of dividends or unlawful stock repurchases or redemptions; and

			

 

	 	
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			any transaction from which the director derived an improper personal benefit.

			

 

If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our Charter does not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Delaware law. This provision also does not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Under our Bylaws, we are empowered to purchase insurance on behalf of any person whom it is required or permitted to indemnify.

 

In addition to the indemnification required in our Charter and our Bylaws, we have entered into indemnification agreements with each of our directors, officers, and some employees, effective upon consummation of the Business Combination. These agreements provide for the indemnification of such directors, officers, and employees for certain expenses and liabilities incurred in connection with any action, suit, proceeding, or alternative dispute resolution mechanism, or hearing, inquiry, or investigation that may lead to the foregoing, to which they are a party, or are threatened to be made a party, by reason of the fact that they are or were a director, officer, employee, agent, or fiduciary of the Company, or any of its subsidiaries, by reason of any action or inaction by them while serving as an officer, director, employee, agent, or fiduciary, or by reason of the fact that they were serving at the Company request as a director, officer, employee, agent, or fiduciary of another entity. In the case of an action or proceeding by or in the right of the Company or any of its subsidiaries, no indemnification will be provided for any claim where a court determines that the indemnified party is prohibited from receiving indemnification. We believe that the provisions of its certificate of incorporation and bylaws described above and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance.

 

10

 

 

The limitation of liability and indemnification provisions in our Charter and our Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit the Company and its stockholders. A stockholder’s investment may be harmed to the extent that we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

 

There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

 

Listing of Securities

 

Our common stock is currently listed on Nasdaq under the symbol “BBCP” and our public warrants are quoted on the OTC Pink marketplace operated by OTC Markets Group, Inc. under the symbol “BBCPW.”

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.

 

11Exhibit 10.5

 

ADDEX THERAPEUTICS LTD 

EQUITY INCENTIVE PLAN 

(BONS)

 

Effective date: 1 January 2018

 

1

 

TABLE OF CONTENTS

 

	
ARTICLE 1 PURPOSE
    	
3
    
	
 
    	
 
    
	
ARTICLE 2 DEFINITIONS   INTERPRETATION
    	
3
    
	
 
    	
 
    
	
ARTICLE 3 SHARES SUBJECT   TO THE PLAN
    	
6
    
	
 
    	
 
    
	
ARTICLE 4 BOARD OF   DIRECTORS
    	
6
    
	
 
    	
 
    
	
ARTICLE 5 ELIGIBILITY AND   CONDITIONS OF PARTICIPATION
    	
6
    
	
 
    	
 
    
	
ARTICLE 6 PROCEDURE
    	
7
    
	
 
    	
 
    
	
ARTICLE 7 BONS GRANT   AGREEMENT
    	
7
    
	
 
    	
 
    
	
ARTICLE 8 VESTING PERIOD
    	
7
    
	
 
    	
 
    
	
ARTICLE 9 EXERCISE PERIOD
    	
8
    
	
 
    	
 
    
	
ARTICLE 10 EXERCISE OF   SUBSCRIPTION RIGHTS
    	
8
    
	
 
    	
 
    
	
ARTICLE 11 TRANSFERABILITY   OF BONS AND SHARES
    	
8
    
	
 
    	
 
    
	
ARTICLE 12 TERMINATION OF   EMPLOYMENT/BREACHES
    	
9
    
	
 
    	
 
    
	
ARTICLE 13 TRANSFER /   LEAVE OF ABSENCE
    	
10
    
	
 
    	
 
    
	
ARTICLE 14 NO (CONTINUED)   EMPLOYMENT OR CONTRACTUAL RELATIONSHIP
    	
10
    
	
 
    	
 
    
	
ARTICLE 15 NO SEGREGATION   OF CASH OR SHARES
    	
11
    
	
 
    	
 
    
	
ARTICLE 16 ADJUSTMENT DUE   TO CORPORATE EVENTS
    	
11
    
	
 
    	
 
    
	
ARTICLE 17 AMENDMENT AND   TERMINATION
    	
11
    
	
 
    	
 
    
	
ARTICLE 18 INDEMNIFICATION
    	
11
    
	
 
    	
 
    
	
ARTICLE 19 TAXES   INDEMNIFICATION
    	
12
    
	
 
    	
 
    
	
ARTICLE 20 APPLICABLE LAW   AND ARBITRATION
    	
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ARTICLE 21 EFFECTIVE DATE
    	
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INTRODUCTION

 

GENERAL INFORMATION

 

Addex Therapeutics Ltd is a Swiss corporation (société anonyme/Aktiengesellschaft) pursuant to Articles 620 et seq. CO with unlimited duration and seat in Plan-les-Ouates, Canton of Geneva, Switzerland.

 

THE PLAN

 

A.                        GENERAL TERMS AND DEFINITIONS

 

Article 1

PURPOSE

 

1.1                              The purpose of the Plan is to provide certain Employees and Directors with an opportunity to obtain Bons, thus providing an increased incentive for these Employees and Directors to contribute to the future success and long-term business value of the Group, enhancing the value of the Shares and increasing the ability of the Company and its Subsidiaries to attract and retain individuals of exceptional skills.

 

1.2                              The Plan rules the conditions and modalities of the grant and disposal of Bons and the exercise of the Subscription Rights.

 

Article 2

DEFINITIONS INTERPRETATION

 

2.1                            In the Plan, the following terms shall have the meanings set forth below:

 

	
“Articles of   Association”
    	
shall mean the articles of association of the Company.
    
	
 
    	
 
    
	
“Board”
    	
shall mean the board of directors of the Company.
    
	
 
    	
 
    
	
“Bons”
    	
shall mean the bons de jouissance (Genussscheine) within the meaning   of Article 657 CO issued by the Company, having the rights, preferences   and privileges as set out in the Articles of Association; as such, the Bons   do not form part of the share capital of the Company and they have no nominal   value. The Bons notably grant to their holders (i) Subscription Rights   and (ii) Liquidation Rights. The Bons do not grant to their holders any   right to vote, any right to attend general meetings of the shareholders of   the Company or any right to dividend or a share of the profit of the Company.
    
	
 
    	
 
    
	
“Bons Grant”
    	
shall mean the number of Bons granted to a Participant pursuant to a   Bons Grant Agreement.
    

 

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“Bons Grant   Agreement”
    	
shall mean the agreement specifying the terms and conditions   of the grant of Bons executed by the Company and a Participant in   substantially the form attached as Appendix I hereto or any other form   decided by the Board from time   to time.
    
	
 
    	
 
    
	
“Change of   Control”
    	
shall mean (i) an event which triggers a mandatory offer on the   Shares under the rules applying to SIX Swiss Exchange listed companies   or any other applicable rules, the event being deemed a qualifying event if any one set of such   rules considers it an event triggering a mandatory offer or   (ii) the acquisition by any   person or entity, alone or jointly with another person or entity (or   persons or entities), of more than 50% of the Shares or of the voting rights   of the Company.
    
	
 
    	
 
    
	
“CO”
    	
shall mean the Swiss Code of Obligations, as amended from time to time.
    
	
 
    	
 
    
	
“Company”
    	
shall mean Addex   Therapeutics Ltd, a company organized under the laws of Switzerland, having its registered   office at c/o Addex Pharma SA, 12, chemin des Aulx, 1228 Plan-les-Ouates, Switzerland.
    
	
 
    	
 
    
	
“Compensation   Committee”
    	
shall mean the   compensation committee, if any, appointed by the Board pursuant to the   organizational rules of   the Company.
    
	
 
    	
 
    
	
“Director”
    	
shall mean a   member of the Board or of the board of directors (or equivalent corporate body) of a Subsidiary.
    
	
 
    	
 
    
	
“Employee”
    	
shall mean any executive or employee of the Company or of a   Subsidiary.
    
	
 
    	
 
    
	
“Exercise Date”
    	
shall mean the   date on which the relevant Participant sends a Subscription Right Exercise Notice.
    
	
 
    	
 
    
	
“Floor Price”
    	
shall mean the   price below which Subscription Rights cannot be exercised, which corresponds   to a multiple of the   Spot Price on the Grant Date, as determined by the Board.
    
	
 
    	
 
    
	
“Grant Date”
    	
shall mean the date on which Bons are granted.
    
	
 
    	
 
    
	
“Group”
    	
shall mean the Group of which the Company is the holding entity, including the Company and   its Subsidiaries.
    
	
 
    	
 
    
	
“Liquidation   Rights”
    	
shall mean, for   each Bon, the right to liquidation proceeds of the Company equivalent to that of one Share.
    
	
 
    	
 
    
	
“Participant”
    	
shall mean an   Employee or a Director to whom Bons are granted hereunder.
    

 

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“Plan”
    	
shall mean this equity incentive plan in its present form or as amended from time to time.
    
	
 
    	
 
    
	
“Plan   Administrator”
    	
shall mean the   person or entity appointed by the Board responsible for receiving and executing Subscription Right Exercise Notices.
    
	
 
    	
 
    
	
“Subscription   Right”
    	
shall mean the right embedded in a Bon to subscribe for Shares   in accordance with the Plan, any Bons Grant Agreement or as the Board shall   otherwise determine from time   to time.
    
	
 
    	
 
    
	
“Subscription Right Exercise Notice”
    	
shall   mean the notice that needs to be given by a Participant when   Subscription Rights are exercised in substantially the form attached as Appendix   II hereto or any other   form decided by the Board from time to time.
    
	
 
    	
 
    
	
“Subscription Right Exercise Period”
    	
shall mean the period   during which Subscription Rights can be exercised, such period starting on   the first day of the calendar quarter following the Vesting Date of the relevant Bon and ending on the Subscription   Right Term of the relevant Subscription Right.
    
	
 
    	
 
    
	
“Subscription   Right Term”
    	
shall mean the term of a Subscription Right.
    
	
 
    	
 
    
	
“Shareholders”
    	
shall mean the holders of any Shares.
    
	
 
    	
 
    
	
“Shares”
    	
shall mean shares of the Company.
    
	
 
    	
 
    
	
“Spot Price”
    	
shall mean the listed price of a Share.
    
	
 
    	
 
    
	
“Strike Price”
    	
shall mean the price at which Shares may be purchased by exercising Subscription   Rights.
    
	
 
    	
 
    
	
“Subsidiary”
    	
shall mean a subsidiary of the Company.
    
	
 
    	
 
    
	
“Vested Bon”
    	
shall mean a Bon   that has vested in accordance with the rules set forth herein.
    
	
 
    	
 
    
	
“Vesting Date”
    	
shall mean the   date upon which a Bon vests in accordance with the rules set forth herein.
    

 

2.2                              References to any statutory provision are to that provision as amended or re-enacted from time to time and, unless the context otherwise requires, words or expressions denoting the singular shall include the plural (and vice versa) and words and expressions denoting the masculine shall include the feminine (and vice versa). Whenever the words “include”, “includes” or “including” are used in the Plan, they are deemed to be followed by the words “without limitation”, and the use of “or” is not intended to be exclusive unless expressly indicated otherwise.

 

2.3                              The Plan is valid for the Participants in its entirety only. No statement made in any part of the Plan shall be construed without reference to the Plan as a whole.

 

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Article 3

SHARES SUBJECT TO THE PLAN

 

Shares may be made available from an increase of the share capital of the Company, whether such increase is based on ordinary, authorized or conditional share capital, or from Shares otherwise owned by, or made available to, the Company.

 

B.                        ADMINISTRATION

 

Article 4

BOARD OF DIRECTORS

 

4.1                              Unless otherwise provided in the Plan, the Board administers and has full power to construe and interpret the Plan, establish and amend rules and regulations for the administration of the Plan, and perform all other actions relating to the Plan, including the delegation of administrative responsibilities. The Board may in particular delegate the administration of the Plan to the Compensation Committee or any other duly authorized committee of the Board, in which case references to the Board in the Plan shall be construed as referring to the Compensation Committee or to the relevant committee of the Board. The Board shall also appoint a Plan Administrator who shall be responsible for giving, receiving and executing the notices set forth in the Plan.

 

4.2                              All decisions made by the Board pursuant to the provisions of the Plan and related orders or resolutions of the Board shall be final, conclusive and binding on all persons and entities, including the Company, the Shareholders, the Participants, the Employees and the Directors.

 

4.3                              A member of the Board shall not vote on any decision regarding any Bon granted or to be granted to him.

 

4.4                              The costs of introducing and administrating the Plan shall be borne by the Company.

 

C.                        GRANT OF BONS

 

Article 5

ELIGIBILITY AND CONDITIONS OF PARTICIPATION

 

5.1                              Those eligible to be granted Bons under the Plan are Employees and Directors.

 

5.2                              The Board shall, at its absolute discretion, select from Employees and Directors those eligible to be granted Bons, the Bons Grant, the Floor Price, the Strike Price, the Grant Date and any other conditions and/or constraints related to the Bons.

 

5.3                              Neither the establishment of the Plan, nor the grant of Bons, nor the payment of any benefits, nor any action of the Company or of the Board shall be held or construed to confer upon any Employee or Director any legal right to further receive Bons. Participation to the Plan in any given year gives no right to participate in any subsequent year.

 

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Article 6

PROCEDURE

 

6.1                              The Board may adopt any procedures as it thinks fit for the granting of Bons.

 

6.2                              The Board may, among others: (i) require a Participant to make such declarations or take such other action as may be required for the purpose of any securities, exchange control, taxation laws, regulations, practice or other laws of any territory which may be applicable to him at the Grant Date, the Exercise Date or on exercise; (ii) determine that any Bon under the Plan shall be subject to additional and/or modified terms and conditions with respect to the grant and terms of exercise as may be necessary to comply with or take account of any securities, exchange control, taxation laws, regulations, practice or other laws of any territory which may have application to the relevant Employees, Directors, members of the boards of directors (or equivalent corporate bodies) of the Subsidiaries, Participants, Company or Subsidiary; (iii) adopt any supplemental rules or procedures governing the grant of Bons or exercise of the Subscription Rights as may be required for the purpose of any securities, exchange control, taxation laws, regulations or practice or other laws of any territory which may be applicable to an Employee, a Director or a Participant; and (iv) require at any time that a Participant transfer a Bon to the Company or to such person or entity as the Board shall direct.

 

Article 7

BONS GRANT AGREEMENT

 

7.1                              The contemplated grant of Bons under the Plan and the terms thereof shall be subject to the execution of a Bons Grant Agreement between the Company and the Participant in substantially the form attached as Appendix I hereto or in such form as the Board shall from time to time determine.

 

7.2                              Each Bon granted by a Bons Grant Agreement shall notably entitle the Participant to subscribe for 1,000 Shares at the Strike Price pursuant to the Plan subject to the conditions specified in such Bons Grant Agreement.

 

7.3                              The Bons Grant Agreement shall include details of the Bons Grant, the Floor Price, the Strike Price, the Grant Date and any other conditions.

 

Article 8

VESTING PERIOD

 

8.1                              Subject in particular to the limitations which may be determined from time to time by the Board, a Bons Grant shall vest gradually on a straight line basis over a period of 4 years from the Grant Date until exhaustion of such Bons Grant, provided however that the Participant may not exercise any Subscription Right relating to such Bons Grant during the first year starting from the Grant Date where the Grant Date falls within the first year of employment or contractual relationship of the Participant with the Company or any of its Subsidiaries.

 

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8.2                              Notwithstanding the above, in the event of a Change of Control, all Bons held by Participants shall vest immediately.

 

Article 9

EXERCISE PERIOD

 

9.1                              Without prejudice to Article 8.2 and Article 10, Subscription Rights relating to Vested Bons may be exercised at any time within the Subscription Right Exercise Period subject to limitations of applicable securities law provisions and subject to the limitations which may be determined by the Board from time to time.

 

9.2                              Subject to Article 12, the Subscription Right Term shall be the fifth anniversary of the Grant Date of the relevant Bon.

 

9.3                              Past the Subscription Right Term, all unexercised Bons, including the Subscription Rights, shall be forfeited and expire without value and the Participant shall transfer the Bons to the Company or to such person or entity as the Board shall direct, without any compensation or remuneration whatsoever.

 

Article 10

EXERCISE OF SUBSCRIPTION RIGHTS

 

10.1                       During the Subscription Right Exercise Period and subject to the provisions of the Plan, notably Article 12, and of any Bons Grant Agreement, the Participant may exercise Subscription Rights relating to Vested Bons in whole or in part, and at one or more times provided that the Spot Price on the Exercise Date is above the Floor Price.

 

10.2                       The exercising Participant shall receive within [5] business days after receipt by the Plan Administrator of a Subscription Right Exercise Notice, the number of Shares for which Subscription Rights are exercised.

 

10.3                       The Company shall not deliver any Shares, respectively register the acquisition of Shares pursuant to the exercise of a Subscription Right, until full payment of the Strike Price by the Participant.

 

10.4                       Upon exercise of a Subscription Right, the Participant shall transfer the Bons to the Company or to such person or entity as the Board shall direct, without any compensation or remuneration whatsoever.

 

D.                        LIMITATIONS ON TRANSFER

 

Article 11

TRANSFERABILITY OF BONS AND SHARES

 

11.1                     Except (i) pursuant to the will of the Participant or the laws of descent and distribution, (ii) for transfers to a trust of which the Participant and his family members are the sole beneficiaries (provided that the Participant retains investment

 

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control with respect to the Bons), the Bons may not be sold, encumbered, assigned or otherwise transferred.

 

11.2                       Any purported sale, assignment or transfer of such Bons in violation of this Article 11 shall be void.

 

11.3                       Shares purchased upon exercise of Subscription Rights may be subject to sales restrictions according to applicable securities law provisions, the Articles of Association and the limitations which may be determined by the Board from time to time, provided however that all such limitations by the Board shall automatically be lifted in the case of a Change of Control.

 

E.                        FORFEITURE OF RIGHTS

 

Article 12

TERMINATION OF EMPLOYMENT/BREACHES

 

12.1                       Unless otherwise agreed upon by the Board and the Participant:

 

·                       upon termination of the employment or contractual relationship with the relevant Participant by the Company or any of its Subsidiaries for cause (e.g., in the case of an employment relationship, according to Article 337 of the Swiss Code of Obligations or similar grounds) or in case of termination by the Participant of the contractual relationship (other than an employment relationship) with the Company or any of its Subsidiaries at an improper time; or

 

·                       upon breach by the Participant of any material obligations set out in any agreement dealing with the Participant’s contractual relationship with the Company or any of its Subsidiaries, as entered into or amended from time to time and/or any provisions of applicable laws as a consequence of which the Company may not be expected in good faith to continue the existing contractual relationship with the Participant,

 

all Bons (including, for the avoidance of doubt, Vested Bons) held by the Participant shall be immediately forfeited without value and the Participant shall transfer the Bons to the Company or to such person or entity as the Board shall direct, without any compensation or remuneration whatsoever.

 

12.2                       Upon termination of the employment or contractual relationship between the relevant Participant and the Company or any of its Subsidiaries as a result of the relevant Participant’s disability, all Bons that are not Vested Bons held by such Participant shall be immediately forfeited without value, while Subscription Rights relating to Vested Bons may be exercised by the relevant Participant pursuant to the Plan during a period of 12 months after the end of the employment or contractual relationship, after which they shall be forfeited without value. The Participant shall transfer the Bons without value to the Company or to such person or entity as the Board shall direct, without any compensation or remuneration whatsoever. For the purpose of this provision, “disability” means the inability to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which constitutes a

 

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permanent and total disability; the determination whether a Participant has suffered a disability shall be made by the Board or Compensation Committee, as the case may be, based upon such evidence as it deems necessary and appropriate.

 

12.3                       Upon the death of a Participant, all Bons that are not Vested Bons held by such Participant shall be immediately forfeited without value, while Subscription Rights relating to Vested Bons may be exercised by the Participant’s estate, or by a person or entity who acquired the right to exercise the Subscription Right(s) by bequest or inheritance, pursuant to the Plan during a period of 12 months after the date of death, after which they shall be forfeited without value. The Participant’s estate or any other person or entity having any right over the Bons shall transfer the Bons to the Company or to such person or entity as the Board shall direct, without any compensation or remuneration whatsoever.

 

12.4                       Upon termination of the employment or contractual relationship between the relevant Participant and the Company or any of its Subsidiaries by any of them for any reason other than as aforesaid, all Bons that are not Vested Bons held by the relevant Participant shall be immediately forfeited without value, while Subscription Rights relating to Vested Bons may be exercised by the relevant Participant pursuant to the Plan during a period of 60 days after the end of the employment or contractual relationship, after which they shall be forfeited without value. The Participant shall transfer the Bons without value to the Company or to such person or entity as the Board shall direct, without any compensation or remuneration whatsoever.

 

Article 13

TRANSFER / LEAVE OF ABSENCE

 

13.1                       A transfer of an employee between the Company and a Subsidiary or a leave of absence, duly authorised in writing by the Company for military service, sickness, pregnancy, confinement or for any other purpose approved by the Board provided the Employee’s right to reemployment is guaranteed either by a statute or by contract, shall not be deemed a termination of employment.

 

13.2                       If employment is terminated prior to the reemployment of the Employee, the provisions of Article 12 shall be applicable.

 

F.                         GENERAL PROVISIONS

 

Article 14

NO (CONTINUED) EMPLOYMENT OR CONTRACTUAL RELATIONSHIP

 

14.1                       Neither the establishment of the Plan, nor the grant of Bons, nor the payment of any benefits, nor any action of the Company, the Board or a Subsidiary shall be held or construed to confer upon any Participant any legal right to continue to be employed by the Company or any of its Subsidiaries or to remain in a contractual relationship with said, each of which expressly reserves the right to discharge any Employee or Director whenever the interest of any such entity in its sole discretion may so require without

 

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liability to such entity or to the Board, except as to any rights which may be expressly conferred upon such Participant under the Plan.

 

14.2                       The mere fact of participating to the Plan shall in no circumstances whatsoever be construed as an employment agreement, or any similar agreement, between the Participant and the Company.

 

Article 15

NO SEGREGATION OF CASH OR SHARES

 

The Company shall not be required to segregate any cash or Shares in order to fulfill its obligations hereunder.

 

Article 16

ADJUSTMENT DUE TO CORPORATE EVENTS

 

The number of Bons, the Floor Price, the Strike Price or any of them shall be subject to adjustment by the Company to reflect any split or combination of the Shares, and such readjustment shall be final and binding.

 

Article 17

AMENDMENT AND TERMINATION

 

17.1                       Subject, as the case may be, to the prior approval of the Shareholders (as provided for by the law or in the Articles of Association), the Board may amend, suspend or discontinue the Plan.

 

17.2                       The Bons granted under the Plan shall be subject to such further rules and regulations as the Company may adopt with respect to its equity incentive plans, and the Participant agrees to enter into such further documents, not inconsistent with the terms hereof, as the Company may require. The Company may also require the Participant to enter into such further documents with respect to the holding and transfer of any Shares acquired pursuant to the Subscription Rights as may be necessary or appropriate in the sole discretion of the Company to ensure compliance with applicable laws with respect to such holding and transfer.

 

17.3                       Amendment, suspension or discontinuity of the Plan shall be communicated by the Board to all Participants.

 

Article 18

INDEMNIFICATION

 

In addition to other rights of indemnification available to them, the members of the Board shall be indemnified by the Company against all costs and expenses reasonably incurred by them in connection with any action, suit or proceeding to which they or any of them may be party by reason of any action taken or failure to act under or in connection with the Plan or any Bons granted under the Plan, and against all amounts paid by them in settlement thereof

 

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(provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgement in any such action, suit or proceeding, except a judgement based upon the finding of bad faith, provided that upon the institution of any such action, suit or proceeding, members of the Board shall, in writing, give the Company notice thereof and an opportunity, at its own expense, to handle and defend the same before such member of the Board undertakes to handle and defend it on such member’s own behalf.

 

Article 19

TAXES INDEMNIFICATION

 

19.1                       The Participant shall indemnify the Company against any tax, including employment and social security taxes, arising in respect of the grant of Bons or the exercise of the Subscription Rights which is a liability of the relevant Participant but for which the Company is required to account under the laws of any relevant territory.

 

19.2                       The Company may recover the tax from the Participant in such manner as the Board thinks fit including: (i) withholding portion of the Bons and selling the same; (ii) deducting the necessary amount from the Participant’s remuneration; or (iii) requiring the Participant to account directly to the Company for such tax.

 

Article 20

APPLICABLE LAW AND ARBITRATION

 

20.1                       The Plan and any related document shall be exclusively governed by and construed in accordance with Swiss law, excluding conflict of laws principles thereof.

 

20.2                       Any dispute, controversy or claim arising out of or in relation with the Plan including the validity, invalidity, breach or termination thereof, shall be finally decided by three arbitrators in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce in force on the date when the notice of arbitration is submitted in accordance with said rules. The seat of the arbitration shall be Geneva, Switzerland. The language of arbitration shall be English.

 

20.3                       The acceptance of any Bon or any related right implies the consent to the choice of law and jurisdiction set in this Article 20.

 

20.4                       By executing a Bons Grant Agreement, the Participant expressly acknowledges and accepts the terms and conditions of the Plan and all its related documents, as well as the powers of the Board to complete, interpret and implement it through further documents which it may from time to time determine necessary or relevant. Any disagreement regarding the interpretation shall be resolved by the Company, whose determination shall be binding.

 

Article 21

EFFECTIVE DATE

 

The Plan shall be effective on 1 January 2018.

 

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APPENDIX I

 

FORM OF BONS GRANT AGREEMENT

 

ADDEX THERAPEUTICS LTD EQUITY INCENTIVE PLAN (BONS)

 

This BONS GRANT AGREEMENT is made on [date], by and between Addex Therapeutics Ltd, a Swiss corporation, with its seat in Plan-les-Ouates, Switzerland (the “Company”) and [name] (the “Participant”).

 

In consideration of the mutual covenants and agreements contained herein and pursuant to the Company’s Equity Incentive Plan (Bons) of [date], [Date] (the “Plan”), the Company and the Participant agree as follows:

 

According to the terms and conditions contained in the Plan and in this Bons Grant Agreement, the Company shall grant to the Participant the following number of Bons, it being specified that each Bon grants to its holder a right to subscribe for Shares:

 

	
Number of Bons:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Number of Subscription Rights:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Floor Price:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Strike Price:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Grant Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Vesting Date:
    	
As   per Article 8 of the Plan and the table below
    
	
 
    	
 
    
	
Other conditions:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Subscription Rights Exercise Period:
    	
Four   years from the first day of the calendar quarter following the Vesting Date   as detailed below:
    

 

	
 
    	
 
    	
 
    	
 
    	
Exercise Expiry Date
    
	
No. of Bons
    	
 
    	
Vesting Date / Exercise Start Date
    	
 
    	
(Subscription Rights Term)
    
	
[e.g. 2]
    	
 
    	
 
    	
 
    	
 
    
	
[e.g. 2]
    	
 
    	
 
    	
 
    	
 
    
	
[e.g. 2]
    	
 
    	
 
    	
 
    	
 
    
	
[e.g. 2]
    	
 
    	
 
    	
 
    	
 
    

 

The signature of this Bons Grant Agreement by the Participant implies his express and complete acceptance of the terms set forth in the Plan, in this Bons Grant Agreement or in any other document related hereto. Furthermore the Participant hereby accepts the powers of the Board to administer the Plan at its absolute discretion, to complete, interpret and implement

 

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the documents herein referred through further documentation to the extent necessary or relevant and to decide on all issues in absolute discretion. The Participant agrees to be bound by the decisions of the Board.

 

All notices to the Company shall be delivered to Addex Therapeutics Ltd, c/o Addex Pharma, 12, chemin des Aulx, Plan-les-Ouates, Switzerland, attn Plan Administrator, and all notices to the Participant may be given to the Participant personally or may be mailed to the Participant c/o Addex Pharmaceuticals Ltd or at such other address as the Participant may designate by written notice to the Company.

 

This Bons Grant Agreement and any related document shall be exclusively governed by Swiss law, excluding conflict of laws principles thereof.

 

Any dispute, controversy or claim arising out of or in relation with the Plan including the validity, invalidity, breach or termination thereof, shall be finally decided by three arbitrators in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce in force on the date when the notice of arbitration is submitted in accordance with said rules. The seat of the arbitration shall be Geneva, Switzerland. The language of arbitration shall be English.

 

IN WITNESS THEREOF, the parties have executed this Bons Grant Agreement in duplicate as of the place and date first above written.

 

	
 
    	
 
    	
 
    
	
Addex   Therapeutics Ltd
    	
 
    	
Participant
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
 
    	
Date
    

 

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APPENDIX II

 

FORM OF SUBSCRIPTION RIGHT EXERCISE NOTICE

 

ADDEX THERAPEUTICS LTD EQUITY INCENTIVE PLAN (BONS)

 

[date of notice]

 

Plan Administrator

[address]

 

Reference: [Name of Participant]: Addex Therapeutics Ltd’s Equity Incentive Plan (Bons).

 

I hereby exercise my Subscription Right(s) according to and under the terms and conditions of the Addex Therapeutics Ltd Equity Incentive Plan (Bons) dated               and the Bons Grant Agreement dated              , as follows:

 

	
Grant   Date of the Bons:
    	
 
    	
 
    	
 
    
	
 
    
	
Number   of Subscription Right(s) exercised:
    	
 
    	
 
    
	
 
    
	
 
    	
 
    	
 
    
	
[Participant]
    
						

 

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