Document:

mrus-ex41_476.htm

Exhibit 4.1

DESCRIPTION OF THE REGISTRANT’S SECURITIES 

REGISTERED PURSUANT TO SECTION 12 OF THE 

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED 

 

As of December 31, 2019, Merus N.V. (the “Company,” “we,” “us,” and “our”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common shares. Set forth below is a summary of certain information concerning our share capital as well as a summary of certain material provisions of our articles of association (our “Articles of Association”) and relevant provisions of Dutch law. Because the following is only a summary, it does not contain all of the information that may be important to you. The summary below does not purport to be complete and is qualified in its entirety by reference to applicable Dutch law and our Articles of Association, which has been publicly filed with the Securities and Exchange Commission. 

 

DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION 

General 

We were incorporated on June 16, 2003 as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under Dutch law. In connection with the initial public offering of our common shares, we converted into a Dutch public company with limited liability (naamloze vennootschap). 

We are registered with the Dutch Trade Register (handelsregister) under number 30189136. Our corporate seat is in Utrecht, the Netherlands, and our registered office is Yalelaan 62, 3584 CM Utrecht, the Netherlands. 

Share Capital 

Common Shares 

Our authorized share capital is €8,100,000, comprised of 45,000,000 common shares and 45,000,000 preferred shares, nominal value €0.09 per share. 

Preferred Shares 

On May 24, 2016, we entered into a call option agreement (the “call option agreement”) with an independent foundation (stichting) under Dutch law called Stichting Continuïteit Merus (the “Protective Foundation”) which agreement was most recently amended on August 27, 2018, pursuant to which the Protective Foundation would be allowed to acquire a number of preferred shares, which number is equal to the lesser of the following numbers: (i) the total number of shares (of whichever class) of our issued capital held by third parties immediately prior to the issuance of such preferred shares less the number of preferred shares already held by the Protective Foundation at that time (if any) and less one; or (ii) the maximum number of preferred shares that may be issued under our authorized capital as included in the Articles of Association, without approval by our general meeting of shareholders or our board of directors. There are no preferred shares outstanding and we have no present plans to issue any preferred shares other than pursuant to an exercise by the Protective Foundation of its rights under the call option agreement. 

 

Articles of Association 

Set forth below is a summary of relevant information concerning our share capital and material provisions of our Articles of Association and applicable Dutch law. This summary does not constitute legal advice regarding those matters and should not be regarded as such. 

Amendment of Articles of Association 

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Exhibit 4.1

The general meeting of shareholders can only resolve to amend the Articles of Association at the proposal of the board of directors. A resolution by the general meeting of shareholders to amend the Articles of Association requires a simple majority of the votes cast.

Company’s Shareholders’ Register 

We must keep our shareholders’ register accurate and up-to-date. The board of directors keeps our shareholders’ register and records names and addresses of all holders of registered shares, showing the date on which the registered shares were acquired, the date of the acknowledgement of the transfer by or notification of the transfer to us as well as the amount paid on each share. The register also includes the names and addresses of those with a right to use and enjoyment in common shares belonging to another person (vruchtgebruik) or a pledge in respect of registered shares, as well as any other particulars which must be recorded in our shareholders’ register pursuant to Dutch law. 

Corporate Objectives 

Our corporate objectives are: (1) to develop products and services in the area of biotechnology, (2) to finance group companies or other parties, (3) to borrow, to lend to raise funds, including the issue of bonds, promissory notes or other financial instruments or evidence of indebtedness as well as to enter into agreements in connection with the aforementioned, (4) to supply advice and to render services to group companies and other parties, (5) to render guarantees, to bind us, to provide security, to warrant performance in any other way and to assume liability, whether jointly and severally or otherwise, in respect of obligations of group companies or other parties, (6) to incorporate, to participate in any way whatsoever in, to manage, to supervise and to hold any other interest in other entities, companies, partnerships and businesses, (7) to obtain, alienate, encumber, manage and exploit registered property and items of property in general, (8) to trade in currencies, securities and items of property in general, (9) to develop and trade in patent, trademarks, licenses, know-how and other intellectual property rights, and (10) to perform any and all activity of an industrial, financial or commercial nature and to do anything which in the broadest sense is connected with or may be conducive to the above-mentioned objects. 

Limitation on Liability and Indemnification Matters 

Under Dutch law, directors may be held liable by us or by third parties for damages in the event of improper or negligent performance of their duties, including as a result of infringement of our Articles of Association or of certain provisions of the Dutch Civil Code. In certain circumstances, they may also incur additional specific civil and criminal liabilities. Directors and certain other officers are insured under an insurance policy taken out by us against damages resulting from their conduct when acting in the capacities as such directors or officers. We have also entered into agreements with our directors and our senior management to indemnify them against expenses and liabilities to the fullest extent permitted by law. These agreements provide, subject to certain exceptions, for indemnification for related expenses including, among other expenses, attorneys’ fees, judgments, penalties, fines and settlement amounts incurred by any of these individuals in any action or proceeding. In addition, our Articles of Association provide for indemnification of our current and former directors (and such other of our current or former officer or employee as designated by our board of directors), including reimbursement for reasonable legal fees and damages or fines based on acts or failures to act in their duties. No indemnification shall be given to an indemnified officer (1) if a competent court or arbitral tribunal has established, without possibility for appeal, that the acts or omissions of such indemnified officer that led to the financial losses, damages, expenses, suit, claim, action or legal proceedings resulted from either an improper performance of his or her duties as an officer of the company or an unlawful or illegal act, (2) to the extent that his or her financial losses, damages and expenses are covered by insurance and the insurer has settled, or has provided reimbursement for, these financial losses, damages and expenses (or has irrevocably undertaken to do so) and (3) in relation to proceedings brought by such indemnified officer against us, except for proceedings brought to enforce indemnification to which he or she is entitled pursuant to our Articles of Association or an agreement between such indemnified officer and us which has been approved by our board of directors. Furthermore, indemnification under our Articles of Association will generally not be available in instances of willful (opzettelijk), intentionally reckless (bewust roekeloos) or seriously culpable (ernstig verwijtbaar) conduct unless Dutch law provides otherwise. 

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Exhibit 4.1

Shareholders’ Meetings and Consents 

General Meeting 

General meetings of shareholders are held in Utrecht, Amsterdam, Rotterdam, The Hague or in the municipality of Haarlemmermeer (Schiphol Airport), all of which are in the Netherlands. The annual general meeting of shareholders must be held within six months of the end of each financial year. Additional extraordinary general meetings of shareholders may also be held, whenever considered appropriate by the board of directors. An additional extraordinary general meeting of shareholders must also be held within three months after our board of directors has considered it to be likely that our shareholders’ equity has decreased to an amount equal to or lower than half of our paid up and called up capital, in order to discuss the measures to be taken if so required. If our board of directors has failed to ensure the annual general meeting of shareholders or the mandatory extraordinary general meeting of shareholders is held, each shareholder or others with meeting rights under Dutch law may be authorized by the competent Dutch court in preliminary relief proceedings to do so. 

Pursuant to Dutch law, one or more shareholders or others with meeting rights under Dutch law, who jointly represent at least one-tenth of the issued capital may request us to convene a general meeting, setting out in detail the matters to be discussed. If our board of directors has not taken the steps necessary to ensure that such meeting can be held within six weeks after the request, the requesting party/parties may, on their application, be authorized by the competent Dutch court in preliminary relief proceedings to convene a general meeting of shareholders. 

General meetings of shareholders can be convened by a notice to be published in a Dutch daily newspaper with national circulation, which shall include an agenda stating the items to be voted and/or discussed and any other particulars required under Dutch law. The agenda shall include such items as have been included therein by the board of directors. The agenda shall also include such items requested by one or more shareholders or others with meeting rights under Dutch law, representing at least 3% of the issued share capital. Requests must be made in writing and received by us at least 60 days before the day of the meeting. No resolutions shall be adopted on items other than those which have been included in the agenda, unless by a unanimous vote of all shareholders and others with voting rights. 

In accordance with the Dutch Corporate Governance Code (the “DCGC”), shareholders are expected to exercise the right of requesting the convening of a general meeting of shareholders or of putting an item on the agenda only after consulting the board of directors in that respect. If one or more shareholders intend to request that an item be put on the agenda that may result in a change in our strategy (e.g., the removal of directors), the board of directors should be given the opportunity to invoke a reasonable response time of up to 180 days after the board of directors is informed of the intentions of the shareholder(s). The board of directors should use this period for further deliberation, constructive consultation (in any event with the shareholder(s) who have made the request) and the exploration of alternatives. At the end of the response period, the board of directors should report its actions to the general meeting of shareholders. The response time may be invoked only once for any given general meeting of shareholders and may not be invoked for an agenda item in respect of which the response period has been invoked previously or for a general meeting of shareholders if a shareholder holds at least 75% of our issued share capital as a consequence of a successful public offer (irrespective of whether the offer was friendly or hostile). 

 

The general meeting is presided over by the chairman of the board of directors. If no chairman has been elected or if he or she is not present at the meeting, the general meeting shall be presided over by the chief executive officer. If no chief executive officer has been elected or if he or she is not present at the meeting, the general meeting shall be presided over by another director present at the meeting. If no director is present at the meeting, the general meeting shall be presided over by any other person appointed by the general meeting. In each case, the person who should chair the general meeting pursuant to the rules described above may appoint another person to chair the general meeting instead. Directors may always attend a general meeting of shareholders. In these meetings, they have an advisory vote. The chairman of the meeting may decide at his or her discretion to admit other persons to the meeting. 

All shareholders and others with meeting rights under Dutch law are authorized to attend the general meeting of shareholders, to address the meeting and, in so far as they have such right, to vote. For this purpose, those who have voting rights and/or meeting rights under Dutch law on the record date for a general meeting of shareholders (i.e., the 28th day prior to the meeting) and are recorded as such in a register designated by the board of directors shall be 

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Exhibit 4.1

considered to have those rights, irrespective of whoever is entitled to the shares at the time of the general meeting of shareholders. The board of directors is free to determine, when convening a general meeting of shareholders, whether to apply a record date. 

Quorum and Voting Requirements 

Each common share and each preferred share carries the right to cast one vote at the general meeting of shareholders. This right can be exercised in person or by proxy. No vote may be cast at a general meeting of shareholders in respect of a share belonging to us or any of our subsidiaries or in respect of a share for which we or any of our subsidiaries holds the depository receipts. Persons with a right to the use and enjoyment of our shares held by another person and pledgees of shares belonging to us or our subsidiaries are not precluded from exercising their voting rights if the right to use and enjoyment or pledge was created before the relevant share belonged to us or one of our subsidiaries. We and our subsidiaries may not vote shares in respect of which we or any of our subsidiaries hold(s) a right of use and enjoyment or a pledge. Shares which cannot be voted pursuant to these rules will not be taken into account for the purpose of determining the number of votes cast, or the amount of the share capital that is represented, at a general meeting of shareholders. 

Subject to any provision of mandatory Dutch law and any higher quorum requirement stipulated in our Articles of Association, if and for as long as the Company is subject to the rules and requirements of a securities exchange and such securities exchange requires the Company to have a quorum for the general meeting of shareholders, then the general meeting of shareholders can only pass resolutions if at least one third of our issued and outstanding shares are present or represented at such general meeting.

Board of Directors 

Election of Directors 

Under our Articles of Association, the directors are appointed by the general meeting of shareholders upon nomination by our board of directors. However, the general meeting of shareholders may at all times overrule the 

binding nomination by a resolution adopted by at least a two-thirds majority of the votes cast, provided such majority represents more than half of the issued share capital. If the general meeting of shareholders overrules the binding nomination, the board of directors shall make a new nomination. If the nomination comprises one candidate for a vacancy, a resolution concerning the nomination shall result in the appointment of the candidate, unless the nomination is overruled. 

At a general meeting of shareholders, a resolution to appoint a director can only be passed in respect of candidates whose names are stated for that purpose in the agenda of that general meeting of shareholders or in the explanatory notes thereto. Upon the appointment of a person as a director, the general meeting of shareholders shall determine whether that person is appointed as executive director or as non-executive director. 

 

Duties and Liabilities of Directors 

Under Dutch law, the board of directors as a collective is responsible for our management, strategy, policy and operations. The executive directors manage our day-to-day business and operations and implement our strategy. The non-executive directors focus on the supervision on the policy and functioning of the performance of the duties of all directors and our general state of affairs. Each director has a statutory duty to act in the corporate interest of the company and its business. Under Dutch law, the corporate interest extends to the interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers. The duty to act in the corporate interest of the company also applies in the event of a proposed sale or break-up of the company, provided that the circumstances generally dictate how such duty is to be applied and how the respective interests of various groups of stakeholders should be weighed. Any resolution of the board of directors regarding a material change in our identity or character requires approval of the general meeting of shareholders. 

Dividends and Other Distributions 

Amount Available for Distribution 

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Exhibit 4.1

As a Dutch public company with limited liability (naamloze vennootschap), we may only make distributions to the extent that our shareholders’ equity exceeds the sum of the paid-in and called-up share capital plus the reserves as required to be maintained by Dutch law. Under our Articles of Association, a dividend is first paid out of the profit, if available for distribution, with respect to any preferred shares. After that, the board of directors shall determine which part of the remaining profit shall be added to our reserves. After reservation by the board of directors of any profit, the remaining profit will be at the disposal of the general meeting of shareholders for distribution on our common shares. However, a distribution to the holders of common shares can only be resolved upon by the general meeting upon a proposal of the board of directors. 

We may only make a distribution of dividends after the adoption of our annual accounts demonstrating that such distribution is legally permitted. The board of directors is permitted, subject to certain requirements, to declare interim dividends (or other interim distributions) without the approval of the general meeting of shareholders. The general meeting of shareholders, subject to certain requirements and a proposal to that effect made by the board of directors, may decide to make distributions from our distributable reserves. The board of directors, however, may resolve to charge amounts to be paid up on shares against our reserves, irrespective of whether those shares are issued to existing shareholders. 

Dividends and other distributions shall be payable on such date and, if it concerns a distribution in cash, in such currency as determined by the board of directors. If it concerns a distribution in the form of assets, the board of directors shall determine the value attributed to such distribution for purposes of recording the distribution in our accounts with due observance of applicable law (including the applicable accounting principles). Claims to dividends and other distributions not paid within five years from the date that such dividends or distributions became payable, will lapse and any such amounts will be considered to have been forfeited to us (verjaring). For the purpose of calculating the amount or allocation of any distribution, shares held by us in our own capital shall not be taken into account. No distribution shall be made to us in respect of shares held by us in our own capital. 

We do not anticipate paying any cash dividends for the foreseeable future. 

Squeeze out Procedures 

Under Dutch law, a shareholder who, alone or together with one or more group companies, for his/their own account contribute(s) at least 95% of our issued share capital may initiate proceedings against our minority shareholders jointly for the transfer of their shares to the claimant. The proceedings are held before the Enterprise Chamber of the Amsterdam court of Appeal (the “Enterprise Chamber”). The Enterprise Chamber may grant 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 offer an opinion to the Enterprise 

 

Chamber on the value to be paid for the shares of the minority shareholders. Once the order to transfer becomes final before the Enterprise Chamber, the shareholder acquiring the shares shall give written notice of the date and place of payment and the price to the holders of the shares to be acquired whose addresses are known to such shareholder. Unless the addresses of all of them are known to the acquiring shareholder, such shareholder is required to publish the same in a Dutch daily newspaper with a national circulation. 

Protective measures 

Under Dutch law, various protective measures are possible and permissible within the boundaries set by Dutch law and Dutch case law. Our governance arrangements include several provisions that may have the effect of making a takeover of our company more difficult or less attractive. In this respect, our general meeting of shareholders has granted the right to the Protective Foundation to acquire preferred shares pursuant to the call option agreement. The call option is continuous in nature and can be exercised repeatedly on multiple occasions. If the Protective Foundation exercises the call option pursuant to the call option agreement, a number of preferred shares, which number is equal to the lesser of the following numbers: (i) the total number of shares (of whichever class) of our issued capital held by third parties immediately prior to the issuance of such preferred shares less the number of preferred shares already held by the Protective Foundation at that time (if any) and less one; or (ii) the maximum number of preferred shares that may be issued under our authorized capital as included in the Articles of Association, will be issued to the Protective Foundation. These preferred shares will be issued to the Protective 

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Exhibit 4.1

Foundation under the obligation to pay up to 25% of their nominal value upon issuance. In order for the Protective Foundation to finance the issue price in relation to the preferred shares, the Protective Foundation intends to enter into a finance arrangement with a bank. As an alternative to securing financing with a bank, subject to applicable restrictions under Dutch law, the call option agreement provides that the Protective Foundation may request us (1) to provide, or cause our subsidiaries to provide, sufficient funding to the Protective Foundation to enable it to satisfy the payment obligation (or part thereof) in cash and/or (2) to charge an amount equal to the payment obligation (or part thereof) against our profits and/or reserves in satisfaction of such payment obligation. The Protective Foundation’s articles of association provide that it will promote and protect the best interests of us, our associated business and our stakeholders and opposing influences that conflict with these interests and threaten our strategy, continuity, independence and/or identity. These influences may include a third party acquiring a significant percentage of our common shares, the announcement of an unsolicited public offer for our common shares, other concentration of control over our common shares or any other form of undue pressure on us to alter our strategic policies. The Protective Foundation is structured to operate independently of us. 

As indicated above, if the Protective Foundation would exercise its call option, the preferred shares to be issued pursuant thereto shall be issued against the obligation to pay up to 25% of their nominal value. The voting rights of our shares are based on nominal value and, as we expect our common shares to trade substantially in excess of nominal value, preferred shares issued at 25% of their nominal value can carry significant voting power for a substantially reduced price compared to the price of our common shares and thus can be used as a defensive measure. These preferred shares will have both a liquidation and dividend preference over our common shares and will accrue cash dividends at a pre-determined rate. 

The Protective Foundation would be expected to require us to cancel its preferred shares once the perceived threat to the company and its stakeholders has been removed or sufficiently mitigated or neutralized. However, subject to the same limitations described above, the Protective Foundation would continue to have the right to exercise the call option in the future in response to a new threat to the interests of us, our business and our stakeholders from time to time. 

 

In addition, our Articles of Association contain certain provisions which might have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of us. These provisions include: 

 

	
 
	
•
	
 
	
requirements that certain shareholder matters, including the amendment of our Articles of Association may only be voted on by the general meeting of shareholders at the proposal of our board of directors; 

 

	
 
	
•
	
 
	
a provision that our directors may only be removed by the general meeting of shareholders by a two-thirds majority of votes cast, provided such majority represents more than half of our issued share capital if such removal is not proposed by our board of directors; and 

 

	
 
	
•
	
 
	
our directors being appointed on the basis of a binding nomination by our board of directors, which can only be overruled by the general meeting of shareholders by a resolution adopted by at least a two-thirds majority of the votes cast, provided such majority represents more than half of the issued share capital (in which case the board of directors shall make a new nomination). 

Also, we have implemented staggered terms of our directors, as a result of which our directors are not all subject to election in any one year. 

Listing 

Our common shares are listed on The Nasdaq Global Market under the symbol “MRUS.” 

Transfer Agent and Registrar 

The U.S. transfer agent and registrar for our common shares is American Stock Transfer & Trust Company, LLC. 

 

 

 

6mrus-ex10112_132.htm

 

Exhibit 10.1.12

SETTLEMENT AGREEMENT

 

THE UNDERSIGNED

 

	
 
	
1.
	
Merus N.V., a public limited liability company (in Dutch: naamloze vennootschap), incorporated under the laws of the Netherlands, having its statutory seat at Utrecht, the Netherlands, registered with the Dutch Trade Register with number 30189136 (the Company);
	
 

 

and

 

	
 
	
2.
	
Mr. T. Logtenberg, born on 22 July 1958, residing at Frans van Mierisstraat 121G (1071 RR), Amsterdam (the Director);
	
 

each a Party and together, collectively, the Parties. 

WHEREAS

	
 
	
A.
	
The Director entered into a Services Agreement with the Company dated 17 September 2019 with effect from 1 September 2019 (the Services Agreement).
	
 

 

	
 
	
B.
	
The Director has been appointed as statutory director (in Dutch: statutair bestuurder) of the Company as per 16 June 2003.
	
 

 

	
 
	
C.
	
The Company has taken the initiative to come to a termination of the Services Agreement effective 1 January 2020.
	
 

 

	
 
	
D.
	
The Company informed the Director of the above initiative on 25 November 2019 and the Parties entered into discussions on the terms and conditions of an amicable settlement on the termination of the Services Agreement as well as any other issues there may be and wish to lay down the settlement in this settlement agreement (this Agreement).
	
 

 

	
 
	
E.
	
The Director has obtained legal advice from a lawyer on the content of this Agreement and the consequences thereof.
	
 

 

	
 
	
F.
	
By means of this Agreement - which is considered to be a settlement agreement within the meaning of article 7:900 et seq. of the Dutch Civil Code (the DCC) - the Parties wish to record and lay down what they exhaustively and comprehensively have established and agreed in respect of the termination of the Services Agreement, with a view to end and prevent any uncertainty or dispute between them as to what applies between them by law, whereby the Parties waive any and all claims and agreements against each other, which might exist or might have existed.
	
 

 

 

 

HAVE AGREED AS FOLLOWS

 

	
 
	
1.
	
Termination of Services Agreement

 

	
 
	
1.1.
	
The Services Agreement shall terminate with mutual consent (in Dutch: eindigt met wederzijds goedvinden) with effect on 1 January 2020 (the Termination Date).
	
 

 

	
 
	
1.2.
	
The Company confirms that the termination of the Services Agreement is triggered on the Company's initiative and that the Director is nothing to blame in this respect.
	
 

 

	
 
	
2.
	
Duties

 

	
 
	
2.1.
	
Without prejudice to article 1 of this Agreement, the Director resigns as statutory director, President, Chief Executive Officer and Principal Financial Officer of the Company and as President and Director of Merus US, Inc., with effect from 31 December 2019, as evidenced by the letter attached hereto as Annex I, to be signed by the Director simultaneously with this Agreement.
	
 

 

	
 
	
2.2.
	
The Director shall resign upon first request from the Company from all other functions he holds on behalf of the Company and its affiliated companies and comply with all necessary formalities with regard thereto.
	
 

 

	
 
	
2.3.
	
Unless otherwise instructed, the Director shall continue to perform his duties pursuant to the Services Agreement and his position as statutory director, whereby the Director shall co- operate to ensure a proper transition of his tasks and duties to his (temporary) successor. If and when the board of the Company decides such, the Director shall be exempt from his duties pursuant to his Services Agreement and position as statutory director with effect from the date of such decision and until the Termination Date.
	
 

 

	
 
	
2.4.
	
Notwithstanding the provisions under articles 2.1 up to and including 2.3 of this Agreement, the Director shall remain available as an employee of the Company to, if so requested, perform duties for the Company and its affiliated companies concerning the transition of the function of the Director to his (temporary) successor, until ultimately the Termination Date. The Director will be facilitated accordingly and shall perform such duties to the best of his abilities and in a loyal manner.
	
 

 

	
 
	
2.5.
	
After termination of the Services Agreement the Director shall remain available for assistance and defense in any proceedings against the Company and its affiliated companies, which relate to the period during which the Director was a statutory director of the Company. The reasonable expense of the Director shall, upon proper receipt of written invoices, be compensated by the Company.
	
 

 

 

 

	
 
	
3.
	
Consultancy services after Termination Date

 

	
 
	
3.1.
	
Without prejudice to the Director's obligation to remain available pursuant to clause 2.5, during the 12 (twelve) month period immediately following the Termination Date, the Director shall remain available to the Company to answer such questions and/or provide such information and/or consultancy services as may be requested from time to time, within reason, with a view to the transfer of know-how to the Director's successor (the Consultancy Services). For the purpose of concretizing the words "within reason" used in the previous sentence, Parties expect that the performance of the Consultancy Services will involve approximately 5 (five) hours per month.
	
 

 

	
 
	
3.2.
	
For the avoidance of doubt, Parties specifically intend that the provision of the Consultancy Services by the Director, if so requested, qualifies as the provision of services as defined in Section 7:400 of the Dutch Civil Code.
	
 

 

	
 
	
4.
	
Compensation

 

	
 
	
4.1
	
As a compensation for the termination of the Services Agreement, including the termination of all functions the Director holds on behalf of the Company and its affiliated companies, the Company shall pay the Director a compensation of, in total, an amount equal to 18 (eighteen) months of the Director's base salary (gross), thus constituting an amount of EUR 688,461 gross.
	
 

 

	
 
	
4.2
	
The compensation referred to in clause 0 shall be paid, under withholding of the required wage tax and social premiums (if any), within 1 (one) month after the Termination Date, by wire transfer to the salary account of the Director as known to the Company.
	
 

 

	
 
	
4.3
	
The Director acknowledges that the payments and benefits set forth in clause 4.1 and Article 5 of this Agreement represent settlement in full of all payments and benefits owed to the Director by the Company in connection with the termination of the Director’s employment with the Company and the Director shall not be entitled to any additional notice period or continued payment of his base salary pursuant to clause 2.2 of the Services Agreement.
	
 

 

	
 
	
5.
	
Outstanding benefits

 

	
 
	
5.1.
	
Until the Termination Date, the Director shall be entitled to his fixed base salary as referred to in the Services Agreement as well as all other current fringe benefits.
	
 

 

	
 
	
5.2.
	
The Director shall be entitled to EUR 247,846 in satisfaction of Director’s annual bonus (STI) for the year 2019, which amount will be paid to Director, under withholding of the required wage tax and social premiums (if any), within 1 (one) month after the Termination Date, by wire transfer to the salary account of the Director as known to the Company. In addition, the Company will issue the Director 30.000 RSUs with a vesting period of 18 (eighteen) months, which vesting will commence on January 1, 2020 with the first 1/18th of the RSU vesting on 31 January 2020 and the remainder vesting 1/18th at the end of each month thereafter.
	
 

 

 

 

 

	
 
	
5.3.
	
Subject to the Director's continued compliance with the terms and conditions of this Agreement, including clause 7.4, and the Company's Employee Proprietary Information and Inventions Assignment Agreement as meant in clause 7.1, the Director's unvested equity awards granted to him under the applicable equity-based long-term incentive plan of the Company (LTIP) will continue to vest under the LTIP until June 30 2021 as if the Director had continued in full time service with the Company through such date and will be further dealt with and settled according to the terms and conditions of the relevant applicable LTIP scheme. In no event shall the Director be eligible to vest in any portion of the LTIP following 30 June 2021.
	
 

 

	
 
	
5.4.
	
The post-termination exercise period of the Director's options to purchase common shares of the Company as set out in the relevant applicable LTIP will not commence until June 30 2021. The exercise period ends at 31 December 2021. Before this date the Director is free to sell his securities at any time.
	
 

 

	
 
	
5.5.
	
The Director is advised that the Director should not sell or otherwise transfer any securities of the Company in violation of any lock-up agreement entered into by the Director in connection with registering the offering of any Company securities or while the Director is in possession of material, non-public information about the Company.
	
 

 

	
 
	
5.6.
	
The Company shall draw up a final statement of indebtedness (in Dutch: eindafrekening) in connection with the termination of the Services Agreement as soon as possible after the Termination Date.
	
 

 

	
 
	
5.7.
	
The final statement shall include the balance of outstanding days' holiday as of the Termination Date. If there is a positive balance of accrued but untaken holidays, these unused holidays shall be paid out to the Director. If there is a negative balance of holidays taken these holidays will be settled with either the final compensation payment and/or the compensation mentioned in clause 0.
	
 

 

	
 
	
5.8.
	
The Company shall pay the amounts ensuing from the final statement of indebtedness as referred to in clause 5.6, under withholding of the required wage tax and social premiums (if any), within 1 (one) month after the Termination Date by wire transfer to the Director's salary account as known to the Company.
	
 

 

	
 
	
5.9.
	
For the avoidance of doubt, the Parties acknowledge that the Director shall not be entitled to any other benefits, compensation, incentive plans or other type of payments, than those explicitly mentioned and provided for in this Agreement. As of the Termination Date, the Director is no longer entitled to and shall not receive any salary (including benefits) anymore.
	
 

 

 

 

 

	
 
	
6.
	
Insurances & pension

 

	
 
	
6.1.
	
At the Termination Date, all insurances and/or schemes in which the Director participates under his Services Agreement shall terminate and cease to be effective, with the exception of the run-off period of any applicable director's liability insurance taken out by the Company for the benefit of its directors and officers.
	
 

 

	
 
	
6.2.
	
The Director's pension will be settled in accordance with the rules of the pension scheme and pension legislation.
	
 

 

	
 
	
7.
	
Restrictive Covenants

 

	
 
	
7.1.
	
Contemporaneously with the execution of this Agreement, the Director agrees to deliver to the Company an executed version of the Company’s Employee Proprietary Information and Inventions Assignment Agreement that was referred to in his Services Agreement (the “Company's Employee Proprietary Information and Assignment Agreement”) and the Director confirms that the Company's Employee Proprietary Information and Inventions Assignment Agreement shall remain in full force and effect following the date of this Agreement.
	
 

 

	
 
	
7.2.
	
Without prejudice to the confidentiality provisions of the Company's Employee Proprietary Information and Inventions Assignment Agreement, the Director shall observe confidentiality with respect to all information, know-how and data relating to the Company and its affiliates that is confidential and shall not use any of such information, know-how and data.
	
 

 

	
 
	
7.3.
	
The Director confirms that he has no intellectual property rights related to the business of the Company and its affiliates.
	
 

 

	
 
	
7.4.
	
In consideration for the portion of the consideration provided under this Agreement to which the Director is not otherwise entitled, and in order to protect the value of any confidential information of the Company to which the Director was provided access during his employment with the Company, the Director agrees that, from the date hereof and during the 12 (twelve) month period following the Termination Date, the Director will not, directly or indirectly, on Director's own behalf or for the benefit of any other individual or entity: (a) operate, conduct, engage in or own (except as the holder of not more than 1% of the outstanding stock of a publicly-held company), or prepare to operate, conduct, engage in or own any business or enterprise that develops, manufactures, markets, licenses, sells or otherwise provides, or is preparing to develop, manufacture, market, license, sell or otherwise provide any product or service that relates to bispecific, trispecific or other multispecific antibody therapeutics and competes with any product or service developed, manufactured, marketed, licensed, sold or otherwise provided, or planned to be developed, manufactured, marketed, licensed, sold or otherwise provided, by the Company or any of its subsidiaries while Director was providing services to the Company (the Competing Business) or (b) participate in, render services to, or assist any individual or entity that engages in a Competing Business in any capacity (whether
	
 

 

 

 

 

as an employee, manager, consultant, director, officer, contractor, or otherwise) (A) which involve the same or similar types of services Director performed for the Company at any time during the last two years of his services to or engagement with the Company or (B) in which Director could reasonably be expected to use or disclose proprietary information of the Com- pany or any of its subsidiaries, in each case (a) and (b) limited to each city, county, state, territory and country in which (x) Director provided services or had a material presence or influence at any time during the last two years of Director's services to or engagement with the Company or (y) the Company or any of its subsidiaries is engaged in or has plans to engage in the Competing Business as of the date hereof.

 

	
 
	
7.5.
	
From the date hereof and during the 18 (eighteen) month period following the Termination Date (the Nonsolicitation Restricted Period), Director will not, directly or indirectly, on Director's own behalf or for the benefit of any other individual or entity: (i) solicit, encourage, induce or attempt to induce or assist others to solicit, encourage, induce or attempt to induce any employees, consultants or independent contractors of the Company or any of its subsidiaries to terminate their employment or other engagement with the Company or any of its subsidiaries; (ii) hire, or recruit or attempt to hire, or engage or attempt to engage as an independent contractor, any person who was employed or otherwise engaged by the Company or any of its subsidiaries at any time during the term of Director's employment with the Company; provided, that this clause (ii) shall not apply to the recruitment or hiring or other engagement of any individual whose employment or other engagement with the Company or any of its subsidiaries has been terminated for a period of six months or longer; (iii) solicit, divert or take away, or attempt to divert or take away, the business of any customer or client of the Company or any of its subsidiaries (served by the Company or any of its subsidiaries during the 12-month period prior to the termination of Director's services to the Company); or (iv) cause or encourage any vendor or supplier to reduce or cease doing business with the Company or any of its subsidiaries. Without limiting the Company's ability to seek other remedies available in law or equity, if Director violates any of the provisions of this clause 7.5, the Nonsolicitation Restricted Period shall be extended by one day for each day that Director is in violation of such provisions, up to a maximum extension equal to the length of the Nonsolicitation Restricted Period, so as to give the Company the full benefit of the bargained- for length of forbearance.
	
 

 

	
 
	
7.6.
	
If any provision of clause 7.4 or 7.5 shall be determined to be unenforceable by any court of competent jurisdiction or arbitrator by reason of its extending for too great a period of time or over too large a geographic area or over too great a range of activities, it shall be interpreted to extend only over the maximum period of time, geographic area or range of activities as to which it may be enforceable.
	
 

 

	
 
	
8.
	
Communication;  references

 

	
 
	
8.1.
	
In view of external statements to be made regarding the Director's departure, the Company will issue a press release as soon as possible after signing of this Agreement or such other date as mutually agreed by the Parties, within the form as laid down in Annex II.
	
 

 

 

 

 

	
 
	
8.2.
	
It is intended that any internal statements to be made by the Company regarding the Director's departure will have materially the same contents as this external statement    (press release).
	
 

 

	
 
	
8.3.
	
The Director shall observe absolute confidentiality in respect of third parties regarding the contents of this Agreement, unless he is required to disclose information on the grounds of applicable statutory or regulatory provisions. In that case, the Director shall consult the Company about such disclosure in advance.
	
 

 

	
 
	
8.4.
	
The Parties shall not make negative comments on each other and shall refrain from (co- operating with) any publication or communication made in the public domain with respect to each other; provided, that, the Company's obligations in this regard shall be limited to disparaging statements by officers and directors of the Company and nothing in this section shall preclude the Company (including its officers and directors) from making truthful statements that are reasonably necessary to comply with applicable law, regulation or legal process, or to defend or enforce the Company's rights under this Agreement.
	
 

 

	
 
	
8.5.
	
Mr. R. Greig will act as contact person with regard to any references to be given about the person and performance of the Director.
	
 

 

	
 
	
9.
	
Return company property; right to access records

 

	
 
	
9.1.
	
By no later than the Termination Date, the Director shall return to the Company or a person to be designated by the Company, in clean and good condition the company car and all records and property belonging to the Company, including credit cards, access passes, emails, notes and (copies of) any data related to the business of the Company and/or any other group companies or affiliates, including any data on the Director’s personal computer and/or other electronic devices used by and/or in the possession of the Director. The Director may retain his Company-issued laptop computer and cell phone; provided, that the Company shall first have the opportunity to remove all of its confidential information from the laptop computer and cell phone.
	
 

 

	
 
	
9.2.
	
The Director shall not keep any copies of such data as referred to in clause 9.1 of this Agreement, with the exception of documents related to the Services Agreement.
	
 

 

	
 
	
9.3.
	
In the event the Director will have to defend himself against one or more claims brought forward with a view to the Director's former capacity as statutory director of the Company, the Director shall have access to the records and minutes of the Company's board of directors (in Dutch: bestuursverslagen) relating to the period that the Director was a statutory director of the Company and/or similar company documents that may be of relevance to the Director for defence against such claim, subject to prior approval by the Company's board, which approval will not be unreasonably withheld or delayed. The Director shall treat any documents accessed pursuant to the previous sentence as strictly confidential and shall not use such documents for any other purposes than defence against the claim at hand.
	
 

 

 

 

 

	
 
	
10.
	
No issues

 

The Director declares that he is not aware of any acts or circumstances that are unknown to the Company and its shareholders and could have a materially adverse effect on the Company and/or its affiliates or its business.

 

	
 
	
11.
	
Discharge

 

	
 
	
11.1.
	
Save for the rights and obligation that arise from this Agreement, the Parties grant each other full and final discharge (in Dutch: finale kwijting) with respect to the Services Agreement as well as the termination thereof; provided, that, nothing in this Agreement is intended to waive or release the Director’s continuing rights (to the extent existing as of the date of this Agreement) to indemnification in accordance with the Company’s Articles of Association or any applicable individual indemnity agreement as in effect on the date of this Agreement.
	
 

 

	
 
	
11.2.
	
The Parties recognise and confirm that save for the arrangements laid down in this Agreement, no other agreements, claims and/or arrangements exist anymore, at least that any such agreements, claims and/or arrangements will be waived and nullified by this Agreement, which means to regulate and cover all possible arrangements between the Parties, with a view to pursue a termination of the Services Agreement exhaustively.
	
 

 

	
 
	
11.3.
	
With respect to the termination of the Director's position as statutory director, the Company intends to endeavour that the Director will be proposed for discharge (in Dutch: decharge) on the agenda of the next annual general meeting of shareholders of the Company (which is expected to be held in June 2020), save for facts or circumstances regarding acts and/or omissions of the Director which justify that such proposal will not be made. At the date of this Agreement, there are no facts or circumstances known to the board of directors of the Company which would cause that the Director would not be proposed for discharge or which may be expected to give reason to belief that the discharge, if and when proposed, will be denied by the general meeting of shareholders.
	
 

 

	
 
	
12.
	
Rescission

 

To the extent permitted by law, the Parties hereby waive their rights under articles 6:265 to 6:272 inclusive of the DCC to rescind (in Dutch: ontbinden), or demand in legal proceedings the rescission (in Dutch: ontbinding) of this Agreement on the grounds of breach (in Dutch: toerekenbare tekortkoming) or error (in Dutch: dwaling).

 

 

 

 

	
 
	
13.
	
Partial invalidity

 

In the event that an article of this Agreement is invalid, illegal, not binding, or unenforceable (either in whole or in part), the remainder of the Agreement shall continue to be effective to the extent that, in view of this Agreement's substance and purpose, such remainder is not inextricably related to and therefore in severable from the invalid, illegal, not binding or unenforceable provision. The Parties shall make every effort to reach agreement on a new respective article which differs as little as possible from the invalid, illegal, not binding or unenforceable article, taking into account the substance and purpose of this Agreement.

 

	
 
	
14.
	
Settlement agreement

 

This Agreement is considered to be a settlement agreement (in Dutch: vaststellingsovereen- komst) within the meaning of article 7:900 of the Dutch Civil Code.

 

	
 
	
15.
	
Legal costs

 

	
 
	
15.1.
	
The Company agrees to reimburse legal costs incurred by the Director in connection with entering into this Agreement up to a maximum of EUR 10,500 (net), including office costs and including VAT.
	
 

 

	
 
	
15.2.
	
The Director should submit the invoice paid by him for legal assistance to the Company as an expense statement, before the Termination Date, after which the Company shall pay the amount stated to the Director up to the maximum referred to in clause 15.1 by transferring it to the Director's salary account as known to the Company.
	
 

 

	
 
	
16.
	
Entire Agreement

 

	
 
	
16.1.
	
This Agreement embodies the entire agreement and understanding of the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, relative to said subject matter.
	
 

 

	
 
	
16.2.
	
This Agreement may only be amended in writing and such amendment signed by each of the Parties.
	
 

 

	
 
	
17.
	
Governing law and competent court

 

	
 
	
17.1.
	
This Agreement shall be governed by and construed in accordance with the laws of the Netherlands.
	
 

 

	
 
	
17.2.
	
Any dispute in connection with this Agreement shall finally be settled before the competent court of Amsterdam, the Netherlands.
	
 

 

 

 

This Agreement is dated 11 December 2019 and may be executed in any number of counterparts, each of which will be deemed an original and all of which together shall constitute one and the same instrument.

 

Thus agreed,

 

 

 

on behalf of Merus N.V.

 

 

 

/s/ R. Greig

name: R. Greig 

title: Chair

 

 

 

Mr. T. Logtenberg

/s/ T. Logtenberg

 

 

 

 

 

 

List of Omitted Schedules and Exhibits

 

The following schedules and exhibits to the Settlement Agreement, dated as of December 11, 2019, by and between Ton Logtenberg and the Registrant have not been provided herein:

 

Annex I: Resignation as Statutory Director, President, Chief Executive Officer, Principal Financial Officer and Director

 

Annex II: Press release

 

The Registrant hereby undertakes to furnish supplementally a copy of any omitted schedules or exhibits to the Securities and Exchange Commission upon request.

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