|
|
|
|
|
|
|
Per ADS
|
|
Total
|
Public Offering Price
|
|
$4.200
|
|
$60,060,000
|
Underwriting Discount(1)
|
|
$0.252
|
|
$ 3,603,600
|
Proceeds to Adaptimmune (before expenses)
|
|
$3.948
|
|
$56,456,400
|
-
(1)
-
We
have agreed to reimburse the underwriters for certain expenses incurred with this offering. See "Underwriting."
The
underwriters expect to deliver the ADSs to purchasers on or about March 27, 2017 through the book-entry facilities of The Depositary Trust Company.
Joint Book-Running Managers
|
|
|
|
|
Citigroup
|
|
Cowen and Company
|
|
Leerink Partners
|
Lead Manager
Guggenheim Securities
March 22, 2017
Table of Contents
TABLE OF CONTENTS
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of England and Wales. Some of our directors and officers reside outside the United States, and a substantial
portion of our assets and all or a substantial portion of the assets of such persons are located outside the United States. As a result, it may be difficult for you to serve legal process on us or our
directors and executive officers (as well as certain directors, managers and executive officers of the finance subsidiaries) or have any of them appear in a United States court. There is doubt as to
the enforceability in the United Kingdom, either in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated on the U.S. federal securities laws.
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is the prospectus supplement, including the documents incorporated by reference herein, which
describes the specific terms of this offering. The
S-i
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second
part, the accompanying prospectus, including the documents incorporated by reference therein, provides more general information. Generally, when we refer to this prospectus, we are referring to
both parts of this document combined. Before you invest, you should carefully read this prospectus supplement, the accompanying prospectus, all information incorporated by reference herein and
therein, as well as the additional information described under "Where You Can Find More Information." These documents contain information you should consider when making your investment decision. This
prospectus supplement may add, update or change information contained in the accompanying prospectus. To the extent that any statement we make in this prospectus supplement is inconsistent with
statements made in the accompanying prospectus or any documents incorporated by reference therein, the statements made in this prospectus supplement will be deemed to modify or supersede those made in
the accompanying prospectus and such documents incorporated by reference therein.
You
should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus and in any free writing prospectuses we may
provide to you in connection with this offering. Neither we nor the underwriters have authorized any other person to provide you with any information that is different. If anyone provides you with
different or inconsistent information, you should not rely on it. We are offering to sell, and seeking offers to buy, ADSs only in jurisdictions where offers and sales are permitted. The distribution
of this prospectus supplement and the offering of the ADSs in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus supplement
must inform themselves about, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus supplement outside the United States. This prospectus
supplement does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement by any person in
any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
Unless
otherwise indicated or the context otherwise requires, "Adaptimmune," the "Group," the "Company," "we," "us" and "our" refer to Adaptimmune Therapeutics plc and its
consolidated subsidiaries, except where the context otherwise requires. "Adaptimmune" and "SPEAR" are registered trademarks of Adaptimmune.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the financial statements and other documents incorporated by reference in this
prospectus supplement may contain forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. All statements other than
statements of historical fact in this prospectus supplement, the accompanying prospectus and the financial statements and other documents that we incorporate by reference in this prospectus supplement
are forward-looking statements.
These
forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial
condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed
in, or suggested by, these forward-looking statements. These forward-looking statements are based on assumptions regarding our present and future business strategies and the environment in which we
expect to operate in the future. Important factors that could cause those differences include, but are not limited to:
-
-
our ability to advance our NY-ESO SPEAR T-cells to a point where GlaxoSmithKline, or GSK, exercises the option to license the product and the
scope and timing of performance of our ongoing collaboration with GSK;
S-ii
Table of Contents
-
-
our ability to successfully advance our MAGE-A10, MAGE-A4 and alpha fetoprotein, or AFP, SPEAR T-cells through clinical development and the
timing within which we can recruit patients in to and treat patients in our clinical trials;
-
-
our ability to further develop our commercial manufacturing process for our SPEAR T-cells, transfer such commercial process to third party
contract manufacturers and for such third party contract manufactuers to manufacture SPEAR T-cells to the quality and on the timescales we require;
-
-
the success, cost and timing of our product development activities and clinical trials;
-
-
our ability to successfully advance our SPEAR T-cell technology platform to improve the safety and effectiveness of our existing SPEAR T-cell
candidates and to submit Investigational New Drug Applications, or INDs, for new SPEAR T-cell candidates;
-
-
the rate and degree of market acceptance of T-cell therapy generally and of our SPEAR T-cells;
-
-
government regulation and approval, including, but not limited to, the expected regulatory approval timelines for T-cell receptor, or TCR,
therapeutic candidates;
-
-
patents, including, any inability to obtain third party licenses, legal challenges thereto or enforcement of patents against us;
-
-
the level of pricing and reimbursement for our SPEAR T-cells, if approved for marketing;
-
-
general economic and business conditions or conditions affecting demand for our SPEAR T-cells in the markets in which we operate, both in the
United States and internationally;
-
-
volatility in equity markets in general and in the biopharmaceutical sector in particular;
-
-
fluctuations in the price of materials and bought-in components;
-
-
our relationships with suppliers and other third-party providers;
-
-
increased competition from other companies in the biotechnology and pharmaceutical industries;
-
-
claims for personal injury or death arising from the use of our SPEAR T-cell candidates;
-
-
changes in our business strategy or development plans, and our expected level of capital expenses;
-
-
our ability to attract and retain qualified personnel;
-
-
regulatory, environmental, legislative and judicial developments including a regulatory requirement to place any clinical trials on hold or to
suspend any trials;
-
-
a change in our status as an emerging growth company under the Jumpstart our Business Startups Act of 2012, or the JOBS Act;
-
-
uncertainty about the future relationship between the United Kingdom and the European Union; and
-
-
additional factors that are not known to us at this time.
Additional
factors that could cause actual results, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results to differ materially include,
but are not limited to, those discussed under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2016, which is
incorporated by reference herein, as updated by our other SEC filings filed after such Annual Report. Additional risks that we may currently deem immaterial or that are not presently known to us could
also cause the forward-looking events discussed in this prospectus supplement, the accompanying prospectus and the documents
S-iii
Table of Contents
incorporated
by reference not to occur. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect" and similar words are intended to identify estimates and
forward-looking statements. Estimates and forward-looking statements speak only at the date they were made, and we undertake no obligation to update or to review any estimate and/or forward-looking
statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future
results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and forward-looking
statements
discussed in this prospectus supplement, the accompanying prospectus and the documents that we incorporate by reference in this prospectus supplement might not occur, and our future results and our
performance may differ materially from those expressed in such forward-looking statements due to, inclusive of, but not limited to, the factors mentioned above. Because of these uncertainties, you
should not make any investment decision based on these estimates and forward-looking statements.
S-iv
Table of Contents
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information contained elsewhere in this prospectus supplement, the accompanying
prospectus and in the documents we incorporate by reference. This summary does not contain all of the information you should consider before making an investment decision. You should read this entire
prospectus supplement and accompanying prospectus carefully, especially the risks of investing in our ADSs discussed under "Risk Factors" beginning on page S-4 of this prospectus supplement,
along with our consolidated financial statements and notes to those consolidated financial statements and the other information incorporated by reference in this prospectus
supplement.
Overview
Adaptimmune is a clinical-stage biopharmaceutical company focused on novel cancer immunotherapy products based on its proprietary SPEAR T-cell
platform. We have developed a comprehensive proprietary platform that enables us to identify cancer targets, find and genetically engineer TCR, and produce TCR therapeutic candidates for
administration to patients. The Company engineers TCRs to increase their affinity to cancer specific peptides in order to destroy cancer cells in patients. Adaptimmune has Phase 1/2 clinical
trials ongoing with our NY-ESO and MAGE-A10 SPEAR T-cells and during 2016 opened two additional INDs for our AFP and MAGE A-4 SPEAR T-cells. Our NY-ESO SPEAR T-cell has shown promising initial results
in clinical trials with a 50% response rate and 18-month median survival rate reported in synovial sarcoma (a solid tumor) and a 91% response rate at day 100 post autologous stem cell transplant in
multiple myeloma. The NY-ESO SPEAR T-cell has shown a promising tolerability profile to date in all clinical trials. Our NY-ESO SPEAR T-cell therapy has breakthrough therapy designation in the United
States and has also received orphan drug designation from the FDA and European Commission for the treatment of soft tissue sarcoma. The EMA has also granted PRIME regulatory access for the Company's
NY-ESO SPEAR T-cell therapy for the synovial sarcoma indication. We expect further clinical data during 2017. In addition, we continue to use our SPEAR T-cell platform to identify further target
peptides which provide additional coverage for any existing indications or which show high expression in specific cancers. We have identified over 30 intracellular target peptides and have 12 research
programs evaluating these peptides. The NY-ESO SPEAR T-cell program is subject to a collaboration and license agreement with GSK under which GSK has an option to obtain an exclusive worldwide license
to the NY-ESO SPEAR T-cell program. In February 2016, the GSK Collaboration and License Agreement was expanded to accelerate the development of the NY-ESO SPEAR T-cells towards pivotal trials in
synovial sarcoma, as well as the exploration of development of NY-ESO SPEAR T-cells in MRCLS. The amendment also provides the opportunity for up to eight combination studies using NY-ESO SPEAR
T-cells. The Company achieved development milestones under the GSK Collaboration and License Agreement of $17.4 million in the year ended December 31, 2016.
Corporate Information
Our registered and principal executive offices are located at 101 Park Drive, Milton Park, Abingdon, Oxfordshire OX14 4RY, United
Kingdom, our general telephone number is (+44) 1235 430000 and our corporate website address is www.adaptimmune.com. Our website and the information contained on or accessible through
our website are not part of this prospectus supplement. Our agent for service of process in the United States is our subsidiary, Adaptimmune LLC, located at 351 Rouse Boulevard, The Navy Yard,
Philadelphia PA 19112, United States. Since May 6, 2015, our ADSs, which each represent 6 ordinary shares, have been listed on The Nasdaq Global Select Market, or Nasdaq, under the symbol
"ADAP."
S-1
Table of Contents
Implications of Being an "Emerging Growth Company"
We qualify as an "emerging growth company" as defined in the JOBS Act. An emerging growth company may take advantage of specified reduced
reporting and other burdens that are otherwise applicable generally to public companies. These provisions include an exemption from the auditor attestation requirement in the assessment of our
internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002.
We
may take advantage of these provisions for a period of five years following the completion of our initial public offering (2020) or such earlier time that we are no longer an emerging
growth company. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our ordinary shares
held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period.
S-2
Table of Contents
THE OFFERING
|
|
|
ADSs offered by us
|
|
14,300,000 ADSs (with each ADS representing six ordinary shares).
|
ADSs outstanding after the offering
|
|
85,095,848
|
Ordinary shares outstanding after the offering
|
|
510,575,092
|
Underwriters' option to purchase additional ADSs
|
|
We have granted the underwriters an option to purchase up to an additional 2,145,000 ADSs from us within 30 days of the
date of this prospectus supplement.
|
Depositary
|
|
Citibank, N.A.
|
Use of proceeds
|
|
We intend to use the net proceeds from this offering to advance our wholly-owned pipeline of SPEAR T-cell candidates through
clinical trials as well as for other general corporate purposes. See "Use of Proceeds."
|
Risk factors
|
|
You should read the "Risk Factors" section of this prospectus supplement and in other documents incorporated by reference
into this prospectus supplement and the accompanying prospectus for a discussion of factors to consider carefully before deciding to purchase our ADSs.
|
Nasdaq Global Select Market Symbol
|
|
ADAP
|
Unless
otherwise indicated, all information in this prospectus supplement, including information relating to the number of ordinary shares to be outstanding immediately after the
completion of this offering:
-
-
excludes 68,008,266 of our ordinary shares issuable upon the exercise of options outstanding as of March 20, 2017;
-
-
excludes up to a maximum of 14,357,463 ordinary shares potentially issuable to employees, consultants and directors under our equity incentive
plans; and
-
-
assumes no exercise by the underwriters of their option to purchase up to an additional ADSs.
S-3
Table of Contents
RISK FACTORS
Our business, and an investment in the securities, is subject to uncertainties and risks. You should carefully consider
and evaluate all of the information included and incorporated by reference in this prospectus supplement and the accompanying prospectus, including the risk factors incorporated by reference from our
most recent Annual Report on Form 10-K, as updated by other SEC filings filed after such report. Our business, financial condition, results of operations and prospects could be materially
adversely affected by any of these risks. The occurrence of any of these risks may cause you to lose all or part of your investment.
Risks Related to Our Business
We may be classified as a passive foreign investment company in any taxable year and U.S. holders of our ADSs
could be subject to adverse U.S. federal income tax consequences.
The rules governing passive foreign investment companies, or PFICs, can have adverse effects for U.S. federal income tax purposes. The tests for
determining PFIC status for a taxable year depend upon the relative values of certain categories of assets and the relative amounts of certain kinds of income. The determination of whether we are a
PFIC depends on the particular facts and circumstances (such as the valuation of our assets, including goodwill and other intangible assets) and may also be affected by the application of the PFIC
rules, which are subject to differing interpretations. Based on our estimated gross income, the average value of our assets, including goodwill, and the nature of our active business, we do not
believe we were treated as a PFIC for U.S. federal income tax purposes for the U.S. taxable year ending December 31, 2016, however, no assurance can be given that the IRS or a court of law will
accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, our status for any taxable year will depend on our assets and activities in each
year, and because this is a factual determination made annually after the end of each taxable year, there can be no assurance that we will not be considered a PFIC for this year or any future taxable
year.
If
we are a PFIC, "U.S. Holders", as defined in "Taxation" below, of our ADSs would be subject to adverse U.S. federal income tax consequences, such as ineligibility for any preferred
tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws and
regulations. A U.S. Holder of our ADSs may be able to mitigate some of the adverse U.S. federal income tax consequences described above with respect to owning the ADSs if we are classified as a PFIC,
provided that such U.S. Holder is eligible to make, and validly makes, a "mark-to-market" election. In certain circumstances a U.S. Holder can make a "qualified electing fund" election to mitigate
some of the adverse tax consequences described with respect to an ownership interest in a PFIC by including in income its share of the PFIC's income on a current basis. However, we do not currently
intend to prepare or provide the information that would enable a U.S. Holder to make a qualified electing fund election.
Investors
should consult their own tax advisors regarding all aspects of the application of the PFIC rules to our ADSs. For more information related to classification as a PFIC, see
"TaxationU.S. Federal Income TaxationPassive Foreign Investment Company Considerations."
Risks Related to Our ADSs and this Offering
If you purchase ADSs in this offering, you will suffer immediate dilution of your investment.
The offering price per ADS in this offering may exceed the net tangible book value per ADS outstanding prior to this offering. Therefore, if you
purchase ADSs in this offering, you may pay a price per ADS that exceeds our as adjusted net tangible book value per ADS after this offering. To the
S-4
Table of Contents
extent
outstanding options are exercised, you will incur further dilution. Assuming that an aggregate of 14,300,000 of our ADSs are sold at a price of $4.20 per ADS pursuant to this prospectus
supplement, for aggregate net proceeds of $56.3 million after deducting commissions and estimated aggregate offering expenses payable by us, you would experience immediate dilution of $0.27 per
ordinary share, or $1.60 per ADS, representing the difference between our as adjusted net tangible book value per ordinary share as of December 31, 2016, after giving effect to this offering
and the offering price. See "Dilution."
We do not anticipate paying cash dividends, and accordingly, holders of our ADSs must rely on appreciation in
the price of the ADSs for any return on their investment.
We currently intend to retain our future earnings, if any, to fund the development and growth of our businesses. As a result, capital
appreciation, if any, of our ADSs will be your sole source of gain on your investment for the foreseeable future. Investors seeking cash dividends should not invest in our ADSs.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research
about our business, our ADS price and trading volume could decline.
The trading market for our ADSs depends on the research and reports that securities or industry analysts publish about us or our business. We do
not have any control over these analysts. We cannot assure you that analysts will cover us or provide favorable coverage. If one or more of the analysts who cover us downgrade our ADSs or change their
opinion of our ADSs, our ADS price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the
financial markets, which could cause our ADS price or trading volume to decline.
You may not have the same voting rights as the holders of our ordinary shares and may not receive voting
materials in time to be able to exercise your right to vote.
Except as described in this prospectus supplement and the accompanying prospectus, holders of the ADSs will not be able to exercise voting
rights attaching to the ordinary shares represented by the ADSs on an individual basis. Holders of the ADSs will appoint the depositary or its nominee as their representative to exercise the voting
rights attaching to the ordinary shares represented by the ADSs. You may not receive voting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their
ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.
You may not receive distributions on our ordinary shares represented by the ADSs or any value for them if it
is unlawful or impracticable to make them available to holders of ADSs.
The depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary
shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of our ordinary shares that your ADSs represent. However,
in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impracticable to make a distribution available to holders of ADSs. We have no obligation to take any other
action to permit distribution on the ADSs, ordinary shares, rights or anything else to holders of the ADSs. This means that you may not receive the distributions we make on our ordinary shares or any
value from them if it is unlawful or impracticable to make them available to you. These restrictions may have a material adverse effect on the value of your ADSs.
S-5
Table of Contents
USE OF PROCEEDS
We estimate that we will receive total estimated net proceeds from this offering of approximately $56.3 million, or $64.7 million
if the underwriters exercise their option to purchase additional ADSs in full, in each case after deducting estimated underwriting discounts and commissions and estimated expenses of the offering
payable by us.
We
currently intend to use the net proceeds of this offering to advance our wholly-owned pipeline of SPEAR T-cell candidates through clinical trials as well as for other general
corporate purposes. Although it is difficult to predict future capital requirements, we believe that the net proceeds from this offering, together with our existing cash resources and expected revenue
contributions from our GSK collaboration and license agreement, will provide us with adequate cash resources to fund our operations through to the middle of 2019.
Our
expected use of net proceeds from this offering represents our current intentions based upon our present plans and business conditions. As of the date of this prospectus supplement,
we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the amounts that we will actually spend on the uses set forth
above. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors, including our ability to obtain additional financing, the relative success and cost of our
research, preclinical and clinical development programs, including a change in our planned course of development or the termination of a clinical program necessitated by the results of data received
from clinical trials or otherwise, the amount and timing of additional revenues, if any, received from our GSK collaboration and license agreement and whether we enter into future collaborations. As a
result, management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering.
S-6
Table of Contents
DILUTION
If you invest in our ADSs in this offering, your ownership interest will be diluted immediately to the extent of the difference between the
price per ADS you pay in this offering and the net tangible book value per ADS after this offering.
Our
net tangible book value as of December 31, 2016 was $164.9 million, or $0.39 per ordinary share ($2.33 per ADS), based on 424,775,092 ordinary shares then outstanding.
After giving effect to the assumed sale by us of 14,300,000 ADSs at a public offering price of $4.20 per ADS, less the estimated commissions and estimated offering expenses payable by us, our net
tangible book value at December 31, 2016 would have been $221.1 million, or $0.43 per ordinary share. This represents an immediate increase in net tangible book value of $0.04 per
ordinary share ($0.27 per ADS) to existing shareholders and an immediate dilution of $0.27 per ordinary share ($1.60 per ADS) to investors in this offering. The following table illustrates this per
ADS dilution. The as adjusted information is illustrative only and will adjust based on the actual price to the public, the actual number of ADSs sold and other terms of the offering determined at the
time our ADSs are sold pursuant to this prospectus supplement.
|
|
|
|
|
|
|
|
Public offering price per ADS
|
|
|
|
|
$
|
4.20
|
|
Net tangible book value per ADS as of December 31, 2016
|
|
$
|
2.33
|
|
|
|
|
Increase per ADS attributable to new investors purchasing ADSs in this offering
|
|
$
|
0.27
|
|
|
|
|
As adjusted net tangible book value per ADS after giving effect to this offering
|
|
|
|
|
$
|
2.60
|
|
|
|
|
|
|
|
|
|
Dilution per ADS to new investors
|
|
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
above discussion and table are based on 424,775,092 ordinary shares outstanding as of December 31, 2016 and excludes 68,008,266 of our ordinary shares issuable upon the
exercise of options outstanding as of March 20, 2017, at a weighted average exercise price of £0.59 per ordinary share.
To
the extent that outstanding options are exercised, you will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic
considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity, the issuance of such
securities may result in further dilution to our ADS holders.
The
share information above also:
-
-
excludes up to a maximum of 14,357,463 ordinary shares potentially issuable to employees, consultants and directors under our equity incentive
plans; and
-
-
assumes no exercise by the underwriters of their option to purchase up to an additional ADSs.
S-7
Table of Contents
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
David M. Mott
|
|
|
51
|
|
Chairman of the Board of Directors
|
Lawrence M. Alleva
|
|
|
67
|
|
Non-Executive Director
|
Ali Behbahani, M.D.
|
|
|
40
|
|
Non-Executive Director
|
Barbara Duncan
|
|
|
52
|
|
Non-Executive Director
|
Giles Kerr
|
|
|
57
|
|
Non-Executive Director
|
Elliott Sigal, Ph.D, M.D.
|
|
|
65
|
|
Non-Executive Director
|
Peter Thompson, M.D.
|
|
|
57
|
|
Non-Executive Director
|
Tal Zaks, Ph.D, M.D.
|
|
|
51
|
|
Non-Executive Director
|
James Noble
|
|
|
57
|
|
Chief Executive Officer and Director
|
David M. Mott.
Mr. Mott has served as our Chairman since January 2017 and as a Non-Executive Director since September 2014,
initially in a
capacity as a nominee of New Enterprise Associates 14 LP (NEA), one of our shareholders. Mr. Mott has served as a General Partner of NEA, an investment firm focused on venture capital
and growth equity investments, since 2008, and leads its healthcare investing practice. He was formerly President and Chief Executive Officer of MedImmune LLC, a subsidiary of
AstraZeneca Plc, and Executive Vice President of AstraZeneca Plc. From 1992 to 2008, Mr. Mott worked at MedImmune and served in roles including Chief Operating Officer, Chief
Financial Officer, President and Chief Executive Officer. Prior to joining MedImmune, Mr. Mott was a Vice President in the Health Care Investment Banking Group at Smith Barney, Harris
Upham & Co., Inc. He is currently a member of the board of directors of Ardelyx, Epizyme and Tesaro, as well as several private companies, including 3-V Biosciences and Cydan, and
has previously served on numerous public and private company boards in the biopharmaceutical industry, including Shire Pharmaceuticals, Ambit Pharmaceuticals, Onthera Pharmaceuticals, Prosensa
Holding BV, Zyngenia and Conceptis. Mr. Mott received a bachelor of arts degree from Dartmouth College. Our Board of Directors believes Mr. Mott's qualifications to serve as a
member of our board include his financial expertise, his experience as a venture capital investor, his extensive experience in the pharmaceutical industry and his years of experience in his leadership
roles as a director and executive officer.
Lawrence M. Alleva.
Mr. Alleva has served as a Non-Executive Director since March 2015. Mr. Alleva is a former partner with
PricewaterhouseCoopers LLP (PwC), where he worked for 39 years from 1971 until his retirement in June 2010, including 28 years' service as a partner. Mr. Alleva worked with
numerous pharmaceutical and biotechnology companies as clients and, additionally, served PwC in a variety of office, regional and national practice leadership roles, most recently as the U.S. Ethics
and Compliance Leader for the firm's Assurance Practice from 2006 until 2010. Mr. Alleva currently serves as a director for public companies Tesaro Inc. (NASDAQ: TSRO), Bright Horizons
Family Solutions Inc. (NYSE: BFAM) and Mirna Therapeutics Inc. (NYSE: MIRN), and chairs the audit committee for those companies. He previously served on the board of
GlobalLogic, Inc. through the sale of the company in 2013 and also chaired the audit committee. Mr. Alleva is a Certified Public Accountant (inactive). He received a B.S. degree in
Accounting from Ithaca College and attended Columbia University's Executive MBA non-degree program. Our Board of Directors believes Mr. Alleva's qualifications to serve as a member of our board
include his financial expertise, his extensive experience working with public companies on corporate finance and accounting matters as a Certified Public Accountant (inactive), his experience serving
as a director on other corporate boards and his experience in a senior leadership role at PwC.
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Ali Behbahani, M.D.
Dr. Behbahani has served as a Non-Executive Director since September 2014, initially in a capacity as a
nominee of NEA,
one of our shareholders. Dr. Behbahani has been a Partner on the healthcare team at NEA since 2013, having worked for the fund since 2007, specializing in investments in the biopharmaceutical,
medical device, specialty pharmaceutical and healthcare services sectors. He is also currently a member of the board of directors of Nevro Corp. and CRISPR Therapeutics AG. He also serves on the board
of directors of several private companies, including Solace Therapeutics, Inc., ClarVista Medical, Inc. and NKarta, Inc. He has previously worked as a consultant in business
development at The Medicines Company and held positions as a Venture Associate at Morgan Stanley Venture Partners from 2000 to 2002 and as a Healthcare Investment Banking Analyst at Lehman Brothers
from 1998 to 2000. Dr. Behbahani conducted basic science research in the fields of viral fusion inhibition and structural proteomics at the National Institutes of Health and at Duke University.
He holds an M.D. degree from The University of Pennsylvania School of Medicine and an MBA from the Wharton School of the University of Pennsylvania. Our Board of Directors believes
Dr. Behbahani's qualifications to serve as a member of our board include his financial expertise, his experience as a venture capital investor, his extensive experience in the healthcare
industry and his years of experience in his leadership roles as a director and executive officer.
Barbara Duncan.
Ms. Duncan has served as a Non-Executive Director since June 2016. She has over 15 years of experience in the
life
sciences industry and served as Chief Financial Officer and Treasurer at Intercept Pharmaceuticals, Inc. (NASDAQ: ICPT) from May 2009 to 2016 and as Chief Financial Officer and then Chief
Executive Officer at DOV Pharmaceuticals, Inc. from 2001 to 2009. Prior to joining DOV, Ms. Duncan served as Vice President of Corporate FinanceGlobal Healthcare at Lehman
Brothers Inc. from 1998 to 2001, and as Director of Corporate Finance at SBC Warburg Dillon Read Inc. from 1994 to 1998. She also worked for PepsiCo, Inc. from 1989 to 1992 in its
international audit division, and was a certified public accountant in the audit division of Deloitte & Touche LLP from 1986 to 1989. Ms. Duncan currently serves as a director for
public companies Aevi Genomic Medicine (NASDAQ: GNMX), Jounce Therapeutics, Inc. (NASDAQ: JNCE) and Innoviva, Inc. (NASDAQ: INVA), and for privately-held companies, Edgemont
Pharmaceuticals, LLC and Observa, Inc. She holds an MBA from the Wharton School of the University of Pennsylvania and a Bachelor of Business Administration from Louisiana State
University. Our Board of Directors believes Ms. Duncan's qualifications to serve as a member of our board include her financial expertise, her extensive experience in the healthcare industry
and her years of experience in her leadership roles as a director and executive officer.
Giles Kerr.
Mr. Kerr has served as a Non-Executive Director since November 2016. He has substantial commercial and financial
experience gained
from service on numerous public and private company boards and as an audit partner. Mr. Kerr has served as Director of Finance of the University of Oxford since 2005. He also currently serves
as a Board member and Audit Committee member of public companies BTG plc (LSE: BTG), Paypoint plc (LSE: PAY) and Senior plc (LSE: SNR) as well as on the boards of several private
companies, including Quanta Dialysis Technologies Ltd, Oxford Sciences Innovation plc and Oxford Capital Fund. Mr. Kerr previously served in roles of increasing seniority at
Amersham plc since 1990, including as Chief Financial Officer and a Board member from 1997 to 2004, when the company was acquired by GE Healthcare, and as a director of Victrex plc and
of Elan
Corporation Inc. Prior to his role at Amersham, Mr. Kerr was a National Partner with Arthur Andersen. He is a Fellow of the Institute of Chartered Accountants of England and Wales and
holds a B.A. degree in Economics from the University of York, U.K. Our Board of Directors believes Dr. Kerr's qualifications to serve as a member of our board include his financial expertise,
his extensive experience in the healthcare industry and his years of experience in his leadership roles as a director and executive officer.
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Table of Contents
Elliott Sigal, M.D., Ph.D.
Dr. Sigal has served as a Non-Executive Director since September 2014 and is a former Executive Vice
President and
member of the Board of Directors of Bristol-Myers Squibb. He joined BMS in 1997 as head of Applied Genomics, went on to head Discovery Research followed by clinical development and ultimately served
as Chief Scientific Officer and President of R&D from 2004 until 2013. Dr. Sigal serves as a board member for the Mead Johnson Nutrition Company, Spark Therapeutics and the Melanoma Research
Alliance. He also serves as a senior advisor to the healthcare team of NEA and consults for several biotechnology companies. Dr. Sigal holds an M.D. from the University of Chicago and trained
in Internal Medicine and Pulmonary Medicine at the University of California, San Francisco, where he was on faculty from 1988 to 1992. He also holds a B.S., M.S, and Ph.D. in engineering from Purdue
University. Our Board of Directors believes Dr. Sigal's qualifications to serve as a member of our board include his extensive experience in the pharmaceutical industry and his years of
experience in his leadership roles as a director and executive officer.
Peter Thompson, M.D.
Dr. Thompson has served as a Non-Executive Director since September 2014, initially in his capacity as a
nominee of
OrbiMed Private Investments V, L.P. (OrbiMed), one of our shareholders. Dr. Thompson is currently a Private Equity Partner with OrbiMed who brings over 25 years of industry
experience. He co-founded and was Chief Executive Officer of Trubion Pharmaceuticals from 2002 to 2009 (NASDAQ: TRBN), co-founded Cleave BioSciences and Corvus Pharmaceuticals (NASDAQ:CRVS), and was
previously an executive of Chiron Corporation and Becton Dickinson. Dr. Thompson also serves as a Director on several public and private company Boards including Cardioxyl
Pharmaceuticals, Inc., Cleave Biosciences, PMV Pharmaceuticals, Inc., Principia BioPharma, ProNai Therapeutics, Inc., Response BioMedical Corp, and OxOnc Development Inc.
He is also an Ernst & Young Entrepreneur of the Year awardee and an Affiliate Professor of Neurosurgery at the University of Washington. He is the inventor on numerous patents, is a
board-certified internist and oncologist and was on the staff at the National Cancer Institute following his internal medicine training at Yale University. Our Board of Directors believes
Dr. Thompson's qualifications to serve as a member of our board include his financial expertise, his experience as a venture capital investor, his extensive experience in the pharmaceutical
industry and his years of experience in his leadership roles as a director and executive officer.
Tal Zaks, Ph.D, M.D.
Dr. Zaks has served as a Non-Executive Director since November 2016. He has substantial research, development
and
commercialization experience gained from service in industry and academia. Dr. Zaks has served as the Chief Medical Officer of Moderna Therapeutics, Inc. since March 2015. He previously
served as Senior Vice President and Head of Global Oncology at Sanofi Inc, where he was responsible for all aspects of oncology drug discovery, development and commercialization. Dr. Zaks began
his industry career at GlaxoSmithKline in the genetics research group, where he built the oncology translational medicine team and led translational research on lapatinib as well as the in-licensing
and clinical development of foretinib. In addition to his industry work, Dr. Zaks is an Adjunct Associate Professor of Medicine at the University of Pennsylvania and has served as a volunteer
physician at the Philadelphia Veterans Administration Medical Center, treating patients with genitourinary cancers. Dr. Zaks received his M.D. and Ph.D. degrees from the Ben Gurion University
in Israel and conducted post-doctoral research at the U.S. National Institutes of Health. He completed his clinical training in internal medicine at Temple University Hospital followed by a fellowship
in medical oncology at the University of Pennsylvania. Our Board of Directors believes Dr. Zaks' qualifications to serve as a member of our board include his extensive experience in the
biopharmaceutical industry and his years of experience in his leadership roles as an executive officer.
James Noble.
Mr. Noble has served as our full-time Chief Executive Officer since March 2014 and part-time CEO from July 2008 to
March 2014 and
is one of our co-founders. From July 2008 until March 2014, Mr. Noble was also part-time CEO of Immunocore Limited. Mr. Noble has 24 years of experience in the biotech industry.
He has held numerous non-executive director positions including at
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CuraGen
Corporation, PowderJect Pharmaceuticals plc, Oxford GlycoSciences plc, MediGene AG, and Advanced Medical Solutions plc. Mr. Noble is also Deputy Chairman of GW
Pharmaceuticals plc (NASDAQ: GWPH). Mr. Noble qualified as a chartered accountant with PwC and spent seven years at the investment bank Kleinwort Benson Limited, where he became a
director in 1990. He then joined British Biotech plc as Chief Financial Officer from 1990 to 1997. Mr. Noble was previously Chief Executive Officer of Avidex Limited, a privately held
biotechnology company that was our predecessor, from 2000 to 2006. Mr. Noble holds an MA from the University of Oxford. Our Board of Directors believes Mr. Noble's qualifications to
serve as a member of our board include his financial expertise, his extensive experience in the biopharmaceutical industry and his years of experience in his leadership roles as a director and
executive officer.
Executive Officers
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
James Noble
|
|
|
57
|
|
Chief Executive Officer and Director
|
William Bertrand
|
|
|
52
|
|
Chief Operating Officer
|
Helen Tayton-Martin, Ph.D
|
|
|
50
|
|
Chief Business Officer
|
Rafael Amado, M.D.
|
|
|
53
|
|
Chief Medical Officer
|
Adrian Rawcliffe
|
|
|
44
|
|
Chief Financial Officer
|
Gwendolyn Binder-Scholl, Ph.D
|
|
|
42
|
|
Chief Technology Officer, Adaptimmune LLC
|
William Bertrand.
Mr. Bertrand has served as our Chief Operating Officer since March 2017 and is responsible for a range of
operational
functions including compliance, risk management, human resources and legal/IP. Mr. Bertrand's prior experience includes a 12 year tenure at MedImmune, where he served as its first
General Counsel and Chief Compliance Officer, along with holding a variety of operational and corporate strategy roles. He has also formerly served as Executive Vice President, General Counsel for
Infinity Pharmaceuticals, Inc., and as Senior Vice President, Acting Chief Operating Officer and General Counsel for Salix Pharmaceuticals, where he remained as General Manager to help finalize
the integration of the company's $14 billion acquisition by Valeant Pharmaceuticals in April 2015. He is currently a member of the board of directors of Ardelyx, Inc. (NASDAQ: ARDX) and
has served as a member of the board of directors of several private companies including Trustwave Holdings and Inotek Pharmaceuticals. Mr. Bertrand received a J.D. from the University of
Wisconsin and a B.S. in biology from Wayne State University.
Helen Tayton-Martin, Ph.D.
Dr. Tayton-Martin transitioned to become Adaptimmune's Chief Business Officer in March 2017, having
served as Chief
Operating Officer since 2008. She is responsible for optimizing the strategic and commercial opportunity for the Company's assets, leading on business development and commercial activities. Her role
encompasses all aspects of pipeline and technology assessment, strategic portfolio analysis, integrated program management, commercial planning and partnerships, including our strategic partnership
with GSK. Dr. Tayton-Martin has 25 years of experience working within the pharmaceutical, biotech and consulting environment in disciplines across preclinical and clinical development,
outsourcing, strategic planning, due diligence and business development. She co-founded Adaptimmune from Avidex Limited (subsequently Medigene), where she was responsible for commercial development of
the soluble TCR program in cancer and HIV therapy from 2005 to 2008. Dr. Tayton-Martin holds a Ph.D. in molecular immunology from the University of Bristol, U.K. and an M.B.A. from London
Business School.
Rafael Amado, M.D.
Dr. Amado has served as our Chief Medical Officer since March 2015 and has 12 years of experience within
the biotech
and pharmaceutical industries. Dr. Amado leads our clinical strategy and is responsible for our clinical trials across the U.S. and Europe under our strategic collaboration with GSK (LSE/NYSE:
GSK), as well as leading the development of our pipeline of wholly-owned research programs. He formerly served as Senior Vice President and Head of Oncology
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R&D
at GSK, where he was responsible for integrating oncology R&D activities, from drug target identification to clinical development and registration globally. Dr. Amado joined GSK in 2008 as
Vice President of Clinical Development, and served in positions of increasing responsibility, including Senior Vice President and Head of Oncology Clinical Development. He oversaw the development and
registration globally of over fifteen novel indications across six products and led the development of a pipeline of products in novel areas of cancer biology. Prior to joining GSK, Dr. Amado
was Executive
Director of Therapeutic Oncology at Amgen from 2003 to 2008 where he was responsible for development activities of several assets. Dr. Amado trained as a Hematologist/Oncologist at the
University of California, Los Angeles, where he remained as faculty for eight years until joining Amgen in 2003. He holds an M.D. from the University of Seville School of Medicine, and performed his
residency in Internal Medicine at Michael Reese Hospital, a University of Chicago Affiliated Hospital, and his fellowship in Hematology/Oncology at the University of California, Los Angeles.
Adrian Rawcliffe.
Mr. Rawcliffe has served as our Chief Financial Officer since March 2015 and leads our financial strategy and
operations, as
well as Investor Relations, corporate communications, global IT and facilities. He has 17 years of experience within the pharmaceutical industry and most recently served as Senior Vice
President, Finance of GSK's North American Pharmaceuticals business. Mr. Rawcliffe currently serves as a non-executive director of WAVE Life Sciences (NASDAQ: WVE). Mr. Rawcliffe joined
GSK in 1998 and his other senior roles at the company included Senior Vice President Worldwide Business Development and R&D Finance, where he was responsible for all business development and finance
activities for GSK's Pharmaceuticals R&D business and Managing Partner and President of SR One Ltd, GSK's venture-capital business. Mr. Rawcliffe qualified as a chartered accountant with
PwC and holds a B.Sc. degree in Natural Sciences from the University of Durham, U.K..
Gwendolyn Binder-Scholl, Ph.D.
Dr. Binder-Scholl has served as our Chief Technology Officer since February 2016. Prior to assuming
this
position, Dr. Binder-Scholl was Executive Vice President of Adaptimmune LLC and Head of Translational Sciences. She has also previously served in senior clinical, regulatory and
operational roles in the company since March 2011. As CTO, Dr. Binder-Scholl leads our Manufacturing Development and Translational Science operations and oversees the UK research team. Her
strategic focus is on optimizing the therapeutic potential of Adaptimmune's product through directed translational research across correlative clinical and manufacturing development. As well as her
leadership of manufacturing operations, she oversees process development and the co-ordination of Research operations more broadly, integrating pipeline and second generation T-cell research with
clinical outcomes. Dr. Binder-Scholl has 14 years of industry and academic experience in cellular and gene therapy translational research and development, with prior roles including
Director of Translational Research Operations at the University of Pennsylvania from 2006 to 2011 and Director of Scientific Affairs at Virxsys Corporation. Dr. Binder-Scholl is a biochemistry
and molecular biology graduate of Wells College with a Ph.D. in cellular and molecular medicine from Johns Hopkins University.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics applicable to all of our employees, officers and directors. The Code of Business Conduct
and Ethics is available on our
website. Any amendment to this code, or any waivers of its requirements, will be disclosed on our website.
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Committees of our Board of Directors
Our Board of Directors has three standing committees: the Audit Committee; the Remuneration Committee; and the Corporate Governance and
Nominating Committee. The charters for each of these committees can be found on our website.
|
|
|
|
|
|
|
Name
|
|
Audit
|
|
Remuneration
|
|
Corporate Governance
and Nominating
|
David M. Mott
|
|
|
|
Chair
|
|
Chair
|
Lawrence M. Alleva
|
|
Chair
|
|
|
|
|
Ali Behbahani, M.D.
|
|
|
|
|
|
X
|
Barbara Duncan
|
|
X
|
|
|
|
|
Giles Kerr
|
|
X
|
|
|
|
X
|
Elliott Sigal, Ph.D, M.D.
|
|
|
|
|
|
X
|
Peter Thompson, M.D.
|
|
|
|
X
|
|
|
Tal Zaks, Ph.D, M.D.
|
|
|
|
X
|
|
|
Audit Committee
Our Audit Committee is currently composed of Mr. Alleva, Ms. Duncan and Mr. Kerr, with Mr. Alleva serving as
chairman of the committee. Our Board of Directors has determined that each member of the Audit Committee meets the independence requirements of Rule 10A-3 under the Exchange Act and the
applicable listing standards of The NASDAQ Global Market. Our Board of Directors has determined that each of Mr. Alleva, Ms. Duncan and Mr. Kerr is an "audit committee financial
expert" within the meaning of SEC regulations and the applicable listing standards of The NASDAQ Global Market. The Audit Committee held eight meetings during 2016. The Audit Committee's
responsibilities include:
-
-
overseeing and reviewing our internal controls, accounting policies and financial reporting and provide a forum through which our independent
registered public accounting firm reports;
-
-
meeting at least once a year with our independent registered public accounting firm without executive Board members present;
-
-
overseeing the activities of our independent registered public accounting firm, including their appointment, reappointment or removal, as well
as monitoring of their objectivity and independence;
-
-
considering the fees paid to the independent registered public accounting firm and determine whether the fee levels for non-audit services,
individually and in aggregate, relative to the audit fee are appropriate to enable an effective and high quality audit to be conducted; and
-
-
maintaining oversight over related person transactions to ensure that they are appropriately disclosed and to make recommendations to the Board
of Directors regarding authorization, and for considering noteworthy questions of possible conflicts of interest involving directors.
Remuneration Committee
Our Remuneration Committee is currently composed of Mr. Mott, Dr. Thompson and Dr. Zaks, with Mr. Mott serving as
chairman of the committee. Our Board of Directors has determined that each member of the Remuneration Committee is "independent" as defined under the applicable listing standards of The NASDAQ Global
Market. The Remuneration Committee held five meetings during 2016. The Remuneration Committee's responsibilities include:
-
-
reviewing corporate goals and objectives relevant to the compensation of our senior executive officers and making recommendations concerning
such objectives to the Board of Directors;
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-
-
appointing, compensating and overseeing the work of any compensation consultant or other advisor retained by the Remuneration Committee;
-
-
reviewing the performance of our senior executive officers and our Chief Executive Officer who is our sole executive director;
-
-
setting the policy for the remuneration of the senior executive officers and executive directors and the basis of their service and employment
agreements with due regard to the interests of the shareholders;
-
-
reviewing and approving the compensation of our senior executive officers other than our Chief Executive Officer;
-
-
making recommendations to the Board of Directors with respect to the compensation of the Chief Executive Officer and the Non-Executive
Directors;
-
-
determining the allocation of awards under our share option schemes to our senior executive officers, making recommendations to the Board of
Directors with respect to the allocation of option awards to our Chief Executive Officer and setting the overall allocation of option awards to our employees and consultants;
-
-
producing a directors' remuneration policy and an annual directors' remuneration report to be included in our U.K. statutory annual report and
financial statements; and
-
-
producing a remuneration committee report on executive compensation when required by the rules of the SEC to be included in our annual proxy
statement.
No
individual will participate in discussion or decisions concerning his or her own remuneration. None of the members of our Remuneration Committee has at any time during the prior three
years been one of our officers or employees. None of our executive officers currently serves, or in the past fiscal year
has served, as a member of our Remuneration Committee or the remuneration committee of any entity that has one or more executive officers serving on our Board of Directors.
Corporate Governance and Nominating Committee
Our Corporate Governance and Nominating Committee is composed of Mr. Mott, Dr. Behbahani, Mr. Kerr and Dr. Sigal,
with Mr. Mott serving as chairman of the committee. Our Board of Directors has determined that each member of the Corporate Governance and Nominating Committee is "independent" as defined under
the applicable listing standards of The NASDAQ Global Market. The Corporate Governance and Nominating Committee held four meetings during 2016. The Nominating and Corporate Governance Committee's
responsibilities include:
-
-
reviewing the structure, size and composition of the Board of Directors;
-
-
recommending to our Board of Directors individuals to be nominated for election as directors and to each of the committees of our Board;
-
-
supervising the selection and appointment process of directors;
-
-
making recommendations to the Board of Directors with regard to any changes and using an external search consultant if considered appropriate;
-
-
appointing, compensating and overseeing the work of any search firm or other advisor retained by the Committee;
-
-
making final recommendations to the Board of Directors with respect to new appointments, which includes meeting the candidate prior to
approving the appointment;
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Table of Contents
-
-
overseeing the induction of new directors and providing appropriate training to the Board of Directors during the course of the year in order
to ensure that they have the knowledge and skills necessary to operate effectively; and
-
-
evaluating the performance of the Board of Directors, both on an individual basis and for the Board of Directors as a whole, taking into
account such factors as attendance record, contribution during board meetings and the amount of time that has been dedicated to board matters during the course of the year.
Independence of our Board of Directors
Our Board of Directors has determined that all of our directors, other than Mr. Noble, qualify as "independent" directors in accordance
with the independence requirements under the applicable listing standards of The NASDAQ Global Market as well as applicable rules promulgated by the SEC. Mr. Noble is not considered independent
because he is an employee of the Company.
Our
Board of Directors has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. In making these determinations, our Board of Directors reviewed and discussed information provided by the directors and us with regard to each
director's business and
personal activities and relationships as they may relate to us and our management. There are no family relationships among any of our directors or executive officers.
Our
independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All of the committees of our Board of Directors are comprised
entirely of directors determined by the Board of Directors to be independent.
Board Oversight of Risk Management
Our management is primarily responsible for assessing and managing risk, while our Board of Directors is responsible for overseeing management's
execution of its responsibilities. Our Board of Directors is supported by its committees in fulfillment of this responsibility. For example, our Audit Committee focuses on our overall financial risk
by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. Our Remuneration Committee strives to create incentives
that encourage an appropriate level of risk-taking consistent with our business strategy. Finally, our Corporate Governance and Nominating Committee ensures that our governance policies and procedures
are appropriate in light of the risks we face. Our Chief Executive Officer, Mr. Noble, serves on our Board of Directors; however, he does not serve as Chairman of the Board of Directors.
Mr. Mott serves as Chairman of the Board of Directors.
Director Nomination Process
The Corporate Governance and Nominating Committee of the Board of Directors reviews possible candidates for the Board and recommends the
nominees for Directors to the Board for approval. The criteria that the Corporate Governance and Nominating Committee and the Board of Directors look for in determining candidates for election to the
Board, include, among others:
-
-
the highest personal and professional ethics, integrity and values;
-
-
commitment to representing the long-term interests of the Company's shareholders;
-
-
independence under the standards promulgated by The NASDAQ Global Market; and
-
-
ability to dedicate the time and resources sufficient to ensure the diligent performance of his or her duties on our behalf, including
attending all Board of Directors and applicable committee meetings.
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Table of Contents
It
is the Corporate Governance and Nominating Committee's policy that the composition of the Board of Directors reflect a range of talents, ages, skills, character, diversity and
expertise, particularly in the areas of accounting and finance, management, domestic and international markets, leadership, corporate governance, and biotechnology and related industries, sufficient
to provide sound and prudent guidance with respect to the operations and interests of the Company.
The
Corporate Governance and Nominating Committee's policy does not contemplate any disparate treatment of management nominees versus those put forth by our shareholders. To date, the
Committee has worked with Egon Zehnder, an independent global board and executive search firm, to assist in identifying and evaluating potential nominees against role specifications.
Shareholder Recommendations and Nominees
It is the policy of our Board of Directors that the Nominating and Corporate Governance Committee consider both recommendations and nominations
for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association and applicable laws, including the rules and regulations of the
SEC. Shareholders may recommend director nominees for consideration by the Corporate Governance and Nominating
Committee by writing to our Company Secretary at the Company's registered office address and providing evidence of the shareholder's ownership of our ordinary shares and/or ADSs, the nominee's name,
home and business address and other contact information, as well as the nominee's detailed biographical data and qualifications for board membership, and information regarding any relationships
between the recommended candidate and the Company within the last three fiscal years.
Following
verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the
Corporate Governance and Nominating Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and
other requirements for shareholder proposals at our annual general meeting. Any vacancies on the Board of Directors occurring between our annual general meetings of shareholders may be filled by
persons selected by a majority of the directors then in office, and any director so elected will serve until the next shareholders' meeting at which directors are elected when such director will offer
himself/herself for re-election.
Shareholder Communication with the Board of Directors
It is the policy of our Board of Directors to allow shareholders to communicate with its members. Communications may be addressed to the entire
board or to any individual director. All such communications will initially be received and processed by our Company Secretary. Spam, junk mail, advertisements and threatening, hostile, illegal and
similar unsuitable communications will not be delivered to the Board. Shareholders can contact members of the Board of Directors, by writing care of our Company Secretary at the Company's registered
office address.
Section 16(A) Beneficial Ownership Reporting Compliance
All of our directors, executive officers and any greater than 10 percent shareholders are required by Section 16(a) of the
Exchange Act to file with the SEC initial reports of ownership and reports of changes in ownership of shares and to furnish us with copies of such reports. Based on a review of those reports and
written representations that no other reports were required, we believe that our Section 16 directors and executive officers complied with all of their applicable Section 16(a) filing
requirements.
S-16
Table of Contents
Executive and Director Compensation
Executive Compensation
This section discusses the material components of the executive compensation program offered to our named executive officers, or NEOs,
identified below. For the year ended December 31, 2016, these NEOs were:
-
-
James Noble, Chief Executive Officer;
-
-
Adrian Rawcliffe, Chief Financial Officer; and
-
-
Rafael Amado, Chief Medical Officer.
We
are an "emerging growth company" as that term is used in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and have elected to comply with the reduced compensation
disclosure requirements available to emerging growth companies under the JOBS Act.
2016 Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Option
awards
($)(4)
|
|
Non-equity
incentive plan
compensation
($)(5)
|
|
All other
compensation
($)
|
|
Total
($)
|
|
James Noble(1)
|
|
|
2016
|
|
|
388,395
|
(3)
|
|
1,411,405
|
|
|
97,099
|
|
|
20,465
|
|
|
1,917,364
|
|
Chief Executive Officer
|
|
|
2015
|
|
|
442,080
|
(3)
|
|
|
|
|
294,720
|
|
|
24,621
|
|
|
761,421
|
|
Adrian Rawcliffe
|
|
|
2016
|
|
|
435,000
|
|
|
674,104
|
|
|
117,450
|
|
|
34,262
|
(6)
|
|
1,260,816
|
|
Chief Financial Officer
(2)
|
|
|
2015
|
|
|
336,452
|
|
|
2,379,693
|
|
|
151,403
|
|
|
42,387
|
(7)
|
|
2,909,935
|
|
Rafael Amado
|
|
|
2016
|
|
|
430,000
|
|
|
674,104
|
|
|
116,100
|
|
|
20,290
|
(8)
|
|
1,240,494
|
|
Chief Medical Officer(2)
|
|
|
2015
|
|
|
331,358
|
|
|
2,379,693
|
|
|
149,111
|
|
|
31,949
|
(9)
|
|
2,892,111
|
|
-
(1)
-
Mr. Noble
also serves as a director but receives no additional compensation for this service.
-
(2)
-
Mr. Rawcliffe
and Dr. Amado commenced employment with us on March 16, 2015. The 2015 salary shown for Mr. Rawcliffe represents the
pro-rated amount of his base salary of $425,000 and the 2015 salary shown from Dr. Amado represents the pro-rated amount of his base salary of $418,200. The 2015 non-equity incentive plan
compensation amounts shown for Mr. Rawcliffe and Dr. Amado are based on 45% of their pro-rated 2015 base salaries.
-
(3)
-
Compensation
paid to Mr. Noble is denominated in Pounds Sterling. For purposes of this table, all 2016 amounts have been converted based on the Pound
Sterling/U.S. Dollar exchange rate in effect as of December 31, 2016 (£1/$1.233) and all 2015 amounts have been converted based on the Pound Sterling/U.S. Dollar exchange rate in
effect as of December 31, 2015 (£1/$1.4736).
-
(4)
-
See
Item 7"Share based compensation" and in Note 2 (r) and Note 10 "Share based compensation" to our audited consolidated financial
statements, in our Form 10-K for an explanation of the assumptions used in the calculation of these amounts.
-
(5)
-
Amount
represents sums paid under our annual cash bonus program.
-
(6)
-
Consists
of Company payments in the amount of (i) $16,962.14 to subsidize city of Philadelphia taxes, (ii) $5,300 in matching contributions under the
401(k) plan and (iii) $12,000 to private health care insurance on behalf of Mr. Rawcliffe.
-
(7)
-
Consists
of Company payments in the amount of (i) $13,188.94 to subsidize city of Philadelphia taxes, (ii) $20,198 in matching contributions under the
401(k) plan and (iii) $9,000 to private health care insurance on behalf of Mr. Rawcliffe.
-
(8)
-
Consists
of Company payments in the amount of (i) $14,989.90 to subsidize city of Philadelphia taxes and $5,300 in matching contributions under the 401(k)
plan.
S-17
Table of Contents
-
(9)
-
Consists
of Company payments in the amount of (i) $11,750.66 to subsidize city of Philadelphia taxes and (ii) $20,198 in matching contributions under
the 401(k) plan.
Narrative Disclosure to Summary Compensation Table
The primary elements of compensation for our NEOs are base salary, annual cash bonuses and long-term, equity-based compensation awards. Our NEOs
also participate in employee benefit plans and programs that we offer to our other full-time employees on the same basis and have from time to time received relocation or other expense reimbursements
from us.
Base Salary.
Our NEOs receive base salary to compensate them for the satisfactory performance of duties to our company. The base salary
payable to
each NEO is intended to provide a fixed component of compensation reflecting the executive's skill set, experience, role and responsibilities.
Our
Remuneration Committee periodically reviews NEO base salaries in consultation with management and Willis Towers Watson, an independent compensation consultant, to determine whether
any adjustments are necessary or appropriate. The following table shows the annual base salaries of our NEOs for 2016 and 2017. All annual base salary increases were effective January 1 of the
given year.
|
|
|
|
|
|
|
|
Name
|
|
2016
Annual Base
Salary ($)
|
|
2017
Annual Base
Salary ($)
|
|
James Noble(1)
|
|
|
388,395
|
|
|
502,854
|
|
Adrian Rawcliffe
|
|
|
435,000
|
|
|
443,700
|
|
Rafael Amado
|
|
|
430,000
|
|
|
442,900
|
|
-
(1)
-
Compensation
paid to Mr. Noble is denominated in pounds sterling. For purposes of this table, 2016 and 2017 amounts for Mr. Noble in the table above
have been converted based on the pound sterling/U.S. dollar exchange rate in effect as of December 31, 2016 (£1/$1.233).
Annual Cash Bonuses.
Our NEOs have the opportunity to earn annual performance bonuses based on the achievement of short-term performance
goals, and
which are expressed as a percentage of base salary.
Our
Remuneration Committee generally determines annual bonuses for our NEOs, and the Board determines the annual bonus for our CEO, subject to: (i) objective criteria set forth by
the Board of Directors or an authorized delegate thereof on an annual basis; and (ii) the overall performance of the Company and the Group. The initial target annual bonus with effect from
January 1, 2017 for Mr. Noble
is fifty percent (50%) of his base salary and for each of Mr. Rawcliffe and Dr. Amado is forty-five percent (45%) of his base salary.
Equity-Based Compensation.
We have historically offered share options to our employees, including our NEOs, as the long-term incentive
component of
our compensation program. We typically grant options to employees as soon as practicable after they commence employment with us and may thereafter grant additional options in the discretion of our
Board of Directors or Remuneration Committee. Our share options allow employees to purchase our ordinary shares at a price equal to the fair market value of our ordinary shares on the date prior to
the grant date. Our share options typically vest as to 25% of the shares subject to the option on the first anniversary of the grant date and in monthly installments during the three-year period
thereafter, subject to the holder's continued service with us. From time to time, our Board of Directors or Remuneration Committee may also construct alternate vesting schedules as it determines in
its sole discretion.
S-18
Table of Contents
We
awarded share options to our NEOs during 2016 in the following amounts and subject to vesting in accordance with our standard time-based vesting schedule described above:
|
|
|
|
|
Named Executive Officer
|
|
2016 Options
Granted (#)
|
|
James Noble
|
|
|
1,968,016
|
|
Adrian Rawcliffe
|
|
|
939,948
|
|
Rafael Amado
|
|
|
939,948
|
|
Retirement, Health, Welfare and Additional Benefits.
Our NEOs are eligible to participate in our employee benefit plans and programs,
including
medical and dental benefits and life insurance, to the same extent as our other full-time employees, subject to the terms and eligibility requirements of those plans. We also sponsor a 401(k) defined
contribution plan in which our NEOs based in the United States may participate, subject to limits imposed by the Internal Revenue Code, to the same extent as all of our other full-time employees.
During 2016, we made discretionary employer matching contributions equal to 50% of the first 4% of the elective contributions made by participants in the 401(k) plan. These matching contributions are
subject to a vesting schedule. In addition, we made a 3% discretionary Safe Harbor match which is fully vested as of the date on which the contribution is made. We believe that providing a vehicle for
tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our NEOs, in accordance
with our compensation policies. We do not typically provide any perquisites or special personal benefits to our NEOs, but have from time to time reimbursed amounts associated with relocation and other
expenses for our NEOs.
Outstanding Equity Awards at 2016 Fiscal Year-End
The following table sets forth information regarding equity awards held by our named executive officers as of December 31, 2016. All
options are options to purchase ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
First date some
or all options
are exercisable
|
|
Number of
securities
underlying
unexercised
options (#)
exercisable
|
|
Number of
securities
underlying
unexercised
options(#)
unexercisable(1)
|
|
Option
exercise
Price ($)(2)
|
|
Option
expiration
date
|
|
James Noble
|
|
|
3/31/2014
|
(3)
|
|
1,055,000
|
|
|
280,000
|
|
|
0.1671
|
|
|
03/30/2024
|
|
|
|
|
3/31/2015
|
(4)
|
|
219,000
|
|
|
219,100
|
|
|
0.1671
|
|
|
03/30/2024
|
|
|
|
|
12/19/2015
|
(5)
|
|
1,749,800
|
|
|
1,750,200
|
|
|
0.5308
|
|
|
12/19/2024
|
|
|
|
|
01/18/2017
|
(6)
|
|
0
|
|
|
1,968,016
|
|
|
1.2717
|
|
|
01/18/2026
|
|
Adrian Rawcliffe
|
|
|
03/16/2016
|
(7)
|
|
1,575,000
|
|
|
2,025,000
|
|
|
0.74
|
|
|
03/16/2025
|
|
|
|
|
01/18/2017
|
(8)
|
|
0
|
|
|
939,948
|
|
|
1.2717
|
|
|
01/18/2026
|
|
Rafael Amado
|
|
|
03/16/2016
|
(7)
|
|
1,575,000
|
|
|
2,025,000
|
|
|
0.74
|
|
|
03/16/2025
|
|
|
|
|
01/18/2017
|
(8)
|
|
0
|
|
|
939,948
|
|
|
1.2717
|
|
|
01/18/2026
|
|
-
(1)
-
Vesting
of all options is subject to continued service through the applicable vesting date.
-
(2)
-
The
exercise price was converted from pounds sterling to U.S. dollars based on the noon buying rate of the Federal Reserve Bank of New York for the U.S. dollar on
the date of grant. The actual exercise price will be the pounds sterling amount regardless of the exchange rate on the date of grant or of exercise.
-
(3)
-
This
option was partially vested and the remainder will vest in annual installments on the thirty first of March from March 31, 2017 through March 31,
2018.
-
(4)
-
This
option was partially vested and 109,500 ordinary shares will vest on April 14, 2017 and 190,600 ordinary shares will vest on April 14, 2018.
S-19
Table of Contents
-
(5)
-
This
option was partially vested and the remainder will vest in monthly installments of 72,900 ordinary shares on the nineteenth of each month from March 19,
2017 through November 19, 2018, and in one installment of 73,500 ordinary shares on December 19, 2018.
-
(6)
-
This
option partially vests as to 492,004 ordinary shares on January 18, 2017 and the remainder will vest in monthly installments of 41,000 ordinary shares on
the eighteenth of each month from February 18, 2017 through December 18, 2019, and in one installment of 41,012 ordinary shares on January 18, 2020.
-
(7)
-
This
option was partially vested and the remainder will vest in monthly installments of 75,000 ordinary shares on the sixteenth of each month from April 16,
2016 through March 16, 2019.
-
(8)
-
This
option partially vests as to 234,987 ordinary shares on January 18, 2017, and the remainder will vest in monthly installments of 19,582 ordinary shares
on the eighteenth of each month from February 18, 2017 through December 18, 2019, and in one installment of 19,591 ordinary shares on January 18, 2020.
Employment Agreements
We have entered into a service agreement with our Chief Executive Officer and employment agreements with each of our NEOs. Certain key terms of
those agreements and our executive severance policy are described below.
We entered into a service agreement with Mr. Noble dated March 10, 2017 that sets forth the terms and conditions under which
Mr. Noble serves as our Chief Executive Officer and as a director. The employment shall continue until terminated by either party giving no less than nine months' written notice.
Mr. Noble's current annual base salary, effective January 1, 2017, is £407,830, subject to review, and Mr. Noble is eligible for an annual bonus at the discretion of
the Company subject to the achievement of certain performance criteria.
In
addition, we may terminate the agreement immediately by notice if Mr. Noble (i) commits a material breach under the agreement, (ii) is guilty of conduct tending
to bring him or the company into disrepute, (iii) becomes bankrupt, (iv) fails to perform his duties to a satisfactory standard, (v) is disqualified from being a director by
reason of any order made under the Companies Directors Disqualification Act 1986 or any other enactment, or (vi) is convicted of an offence under any statutory enactment or regulation
(including the criminal offence of insider dealing under the Criminal Justice
Act 1993 or any similar conviction in the United States, but excluding a motoring offence for which no custodial sentence is given).
Mr. Noble
is eligible to participate in the Company's share option schemes, Group Personal Pension Scheme and in the private health care scheme and permanent health insurance
schemes which the Company or any Group Company may maintain for the benefit of its senior executives.
Mr. Noble's
service agreement contains non-solicitation and non-competition provisions for a twelve month period as well as confidentiality provisions.
The employment agreements for Mr. Rawcliffe and Dr. Amado were entered into on March 10, 2017. The agreements have no
specific term and establish an at-will employment relationship. Mr. Rawcliffe's current annual base salary, effective January 1, 2017, is $443,700 and Dr. Amado's current annual
base salary is $442,900, subject to periodic review and adjustment by the Company, and their annual target bonus opportunities are 45% of their annual base salaries subject to the achievement of
certain performance criteria.
S-20
Table of Contents
Mr. Rawcliffe
and Dr. Amado are eligible to participate in the equity plans sponsored and/or maintained by the Company and its affiliates from time to time, in accordance
with the terms of any such plans, at the sole and absolute discretion of the Company and the Board of Directors.
The
Company may terminate either of their employment with or without cause and without notice, but Mr. Rawcliffe and Dr. Amado are required to provide at least
60 days' advance written notice to us if he is terminating his employment. In the event of a termination of his employment by the Company without Cause or by Mr. Rawcliffe or
Dr. Amado for good reason, any portion of his initial award of 3,600,000 share options that was granted on March 16, 2015, which is unvested as of the date of termination shall vest and
immediately become exercisable on the date of termination. The agreements contain non-solicitation and non-competition provisions for a twelve month period as well as confidentiality provisions.
The Company's executive severance policy is applicable in relation to our NEOs. If the employment of any of our NEOs is terminated by the
Company without cause, or if he resigns for good reason, then the NEO will be entitled under his employment agreement and the executive severance policy to receive a severance payment equal to his
annual base salary for nine months and to payment of premiums for continuation of healthcare benefits for a period of nine months following such termination. In addition, at the sole discretion of the
Board (or an authorized committee thereof), the NEO may be paid a lump sum cash amount equal to his target annual performance bonus for the year of termination, prorated based on the number of
calendar days he was employed during the year. Furthermore, if the employment of any of our NEOs is terminated without cause or he resigns for good reason within 12 months following a change in
control, he will be entitled to receive a severance payment equal to his annual base salary for 12 months, payment of premiums for continuation of healthcare benefits for a period of
12 months, a lump sum cash amount equal to the full target performance bonus for the year of termination, and accelerated vesting of any unvested and outstanding equity awards. In order to
receive severance benefits under the employment agreement and executive severance policy, the NEO is required to execute a release of claims in favor of the Company and comply with certain other
post-employment covenants set forth in his employment agreement.
Retirement Plans
We maintain a tax-qualified retirement plan for our U.S.-based employees that provides eligible employees with an opportunity to save for
retirement on a tax-advantaged basis. We make discretionary employer matching contributions equal to 50% of the first 4% of the elective contributions made by participants in the 401(k) plan. These
company matching contributions are subject to a vesting schedule. In addition, we make a 3% discretionary Safe Harbor matching contribution, which is fully vested as of the date of the contribution.
Pre-tax contributions are allocated to each participant's individual account and are then invested in selected investment alternatives according to the participant's directions. The 401(k) plan is
intended to qualify under Sections 401(a) and 501(a) of the Internal Revenue Code. As a tax-qualified retirement plan, contributions to the
401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan.
In the U.K., we maintain a defined contribution plan that provides employees with an opportunity to contribute a portion of their monthly salary
into the plan. If an employee elects to participate in the plan, there is a minimum employee contribution of 5% of monthly salary; there is no maximum limit to the employee contribution. The employee
contribution to this plan is matched by us up to a maximum of 5% of monthly salary. All U.K. employees are eligible to participate in this plan. The method by which our U.K. employees participate is
through a so-called "salary exchange" pursuant to which employees agree to a reduction in monthly salary in an amount equal to the defined contribution plan election. The amount of the reduction,
together with the tax and national insurance savings to the employee and us as a result of the salary reduction, are contributed into the plan in addition to the 5% matching contribution described
above.
S-21
Table of Contents
Director Compensation
The Board has the discretion to pay our Non-Executive Directors for their Board and committee service in the form of cash fees or share options
or a mixture of cash fees and share options. Our remuneration arrangements for Non-Executive Directors during 2016 comprised an award of a fixed number of share options, plus an additional number of
share options or cash payment at the director's election. The option awards and cash payments were established at competitive levels taking into account peer data from comparable companies provided in
a benchmarking survey undertaken by Radford consultants and are compliant with the last Directors' Remuneration policy approved by our shareholders.
Our
Non-Executive Directors do not receive any pension from the Company nor do they participate in any performance-related incentive plans. Our Non-Executive Directors participate in the
Group's long-term incentive plans on terms similar to those used for Executive Directors. In accordance with
their Letters of Appointment, all Non-Executive Directors (except for Barbara Duncan, Giles Kerr and Tal Zaks) were granted an annual award of share options on August 11, 2016.
Ms. Duncan, Mr. Kerr and Dr. Zaks were awarded share options on joining the Board of Directors and relevant committees during 2016. Each Non-Executive Director is entitled to
receive an annual award of share options, with such number to be determined by the Board.
In
determining option awards, the Board of Directors works within benchmarking guidelines provided by remuneration consultants. All options are granted with an exercise price that is no
lower than the fair market value of an ordinary share on the date prior to the date of grant and options awarded to new directors become exercisable over three years while options awarded annually are
exercisable on the first anniversary of the date of grant.
2016 Director Compensation Table
The table below shows the compensation paid to our Non-Executive Directors during the year ended December 31, 2016. The compensation paid
to James Noble, our Chief Executive Officer and an executive director is set forth in the "
Summary Compensation Table
" above.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees
Earned
or paid in
cash$(1)
|
|
Option
awards($)(2)
|
|
Total ($)
|
|
David M. Mott(3)
|
|
|
|
|
|
141,063
|
|
|
141,063
|
|
Lawrence Alleva(4)
|
|
|
|
|
|
144,945
|
|
|
144,945
|
|
Ali Behbahani(4)
|
|
|
|
|
|
136,016
|
|
|
136,016
|
|
Barbara Duncan(5)
|
|
|
|
|
|
295,099
|
|
|
295,099
|
|
Giles Kerr(6)
|
|
|
7,166
|
|
|
134,489
|
|
|
141,655
|
|
Jonathan Knowles(7)
|
|
|
|
|
|
160,085
|
|
|
160,085
|
|
Ian Laing(8)
|
|
|
17,209
|
|
|
106,123
|
|
|
123,332
|
|
Elliott Sigal(9)
|
|
|
|
|
|
136,016
|
|
|
136,016
|
|
Peter Thompson(10)
|
|
|
|
|
|
137,180
|
|
|
137,180
|
|
Tal Zaks(11)
|
|
|
5,217
|
|
|
134,489
|
|
|
139,706
|
|
-
(1)
-
The
fees paid to Mr. Kerr and Mr. Laing were denominated in pounds sterling. For purposes of this table, the 2016 amounts paid to those Directors have
been converted based on the pound sterling/U.S. dollar exchange rate in effect as of December 31, 2016(£1/$1.233). All fees paid represent pro rated amounts as Mr. Kerr
joined the Board on November 1, 2016, Dr, Zaks joined the Board on November 16, 2016 and Mr. Laing was paid effective from August 11, 2016 and resigned from the Board on
December 31, 2016.
S-22
Table of Contents
-
(2)
-
See
Item 7"Share based compensation" and in Note 2 (r) and Note 10 "Share based compensation" to our audited consolidated
financial statements, in our Form 10-K for an explanation of the assumptions used in the calculation of these amounts.
-
(3)
-
Mr. Mott
received an annual option award covering 191, 410 ordinary shares on August 11, 2016.
-
(4)
-
Mr. Alleva
received an annual option award covering 196,678 ordinary shares on August 11, 2016.
-
(5)
-
Ms. Duncan
received an initial option award covering 332,776 ordinary shares on June 23, 2016.
-
(6)
-
Mr. Kerr
received an initial option award covering 288,000 ordinary shares on November 29, 2016.
-
(7)
-
Dr. Knowles
received an annual option award covering 217,222 ordinary shares on August 11, 2016.
-
(8)
-
Mr. Laing
received an annual option award covering 144,000 ordinary shares on August 11, 2016.
-
(9)
-
Dr. Sigal
received an annual option award covering 184,562 ordinary shares on August 11, 2016.
-
(10)
-
Dr. Thompson
received an annual option award covering 186,142 ordinary shares on August 11, 2016.
-
(11)
-
Dr. Zaks
received an initial option award covering 288,000 ordinary shares on November 29, 2016.
In
2016, our Board of Directors met 14 times. With the exception of Ms. Duncan, Mr. Kerr and Dr. Zaks, all of our directors attended a minimum of 75% of the meetings
of our Board of Directors and its committees during their membership on the board. Ms. Duncan was first appointed in late June and has attended six meetings in 2016. Mr. Kerr was
appointed on November 1, 2016, and attended one meeting in 2016. Dr. Zaks was appointed on November 14, 2016, and was unable to attend the final board meeting of 2016; however, he
has attended board and Remuneration Committee meetings in January through March 2017.
Deeds of Indemnification
We do not have any third party indemnification provisions in place for the benefit of one or more of our directors. However, we agree to use all
reasonable endeavors to provide and maintain appropriate directors' and officers' liability insurance (including ensuring that premiums are properly paid) for their benefit for so long as any claims
may lawfully be brought against them.
Non-Executive Director Appointment Letters
We have entered into letters of appointment with each of our Non-Executive Directors. These letters set forth the main terms on which each of
our Non-Executive Directors serve on our Board of Directors. Continued appointment under the letter is contingent on continued satisfactory performance as a member of the Board of Directors and as a
member of a committee, if relevant, as well as being re-elected at the annual general meetings in accordance with the Articles of Association of the Company. The appointment may be terminated by the
Company or the Non-Executive Director with a three months' prior written notice. Upon termination, the Non-Executive Director is entitled to a pro-rata amount of the annual fee (if applicable) that is
outstanding and payable up to the date of termination, and reimbursement in the normal way of any expenses properly incurred before that date.
S-23
Table of Contents
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of
March 20, 2017, by:
-
-
each beneficial owner of more than 5% of our ordinary shares
-
-
each of our named executive officers and directors;
-
-
all of our executive officers and directors as a group.
Beneficial
ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or
shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or
other rights held by such person that are currently exercisable or will become exercisable within 60 days of March 20, 2017 are considered outstanding. These ordinary shares, however,
are not included in the computation of the percentage ownership of any other person. Applicable percentage ownership is based on 424,775,092 ordinary shares outstanding as of March 20, 2017.
Unless
otherwise indicated, the address for each of the shareholders listed in the table below is c/o Adaptimmune Therapeutics plc, 101 Park Drive, Milton Park, Oxfordshire
OX14 4RY, United Kingdom.
|
|
|
|
|
|
|
|
|
|
Ordinary Shares
Beneficially Owned
|
|
Name of Beneficial Owner
|
|
Number
|
|
Percent
|
|
Greater than 5% Shareholders
|
|
|
|
|
|
|
|
New Enterprise Associates(1)
|
|
|
59,286,000
|
|
|
13.96
|
|
FMR LLC(2)
|
|
|
42,391,084
|
|
|
9.98
|
|
OrbiMed Private Investments V, L.P.(3)
|
|
|
29,753,404
|
|
|
7.00
|
|
Ian Laing(4)
|
|
|
29,346,675
|
|
|
6.91
|
|
Nicholas Cross(5)
|
|
|
29,322,178
|
|
|
6.90
|
|
Immunocore Limited
|
|
|
26,976,700
|
|
|
6.35
|
|
Capital World Investors(6)
|
|
|
26,882,916
|
|
|
6.33
|
|
George Robinson(7)
|
|
|
22,896,520
|
|
|
5.39
|
|
Named Executive Officers and Directors
|
|
|
|
|
|
|
|
James Noble(8)
|
|
|
15,466,404
|
|
|
3.64
|
|
Rafael Amado, M.D(9).
|
|
|
2,359,315
|
|
|
0.56
|
|
Adrian Rawcliffe(10)
|
|
|
2,263,315
|
|
|
0.53
|
|
David Mott(11)
|
|
|
59,449,229
|
|
|
14.00
|
|
Ali Behbahani, M.D.(12)
|
|
|
59,441,682
|
|
|
13.99
|
|
Peter Thompson, M.D.(13)
|
|
|
29,909,086
|
|
|
7.04
|
|
Elliott Sigal, M.D., Ph.D.(14)
|
|
|
673,012
|
|
|
0.16
|
|
Lawrence M. Alleva(15)
|
|
|
382,707
|
|
|
0.09
|
|
Barbara Duncan(16)
|
|
|
|
|
|
|
|
Giles Kerr(16)
|
|
|
|
|
|
|
|
Tal Zaks, Ph.D.(16)
|
|
|
|
|
|
|
|
All Executive Officers and Directors as a Group (14 persons
)
|
|
|
117,129,449
|
|
|
27.57
|
%
|
-
(1)
-
Consists
of (i) 59,269,000 ordinary shares directly held by New Enterprise Associates 14, L.P., or NEA 14 and (ii) 17,000 ordinary shares
directly held by NEA Ventures 14, L.P., or NEA Ven 14. These ordinary shares are represented by ADSs. The shares directly held by NEA 14 are indirectly held by NEA
Partners 14, L.P., or NEA Partners 14, the sole general partner of NEA 14, NEA 14 GP, LTD, or NEA 14 LTD, the sole general partner
S-24
Table of Contents
of
NEA Partners 14 and each of the individual Directors of NEA 14 LTD. The individual Directors, or collectively, the Directors of NEA 14 LTD, are M. James Barrett,
Peter J. Barris, Forest Baskett, Ryan D. Drant, Anthony A. Florence, Jr., Patrick J. Kerins, Krishna "Kittu" Kolluri, C. Richard Kramlich, David M. Mott (a
member of our Board), Scott D. Sandell, Peter Sonsini, Ravi Viswanathan and Harry R. Weller. The shares directly held by NEA Ven 14 are indirectly held by Karen P.
Welsh, the general partner of NEA Ven 14. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual
pecuniary interest therein. The principal business address of New Enterprise Associates, Inc. is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.
-
(2)
-
FMR LLC
holds these shares in the form of ADSs on behalf of certain of its direct and indirect subsidiaries and has sole voting power and sole dispositive
power over these shares. The registered office of FMR, LLC is 245 Summer Street, Boston, MA 02210, United States.
-
(3)
-
OrbiMed
Capital GP V LLC ("GP V") is the sole general partner of OPI V. OrbiMed Advisors LLC ("OrbiMed Advisors") is the managing member
of GP V. GP V and OrbiMed Advisors may be deemed to have beneficial ownership of the shares held by OPI V. Samuel D. Isaly is the managing member of and owner of a controlling interest
in OrbiMed Advisors and as such may be deemed to have beneficial ownership of the shares held by OPI V. Peter Thompson, one of our directors, is employed as a Private Equity Partner at OrbiMed
Advisors. Each of GP V, OrbiMed Advisors, Mr. Isaly and Dr. Thompson disclaims beneficial ownership of the shares held by OPI V except to the extent of its or his pecuniary
interest therein, if any. The address for these entities is 601 Lexington Avenue, 54th floor, New York, New York 10022.
-
(4)
-
Includes
options held by Mr. Laing to purchase 303,875 ordinary shares that are exercisable immediately.
-
(5)
-
Includes
279,378 ordinary shares represented by 46,563 ADSs.
-
(6)
-
Capital
World Investors holds these shares in the form of ADSs. Capital World Investors, a division of Capital Research and Management Company (CRMC), a
U.S.based investment management company, holds these shares in the form of ADSs. The Capital Group Companies, Inc. is the parent company of CRMC. The business address for CRMC is
333 South Hope Street, Los Angeles, CA 90071.
-
(7)
-
Includes
7,053,720 ordinary shares represented by 1,175,620 ADSs.
-
(8)
-
Consists
of (i) 9,972,600 ordinary shares; (ii) 1,200,000 ordinary shares represented by 200,000 ADSs and (ii) options to purchase 4,293,804
ordinary shares that are or will be exercisable within 60 days of March 20, 2017'
-
(9)
-
Consists
of (i) 96,000 ordinary shares represented by 16,000 ADSs and (ii) options to purchase 2,263,315 ordinary shares that are or will be
exercisable within 60 days of March 20, 2017.
-
(10)
-
Consists
of options to purchase 2,263,315 ordinary shares that are or will be exercisable within 60 days of March 20, 2017.
-
(11)
-
Includes
the shares set forth in footnote (1) above and options held by Mr. Mott to purchase 163,229 ordinary shares that are exercisable immediately.
Mr. Mott is a member of the Board at NEA 14 GP, LTD, which has ultimate voting and investment power over shares held of record by New Enterprise Associates 14, Limited
Partnership. He disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein.
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Table of Contents
-
(12)
-
Includes
the shares set forth in footnote (1) above and options held by Dr. Behbahani to purchase 155,682 ordinary shares that are exercisable
immediately. Dr. Behbahani is a partner of New Enterprise Associates, Inc., which has ultimate voting and investment power over shares held of record by New Enterprise Associates 14,
Limited Partnership.
-
(13)
-
Includes
the shares set forth in footnote (3) above and options held by Dr. Thompson to purchase 155,682 ordinary shares that are exercisable
immediately. Dr. Thompson is an employee of Orbimed Advisors LLC, which has ultimate voting and investment power over shares held of record by Orbimed Private Investments V, L.P.
-
(14)
-
Includes
shares held by Sigal Family Investments, LLC, and options held by Dr. Sigal to purchase 305,974 ordinary shares that are or will be
exercisable within 60 days of March 20, 2017. Dr. Sigal is a manager of Sigal Family Investments, LLC. Dr. Sigal may be deemed to have voting and investment power
over the shares held by Sigal Family Investments, LLC. Dr. Sigal disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein. Also included in
the ordinary shares beneficially owned are 52,938 ordinary shares represented by 8,823 ADSs that Dr. Sigal purchased during the IPO.
-
(15)
-
Consists
of options held by Mr. Alleva to purchase 312,123 ordinary shares that are or will be exercisable within 60 days of March 20, 2017 and
70,584 ordinary shares represented by 11,764 ADSs that Mr. Alleva purchased during the IPO.
-
(16)
-
The
options held by Barbara Duncan, Giles Kerr and Tal Zaks are not exercisable within 60 days of March 20, 2017.
Equity Compensation Plan Information
The following table provides information on our equity compensation plans as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options
|
|
Weighted
Average
Exercise Price
of Outstanding
Options
$(1)
|
|
Number of Securities
Available for
Future Issuance
Under Equity
Compensation
Plans
|
|
Equity compensation plans
|
|
|
49,237,290
|
|
|
0.72
|
|
|
33,128,439
|
|
Total
|
|
|
49,237,290
|
|
|
0.72
|
|
|
33,128,439
|
|
-
(1)
-
For
purposes of this table, the Weighted Average Exercise Price of Outstanding Options has been converted from £0.58 based on the pound sterling/U.S.
dollar exchange rate in effect as of December 31, 2016 (£1/$1.233).
The
Company grants options over ordinary shares in Adaptimmune Therapeutics plc under the following option plans: (i) the Adaptimmune Therapeutics plc Employee Share
Option Scheme (adopted
January 14, 2016), (ii) the Adaptimmune Therapeutics plc 2015 Share Option Scheme and (adopted March 16, 2015) and (iii) the Adaptimmune Therapeutics plc
Company Share Option Plan (adopted March 16, 2015). The maximum aggregate number of options which may be granted under these plans and any incentive plans adopted by the Company cannot exceed a
scheme limit that equates to 8% of the initial fully diluted share capital of the Company immediately following our IPO plus an automatic annual increase of an amount equivalent to 4% of the issued
share capital on each June 30 (or such lower number as the Board, or an appropriate committee of the Board, may determine). The automatic increase is effective from July 1, 2016.
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Table of Contents
Prior to December 31, 2014, the Company granted options to purchase ordinary shares in Adaptimmune Limited under three option schemes: (i) the
Adaptimmune Limited Share Option Scheme (adopted May 30, 2008), (ii) the Adaptimmune Limited 2014 Share Option Scheme (adopted April 11, 2014) and (iii) the Adaptimmune
Limited Company Share Option Plan (adopted December 16, 2014). As part of the corporate reorganization in connection with our IPO, the holders of options granted under these schemes over
ordinary shares of Adaptimmune Limited were granted equivalent options on substantially the same terms over ordinary shares of Adaptimmune Therapeutics plc in exchange for the release of these
options. The Company does not intend to grant any further options under these schemes. Further details of our share option plans are set forth in Note 10 titled "Share-based compensation" in
our audited consolidated financial statements incorporated by reference in this prospectus supplement.
Certain Relationships and Related Party Transactions
Related Person Transactions Policy
We have adopted a policy with respect to the review, approval and ratification of related party transactions. Under the policy, our Audit
Committee will be responsible for reviewing and approving related person transactions. In the course of its review and approval of related person transactions, our Audit Committee will consider the
relevant facts and circumstances to decide whether to approve such transactions. In particular, our policy will require our Audit Committee to consider, among other factors it deems
appropriate:
-
-
the related person's relationship to us and interest in the transaction;
-
-
the interests, direct or indirect, of any related person in the transaction in sufficient detail so as to enable the Audit Committee to assess
such interests;
-
-
the materials facts of the proposed related-person transaction, including the proposed aggregate value of such transaction, or, in the case of
indebtedness, that amount of principal that would be involved;
-
-
the benefits to us of the proposed transaction;
-
-
an assessment of whether the proposed transaction is on terms that are comparable to the terms available to an unrelated third party or to
employees generally; and
-
-
management's recommendation with respect to the proposed related-person transaction.
The
Audit Committee may only approve those transactions that are in, or are not inconsistent with, our best interests and those of our shareholders, as the Audit Committee determines in
good faith. If Audit Committee review and approval would be inappropriate, the relevant related party transaction will be referred to another independent body of our Board for review, consideration,
approval or ratification.
Certain Related Person Transactions
The following is a description of transactions since the beginning of 2016 in which (a) we were a participant, (b) the amount
involved exceeded $120,000 and (c) one or more of our executive officers, directors, director nominees or 5% shareholders, or their immediate family members, each of whom we refer to as a
"related person," had a direct or indirect material interest. We refer to these as "related person transactions." The information below excludes compensation arrangements with directors and executive
officers, which are described above elsewhere in this prospectus supplement under "Executive Compensation."
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Table of Contents
-
-
On September 12, 2016, we entered into a letter agreement with Immunocore Limited ("Immunocore") that become effective
November 8, 2016, recording our mutual agreement to terminate the target collaboration agreement with the termination effective on March 1, 2017.
-
-
The board overlap between us and Immunocore ended on December 31, 2016 when Dr. Jonathan Knowles and Ian Laing resigned from our
board of directors.
-
-
We and Immunocore have invoiced each other in respect of a transitional services agreement (under which certain staff resources and other
administration services are supplied by each company to the other company for a transitional period). Additionally, during the periods presented Immunocore has invoiced the Company in respect of
services provided under a target collaboration agreement (under which certain target identification services were provided by Immunocore), costs related to joint patents and in respect of property
rent. The amount payable by the Company to Immunocore at December 31, 2016 was $365,000.
Investors Rights Agreement
We are party to an investors rights agreement entered into on February 23, 2015, with certain of our shareholders, including New
Enterprise Associates 14, L.P., NEA Ventures 2014, L.P., OrbiMed Private Investments V, L.P. and Sigal Family Investments, LLC pursuant to which certain of our
shareholders, including certain holders with beneficial ownership of five percent or more of our ordinary shares and entities affiliated with certain of our directors, have the right to demand that we
file a registration statement for their ordinary shares or request that their ordinary shares be covered by a registration statement that we are otherwise filing.
Principal Accountant Fees and Services
The table below sets forth the fees paid to KPMG LLP over the past two years in connection with its work for us, including our
subsidiary, Adaptimmune LLC. All such audit,
audit-related and tax services were pre-approved by the Audit Committee, which concluded that the provision of such services by KPMG LLP was compatible with the maintenance of that firm's
independence in the conduct of its auditing functions.
|
|
|
|
|
|
|
|
Fees
|
|
December 31, 2015
($)(1)
|
|
December 31, 2016
($)
|
|
Audit Fees
|
|
|
212,000
|
|
|
360,000
|
|
Audit-related Fees
|
|
|
151,000
|
|
|
352,000
|
|
Tax Fees
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
10,000
|
|
|
|
|
Total
|
|
|
373,000
|
|
|
712,000
|
|
-
(1)
-
On
July 1, 2015 we changed our fiscal year from June 30 to a calendar fiscal year. The fees for the period ending December 31, 2015 in the table
above have been calculated by adding the fees paid for the six months ended June 30, 2015 and the six months ended December 31, 2015. Fees paid for the six months ended June 30,
2015 have been calculated by prorating the amounts paid for the year by the six month period.
Audit Fees
Audit fees consist of fees billed for the audit of our annual consolidated financial statements, the review of the interim consolidated
financial statements, and related services that are normally provided in connection with registration statements, including the registration statement for our initial public offering. Included in the
2015 audit fees are the fees billed in connection with our initial public offering in May 2015.
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Table of Contents
Audit-Related Fees
Audit- related fees incurred were $352,000 and $151,000 in 2016 and 2015, respectively.
Tax Fees
Tax fees consist of fees for professional services, including tax consulting and compliance. There were no such fees incurred in 2016 or 2015.
All Other Fees
We incurred $10,000 for all other fees in 2015, but did not incur any such fees in 2016.
Audit Committee Pre-Approval Policy and Procedures
Our Audit Committee has reviewed and discussed with management our audited consolidated financial statements for the year ended
December 31, 2016. Our Audit Committee has also discussed with KPMG LLP, our independent registered public accounting firm, the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended, regarding communication with audit committees, as adopted by the Public Company Accounting Oversight Board ("PCAOB") in Rule 3200T.
Our
Audit Committee has also received the written disclosures and the letter from KPMG LLP required by the applicable requirements of the PCAOB regarding communications with the
audit committee concerning independence, and our Audit Committee has discussed with KPMG LLP its independence from management and the Company.
Based
on our Audit Committee's review and discussions with management and the independent auditors, and subject to the limitations of the Audit Committee's role and responsibilities
referred to above and in the Audit Committee charter, our Audit Committee recommended to the Board of Directors that our audited consolidated financial statements be included in our Annual Report on
Form 10-K for the year ended December 31, 2016 for filing with the SEC.
The
Audit Committee approves KPMG LLP's and its affiliates audit and non-audit services in advance as required under Sarbanes-Oxley and SEC rules. Before the commencement of each
fiscal year, the Audit Committee appoints the independent auditor to perform audit services that we expect to be performed for the fiscal year and appoints the auditor to perform audit-related, tax
and other permitted non-audit services. In addition, our Audit Committee approves the terms of the engagement letter to be entered into by us with the independent auditor. The Audit Committee has also
delegated to its chairman the authority, from time to time, to pre-approve audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees,
provided that the chairman shall report any decisions to pre-approve such audit-related and non-audit services and fees to our full Audit Committee at its next regular meeting.
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Table of Contents
TAXATION
U.K. Tax Considerations
The following is a general summary of certain limited U.K. tax considerations relating to the ownership and disposal of the ordinary shares or
the ADSs and does not address all possible tax consequences relating to an investment in the ordinary shares or the ADSs. It is based on current U.K. tax law and published HM Revenue & Customs
("HMRC"), practice as of the date hereof, both of which are subject to change, possibly with retrospective effect.
Except
as provided otherwise, this summary applies only to persons who are resident (and, in the case of individuals, domiciled) in the United Kingdom for tax purposes and who are not
resident for tax purposes in any other jurisdiction, and do not have a permanent establishment or fixed base in any other jurisdiction with which the holding of the ordinary shares or the ADSs is
connected ("U.K. Holders"). Persons (a) who are not resident (or, if resident, are not domiciled) in the United Kingdom for tax purposes, including those individuals and companies who trade in
the United Kingdom through a branch, agency or permanent establishment in the United Kingdom to which the ordinary shares or the ADSs are attributable, or (b) who are resident or otherwise
subject to tax in a jurisdiction outside the United Kingdom, are recommended to seek the advice of professional advisors in relation to their taxation obligations.
This
summary is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular investor. It does not address all of the
tax considerations that may be relevant to specific investors in light of their particular circumstances or to investors subject to special treatment under U.K. tax law. In
particular:
-
-
this summary only applies to the absolute beneficial owners of the ordinary shares or the ADSs and any dividends paid in respect of the
ordinary shares represented by the ADSs where the dividends are regarded for U.K. tax purposes as that person's own income (and not the income of some other person); and
-
-
this summary: (a) only addresses the principal U.K. tax consequences for investors who hold the ordinary shares or the ADSs as capital
assets/investments, (b) does not address the tax consequences that may be relevant to certain special classes of investor such as dealers, brokers or traders in shares or securities and other
persons who hold the ordinary shares or the ADSs otherwise than as an investment, (c) does not address the tax consequences for holders that are financial institutions, insurance companies,
collective investment schemes, pension schemes, charities or tax-exempt organizations, (d) assumes that the holder is not an officer or employee of the Company (or of any related company) and
has not (and is not deemed to have) acquired the ordinary shares or the ADSs by virtue of an office or employment, and (e) assumes that the holder does not control or hold (and is not deemed to
control or hold), either alone or together with one or more associated or connected persons, directly or indirectly (including through the holding of the ordinary shares), an interest of 10% or more
in the issued share capital (or in any class thereof), voting power, rights to profits or capital of the Company, and is not otherwise connected with the Company.
This
summary further assumes that a holder of ADSs is the beneficial owner of the underlying ordinary shares for U.K. tax purposes.
POTENTIAL
INVESTORS IN THE ADSs SHOULD SATISFY THEMSELVES PRIOR TO INVESTING AS TO THE OVERALL TAX CONSEQUENCES, INCLUDING, SPECIFICALLY, THE CONSEQUENCES UNDER U.K. TAX LAW AND HMRC
PRACTICE OF THE ACQUISITION, OWNERSHIP AND DISPOSAL OF THE ORDINARY SHARES OR ADSs IN THEIR OWN PARTICULAR CIRCUMSTANCES BY CONSULTING THEIR OWN TAX ADVISERS.
S-30
Table of Contents
Taxation of dividends
Withholding Tax
Dividend payments in respect of the ordinary shares represented by the ADSs may be made without withholding or deduction for or on account of
U.K. tax.
Dividends received by individual U.K. Holders will be subject to U.K. income tax on the amount of the dividend paid.
An
individual U.K. Holder will be exempt from U.K. income tax (by applying a nil rate of tax) on the first £5,000 of dividend income received by such individual U.K. Holder
in a tax year, regardless of the amount of the individual's other taxable income. It is noted that a legislative measure has been announced (but not yet finalized) to change the amount of dividend
income in a tax year that
is charged at the nil rate of tax from the first £5,000 to the first £2,000, with effect from April 6, 2018.
Dividend
income in excess of the £5,000 allowance will be taxed at the rate of 7.5% to the extent that the dividend, when treated as the top slice of the relevant U.K.
Holder's income, does not exceed the basic rate income tax limit; at the rate of 32.5% to the extent that the dividend, when treated as the top slice of the relevant U.K. Holder's income, exceeds the
basic rate income tax limit but does not exceed the higher rate income tax limit; and at the rate of 38.1% to the extent that the dividend, when treated as the top slice of the relevant U.K. Holder's
income, exceeds the higher rate income tax limit.
An
individual holder of ordinary shares or ADSs who is not a U.K. Holder will not be chargeable to U.K. income tax on dividends paid by the company, unless such holder carries on
(whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency in the United Kingdom to which the ordinary shares or the ADSs are attributable. In
these circumstances, such holder may, depending on his or her individual circumstances, be chargeable to U.K. income tax on dividends received from the company.
A U.K. Holder within the charge to U.K. corporation tax may be entitled to exemption from U.K. corporation tax in respect of dividend payments.
If the conditions for the exemption are not satisfied, or such U.K. Holder elects for an otherwise exempt dividend to be taxable, U.K. corporation tax will be chargeable on the gross amount of any
dividends. If potential investors are in any doubt as to their position, they should consult their own professional advisers.
A
corporate holder of ordinary shares or ADSs that is not a U.K. Holder will not be subject to U.K. corporation tax on dividends received from the Company, unless it carries on a trade
in the United Kingdom through a permanent establishment to which the ordinary shares or the ADSs are attributable. In these circumstances, such holder may, depending on its individual circumstances
and if the exemption from U.K. corporation tax discussed above does not apply, be chargeable to U.K. corporation tax on dividends received from the Company.
Taxation of Disposals
U.K. Holders
A disposal or deemed disposal of ordinary shares or ADSs by an individual U.K. Holder may, depending on his or her individual circumstances,
give rise to a chargeable gain or to an allowable loss for the purpose of U.K. capital gains tax. The principal factors that will determine the capital gains tax position on a disposal of ordinary
shares or ADSs are the extent to which the holder realizes any other capital gains in the tax year in which the disposal is made, the extent to which the holder has incurred
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Table of Contents
capital
losses in that or any earlier tax year and the level of the annual allowance of tax-free gains in that tax year (the "annual exemption"). The annual exemption for the 2016/2017 tax year is
£11,100. If, after all allowable deductions, an individual U.K. Holder's total taxable income for the year (which, for the avoidance of doubt, will include any dividend income within the
£5,000 nil rate band described above) exceeds the basic rate income tax limit, a taxable capital gain accruing on a disposal of ordinary shares or ADSs will be taxed at 20%. If, after all
allowable deductions, an individual U.K. Holder's total taxable income for the year does not exceed the basic rate income tax limit, and assuming the individual does not have any other taxable capital
gains in the tax year that would use up the remaining basic rate allowance, a taxable capital gain accruing on a disposal of ordinary shares or ADSs will be taxed at 10% on an amount that, when
treated as the top slice of the relevant U.K. Holder's income/gains, does not exceed the basic rate income tax limit and at 20% on the remainder.
An
individual U.K. Holder who ceases to be resident in the United Kingdom (or who fails to be regarded as resident in a territory outside the United Kingdom for the purposes of double
taxation relief) for a period of less than five years and who disposes of his or her ordinary shares or ADSs during that period of temporary non-residence may be liable to U.K. capital gains tax on a
chargeable gain accruing on such disposal on his or her return to the United Kingdom (or upon ceasing to be regarded as resident outside the United Kingdom for the purposes of double taxation relief)
(subject to available exemptions or reliefs).
A
disposal (or deemed disposal) of ordinary shares or ADSs by a corporate U.K. Holder may give rise to a chargeable gain or an allowable loss for the purpose of U.K. corporation tax.
Such a holder should be entitled to an indexation allowance, which applies to reduce capital gains to take account of inflation. The allowance may reduce a chargeable gain but will not create or
increase an allowable loss.
Any
gains or losses in respect of currency fluctuations over the period of holding the ordinary shares or ADSs would also be brought into account on the disposal.
An individual holder who is not a U.K. Holder will not be liable to U.K. capital gains tax on capital gains realized on the disposal of his or
her ordinary shares or ADSs unless such holder carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency in the United Kingdom to
which the ordinary shares or ADSs are attributable. In these circumstances, such holder may, depending on his or her individual circumstances, be chargeable to U.K. capital gains tax on chargeable
gains arising from a disposal of his or her ordinary shares or ADSs.
A
corporate holder of ordinary shares or ADSs that is not a U.K. Holder will not be liable for U.K. corporation tax on chargeable gains realized on the disposal of its ordinary shares or
ADSs unless it carries on a trade in the United Kingdom through a permanent establishment to which the ordinary shares or ADSs are attributable. In these circumstances, a disposal (or deemed disposal)
of ordinary shares or ADSs by such holder may give rise to a chargeable gain or an allowable loss for the purposes of U.K. corporation tax.
If, for the purposes of the Taxes on Estates of Deceased Persons and on Gifts Treaty 1978 between the United States and the United Kingdom, an
individual holder of ordinary shares or ADSs is domiciled in the United States and is not a national of the United Kingdom, any ordinary shares or ADSs beneficially owned by that holder will not
generally be subject to U.K. inheritance tax on that holder's death or on a gift made by that holder during his/her lifetime, provided that any applicable U.S. federal gift or estate tax liability is
paid, except where (i) the ordinary shares or
ADSs are part of the business property of a U.K. permanent establishment or pertain to a U.K. fixed base used for the
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performance
of independent personal services; or (ii) the ordinary shares or ADSs are comprised in a settlement unless, at the time the settlement was made, the settlor was domiciled in the
United States and not a national of the United Kingdom (in which case no charge to U.K. inheritance tax should apply).
Stamp Duty and Stamp Duty Reserve Tax
Issue and Transfer of Ordinary Shares
No U.K. stamp duty is payable on the issue of the ordinary shares.
Based
on current published HMRC practice and recent case law, there should be no U.K. stamp duty reserve tax ("SDRT") payable on the issue of ordinary shares to a depositary receipt
system or a clearance service (for example DTC).
Transfers
of ordinary shares to, or to a nominee or agent for, a person whose business is or includes issuing depositary receipts or to, or to a nominee or agent for, a person whose
business is or includes the provision of clearance services, will generally be regarded by HMRC as subject to stamp duty or SDRT at 1.5% of the amount or value of the consideration or, in certain
circumstances, the value of the ordinary shares transferred. In practice, this liability for stamp duty or SDRT is in general borne by such person depositing the relevant shares in the depositary
receipt system or clearance service. Transfers of ordinary shares between depositary receipt systems and clearance services will generally be exempt from stamp duty and SDRT.
The
transfer on sale of ordinary shares by a written instrument of transfer will generally be liable to U.K. stamp duty at the rate of 0.5% of the amount or value of the consideration
for the transfer. The purchaser normally pays the stamp duty.
An
agreement to transfer ordinary shares outside a depositary receipt system or a clearance service will generally give rise to a liability on the purchaser to SDRT at the rate of 0.5%
of the amount or value of the consideration. Such SDRT is payable on the seventh day of the month following the month in which the charge arises, but where an instrument of transfer is executed and
duly stamped before the expiry of a period of six years beginning with the date of that agreement, (i) any SDRT that has not been paid ceases to be payable, and (ii) any SDRT that has
been paid may be recovered from HMRC, generally with interest.
We
do not expect that HMRC will consider any liability to U.K. stamp duty or SDRT to have arisen in relation to the deposit with the custodian or the depositary of the ordinary shares
offered by us pursuant to this offering. However, a liability to U.K. stamp duty or SDRT may, depending on the circumstances, arise in respect of the deposit with the custodian or the depositary of
ordinary shares where ordinary shares are transferred to the custodian or the depositary otherwise than as an integral part of an issue of share capital.
Transfer of ADSs
Based on current HMRC published practice, no U.K. stamp duty should be payable on a written instrument transferring an ADS or on a written
agreement to transfer an ADS, as an ADS is not regarded as "stock" or a "marketable security" for U.K. stamp duty purposes.
No
SDRT will be payable in respect of an agreement to transfer an ADS, as an ADS is not considered to be a "chargeable security" for the purposes of SDRT.
The
statements above in relation to stamp duty and SDRT apply irrespective of whether the relevant holder of ordinary shares or ADSs is resident or domiciled in the United Kingdom.
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U.S. Federal Income Taxation
The following discussion describes the material U.S. federal income tax consequences to U.S. Holders (as defined below) under present law of the
purchase, ownership and disposition of the ADSs. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (or the "Code" for purposes of this discussion), in effect as of the
date of this prospectus supplement and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this prospectus supplement, as well as judicial and administrative
interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described
below.
This
discussion applies only to U.S. Holders that hold the ADSs as capital assets for U.S. federal income tax purposes. It does not purport to be a comprehensive description of all tax
considerations that may be relevant to a decision to purchase the ADSs by any particular investor. In particular, this discussion does not address tax considerations applicable to a U.S. Holder that
may be subject to special tax rules, including, without limitation, a dealer in securities or currencies, a trader in securities that elects to use a mark-to-market method of accounting for securities
holdings, banks, thrifts, or other financial institutions, an insurance company, a tax-exempt organization, a person that holds the ADSs as part of a hedge, straddle or conversion transaction for tax
purposes, a person whose functional currency for tax purposes is not the U.S. dollar, certain former citizens or residents of the United States or a person that owns or is deemed to own 10% or more of
the company's voting shares. Moreover, this description does not address the U.S. federal estate, gift, or alternative minimum tax consequences, or any state, local or non-U.S. tax consequences, of
the acquisition, ownership and disposition of the ADSs. In addition, the discussion does not address tax consequences to an entity treated as a partnership for U.S. federal income tax purposes that
holds the ADSs, or a partner in such partnership. The U.S. federal income tax treatment of each partner of such partnership generally will depend upon the status of the partner and the activities of
the partnership. Prospective purchasers that are partners in a partnership holding the ADSs are urged to consult their own tax advisers.
The
discussion below of the U.S. federal income tax consequences to "U.S. Holders" will apply to an investor that is a beneficial owner of ADSs and that is, for U.S. federal income tax
purposes,
-
-
an individual who is a citizen or resident of the United States;
-
-
a corporation (or other entity taxable as a corporation) organized under the laws of the United States, any state therein or the District of
Columbia;
-
-
an estate whose income is subject to U.S. federal income taxation regardless of its source; or
-
-
a trust that (i) is subject to the primary supervision of a court within the United States and subject to the control of one or more
U.S. persons for all substantial decisions or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
For
U.S. federal income tax purposes, a beneficial owner of ADSs generally will be treated as the owner of the underlying ordinary shares represented by such ADSs. Accordingly, deposits
or withdrawals of the underlying ordinary shares for ADSs generally will not be subject to U.S. federal income tax.
Prospective purchases are urged to consult their tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well
as the state, local, non-U.S. and other tax consequences to them of the purchase, ownership and disposition of the ADSs.
Subject to the PFIC rules discussed below, the gross amount of distributions made by us to a U.S. Holder with respect to the ADSs, before
reduction for any non-U.S. taxes withheld therefrom, will be
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includable
in gross income as dividend income to the extent that such distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax
principles). To the extent, if any, that the amount of any cash distribution exceeds our current and accumulated earnings and profits, it will be treated, first as a tax-free return of such U.S.
Holder's tax basis in its ADSs, and to the extent the amount of the distribution exceeds such U.S. Holder's tax basis, the excess will be taxed as capital gain. We do not intend to calculate our
earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will generally be treated as a dividend even if that distribution would
otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. A dividend in respect of the ADSs will not be eligible for the dividends-received deduction
allowed to corporations in respect of dividends received from other U.S. corporations. Non-corporate U.S. Holders may qualify for the lower rates of taxation with respect to dividends on ADSs
applicable to long term capital gains (i.e., gains from the sale of capital assets held for more than one year), provided that certain conditions are met, including certain holding period
requirements and the absence of certain risk reduction transactions. Moreover, such reduced rate shall not apply if we are a PFIC for the taxable year in which we pay a dividend, or were a PFIC for
the preceding taxable year.
Subject
to the paragraph below, dividends generally will constitute income from sources outside the United States, which may be relevant in calculating a U.S. Holder's foreign tax credit
limitation. Subject to certain conditions and limitations, non-U.S. tax withheld, if any, on dividends may be deducted from such U.S. Holder's taxable income or credited against such U.S. Holder's
U.S. federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends that we
distribute generally should constitute "passive category income," or, in the case of certain U.S. Holders, "general category income." A foreign tax credit for foreign taxes imposed on distributions
may be denied if a U.S. Holder does not satisfy certain minimum holding period requirements.
Notwithstanding
the paragraph above, if 50% or more of the ADSs are treated as held by U.S. persons, we will be treated as a "U.S.-owned foreign corporation." In that case, dividends may
be treated for U.S. foreign tax credit purposes as income from sources outside the United States to the extent paid out of our non-U.S. source earnings and profits, and as income from sources within
the United States to the extent paid out of our U.S. source earnings and profits. There can be no assurance that we will not be treated as a U.S.-owned foreign corporation. If the dividends are taxed
as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the U.S. foreign tax credit limitation will generally be limited to the
gross amount of the dividend, multiplied by the preferential rate divided by the highest rate of tax normally applicable to dividends. The rules relating to the determination of the foreign tax credit
are complex, and U.S. Holders are urged to consult their tax advisors to determine whether and to what extent such U.S. Holder will be entitled to a foreign tax credit.
U.S.
Holders are urged to consult their tax advisors regarding the tax consequences of receiving, converting or disposing of any U.S. currency, received or deemed received as dividends
on our ADSs or on the sale or retirement of an ADS.
Subject to the PFIC rules discussed below, a U.S. Holder will recognize taxable gain or loss on any sale, exchange or other taxable disposition
of an ADS equal to the difference between the amount realized (in U.S. dollars) for the ADS and such U.S. Holder's tax basis (in U.S. dollars) in the ADS.
The
gain or loss will generally be capital gain or loss. A non-corporate U.S. Holder that has held the ADS for more than one year, may be eligible for preferential tax rates. The
deductibility of capital
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losses
is subject to limitations. Any such gain or loss generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes.
A Medicare contribution tax of 3.8% is imposed on a portion or all of the net investment income of certain individuals with a modified adjusted
gross income of over $200,000 (or $250,000 in the case of joint filers or $125,000 in the case of married individuals filing separately) and on the undistributed net investment income of certain
estates and trusts. For these purposes, "net investment income" generally includes income from any dividends paid with respect to ADSs and net gain from the sale, exchange or other taxable disposition
of ADSs, reduced by any deductions properly allocable to such income or net gain. U.S. Holders are urged to consult their tax advisors regarding the applicability of this tax to their income and gains
in respect of an investment in the ADSs.
Special U.S. tax rules apply to U.S. Holders of shares of ADS of companies that are considered to be passive foreign investment companies, or
PFICs. We will be classified as a PFIC in a particular taxable year if either (i) 75% or more of our gross income for the taxable year is passive income or (ii) on average at least 50%
of the value of our assets produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, certain dividends, interest,
royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive income. In making this determination, we will be treated as
earning our proportionate share of any income and owning our proportionate share of any assets of any corporation in which we hold a 25% or greater interest (by value).
Based
on our estimated gross income, the average value of our assets, including goodwill, and the nature of our active business, we do not believe we were treated as a PFIC for U.S.
federal income tax purposes for the U.S. taxable year ending December 31, 2016. Our status for any taxable year will depend on our assets and activities in each year, and because this is a
factual determination made annually after the end of each taxable year, there can be no assurance that we will not be considered a PFIC for this year or any future taxable year. The market value of
our assets may be determined in large part by reference to the market price of the ADSs, which is likely to fluctuate (and may fluctuate considerably given that market prices of life sciences
companies can be especially volatile). Furthermore, because the value of our gross assets is likely to be determined in large part by reference to our market capitalization and the value of our
goodwill, a decline in the value of our shares could affect the determination of whether we are a PFIC. A U.S. Holder may be able to mitigate some of the adverse U.S. federal income tax consequences
described below with respect to owning the ADSs if we are classified as a PFIC for any taxable year, provided that such U.S. Holder is eligible to make, and validly makes a "mark-to-market" election,
described below. In certain circumstances a U.S. Holder can make a "qualified electing fund" election to mitigate some of the adverse tax consequences described with respect to an ownership interest
in a PFIC by including in income its share of the PFIC's income on a current basis. However, we do not currently intend to prepare or provide the information that would enable a U.S. Holder to make a
qualified electing fund election.
In
the event that we are classified as a PFIC in any year in which a U.S. Holder holds the ADSs, and the "mark-to-market" election described in the following paragraph is not made by a
taxable U.S. Holder, a special tax regime will apply with respect to such U.S. Holder to both (a) any gain realized on the sale or other disposition of the ADSs and (b) any "excess
distribution" by us to such U.S. Holder (generally, such U.S. Holder's ratable portion of distributions received by such U.S. Holder in any year which are greater than 125% of the average annual
distribution received by such U.S. Holder in the shorter of the three preceding years or such U.S. Holder's holding period for the ADSs). Any gain recognized by such U.S. Holder on a sale or other
disposition (including a pledge) of the ADSs
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and
any excess distribution would be allocated ratably over such U.S. Holder's holding period for the ADSs.
The
amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other
taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and the interest charge generally applicable to underpayments
of tax would be imposed on taxes deemed to have been payable in for the relevant taxable PFIC years. Classification as a PFIC may also have other adverse tax consequences, including, in the case of
U.S. Holders that are individuals, the denial of a step-up in the basis of such U.S. Holder's ADSs at death.
If we are a PFIC for any taxable year during which a U.S. Holder holds the ADSs, then in lieu of being subject to the special tax regime and
interest charge rules discussed above, a U.S. Holder may make an election to include gain on the ADSs as ordinary income under a mark-to-market method, provided that such the ADSs are treated as
"regularly traded" on a "qualified exchange." In general, the ADSs will be treated as "regularly traded" for a given calendar year if more than a
de
minimis
quantity of the ADSs are traded on a qualified exchange on at least 15 days during each calendar quarter of such calendar year. Although the U.S. Internal
Revenue Service ("IRS") has not published any authority identifying specific exchanges that may constitute "qualified exchanges," Treasury Regulations provide that a qualified exchange is (a) a
U.S. securities exchange that is registered with the Securities and Exchange Commission, (b) the U.S. market system established pursuant to section 11A of the Securities and Exchange Act
of 1934, or (c) a non-U.S. securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such non-U.S.
exchange has trading volume, listing, financial disclosure, surveillance and other requirements designed to prevent fraudulent and manipulative acts and practices, to remove impediments to and perfect
the mechanism of a free and open, fair and orderly, market, and to protect investors; and the laws of the country in which such non-U.S. exchange is located and the rules of such non-U.S. exchange
ensure that such requirements are actually enforced and (ii) the rules of such non-U.S. exchange effectively promote active trading of listed shares. We have received approval to have the ADSs
listed on The Nasdaq Global Select Market, which is a U.S. securities exchange that is registered with the SEC. However, no assurance can be given that the ADSs will meet the requirements to be
treated as "regularly traded" for purposes of the mark-to-market election. In addition, because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may
continue to be subject to the special tax regime with respect to such holder's indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income
tax purposes, including shares in any future subsidiary of ours that is treated as a PFIC.
If
a U.S. Holder makes this mark-to-market election, such U.S. Holder will be required in any year in which we are a PFIC to include as ordinary income the excess of the fair market
value of such U.S. Holder's ADSs at year-end over its basis in those ADSs. In addition, the excess, if any, of such U.S. Holder's basis in the ADSs over the fair market value of such U.S. Holder's
ADSs at year-end is deductible as an ordinary loss in an amount equal to the lesser of (i) the amount of the excess or (ii) the amount of the net mark-to-market gains that have been
included in income in prior years by such U.S. Holder. Any gain recognized by such U.S. Holder upon the sale of such U.S. Holder's ADSs will be taxed as ordinary income in the year of sale. Amounts
treated as ordinary income will not be eligible for the preferential tax rate applicable to qualified dividend income or long-term capital gains. A U.S. Holder's adjusted tax basis in the ADSs will be
increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. If a U.S. Holder makes a mark-to market election, it will be effective for
the taxable year for which the election
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is
made and all subsequent taxable years unless the ADSs are no longer regularly traded on a qualified exchange or the IRS consents to the revocation of the election.
U.S.
Holders who hold or have held our ADSs during a period when we were or are a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC in subsequent years, subject
to exceptions for U.S. Holders who made a timely qualified electing fund election or mark-to-market election. The U.S. federal income tax rules relating to PFICs are complex. U.S. Holders are urged to
consult their tax advisors with respect to the purchase, ownership and disposition of the ADSs, the availability of the mark-to-market election and whether making the election would be advisable in
their particular circumstances, and the IRS information reporting obligations with respect to the purchase, ownership and disposition of the ADSs.
Distributions with respect to ADSs and proceeds from the sale, exchange or disposition of ADSs may be subject to information reporting to the
U.S. Internal Revenue Service, or IRS, and U.S. backup withholding rules. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other
required certification or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal
Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup
withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder's U.S. federal income tax liability, and a U.S. Holder may
obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information.
U.S. Holders who are either individuals or certain domestic entities may be required to submit certain information to the IRS with respect to
such holder's beneficial ownership of the ADSs, if such ADSs are not held on such holder's behalf by a financial institution, as our ordinary shares are considered "specified foreign financial
assets." Penalties and potential other adverse tax consequences may be imposed if a U.S. Holder is required to submit such information to the IRS and fails to do so. U.S. Holders are urged to consult
their tax advisors regarding the potential information reporting obligations that may be imposed with respect to the ownership and disposition of the ADSs.
The above description is not intended to constitute a complete analysis of all tax consequences relating to acquisition, ownership and disposition of the ADSs.
Prospective purchases are urged to consult their tax advisors concerning the tax consequences related their particular circumstances.
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UNDERWRITING
Citigroup Global Markets Inc., Cowen and Company, LLC and Leerink Partners LLC are acting as joint book-running managers of
the offering and as representatives of the underwriters named below. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus supplement, each
underwriter named below has severally agreed to purchase, and we have agreed to sell to that underwriter, the number of ordinary shares in the form of ADSs, set forth opposite the underwriter's name.
|
|
|
|
|
Underwriter
|
|
Number of
ADSs
|
|
Citigroup Global Markets Inc.
|
|
|
5,005,000
|
|
Cowen and Company, LLC
|
|
|
3,932,500
|
|
Leerink Partners LLC
|
|
|
3,932,500
|
|
Guggenheim Securities LLC
|
|
|
1,430,000
|
|
|
|
|
|
|
Total
|
|
|
14,300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
underwriters may elect to take delivery of all or a portion of the ordinary shares purchased in the form of ADSs. References in this section to ordinary shares include ADSs to the
extent applicable.
The
underwriting agreement provides that the obligations of the underwriters to purchase the ADSs included in this offering are subject to approval of legal matters by counsel and to
other conditions. The underwriters are obligated to purchase all the ADSs (other than those covered by the underwriters' option to purchase additional ADSs described below) if they purchase any of the
ADSs. The offering price and the total underwriting discounts and commissions per ADS or per ordinary share are identical.
ADSs
sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus supplement. Any ADSs sold by the
underwriters to securities
dealers may be sold at a discount from the initial public offering price not to exceed $0.1512 per ADS. If all the ADSs are not sold at the initial offering price, the underwriters may change the
offering price and the other selling terms.
If
the underwriters sell more ADSs than the total number set forth in the table above, we have granted to the underwriters an option, exercisable for 30 days from the date of this
prospectus supplement, to purchase up to 2,145,000 additional ADSs at the public offering price less the underwriting discount. To the extent the option is exercised, each underwriter must purchase a
number of additional ADSs approximately proportionate to that underwriter's initial purchase commitment. Any ADSs issued or sold under the option will be issued and sold on the same terms and
conditions as the other ADSs that are the subject of this offering.
Pursuant
to certain "lock-up" agreements, we and our executive officers and directors have agreed, subject to certain exceptions, not to offer, sell, assign, transfer, pledge, contract
to sell, or otherwise dispose of or announce the intention to otherwise dispose of, or enter into any swap, hedge or similar agreement or arrangement that transfers, in whole or in part, the economic
consequence of ownership of, directly or indirectly, or make any demand or request or exercise any right with respect to the registration of, or file with the SEC a registration statement under the
Securities Act relating to, any ADSs, ordinary shares or any securities convertible into or exercisable or exchangeable for or representing ADSs or ordinary shares, without the prior written consent
of Citigroup Global Markets Inc., Cowen and Company, LLC and Leerink Partners LLC for a period of 90 days after the date of the pricing of the offering.
This
lock-up provision applies to the ordinary shares and ADSs and to securities convertible into or exchangeable or exercisable for ordinary shares and ADSs. It also applies to ordinary
shares and
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ADSs
owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition. The exceptions permit parties to the
"lock-up" agreements, among other things and subject to restrictions, to: (a) make certain gifts, (b) make transfers to immediate family members, (c) make transfers to affiliates
or to any investment fund or other entity controlled or managed by the party and (d) participate in tender offers, mergers, consolidations or other similar transactions made to all holders of
the ADSs and/or ordinary shares involving a change of control of the Company. In addition, the lock-up provision will not restrict broker-dealers from engaging in market making and similar activities
conducted in the ordinary course of their business.
Citigroup
Global Markets Inc., Cowen and Company, LLC and Leerink Partners LLC, in their sole discretion, may release our ordinary shares and ADSs subject to the
lock-up agreements described
above in whole or in part at any time. When determining whether or not to release our ordinary shares and ADSs from lock-up agreements, Citigroup Global Markets Inc., Cowen and
Company, LLC and Leerink Partners LLC will consider, among other factors, the holder's reasons for requesting the release, the number of ordinary shares and ADSs for which the release is
being requested and market conditions at the time of the request.
The
ADSs are listed on The Nasdaq Global Select Market under the symbol "ADAP".
The
following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no
exercise and full exercise of the underwriters' option to purchase additional ADSs.
|
|
|
|
|
|
|
|
|
|
Paid by Adaptimmune
|
|
|
|
No Exercise
|
|
Full Exercise
|
|
Per Ordinary Share
|
|
$
|
0.042
|
|
$
|
0.042
|
|
Per ADS
|
|
$
|
0.252
|
|
$
|
0.252
|
|
Total
|
|
$
|
3,603,600
|
|
$
|
4,144,140
|
|
We
estimate that our portions of the total expenses of this offering will be $200,000. We have also agreed to reimburse the underwriters for up to $25,000 for their FINRA counsel fee. In
accordance with FINRA Rule 5110, this reimbursed fee is deemed underwriting compensation for this offering.
In
connection with the offering, the underwriters may purchase and sell ADSs in the open market. Purchases and sales of ADSs in the open market may include short sales, purchases to
cover short positions, which may include purchases pursuant to the underwriters' option to purchase additional ADSs, and stabilizing purchases.
-
-
Short sales involve secondary market sales by the underwriters of a greater number of ADSs than they are required to purchase in the offering.
-
-
"Covered" short sales are sales of ADSs in an amount up to the number of ADSs represented by the underwriters' option to purchase
additional ADSs.
-
-
"Naked" short sales are sales of ADSs in an amount in excess of the number of ADSs represented by the underwriters' option to
purchase additional ADSs.
-
-
Covering transactions involve purchases of ADSs either pursuant to the underwriters' option to purchase additional ADSs or in the open market
in order to cover short positions.
-
-
To close a naked short position, the underwriters must purchase ADSs in the open market. A naked short position is more likely to
be created if the underwriters are concerned that there may be downward pressure on the price of the ADSs in the open market after pricing that could adversely affect investors who purchase in the
offering.
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-
-
To close a covered short position, the underwriters must purchase ADSs in the open market or must exercise the option to purchase
additional ADSs. In determining the source of ADSs to close the covered short position, the underwriters will consider, among other things, the price of ADSs available for purchase in the open market
as compared to the price at which they may purchase ADSs through the option to purchase additional ADSs.
-
-
Stabilizing transactions involve bids to purchase ADSs so long as the stabilizing bids do not exceed a specified maximum.
Purchases
to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a
decline in the market price of the ADSs. They may also cause the price of the ADSs to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The
underwriters may conduct these transactions on The Nasdaq Global Select Market, in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may
discontinue them at any time.
In
addition, in connection with this offering, some of the underwriters (and selling group members) may engage in passive market making transactions in the ADSs on The Nasdaq Global
Select Market,
prior to the pricing and completion of the offering. Passive market making consists of displaying bids on The Nasdaq Global Select Market no higher than the bid prices of independent market makers and
making purchases at prices no higher than those independent bids and effected in response to order flow. Net purchases by a passive market maker on each day are limited to a specified percentage of
the passive market maker's average daily trading volume in the ADSs during a specified period and must be discontinued when that limit is reached. Passive market making may cause the price of the ADSs
to be higher than the price that otherwise would exist in the open market in the absence of those transactions. If the underwriters commence passive market making transactions, they may discontinue
them at any time.
Conflicts of Interest
The underwriters are full service financial institutions engaged in various activities, which may include securities trading, commercial and
investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The underwriters and their respective affiliates have in the past
performed commercial banking, investment banking and advisory services for us from time to time for which they have received customary fees and reimbursement of expenses and may, from time to time,
engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of
their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative
securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short
positions in such securities and instruments. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may
also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they
acquire, long and/or short positions in such securities and instruments.
We
have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to
make because of any of those liabilities.
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Notice to Prospective Investors in Canada
The ADSs be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National
Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration
Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the ADSs must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements
of applicable securities laws.
Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement (including any
amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of
the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or
consult with a legal advisor.
Pursuant
to section 3A.3 of National Instrument 33-105 Underwriting Conflicts ("NI 33-105"), the underwriters are not required to comply with the disclosure
requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Notice to Prospective Investors in the European Economic Area
In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state),
with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date), an offer of ADSs described in this prospectus
supplement may not be made to the public in that relevant member state other than:
-
-
to any legal entity which is a qualified investor as defined in the Prospectus Directive;
-
-
to fewer than 100 or, if the relevant member state has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or
legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or
Dealers nominated by us for any such offer; or
-
-
in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided
that no such offer of securities shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.
For
purposes of this provision, the expression an "offer of securities to the public" in any relevant member state means the communication in any form and by any means of sufficient
information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the expression may be varied in that member
state by any measure implementing the Prospectus Directive in that member state, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD
Amending Directive, to the extent implemented in the relevant member state) and includes any relevant implementing measure in the relevant member state. The expression 2010 PD Amending Directive means
Directive 2010/73/EU.
The
sellers of the ADSs have not authorized and do not authorize the making of any offer of ADSs through any financial intermediary on their behalf, other than offers made by the
underwriters with a view to the final placement of the ADSs as contemplated in this prospectus supplement. Accordingly, no purchaser of the ADSs, other than the underwriters, is authorized to make any
further offer of the ADSs on behalf of the sellers or the underwriters.
S-42
Table of Contents
Notice to Prospective Investors in the United Kingdom
This prospectus supplement and the accompanying prospectus are only being distributed to, and is only directed at, persons in the United Kingdom
that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order (each such person being referred to as a "relevant person"). This prospectus supplement and its contents are confidential and should not be
distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom. Any person in the United Kingdom that is not a relevant persons should
not act or rely on this document or any of its contents.
Notice to Prospective Investors in France
Neither this prospectus supplement nor any other offering material relating to the ADSs described in this prospectus supplement has been
submitted to the clearance procedures of the
Autorité des Marchés Financiers
or of the competent authority of another
member state of the European Economic Area and notified to the
Autorité des Marchés Financiers.
The ADSs have not been
offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus supplement nor any other offering material relating to the ADSs has been or
will be:
-
-
released, issued, distributed or caused to be released, issued or distributed to the public in France; or
-
-
used in connection with any offer for subscription or sale of the ADSs to the public in France.
Such
offers, sales and distributions will be made in France only:
-
-
to qualified investors (
investisseurs qualifiés
) and/or to a restricted circle
of investors (
cercle restreint d'investisseurs
), in each case investing for their own account, all as defined in, and in accordance with,
articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French
Code monétaire et financier
;
-
-
to investment services providers authorized to engage in portfolio management on behalf of third parties; or
-
-
in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French
Code monétaire et
financier
and article 211-2 of the General Regulations (
Règlement
Général
) of the
Autorité des Marchés Financiers
, does not constitute
a public offer (
appel public à l'épargne
).
The
ADSs may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French
Code
monétaire et financier
.
Notice to Prospective Investors in Hong Kong
The ADSs may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an
offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance
(Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies
Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the ADSs may be issued or may be in the possession of any person for the purpose of issue (in each case
whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong
Kong) other than with respect to ADSs which are or are intended to be
S-43
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disposed
of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made
thereunder.
Notice to Prospective Investors in Japan
The ADSs offered in this prospectus supplement have not been and will not be registered under the Financial Instruments and Exchange Law of
Japan. ADSs have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan (including any corporation or other entity
organized under the laws of Japan), except (i) pursuant to an exemption from the registration requirements of the Financial Instruments and Exchange Law and (ii) in compliance with any
other applicable requirements of Japanese law.
Notice to Prospective Investors in Singapore
This prospectus supplement has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus
supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the ADSs may not be circulated or distributed, nor may the ADSs be
offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under
Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to
Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where
the ADSs are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
-
-
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold
investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
-
-
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an
individual who is an accredited investor,
-
-
shares, debentures and units of shares and debentures of that corporation or the beneficiaries' rights and interest (howsoever described) in
that trust shall not be transferred within six months after that corporation or that trust has acquired the ADSs pursuant to an offer made under Section 275 of the SFA
except:
-
-
to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2)
of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust
are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or
other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
-
-
where no consideration is or will be given for the transfer; or
-
-
where the transfer is by operation of law.
S-44
Table of Contents
LEGAL MATTERS
Certain legal matters of United States federal law and New York State law will be passed upon for us by Mayer Brown LLP. The validity of
the ordinary shares represented by ADSs and certain other matters as to English law will be passed upon for us by Mayer Brown International LLP. Covington & Burling LLP, New York,
New York, is counsel to the underwriters in connection with this offering.
EXPERTS
The consolidated financial statements of Adaptimmune Therapeutics plc as of December 31, 2016, December 31, 2015 and
June 30, 2015, and for the year ended December 31, 2016, six month period ended December 31, 2015 and the years ended June 30, 2015 and June 30, 2014, have been
incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the U.S. Securities and Exchange Commission a registration statement (including amendments and exhibits to the registration
statement) on Form S-3 under the Securities Act. Our SEC filings are available to the public over the Internet at the SEC's website at
http://www.sec.gov
. Copies of certain information filed by us
with the SEC are also available on our website at
http://www.adaptimmune.com
. Our website is not a part of this prospectus supplement and is not incorporated by reference in this prospectus supplement.
You may also read and copy any document we file at the SEC's Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on
the operation of the Public Reference Room.
This
prospectus supplement is part of a registration statement we filed with the SEC. This prospectus supplement omits some information contained in the registration statement in
accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information on us and our consolidated subsidiaries and the
securities we are offering. Statements in this prospectus supplement concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not
intended to be comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these statements.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference information into this document. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information incorporated by reference is an important part of this prospectus supplement, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934 made subsequent to the date of this prospectus supplement until the termination of the offering of the securities described in this prospectus
supplement (other than information in such filings that was "furnished," under applicable SEC rules, rather than "filed").
We
incorporate by reference the following documents or information that we have filed with the SEC:
-
-
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on March 13, 2017;
S-45
Table of Contents
-
-
Our Current Report on Form 8-K filed with the SEC on March 15, 2017; and
-
-
The description of our ordinary shares and ADSs contained in our registration statement on Form 8-A, filed with the SEC under the
Exchange Act on April 30, 2015, including any amendment or report filed for the purpose of updating such description.
You
may request a copy of these filings at no cost, by writing or telephoning us at the following address:
Adaptimmune
Therapeutics plc
Attn: Company Secretary
101 Park Drive, Milton Park
Abingdon, Oxfordshire OX14 4RY
United Kingdom
(44) 1235 430000
You
should rely only on the information incorporated by reference or provided in this prospectus supplement. We have not authorized anyone else to provide you with different or
additional information. An offer of these securities is not being made in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this prospectus
supplement is accurate as of any date other than the date on the front of those documents.
S-46
PROSPECTUS
$250,000,000
American Depositary Shares representing Ordinary Shares
We may offer, from time to time, the ADSs described in this prospectus, up to an aggregate amount of $250,000,000.
This
prospectus describes some of the general terms that may apply to the American Depositary Shares, or ADSs, of Adaptimmune Therapeutics plc. Each ADS represents 6 ordinary
shares, par value £0.001 per share. The specific terms of the ADSs to be offered, and any other information relating to a specific offering, will be set forth in a supplement to this
prospectus or in one or more documents incorporated by reference in this prospectus. You should carefully read this prospectus and the applicable prospectus supplement, as well as the documents
incorporated or deemed to be incorporated by reference in this prospectus, before you purchase any of the ADSs offered hereby. This prospectus may not be used to sell these ADSs without a supplement.
We
may offer ADSs from time to time in amounts, at prices and on other terms to be determined at the time of offering. We may offer and sell ADSs to or through one or more underwriters,
dealers and agents or directly to purchasers, on a continuous or delayed basis. The names of any underwriters, dealers or agents involved in the sale of any ADSs and the specific manner in which they
may be offered, including any applicable purchase price, fee, commission or discount arrangement between or among them, will be set forth in the prospectus supplement covering the sale of those ADSs.
See "Plan of Distribution."
Our
ADSs are listed on The Nasdaq Global Select Market under the symbol "ADAP." On September 6, 2016, the last reported sales price per ADS of our ADSs on The Nasdaq Global Select
Market was $6.75.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE "RISK FACTORS" ON PAGE 6 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE
APPLICABLE PROSPECTUS SUPPLEMENT OR ANY DOCUMENTS WE INCORPORATE BY REFERENCE CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is September 12, 2016.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
|
|
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1
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|
WHERE YOU CAN FIND MORE INFORMATION
|
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1
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INCORPORATION BY REFERENCE
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2
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THE COMPANY
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3
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FORWARD-LOOKING STATEMENTS
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4
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RISK FACTORS
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6
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USE OF PROCEEDS
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7
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DESCRIPTION OF SHARE CAPITAL
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8
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DESCRIPTION OF AMERICAN DEPOSITARY SHARES
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25
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PLAN OF DISTRIBUTION
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36
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LEGAL MATTERS
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38
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EXPERTS
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38
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SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS
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38
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i
ABOUT THIS PROSPECTUS
This prospectus is part of a shelf registration statement that we filed with the Securities and Exchange Commission, which we refer to as the
"SEC," utilizing a "shelf" registration process. Under this shelf registration process, we may, over time, offer and sell the securities described in this prospectus in one or more offerings, up to a
total dollar amount of $250,000,000, as described in this prospectus. This prospectus provides you with a general description of the securities that may be offered. Each time we offer securities under
this prospectus, we will provide a prospectus supplement or other offering materials that will contain specific information about the terms of that offering. We may also add, update or change
information contained in this prospectus by means of a prospectus supplement or by incorporating by reference information that we file or furnish to the SEC. The registration statement that we filed
with the SEC includes exhibits that provide more detail on the matters discussed in this prospectus. If the information in this prospectus is inconsistent with a prospectus supplement, you should rely
on the information in that prospectus supplement. Please carefully read this prospectus and any prospectus supplement, together with the additional information described under the headings "Where You
Can Find More Information" and "Incorporation by Reference," before purchasing any securities.
You should rely only on the information contained or incorporated by reference in this prospectus, any prospectus supplement and any issuer free writing
prospectus. "Incorporated by reference" means that we can disclose important information to you by referring you to another document filed separately with the SEC. We have not authorized any other
person to provide you with different information. If anyone provides you with different information, you should not rely on it. We are not making an offer of these securities in any state or
jurisdiction where the offer is not permitted. You should only assume that the information in this prospectus or in any prospectus supplement or issuer free writing
prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates.
In
this prospectus, "Adaptimmune," the "Group," the "Company," "we," "us" and "our" refer to Adaptimmune Therapeutics plc and its consolidated subsidiaries, except where the
context otherwise requires. "Adaptimmune®" and "SPEAR®" are registered trademarks of Adaptimmune.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public
over the Internet at the SEC's website located at
http://www.sec.gov
and on the investor relations pages of our website located at
http://www.adaptimmune.com
. You may also read and copy any document we file at the SEC's public reference room at 100 F Street, N.E., Washington,
D.C. 20549. You can call the SEC at 1-800-SEC-0330 for further information on the public reference room.
We
will furnish to Citibank, N.A., as depositary bank of our ADSs, our annual reports. When the depositary bank receives these reports, it will upon our request promptly provide them to
all holders of record of ADSs or otherwise make such reports available to such ADS holders in accordance with the terms of the deposit agreement. We will also furnish the depositary bank with all
notices of shareholders' meetings and other reports and communications in English that we make available to our shareholders. The depositary bank will make these notices, reports and communications
available to holders of ADSs and will upon our request mail to all holders of record of ADSs the information contained in any notice of a shareholders' meeting it receives.
Information
about us is also available on our website at
http://www.adaptimmune.com
. Such information on our website is not part of this
prospectus.
1
INCORPORATION BY REFERENCE
The SEC allows us to disclose certain information to you in this prospectus by referring you to documents previously filed with the SEC that
include such information. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 made subsequent to the date of this initial registration statement and prior to effectiveness of the registration statement and any reports filed by us with the SEC after the date of this
prospectus until the termination of the offering of the securities described in this prospectus (other than information in such filings that was "furnished," under applicable SEC rules, rather than
"filed").
-
-
Our Annual Report on Form 20-F for the fiscal year ended June 30, 2015 filed with the SEC on October 13, 2015 (the
"June 30, 2015 Annual Report on Form 20-F");
-
-
Our Transition Report on Form 20-F for the period from July 1, 2015 to December 31, 2015 filed with the SEC on
March 17, 2016 (the "December 31, 2015 Transition Report on Form 20-F");
-
-
Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016 filed with the SEC on
May 12, 2016 and August 8, 2016, respectively;
-
-
Our Current Reports on Form 8-K filed with the SEC on January 8, 2016, February 3, 2016, February 10, 2016,
February 12, 2016, February 16, 2016, March 17, 2016, March 30, 2016, April 7, 2016, April 15, 2016, April 22, 2016, April 29, 2016,
May 24, 2016, June 6, 2016, June 16, 2016, June 20, 2016, June 21, 2016, June 23, 2016, July 8, 2016 and August 12, 2016; and
-
-
The description of our ordinary shares and ADSs contained in our registration statement on Form 8-A, filed with the SEC under the
Exchange Act on April 30, 2015, including any amendment or report filed for the purpose of updating such description.
You
may request a copy of these filings at no cost, by writing or telephoning us at the following address:
Adaptimmune
Therapeutics plc
Attn: Company Secretary
101 Park Drive, Milton Park
Abingdon, Oxfordshire OX14 4RY
United Kingdom
(44) 1235 430000
You
should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with
different or additional information. An offer of these securities is not being made in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents.
2
THE COMPANY
Adaptimmune is a clinical stage biopharmaceutical company focused on novel cancer immunotherapy products based on its SPEAR®
(Specific Peptide Enhanced Affinity Receptor) T-cell platform. Established in 2008, the Company aims to utilize the body's own machinerythe T-cellto target and destroy cancer
cells by using engineered, increased affinity T-cell receptors, or TCRs, as a means of strengthening natural patient T-cell responses. Adaptimmune's lead program is a SPEAR T-cell therapy targeting
the NY-ESO
cancer antigen. Its NY-ESO SPEAR T-cell therapy has demonstrated signs of efficacy and tolerability in Phase 1/2 trials in solid tumors and in hematologic cancer types, including synovial sarcoma and
multiple myeloma. Adaptimmune has a strategic collaboration and licensing agreement with GlaxoSmithKline, or GSK, for the development and commercialization of the NY-ESO TCR program. In addition,
Adaptimmune has a number of proprietary programs. These include SPEAR T-cell therapies targeting the MAGE-A10 and alpha fetoprotein, or AFP, cancer antigens, which both have open Investigational New
Drug Applications, or INDs, and a further SPEAR T-cell therapy targeting the MAGE-A4 cancer antigen which is in pre-clinical phase with IND acceptance targeted for 2017. The Company has identified
over 30 intracellular target peptides preferentially expressed in cancer cells and is currently progressing 12 through unpartnered research programs. Adaptimmune has over 250 employees and is located
in Oxfordshire, U.K. and Philadelphia, USA.
Corporate Information
Our registered and principal executive offices are located at 101 Park Drive, Milton Park, Abingdon, Oxfordshire OX14 4RY, United
Kingdom; our general telephone number is (44) 1235 430000; and our internet address is
http://www.adaptimmune.com
. Our website and the
information contained on or accessible through our website are not part of this prospectus. Our agent for service of process in the United States is our subsidiary, Adaptimmune LLC, Two
Commerce Square, Suite 1700, 2001 Market Street, Philadelphia, PA 19103. Since May 6, 2015, our ADSs, which each represent 6 ordinary shares, have been listed on The Nasdaq Global
Select Market, or Nasdaq, under the symbol "ADAP."
3
FORWARD-LOOKING STATEMENTS
This prospectus, the financial statements and other documents that we incorporate by reference in this prospectus and any related prospectus
supplement may contain forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. All statements other than statements of
historical fact in this prospectus, the financial statements and other documents that we incorporate by reference in this prospectus and any related prospectus supplement are forward-looking
statements.
These
forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial
condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed
in, or suggested by, these forward-looking statements. These forward-looking statements are based on assumptions regarding our present and future business strategies and the environment in which we
expect to operate in the future. Important factors that could cause those differences include, but are not limited to:
-
-
our ability to advance our NY-ESO SPEAR® T-cells to a point where GSK exercises the option to license the product;
-
-
our ability to successfully advance our MAGE-A10 and AFP SPEAR T-cells through clinical development and to advance our MAGE-A4 SPEAR T-cells
into clinical development;
-
-
the success, cost and timing of our product development activities and clinical trials;
-
-
our ability to successfully advance our SPEAR T-cell technology platform to improve the safety and effectiveness of our existing SPEAR T-cell
candidates and to submit INDs for new SPEAR T-cell candidates;
-
-
the rate and degree of market acceptance of T-cell therapy generally and of our SPEAR T-cells;
-
-
government regulation and approval, including, but not limited to, the expected regulatory approval timelines for TCR therapeutic candidates;
-
-
patents, including, any inability to obtain third party licenses, legal challenges thereto or enforcement of patents against us;
-
-
the level of pricing and reimbursement for our SPEAR T-cells, if approved for marketing;
-
-
general economic and business conditions or conditions affecting demand for our SPEAR T-cells in the markets in which we operate, both in the
United States and internationally;
-
-
volatility in equity markets in general and in the biopharmaceutical sector in particular;
-
-
fluctuations in the price of materials and bought-in components;
-
-
our relationships with suppliers and other third-party providers;
-
-
increased competition from other companies in the biotechnology and pharmaceutical industries;
-
-
claims for personal injury or death arising from the use of our SPEAR T-cell candidates;
-
-
changes in our business strategy or development plans, and our expected level of capital expenses;
-
-
our ability to attract and retain qualified personnel;
-
-
regulatory, environmental, legislative and judicial developments including a regulatory requirement to place any clinical trials on hold or to
suspend any trials;
4
-
-
a change in our status as an emerging growth company under the Jumpstart our Business Startups Act of 2012, or the JOBS Act;
-
-
the change in our status from reporting as a foreign private issuer to reporting as a U.S. domestic company now using Securities Act and
Exchange Act U.S. domestic company forms; and
-
-
additional factors that are not known to us at this time.
Additional
factors that could cause actual results, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results to differ materially include,
but are not limited to, those discussed under "Risk Factors" in in Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended June 30, 2016, which is
incorporated by reference herein, as updated by our other SEC filings filed after such Quarterly Report. Additional risks that we may currently deem immaterial or that are not presently known to us
could also cause the forward-looking events discussed in this prospectus not to occur. Additional risks that we may currently deem immaterial or that are not presently known to us could also cause the
forward-looking events discussed in this prospectus not to occur. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect" and similar words are intended to
identify estimates and forward-looking statements. Estimates and forward-looking statements speak only at the date they were made, and we undertake no obligation to update or to review any estimate
and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future
performance. Our future results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and
forward-looking statements discussed in this prospectus, the documents that we incorporate by reference in this prospectus and any related prospectus supplement might not occur, and our future results
and our performance may differ materially from those expressed in such forward-looking statements due to, inclusive of, but not limited to, the factors mentioned above. Because of these uncertainties,
you should not make any investment decision based on these estimates and forward-looking statements.
5
RISK FACTORS
Our business, and an investment in the securities, is subject to uncertainties and risks. You should carefully consider
and evaluate all of the information included and incorporated by reference in this prospectus, including the risk factors set forth below and the risk factors incorporated by reference from our most
recent Quarterly Report on Form 10-Q for the period ended June 30, 2016, as updated by other SEC filings filed after such report, as well as any risks described in any applicable
prospectus supplement. Our business, financial condition, results of operations and prospects could be materially adversely affected by any of these risks. The occurrence of any of these risks may
cause you to lose all or part of your investment.
6
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the ADSs as set forth in the applicable prospectus supplement.
7
DESCRIPTION OF SHARE CAPITAL
The following summary describes our share capital, the material provisions of our articles of association, and
applicable provisions of the U.K. Companies Act 2006 (the "Companies Act 2006"). Because the following is only a summary, it does not contain all of the information that may be important to you. For a
complete description, you should refer to our articles of association, a copy of which has been previously filed.
General
We were incorporated pursuant to the laws of England and Wales as Adaptimmune Therapeutics Limited in December 2014 to become a holding company
for Adaptimmune Limited. Pursuant to the terms of a corporate reorganization the first stage of which was completed on February 23, 2015, all of the issued share capital in Adaptimmune Limited
was exchanged for identical shares in Adaptimmune Therapeutics Limited and, as a result, Adaptimmune Limited became a wholly owned subsidiary of Adaptimmune Therapeutics Limited. On March 20,
2015, all holders of options over ordinary shares of Adaptimmune Limited exchanged each of their options for equivalent options over ordinary shares of Adaptimmune Therapeutics Limited. On
April 1, 2015, we re-registered Adaptimmune Therapeutics Limited as a public limited company and changed the company's name to Adaptimmune Therapeutics plc.
We
are registered with the Registrar of Companies in England and Wales under number 9338148 and our registered office is at 101 Park Drive, Milton Park, Oxfordshire
OX14 4RY, United Kingdom.
Following
our corporate reorganization, certain resolutions were passed by our shareholders on April 27, 2015. These included resolutions for the adoption of new articles of
association that became effective upon the admission of our ADSs to trading on Nasdaq on May 6, 2015, and which articles of association were amended by special resolution passed on
June 16, 2016. See "Key Provisions of Our Articles of Association."
Certain
other resolutions were passed by our shareholders at our first annual general meeting on December 17, 2015. These included resolutions
for:
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The general authorization of our directors for the purpose of s551 Companies Act 2006 to issue shares in the Company and grant rights to
subscribe for or convert any securities into shares in the Company up to a maximum aggregate nominal amount of £150,000.00 for a period of five years from the date of the resolution and
expiring on December 17, 2020.
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The empowering of our directors pursuant to s570(1) Companies Act 2006 to issue equity securities for cash pursuant to the s551 authority
referred to above as if the statutory pre-emption rights under s561(1) Companies Act 2006 did not apply to such allotments for a period commencing on the date of the resolution and expiring on the
conclusion of the annual general meeting of the Company to be held in 2017.
Issued Share Capital
Our issued share capital as of August 31, 2016 was 424,711,900 ordinary shares with a par value of £0.001 per ordinary share.
Each issued ordinary share is fully paid. We currently have no deferred shares in our issued share capital.
Ordinary Shares
Our ordinary shares have the rights and restrictions described in "Key Provisions of Our Articles of Association."
As
of August 31, 2016, there were options to purchase 48,456,517 ordinary shares outstanding. All options granted are exercisable at the share price on or around the date of the
grant.
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The
vesting periods for options granted through August 31, 2016 are:
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Options granted in 2009:
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100% on the third anniversary of the grant date
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Options granted in 2011, 2012 2013 and April 2014:
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25% on the first anniversary and 75% in annual installments over the following three years
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Options granted in December 2014:
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25% on the first anniversary and 75% in monthly installments over the following three years
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Options granted in March 2015:
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25% on the first anniversary and 75% in monthly installments over the following three years
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Options granted in May 2015:
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25% on the first anniversary and 75% in monthly installments over the following three years, except for options granted to Non-Executive Directors which all vested immediately
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Options granted in January and April 2016:
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25% on the first anniversary and 75% in monthly installments over the following three years
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Options granted in June 2016:
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25% on the first anniversary and 75% in monthly installments over the following two years
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Options granted in August 2016
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25% on the first anniversary and 75% in monthly installments over the following three years, except for options granted to Non-Executive Directors which will all vest on the first anniversary of the grant
date.
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All options lapse after 10 years.
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Preferred Shares
Our board of directors may, from time to time, following an ordinary resolution of the ordinary shareholders granting authority to the directors
to allot shares and special resolution of the ordinary shareholders to amend the articles of association (and disapply pre-emption rights, if not already disapplied), direct the issuance of preferred
shares in series and may, at the time of issuance, determine the designations, powers, preferences, privileges, and relative participating, optional or special rights as well as the qualifications,
limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of
the ordinary shares. Holders of preferred shares may be entitled to receive a preference payment in the event of our liquidation before any payment is made to the holders of ordinary shares. There are
currently no preferred shares outstanding, and we have no present intention to issue any preferred shares.
Key Provisions of Our Articles of Association
The following is a summary of certain key provisions of our articles of association. Please note that this is only a
summary and is not intended to be exhaustive. For further information please refer to the full version of our articles of association, which is included as an exhibit to the registration statement of
which this prospectus is a part
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All ordinary shares have the same rights and rank
pari passu
in all respects. Subject to the
provisions of the Companies Act 2006 and any other relevant legislation, our shares may be issued with such preferred, deferred or other rights, or such restrictions, whether in relation to dividends,
returns
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of
capital, voting or otherwise, as we may determine by ordinary resolution (or, failing any such determination, as the directors may determine).
Subject to any other provisions of our articles of association and without prejudice to any special rights, privileges or restrictions as to
voting attached to any shares forming part of our share capital, the voting rights of shareholders are as follows. On a show of hands, each shareholder present in person, and each duly authorized
representative present in person of a shareholder that is corporation, has one vote. On a show of hands, each proxy present in person who has been duly appointed by one or more shareholders has one
vote, but a proxy has one vote for and one vote against a resolution if, in certain circumstances, the proxy is instructed by more than one shareholder to vote in different ways on a resolution. On a
poll, each shareholder present in person or by proxy or (being a corporation) by a duly authorized representative has one vote for each share held by the shareholder.
We
are prohibited (to the extent specified by the Companies Act 2006) from exercising any rights to attend or vote at meetings in respect of any shares held by us as treasury shares.
None of our shareholders (whether present in person by proxy or, in the case of a corporate member, by a duly authorized representative) shall
(unless the directors otherwise determine) be entitled to vote at any general meeting or at any separate class meeting in respect of any share held by him unless all calls or other sums payable by him
in respect of that share have been paid.
The directors may from time to time make calls on shareholders in respect of any moneys unpaid on their shares, whether in respect of the
nominal value of the shares or by way of premium. Shareholders are required to pay called amounts on shares subject to receiving at least 14 clear days' notice specifying the time and place for
payment. If a shareholder fails to pay any part of a call, the directors may serve further notice naming another day not being less than 14 clear days from the date of the further notice requiring
payment and stating that in the event of non-payment the shares in respect of which the call was made will be liable to be forfeited. Subsequent forfeiture requires a resolution by the directors.
Subject to the Companies Act 2006 and the provisions of all other relevant legislation, we may by ordinary resolution declare dividends in
accordance with the respective rights of shareholders but no such dividend shall exceed the amount recommended by the directors. If, in the opinion of the directors, our profits available for
distribution justify such payments, the directors may pay fixed dividends payable on any of our shares with preferential rights, half-yearly or otherwise, on fixed dates and from time to time pay
interim dividends to the holders of any class of shares. Subject to any special rights attaching to or terms of issue of any shares, all dividends shall be declared and paid according to the amounts
paid up on the shares on which the dividend is paid. No dividend shall be payable to us in respect of any shares held by us as treasury shares (except to the extent permitted by the Companies Act 2006
and any other relevant legislation).
We
may, upon the recommendation of the directors, by ordinary resolution, direct payment of a dividend wholly or partly by the distribution of specific assets.
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All
dividends unclaimed may be invested or otherwise used at the directors' discretion for our benefit until claimed (subject as provided in the articles of association), and all
dividends unclaimed after a period of 12 years from the date when such dividend became due for payment shall be forfeited and shall revert to us.
The
directors may, if so authorized by ordinary resolution passed at any general meeting, offer any holders of the ordinary shares the right to elect to receive in lieu of that dividend
an allotment of ordinary shares credited as fully paid.
We
may cease to send any check or warrant by mail or may stop the transfer of any sum by any bank or other funds transfer system for any dividend payable on any of our shares, which is
normally paid in that manner on those shares if in respect of at least two consecutive dividends the checks or warrants have been returned undelivered or remain uncashed or the transfer has failed and
reasonable inquiries made by us have failed to establish any new address of the holder.
We
or the directors may specify a "record date" on which persons registered as the holders of shares shall be entitled to receipt of any dividend.
Subject to any special rights attaching to or the terms of issue of any shares, on any winding-up of the Company our surplus assets remaining
after satisfaction of our liabilities will be distributed among our shareholders in proportion to their respective holdings of shares and the amounts paid up on those shares.
On
any winding-up of the Company (whether the liquidation is voluntary, under supervision or by the Court, the liquidator may with the authority of a special resolution of the Company
and any other sanction required by any relevant legislation, divide among our shareholders (excluding the Company itself to the extent that it is a shareholder by virtue of its holding any shares or
treasury shares)
in specie
or in kind the whole or any part of our assets (subject to any special rights attached to any shares issued by us in the
future) and may for that purpose set such value as he deems fair upon any one or more class or classes of property and may determine how that division shall be carried out as between the shareholders
or different classes of shareholders. The liquidator may, with that sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the shareholders as he with the
relevant authority determines, and the liquidation of the Company may be closed and the Company dissolved, but so that no shareholders shall be compelled to accept any shares or other property in
respect of which there is a liability.
The rights or privileges attached to any class of shares may (unless otherwise provided by the terms of the issue of the shares of that class)
be varied or abrogated with the consent in writing of the holders of three-fourths in requisite amount of the issued shares of that class (excluding any shares of that class held as treasury shares)
or with the sanction of a special resolution passed at a separate general meeting of the shareholders of that class, but not otherwise.
All of our shares are in registered form and may be transferred by a transfer in any usual or common form or any form acceptable to the
directors and permitted by the Companies Act 2006 and any other relevant legislation.
The
directors may decline to register a transfer of a share that is:
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not fully paid or on which we have a lien;
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(except where uncertificated shares are transferred without a written instrument) not lodged duly stamped (if it is required to be duly
stamped) at our registered office or at such other place as the directors may appoint;
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(except where a certificate has not been issued) not accompanied by the certificate of the share to which it relates or such other evidence
reasonably required by the directors to show the right of the transferor to make the transfer;
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in respect of more than one class of share; or
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in the case of a transfer to joint holders of a share, the number of joint holders to whom the share is to be transferred exceeds four.
We may, by ordinary resolution, consolidate and divide all or any of our share capital into shares of a larger nominal amount than our existing
shares or sub-divide our shares, or any of them, into shares of a smaller amount than our existing shares. Subject to the provisions of the Companies Act 2006 and any other relevant legislation, we
may by special resolution reduce our share capital, any capital redemption reserve fund or any share premium account and may redeem or purchase any of our own shares.
There are no rights of pre-emption under our articles of association in respect of transfers of issued ordinary shares. In certain
circumstances, our shareholders may have statutory pre-emption rights under the Companies Act 2006 in respect of the allotment of new shares in the Company. These statutory pre-emption rights, when
applicable, would require us to offer new shares for allotment to existing shareholders on a pro rata basis before allotting them to other persons. In such circumstances, the procedure for the
exercise of such statutory pre-emption rights would be set out in the documentation by which such ordinary shares would be offered to our shareholders. These statutory pre-emption rights may be
disapplied by a special resolution passed by shareholders in a general meeting in accordance with the provisions of the Companies Act 2006.
Unless and until we in a general meeting of our shareholders otherwise determine, the number of directors shall not be subject to any maximum
but shall not be less than two.
Under our directors' general power to manage our business, our directors may exercise all the powers of the Company to borrow money and to
mortgage or charge our undertaking, property and uncalled capital or parts thereof and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or
obligation of the Company or of any third party.
Directors' Interests and Restrictions
(a) The
board may, in accordance with our articles of association and the requirements of the Companies Act 2006, authorize a matter proposed to us which would, if not
authorized, involve a breach by a director of his duty under section 175 of the Companies Act 2006 to avoid a situation in which he has, or can have, a direct or indirect interest that
conflicts, or possibly may conflict, with our interests. A director is not required, by reason of being a director, to account to the
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Company
for any remuneration or other benefit that he derives from a relationship involving a conflict of interest or possible conflict of interest that has been authorized by the board.
(b) Subject
to the provisions of any relevant legislation and provided that he has disclosed to the directors the nature and extent of any material interest of his, a
director may be a party to, or otherwise interested in, any transaction, contract or arrangement with us and he may be a director or other officer of, or employed by, or a party to any transaction or
arrangement with, or otherwise interested in any body corporate promoted by the Company or in which the Company is otherwise interested and that director shall not, by reason of his office, be
accountable to the Company for any
benefit that he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate; and no such transaction or arrangement shall be
liable to be voided on the ground of any such interest or benefit.
(c) Except
as provided in our articles of association, a director shall not vote at a meeting of the directors in respect of any transaction or arrangement or any other
proposal whatsoever in which he has an interest (together with any person connected with him within the meaning of section 252 of the Companies Act 2006), other than (i) an interest in
shares or debentures or other securities of the Company, (ii) where permitted by the terms of any authorization of a conflict of interest or by an ordinary resolution, (iii) where the
interest cannot reasonably be regarded as likely to give rise to a conflict of interest, or (iv) in the circumstances set out in paragraph (d) below, and shall not be counted in the
quorum at a meeting in relation to any resolution on which he is not entitled to vote.
(d) A
director shall (in the absence of some material interest other than those indicated below) be entitled to vote (and be counted in the quorum) in respect of any
resolution concerning any of the following matters:
(i) the
giving of any guarantee, security or indemnity in respect of an obligation incurred by him or for the benefit us or any of our subsidiaries;
(ii) any
proposal concerning an offer of shares or debentures or other securities of or by us or any of our subsidiaries for subscription or purchase or exchange in which
offer he is or will be interested as a participant in the underwriting, sub-underwriting or guaranteeing of such offer;
(iii) any
proposal concerning any other company in which he is interested, directly or indirectly and whether as an officer or shareholder or otherwise, provided that he
(together with persons connected with him) does not to his knowledge hold an interest in shares representing one percent or more of the issued shares of any class of such company (or of any third
company through which his interest is derived) or of the voting rights available to shareholders of the relevant company;
(iv) any
proposal concerning arrangements pursuant to which benefits are made available to our employees and/or directors and which does not provide special benefits for
directors or former directors;
(v) any
proposal under which he may benefit concerning the giving of indemnities to our directors or other officers that the directors are empowered to give under our
articles of association;
(vi) any
proposal under which he may benefit concerning the purchase or maintenance of insurance for any of our directors or other officers; and
(vii) any
proposal under which he may benefit concerning the provision to directors of funds to meet expenditures in defending proceedings.
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(e) Where
proposals are under consideration to appoint two or more directors to offices or employments with us or with any company in which we are interested or to fix or
vary the terms of such appointments, such proposals may be divided and considered in relation to each director separately and in such case each of the directors concerned (if not debarred from voting
under paragraph (d)(iv) above) shall be entitled to vote (and be counted in the quorum) in respect of each resolution, except that concerning his own appointment.
(f) If
any question shall arise at any meeting as to the materiality of a director's interest or as to the entitlement of any director to vote and such question is not
resolved by his agreeing voluntarily to abstain from voting, such question shall be referred to the chairman of the meeting (or where the interest concerns the chairman himself to the deputy chairman
of the meeting) and his ruling in relation to any director shall be final and conclusive, except in a case where the nature or extent of the interests of the director concerned have not been fairly
disclosed.
Remuneration
(a) Each
of the directors may (in addition to any amounts payable under paragraph (b) and (c) below or under any other provision of our articles of
association) be paid out of the funds of the Company such sum by way of directors' fees as the directors may from time to time determine.
(b) Any
director who is appointed to hold any employment or executive office with us or who, by our request, goes or resides abroad for any purposes of the Company or who
otherwise performs services that in the opinion of the directors are outside the scope of his ordinary duties may be paid such additional remuneration (whether by way of salary, commission,
participation in profits or otherwise) as
the directors (or any duly authorized committee of the directors) may determine and either in addition to or in lieu of any remuneration provided for by or pursuant to any other Article.
(c) Each
director may be paid his reasonable traveling expenses (including hotel and incidental expenses) of attending and returning from meetings of the directors or
committees of the directors or general meetings or any separate meeting of the holders of any class of our shares or any other meeting that as a director he is entitled to attend and shall be paid all
expenses properly and reasonably incurred by him in the conduct of the Company's business or in the discharge of his duties as a director.
Pensions and Other Benefits
The directors may exercise all the powers of the Company to provide benefits, either by the payment of gratuities or pensions or by insurance or
in any other manner whether similar to the foregoing or not, for any director or former director, or any person who is or was at any time employed by, or held an executive or other office or place of
profit in, the Company or any body corporate that is or has been a subsidiary of the Company or a predecessor of the business of the Company or of any such subsidiary and for the families and persons
who are or was a dependent of any such persons and for the purpose of providing any such benefits contribute to any scheme trust or fund or pay any premiums.
Appointment and Retirement of Directors
(a) The
directors shall have power to appoint any person who is permitted by the Companies Act 2006 and any other relevant legislation and is willing to act to be a
director, either to fill a casual vacancy or as an additional director but so that the total number of directors shall not exceed the maximum number fixed (if any) by or in accordance with our
articles of association. Any director so appointed shall retire from office at our annual general meeting following such appointment. Any director so retiring shall be eligible for re-election.
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(b) Subject
as provided in our articles of association, the shareholders may by ordinary resolution elect any person who is willing to act as a director either to fill a
casual vacancy or as an addition to the existing directors or to replace a director removed from office under our articles of association but so that the total number of directors shall not at any one
time exceed any maximum number fixed by or in accordance with our articles of association.
(c) At
each annual general meeting a minimum number equal to one-third of the number of those directors who are not due to retire at the annual general meeting under
sub-paragraph (a) above (referred to for as the purposes of this paragraph relevant directors) (or, if their number is not a multiple of three, the number nearest to but not greater than
one-third) shall retire from office. Directors retiring under paragraph (e) below shall be counted as part of this minimum number.
(d) The
directors to retire by rotation pursuant to paragraph (c) above shall include (so far as necessary to obtain the minimum number required and after taking into
account the directors to retire under paragraph (e) below) any relevant director who wishes to retire and not to offer himself for re-election. Any further directors to retire shall be those of
the other relevant directors who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected directors on the same day,
those to retire shall (unless they otherwise agree among themselves) be determined by lot. A retiring director shall be eligible for re-election.
(e) In
any event, each director shall retire and shall (unless his terms of appointment with the Company specify otherwise) be eligible for re-election at the annual general
meeting held in the third calendar year (or such earlier calendar year as may be specified for this purpose in his terms of appointment with the Company) following his last appointment, election or
re-election at any general meeting of the Company.
(f) At
the meeting at which a director retires under any provision of our articles of association, the shareholders may by ordinary resolution fill the vacated office by
appointing a person eligible for election as a director under our articles of association to it, and in default the retiring director shall be deemed to have been re-appointed except where:
(i) that
director has given notice to us that he is unwilling to be elected; or
(ii) at
such meeting it is expressly resolved not to fill such vacated office or a resolution for the reappointment of such director shall have been put to the meeting and
not passed.
(g) In
the event of the vacancy not being filled at such meeting, it may be filled by the directors as a casual vacancy in accordance with sub-paragraph (a) above.
(h) The
retirement of a director pursuant to paragraphs (c), (d) and (e) shall not have effect until the conclusion of the relevant meeting except where
a resolution is passed to elect some other person in the place of the retiring director or a resolution for his re-election is put to the meeting and not passed and accordingly a retiring director who
is re-elected or deemed to have been re-elected will continue in office without break.
Company Name
The directors may resolve to change the Company's name.
Subject to the provisions of any relevant legislation, each of our directors and other officers (excluding an auditor) are entitled to be
indemnified by us against all liabilities incurred by him in the execution and discharge of his duties or in relation to those duties. The Companies Act 2006 renders
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void
an indemnity for a director against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a
directors as described in"Differences in Corporate LawLiability of Directors and Officers."
Shareholders Meetings
Annual General Meetings
We shall in each year hold a general meeting of our shareholders in addition to any other meetings in that year, and shall specify the meeting
as such in the notice convening it. The annual general meeting shall be held at such time and place as the directors may appoint.
The directors may call a general meeting of shareholders. The directors must call a general meeting if the shareholders and the Companies Act
2006 require them to do so. The arrangements for the calling of general meetings are described in "Differences in Corporate LawNotice of General Meetings."
No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business but the absence of a
quorum shall not preclude the appointment of a chairman that shall not be treated as part of the business of a meeting. One or more qualifying persons present at a meeting and between them holding (or
being the proxy or corporate representative of the holders of) at least one-third in number of the issued shares (excluding any shares held as treasury shares) entitled to vote on the business to be
transacted are a quorum. A qualifying person for these purposes is an individual who is a member, a person authorized to act as the representative of a member (being a corporation) in relation to the
meeting or a person appointed as proxy of a member in relation to the meeting.
Other U.K. Law Considerations
Mandatory Purchases and Acquisitions
Pursuant to sections 979 to 991 of the Companies Act 2006, where a takeover offer has been made for the Company and the offeror has
acquired or unconditionally contracted to acquire not less than 90 percent of the voting rights carried by those shares, the offeror may give notice, to the holder of any shares to which the
offer relates which the offeror has not acquired or unconditionally contracted to acquire that he wishes to acquire and is entitled to so acquire, to acquire those shares of the same terms as the
general offer.
Pursuant to Part 22 of the Companies Act 2006 and our articles of association, we are empowered by notice in writing to require any
person whom we know to be, or have reasonable cause to believe to be, interested in the Company, our shares or, at any time during the three years immediately preceding the date on which the notice is
issued has been so interested, within a reasonable time to disclose to us particulars of any interest, rights, agreements or arrangements affecting any of the shares held by that person or in which
such other person as aforesaid is interested (so far as is within his knowledge).
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Under
our articles of association, if a person defaults in supplying us with the required particulars in relation to the shares in question ("default shares"), the directors may be
notice direct that:
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in respect of the default shares, the relevant member shall not be entitled to vote or exercise any other right conferred by membership in
relation to general meetings; and/or
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where the default shares represent at least 0.25 percent of their class, (a) any dividend or other money payable in respect of
the default shares shall be retained by us without liability to pay interest, and/or (b) no transfers by the relevant member of shares other than certain approved transfers may be registered
(unless the member himself is not in default and the transfer does not relate to default shares), and/or (c) any shares held by the relevant number in uncertificated form shall be converted
into certificated form.
Under English law, a public limited company may only purchase its own shares out of the distributable profits of the company or the proceeds of
a fresh issue of shares made for the purpose of financing the purchase. A limited company may not purchase its own shares if as a result of the purchase there would no longer be any issued shares of
the company other than redeemable shares or shares held as treasury shares.
Subject
to the above, we may purchase our own shares in the manner prescribed below. We may purchase on a recognized investment exchange our own fully paid shares pursuant to an ordinary
resolution of the Company. The resolution authorizing the purchase must:
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specify the maximum number of shares authorized to be acquired;
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determine the maximum and minimum prices that may be paid for the shares; and
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specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.
We
may purchase our own fully paid shares otherwise than on a recognized investment exchange pursuant to a purchase contract authorized by special resolution of the Company before the
purchase takes place. Any authority will not be effective if any shareholder from whom we propose to purchase shares votes on the resolution and the resolution would not have been passed if he had not
done so. The resolution authorizing the purchase must specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.
Registration Rights
Under the Investors' Rights Agreement, dated February 23, 2015, or the Investors' Rights Agreement, certain of our shareholders have
registration rights for the resale of the ordinary shares held by them. Under this agreement, the holders of approximately 84,948,400 ordinary shares (including in the form of ADSs) have the right to
require us to register the offer and sale of their ordinary shares, or the registrable securities (including in the form of ADSs), or to include such registrable securities in registration statements
we file, in each case as described below.
At any time after six months following our IPO, the holders of more than fifty percent of the registrable securities than outstanding have the
right to demand that we use our best efforts to file a registration statement, provided that the anticipated aggregated offering price for such offering must exceed $10 million. We are
only obligated to file up to two registration statements in connection with the exercise of demand registration rights.
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In
addition, at any time after we qualify to file a registration statement on Form F-3 (or any substantially similar form such as Form S-3), any holder of
registrable securities has the right to demand that we use our commercially reasonable efforts to file a registration statement on Form F-3 (or any substantially similar form such as
Form S-3) covering at least $5 million of registrable securities. We are not obligated to file more than two such registration statements in any 12-month period.
If we propose to register (other than in certain excluded registrations) any ordinary shares or ADSs representing such ordinary shares,
shareholders who have entered into the Investors' Rights Agreement are entitled to notice of such registration and to include their registrable securities in that registration. The registration of
such shareholders' registrable securities pursuant to a company registration does not relieve us of the obligation to effect a demand registration. The managing underwriter has the right to limit the
number of registrable securities included in a company registration if the managing underwriter believes it would interfere with the successful marketing of the ordinary shares or ADSs.
Subject to limited exceptions, the Investors' Rights Agreement provides that we must pay all registration expenses in connection with the
registration rights set forth above. The Investors' Rights Agreement contains customary indemnification and contribution provisions.
The registration rights set forth above terminate upon the earlier of (1) sale of the company (2) as to a particular holder, when
such holder can sell all of its ordinary shares (including in the form of ADSs) without limitation during a three-month period without registration pursuant to Rule 144 under the Securities Act
or another exemption; or (3) the fifth anniversary of the completion of our IPO.
Differences in Corporate Law
The applicable provisions of the Companies Act 2006 differ from laws applicable to U.S. corporations and their
shareholders. Set forth below is a summary of certain differences between the
provisions of the Companies Act 2006 applicable to us and the Delaware General Corporation Law relating to shareholders' rights and protections. This summary is not intended to be a complete
discussion of the respective rights and it is qualified in its entirety by reference to Delaware law and English law
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England and Wales
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Delaware
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Number of Directors
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Under the Companies Act 2006, a public limited company must have at least two directors and the number of directors may be fixed by or in the manner provided in a company's articles of association.
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Under Delaware law, a corporation must have at least one director and the number of directors shall be fixed by or in the manner provided in the bylaws.
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England and Wales
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Delaware
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Removal of Directors
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Under the Companies Act 2006, shareholders may remove a director without cause by an ordinary resolution (which is passed by a simple majority of those
voting in person or by proxy at a general meeting) irrespective of any provisions of any service contract the director has with the company, provided that 28 clear days' notice of the resolution is given to the company and its shareholders and
certain other procedural requirements under the Companies Act 2006 are followed (such as allowing the director to make representations against his or her removal either at the meeting or in writing).
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Under Delaware law, unless otherwise provided in the certificate of incorporation, directors may be removed from office, with or without cause, by a
majority stockholder vote, though in the case of a corporation whose board is classified, stockholders may effect such removal only for cause.
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Vacancies on the Board of Directors
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Under English law, the procedure by which directors (other than a company's initial directors) are appointed is generally set out in a
company's articles of association, provided that where two or more persons are appointed as directors of a public limited company by resolution of the shareholders, resolutions appointing each director must be voted on individually.
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Under Delaware law, vacancies on a corporation's board of directors, including those caused by an increase in the number of directors, may
be filled by a majority of the remaining directors.
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Annual General Meeting
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Under the Companies Act 2006, a public limited company must hold an annual general meeting in each six-month period following the company's
annual accounting reference date.
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Under Delaware law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from
time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws.
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General Meeting
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Under the Companies Act 2006, a general meeting of the shareholders of a public limited company may be called by the directors.
Shareholders holding at least 5% of the
paid-up capital of the company carrying voting rights at general meetings can require the directors to call a general meeting.
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Under Delaware law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be
authorized by the certificate of incorporation or by the bylaws.
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England and Wales
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Delaware
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Notice of General Meetings
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Under the Companies Act 2006, 21 clear days' notice must be given for an annual general meeting and any resolutions to be proposed at the meeting. Subject
to a company's articles of association providing for a longer period, at least 14 clear days' notice is required for any other general meeting. In addition, certain matters (such as the removal of directors or auditors) require special notice, which
is 28 clear days' notice. The shareholders of a company may in all cases consent to a shorter notice period, the proportion of shareholders' consent required being 100% of those entitled to attend and vote in the case of an annual general meeting and,
in the case of any other general meeting, a majority in number of the members having a right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving a right to attend and vote at
the meeting.
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Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given
to each stockholder entitled to vote at the meeting not less than 10 nor more than 60 days before the date of the meeting and shall specify the place, date, hour, and purpose or purposes of the meeting.
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Proxy
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Under the Companies Act 2006, at any meeting of shareholders, a shareholder may designate another person to attend, speak and vote at the
meeting on their behalf by proxy.
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Under Delaware law, at any meeting of stockholders, a stockholder may designate another person to act for such stockholder by proxy, but no
such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.
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Preemptive Rights
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Under the Companies Act 2006, "equity securities" (being (i) shares in the company other than shares that, with respect to dividends
and capital, carry a right to participate only up to a specified amount in a distribution ("ordinary shares") or (ii) rights to subscribe for, or to convert securities into, ordinary shares) proposed to be allotted for cash must be offered first
to the existing equity shareholders in the company in proportion to the respective nominal value of their holdings, unless an exception applies or a special resolution to the contrary has been passed by shareholders in a general meeting or the
articles of association provide otherwise in each case in accordance with the provisions of the Companies Act 2006.
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Under Delaware law, unless otherwise provided in a corporation's certificate of incorporation, a stockholder does not, by operation of law,
possess preemptive rights to subscribe to additional issuances of the corporation's stock.
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England and Wales
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Delaware
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Liability of Directors and Officers
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Under the Companies Act 2006, any provision (whether contained in a company's articles of association or any contract or otherwise) that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him
in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
Any provision by which a company directly or indirectly
provides an indemnity (to any extent) for a director of the company or of an associated company against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which
he is a director is also void except as permitted by the Companies Act 2006, which provides exceptions for the company to (a) purchase and maintain insurance against such liability; (b) provide a "qualifying third party indemnity" (being an
indemnity against liability incurred by the director to a person other than the company or an associated company as long as he is successful in defending the claim or criminal proceedings); and (c) provide a "qualifying pension scheme indemnity"
(being an indemnity against liability incurred in connection with the company's activities as trustee of an occupational pension plan).
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Under Delaware law, a corporation's certificate of incorporation may include a provision eliminating or limiting the personal liability of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a
director. However, no provision can limit the liability of a director for:
any breach of the
director's duty of loyalty to the corporation or its stockholders;
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
intentional or negligent payment of unlawful dividends or stock
purchases or redemptions; or
any transaction from which the director derives an improper personal benefit.
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England and Wales
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Delaware
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Voting Rights
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Under English law, unless a poll is demanded by the shareholders of a company or is required by the chairman of the meeting or the company's articles of
association, shareholders shall vote on all resolutions on a show of hands. Under the Companies Act 2006, a poll may be demanded by (a) not fewer than five shareholders having the right to vote on the resolution; (b) any shareholder(s)
representing at least 10% of the total voting rights of all the shareholders having the right to vote on the resolution; or (c) any shareholder(s) holding shares in the company conferring a right to vote on the resolution being shares on which
an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right. A company's articles of association may provide more extensive rights for shareholders to call a poll.
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Delaware law provides that, unless otherwise provided in the certificate of incorporation, each stockholder is entitled to one vote for each share of
capital stock held by such stockholder.
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Under English law, an ordinary resolution is passed on a show of hands if it is approved by a simple majority (more than 50%) of the votes
cast by shareholders present (in person or by proxy) and entitled to vote. If a poll is demanded, an ordinary resolution is passed if it is approved by holders representing a simple majority of the total voting rights of shareholders present (in
person or by proxy) who (being entitled to vote) vote on the resolution. Special resolutions require the affirmative vote of not less than 75% of the votes cast by shareholders present (in person or by proxy) at the meeting.
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England and Wales
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Delaware
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Shareholder Vote on Certain Transactions
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The Companies Act 2006 provides for schemes of arrangement, which are arrangements or compromises between a company and any class of shareholders or creditors and used in certain types of reconstructions, amalgamations, capital reorganizations or
takeovers. These arrangements require:
the approval at a
shareholders' or creditors' meeting convened by order of the court, of a majority in number of shareholders or creditors representing 75% in value of the capital held by, or debt owed to, the class of shareholders or creditors, or class thereof
present and voting, either in person or by proxy; and
the approval of the court.
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Generally, under Delaware law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation, sale, lease or exchange of all or substantially all of a corporation's assets or
dissolution requires:
the approval of the
board of directors; and
approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of a corporation entitled to
vote on the matter.
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Standard of Conduct for Directors
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Under English law, a director owes various statutory and fiduciary duties to the company, including:
to act in the way he
considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole;
to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly conflicts, with the interests of the
company;
to act in
accordance with the company's constitution and only exercise his powers for the purposes for which they are conferred;
to exercise independent judgment;
to exercise reasonable care, skill and diligence;
not to accept benefits from a third party conferred by reason of his
being a director or doing (or not doing) anything as a director; and
a duty to declare any interest that he has, whether directly or indirectly, in a proposed or existing transaction or arrangement with the company.
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Delaware law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of
directors is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed basis and in a manner they reasonably believe to be in the best interest of the
stockholders.
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England and Wales
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Delaware
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Stockholder Suits
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Under English law, generally, the company, rather than its shareholders, is the proper claimant in an action in respect of a wrong done to the company or
where there is an irregularity in the company's internal management. Notwithstanding this general position, the Companies Act 2006 provides that (i) a court may allow a shareholder to bring a derivative claim (that is, an action in respect of
and on behalf of the company) in respect of a cause of action arising from a director's negligence, default, breach of duty or breach of trust and (ii) a shareholder may bring a claim for a court order where the company's affairs have been or
are being conducted in a manner that is unfairly prejudicial to some of its shareholders.
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Under Delaware law, a stockholder may initiate a derivative action to enforce a right of a corporation if the corporation fails to enforce the right itself. The complaint must:
state that the
plaintiff was a stockholder at the time of the transaction of which the plaintiff complains or that the plaintiffs shares thereafter devolved on the plaintiff by operation of law; and
allege with particularity the efforts made by the plaintiff to obtain
the action the plaintiff desires from the directors and the reasons for the plaintiff's failure to obtain the action; or
state the reasons for not making the effort.
Additionally, the
plaintiff must remain a stockholder through the duration of the derivative suit. The action will not be dismissed or compromised without the approval of the Delaware Court of Chancery.
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If at the time of a takeover offer the U.K. Panel on Takeovers and Mergers (the "Takeover Panel") determines that we have our place of central
management and control in the United
Kingdom, we would be subject to the U.K. City Code on Takeovers and Mergers (the "Takeover Code"), which is issued and administered by the Takeover Panel. The Takeover Code provides a framework within
which takeovers of companies subject to it are conducted. In particular, the Takeover Code contains certain rules in respect of mandatory offers. Under Rule 9 of the Takeover Code, if a person:
(a) acquires
an interest in our shares which, when taken together with shares in which such person or persons acting in concert with such person are interested, carries 30%
or more of the voting rights of our shares; or
(b) who,
together with persons acting in concert with such person, is interested in shares that in the aggregate carry not less than 30% and not more than 50% of the voting
rights in the company, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person is interested,
the
acquirer and, depending on the circumstances, its concert parties, would be required (except with the consent of the Takeover Panel) to make a cash offer for our outstanding shares at a price not
less than the highest price paid for any interests in the shares by the acquirer or its concert parties during the previous 12 months.
There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital,
including the availability of cash and cash equivalents for use by us, or that may affect the remittance of dividends, interest, or other payments by us to non-resident holders of our ordinary shares
or ordinary shares, other than withholding tax requirements. There is no limitation imposed by English law or our articles of association on the right of non-residents to hold or vote shares.
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DESCRIPTION OF AMERICAN DEPOSITARY SHARES
Citibank, N.A. has agreed to act as the depositary bank for the American Depositary Shares. Citibank's depositary offices are located at 388
Greenwich Street, New York, New York 10013. American Depositary Shares are frequently referred to as "ADSs" and represent ownership interests in securities that are on deposit with the depositary
bank. ADSs may be represented by certificates that are commonly known as "American Depositary Receipts" or "ADRs." The depositary bank typically appoints a custodian to safekeep the securities on
deposit. In this case, the custodian is Citibank, N.A. London Branch, having its principal office at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, England.
We
have appointed Citibank as depositary bank pursuant to a deposit agreement. A copy of the deposit agreement is on file with the SEC under cover of a Registration Statement on
Form F-6. You may obtain a copy of the deposit agreement from the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and from the SEC's
website (www.sec.gov). Please refer to Registration Number 333-203642 when retrieving such copy.
We
are providing you with a summary description of the material terms of the ADSs and of your material rights as an owner of ADSs. Please remember that summaries by their nature lack the
precision of the information summarized and that the rights and obligations of an owner of ADSs will be determined by reference to the terms of the deposit agreement and not by this summary. We urge
you to review the deposit agreement in its entirety. The portions of this summary description that are
italicized describe matters that may be relevant to the ownership of ADSs but that may not be contained in the deposit agreement.
Each
ADS represents the right to receive and to exercise the beneficial ownership interests in 6 ordinary shares that are on deposit with the depositary bank and/or custodian. An
ADS also represents the right to receive, and to exercise the beneficial interests in any other property received by the depositary bank or the custodian on behalf of the owner of the ADS but that has
not been distributed to the owners of ADSs because of legal restrictions or practical considerations. The custodian, the depositary bank and their respective nominees will hold all deposited property
for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the depositary bank, the custodian or their nominees. Beneficial
ownership in the deposited property will under the terms of the deposit agreement be vested in the beneficial owners of the ADSs. The depositary bank, the custodian and their respective nominees will
be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. A beneficial owner of ADSs may or may not be the
holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercise beneficial ownership interests in the deposited property only through the registered holders of the ADSs, the
registered holders of the ADSs (on behalf of the applicable ADS owners) only through the depositary bank, and the depositary bank (on behalf of the owners of the corresponding ADSs) directly, or
indirectly through the custodian or their respective nominees, in each case upon the terms of the deposit agreement.
If
you become an owner of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The
deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations as an owner of ADSs and those of the depositary bank. As an ADS holder you appoint the
depositary bank to act on your behalf in certain circumstances. The deposit agreement and the ADRs are governed by New York law. However, our obligations to the holders of ordinary shares will
continue to be governed by the laws of England and Wales, which may be different from the laws in the United States.
In
addition, applicable laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. You are solely responsible for
complying with such reporting requirements and obtaining such approvals. Neither the depositary bank, the custodian, us or
25
any
of their or our respective agents or affiliates shall be required to take any actions whatsoever on your behalf to satisfy such reporting requirements or obtain such regulatory approvals under
applicable laws and regulations.
As an owner of ADSs, we will not treat you as one of our shareholders and you will not have direct shareholder rights. The depositary bank will hold on your
behalf the shareholder rights attached to the ordinary shares underlying your ADSs. As an owner of ADSs you will be able to exercise the shareholders rights for the ordinary shares represented by your
ADSs through the depositary bank only to the extent contemplated in the deposit agreement. To exercise any shareholder rights not contemplated in the deposit agreement you will, as an ADS owner, need
to arrange for the cancellation of your ADSs and become a direct shareholder.
As
an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through an account established by the
depositary bank in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary bank (commonly referred to as the "direct registration system" or "DRS"). The
direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary bank. Under the direct registration system, ownership of ADSs is evidenced by
periodic statements issued by the depositary bank to the holders of the ADSs. The direct registration system includes automated transfers between the depositary bank and The Depository Trust Company
("DTC"), the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely
on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The
procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning
these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the ADSs directly by means of an
ADS registered in your name and, as such, we will refer to you as the "holder." When we refer to "you," we assume the reader owns ADSs and will own ADSs at the relevant time.
The
registration of the ordinary shares in the name of the depositary bank or the custodian shall, to the maximum extent permitted by applicable law, vest in the depositary bank or the
custodian the record ownership in the applicable ordinary shares with the beneficial ownership rights and interests in such ordinary shares being at all times vested with the beneficial owners of the
ADSs representing the ordinary shares. The depositary bank or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case only on
behalf of the holders and beneficial owners of the ADSs representing the deposited property.
Dividends and Distributions
As a holder of ADSs, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your
receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the deposit agreement in
proportion to the number of ADSs held as of the specified record date, after deduction of the applicable fees, taxes and expenses.
Whenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon
receipt of confirmation of the deposit of the requisite funds, the depositary bank will arrange for the funds to be converted into U.S. dollars and for the
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distribution
of the U.S. dollars to the holders, subject to the laws and regulations of England and Wales.
The
conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The depositary bank will apply the same method for
distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.
The
distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. The depositary bank will hold
any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the
funds that the depositary bank holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.
Whenever we make a free distribution of ordinary shares for the securities on deposit with the custodian, we will deposit the applicable number
of ordinary shares with the custodian. Upon receipt of confirmation of such deposit, the depositary bank will
either
distribute to holders new ADSs
representing the ordinary shares deposited
or
modify the ADS-to-ordinary share ratio, in which case each ADS you hold will represent rights and
interests in the additional ordinary shares so
deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.
The
distribution of new ADSs or the modification of the ADS-to-ordinary share ratio upon a distribution of ordinary shares will be made net of the fees, expenses, taxes and governmental
charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or governmental charges, the depositary bank may sell all or a portion of the new ordinary shares so
distributed.
No
such distribution of new ADSs will be made if it would violate a law (i.e., the U.S. securities laws) or if it is not operationally practicable. If the depositary bank does not
distribute new ADSs as described above, it may sell the ordinary shares received upon the terms described in the deposit agreement and will distribute the proceeds of the sale as in the case of a
distribution of cash.
Whenever we intend to distribute rights to purchase additional ordinary shares, we will give prior notice to the depositary bank and we will
assist the depositary bank in determining whether it is lawful and reasonably practicable to distribute rights to purchase additional ADSs to holders.
The
depositary bank will establish procedures to distribute rights to purchase additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and
reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of
the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The depositary bank is not obligated to
establish procedures to facilitate the distribution and exercise by holders of rights to purchase new ordinary shares other than in the form of ADSs.
The
depositary bank will
not
distribute the rights to you if:
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We do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or
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We fail to deliver satisfactory documents to the depositary bank; or
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It is not reasonably practicable to distribute the rights.
The
depositary bank will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to
holders as in the case of a cash distribution. If the depositary bank is unable to sell the rights, it will allow the rights to lapse.
Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior
notice thereof to the depositary bank and will indicate whether we wish the elective distribution to be made available to you. In such case, we will assist the depositary bank in determining whether
such distribution is lawful and reasonably practicable.
The
depositary bank will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated in the deposit agreement.
In such case, the depositary bank will establish procedures to enable you to elect to receive either cash or additional ADSs, in each case as described in the deposit agreement.
If
the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in England and Wales would receive upon failing to make an
election, as more fully described in the deposit agreement.
Whenever we intend to distribute property other than cash, ordinary shares or rights to purchase additional ordinary shares, we will notify the
depositary bank in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the depositary bank in determining whether such distribution to holders is
lawful and reasonably practicable.
If
it is reasonably practicable to distribute such property to you and if we provide all of the documentation contemplated in the deposit agreement, the depositary bank will distribute
the property to the holders in a manner it deems practicable.
The
distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes and
governmental charges, the depositary bank may sell all or a portion of the property received.
The
depositary bank will
not
distribute the property to you and will sell the property if:
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We do not request that the property be distributed to you or if we ask that the property not be distributed to you; or
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We do not deliver satisfactory documents to the depositary bank; or
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The depositary bank determines that all or a portion of the distribution to you is not reasonably practicable.
The
proceeds of such a sale will be distributed to holders as in the case of a cash distribution.
Whenever we decide to redeem any of the securities on deposit with the custodian, we will notify the depositary bank in advance. If it is
practicable and if we provide all of the documentation contemplated in the deposit agreement, the depositary bank will provide notice of the redemption to the holders.
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The
custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary bank will convert the redemption funds received
into U.S. dollars upon the terms of the deposit agreement and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the
depositary bank. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be
selected by lot or on a
pro rata
basis, as the depositary bank may determine.
The ordinary shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, a
split-up, cancellation, consolidation or any other reclassification of such ordinary shares or a recapitalization, reorganization, merger, consolidation or sale of assets of the Company.
If
any such change were to occur, your ADSs would, to the extent permitted by law, represent the right to receive the property received or exchanged in respect of the ordinary shares
held on deposit. The depositary bank may in such circumstances deliver new ADSs to you, amend the deposit agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for
the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the
change affecting the Shares. If the depositary bank may not lawfully distribute such property to you, the depositary bank may sell such property and distribute the net proceeds to you as in the case
of a cash distribution.
Issuance of ADSs upon Deposit of Ordinary Shares
After the completion of this offering, the ordinary shares that underlie the ADSs that are being offered for sale pursuant to this prospectus
will be deposited by us with the custodian. Upon receipt of confirmation of such deposit, the depositary bank will issue ADSs to the underwriters named in any applicable prospectus supplement.
After
the closing of this offer, the depositary bank may create ADSs on your behalf if you or your broker deposit ordinary shares with the custodian. The depositary bank will deliver
these ADSs to the person you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the ordinary shares to the custodian. Your ability to
deposit ordinary shares and receive ADSs may be limited by U.S. and English legal considerations applicable at the time of deposit.
The
issuance of ADSs may be delayed until the depositary bank or the custodian receives confirmation that all required approvals have been given and that the ordinary shares have been
duly transferred to the custodian. The depositary bank will only issue ADSs in whole numbers.
When
you make a deposit of ordinary shares, you will be responsible for transferring good and valid title to the depositary bank. As such, you will be deemed to represent and warrant
that:
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The ordinary shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained.
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All preemptive (and similar) rights, if any, with respect to such ordinary shares have been validly waived or exercised.
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You are duly authorized to deposit the ordinary shares.
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The ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim,
and are not, and the ADSs issuable upon such deposit will not be, "restricted securities" (as defined in the deposit agreement).
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The ordinary shares presented for deposit have not been stripped of any rights or entitlements.
If
any of the representations or warranties are incorrect in any way, we and the depositary bank may, at your cost and expense, take any and all actions necessary to correct the
consequences of the misrepresentations.
Transfer, Combination and Split Up of ADRs
As an ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you
will have to surrender the ADRs to be transferred to the depositary bank and also must:
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ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;
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provide such proof of identity and genuineness of signatures as the depositary bank deems appropriate;
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provide any transfer stamps required by the State of New York or the United States; and
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pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the
deposit agreement, upon the transfer of ADRs.
To
have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary bank with your request to have them combined or split up, and you must pay all
applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the deposit agreement, upon a combination or split up of ADRs.
Withdrawal of Ordinary Shares Upon Cancellation of ADSs
As a holder, you will be entitled to present your ADSs to the depositary bank for cancellation and then receive the corresponding number of
underlying ordinary shares at the custodian's offices. Your ability to withdraw the ordinary shares held in respect of the ADSs may be limited by U.S. and English considerations applicable at the time
of withdrawal. In order to withdraw the ordinary shares represented by your ADSs, you will be required to pay to the depositary bank the fees for cancellation of ADSs and any charges and taxes payable
upon the transfer of the ordinary shares. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the deposit agreement.
If
you hold ADSs registered in your name, the depositary bank may ask you to provide proof of identity and genuineness of any signature and such other documents as the depositary bank
may deem appropriate before it will cancel your ADSs. The withdrawal of the ordinary shares represented by your ADSs may be delayed until the depositary bank receives satisfactory evidence of
compliance with all
applicable laws and regulations. Please keep in mind that the depositary bank will only accept ADSs for cancellation that represent a whole number of securities on deposit.
You
will have the right to withdraw the securities represented by your ADSs at any time except for:
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Temporary delays that may arise because (i) the transfer books for the ordinary shares or ADSs are closed, or (ii) ordinary
shares are immobilized on account of a shareholders' meeting or a payment of dividends;
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Obligations to pay fees, taxes and similar charges; and
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Restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.
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The
deposit agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatory provisions of law.
Voting Rights
As a holder, you generally have the right under the deposit agreement to instruct the depositary bank to exercise the voting rights for the
ordinary shares represented by your ADSs. The voting rights of holders of ordinary shares are described in "Description of Share
CapitalKey Provisions of Our Articles of AssociationShares and Rights Attaching to ThemVoting Rights."
At
our request, the depositary bank will distribute to you any notices of shareholders' meetings received from us together with information explaining how to instruct the depositary bank
to exercise the voting rights of the securities represented by ADSs.
If
the depositary bank timely receives voting instructions from a holder of ADSs, it will endeavor to vote the securities (in person or by proxy) represented by the holder's ADSs in
accordance with the voting instructions received from such holder.
Securities
for which no voting instructions have been received will not be voted (except as otherwise contemplated herein). Please note that the ability of the depositary bank to carry
out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. We cannot assure you that you will receive voting materials in time to enable you
to return voting instructions to the depositary bank in a timely manner.
Fees and Charges
As an ADS holder, you will be required to pay the following fees under the terms of the deposit agreement:
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Service
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Fees
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Issuance of ADSs upon deposit of ordinary shares (excluding issuances as a result of distributions of ordinary shares)
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Up to U.S. 5¢ per ADS issued
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Delivery of deposited property against surrender of ADSs
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Up to U.S. 5¢ per ADS surrendered
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Distribution of cash dividends or other cash distributions (i.e., sale of rights and other entitlements)
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Up to U.S. 5¢ per ADS held
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Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights
to purchase additional ADSs
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Up to U.S. 5¢ per ADS held
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Distribution of securities other than ADSs or rights to purchase additional ADSs (i.e., spin-off ordinary
shares)
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Up to U.S. 5¢ per ADS held
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ADS Services
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Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the depositary bank
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As
an ADS holder you will also be responsible to pay certain charges such as:
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taxes (including applicable interest and penalties) and other governmental charges;
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the registration fees as may from time to time be in effect for the registration of ordinary shares on the share register and applicable to
transfers of ordinary shares to or from the name of the custodian, the depositary bank or any nominees upon the making of deposits and withdrawals, respectively;
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certain cable, telex and facsimile transmission and delivery expenses;
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the expenses and charges incurred by the depositary bank in the conversion of foreign currency;
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the fees and expenses incurred by the depositary bank in connection with compliance with exchange control regulations and other regulatory
requirements applicable to ordinary shares, ADSs and ADRs; and
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the fees and expenses incurred by the depositary bank, the custodian, or any nominee in connection with the servicing or delivery of deposited
property.
ADS
fees and charges payable upon (i) deposit of ordinary shares against issuance of ADSs and (ii) surrender of ADSs for cancellation and withdrawal of ordinary shares are
charged to the person to whom the ADSs are delivered (in the case of ADS issuances) and to the person who delivers the ADSs for cancellation (in the case of ADS cancellations). In the case of ADSs
issued by the depositary bank into DTC or presented to the depositary bank via DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may be
charged to the DTC participant(s) receiving the ADSs or the DTC participant(s) surrendering the ADSs for cancellation, as the case may be, on behalf of the beneficial owner(s) and will be charged by
the DTC participant(s) to the account(s) of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participant(s) as in effect at the time. ADS fees and charges
in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and
charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced
for the amount of the ADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for
distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC participants in accordance with the procedures and practices
prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they hold ADSs.
In
the event of refusal to pay the depositary bank fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested service until payment is received or may
set off the amount of the depositary bank fees from any distribution to be made to the ADS holder. Certain ADS fees and charges such as the ADS service fee may become payable shortly after the closing
of this offering. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary bank. You will receive prior notice of such changes. The
depositary bank may reimburse us for certain expenses incurred by us in respect of the ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise,
upon such terms and conditions as we and the depositary bank may agree from time to time.
Amendments and Termination
We may agree with the depositary bank to modify the deposit agreement at any time without your consent. We undertake to give holders
30 days' prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not consider to be
32
materially
prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry
settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or
supplements that are required to accommodate compliance with applicable provisions of law.
You
will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit agreement become effective. The deposit agreement
cannot be amended to prevent you from withdrawing the ordinary shares represented by your ADSs (except as permitted by law).
We
have the right to direct the depositary bank to terminate the deposit agreement. Similarly, the depositary bank may in certain circumstances on its own initiative terminate the
deposit agreement. In either case, the depositary bank must give notice to the holders at least 30 days before termination. Until termination, your rights under the deposit agreement will be
unaffected.
After
termination, the depositary bank will continue to collect distributions received (but will not distribute any such property until you request the cancellation of your ADSs) and may
sell the securities held on deposit. After the sale, the depositary bank will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest bearing account.
At that point, the depositary bank will have no further obligations to holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable
fees, taxes and expenses).
Books of Depositary
The depositary bank will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular
business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the deposit agreement.
The
depositary bank will maintain in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from
time to time, to the extent not prohibited by law.
Limitations on Obligations and Liabilities
The deposit agreement limits our obligations and the depositary bank's obligations to you. Please note the
following:
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We and the depositary bank are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith.
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The depositary bank disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the
effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement.
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The depositary bank disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any
document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in ordinary shares, for the validity or worth of
the ordinary shares, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit
agreement, for the timeliness of any of our notices or for our failure to give notice.
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We and the depositary bank will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.
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We and the depositary bank disclaim any liability if we or the depositary bank are prevented or forbidden from or subject to any civil or
criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement, by reason of any provision, present or future of any
law or regulation, or by reason of present or future provision of any provision of our articles of association or any provision of or governing the securities on deposit, or by reason of any act of
God or war or other circumstances beyond our control.
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We and the depositary bank disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the
deposit agreement or in our articles of association or in any provisions of or governing the securities on deposit.
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We and the depositary bank further disclaim any liability for any action or inaction in reliance on the advice or information received from
legal counsel, accountants, any person presenting Shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith to be
competent to give such advice or information.
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We and the depositary bank also disclaim liability for the inability by a holder to benefit from any distribution, offering, right or other
benefit that is made available to holders of ordinary shares but is not, under the terms of the deposit agreement, made available to you.
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We and the depositary bank may rely without any liability upon any written notice, request or other document believed to be genuine and to have
been signed or presented by the proper parties.
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We and the depositary bank also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit
agreement.
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No disclaimer of any Securities Act liability is intended by any provision of the deposit agreement.
Pre-Release Transactions
Subject to the terms and conditions of the deposit agreement, the depositary bank may issue to broker/dealers ADSs before receiving a deposit of
ordinary shares or release ordinary shares to broker/dealers before receiving ADSs for cancellation. These transactions are commonly referred to as "pre-release transactions," and are entered into
between the depositary bank and the applicable broker/dealer. The deposit agreement limits the aggregate size of pre-release transactions (not to exceed 30% of the ordinary shares on deposit in the
aggregate) and imposes a number of conditions on such transactions (i.e., the need to receive collateral, the type of collateral required, the representations required from brokers, etc.). The
depositary bank may retain the compensation received from the pre-release transactions.
Taxes
You will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the
depositary bank and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental
charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.
The
depositary bank may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable
holder. The depositary bank and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be
required to provide
34
to
the depositary bank and to the custodian proof of taxpayer status and residence and such other information as the depositary bank and the custodian may require to fulfill legal obligations. You are
required to indemnify us, the depositary bank and the custodian for any claims with respect to taxes based on any tax benefit obtained for you.
Foreign Currency Conversion
The depositary bank will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical,
and it will distribute the U.S. dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses
incurred in complying with currency exchange controls and other governmental requirements.
If
the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the
depositary bank may take the following actions in its discretion:
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Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the conversion and
distribution is lawful and practical.
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Distribute the foreign currency to holders for whom the distribution is lawful and practical.
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Hold the foreign currency (without liability for interest) for the applicable holders.
The deposit agreement and the ADRs will be interpreted in accordance with the laws of the State of New York. The rights of holders of ordinary
shares (including ordinary shares represented by ADSs) are governed by the laws of England and Wales.
AS
A PARTY TO THE DEPOSIT AGREEMENT, YOU WAIVE YOUR RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE DEPOSIT AGREEMENT OR THE ADRs AGAINST US AND/OR THE DEPOSITARY BANK.
35
PLAN OF DISTRIBUTION
The ADSs may be offered and sold by purchasers, transferees, donees, pledgees or other successors in interest, directly or through brokers,
dealers, agents or underwriters who may receive compensation in the form of discounts, commissions or similar selling expenses paid by us or by a purchaser of the ADSs on whose behalf such
broker-dealer may act as agent. Sales and transfers of the ADSs may be effected from time to time in one or more transactions, in private or public transactions, on The Nasdaq Global Select Market, in
the over-the-counter market, in negotiated transactions or otherwise, at a fixed price or prices that may be changed, at market prices prevailing at the time of sale, at negotiated prices, without
consideration or by any other legally available means. If sales and transfers are effected by means of an underwriting, underwriting discounts will not exceed 8% of the proceeds of the offering. Any
or all of the ADSs may be sold from time to time by means of:
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a sale to one or more underwriters for resale to the public or to institutional investors in one or more transactions;
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a block trade, in which a broker or dealer attempts to sell ADSs as agent but may position and resell a portion of ADSs as principal to
facilitate the transaction;
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in "at-the-market" offerings, within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an
existing trading market on an exchange or otherwise;
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purchases by a broker or dealer as principal and the subsequent sale by such broker or dealer for its account pursuant to this prospectus;
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ordinary brokerage transactions (which may include long or short sales) and transactions in which the broker solicits purchasers;
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the writing (sale) of put or call options on the ADSs;
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the pledging of ADSs as collateral to secure loans, credit or other financing arrangements and subsequent foreclosure, the disposition of ADSs
by the lender thereunder;
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an exchange distribution in accordance with the rules of the applicable stock exchange;
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privately negotiated transactions;
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settlement of short sales entered into after the date of this prospectus;
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a combination of any such methods of sale; and
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any other legally available means.
To
the extent required with respect to a particular offer or sale of ADSs, we will file a prospectus supplement, which will accompany this prospectus, to disclose the number of
ADSs to be sold and the purchase price. The prospectus supplement will set forth the terms of the offering, including the names of any underwriters, dealers or agents, the purchase price of such
securities and the proceeds to us from such sale, any underwriting discounts and commissions or agency fees and other items constituting underwriters' or agents' compensation, any public offering
price and any discounts or concessions allowed or paid to dealers or any securities exchange on which such securities may be listed. Any public offering price, discounts or concessions allowed or paid
to dealers may be changed from time to time.
We
may grant to the underwriters options to purchase additional ADSs, at the public offering price, with additional underwriting commissions or discounts, as applicable, set forth in the
prospectus supplement. The terms of any such option will be set forth in the prospectus supplement for those ADSs.
Sales
to or through one or more underwriters or agents in at-the-market offerings will be made pursuant to the terms of the applicable underwriting sales or distribution agreement with
the
36
underwriters
or agents. Such underwriters or agents may act on an agency basis or on a principal basis. During the term of any such agreement, ADSs may be sold on a daily basis on any stock exchange,
market or trading facility on which the ADSs are traded, in privately negotiated transactions or otherwise as agreed with the underwriters or agents. The agreement will provide that any ADSs sold will
be sold at negotiated prices or at prices related to the then prevailing market prices for our ADSs. Therefore, exact figures regarding proceeds that will be raised or commissions to be paid cannot be
determined at this time and will be described in a prospectus supplement. Pursuant to the terms of the agreement, we may also agree to sell, and the relevant underwriters or agents may agree to
solicit offers to purchase, blocks of our ADSs. The terms of each such agreement will be described in a prospectus supplement.
Any
discounts, concessions or commissions received by underwriters or agents and any profits on the resale of securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Unless otherwise set forth in the applicable prospectus supplement, the obligations of underwriters to purchase the offered securities will be subject to certain
conditions precedent, and such underwriters will be obligated to purchase all such securities, if any are purchased. Unless otherwise indicated in the applicable prospectus supplement, any agent will
be acting on a best efforts basis for the period of its appointment.
We
may enter into derivative transactions with third parties or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable
prospectus supplement indicates, in connection with those derivatives, such third parties (or affiliates of such third parties) may sell securities covered by this prospectus and the applicable
prospectus supplement, including in short sale transactions. If so, such third parties (or affiliates of such third parties) may use securities pledged by us or borrowed from us or others to settle
those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The
third parties (or affiliates of such third parties) in such sale transactions will be underwriters and, if not identified in this prospectus, will be identified in the applicable prospectus supplement
(or a post-effective amendment).
We
may loan or pledge securities to a financial institution or other third party that in turn may sell the securities using this prospectus. Such financial institution or third party may
transfer its short position to investors in our securities or in connection with a simultaneous offering of other securities offered by this prospectus.
The
aggregate net proceeds to us from the sale of ADSs will be the purchase price of such ADSs less any discounts, concessions or commissions.
The
ADSs covered by this prospectus may become qualified for sale under Section 4(1) of the Securities Act or Rules 144 or 145 promulgated thereunder, whereupon they may be
sold pursuant to such provisions rather than pursuant to this prospectus.
We
may indemnify agents, underwriters and dealers against certain liabilities, including liabilities under the Securities Act. Our agents, underwriters, dealers and remarketing firms, or
their affiliates, may be customers of, engage in transactions with or perform services for us, in the ordinary course of business.
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LEGAL MATTERS
Certain legal matters of United States federal law and New York State law will be passed upon for us by Mayer Brown LLP. The validity of
the ordinary shares represented by the ADSs
and certain other legal matters as to English law will be passed upon for us by Mayer Brown International LLP, our English counsel.
EXPERTS
The consolidated financial statements of Adaptimmune Therapeutics plc as of December 31, 2015, June 30, 2015 and 2014, and
for the six month period ended December 31, 2015 and each of the years in the three year period ended June 30, 2015, which have been prepared under U.S. generally accepted accounting
principles ("U.S. GAAP") and which were included in Item 9.01 of the Form 8-K dated July 8, 2016, have been incorporated by reference herein in reliance upon the report of
KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The
consolidated financial statements of Adaptimmune Therapeutics plc prepared under International Financial Reporting Standards as issued by the International Accounting
Standards Board, which are included in the June 30, 2015 Annual Report on Form 20-F and the December 31, 2015 Transition Report on Form 20-F (which filings are incorporated
by reference herein), are superseded by the consolidated financial statements prepared under U.S. GAAP included in Item 9.01 of the Form 8-K dated July 8, 2016,
incorporated by reference herein.
SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS
We are incorporated under the laws of England and Wales. Some of our directors and officers reside outside the United States, and a substantial
portion of our assets and all or a substantial portion of the assets of such persons are located outside the United States. As a result, it may be difficult for you to serve legal process on us or our
directors and executive officers (as well as certain directors, managers and executive officers of the finance subsidiaries) or have any of them appear in a United States court.
We
have appointed Adaptimmune LLC as our authorized agent upon whom process may be served in any action instituted in any U.S. federal or state court having subject matter
jurisdiction in the Borough of Manhattan in New York, New York, arising out of or based upon the ADSs, the deposit agreement or the underwriting agreement related to such ADSs.
Mayer
Brown International LLP, our English counsel, has advised us that there is some doubt as to the enforceability in the United Kingdom, in original actions or in actions for
enforcement of judgments of
U.S. courts, of civil liabilities based solely on the federal securities laws of the United States. In addition, awards for punitive damages in actions brought in the United States or elsewhere may be
unenforceable in the United Kingdom. An award for monetary damages under the U.S. securities laws would be considered punitive if it does not seek to compensate the claimant for loss or damage
suffered and is intended to punish the defendant. The enforceability of any judgment in the United Kingdom will depend on the particular facts of the case as well as the laws and treaties in effect at
the time. The United States and the United Kingdom do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial
matters.
38
Table of Contents
14,300,000 American Depositary Shares
Representing 85,800,000 Ordinary Shares
PROSPECTUS SUPPLEMENT
March 22, 2017
Joint Book-Running Managers
Citigroup
Cowen and Company
Leerink Partners
Lead Manager
Guggenheim Securities
Adaptimmune Therapeutics (NASDAQ:ADAP)
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