|
|
|
|
|
Charles A. Rowland, Jr.
Daniel Burgess
Stephen Webster
|
Audit Fees and Services
The following table sets forth, for each of the years indicated, the aggregate fees billed or expected to be billed to Nabriva AG for services
rendered by PwC Wirtschaftsprüfung GmbH, the independent registered public accounting firm of Nabriva AG during the periods indicated.
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
Audit Fees
|
|
$
|
417
|
|
$
|
382
|
|
Audit-Related Fees(1)
|
|
|
253
|
|
|
133
|
|
Tax Fees(2)
|
|
|
30
|
|
|
|
|
All Other Fees(3)
|
|
|
989
|
|
|
1,857
|
|
Total
|
|
$
|
1,689
|
|
$
|
2,372
|
|
-
(1)
-
Fees
for the performance of assurance reporting on historical information included in Nabriva AG's initial public offering registration statement that was filed with
the Securities and Exchange Commission in 2015 and other audit related assurance services.
-
(2)
-
Fees
related to services rendered on tax compliance, tax advice and tax planning.
-
(3)
-
Fees
related to consulting services and services associated with Nabriva AG's initial public offering and rights offering.
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Pre-Approval Policies and Procedures
Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by
our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless
the service is specifically approved in advance by our audit committee or the engagement is entered into pursuant to a de minimis exception in accordance with applicable SEC rules.
All
of the services related to Nabriva AG provided by PwC Wirtschaftsprüfung GmbH during the last fiscal year were approved by the Nabriva AG audit committee.
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MATTERS TO BE VOTED ON
Proposal 1: Election of Directors
Based upon the recommendation of the nominating and corporate governance committee of our board of directors, our board of directors has
nominated each of Daniel Burgess, Axel Bolte, Carrie Bourdow, Colin Broom, Mark Corrigan, Charles A. Rowland, Jr., George H. Talbot and Stephen Webster for election as directors to serve until the
2018 Annual General Meeting. Ms. Bourdow who was not a member of Nabriva AG's supervisory board prior to the Redomiciliation, was recommended to the nominating and corporate governance
committee by our non-employee directors. Dr. Broom was not a member of Nabriva AG's supervisory board because of limitations imposed by Austrian law. The nominating and corporate governance
committee recommended Dr. Broom as a director nominee because he is our chief executive officer. All nominees are presently directors and their biographies are provided above under "Corporate
GovernanceBoard of Directors."
Unless
otherwise instructed in the proxy, all proxies will be voted "FOR" the election of each of the nominees identified above. Shareholders who do not wish their shares to be voted for
any of the nominees may so indicate by striking out the name of such nominee(s) on the proxy card. Each of the nominees has indicated his willingness to serve on our board of directors, if elected. If
any nominee should be unable to serve, the person acting under the proxy may vote the proxy for a substitute nominee designated by our board of directors. We do not contemplate that any of the
nominees will be unable to serve if elected.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE NOMINEES AS DIRECTORS.
Proposal 2: To Ratify the Selection of KPMG LLP as Our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2017
The audit committee of our board of directors has selected the firm of KPMG LLP as our independent registered public accounting firm for
the fiscal year ending December 31, 2017. KPMG LLP has served as our independent registered public accounting firm since May 24, 2017. PwC
Wirtschaftsprüfung GmbH had previously served as the independent registered public accounting firm for Nabriva AG until it was dismissed on May 24, 2017. The decision to
dismiss PwC Wirtschaftsprüfung GmbH was made by the Nabriva AG audit committee.
PwC
Wirtschaftsprüfung GmbH's reports on the Nabriva AG consolidated financial statements for the fiscal years ended December 31, 2016 and 2015 did not
contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that PwC
Wirtschaftsprüfung GmbH's audit report dated March 24, 2017 on the December 31, 2016 consolidated financial statements contained an explanatory paragraph stating
that Nabriva AG will require additional financing to fund future operations and may be required to reduce planned expenditures.
During
the fiscal years ended December 31, 2016 and 2015 and the subsequent interim period through May 24, 2017, there were no (1) disagreements with PwC
Wirtschaftsprüfung GmbH on any matter of accounting principles or practices, financial statement disclosure, or auditing scope and procedure, which disagreements, if not resolved
to PwC Wirtschaftsprüfung GmbH's satisfaction, would have caused PwC Wirtschaftsprüfung GmbH to make reference to the subject matter of the disagreement in
connection with reports for such years; or (2) reportable events (as described in Item 304(a)(i)(v) of Regulation S-K).
Nabriva
AG provided PwC Wirtschaftsprüfung GmbH with a copy of the disclosures above, which it made in its Current Report on Form 8-K dated May 31,
2017 and requested from PwC
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Wirtschaftsprüfung GmbH
a letter addressed to the Securities and Exchange Commission indicating whether it agrees with such disclosures. A copy of PwC
Wirtschaftsprüfung GmbH's letter, dated May 31, 2017, is attached thereto as Exhibit 16.1.
Our
board of directors is seeking shareholder ratification of the selection by the audit committee of KPMG LLP to serve as our independent registered public accounting firm. If
this proposal is not approved at the EGM, our audit committee may reconsider this selection.
Representatives
of KPMG LLP are expected to be present telephonically at the EGM and will have the opportunity to make a statement if they desire to do so. It is also expected
that they will be available to respond to appropriate questions from shareholders. Representatives of PwC Wirtschaftsprüfung GmbH are not expected to be present at the EGM.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
THE FISCAL YEAR ENDING DECEMBER 31, 2017.
Proposal 3: To Approve the Adoption of Our 2017 Share Incentive Plan
On July 26, 2017, our board of directors adopted, subject to shareholder approval, the 2017 Share Incentive Plan, which we refer to as
the 2017 Plan. The 2017 Plan, if approved by our shareholders, will replace our Stock Option Plan 2007 and Stock Option Plan 2015, each as amended and restated to date (the "SOPs"). If the 2017 Plan
is approved by our shareholders, no further awards will be made under the SOPs. However, all then outstanding awards under the SOPs will remain in effect and continue to be governed by the terms of
the SOPs.
As
of July 15, 2017, options to purchase an aggregate of 2,891,200 of our ordinary shares were outstanding under all of our equity incentive plans in the aggregate with a weighted
average exercise price of $8.02 per share and a weighted average remaining contractual life of 8.7 years. As of July 15, 2017, no awards of restricted shares, restricted share units or
share appreciation rights were outstanding under any of our equity incentive plans.
As
further described below, upon effectiveness of the 2017 Plan, the number of our ordinary shares that will be reserved for issuance under the 2017 Plan will be the sum of
(1) 3,000,000 ordinary shares; plus (2) a number of ordinary shares (up to 3,438,990 ordinary shares) which is equal to the sum of the number of our ordinary shares then available for
issuance under the Stock Option Plan 2015 and the number of ordinary shares subject to outstanding awards under the Stock Option Plan 2015 that expire, terminate or are otherwise surrendered,
cancelled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right; plus (3) an annual increase, to be added on the first day of each fiscal
year beginning in the fiscal year ending December 31, 2018 and continuing until, and including, the fiscal year ending December 31, 2027, equal to the least of (i) 2,000,000
ordinary shares, (ii) 4% of the number of outstanding ordinary shares on such date and (iii) an amount determined by the board of directors. All of the foregoing share numbers are
subject, in the case of incentive share options, to any limitations under the Internal Revenue Code of 1986, as amended, which we refer to as the Code, and are also subject to adjustment, as described
in the 2017 Plan, upon share splits, share dividends, and other specified events.
The
2017 Plan is intended to be a broad-based plan that allows for the issuance of equity awards within our organization. Approximately 66 employees, or about 100% of our employee
population, currently participate in our equity incentive compensation programs. In addition, our non-employee directors currently participate in our equity incentive compensation programs. Our board
of directors believes that approving the 2017 Plan is appropriate and in the best interests of shareholders given the highly competitive environment in which we recruit and retain employees.
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Summary of the 2017 Share Incentive Plan
The following summary of the 2017 Plan is qualified in its entirety by reference to the full text of the 2017 Plan, as proposed, which is
attached as Appendix A to this Proxy Statement. References to the board of directors in this summary includes the compensation committee of the board of directors or any similar committee
appointed by the board of directors to administer the 2017 Plan.
Material
features of the 2017 Plan include the following:
-
-
The 2017 Plan permits the award of share options (both incentive and nonstatutory options), share appreciation rights (which we refer to as
SARs), restricted shares, restricted share units (which we refer to as RSUs) and other share-based awards to our employees, officers, directors, consultants and advisers;
-
-
The 2017 Plan prohibits the reuse of shares withheld or delivered to satisfy the exercise price of an option or to satisfy tax withholding
requirements and provides that, in the case of the exercise of an SAR, the number of shares counted against the shares available under, and the sublimits of, the 2017 Plan is based on the full number
of shares subject to the exercised portion of the SAR regardless of the number of shares actually used to settle the SAR;
-
-
Subject to adjustment in the event of share splits, share dividends or similar events, no more than 200,000 ordinary shares may be subject to
awards granted to any 2017 Plan participant per fiscal year. In addition, subject to exception only in extraordinary circumstances, the 2017 Plan includes limitations on the maximum value of ordinary
shares that may be subject to awards granted to any individual non-employee director in any fiscal year and the maximum amount of cash compensation that may be paid to any individual non-employee
director in any fiscal year;
-
-
The 2017 Plan generally prohibits the direct or indirect repricing of share options or SARs without shareholder approval;
-
-
The 2017 Plan prohibits the payment or accrual of dividend equivalents on share options or SARs and requires that dividends or dividend
equivalents, as the case may be, granted with respect to restricted shares, RSUs or other share-based awards be subject to the same restrictions on transfer and forfeitability that apply to the award
with respect to which they are paid; and
-
-
Shareholder approval is required prior to an amendment to the 2017 Plan that would (i) expand the types of available awards,
(ii) materially expand the class of participants eligible to participate, or (iii) except as set forth in the 2017 Plan, materially increase the number of ordinary shares authorized for
issuance under the 2017 Plan.
Types of Awards; Shares Available for Awards; Share Counting Rules
The 2017 Plan allows for the issuance of incentive share options intended to qualify under Section 422 of the Code, nonstatutory share
options, SARs, restricted shares, RSUs, and other share-based awards, which we refer to collectively as awards. Upon effectiveness of the 2017 Plan and subject to adjustment in the event of share
splits, share dividends or similar events, the number of our ordinary shares that will be reserved for issuance under the 2017 Plan will be the sum of (1) 3,000,000 ordinary shares; plus
(2) a number of ordinary shares (up to 3,438,990 ordinary shares) which is equal to the sum of the number of our ordinary shares then available for issuance under the Stock Option Plan 2015 and
the number of ordinary shares subject to outstanding awards under the Stock Option Plan 2015 that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us at their
original issuance price pursuant to a contractual repurchase right; plus (3) an annual increase, to be added on the first day of each fiscal year beginning in the fiscal year ending
December 31, 2018 and continuing until, and including, the fiscal year ending December 31, 2027, equal to the least of
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(i) 2,000,000
ordinary shares, (ii) 4% of the number of outstanding ordinary shares on such date and (iii) an amount determined by the board of directors.
Subject
to adjustment in the event of share splits, share dividends or similar events, the maximum number of ordinary shares with respect to which awards may be granted under the 2017
Plan to any participant is 200,000 per fiscal year. For this purpose, the combination of an option in tandem with an SAR will be treated as a single award. In addition, the maximum value (calculated
based on grant date fair value for financial reporting purposes) of our ordinary shares subject to awards granted under the 2017 Plan in any fiscal year to any individual non-employee director may not
exceed (i) $500,000 in the case of an incumbent non-employee director, or (ii) $1,000,000, in the case of a new non-employee director during his or her first year of service. The maximum
cash compensation paid in any fiscal year to any individual non-employee director may not exceed $175,000 in the case of an incumbent director and $225,000 in the case of the chairman of our board of
directors. Exceptions to the foregoing limitation may be made in extraordinary circumstances, provided that the non-employee director receiving such additional compensation may not participate in the
decision to award such compensation.
For
purposes of counting the number of shares available for the grant of awards under the 2017 Plan, all ordinary shares covered by SARs will be counted against the number of shares
available for the
grant of awards and against the sublimits of the 2017 Plan. However, SARs that may be settled only in cash will not be so counted, and if we grant an SAR in tandem with an option for the same number
of ordinary shares and provide that only one such award may be exercised, which we refer to as a tandem SAR, only the shares covered by the option, and not the shares covered by the tandem SAR, will
be so counted, and the expiration of one in connection with the other's exercise will not restore shares to the 2017 Plan.
Shares
covered by awards under the 2017 Plan that expire or are terminated, surrendered, or cancelled without having been fully exercised or are forfeited in whole or in part (including
as the result of shares subject to such award being repurchased by us at the original issuance price pursuant to a contractual repurchase right) or that result in any shares not being issued
(including as a result of an SAR that was settleable either in cash or in ordinary shares actually being settled in cash) will again be available for the grant of awards under the 2017 Plan (subject,
in the case of incentive share options, to any limitations under the Code). In the case of the exercise of an SAR, the number of shares counted against the shares available for the grant of awards and
against the sublimits of the 2017 Plan will be the full number of shares subject to the SAR multiplied by the percentage of the SAR actually exercised, regardless of the number of shares actually used
to settle the SAR upon exercise, and the shares covered by a tandem SAR will not again become available for grant upon the expiration or termination of the tandem SAR.
Ordinary
shares that are delivered (by actual delivery, attestation, or net exercise) to us by a participant to purchase ordinary shares upon exercise of an award or to satisfy tax
withholding obligations (including shares retained from the award creating the tax obligation) will not be added back to the number of shares available for the future grant of awards under the 2017
Plan. Ordinary shares of ours repurchased by us on the open market using the proceeds from the exercise of an award will not increase the number of shares available for future grant of awards under
the 2017 Plan.
In
connection with a merger or consolidation of an entity with us or our acquisition of property or shares of an entity, our board of directors may grant awards under the 2017 Plan in
substitution for any options or other shares or share-based awards granted by such entity or an affiliate thereof on such terms as our board of directors determines appropriate in the circumstances,
notwithstanding any limitation on awards contained in the 2017 Plan. Any such substitute awards will not count against the overall share limits or the sublimits described above, except as required by
Section 422 and related provisions of the Code.
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Shares
issued under the 2017 Plan may consist in whole or in part of authorized but unissued shares or treasury shares.
Descriptions of Awards
.
Options.
Optionees receive the right to purchase a specified number of our ordinary shares at a specified option price and subject to
such other
terms and conditions as are specified in connection with the option grant. Only our employees or employees of our subsidiaries may receive "incentive share options" as defined in Section 422 of
the Code. An option that is not intended to be an "incentive share option" is a "nonstatutory share option". Options may not be granted at an exercise price that is less than 100% of the fair market
value of our ordinary shares on the date of grant; provided, however, that if our board of directors approves the grant of an option with an exercise price to be determined on a future date, the
exercise price may not be less than 100% of the fair market value of our ordinary shares on such future date. Under present law, incentive share options may not be granted at an exercise price less
than 110% of the fair market value of our ordinary shares on the date of grant in the case of incentive share options granted to optionees holding more than 10% of the total combined voting power of
all classes of our shares or any of our subsidiaries. Under the terms of the 2017 Plan, options may not be granted for a term of more than ten years (and, under present law, five years in the case of
incentive share options granted to optionees holding greater than 10% of the total combined voting power of all classes of our shares or any of our subsidiaries). The 2017 Plan permits participants to
pay the exercise price of options using one or more of the following manners of payment: (i) payment by cash, by check or, except as may otherwise be provided in the applicable option agreement
or approved by our board of directors, in connection with a "cashless exercise" through a broker, (ii) to the extent provided in the applicable option agreement or approved by our board of
directors, and subject to certain conditions, by delivery of ordinary shares to us owned by the participant valued at their fair market value, (iii) except for awards made to non-employee
participants, to the extent provided in an applicable nonstatutory share option agreement or approved by our board of directors, by delivery of a notice of "net exercise" as a result of which we will
retain a number of ordinary shares otherwise issuable pursuant to the share option equal to the aggregate exercise price for the portion of the option being exercised divided by the fair market value
of an ordinary share of ours on the date of exercise, (iv) to the extent permitted by applicable law and provided for in the applicable option agreement or approved by our board of directors,
by any other lawful means, or (v) by any combination of these forms of payment. No option granted under the 2017 Plan may contain any provision entitling the participant to the automatic grant
of additional options in connection with the exercise of the original option nor may any option granted under the 2017 Plan provide for the payment or accrual of dividend equivalents.
Share Appreciation Rights.
An SAR is an award entitling the holder, upon exercise, to receive a number of ordinary shares, or cash (or a
combination
of our ordinary shares and cash) determined by reference to appreciation, from and after the date of grant, in the fair market value of an ordinary share over the measurement price. The 2017 Plan
provides that the measurement price of an SAR may not be less than 100% of the fair market value of our ordinary shares on the date the SAR is granted (provided,
however, that if our board of directors approves the grant of an SAR effective as of a future date, the measurement price may not be less than 100% of the fair market value on such future date) and
that SARs may not be granted with a term in excess of 10 years. No SAR granted under the 2017 Plan may contain any provision entitling the participant to the automatic grant of additional SARs
in connection with any exercise of the original SAR nor may any SAR granted under the 2017 Plan provide for the payment or accrual of dividend equivalents.
Limitation on Repricing of Options and SARs.
With respect to options and SARs, unless such action is approved by our shareholders or
otherwise
permitted under the terms of the 2017 Plan in connection with certain changes in capitalization and reorganization events, we may not (1) amend any
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outstanding
option or SAR granted under the 2017 Plan to provide an exercise price or measurement price per share that is lower than the then-current exercise price or measurement price per share of
such outstanding option or SAR, (2) cancel any outstanding option or SAR (whether or not granted under the 2017 Plan) and grant in substitution therefor new awards under the 2017 Plan (other
than certain substitute awards described above) covering the same or a different number of ordinary shares and having an exercise price or measurement price per share lower than the then-current
exercise price or measurement price per share of the canceled option or SAR, (3) cancel in exchange for a cash payment any outstanding option or SAR with an exercise price or measurement price
per share above the then-current fair market value of an ordinary share of ours, or (4) take any other action under the 2017 Plan that constitutes a "repricing" within the meaning of the rules
of the NASDAQ Stock Market.
Restricted Shares.
Restricted shares entitle recipients to acquire ordinary shares, subject to our right to repurchase all or part of
such shares at
their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) in the event that the conditions specified in the applicable award are not satisfied
prior to the end of the applicable restriction period established for such award. Unless otherwise provided in the applicable award agreement, any dividend declared and paid by us with respect to
restricted shares will be paid to the participant only if and when such shares become free from any applicable restrictions on transferability and forfeitability.
Restricted Share Unit Awards.
RSUs entitle the recipient to receive ordinary shares, or cash equal to the fair market value of such
shares, to be
delivered at the time such award vests pursuant to the terms and conditions established by our board of directors. Our board of directors may provide that settlement of an RSU will be deferred, on a
mandatory basis or at the election of the participant in a
manner that complies with Section 409A of the Code. A participant has no voting rights with respect to any RSU. Our board may provide that a grant of RSUs may provide the participant with the
right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding ordinary shares. Any such dividend equivalents may be paid currently or
credited to an account for the participant, may be settled in cash and/or ordinary shares and will be subject to the same restrictions on transfer and forfeitability as the RSUs with respect to which
such dividend equivalents are paid, in each case to the extent provided in the award agreement.
Other Share-Based Awards.
Under the 2017 Plan, our board of directors may grant other awards of ordinary shares, and other awards that
are valued in
whole or in part by reference to, or are otherwise based on, ordinary shares or other property, having such terms and conditions as our board of directors may determine. We refer to these types of
awards as other share-based awards. Other share-based awards may be available as a form of payment in settlement of other awards granted under the 2017 Plan or as payment in lieu of compensation to
which a participant is otherwise entitled. Other share-based awards may be paid in ordinary shares or in cash, as our board of directors may determine. The award agreement for an other share-based
award may provide participants with the right to receive dividend equivalents. Such dividend equivalents may be paid currently or credited to an account for the participant, may be settled in cash
and/or ordinary shares and will be subject to the same restrictions on transfer and forfeitability as the other share-based award with respect to which it is paid, in each case to the extent provided
in the award agreement.
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Performance Awards.
Restricted shares, RSUs and other share-based awards under the 2017 Plan may be made subject to the achievement of
performance
goals. We refer to such awards as performance awards. Performance awards intended to qualify as "performance-based compensation" under Section 162(m) of the Code will be made only by a
committee (or subcommittee) of our board of directors comprised solely of two or more directors eligible to serve on a committee making awards qualifying as "performance-based compensation" under
Section 162(m). For any award intended to qualify as "performance-based compensation," the committee will specify that the degree of granting, vesting and/or payout will be subject to the
achievement of one or more objective performance measures established by the committee, which will be based on the relative or absolute attainment of specified levels of one or any combination of the
following, which may be determined pursuant to generally accepted accounting principles, or GAAP, or on a non-GAAP or other basis, as determined by the committee: net income, earnings before or after
discontinued operations, interest, taxes, depreciation and/or amortization, operating profit before or after discontinued operations and/or taxes, sales, sales growth, earnings growth, cash flow or
cash position, gross margins, share price, market share, return on sales, assets, equity or investment, improvement of financial ratings, achievement of balance sheet or income statement objectives or
total shareholder return.
Such
performance goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the
selected performance criteria and may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated. The committee may specify that
such performance measures will be adjusted to exclude any one or more of (i) non-recurring or unusual gains or losses, (ii) gains or losses on the dispositions of discontinued
operations, (iii) the cumulative effects of changes in accounting principles, (iv) the writedown of any asset, (v) fluctuation in foreign currency exchange rates, and
(vi) charges for restructuring and rationalization programs. Such performance measures (x) may vary by participant and may be different for different awards, (y) may be particular
to a participant or the department, branch, line of business, subsidiary or other unit in which the participant works and may cover such period as may be specified by the committee, and
(z) will be set by the committee within the time period prescribed by, and will otherwise comply with the requirements of, Section 162(m) of the Code. The committee may adjust downwards,
but not upwards, the number of shares payable pursuant to such a performance award, and the committee may not waive the achievement of applicable performance measures except in the case of the death
or disability of the participant or a change in control of us. In addition, the committee may impose such other restrictions on performance awards as it may deem necessary or appropriate to ensure
that such awards satisfy all the applicable requirement for "performance-based compensation" under Section 162(m). Performance awards that are not intended to qualify as "performance-based
compensation" under Section 162(m) may be based on these or other performance measures as determined by our board of directors.
Transferability of Awards
Awards may not be sold, assigned, transferred, pledged or otherwise encumbered by granted participant, either voluntarily or by operation of
law, except by will or the laws of descent and distribution or, other than in the case of an incentive share option, pursuant to a qualified domestic relations order. During the life of the
participant, awards are exercisable only by the participant. However, except with respect to awards that are subject to Section 409A, our board of directors may permit or provide in an award
for the gratuitous transfer of the award by the participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the participant and/or an
immediate family member thereof if, with respect to such proposed transferee, we would be eligible to use a Form S-8 for the registration of the sale of the ordinary shares subject to such
award under the Securities Act of 1933, as amended. Further, we are not required to recognize any such transfer until such time as the permitted transferee has, as a condition to such transfer,
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delivered
to us a written instrument in form and substance satisfactory to us confirming that such transferee will be bound by all of the terms and conditions of the award. Nothing in the 2017 Plan
restricts a participant from making a transfer to us.
Eligibility to Receive Awards
All of our employees, officers, and directors, as well as our consultants and advisors, are eligible to receive awards under the 2017 Plan.
However, incentive share options may only be granted to our employees, employees of our present or future parent or subsidiary corporations, and employees of any other entities the employees of which
are eligible to receive incentive share options under the Code.
Plan Benefits
The granting of awards under the 2017 Plan is discretionary, and except as noted above, we cannot now determine the number or type of awards to
be granted in the future to any particular person or group.
On
August 15, 2017, the last reported sale price of our ordinary shares at the close of business on the NASDAQ Global Select Market was $9.65.
Administration
The 2017 Plan will be administered by our board of directors. Our board of directors has the authority to grant awards, to adopt, amend and
repeal the administrative rules, guidelines and practices relating to the 2017 Plan that it deems advisable and to construe and interpret the provisions of the 2017 Plan and any award agreements
entered into under the 2017 Plan. Our board may correct any defect, supply any omission or reconcile any inconsistency in the 2017 Plan or any award. All actions and decisions by our board of
directors will be made in our board of directors' discretion and will be final and binding on all persons having or claiming any interest in the 2017 Plan or in any award. Pursuant to the terms of the
2017 Plan, our board of directors may delegate any or all of its powers under the 2017 Plan to one or more committees or subcommittees of our board of directors.
In
addition, subject to any requirements of applicable law, our board of directors may delegate to one or more of our officers the power to grant awards (subject to any limitations under
the 2017 Plan) to our employees or officers and to exercise such other powers under the 2017 Plan as our board of directors may determine. Our board will fix the terms of any awards to be granted by
such officers, the maximum number of shares subject to awards that the officers may grant, and the time period in which such awards may be granted. No officer will be authorized to grant awards to any
"executive officer" of ours (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, or, the Exchange Act) or to any "officer" of ours (as defined by Rule 16a-1 under the
Exchange Act).
Notwithstanding
the foregoing, awards made under the 2017 Plan to non-employee directors will be granted and administered by a committee, all of the members of which are independent
directors as defined by 5605(a)(2) of the NASDAQ Marketplace Rules.
Subject
to any applicable limitations contained in the 2017 Plan (including with respect to performance awards), our board of directors generally selects the recipients of awards and
determines the following with respect to such awards:
-
-
the number of ordinary shares, cash or other consideration covered by awards and the terms and conditions of such awards, including the dates
upon which such awards becomes exercisable or otherwise vest;
-
-
the exercise or measurement price of awards, if any;
-
-
the duration of awards; and
-
-
the effect on awards of a change in control of us.
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Each
award under the 2017 Plan may be made alone or in addition or in relation to any other award. The terms of each award need not be identical, and our board of directors need not
treat participants uniformly. Our board will determine the effect on an award of the disability, death, termination or other cessation of employment, office or services, authorized leave of absence or
other change in the employment or other status of a participant, and the extent to which, and the period during which, the participant (or the participant's legal representative, conservator, guardian
or designated beneficiary) may exercise rights, or receive any benefits, under the award.
Notwithstanding
any other provision of the 2017 Plan, (a) we are not obliged to issue any ordinary shares pursuant to an award unless at least the par value of such newly issued
ordinary share has been fully paid in advance in accordance with all applicable law (which requirement may mean the holder of an award is obliged to make such payment) and (b) we are not
obligated to deliver any ordinary shares pursuant to the 2017 Plan or to remove restrictions from shares previously issued or delivered under the 2017 Plan until (i) all conditions of the award
have been met or removed to our satisfaction, (ii) in the opinion of our counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations, and (iii) the participant has executed and delivered to us such
representations or agreements as we may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.
Our
board of directors may at any time provide that any award granted under the 2017 Plan shall become immediately exercisable in whole or in part, free from some or all restrictions or
conditions or otherwise realizable in whole or in part, as the case may be.
In
the event of any alternation or reorganization whatsoever taking place in our capital structure whether by way of share split, reverse share split, share dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of our ordinary shares, other than an
ordinary cash dividend, we are required to make equitable adjustments (or make substituted awards, as applicable), in the manner determined by our board of directors, to (i) the number and
class of securities available under the 2017 Plan, (ii) the share counting rules and sublimits set forth in the 2017 Plan, (iii) the number and class of securities and exercise price per
share of each outstanding option, (iv) the share- and per-share provisions and the measurement price of each outstanding SAR, (v) the number of shares subject to and the repurchase price
per share subject to each outstanding award of restricted shares, and (vi) the share-and per-share-related provisions and the purchase price, if any, of each outstanding RSU and each other
share-based award.
We
will, subject to applicable law and the terms of our constitutional documents, indemnify and hold harmless each director, officer, employee or agent to whom any duty or power relating
to the administration or interpretation of the 2017 Plan has been or will be delegated against any cost or expense (including attorneys' fees) or liability (including any sum paid in settlement of a
claim with our board of directors' approval) arising out of any act or omission to act concerning the 2017 Plan unless arising out of such person's own fraud or bad faith.
In
accepting an award granted under the 2017 Plan, a participant agrees to be bound by any clawback policy that we have in effect or may adopt in future.
Amendment of Awards.
Except as otherwise provided under the 2017 Plan with respect to repricing outstanding share options or SARs, or
actions
requiring shareholder approval, our board of directors may amend, modify or terminate any outstanding award, including but not limited to, substituting therefor another award of the same or a
different type, changing the date of exercise or realization, and converting an incentive share option to a nonstatutory share option, provided that the participant's consent to any such action will
be required unless our board of directors determines that the action, taking into account any related action, does not materially and adversely affect the
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participant's
rights under the 2017 Plan or the change is otherwise permitted under the terms of the 2017 Plan in connection with a change in capitalization or reorganization event.
Reorganization Events
The 2017 Plan contains provisions addressing the consequences of any reorganization event. A reorganization event is defined under the 2017 Plan
as (a) any merger or consolidation of us with or into another entity as a result of which all of our ordinary shares are converted into or exchanged for the right to receive cash, securities or
other property, or are cancelled, (b) any transfer or disposition of all of our ordinary shares for cash, securities or other property pursuant to a share exchange or other transaction or
(c) our liquidation or dissolution; any one of which, (a), (b) or (c), may be effected pursuant to the laws of the Republic of Ireland.
Consequences of Reorganization Event on Awards Other than Restricted Shares.
Under the 2017 Plan, if a reorganization event occurs, our
board of
directors may take any one or more of the following actions as to all or any (or any portion of) outstanding awards other than restricted shares on such terms as our board of directors determines
(except to the extent specifically provided otherwise in an applicable award agreement or another agreement between a participant and us): (1) provide that such awards will be assumed, or
substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (2) upon written notice to a participant, provide that all of the
participant's unvested awards will be forfeited immediately prior to the consummation of such reorganization event and/or that all of the participant's unexercised awards will terminate immediately
prior to the consummation of such reorganization event unless exercised by the participant (to the extent then exercisable) within a specified period following the date of such notice,
(3) provide that outstanding awards will become exercisable, realizable, or deliverable, or restrictions applicable to an award will lapse, in whole or in part prior to or upon such
reorganization event, (4) in the event of a reorganization event under the terms of which holders of our ordinary shares will receive, upon consummation thereof, a cash payment for each share
surrendered in the reorganization event, which we refer to as the Acquisition Price, make or provide for a cash payment to participants with respect to each award held by a participant equal to
(A) the number of ordinary shares subject to the vested portion of the award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such reorganization
event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise, measurement or purchase price of such award and any applicable tax withholdings,
in exchange for the termination of such award, (5) provide that, in connection with our liquidation or dissolution, awards will convert into the right to receive liquidation proceeds (if
applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings) and (6) any combination of the foregoing. Our board is not obligated to treat all
awards, all awards held by a participant, or all awards of the same type, identically.
The
2017 Plan also provides, however, that for RSUs that are subject to Section 409A of the Code: (A) if the applicable RSU agreement provides that the RSUs will be settled
upon a "change in control event" within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i), and the reorganization event constitutes such a "change in control event," then no
assumption or substitution of the RSU will be permitted, and the RSUs will instead be settled in accordance with the terms of the applicable RSU agreement; and (B) our board of directors may
only undertake the actions set forth in clauses (3), (4) or (5) above if the reorganization event is a "change in control event" as so defined under the Treasury Regulation and
such action is permitted or required by Section 409A of the Code. If the reorganization event does not constitute a "change in control event" as defined in the Treasury Regulation or such
action is not permitted or required by Section 409A of the Code, and the acquiring or succeeding corporation does not assume or substitute the RSUs pursuant to clause (1) above, then the
unvested RSUs will terminate immediately prior to the consummation of the reorganization event without any payment in exchange therefor.
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Consequences of Reorganization Event on Restricted Shares.
Upon the occurrence of a reorganization event other than our liquidation or
dissolution,
our repurchase and other rights with respect to outstanding restricted shares will inure to the benefit of our successor and will, unless our board of directors determines otherwise, apply to the
cash, securities or other property which our ordinary shares were converted into or exchanged for pursuant to such reorganization event in the same manner and to the same extent as they applied to
such restricted shares. However, our board of directors may provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any restricted shares or
any other agreement between a participant and us, either initially or by amendment, or provide for forfeiture of such restricted shares if issued at no cost. Upon the occurrence of a reorganization
event involving our liquidation or dissolution, except to the extent specifically provided to the contrary in the instrument evidencing any award of restricted shares or any other agreement between
the participant and us, all restrictions and conditions on all restricted shares then outstanding will automatically be deemed terminated or satisfied.
Authorization of Sub-Plans
Our board may from time to time establish one or more sub-plans under the 2017 Plan for purposes of satisfying applicable securities, tax or
other laws of various jurisdictions. Our board will establish such sub-plans by adopting supplements to the 2017 Plan containing any limitations on our board of directors' discretion under the 2017
Plan as our board of directors deems necessary or desirable or any additional terms and conditions not otherwise inconsistent with the 2017 Plan that our board of directors deems necessary or
desirable. All supplements adopted by our board of directors will be deemed to be part of the 2017 Plan, but each supplement will apply only to participants within the affected jurisdiction.
Amendment or Termination
If we receive shareholder approval of the 2017 Plan, no award may be granted under the 2017 Plan after September 14, 2027, but awards
previously granted under the 2017 Plan may extend beyond that date. Our board may amend, suspend or terminate the 2017 Plan or any portion thereof at any time, except that (i) to the extent
required by Section 162(m) of the Code, no award granted to a participant that is intended to comply with Section 162(m) after the date of such amendment will become exercisable,
realizable or vested, as applicable, unless and until such amendment has been approved by our shareholders in the manner required by Section 162(m), (ii) no amendment that would require
shareholder approval under the rules of the NASDAQ stock market may be made effective unless and until such amendment has been approved by our shareholders and (iii) if the national securities
exchange on which we then maintain our primary listing does not have rules regarding when shareholder approval of amendments to equity compensation plans is required (or
if our ordinary shares are not then listed on any national securities exchange), then no amendment to the 2017 Plan (A) materially increasing the number of shares authorized under the 2017 Plan
(other than pursuant to terms of the 2017 Plan), (B) expanding the types of awards that may be granted under the 2017 Plan, or (C) materially expanding the class of participants eligible
to participate in the 2017 Plan will be effective unless and until our shareholders approve such amendment. If at any time the approval of our shareholders is required as to any other modification or
amendment under Section 422 of the Code or any successor provision with respect to incentive share options, our board of directors may not effect such modification or amendment without such
approval. Unless otherwise specified in the amendment, any amendment to the 2017 Plan adopted in accordance with the procedures described above will apply to, and be binding on the holders of, all
awards outstanding under the 2017 Plan at the time the amendment is adopted, provided that our board of directors determines that such amendment, taking into account any related action, does not
materially and adversely affect the rights of participants under the 2017 Plan. No award will be made that is conditioned on shareholder approval of any amendment to the 2017 Plan unless the award
provides that (i) it will terminate or be forfeited if shareholder
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approval
of such amendment is not obtained within no more than 12 months from the date the award was granted and (ii) it may not be exercised or settled (or otherwise result in the
issuance of ordinary shares) prior to the receipt of such shareholder approval.
Federal Income Tax Consequences
The following is a summary of the United States federal income tax consequences that generally will arise with respect to awards granted under
the 2017 Plan. This summary is based on the federal tax laws in effect as of the date of this proxy statement. In addition, this summary assumes that all awards are exempt from, or comply with, the
rules under Section 409A of the Code regarding nonqualified deferred compensation. Changes to these laws or assumptions could alter the tax consequences described below.
Incentive Share Options
A participant will not have income upon the grant of an incentive share option. Also, except as described below, a participant will not have
income upon exercise of an incentive share option if the participant has been employed by us or our corporate parent or 50% or more-owned corporate subsidiary at all times beginning with the option
grant date and ending three months before the date the participant exercises the option. If the participant has not been so employed during that time, then the participant will be taxed as described
below under "Nonstatutory Share Options." The exercise of an incentive share option may subject the participant to the alternative minimum tax.
A
participant will have income upon the sale of the shares acquired under an incentive share option at a profit (if sales proceeds exceed the exercise price). The type of income will
depend on when the participant sells the shares. If a participant sells the shares more than two years after the option was granted and more than one year after the option was exercised, then all of
the profit will be long-term capital gain. If a participant sells the shares prior to satisfying these waiting periods, then the participant will have engaged in a disqualifying disposition and a
portion of the profit will be ordinary income and a portion may be capital gain. This capital gain will be long-term if the participant has held the shares for more than one year and otherwise will be
short-term. If a participant sells the shares at a loss (sales proceeds are less than the exercise price), then the loss will be a capital loss. This capital loss will be long-term if the participant
held the shares for more than one year and otherwise will be short-term.
Nonstatutory Share Options
A participant will not have income upon the grant of a nonstatutory share option. A participant will have compensation income upon the exercise
of a nonstatutory share option equal to the fair market value of the shares on the day the participant exercised the option less the exercise price. Upon sale of the shares, the participant will have
capital gain or loss equal to the difference between the sales proceeds and the fair market value of the shares on the day the option was exercised. This capital gain or loss will be long-term if the
participant has held the shares for more than one year and otherwise will be short-term.
Share Appreciation Rights
A participant will not have income upon the grant of an SAR. A participant generally will recognize compensation income upon the exercise of an
SAR equal to the amount of the cash and the fair market value of any shares received. Upon the sale of the shares, the participant will have capital gain or loss equal to the difference between the
sales proceeds and the value of the shares on the day the SAR was exercised. This capital gain or loss will be long-term if the participant held the shares for more than one year and otherwise will be
short-term.
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Restricted Shares
A participant will not have income upon the grant of restricted shares unless an election under Section 83(b) of the Code is made within
30 days of the date of grant. If a timely Section 83(b) election is made, then a participant will have compensation income equal to the fair market value of the shares less the purchase
price, if any. When the shares are sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the fair market value of the shares on the date of grant.
If the participant does not make a Section 83(b) election, then when the shares vest the participant will have compensation income equal to the fair market value of the shares on the vesting
date less the purchase price. When the shares are sold, the participant will have capital gain or loss equal to the sales proceeds less the fair market value of the shares on the vesting date. Any
capital gain or loss will be long-term if the participant held the shares for more than one year and otherwise will be short-term.
Restricted Share Units
A participant will not have income upon the grant of an RSU. A participant is not permitted to make a Section 83(b) election with respect
to an RSU award. When the RSU vests, the participant will have income on the vesting date in an amount equal to the fair market value of the
shares on such date less the purchase price, if any. When the shares are sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the shares on the vesting
date. Any capital gain or loss will be long-term if the participant held the shares for more than one year and otherwise will be short-term.
Other Share-Based Awards
The tax consequences associated with any other share-based award granted under the 2017 Plan will vary depending on the specific terms of such
award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer,
the nature of the property to be received by the participant under the award and the participant's holding period and tax basis for the award or underlying ordinary shares.
Tax Consequences to Us
There will be no tax consequences to us with respect to awards made under the 2017 Plan, except that we will be entitled to a deduction when a
participant has compensation income. Any such deduction will be subject to the limitations of Section 162(m) of the Code.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE ADOPTION OF THE 2017 SHARE INCENTIVE PLAN.
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