be determined at the
time of grant by the plan administrator, but shall not be less than 100 percent of fair market value on the date of grant.
Further, awards with an “Option Term” may not exceed 10 years. No awards were issued under the 2016 Plan during
2016. According to the external benchmarking, the equity awards continued to be in the lower range of the peer group.
Since our inception in 2003, we have had four separate Prior
Plans: Plan A which was established in 2003/2004 and amended in June 2015. Plan B, which was established in 2005; Plan C1, which
was established in 2006; and Plan C2; which was also established in 2006 but which is intended specifically for members of our
board of directors to purchase our common shares. Due to a change in the taxation of options in 2013, we introduced a new Equity
Incentive Plan in 2013. The vesting periods of options issued under our Prior Plans vary. The options granted under Plan A vested
immediately but were subject to a four-year lockup period. The options granted under Plan B and Plan C1 vested over a four year
period with 25% of these options vesting each year. Under Plan C2, options were immediately exercisable.
Our Board of Directors has the authority to amend each of the
Plan “Employment Consideration”
In 2015 we have granted one member of the EC, in the aggregate,
options that will give him the right to acquire shares. Contingent upon continued employment and approval of our Board of Directors,
such options vesting conditions are as follows:
• 45,000 options which became purchasable on July 15, 2015,
on a four-year period at a price of CHF 0.14548 per share with 25% having vested on July 14, 2016 and a further 25% vesting on
each of July 14, 2017, July 14, 2018 and July 14, 2019; upon consummation of the proposed IPO, the 33,750 unvested options were
accelerated and vested upon consummation of the IPO; and
• 98,500 options which were granted on July 15, 2016 at a
price of CHF 0.14548 per share and will vest over a four-year period with 25% vesting on each of July 14, 2017, July 14, 2018,
July 14, 2019 and July 14, 2020. Due to the departure of the employee in the fourth quarter of 2016, the initial grant was considered
forfeited as the vesting conditions of the 98,500 options would not be met. Subsequently, an agreement was formalized whereby 50%
of the previously forfeited options (49,250 options) would be awarded as a replacement grant with no remaining service condition,
which has been accounted for as a new award granted on the date of forfeiture of the original award. The fourth quarter 2016 grant
date fair value of the replacement was CHF 674,000.
The Executive Committee of the Company is employed under employment
contracts of unlimited duration with a notice period of six months for the Chief Executive Officer, three months for the Chief
Scientific Officer and two months for the Chief Administrative Officer. Executive members are not contractually entitled to termination
payments other than the vested portions of the stock options.