Awards. Awards may be granted in
the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted share units, restricted
share awards, unrestricted share awards, performance share awards and dividend equivalent rights.
Eligibility. Under the 2016 Plan,
full or part-time officers and other employees, non-employee directors and consultants of the Company and its subsidiaries who
are selected by the administrator are eligible to participate in the plan.
Option Exercise Price. Under the
2016 Plan, the option exercise price is determined by the plan administrator at the time of grant, but will not be less than fair
market value (as defined in the 2016 Plan) on the grant date, and for incentive stock options granted to any employee who is a
10 percent owner in the Company, will not be less than 110 percent of the fair market value on the grant date.
Vesting Period. Vesting conditions
are determined by the administrator at the time of grant and are specified in the applicable award certificate.
Accelerated Vesting. The administrator
may accelerate the exercisability or vesting of all or any portion of any award in circumstances involving the grantee’s
death, disability, retirement or termination of employment, or a change in control.
Amendment. Our board of directors
has the authority to amend the 2016 Plan.
For the fiscal year ended December 31,
2018, we have granted our directors and executive officers, in the aggregate, options for the right to acquire 256,528 shares at
exercise prices ranging from CHF 8.36 to CHF 9.33 per share, that vest over a four year period with vesting to occur quarterly.
In addition to the stock options granted, the Company also granted 58,741 restricted share units to its directors and executive
officers. The restricted share units granted to directors total 54,489 and vest over a one-year period. The remaining 4,252 restricted
share units were granted to executives and have a four year vesting life to be vested quarterly.
Board Composition and Election of Directors
Our board of directors is composed of eight
directors. Each director is elected for a one-year term. The current members of our board of directors were appointed at a shareholders’
meeting held on July 6, 2018 to serve until the 2019 shareholders’ meeting to be held in June 2019.
We are a foreign private issuer. As a result,
in accordance with the Nasdaq stock exchange listing requirements, we rely on home country governance requirements and certain
exemptions thereunder rather than relying on the stock exchange corporate governance requirements. For an overview of our corporate
governance principles, see “Item 16G. Corporate governance.”
Our Board of Directors held five physical
meetings in 2018 and several additional meetings by conference call. The Board discussed and analyzed the scientific, business,
financial and organizational risks of the Company based on the external factors and internal changes impacting the risks for the
Company in the future.
As a foreign private issuer, under the
listing requirements and rules of Nasdaq, we are not required to have independent directors on our board of directors, except to
the extent that our audit and finance committee is required to comply with independence requirements, subject to certain phase-in
schedules. However, our board of directors has determined that, under current listing requirements and rules of Nasdaq (which we
are not subject to) and taking into account any applicable committee independence standards, Martin Velasco, Detlev Riesner, Friedrich
von Bohlen Und Halbach, Peter Bollmann, Thomas Graney, Douglas Williams and Werner Lanthaler are “independent directors.”
In making such determination, our board of directors considered the relationships that each non-employee director has with us and
all other facts and circumstances our board of directors deemed relevant in determining the director’s independence, including
the number of ordinary shares beneficially owned by the director and his or her affiliated entities, if any.