Announcement PDF Employee Incentive Plan Rules LTR Pharma Limited ACN 644 924 569 (Company) AU_Active01 914228363v1 MASEROR Table of contents 1. 1.1 1.2 1.3 Introduction Purpose of plan Advice Listing Rules only apply if Company is listed 4 4 4 4 2. 2.1 2.2 2.3 2.4 Definitions and Interpretations Definitions Interpretation Headings Tax treatment of Plan 4 4 8 9 9 3. 3.1 3.2 3.3 3.4 3.5 3.6 Awards that may be made under the Plan Making of Awards Options Performance Rights Loan Shares Deferred Share Awards Exempt Share Awards 9 9 9 9 10 10 10 4. 4.1 4.2 4.3 4.4 4.5 4.6 Loan Shares Offer of Acquisition Loan Default Acquisition Loan Terms Repayment of Acquisition Loan Limited recourse Security Dividends and other entitlements 10 10 11 12 13 13 13 5. 5.1 5.2 5.3 5.4 5.5 5.6 Offers of Awards Offers to any ESS Participant Form of Offer for Awards involving monetary consideration Additional requirements if the Company is not Listed Form of Offer for Awards involving no monetary consideration Compliance with laws Acceptance 14 14 14 14 15 16 16 6. 6.1 6.2 Issue cap Issue cap Offers involving monetary consideration Issue cap for Offers not involving monetary consideration 16 16 17 7. 7.1 7.2 7.3 Monetary cap of Awards while Company is not Listed Monetary Cap Carry forward of Monetary Cap Excluded amounts under the Monetary Cap 17 17 17 17 8. 8.1 8.2 8.3 8.4 Vesting and Exercise of Awards Vesting Default vesting conditions if none specified in an Offer Automatic Exercise Exercise of Awards 18 18 18 19 19 9. 9.1 9.2 Allotment of Shares on exercise or vesting of Awards Rights attaching to Shares Quotation 19 19 19 AU_Active01 914228363v1 MASEROR 9.3 9.4 New or existing Shares Trustee 20 20 10. 10.1 10.2 10.3 10.4 Restricted Awards Restrictions Bonus issues Takeovers and control transactions Personal representatives 20 20 20 20 20 11. Hedging unvested Awards 21 12. Clawback 21 13. 13.1 13.2 13.3 Share buy-back or transfer When Shares are bought back or transferred Buy-back price How Shares are bought back 22 22 22 22 14. 14.1 14.2 14.3 14.4 14.5 Adjustments Application of this clause New issues of shares Bonus issues Other reorganisations of capital General 23 23 23 23 23 23 15. Termination benefits 23 16. 16.1 16.2 Tax compliance Taxes and withholding Tax reporting 24 24 24 17. Power of attorney 24 18. Powers of the Board 25 19. Commencement, suspension, termination and amendment of Plan 25 20. 20.1 20.2 20.3 20.4 General provisions Bound by Constitution and Securities Trading Policy Notices Effect on employee entitlements Governing law and jurisdiction 25 25 26 26 26 AU_Active01 914228363v1 MASEROR Employee Incentive Plan Rules 1. Introduction 1.1 Purpose of plan The Company has established this Plan to encourage ESS Participants to share in the ownership of the Company and to promote the long-term success of the Company as a goal shared by all ESS Participants. 1.2 1.3 Advice (a) There are legal and tax consequences associated with participation in the Plan. ESS Participants should ensure that they understand these consequences before accepting an invitation to participate in the Plan. (b) Any advice given by or on behalf of the Company is general advice only, and ESS Participants should consider obtaining their own financial product advice from an independent person who is licensed by ASIC to give such advice. Listing Rules only apply if Company is listed In this Plan, a reference to the Listing Rules: (a) only has effect if at the relevant time the Company is admitted to the official list of the ASX and is otherwise to be disregarded; and (b) is to be read taking into account any waivers or exemptions from those Listing Rules applicable to the Company. 2. Definitions and Interpretations 2.1 Definitions In these Rules unless the contrary intention appears: Acquisition Loan means a loan made by the Company to an ESS Participant under clause 4.1 or the purpose of the Participant acquiring a Loan Share as the result of the acceptance of an Offer; Acquisition Loan Period means the period of the Acquisition Loan determined in accordance with clause 4.2(a)(v); Amount has the meaning given to it under clause 16; Application means a written acceptance of an Offer for, or an application for, Awards in form approved by or acceptable to the Company; ASIC means the Australian Securities and Investments Commission; ASX means ASX Limited or the securities market which it operates, as the context requires; Award means: (a) an Option, (b) a Performance Right, 4 AU_Active01 914228363v1 MASEROR (c) a Loan Share, (d) a Deferred Share Award, (e) an Exempt Share Award, as applicable, and (f) any other ESS Interest as defined under section 1100E of the Corporations Act; Benefit has the meaning given to it under clause 15; Board means the Board of Directors of the Company; Company means LTR Pharma Limited ACN 644 924 569; Constitution means the constitution of the Company; Corporations Act means the Corporations Act 2001 (Cth); Deferred Share Award means a Share issued under clause 3.5; ESS Contribution Plan means, for an Offer for the issue or sale of ESS Interests, a plan with terms that: (a) allow an ESS Participant to make regular payments, or elect to have regular deductions made from their wages or salary, for the purpose of acquiring the ESS Interests under the Offer; and (b) provide that, before the participant acquires the ESS Interests under the Offer, the payments or deductions are held on trust in an account with an Australian ADI that is kept solely for that purpose; and (c) allow the participant to elect to discontinue the deductions or payments at any time; and (d) provide that, if the participant so elects: (i) any deductions from the participant’s wages or salary will cease, and any deductions made after the election will be repaid to the participant, within 45 days of the election; and (ii) the amount of the deductions or payments standing, at the time when the election is made, to the credit of the account for the participant, and any interest on that amount, will be repaid to the participant within 45 days of the election; and (e) require the participant to agree in writing to the terms of the plan before participating in the plan; and (f) meet any requirements prescribed in the regulations for the purposes of this paragraph. ESS Interest has the meaning given to it under section 1100E of the Corporations Act, being offers of interests under an employee share scheme of a body corporate or a registered scheme that meets certain listing requirements; ESS Participant means a person who is: (a) a Primary Participant in relation to the Plan; or (b) a Related Person in relation to the Plan. 5 AU_Active01 914228363v1 MASEROR Exempt Share Award means a Share issued under clause 3.6; Exercise means exercise of an Award in accordance with its terms, and includes automatic exercise in accordance with these Rules; Exercise Price means the price payable (if any) per Share to exercise an Award; Expiry Date means the date on which an Award lapses, being the date specified in an Offer as the Expiry Date, or fixed by a method of calculation set out in an Offer; Good Leaver means an ESS Participant who ceases to be employed by, contracted by, or a director of, a Group Member as a result of: (a) total or permanent disablement, or an illness which persists for at least 3 months, which in either case prevents the person from carrying out their previous functions as an employee, contractor or director; (b) genuine redundancy; (c) death; or (d) other factors determined by the Board in its discretion to constitute sufficient reason to treat the person as a Good Leaver; Group means the Company and each of its controlled entities, and Group Member means any of them; Issue of a Share includes the transfer of an existing Share in accordance with clause 9.3; Issue Price means the price (if any) to be paid for the issue of a Share as stated in the Offer; Liability means any liability, whether actual or contingent, present or future, quantified or unquantified; Limiting Legislation has the meaning given to it under clause 15; Listed means the Company being and remaining admitted to the official list of the ASX; Listing Rules means the Listing Rules of ASX and any other rules of the ASX which are applicable while the Company is Listed each as amended or replaced from time to time, except to the extent of any waiver granted by the ASX; Liquidity Period means, in relation to an ESS interest, the period during which: (a) the ESS interest is in a class of interests that is able to be traded on the official list of the ASX or any other financial market covered by section 1100K; or (b) an executed sale agreement constituting an offer to acquire ESS Interests in the same class as the ESS Interest is open for acceptance; or (c) any other circumstances prescribed by the Corporations Act or Corporations Regulations for the purposes of this definition. Loan Share means a Share issued under clause 3.4 on the terms set out in clause 4; Market Price means the weighted average sale price of Shares on the ASX over the five trading days immediately preceding the day the Offer is made, or another pricing method determined by the Company; 6 AU_Active01 914228363v1 MASEROR Monetary Cap means in relation to an ESS Participant which is not otherwise exempt from disclosure under the Corporations Act for a 12-month period (current period), subject to the excluded amounts under clause 7.3 of these Rules and any other provisions of the Corporations Act, Corporations Regulations and any other regulations, rules, relief or instruments that apply at the time of the Offer, the sum of: (a) $30,000; and (b) 70% of the amount of any distributions received in the current period by the ESS Participant on an ESS Interests acquired under the scheme (dividend); and (c) 70% of the amount of any cash remuneration received in the current period by the ESS Participant, to the extent the remuneration was conditional on the achievement of objectives (cash bonus); and (d) if the current period is not the first 12-month period, the sum of any amount carried forward for each previous 12-month period that started: (i) at or after the start of the first 12-month period; and (ii) not earlier than 4 years before the start of the current period; Offer means an offer or issue of Awards made to an ESS Participant under clause 4. Where Awards are issued without the need for acceptance, an Offer includes the document setting out the terms of the Award; Option means an option to acquire Shares issued under clause 3.2; Performance Right means a right to acquire a Share issued under clause 3.3; Plan means this Employee Incentive Plan; PPSA means the Personal Property Securities Act 2009 (Cth); Primary Participant means, subject to the Corporations Act, a person who is: (a) an employee or director of, or an individual who provides services to, the Company; (b) an employee or director of, or an individual who provides services to, an associated entity of the Company, where the associated entity is a body corporate; (c) a prospective person to whom subparagraph (a) or (b) may apply; or (d) a person prescribed by the regulations of the Corporations Act for the purposes of this definition. Related Person means, subject to the Corporations Act, another person who is: (a) a spouse, parent, child or sibling of the Primary Participant; or (b) another body corporate controlled by the Primary Participant or a person mentioned in subparagraph (a); or (c) a body corporate that is the trustee of a self-managed superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993 (Cth)) where the primary participant is a director of the body corporate; or (d) a person prescribed in relation to the primary participant by the regulations for the purposes of section 1100L of the Corporations Act; or 7 AU_Active01 914228363v1 MASEROR (e) any other person defined as a "related person" under section 1100L of the Corporations Act, as updated from time to time; Restricted Award means an Award or a Share issued on exercise of an Award in respect of which a restriction on sale or disposal applies under this Plan; Restriction Period means the period during which Awards, or Shares issued on exercise of Awards, must not be sold or disposed of, being the period specified in these Rules in respect of Deferred Share Awards and Exempt Share Awards, and as specified in the Offer in respect of other Awards; Rules means these rules as amended from time to time; Securities Trading Policy means any securities trading policy adopted by the Company from time to time; Security Interest means a right, interest, power or arrangement in relation to any property which provides security for, or protects against default by a person in, the payment or satisfaction of a debt, obligation or Liability, including a mortgage, charge, bill of sale, pledge, deposit, lien, encumbrance or hypothecation and a security interest as defined in sections 12(1) and 12(2) of the PPSA; Share means a fully paid ordinary share of the Company, and where the context requires, includes a Loan Share; Tax Act means the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997, or any legislation amending or replacing the provisions of those Acts relating to the issue and exercise of Awards; Vesting Conditions means any conditions described in the Offer that must be satisfied before an Award can be exercised or before an Award (or Share issued under an Award) is no longer subject to forfeiture; Vesting Date means the date on which an Award is exercisable or is no longer subject to forfeiture following satisfaction of any Vesting Conditions; 2.2 Interpretation In these Rules, unless expressed to the contrary: (a) terms defined in the Corporations Act or the Listing Rules have the same meaning in these Rules; (b) words importing: (i) the singular include the plural and vice versa; (ii) any gender includes the other genders; (c) if a word or phrase is defined cognate words and phrases have corresponding definitions; (d) a reference to: (i) a person includes a firm, unincorporated association, corporation and a government or statutory body or authority; (ii) a person includes its legal personal representatives, successors and assigns; 8 AU_Active01 914228363v1 MASEROR 2.3 (iii) a statute, ordinance, code or other law includes regulations and other statutory instruments under it and consolidations, amendments, reenactments or replacements of any of them; (iv) a right includes a benefit, remedy, discretion, authority or power; (v) "$" or "dollars" is a reference to the lawful currency of Australia; (vi) this or any other document includes the document as varied or replaced and notwithstanding any change in the identity of the parties; and (vii) any thing (including, without limitation, any amount) is a reference to the whole or any part of it and a reference to a group of things or persons is a reference to any one or more of them. Headings Headings are for convenience only and do not affect the interpretation of these Rules. 2.4 Tax treatment of Plan This Plan is a plan to which Subdivision 83A-C of the Tax Act applies (subject to the conditions in that Act). 3. Awards that may be made under the Plan 3.1 Making of Awards The Company may, at the discretion of the Board, offer and issue Awards to ESS Participants of the kind set out in this clause 3. 3.2 Options (a) 3.3 The Company may offer or issue Options, which are rights to be issued a Share upon payment of the Exercise Price and satisfaction of specified Vesting Conditions. These terms apply unless the Offer specifies otherwise: (i) Options are Restricted Awards until they are exercised or expire. (ii) An Offer may specify a Restriction Period for Shares issued on the exercise of Options. (iii) Options are subject to adjustment under clause 14. Performance Rights (a) The Company may offer or issue Performance Rights, which are rights to be issued a Share for nil Exercise Price upon the satisfaction of specified Vesting Conditions. These terms apply unless the Offer specifies otherwise: (i) Performance Rights are Restricted Awards until they are exercised or expire. (ii) An Offer may specify a Restriction Period for Shares issued on the exercise of Performance Rights. (iii) Performance Rights are subject to adjustment under clause 14. 9 AU_Active01 914228363v1 MASEROR 3.4 Loan Shares (a) 3.5 (i) Loan Shares are Restricted Awards until Vesting Conditions are satisfied and the Acquisition Loan is repaid or satisfied. (ii) The Acquisition Loan and security terms in clause 4 apply. Deferred Share Awards (a) (b) 3.6 The Company may offer or issue Loan Shares, which are Shares issued to ESS Participants at an Issue Price that the Board in its discretion determines, and may be subject to the satisfaction of specified Vesting Conditions. These terms apply unless the Offer specifies otherwise: The Company may offer or issue Deferred Share Awards, which are Shares issued to ESS Participants: (i) who elect to receive Shares in lieu of any wages, salary, director's fees, or other remuneration; or (ii) by the Company in its discretion, in addition to their wages, salary and remuneration, or in lieu of any discretionary cash bonus or other incentive payment. Unless a different Restriction Period is specified in an Offer, the Restriction Period for Deferred Share Awards will expire on the earlier of: (i) when a Primary Participant ceases to be an employee; (ii) when the Board, in its discretion, agrees to end the Restriction Period; and (iii) 10 years from the date of issue of the Shares. Exempt Share Awards (a) The Company may offer or issue Exempt Share Awards, which are Shares issued for no consideration or at an Issue Price which is a discount to the Market Price with the intention that up to $1,000 (or such other amount which is exempted from tax under the Tax Act from time to time) of the total value or discount received by each ESS Participant will be exempt from tax. (b) Unless a different Restriction Period is specified in an Offer, the Restriction Period for Exempt Share Awards will expire on the earlier of: (c) (i) three years from the date of issue of the Shares; and (ii) the time when a Primary Participant ceases to be an employee. The Company must offer Exempt Share Awards on a non-discriminatory basis as defined by section 83A-35(6) of the Tax Act. 4. Loan Shares 4.1 Offer of Acquisition Loan (a) The Company may provide an Acquisition Loan in relation to Loan Shares by making a loan to an ESS Participant on the terms set out in an Offer and in these Rules. 10 AU_Active01 914228363v1 MASEROR 4.2 (b) If the Company is not Listed, then a loan will not comply with the Corporations Act if the Company makes or offers a loan to an ESS Participant who at the time the loan is offered or made (as the case may be), is a shareholder of the Company. (c) The offer of an Acquisition Loan may be subject to the Company and the Participant executing agreements and other documents in a form acceptable to the Company providing for: (i) the offer by the Company and the acceptance by the Participant of an Acquisition Loan equal to the aggregate Issue Price of the Loan Shares offered; (ii) the grant by the Participant in favour of the Company of a Security Interest over the Loan Shares as set out in this clause 4 and the perfection of that Security Interest under the PPSA as a first ranking Security Interest; and (iii) if required by the Company, a written agreement by the Participant to the application of a holding lock in respect of the Loan Shares. Default Acquisition Loan Terms (a) Unless otherwise determined by the Board: (i) (Timing) an Acquisition Loan will be made to an ESS Participant at the time the Participant acquires a Loan Share as the result of their acceptance of an Offer; (ii) (Amount) the amount of the Acquisition Loan will be equal to the aggregate Issue Price of the Loan Shares offered; (iii) (Application of Acquisition Loan money) an ESS Participant who accepts an Acquisition Loan irrevocably authorises the Company to apply the Acquisition Loan on behalf of the Participant to pay for the aggregate Issue Price of the Loan Shares to be issued or transferred to the ESS Participant; (iv) (Acquisition Loans interest free) an Acquisition Loan will not bear interest; (v) (Acquisition Loan Period) the Acquisition Loan Period commences when the Acquisition Loan is made and ends on the earliest of: (vi) (A) the date on which the Primary Participant ceases to be an employee; (B) the buy-back of the Loan Shares in accordance with clause 13; (C) the failure to satisfy any Vesting Conditions applicable to the Loan Shares; (D) any breach by the Participant of this Plan where the breach is not remedied within seven days of the Company's notice to the Participant to do so; or (E) an application being made to a court for an order, or an order being made, that the Participant be made bankrupt (or any similar event in any jurisdiction as determined by the Board in its discretion); and (Repayment) an ESS Participant: (A) may repay all or part of an Acquisition Loan made to the Participant at any time before expiry of the Acquisition Loan Period; and 11 AU_Active01 914228363v1 MASEROR (B) 4.3 must repay in full the outstanding amount of the Acquisition Loan at the end of the Acquisition Loan Period. Repayment of Acquisition Loan (a) (b) If an Acquisition Loan provided to an ESS Participant becomes repayable, the Company must accept in full and complete satisfaction of the Participant's indebtedness and obligations to it under the Acquisition Loan: (i) if the applicable Vesting Conditions have been satisfied, the total amount owing by the Participant to the Company in cash or by other means agreed between the Participant and the Company; or (ii) in any case, the transfer to the Company (or its nominee) of the Loan Shares to which the Acquisition Loan relates in accordance with clause 13. If the Participant has: (i) not repaid the outstanding amount of an Acquisition Loan (if any) at the end of the Acquisition Loan Period; or (ii) not satisfied the Vesting Conditions applicable to the Loan Shares, the Board may, in its discretion, determine that the Company may, on behalf of the Participant: (i) transfer to the Company (or its nominee) the Loan Shares to which the outstanding amount of the Acquisition Loan or outstanding Vesting Conditions (as applicable) relate in accordance with clause 13; or (ii) sell the relevant Loan Shares to which the outstanding amount of the Acquisition Loan or outstanding Vesting Conditions (as applicable) relate. (c) Without limiting the generality of clause 17, for the purpose of the sale of the Loan Shares in accordance with clause 4.3(b), the Participant appoints the secretary of the Company (or his or her duly authorised delegate) as their attorney and authorises the secretary of the Company (or their duly authorised delegate) to sell the relevant Loan Shares on behalf of the Participant. The Company and the secretary will have complete discretion in respect of the sale of the relevant Loan Shares under clause 4.3(b) and will not be liable to the Participant in respect of the timing of or price obtained on or any other circumstances relating to such sale. (d) If the Company sells any Loan Shares in accordance with clause 4.3(b), the proceeds of sale will be applied in the following order, unless the Board otherwise determines: (i) in payment of any costs and expenses of the sale incurred by the Company; (ii) in reduction of the outstanding amount of the Acquisition Loan (if any); and (iii) the balance (if any): (A) if Vesting Conditions applicable to the Loan Shares were satisfied at the time of the sale, in payment to the Participant; or (B) if the Loan Shares were unvested at the time of the sale, in payment to the Company. 12 AU_Active01 914228363v1 MASEROR 4.4 Limited recourse (a) (b) 4.5 (i) no further amount will be repayable by the Participant to the Company under the Acquisition Loan in respect of the Loan Shares; and (ii) no further amount will at any time be recoverable by the Company from the Participant in respect of the Acquisition Loan. In the event of default in the payment of the loan, the rights of the Company against the ESS Participant are limited to forfeiture of the ESS Interests acquired using the loan. Security (a) (b) 4.6 If the Acquisition Loan is discharged or repaid under clauses 4.3 then: As security for the Acquisition Loan, each Participant grants to the Company: (i) a pledge of its Loan Shares provided under the Plan; and (ii) a charge over all dividends and other amounts paid or payable on those Loan Shares. While the Shares are subject to the restrictions of this Plan, an ESS Participant must not without the consent of the Board: (i) create, other than in favour of the Company, any Security Interest over any Shares; or (ii) grant, or agree to grant, a first right of refusal, voting right, or pre-emptive right or enter into any agreement, option or other arrangement to grant such an interest or right. (c) Loan Shares are Restricted Awards until the Vesting Conditions applicable to the Loan Shares (if any) are satisfied and/or the Acquisition Loan is repaid, unless the Board in its discretion determines otherwise. (d) The Company is entitled to retain the share certificates (if any) for any Loan Shares provided under this Plan to the Participant, and to impose a holding lock on the Loan Shares. Dividends and other entitlements (a) The Company may retain, or pay to itself on behalf of an ESS Participant, any moneys (including dividends) and any capital distributions that may become payable in respect of a Loan Share in reduction of the amount outstanding under the Acquisition Loan in respect of that Loan Share. (b) A Participant may not participate in any dividend reinvestment plan (or similar plan) established by the Company until the Acquisition Loan in respect of his or her Loan Shares has been fully repaid. (c) If any Shares or other securities are issued in respect of Loan Shares as part of a bonus or entitlement issue, then those Shares or other securities will also be subject to the security in this clause 4.5 and the other terms of this Plan as if they were a Loan Share (unless the Board otherwise determines). 13 AU_Active01 914228363v1 MASEROR 5. Offers of Awards 5.1 Offers to any ESS Participant Subject to the Corporations Act, the Company's constitution and Listing Rules, the Company may make an Offer to any ESS Participant. 5.2 Form of Offer for Awards involving monetary consideration (a) (b) 5.3 Each Offer for Awards involving consideration must be in writing (which includes email), include an Application if acceptance is required, and, if Offered to an ESS Participant that is not otherwise exempt from disclosure under the Corporations Act any other regulations, rules, relief or instruments that apply at the time of the Offer, specify the following to the extent applicable: (i) the identity of the ESS Participant to whom the Offer is made; (ii) the terms of the Offer, or a summary of the terms of the Offer with a statement that, on request, a copy of the full terms of the Offer will be provided to the ESS Participant; (iii) provide general information about the risks of acquiring and holding the ESS Interests; (iv) state that advice given in relation to the Offer does not take into account the ESS Participant's objectives, financial situation and needs; (v) suggests that the ESS Participant obtain personal advice in relation to the Offer; (vi) states the period during which the ESS Participant may accept the Offer; (vii) if ESS Interests may be acquired under the Offer using a loan or contribution plan, then the: (A) terms of the loan or plan; or (B) a summary of the terms of the loan or plan and a statement that, on request, a copy of the plan or loan will be provided to the ESS Participant; (viii) any other terms or conditions that the Board decides to include; and (ix) any other matters required to be specified in the Offer by either the Corporations Act, any other regulations, rules, relief or legislative instruments or applicable laws that apply at the time of the Offer or the Listing Rules. If required by applicable laws or the conditions to applicable ASIC relief, the Offer must include an undertaking by the Company to provide to an ESS Participant, if a request is made before the Award is exercised and within a reasonable period of being so requested, the current market price of the Shares. Additional requirements if the Company is not Listed (a) In addition to the above disclosure documents, if the Awards are offered while offered to an ESS Participant that is not otherwise exempt from disclosure under the any other regulations, rules, relief or instruments that apply at the time of the Offer and the Company is not Listed, the following will be provided: 14 AU_Active01 914228363v1 MASEROR 5.4 (i) a statement that the ESS Interests may not have any value and that the value of the ESS Interests will depend on future events that may not occur; (ii) where shares that not ordinary shares, a description of the rights that attach to the shares, and how the shares differ from ordinary shares; (iii) a copy of the most recent report lodged with ASIC accompanied by a statement as to whether that financial information has been audited; (iv) valuation information in relation to the Award, which may include