As filed with the Securities and Exchange Commission on February 6, 2017

Registration No. 333-

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SEQUANS COMMUNICATIONS S.A.

(Exact name of Registrant as specified in its charter)

 

 

 

French Republic   Not Applicable

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

Sequans Communications S.A.

15-55 boulevard Charles de Gaulle

92700 Colombes, France

Telephone: +33 1 70 72 16 00

(Address of Principal Executive Offices)

 

 

Restricted Share Award Plan 2016-2

(Full title of the plan(s))

 

 

GKL Corporate/Search, Inc.

One Capitol Mall, Suite 660

Sacramento, California 95814

Telephone: +1 916 442 7652

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copy to:

John V. Bautista, Esq.

Brett Cooper, Esq.

Orrick, Herrington & Sutcliffe LLP

1000 Marsh Road

Menlo Park, California 94025

Telephone: +1 650 614 7400

Facsimile: +1 650 614 7401

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   ☐    Accelerated filer   ☒
Non-accelerated filer   ☐  (Do not check if a smaller reporting company)    Smaller reporting company   ☐

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered (1)

 

Amount

to be
registered (2)

  Proposed
maximum
offering price
per share 		 

Proposed
maximum
aggregate

offering price

 

Amount of

registration fee

Ordinary Shares, nominal value €0.02 per share

  82,500   N/A (3)   N/A (3)   N/A (3)

 

 

(1) These shares may be represented by the Registrant’s American Depositary Shares, or ADS. Each ADS represents one ordinary share. ADSs issuable upon deposit of the ordinary shares registered hereby were registered pursuant to a separate Registration Statement on Form F-6 (File No. 333-173002).
(2) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this Registration Statement shall also cover any Ordinary Shares which become issuable under the Registrant’s Restricted Share Award Plan by reason of any share dividend, share split, recapitalization or any other similar transaction effected without the Registrant’s receipt of consideration which results in an increase in the number of the Registrant’s outstanding Ordinary Shares.
(3) As described in the Explanatory Note below, all of the Ordinary Shares registered hereby (the “Reallocated Shares”) were previously registered by the Registrant under its Stock Option Subscription Plan 2016-1, Restricted Share Award Plan 2016-1, BSA (Warrants) Subscription Plan 2016-1, BSA (Warrants) Subscription Plan 2016-2 and BSA (Warrants) Issuance Agreement dated June 28, 2016 (collectively, the “2016 Plans”) on the Registrant’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission (the “Commission”) on November 4, 2016 (Registration No. 333-214444) (the “Prior Registration Statement”). A post-effective amendment to the Prior Registration Statement to deregister the Reallocated Shares is being filed contemporaneously with the filing of this Registration Statement. The registration fee with respect to the Reallocated Shares was paid in connection with registration of such shares on the Prior Registration Statement. Therefore, no further registration fee is required.

 

 

 

EXPLANATORY NOTE

Pursuant to authority granted by the general meeting of shareholders of Sequans Communications S.A. (“Sequans,” the “Company” or the “Registrant”) on June 28, 2016, the board of directors of the Company adopted the Restricted Share Award Plan 2016-2 on December 12, 2016. The purpose of this Registration Statement is to reallocate the Reallocated Shares to this Registration Statement for issuance under the Restricted Share Award Plan 2016-2. The Reallocated Shares consist of 82,500 Ordinary Shares previously registered under the 2016 Plans on the Prior Registration Statement.

The total registration fee paid with respect to the registration of the Ordinary Shares on the Prior Registration Statement was $258.76. In accordance with Instruction E to the General Instructions to Form S-8 and the principles set forth in Interpretation 89 under Section G of the Manual of Publicly Available Telephone Interpretations (July 1997) of the Division of Corporate Finance of the Commission, the purpose of this Registration Statement is to carry forward and reallocate to this Registration Statement the 82,500 Reallocated Shares, which were previously registered by the Company under the 2016 Plans pursuant to the Prior Registration Statement, and the $19.45 registration fee previously paid with respect to the registration of those shares. A post-effective amendment to the Prior Registration Statement to deregister the Reallocated Shares is being filed contemporaneously with the filing of this Registration Statement.

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The information called for in Part I of Form S-8 is not being filed with or included with this Registration Statement, by incorporation by reference or otherwise, in accordance with the rules and regulations of the Commission and the instructions to Form S-8.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3. Incorporation of Documents by Reference.

The Registrant hereby incorporates into this Registration Statement the following documents, which have been previously filed by the Registrant with the Commission:

(a) The Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2015 (File No. 001-35135), filed with the Commission on April 29, 2016, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

(b) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Registrant’s Form 20-F referred to in (a) above; and

(c) The description of the Registrant’s Ordinary Shares and American Depositary Shares contained in its Registration Statement on Form 8-A (File No. 001-35135), filed with the Commission on April 12, 2011 pursuant to Section 12 of the Exchange Act, including any amendment or report filed for the purpose of updating such description.

All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be part hereof from the date of filing such documents. For purposes of this Registration Statement, any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated herein by reference modifies or supersedes such statement.

Item 4. Description of Securities.

Not applicable.

 

Item 5. Interests of Names Experts and Counsel.

Not applicable.

 

Item 6. Indemnification of Directors and Officers.

The Registrant maintains liability insurance for its directors and officers, including coverage against liabilities under the Securities Act.

 

Item 7. Exemption from Registration Claimed.

Not Applicable.

 

Item 8. Exhibits.

 

Exhibit

Number

  

Description of Exhibit

  4.1    By-laws of Sequans Communications S.A. (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-214444) filed with the Commission on November 4, 2016)
  5.1*    Opinion of Orrick, Herrington & Sutcliffe (Europe) LLP
23.1*    Consent of Orrick, Herrington & Sutcliffe (Europe) LLP (included in Exhibit 5.1)
23.2*    Consent of Ernst & Young Audit, independent registered public accounting firm
24.1    Power of Attorney (included on the signature page of this Registration Statement)
99.1*    Restricted Share Award Plan 2016-2

 

* Filed herewith.

 

Item 9. Undertakings.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to the registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Colombes, France, on February 6, 2017.

 

SEQUANS COMMUNICATIONS S.A.
By:   /s/ Georges Karam
Name:   Dr. Georges Karam
Title:   Chairman and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dr. Georges Karam and Deborah Choate, and each of them acting individually, as his true and lawful attorneys-in-fact and agents, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Registration Statement on Form S-8, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, with full power of each to act alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Name

  

Title

 

Date

/s/ Georges Karam

Dr. Georges Karam

  

Chairman and Chief Executive Officer (Principal Executive Officer)

  February 6, 2017

/s/ Deborah Choate

Deborah Choate

  

Chief Financial Officer (Principal Financial and Accounting Officer)

  February 6, 2017

/s/ Yves Maitre

Yves Maitre

   Director   February 6, 2017

/s/ Richard Nottenburg

Richard Nottenburg

   Director   February 6, 2017

/s/ Dominique Pitteloud

Dominique Pitteloud

   Director   February 6, 2017

/s/ Alok Sharma

Alok Sharma

   Director   February 6, 2017

/s/ Zvi Slonimsky

Zvi Slonimsky

   Director   February 6, 2017

SIGNATURE OF AUTHORIZED U.S. REPRESENTATIVE OF THE REGISTRANT

Pursuant to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of Sequans Communications, S.A. has signed this Registration Statement or amendment thereto in the City of San Diego, State of California, on February 6, 2017.

 

By:   /s/ T. Craig Miller
  Name: T. Craig Miller
  Title:   U.S. Representative

INDEX TO EXHIBITS

 

Exhibit

Number

  

Description of Exhibit

  4.1    By-laws of Sequans Communications S.A. (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 (Registration No. 333-214444) filed with the Commission on November 4, 2016)
  5.1*    Opinion of Orrick, Herrington & Sutcliffe (Europe) LLP
23.1*    Consent of Orrick, Herrington & Sutcliffe (Europe) LLP (included in Exhibit 5.1)
23.2*    Consent of Ernst & Young Audit, independent registered public accounting firm
24.1    Power of Attorney (included on the signature page of this Registration Statement)
99.1*    Restricted Share Award Plan 2016-2

 

* Filed herewith.

EXHIBIT 5.1

 

LOGO   

Orrick, Herrington & Sutcliffe
(Europe) LLP

 

31, avenue Pierre 1er de Serbie
75782 Paris Cedex 16

France

Siren : 808 676 316

 

T +33 1 53 53 75 00

F +33 1 53 53 75 01

orrick.com

February 6, 2017

Sequans Communications S.A.

15-55 boulevard Charles de Gaulle

92700 Colombes, France

Re: Registration Statement on Form S-8

Ladies and Gentlemen:

At your request, we are rendering this opinion in connection with the proposed issuance of up to 82,500 ordinary shares (the “ Shares ”) of Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “ Company ”), pursuant to the Company’s Restricted Share Award Plan 2016-2, as approved by the general meeting of shareholders of the Company on June 28, 2016 and by the board of directors of the Company on December 12, 2016 (the “ Plan ”), and pursuant to a Registration Statement on Form S-8 (the “ Registration Statement ”).

We have examined instruments, documents, and records which we deemed relevant and necessary for the basis of our opinion hereinafter expressed and have relied on a certificate of an officer of the Company as to factual statements contained in such instruments, documents and records. In such examination, we have assumed the following: (a) the authenticity of original documents and the genuineness of all signatures and (b) the conformity to the originals of all documents submitted to us as copies.

Based on such examination, we are of the opinion that the Shares to be issued by the Company pursuant to the Plan are duly authorized, and when issued and subscribed for as described in the Plan and Registration Statement, will be validly issued, fully paid up and nonassessable.

In rendering this opinion, we have assumed that (i) the Registration Statement becomes and remains effective during the period when the Shares are offered, issued and subscribed for, (ii) the Shares to be subscribed for are issued in accordance with the terms of the Plan, (iii) the Company receives the full consideration for the Shares as stated in the Plan, (iv) the per share consideration for each Share includes payment of cash or other lawful consideration at least equal to the par value of the Company’s common stock, and (v) all applicable securities laws are complied with.

The opinion expressed above is limited to the laws of the French Republic and we do not express any opinion as to the effect of any other laws.

Membre du groupement transnational avec Orrick, Herrington & Sutcliffe, Solicitors of the Supreme Court of England and Wales depuis le 1er janvier 2006.

Membre d’une association agréée, le règlement des honoraires par chèque est accepté.

BEIJING BERLIN DÜSSELDORF FRANKFURT HONG KONG LONDON LOS ANGELES MILAN MOSCOW NEW YORK

ORANGE COUNTY PARIS PORTLAND ROME SACRAMENTO SAN FRANCISCO SEATTLE SHANGHAI

SILICON VALLEY TAIPEI TOKYO WASHINGTON DC

LOGO

Sequans Communications S.A.

February 6, 2017

Page 2

 

We hereby consent to the filing of this opinion as an exhibit to the above-referenced Registration Statement and to the use of our name wherever it appears in said Registration Statement, including any prospectus constituting a part thereof, as originally filed or as subsequently amended or supplemented. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Commission promulgated thereunder, nor do we thereby admit that we are “experts” within the meaning of such term as used in the Securities Act with respect to any part of the Registration Statement, including this opinion letter as an exhibit or otherwise.

Very truly yours,

/s/ Orrick, Herrington & Sutcliffe (Europe) LLP

ORRICK, HERRINGTON & SUTCLIFFE (EUROPE) LLP

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-00000) pertaining to the Restricted Share Award Plan 2016-2 of Sequans Communications S.A. of our reports dated April 29, 2016, with respect to the consolidated financial statements of Sequans Communications S.A. and the effectiveness of internal control over financial reporting of Sequans Communications S.A. included in its Annual Report (Form 20-F) for the year ended December 31, 2015 filed with the Securities and Exchange Commission.

Ernst & Young Audit

/s/ Pierre-Henri Pagnon

Represented by Pierre-Henri Pagnon

Paris – La Défense, France

February 6, 2017

Exhibit 99.1

SEQUANS COMMUNICATIONS

Société anonyme au capital de 1.184.876,98 euros

Siège social : Les Portes de la Défense, 15-55 boulevard Charles de Gaulle – 92700 COLOMBES

RCS Nanterre 450 249 677

Regulations

 

 

Restricted Share Award Plan – 2016-2

- CONTENTS -

 

I –      GENERAL PRINCIPLE OF RESTRICTED SHARE AWARDS

     3   

II –    LEGAL FRAMEWORK OF THE PLAN

     3   

III – CHARACTERISTICS OF THE RESTRICTED SHARE AWARDS

     3   

IV – CONDITIONS FOR THE RESTRICTED SHARE AWARDS AND BENEFICIARIES’ RIGHTS

     4   

-        Vested Award

     4   

-        Presence condition – Exceptions

     4   

-        Delivery of the Shares – Listing

     5   

-        Rights of the Shares after the Vesting Period

     5   

-        Adjustment

     5   

-        Reduction of Beneficiaries’ rights in case of a capital decrease due to losses

     5   

V –   TAX PROVISIONS

     5   

VI – AMENDMENT OF THE PLAN

     6   

 

- 2/6 -

I – GENERAL PRINCIPLES OF RESTRICTED SHARE AWARDS

The purpose of this plan is to manage the restricted share award program implemented for the benefit of certain of the employees (hereinafter the “ Beneficiaries ”) of Sequans Communications (hereinafter “ Sequans ” or the “ Company ”) and its subsidiaries within the meaning of Article L.233-3, 1° of the French Commercial code (hereinafter the “ Subsidiaries ”).

This plan allows the Beneficiaries to receive free ordinary shares of Sequans (hereinafter the “ Award ”), subject to certain temporary restrictions. i.e. the restricted shares (hereinafter referred to as the “ Shares ”).

The Shares are effectively and gradually acquired by the Beneficiaries over a period of four (4) years from the date of the Award by the Board of Directors (the “ Vesting Period ”) provided that the Award conditions established by the Board of Directors are observed on the Vesting Date as defined hereafter. During the Vesting Period, the Beneficiaries are not the owners of the Shares. The Beneficiaries become owners of the Shares only at the end of the Vesting Period (hereinafter the “ Vesting Date ”).

Any Shares vested before the second anniversary date of the Award by the Board of Directors must be retained until the second anniversary date of the Award by the Board of Directors. No retention period is required for Shares vested as from the second anniversary date of the Award by the Board of Directors. However, the shares may be subject to transfer or resale restrictions as required by applicable securities laws.

The Award of the Shares is an offer reserved to the Beneficiaries restrictively designated by the Board of Directors and consequently does not represent an offer made to the public. No Share can be awarded to any employee who owns more than 10% of the share capital of the Company or who would own more than 10% of the share capital as a result of the Award.

Beneficiaries are reminded that the change in the price of the Sequans’ shares and, consequently, the acquisition capital gain and the potential sale capital gain obtained through the sale of the Shares after the end of the Vesting Period, will depend on Sequans’ performance and results, as well as overall industry and external economic factors.

Nothing in this Plan forms part of the employment contract of a Beneficiary. The rights and obligations arising from the employment relationship between the Beneficiary and the Company or its Subsidiaries are separate from, and are not affected by, this Plan. Participation in the Plan does not create any right to, or expectation of, continued employment.

II – LEGAL FRAMEWORK OF THE PLAN

This plan is governed by French legal and regulatory provisions in effect on the date hereof and namely by articles L.225-197-1 et seq. of the French Commercial Code.

Pursuant to these provisions, the Company’s combined general shareholders’ meeting held on 28 June 2016 adopted a twelfth resolution authorising the principle of the award of Shares, deciding that the maximum number of Shares which may be issued by virtue of this authorisation shall not exceed 1,000,000 new ordinary shares with a unitary par value of EUR 0.02.

This combined general shareholders’ meeting has granted the Board of Directors the power to allocate these Shares, on one or more occasions, including the authority to determine the Beneficiaries.

Therefore and pursuant to the aforesaid grant of authority, at a meeting held on December 13, 2016, the Board of Directors decided the procedures applicable to Shares Awards and established the present Restricted Shares Award Plan 2016-2 (hereinafter the “ Plan ”), in conformity with the principles set by the combined general shareholders’ meeting and aforesaid statutory provisions.

III – CHARACTERISTICS OF THE RESTRICTED SHARE AWARD

The list of the Plan’s Beneficiaries is established and approved by the Company’s Board of Directors as well as the decision to grant Shares. The Shares allocated to the Beneficiaries shall either be existing shares owned by the Company or new shares to be issued.

The date of the decision of Award taken by the Board of Directors shall mark the commencement of the Vesting Period.

Beneficiaries will be individually notified of the Award by the CEO acting through a delegation of the Board of Directors (hereinafter the “ Individual Letter of Notification ”).

 

- 3/6 -

Such Individual Letter of Notification is deemed to be an exhibit of this Plan and shall specify :

 

  -   the number of Shares granted to the Beneficiary,

 

  -   the term of the Vesting Period, and

 

  -   the right to accept or refuse the Award of Shares through a receipt confirmation form that must be returned to the Company.

Within a period of fifteen (15) days following the receipt of the Individual Letter of Notification the Beneficiary undertakes to return to the Company a copy of this Plan, a copy of the Individual Letter of Notification, and the receipt confirmation form attached to said letter, being specified that all such copies shall be duly executed by the Beneficiary who acknowledges that the Individual Letter of Notification is part of this Plan. Alternatively, the Beneficiary may acknowledge the Notification and terms of the Plan via the on-line platform administered by the Company’s equity plan administrator.

IV – CONDITIONS FOR THE RESTRICTED SHARE AWARD AND BENEFICIARIES’ RIGHTS

IV-1. Vested Award

The Award of Shares to Beneficiaries will become final only at the end of the Vesting Period, as follows :

 

  -   50% of the Award shall become final on the two-year anniversary of the Award date;

 

  -   thereafter, an additional 1/8 th of the remaining 50% of the Award become final on the corresponding day of each three month period thereafter (i.e. quarterly vesting), such that 100% of the Award has become final by the 4 th anniversary of the Award date.

For example , if 160 Shares are awarded on 13 December 2016, the Award of 80 Shares becomes final on 13 December 2018, then the award of 10 Shares becomes final on 13 March 2019, the Award of another 10 Shares becomes final on 13 June 2019 and so forth until the Award of all 160 Shares is final as of 13 December 2020.

Such Award shall also be subject to the observance of the presence condition as set forth under Paragraph IV-2 hereafter.

IV-2. Presence condition – Exceptions

The Award of Shares to Beneficiaries is strictly related to the Beneficiary’s status as an employee of Sequans or its Subsidiaries. The Vested Award of Shares is consequently reserved for any Beneficiary (employee) designated at the time of the initial Award, linked to Sequans or to a Subsidiary through an employment agreement still in effect on the Vested Award date.

In case of termination of the employment agreement of the Beneficiary, for any reason whatsoever, effective before the end of the Vesting Period, the Beneficiary will lose any right to the related Shares.

Notwithstanding the above provisions, should the loss of the status as an employee during the Vesting Period be due to one of the following reasons, the granted Shares would be treated as follows :

 

  •   Retirement or early retirement : Beneficiaries retain their right to the Shares, even though they are no longer bound by an employment agreement, but they remain subject to the other conditions of this Plan.

 

  •   Death : pursuant to the provisions of article L.225-197-3 of the French Commercial Code, the successors or beneficiaries (“ ayant-droits ”) of the Beneficiaries, may, if they so desire, request the Award of the Shares. Such request must be made within six (6) months of the date of death; after such time limit, the successors or beneficiaries of the Beneficiary will definitively lose the right to request the Award of Shares. In any case, the final vesting of Shares will take place only upon the expiration of the Vesting Period .

 

  •   2nd and 3r d category disability , within the meaning of article L.341-4 of the French Social Security Code : Beneficiaries may preserve their right to the Award of the Shares, but they will remain subject to the other conditions of this Plan.

 

  •   A Subsidiary leaving the Group , if the Beneficiary is the employee of such company : the benefit of the right to the Award of the Shares is maintained for the Beneficiary, but will be subject to the other terms and conditions of this Plan.

 

  •   Termination for economic reasons : the Beneficiaries keep the benefit of the right to the Award of the Shares, which shall continue to vest after such termination date, and which will be subject to the other conditions of this Plan.

 

- 4/6 -

  •   Termination following an acquisition of Sequans Communications : In the event that a third party acquires a 100% interest in Sequans Communications, the Restricted Shares awarded to a Beneficiary who is subsequently dismissed within six months of the acquisition, other than for misconduct or gross negligence, shall vest immediately upon the date of employment contract termination as a result of said dismissal, unless the contract termination date is less than one year from the grant date. In this latter case, all Restricted Shares shall then vest one year from the grant date.

IV-3. Delivery of Shares upon Vesting – Listing

At the end of the Vesting Period and subject to the observance of the presence condition defined above, the Company shall transfer the number of granted Shares to the Beneficiary who shall thus become the owner of such Shares and a shareholder of the Company.

The Shares shall be registered in an account opened in the name of the Beneficiary, in the registers of Sequans Communications.

The new Shares issued for the purpose of the Plan will be subject to an application for admission trading on the New York Stock Exchange, under the form of American Depositary Shares (ADS).

IV-4. Rights of the Shares after the Vesting Period

After the Vesting Period, and subject to the requirement to hold all Shares until two years after the Grant Date, the Shares are no longer restricted shares and shall entitle the Beneficiary, as of the Vesting Date, to all rights pertaining to ordinary shares comprising the share capital and shall be subject to all provisions of the by-laws.

However, since these Shares are listed for trading on the New York Stock Exchange and in order to avoid any insider trading risk, Beneficiaries shall comply with the Insider Trading Compliance Program of the Company, a copy of which is attached hereto.

IV-5. Adjustment

Should the Company complete one of the financial transactions referred to under article L.225-181 of the French Commercial Code, no adjustment of the number of allocated Shares under this Plan shall be made, except if the general shareholders meeting voting the transaction decides otherwise.

IV-6. Reduction of Beneficiaries’ rights in case of a capital decrease due to losses

In case of a capital decrease due to losses realized by a decrease either in the par value of Sequans shares or in the number thereof, the rights of the Beneficiaries shall be reduced accordingly as if the Beneficiaries had been shareholders prior to the date on which the capital decrease became final.

V – TAX PROVISIONS

This presentation of tax treatment is provided for informational purposes only . It corresponds to the French legislation in effect as of the date this plan was approved by the Board of Directors.

The Beneficiary shall be responsible for learning about any amendments to the applicable tax treatment and the Company shall have no liability whatsoever in this respect.

 

V-1. T AX PROVISIONS APPLICABLE TO B ENEFICIARIES WHO ARE RESIDENT IN F RANCE FROM THE DATE OF THE AWARD UP TO THE SALE OF THE SHARES AND SUBMITTED TO THE F RENCH S OCIAL S ECURITY

1. Capital gain realised at the time of acquisition (Vested Award) and Capital gain realised at the time of disposal

Both (i) the capital gain resulting from the acquisition which is equal to the value of ordinary share at the Vesting Date and (ii) the capital gain on the disposal which corresponds to the difference between the sales price of the ordinary share and the value of such share at the Vesting Date, are subject to :

 

  -   an individual income tax ( impôt sur le revenu ) : progressive rate up to 45%(*)

 

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  -   social security contributions ( prélèvements sociaux : CSG, CRDS. ..) : 15.5 % (5.1% being deductible for income tax purposes)

 

  -   as the case may be, an exceptional contribution on high income ( contribution exceptionnelle sur les hauts revenus ) : progressive rate up to 4%

(*) : The Holder will also enjoy a complementary abatement of

 

  -   50% if he holds the shares for an additional period of at least 2 years and less than 8 years from the date of exercise

 

  -   65% if he holds the shares for a period of at least 8 years from the date of exercise

Both capital gains are taxed in the year during which the Shares are sold.

2. Wealth tax

Subject to comments from the tax administration, the Shares should, as at the Vesting Date, be included in the basis for the calculation of the wealth tax.

3. The tax information contained in this section V-1 is related to 2015 and is likely to change in accordance with the applicable statutory and regulatory provisions. The Beneficiary acknowledges that Sequans Communications and its subsidiaries shall have no liability in this respect and no obligation to provide advice and/or assistance in this regard.

 

V-2. T AX PROVISIONS APPLICABLE TO B ENEFICIARIES WHO ARE NOT RESIDENT IN F RANCE AND NOT SUBMITTED TO THE F RENCH S OCIAL S ECURITY

Beneficiaries who are not residents in France are solely responsible for :

 

  -   Determining the tax provisions applicable to gains resulting from (i) the acquisition of Shares (ii) the disposal of such shares;

 

  -   Paying all taxes and contributions due as a result.

However, Beneficiaries domiciled abroad might be subject to a French withholding Tax in respect of the gain resulting from the acquisition of Shares, to the extent of days worked in France over the vesting period.

Sequans Communications and its subsidiaries shall have no obligation to provide advice and/or assistance in this regard.

VI – AMENDMENT OF THIS PLAN

This Plan may be amended by the Board of Directors if new legislation would have an unfavourable impact on the Company or on the Company’s financial statements or would increase the cost of such a Plan for the Company. Please note that any such amendment could affect the tax regime described in Section V above.

Subject to the scenarios set forth in the paragraph above, no amendment that could affect the rights of the Beneficiaries may be made to this Plan.

Furthermore, the Board of Directors is responsible for interpreting the provisions of this Plan, as needed.

This Plan shall prevail in case of conflict of interpretation between the Individual Letter of Notification and the Plan itself.

*        *

*

 

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APPENDIX RELATING TO UK BENEFICIARIES

 

 

RESTRICTED SHARES AWARD PLAN – 2016-2

 

  1. GENERAL

 

1.1. This appendix (the “Appendix”) shall apply only to beneficiaries (the “Beneficiaries”) of the Plan (as such term is defined below) who are residents of the United Kingdom for the purpose of payment of income tax (the “UK Beneficiaries”). The provisions specified hereunder shall form an integral part of the Restricted Share Award Plan – 2016-2 (the “Plan”), which applies to the grant of restricted free shares of SEQUANS COMMUNICATIONS SA, a Société Anonyme , incorporated under the laws of the Republic of France, having its statutory seat in Colombes, France (the “Company”).

 

     This Appendix was approved by the board of directors of SEQUANS COMMUNICATIONS SA on December 13, 2016.

 

1.2. According to the Plan, restricted free shares of the Company may notably be granted to to employees of SEQUANS COMMUNICATIONS LTD. (the “UK Beneficiaries”), English subsidiary of the Company.

 

1.3. The Appendix is to be read as an integral part of the Plan so that the Appendix and the Plan jointly will comply with the requirements of UK law and notably Paragraph 1 of the Social Security Contributions and Benefits Act 1992. For the avoidance of doubt, this Appendix does not apply to or modify the Plan with respect of any Beneficiaries except for the UK Beneficiaries.

 

1.4. The Plan and this Appendix are complimentary to each other and shall be deemed as one with respect to UK Beneficiaries. In any case of a contradiction (explicit or implicit) between the provisions of this Appendix and the Plan, the provisions of this Appendix shall prevail where tax law issues are concerned.

 

1.5. Any capitalized term not specifically defined in this Appendix shall be construed according to the meaning given to it in the Plan.

 

  2. VESTING OF RESTRICTED FREE SHARES

Upon the free and clear acquisition of the shares due to the passage of time in the employment of the Company (“vesting”), the UK Beneficiary shall (as the Board shall direct) :

 

a. pay to SEQUANS COMMUNICATIONS Ltd. (or such other person as the Board may direct) such sum or sums as may, in the reasonable opinion of the Board, be appropriate to indemnify SEQUANS COMMUNICATIONS Ltd. as employer (as the term is defined in the PAYE Regulations or NI Rules, as appropriate) of the Beneficiary in respect of any free share Tax Liability; and/or

b. authorise SEQUANS COMMUNICATIONS Ltd. to arrange the sale on his behalf of sufficient shares of, to discharge any free share Tax Liability in respect of the vesting of the restricted free share and retain from the proceeds of sale any amount of free share Tax Liability which has not been recovered; and/or

 

c. authorise SEQUANS COMMUNICATIONS Ltd. to deduct from any amounts which are or at any time in the future become due to the Beneficiary, whether from SEQUANS COMMUNICATIONS Ltd. or any other person (and whether such amounts are due pursuant to the office or employment or otherwise), such amount or amounts as, in the reasonable opinion of the Board, is necessary to give effect to such indemnity; and/or

 

d. consent to being party to an agreement under Social Security Contributions and Benefits Act 1992 Schedule 1 paragraph 3A or consent to be party to a joint election under Social Security Contributions and Benefits Act 1992 Schedule 1 paragraph 3B as appropriate. The effect of the aforementioned paragraphs is to make the Beneficiary liable to secondary Class 1 national insurance contributions, for which section 481 ITEPA 2003 allows a deduction in arriving at the Beneficiary’s income subject to income tax; and/or

 

e. appoint (irrevocably and by way of security for the performance of his obligations under clause 7.4(b)) SEQUANS COMMUNICATIONS Ltd. (with full power of substitution) as his attorney for the purpose of signing, in his name and on his or her behalf any documents required to implement the foregoing; and/or

 

f. agree to be party to an election under section 431 of the Income Tax (Earnings and Pensions) Act 2003 within 14 days of the vesting of the Restricted Free Shares.

 

3. TAX CONSEQUENCES

The UK Beneficiary hereby expressly agrees that the SEQUANS COMMUNICATIONS Ltd. National Insurance be transferred to him/her, with respect to the grant of employment related securities (the “Restricted Free Shares”) pursuant to the Plan.

Consequently, the Beneficiary agrees to the transfer of the whole liability for the secondary contributor’s National Insurance contributions (NICs) that arise on any relevant employment income covered by election from the secondary contributor of SEQUANS COMMUNICATIONS Ltd (hereafter the “ Transfer ”).

Relevant employment income from securities and options on which SEQUANS COMMUNICATIONS Ltd.’s NICs becomes due is defined as :

 

i. an amount that counts as employment income of the earner under section 426 of ITEPA 2003 (restricted securities : charge on certain post-acquisition events),

 

ii. an amount that counts as employment income of the earner under section 438 of that Act (convertible securities : charge on certain post-acquisition events), or

 

iii. any gain that is treated as remuneration derived from the earner’s employment by virtue of section 4(4)(a) SSCBA 1992.

The Transfer will not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part 7 of ITEPA 2003 (employment income : securities with artificially depressed market value).

The Transfer does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the Social Security Contributions and Benefits Act 1992 or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

 

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In signing the Plan and the Appendix, the UK Beneficiary authorises SEQUANS COMMUNICATIONS Ltd., or other body (if applicable), to recover an amount sufficient to cover the liability for the employer’s NICs transferred in accordance with the arrangements summarised below and further detailed in the Plan :

 

  •   A deduction from salary or other payments due; or.

 

  •   The delivery in cleared funds from the UK Beneficiary in sufficient time to enable SEQUANS COMMUNICATIONS Ltd. to make payment to HM Revenue & Customs (HMRC); or

 

  •   The sale of sufficient shares acquired from the UK Beneficiary’s vested free shares following notification to SEQUANS COMMUNICATIONS Ltd. Scheme Administrator, the proceeds of which must be delivered to SEQUANS COMMUNICATIONS Ltd. in sufficient time for payment to be made to HMRC by the due date; or.

 

  •   A deduction from any cash payment, treated as Relevant Employment Income, given to the UK Beneficiary; or.

 

  •   Where the proceeds of the gain are to be made through a third party, the UK Beneficiary will authorise that party to withhold an amount from the payment or to sell shares sufficient to cover the secondary NICs transferred. Such amount will be paid in sufficient time to enable SEQUANS COMMUNICATIONS Ltd. to make payment to HMRC by the due date.

SEQUANS COMMUNICATIONS Ltd. and the Beneficiary will ensure that payment of the liability for the secondary NICs will be made to HMRC within 14 days following the end of the Income Tax month in which the relevant employment income arises – the due date.

The UK Beneficiary understands that in agreeing the Transfer he/her will be personally liable for the secondary NICs.

The UK Beneficiary is expressly informed that he shall enter into a separate joint election related to the Transfer.

 

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