Galapagos NV’s share capital and shares
Share capital increases and issue of shares by Galapagos NV in 2019
On 1 January 2019, the share capital of Galapagos NV amounted to €294,599,712.11 represented by 54,465,421 shares. In the course of 2019 there were four capital increases resulting from the exercise of warrants under employee warrant plans, resulting in the issuance of 754,605 new shares, an increase of the share capital by €4,082,413.05 and an increase of the issuance premium account by €13,085,809.23. In addition, on 23 August 2019, Gilead Therapeutics A1 Unlimited Company subscribed to 6,828,985 new shares at a price of €140.59 per share pursuant to the closing of the share subscription agreement of 14 July 2019. This resulted in a share capital increase of €36,944,808.85 and an increase of the issuance premium account by €923,142,192.30. Finally, on 6 November 2019, Gilead Therapeutics A1 Unlimited Company exercised initial warrant A, resulting in the issuance of 2,617,791 new shares at an issuance price of €140.59 per share, an increase in the share capital by €14,162,249.31 and an increase of the issuance premium account by €353,872,987.38.
At the end of 2019, the share capital of Galapagos NV amounted to €349,789,183.32 represented by 64,666,802 shares.
On 10 April 2019, the board of directors issued 1,699,690 warrants (after acceptance by the beneficiaries) within the framework of the authorized capital, for the benefit of the directors and an independent consultant of Galapagos NV, and of employees of the group under new warrant plans (“Warrant Plan 2019” and “Warrant Plan 2019 RMV”).
The offer of warrants to the directors and to the members of the executive committee under Warrant Plan 2019 was approved by the annual shareholders’ meeting of 30 April 2019. The warrants issued under Warrant Plan 2019 and Warrant Plan 2019 RMV have a term of eight years and an exercise price of €95.11.
On 22 October 2019, the extraordinary shareholders’ meeting approved the issuance of two warrants for the benefit of Gilead Therapeutics A1 Unlimited Company, called the initial warrant A and the initial warrant B. These warrants entitle the holder thereof to subscribe, during the entire term of the respective warrant, upon each exercise of a warrant, for a maximum number of shares that is sufficient to bring the shareholding of Gilead and its affiliates to 25.1% and 29.9%, respectively, of the actually issued and outstanding shares after the exercise of the relevant warrant (rounded down to the nearest whole share). The initial warrant A has a term of one year and an exercise price of €140.59 per share. The initial warrant B has a term of five years and an exercise price per share equal to the greater of (i) 120% multiplied by the arithmetic mean of the 30-day daily volume weighted average trading price of Galapagos’ shares as traded on Euronext Brussels and Euronext Amsterdam, and (ii) €140.59.
Number and form of Galapagos shares
Of the 64,666,802 shares of Galapagos NV outstanding at the end of 2019, 9,382,267 were registered shares and 55,284,535 shares were dematerialized shares. All shares are issued and fully paid up and are of the same class.
Rights attached to Galapagos shares
Each share (i) entitles its holder to one vote at the shareholders’ meetings; (ii) represents an identical fraction of the share capital and has the same rights and obligations and shares equally in the profit of Galapagos NV; and (iii) gives its holder a preferential subscription right to subscribe to new shares, convertible bonds or warrants in proportion to the part of the share capital represented by the shares already held. The preferential subscription right can be restricted or cancelled by a resolution approved by the shareholders’ meeting, or by the board of directors subject to an authorization of the shareholders’ meeting, in accordance with the provisions of the New Belgian Companies Code and Galapagos NV’s articles of association.
Galapagos NV’s authorized capital
In accordance with the articles of association, the extraordinary shareholders’ meeting of Galapagos NV authorized the board of directors to increase the share capital of Galapagos NV, in one or several times, and under certain conditions set forth in extenso in the articles of association of Galapagos NV.
This authorization consists of two parts. A general authorization for capital increases up to 20% of the share capital at the time of convening the shareholders’ meeting of 22 October 2019 (i.e. €67,022,402.04) was renewed and is valid for a period of five years from the date of publication of this renewal in the Annexes to the Belgian State Gazette, i.e. 13 November 2019. A specific authorization for capital increases of more than 20% and up to 33% of the share capital at the time of the convening the shareholders' meeting of 25 April 2017 (i.e. € 82,561,764.93), was renewed and is valid for a period of five years from the date of publication of this renewal in the Annexes to the Belgian State Gazette, i.e. 31 May 2017. This specific part of the authorized capital can, however, only be used in a number of specific circumstances and upon a resolution of the board of directors that all independent directors (within the meaning of article 526ter of the Belgian Companies Code) approve.
In 2019, Galapagos NV’s board of directors made use of the right to increase the capital in the framework of the authorized capital on two occasions: (1) on 10 April 2019, in connection with the issuance of Warrant Plan 2019 and Warrant Plan 2019 RMV, under which a maximum of 1,699,690 new shares could be issued for a total maximum capital increase of €9,195,322.90 (plus issuance premium); and (2) on 23 August 2019, in connection with the subscription by Gilead Therapeutics A1 Unlimited Company to 6,828,985 new shares, resulting in an increase of the share capital by €36,944,808.85 (plus issuance premium). On 31 December 2019, an amount of €67,022,402.04 still remained available under the general part of the authorized capital and an amount of €13,717,929.80 remained available under the specific part of the authorized capital.
When increasing the share capital within the limits of the authorized capital, the board of directors may, in Galapagos NV’s interest, restrict or cancel the shareholders’ preferential subscription rights, even if such restriction or cancellation is made for the benefit of one or more specific persons other than the employees of the group.
Procedure for changes in Galapagos NV’s share capital
In accordance with the New Belgian Companies Code, Galapagos NV may increase or decrease its share capital by decision of the extraordinary shareholders’ meeting approved by a majority of 75% of the votes cast, at a meeting where at least 50% of the share capital of Galapagos NV is present or represented. If the attendance quorum of 50% is not met, a new extraordinary shareholders’ meeting must be convened at which the shareholders may decide on the agenda items, irrespective of the percentage of share capital present or represented at such meeting. In this respect, there are no conditions imposed by Galapagos NV’s articles of association that are more stringent than those required by law.
Within the framework of the powers granted to it under the authorized capital, the board of directors may also increase Galapagos NV’s capital as specified in its articles of association.
Purchase and sale of Galapagos treasury shares
In accordance with the New Belgian Companies Code, Galapagos NV may purchase, subject to the provisions of the New Belgian Companies Code, Galapagos NV’s own shares and dispose thereof by decision of the extraordinary shareholders’ meeting approved by a majority of 75% of the votes cast, at a meeting where at least 50% of the share capital of Galapagos NV is present or represented. If the attendance quorum of 50% is not met, a new extraordinary shareholders’ meeting must be convened at which the shareholders may decide on the agenda items, irrespective of the percentage of share capital present or represented at such meeting. The aforementioned rules are also applicable to the acquisition of shares of Galapagos NV by its subsidiaries.
The board of directors has currently not been authorized by an extraordinary shareholders’ meeting to purchase or sell its own shares.
On 31 December 2019, neither Galapagos NV nor any subsidiary of Galapagos NV held any shares in Galapagos NV, nor did any third party hold any shares in Galapagos NV on behalf of Galapagos NV or any of its subsidiaries either.
Anti-takeover provisions in Galapagos NV’s articles of association
Galapagos NV’s articles of association currently do not contain any anti-takeover provisions.
Anti-takeover provisions under Belgian law
Under Belgian law, public takeover bids for all outstanding voting securities of the issuer are subject to the supervision of the FSMA. If the latter determines that a takeover violates Belgian law, it may lead to suspension of the exercise of the rights attached to any shares that were acquired in connection with the envisaged takeover. Pursuant to the Belgian Law of 1 April 2007 on public takeovers, a mandatory takeover bid must be made when, as a result of its own acquisition or the acquisition by persons acting in concert with it, a person owns, directly or indirectly, more than 30% of the securities with voting rights in a company with registered office in Belgium whose securities are admitted to trading on a regulated or recognized market. The acquirer must offer to all other shareholders the opportunity to sell their shares at the higher of (i) the highest price offered by the acquirer for shares of the issuer during the 12 months preceding the announcement of the bid or (ii) the weighted average price of the shares on the most liquid market of the last 30 calendar days prior to the date on which it became mandatory for the acquirer to launch a mandatory takeover bid for the shares of all other shareholders.
Material contracts containing change of control clauses
The amended and restated license and collaboration agreement between Galapagos NV and Gilead Sciences, Inc. ("Gilead") dated 23 August 2019 contains provisions granting certain rights to Gilead upon the occurrence of a public takeover bid on our shares or a change of control in respect of Galapagos NV, including clause 15.6 (Assignment; Industry Transaction; Acquired Programs), entitling Gilead in the event of an industry transaction involving Galapagos, as a result of which a drug company of a certain minimum size acquires control over Galapagos, to terminate our co-promotion rights, to disband all joint committees and undertake exclusive control of their activities.
The product development, license and commercialization agreement between Galapagos NV, Les Laboratoires Servier and Institut de Recherches Servier (“Servier”) as amended and restated on 8 May 2018 contains provisions granting certain rights to Servier upon the occurrence of a public takeover bid on our shares or a change of control in respect of Galapagos NV including, but not limited to, clause 13.4 (Termination by Servier Without Cause or Due to Galapagos Change of Control), clause 13.5 (Rights on Termination) and clause 13.7 (Change of Control), entitling Servier, in the event of a change of control of Galapagos NV, to elect to terminate the agreement subject to an option for Galapagos NV to choose from two contractual termination regimes, both including the termination of the licenses granted by Galapagos NV to Servier and the freedom for Galapagos NV to conduct research and development activities on terminated licensed products, or to have the licenses granted to Servier continue, with all payment obligations remaining in place, but with Servier having full control over the further development and patent strategies for the licensed product in Servier’s territory.
The second amended and restated collaboration agreement between Galapagos NV and AbbVie S.à r.l. ("AbbVie") dated 24 October 2018 contains provisions granting certain rights to AbbVie upon the occurrence of a public takeover bid on our shares or a change of control in respect of Galapagos NV, including, but not limited to clause 11.2 (Change in Control of Galapagos), entitling AbbVie, to oblige Galapagos NV to take appropriate measures to avoid the disclosure of confidential information, to limit AbbVie’s reporting obligations to Galapagos NV, or, depending on the stage in which the change of control occurs, to terminate the agreement.
Procedure for amendments to Galapagos NV’s articles of association
Pursuant to the New Belgian Companies Code, any amendment to the articles of association, such as an increase or decrease in the share capital of Galapagos NV, and certain other matters, such as the approval of the dissolution, merger or de-merger of Galapagos NV may only be authorized with the approval of at least 75% of the votes validly cast at an extraordinary shareholders’ meeting where at least 50% of Galapagos NV’s share capital is present or represented. If the attendance quorum of 50% is not met, a new extraordinary shareholders’ meeting must be convened at which the shareholders may decide on the agenda items, irrespective of the percentage of share capital present or represented at such meeting.