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Rules and regulations of the board of directors

The operation of the Company’s Board of Directors and its working committees is governed by rules of procedure that were updated in 2022.

These internal rules contain provisions on the following:

• The powers of the Board of Directors. The internal rules stipulate that the Board defines the strategies of the Company’s activities and ensures that they are implemented. Subject to the powers expressly granted to shareholders’ meetings, and within the limits of the corporate purpose, the Board considers any question that is relevant to the proper operation of the Company and decides the Company’s affairs through its resolutions. In particular, the Board rules on the budget, the business plan and, in general, any major transaction. In the event of a difference between a decision of the Board and a MiddleNext recommendation, the Board shall provide an explanation for this difference (according to the “comply or explain ” principle).

• The composition of the Board of Directors, in order to ensure and monitor its independence. Thus, the internal rules stipulate that the Company’s Board must have, to the extent possible, at least two independent members. The independence of the directors must be reevaluated annually by the Board on the basis of the criteria set forth in the revised MiddleNext code of September 2021.

• The procedures and conditions for meetings of the Board of Directors. The Internal Rules of Procedure stipulate that, subject to the limits and exceptions provided by law, directors who participate in the meeting via videoconferencing or electronic methods that allow identification and guarantee effective participation, the nature and conditions of which shall be defined by the regulations in force and subject to reservations stipulated by said regulations, shall be deemed present for calculating the quorum and majority. In this respect, it is specified that participation via videoconferencing or electronic methods is not open for Board meetings called for the purpose of establishing the annual financial statements, the consolidated financial statements and the management report.

• The procedures for information to the members of the Board of Directors. In particular, the Internal Rules of Procedure provide for an obligation to regularly inform the directors of the Company’s financial position, about the cash it holds and its financial commitments. It also provides that the Chairman of the Board of Directors must provide Board members with all significant information concerning the company. The internal rules stipulate, for each member of the Board, the right to obtain any information or document the member believes he needs to perform his duties and/or to meet with any of the senior executives of the company outside the presence of the Chair of the Board..

• The list of the decisions for which the Chief Executive Officer must obtain prior approval from the Board. This list includes: decisions to establish operations in international markets or withdraw from foreign sites; significant transactions that could impact the Group’s strategy or modify its financial structure or scope of activity; the acquisition or sale of stakes in other companies; all transactions covering assets, securities or stocks; the acquisition or sale of real estate; the granting of sureties on corporate assets, or obtaining loans in excess of €150,000.

• The conditions for appointment and the role of the Working Committees. The internal rules stipulate that the Board may form committees to prepare its work. The Board defines the role assigned to each committee; it is specified that these committees operate under the exclusive and collective responsibility of the Board members. The mission of the committees is to clarify the Board’s decisions through their analyses, and they formulate proposals, recommendations and opinions for this purpose. The members of the committees must personally participate in the meetings and may not be represented by another member. The committees may not deliberate with fewer than half the members. The committees can consider any question falling within their area of expertise. They may also be petitioned by the Board of Directors or the Chair.

• Audit Committee responsibilities. The mission of the Audit Committee is to ensure the quality of the Internal Audit and the reliability of the information provided to shareholders and the financial markets. In particular, it is responsible for monitoring the process to prepare the financial information, evaluating procedures, monitoring the control of the parent company and consolidated financial statements by the Statutory Auditors (review of the assumptions used to close the financial statements, review of the annual, half-yearly and quarterly financial statements, if applicable, before they are reviewed by the Board of Directors, a review, in consultation with the Statutory Auditors, of the accounting principles and methods used, examination of the major transactions that might generate a conflict of interest), monitoring the independence of the Statutory Auditors, the procedure for selecting them, their fees, and the use of the Statutory Auditors for work other than auditing the financial statements.

• Audit Committee members. The Audit Committee is comprised of three members, all independent directors appointed for the duration of their term as board members that includes at least one member with specific expertise in finance or accounting. The Chairman-CEO is not a member of the Audit Committee. The Audit Committee meets whenever it deems necessary and at least twice a year before the Board meetings that review the annual and half-yearly financial statements. The Audit Committee may conduct visits or audition managers of operating or functional entities that are useful for performing its mission. It may also meet with the statutory auditors, including outside the presence of the senior executives. It may be assisted by outside experts subject to the Board of Directors’ authorization

• Compensation Committee responsibilities. The mission of the Compensation Committee is to make recommendations on the general compensation policy for executive corporate officers (fixed and performance-based, in-kind benefits, retirement, severance packages), and the award of restricted stock units (actions gratuites), stock options or equity warrants; to make recommendations concerning all elements of compensation for each executive officer (including in-kind benefits); to make proposals concerning the total allocation for directors’ compensation and its allocation, on all elements of compensation (including the award of stock options or free shares) and for the principal executives (Senior Managers, Vice Presidents, Vice President for Finance); to review the annual increase in the payroll; to review plans to grant shares and stock options, and the criteria and conditions applicable to these grants; to collect information about the compensation and benefits paid to the corporate officers of the Company and the companies that it controls.

• Compensation Committee members. The Compensation Committee has three to five members, half of whom should be considered independent, if possible. The Chief Executive Officer is not, in principle, a member of the Compensation Committee. The Compensation Committee meets whenever it deems necessary, and at least once a year. The Compensation Committee may ask the Chair to provide any document or interview any person.

• The responsibilities of the Corporate Governance Committee. The mission of the Corporate Governance Committee is to propose criteria to evaluate the independence of Board members, assess the effectiveness, relevance and implementation of the corporate government procedures, and to make recommendations to improve them, submit proposals on the composition and responsibilities of the committees, and examine candidates for director and strategic management positions.

• The members of the Corporate Governance Committee. The Corporate Governance Committee has three to five members, half of whom are considered independent, if possible. The Chief Executive Officer is not, in principle a member of the Corporate Governance Committee, but he participates in the work of the Committee to select directors and corporate executive officers. The Corporate Governance Committee meets whenever it deems necessary, and at least once a year. The Corporate Governance Committee may ask the Chair to provide it with any document or interview any person.

• Science and Technology Committee responsibilities. The mission of the Science and Technology Committee is to assist the Board in supervising the scientific and technical aspects of the company’s activities and periodically provide the Board with information. Its mission consists mainly in assisting the Board in supervising the objectives of the R&D programs by examining progress and performances of management in meeting the objectives and by limiting the associated risks, examining the Company’s research pipeline, examining recommendations of the Board on the scientific, technical and medical aspects of operations which must be submitted to the Board for approval, identifying new trends and significant developments in the area of science and R&D and their potential impact on the Company, reviewing the Company’s intellectual property portfolio and its strategy in this area, performing all activities that the Committee shall deem necessary or appropriate to exercise its responsibilities to assist the Board in supervising the Company’s R&D activities. The Committee may, in connection with its missions, request the Chairman to provide it with any document or allow it to meet with any person, and notably the Chief Scientific Officer, the Head of Development, the Chief Business Officer, the Chief Financial Officer and external advisors.

• Composition of the Science and Technology Committee. The Committee is comprised of at least two and not more than five directors. To the possible, the members shall be considered as independent. In principle, the Chairman of the Board of Directors, the Chief Executive Officer and the Executive Vice President are not members of the Science and Technology Committee. However, the Chairman of the Board of Directors is associated with the work of the Committee at the request of its members. The Committee meets whenever it deems necessary, and at least three times a year. It sets the calendar of its meetings. It may also meet at the request of two of its members, its Chair or the Chairman of the Board of Directors.

• Corporate Social Responsibility Committee responsibilities. The Committee assists the Board in overseeing the social, societal and environmental aspects of the Company’s activities and regularly provides information to the Board. Its mission is to examine employment, social and environmental issues and to consider areas for improvement to be proposed to the Board, in particular to help the Board consider how to share value and achieve a balance between the level of employee compensation, compensation for shareholder risk-taking and the investments needed to ensure the company’s long-term sustainability. The CSR Committee works in coordination with other committees, according to the issues involved.

• Corporate Social Responsibility Committee members. The Committee is comprised of at least two and not more than five directors. As far as possible, it is composed of members considered to be independent, and is chaired by an independent member. In principle, the Chairman of the Board of Directors, the Chief Executive Officer and the Executive Vice President are not members of the CSR Committee. However, the Chairman of the Board of Directors is associated with the work of the Committee at the request of its members. The Committee meets whenever it deems necessary, and at least once a year. It sets the calendar of its meetings. It may also meet at the request of two of its members, its Chair or the Chairman of the Board of Directors. The Committee may, as part of its mission, ask the Chairman to provide it with all documentation or allow it to consult with any person, including external advisors. It may be assisted by qualified persons, as needed.

• Principles for allocating directors’ compensation. For the distribution of directors’ compensation, the Board may take into consideration the activity of the directors, attendance of members at Board meetings, and any participation in the work of the Committees.

• A restatement of the confidentiality obligations;

• A restatement of the legal obligation for members of the Board of Directors to hold their shares in registered form;

• The declaration procedures for transactions executed by the directors and their relatives in securities of the Company, which stipulates an obligation for Board members and chief executive officers to declare in writing each of the transactions they, or their families, have executed in securities of the Company to the French Autorité des Marchés Financiers, within five trading days, in accordance with the procedures and force;

Recommendations to prevent insider trading
In addition, the Board of Directors adopted, for its employees and officers, recommendations to prevent insider trading in the Company. These recommendations contain a list of precautions to take to preserve the confidentiality of sensitive information; a general obligation to abstain if privileged information is held, and a specific obligation to refrain from executing any transaction in Nicox financial instruments (or financial instruments related to Nicox securities) for thirty calendar days before, and one day after, the publication of the annual and interim results and fifteen calendar days before, and one day after, the publication of quarterly financial information.

Importance of social, societal and environmental issues

We have put in place procedures governing the way we conduct our activities, in particular to ensure men and women equality, the inclusion and the prevention of corruption. We have reviewed the statements of our suppliers regarding men and women equality, the inclusion and the prevention of corruption, and the vast majority of our subcontractors have policies in place in these areas. Nicox outsources the implementation of the development of its compounds (synthesis, formulation and manufacture of molecules and products, non-clinical studies and clinical trials). In our offices, we have implemented sustainable development initiatives. Although we have little influence on the environmental policies of our subcontractors due to the size of our Company, we review and consider these aspects for our main suppliers, including in their selection. Our key subcontractors declare that they have a policy to reduce their environmental impact, and those that have not implemented it have committed to doing so in the short term. Some of our subcontractors have been assessed by environmental rating agencies, obtaining high scores, and others provide reports in line with international sustainability assessment standards. Some suppliers have provided us with detailed reports on their progress in certain key areas.

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