Aurinia Pharmaceuticals : 2024 Proxy Supplement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐

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AURINIA PHARMACEUTICALS INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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SUPPLEMENT TO MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 14, 2024

On or about May 3, 2024, Aurinia Pharmaceuticals Inc. (the "Company") furnished or otherwise made available to shareholders a Management Information Circular and Proxy Statement (the "Proxy Statement/Circular") describing the matters to be voted upon at our 2024 Annual General Meeting of Shareholders (the "Annual Meeting"), to be held at 12:00 p.m., Eastern Time, on June 14, 2024.

This Supplement is being filed to reflect that the Company is reducing the increase in the shares reserved for issuance under the Company's Equity Incentive Plan in Proposal 4 from 11,375,000 Plan Shares (as defined in the Proxy Statement/Circular) to 8,500,000 Plan Shares. Accordingly, this Supplement revises and amends the Proxy Statement/Circular to decrease the number of Plan Shares requested to be reserved for use under our Equity Incentive Plan in Proposal 4 in the Proxy Statement/Circular from 35,190,115 to 32,315,115, representing a total increase of 8,500,000 Plan Shares, and representing, in aggregate, 22.7% of total shares outstanding as of April 30, 2024. For clarity, all references in the Proxy Statement/Circular to (i) 35,190,115 Plan Shares shall hereby be amended to reference 32,315,115 Plan Shares, (ii) 11,375,000 Plan Shares shall hereby be amended to reference 8,500,000 Plan Shares and (iii) 24.7% shall hereby be amended to reference 22.7%. In addition, Appendix C of the Proxy Statement/Circular shall hereby be amended to reflect the proposed amendment to the Equity Incentive Plan as set forth in Appendix C hereto. This Supplement should be read in conjunction with the Proxy Statement/Circular.

The Plan Amendment (as defined in the Proxy Statement/Circular) was further approved by the Board on June 3, 2024.

Revised Proposed Resolutions

For clarity, it is proposed that at the Meeting the following revised resolution be adopted:

"RESOLVED that the proposed amendment and restatement of the Company's Equity Incentive Plan, in the form attached as Appendix C to this Proxy Statement/Circular to increase the maximum fixed number of common shares reserved for issuance pursuant to the Equity Incentive Plan from 23,815,115, to 32,315,115, be approved."

Additional Information

Shareholders of record who have already submitted proxies for the Annual Meeting may revoke them, or if they wish to change their vote they may do so by:

• Online during the Meeting, follow the provided instructions to join the Meeting at https://web.lumiagm.com/415837864, starting at 12:00 p.m. Eastern Time on Friday, June 14, 2024. The password for the meeting is aurinia2024 (case sensitive). The webcast will open prior to the start of the Meeting and we recommend that you log in at least 15 minutes before the Meeting to ensure you are logged in when the Meeting begins.
• Mail using the proxy card, simply complete, sign and date the proxy card delivered to you and return it promptly in the envelope provided. If you return your signed proxy card to us before the Meeting by 12:00 p.m. (Eastern Time) on June 12, 2024, or no later than 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment or postponement of the Meeting, we will vote your shares as you direct.
• Telephone, dial toll-free1-866-732-8683 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the proxy card.
• Internet, go to www.investorvote.com to complete an electronic proxy card. You will be asked to provide the control number from the proxy card.

Proxies which have already been submitted, and which are not subsequently revoked or changed as described above, will be voted at the Annual Meeting as indicated and if you have already voted and do not wish to change your vote,

no further action is necessary. Detailed information regarding voting procedures can be found in the Proxy Statement/Circular.

Except as described in this Supplement, the information disclosed in the Proxy Statement/Circular continues to apply. To the extent that information in this Supplement differs from information disclosed in the Proxy Statement/Circular, the information in this Supplement applies. The Proxy Statement/Circular, together with this Supplement, have been filed with the SEC and are also available for viewing at the Company's website www.auriniapharma.com, on SEDAR+ at www.sedarplus.ca or at EDGAR at www.sec.gov and the website maintained for the Annual Meeting at www.proxyvote.com. We will furnish a copy of this Supplement to any shareholder by mail upon request. All requests should be made to our proxy solicitation agent, Laurel Hill Advisory Group toll free within North America at 1-877-452-7184(1-416-304-0211 outside North America), or by email at [e-mail].

Appendix C

AURINIA PHARMACEUTICALS INC.

(the "Company")

EQUITY INCENTIVE PLAN

AS AMENDED AND RESTATED AS OF JUNE 7, 2021JUNE 14, 2024

Article 1

PURPOSE AND INTERPRETATION

Purpose

1.1 The purpose of the Plan is to advance the interests of the Company by encouraging equity participation in the Company through the acquisition of Common Shares of the Company. It is the intention of the Company that this Plan will at all times be in compliance with the rules and policies of any applicable stock exchange on which the securities of the Company are listed or quoted for trading and any inconsistencies between this Plan and the rules and policies of such exchanges, whether due to inadvertence or changes in such rules or policies, will be resolved in favor of the latter.

Definitions

1.2 In this Plan:

"Actively Engaged", in reference to a certain date, means that the Service Provider is engaged by the Company (including being on vacation or being on a statutory or other leave authorized by the Company) on the applicable date. Except to the minimum extent, if any, required by applicable employment standards legislation, "Actively Engaged" does not include:

1. any period following the date the Service Provider, if a Director or Officer, ceases to be a Director or Officer upon termination of office or, if an Employee or other Service Provider, ceases to be employed or engaged by the Company upon termination of employment or service, for any reason (whether voluntary or involuntary, and whether with or without just cause, and regardless of whether the termination is lawful or unlawful);
2. any period in relation to which the Company provides pay in lieu of notice in respect of such termination of office, employment or service; or any period in relation to which the Company fails to give notice that ought to have been given pursuant to any agreement between the Company and the Service Provider or pursuant to any applicable law, including the common law or civil law, as applicable, in respect of such termination of office, employment or service, and in relation to which damages may be awarded, including for the failure to provide such notice.

"Affiliate" has the meaning assigned by the Securities Act;

"Award" means any Option, Restricted Stock, Restricted Stock Unit, Performance Award or Dividend Equivalent Right granted under this Plan;

"Award Commitment" means any written agreement, contract or other instrument or document evidencing any Award granted under this Plan. Each Award Commitment shall be subject to the applicable terms and conditions of this Plan and any other terms and conditions (not inconsistent with this Plan) determined by the Board;

"Award Shares" means Common Shares that may be issued in the future to a Service Provider in connection with the grant, vesting or settlement of or upon the exercise of an Award;

"Black-outPeriod" means the period during which the relevant Recipient is prohibited from exercising an Award due to trading restrictions imposed by the Company in accordance with its securities trading policies governing trades in the Company's securities;

"Board" means the board of directors of the Company (the "Company Board") or any committee thereof duly empowered or authorized to grant Awards under this Plan, or any Person to whom the board of directors or empowered or authorized committee thereof delegates such authority;

"Business Day" means a day that the NASDAQ Stock Market LLC (or such other exchange on which the highest volume of the Company's securities are traded) is open for trading;

"Change in Control" means any of the following transactions, provided, however, that the Board shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding and conclusive:

1. consummation of a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated;
2. the sale, transfer or other disposition of all or substantially all of the assets of the Company;
3. the complete liquidation or dissolution of the Company;
4. any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the Common Shares outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series of related transactions that the Board determines shall not be a Change in Control;
5. acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities but excluding any such transaction or series of related transactions that the Board determines shall not be a Change in Control;
6. the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange

Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company's shareholders which a majority of the Continuing Directors who are not Exchange Act Affiliates or Exchange Act Associates of the offeror do not recommend such shareholders accept; or

1. a change in the composition of the Company Board over a period of twelve (12) months or less such that a majority of the Company Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Company Board membership, to be comprised of individuals who are Continuing Directors.

For the purpose of this Plan, "Continuing Directors" means members of the Company Board who either

1. have been Company Board members continuously for a period of at least twelve (12) months or (ii) have been Company Board members for less than twelve (12) months and were elected or nominated for election as Board members by at least a majority of the Company Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Company Board. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Act Affiliate" and "Exchange Act Associate" shall have the respective meanings ascribed to "Affiliate" and "Associate" in Rule 12b-2 promulgated under the Exchange Act.

"Code" means the United States Internal Revenue Code of 1986, as amended.

"Common Shares" means common shares in the capital of the Company;

"Company" means Aurinia Pharmaceuticals Inc. or any successor thereto, and includes an Affiliate;

"Consultant" means an individual or a consultant Company, other than an Employee, Officer or Director who:

1. provides on an ongoing bona fide basis, consulting, technical, managerial or like services to the Company, other than services provided in relation to a Distribution;
2. provides the services under a written contract between the Company and the individual or the Consultant Company;
3. in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the business and affairs of the Company; and
4. has a relationship with the Company that enables the individual or Consultant Company to be knowledgeable about the business and affairs of the Company;

"Consultant Company" means for an individual Consultant, a company or partnership of which the individual is an employee, shareholder or partner;

"Continuously Employed" shall mean the absence of any interruption or termination of service. Continuous Employment with the Company shall not be considered interrupted in the case of the sick leave, military leave or any other leave of absence approved by the Company or protected under applicable law or in the case of transfers between location of the Company; provided that the individual continues to be an Employee of the Company;

"Directors" means the directors of the Company as may be elected or appointed from time to time;

"Disability" shall mean any physical, mental or other health condition which results in it being impossible for the Recipient to perform his or her assigned duties for the reasonably foreseeable future, such that his or her employment or engagement has been frustrated. For purposes of Incentive Stock Options,

"Disability" shall mean a "permanent and total disability" within the meaning of Section 22(e)(3) of the Code. The Board shall determine whether a Recipient has incurred a Disability on the basis of medical evidence acceptable to the Board. Upon making a determination of Disability, the Board shall, for the purposes of the Plan, determine the date of the Recipient's termination of office, employment or service;

"Distribution" has the meaning assigned by the Securities Act, and generally refers to a distribution of securities by the Company from treasury;

"Dividend Equivalent Right" means a right, granted to a Participant pursuant to this Plan, to receive cash, Common Shares, other Awards or other property equal in value to dividends or other periodic payments paid or made with respect to a specified number of Common Shares.

"Employee" means:

1. an individual who is considered an employee of the Company or its Affiliates under the Income Tax Act (Canada) (i.e. for whom income tax, employment insurance and Canada Pension Plan deductions must be made at source) or the tax legislation of another jurisdiction in which the Company or its Affiliates may do business (including the Code);
2. an individual who works full-time for the Company (or one of its Affiliates) providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions are not made at source; or
3. an individual who works for the Company on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions need not be made at source, and may include an Officer;

"Exercise Price" means the amount payable per Common Share on the exercise of an Award, if applicable, as determined in accordance with the terms hereof;

"Expiry Date" means the day on which an Award lapses as specified in the Award Commitment therefor or in accordance with the terms of this Plan;

"Grant Date" for an Award means the date of grant thereof by the Board;

"Incentive Stock Option" or "ISO" means a stock option that is intended to be, and qualifies as, an incentive stock option within the meaning of Section 422 of the Code.

"Insider" means an insider as defined in the Securities Act;

"Investor Relations Activities" means generally any activities or communications that can reasonably be seen to be intended to or be primarily intended to promote the merits or awareness of or the purchase or sale of securities of the Company;

"Management Company Employee" means an individual employed by another individual or a corporation providing management services to the Company which are required for the ongoing successful operation of the business enterprise of the Company, but excluding a corporation or individual engaged primarily in Investor Relations Activities;

"Market Price" means:

1. the closing trading price for the Common Shares on the stock exchange on which the majority of the Company's common shares traded on the day immediately prior to the date of determination (which may be denominated in either Canadian or US dollars, based on the applicable exchange rate on the day immediately prior to the date of determination) provided however that the determination date in respect of Options granted to Canadian residents shall be the Grant Date of such Options; or
2. if the Common Shares are not listed on a stock exchange, then the trading price determined by the Board using good faith discretion;

"Nonstatutory Stock Option" or "NSO" means a stock option does not qualify as an Incentive Stock Option.

"Officer" means a duly appointed senior officer of the Company;

"Option" means an Option granted pursuant to Section 3.1 hereof;

"Performance Award" means a Performance Award granted pursuant to Section 3.4 hereof;

"Recipient" means the recipient of an Award hereunder;

"Outstanding Shares" means at the relevant time, the number of outstanding Common Shares of the Company from time to time;

"Participant" means a Service Provider that becomes a Recipient;

"Person" means a company or an individual;

"Plan" means this Equity Incentive Plan, the terms of which are set out herein or as may be amended;

"Plan Shares" means the total number of Common Shares which may be reserved for issuance as Award Shares under the Plan as provided in Section 2.2;

"Regulatory Approval" means the approval of any securities regulatory authority (including, if applicable, any stock exchange on which the securities of the Company may be listed or quoted for trading) that may have lawful jurisdiction over the Plan and any Awards issued hereunder;

"Restricted Stock" means Restricted Stock granted pursuant to Section 3.2 hereof;

"Restricted Stock Unit" means a Restricted Stock Unit granted pursuant to Section 3.3 hereof; "Securities Act" means the Securities Act, R.S.A. 2000, c. S-4, as amended from time to time;

"Service Provider" means an individual who is a bona fide Director, Officer, Employee, Management Company Employee or Consultant, and also includes a company of which 100% of the share capital is beneficially owned by one or more individual Service Providers;

"Share Compensation Arrangement" means any Award under this Plan but also includes any other stock option, stock option plan, employee stock purchase plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares to a Service Provider;

"Shareholder Approval" means approval by a majority of the votes cast by eligible shareholders at a duly constituted shareholders' meeting; and

"U.S. Participant" means a Participant that is resident in or a citizen of the United States of America.

Article 2

EQUITY INCENTIVE PLAN

Establishment of Equity Incentive Plan

2.1 There is hereby established an equity incentive plan to recognize contributions made by Service Providers and to create an incentive for their continuing assistance to the Company.

Maximum Plan Shares

1. Subject to the provisions of Section 3.12 below, the maximum aggregate number of Plan Shares which may be issued pursuant to all Awards (including Incentive Stock Options) following the 20212024annual general meeting of Shareholders of the Company is 23,815,11532,315,115Common Shares (inclusive of the number of Common Shares subject to outstanding Awards as of the date of the 20214annual general meeting of Shareholders of the Company). The Plan Shares may be authorized, but unissued, or reacquired Common Shares.
2. Unless otherwise determined in the discretion of the Board, the number of Plan Shares that may be reserved for issuance under the Plan to any one Recipient will not exceed 5% of the Outstanding Shares on a non-diluted basis, less any Common Shares reserved for issuance to such Recipient under Share Compensation Arrangements other than this Plan.

Eligibility

2.4 Awards may be granted hereunder to Service Providers from time to time by the Board. Service Providers that are corporate entities will be required to undertake in writing not to effect or permit any transfer of ownership or option of any of its shares, nor issue more of its shares so as to indirectly transfer the benefits of an Award, as long as such Award remains outstanding, unless the written permission of the Company is obtained.

Awards Granted Under the Plan

2.5 All Awards granted under the Plan will be evidenced by an Award Commitment, showing the number of Award Shares, the term of the Award, a reference to vesting terms, if any, and the Exercise Price, if applicable, or otherwise modified in respect of the terms of the specific Award as necessary.

2.6 Subject to specific variations approved in accordance with this Plan, all terms and conditions set out herein will be deemed to be incorporated into and form part of an Award Commitment made hereunder.

Awards Not Settled

2.7 Except as set out below, any Plan Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Plan Shares which may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited or repurchased by the Company, such Shares shall become available for future grant under the Plan. Notwithstanding anything to the contrary in this Plan, the number of Common Shares (i) tendered or withheld or subject to an Award surrendered in connection with the purchase of Common Shares upon exercise of an Option, (ii) deducted or delivered from payment of an Award in connection with the Company's tax withholding obligations, or (iii) purchased by the Company with proceeds from Option exercises will be deemed to have been issued and will not increase the number of Plan Shares available for issuance under the Plan.

Administration of Plan

1. The Board will be responsible for the general administration of the Plan and the proper execution of its provisions, the interpretation of the Plan and the determination of all questions arising hereunder.
2. Without limiting the generality of the foregoing, but subject to the provisions of this Plan, the Board has the power to:
3. 1. determine the Service Providers to whom Awards are to be granted, to grant such Awards, and, subject to the other terms of this Plan, to determine any terms and conditions, limitations and restrictions in respect of any particular grant of Award;
   2. allot Common Shares for issuance in connection with the exercise vesting or other settlement of Awards; and
   3. delegate all or such portion of its powers hereunder as it may determine to one or more committees of the Board, either indefinitely or for such period of time as it may specify, and thereafter each such committee may exercise the powers and discharge the duties of the Board in respect of the Plan so delegated to the same extent as the Board is hereby authorized so to do.

Regulatory Approval

2.10 This Plan will be subject to the approval of any regulatory authority whose approval is required. Any Awards granted under this Plan prior to such approvals being given will be conditional upon such approvals being given, and no such Awards may be exercised unless and until such approvals are given.

Compliance with Legislation

2.11 The Company will not be required to issue any Common Shares under the Plan unless such issuance is in compliance with all applicable laws, regulations, rules, orders of governmental or regulatory authorities and the requirements of any stock exchange upon which Common Shares of the Company are listed. The Company will not in any event be obligated to take any action to comply with any such laws, regulations, rules, orders or requirements.