Notice of annual shareholders’ meeting in Alligator Bioscience AB
The shareholders of Alligator Bioscience AB, Reg. No 556597-8201, are hereby invited to attend the annual shareholders’ meeting to be held on Wednesday 20 April 2016, at 1.00 pm, at the company’s office, Medicon Village, Scheelevägen 2 in Lund.
RIGHT TO PARTICIPATE
Shareholders that wants to participate must be recorded in the company’s share register kept by Euroclear Sweden AB as of Thursday 14 April 2016 and, further, have given notice of their intent to participate to the company (Claes Eriksson), which notice have been received by the company no later than Thursday 14 April 2016, by mail to address, Alligator Bioscience AB, Medicon Village, SE-223 81 Lund, Sweden, by phone to +46 46-286 42 80, or by e-mail to cle@alligatorbioscience.com. The notice should specify the shareholder’s name, personal identity number or company registration number, telephone number during work hours and the number of shares held by the shareholder and, when applicable, information on the number of advisors (2 at the most).
TRUSTEE REGISTERED SHARES
Shareholders, whose shares are trustee-registered must, in order to participate in the shareholders’ meeting, temporarily register their shares in their own name in the share register kept by Euroclear Sweden AB. Such re-registration of ownership must be implemented no later than as of Thursday 14 April 2016. The shareholders must well in advance before this date request their trustees thereof.
PROXY
Shareholders participating by proxy must issue a dated and signed proxy. Should the proxy be issued by a legal entity, a certified copy of the valid registration certificate (Sw. registreringsbevis) of the legal entity (or similar document for non-Swedish legal entities) must be attached the proxy. Eventual proxies should be in writing and submitted at the latest at the shareholders’ meeting, but should preferably be sent before the shareholders’ meeting. The validity term of the proxy may be at the longest five years if this is specifically stated. In case no validity term is stated, the proxy is valid for at the longest one year. Proxy forms are available at the company website (www.alligatorbioscience.se) and at the company (see address above), and will also be sent to the shareholders that requests it and that states their address.
PROPOSED AGENDA
1. Opening of the meeting
2. Election of chairman of the meeting
3. Preparation and approval of the register of voters
4. Election of two persons to confirm the minutes
5. Approval of the agenda
6. Determination as to whether the meeting has been duly convened
7. Address by the CEO
8. Presentation of the Annual Report and Audit Report and the Consolidated Annual Report and Consolidated Audit Report
9. Resolution on
a) adoption on the profit and loss statement and balance sheet, as well as the consolidated profit and loss statement and the consolidated balance sheet;
b) distribution of the company’s profit according to the adopted balance sheet;
c) discharge from liability of the members of the board and the CEO
10. Determination of the number of board members as well as auditors and deputy auditors
11. Determination of remuneration for the board members and the auditors
12. Election of board members, auditors and deputy auditors
13. Instruction and charter for the Nomination Committee
14. Determination of Remuneration Policy for senior executives
15. Authorization for issues of shares
16. Resolution on directed issue of warrants and approval of transfer of warrants
17. Resolution on (a) program with personnel options; and (b) directed issue of warrants; as well as approval of transfer of warrants
18. Closing of the meeting
PROPOSED RESOLUTIONS
Item 9 b: Resolution on distribution of the company’s profit
The board proposes that no dividends are paid and that the available funds of SEK 374,964,410 are carried forward to a new account.
Item 10 – 12: Determination of the number of board members as well as auditors and deputy auditors, Determination of remuneration for the board members and the auditors and Election of board members, auditors and deputy auditors
Major shareholders proposes that the board shall consist of 7 board members without deputies, that Peter Benson, Carl Borrebaeck, Jakob Lindberg, Kenth Petersson, Mathias Uhlén, Jonas Sjögren and Ulrika Danielsson are re-elected as ordinary board members, and that Peter Benson is re-elected as Chairman of the board.
Major shareholders propose that remuneration to the board shall be paid with SEK 300,000 to the Chairman of the board and with SEK 150,000 to each of the other board members who are not employed by the company. In addition, remuneration is proposed for committee work with SEK 50,000 to be paid in remuneration for the Chairman of the Audit Committee and SEK 25,000 to each of the other members in the Audit Committee.
The board proposes that one registered public accounting firm without deputy is appointed, and that Ernst Young AB is re-elected as auditor. Ernst & Young AB has informed that Göran Neckmar will continue to be appointed as the responsible auditor. The board also proposes that the remuneration for the auditor shall be paid in accordance with customary norms and approved invoice.
Item 13: Instruction and charter for the Nomination Committee
The board proposes that a Nomination Committee shall be appointed before the coming election and remuneration, and that an instruction and charter for the Nomination Committee shall be adopted in accordance with the following substantial terms. The Nomination Committee shall consist of four members, representing the three largest shareholders at the last weekday of September, together with the Chairman of the board. If any of the three largest shareholders refrains to appoint a member of the Nomination Committee, or if such member resigns or relinquishes before completion of the assignment and the shareholder who appointed the member does not appoint a new member, the Chairman of the board shall encourage the next owner in size (i.e. the fourth largest shareholder), up until the tenth largest shareholder, to appoint a shareholder representative within a week from the encouragement. If, despite such encouragements, only three members have been appointed four months prior the annual shareholders’ meeting, the Nomination Committee shall be able to constitute itself with three members and the Nomination Committee shall be able to resolve if the procedure to appoint the fourth member shall proceed or not.
The members of the Nomination Committee shall be announced on the company’s website no later than six months before the annual shareholders’ meeting. If a substantial change of ownership occurs no later than six weeks before the annual shareholders’ meeting, an additional shareholder representative shall be appointed. The Chairman of the board shall notify the one shareholder of the three largest shareholders who has not yet appointed a shareholder representative and encourage this shareholder to appoint such a representative. When the shareholder has appointed a shareholder representative, this representative shall be a member of the Nomination Committee and replace the earlier member of the Nomination Committee who no longer represents one of the three largest shareholders.
The Nomination Committee’s main responsibility is to submit proposals in reference to nomination of the Chairman of the annual shareholders’ meeting, election and remuneration for the members of the board, election and remuneration for the auditor, as well as to submit proposals in reference to principles for the appointment of the Nomination Committee and instructions for the Nomination Committee.
Item 14: Determination of Remuneration Policy for senior executives
The board proposes that a Remuneration Policy regarding determination of remuneration and other benefits for the CEO and other senior executives in the company shall be adopted with the following substantial terms.
The company’s principle is that remuneration shall be paid on market oriented and competitive terms in order for the company to be able to recruit and retain senior executives. The remuneration for senior executives may consist of fixed salary, variable remuneration, pension, other benefits and share-based incentive programs. The CEO and other senior executives are in general entitled to other customary benefits, such as health insurance, company car and other benefits that can be considered as reasonable in reference to market practice and the benefit for the company.
The remuneration for the CEO and other senior executives shall be based on factors such as work tasks, expertise, experience, position and performance. Furthermore, the distribution between fixed salary and variable remuneration shall be related to the employee’s position and work tasks. Variable remuneration is to be linked to predetermined and measurable performance criteria, formulated with the objective to promote the company’s long-term value creation. The remuneration is not to be discriminating on grounds of gender, ethnic background, national origin, age, disability or other irrelevant factors.
The CEO and other senior executives shall be offered a fixed salary that is market oriented and based on the individual’s responsibility, expertise and performance. In addition to fixed salary, the CEO and other senior executives are generally entitled to an annual bonus of a maximum of 25 per cent of the annual fixed salary.
In addition to what is agreed in collective agreements or other agreements, the CEO and other senior executives may be entitled to arrange individual pension schemes. Refrained salaries and variable remuneration can be used for increased pension contributions, provided that the total cost for the company is unchanged over time.
A mutual notice period of six months is applied for the CEO and for other senior executives a notice period not exceeding six months shall be applied. Severance payment, apart from salary during the notice period, only exists for the CEO who is entitled to a severance payment of six monthly salaries provided that the company has terminated the CEO’s employment.
The board shall be entitled to deviate from these guidelines in individual cases if there are special reasons for doing so.
The board shall every year consider whether or not a share-based incentive program shall be proposed to the annual shareholders’ meeting. Issues and transfers of securities which have been resolved by the shareholders’ meeting in accordance with the provisions in chapter 16 of the Swedish Companies Act shall not be comprised by these guidelines to the extent a shareholders’ meeting has resolved, or will resolve, on such a resolution.
Item 15: Authorization for issues of shares
The board proposes that the annual shareholders’ meeting authorizes the board to, until the next annual shareholders’ meeting, on one or several occasions, with our without deviation from the shareholders’ preferential rights, and with our without conditions of payment in kind, set-off or such other conditions as referred in chapter 13, section 5 item 6 of the Swedish Companies Act, decide on issues of shares. The reason for that deviation from the shareholders’ preferential rights shall be permitted is to enable the company to raise working capital, to execute acquisitions of companies or operating assets, as well as to enable issues to institutional investors and the public in connection with a possible listing of the company. The total number of shares that may be issued shall not exceed 15,000,000 shares. To the extent the authorization is used for an issue of shares with deviation from the shareholders’ preferential rights, the issue shall be made on market terms.
Item 16: Resolution on directed issue of warrants and approval of transfer of warrants
The board proposes that the annual shareholders’ meeting resolves to adopt a program with warrants to employees in the company (the “Warrant Program 2016/2020”) with a maximum of 1,000,000 warrants to be issued with the right to subscribe for new shares in the company on the following substantial terms:
With deviation from the shareholders’ preferential rights, the warrants may only be subscribed for by a wholly owned subsidiary of the company (the “Subsidiary”). The reason for the deviation from the shareholders’ preferential rights is that the warrants shall be used under the Warrant Program 2016/2020.
Subscription by the Subsidiary shall be made at the latest on 13 May 2016, provided that the board shall be entitled to prolong the subscription period. Over subscription cannot occur.
The warrants shall be issued to the Subsidiary against cash consideration corresponding to the market value of the warrants calculated in accordance with the “Black Scholes”-formula and customary assumptions on i.a. volatility and risk-free interest rate. The calculation of the market value of the warrants should be made by an independent valuer in connection with the annual shareholders’ meeting. Payment shall take place at the latest on 13 May 2016, provided that the board shall be entitled to postpone the payment period.
The Subsidiary shall have the right, on one or several occasions, to transfer the warrants to employees in the company in accordance with the terms and guidelines set forth below.
Transfer from the Subsidiary to participants in the Warrant Program 2016/2020 shall be made against cash consideration corresponding to the market value of the warrant calculated in accordance with the “Black Scholes”-formula in accordance with above.
Each warrant confers right to subscribe for one new share in the company against cash consideration at a subscription price of SEK 75 per share during the time periods from and including 1 June 2019 to and including 31 August 2019 and from and including 1 March 2020 to and including 31 May 2020. The subscription price and the number of shares that each warrant confers right to subscribe for should be subject to customary recalculation in connection with i.a. split, consolidation and rights issues. The shares issued upon utilization of a warrant shall confer right to dividend as from the first time on the record date for dividends that occurs immediately following effectuation of subscription to such extent that the share has been recorded in the company’s share ledger as interim share.
In case all warrants are utilized for subscription of new shares, the share capital will increase with SEK 400,000.
The Chairman of the board, or anyone appointed by him, shall be authorized to make minor formal adjustments of the resolution which may be required for registration with the Swedish Companies Registration Office (Sw. Bolagsverket) or Euroclear Sweden AB.
The board of the company shall be entitled to resolve on transfer of warrants from the Subsidiary to employees in the company. Right to participate in the Warrant Program 2016/2020 shall accrue to employees of the company as of 20 April 2016. The warrants shall be transferred in accordance with the following guidelines:
(a) CEO at maximum 300,000 warrants
(b) Other senior executives at maximum 150,000 warrants per
individual
(c) Other employees at maximum 50,000 warrants per
individual
A participant may subscribe for a lower number of warrants than stated above. Over subscription cannot occur. Warrants not allotted as described above shall be able to be reserved for future recruitment of employees of the company, in which case the above guidelines for allotment shall be applicable. Upon such allotment, a new calculation of the warrants market value, to be paid by the participants, shall be made.
Notice of participation in the Warrant Program 2016/2020 shall have been received by the company at the latest on 3 May 2016, provided that the board shall be entitled to prolong this time period and to apply a different notification period for participants that have been employed in the company at a later time. Transfer to participants shall be made promptly after the expiration of the notification period.
The reasons for the implementation of the Warrant Program 2016/2020 and the deviation from the shareholders’ preferential rights are to be able to create possibilities for the company to retain competent personnel through the offering of a long term ownership engagement for the employees. Such ownership engagement is expected to stimulate the employees to an increased interest in the business and profit development and increase the feeling of connectedness with the company.
In case all warrants within the Warrant Program 2016/2020 are utilized for subscription of shares, a total of 1,000,000 new shares will be issued, which corresponds to a dilution of approximately 1.7 per cent of the company’s share capital and votes after full dilution, calculated based on the number of shares that will be added upon full utilization of the Warrant Program 2016/2020.
In addition to the Warrant Program 2016/2020 the board proposes in accordance with item 17 below that the annual shareholders’ meeting also resolves to adopt a personnel option program. In connection with the personnel option program a total of 1,314,200 warrants will be issued. In case all warrants in the personnel option program are utilized for subscription, the company will issue a total of 1,314,200 shares, which corresponds to a dilution of approximately 2.2 per cent of the company’s share capital.
Since previously, there is one warrant program outstanding which was resolved upon by the extraordinary shareholders’ meeting of 5 November 2013. In that warrant program there are a total of 1,605,000 outstanding warrants. Each warrant confers right to the holder of the warrant to subscribe for one new share in the company at a subscription price of SEK 9 during the time period from 1 April 2014 to and including 31 March 2017. In case all warrants are utilized for subscription, a total of 1,605,000 new shares will be issued.
In case all warrants (outstanding as well as the now proposed for the annual shareholders’ meeting to resolve upon) are utilized, a total of 3,919,200 shares will be issued, which corresponds to a dilution of approximately 6.2 per cent of the company’s share capital and votes after full dilution, calculated based on the number of shares that will be added upon full utilization of all warrants (outstanding as well as the proposed).
Since the warrants in the Warrant Program 2016/2020 will be transferred at market value, it is the company’s opinion that no social charges will be triggered for the company in reference to the Warrant Program 2016/2020. The costs for the Warrant Program 2016/2020 will hence only consist of limited costs related to implementation and administration of the program.
The proposal of the Warrant Program 2016/2020 has been prepared by the board and the Remuneration Committee together with external consultants.
Item 17: Resolution on (a) program with personnel options; and (b) directed issue of warrants; as well as approval of transfer of warrants
The board proposes that the annual shareholders’ meeting resolves to adopt a program with personnel options for employees in the company (the “Personnel Option Program 2016/2020”) in accordance with Section A below.
In order to secure the company’s obligations under the Personnel Option Program 2016/2020, the board also proposes that the annual shareholders’ meeting resolves on a directed issue of warrants, as well as an approval of transfer of warrants in accordance with Section B below.
- The board’s proposal to resolution on Personnel Option Program 2016/2020
The board proposes that the annual shareholders’ meeting resolves to adopt the Personnel Option Program 2016/2020 in accordance with the following substantial guidelines:
The Personnel Option Program 2016/2020 shall consist of a maximum of 1,000,000 personnel options.
Each personnel option confers the holder a right to acquire one new share in the company against cash consideration at a utilization price of SEK 75. The utilization price and the number of shares that each personnel option confers right to may be subject to recalculation in the event of a bonus issue, split, rights issue etc., wherein the recalculation terms in the complete terms and conditions of the warrants shall be applied.
The Personnel Option Program 2016/2020 shall be offered to employees of the Company as of 20 April 2016. The offer shall be submitted in accordance with the following guidelines:
(a) CEO at maximum 300,000 personnel options
(b) Other senior executives at maximum 150,000 personnel options per individual
(c) Other employees at maximum 50,000 personnel options
per individual
Notice of participation in the Personnel Option Program 2016/2020 shall have been received by the company at the latest on 3 May 2016, provided that the board shall be entitled to prolong this time period. The allotment of personnel options to participants shall be made promptly after the expiration of the notification period.
Vesting of the allotted personnel options will take place over a three-year period in accordance with the following:
(a) One-third of the allotted personnel options will be vested on 1 May 2017;
(b) One-third of the allotted personnel options will be vested on 1 May 2018; and
(c) One third of the allotted personnel options will be vested on 1 May 2019.
Vesting requires that the participant is still employed by the company and that the employee has not terminated the employment as of the date when the respective vesting occurs. If the participants ceases to be employed or terminates the employment before a vesting date, the already vested personnel options can be utilized on the ordinary date of utilization in accordance with the below, but further vesting will not take place.
The personnel options shall be allotted without consideration. The personnel options shall not constitute securities and shall not be able to be transferred or pledged. However, tn the event of death, the rights constituted by the personnel options shall accrue to the beneficiaries of the holder of the personnel options.
The holders can utilize allotted and vested personnel options during the time periods from and including 1 June 2019 to and including 31 August 2019 and from and including 1 March 2020 to and including 31 May 2020.
Participation in the Personnel Option Program 2016/2020 requires that such participation is in accordance with applicable laws, as well as that such participation can be executed with reasonable administrative costs and financial efforts in accordance with the company’s opinion.
The personnel options shall be governed by separate agreements with each participant. The board shall be responsible for the preparation and management of the Personnel Option Program 2016/2020 within the above mentioned substantial terms.
- The board’s proposal to resolution on directed issue of warrants as well as approval of transfer of warrants
In order to enable the company’s delivery of shares under the Personnel Option Program 2016/2020 as well as to hedge ancillary costs, primarily social charges, the board proposes that the annual shareholders’ meeting resolves on a directed issue of warrants as well as an approval of transfer of warrants. The board therefore proposes that the annual shareholders’ meeting resolves on an issue of a maximum of 1,314,200 warrants on the following substantial terms:
The warrants shall, with deviation from the shareholders’ preferential rights, only be able to be subscribed for by a wholly owned subsidiary of the Company (the “Subsidiary”).
Subscription shall be made at the latest on 13 May 2016. The board shall be entitled to prolong the subscription period. Over subscription cannot occur.
The warrants shall be issued without consideration. The reason hereto is that the warrants shall be issued to the Subsidiary as a part of the implementation of the Personnel Option Program 2016/2020.
Each warrant confers right to subscribe for one new share in the company against cash consideration at a subscription price of SEK 75 per share during the time period from and including the registration of the warrants at the Swedish Companies Registration Office (Sw. Bolagsverket) to and including 30 June 2020. The subscription price and the number of shares that each warrant confers right to subscribe shall be subject to customary recalculation in connection with i.a. split, consolidation and rights issues. The shares issued upon utilization of a warrant shall confer right to dividend as from the first time on the record date for dividends that occurs immediately following effectuation of subscription to such extent that the share has been recorded in the company’s share ledger as interim share.
In case all warrants are utilized for subscription of new shares, the share capital will increase with SEK 525,680.
The Chairman of the board, or anyone appointed by him, shall be authorized to make minor formal adjustments of the resolution which may be required for registration with the Swedish Companies Registration Office (Sw. Bolagsverket) or Euroclear Sweden AB.
The board further proposes that the annual shareholders’ meeting resolves to approve that the Subsidiary may transfer warrants to the participants in the Personnel Option Program 2016/2020 without consideration in connection with the utilization of personnel options in accordance with the terms in section A, or in another way to dispose the warrants options in order to be able to secure the company’s commitments and costs in relation to the Personnel Option Program 2016/2020.
The reasons for the implementation of the Personnel Option Program 2016/2020 and the deviation from the shareholders’ preferential rights are to be able to create possibilities for the company to retain competent personnel through the offering of a long term ownership engagement for the employees. Such ownership engagement is expected to stimulate the employees to an increased interest in the business and profit development and increase the feeling of connectedness with the company.
Information about previous and outstanding warrant programs as well as dilution effects are described above under the proposal pursuant to item 16.
The board’s opinion is that Personnel Option Program 2016/2020 will trigger costs in reference partly to accounting salary costs and partly to social charges.
The proposal of the Personnel Option Program 2016/2020 has been prepared by the board and the Remuneration Committee together with external consultants.
PARTICULAR MAJORITY REQUIREMENTS
For a valid resolution on the proposal pursuant to item 15, the proposal has to be supported by shareholders representing at least two-thirds of the votes cast as well as of all shares represented at the annual shareholders’ meeting. For a valid resolution on the proposals pursuant to item 16 and 17, the proposals have to be supported by shareholders representing at least nine-tenths of the votes cast as well as of all shares represented at the annual shareholders’ meeting.
SHAREHOLDERS’ MEETING DOCUMENTS AND OTHER INFORMATION
The complete proposals for the decisions pursuant to item 13-17 are available at the company (address above) and at the company website (www.alligatorbioscience.se) as from no later than three weeks prior to the annual shareholders’ meeting. A copy of the documents will be sent to the shareholders that request it and that states their address and will also be available at the annual shareholders’ meeting.
The shareholders’ are reminded of their right to request information at the shareholders’ meeting from the board of directors and the managing director according to chapter 7 section 32 of the Swedish Companies Act (Sw. Aktiebolagslagen 2005:551)).
The total number of shares and votes in the company amounts to 59,014,384. The company does not hold any own shares.
_____________________
Lund in March 2016
ALLIGATOR BIOSCIENCE AB (PUBL)
The board of directors