Notice at extraordinary general meeting in Swedish Orphan Biovitrum AB (publ)
The shareholders in Swedish Orphan Biovitrum AB (publ), Reg. No. 556038-9321,
are hereby summoned to an Extraordinary General Meeting (the "Meeting"), to be
held on Wednesday August 24, 2011 at 4 p.m. IVAs Konferenscenter -
Wenströmsalen, Grev Turegatan 16, Stockholm.
Participation, etc
Shareholders who wish to attend the Meeting must be recorded in the share
register maintained by Euroclear Sweden AB (the Swedish Central Securities
Depository) on Thursday August 18 2011, and must notify the company of their
intention to participate in the Meeting not later than Thursday August 18, 2011
at Swedish Orphan Biovitrum's web site www.sobi.com, by mail to Swedish Orphan
Biovitrum AB (publ), "Extraordinary General Meeting", 112 76 Stockholm, Sweden
or by phone no. +46 8 697 2000. The notification shall set forth the name,
address, telephone number (daytime), personal/corporate identity number, the
number of shares held and, when applicable, information about representatives
and assistants.
Per the day of this notice there are 267,295,132 shares outstanding in the
company, whereof 265,226,598 common shares representing one vote each and
2,068,534 series C shares representing 1/10 vote each, altogether representing
265,433,451.4 votes. 206,853.4 votes are referrable to the 2,068,534 series C
shares, which are held by the company and cannot be represented at the general
meeting.
Nominee shares
Shareholders, whose shares have been registered in the name of a nominee,
through the trust department of a bank or similar institution, must temporarily
re-register their shares in their own names in the shareholders' register
maintained by Euroclear Sweden AB to be entitled to participate in the Meeting.
Shareholders must inform their nominee of such re-registration well before
Thursday August 18, 2011, when such re-registration must have been executed.
Proxy, etc
Shareholders represented by proxy shall issue a written and dated power of
attorney for the proxy. If the power of attorney is issued on behalf of a legal
entity, a certified copy of a registration certificate for the legal entity
shall be appended. The power of attorney is valid for one year from the issue
thereof or such longer period of time stated in the power of attorney, however
not more than five years. A registration certificate shall evidence the
circumstances prevailing at the day of the Meeting and should not be older than
one year at the time of the Meeting.
The power of attorney in original and, when applicable, the registration
certificate, should be submitted to the company by mail at the address indicated
above well before the Meeting. A proxy form is available at the company's web
site, www.sobi.com, and will also be sent to shareholders who so request and who
inform the company of their postal address.
Proposed agenda
1. Opening of the Meeting.
2. Election of the chairman of the Meeting.
3. Preparation and approval of the voting list.
4. Approval of the agenda.
5. Election of one or several persons to verify the minutes.
6. Determination of whether the Meeting has been duly convened.
7. Resolution on a performance based, long-term share program for the CEO.
8. Resolution on:
(a) an authorization to issue series C shares,
(b) an authorization to repurchase series C shares, and
(c) the transfer of own shares under the CEO Share Program 2011.
9. Resolution on guidelines for remuneration for the management.
10. Closing of the Meeting.
Proposal regarding chairman of the Meeting (item 2)
The nomination committee of Swedish Orphan Biovitrum AB (publ), which consists
of Bo Jesper Hansen (chairman of the board of directors), Petra Hedengran,
chairman (Investor), Roger Johanson (Skandia Liv) and Åsa Nisell (Swedbank Robur
Fonder), proposes that Klaes Edhall from Mannheimer Swartling Advokatbyrå is
elected chairman of the Meeting.
The board of directors' proposal regarding a performance based, long-term share
program for the CEO (the "CEO Share Program 2011") (item 7)
Swedish Orphan Biovitrum's annual general meeting 2011 approved a performance
based, long-term share program for 2011 (the "Share Program 2011"), in which a
group of up to 80 managers and key employees will be offered to participate.
In June 2011, the company recruited a new CEO. In addition to the CEO's
participation in the Share Program 2011 (and similar future share programs, if
any), the new CEO is willing to make a more significant one-time investment in
the Swedish Orphan Biovitrum share, as part of a performance based, long-term
share program. The board of directors is of the opinion that such investment
indicates a firm commitment by the CEO as regards his efforts to improve the
company's results, profitability and value growth. The board of directors
further believes that it is in the best interest of the company's shareholders
that the CEO's interests and perspectives are aligned with those of the
shareholders to an even larger extent than foreseen by the existing Share
Program 2011.
The board of directors considers that the proposal for the CEO Share Program
2011 is well balanced and will constitute a suitable element in the compensation
package provided by the company to the CEO.
In brief, the proposal for the CEO Share Program 2011 is based on an own
investment in shares in the market, to be held during a three-year period, and
the allotment of performance shares free of charge upon the fulfillment of
certain pre-defined targets at the end of a performance period ending on 15
August 2014.
The main differences between the terms and conditions of the existing Share
Program 2011 and the proposed CEO Share Program 2011 are that:
* the performance requirements are stricter in the proposed CEO Share Program
2011, to the effect that the threshold for allotment of the maximum number
of performance shares is higher;
* the grant of performance shares in the proposed CEO Share Program 2011 is
based on an increase in share price (as opposed to total shareholder
return);
* the grant of performance shares under the proposed CEO Share Program 2011 is
based on an increase in the company's share price (as opposed to also taking
into consideration the performance of a group of comparable companies); and
that
* no matching shares will be granted in the proposed CEO Share Program 2011.
The board of directors intends to carry out an evaluation of the CEO Share
Program 2011, which will systematically analyze the achieved results. The aim of
the evaluation will be to determine whether the program fulfils its purposes,
and this will also include the review of the outcome and the costs for the
program.
The board of directors proposes, in view of the above, that the extraordinary
general meeting resolves to approve the CEO Share Program 2011, in accordance
with the following principal terms and conditions.
i. The program is proposed to include one participant; the CEO of the Swedish
Orphan Biovitrum-group.
ii. A maximum number of 500,000 common shares (the "Performance Shares") are
proposed to be allotted to the participant free of charge upon fulfillment
of the below performance targets.
iii. To be allowed to participate in the CEO Share Program 2011, the
participant must, prior to 15 August 2011, purchase common shares in
Swedish Orphan Biovitrum in the market, at a value of approximately 4
MSEK.
iv. The outcome of the CEO Share Program 2011 is dependent on the fulfillment
of targets for value creation, based on the share price development,
during a period as from the date of the offer to participate in the
program, i.e. as from 22 June 2011, up to and including 15 August 2014
(the "Performance Period"). The calculation of the share price development
shall be based on a comparison of the volume weighted average price for
the Swedish Orphan Biovitrum common share during a period of nine trading
days prior to and including the day the participant was offered to
participate in the program (i.e. during the period 10-22 June 2011) and
the volume weighted average price for the Swedish Orphan Biovitrum common
share during the last ten trading days of the Performance Period.
The 500,000 Performance Shares shall be allotted as follows:
Pro-rata allotment of 400,000 Performance Shares
a. For any allotment of Performance Shares to be possible under the CEO Share
Program 2011, the share price of the Swedish Orphan Biovitrum common share
must be increased by more than 15% during the Performance Period (i.e. the
volume weighted average price during the last ten trading days of the
Performance Period shall amount to more than SEK 25.77).
b. For the maximum allotment of 400,000 Performance Shares, the volume weighted
average share price during the last ten trading days of the Performance
Period shall amount to at least SEK 45.00.
c. If the volume weighted average share price during the ten last trading days
of the Performance Period is between the thresholds set out in item a and
item b above, the portion of the 400,000 Performance Shares to be allotted
shall be calculated on a pro rata basis (i.e. the calculation shall be
linear).
Threshold allotment 1 of 30,000 Performance Shares
d. In addition to the Pro-rata allotment under items a-c above, the participant
shall be allotted 30,000 Performance Shares if the volume weighted average
price during the last ten trading days of the Performance Period amounts to
at least SEK 30.00.
Threshold allotment 2 of 70,000 Performance Shares
e. In addition to the Pro-rata allotment and the Threshold allotment 1 under
items a-d above, the participant shall be allotted 70,000 Performance Shares
if the volume weighted average price during the last ten trading days of the
Performance Period amounts to at least SEK 35.00. For the avoidance of
doubt, none of the 70,000 Performance Shares to be allotted pursuant to this
item e shall be allotted at a volume weighted average share price below SEK
35.00, i.e. there shall be no pro rata allotment of the 70,000 Performance
Shares where the volume weighted average share price is between the
thresholds set out in item d above and in this item e.
v. Allotment pursuant to the CEO Share Program 2011 requires that the
participant remains employed as CEO of the Swedish Orphan Biovitrum-group
during the three-year period as from 15 August 2011 up to and including 15
August 2014, subject to certain exemptions to be determined by the Board of
Directors, and that the employment has not, at the time of allotment, been
terminated following a termination from Swedish Orphan Biovitrum, or that
the participant at such time has notified Swedish Orphan Biovitrum of his
termination of the employment. Allotment also requires that the participant
has kept his personal investment during the entire aforementioned period,
i.e. from 15 August 2011 up to and including 15 August 2014. If all
conditions for allotment in the CEO Share Program 2011 are met, allotment
will take place free of charge after expiration of the Performance Period
and following approval of the results by the board of directors at the
board meeting that follows immediately after the expiration of the
Performance Period.
vi. The board of directors and the Compensation & Benefits committee shall be
responsible for the preparation and management of the CEO Share Program
2011, within the framework of the aforementioned terms and conditions. The
board of directors shall determine the detailed terms and conditions of the
program (among other things provisions on recalculation in the event of an
intervening bonus issue, split, rights issue and/or other similar events).
Costs for the CEO Share Program 2011
The costs for the CEO Share Program 2011, which are charged in the profit and
loss account, are based on the accounting standard IFRS 2 and distributed on a
straight line basis over the vesting period. The board of directors has allowed
for a preliminary calculation of the theoretical value of the possibility to
receive allotment of common shares in Swedish Orphan Biovitrum free of charge
based on the fulfillment of the performance targets. The calculation has been
made based on the following assumptions: (i) a share price of SEK 22.41 and (ii)
an assessment of future share price volatility. Based on these assumptions, the
value has been calculated to SEK 8.50 per Performance Share for the Pro-rata
allotment, SEK 3.50 per Performance Share for the Threshold allotment 1, and SEK
2.50 per Performance Share for the Threshold allotment 2.
In total, this can lead to maximum costs for the CEO Share Program 2011 of
approximately SEK 3.7 million, excluding social security charges. The costs for
social security charges are calculated to approximately SEK 7.1 million assuming
a share price upon final allotment of SEK 45.00 and an allotment of shares based
on the fulfillment of the performance targets of 100% of maximum allotment.
Dilution
Upon full allotment according to the CEO Share Program 2011, i.e. a maximum
allotment of Performance Shares, the number of shares under the CEO Share
Program 2011 amounts to 500,000 corresponding to a dilution effect of
approximately 0.2% of the share capital and the votes.
If the 158,000 shares to secure for future cash flow effects due to payments of
social security costs connected with the CEO Share Program 2011, see further
below, are included, as a result of which the calculation is based on in total
658,000 shares for the CEO Share Program 2011, the maximum dilution effect of
the CEO Share Program 2011 amounts to 0.2%. If outstanding warrant and employee
stock option plans, as well as the share programs for 2008 - 2011, are included
in the calculation, including their respective hedging arrangements, the
corresponding maximum level of dilution amounts to 1.7%.
Hedging
To secure that the company can fulfill its commitment according to the CEO Share
Program 2011, it is proposed to the extraordinary general meeting to resolve to
authorize the board of directors to resolve on a directed issue of series C
shares. It is also proposed that the company shall be able to use series C
shares, which have been previously issued under the Share Programs 2008-2011 and
that will not be used for hedging under such programs due to, inter alia, that
certain employees have terminated their employments with Swedish Orphan
Biovitrum. Furthermore, the board of directors proposes that the general meeting
resolves to authorize the board of directors to repurchase all issued series C
shares.
The series C shares will be converted into common shares and transferred in the
number that is required to secure delivery of the gratuitous common shares that
may be allotted to the CEO after the Performance Period. In addition, up to
158,000 series C shares may be converted to common shares to secure for future
cash flow effects due to payments of social security costs connected with the
CEO Share Program 2011. Should the extraordinary general meeting not approve of
the proposed transfer of own shares, the board of directors may enter into a
hedging arrangement with an external party to hedge the obligations of the
company under the program.
Preparations
The Compensation & Benefits committee has participated in the preparation of the
CEO Share Program 2011. The proposal has been adopted by the board of directors.
Previous incentive programs in Swedish Orphan Biovitrum
For a description of the company's other long-term incentive programs, including
the share programs 2008-2010, reference is made to the company's annual report
for 2010, note 14, and the company's website, www.sobi.com. For a description of
the Share Program 2011, reference is made to the resolution by the annual
general meeting 2011, which is available on the company's website. In addition
to the aforementioned programs, no other long-term incentive programs have been
implemented in Swedish Orphan Biovitrum.
Majority requirements
For a resolution in accordance with the proposal for the CEO Share Program 2011
to be valid, more than 50 per cent of the votes cast at the extraordinary
general meeting must be in favor of the proposal.
The board of directors' proposal for resolutions on (a) an authorization to
issue series C shares, (b) an authorization to repurchase series C shares, and
(c) the transfer of own shares under the CEO Share Program 2011 (item 8)
a) Authorization to issue series C shares
The annual general meeting 2011, held on 28 April 2011, resolved to authorize
the board of directors to resolve on directed issues of series C shares, as part
of the company's share programs 2008-2011. The board of directors now proposes
that the extraordinary general meeting, by amending the resolution by the annual
general meeting, resolves that the aforementioned authorization shall cover
series C shares to be issued also in connection with the performance based,
long-term share program for the CEO that is proposed to be approved by the
extraordinary general meeting (the "CEO Share Program 2011"). As a result, the
amended authorization shall have the following wording:
The board of directors shall be authorized to resolve on one or several directed
issues of series C shares, during the time period until the end of the next
annual general meeting of shareholders, as part of the company's share programs
2008-2011 and the CEO Share Program 2011 (jointly referred to as the "Share
Programs"), for the purpose of creating share delivery capacity for the company
and to secure for future cash flow effects due to payments of social security
costs connected with the Share Programs. The right to subscribe for the series C
shares shall, with deviation from the shareholders pre-emptive rights, be
granted only to an external party who has been informed in advance. Such issues
must not result in the share capital of the company exceeding the limits set out
in the articles of association as adopted from time to time.
The basis for the subscription price shall be the share's quota value. It is
proposed that the subscription price be equivalent to the quota value in order
to limit the company's costs in conjunction with any future repurchase of the
issued shares.
It is noted that the new series C shares will be subject to restrictions
pursuant to Chapter 4, Section 6 (conversion clause) and Chapter 20, Section 31
(redemption clause) of the Swedish Companies Act.
b) Authorization to repurchase series C shares
The annual general meeting 2011 further resolved to authorize the board of
directors to resolve on repurchases of series C shares, for the purpose of
fulfilling the company's obligations under its share programs 2008-2011. The
board of directors now proposes that the extraordinary general meeting, by
amending the resolution by the annual general meeting, resolves that the
aforementioned authorization shall cover series C shares to be repurchased also
in connection with the proposed CEO Share Program 2011. As a result, the amended
authorization shall have the following wording:
The board of directors shall be authorized to resolve on repurchase of the
company's own shares in accordance with the following terms and conditions:
1. The board of directors shall have the right to repurchase all issued series
C shares through an offer directed to all holders of series C shares.
2. The repurchase authorization may be exercised on one or several occasions
until the next annual general meeting.
3. The number of repurchased shares may not exceed 10% of all issued shares in
the company at any given time.
4. The repurchase shall be made at a price corresponding to the share's quota
value.
The reason for the proposed authorization to repurchase own shares is that the
company shall be able to fulfill its obligations pursuant to its Share Programs
(for the avoidance of doubt, including the share programs 2008-2011 and the CEO
Share Program 2011).
c) Transfer of own shares under the CEO Share Program 2011
The annual general meeting 2011 further resolved on transfers of own shares to
participants in the company's share programs 2008-2011. The board of directors
now proposes that the extraordinary general meeting in addition thereto shall
resolve on a transfer of own shares to the participant in the CEO Share Program
2011, in accordance with the following terms and conditions:
Not more than 500,000 series C shares that Swedish Orphan Biovitrum either (i)
purchases by virtue of the above proposed authorization to repurchase its own
shares, or (ii) has issued and repurchased (but not transferred to any
participant) in connection with any of the share programs 2008-2011, may,
following conversion into common shares, be transferred to the participant in
the CEO Share Program 2011, in accordance with the terms and conditions of such
program.
The participant in the CEO Share Program 2011 shall receive such shares free of
charge. The number of shares that may be transferred shall be subject to
recalculation in the event of an intervening bonus issue, split, rights issue
and/or other similar events.
Miscellaneous
The purpose of the board's proposals a)-c) above and the reason for the
deviation from the shareholders' preferential right is to enable the company to
transfer shares to the participants in the Share Programs and to secure future
cash flow effects due to payments of social security costs connected with the
Share Programs.
Majority requirements
The board of directors proposes that the resolutions pursuant to items a)-c)
above shall be adopted by the extraordinary general meeting as one resolution.
Valid resolution requires the approval of shareholders representing at least
nine-tenths of the votes cast as well as the shares represented at the general
meeting.
The board of directors' proposal regarding guidelines for remuneration for the
management (item 9)
The annual general meeting 2011 resolved on guidelines for remuneration for the
management for the period until the annual general meeting 2012. The board of
directors proposes that the extraordinary general meeting, by amendment of the
resolution by the annual general meeting, resolve to approve the following
proposal for revised guidelines for remuneration for the management, which shall
apply until the annual general meeting 2012. The proposed changes compared to
the guidelines adopted by the annual general meeting 2011 are primarily
referable to the section "Other compensation and terms of employment" and are
proposed in light of the review of the guidelines made by the board of directors
in connection with the company's recruitment of a new managing director.
In this context, the management means the managing director of Swedish Orphan
Biovitrum and the executives who, from time to time, are reporting to him and
who are also members of the senior management, as well as members of the board
of directors to the extent employment or consulting agreements are entered into.
Motives
Swedish Orphan Biovitrum shall offer a total remuneration in line with market
conditions to enable the company to recruit and retain competent personnel. The
remuneration to the management may consist of fixed salary, variable salary,
pension and other compensation. Long-term incentive programs may be offered in
addition to the above and will then be submitted to the general meeting for
approval. The remuneration is mainly based on position, performance and the
company's and the member's, respectively, performance in relation to objectives
determined in advance.
Fixed salary
The fixed salary for the managing director and the other members of the
management shall be in line with market conditions and mirror the demands and
responsibility that the position entails. The fixed salary for the managing
director and the other members of the management is revised once every year, as
per 1 January.
To the extent a member of the board of directors carries out work for the
company or for another group company, in addition to the board work, consulting
fees and/or other remuneration for such work may be payable.
Variable salary
The variable salary for the managing director and the other members of the
management shall be based on the company's fulfillment of objectives determined
in advance. These objectives are determined for the promotion of the
company's/the group's long-term development, value creation and financial growth
and shall be designed in a way that does not encourage an excessive risk-taking.
The variable salary may not amount to more than 50 per cent of the annual gross
salary (including pension) for the managing director and not more than 20 - 50
per cent of the fixed annual salary (excluding pension, or in specific cases,
including pension) for the other members of the management.
Long-term incentive programs
Long-term incentive programs may constitute a complement to the fixed salary and
the variable salary. The program participants are nominated based on competence,
performance and to retain key employees with the company. The outcome is
dependent on the fulfillment of certain predetermined performance requirements.
The aim with having long-term incentive programs shall be to create a long-term
commitment to Swedish Orphan Biovitrum, to offer the participants to take part
in Swedish Orphan Biovitrum's long-term success and value creation and to create
possibilities to attract and retain members of the management and key employees.
For more information on Swedish Orphan Biovitrum's current incentive programs,
see Swedish Orphan Biovitrum's annual report 2010 note 14.
Other compensation and terms of employment
The pension benefits for the managing director and the other members of the
management shall preferably consist of premium based pension plans, but may also
be defined-benefit pursuant to collective agreements.
Fixed salary during notice periods and severance payment, including payments for
any restrictions on competition, shall in aggregate not exceed an amount
equivalent to the fixed salary for two years. The total severance payment shall
for all members of the management be limited to the existing salary for the
remaining months up to the age of 65.
The managing director may, in case of a change of control of the company meaning
that more than 50 per cent of the shares in the company are owned by one
shareholder, (i) be entitled to a retention bonus corresponding to maximum 6
monthly gross salaries (including pension) provided that notice of termination
of the managing director's employment has not been given 6 months after the
change of control, alternatively (ii) in case of a material change of the
managing director's employment conditions, be entitled to terminate the
employment with a right to severance payment in accordance with the above. Upon
a material change in the business, other executives may (i) be entitled to a
retention bonus corresponding to maximum 6 monthly fixed salaries (excluding
pension, or in specific cases, including pension), provided that notice of
termination of employment has not been given 6 months after such change,
alternatively (ii) under certain circumstances, be entitled to terminate the
employment with a right to severance payment, however, corresponding to maximum
12 monthly fixed salaries (excluding pension, or in specific cases, including
pension), to be paid in addition to the salary during the notice period.
Other compensation can consist of other customary benefits, such as healthcare
insurance, which shall not constitute a material portion of the total
remuneration.
In addition thereto, additional compensation may be paid out in extraordinary
circumstances, provided that such arrangement is made for recruitment or
retention purposes and is agreed on an individual basis. Such extraordinary
arrangements may for example include a one-time cash payment, or a support
package including relocation support, tax filing support, or similar.
Deviation from the guidelines
The board of directors may resolve to deviate from the guidelines if the board
of directors, in an individual case, is of the opinion that there are special
circumstances justifying that.
Other information
The board of directors' complete proposal pursuant to item 9 above will be
available at the company's office at Tomtebodavägen 23A, in Solna and at the
company's website, www.sobi.com, not later than on Monday 1 August 2011, and
will be sent to those shareholders who so request and who inform the company of
their postal address. The board of directors' complete proposals and other
documents relating to the proposals under items 7-8 above will in addition there
to be sent without charge to shareholders who notify the company of their
participation in the Meeting.
Information at the extraordinary general meeting
The board of directors and the CEO shall, if any shareholder so requests and the
board of directors believes that it can be done without material harm to the
company, at the Meeting provide information regarding circumstances that may
affect the assessment of an item on the agenda. Shareholders may submit
questions in advance by sending them to Swedish Orphan Biovitrum AB (publ),
"Extraordinary General Meeting", 112 76 Stockholm or by email:
communication@sobi.com.
Stockholm, in July 2011
Swedish Orphan Biovitrum AB (publ)
The Board of Directors
About Swedish Orphan Biovitrum (Sobi)
Sobi is a leading European specialty pharmaceutical company focused on providing
and developing specialty pharmaceuticals for patients with rare diseases and
significant medical needs. The portfolio comprises about 60 marketed products,
as well as projects in late clinical phase. Key therapeutic areas are
hematological diseases, autoimmune diseases, hereditary metabolic disorders and
therapeutic oncology. In 2010 Sobi had revenues of SEK 1.9 billion and
approximately 500 employees. The share (STO: SOBI) is listed on NASDAQ OMX
Stockholm. For more information please visit www.sobi.com
The above information has been made public in accordance with the Swedish
Securities Market Act and/or the Financial Instruments Trading Act. The
information was released for public distribution on July 19, 2011 at 8.30 CET.
