The shareholders in Swedish Orphan Biovitrum AB (publ) (Sobi™) Reg. No. 556038-9321, are hereby summoned to the annual general meeting (the “Meeting”), to be held on Wednesday 9 May 2018 at 15:00 in Näringslivets Hus, Storgatan 19, Stockholm, Sweden.
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, 3 May 2018, and must notify the company of their intention to participate in the Meeting not later than on Thursday, 3 May 2018 at the company’s web site www.sobi.com, by mail to Swedish Orphan Biovitrum AB (publ), “Annual General Meeting”, SE-112 76 Stockholm, Sweden or by phone no. +46 8 697 31 91. 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.
As per the day of this notice there are 272,507,708 shares issued in the company. All shares are common shares representing one vote each. The company holds 3,249,870 own common shares, which 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, in order to be able to participate in the Meeting, re-register their shares in their own names in the shareholders’ register maintained by Euroclear Sweden AB as per Thursday, 3 May 2018. Shareholders who wish to re-register their shares in their own name should inform their nominee of such re-registration well in advance of such date. Such registration may be temporary.
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 held 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
Proposal regarding chairman of the Meeting, fees for the members of the Board of Directors and the auditor, the number of members of the Board of Directors, deputy members, auditors and deputy auditors as well as election of the chairman, the members of the Board of Directors and the auditor (items 2, 13, 14 and 15)
The nomination committee of Swedish Orphan Biovitrum AB (publ), which consists of Håkan Björklund (chairman of the Board of Directors), Petra Hedengran, chairman (Investor AB), Thomas Ehlin (The Fourth Swedish National Pension Fund) and Lennart Francke (Swedbank Robur Fonder AB) proposes:
David Allsop
Mr. Allsop was born in 1963 and has a BSc Hons Chemistry from Coventry University, UK.
Through his company U-R-NOT Ltd., Mr Allsop offers advisory services to the pharma industry. He has international experience from the pharmaceutical and biotechnology industry and a commercial and general management background. Further, Mr. Allsop has experience from successfully launching blockbuster biologics across the entire world. Until January 2018, he was Head of International in Amicus Therapeutics Ltd. Before then Mr. Allsop held a number of senior positions in Biogen 1998–2015.
Elisabeth Svanberg
Ms. Svanberg was born 1961 and has a MD and PhD from the University of Gothenburg, Sweden.
Ms. Svanberg is associate professor of surgery and is serving as Chief Development Officer at Ixaltis SA since 2016. She is member of the Board of Directors of Follicum AB and PledPharma AB, and has also served as board member of the Swedish American Chamber of Commerce New York. Previously she was Head of the Established Products Group at Janssen Pharmaceuticals 2014–2016 and has worked with Bristol Myers Squibb (BMS) in the US leading the development of a novel diabetes medicine and subsequently served as Head of Medical Affairs for the Intercontinental region. 2000–2007, Ms. Svanberg worked at Serono International in the field of metabolism.
The nomination committee recommends the elected board members to build their own holdings of shares in the company
Similar to previous years, the nomination committee recommends the Board of Directors of Swedish Orphan Biovitrum AB (publ) to establish a shareholding policy pursuant to which the members of the Board of Directors, who do not already have such holding, are expected to, over a five year period, acquire an ownership in Swedish Orphan Biovitrum AB (publ) shares with a market value which is expected to correspond to at least one year board remuneration, before taxes, excluding remuneration for committee work.
Proposal regarding appropriation of the company’s profit or loss in accordance with the adopted balance sheet (item 11)
The Board of Directors proposes that the company’s retained profits are carried forward.
Proposal regarding guidelines for remuneration for the Management (item 16)
The Board of Directors proposes that the Annual General Meeting resolves on guidelines for remuneration for the Management as set forth below which shall apply until the annual general meeting 2019. The Management is defined as the managing director of Swedish Orphan Biovitrum AB (publ) and the executives who report to the managing director and are members of the senior management.
Objective
The objective of the guidelines is to ensure that the company can attract and retain the best people in order to support the vision and strategy of the company. Remuneration for the Management is designed on a total remuneration approach. The position of total remuneration should be market competitive without being leading relative to competitors in each local market. The market comparisons should be made against a set of peer group companies with comparable sizes, industries and complexity. The remuneration guidelines should enable international hiring and should support diversity within the Management. The remuneration may consist of the following components:
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.
Fixed Base Pay
The fixed base pay of the Management should be based on competence, responsibility and performance. The company uses an international evaluation system in order to evaluate the scope and responsibility of the position.
Variable Pay
The annual Short-Term Incentive plan is based on the achievement of annual performance objectives (corporate and individual). Payment is based on achievement of the pre-determined objectives. The annual performance objectives are defined in advance by the Compensation & Benefits Committee and approved by the Board of Directors.
These objectives are determined for the promotion of the company’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 Short-Term Incentives are limited to 75% of the annual gross salary for the managing director and 60% of the fixed annual salary for the other members of the management.
Long-term Incentives
The company can introduce long-term incentive programmes for all or some of its employees. The objectives of such a programme should be to align the employees’ interests with those of the shareholders, to create a long-term commitment to the company, to be a tool to retain and attract executives and top talent, to offer participants to take part in the company’s long-term success and value creation, and to contribute to a competitive total remuneration.
For more information on the company’s current incentive programmes, see note 11 in the annual report 2017 (to be published 17 April 2018).
Pensions
The preferred pension plan design is defined contribution[1]. If the operating environment requires the establishment of a defined benefit pension plan by law or other regulations, such a plan may be established. The defined benefit level should in such cases be limited to the mandatory level.
Other Benefits
Fixed salary during notice periods and severance pay, including payments for any restrictions on competition, shall in total not exceed an amount equivalent to the fixed base pay for two years. In addition to this restriction, the total severance payment shall be limited to the existing monthly salary for the remaining months up to the age of 65.
Additional compensation may also be paid out in extraordinary circumstances, provided that such arrangement is made for management recruitment or retention purposes and is agreed on an individual basis. Such extraordinary arrangements shall be in line with market practice and may for example include a one-time cash payment, a support package including relocation and tax filing support, retention bonus or severance payment in case of a change of control, 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.
Proposal regarding the implementation of a long-term incentive programmes in accordance with (A) and hedging arrangements in respect thereof in accordance with (B) or (C) (item 17)
Background
The Board of Directors of Swedish Orphan Biovitrum AB (publ) (“Sobi”) proposes that the Annual General Meeting 2018 resolves on the implementation of a long-term incentive programmes (the “Programme”). The proposed Programme gives all permanent employees of the Sobi Group the opportunity of becoming shareholders in Sobi. It is proposed that the Programme should be divided into two parts: (I) one part directed to managers and executives (the “Management Programme”) and (II) one part directed to all other employees (the “All Employee Programme”). No employees based in the US will be invited to participate in the Programme.
The overall purpose of the Programme is to closely align the employees’ interests with those of the shareholders and to create a long-term commitment to Sobi. The Management Programme provides Sobi with a crucial component of a competitive total remuneration package with which to attract and retain executives who are critical to Sobi’s long-term success. The purpose of the All Employee Programme is to create commitment and motivation for the entire permanent workforce of the Sobi Group. For these reasons the Board of Directors considers that having recurring long-term incentive programmes is a vital and important part of Sobi’s total remuneration package.
The Board of Directors of Sobi has evaluated the long-term incentive programmes approved by the 2017 Annual General Meeting and has concluded that the All Employee Programme as well as the Management Programme work well and satisfy the intended purposes.
Similar to the incentive programme approved by the 2017 annual meeting, the Programme shall be inspiring, achievable, easy to understand, cost effective to administer, easy to communicate and in line with market practice. Following implementation of the Programme, the Board of Directors intends to carry out an evaluation thereof in order to systematically analyse the achieved results in relation to the aims outlined above. The aim of the evaluation will be to determine whether the Programme satisfies its purposes, and this will also include a review of the outcome and the costs for the Programme.
A. Implementation of the Programme
The Board of Directors proposes that the annual general meeting 2018 resolves on the implementation of the Programme in accordance with the principal terms and conditions set out below.
I. Terms and conditions applying to the Management Programme
II. Terms and conditions applying to the All Employee Programme
III. Terms and conditions applying to the Management Programme and the All Employee Programme
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Costs for the Programme etc.
The costs for the Programme, which are charged in the profit and loss account, are calculated according to the accounting standard IFRS 2 and distributed on a linear basis over the Vesting Period. The calculation has been made based on the following assumptions: (i) a market price of the Sobi common share of SEK 135, (ii) no dividend is paid by Sobi during the Programme, (iii) an assessment of future volatility in respect of the Sobi common share and (iv) full vesting related to annual revenues will occur. In total, this can lead to maximum costs for the Programme of approximately MSEK 114.7, excluding social security costs. The costs for social security charges are calculated to approximately MSEK 52.0 assuming an annual share price increase of 10% during the Vesting Period. In addition to what is set forth above, the maximum costs for the Programme have been based on a share price of SEK 135 at the time of the commencement of the Vesting Period, that the Programme comprises 869 participants, that each All Employee Programme participant makes a maximum investment and based on historical employee turnover for the group of 5%. If the share price increases from SEK 135 with 10% until the implementation of the Programme the effect on costs would only be marginal as the number of Employee Matching Shares and Management Performance Shares would be reduced correspondingly. Also in case of a decrease in the share price the effect on costs would be marginal. Based on the assumptions above the annual costs for the Programme, including social security charges, corresponds to approximately 4.4% of Sobi’s total annual employee costs.
If the Programme had been implemented in 2017, if the company had had costs in accordance with the example in the preceding paragraph, and Employee Matching Shares and Management Performance Shares had been allocated in 2017 in accordance with the assumptions in the sample calculation, which among other things assumes an annual share price increase of 10% during the Vesting Period, the earnings per share for the financial year 2017 had decreased by SEK 0.19 to SEK 4.08 and the shareholders’ equity per share for the financial year 2017 had decreased by SEK 0.23 to SEK 24.37.
Dilution
Upon full allocation of Employee Matching Shares and Management Performance Shares, the number of shares under the Programme amounts to 1,427,269 common shares in Sobi, corresponding to a dilution effect of approximately 0.53% of the share capital and the votes. Aggregated with the 448,448 shares that may be transferred in order to cover the cash flow effects associated with the Programme, primarily social security charges, the maximum dilution effect of the Programme amounts to approximately 0.69% of the share capital and the votes. If all outstanding long-term incentive programmes are included in the calculation, then the corresponding maximum level of dilution amounts to 1.49%.
Hedging arrangements
The Board of Directors has considered different methods for transfer of shares under the Programme, in order to implement the Programme in a cost-effective and flexible manner. The Board of Directors has found the most cost-effective alternative to be, and thus proposes that the Annual General Meeting as a main alternative resolves on (i) a directed issue of redeemable and convertible series C shares and (ii) an authorisation for the Board of Directors to resolve on the repurchase of all issued redeemable and convertible series C shares. Following conversion to common shares in Sobi, the shares are intended to be transferred to Programme participants as well as transferred on a regulated market in order to cover the cash flow effects associated with the Programme, primarily social security charges. For this purpose, the Board of Directors further proposes that the annual general meeting resolves (iii) on transfers of own common shares free of charge to Programme participants. As further described in item B.(III) below, the Board of Directors proposes that shares acquired for the purpose of securing Sobi’s obligations under previous share programmes also may be transferred under the Programme. The detailed conditions for the Board of Directors’ main alternative are set out in item B. below.
Since the Programme, in principle, is not expected to give rise to any initial social security payments for the Sobi Group, the Board of Directors has decided not to propose to the Annual General Meeting 2018 to resolve on transfers of own common shares on a regulated market in order to cover such payments. However, prior to the transfers of common shares to Programme participants, the Board of Directors intends to propose to the Annual General Meeting 2021 that transfers be made of own common shares on a regulated market in order to cover such costs.
Should the majority required under item B. below not be reached, the Board of Directors proposes that Sobi shall be able to enter into an equity swap agreement with a third party, in accordance with item C. below.
Preparations of the proposal
The Compensation & Benefits Committee of Sobi has prepared guidelines for the proposed Programme. These guidelines have been presented for and adopted by the Board of Directors.
The Board of Directors has established shareholding guidelines which recommend that the CEO and the ExCom members accumulate personal holdings in Sobi shares representing a value of an annual gross base salary for the CEO and 50% of an annual gross base salary for other ExCom members, by maintaining Sobi shares already held as well as Sobi shares allocated under the Programme and under previous incentive programmes. It is recommended that the personal holding of shares is established within three years from the introduction of the guidelines in April 2017 and, for new hires, within three years from commencement of employment with Sobi. It is recommended that the CEO and the ExCom members maintain shares of such a value for the duration of their appointment as CEO or ExCom member.
Hedging arrangements in respect of the Programme
B. Directed issue of redeemable and convertible series C shares, authorisation for the Board of Directors to resolve to repurchase all issued redeemable and convertible series C shares and transfers of own common shares to Programme participants
I. Resolution on a directed issue of redeemable and convertible series C shares
Increase of Sobi’s share capital by no more than SEK 446,871 through an issue of no more than 814,409 series C shares in Sobi. The issue shall be effected on the following terms.
II. Authorisation for the Board of Directors to decide on a repurchase of all issued redeemable and convertible series C shares
Authorisation for the Board of Directors to decide on a repurchase of all issued redeemable and convertible series C shares in Sobi on the following terms.
The repurchase of own shares is an integrated part of the hedging arrangements for the Programme. The reason for the proposed possibility to repurchase own shares is that Sobi shall be able to fulfil its obligations pursuant to the Programme in a cost-effective manner.
III. Resolution on transfers of own common shares to Programme participants
Series C shares have been issued and repurchased by Sobi under previous share programmes for the purpose of securing Sobi’s obligations under such programmes. Those shares have been converted to common shares. Full allocation of shares will not take place under these programmes and, accordingly, all shares will not be required to secure the obligations under such programmes. The Board of Directors proposes that 1,061,308 common shares, which are no longer required to secure the obligations of Sobi under previous share programmes, together with the shares issued and repurchased in accordance with items B.(I) and B.(II) above, following conversion to common shares, may be transferred under the Programme.
Transfers of Sobi’s own common shares to Programme participants may be made on the following terms.
C. Equity swap agreement with a third party
Should the majority required under item B. above not be reached, the Board of Directors proposes that the Annual General Meeting resolves that the expected financial exposure of the Programme shall be hedged by Sobi being able to enter into an equity swap agreement with a third party on terms in accordance with market practice, whereby the third party in its own name shall be entitled to acquire and transfer common shares in Sobi to the Programme participants.
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Conditions
The Annual General Meeting’s resolution on the implementation of the Programme according to item A. above is conditional upon the meeting either resolving in accordance with the Board of Directors’ proposal under item B. above or in accordance with the Board of Directors’ proposal under item C. above.
Majority requirements, etc.
The Annual General Meeting’s resolution according to item A. above requires a simple majority of the votes cast. A valid resolution under item B. above requires that shareholders representing not less than nine-tenths of the votes cast as well as of the shares represented at the meeting approve the resolution. A valid resolution under item C. above requires a simple majority of the votes cast.
The issue, repurchase and transfer of shares in Sobi are integral parts of the proposed Programme. Therefore, and in light of the above, the Board of Directors considers it to be advantageous for Sobi and the shareholders that the Programme participants are invited to become shareholders in Sobi.
For the purpose of minimising Sobi’s costs for the Programme, the subscription price has been set at the quotient value of the share.
Previous incentive programmes in Sobi
For a description of the company’s other long-term incentive programmes, reference is made to the company’s annual report for 2017, note 11, and the company’s web site, www.sobi.com. No other long-term incentive programmes than those described herein or in the annual report for 2017, note 11, have been implemented in Sobi.
Authorisation for the CEO
The Board of Directors proposes that the CEO shall be authorized to make the minor adjustments to the above resolution regarding the directed issue of redeemable and convertible series C shares in connection with the registration thereof with the Swedish Companies Registration Office and Euroclear Sweden AB.
Proposal regarding the approval to authorise the issuance of new shares and/or convertible bonds and/or warrants (item 18)
The Board of Directors proposes that the Annual General Meeting resolves to authorise the Board of Directors to resolve, on one or several occasions, prior to the next annual general meeting, on a pre-emptive or non-pre-emptive basis, on the issuance of shares and/or convertible bonds and/or warrants. Such resolution may provide for payment in kind, payment against set-off of claims and/or on other conditions. The number of shares that may be issued, the number of shares that convertible bonds may be converted into and the number of shares that may be subscribed for by the exercise of warrants may not exceed 30,000,000 shares in total.
If the authorisation is exercised in full, the dilution would amount to approximately 10% of the number of shares in the company (counted after the authorisation has been fully exercised).
The Board of Directors, or any person appointed by it, is authorized to make any minor adjustments to the resolution that may be necessary to enable registration with the Swedish Companies Registration Office (Sw: Bolagsverket).
Majority requirements, etc.
The purpose of the authorisation is to enable payment through the issuance of own financial instruments in connection with possible acquisitions that the company may make as well as to raise capital in connection with and in order to finance such acquisitions. A valid resolution in accordance with the Board of Directors’ proposal requires that shareholders representing at least two-thirds of both the number of votes cast and the shares represented at the annual general meeting support the resolution.
Proposal regarding transfer of own shares (item 19)
The Board of Directors proposes that the Annual General Meeting resolves that not more than 144,808 common shares may, prior to the Annual General Meeting 2019, be transferred for the purpose of covering certain payments, primarily social security charges that may occur in relation to the Share Programme 2015. Transfer of shares shall be effected on Nasdaq Stockholm at a price within the, at each time, prevailing price interval for the share. 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.
Majority requirements, etc.
The purpose of the Board of Directors’ proposal to transfer shares is to secure for future cash flow effects due to payments of social security costs connected with the Share Programme 2015. A valid resolution requires approval of shareholders representing at least two-thirds of the votes cast as well as the shares represented at the Annual General Meeting.
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Additional information
Information regarding all board members proposed to the Board of Directors of Swedish Orphan Biovitrum AB (publ) as well as the nomination committee’s proposal and motivated opinion are available on the company’s web site. The annual report, the audit report and other documents will be held available at the company’s office at Tomtebodavägen 23A, in Solna and at the company’s web site, www.sobi.com, not later than from Wednesday, 18 April 2018, and will be sent without charge to those shareholders who so request and who inform the company of their postal address.
Information at the annual 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, provide information regarding circumstances that may affect the assessment of an item on the agenda, circumstances that can affect the assessment of the company’s or its subsidiaries’ financial situation or the company’s relation to other companies within the group. Shareholders may submit questions in advance by sending them to Swedish Orphan Biovitrum AB (publ), “Annual General Meeting”, SE-112 76 Stockholm or by email: [email protected].
Stockholm in April 2018
Swedish Orphan Biovitrum AB (publ)
The Board of Directors
About Sobi™
Sobi™ is an international speciality healthcare company dedicated to rare diseases. Our vision is to be recognised as a global leader in providing access to innovative treatments that make a significant difference for individuals with rare diseases.
The product portfolio is primarily focused on treatments in Haemophilia and Specialty Care. Partnering in the development and commercialisation of products in specialty care is a key element of our strategy. Sobi has pioneered in biotechnology with world-class capabilities in protein biochemistry and biologics manufacturing. In 2017, Sobi had total revenues of SEK 6.5 billion and approximately 850 employees. The share (STO:SOBI) is listed on Nasdaq Stockholm. More information is available at www.sobi.com.
For more information please contact
| Media relations | Investor relations |
| Linda Holmström, Senior Communications Manager | Jörgen Winroth, Vice President, Head of Investor Relations |
| +46 70 873 40 95 | +1 347 224 0819, +1 212 579 0506 |
| [email protected] | [email protected] |
[3] The quotient value of the share as per the day of this notice is approximately SEK 0.55.
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[2] So-called Total Shareholder Return.
[1] A defined contribution pension plan defines the level of contribution that will be paid into the pension plan for each employee.
Swedish Orphan Biovitrum AB (publ)
Postal address SE-112 76 Stockholm, Sweden
Phone: 46 8 697 20 00 www.sobi.com
We are a global biopharma company unlocking the potential of breakthrough innovations, transforming everyday life for people living with rare diseases.
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