Participation and notification of attendance
A shareholder, who wishes to participate in the meeting, must
(i) be recorded as shareholder (not nominee registered) in the share register held by Euroclear Sweden AB on Wednesday May 13, 2015, and
(ii) notify Karolinska Development of his/her intention to attend the meeting, no later than on Wednesday May 13, 2015, by telephone +46 (0)8 524 860 70, by e-mail to info@karolinskadevelopment.com or by regular mail to Karolinska Development AB, Tomtebodavägen 23 A, SE-171 65 Solna, Sweden.
The notification should include name, identification-/registration number, address and telephone number and, if applicable, number of assistants.
Nominee registered shares
Shareholders whose shares are registered in the name of a nominee shareholder must temporarily register their shares in their own name in the share register kept by Euroclear Sweden AB to be allowed to participate in the meeting. The registration must be completed on May 13, 2015 at the latest. Request for registration must be made well in advance.
Proxy etc.
A shareholder attending the meeting by proxy, must issue a written proxy. The proxy is valid during the period set forth in the proxy, however, at most 5 years from the issuance. If a proxy is issued by a legal entity, a copy of the legal entity's registration certificate or similar document evidencing signatory powers must be enclosed. Proxy forms in Swedish and English are available for download on the Company´s website, www.karolinskadevelopment.com.
Proposal for agenda
- Opening of the meeting
- Election of chairman of the meeting
- Preparation and approval of the voting list
- Approval of the agenda
- Election of one or two persons to verify the minutes
- Determination of whether the meeting was duly convened
- Presentation of the annual report and the auditor’s report and the group annual report and the auditor’s group report
- Information from the CEO
- Report on the work of the Board of Directors
-
Resolutions regarding
a) adoption of the profit and loss statement and the balance sheet, and consolidated profit and loss statement and consolidated balance sheet
b) appropriation of the Company’s result according to the adopted balance sheet
c) discharge from liability for the directors and the CEO - Report on the work of the Nomination Committee
- Resolution regarding the number of directors and auditors and deputy auditors to be appointed
- Resolution in respect of the fees for the Board of Directors and for the auditor
- Election of chairman of the Board of Directors, directors and auditors and deputy auditors
- Procedure to appoint members of the Nomination Committee
- The Board of Directors’ proposal regarding principles for remuneration to executive management
- The Board of Directors’ proposal regarding a performance based share incentive program 2015 (PSP 2015)
- The Board of Directors’ proposal regarding authorization for the Board of Directors to resolve on new issues of shares
- The Board of Directors’ proposal regarding approval of transfer of warrants and new issues in subsidiaries
- Closing of the meeting
Items 2 and 12-15: The Nomination Committee’s proposal regarding chairman at the meeting; number of directors, auditors and deputy auditors to be appointed; fees for the Board of Directors and auditors; election of chairman of the Board of Directors, directors, auditors and deputy auditors and instructions for appointment of members of the Nomination Committee
The Nomination Committee, consisting of Gillis Cullin (Chairman), appointed by Östersjöstiftelsen (The Foundation for Baltic and East European Studies); Magnus Persson, appointed by Karolinska Institutet Holding AB; Tse Ping, appointed by Sino Biopharmaceutical; Peter Lundkvist, appointed by Tredje AP-fonden (Third Swedish National Pension Fund) and; Todd Plutsky, appointed by Coastal Investment Management, proposes that the Annual General Meeting resolves as follows:
Johan Hessius (law firm Lindahl), is appointed to chair the Annual General Meeting.
The number of directors will be eight and no deputies will be appointed.
The number of auditors will be one and no deputy auditor will be appointed.
The Chairman will be paid a fixed amount of SEK 400,000. All other directors will be paid a fixed amount of SEK 200,000. In addition SEK 10,000 will be paid to the Chairman of the Board of Directors for each board meeting where the directors meet in person. The fees to the directors remain unchanged compared to previous year.
The auditors will be paid as per invoice.
Re-election of the directors Bo Jesper Hansen, Vlad Artamonov, Hans Wigzell, Henrijette Richter and Carl Johan Sundberg. New election of Tse Ping, Niclas Adler and Khalid Islam. Election of Bo Jesper Hansen as Chairman of the Board of Directors. The composition of the Board of Directors meets the independence requirement of the Swedish Corporate Governance Code.
Information regarding the directors proposed for new election
Tse Ping: Born 1952. Education: Honorary Doctorate, Fil Dr hc. Other appointments: Founder and Chairman of Sino Biopharmaceutical Limited, one of the largest and most successful pharmaceutical companies in Hong Kong. Mr. Tse Ping is also Vice Chairman of Charoen Pokphand Group (CP Group), the largest company in Thailand, where he has extensive experience of major merger and acquisition activity including Ping An Insurance, CITIC Group, China Mobile, ITOCHU Corporation, and Marko Group. Previous appointments: Member of the Ninth, Tenth, and Eleventh National Committee of the Chinese People’s Political Consultative Conference. Holdings in the Company: 4,853,141 shares and SEK 272,858,294 in convertible bonds. Independent of the Company and its senior management, as well as major shareholders in the Company.
Niclas Adler: Born 1971. Education PhD, MSc. Other appointments: Managing Partner Accelerated Innovation Ltd, President Indonesian International Institute for Life-sciences, Chairman PT Accelerated Value, Chairman e-Cognition PTE Ltd, Chairman ITH Immune Therapy Holdings AB, Chairman TLA Targeted Immunotherapies AB, Chairman Accelerated Drug Development AB and Babson Global Professor of Entrepreneurship Practice. Previous appointments: President IPMI International Business School, Jakarta, Director Truepoint Partners, Boston, Fellow, Sunningdale Institute, London, Fellow, Centre For International Business and Management, Judge Business School, Cambridge University, CEO Jönköping International Business School, Director FENIX Center for Innovations in Management, Stockholm School of Economics, Executive Director, Stockholm School of Entrepreneurship. No holdings in the Company. Independent of the Company and its senior management, as well as major shareholders in the Company.
Khalid Islam: Born 1955. PhD. Other appointments: Board member of Pcovery Aps, Adenium Aps, Oxthera AB, Fennec Pharma Inc. and Molmed SpA.; Advisor to Kurma Biofund, member of the Editorial Board of Current Drug Discovery & Technologies and of the International Scientific Advisory Board of The Network of Excellence for Pathogenomics. Previous appointments: President of Gentium SpA and Arpida AG and various leadership positions in research and development in Hoechst Marion Roussel (HMR) and Marion Merrell Dow (MMD). No holdings in the Company. Independent of the Company and its senior management, as well as major shareholders in the Company.
Election of E&Y as auditor, currently with Björn Ohlsson as auditor in charge, for the time until the end of the 2016 Annual General Meeting.
The Nomination Committee shall have five members of which the five largest owners (as set forth in the share register kept by Euroclear Sweden AB as of 31 August 2015) shall appoint one member each. The chairman of the Board of Directors shall convene the first meeting. If a shareholder does not exercise its right to appoint a member, the shareholder next in order of voting power, who has not already appointed a member or has a right to appoint a member, shall have the right to appoint a member to the Nominating Committee. The members of the Nomination Committee shall be made public as soon as the members have been appointed, and in no case later than six months prior to Annual General Meeting 2016. The members shall among themselves appoint the chairman of the committee. If a member resigns or is prevented from pursuing his/her assignment, the shareholder that has appointed such member shall appoint a new member. In the event that the shareholding in the Company is materially changed, before the Nomination Committee has completed its assignment, the Nomination Committee may decide to change the composition of the Nomination Committee, as determined by the Nomination Committee (considering the principles applicable for the appointment of the Nomination Committee). Any change in the composition of the Nomination Committee shall be announced as soon as possible. No fees shall be paid to the members of the Nomination Committee. Out of pocket expenses shall be reimbursed by the Company. The mandate of the committee shall be until the members of the succeeding committee have been announced. The Nomination Committee shall carry out the tasks that, according to the Swedish Corporate Governance Code, are the responsibility of the Nomination Committee.
Item 10 b: Appropriation of the Company’s result according to the adopted balance sheet
The Board of Directors and the managing director proposes that the amount at disposal of the Annual General Meeting, in total SEK 1,258,200,407 shall be allocated as follows: To be carried forward SEK 1,258,200,407.
Item 16: The Board of Directors’ proposal regarding principles for remuneration to executive management
Karolinska Development shall maintain compensation levels and terms required to attract and keep an executive management with the competence and experience needed to achieve the objects of the Company’s operations. The total remuneration to an executive management employee shall be competitive, reasonable and appropriate. Fixed salary shall be based on responsibility and experience of the individual. Variable compensation shall (i) be construed in order to support Karolinska Development´s long-term value creation; (ii), have governing elements that are clear, measurable and that can be influenced; (iii) regarding variable salary, have a pre-determined maximum outcome and (iv) not be included in calculation of pension. The notice period in case of termination by the Company is six months for executive management. Severance pay can be applied only for a CEO.
The proposal in full will be available at Karolinska Development’s website.
Item 17: The Board of Directors’ proposal regarding a Performance Share Program 2015 (PSP 2015)
Background
The Board of Directors´ find it essential and in all shareholders’ interest that the employees in the Company have a long-term interest of a good value development of the share in the Company and therefore proposes the Annual General Meeting the below long-term incentive program for the employees. The now proposed program corresponds to a large extent to the performance related share program that was approved by the Annual General Meeting 2014 with the exception of the following:
- The maximum allotment to the CEO in the program is based on 30 percent of the annual fixed gross base salary for 2015 (maximum allotment to the management in the performance related share program approved on the Annual General Meeting 2014 was based on 20 percent of the annual fixed gross base salary for 2014).
- The allotment of Performance Share Rights is based on a share price growth of between 15 percent and 100 percent (allotment of Performance Share Rights in the performance related share program approved on the Annual General Meeting 2014 was based share price growth of between 30 percent and 75 percent).
The purpose of the long-term incentive program is to stimulate the employees to continued and long-term good performance. Furthermore, it is the Board of Directors’ view that the incentive program increases the Company’s attractiveness as an employer. To participate in the program the employee is required to invest his own money. Thereafter, the participant will, after a three-year vesting period commencing on the day when the Performance Share Program 2015 (PSP 2015) agreement is entered into and ending at the earliest three years after the PSP 2015 agreement is entered into, will be allotted free of charge warrants, which entitles to subscription of shares in the Company at a price equal to the quota value, provided that certain conditions are fulfilled.
In order to ensure the delivery of shares under PSP 2015, the Board of Directors proposes that a maximum of 1,078,410 warrants, which entitles to 1,078,410 shares of series B, are issued to a wholly-owned subsidiary in the Group. In addition the Board of Directors proposes that maximum 338,840 shares of Series B will be able to be acquired and transferred on Nasdaq Stockholm in order to cover social security fees under PSP 2015.
Proposal
The Board of Directors proposes that the Annual General Meeting resolves on a Performance Share Program 2015 (PSP 2015) which includes in total a maximum of 1,417,250 shares of series B according to the principal guidelines below.
1. Participant in PSP 2015, allotment and personal investment
PSP 2015 comprises a total of maximum 10 employees divided into three categories.
Category 1 consists of CEO.
Category 2 consists of other members of executive management.
Category 3 consists of other participants.
To participate in PSP 2015, the participant must acquire shares of series B in the Company at market price on Nasdaq Stockholm ("Saving Shares").
Participant in Category 1 must in order to be able to receive maximum allotment, acquire Savings Shares corresponding to 30 percent of his annual fixed gross base salary for 2015.
Participant in Category 2 must in order to be able to receive maximum allotment, acquire Savings Shares corresponding to 20 percent of his annual fixed gross base salary for 2015.
Participant in Category 3 must in order to be able to receive maximum allotment, acquire Savings Shares corresponding to 10 percent of his annual fixed gross base salary for 2015.
Acquisition of Savings Shares shall take place on June 15, 2015 at the latest, with a right for the Board of Directors to extend this period if there is any impediment regarding the participant’s acquisition.
For each Saving Share that the participant acquires and holds, the participant will, free of charge, be allotted one (1) matching share right ("Matching Share Right") and five (5) performance share rights if a participant belongs to category 1 or 2 or three (3) performance share rights if a participant belongs to category 3 ("Performance Share Rights") (together referred to as "Share Rights"). Provided that the conditions set out below in item 2) and item 3) respectively, are fulfilled, the Share Rights entitle to allotment of warrants in the Company for conversion into shares of series B as described below. Allotment of warrants in the Company, on basis of the held Share Rights, is made at earliest three years after the PSP 2015 agreement is entered into ("Vesting Period").
2. Matching Share Rights
For each Saving Share that the participant acquires and holds, the participant is, free of charge, allotted one (1) Matching Share Right, which entitles the participant to, free of charge, receive one (1) warrant in the Company, based on the conditions set out below:
i. that the participant remain employed within the Group during the Vesting Period; and
ii. that the participant has not disposed of the Saving Shares held during the Vesting Period.
3. Performance Share Rights
For each Saving Share that the participant acquires and holds, the participant in category 1 and 2 is, free of charge, allotted five (5) Performance Share Rights that give right to five (5) warrants and the participant in category 3 is, free of charge, allotted three (3) Performance Share Rights that give right to five (3) warrants. In order for Performance Share Rights to entitle to allotment of warrants, it is required that the conditions for the Matching Share Rights are fulfilled. In addition, fulfillment of certain performance conditions is required in order for Performance Share Rights respectively to entitle to allotment of warrants.
The performance conditions for the Performance Share Rights are dependent on the Company share price development. For allotment of warrants the average price paid for a share of series B on Nasdaq Stockholm during a period of ten (10) trading days beginning May 2, 2018 (”End Price”) must exceed the average price paid for a share of series B on Nasdaq Stockholm during a period of ten (10) trading days immediately after the Annual General Meeting 2015 (”Start Price”) according to the following. For maximum allotment of warrants the share must be traded at a level that corresponds to a share price growth of 100 percent from the Start Price. If the End Price is between the Start Price adjusted upwards by 15 percent and the share price that triggers maximum allotment, the participants will receive a linear allotment of warrants. If the End Price is lower than the Start Price adjusted upwards by 15 percent, no allotment will be made.
4. Shared terms and conditions for Share Rights
In addition to what has been stated above, the following terms and conditions apply for both the Share Matching Rights and the Performance Share Rights:
• The Share Rights are allotted free of charge.
• The participant is not entitled to transfer, pledge, or dispose the Share Rights or perform any shareholder’s rights regarding the Share Rights during the Vesting Period.
• Allotment, free of charge, of warrants in the Company on the basis of held Share Rights will take place at earliest three years after the PSP 2015 agreement is entered into.
• Each warrant entitles the holder to acquire a share of series B in the Company for a subscription price corresponding to the quota value of the share and requires that the option is exercised as soon as possible after receipt of warrant.
• The Company will, through a cash payment, compensate the participant in PSP 2015 for dividends distributed in respect of the shares that the respective warrants entitle to.
• The value that the participant can receive at allotment of warrants in the program is maximized at an amount per share that corresponds to thirty-five (35) times the Starting Price.
5. Detailed terms and administration
The Board of Directors, or a certain committee appointed by the Board of Directors, shall be responsible for the determining the detailed terms and the administration of PSP 2015, within the scope of the given terms and guidelines. If delivery of warrants/shares cannot be accomplished at reasonable costs and with reasonable administrative effort, the Board of Directors shall be entitled to decide that the participating individual may instead be offered a cash-based settlement. The Board of Directors shall also be entitled to decide on other adjustments in the event that major changes in the Group, the market or otherwise in the industry would occur, which would entail that resolved conditions for allotment and the possibility to use the Share Rights under PSP 2015 would no longer be appropriate.
6. Hedging of commitments according to PSP 2012, PSP 2013, PSP 2014 and PSP 2015
Issue of warrants and approval of transfer of warrants
In order to secure delivery of shares at exercise of Share Rights, an issue of warrants (”Warrants”) to a wholly owned subsidiary in the Group is proposed to be made. The subsidiary shall be authorized to dispose over and without consideration transfer the warrants with the purpose to fulfill commitments according to PSP 2015. The Warrants shall be issued to the subsidiary free of charge. Subscription of Warrants shall take place in the subscription list no later than 5 June 2015.
No more than 1,078,410 Warrants shall be issued. Each Warrant shall entitle to subscription of one share of series B in the Company during the period from 15 June 2015 up to and including 31 August 2018 at a subscription price corresponding to the quota value of the share.
The share capital can increase at maximum SEK 539,205, with reservation for the increase that can be caused by a re-calculation following new share issues etc.
Acquisition and transfer of own shares
The Board of Directors are proposed to be authorized to decide, on one or several occasions and until the next Annual General Meeting, to acquire maximum 338 840 shares of series B and transfer these and earlier acquired shares of series B amounting to 244,285, i.e. in total maximum 583,125 shares of series B to cover charges in the form of social security fees in PSP 2012, PSP 2013, PSP 2014 and PSP 2015. Acquisitions and transfer shall be made on Nasdaq Stockholm. Acquisitions and transfer can only be made at a price within the price interval registered at each time for the share.
7. Dilution effects and costs for the program
At exercise of the proposed Share Rights the number of shares increases. These new shares will constitute, at full exercise, approximately 1.98 percent of the outstanding shares and approximately 1.59 percent of the votes. At full exercise of the now proposed Share Rights and outstanding warrants in outstanding incentive programs, the number of new shares constitutes approximately 3.03 percent of outstanding shares and approximately 2.43 percent of the votes calculated after full exercise of outstanding warrants and proposed Share Rights. In addition 338,840 shares of series B are required to cover social security fees, which correspond to approximately 0.63 percent of the outstanding shares and approximately 0.51 percent of the votes. The Share Rights can cause costs for the Group in the form of social security fees at exercise as well as accounting costs during the term of the Share Rights.
8. The objectives of the proposal and reasons for deviations from the shareholders’ preferential rights
The Board of Directors considers the existence of effective share-related incentive programs for employees of the Company to be of material importance for the development of the Company. The proposed program creates a common group focus for the employees in the different parts of the Group. By linking the employees’ remuneration to the Company’s earnings and value trend, the long-term increase in value is rewarded and thus an alignment of interest of employees and shareholders.
In light of these circumstances, the Board of Directors consider, that the proposed incentive program, with regard to the terms and conditions, the size of the allotment, the existence of other incentive programs and other circumstances, is reasonable and advantageous for the Company and its shareholders.
A resolution in accordance with the board’s proposal requires support from shareholders with not less than 9/10 of votes cast as well as shares represented at the meeting.
The proposal in full, including statement by the Board of Directors in accordance with Chapter 19, Section 22 of the Companies Act, will be available at Karolinska Development’s website.
Item 18: The Board of Directors’ proposal regarding authorization for the Board of Directors to resolve on new issues of shares
The Board of Directors proposes that the Annual General Meeting resolves to authorize the Board of Directors for the period up to the next Annual General Meeting to resolve, whether on one or several occasions, with or without deviation from the shareholders’ priority rights, and for payment in cash, by set-off or in kind, to issue new shares of series B up to a number that, at the time of the first resolution under this authorization, corresponds to ten (10) per cent of the total share capital; provided however that any such issue must not result in the Company’s share capital exceeding the Company’s maximum allowed share capital as set out in the articles of association.
A resolution in accordance with the Board of Directors’ proposal requires support from shareholders with not less than 2/3 of votes cast as well as shares represented at the meeting.
Item 19: Approval of transfer of warrants and new issues of shares in subsidiaries
According to Chapter 16 of the Swedish Companies Act ("LEO Law") transfer of shares to inter alia directors or employees of the issuing company or another group company, and new issues of shares in subsidiaries directed to directors or employees of the issuer or another group company, must in some cases be approved by the general meeting of the parent company.
Aprea AB, a subsidiary to Karolinska Development AB, has, within the scope of an incentive program for employees, issued warrants to its wholly-owned subsidiary Aprea Personal AB. The warrants have been issued with an obligation for Aprea Personal AB to transfer these warrants to employees in Aprea AB under certain conditions. Each warrant gives, under certain conditions, a right to subscribe for one new share in Aprea AB.
KCIF Fund Management KB (”KCIF”) is the vehicle for co-investments by the European Investment Fund (“EIF”) in Karolinska Development´s portfolio. KCIF is managed by KCIF Fund Management AB (”FMAB”), a company which is partly held by Karolinska Development´s management. The holding is a formal solution tied to the employment in Karolinska Development, is set forth in Karolinska Development´s agreement with the EIF and with no possibilities for the holder to transfer the shares. Due to the construction, co-investments by KCIF or transfer of shares from Karolinska Development to KCIF require approval under the LEO Law, by the general meeting of Karolinska Development.
On 4 June, 2014, XSpray issued a total of 21,282 shares to KCIF.
The Board of Directors proposes that the Annual General Meeting approves the transferor warrants and share issue described above.
A resolution in accordance with the Board of Directors’ proposal requires support from shareholders with not less than 9/10 of votes cast as well as shares represented at the meeting.
The proposal in full will be available at Karolinska Development’s website.
Miscellaneous
The annual report, the auditor´s report, the proposal by the Nomination Committee, the auditor´s statement regarding compliance with the Guidelines for Remuneration to Executive Management and complete proposals for decisions in all matters on the agenda will be available at the Company’s office at Tomtebodavägen 23 A in Solna, Sweden and on the Company´s web site, www.karolinskadevelopment.com on April 29, 2015. Copies of the above mentioned documents will, upon request, be sent to shareholders who have provided their postal address. A request for such documents may be made in the way set forth above for notification of attendance. The Board of Directors’ complete proposal regarding item 17 and 19 will automatically be sent to all shareholders that have notified the Company of their participation in the Annual General Meeting and who have informed the Company of their postal address.
A shareholder is entitled to require that the Board of Directors and the CEO (when possible without causing material damage to the Company) provides information regarding (i) circumstances that may have an effect on the assessment of an item on the agenda or on the economic situation of the Company or a subsidiary within the Group; (ii) the Company´s relation to another Company within the Group; (iii) the consolidated Group report.
As per the date of this notice, there are 53,384,558 shares, representing a total of 66,912,440 votes outstanding in the Company, distributed among 1,503,098 shares of series A (with 15,030,980 votes) and 51,881,460 shares of series B (with 51,881,460 votes). As per the date of this notice, the Company holds 244,285 treasury shares of series B.
Solna in April 2015
Karolinska Development AB (publ)
The Board of Directors
For further information, please contact:
Jim Van heusden, CEO, Karolinska Development AB
Phone: +46 72 858 32 09, e-mail: jim.van.heusden@karolinskadevelopment.com
TO THE EDITORS
About Karolinska Development AB
Karolinska Development aims to create value for patients, researchers, investors and society by developing innovations from world class science into differentiated products that can be partnered. The business model is to: SELECT the most commercially attractive medical innovations that can potentially satisfy unmet medical needs; DEVELOP innovations to the stage where the greatest return on investment can be achieved; and COMMERCIALIZE the innovations through the sale of companies or out-licensing of products. An exclusive deal flow agreement with Karolinska Institutet Innovations AB, along with other cooperation agreements with leading universities, delivers a continuous flow of innovations. For more information, please visit www.karolinskadevelopment.com.
Karolinska Development is listed on NASDAQ OMX (STO: KDEV). Karolinska Development may be required to disclose the information provided herein pursuant to the Securities Markets Act.
