Source: H. Lundbeck A/S
Notice of Annual General Meeting
Valby, Denmark, 28 February 2019 – Notice is hereby given of the Annual General Meeting of H. Lundbeck A/S to be held on:
Tuesday 26 March 2019 at 10:00 am
The general meeting will be held at the offices of the Company at:
H. Lundbeck A/S, Ottiliavej 9, DK-2500 Valby
Agenda
In accordance with Article 8.1 of the Articles of Association, the agenda of the meeting is as follows:
- Report of the Board of Directors on the Company's activities during the past year.
- Presentation and adoption of the annual report.
- Resolution on the appropriation of profit or loss as recorded in the adopted annual report.
- Election of members to the Board of Directors.
- Approval of remuneration for the Board of Directors for the current financial year
- Election of one or two state-authorised public accountants
- Any proposals by shareholders or the Board of Directors:
7.1. Proposal from the Board of Directors to authorise the Board of Directors to allow the Company to acquire own shares.
7.2. Proposal from the Board of Directors to adopt amended Remuneration Guidelines for the Board of Directors and Executive Management.
7.3. Proposal from the Board of Directors to remove the age limit for members of the Board of Directors and thereby amend Article 5.1 of the Company’s Articles of Association.
7.4. Proposal from the shareholder Kritiske Aktionærer (a Danish association) that if the return on equity in the Company exceeds 7%, then the Company must reduce the prices on the medicine sold by the Company.
7.5. Proposal from the Board of Directors to authorise the Chairman of the meeting to file for registration of the resolutions passed at the general meeting with the Danish Business Authority.
- Any other business.
Complete proposals
Re agenda item 1:
The Board of Directors recommends that the report be adopted.
Re agenda item 2:
The Board of Directors proposes that the annual report be approved.
Re agenda item 3:
The Board of Directors proposes to distribute a dividend of 61% of the net profit for the accounting year 2018, corresponding to DKK 12.00 per share, or a total dividend of DKK 2,389 million.
Re agenda item 4:
The Board of Directors of H. Lundbeck A/S should consist of persons who together possess the financial, pharmaceutical and international qualifications required for safeguarding the Company's and, thus, the shareholders' interests in the best manner possible having regard to the Company's other stakeholders. The Board of Directors' most important duties are to formulate H. Lundbeck A/S’ overall strategy, set specific objectives for the Company's Executive Management and ensure that the members of the Executive Management have the right qualifications.
For a more detailed description of the qualifications required for members of the Board of Directors, please see the Company's website: www.lundbeck.com à About Us à Corporate Governance.
Members of the Board of Directors elected by the general meeting are elected or re-elected every year, and therefore the term of office of the current members expires in connection with this annual general meeting. The Board of Directors proposes that the following members elected by the general meeting should be re-elected: Lars Søren Rasmussen, Lene Skole-Sørensen, Lars Erik Holmqvist, Jeffrey Berkowitz, Henrik Andersen and Jeremy Max Levin. The Board of Directors expects to elect Lars Søren Rasmussen as Chairman and elect Lene Skole-Sørensen as Deputy Chairman.
The Board of Directors assesses that the candidates together possess the professional and international experience required for maintaining the Company's position as a leading global pharmaceutical company focusing on research and development in the field of brain disorders. The Board of Directors also considers the size of the Board appropriate considering the Company's needs and the aim of ensuring constructive debate and effective decision-making. Regard has been given to diversity in the selection of board candidates.
The Recommendations on Corporate Governance recommend that at least half of a company's board members elected by the general meeting should be independent of the Company. Lars Søren Rasmussen, Jeremy Max Levin, Jeffrey Berkowitz and Henrik Andersen meet the criteria for independence. Lene Skole-Sørensen and Lars Erik Holmqvist are considered to be non-independent board members due to their responsibilities in the Lundbeck Foundation. If the proposed candidates are elected to the Board of Directors, the Board will meet the recommendation for independence as defined by the Recommendations on Corporate Governance.
The following persons have been elected to the Board of Directors as employee representatives in accordance with the Danish Companies Act (Selskabsloven): Ludovic Tranholm Otterbein, Henrik Sindal Jensen and Rikke Kruse Andreasen.
The proposed board candidates to be elected by the general meeting have the following backgrounds:
Lars Søren Rasmussen
Lars Søren Rasmusseen, BSc Engineering and MBA, was born on 31 March 1959 and is a Danish citizen. He was nominated for election to Lundbeck's Board of Directors at the 2013 annual general meeting. He chairs Lundbeck’s Remuneration Committee and is a member of Lundbeck's Audit Committee.
Lars Søren Rasmussen has considerable management experience in global med-tech. Lars Søren Rasmussen has most recently been CEO of Coloplast A/S from 2008 to 2018 and has been a member of the company's executive management since 2001. In this period, he was responsible for various functions in the group, including global sales, innovation and production. He performed these duties from both Denmark and the US.
Lars Søren Rasmussen's special qualifications for serving on Lundbeck's Board of Directors include his top management experience and knowledge of efficiency improvements and internationalisation.
Lars Søren Rasmussen is Chairman of the Board of Directors in Coloplast A/S and member of the Board of Directors of William Demant Holding A/S.
Lene Skole-Sørensen
Lene Skole-Sørensen, BCom Finance, was born on 28 April 1959 and is a Danish citizen. She was nominated for election to Lundbeck’s Board of Directors at the 2015 annual general meeting. She is a member of Lundbeck's Remuneration and Scientific Committees.
Lene Skole-Sørensen is CEO at the Lundbeck Foundation, CEO at Lundbeckfond Invest A/S and Chairman of the Board of Directors at LFI Equity A/S. Prior to joining the Lundbeck Foundation in 2014, Lene Skole-Sørensen was CFO at Coloplast A/S where she was a member of the company’s executive management since joining in 2005. Lene Skole-Sørensen’s responsibilities included finance, IT, HR, communication, strategy and M&A. Before 2005, Lene Skole-Sørensen held various positions in the AP Moller-Maersk group, most recently as CFO of Maersk Company Ltd., London from 2000-2005.
Lene Skole-Sørensen’s special qualifications for serving on Lundbeck’s Board of Directors include extensive knowledge and expertise within financing, strategy, business development and M&A as well as management experience from international companies including med-tech.
Lene Skole-Sørensen is vice chairman of the Board of Directors of Ørsted A/S, Falck A/S, ALK-Abelló A/S, and member of the Board of Directors of Tryg A/S and Tryg Forsikring A/S.
Lars Erik Holmqvist
Lars Erik Holmqvist, MSc in business administration, was born on 4 September 1959 and is a Swedish citizen. He was nominated for election to Lundbeck’s Board of Directors at the 2015 annual general meeting. He is member of Lundbeck’s Audit Committee.
Lars Erik Holmqvist previously served as vice president responsible for sales and marketing at Pharmacia. In addition, he has held management positions in several pharma and med-tech companies including Boston Scientific Corporation, Medtronic, Applied Biosystems Group, DAKO and Agilent Technologies.
Lars Erik Holmqvist’s special qualifications for serving on Lundbeck’s Board of Directors include his international management experience, his expertise in finance, and his sales and marketing experience from the global pharmaceutical, med-tech and life-science industry.
Lars Erik Holmqvist is member of the Board of Directors of the Lundbeck Foundation, Lundbeckfond Invest A/S, ALK-Abelló A/S, Tecan Trading AG, Vitrolife AB and Naga Uk Topco Ltd.
Jeremy Max Levin
Jeremy Max Levin, BA Zoology, MA and DPhil in Molecular Biology and MB BChir Medicine and Surgery, was born on 9 September 1953 and is a British and US citizen. He was nominated for election to Lundbeck’s Board of Directors at the 2017 annual general meeting. He chairs Lundbeck’s Scientific Committee.
Jeremy Max Levin has more than 25 years of experience in the global pharmaceuticals industry, leading companies and people to develop and commercialize medicines that address compelling medical needs worldwide. Since 2014, he has been CEO and chairman of Ovid Therapeutics, a New York-based neurology company focused on rare and orphan diseases of the brain. Previously, Jeremy Max Levin served as President & CEO of Teva Pharmaceuticals and before becoming CEO of Teva, he was a member of the Executive Committee of Bristol-Myers Squibb where he was globally responsible for overall strategy, alliances and business development. Prior to that, he was Global Head of Strategic Alliances at Novartis, where he established and managed strategic collaborations with multiple companies and research institutions around the world.
Jeremy Max Levin’s special qualifications for serving on Lundbeck’s Board of Directors include a robust blend of clinical insight and experience, business development skills, corporate strategy and financial savvy. In addition, he has substantial board experience.
Jeremy Max Levin is member of the Board of Directors of BioCon Limited, an Indian biopharmaceutical company based in Bangalore, India, and Vice-Chairman of BIO, the Biotechnology Innovation Organization in the US.
Jeffrey Berkowitz
Jeffrey Berkowitz, Juris Doctor and BA in Political Science, was born on 9 January 1966 and is a US citizen. Jeffrey Berkowitz was elected as member of the Lundbeck Board of Directors in 2018 and is a member of the Scientific Committee.
Jeffrey Berkowitz is currently the CEO of Real Endpoints, a leader in the development and implementation of proprietary tools to strengthen market access for an evolving healthcare landscape. Prior to this, Jeffrey Berkowitz has recently served as an Executive Vice President of UnitedHealth Group (UNH), and CEO of their Optum International subsidiary since 2016. He served as Executive Vice President and President of Pharma & Global Market Access at Walgreens Boots Alliance, Inc. from 2015 and served first as Senior Vice President of Pharmaceutical Development and Market Access of Walgreen Co, then as President of Walgreens Boots Alliance Development in the period 2010 to 2015. From 1998 to 2009, he held a variety of positions with increasing responsibility in market access, sales and marketing with Schering-Plough prior to its acquisition by Merck in 2009. Prior to joining Schering-Plough, Jeffrey Berkowitz was a health care attorney for the international law firm Proskauer, LLP in New York and Washington, D.C.
Jeffrey Berkowitz’s special qualifications for serving on Lundbeck’s Board of Directors include global experience with payers, pharmaceutical companies, specialty and retail pharmacies and wholesalers with responsibility for generic and branded procurement and inventory management, as well as pricing, reimbursement, specialty pharmacy and health care strategies. He and his team led the joint venture between Walgreens and Alliance Boots based in Bern, Switzerland, and were key drivers of the merger surpassing aggressive synergy targets. Jeffrey Berkowitz has also been recognized in PharmaVoice magazine as one of the 100 Most Inspiring Leaders in the Life Sciences in 2009, 2010 and 2012 and serves on the Editorial Boards of Life Science Leader and Pharmaceutical Commerce magazines.
Jeffrey Berkowitz is independent director of Infinity Pharmaceuticals, Inc. and Esperion Therapeutics, Inc.
Henrik Andersen
Henrik Andersen, Master of Law and graduate diploma in Trade and Finance, was born on 31 December in 1967 and is a Danish citizen. He was nominated for election to Lundbeck’s Board of Directors at the 2018 general meeting.
Henrik Andersen is Group President and CEO of Hempel A/S, a Danish based supplier of coatings with more than 6,500 employees across more than 80 countries. Prior to joining Hempel in 2016, Henrik Andersen was with ISS since 2000 where he held various positions. He was appointed to the Executive Board in ISS in 2011 first as Group CFO, later as Chief Operating Officer (COO) for EMEA and most recently Group COO. Henrik Andersen also spent seven years in the UK successfully growing ISS UK as CEO. Before joining ISS, Henrik Andersen was in the financial industry for 10 years.
Henrik Andersen’s qualifications for serving on Lundbeck’s Board of Directors include extensive experience with accounting, finance, capital markets, international business and strategic management of international companies.
Henrik Andersen is a member of the Board of Directors in Vestas Wind Systems A/S and member of The Investment Committee of Maj Invest Equity 4 and 5 K/S.
Re agenda item 5:
It is proposed that the Board of Directors should receive the following remuneration for 2019:
- Ordinary members will receive a base fee of DKK 350,000 (unchanged from 2018).
- The Chairman will receive three times the base fee (unchanged from 2018).
- The Deputy Chairman will receive two times the base fee (unchanged from 2018).
- Ordinary members of the Board Committees will receive DKK 200,000 in addition to the base fee (unchanged from 2018).
- The committee chairmen will receive DKK 300,000 in addition to the base fee (unchanged from 2018).
- Contingent upon the adoption of Lundbeck’s amended Remuneration Guidelines as set out in item no. 7.2.a) of the agenda, Board members with permanent residence outside of Europe will receive DKK 350,000 in addition to the base fee (new compared to 2018 remuneration). As all ordinary Board meetings are held in Denmark, the proposal is intended to compensate members for time spent on intercontinental travel.
Re agenda item 6:
In accordance with the recommendation submitted to the Board of Directors by the Audit Committee, the Board of Directors proposes that Deloitte Statsautoriseret Revisionspartnerselskab should be re-elected. The Audit Committee is free from influence by a third party and is not subject to a contract with a third party restricting the choice of the general meeting to certain categories or lists of statutory auditors or audit firms, as regards the appointment of a particular statutory auditor or audit firm to carry out the statutory audit of the Company.
Re agenda item 7:
7.1 It is proposed to authorise the Board of Directors until the next annual general meeting to allow the Company to acquire own shares of a total nominal value of up to 10% of the share capital. The purchase price for the relevant shares may not deviate by more than 10% from the price quoted on Nasdaq Copenhagen A/S at the time of the acquisition.
7.2 The Board of Directors proposes to adopt the amended Remuneration Guidelines for the Board of Directors and the Executive Management of H. Lundbeck A/S. In 2016, the annual general meeting adopted the current Remuneration Guidelines for the Board of Directors and the Executive Management. In addition to a number of primarily linguistic adjustments, clarifications, and amendments made as a consequence of new Corporate Governance Recommendations, the Board of Directors proposes, amongst others, the following changes to the Remuneration Guidelines:
a) Amendment to the Remuneration Guidelines to grant members of the Board of Directors with permanent residence outside of Europe DKK 350,000 in addition to the base fee, to compensate for the time spent on intercontinental travel to the Board meetings.
b) Amendment of the long-term incentive (LTI) program for the CEO to the effect that the maximum awarded value of LTI Instruments for the grant year for the CEO is increased to twelve (12) months of base salary (at time of grant) (up from eight (8) months).
c) Amendment of the short-term incentive (STI) program for the CEO to the effect that the maximum awarded value of the STI is increased to fourteen (14) months (up from nine (9) months).
d) Amendment of the Remuneration Guidelines to allow an exception to the general principles for awarding LTI for the year 2019 only.
Re. d)
The annual grant program implemented in 2016 achieved full vesting only after 4 years, due to a 1 year lag in the time from program initiation to the time of actual grant, hence no LTI program was granted in 2016. From 2019 and going forward the Company wishes to align the full vesting period with peer companies in Denmark and in the healthcare sector and therefore implement a full vesting for the grant to be completed in 3 years.
These changes in the terms related to the vesting period means that both the 2018 LTI program and the 2019 LTI program will be granted in 2019. Both grants will vest over the three subsequent years. This implies that in 2019 the members of the Executive Management may receive an awarded value of LTI Instruments of up to a maximum of 16 months’ (4 months for 2018 + 12 months for 2019) of base salary (at the time of grant) for the CEO and 12 months’ (6 months for 2018 + 6 months for 2019) of base salary (at the time of grant) for other members of the Executive Management. The value of the LTI instruments will be calculated in accordance with the principles described in the amended Remuneration Guidelines.
The complete wording of the updated Remuneration Guidelines for the Board of Directors and the Executive Management of H. Lundbeck A/S will be made available on the Company’s website on 28 February 2019.
7.3 The Board of Directors proposes to remove the age limit for members of the Board of Directors and thereby amend Article 5.1 of the Company’s Articles of Association.
It is the opinion of the Board of Directors that a specific age should not automatically exclude persons from being elected to the Company’s Board of Directors. Further, the Board of Directors note that the age limit has been removed in the latest revision of the Corporate Governance Recommendations issued on 27 November 2017.
The Board of Directors proposes to delete the following sentence of Article 5.1. in the Company’s Articles of Association:
“However, no member may remain on the Board of Directors after the annual general meeting of the calendar year in which the member reaches the age of 70.”
Upon such deletion, Article 5.1 will have the following wording:
“5. Management
5.1 The Company is managed by a Board of Directors consisting of four to six members elected by the general meeting to hold office for one-year terms. The board members are eligible for re-election. In addition to the members elected by the general meeting, the employees of H. Lundbeck A/S and its subsidiaries shall elect a number of members to the Board of Directors in accordance with the Danish Companies Act (selskabsloven) in force from time to time.”
7.4 Proposal from the shareholder Kritiske Aktionærer (a Danish association) that if the return on equity in the Company exceeds 7%, then the Company must reduce the prices on the medicine sold by the Company.
The Board of Directors recommends not to adopt the proposal. A more detailed explanation will be presented by the Company at the annual general meeting.
7.5 The Board of Directors proposes to authorise the Chairman of the general meeting to make such amendments and additions to the resolutions passed by the general meeting and the application for registration with the Danish Business Authority that may be required by the Danish Business Authority in connection with the registration of the adopted amendments.
The proposal of item 7.3 of the agenda requires that the proposal be adopted by at least 2/3 of the votes cast and of by at least 2/3 of the share capital represented at the annual general meeting. All other proposals on the agenda may be adopted by a simple majority of votes.
PRACTICAL INFORMATION
H. Lundbeck A/S welcomes all shareholders who have obtained an admission card for themselves and for any adviser accompanying them at the general meeting. Please note that admission cards must be obtained prior to the general meeting in order to attend. Access to the general meeting is via the reception on Otilliavej 9, DK-2500 Valby. There is limited parking space available on Ottiliavej and Krumtappen, where parking is allowed for up to three hours (remember to set the parking disc). Due to the parking rules in the area, it is not possible to purchase extra parking time, and no guest tickets or guest licenses are issued.
In accordance with Article 10.1 of the Articles of Association, admission cards will be provided to shareholders en-titled to vote at the general meeting. Anyone who is registered as a shareholder in the register of shareholders on the date of registration, 19 March 2019, or who has made a request to such effect, including evidence of title to shares, that has reached the Company on that date, is entitled to vote at the general meeting (see Article 10.4 of the Articles of Association).
Admission cards for the general meeting can be obtained up to and including 22 March 2019 at the Company's website www.lundbeck.com, or by returning the admission card request form to Computershare A/S, Lottenborgvej 26 D, DK-2800 Kgs. Lyngby, tel. +45 4546 0997.
Admission cards will be sent out electronically via email to the email address specified in the investor portal upon registration. The admission card must be presented at the general meeting either electronically on a smartphone/tablet or printed.
Shareholders who have ordered admission cards without specifying their email address can pick up the admission card at the entrance of the general meeting upon presentation of valid ID.
Voting cards will be handed out at the entrance of the general meeting.
The Company's nominal share capital is DKK 995,553,135 divided into shares of DKK 5 nominal value. Each share of DKK 5 carries one vote as provided by Article 10.6 of the Articles of Association.
The following information and documents will be made available on the Company's website, www.lundbeck.com, on 28 February 2019: 1) The notice convening the general meeting; 2) the total number of shares and voting rights at the date of the notice; 3) all documents to be submitted to the general meeting, including the audited annual report and the amended Remuneration Guidelines; 4) the agenda and the full text of all proposals to be submitted to the general meeting; and 5) postal and proxy voting forms.
All shareholders may ask questions in writing about the agenda and the documents to be used for the general meeting. Questions may be sent by post or by email to info@lundbeck.com and will be answered prior to or at the general meeting.
If you are prevented from attending the general meeting, the Board of Directors would be pleased to act as proxy to cast the votes attached to your shares, in which case the proxy form, duly completed, dated and signed, must reach Computershare A/S, Lottenborgvej 26 D, DK-2800 Kgs. Lyngby, by 22 March 2019. If you wish to appoint proxies other than to the Board of Directors, the form for appointing a third party as proxy can be used. The proxy forms are available on the Company's website, www.lundbeck.com. Proxies may also be appointed electronically on www.lundbeck.com on or before 22 March 2019 (please use custody account number and access code or the Danish NemID).
You may also vote by post by completing and signing the postal voting form and returning it to Computershare A/S, Lottenborgvej 26 D, DK-2800 Kgs. Lyngby, so that it is received by 25 March 2019 at 12 noon. A postal voting form is available on the Company's website www.lundbeck.com, where votes may also be cast electronically.
Lundbeck offers simultaneous interpretation from Danish into English in the Auditorium. Presentation and answers provided by our CEO in English will be simultaneously interpreted from English to Danish. The general meeting will also be webcast live in Danish and English (can be replayed after the meeting). See the Company's website www.lundbeck.com.
If you have functional impairments which make passage from the entrance to the Auditorium difficult, you may request assistance from the staff upon arrival at the reception.
As a shareholder in Lundbeck, we will process your ordinary personal data for the purpose of keeping a register of Lundbeck’s investors, for analyzing the composition of investors and for being able to communicate effectively with investors, including when sending this invitation to the annual general meeting. Further, Lundbeck will process your personal data in connection with your participation at the annual general meeting, including in connection with issuing and use of proxies, if you put forward proposals to be handled at the annual general meeting, if you raise questions to Lundbeck prior to or at the general meeting, or if you wish to speak at the general meeting. You can read more about Lundbeck’s handling and processing of your personal data in connection with the annual general meeting on the Company’s website www.lundbeck.com.
Valby, 28 February 2019
The Board of Directors
H. Lundbeck A/S
Lundbeck contacts
Investors: Media:
Palle Holm Olesen Mads Kronborg
Vicedirektør, Investor Relations Kommunikationschef
palo@lundbeck.com mavk@lundbeck.com
+45 30 83 24 26 +45 36 43 40 00
About H. Lundbeck A/S
H. Lundbeck A/S (LUN.CO, LUN DC, HLUYY) is a global pharmaceutical company specialized in brain diseases. For more than 70 years, we have been at the forefront of neuroscience research. We are tirelessly dedicated to restoring brain health, so every person can be their best.
An estimated 700 million people worldwide are living with brain diseases and far too many suffer due to inadequate treatment, discrimination, a reduced number of working days, early retirement and other unnecessary consequences. Every day, we strive for improved treatment and a better life for people living with brain diseases – we call this Progress in Mind.
Read more at www.lundbeck.com/global/about-us/progress-in-mind.
Our approximately 5,000 employees in more than 50 countries are engaged in the entire value chain throughout research, development, production, marketing and sales. Our pipeline consists of several late-stage development programs and our products are available in more than 100 countries. Our research center is based in Denmark and our production facilities are located in Denmark, France and Italy. Lundbeck generated revenue of DKK 18,1 billion in 2018 (EUR 2,4 billion; USD 2,8 billion).
For additional information, we encourage you to visit our corporate site www.lundbeck.com and connect with us on Twitter at @Lundbeck and via LinkedIn.
Safe Harbor/Forward-Looking Statements
The above information contains forward-looking statements that provide our expectations or forecasts of future events such as new product introductions, product approvals and financial performance.
Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions. This may cause actual results to differ materially from expectations and it may cause any or all of our forward-looking statements here or in other publications to be wrong. Factors that may affect future results include interest rate and currency exchange rate fluctuations, delay or failure of development projects, production problems, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Lundbeck's products, introduction of competing products, Lundbeck's ability to successfully market both new and existing products, exposure to product liability and other lawsuits, changes in reimbursement rules and governmental laws and related interpretation thereof, and unexpected growth in costs and expenses.
Certain assumptions made by Lundbeck are required by Danish Securities Law for full disclosure of material corporate information. Some assumptions, including assumptions relating to sales associated with product that is prescribed for unapproved uses, are made considering past performances of other similar drugs for similar disease states or past performance of the same drug in other regions where the product is currently marketed. It is important to note that although physicians may, as part of their freedom to practice medicine in the US, prescribe approved drugs for any use they deem appropriate, including unapproved uses, at Lundbeck, promotion of unapproved uses is strictly prohibited.
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