Notice to attend the annual general meeting of Recipharm AB (publ)
The shareholders in Recipharm AB (publ), reg. no. 556498-8425, are hereby invited to attend the annual general meeting (“AGM”) to be held on Monday 14 May 2018 at 3.00 pm at IVA Konferenscenter, Grev Turegatan 16 in Stockholm, Sweden.
Notification to attend etc.
Shareholders who wish to attend the AGM must
- be recorded in the share register kept by Euroclear Sweden AB no later than on Monday 7 May 2018; and
- notify the company of their intention to attend the AGM at the latest by Tuesday 8 May 2018.
Notification to participate in the AGM must be in writing via the booking form available on the company’s website www.recipharm.com or by e-mail to AGM2018@recipharm.com. Notification can also be made by telephone at +46-8-602 45 44. The notification shall state name, personal identification number/company registration number, address, telephone number and number of shares held.
Shareholders represented by proxy must issue a written, signed and dated proxy. If the proxy is issued by a legal entity, a certified copy of the valid registration certificate (Sw. registreringsbevis) of the legal entity (or similar document for non-Swedish legal entity) must be attached to the proxy. The proxy may not be older than one year unless it states that it is valid for a longer period of time (the validity of the proxy may not exceed five years).
In order to facilitate the registration, proxies in its original as well as registration certificates and other authorization documents should be sent to the company address, Recipharm AB (publ), Att: Anna Krantz, Box 603, SE-101 32 Stockholm, well in advance before the meeting.
Proxy forms for shareholders who wish to attend the meeting by proxy will be available on the company website, www.recipharm.com.
Shareholding in the name of a nominee
In order to be entitled to participate in the meeting, shareholders who hold their shares through nominees (Sw. förvaltare) must request a temporary registration of the shares in their own name, with Euroclear Sweden AB. Shareholders who wishes to obtain such registration must contact the nominee regarding this well in advance of 7 May 2018.
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 approve the minutes
- Determination as to whether the meeting has been duly convened
- Presentation of the annual report and the auditor’s report as well as the consolidated annual report and the auditor’s report on the consolidated annual report
- Statement by the CEO
- Adoption of the profit and loss statement and the balance sheet as well as the consolidated profit and loss statement and the consolidated balance sheet
- Resolution in respect of appropriation of the company’s profit or loss as set forth in the adopted balance sheet
- Resolution in respect of discharge of the board members and the CEO from liability
- Determination of number of board members and auditors
- Determination of fees for board members and auditors
- Election of board members and chairman of the board
- Election of auditor
- Resolution in respect of guidelines for remuneration for senior executives
- Resolution to implement a share savings program for 2018, including:
(a) approval of the program;
(b) authorization for the board to resolve on direct issues of shares of series D; and
(c) authorization for the board to resolve to repurchase of shares of series D
18. Resolution in respect of authorization for the board to issue shares and/or convertible bonds
19. Closing of the meeting
Proposals by the nomination committee
The Nomination Committee has consisted of Axel Calissendorff, Chairman of the nomination committee, representing Flerie Participation AB, Lars Backsell, Chairman of the board of directors of Recipharm AB, Johan Lannebo, representing Lannebo Fonder, and Ossian Ekdahl, representing Första AP-fonden.
Election of chairman of the meeting (item 2)
The nomination committee proposes that Lars Backsell is elected as chairman of the meeting.
Determination of number of board members and auditors (item 12)
The nomination committee proposes that the board shall consist of seven board members elected by the general meeting. The nomination committee also proposes that the company shall have one registered auditing company as auditor.
Determination of fees for board members and auditors (item 13)
The nomination committee proposes that the total remuneration for the board of directors shall amount to SEK 1,755,000 (previous SEK 1,815,000), of which SEK 400,000 (unchanged) shall be paid to the chairman of the board of directors and SEK 220,000 (previous SEK 200,000) shall be paid to each of the other board members elected by the general meeting and who are not employees of the group. The nomination committee proposes that a fee of SEK 75,000 (previous SEK 60,000) shall be paid to the chairman of the audit committee and that a fee of SEK 45,000 (previous SEK 35,000) shall be paid to each of the other three members. The nomination committee proposes that a fee of SEK 35,000 (previous SEK 30,000) shall be paid to the chairman of the remuneration committee and that a fee of SEK 25,000 (previous SEK 20,000) shall be paid to the other member.
The nomination committee proposes that the audit fees shall be paid in accordance with approved invoices.
Election of board members and chairman of the board of directors (item 14)
As members of the board of directors until the end of the next annual general meeting, the nomination committee proposes re-election of Marianne Dicander Alexandersson, Lars Backsell, Carlos von Bonhorst, Anders G. Carlberg, Thomas Eldered, Helena Levander and Wenche Rolfsen. Board member Tony Sandell has declined to be re-elected.
The nomination committee also proposes re-election of Lars Backsell as the chairman of the board of directors.
Election of auditor (item 15)
The nomination committee proposes that the registered auditing company Ernst & Young AB shall be re-elected as auditor for the period until the next AGM 2019. Ernst & Young AB has informed that, if Ernst & Young AB is re-elected as auditor, Jennifer Rock-Baley will continue as the responsible auditor. The nomination committee’s proposal is recommended by the company’s audit committee.
Proposals by the board
Dividend (item 10)
The board proposes that the AGM shall resolve not to distribute any dividends for the financial year 2017.
Resolution in respect of guidelines for remuneration of senior executives (item 16)
The board proposes that the AGM decides on guidelines for remuneration and other terms of employment for senior executives according to the following.
These guidelines for remuneration of senior executives include salary and other terms for the CEO and other senior executives in Recipharm. Other senior executives are those who, besides the CEO, constitute the group management.
The opinion of Recipharm is that remuneration shall be paid according to competitive terms, which enables senior executives to be recruited and retained. Remuneration of senior executives may consist of basic salary, annual bonus, pension, other benefits and share-based incentive programs. The remuneration of the CEO and other senior executives shall be based on factors such as duties, expertise, experience, position and performance. Furthermore, the relationship between basic salary and annual bonus shall be proportionate to employees’ responsibilities and duties. The annual bonus shall be linked to pre-determined criteria designed to promote the company’s creation of value in the long-term. The remuneration shall not discriminate on grounds of gender, ethnic background, national origin, age, disability, religion or other irrelevant factors.
In addition to salary, the CEO and other senior executives are generally entitled to an annual bonus of up to 40 percent of the base salary, annual pension equivalent to up to 35 percent of annual salary or according to collective agreements, sick pay equivalent to 75-90 percent of the monthly salary during the first 3-6 months of a period of sickness. The CEO and other senior executives generally have the right to health insurance and company car as well as other benefits in accordance with local practice. When possible, the pension arrangements shall be in accordance with current collective agreements. In addition to the bonus, approved share or share-price related incentive programs may be added.
Regarding senior executives, provided that collective agreements do not state otherwise, the employee and the employer have a mutual notice period of up to six months. In addition to salary during the notice period, severance pay of up to six months of salary may occur.
Senior executives residing outside Sweden may receive other remuneration or benefits that are competitive in the country of their residence, preferably equivalent to those of other senior executives residing in Sweden.
The board members are paid fees determined by the general meeting. Board members elected by the shareholders’ meeting shall, in specific cases, receive a fee for services within their respective areas of expertise, which do not constitute work of the board. These services shall be remunerated according to market terms, which shall be approved by the board.
The board shall be entitled to deviate from the guidelines in individual cases if there are special reasons for doing so.
Resolution to implement a share savings program for 2018 (item 17)
The AGMs of 2014, 2015, 2016 and 2017 decided to implement share savings programs for all employees of the Recipharm group (“Previous Programs”). The board’s intention is to make the structure of Previous Programs long-lasting, which is why the board intends to make similar proposals to be decided upon by the AGMs in the years to come. The board therefore proposes that the AGM approves a share savings program for 2018 (the “Program”), which is to include all employees in the group according to the following.
Resolution to approve the Program (item 17(a))
The main purpose of the Program is to increase the possibilities to recruit and retain employees in the group. Ownership commitment among the participants of the Program is also expected to increase the interest for the operations and the results, as well as raise the motivation and the affinity with Recipharm. The Program will constitute a competitive and motivating incitement for senior executives and other key members of the Recipharm group. The board therefore proposes that the AGM resolves to approve a share savings program for 2018 mainly based on the Previous Programs and based on the following conditions and principles.
- The Program will encompass all employees of the Recipharm group who are active in Sweden as well as other countries. Participation in the Program requires that participants, with their own funds, during the period from July 2018 to July/August 2019, acquires Saving Shares in Recipharm at market price on Nasdaq Stockholm and for an amount not exceeding 5 percent of each participant’s annual fixed gross salary. Participation for senior executives, members of the subsidiaries’ managerial groups and selected key employees, who are also eligible for the Performance Shares as described below, requires that participants acquire Saving Shares for an amount not exceeding 10 percent of the annual fixed gross salary.
- The duration of the Program is suggested to be set at just above 3 years from the effective date of the Program (“Saving Period”).
- A participant who keeps the Saving Shares during the entire Saving Period, and additionally remain employed in the group during the entire Saving Period, will, after the expiration of the Saving Period, receive one new Saving Share of series B for every old Saving Share (“Matching Share”), free of charge.
- The senior executives within the company group, members of local managerial groups and selected key employees will, in addition to Matching Shares, also be eligible for free additional shares of series B in Recipharm (”Performance Shares”), provided that the participant remains employed within the group for the entire Saving Period, and also fulfils certain requirements of performance. These requirements of performance involve that the yield on the Recipharm share remains positive during the entire Saving Period and that the outcome of the Program is made dependent on the total yield in relation to certain predetermined reference companies. The CEO of the company is entitled to a maximum of six Performance Shares per Saving Share, and certain other senior executives (including affiliates’ CEOs) are entitled to a maximum of four Performance Shares respectively. Members of local managerial groups (excluding affiliates’ CEOs) and selected key employees are entitled to one Performance Share per Saving Share. The current CEO of the company, Thomas Eldered (who is, moreover, one of the main owners of the company), has announced that he has no intention of participating in the Program.
- The number of Matching Shares and Performance Shares can be subject of recalculation in the event of an intervening bonus issue, preferential issue, split, and/or other similar measures.
- The board, or the remuneration committee of the company, shall be responsible for the further construction of the detailed conditions for the Program, within the scope of the conditions and guidelines stated above. The board shall have the right to make necessary adjustments in order to observe legislation, market conditions or restrictions of certain jurisdictions. The board shall also, in the event that participation and/or delivery of shares to participants outside Sweden cannot be fulfilled at reasonable costs and with a reasonable amount of administrative efforts, have the right to make adjustments, encompassing inter alia a right to decide upon a cash deduction-offer to an employee. Furthermore, it is proposed that the board shall have the right to make other amendments, if the board finds it suitable, if changes occur within the Recipharm group or its surroundings, which imply that the Program does no longer fulfils its overarching purpose.
- The maximum number of shares covered by the Program amounts to 1,508,000 shares of series B, corresponding to approximately 2.35 percent of the number of issued shares after dilution and approximately 0.75 percent of the votes after dilution. In consideration of the number of shares estimated to be issued within Previous Programs (including hedge for social security contributions) the total dilution effect amounts to approximately 3.51 percent of the issued shares after dilution and approximately 1.13 percent of the number of votes after dilution.
The complete proposal for adoption of share savings program for 2018 will be available in accordance to the section “Documents” below.
Resolution in respect of authorization for the board to resolve on directed issue of shares of series D (item 17(b))
The board proposes that the AGM resolves to authorize the board to, at one or several occasions during the period until the next AGM, issue of up to 1,508,000 shares of series D, each with a quota value of SEK 0.50. The new shares may, with deviation from the shareholders’ preferential rights, be subscribed for by a bank or a securities company. The amount to be paid for each new share (the subscription price) shall correspond to the share’s quota value at the time of the subscription.
The purpose of the authorization and the reason for deviation from the shareholders’ preferential rights is to assure delivery of shares to the participants in accordance with all Recipharm’s share saving programs.
Resolution in respect of authorization for the board to resolve to repurchase shares of series D (item 17(c))
The board proposes that the AGM resolves to authorize the board to, for the period until the next AGM, decide on a repurchase of shares of series D. Repurchase may only take place by way of an acquisition offer directed to all holders of shares of series D and shall encompass all outstanding shares of series D. Purchases shall be made at a price per share corresponding to the quota value per share applicable at the time of subscription. Payment of repurchased shares shall be made in cash.
The purpose of the authorization is to hedge to undertakings of the delivery of Matching Shares and Performance Shares to the participants in accordance with all Recipharm’s share saving programs.
The board’s opinion, pursuant to Chapter 19, section 22 of the Swedish Companies Act, on the proposal to authorize the board to decide on a repurchase of shares of series D is available in accordance to the section “Documents” below.
Resolution in respect of authorization for the board to resolve to issue of shares and/or convertible bonds (item 18)
Recipharm has a clear acquisition strategy aimed at enable the company to participate in the consolidation of CDMO industry. Through acquisitions, Recipharm is offered the opportunity to have access to both new technologies and extended capacity, and new customers and markets. Through acquisitions, Recipharm also strengthen its presence in emerging markets.
The board of directors proposes that the AGM authorizes the board of directors to, on one or several occasions during the period until the next AGM, with or without deviation from the shareholders’ preferential rights, resolve on share issues and/or issues of convertible bonds that involve the issue of or conversion to a maximum of 6,300,000 shares of series B, corresponding to a dilution of approximately 10,0 percent of the share capital and approximately 3,1 percent of the voting rights, based on the current number of shares in the company.
The purpose of the authorization and the reason for the deviation from the shareholders’ preferential rights, if any, is to enable the company to carry out issues of shares and/or convertible bonds in a time-efficient way to finance acquisitions or investments in new or existing businesses. The issuance of shares or convertible bonds under the authorisation shall, in case of deviation from the shareholders’ preferential rights, be made at a subscription price according to the prevailing market conditions at the time of the issuance of the shares and/or convertible bonds. Payment for subscribed shares and/or convertible bonds shall be made in cash, in kind or by way of set-off.
Number of shares and votes
As per 13 April 2018 the total number of shares in the company amounts to 63,217,532 representing a total of 200,223,254 votes, whereof 15,222,858 shares of series A, 47,624,674 shares of series B and 370,000 shares of series D. The company holds 120,661 shares of series B and 370,000 shares of series D.
Majority requirement of the proposed resolutions in items 17-18
A resolution pursuant to item 17(a) is only valid if approved by shareholders representing at least nine-tenths of the votes cast as well as the shares represented at the AGM. The items 17(a), 17(b) and 17(c) are conditional upon each other.
Resolutions pursuant to item 17(b), 17(c) and 18 are only valid if approved by shareholders representing at least two-thirds of the votes cast as well as the shares represented at the shareholders’ meeting.
The board’s complete proposal pursuant to item 17, the board’s reports and the auditor’s statements pursuant to the Swedish Companies Act (SFS 2005:551), the nominations committee’s statement regarding the proposals relating to the board of directors and information about the proposed board members will, no later than on 16 April 2018, be held available at the company’s website, www.recipharm.com, at the company’s office at Drottninggatan 29 in Stockholm and will be sent free of charge to shareholders who so request and provide their postal address or email address. The annual report and the audit report will be available at the company’s website and at the company’s office at the address set out above as from 23 April 2018.
The shareholders’ right to submit questions
The board and the CEO shall, if any shareholder so requests and the board believes that it may be done without significantly harming 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 position and the company’s relationship to other companies within the group as well as the consolidated financial statements. Anyone wishing to submit questions in advance can do so by sending them to the company at the address mentioned above.
Stockholm, April 2018
RECIPHARM AB (PUBL)
The Board of Directors