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Zug, 18. May 2018
HBM Healthcare Investments Ltd
Bundesplatz 1, 6300 Zug
Invitation to the 17th Ordinary Shareholders' Meeting
Monday, 25 June 2018, 2:00 pm
Theater Casino Zug
Artherstrasse 2 - 4
6300 Zug
The admission office opens at 1:30 pm.
Agenda and motions of the Board of Directors:
1. Statutory financial statements and group financial statements 2017/2018;
reports of the auditors
Motion: Approval of statutory financial statements and group financial statements for the 2017/2018 business year
2. Discharge from liability of the members of the Board of Directors and Management
Motion: Discharge from liability of the members of the Board of Directors and of the Management for the 2017/2018 business year
3. Appropriation of results
Motions:
3.1 Appropriation of disposable profit of CHF 136'370'716 as follows:
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in CHF
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2017/2018
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profit for the year
profit carry forward
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54'974'908
81'422'808
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disposable profit
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136'370'716
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– allocation to the general legal reserve
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0
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– carry forward to the new account
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136'370'716
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3.2 Withholding tax-exempt cash distribution from the reserve from capital brought in of CHF 5.50 per entitled share*, i.e. a maximum of CHF 38.3 million
* All registered shares in HBM Healthcare Investments Ltd which are not held by the Company itself are entitled to receive a distribution. Changes in the Company's holdings may still change the number of entitled shares.
In view of the business result, the Board of Directors proposes first a cash distribution of CHF 5.50 per share, in the form of a withholding tax-exempt dividend from the reserve from capital brought in. Should the motion be passed, the cash payment of CHF 5.50 per registered share will be made on 29 June 2018. Registered shares which are entitled to receive the dividend will be traded for the last time on 26 June 2018. As of 27 June 2018 they will be traded without the distribution entitlement (ex date). An additional distribution is proposed in agenda item 9.2.
4. Elections regarding the Board of Directors
4.1 Re-elections of the Chairman and of the Members of the Board of Directors
Motions:
a. Re-election of Mr Hans Peter Hasler as Chairman of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
b. Re-election of Prof. Dr h.c. mult. Heinz Riesenhuber as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
c. Re-election of Dr Eduard Holdener as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
d. Re-election of Mr Robert A. Ingram as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
e. Re-election of Dr Rudolf Lanz as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
f. Re-election of Mr Mario Germano Giuliani as member of the Board of Directors to the close of the 2019 Ordinary Shareholders' Meeting
Mr Hans Peter Hasler has been a member of the Board of Directors since 2009, and its Chairman since 2011. To date he also was a member of the Compensation Committee. He knows the biotech business, having spent eight years in leading positions at Biogen Idec and, previously, Wyeth. Mr Hasler is CEO of Vicarius Pharma, Chairman of the Board of Directors of MIAC AG (Medical Imaging Analysis Center, a not-for-profit organisation of the University Hospital of Basel), member of the Board of Directors of Dr. Reddy's Laboratories and Minverva Neurosciences.
Mr Prof. Dr Heinz Riesenhuber has been a member of the Board of Directors since 2001, and its Vice-Chairman since 2006. He has also been a member of the Audit Committee. He is a certified chemist and has 15 years' industry experience as the CEO of subsidiaries of Metallgeschaft AG. Prof. Riesenhuber was a member of the German Federal Parliament from 1976 until 2017 and served as Federal Minister of Research and Technology from 1982 to 1993. Prof. Riesenhuber is a member of the Investors Committee of Heidelberg Innovation BioScience Venture II, as well as Chairman of the advisory board of Rock Tech Lithium Inc..
Mr Dr Eduard Holdener has been a member of the Board of Directors since 2008. He is an onco-haematologist, and has 14 years' clinical experience in a hospital environment in Switzerland and the USA, as well as 22 years' experience in clinical research and development at Roche. In his last eight years at Roche, he was Head of Global Clinical Deve-lopment, as well as member of the Pharma Executive and the Corporate Executive Committee. Dr Holdener is Chairman of the Board of Directors and CEO of NovImmune SA.
Mr Robert Ingram has been a Member of the Board of Directors since 2006. He is also a member of the Nominating Committee and a member of the Compensation Committee. He is an economist with world-wide knowledge and personal network in the pharma industry, especially in the USA, where the majority of HBM Healthcare Investments' portfolio companies are based. Mr Ingram worked at GlaxoSmithKline for 20 years, in positions including Chairman, COO and CEO. He is Chairman of the Board of Directors of Novan Inc., Viamet Pharmaceuticals Inc., Cree Inc. and BioCryst Pharmaceuticals Inc..
Mr Dr Rudolf Lanz has been a member of the Board of Directors since 2003. He is also a member of the Audit Committee and a member of the Nominating Committee. He has a master's degree in economics and a doctorate in law, and has longstanding professional experience in acquisitions, divestments, mergers and major financing transactions. For 20 years, Dr Lanz worked mainly in management positions at Ernst & Young, before founding "The Corporate Finance Group" with partners, and becoming the Chairman of its Board of Directors. Dr Lanz is a member of the Board of Directors of Pearls Fashion Holding AG and of MIAC AG (Medical Imaging Analysis Center, a not-for-profit organisation set up by the University Hospital of Basel).
Mr Mario Germano Giuliani has been a member of the Board of Directors since 2012. He is also a member of the Compensation Committee. He is an economist. In the course of 16 years at his family pharmaceutical company, Milan-based Giuliani SpA, he has held positions at all levels: member of the Board of Directors since 1999, Chairman of the Board of Directors from 2003-2014 and Chief Executive Officer from 2001-2014. Mr. Giuliani is also a member of the Investment Committee of Mosaix Ventures LLP and Royalty Pharma, member of the Board of Directors of Jukka LLC as well as Chairman of the Board of Directors of NGR (Monaco) SAM and Fair-Med Healthcare AG.
4.2 Re-election of the members of the Compensation Committee
Motions:
a. Re-election of Mr Mario Germano Giuliani as a member of the Compensation Committee to the close of the 2019 Ordinary Shareholders' Meeting
b. Re-election of Mr Robert Ingram as a member of the Compensation Committee to the close of the 2019 Ordinary Shareholders' Meeting
To date Mr Hans Peter Hasler was a member of the Compensation Committee too. He now wishes to refrain from re-election to this committee. The Board of Directors sees no need for a replacement.
5. Compensation to the Board of Directors and to the Management
5.1 Fixed compensation to the Board of Directors
Motion: Approval of the maximum fixed compensation to the Board of Directors of CHF 450’000 (including social security contributions) for the time between the Ordinary Shareholders’ Meetings 2018 and 2019
5.2 Variable compensation to the Board of Directors
Motion: Approval of the variable compensation to the Board of Directors of CHF 1'017'600, plus pro rata social security contributions of CHF 36'082, for the 2017/2018 business year
5.3 Fixed compensation to the Management
Motion: Approval of the maximum fixed compensation to the Management of CHF 330‘000 (including social security contributions) for the time between 1 July 2018 and 30 June 2019
The amounts proposed are explained in detail in the Compensation Report. Due to the fact that the High Water Mark has been exceeded, the Members of the Board of Directors are entitled to a variable compensation for the financial year 2017/2018. There is currently no agreement for a variable compensation to the Management in place.
6. Appointment of auditors
Motion: Re-appointment of Ernst & Young AG, Zurich, as auditors of the statutory financial statements and the group financial statements for the 2018/2019 business year
7. Appointment of independent proxy-holder
Motion: Appointment of KBT Treuhand AG, Zurich, as independent proxy-holder to the close of the 2019 Ordinary Shareholders' Meeting
8. Reduction of share capital by means of cancellation of own shares
Motion: (1) Reduction of share capital of CHF 411'840'000.-- to CHF 407'160'000.-- by cancellation of 80‘000 registered shares at a par value of CHF 58.50 each;
(2) Formal acknowledgement of the audit report from Ernst & Young AG, which states that creditor receivables are covered in full even after the share capi-tal has been reduced;
(3) Amendment of Art. 3 of the Articles of Association, concerning share capital, as follows (changes marked):
"The share capital of the corporation is CHF 411'840'000.-- 407'160'000.-- and is divided in 7'040'000 6‘960‘000 registered shares with a par value of CHF 58.50 each. All shares are fully paid in."
As part of the 2016 share buy-back programme, up to the date on which this invitation was sent out, the Company acquired another 80‘000 of its own shares, i.e. about 1.1% of the shares outstanding, via a second trading line on SIX Swiss Exchange AG, which are to be cancelled at the Ordinary Shareholders' Meeting.
9. Nominal value reduction and partial repayment (additional distribution)
Motion: (1) Reduction of the share capital from CHF 407'160'000.-- [after execution of agenda item 8] to CHF 396'720'000.-- by reducing the par value of the 6'960'000 registered shares from CHF 58.50 to CHF 57.-- and repayment of CHF 1.50 per share to the shareholders;
(2) Formal acknowledgement of the audit report of Ernst & Young AG, which states that creditor receivables are covered in full even after the share capital has been reduced;
(3) Amendment of Art. 3 of the Articles of Association, concerning the share capital, as follows (changes marked, depending on agenda item 8):
"The share capital of the corporation is CHF 407,160,000.-- 396'720'000.-- and is divided in 6'960'000 registered shares with a par value of CHF 58.50 57.-- each. All shares are fully paid-in."
10. Miscellaneous
Documentation
The 2017/2018 annual report, including the statutory financial statements, the group financial statements, the compensation report, as well as the reports of the auditors, is sent out to all shareholders entered in the Shareholders' Register unless they have requested not to receive a copy. It is also available for review at Bundesplatz 1, 6300 Zug, Monday to Friday from 9.00 am to 5.00 pm. It can be ordered from the same address. Please call +41 (0)41 710 75 77. The same applies to the Ernst & Young AG audit reports with regard to agenda items 8 and 9.1. The annual report is also available on the www.hbmhealthcare.com website.
Admission cards / voting materials
Shareholders who are entered in the Shareholders' Register with the right to vote as at 5.00 pm on 15 June 2018 (the qualifying date) will receive the invitation as well as, upon request, a personal admission card and the voting materials directly from the company.
Shareholders who are entitled to vote according to the Shareholders' Register as of the qualifying date may participate in the Ordinary Shareholders' Meeting. Each share carries one vote. Shareholders who have sold their shares before the Ordinary Shareholders' Meeting takes place are no longer entitled to vote.
Granting of powers of attorney
Shareholders who do not participate in person in the Ordinary Shareholders' Meeting may appoint as a representative a different shareholder, a third party, or Mr Reto Leemann, chartered fiduciary agent, KBT Treuhand AG, Zimmergasse 16, 8032 Zurich, as independent proxy holder in the sense of Art. 689c of the Swiss Code of Obligations. Granting of powers of attorney to members of governing bodies or custody accounts is illegitimate.
The power of attorney on the registration form must be filled in accordingly, signed and returned to the independent proxy holder, or to the Shareholders' Register at Computershare Switzerland Ltd., Baslerstrasse 90, CH-4600 Olten, by 20 June 2018 at the latest.
In the absence of any specific instructions, the independent proxy-holder will be deemed to have been instructed to exercise the voting right in favour of the motions of the Board of Directors. This also applies to motions put forward in the Ordinary Shareholders’ Meeting.
As an alternative to written power of attorneys, Shareholders have the opportunity to submit power of attorneys and voting instructions to the independent proxy-holder electronically via the platform https://ip.computershare.ch/hbmag of Computershare Switzerland Ltd. Shareholders who wish to make use of this may follow the enclosed instructions regarding the opening of a Shareholder account and the registration to the Ordinary Shareholders’ Meeting.
Admission office
The admission office opens at 1.30 pm on the day of the Ordinary Shareholders' Meeting. Shareholders are asked to present their admission cards at the entrance.
Registration
We ask you kindly to return the registration form by 20 June 2018 if you intend to participate in the Ordinary Shareholders' Meeting.
Reception
The Board of Directors is pleased to invite you to a reception after the meeting.
Zug, 1 June 2018 On behalf of the Board of Directors
The Chairman: Hans Peter Hasler
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