- Corporate
Corporate Governance
Articles of Incorporation
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Code of Conduct
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All of the following detailed information is up to date as of December 31, 2012; please refer to the News&Media section for any information on subsequent material changes.
Group structure and shareholders
Group structure
The Basilea group is composed of the parent company Basilea Pharmaceutica Ltd. ("Basilea"); the Swiss operating subsidiary Basilea Pharmaceutica International Ltd. ("Basilea International"); BPh Investitionen Ltd. ("BPh"), a subholding company; Basilea Pharmaceutica China Ltd. ("Basilea China"), a Chinese operating subsidiary held through BPh; and wholly-owned subsidiaries in Denmark, France, Germany, and the United Kingdom (collectively the "Company").
As of December 31, 2012, the Company engaged approximately 200 employees (full-time equivalents).
Basilea subsidiaries and subholdings (as of December 31, 2012)
– Basilea Pharmaceutica China Ltd., Haimen, China
– Basilea Pharmaceuticals A/S, Birkerød, Denmark1
– Basilea Pharma SAS, Boulogne-Billancourt, France1
– Basilea Pharmaceutica Deutschland GmbH, Munich, Germany1
– Basilea Pharmaceutica International Ltd., Basel, Switzerland
– BPh Investitionen Ltd., Baar, Switzerland
– Basilea Medical Ltd., Guildford, UK
– Basilea Pharmaceuticals Ltd., Guildford, UK1
– Basilea Pharmaceuticals A/S, Birkerød, Denmark1
– Basilea Pharma SAS, Boulogne-Billancourt, France1
– Basilea Pharmaceutica Deutschland GmbH, Munich, Germany1
– Basilea Pharmaceutica International Ltd., Basel, Switzerland
– BPh Investitionen Ltd., Baar, Switzerland
– Basilea Medical Ltd., Guildford, UK
– Basilea Pharmaceuticals Ltd., Guildford, UK1
1Organizations are being closed down following the Toctino® transaction with Stiefel/GSK.
The operating activities of the Company are currently focused on research and development of pharmaceutical products. The Company's operating activities are directed by and primarily located within Basilea International.
On July 23, 2012, as the result of a global agreement with Basilea, Stiefel, a GlaxoSmithKline (GSK) company, assumed responsibility for the development, manufacturing and commercialization of the hand eczema drug Toctino® (alitretinoin). On this date, approximately 90 employees were transferred to Stiefel from or left the Company's European subsidiaries that had been commercializing Toctino® with a remaining core marketing group at Basilea International reporting to the Chief Operating Officer.
In 2012, Basilea International was operationally organized along core activities with the Chief Executive Officer responsible for overseeing the development function, headed by the Chief Medical Officer, and the research function, headed by the Chief Scientific Officer. The Chief Operating Officer was responsible for overseeing finance, headed by the Chief Financial Officer, and technical operations, headed by the Chief Technology Officer, and commercial operations, headed by the Chief Commercial Officer, through July 2012. All these individuals were members of the Management Committee, led by the Chief Executive Officer. In 2013, based on the announced personnel changes, the responsibilities of the COO function will be assumed by the CEO and the COO position will be eliminated. In addition, Human Resources will be represented in the Management Committee. For further information on the Management Committee, please refer to the section "Management Committee/members, functions and other activities".
The Company liquidated its subsidiaries in Italy and Spain in 2012 in connection with a distribution agreement with a third party for these countries. For further information, please refer to note 21 (restructuring) to the consolidated financial statements of the Annual Report 2012.
Basilea is represented on the Board of Directors of its wholly-owned subsidiaries. In addition, there is close operational cooperation between Basilea International and Basilea's subsidiaries.
Basilea Pharmaceutica Ltd.
Basilea is located at Grenzacherstrasse 487, 4058 Basel, Switzerland, and Basilea's shares were listed on the SIX Swiss Exchange on March 25, 2004, under the Swiss security number (Valorennummer) 1 143 244. The ISIN is CH0011432447. The Common Code is 018859220. The ticker symbol is BSLN.
As of December 31, 2012, the market capitalization of Basilea amounted to CHF 427,607,897 (9,587,621 registered shares with a nominal value of CHF 1 per share). None of its shares were held by the Company on this date.
Basilea Pharmaceutica China Ltd.
Basilea China is a wholly foreign owned enterprise ("WFOE"), founded on May 29, 2002, and
incorporated with limited liability under the laws of The People's Republic of China, with a fully paid-up registered capital of USD 7 million as of December 31, 2012. Basilea China is located in the Haimen Technological Development Zone, Jiangsu Province (north of Shanghai), People's Republic of China. The subsidiary supports Basilea International's key research and development projects, focusing on chemical synthesis, analytical development, process research, and process development. The shares of Basilea China are not listed on any stock exchange. All of its shares are held and controlled by BPh, a Swiss stock corporation with registered office at Schochenmühlestrasse 4 in 6340 Baar, Switzerland. BPh has a share capital of CHF 131,950, divided into 10,150 fully paid-up registered shares with a par value of CHF 13 each, all held and controlled by Basilea.
incorporated with limited liability under the laws of The People's Republic of China, with a fully paid-up registered capital of USD 7 million as of December 31, 2012. Basilea China is located in the Haimen Technological Development Zone, Jiangsu Province (north of Shanghai), People's Republic of China. The subsidiary supports Basilea International's key research and development projects, focusing on chemical synthesis, analytical development, process research, and process development. The shares of Basilea China are not listed on any stock exchange. All of its shares are held and controlled by BPh, a Swiss stock corporation with registered office at Schochenmühlestrasse 4 in 6340 Baar, Switzerland. BPh has a share capital of CHF 131,950, divided into 10,150 fully paid-up registered shares with a par value of CHF 13 each, all held and controlled by Basilea.
For information on the non-listed companies belonging to the Company, please refer to note 3 (investments) to the financial statements of the Annual Report 2012.
In this case, Basilea will endeavor to provide for a cashless exercise and provide for the difference
in the share price realized in such cashless exercise and the price offered for the underlying shares. Alternatively, Basilea will procure that the offeror will offer to purchase the options.
Significant shareholders
According to the Company's share register, Chase Nominees Ltd., London Wall 125, London EC2Y 5AJ, UK, held 1,199,612 Basilea shares as of December 31, 2012, nominally corresponding to 12.51% of the voting rights but registered without voting rights.
In addition, Basilea received the following notifications in accordance with the Swiss Federal Act on Stock Exchanges and Securities from shareholders who held more than three percent as of December 31, 2012:
On November 26, 2012, Morgan Stanley & Co LLC, 1585 Broadway, New York, NY 10036, USA, notified Basilea that Morgan Stanley & Co International Plc, 25 Cabot Square, Canary Wharf, London E14 4QA, UK, held 538,463 Basilea shares as a result of a securities lending agreement, corresponding to 5.62% of the voting rights. At the same time Morgan Stanley reported sale positions corresponding to 0.04% of the voting rights.
On October 17, 2012, HBM Healthcare Investments AG (until June 28, 2012: HBM BioVentures AG), Bundesplatz 1, 6300 Zug, Switzerland, notified Basilea that HBM Healthcare Investments (Cayman) Ltd. (until July 13, 2012: HBM BioVentures (Cayman) Ltd.), Centennial Towers, 3rd Floor, 2454 West Bay Road, Grand Cayman, Cayman Islands, held 2,394,016 Basilea shares, corresponding to 24.97% of the voting rights.
On July 25, 2012, Credit Suisse Funds AG, Kalandergasse 4, 8045 Zurich, Switzerland, notified Basilea of its holdings of 287,875 Basilea shares, corresponding to 3.00% of the voting rights.
On October 29, 2010, Franklin Resources, Inc., One Franklin Parkway, San Mateo, CA 94403, USA, notified Basilea of its holdings of 960,203 Basilea shares, corresponding to 10.02% of the voting rights.
Additionally, Basilea reported that following the annual option grant under the Basilea stock option plan on December 4, 2012, the number of outstanding options (sale positions to be reported pursuant to Art. 12 para. 1b SESTO-FINMA) amounted to 1,928,577, corresponding to 20.12% of the voting rights.
All disclosures of shareholdings, including those of shareholders that fell below three percent during 2012, are published on the website of the SIX Disclosure Office and can be accessed there (http://www.six-swiss-exchange.com/shares/ companies/major_shareholders_en. html?issuer=12329).
Basilea has not entered into any shareholder agreement regarding the voting rights or holding
of Basilea shares.
of Basilea shares.
Cross-shareholdings
No cross-shareholdings existed as of December 31, 2012.
Capital structure and shares
Share capital
The share capital of Basilea as of December 31, 2012 amounted to CHF 9,587,621 consisting of 9,587,621 registered shares with a par value of CHF 1 per share. The share capital is fully paid up. As of December 31, 2012, the Company did not hold any shares of Basilea.
Authorized capital and conditional capital
As of December 31, 2012, total authorized capital amounted to CHF 2,000,000 and total conditional capital amounted to CHF 3,312,520.
Any shares issued under the authorized or conditional capital are subject to the transfer restrictions set forth under "limitations on transferability of shares and nominee registrations" below.
Changes in capital
In 2012, Basilea increased its share capital by CHF 50 (50 registered shares with a par value of CHF 1 per share) as a result of the exercise of stock options under Basilea's stock option plan.
In 2011, Basilea increased its share capital by CHF 700 (700 registered shares with a par value of CHF 1 per share) as a result of the exercise of stock options under Basilea's stock option plan.
In 2010, Basilea increased its share capital by 1,950 registered shares with a par value of CHF 1 per share as a result of the exercise of stock options under Basilea's stock option plan.
For further information on changes in capital in 2012, 2011 and 2010, including changes in reserves and retained earnings, please refer to the consolidated statement of changes in shareholders' equity as well as note 13 (shareholders' equity) to the consolidated financial statements of the Annual Report 2012, and note 4 (share capital, authorized capital and conditional capital) to the financial statements of Basilea. Please also refer to the consolidated statement of changes in shareholders' equity included in the annual reports 2011 and 2010 for information on changes in equity in the respective years.
Shares, participation and profit sharing certificates
Basilea has only one class of shares (registered shares) and the par value of Basilea's shares is CHF 1 per share. Each share is fully paid up and carries one vote and equal dividend rights, with no special privileges. Basilea has not issued any participation or profit sharing certificates.
Limitations on transferability of shares and nominee registrations
Basilea's shares are not certificated since its IPO. Basilea may issue registered shares in the form
of single certificates, global certificates or uncertificated securities. Within the limits of the law Basilea is free to convert the registered shares issued in one of those forms into another form at any time and without the approval of the shareholders. Basilea bears the related costs.
of single certificates, global certificates or uncertificated securities. Within the limits of the law Basilea is free to convert the registered shares issued in one of those forms into another form at any time and without the approval of the shareholders. Basilea bears the related costs.
The shareholder has no claim for conversion of registered shares issued in one form into another form. A shareholder may, however, request Basilea at any time to issue at no cost a document certifying the ownership of his shares according to the share register, but such confirmation is not a negotiable instrument.
Intermediated securities (Bucheffekten) underlying registered shares of Basilea may not be transferred by way of assignment. In addition, such intermediated securities may not be provided
as collateral by way of assignment.
as collateral by way of assignment.
A transfer of shares further requires that a shareholder files a share registration form in order to be
registered in the share register of Basilea with voting rights. Failing such registration by the
registered in the share register of Basilea with voting rights. Failing such registration by the
respective deadline set by the Board of Directors, a shareholder or usufructuary (Nutzniesser) may not vote at or participate in a shareholders meeting, but is still entitled to receive dividends and other rights of financial value. No exemptions were granted from the above restrictions in 2012.
According to article 5 of Basilea's Articles of Incorporation, a purchaser of shares will be recorded in Basilea's share register as a shareholder or usufructuary with voting rights if the purchaser discloses its name, citizenship or registered office, respectively, and address, and gives a declaration that it has acquired the shares in its own name and for its own account. According to the nominee regulation enacted by the Board of Directors, a person or legal entity not explicitly stating in its registration request that it will hold the shares for its own account ("nominee") may be entered as a shareholder in the share register with voting rights for shares up to a maximum of 3% of the outstanding nominal share capital, provided such nominee enters into a nominee agreement with Basilea. Shares held by a nominee that exceed this limit are only registered in the share register with voting rights if such nominee declares in writing to disclose name, address, and shareholding of any person or legal entity for whose account the nominee is holding 0.5% or more of the outstanding nominal share capital. The limit of 3% shall apply correspondingly to nominees who are related to one another through capital ownership or voting rights or have a common management or are otherwise interrelated.
Basilea's Articles do not further limit the transferability of shares. A qualified majority of at least
two-thirds of the share votes represented as well as the majority of the par values of shares represented at a shareholders meeting are required for resolutions on transfer restrictions of Basilea's shares. For further information on the registration in the share register, please refer to the section "registration in the share register".
two-thirds of the share votes represented as well as the majority of the par values of shares represented at a shareholders meeting are required for resolutions on transfer restrictions of Basilea's shares. For further information on the registration in the share register, please refer to the section "registration in the share register".
Convertible bonds and options
As of December 31, 2012 there were no convertible bonds of the Company outstanding.
For information on the stock option plan for directors, management and employees, and on the number of options granted thereunder, please refer to note 12 (stock-based compensation) to the consolidated financial statements included in the Annual Report 2012.
Board of Directors
Members, functions and other activities
The following table sets forth the names and terms of the current members of the Board of Directors:
|
Name
|
Year of
first election |
End of
current term
|
|
Mr. Werner Henrich, Chairman
|
2000
|
2013
|
|
Mr. Hans-Beat Gürtler,
Vice-Chairman
|
2009 | 2015 |
| Prof. Daniel Lew | 2003 | 2015 |
| Dr. Thomas M. Rinderknecht | 2011 | 2014 |
| Mr. Domenico Scala | 2011 | 2014 |
| Mr. Claude Schreiner | 2007 | 2013 |
|
Mr. Steven D. Skolsky
|
2008
|
2014
|
| Dr. Thomas Werner | 2011 | 2014 |
In 2012, Claude Schreiner reached the statutory age limit for board members. As a consequence, Mr. Schreiner cannot be reelected after the end of his current term at the annual shareholder meeting of April 9, 2013.
 |
 |
 |
 |
|
Mr. Werner Henrich
|
Mr. Hans-Beat Gürtler
|
Prof. Daniel Lew
|
Dr. Thomas M. Rinderknecht
|
 |
 |
 |
 |
|
Mr. Domenico Scala
|
Mr. Claude Schreiner
|
Mr. Steven D. Skolsky
|
Dr. Thomas Werner
|
Changes in the Board of Directors
Mr. Hans-Beat Gürtler and Prof. Daniel Lew were reelected as members of the Board of Directors for a term of three years at the ordinary general meeting of shareholders on April 17, 2012.
A description of each member's nationality, business experience, education and activities is outlined below:
Werner Henrich, Chairman, was born in 1943 and is a French citizen. He has an education as a
chemist and European patent attorney. He worked for F. Hoffmann-La Roche Ltd. ("Roche") in Basel for more than 30 years. Mr. Henrich held various positions at Roche including Head of Global Intellectual Property and Pharmaceutical Licensing for more than 12 years. He was also a member of the Roche Pharmaceutical Division Executive Board. In this function Mr. Henrich was responsible for intellectual property activities of all Roche divisions and for major pharmaceutical transactions including research collaborations, patent settlements, in- and out-licensing as well as product acquisitions. From February 2001 to October 2001, Mr. Henrich acted as CEO of Basilea. He retired from Roche in November 2003. Mr. Henrich has a wide experience in the pharmaceutical industry both with start-ups and large pharmaceutical companies. Mr. Henrich is also a member of the Board of Directors of Actelion Ltd., Allschwil, a Swiss biopharmaceutical company listed on the SIX Swiss Exchange. He acts as a consultant for several biopharmaceutical companies on a part-time basis.
chemist and European patent attorney. He worked for F. Hoffmann-La Roche Ltd. ("Roche") in Basel for more than 30 years. Mr. Henrich held various positions at Roche including Head of Global Intellectual Property and Pharmaceutical Licensing for more than 12 years. He was also a member of the Roche Pharmaceutical Division Executive Board. In this function Mr. Henrich was responsible for intellectual property activities of all Roche divisions and for major pharmaceutical transactions including research collaborations, patent settlements, in- and out-licensing as well as product acquisitions. From February 2001 to October 2001, Mr. Henrich acted as CEO of Basilea. He retired from Roche in November 2003. Mr. Henrich has a wide experience in the pharmaceutical industry both with start-ups and large pharmaceutical companies. Mr. Henrich is also a member of the Board of Directors of Actelion Ltd., Allschwil, a Swiss biopharmaceutical company listed on the SIX Swiss Exchange. He acts as a consultant for several biopharmaceutical companies on a part-time basis.
Hans-Beat Gürtler, Vice-Chairman, was born in 1946 and is a Swiss citizen. He holds a Commercial
Diploma. He currently serves as management partner for entrepreneurial investments of Varuma AG, a privately held Swiss investment company. He is Member and President of the Boards of Directors of several Swiss-based companies, most of them start-ups and SMEs, primarily in the pharma and biotech sector. He is Vice-Chairman of SIX Swiss Exchange listed Implenia. Prior to joining Varuma, he held the position of Global Chief Executive Officer at Novartis Animal Health in Basel where he was responsible for the worldwide business, including research, development, manufacturing and marketing of animal pharmaceuticals for pets and farm animals. Previously, Mr. Gürtler held various management positions at Ciba-Geigy Ltd., including business responsibilities in Eastern Europe, the Northern Hemisphere and the global pest-control business. As CEO of Mahissa, Ciba-Geigy's Seeds business in Spain, he lived in Barcelona for several years.
Daniel Lew was born in 1948 and is a Swiss citizen. He is a Professor of Medicine at the University of Geneva Medical School, Chief of the Service of Infectious Diseases, Chief of the Department of Specialties of Internal Medicine at the Geneva University Hospitals. He obtained his MD degree from Geneva University in 1976 and specialized in infectious diseases both in Geneva and then subsequently at Harvard Medical School and Massachusetts General Hospital in Boston, United States. He is a recipient of numerous scientific awards and grants for his research work. Professor Lew lectures widely, acts both as reviewer and editor for several major scientific journals, and is author of many publications on neutrophil function, bacterial pathogenesis and drug resistance. Prof. Daniel Lew is the past President of the Swiss Society of Infectious Diseases (SSI) and the past President of the International Society for Infectious Diseases (ISID).
Thomas M. Rinderknecht was born in 1954 and is a Swiss citizen. He is an attorney-at-law and senior partner at Badertscher Rechtsanwälte AG, Zurich and Zug. He has served on the Boards of Directors of several biotech, pharma and medtech companies, including SkyePharma Plc, UK; Antares Pharma Inc., USA; Speedel Holding AG, Switzerland; GlycArt Biotechnology AG, Switzerland, and Ganymed Pharmaceuticals AG, Germany. He currently serves as Chairman of Canyon Pharmaceuticals AG, and Vice-Chairman of APR Applied Pharma Research SA, both in Switzerland. Dr. Rinderknecht holds a PhD in law from the University of Zurich and is admitted to the Bar in Zurich.
Domenico Scala was born in 1965 and is a Swiss and Italian citizen. He studied at the University of Basel and graduated with a degree in economics with a specialization in corporate finance. He also holds executive development degrees from INSEAD and London Business School. Since May 2012, he is the Chairman of the Audit & Compliance Committee of FIFA. He also acts as Senior Advisor to private equity and M&A firms. From 2007 to 2011 he was President & Chief Executive Officer of Nobel Biocare Holding AG and from 2003 to 2007 he was Chief Financial Officer of Syngenta Holding AG. From 1995 to 2003 he served in various senior leadership positions in finance at Roche Holding AG. Before joining Roche, he served as Finance Director at Panalpina Italy SpA and Senior Auditor at Nestlé SA. In addition to his professional activities, his academic activities have included serving as a member of the Board of Overseers of the Tufts University, Boston, USA.
Claude Schreiner was born in 1942 and is a French citizen. He studied Economics at the University of Strasbourg, France, and has extensive experience in business and commerce. He started his career at Roche in 1966 and held various positions in the Pharma Division as well as in the Vitamins & Fine Chemicals Division at the Headquarters in Basel. In 1978 he was appointed head of the Vitamins & Fine Chemicals Division of Roche in France and subsequently General Manager of Roche's main agrochemicals company, La Quinoléine SA. In 1990, Mr. Schreiner became Head of the Roche Vitamins & Fine Chemicals Division for Western Europe and later General Manager of Roche France. In 2001 he took over as Head of Western European Pharma Operations and became a Member of the Roche Pharma Division Executive Committee. Mr. Schreiner has retired from Roche at the end of May 2007. He is also a member of the Board of Directors of Phinex SAS, France.
Steven D. Skolsky was born in 1956 and is a U.S. citizen. He holds a BA degree in Biology from the University of North Carolina at Chapel Hill, USA. Mr. Skolsky has over 25 years of general management and international pharmaceutical industry experience with emphasis on product strategy, commercialization and product development. He currently is a member of the Board of Directors of Adherex Technologies Inc., USA, and holds the position of Global Head of Clinical and Data Operations at Quintiles Transnational, a leading Clinical Research Organization, after serving as Principal of EXPIS Partners, USA, a strategic life science consultancy. He previously served as President and Chief Executive Officer of Sequoia Pharmaceuticals, a privately held U.S. based company specializing in novel antiviral therapeutics. Prior to his appointment at Sequoia, he held the position of Chief Executive Officer at Trimeris, Inc., a publicly held U.S. based company that discovered and commercialized Fuzeon®, a first-in-class HIV therapeutic in collaboration with partner F. Hoffmann-La Roche. Previously, Mr. Skolsky served for more than 20 years at GlaxoSmithKline (GSK) in a range of senior leadership roles, including Senior Vice President, Global Product Strategy and Clinical Development, and Managing Director of GSK's operations in Australia and New Zealand.
Thomas Werner was born in 1956 and is a German citizen. He has over 28 years of experience in the pharmaceutical industry, most recently as Senior Vice President of GlaxoSmithKline where he was Managing Director for Germany and also coordinated the European oncology business. Prior to that, he was responsible for Glaxo Wellcome Germany and Central Europe, Bristol-Myers Squibb Germany and Convatec Germany/Central Europe. Dr. Werner sits on the boards of SkyePharma plc, UK; Medigene AG, Germany; SuppreMol GmbH, Germany, as well as on the board of BSN medical GmbH and Blackfield AG, both in Germany. He serves as Chairman of the Board of 4SC AG, Germany. He holds a degree in chemistry from the University of Göttingen, Germany.
The Board of Directors is fully composed of non-executive members.
Mr. Henrich, Chairman of the Board, acted as CEO of Basilea from February 2001 to October 2001. In addition, Mr. Henrich acted as a consultant to Basilea in 2012. None of the other members of the Board of Directors have served in the management of Basilea or any of its subsidiaries since inception of Basilea.
There are no other significant business connections between members of the Board of Directors and Basilea or any of its subsidiaries. For further information, please refer to note 18 (related party transactions) to the consolidated financial statements of the Annual Report 2012.
Apart from the information given above, there are no other activities of the members of the Board in governing and supervisory bodies of important Swiss and foreign organizations, institutions and foundations under private and public law, permanent management and consultancy functions for important Swiss and foreign interest groups as well as official functions and political posts.
Elections and terms of office
Basilea's Articles provide for a Board of Directors consisting of between one and eleven members.
Members of the Board of Directors are appointed and removed exclusively by shareholders' resolution. Their term of office is up to three years, reelection being allowed. According to the Articles, elections are made by rotation in such a way that the term of office of about one third of the members of the Board of Directors may expire every year. The Chairman and the Vice-Chairman of the Board of Directors are designated by the Board of Directors.
Members of the Board of Directors are appointed and removed exclusively by shareholders' resolution. Their term of office is up to three years, reelection being allowed. According to the Articles, elections are made by rotation in such a way that the term of office of about one third of the members of the Board of Directors may expire every year. The Chairman and the Vice-Chairman of the Board of Directors are designated by the Board of Directors.
According to the current Organizational Regulations of Basilea enacted by the Board of Directors,
each member of the Board of Directors shall resign effective as per the ordinary shareholders
meeting immediately following completion of his or her 70th year of age, even if the term of office
has not yet expired. In this instance, a newly elected board member would enter into the term of his or her predecessor.
each member of the Board of Directors shall resign effective as per the ordinary shareholders
meeting immediately following completion of his or her 70th year of age, even if the term of office
has not yet expired. In this instance, a newly elected board member would enter into the term of his or her predecessor.
For an overview of the years of first election and of expiry of the current terms of each member of the Board of Directors, please refer to the section "Board of Directors/members, functions and other activities".
Areas of responsibility
Responsibilities of the Board of Directors
The Board of Directors is entrusted with the ultimate direction of Basilea and the supervision of
management. The Board of Directors' non-transferable and irrevocable duties include ultimately
managing the corporation and issuing the necessary directives, determining the organization, organizing the accounting system, the financial controls as well as the financial planning, and appointing, recalling, and ultimately supervising the persons entrusted with the management and representation of Basilea. Furthermore, these duties comprise the responsibility for the preparation of the annual report and the shareholders meeting, the carrying out of shareholders' resolutions and the notification of the judge in case of over indebtedness of Basilea.
management. The Board of Directors' non-transferable and irrevocable duties include ultimately
managing the corporation and issuing the necessary directives, determining the organization, organizing the accounting system, the financial controls as well as the financial planning, and appointing, recalling, and ultimately supervising the persons entrusted with the management and representation of Basilea. Furthermore, these duties comprise the responsibility for the preparation of the annual report and the shareholders meeting, the carrying out of shareholders' resolutions and the notification of the judge in case of over indebtedness of Basilea.
In addition, the Board specifically retains certain main decision-making competencies, including setting the strategy and short and long-term goals of Basilea; all M&A transactions for which no shareholder approval is required; decisions on annual budgets; the general direction of research and development (e.g. therapeutic areas covered, areas of priority and third party co-operations); general policies in relation to personnel matters, including basic principles related to benefit and incentive plans; certain communication tasks towards shareholders and the public as required by applicable laws and regulations; and general policies on outsourcing versus internal functions for manufacturing, sales and marketing.
Internal organization
According to Basilea's Organizational Regulations, resolutions of the Board of Directors are passed by way of simple majority. To validly pass a resolution, a quorum of more than half of the members of the Board of Directors must attend the meeting. No quorum is required for confirmation resolutions (Feststellungsbeschlüsse) and adaptations of the Articles in connection with capital increases pursuant to articles 651a, 652g and 653g of the Swiss Code of Obligations.
Chairman of the Board of Directors
The Chairman of the Board calls, prepares, and chairs the meetings of the Board of Directors. The
Chairman also chairs the shareholders meetings. He supervises the implementation of the resolutions of the Board of Directors and generally supervises the CEO and the Management Committee. The CEO regularly reports to the Chairman on the meetings of the Management Committee and on all important matters of the Company. The Chairman is also entitled to attend the meetings of the Management Committee. In urgent matters that do not allow for the Board of Directors to take resolutions in time, the Chairman is entitled to take decisions that fall within the competencies of the Board of Directors. The Vice-Chairman of the Board of Directors exercises the powers of the Chairman in the Chairman's absence.
Chairman also chairs the shareholders meetings. He supervises the implementation of the resolutions of the Board of Directors and generally supervises the CEO and the Management Committee. The CEO regularly reports to the Chairman on the meetings of the Management Committee and on all important matters of the Company. The Chairman is also entitled to attend the meetings of the Management Committee. In urgent matters that do not allow for the Board of Directors to take resolutions in time, the Chairman is entitled to take decisions that fall within the competencies of the Board of Directors. The Vice-Chairman of the Board of Directors exercises the powers of the Chairman in the Chairman's absence.
Board committees
The Board of Directors established an Audit Committee and a Compensation Committee in 2003.
In addition, the Board of Directors established a Corporate Governance Committee in 2012. The tasks and responsibilities of these committees are set forth in the Organizational Regulations. These committees make proposals to the Board of Directors in their areas of responsibilities. The full Board nominates members for the committees.
In the meeting of the Board of Directors subsequent to the ordinary general meeting of shareholders on April 17, 2012, the following Audit Committee members were confirmed: Mr. Claude Schreiner (Chairman), Mr. Hans-Beat Gürtler and Mr. Domenico Scala. Until the ordinary general meeting, Prof. Daniel Lew was member of the Audit Committee.
The Audit Committee assists the Board of Directors in fulfilling its duties of supervision of the management. It is responsible for the guidelines of Basilea's risk management and internal control
system, and the review of their adequacy and effectiveness, the review of the compliance, the
assessment of the external auditors' quality and work and the review of their audit plans, the
monitoring of the independence of external auditors (including the authorizing of non-audit services by the auditors and their compliance with applicable rules), the proposal of new auditors, if necessary, to the Board of Directors, the review of annual and interim financial statements, the review of the audit results, and the monitoring of the implementation of any findings by the Management Committee. The Audit Committee is at all times authorized to inspect the books and records of Basilea and to request information from and meetings with all management bodies and employees of Basilea as well as its external auditors.
system, and the review of their adequacy and effectiveness, the review of the compliance, the
assessment of the external auditors' quality and work and the review of their audit plans, the
monitoring of the independence of external auditors (including the authorizing of non-audit services by the auditors and their compliance with applicable rules), the proposal of new auditors, if necessary, to the Board of Directors, the review of annual and interim financial statements, the review of the audit results, and the monitoring of the implementation of any findings by the Management Committee. The Audit Committee is at all times authorized to inspect the books and records of Basilea and to request information from and meetings with all management bodies and employees of Basilea as well as its external auditors.
The Audit Committee held three meetings at the offices of Basilea in 2012, with a duration of
approximately half a day. The main topics at these meetings were the review of the year-end financial statements and annual report 2011; the review of the half-year financial statements 2012; the review of the annual budget 2012 and 2013 as well as mid-term financial forecasts; financial and non-financial risk management and the scope of the external audit 2012 as well as scope and results of the internal audits 2012. The external auditors were present at two Audit Committee meetings in 2012 to report on the results of the audit 2011 and the half-year review 2012. The respective recommendations of the Audit Committee were then provided for approval or modification to the full Board of Directors.
approximately half a day. The main topics at these meetings were the review of the year-end financial statements and annual report 2011; the review of the half-year financial statements 2012; the review of the annual budget 2012 and 2013 as well as mid-term financial forecasts; financial and non-financial risk management and the scope of the external audit 2012 as well as scope and results of the internal audits 2012. The external auditors were present at two Audit Committee meetings in 2012 to report on the results of the audit 2011 and the half-year review 2012. The respective recommendations of the Audit Committee were then provided for approval or modification to the full Board of Directors.
In the meeting of the Board of Directors subsequent to the ordinary general meeting of shareholders on April 17, 2012, the following Compensation Committee members were confirmed: Mr. Werner Henrich (Chairman), Mr. Hans-Beat Gürtler, Mr. Steven D. Skolsky and Dr. Thomas Werner. Until the ordinary general meeting, Mr. Claude Schreiner was member of the Compensation Committee.
The Compensation Committee assists the Board of Directors in compensation-related matters. It provides the Board of Directors with recommendations on the compensation of the members of the Board of Directors and of the Management Committee, the policies for the compensation of the Management Committee and the Company's employees, and the basic principles for the establishment, amendment and implementation of the Company's stock option plan.
The Compensation Committee held four meetings in 2012 each with a duration of one or more hours. The main topics at these meetings included the review of the 2011 achievements versus the planned Company objectives and determination of the performance-related bonus pool; the annual general salary increases; the grant of options; and the general remuneration of members of the Management Committee and employees. The respective recommendations of the Compensation Committee were then provided for approval or modification by the full Board of Directors.
In the board meeting following the annual general meeting on April 17, 2012, the following board members were elected to the Corporate Governance Committee: Dr. Thomas M. Rinderknecht (Chairman), Mr. Werner Henrich and Prof. Daniel Lew.
The Corporate Governance Committee is responsible for developing, updating as necessary and recommending to the Board of Directors corporate governance principles and policies applicable to the Company and for monitoring the compliance with such principles and policies.
The Corporate Governance Committee held two meetings in 2012 with a duration of one hour. The main topics at these meetings were approval of a charter of the committee and the evaluation of the Company's current corporate governance principles, policies, and ongoing compliance activities.
Working methods of the Board of Directors and its committees
According to the Organizational Regulations, the Board of Directors must hold at least four meetings per year. When required, the Board of Directors holds ad hoc meetings or telephone conferences to discuss specific issues or passes resolutions by way of circulation.
In 2012, the Board of Directors held ten meetings. Six of these meetings were held at the offices of Basilea or at the location of the ordinary general meeting of shareholders, with a typical duration of one-half to one day. Four meetings were held by telephone conference. The overall attendance rate (in person or by phone) was more than 90%.
The members of the Management Committee report to the Board of Directors at each board meeting on the status of operations especially related to the progress of research and clinical development, commercial operations as well as the status of drug supply, licensing and financial activities. In addition, an update on the development of the Company's share price is given.
The board committees report about their committee meetings to the full Board of Directors at the board meeting following the relevant committee meeting. Any resolutions on matters assigned to the committees are taken by the Board of Directors on the basis of recommendations of the relevant committee.
Responsibilities of the Management Committee
In accordance with the Articles and the Organizational Regulations, the Board of Directors has
delegated all areas of management of Basilea that are not reserved to the Board of Directors by law, the Articles or the Organizational Regulations (see section "responsibilities of the Board of Directors"), to the CEO and the Management Committee reporting to the CEO. The main duty of the CEO with the assistance of the Management Committee is to operationally manage the Company, to implement the strategies and other decisions of the Board of Directors, to make proposals to the Board of Directors regarding matters constituting decision making competencies of the Board of Directors, to set the operative focus and priorities as well as to procure the necessary resources.
delegated all areas of management of Basilea that are not reserved to the Board of Directors by law, the Articles or the Organizational Regulations (see section "responsibilities of the Board of Directors"), to the CEO and the Management Committee reporting to the CEO. The main duty of the CEO with the assistance of the Management Committee is to operationally manage the Company, to implement the strategies and other decisions of the Board of Directors, to make proposals to the Board of Directors regarding matters constituting decision making competencies of the Board of Directors, to set the operative focus and priorities as well as to procure the necessary resources.
Information and control instruments of the Board of Directors
The board meetings are the Board of Directors' main platform to supervise and control management.
At board meetings, the CEO, COO and CFO report on the financial, commercial, research and development, drug supply and business development activities with a particular focus on the main risks of the Company related to its key value drivers, respective measures taken and related strategic proposals. The Board of Directors may also call upon further members of the Management Committee and management to attend board meetings for reporting purposes.
In addition, management provides interim updates to the Board of Directors as necessary on the status of operations and other issues that may be requested by the Board of Directors. The main components of these updates are the status of commercial operations, development and research programs as well as the status of the drug supply and licensing activities. Furthermore, management provides a monthly financial report to the Board of Directors including an unaudited consolidated balance sheet, profit and loss statement and statement of cash flows for the respective month. The financial report further includes comparisons of actual versus budget numbers.
Draft consolidated financial statements for the previous financial year and draft consolidated financial interim statements, as prepared by Basilea management, are provided to the Audit Committee for review and to the external auditors for performing their audit and review, respectively. Each year at the end of January/ beginning of February (for the audited consolidated financial statements) and end of July/ beginning of August (for the unaudited consolidated interim statements) the respective financial statements are recommended for approval by the Audit Committee to the full Board of Directors at its subsequent meeting.
Furthermore, towards year-end, upon recommendation of the Audit Committee, the Board of Directors reviews and approves the annual budget of the Company for the following year. The Audit Committee reviews any budget changes as may occur from time to time related to strategic changes or opportunities. In the event the Audit Committee recommends any changes to the budget, the Board considers and may determine to approve such budget changes consistent with the strategy of the Company.
The Board of Directors additionally requests the auditors to issue a written report on any of their
findings with respect to internal controls as a result of their audit procedures.
findings with respect to internal controls as a result of their audit procedures.
Management Committee
Members, functions and other activities
The Management Committee, under the responsibility of the CEO and the supervision of the Board of Directors, is responsible for the operational management of the Company pursuant to the Organizational Regulations and reports to the Board of Directors under the direction of the CEO. Under the direction of the CEO, the Management Committee focuses on the corporate goals, budget, portfolio review and risk management, and as needed on organizational structure, corporate policies and corporate strategies. In addition, regular operational management meetings for the different functions are held. These operational management meetings, chaired by the responsible Management Committee member, mainly focus on significant operational issues concerning execution of goals, budget, resources, new business proposals, and priorities. The participants of these management operational meetings are key people on a managerial level, the CEO, and Management Committee members as required.
The following table sets forth the name, date of appointment and position of the members of the Management Committee as of December 31, 2012.
|
Name
|
Appointed
|
Position
|
|
Dr. Anthony Man
|
2003
|
Chief Executive Officer
|
| Mr. Joachim Blatter | 2012 | Chief Financial Officer1 |
| Dr. Ingrid Heinze-Krauss | 2006 | Chief Technology Officer |
|
Prof. Achim Kaufhold
|
2010
|
Chief Medical Officer
|
|
Dr. Laurenz Kellenberger
|
2009
|
Chief Scientific Officer
|
|
Mr. Ronald Scott
|
2000
2011
|
Chief Financial Officer
Chief Operating Officer2
|
1Mr. Joachim Blatter was appointed Chief Financial Officer as per January 16, 2012.
2Mr. Ronald Scott additionally served as ad interim Chief Financial Officer until January 16, 2012.
 |
 |
 |
|
Dr. Anthony Man
|
Mr. Joachim Blatter
|
Dr. Ingrid Heinze-Krauss
|
|
|
|
|
 |
 |
 |
|
Prof. Achim Kaufhold
|
Dr. Laurenz Kellenberger
|
Mr. Ronald Scott
|
Changes in the Management Committee
In December 2012, Basilea announced that the board had appointed COO Ronald Scott to serve as CEO of Basilea International effective as of January 1, 2013, succeeding Dr. Anthony Man who left Basilea International at year-end 2012. In addition, the board promoted Ms. Heidi McDaid, Head of Global Human Resources, to serve as a member of the Management Committee, starting on
January 1, 2013.
January 1, 2013.
On July 23, 2012, Basilea announced that with completion of the Toctino® transaction Mr. Hans Christian Rohde, Chief Commercial Officer (CCO) since 2007, transferred to Stiefel.
A description of each member's nationality, business experience, education and activities is outlined below:
Anthony Man, Chief Executive Officer (CEO), MD, FRCP, is a Swiss citizen. He holds an honor's degree in biochemistry in addition to a medical degree and is an elected Fellow of the Royal College of Physicians (UK). Dr. Man has over 25 years international pharmaceutical industry experience and has played a major role in bringing 14 products to the market particularly in oncology. He has held a variety of senior positions spanning pre-clinical development to registration and commercialization while at Lederle, Roche, Ciba-Geigy AG, and Novartis AG. As Chief Development Officer at Basilea from 2001 to 2003, he built up the drug development organization and advanced all key development products through their major milestones. In April 2003, Dr. Man was appointed as Chief Executive Officer.
Joachim Blatter, Chief Financial Officer (CFO), is a German citizen. He holds a degree in business administration from the University of Cologne, Germany, and is a certified management accountant as well as a certified financial manager. He held various senior finance positions, most recently as CFO of Swissmetal Industries Ltd. in Dornach, Switzerland. Prior to that Mr. Blatter was CFO of Alcan Singen GmbH, Germany, and Managing Director of Alcan Holdings Germany GmbH.
Ingrid Heinze-Krauss, Chief Technology Officer (CTO), is a German citizen. She holds a PhD in organic chemistry from the University of Freiburg, Germany, and was a fellow at the University of Massachusetts, USA. She joined Basilea in 2001 and built up the Technical Operations group. Prior to joining Basilea she held a series of managerial positions in Pharma Research at Roche, including Area Head Medicinal Chemistry in Antibacterial Research and R&D project management.
Achim Kaufhold, Chief Medical Officer (CMO), is a German citizen. He holds a medical degree from the University of Cologne, Germany. During his 10-year academic career he worked in the fields of pediatrics, basic and applied medical microbiology, laboratory medicine and infectious diseases in Germany and the U.S. Dr. Achim Kaufhold is Professor of Medical Microbiology and Infectious Diseases and a member of the Faculty of Medicine of the University of Aachen, Germany. Prof. Kaufhold has spent more than 18 years in senior management positions in the biotech and pharmaceutical industry, mainly in leadership roles in research, product and business development, and general management. Prior to joining Basilea, Prof. Kaufhold was President & Chief Executive Officer of Affitech A/S, previously Pharmexa A/S, Denmark. His previous executive management roles included positions at Chiron, now part of the Novartis group, Berna Biotech, now a Crucell company, and GlaxoSmithKline Biologicals.
Laurenz Kellenberger, Chief Scientific Officer (CSO), is a Swiss citizen. He holds a PhD in organic chemistry from the Swiss Federal Institute of Technology Zurich (ETH Zurich). His scientific research continued at the University of Cambridge, UK, and at Hoffmann-La Roche, Basel, Switzerland where he held different positions in preclinical research and chemical technologies before joining Basilea in 2000. His expertise covers the range of synthetic organic and natural product chemistry to microbial molecular genetics and he is author of numerous scientific publications. At Basilea he held roles of increasing responsibility and served as Head of Chemistry and member of the research management team with responsibilities for key projects from lead finding and optimization through to preclinical development. He is a member of the Board of the Medicinal Chemistry division of the Swiss Chemical Society.
Hans Christian Rohde, who served as Chief Commercial Officer (CCO) until July 22, 2012, is a Danish citizen. He holds a Master of Science from the University of Copenhagen, August Krogh Institute and a B.Sc. from the University of Odense, Denmark. In addition, he holds an executive MBA from the University of Birmingham, UK. He has over 20 years of international experiences in the pharmaceutical industry. He has held operational and strategic positions in sales, marketing and general management across multiple therapeutic areas in six European countries and in the United States. His pharma and biotech experience was gained with Syntex Danmark A/S, Novo Nordisk A/S and Biogen Inc. Prior to joining Basilea he was Corporate Vice President, Head of Global Therapeutic Area Reproductive Health with Merck Serono SA, Geneva, Switzerland.
Ronald Scott, Chief Operating Officer (COO), is a Swiss citizen. He was Basilea's CFO from the company's founding in 2000 through January 2012. In October 2011 he was appointed Chief Operating Officer. Prior to joining Basilea, he worked for nine years at Roche in management positions in Pharmaceutical Finance, Licensing, and the Roche Corporate Finance Mergers and Acquisitions group. His assignments included managing Roche's initial call, primary and secondary offerings of Genentech; Roche's biotechnology investment portfolio; acquisitions and divestitures. Prior to joining Roche, Mr. Scott worked for Prudential Investment Corporation in the United States as director in Prudential's Finance and International Business Development Units, managing divestitures and joint venture transactions.
Apart from the information given above, there are no other activities of the members of the
Management Committee in governing and supervisory bodies of important Swiss and foreign
organizations, institutions and foundations under private and public law, permanent management
and consultancy functions for important Swiss and foreign interest groups as well as official
functions and political posts.
Management Committee in governing and supervisory bodies of important Swiss and foreign
organizations, institutions and foundations under private and public law, permanent management
and consultancy functions for important Swiss and foreign interest groups as well as official
functions and political posts.
Management contracts
There are no management contracts between Basilea and any third parties.
Compensation, shareholdings and loans
Content and method of determining the compensation including the stock option program
The compensation of the members of the Board of Directors and of the Management Committee is reviewed and set annually by the Board of Directors, based on recommendations of the Compensation Committee in accordance with Basilea's compensation policies. In its review, the Compensation Committee takes into account the professional experience and areas of responsibility of the respective board and management members and also considers compensation packages of other companies in the biotech and pharmaceutical industry in Switzerland and Europe that are comparable to Basilea with respect to size or business model. To offer competitive compensation packages in order to attract and retain highly qualified employees in a competitive environment, the Board also considers compensation at larger Swiss biotech and pharmaceutical companies, and evaluates respective compensation surveys of public companies in Switzerland.
Board of Directors
The compensation package for board members consists of: a fixed annual monetary compensation, the reimbursement of social security contributions, a compensation based on board meeting attendance and participation in board committees, and stock options. In addition, Basilea reimburses board members' out-of-pocket expenses incurred in relation to their service on the board on an on-going basis upon presentation of the corresponding receipts. The latest board review of the compensation for board members took place on April 17, 2012.
Board members obtain a fixed annual compensation of CHF 31,250 (2011: CHF 31,250) which is paid annually in June. Board members also are compensated CHF 6,250 (2011: CHF 6,250) for each board meeting attended (paid in December) with the maximum cumulative annual amount for meeting attendance limited to CHF 31,250 (2011: CHF 31,250). Board members also receive CHF 5,250 (2011: CHF 5,250) for serving on the Audit, Compensation or Corporate Governance Committee, paid annually for each committee membership in December. The Chairman of the Board of Directors receives a fixed annual compensation of CHF 46,875 (2011: CHF 46,875), an annual fee per committee of CHF 7,875 (2011: CHF 7,875) and a board meeting fee of CHF 9,375 (2011: CHF 9,375) per meeting attended with the maximum cumulative amount paid for meeting attendance limited to CHF 46,875 (2011: CHF 46,875).
Management Committee
The compensation of the members of the Management Committee includes a base salary, as well as a bonus and stock options. In addition, Basilea International contributes to the pension plan and maintains certain insurance for death and invalidity. The amount of the base salary depends on the position, responsibilities, experience and skills and accounts for the individual performance. The base salaries are reviewed at the beginning of each year by the Compensation Committee. Changes in the base salaries, if any, are effective from April of each year. The bonus and the stock options vary annually and are based on individual and company performance. The potential bonus is determined in the employment contract and calculated as a percentage of the base salary. The range of bonuses available for 2012 is up to 35% and 45% of the base salary depending on position, adjusted by performance as further described below. As in 2011, two members of the Management Committee had a guaranteed minimum bonus of 20% of their base salary in 2012. Such guaranteed bonuses are only paid out if a bonus is distributed by Basilea for the respective fiscal year.
At the beginning of each year the Board of Directors decides, considering the recommendations of the Compensation Committee, on the total amount of bonus to be granted for the previous year based on the achievement of company goals set by the Board of Directors annually. In the current development stage of Basilea, the company goals are related to key value drivers such as successful completion of clinical trials and submission of marketing authorization and new drug applications, providing drug supply for clinical trials and commercial requirements, identification of clinical product candidates, successful achievement of commercial operations goals and financing these activities. For 2012, key company goals included the completion of audits of ceftobiprole phase 3 pneumonia studies and the subsequent filing of a Marketing Authorization Application in Europe, the Toctino®
transaction and relative performance indicators such as the Basilea share price compared to the SIX Swiss Stock Exchange Swiss Market Index (SMI). In a second step, the individual cash bonus for members of the Management Committee is determined by the Board of Directors upon recommendation of the Compensation Committee based on the individual performance and the Management Committee member's respective contribution to achieving the Company's goals. The individual performance objectives of the members of the Management Committee relate to their roles and responsibilities and are aligned with the company strategy and annual company goals. The weighting of the company goals (40%) and individual objectives (60%) is the same for all members of the Management Committee and is multiplied by the available bonus as described above. The company goals portion may be rated above 100% in the event that the board determines that certain "upsides" were achieved to a maximum of 130% of the respective 40% weighting. The individual portion may be rated above 100% to a maximum of 130% of the respective 60% weighting on an individual basis in the event of extraordinary performance; however, the total average companywide individual performance bonus cannot exceed 100% of the respective 60%. A special bonus is available for extraordinary performance by an employee in accordance with a total amount which is agreed annually by the Board of Directors. One member of the Management Committee has a 12 month notice period with a fixed bonus of 45% of salary for that notice period in lieu of any other bonus. The annual bonus may be increased when set objectives are exceeded or operative results increase over the previous year; it may be decreased when set objectives are not met or operative results decrease over the previous year.
Basilea has no contractual termination payment obligations to board members or members of the Management Committee, and made no termination payments in 2012. However, at the end of the former CEO's effective one and one half month notice period in mid February 2013, he will receive a compensation in an amount of 12 monthly salaries against executing a full waiver and discharge; during this notice period, his individual objectives will be rated at 100% achievement for the purpose of bonus calculation. For one member of the Management Committee, termination is restricted for an 18 month period starting January 1, 2013. Members of the Management Committee are subject to the Standard Basilea Terms and Conditions for Basilea employees. The notice period of the employment agreement for one member of the Management Committee is 12 months and for all others it is six months.
No loans have been provided to any member of the Board of Directors or Management Committee.
Stock option program
The purpose of the Basilea stock option program is to provide directors, management and certain groups of employees with an opportunity to obtain stock options and to benefit from the appreciation thereof, thus providing an increased incentive for participants to contribute to the future success and prosperity of the Company, enhancing the value of the shares for the benefit of the shareholders of the Company and increasing the ability of the Company to attract and retain individuals of exceptional skill. The grant of any option under the stock option program is wholly discretionary. Key factors considered by the Board of Directors in the stock option grant are the amount of shareholder approved conditional capital, the dilution of Basilea shares, the benchmarking with other companies as well as the individual performance. Any value, income or other benefit derived from any option is not to be considered part of the participant's salary or compensation for the purposes of calculating any severance, resignation, termination, redundancy or other end of service or employment payments, vacation, bonuses, long-term service awards, indemnification, pension or retirement benefits, or any other payment, benefits or rights of any kind. The strike price is determined by the Board of Directors and is based on the closing price of the Basilea shares on the SIX Swiss Exchange on the grant date. All applicable relevant rules and regulations of the tax authorities are taken into account. The strike price of the options of the business year 2012 was CHF 42.90 (2011: CHF 30.00). 25% of the options received under an annual stock option grant vest one year from the grant date, 25% of such options vest two years from the grant date, 25% of such options vest three years from the grant date and 25% of such options vest four years from the grant date.
For further information on compensation and stock option plan, please refer to note 12 (stock-based
compensation) to the consolidated financial statements as well as note 5 (compensation and shareholdings) to the financial statements of the Annual Report 2012.
compensation) to the consolidated financial statements as well as note 5 (compensation and shareholdings) to the financial statements of the Annual Report 2012.
Voting rights may be exercised only after a shareholder has been recorded in Basilea's share
register (Aktienbuch) as a shareholder or usufructuary (Nutzniesser) with voting right. No exceptions from these restrictions were granted in 2012.
At shareholders meetings, shareholders can be represented by proxy by a third party who does
not need to be a shareholder.
not need to be a shareholder.
Subject to the registration of shares in the share register within the deadline set by the Board of Directors before each annual shareholders meeting, Basilea's Articles do not impose any restrictions on the voting rights of shareholders. Specifically, there is no limitation on the number of voting rights per shareholder.
For further information on the conditions for registration in the share register (including in relation
to nominees) and for attending and voting at a shareholders meeting, please refer to the sections
"limitations on transferability of shares and nominee registrations" and "registration in the share register".
to nominees) and for attending and voting at a shareholders meeting, please refer to the sections
"limitations on transferability of shares and nominee registrations" and "registration in the share register".
A shareholder resolution with a qualified majority of at least two-thirds of the share votes
represented as well as the majority of the par values of the shares represented at a shareholders meeting are required for the creation of shares with privileged voting rights.
Statutory quorums
There is no provision in the Articles requiring a quorum for shareholders meetings.According to article 11 of the Articles, resolutions generally require the approval of the absolute
majority (absolutes Mehr) of the share votes represented at the shareholders meeting.
Shareholders' resolutions requiring such a majority include amendments to the Articles (subject
to the exceptions below), elections of members of the Board of Directors, elections of the auditors
and the group auditors, approvals of the annual report, the annual financial statements and consolidated financial statements of the Company, decisions regarding dividends, decisions to discharge the members of the Board of Directors and the management from liability for matters disclosed to the shareholders meeting, and the ordering of an independent investigation into specific matters proposed to the shareholders meeting (Sonderprüfung).
majority (absolutes Mehr) of the share votes represented at the shareholders meeting.
Shareholders' resolutions requiring such a majority include amendments to the Articles (subject
to the exceptions below), elections of members of the Board of Directors, elections of the auditors
and the group auditors, approvals of the annual report, the annual financial statements and consolidated financial statements of the Company, decisions regarding dividends, decisions to discharge the members of the Board of Directors and the management from liability for matters disclosed to the shareholders meeting, and the ordering of an independent investigation into specific matters proposed to the shareholders meeting (Sonderprüfung).
Pursuant to article 12 of the Articles, a resolution passed at a shareholders meeting with a qualified
majority (qualifiziertes Mehr) of at least two-thirds of the share votes represented as well as the majority of the par values of the shares represented at a shareholders meeting are required for: (i) changes in Basilea's purpose; (ii) the creation of shares with privileged voting rights; (iii) restrictions on the transferability of registered shares; (iv) an authorized or conditional capital increase (genehmigte oder bedingte Kapitalerhöhung); (v) an increase of capital out of equity against contributions in kind (Kapitalerhöhung aus Eigenkapital gegen Sacheinlage) or for the purpose of an acquisition of assets (zwecks Sachübernahme) and the granting of special benefits; (vi) the limitation or withdrawal of preferential subscription rights; (vii) the change of the registered offices of Basilea; and (viii) the dissolution of Basilea without liquidation (e.g. through merger). In addition, amendments of the clauses of the Articles of Basilea on transfer restrictions, on the conversion of registered shares into bearer shares as well as amendments to the clause relating to such additional items requiring a qualified majority also require the qualified majority mentioned before.
majority (qualifiziertes Mehr) of at least two-thirds of the share votes represented as well as the majority of the par values of the shares represented at a shareholders meeting are required for: (i) changes in Basilea's purpose; (ii) the creation of shares with privileged voting rights; (iii) restrictions on the transferability of registered shares; (iv) an authorized or conditional capital increase (genehmigte oder bedingte Kapitalerhöhung); (v) an increase of capital out of equity against contributions in kind (Kapitalerhöhung aus Eigenkapital gegen Sacheinlage) or for the purpose of an acquisition of assets (zwecks Sachübernahme) and the granting of special benefits; (vi) the limitation or withdrawal of preferential subscription rights; (vii) the change of the registered offices of Basilea; and (viii) the dissolution of Basilea without liquidation (e.g. through merger). In addition, amendments of the clauses of the Articles of Basilea on transfer restrictions, on the conversion of registered shares into bearer shares as well as amendments to the clause relating to such additional items requiring a qualified majority also require the qualified majority mentioned before.
The shareholders meeting may at any time convert registered shares into bearer shares or bearer
shares into registered shares through an amendment of the Articles.
shares into registered shares through an amendment of the Articles.
Convening of shareholders meetings and agenda items
The shareholders meeting is the highest governing institution of Basilea. Under Swiss law, the ordinary shareholders meeting takes place annually within six months after the close of the business year. Shareholders meetings may be convened by the Board of Directors or, if necessary, by the auditors. The Board of Directors is furthermore required to convene an extraordinary shareholders meeting if so requested in writing by holders of shares representing at least 10% of the share capital of Basilea, setting forth the items to be included on the agenda and the proposals. Shareholders representing shares with a par value of at least CHF 100,000 have the right to request in writing that an item be included on the agenda of the next shareholders meeting, setting forth the item and the proposals. According to article 7 of the Articles, the request to put an item on the agenda has to be made at least 45 days prior to the shareholders meeting. Extraordinary shareholders meetings can be called as often as necessary, in particular, in all cases required by law.
Shareholders meetings must be convened by publishing a notice in the Swiss Official Gazette of Commerce (Schweizerisches Handelsamtsblatt) at least 20 days prior to such meeting. In addition, holders of registered shares may be informed by a letter sent to the address indicated in the share register.
Registration in the share register
The Board of Directors determines the relevant deadline for registration in the share register giving
the right to attend and to vote at the shareholders meeting (Stichtag). Such deadline is published by Basilea in the Swiss Official Gazette of Commerce and the Company's website, usually in connection with the publication of the invitation to the shareholders meeting. In case that such deadline for the ordinary annual shareholders meeting is already determined by the Board of Directors prior to the printing of the annual report, it will also be included in the annual report.
the right to attend and to vote at the shareholders meeting (Stichtag). Such deadline is published by Basilea in the Swiss Official Gazette of Commerce and the Company's website, usually in connection with the publication of the invitation to the shareholders meeting. In case that such deadline for the ordinary annual shareholders meeting is already determined by the Board of Directors prior to the printing of the annual report, it will also be included in the annual report.
In 2012, the deadline for registration in the share register in order to participate and to vote at the ordinary general meeting of shareholders of April 17, 2012 was April 5, 2012.
The registration deadline for the ordinary general meeting of shareholders to be held on April 9, 2013 has been set as March 28, 2013.
Basilea has not enacted any rules on the granting of exceptions in relation to these deadlines.
For further information on the registration in the share register, please refer to the section "limitations on transferability of shares and nominee registrations" above.
The Articles contain no provision which would rule out the obligation of an acquirer of shares exceeding the threshold of 33 1/3% of the voting rights to proceed with a public purchase offer (opting-out provision pursuant to article 22 para. 2 and 3 SESTA), or which would increase such threshold to 49% of the voting rights (opting-up provision pursuant to article 32 para. 1 SESTA).
Clauses on changes of control
Basilea's stock option plan contains provisions in respect of changes of Basilea's shareholder base. The change of control definition in the stock option plan includes the launch of any offer for the shares of the Company, which exceeds the mandatory offer threshold of 33 1/3% of all shares of the Company, if such offer becomes unconditional (subject to conditions subsequent).
In case of a change of control, all unexercised stock options of all option holders, including but not limited to stock options held by members of the Board of Directors and of the Management
Committee, vest and become exercisable.
Committee, vest and become exercisable.
in the share price realized in such cashless exercise and the price offered for the underlying shares. Alternatively, Basilea will procure that the offeror will offer to purchase the options.
Furthermore, upon a change of control, the provisions of the stock option plan cannot be changed to the detriment of their holders and Basilea will hold the option holders harmless for any income taxes or social security contributions that are due or may become due related to the exercise, conversion or sale of stock options. These provisions would also apply to stock appreciation rights under Basilea's stock option plan.
In addition, with regard to all employment agreements of indefinite nature, the period for terminations for any cause by the Company, will automatically and immediately be extended to 12 months. In the event of any material change of the particulars of the contract regarding the position and location, the employee shall have the right to terminate employment with immediate effect resulting in a severance payment of an annual salary by the Company. Material change means a planned downgrading of more than one level in terms of position. In terms of work place, any location outside the greater Basel area is considered material.
No other change of control provision exists for the benefit of members of the Board of Directors or of the Management Committee.
Auditors
Duration of the mandate and term of office of the lead auditor
The statutory and group auditors of Basilea are PricewaterhouseCoopers AG, Basel, Switzerland.
PricewaterhouseCoopers AG has held the function of statutory auditor since inception of Basilea on October 17, 2000, and acts as group auditor since 2002. The lead auditor of Basilea since March 2008 is Mr. Thomas Brüderlin.
PricewaterhouseCoopers AG has held the function of statutory auditor since inception of Basilea on October 17, 2000, and acts as group auditor since 2002. The lead auditor of Basilea since March 2008 is Mr. Thomas Brüderlin.
Auditing fees
In 2012, PricewaterhouseCoopers AG and its affiliates charged the Company auditing fees in the amount of CHF 243,672 (2011: CHF 228,108).
Additional fees
In 2012, PricewaterhouseCoopers AG and its affiliates have not charged the Company any additional fees.
Information instruments of the auditors
The Audit Committee of the Board of Directors assumes the task of supervising the auditors. The
Audit Committee meets with the external auditors at least once a year to discuss the scope and the results of the audit and to assess the quality of their services.
Audit Committee meets with the external auditors at least once a year to discuss the scope and the results of the audit and to assess the quality of their services.
In 2012, the Audit Committee met with the auditors twice to discuss the scope and results of their
year-end audit for 2011, the scope of the 2012 audit as well as the results of their review of the
half-year financial statements per June 30, 2012.
year-end audit for 2011, the scope of the 2012 audit as well as the results of their review of the
half-year financial statements per June 30, 2012.
Information policy
Basilea publishes financial results twice a year in form of an annual report and a half-year interim
report. In addition, Basilea informs shareholders and the public regarding the Company's business
through press releases, conference calls and road-shows. Where required by law or Basilea's Articles
of Incorporation, publications are also made in the Swiss Official Gazette of Commerce.
report. In addition, Basilea informs shareholders and the public regarding the Company's business
through press releases, conference calls and road-shows. Where required by law or Basilea's Articles
of Incorporation, publications are also made in the Swiss Official Gazette of Commerce.
The annual report is customarily published within three months after the end of the financial year,
while the interim report is customarily published within two months after the end of the half-year
reporting period. Key financial figures for the respective reporting period are disclosed in a press release. Both, report and press release are usually published on the same day. The intended
release dates for the annual and interim report will be posted in the investors calendar on Basilea's website (www.basilea.com) at the latest six months prior to the event.
The annual report may be sent in printed form to all registered shareholders. Annual reports, interim reports and press releases can be obtained free of charge in either German or English upon request and are also made available on the Company's website.
Basilea's website is the permanent source of information for investors and stakeholders. It also
provides information on the Company's marketed products, research and development programs as well as contact information. In addition, it includes an investors calendar with information on events such as shareholders meetings, publication dates of half and full-year financials, and information on investor conferences where Basilea is presenting. The investors calendar is continuously updated throughout the financial year.
The Company provides general guidance to support the investment community and the public in their assessment of the Company and its business prospects. The Board of Directors has issued a disclosure policy to ensure that investors will be informed in compliance with the requirements of the SIX Swiss Exchange.
The Company's investor relations department is available to respond to queries from shareholders or potential investors under investor_relations@basilea.com or via post to Basilea Pharmaceutica International Ltd., Investor Relations, P.O. Box, 4005 Basel, Switzerland. Additionally, investor relations inquiries may also be made by phone at +41 61 606 1233.
A subscription service to Basilea's press releases is provided at http://www.basilea.com/Investor-
Relations/News-subscription.
Relations/News-subscription.
The Board of Directors has approved a policy with the goal of preventing any inappropriate trading based on confidential Company information. The policy provides guidance to Company employees on their responsibilities with respect to trading. The Board of Directors has established close periods, i.e. non-trading periods, during which board and management members as well as certain groups of employees that are involved in the financial reporting are prohibited from trading.
Ethical business conduct
The Company is committed to the highest standards of ethical business conduct. As a biopharmaceutical company, the Company is operating in a highly regulated business environment. Strict compliance with all legal and health authority requirements, as well as requirements of other regulators, is mandatory. To fulfill these goals, the Board of Directors issued a Code of Conduct which was reviewed and updated in 2011. The Code of Conduct sets forth the Company's policy embodying the high standards of business ethics and integrity required of all employees, contractors and agents when conducting business affairs on behalf of the Company. The Company's internal Compliance Committee, established by the Management Committee in 2011, met regularly during 2012. It is comprised of representatives of the assurance functions to oversee and coordinate compliance. The Company is committed to complying with the spirit and letter of all applicable laws and regulations where the Company engages in business.
© 2013 Basilea Pharmaceutica Ltd.
