- Corporate
Corporate Governance
Articles of Incorporation
Statuten-D.pdf
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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, 2010; 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 its 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, Italy, Spain, and the United Kingdom focusing on the distribution of pharmaceutical products (collectively the "Company").
Basilea subsidiaries (as of December 31, 2010)
– Basilea Pharmaceutica China Ltd., Haimen, China
– Basilea Pharmaceuticals A/S, Birkerød, Denmark
– Basilea Pharma SAS, Boulogne-Billancourt, France
– Basilea Pharmaceutica Deutschland GmbH, Munich, Germany
– Basilea Pharmaceutica S.r.l., Milan, Italy
– Basilea Pharmaceuticals Iberia S.L., Madrid, Spain
– Basilea Pharmaceutica International Ltd., Basel, Switzerland
– BPh Investitionen Ltd., Baar, Switzerland
– Basilea Medical Ltd., Guildford, UK
– Basilea Pharmaceuticals Ltd., Guildford, UK
– Basilea Pharmaceutica China Ltd., Haimen, China
– Basilea Pharmaceuticals A/S, Birkerød, Denmark
– Basilea Pharma SAS, Boulogne-Billancourt, France
– Basilea Pharmaceutica Deutschland GmbH, Munich, Germany
– Basilea Pharmaceutica S.r.l., Milan, Italy
– Basilea Pharmaceuticals Iberia S.L., Madrid, Spain
– Basilea Pharmaceutica International Ltd., Basel, Switzerland
– BPh Investitionen Ltd., Baar, Switzerland
– Basilea Medical Ltd., Guildford, UK
– Basilea Pharmaceuticals Ltd., Guildford, UK
In 2010, the Company closed down its organizations in Italy and Spain and closed down and
liquidated its subsidiary in Canada in connection with the execution of distribution agreements
with third parties for these countries.
liquidated its subsidiary in Canada in connection with the execution of distribution agreements
with third parties for these countries.
The operating activities of the Company are focused on research, development and commercialization of pharmaceutical products. The Company’s operating activities are directed by and primarily located within Basilea International. Basilea International is operationally organized along core activities with commercial operations, headed by the Chief Commercial Officer, a development function, headed by the Chief Medical Officer, a research function, headed by the Chief Scientific Officer, finance and business development, headed by the Chief Financial Officer and technical operations, headed by the Chief Technology Officer. These heads are members of the Management Committee. The Management Committee is led by the Chief Executive Officer. For further information on the Management Committee, please refer to the section "Management Committee/members, functions and other activities".
Basilea is represented on the Board of Directors of its wholly-owned subsidiaries. In addition, there is close operational cooperation between Basilea International and its 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, 2010, the market capitalization of Basilea amounted to CHF 623,146,615 (9,586,871 registered shares with a nominal value of CHF 1 per share). None of its shares were held
by the Company on this date.
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, 2010. Basilea China is located in the Haimen Technological Development Zone, Jiangsu Province (north of Shanghai), People’s Republic of China. The subsidiary provides complementary services in connection with Basilea’s research and development compounds, primarily in the field of chemical synthesis research and 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 Zugerstrasse 76b 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, 2010. Basilea China is located in the Haimen Technological Development Zone, Jiangsu Province (north of Shanghai), People’s Republic of China. The subsidiary provides complementary services in connection with Basilea’s research and development compounds, primarily in the field of chemical synthesis research and 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 Zugerstrasse 76b 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.
As of December 31, 2010, the Company engaged about 300 employees (full-time equivalents).
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 2010.
Significant shareholders
According to the Company's share register, the following shareholders held three percent or
more of Basilea shares as of December 31, 2010:
more of Basilea shares as of December 31, 2010:
|
Shareholder |
Number of registered shares |
Ownership percentage |
|
Chase Nominees Ltd., London
Wall 125, London EC2Y 5AJ,
UK (registered without voting rights) |
1 088 971 |
11.36 |
|
Pictet Funds Europe SA on behalf of Pictet Funds (LUX) - Biotech, 1 Boulevard Royal, 2449 Luxembourg, Luxembourg |
738 940 |
7.71 |
|
Roche Finanz AG,
Grenzacherstrasse 122,
4058 Basel, Switzerland |
605 827 |
6.32 |
|
Varuma AG,
Aeschenvorstadt 55,
4051 Basel, Switzerland |
395 000 |
4.12 |
The ownership percentages in the table above are based on the 9,586,871 shares outstanding as of December 31, 2010.
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, 2010:
During 2010, Basilea received several notifications regarding indirect holdings of Franklin Resources, Inc., One Franklin Parkway, San Mateo, CA 94403, USA. As per the last notification, received on October 29, 2010, Franklin Resources, Inc. held 960,203 Basilea shares, corresponding to 10.02% of the voting rights.
On March 25, 2008, HBM BioVentures (Cayman) Ltd., Centennial Tower, 3rd Floor, 2454 West Bay
Road, Grand Cayman, Cayman Islands, notified Basilea of its holdings of 534,000 Basilea shares,
corresponding to 5.57% of the voting rights.
Road, Grand Cayman, Cayman Islands, notified Basilea of its holdings of 534,000 Basilea shares,
corresponding to 5.57% of the voting rights.
On February 25, 2009, Sectoral Asset Management Inc., 1000 Sherbrooke Street West, Suite 2120, Montreal H3A 3G4, Canada, notified Basilea of its holdings of 489,458 Basilea shares, corresponding to 5.11% of the voting rights.
All disclosures of shareholdings, including those of shareholders that fell below three percent during
2010, 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
2010, 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, 2010.
Capital structure and shares
Share capital
The share capital of Basilea as of December 31, 2010, amounted to CHF 9,586,871 consisting of
9,586,871 registered shares with a par value of CHF 1 per share. The share capital is fully paid
up. As of December 31, 2010, the Company did not hold any shares of Basilea.
9,586,871 registered shares with a par value of CHF 1 per share. The share capital is fully paid
up. As of December 31, 2010, the Company did not hold any shares of Basilea.
Authorized capital and conditional capital
As of December 31, 2010, total authorized capital amounted to CHF 2,000,000 and total conditional
capital amounted to CHF 3,313,270.
capital amounted to CHF 3,313,270.
On March 30, 2010, the general meeting of shareholders approved to increase the conditional capital of the Company by CHF 500,000. The share capital of the Company thus shall be increased by a maximum amount of CHF 2,675,220 by the issue of a maximum of 2,675,220 fully paid-up registered shares having a par value of CHF 1 – each by the exercise of option rights granted under the Company’s or a Group company’s option plan to the employees and/or members of the Board of Directors. The preferential subscription rights of the existing shareholders are excluded. The issue price will be set by the Board of Directors. Additional CHF 640,000 are reserved for the exercise of
option or conversion rights granted to the holders of options or bonds in connection with new bonds or similar debt instruments that would be issued by Basilea or one of its subsidiaries, and for which the Board of Directors is entitled to set the conditions. The prior subscription right of shareholders ("Vorwegzeichnungsrecht") is granted for the portion of CHF 640,000, but its exercise is limited to three working days. The minimum issue price for shares issued in connection with bonds or similar debt instruments has to amount to at least CHF 75 per share and is set by the Board of Directors. Relating to bonds or similar debt instruments connected with conversion or option rights for which the prior subscription right is withdrawn, the option rights may be exercised only during a maximum period of seven years, and the conversion rights only during a maximum of ten years.
option or conversion rights granted to the holders of options or bonds in connection with new bonds or similar debt instruments that would be issued by Basilea or one of its subsidiaries, and for which the Board of Directors is entitled to set the conditions. The prior subscription right of shareholders ("Vorwegzeichnungsrecht") is granted for the portion of CHF 640,000, but its exercise is limited to three working days. The minimum issue price for shares issued in connection with bonds or similar debt instruments has to amount to at least CHF 75 per share and is set by the Board of Directors. Relating to bonds or similar debt instruments connected with conversion or option rights for which the prior subscription right is withdrawn, the option rights may be exercised only during a maximum period of seven years, and the conversion rights only during a maximum of ten years.
In 2010, 1,950 (2009: 13,518, 2008: 27,725) registered shares with a par value of CHF 1 per share
were issued under the conditional capital in connection with the exercise of stock options under
Basilea’s stock option plan.
were issued under the conditional capital in connection with the exercise of stock options under
Basilea’s stock option plan.
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.
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.
set forth under "limitations on transferability of shares and nominee registrations" below.
Stock option plan amendment
In 2010, the Company offered participants of its stock option plan an option to amend the terms
and conditions of certain outstanding stock options, in return for the cancellation of a number
of stock options. The amendment of the stock options was value-neutral. As a result, 575,409
stock options were cancelled.
and conditions of certain outstanding stock options, in return for the cancellation of a number
of stock options. The amendment of the stock options was value-neutral. As a result, 575,409
stock options were cancelled.
For further information on the stock option amendment, please refer to note 12 (stock-based
compensation) to the consolidated financial statements of the Annual Report 2010.
compensation) to the consolidated financial statements of the Annual Report 2010.
Changes in capital
In 2010, Basilea increased its share capital by CHF 1,950 (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.
value of CHF 1 per share as a result of the exercise of stock options under Basilea’s stock option plan.
In 2009, Basilea increased its share capital by CHF 13,518 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 2008, 27,725 registered shares were issued as a result of the exercise of stock options under Basilea's stock option plan.
For further information on changes in capital in 2010, 2009 and 2008, 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, 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 2009 and 2008 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. 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.
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 2010.
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, 2010 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 2010.
Board of Directors
Members, functions and other activities
The following table sets forth the name 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 | 2009 | 2012 |
| Prof. Daniel Lew | 2003 | 2012 |
| Dr. Anthony Man | 2004 | 2011 |
| Mr. Claude Schreiner | 2007 | 2013 |
|
Mr. Ronald Scott |
2004 |
2011 |
|
Mr. Steven D. Skolsky, Vice-Chairman |
2008 |
2011
|
 |
 |
 |
 |
|
Mr. Werner Henrich
|
Mr. Hans-Beat Gürtler |
Prof. Daniel Lew |
|
 |
 |
 |
|
|
Mr. Claude Schreiner |
Mr. Ronald Scott |
Mr. Steven D. Skolsky |
|
Changes in the Board of Directors
Mr. Werner Henrich, Chairman and Mr. Claude Schreiner were re-elected as members of the Board of Directors for a term of three years at the general meeting of shareholders on March 30, 2010.
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 was born in 1946, is a Swiss citizen and 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 startups and SMEs, primarily in the pharma and biotech sector. He is a board member 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 and Chief of the Academic Department 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, Massachusetts, 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 President of the International Society for Infectious Diseases (ISID).
Geneva Medical School, Chief of the Service of Infectious Diseases, Chief of the Department of
Specialties and Chief of the Academic Department 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, Massachusetts, 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 President of the International Society for Infectious Diseases (ISID).
Anthony Man, Chief Executive Officer, MD, FRCP, was born in 1956, is a Swiss citizen and holds an
honor’s degree in biochemistry in addition to a medical degree. He is an elected Fellow of the Royal College of Physicians (UK). Dr. Man has over 20 years international pharmaceutical industry
experience and has developed numerous successful products particularly in oncology. He has
held a variety of senior positions spanning preclinical 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.
honor’s degree in biochemistry in addition to a medical degree. He is an elected Fellow of the Royal College of Physicians (UK). Dr. Man has over 20 years international pharmaceutical industry
experience and has developed numerous successful products particularly in oncology. He has
held a variety of senior positions spanning preclinical 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.
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 Head Quarters 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.
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 Head Quarters 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.
Ronald Scott, Chief Financial Officer, was born in 1955 and is a Swiss citizen. 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.
Steven D. Skolsky, Vice-Chairman, was born in 1956. He is a U.S. citizen and holds a Bachelor of
Arts degree in Biology from the University of North Carolina at Chapel Hill. Mr. Skolsky has over 28
years of general management and international pharmaceutical experience with emphasis on product strategy, commercialization and product development. 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 company that discovered and commercialized Fuzeon®, a novel, first-in-class HIV therapeutic in collaboration with partner F. Hoffmann-La Roche. Previously, Mr. Skolsky served over 23 years at GlaxoSmithKline 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.
Arts degree in Biology from the University of North Carolina at Chapel Hill. Mr. Skolsky has over 28
years of general management and international pharmaceutical experience with emphasis on product strategy, commercialization and product development. 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 company that discovered and commercialized Fuzeon®, a novel, first-in-class HIV therapeutic in collaboration with partner F. Hoffmann-La Roche. Previously, Mr. Skolsky served over 23 years at GlaxoSmithKline 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.
Dr. Man, CEO of Basilea, and Mr. Scott, CFO of Basilea, are executive members of the Board of
Directors. Neither Dr. Man nor Mr. Scott is member of any of the board committees. All other members were non-executive board members in 2010.
Directors. Neither Dr. Man nor Mr. Scott is member of any of the board committees. All other members were non-executive board members in 2010.
Mr. Henrich, Chairman of the Board, acted as CEO of Basilea from February 2001 to October 2001. None of the other non-executive members of the Board of Directors served in the management
of Basilea or any of its subsidiaries since inception of Basilea. In addition, Mr. Henrich acted as a consultant to Basilea in 2010.
of Basilea or any of its subsidiaries since inception of Basilea. In addition, Mr. Henrich acted as a consultant to Basilea in 2010.
There are no other significant business connections between non-executive 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 2010.
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.
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. Newly elected members enter into the term of their predecessors.
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. Newly elected members enter into the term of their predecessors.
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 to ultimately
manage the corporation and to issue the necessary directives, to determine the organization, to organize the accounting system, the financial controls as well as the financial planning and to appoint, recall, and ultimately supervise 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 to ultimately
manage the corporation and to issue the necessary directives, to determine the organization, to organize the accounting system, the financial controls as well as the financial planning and to appoint, recall, and ultimately supervise 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 or specification of these duties, the Board specifically retains certain main decisionmaking competencies, including setting the strategy and short and long-term goals of Basilea; all M&A transactions as far as 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, 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 his 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 his 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.
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 while
the resolutions are passed by the Board of Directors. The Board determined to retain nomination
responsibilities for the full Board of Directors.
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 while
the resolutions are passed by the Board of Directors. The Board determined to retain nomination
responsibilities for the full Board of Directors.
In the meeting of the Board of Directors subsequent to the ordinary shareholder’s meeting on March 30, 2010, the following Audit Committee was elected or confirmed, respectively: Mr. Claude Schreiner (Chairman), Prof. Daniel Lew and Mr. Hans-Beat Gürtler.
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 nonaudit 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 the 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 nonaudit 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 the 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 five meetings at the offices of Basilea in 2010, with a duration of
approximately one half-day to a full day. The main topics at these meetings were the review of the year-end financial statements and annual report 2009; the review of the half-year financial statements 2010; the review of the annual budget 2010 and 2011 as well as mid-term financial
forecasts; financial and non-financial risk management and the scope of the external audit 2010. The external auditors were present at two Audit Committee meetings in 2010 to report on the results of the audit 2009 and the half-year review 2010. The respective recommendations of the Audit Committee were then further discussed for approval or modification by the full Board of Directors.
approximately one half-day to a full day. The main topics at these meetings were the review of the year-end financial statements and annual report 2009; the review of the half-year financial statements 2010; the review of the annual budget 2010 and 2011 as well as mid-term financial
forecasts; financial and non-financial risk management and the scope of the external audit 2010. The external auditors were present at two Audit Committee meetings in 2010 to report on the results of the audit 2009 and the half-year review 2010. The respective recommendations of the Audit Committee were then further discussed for approval or modification by the full Board of Directors.
In the meeting of the Board of Directors subsequent to the ordinary shareholder’s meeting on March 30, 2010, the following Compensation Committee was elected or confirmed, respectively: Mr. Werner Henrich (Chairman), Mr. Claude Schreiner, Mr. Steven D. Skolsky and Mr. Hans-Beat Gürtler.
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 Basilea’s other employees, and the basic principles for the establishment, amendment and implementation of Basilea’s stock option plan.
The Compensation Committee held two meetings in 2010 each with a duration of one or more hours. The main topics at these meetings included the review of the 2009 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 further discussed for approval or modification by the full Board of Directors.
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 2010, the Board of Directors held twelve meetings with a typical duration of one-half to one day. Six of these meetings were held at the offices of Basilea. Five 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 and licensing activities. In addition, an update is given at board meetings on the status of the Company’s share price development.
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 by law, the Articles or the
Organizational Regulations, to the Board of Directors (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 by law, the Articles or the
Organizational Regulations, to the Board of Directors (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 the management. At each board meeting, the CEO and CFO report on the financial, commercial and
research and development status, 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 from time to time also calls upon further members of the Management Committee and management to attend board meetings for reporting purposes.
research and development status, 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 from time to time also calls 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 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.
The audited consolidated financial statements for the previous financial year are provided to the Audit Committee for their review at the end of January/beginning of February of each year. The consolidated interim financial statements for the half-year are provided to the Audit Committee at the end of July/beginning of August of each year. The financial statements are then recommended by the Audit Committee to the full Board of Directors at its subsequent meeting.
Furthermore, around November of each year, upon recommendation of the Audit Committee, the Board of Directors 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 comprises certain executives including the CEO. Under the
responsibility of the CEO and the supervision of the Board of Directors, it conducts the operational management of the Company pursuant to the Organizational Regulations and provides reports to the Board of Directors under the direction of the CEO at least on a monthly basis. 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 current members
of the Management Committee. In addition, a short description of each member’s nationality, business experience, education and activities is outlined below.
of the Management Committee. In addition, a short description of each member’s nationality, business experience, education and activities is outlined below.
|
Name |
Appointed |
Position |
|
Dr. Anthony Man |
2003 |
Chief Executive Officer |
| Dr. Ingrid Heinze-Krauss | 2006 | Chief Technology Officer |
|
Prof. Achim Kaufhold |
2010 |
Chief Medical Officer |
|
Dr. Laurenz Kellenberger |
2009 |
Chief Scientific Officer |
|
Mr. Hans Christian Rohde |
2007 |
Chief Commercial Officer |
|
Mr. Ronald Scott |
2000 |
Chief Financial Officer |
 |
 |
 | ||
|
Dr. Anthony Man |
|
Dr. Ingrid Heinze-Krauss |
|
Prof. Achim Kaufhold |
|
|
|
|
|
|
 |
 |
| ||
|
Dr. Laurenz Kellenberger |
|
Mr. Hans Christian Rohde |
|
Mr. Ronald Scott |
For information on Anthony Man, Chief Executive Officer, and Ronald Scott, Chief Financial Officer, please refer to the section "Board of Directors" above.
Ingrid Heinze-Krauss, Chief Technology Officer, is a German citizen, holds a Ph.D. 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.
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, a German citizen, 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 USA. 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. Dr. Kaufhold has spent
more than 17 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, Dr. 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, a Swiss citizen, holds a Ph.D. in organic chemistry from the Swiss Federal Institute of Technology Zürich (ETH Zürich). 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. Dr. Kellenberger’s expertise covers the range of synthetic organic and natural product chemistry to microbial molecular genetics. 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.
Hans Christian Rohde, Chief Commercial Officer, Danish citizen, holds a Master of Science from the University of Copenhagen, August Krogh Institute and B.Sc., University of Odense. In addition, he holds an executive MBA from the University of Birmingham. 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 countries both in Europe 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.
experiences in the pharmaceutical industry. He has held operational and strategic positions in sales, marketing and general management across multiple therapeutic areas in six countries both in Europe 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.
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.
For further information on activities for the Company and changes in the Management Committee,
please refer to the sections "Board of Directors/members, functions and other activities" and "Management Committee/members, functions and other activities".
please refer to the sections "Board of Directors/members, functions and other activities" and "Management Committee/members, functions and other activities".
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 considers compensation packages of other Swiss companies in the
biotech and pharmaceutical industry that are comparable to Basilea with respect to sector, size or business model and also evaluates respective compensation surveys.
Compensation Committee considers compensation packages of other Swiss companies in the
biotech and pharmaceutical industry that are comparable to Basilea with respect to sector, size or business model and also evaluates respective compensation surveys.
Board of Directors
The compensation package for non-executive board members consists of a fixed annual monetary
compensation, a compensation based on meeting attendance and engagement in board committees, as well as stock options. In addition, Basilea reimburses director’s out-of-pocket expenses related to their engagement as members of the board on an on-going basis upon invoice receipt. The non-executive board members obtain a fixed annual compensation for their board membership of CHF 26,250 which is paid in June each year. Furthermore, each nonexecutive board member obtains a meeting fee of CHF 5,250 per meeting attended whereby the maximum cumulated meeting fee paid per year is limited to CHF 26,250. The cumulated meeting fee is paid once a year in December. In addition, each non-executive board member acting as a member of the Audit or Compensation Committee obtains an annual one-time committee fee of CHF 5,250 paid in December each year.
The Chairman of the Board of Directors receives a fixed annual compensation of CHF 39,375, an annual committee fee of CHF 7,875 and a meeting fee of CHF 7,875 per meeting attended whereby the maximum cumulated meeting fee paid is limited to CHF 39,375. The latest Board review of the compensation for non-executive board members took place on November 10, 2010.
compensation, a compensation based on meeting attendance and engagement in board committees, as well as stock options. In addition, Basilea reimburses director’s out-of-pocket expenses related to their engagement as members of the board on an on-going basis upon invoice receipt. The non-executive board members obtain a fixed annual compensation for their board membership of CHF 26,250 which is paid in June each year. Furthermore, each nonexecutive board member obtains a meeting fee of CHF 5,250 per meeting attended whereby the maximum cumulated meeting fee paid per year is limited to CHF 26,250. The cumulated meeting fee is paid once a year in December. In addition, each non-executive board member acting as a member of the Audit or Compensation Committee obtains an annual one-time committee fee of CHF 5,250 paid in December each year.
The Chairman of the Board of Directors receives a fixed annual compensation of CHF 39,375, an annual committee fee of CHF 7,875 and a meeting fee of CHF 7,875 per meeting attended whereby the maximum cumulated meeting fee paid is limited to CHF 39,375. The latest Board review of the compensation for non-executive board members took place on November 10, 2010.
Executive members of the Board of Directors do not obtain any compensation for their participation
in the Board of Directors.
in the Board of Directors.
Management Committee
The compensation of the members of the Management Committee includes a base salary, as well as a bonus and stock options. 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 bonus is calculated as a percentage of the base salary whereby the maximum is determined in the employment contract. The range of bonuses for 2010 is between 35% and 45% of the base salary, which constitutes an increase from the bonus range of 25% and 40% in 2009. The Board of Directors approved this increase of the annual bonus percentage in 2010 in combination with a reduction of the 2010 option grant. As in 2009, two members of the Management Committee have a guaranteed minimum bonus of 20% of their base salary provided that a bonus is distributed by Basilea. In addition, Basilea contributes to the pension plan and maintains certain insurances for death and invalidity.
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 the Company goals set by the Board of Directors annually. These Company goals are related to the key value drivers of the Company, such as successful completion of clinical trials, providing drug supply for clinical trials and commercial requirements, identification of clinical product candidates, successful achievement of commercial operations goals and financing these activities. In a second step, the individual bonus for members of the Management Committee which includes the two executive board members is determined by the Board of Directors upon recommendation of the Compensation Committee based on the individual performance and management’s respective contribution to achieving the Company’s goals. The individual performance objectives of the members of the Management Committee are aligned to the company strategy and annual goals. The weighting of the company goals (40%) and individual objectives (60%) is the same for all members of the Management Committee. An increase of the operative results compared to the previous year and/or exceeding the set objectives therefore has a positive impact on the annual bonus. A reduction of the operative results and/or the non-achievement of set objectives reduces the annual bonus.
Basilea has no contractual termination payment obligations to Board members or members of the Management Committee. Basilea made no termination payments in 2010. Board members and members of the Management Committee are subject to the Standard Basilea Terms and Conditions for Basilea employees. The notice period of the employment agreements for the members of the Management Committee 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
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 development of 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 performances. Any value, income or other benefit derived from any option or stock appreciation right 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 2010 was CHF 65.55 (2009: CHF 78.00). 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 2010.
compensation) to the consolidated financial statements as well as note 5 (compensation and shareholdings) to the financial statements of the Annual Report 2010.
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 2010.
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 shareholder 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.
Directors before each annual shareholder 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 ("Kapitalerhöhung aus Eigenkapital") against contributions in kind ("Sacheinlage") or for the purpose of an acquisition of assets ("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 ("Kapitalerhöhung aus Eigenkapital") against contributions in kind ("Sacheinlage") or for the purpose of an acquisition of assets ("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 supreme 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’ 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 2010, the deadline for registration in the share register in order to participate and to vote at the
ordinary shareholders’ meeting of March 30, 2010, was March 18, 2010. It is Basilea’s intention
regarding future shareholders’ meetings that this timeframe will not change significantly.
ordinary shareholders’ meeting of March 30, 2010, was March 18, 2010. It is Basilea’s intention
regarding future shareholders’ meetings that this timeframe will not change significantly.
The registration deadline for the ordinary shareholders’ meeting to be held on April 6, 2011, has
been determined to be March 25, 2011.
been determined to be March 25, 2011.
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).
(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 2010, PricewaterhouseCoopers AG and its affiliates charged the Company auditing fees in the amount of CHF 214,715.
Additional fees
In 2010, 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 2010, the Audit Committee met with the auditors twice to discuss the scope and results of their
year-end audit for 2009, the scope of the 2010 audit as well as the results of their review of the
half-year financial statements per June 30, 2010.
year-end audit for 2009, the scope of the 2010 audit as well as the results of their review of the
half-year financial statements per June 30, 2010.
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 usually published within three months after the end of the financial year, and no later than April, while the interim report is usually published within two months after the end of the half-year reporting period. In addition, 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 on Basilea's website (www.basilea.com) at the end of the respective full or half-year reporting period.
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 language versions 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 a corporate calendar with information on events important to investors such as the annual shareholders' meeting, conferences or analyst events. The corporate calendar is continuously updated throughout the financial year.
provides information on the Company’s marketed products, research and development programs as well as contact information. In addition, it includes a corporate calendar with information on events important to investors such as the annual shareholders' meeting, conferences or analyst events. The corporate calendar is continuously updated throughout the financial year.
The Company will provide 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 the 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 shareholders’ or potential
investors’ queries under investor_relations@basilea.com or via post to Basilea Pharmaceutica Ltd., Investor Relations, P.O. Box, CH-4005 Basel, Switzerland. Additionally, investor relations inquiries may also be made by phone at +41 61 606 1233.
investors’ queries under investor_relations@basilea.com or via post to Basilea Pharmaceutica Ltd., Investor Relations, P.O. Box, CH-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 issued an Insider Policy, which was reviewed and amended in 2006 in order to prevent insiders from benefiting from confidential information. The policy provides guidance on how to deter corporate insiders from making use of confidential information. The Board of Directors has established close periods, i.e. non-trading periods, to prevent insiders from trading during sensitive periods.
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. The Company expects that its employees, contractors and agents ("personnel") observe the highest standards of integrity in the conduct of Company’s business. The code of conduct sets forth Company’s policy embodying the high standards of business ethics and integrity required of all personnel when conducting business affairs on behalf of the Company. The Company is committed to complying with the spirit and letter of all applicable laws and regulations where the Company engages in business.
Strict compliance with all legal and health authority requirements, as well as requirements of other regulators, is mandatory. The Company expects that its employees, contractors and agents ("personnel") observe the highest standards of integrity in the conduct of Company’s business. The code of conduct sets forth Company’s policy embodying the high standards of business ethics and integrity required of all personnel when conducting business affairs on behalf of the Company. The Company is committed to complying with the spirit and letter of all applicable laws and regulations where the Company engages in business.
© 2012 Basilea Pharmaceutica Ltd.
