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REG - Faron Pharma. Oy - Notice of Faron Pharmaceuticals Ltd’s AGM

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RNS Number : 8355R  Faron Pharmaceuticals Oy  03 March 2023

NOTICE OF faron pharmaceuticals LTD's ANNUAL GENERAL MEETING

Shareholders of Faron Pharmaceuticals Ltd (the "Company") are notified of the
Annual General Meeting (the "AGM") to be held on March 24, 2023 at 9:00 a.m.
EET (Finnish time) at BioCity, meeting room "Ministeri" at Tykistökatu 6,
FI-20520 Turku, Finland. The registration of attendees and the distribution of
voting slips will commence at the meeting venue at 8:30 a.m. EET (Finnish
time).

The Company's Annual Report 2022 is available to view and download on the
Company's website at https://www.faron.com/ (https://www.faron.com/) .

 

A.  MATTERS ON THE AGENDA OF THE ANNUAL GENERAL MEETING

 

1.   Opening of the meeting

 

2.   Calling the meeting to order

 

3.   Election of persons to scrutinise the minutes and to supervise the
counting of votes

 

4.   Recording the legality of the meeting

 

5.   Recording the attendance at the meeting and adoption of the list of
votes

 

6.   Presentation of the financial statements, the report of the Board of
Directors and the auditor's report for 2022

 

Review by the CEO.

 

7.   Adoption of the financial statements

 

8.   Resolution on the use of the profit shown on the balance sheet and the
payment of dividend

 

The Board of Directors (the "Board") proposes that no dividend for the
financial year 2022 will be paid and that the losses of the Company for the
financial year, amounting to EUR 28.7 million (IFRS), will be carried forward
to the reserve for invested unrestricted equity.

 

9.   Resolution on the discharge of the members of the Board and the CEO of
the Company from liability

 

10. Resolution on the remuneration of the members of the Board

The Board proposes, on the basis of the proposal of the remuneration
committee, that the annual remuneration of the members of the Board remain
unchanged and that EUR 35,000 will be paid to the Board members, in addition
to which an annual remuneration of EUR 35,000 will be paid to the chair of the
Board. In addition, a further annual remuneration of EUR 11,000 will be paid
to the chair of the audit committee, a further annual remuneration of EUR
9,000 will be paid to the chair of the remuneration committee and a further
annual remuneration of EUR 6,000 will be paid to the chair of the nomination
committee. In addition, a further annual remuneration of EUR 6,000 will be
paid to the audit committee members, a further annual remuneration of EUR
5,000 will be paid to the remuneration committee members and a further annual
remuneration of EUR 3,000 will be paid to the nomination committee members.

The Board furthermore proposes that meeting fees will be paid to the Board
members as follows:

•      a meeting fee of EUR 1,000 will be paid to Board members per Board
meeting where the Board member was physically present, and which was held on
another continent than the member's place of residence; and

•      no meeting fees will be paid to Board members who were attending a
Board meeting but not physically present or for Board meetings held on the
same continent as the member's place of residence.

In addition, it is proposed that all reasonable and properly documented
expenses incurred in the performance of duties of the members of the Board
would be compensated.

The Board also proposes, on the basis of the proposal of the remuneration
committee, that no remuneration will be paid based on the Board membership of
the CEO of the Company or a person serving the Company under a full-time
employment or service agreement.

 

11. Resolution on the number of members of the Board

 

The Board proposes, on the basis of the proposal of the nomination committee,
that seven (7) members be elected to the Board.

 

12. Election of members of the Board

 

The Board proposes, on the basis of the proposal of the nomination committee,
that Frank Armstrong, John Poulos, Leopoldo Zambeletti, Markku Jalkanen, Anne
Whitaker and Erik Ostrowski be re-elected to the Board for a term that ends at
the end of the next AGM. In addition, the Board proposes, on the basis of the
proposal of the nomination committee, that Tuomo Pätsi be elected as a new
member to the Board for a term that ends at the end of the next AGM.

 

Tuomo Pätsi, citizen of Finland and Switzerland, holds no other board
memberships at the moment. He is

independent of the Company and its significant shareholders. Information on
the proposed new Board member is available on the Company's website at
https://www.faron.com/investors/general-meetings
(https://www.faron.com/investors/general-meetings) .

 

All proposed Board member candidates have given their consent for the
election. The proposed Board members have informed the Company that in the
event they are elected, they intend to elect Frank Armstrong as chair of the
Board.

 

Information on the Board member candidates proposed to be re-elected are
available on the Company's website at
https://www.faron.com/faron/leadership/board-directors
(https://www.faron.com/faron/leadership/board-directors) .

 

13. Resolution on the remuneration of the auditor

 

The Board proposes, on the basis of the proposal of the audit committee, that
the auditor be remunerated in accordance with the invoice approved.

 

14. Election of the auditor

 

The Board proposes, on the basis of the proposal of the audit committee, that
PricewaterhouseCoopers Oy ("PwC"), a firm of authorised public accountants,
continue to act as the Company's auditor.

 

PwC has informed the Company that it will appoint Panu Vänskä, authorised
public accountant (KHT), as the key audit partner.

 

15. Amendment of the Articles of Association

 

The Board proposes that article 11 § of the Articles of Association of the
Company (Meeting venue) be amended to enable holding a General Meeting
entirely without a meeting venue as a so-called remote meeting in addition to
the Company's domicile and London. The said clause would read amended as
follows:

 

"11§ Meeting venue

 

A General Meeting may in addition to the Company's domicile be held in the
city of London, United Kingdom, on the basis of a resolution of the Board of
Directors. In addition, the Board of Directors may decide that the General
Meeting of the Shareholders be held without a meeting venue so that the
shareholders exercise their power of decision in full in real time during the
meeting using a telecommunications connection and technical means (remote
meeting)."

 

It is proposed that the Articles of Association remain unchanged in other
respects.

 

The proposal is based on the changes to Chapter 5 of the Finnish Companies
Act, including the possibility to arrange general meetings remotely. Arranging
a General Meeting as a remote meeting only, requires specific language in the
Articles of Association. The legislative changes are based on the premise
that, irrespective of the chosen General Meeting format, shareholders' rights
must not be compromised and that all participating shareholders can exercise
their shareholder rights in full in real time, including the right to present
questions and vote. The possibility to organize General Meetings remotely
enables the Company to prepare for rapid changes in the Company's operating
environment and society in general, which may be caused, for example, by
pandemics. It is important that the Company has the necessary means to offer
its shareholders the possibility to exercise their shareholder rights and
resolve on any matters that are presented in a General Meeting under any
circumstances.

 

16. Authorising the Board to decide on the issuance of shares, options or
other special rights entitling to shares

 

The Board proposes that the AGM authorise the Board to resolve by one or
several decisions on issuances of shares, options or other special rights
entitling to shares referred to in Chapter 10, Section 1 of the Finnish
Limited Liability Companies Act, which authorisation contains the right to
issue new shares or dispose of the Company's own shares in the possession of
the Company. The authorisation would consist of up to twelve million five
hundred thousand (12,500,000) new shares in the aggregate (including shares to
be received based on options or other special rights), which corresponds to
approximately twenty (20) per cent of the existing shares and votes in the
Company, as well as the conveyance of up to the same maximum number (twelve
million five hundred thousand (12,500,000)) of treasury shares in the
possession of the Company.

 

In practise, the above authorisation includes that the Board may first resolve
on one or several share issues (up to the maximum number of twelve million
five hundred thousand (12,500,000) new shares) without consideration to the
Company itself and then further convey such treasury shares (up to the maximum
number of twelve million five hundred thousand (12,500,000) shares) against
consideration.

 

The authorisation would not exclude the Board's right to decide on the
issuance of shares, options or other special rights entitling to shares in
deviation from the shareholders' pre-emptive rights.

 

The authorisation is proposed to be used for material arrangements from the
Company's point of view, such as financing (including, without limitation,
issuance of warrants under the funding agreement with IPF Partners announced
on February 28, 2022) or implementing business arrangements, investments or
for other such purposes determined by the Board in which case a weighty
financial reason for issuing shares, options or other special rights entitling
to shares, and possibly deviating from the shareholders' pre-emptive rights,
would exist.

 

For the sake of clarity, it is noted that in no circumstances can the total
number of new shares to be registered under this authorisation exceed twelve
million five hundred thousand (12,500,000) new shares in aggregate.

 

The Board would be authorised to resolve on all other terms and conditions of
the issuance of shares, options or other special rights entitling to shares.

 

The authorisation would be effective until June 30, 2024.

 

17. Resolution on the amendment of the option programme and authorising the
Board to decide on the issuance of options or other special rights entitling
to shares

The Company's AGM has on May 28, 2019 decided to authorise the Board to
resolve on issuances of options or other special rights entitling to shares
referred to in chapter 10, section 1 of the Finnish Limited Liability
Companies Act, and the terms and conditions have later been amended by the
decision of the Company's AGM on May 18, 2020 (the "Share Option Plan 2019").
The Board proposes, on the basis of the proposal of the remuneration
committee, that the AGM would resolve to amend the terms and conditions of the
Share Option Plan 2019, so that a maximum total of four million three hundred
and fifty thousand (4,350,000) options (previously two million (2,000,000)
options) would be offered under said terms and conditions as follows:

 

• to the chair of the Board, a maximum of two hundred and fifty thousand
(250,000) options (before the amendment one hundred and eighty thousand
(180,000) options);

• to each member of the Board (excluding the chair of the Board and the
Chief Executive Officer and the Chief Financial Officer if they would be
considered as members of the Company's Board herein), a maximum of one hundred
and twenty five thousand (125,000) options (before the amendment ninety
thousand (90,000) options);

• to the Chief Executive Officer, a maximum of four hundred and ninety five
thousand (495,000) options (before the amendment three hundred and sixty
thousand (360,000) options);

• to the Chief Financial Officer, a maximum of one hundred and eighty
thousand (180,000) options (before the amendment one hundred and thirty
thousand (130,000) options); and

• for any other non-employee person as determined by the Board, a maximum of
seventy thousand (70,000) options (before the amendment fifty thousand
(50,000) options).

 

Excluding the addition concerning the listing on Nasdaq Helsinki and the
extension of the duration of the authorisation, the terms and conditions of
the option programme would remain otherwise unchanged. The consolidated rules
of the Share Option Plan 2019, incorporating the amendments proposed herein,
are attached hereto as Annex 1. The proposed amendments provide greater
flexibility to offer competitive equity incentive awards to senior leadership
and wider employees in a competitive global talent market.

 

The proposed amendment would increase the maximum total number of options
under the Share Option Plan 2019 by two million three hundred and fifty
thousand (2,350,000) options. This would increase the aggregate per centage of
shares that can be subscribed for based on options from 3,1 per cent to 6,9
per cent of all shares registered at the date of this proposal. The maximum
number of options granted to the chair of the Board would increase by seventy
thousand (70,000) options, representing an increase of approximately 38.9 per
cent, the maximum number of options granted to each member of the Board
(excluding the chair of the Board and the Chief Executive Officer and the
Chief Financial Officer if they would be considered as members of the
Company's Board herein) would increase by thirty five thousand (35,000)
options, representing an increase of approximately 38.9 per cent, the maximum
number of options granted to the Chief Executive Officer would increase by one
hundred and thirty five thousand (135,000) options, representing an increase
of 37.5 per cent, the maximum number of options granted to the Chief Financial
Officer would increase by fifty thousand (50,000) options, representing an
increase of approximately 38.5 per cent and the maximum number of options
granted to other non-employee persons as determined by the Board would
increase by twenty thousand (20,000) options, representing an increase of 40.0
per cent, over the current maximum totals.

 

In relation to the amendment proposed above, the Board further proposes, on
the basis of the proposal of the remuneration committee, that the AGM
authorise the Board to resolve by one or several decisions on issuances of
options or other special rights entitling to shares referred to in chapter 10,
section 1 of the Finnish Limited Liability Companies Act. The authorisation
would consist of up to two million four hundred seventy-three thousand and
eighty four (2,473.084) shares, options or other special rights entitling to
shares in the aggregate, which corresponds to approximately 3.9 per cent of
the existing shares and votes in the Company.

 

The authorisation would not exclude the Board's right to decide on the
issuance of options or other special rights entitling to shares in deviation
from the shareholders' pre-emptive rights. The authorisation is proposed to be
used for implementing an option plan for the employees and directors of, and
persons providing services to, the group, substantially in the form of the
amended Share Option Plan 2019 attached hereto as Annex 1. There is a weighty
financial reason for issuing options, as options are an integral part of the
incentivisation system for the management and personnel of the Company. The
maximum numbers of options to be granted shall be as presented above. For the
sake of clarity it is noted that, as described above, the new amended maximum
amounts include the options already granted under the Share Option Plan 2019,
which is why the proposed size of the authorisation also takes into account
the options already granted based on the previous authorisation.

 

The exercise of options will be subject to fulfilment of certain criteria to
be resolved by the Board (the "Exercise Conditions"). Subject to fulfilment of
the Exercise Conditions, the options may be exercised at the exercise price,
which may not be less than the market value of a share at the grant date, as
determined by the Board (the "Exercise Price"). In determining such market
value, if shares are traded on Nasdaq Helsinki and/or on the AIM market of the
London Stock Exchange, the Board shall have regard to the average price per
share at which shares have been traded over a period of 90 days immediately
preceding the grant date. The Exercise Price will be determined to create a
sufficient incentive for the recipients of options. The Exercise Price shall
be recorded in the Company's reserve for invested unrestricted equity.

 

The Company's Board would be authorised to resolve on all other terms and
conditions of the issuance of options or other special rights entitling to
shares referred to in chapter 10, section 1 of the Finnish Limited Liability
Companies Act.

 

The authorisation will be effective until 30 June 2026. This authorisation
shall not replace other authorisations granted to the Board (but for the sake
of clarity, replaces the authorisation granted in 2019 relating to the Share
Option Plan 2019).

 

18. Closing of the meeting

 

 

B.   DOCUMENTS OF THE ANNUAL GENERAL MEETING

The above-mentioned proposals to the AGM, the Company's Annual Report 2022
including the financial statements, the Report of the Board of Directors and
the Auditor's Report and this notice are available on the Company's website at
https://www.faron.com/investors (https://www.faron.com/investors) as of the
date of publication of this notice. The Board's proposals and the other
above-mentioned documents will also be available at the AGM. Copies of these
documents and of this notice will be sent to shareholders upon request. The
minutes of the AGM will be available on the Company's website from 6 April
2023 at the latest.

C.  INSTRUCTIONS FOR THE PARTICIPANTS

 

1.   The right to participate and registration

Each shareholder who on the record date of the AGM, being March 14, 2023, is
registered in the Company's shareholders' register held by Euroclear Finland
Oy has the right to participate in the AGM. A shareholder whose shares are
registered on their personal Finnish book-entry account is registered in the
Company's shareholders' register. If you do not have a Finnish book-entry
account, see section C3 "Holder of nominee-registered shares (including
depositary interest holders)".

A shareholder who is registered in the Company's shareholders' register and
who wants to participate in the AGM should register for the meeting by no
later than 10:00 a.m. EET (Finnish time) on Tuesday, March 21, 2023 by giving
a prior notice of participation. The notice must be received before the end of
the registration period. Notice of participation can be given:

•     by email to general.meeting@faron.com or

•     by mail to Faron Pharmaceuticals Ltd, attn. Kaisa Kyttä,
Joukahaisenkatu 6, FI-20520 Turku, Finland.

When registering, a shareholder shall state their name, personal
identification number / business identity code, address, telephone number and
the name of a possible proxy representative, legal representative or assistant
and the personal identification number of the proxy representative or legal
representative. The personal data given by shareholders to the Company are
used only in connection with the AGM and the necessary processing of related
registrations.

Shareholders, and their authorised representatives or proxy representatives
should, when necessary, be able to prove their identity and/or right of
representation at the meeting venue.

2.   Proxy representative and powers of attorney

Shareholders may participate in the AGM and exercise their rights at the
meeting by way of proxy representation. A proxy representative must present a
dated power of attorney or other reliable proof of their authority to
represent the shareholder.

If a shareholder participates in the AGM by means of several proxy
representatives, who represent the shareholder with shares held on different
book-entry accounts, the shares represented by each proxy representative shall
be identified when registering for the AGM.

The Company offers the possibility for shareholders to designate Yrjö
Wichmann, VP, Financing & IR, as their proxy representative, to represent
them at the AGM in accordance with shareholder's voting instructions.
Authorizing the designated proxy representative will not accrue any costs for
the shareholder, excluding possible postal fees for proxy documents.

Possible proxy documents should be sent by email to general.meeting@faron.com
and in originals to Faron Pharmaceuticals Ltd, attn. Kaisa Kyttä,
Joukahaisenkatu 6, FI-20520 Turku, Finland before the end of registration
period by which time the proxy documents must be received.

In addition to providing proxy documents, the shareholder or their proxy
representative must take care of registering for the AGM in the manner
described in this notice.

3.   Holder of nominee-registered shares (including depositary interest
holders)

A holder of nominee-registered shares (including depositary interest holders)
has the right to participate in the AGM by virtue of such shares based on
which the holder would be entitled to be registered in the Company's
shareholders' register held by Euroclear Finland Oy on the AGM's record date
of March 14, 2023.

Additionally, participation requires that the holder of nominee-registered
shares is on the basis of such shares temporarily registered in the Company's
shareholders' register held by Euroclear Finland Oy by 10:00 a.m. EET (Finnish
time) on Tuesday, March 21, 2023. As regards nominee-registered shares, this
constitutes due registration for the AGM.

A holder of nominee-registered shares is advised to request the necessary
instructions regarding the temporary registration in the shareholders'
register, the issuing of proxy documents and registration for the AGM from
their custodian bank without delay. A holder of nominee-registered shares
shall note that custodian banks may apply deadlines for the registration and
the providing of voting instructions of holders of nominee-registered shares.
The account management organisation of the custodian bank must register a
holder of nominee-registered shares who wants to participate in the AGM to be
temporarily entered into the Company's shareholders' register by the
above-mentioned time.

4.   Other instructions and information

Pursuant to Chapter 5, Section 25 of the Finnish Limited Liability Companies
Act, shareholders who are present at the AGM are entitled to request
information regarding the matters addressed by the meeting.

Changes in shareholding occurred after the record date of the AGM do not
affect the right to participate in the AGM or the number of votes held by a
shareholder.

On the date of this notice, March 3, 2023, the total number of shares and
votes in the Company is 63,497,691.

The AGM shall be held in Finnish, partially translated into English.

 

Turku, March 3, 2023

FARON PHARMACEUTICALS LTD

Board of Directors

 

For more information please contact:

Media / Investor Contact

Faron Pharmaceuticals

Jennifer C. Smith-Parker

Head of Communications

Jennifer.Smith-Parker@faron.com (mailto:Jennifer.Smith-Parker@faron.com)

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

faron@consilium-comms.com (mailto:faron@consilium-comms.com)

Phone: +44 (0)20 3709 5700

 

Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON) together with its
subsidiaries, is a clinical stage biopharmaceutical group focused on building
the future of immunotherapy by harnessing the power of the immune system to
tackle cancer and inflammation. Bexmarilimab, a novel anti-CLEVER-1
humanized antibody, is its investigative precision immunotherapy with the
potential to provide permanent immune stimulation for difficult-to-treat
cancers through targeting myeloid function. Currently in Phase I/II clinical
development as a potential therapy for patients with hematological cancers and
untreatable solid tumors, bexmarilimab has potential as a single-agent
therapy or in combination with other standard treatments including immune
checkpoint molecules. In terms of other pipeline assets, Traumakine® is an
investigational intravenous (IV) interferon beta-1a therapy for the treatment
of hyperinflammatory conditions. Faron is headquartered in Turku, Finland.
Further information is available at www.faron.com (http://www.faron.com/) .

 

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