The shareholders in Inzile AB (publ), reg. no. 556907-0070, are hereby given notice to attend the extraordinary general meeting at 10:00 a.m. on Thursday 17 December 2020.

Special arrangements due to the risk for spread of the virus COVID-19 (coronavirus)

The board of directors has, in light of continued spread of the coronavirus and in accordance with the Swedish Act (2020:198) on temporary exceptions to facilitate the execution of general meetings in companies and other associations, decided that the extraordinary general meeting shall be held without physical presence of shareholders, proxies and/or external parties and that the shareholders shall have only the opportunity to vote by mail prior to the extraordinary general meeting.

Inzile welcomes all shareholders to exercise their voting rights at the extraordinary general meeting through postal voting as described below. Information on the resolutions passed at the extraordinary general meeting will be published on Thursday 17 December 2020, as soon as the result of the postal voting has been finally confirmed.  

Notice

Shareholders wishing to participate at the meeting must:

(i)        be entered in the shareholders’ register, kept by Euroclear Sweden AB (the Swedish Central Securities Depository & Clearing Organisation), on the record day which is Wednesday 9 December 2020; and

(ii)       notify the company of their attendance no later than Wednesday 16 December 2020 by casting their postal vote in accordance with the instructions under the heading “Postal voting” below so that the postal voting form is received by Setterwalls Advokatbyrå AB no later than that day. Please note that a notification to attend the general meeting can only be done by a postal vote.

A shareholder represented by proxy shall issue a power of attorney. Further instructions regarding this are available below under the heading ”Proxy voting”.

Nominee registered shares

Shareholders who have their shares registered in the name of a nominee must request temporary entry in the transcription of the share register kept by Euroclear Sweden AB (so-called voting rights registration) in order to be entitled to participate and vote for their shares at the meeting through postal voting. The shareholder must inform the nominee well in advance of Wednesday 9 December 2020, at which time the register entry must have been made.Voting rights registration that has been requested by the shareholder at such time that the registration has been completed by the nominee no later than Friday 11 December 2020, will, however, be taken into account in the preparation of the share register.

Postal voting

The shareholders may exercise their voting rights at the extraordinary general meeting only by voting in advance, so-called postal voting, in accordance with Section 22 of the Swedish Act (2020:198) on temporary exceptions to facilitate the execution of general meetings in companies and other associations.

A special form shall be used for postal voting. The form will be available on the company’s website, www.inzile.com. The postal voting form is considered as the notification of participation at the extraordinary general meeting.

The completed voting form must be received by Setterwalls Advokatbyrå AB no later than Wednesday 16 December 2020. The form may be submitted by post to Setterwalls Advokatbyrå AB, Attn: Magnus Melin, P.O. Box 1050, 101 39 Stockholm, Sweden or via e-mail to magnus.melin@setterwalls.se.

The shareholder may not provide special instructions or conditions in the voting form. If so, the vote (i.e. the postal vote in its entirety) is invalid. Further instructions and conditions are included in the form for postal voting.  

The shareholders may request in the postal voting form that a resolution on one or several of the matters on the proposed agenda below should be deferred to a so-called continued general meeting, which cannot be conducted solely by way of postal voting. Such general meeting shall take place if the extraordinary general meeting so resolves or if shareholders with at least one tenth of all shares in the company so requests.

Proxy voting

A shareholder represented by proxy shall issue a power of attorney which shall be dated and signed by the shareholder. If the shareholder postal votes by proxy, the power of attorney shall be enclosed to the form. If issued by a legal entity, the power of attorney shall also be accompanied by registration certificate or, if not applicable, equivalent documents of authority. Power of attorney forms for those shareholders wishing to postal vote by proxy will be available on the company’s website www.inzile.com.

Processing of personal data

For information regarding how your personal data is processed in connection with the extraordinary general meeting, please refer to the privacy policy on Euroclear Sweden AB’s website, https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.

Proposed agenda

      1.  Opening of the meeting and election of chairman of the meeting;

  1. Preparation and approval of the voting list;
  2. Approval of the agenda;
  3. Election of one or two persons who shall approve the minutes of the meeting;
  4. Determination of whether the meeting has been duly convened;
  5. Resolution on implementation of a long term incentive programme in the form of employee stock options for employees including (i) a directed issue of warrants in order to enable delivery of shares and (ii) approval of transfer;
  6. Resolution on changes to the limits with respect to share capital and number of shares in the articles of association;
  7. Resolution on an authorization for the board of directors to increase the share capital;
  8. Resolution on changes to the articles of association by introducing a provision on the collection of proxy forms and postal voting;
  9. Resolution on changes to the articles of association regarding the prerequisites for participating in shareholders’ meetings;
  10. Closing of the meeting.

The board of directors’ proposed resolutions

Item 6. Resolution on implementation of a long term incentive programme in the form of employee stock options for employees including (i) a directed issue of warrants in order to enable delivery of shares and (ii) approval of transfer

The board of directors proposes that the general meeting resolves on implementation of a long-term incentive programme (the “Employee Stock Option Programme 2021/2025”) for employees of the company (the “Participants”) by way of granting qualified employee stock options (as defined in the Swedish Income Tax Act) giving right to acquire new shares in the company. The proposal also includes decision on a directed issue of warrants in order to enable delivery of shares under the programme (if and to the extent the company would like to effect delivery of shares by use of such warrants) and approval of transfer of such warrants and/or shares on the terms and conditions set forth below.

Employee Stock Option Programme 2021/2025

The board of directors proposes that the general meeting resolves on implementation of the Employee Stock Option Programme 2021/2025 in accordance with the guidelines set forth below.

1. The programme shall consist of no more than 172,425 qualified employee stock options to be allotted to the Participants free of charge.

2. Each employee stock option confers the holder a right to acquire one (1) new share in the company against cash consideration at an exercise price of SEK 100. The exercise price and the number of new shares that each employee stock option confers right to may be subject to recalculation by the corresponding application of the provisions in the complete terms and conditions for the warrants (see below).

3. The employee stock options shall be offered to the Participants whereby each participant shall be offered a maximum of 3,025 employee stock options (each Participant shall be offered the same number of employee stock options).

4. Notice of participation in the programme shall have been received by the company no later than one week after the date of the offer with a right for the board of directors of the company to prolong the time period until 31 December 2020 at the latest. Allotment of employee stock options to Participants shall be made promptly after the expiration of the notification period, however no later than 31 December 2020.

5. The employee stock options do not constitute securities and may not be transferred or pledged and may only be exercised for acquisition of new shares in the company by the person to whom they have been granted. 

6. The allotted employee stock options will be vested over a 36 months’ period and may only be exercised for acquisition of new shares provided that the Participant is still employed and fulfillment of the other preconditions for qualified employee stock options set forth in the Swedish Income Tax Act.

7. The holder may exercise allotted and vested employee stock options during the period from and including 1 January 2025 until and including 31 March 2025. Should the Holder be prevented from exercising vested employee stock options during the aforementioned period in accordance with the Market Abuse Regulation or other applicable insider rules (including the company’s internal guidelines, as amended), the aforementioned period shall be extended by a corresponding number of days in relation to such holder (i.e. the number of days the holder has been prevented from exercising vested employee stock options), however no longer than until and including 30 June 2025.

8. The employee stock options shall be governed by the more detailed terms and conditions set forth in “Terms and Conditions for Employee Stock Options 2021/2025 in Inzile AB (publ)”, in accordance with the board of directors’ complete proposal, and separate agreements with each Participant. The board of directors shall be responsible for the preparation and management of the Employee Stock Option Programme 2021/2025 within the abovementioned substantial terms.   

Terms and conditions for the issue of warrants

1. The company shall issue no more than 172,425 warrants of series 2021/2025. Each warrant entitles to subscription of one (1) new share in the company, each with a quotient value of SEK 0.10. If all warrants are exercised for subscription of new shares, the company’s share capital will increase by SEK 17,242.50 (subject to potential recalculations in accordance with customary terms and conditions to be applicable in relation to the warrants).

2. The warrants may, with deviation from the shareholders’ preferential rights, only be subscribed for by the company. The reason for the deviation from the shareholders’ preferential rights is to enable delivery of new shares to the Participants in the Employee Stock Option Programme 2021/2025.

3. Subscription of warrants shall be made by the company on a subscription list on the same day as the general meeting’s issue resolution. The board of directors shall be entitled to prolong the subscription period.

4. The company is not to pay anything for the warrants.

5. The warrants may be exercised for subscription of new shares during the period from and including the registration of the warrants with the Swedish Companies Registration Office until and including 30 September 2025.

6. Each warrant shall entitle to subscription for one new share in the company at a subscription price of SEK 100 per share (the “Exercise Price”).

7. The warrants shall also be subject to the terms and conditions, inter alia containing customary recalculation conditions, set forth in the board of directors’ complete proposal.

8. The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office.

Further, the board of directors proposes that the general meeting resolves to approve transfer of the warrants and/or shares that have been issued following the exercise of warrants for delivery of new shares to the Participants in the Employee Stock Option Programme 2021/2025.

Reasons for the employee stock option programme and the deviation from the shareholders’ preferential rights

This proposal is presented in order to strengthen the retention of employees and to motivate employees to create shareholder value. The board of directors assess that these objectives are in line with all shareholders’ interests. The warrants are proposed to be issued to the company in order to enable delivery of new shares to the Participants in the programme.

Existing share related incentive programmes

There are no share or share price related incentive programmes outstanding in the company as of today.

Costs, dilution, etc.

The company’s assessment is that the company will not incur any social security costs in relation to the Employee Stock Option Programme 2021/2025. The company’s costs are thus expected to only be composed of costs for implementation and practical management of the programme.

Upon full exercise of all 172,425 issued employee stock options, a total of 172,425 new shares will be issued in the company (subject to potential recalculations in accordance with applicable terms and conditions). This corresponds to approximately 1% of the total share capital and number of shares/votes in the company and would lead to a dilution corresponding to approximately 0.99% of the total share capital and number of shares/votes (based on the share capital and number of shares/votes in the company registered with the Swedish Companies Registration Office as of the day of this proposal and calculated as the maximum amount of share capital and number of shares/votes that may be issued, divided by the total share capital and the total number of shares/votes in the company after all employee stock options have been exercised). The key ratio earnings per share for the full year 2019 would then have been changed from SEK -5.35 (based on the average number of shares during 2019) to SEK -5.25 (based on the average number of shares during 2019 increased with the number of shares which may be issued upon full exercise of all employee stock options as if these had been outstanding during the entire year 2019, however excluding any new shares issued during 2020 or the funds received by the company through the participants payment of the exercise price at the time of the exercise of the employee stock options).

The above calculations regarding dilution and impact on key ratios are subject to recalculations in accordance with the customary recalculation terms set out for the programmes. 

Preparation of the proposal

This proposal has been prepared by the board of directors together with external consultants. The final proposal has been presented by the board of directors.

Majority requirements

The proposed implementation of Employee Stock Option Programme 2021/2025 including a directed issue of warrants, and the approval of the transfer of warrants and/or shares, is governed by the provisions in Chapter 16 of the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551)), and a valid resolution therefore requires that the proposal is supported by shareholders representing at least nine-tenths (9/10) of the votes cast as well as of all shares represented at the meeting.

Item 7. Resolution on changes to the limits with respect to share capital and number of shares in the articles of association

The board of directors proposes that the general meeting resolves on changes to the limits in the articles of association with respect to share capital and number of shares (§§ 4 and 5). The company’s articles of association only exist in Swedish language. The below extract and proposed new wording are unofficial translations with the only aim to inform non-Swedish speaking shareholders of the proposed changes.

§ 4 is proposed to be changed from “The company’s share capital shall be not less than SEK 560,000 and not more than SEK 2,240,000” to “The company’s share capital shall be not less than SEK 1,700,000 and not more than SEK 6,800,000”. § 5 is proposed to be changed from “The number of shares in the company shall be no less than 5,600,000 and no more than 22,400,000” to “The number of shares in the company shall be no less than 17,000,000 and no more than 68,000,000”.The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office. A valid resolution requires that the proposal is supported by shareholders representing at least two-thirds (2/3) of the votes cast as well as of all shares represented at the meeting.

Item 8. Resolution on an authorization for the board of directors to increase the share capital

The board of directors proposes that the general meeting resolves on an authorization for the board of directors – during the period until the next annual general meeting and at one or more occasions – to resolve upon issuance of new shares, warrants and/or convertibles. New issues may occur with or without preferential rights for shareholders of the company. Payment may be made in cash, trough set-off of claims or otherwise be conditional. The company’s share capital and the number of shares in the company may by support of the authorization be increased by a total amount and number of shares corresponding to a maximum of 50 per cent of the share capital and number of shares in the company as of the date of this notice to attend, respectively. Deviation from the shareholders’ preferential rights shall be allowed in situations where a directed issue is deemed more appropriate for the company due to timing, commercial or similar reasons. In the case of new issues with deviation from the shareholders’ preferential rights, the subscription price shall be based on the prevailing market conditions subject to any customary discount, as applicable.The proposed authorization is intended to replace the authorization that the board of directors previously received in accordance with a resolution at the annual general meeting held on 12 June 2020.The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office. A valid resolution requires that the proposal is supported by shareholders representing at least two-thirds (2/3) of the votes cast as well as of all shares represented at the meeting.

Item 9. Resolution on changes to the articles of association by introducing a provision on the collection of proxy forms and postal voting

The board of directors proposes that the general meeting resolves on changes to the articles of association by introducing a provision on the collection of proxy forms and postal voting. The company’s articles of association only exist in Swedish language. The below extract and proposed new wording are unofficial translations with the only aim to inform non-Swedish speaking shareholders of the proposed changes.

A new provision is proposed to be introduced (a new section 12, whereby the current sections 12 and 13 become sections 13 and 14) allowing the board of directors to collect proxy forms at the company’s expense and, prior to a general meeting, resolve that shareholders shall have the option to exercise their voting rights by means of postal voting, pursuant to the procedure stated in the Swedish Companies Act, with the heading “Collection of proxy forms and postal voting”, and with the following wording: “The board of directors may collect proxies at the company’s expense pursuant to the procedure stated in Chapter 7, section 4, second paragraph of the Swedish Companies Act. The board of directors may also, prior to a general meeting, resolve that shareholders shall have the option to exercise their voting rights by means of postal voting pursuant to the procedure stated in Chapter 7, section 4 a, second paragraph of the Swedish Companies Act”. The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office. A valid resolution requires that the proposal is supported by shareholders representing at least two-thirds (2/3) of the votes cast as well as of all shares represented at the meeting.

Item 10. Resolution on changes to the articles of association regarding the prerequisites for participating in shareholders’ meetings

The board of directors proposes that the general meeting resolves to change the articles of association regarding the prerequisites for participating in shareholders’ meetings. The company’s articles of association only exist in Swedish language. The below extract and proposed new wording are unofficial translations with the only aim to inform non-Swedish speaking shareholders of the proposed changes.

The following wording in § 10 is proposed to be changed: “Shareholders wishing to participate in general meetings must be listed as such shareholders in a printout or other presentation of the entire share register referred to in Chapter 7, section 28, third paragraph of the Swedish Companies Act, reflecting the circumstances five weekdays before the general meeting and notify the company no later than the date specified in the notice of the general meeting. The last mentioned date may not be a Sunday, other public holiday, Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and may not occur earlier than the fifth weekday before the general meeting.” It is proposed that said provision is changed to the following new wording: “Shareholders wishing to participate in general meetings must notify the company no later than the date specified in the notice of the general meeting.” The change to § 10 of the articles of association is proposed by reason of the right to participate at the general meeting being regulated by the Swedish Companies Act (2005: 551) and therefore does not need to be part of the articles of association, and that a legislative change passed during 2020 has led to the current wording being contrary to law. The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office. A valid resolution requires that the proposal is supported by shareholders representing at least two-thirds (2/3) of the votes cast as well as of all shares represented at the meeting.

Number of shares and votes in the company

The total number of shares in the company at the time of issuance of this notice is 17,227,135. The company does not hold any of its own shares.          

Shareholders’ right to request information

The board of directors and the CEO shall, if any shareholder so requests and the board of directors believe that it can be done without material damage to the company, provide information regarding circumstances that may affect the assessment of an item on the agenda. A request for such information shall be made in writing no later than on Monday 7 December 2020. The information will be made available at the company’s office from Saturday 12 December 2020, at the latest. The information will, from the same date, also be available on the company’s website www.inzile.com. The information will also be sent, within the same period of time, to the shareholder who has requested it and stated its address.

Documentation

The board of directors’ complete proposals and documents pursuant to Chapter 14 section 8 of the Swedish Companies Act (Sw.aktiebolagslagen (2005:551)) will be kept available at the company’s office not later than two weeks before the meeting. The documents will be sent free of charge to shareholders who so request and state their postal address. The documents will also be made available not later than the aforementioned date on the company’s website www.inzile.com.

_____

Västervik, November 2020

The board of directors

For further information, please contact:

Ragnar Åhgren, CEO, ragnar.ahgren@inzile.com, +46 73 356 89 89
Peter Wergens, CFO, peter.wergens@inzile.com,  +46 73 325 75 04