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Articles of Association of Probi Aktiebolag (publ) Corp. Reg. No. 556417-7540
Article 1
The business name of the company is Probi Aktiebolag (publ).
Article 2
The registered office of the Board of Directors shall be situated in the Municipality of Lund, Skåne County, Sweden.
Article 3
The company shall engage, directly or through subsidiaries, in the development, manufacture and marketing of products stimulating growth and/or regulating the natural microbial flora in humans, and undertake any other operations compatible therewith.
Article 4
The company’s share capital shall amount to not less than SEK 40,000,000 and not more than SEK 160,000,000.
Article 5
The company shall have not less than 8,000,000 shares and not more than 32,000,000 shares.
Article 6
The Board of Directors shall consist of three to seven members, with not more than two deputies.
Article 7
The company shall have one auditor, with or without one deputy. The auditor shall be an authorised public accountant or firm of authorised public accountants.
Article 8
Notices of General Meetings shall be published in Post- och Inrikes Tidingar (Swedish Official Gazette) and on the company’s website. That the notice has been issued shall be published in Dagens Industri.
Article 9
The following items of business shall be addressed at the company’s Annual General Meeting:
Article 10
The company’s financial year shall be the calendar year.
Article 11
The company’s shares shall be registered in a central securities depository register in accordance with the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479).
Article 12
In order to be entitled to participate in a General Meeting, shareholders shall notify the company of their intention not later than on the day stipulated in the notice convening the general meeting. This day must not be a Sunday, any other public holiday, a Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and must not be earlier than the fifth weekday prior to the general meeting.
Assistants to the shareholder shall be entitled to attend the general meeting only if the shareholder has notified the company of the number of assistants (not more than two) in the manner set out above.
Article 13
The Board of Directors may collect proxies pursuant to the procedure stated in Chapter 7, Section 4, second paragraph of the Swedish Companies Act (2005:551). The Board of Directors may decide before a General Meeting that the shareholders shall be able to exercise their voting rights by post before the General Meeting pursuant to the procedure stated in Chapter 7, Section 4 a of the Swedish Companies Act (2005:551).
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This Article of Association has been approved at the Annual General Meeting on May 5 2022.
At the 2024 Annual General Meeting, Ernst & Young AB was appointed as the company’s auditor, with Authorised Public Accountant Peter Gunnarsson as Auditor-in-Charge until the close of the next Annual General Meeting.
The Nomination Committee has the following members:
The members are appointed in accordance with by below guidelines.
The Chairman of the Board shall - no later than the end of the third quarter of each year - ensure that the company's three largest shareholders or owner groups, in terms of votes, are each offered to appoint a representative to the Nomination Committee. The reconciliation shall be based on Euroclear Sweden AB's list of shareholders (ownership grouped) as of the last banking day in August or such other documentation that shareholders or ownership groups at this time report as evidence of their shareholding. Where one or more shareholders or ownership groups refrain from appointing a member of the nomination committee, one or more of the next largest shareholders in terms of ownership shall be offered to appoint a member of the Nomination Committee. However, more than five additional shareholders need not be contacted if two shareholders have accepted a seat on the nomination committee and unless the Chairman of the Board finds that there are special reasons for this. When shareholders are contacted with a request for the appointment of a member of the Nomination Committee, the Chairman of the Board shall establish the necessary rules of procedure, such as the last date for reply, etc. The Chairman of the Board shall be co-opted to the Nomination Committee. In addition, if the shareholders' representatives so agree, it may appoint a representative of the smaller shareholders, independent of the company and its major shareholders, as a member of the Nomination Committee.
The Nomination Committee shall appoint one of its members as chairman, who shall not be the Chairman of the Board. The chairman of the Nomination Committee shall, unless the Nomination Committee decides otherwise, be the member appointed by the largest shareholder in terms of votes. The names of the members of the Nomination Committee and the names of the shareholders who appointed them shall be published at least six months before the annual general meeting.
If, during the term of office of the Nomination Committee, one or more shareholders who have appointed members of the Nomination Committee no longer belong to the three largest shareholders in terms of voting rights, members appointed by these shareholders shall make their seats available and the shareholder or shareholders who have been added to the three largest shareholders in terms of voting rights shall be entitled to appoint representatives. In the event that a member leaves the Nomination Committee before the end of its term of office, the shareholder who appointed the member shall appoint a new member. If this shareholder is no longer one of the three largest shareholders in terms of voting rights, a new member shall be appointed in the above order. Unless there are special reasons, no changes shall be made to the composition of the Nomination Committee if only marginal changes in the number of votes have taken place or if the change occurs later than three months before the annual general meeting. However, shareholders who have been added to the three largest shareholders in terms of voting power as a result of a more significant change in voting power later than three months before the annual general meeting shall be entitled to appoint a representative to be co-opted to the Nomination Committee. Shareholders who have appointed a representative as a member of the Nomination Committee are entitled to dismiss such member and appoint a new representative as a member of the Nomination Committee. Changes in the composition of the Nomination Committee shall be published as soon as they occur. The above principles for the appointment of the Nomination Committee shall apply until further notice.
The Nomination Committee shall prepare and submit to the general meeting proposals for the chairman of the meeting, the members of the Board of Directors, the Chairman of the Board, remuneration to each of the members of the Board of Directors and the chairman, as well as any remuneration for committee work, remuneration to the company's auditor and, where applicable, proposals for the auditor. The Nomination Committee shall be entitled to charge the company with costs for consultants or other costs required for the Nomination Committee to fulfil its assignment. No remuneration shall be paid to the members of the Nomination Committee.
The term of office of the Nomination Committee ends when the next Nomination Committee is announced.
The Nomination Committee’s principal tasks are to:
Shareholders who would like to contact the Nomination Committee may do so by e-mailing bolagsstamma@probi.com or by letter addressed to Probi AB, c/o Nomination Committee, Ideongatan 1A, SE-223 70 Lund, Sweden.
Probi's Remuneration Committee consists of board members Malin Ruijsenaars and Jean-Yves Parisot. The task of the Remuneration Committee is to assist the Board of Directors by providing proposals concerning remuneration issues and regularly monitoring and evaluating remuneration structures and remuneration levels for the CEO and other members of the company’s executive management. The Committee’s work also includes providing proposals concerning policies for remuneration and other terms and conditions of employment for the CEO and senior executives that are to be resolved by the AGM. The sphere of responsibility of the Remuneration Committee is defined in the Board of Directors’ work procedure and in the instructions for the Remuneration Committee.
Probi's Audit Committe consists of board members Charlotte Hansson and Jörn Andreas. The task of the Audit Committee is to assist the Board of Directors in its fulfilment of the Board’s supervisory obligations in terms of internal control, audits, any internal audits, risk management, accounting and financial reporting, and to prepare matters involving the procurement of audit and other services as well as preparing certain accounting and audit matters that are to be addressed by the Board. The sphere of responsibility of the Audit Committee is defined in the Board of Directors’ work procedure and in the instructions for the Audit Committee. The Audit Committee maintains continuous contact with the company’s auditors, who personally report their findings and observations at least twice annually. The auditors also provide information on the priority areas that future audits are to examine, while the Audit Committee informs the auditors about issues or areas that it wishes them to specifically highlight.
Scope
These guidelines shall apply to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the AGM 2020. These guidelines do not apply to any remuneration decided or approved by the general meeting.
If a Board member performs work for the company in addition to the assignment as Board member, the Board member shall receive cash remuneration on market terms, taking into the account the nature of the assignment and the work effort. Such remuneration is resolved by the Board of Directors (or, if provided by law, by the general meeting).
Remuneration under employments subject to other rules than Swedish may be duly adjusted to comply with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines.
Promotion of the company’s business strategy, long-term interests and sustainability
Probi is a complete, integrated probiotics group with operations throughout most of the world. Probi’s vision is to be the innovative research-driven leader within probiotics, with an ambition to enhance people’s well-being throughout the world. Probi’s mission is to offer probiotic products of high quality, based on science, grown with care and delivered in attractive formats.
The strategy consists of three focus areas where the first strategic goal is to double the company’s sales. This is to be achieved through a strengthened position within premium solutions for digestive health and immune function, increased presence in the US, China and other growth markets, an increased number of global key customers and also through more strategic partnerships and acquisitions within relevant geographies and segments. The second strategic goal is to have a leading position within innovation and development, which shall be supported by an extended range with more clinically documented offerings, approved health claims in relevant markets, increased number of international research collaborations and evaluation of growth opportunities in fields related to probiotics. The third goal refer to the company’s production capacity; the facilities shall have a secured high qualitative production capacity adapted to the market and address the need for new production opportunities in growth regions, focusing on long-term improvement of the gross margins.
The key to successful implementation of the strategy is committed and dedicated employees who work systematically and strategically. These guidelines are expected to contribute to the implementation of the strategy, including Probi’s long-term interests and sustainability, by enabling Probi to offer a total remuneration that is competitive and on market terms in order to recruit and retain senior executives and by promoting the senior executive’s abilities to carry out their duties.
Principles for different forms of remuneration, etc.
The total remuneration to senior executives shall be competitive and on market terms and may consist of fixed cash salary (base salary), variable cash remuneration (bonus), pensions and other benefits, and also further variable cash remuneration in certain extraordinary circumstances. Additionally, the general meeting may – irrespective of these guidelines – resolve on, among other things, long-term share-related or share price-related incentive programs.
Fixed cash salary
The fixed cash salary (base salary) shall take into account the individual’s potential, areas of responsibility and experience.
Variable cash remuneration
Annual variable remuneration
The annual variable cash remuneration may, for the CEO, amount to a maximum of 60% of the fixed annual cash base salary and may, for the other senior executives, amount to a maximum of 50% of the fixed annual cash base salary. For senior executives employed in the American organization, the annual variable cash remuneration may amount to a maximum of 100% of the fixed annual cash base salary. Annual variable cash remuneration shall be linked to the senior executive’s fulfilment of pre-determined quantitative and qualitative goals. The goals may be financial, for example by relating to result or net sales and non-financial, for example by relating to how the individual contribute to Probi’s work with matters on diversity and the maintenance and building of Probi’s culture. The goals shall, among other things, aim to secure a long-term commitment for the company’s progress, whereby they are expected to contribute to the successful implementation of Probi’s business strategy, long-term interests and sustainability. The fulfilment of criteria for awarding annual variable cash remuneration shall be measured on a yearly basis.
Long-term cash bonus (LTI-bonus)
In addition to the fixed cash salary and the annual variable cash remuneration, senior executives and other selected key employees (up to ten persons) may each year be granted a variable long-term cash bonus (LTI-bonus). The LTI-bonus shall award EPS growth during the year of inclusion, which is also the performance year (year 1). The initial grant value shall be based on reach of the performance goal and shall amount to a maximum of 7.5-37.5% of the annual salary in the year of inclusion of each participant, depending on position. The initial grant value shall be vested over the following three years (year 2-4) and shall thereafter, upon pay-out, be indexed to reflect the share price development during the vesting period; i.e. if during the vesting period the share price has increased by 25%, the initial grant value shall upon payout of the LTI-bonus be increased by 25%. If during the vesting period the share price has declined by more than 33%, there shall be a guaranteed minimum of 67% of the grant value. If the share price has increased by more than 50% during the vesting period, the LTI-bonus payout shall be capped at 150% of the initial grant value. Should the initial grant value be the maximum value of 37.5% of the annual salary and the share price development over the vesting period be more than 50%, then the maximum payout value of the individual LTI-bonus should be 56.25% of the annual salary as per the year of inclusion. Payout of the LTI-bonus is conditional upon continued employment by the end of the vesting period (subject to customary exceptions). The costs associated with the LTI-bonus are regular personnel costs associated with cash compensation.
Determination of the outcome for variable cash remuneration, etc.
Ahead of each yearly measurement period for the criteria for awarding variable cash remuneration, the Board of Directors shall, based on the Remuneration Committee’s proposal, establish which criteria that are deemed to be relevant for the upcoming measurement period. To which extent the criteria for awarding variable cash remuneration has been satisfied shall be determined when the measurement period has ended. The Board of Directors is responsible for the evaluation so far as it concerns variable remuneration to the CEO. For variable cash remuneration to other executives, the CEO and the Chairman of the Board is responsible for the evaluation. Evaluations regarding fulfilment of financial targets shall be based on established financial basis for the relevant period.
Variable cash remuneration can be paid after the measurement period has ended or be subject to deferred payment. The Board of Directors shall have the possibility, under applicable law or contractual provisions, subject to the restrictions that may apply under law or contract, to in whole or in part reclaim variable remuneration paid on incorrect grounds.
Further variable cash remuneration
Further variable cash remuneration may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are limited in time and only made on an individual basis, either for the purpose of recruiting or retaining senior executives, or as remuneration for extraordinary performance beyond the individual’s ordinary tasks. Such remuneration may not exceed 30% of the fixed annual cash base salary and may not be paid more than once each year per individual. Any resolution on such remuneration shall be made by the Board of Directors.
Pensions
For senior executives, pensions, including health insurance (Sw: sjukförsäkring), shall be based on defined contribution plans. Variable cash remuneration shall qualify for pension benefits. The pension premiums for the contribution defined pension shall follow the ITP1 plan and shall amount to not more than 4.5% of the pensionable salary up to 7.5 income base amounts, and not more than 30% on exceeding salary. Additionally, according to applicable collective agreements, a part of the senior executive’s pensionable salary may be allocated as a complement to the senior executive’s pension as set out in his or her employment contract (Sw: deltidspensionspremie).
Other benefits
Other benefits may include, for example, life insurance, medical insurance (Sw: sjukvårdsförsäkring) and company cars, and may be provided to the extent that such benefits are deemed to be on market terms for senior executives in equivalent positions in the market where the senior executive is active. Such benefits may amount to not more than 10% of the fixed annual cash base salary.
Termination of employment
Senior executives shall be employed until further notice. The notice period may not exceed twelve months for the CEO and nine months for other senior executives if notice of termination of employment is made by the company. Fixed cash base salary during the period of notice and severance pay may together not exceed an amount equivalent to the fixed cash base salary for twelve months. The period of notice may not exceed six months, without any right to severance pay, when termination is made by the executive.
Additionally, remuneration may be paid for non-compete undertakings. Such remuneration shall compensate for loss of income and may only be paid in so far as the previously employed executive does not receive severance pay. The remuneration shall amount to not more than 60% of the fixed cash base salary at the time of termination of the employment, unless otherwise provided by mandatory collective agreement provisions and be paid during the time the non-compete undertaking applies, however not for more than twelve months following termination of the employment.
Salary and employment conditions for employees
In the preparation of the Board of Directors’ proposal for these remuneration guidelines, salary and employment conditions for employees of the company have been taken into account by including information on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the Remuneration Committee’s and the Board of Directors’ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
The decision-making process to determine, review and implement the guidelines
The Board of Directors has established a Remuneration Committee. The committee’s tasks include preparing the Board of Director’s decisions to propose guidelines for remuneration to senior executives. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit to the AGM. The guidelines shall be in force until new guidelines are adopted by the general meeting. The Remuneration Committee shall also monitor and evaluate programs for variable remuneration for the senior executives, the application of the guidelines for remuneration to senior executives as well as the current remuneration structures and compensation levels in the company. The members of the Remuneration Committee are independent of the company and its senior management. The CEO and other senior executives do not participate in the Board of Director’s processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.
Derogation from the guidelines
The Board of Directors may derogate from these guidelines if the Board of Directors considers that, in a specific case, there is special cause for the derogation and a derogation is necessary to serve Probi’s long-term interests, including its sustainability, or to ensure Probi’s financial viability. As set out above, the Remuneration Committee’s tasks include preparing the Board of Directors’ resolutions in remuneration-related matters. This includes any resolutions to derogate from the guidelines.
