Biotie Therapies Corp. (hereafter, the “Company or Biotie”) is a public Finnish limited liability company which complies with the Finnish Companies Act, Securities Market Act, Accounting Act, the rules of NASDAQ OMX Helsinki Ltd as well as the Company’s Articles of Association. In addition, Biotie complies with the Finnish Corporate Governance Code and does not deviate from its recommendations.
Group structure
The parent company of the group (“Group”) is Biotie Therapies Corp. (”Biotie” or the “Company”). The domicile of the Company is Turku, Finland. The Company has an operative subsidiary, Biotie Therapies GmbH, located in Radebeul, Germany.
The Group also has a non-operational subsidiary named Biotie Therapies International Ltd in Finland and an associated company with no activities Contral USA of Delaware USA.
General Meeting
The highest decision-making power in Biotie is exercised by the Company’s shareholders at General Meetings.
The Annual General Meeting is held by the end of June each year and it handles the matters that fall under its authority according to the Articles of Association as well as any matters proposed to a General Meeting. Biotie’s Annual General Meeting has usually been held in March or April. Extraordinary General Meetings are convened to handle specifi c matters proposed to a General Meeting.
General Meetings handle the matters placed on its agenda by the Board of Directors. According to the Finnish Companies Act, shareholders also may request to the company’s Board of Directors to place a matter on the agenda of the next General Meeting. Shareholders holding a minimum of 10% of all shares and the company’s auditor, may request the handling of a specifi ed matter at a General Meeting, which the Board of Directors shall then convene without delay.
Major matters subject to the decision-making power of a General Meeting include:
- amendments to the Articles of Association
- increases or decreases in share capital
- decisions on the number, election and remuneration of Directors
- adoption of the fi nancial statements
- distribution of profi ts / allocation of losses.
Advance information
The shareholders of the Company are summoned to the General Meeting by publishing the summons on the company's website. The summons shall be published not earlier than two (2) months before the last registration date mentioned in the summons and not later than three (3) weeks prior to the date of the meeting. In addition, the Board of Directors shall publish a summary notice of the General Meeting in one or more national daily newspapers, or by sending the notice of the General meeting as a registered letter or other verifi able way to the shareholders' address, which is registered in the share register. The notice to convene shall state the matters to be handled at the General Meeting.
In accordance with the Corporate Governance Code, the notice and the proposals of the Board of Directors to the General Meeting are also published by means of a stock exchange release and on the Company’s website at least 21 days before General Meetings.
The notice of the General Meeting and the following information shall be made available on the company website at least 21 days before the General Meeting:
-Total number of shares and voting rights according to classes of shares at the date of the notice
- Documents to be submitted to the General Meeting
- Resolution proposals
- Any items on the agenda for which no resolution proposal has been made
- An introduction of possible candidates for election to the Board of Directors
- The proposal for the election of the external auditor is disclosed in the notice to convene.
Attendance
Shareholders who have registered ten (10) days before the General Meeting in the Company’s shareholders register kept by Euroclear Finland Ltd have the right to attend and exercise their voting rights. Shareholders may exercise their right at the General Meeting either in person or through an authorized representative. The minutes of the General Meeting including the voting results and any appendices that are part of a decision made by the General Meeting shall be posted on the Company website within two weeks after the General Meeting and are also published by means of a stock exchange release immediately after the General Meeting.
Attendance of the members of the Board and the Managing Director
The Managing Director, the chairman of the Board and a suffi cient number of Directors shall attend the General Meeting. In addition, the auditor shall be present at the Annual General Meeting. A candidate proposed for the fi rst time to be elected to the Board shall participate in the General Meeting that decides on his or her election unless there are well-founded reasons for the absence.
Decision-making
Biotie has only one series of shares, which entitle its holders to one vote per share owned at the General Meeting. Most resolutions by the General Meeting require a simple majority of the votes cast at the meeting. In an election, the person receiving the highest number of votes shall be deemed elected. The General Meeting may, however, prior to an election, decide that to be elected, a person shall receive more than half of the votes cast. However, there are several matters, which according to the Finnish Companies Act require a 2/3 majority of the votes cast and of the shares represented at the meeting.
The Articles of Association of Biotie include no redemption clauses or voting limitations.
For more information on shareholders´ meetings
ADMINISTRATION:
Board of Directors
Composition and term
Under the Articles of Association, the Board of Directors consists of at least three (3) and at most eight (8) members. The members of the Board are elected by the Annual General Meeting of the shareholders and the term of offi ce of the Board members expires at the end of the Annual General Meeting following their election.
The Articles of Association set no limitations regarding the number of terms that Directors may serve, nor do they restrict in any other way the decision-making power of the General Meeting in electing Board members. However, the General Meeting shall take into account all recommendations stipulated by the Corporate Governance Code regarding the composition of the Board of Directors. Especially with regards to meeting the independence and other requirements applicable to publicly listed companies in Finland. The Board of Directors elects one of its members as the Chairman of the Board and a possible deputy. The Managing Director of the company cannot be elected as the Chairman of the Board of Directors.
Current composition of the Board of Directors (Annual General Meeting April 15, 2010)
The number of the members of the Board of Directors was resolved to be seven. Peter Fellner, Merja Karhapää, Bernd Kastler, Pauli Marttila, Riku Rautsola, Pierre Serrure and James S. Shannon were elected as the members of the Board of Directors.
Peter Fellner was elected as the Chairman of the Board of Directors and Pauli Marttila as the deputy chairman.
Bernd Kastler was elected as the Chairman and Merja Karhapää, Riku Rautsola and Pierre Serrure as the members of the Board's Audit Committee.
Peter Fellner as the Chairman and Pauli Marttila and James S. Shannon as the members of the Nomination and Remuneration Committee.
Based on the evaluation of independence, the Board concluded that all Board members are independent of the company and of its significant shareholders.
For more information on the members of the Board of Directors
Duties of the Board of Directors
The duties of the Company's Board of Directors are set forth in the Companies Act and other applicable legislation. The Board of Directors is responsible for the management of the company. Its responsibilities include, inter alia, to:
- decide on the strategy
- confi rm the business plan and budget deliberate on and approve interim reports, the annual accounts and the Board’s reports as well as the corporate governance statement
- decide on investments (as far as not approved as part of the budget), mergers and acquisitions as well as divestments (as far as not falling into the responsibility of the shareholder) and on all creations of actual or potential liabilities (as far as not approved as part of the budget) - confi rm internal control and risk management systems and reporting procedures
- decide on bonus and incentive schemes for the management (as far as not falling into the responsibility of the shareholders)
- decide on the structure of the Group and organisation of the Company
and
- appoint the Managing Director and the other senior members of the executive management as well as to decide on their perquisites.
The Board of Directors held 14 meetings during 2009. The average ratio of attendance at the meetings was 91 percent.
Biotie does not have a supervisory board.
Decision-making
Meetings of the Board of Directors are convened by its chairman. The Board of Directors constitutes a quorum when more than half of the members are present. The Board of Directors is always obliged to act in the Company’s interests and in such a way that its acts or measures are not likely to produce unjustifi ed benefi t to any shareholder or other third party at the cost of the Company or another shareholder. A Board member is disqualifi ed from participating in the handling of a matter pertaining to a contract or other transaction between the Board member and the Company or of such matter where the member is to derive an essential benefi t and that benefi t may be contrary to the interests of the Company. When votes are cast, the majority opinion will be the Board’s decision and, in the case of a tie, the Chairman will have the casting vote.
Meeting practice
The Board of Directors shall convene as frequently as necessary to discharge its responsibilities. The Managing Director ensures that the Board is provided with suffi cient information to assess the operations and fi nancial situation of the group. The secretary of the
Board of Directors is Mr. Mikko Heinonen from Hannes Snellman Attorneys at Law Ltd.
The Board of Directors conducts annual performance self-evaluations.
Audit Committee
The Audit Committee has been established by the Board to ensure the overseeing of the accounting, auditing and fi nancial reporting processes. The Audit Committee consists of the committee’s Chairperson and at least two (2) additional members, who are all annually appointed after the Annual General Meeting by the Board among its members. The committee members shall be independent of the Company and at least one member shall be independent of signifi cant shareholders.
The Audit Committee shall:
- monitor and supervise the reporting process of fi nancial statements
- monitor the effi ciency of the company’s internal control and risk management systems
- initiate and oversee internal fi nancial audits
- review the description of the main features of the internal control and risk management systems pertaining to the financial reporting process, which is included in the company’s corporate governance statement
- monitor the disclosure controls and procedures
- evaluate and monitor arrangements for the employees to raise concerns, in confi dence, about possible wrongdoing in fi nancial reporting or other matters (“whistle blowing”) and respond to any requests received by employees and third parties in the context of whistle blowing policies
- monitor the statutory audit of the fi nancial statements and audit of consolidated fi nancial statements
- evaluate the independence of the statutory auditor or audit fi rm, particularly the provision of related services to the Company to be audited
and
- prepare the proposal for resolution on the election of the auditor.
In 2009, The Audit Committee held six meetings. The average ratio of attendance at the meetings was 100 percent. The Audit Committee members in 2009 were Bernd Kastler (Chairman), Pauli Mattila (until June 2009), Riku Rautsola (from June 2009) and Piet Serrure.
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On April 15, 2010 Bernd Kastler was elected as the Chairman and Merja Karhapää, Riku Rautsola and Pierre Serrure as the members of the Board's Audit Committee.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee has been established to ensure the effi cient preparation of nomination and remuneration matters.
The committee consists of the committee’s Chairperson and at least two (2) additional members who all are annually appointed after the Annual General Meeting by the Board among its members. The majority of the members of the committee shall be independent of the company. The managing director or other executives of the company may not be appointed to the Committee.
The Nomination and Remuneration Committee shall
-prepare and present a recommendation to the Board for the proposal to the Annual General Meeting concerning the composition and compensation of the Board.
- prepare for the Board the appointment of any executive directors or other senior members of the executive management. When considering the appointment of the other members of the executive management, the managing director of the Company shall participate to the handling of such matters.
- prepare the framework for remuneration of the Company’s managing director, the executive directors and such other members of the executive management as it is designated to consider. No Board member, director or manager shall be involved in any decisions as to their own remuneration.
- assess the need for bonus or other incentive programs as well as to review design of and determine targets for any performance related compensation schemes.
- prepare the policy for authorising claims for expenses from the managing director and Chairperson of the Board.
- prepare the annual self-evaluation, including its nature and manner, to be conducted in accordance with the rules and procedure of the Board of Directors.
In 2009, The Nomination and Remuneration Committee held one meeting. The average ratio of attendance at the meetings was 100 percent.
The Nomination and Remuneration Committee members in 2009 were Juha Jouhki (Chairman), Pauli Marttila (from June 2009), Christoph Schröder and Peter Fellner (since December 2009).
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On April 15, 2010 Peter Fellner was elected as the Chairman and Pauli Marttila and James S. Shannon as the members of the Nomination and Remuneration Committee.
Managing Director
The Managing Director is responsible for the day-to-day management of the Group in accordance with the instructions and guidance given by the Board of Directors and ensuring that the accounting practices of the Group comply with the law and that the fi nancial management of the group has been arranged in a reliable manner.
The Managing Director primarily presents the matters handled in Board meetings and is responsible for preparing draft resolutions. The Board of Directors elects the Managing Director and decides on the remuneration of the Managing Director and on other terms of the Managing Director contract on the basis of the recommendations by the Nomination and Remuneration Committee of the Board. The terms of duty of the Managing Director have been agreed on in writing. The Managing Director is elected for an indefi nite term until further notice.
Management team
Biotie group has a management team consisting of Timo Veromaa (President and CEO), Antero Kallio (Chief Medical Offi cer), Thomas Kronbach (Chief Scientifi c Offi cer), Chris Piggott (Chief Business Offi cer) and Thomas Taapken (Chief Financial Offi cer).
More information
The management team members handle the issues that concern managing of the group in their respective areas and on the basis of the guidance provided by the Board of Directors.
The management team assists the Managing Director in running the Company. The management team members prepare matters that are to be put before the Board of Directors for decision-making, e.g. the Company's strategies, budgets and policies as well as significant acquisitions and divestments. In addition, the management team handles matters pertaining to reporting, internal and external communication, personnel development, hiring of employees and their terms of employment as well as investor relations. The management team has no formal status under company law.
Remuneration
More information
Internal control and risk management in Biotie
More information
Insider Administration
Biotie’s insider rules fully observe the insider guidelines issued by NASDAQ OMX Helsinki Ltd. Biotie’s insider rules are regularly updated and compliance therewith monitored on an ongoing basis. Biotie has appointed Thomas Taapken, CFO as insider officer.
Information on shareholding data of public insiders is accessible via Euroclear Finland Ltd and available on Biotie’s website (www. biotie.com) more information. Biotie’s insider rules stipulate that all members of the Board of Directors, the Managing Director and the Group auditors are considered to be public insiders. All other members of the management team, the secretary to the Board of Directors and certain key employees of the Company are registered as permanent company-specifi c insiders within the Company.
Trading in any kind of securities or derivatives related to the Company is limited for all permanent insiders of Biotie. Three principal rules govern trading by the permanent insiders: (i) trading is generally permitted only during the four-week period following the date of publication of the annual results or of an interim report (the ”Open Window”); (ii) trading may exceptionally be permitted outside of the Open Window upon prior approval Biotie’s insider officer; (iii) trading is always prohibited during the two week period preceding the release of the annual results and interim reports, and on the date of publication itself (the ”Closed Window”). In addition, specifi c trading restrictions apply to project specifi c insiders.
The Company´s insider administration is included in the Sire-system of Euroclear Finland Ltd. Visiting address of the public insiders register is Euroclear Finland Oy, Urho Kekkosen katu 5 C, 00100 Helsinki.
Audit
More information
Shareholders’ Agreements
Biotie is not aware of any shareholders’ agreements regarding the Company.
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(Updated June, 2010)