Biotie Therapies Corp. (“Biotie” or the Company, or together with its subsidiaries the “Group”) complies with the Finnish Corporate Governance Code for listed companies issued in 2015 by the Securities Market Association. Furthermore, Biotie’s corporate governance is in line with the laws of Finland, the rules of Nasdaq Helsinki Ltd, corporate governance principles and Biotie’s Articles of Association.
As a result of the listing of the American Depositary Shares on NASDAQ Global Select Market ("NASDAQ") in New York and the Company’s registration under the US Securities Exchange Act of 1934 and the rules and regulations thereunder (the "Exchange Act"), Biotie must comply with the US federal securities laws and regulations, including the Sarbanes-Oxley Act of 2002 as well as the requirements of NASDAQ, in particular the NASDAQ Listing Rules. The NASDAQ Listing Rules include, however, certain accommodations in the corporate governance requirements that allow foreign private issuers to follow “home country” corporate governance practices in lieu of the otherwise applicable corporate governance standards of NASDAQ. The Company follows Finnish corporate governance practices in lieu of the corporate governance requirements of NASDAQ Listing Rules in certain respects. The Company describes these corporate governance practices in its filings with the US Securities and Exchange Commission (the "US SEC"), e.g. in the registration statement on Form F-1.
Following the recent completion of the voluntary public tender offer by Acorda Therapeutics, Inc. (“Acorda”) to purchase all of the issued and outstanding Biotie shares, American Depositary Shares, stock options, share units and warrants in Biotie not owned by Biotie or any of its subsidiaries (the “Tender Offer”), Acorda holds more than 90 percent of the shares in the Company. Further, Acorda will initiate arbitral proceedings as provided in the Finnish Limited Liability Companies Act to effectuate the redemption of the Biotie shares held by minority shareholders.
As a result of this, the Company departs from recommendation 10 of the Finnish Corporate Governance Code as all three members of the Board of Directors are not independent of the company’s significant shareholder Acorda.
The parent company of the group is Biotie Therapies Corp. The domicile of the Company is Turku, Finland. The Company has two operative subsidiaries Biotie Therapies Inc, located in South San Francisco, United States of America and Biotie Therapies AG, located in Zurich, Switzerland.
The Group also has two non-operational subsidiaries named Biotie Therapies GmbH, located in Radebeul, Germany and Biotie Therapies International Ltd in Finland.
The highest decision-making power in Biotie is exercised by the Company’s shareholders at General Meetings, in which the shareholders may exercise their right to speak, ask questions and vote.
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 although in 2015 and 2016 it was held in May. Extraordinary General Meetings are convened if needed to handle specific matters proposed to a General Meeting.
Usually General Meetings handle the matters placed on its agenda by the Board of Directors. According to the Finnish Companies Act, shareholders may also request the Company’s Board of Directors to place a matter on the agenda of the next General Meeting. The Company states well in advance on its website the date by which a shareholder must declare his or her demands for matters to be dealt with at the Annual General Meeting. The demand is always deemed to have arrived in sufficient time, if the Board of Directors has been notified of the demand four weeks before the delivery of the summons to the General Meeting at the latest.
Shareholder or shareholders holding a minimum of 10% of all shares and the Company’s auditor, may request the handling of a specified matter at a General Meeting, which the Board of Directors shall then convene.
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 the Board of Directors
- Adoption of the financial statements
- Distribution of profits / allocation of losses.
Summons to the General Meeting
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 verifiable way to the shareholders' address, which is registered in the share register. The summons shall state the matters to be handled at the General Meeting and other information required in Finnish Companies Act and Corporate Governance Code.
The summons and the proposals of the Board of Directors to the General Meeting are also published by means of a stock exchange release.
The summons to the General Meeting and the following information shall be made available on the Company´s 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 summons is disclosed in the summons.
- Documents to be submitted to the General Meeting
- Resolution proposals to the General Meeting
- An introduction of candidates for election to the Board of Directors
- The proposal for the election of the external auditor is disclosed in the summons.
The Board of Directors may decide that the shareholders may participate in the General Meeting by post or telecommunications or by other technical means.
Shareholders who have registered eight (8) working days before the General Meeting in the Company’s shareholders register kept by Euroclear Finland Ltd have the right to attend the General Meeting and exercise their voting (and other shareholder´s) rights. Shareholders may exercise their rights at the General Meeting either in person or through an authorized proxy representative. A shareholder may have several proxy representatives, who represent the shareholder with shares on different book-entry accounts. When registering for the General Meeting, the shares on the basis of which each proxy representative represents the shareholder must be declared.
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. The decisions of the General Meeting are also published by means of a stock exchange release immediately after the General Meeting. The documents related to the General Meeting shall be available on the Company´s website at least for five years after the General Meeting.
Attendance of the members of the Board and the Managing Director
The chairman of the Board of Directors, the members of the Board of Directors, and the Managing Director shall be present at the General Meeting. In addition, the auditor shall be present at the Annual General Meeting. A candidate proposed for the first time to be elected to the Board of Directors shall participate in the General Meeting that decides on his or her election.
Biotie has only one series of shares, which entitle its holders to one vote per share owned at the General Meeting. The shareholder may vote with different shares in a different manner, unless the Articles of Association stipulate otherwise. A shareholder may also vote with only part of his or her shares. 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
Board of Directors
Composition and term
Under the Articles of Association, the Board of Directors consists of at least three (3) and at most ten (10) members. The members of the Board are elected by the Annual General Meeting of the shareholders and the term of office of the members of the Board of Directors expires at the end of the Annual General Meeting following their election. Acorda is responsible for preparing the proposals to the General Meeting for the election and remuneration of the members of the Board of Directors.
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 members of the Board of Directors. 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 of Directors 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 May 3, 2016)
The number of the members of the Board of Directors was resolved to be three. The following members were elected as the members of the Board of Directors: Ron Cohen, Michael Rogers and Jane Wasman.
At the organization meeting of the new Board of Directors, which convened immediately after the Annual General Meeting, Ron Cohen was elected as the Chairman of the Board of Directors and the Board resolved not to set up any Board committees.
Based on an evaluation of independence under Finnish independence standards, the Board of Directors concluded that all members of the Board of Directors are independent of the Company, but dependent of its significant shareholder.
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
- Confirm the business plan and budget as well as financing transactions (as far as not falling into the responsibility of the shareholders)
- Deliberate on and approve interim reports, the annual accounts and the Board of Directors' reports
- Deliberate on an approve the corporate governance statement as well as statements on remuneration, internal control policies and certain business principles
- Decide on all mergers and acquisitions as well as on divestments (as far as not falling into the responsibility of the shareholders)
- Decide on major capital expenditures, entering into significant commitments or contracts, and on all other creations of significant actual or potential liabilities, such as loans, guarantees and mortgages
- Confirm internal control and risk management systems and reporting procedures as well as confirm the general operating principles and policies
- Settling any material action, suit or proceeding to which the Company is a party
- Decide on bonus and incentive schemes for the management and pension schemes for employees and management
- Decide on the structure of the Group, organisation of the Company (as far as not falling into the responsibility of the shareholders)
- Decide on any related party transactions
- Point 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 21 meetings during 2015. The average ratio of attendance at the meetings was 88 percent.
Biotie does not have a supervisory board.
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 appointed by the General Meeting are present at the meeting. 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 unjustified benefit to any shareholder or other third party at the cost of the Company or another shareholder. A Board member is disqualified 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 benefit and that benefit may be contrary to the interests of the Company. In principle, a Board member may not participate in the handling of a matter if the Board member is involved in the matter under assessment in another capacity. 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.
The Board of Directors shall convene as frequently as necessary to discharge its responsibilities. The Managing Director ensures that the Board of Directors is provided with sufficient information to assess the operations and financial situation of the Group. The secretary of the Board of Directors is Mr. Mikko Heinonen from Hannes Snellman Attorneys Ltd.
The Board of Directors conducts annual performance self-evaluations.
The Board of Directors has no set up any committees and therefore, in its entirety conducts the tasks appointed to different committees in the Finnish Corporate Governance Code.
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 financial 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. The terms of duty of the Managing Director have been agreed on in writing. The Managing Director is elected for an indefinite term until further notice.
Antero Kallio (born 1960), M.D., Ph.D., special competence in pharmaceutical medicine, Biotie´s CEO since 1 July 2016 and performs the role of Managing Director.
Biotie has a management team consisting of Antero Kallio (Chief Executive Officer) and Kristian Rantala (Chief Financial Officer).
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 schemes are drawn up in such a manner that their goal is to promote competitiveness and long-term financial success of the Company and to contribute to the favorable development of shareholder value. Remuneration schemes are based on predetermined and measurable performance and result criteria.
The General Meeting decides on the remuneration payable for Board of Directors as well as the basis for its determination. The Board of Directors decides on the remuneration of the Managing Director as well as other compensation payable to him or her.
Annual General Meeting (May 3, 2016)
The General Meeting resolved that no remuneration is payable to the members of the Board of Directors. Reasonable travel and other expenses related to Board work shall be covered by the Company.
Internal control and risk management in Biotie
Biotie’s insider rules fully observe the insider guidelines issued by Nasdaq Helsinki Ltd and applicable EU and Finnish regulation, especially the Market Abuse Directive (“MAR”). Biotie’s insider rules are regularly updated and compliance therewith monitored on an ongoing basis.
Following the entry into force of the MAR on 3 July 2016, the Company does not have an obligation to maintain a public or permanent company-specific insider registers. Instead, the Company has an obligation under MAR to promptly publish transactions made in the Company’s financial instruments by its managers and their closely associated persons. The Company has an obligation to keep its public insider register on the Company’s website for 12 months from the entry into force of MAR. Visiting address of the public insiders register for the forthcoming five years is Euroclear Finland Ltd, Urho Kekkosen katu 5 C, 00100 Helsinki.
The managers are prohibited to trade (on its own account or for the account of a third party), directly or indirectly, in the financial instruments of the Company during a closed period of 30 calendar days before the announcement of each of the quarterly financial reports and the year-end report and the day of publication of such report.
Biotie is not aware of any shareholders’ agreements regarding the Company.
29 July, 2016