HUDDINGE, Sweden, Aug. 16, 2004 (PRIMEZONE) -- A special general meeting of the shareholders of Karo Bio Aktiebolag (publ) will be held on Monday August 30, 2004 at 4.00 pm in Strindbergsalen at Berns, Berzelii Park, Stockholm, Sweden.
I. RIGHT TO PARTICIPATE, NOTIFICATION
Shareholders who wish to participate in the general meeting must be recorded in the share register kept by the Swedish Securities Register Centre (VPC AB) by Friday August 20 2004 and, further, must notify the company of their intention to participate in the meeting by no later than 4.00 pm on Thursday August 26, 2004. Notification should be made in writing to Karo Bio AB, att: Eva Kruse, Novum, SE-141 57 Huddinge, Sweden, by fax + 46 8 774 52 80 or by e-mail to sgm@karobio.com. Notification can also be made on the company's web site www.karobio.com/sgm. When notifying, the shareholders should state name, personal/corporate identity number (where applicable), address, telephone number and e-mail address. In the case of representatives participating in the meeting, proof of due authorization should be forwarded to the company in conjunction with the notification. One or two advisors may accompany a shareholder to the meeting, provided that the shareholder gives notice as to the number of such advisors. Shareholders whose shares are registered under the name of a nominee must temporarily register their shares in their own names to be entitled to participate in the meeting. Such registration must be in effect at Swedish Securities Register Centre (VPC AB) no later than Friday August 20, 2004, which means that shareholders must notify their nominee well in advance of that date.
II. PROPOSED AGENDA
1. Opening of the meeting and election of chairman at the meeting
2. Preparation and approval of the voting list
3. Approval of the agenda
4. Election of persons to confirm the minutes
5. The determination as to whether the meeting has been duly convened
6. Resolution to approve the board's decision to issue new shares with
preferential rights for the shareholders
7. Resolution on the board's proposal to authorize the board to decide
on a new issue of shares with deviation from the preferential rights
of the shareholders
8. Closing of the meeting.
III. PROPOSED RESOLUTIONS
Item 6: Resolution to approve the board's decision to issue new shares with preferential rights for the shareholders On August 12, 2004 the board resolved -- subject to the approval of the general meeting -- that the share capital of the company shall increase by not more than SEK 56,300,215 by way of a new share issue of not more than 11,260,043 shares, each with a nominal value of SEK 5. The shareholders shall have preferential rights to subscribe for the new shares. For each new share, payment of SEK 8.50 shall be made. Each existing share entitles to two subscription rights. Each three subscription rights entitles to subscription of one new share. Subscription of shares with preferential rights shall be made by way of cash payment during the period as from and including September 13, 2004 up to and including October 1, 2004, with a right for the board to extend the subscription period. Record date for the new share issue, on which shareholders shall be recorded in order to be entitled to participate in the new share issue with preferential rights, shall be September 8, 2004. If full subscription is made on the basis of the company's warrants 2000/2010, 2001/2008 and 2003/2011:A-D, the resolution shall be deemed to mean that the company's share capital shall be increased by an additional amount of not more than SEK 2,038,060 by way of a new share issue of not more than 407,612 additional new shares.
Item 7: The board's proposal to authorize the board to decide on a new issue of shares The board proposes that the general meeting resolves to authorize the board, during the period until the next annual general meeting of the shareholders, on one or several occasions and with deviation from the preferential rights of the shareholders, to decide on a new issue of shares of up to 2,815,010 shares, whereby the share capital would be increased by a maximum of SEK 14,075,050 corresponding to an increase of the share capital and voting rights of approximately 10 percent after the new issue under item 6 against payment in cash. The authorization shall be used only provided that the new share issue resolved under item 6 has been executed and over-subscribed. The subscription price per share shall be SEK 8.50. Entitled to subscribe for new shares shall be those who were recorded as shareholders on the record date and who have not been allotted all shares subscribed for in the new issue resolved under item 6. This means that in case the board resolves on a new issue pursuant to this authorization, investors who have applied for new shares in accordance with guarantee undertakings or statements of intent to subscribe and who have not received shares to the extent applied for in the new issue pursuant to section 3, will be allotted shares. The proposal also involves giving special regard to shareholders seeking to increase their holding up to one trading lot. The reasons for deviating from the preferential rights of the shareholders are the following. In order to secure commitments from investors for the rights issue, the board has determined that it is imperative, in the current financial situation, to offer an opportunity in case of over-subscription to subscribe for shares without preferential rights. The company is currently actively seeking to out- license compounds as well as to proceed with own further development of compounds. In order for the company to be a solid and long-term partner, and in order to strengthen the company's position in its negotiations with potential partners, it is important that the company's financial position is as strong as possible. This is achieved by allowing shareholders to subscribe for shares in addition to their preferential rights. It is the board's opinion that an issue of new shares as described above will benefit the company and thus be in the interests of its shareholders.
IV. DOCUMENTS
The board's resolution under item 6 above in its entirety and the board's proposal for resolution under item 7 above in its entirety as well as documents in accordance with chapter 4 section 4 of the Swedish Companies Act will be available at the company's offices in Huddinge and on the company's web site www.karobio.com/sgm from August 23, 2004. Copies of all documents will be sent to shareholders that so request and state their address or e-mail address. Copies of all documents will be available at the general meeting.
V. OTHER ISSUES
A decision by the general meeting under item 7 above will be valid only if it is supported by shareholders holding two-thirds of the shares voted as well as two-thirds of all shares present or represented at the meeting. The board proposes that the general meeting in connection with item 7 above resolves to authorize the managing director, the board or a person appointed by the board to make such minor changes to the resolutions of the general meeting that may be necessary in order for registration to take place at the Swedish Companies Register Office.
Huddinge in August 2004 Karo Bio Aktiebolag (publ) The Board of Directors
For further information, please contact
Bjorn O. Nilsson, President & Chief Executive Officer, phone +46 8 608 60 20 Bertil Jungmar, Chief Financial Officer, phone +46 8 608 60 52
Facts about Karo Bio
Karo Bio has operations in Huddinge, Sweden and 95 employees.
Karo Bio has been listed on the Stockholm stock exchange (Reuters: KARO.ST) since 1998 and maintains a leading position in the field of drug discovery focused on nuclear receptors. Nuclear receptors are validated drug targets for a number of clinical indications and the Company uses proprietary technologies for the development of novel and improved therapies for major markets.
Karo Bio has drug discovery programs in several therapeutic areas including women's health care, cancer, cardiovascular disease, atherosclerosis and diabetes.
Karo Bio collaborates with major pharmaceutical companies for the development of products and marketing. In these collaborations Karo Bio receives upfront payments, R&D funding and milestone payments, as well as royalties on net sales when products reach the market.
Karo Bio has strategic pharmaceutical drug discovery collaborations with Merck & Co., Inc. and Wyeth Pharmaceuticals.
This press release is also available online at www.karobio.com and at www.waymaker.net.
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