Exhibit 1.1
SERONO S.A.
COMPANY LIMITED BY SHARES
WITH REGISTERED OFFICES AT COINSINS, VAUD, SWITZERLAND
ARTICLES OF ASSOCIATION
OF MARCH 20, 2003
This document is a free translation. The original version of the
Articles of Association of Serono SA is the French version which has
been registered with the Trade Registrar of the State of Vaud,
Switzerland, on March 27, 2003.
SERONO S.A.
ARTICLES OF ASSOCIATION
__________________________________________________
SECTION I
NAME - REGISTERED OFFICE
OBJECT - DURATION
ARTICLE 1: NAME
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There is hereby formed a company limited by shares named SERONO S.A., which is
governed by the present Articles of Association and by Section XXVI of the Code
of Obligations (also referred to hereinafter as "CO").
ARTICLE 2: REGISTERED OFFICE
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The registered offices of the company are in Coinsins (Canton of Vaud).
ARTICLE 3: OBJECT
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The principal object of the company is to act as a holding company (for the
acquisition and management of shareholdings in Switzerland and abroad) in the
pharmaceutical and related fields.
The company may establish enterprises or companies, carry out any financial,
commercial, industrial and real estate transactions, and conclude any contracts
which further or are directly or indirectly connected with its object.
ARTICLE 4: DURATION
-------------------
The company is established for an indefinite duration.
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SECTION II
SHARE CAPITAL
SHARES
ARTICLE 5: SHARE CAPITAL
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The share capital is fixed in the sum of CHF 402,276,800 (four hundred and two
million two hundred and seventy-six thousand eight hundred Swiss francs),
divided into:
a) 11,013,040 registered "A" shares with restricted transferability, each with
a par value of CHF 10 (ten Swiss francs), fully paid up; and
b) 11,685,856 bearer "B" shares, each with a par value of CHF 25 (twenty-five
Swiss francs), fully paid up.
ARTICLE 5 BIS: CONDITIONAL CAPITAL
----------------------------------
A. CONDITIONAL CAPITAL FOR OPTION AND/OR CONVERTIBLE LOANS
The share capital of the company shall be increased by a maximum of CHF
3,800,000 (three million eight hundred thousand Swiss francs) through the issue
of 152,000 (one hundred and fifty-two thousand) bearer "B" shares with a par
value of CHF 25 (twenty-five Swiss francs) each, to be fully paid up by the
exercise of the option and/or conversion rights granted in connection with loans
issued by companies of the Serono group.
The amount and conditions of the loans, together with the procedures and
conditions for the exercise of option and/or conversion rights and the issue
price shall be determined by the Board of Directors. The new shares may be
purchased or acquired by holders of convertible bonds or option rights arising
from option bonds.
The Board of Directors may resort to the issuance of loans to be subscribed by a
consortium, with a subsequent public offering, subject to the provisions
indicated below.
The Board of Directors shall determine the procedures for the exercise of
preferential subscription rights. Preferential subscription rights which are not
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exercised shall revert to the company. The Board of Directors may offer them at
market rates or allow them to expire.
The Board of Directors may remove the shareholders' preferential subscription
right if loans are issued to finance the acquisition of shareholdings or other
rights in companies or with a view to financing research and development
projects. Should the Board of Directors remove the shareholders' preferential
subscription right, the following conditions shall apply:
a) conversion rights may be exercised for a maximum period of 15 years and
option rights for a period of 7 years from the date of issue of the related
loan
b) convertible loans and/or loans with options shall be issued subject to
normal market conditions (including the normal market conditions relating
to protection against dilution for the holders of option and/or conversion
rights); and
c) conversion and/or option prices shall correspond at the least to the
average rate quoted on the Zurich stock exchange for the shares of the
company during the 5 days preceding the determination of the definitive
issue conditions for the convertible loan or loan with options loan in
question.
B. CONDITIONAL CAPITAL FOR A STOCK OPTION PLAN
The share capital of the company shall be increased by a maximum of CHF
9,474,150 (nine million four hundred and seventy-four thousand one hundred and
fifty Swiss francs), namely 378,966 (three hundred and seventy-eight thousand
nine hundred and sixty-six) bearer "B" shares, each with a par value of CHF 25
(twenty-five Swiss francs), fully paid up, through the exercise of option rights
which the Board of Directors intends to grant to employees of companies of the
Serono group and to the directors of the company.
The subscription right of shareholders shall be removed for these new shares.
The Board of Directors shall lay down regulations specifying the conditions and
procedures for the granting and exercise of the options.
The shares may be subscribed at a rate lower than the stock market rate.
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ARTICLE 5 TER: AUTHORISED CAPITAL
---------------------------------
The Board of Directors shall be authorised, until 21 May 2004, to increase the
share capital by a maximum of CHF 35,000,000 (thirty-five million Swiss francs)
through the issuance of a maximum of 1,400,000 (one million and four hundred
thousand) bearer shares, each with a par value of CHF 25 (twenty-five Swiss
francs), fully paid up. The Board of Directors may proceed to increase the share
capital either all at once or in instalments. The preferential subscription
rights which have been granted, but not exercised, are at the disposal of the
Board of Directors, which may use them in the interest of the company.
The Board of Directors is authorised to withdraw the preferential subscription
right of shareholders in favour of a bank or another institution selected by the
Board of Directors which shall purchase the shares on a firm basis, if the bank
or institution which firmly purchases the shares undertakes to offer the
subscription of the newly issued shares to the shareholders in proportion to
their current participation.
The issue price of the shares, the manner in which they are paid up and the date
as from which the new shares give right to dividends as well as the conditions
for the exercise of the preferential subscription right shall be determined by
the Board of Directors.
ARTICLE 6: SHARES
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6.1. The shares are registered shares or bearer shares. They are numbered and
signed by a director, whose signature may be printed.
Each share shall be entitled to a proportional part of the profits and of
the proceeds of liquidation.
6.2. Instead of issuing individual registered or bearer shares, the company may
issue certificates representing a number of shares.
6.3. REGISTERED SHARES
The company considers registered shares to be indivisible and recognises
only one holder for each registered share. Shareholders who hold
registered shares must notify the company of any change of domicile. Any
communication from the company to the shareholder shall be deemed valid if
sent to the shareholder's last recorded address.
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6.4. REGISTER OF REGISTERED SHARES
The company shall keep a register, indicating the names and addresses of
the owners and usufructuaries of registered shares. The company shall
consider only the persons entered in this register as owners or
usufructuaries of registered shares.
No entry shall be made in the share register from the date on which the
General Meeting of Shareholders is convened until the day following the
General Meeting.
6.5. TRANSFER OF REGISTERED SHARES
The transfer of registered shares is subject to approval by the company.
The Board of Directors has the power to grant such approval. It may
delegate this power to the Executive Committee. The request for
authorisation shall include a declaration whereby the person acquiring the
shares certifies that they are being acquired in its own name and for
his/her own account. The company shall inform the applicant whether the
transfer has been approved or rejected.
Registration shall be rejected if the applicant does not expressly declare
that the shares are being acquired in its own name and for its own
account.
Registration may be rejected for a justifiable cause connected with the
object of the company or its economic independence and, in particular, if
the applicant is a competitor of the company or of a company in which
Serono S.A. holds a participating interest.
The company may, without giving reasons, refuse to approve a transfer of
shares by offering to the seller to buy back the shares for its own
account, for the account of other shareholders or for the account of third
parties, at their real value at the time the transfer request is received
by the company.
In the case of a transfer by succession, the company must enter the name
of the acquirer in the share register, unless there is a justifiable cause
not to do so in accordance with Paragraph 3 above. In such an eventuality,
if the company intends to refuse to allow the transfer, it must offer to
buy back the shares for its own account, for the account of other
shareholders or for the account of third parties, at their real value at
the time the registration request is received by the company.
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If the company offers to buy back the shares for the account of
shareholders, it must abide by the principle of equal treatment of all
holders of registered shares.
After hearing the persons concerned, the Board of Directors, or the
Executive Committee by delegation of the Board of Directors, may cancel,
with retroactive effect, any entries made in the share register on the
basis of false declarations.
The foregoing provisions shall also apply where the registered shares of
the company are made subject to a usufruct.
The registered shares may not be used by way of pledge, guarantee or
security in any form whatsoever, save with the express prior authorisation
of the Board of Directors, which is free to give or not to give reasons
for its decision. The Board of Directors may delegate this power to the
Executive Committee.
The restrictions on the free transfer of registered shares shall be noted
on the documents representing the shares.
The provisions of Article 6.5 may be amended only by a resolution carried
by the majority as stipulated in Article 704 Paragraph. 1 CO.
6.6. CONVERSION OF SHARES
The General Meeting may decide at any time to convert some or all of the
registered shares into bearer shares and vice versa.
ARTICLE 7: INCREASE IN SHARE CAPITAL
------------------------------------
7.1. The General Meeting may decide at any time to increase the share capital
by issuing new registered shares or new bearer shares. Each category of
shares may be the sole object of a particular issuance.
7.2. Every shareholder shall be entitled to a portion of the new share issue
corresponding to his previous holding. In the event of an increase in
share capital comprising an increase of registered shares and of bearer
shares in the same proportion, each shareholder in possession of
registered shares shall be entitled to subscribe for the new registered
shares only in proportion to the number of registered shares it holds.
Similarly, each shareholder in possession of bearer shares shall be
entitled to subscribe for the new bearer shares only in proportion to the
number of shares it holds.
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SECTION III
ORGANISATION OF THE COMPANY
A. THE GENERAL MEETING
ARTICLE 8
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8.1. The General Meeting is the highest authority of the company. Its
resolutions are binding on all shareholders.
8.2. Resolutions of the General Meeting which violate the law or the Articles
of Association may be contested by the Board of Directors or by any
shareholder under the conditions stipulated in Article 706 of the Code of
Obligations.
ARTICLE 9
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The General Meeting of Shareholders has the inalienable right:
9.1. to adopt and to amend the Articles of Association;
9.2. to appoint and to dismiss the members of the Board of Directors and the
auditors;
9.3. to approve the Group's annual report and accounts;
9.4. to approve the annual accounts, to determine the distribution of profits
and, in particular, to fix the dividend;
9.5. to give discharge to the members of the Board of Directors;
9.6. to resolve upon all matters reserved to it by the law and the Memorandum
and Articles of Association.
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ARTICLE 10
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10.1. No resolution may be passed on items which have not been placed on the
agenda, except for a proposal to convene an Extraordinary General Meeting
or to have a special audit carried out.
10.2. Advance notice is not required for proposals falling within the scope of
items on the agenda or for deliberations which do not have to be followed
by a vote.
ARTICLE 11
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11.1. The General Meeting shall be held at the registered offices of the company
or at a place designated by the Board of Directors.
11.2. The Ordinary General Meeting shall be held every year within six months of
the close of the financial year.
11.3. Extraordinary General Meetings may be convened as often as necessary, in
particular in the cases provided for by law, as well as upon a resolution
passed by the General Meeting itself.
ARTICLE 12
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The General Meeting shall be convened by the Board of Directors and, where
necessary, by the auditors. Liquidators shall also have the right to convene the
General Meeting.
ARTICLE 13
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13.1. The General Meeting shall be convened, at least twenty days prior to the
date on which it is to be held, by registered letter sent to every
registered shareholder at the address indicated in the share register, as
well as by an announcement published in the Feuille Officielle Suisse du
Commerce (Swiss Official Trade Gazette).
13.2. The invitation shall state the items on the agenda, together with the
proposals of the Board of Directors and of the shareholders who requested
the calling of the Meeting or the entry of an item on the agenda. The
invitation must also state the date, place and time of the Meeting.
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13.3. Proposals to amend the Memorandum and Articles of Association shall be
placed at the disposal of the shareholders at the registered office of the
company. Their availability for inspection shall be stated in the
invitation.
13.4. The invitation to attend the Ordinary General Meeting must inform the
shareholder that the annual report, the profit and loss account and the
balance sheet, as well as the Group accounts and the auditors' report will
be placed at the disposal of shareholders at the registered office of the
company at least twenty days prior to the General Meeting.
ARTICLE 14
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Provided that there is no objection, the owners or representatives of all the
shares may hold a General Meeting without following the convening procedure. As
long as they remain present, such a meeting shall have the right to deliberate
and duly pass resolutions on all matters which fall within the competence of the
General Meeting.
ARTICLE 15
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Each share shall be entitled to one vote.
ARTICLE 16
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Every holder of registered shares may arrange to have all or any of its shares
represented by another person, who must be in possession of a written proxy
form.
ARTICLE 17
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17.1. As a rule, the General Meeting has a quorum irrespective of the number of
shares represented.
17.2. Unless otherwise required by the law or by the Articles of Association,
the General Meeting shall proceed to pass resolutions and to conduct
elections by an absolute majority of the votes attached to the shares
represented.
17.3. However, at least two-thirds of the votes attached to the shares
represented and an absolute majority of the par values represented shall
be necessary to pass any resolution of the General Meeting to amend the
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object of the company, to introduce preferential voting shares, to
restrict the transferability of registered shares, to increase the share
capital, whether the increase is authorised or conditional, to increase
the share capital from shareholders' equity in consideration of a
contribution in kind or with a view to acquire assets and the granting of
special advantages, to limit or remove the right of preferential
subscription, to transfer the registered office of the company, and to
dissolve the company without liquidation.
ARTICLE 18
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18.1. Minutes shall be kept of the General Meeting, stating the number, type,
par value and category of the shares represented by the shareholders, the
organs of the company, the independent representatives and the trustee
representatives the resolutions and the results of the elections, the
requests for information and the replies given as well as the declarations
which shareholders ask to be recorded. The minutes shall be signed by the
chairman and the secretary of the General Meeting.
18.2. Extracts from the minutes shall be certified by a director or by any other
person appointed for such purpose by a director.
ARTICLE 19
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19.1. The General Meeting shall be chaired by the chairman of the Board of
Directors or by another director designated by the Board. Failing that,
the chairman shall be designated by the General Meeting.
19.2. The chairman of the General Meeting shall designate the secretary and the
person or persons who shall count the votes.
B. THE BOARD OF DIRECTORS
ARTICLE 20
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20.1. The Board of Directors shall consist of at least five and at most ten
members, chosen from among the shareholders and appointed by the General
Meeting.
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20.2. The majority of the members of the Board of Directors must be Swiss
nationals domiciled in Switzerland, unless the company obtains a
derogation from this rule in accordance with Article 708 Paragraph 1 CO.
ARTICLE 21
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21.1. The members of the Board of Directors shall be appointed for a term of one
year.
21.2. There is no limit on the number of times they may be re-elected.
21.3. The Board of Directors shall appoint its chairman and secretary by a
simple majority.
ARTICLE 22
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22.1. Meetings of the Board of Directors shall be convened , as often as
business may require, either by the chairman or, upon his order, by the
secretary.
22.2. Minutes shall be kept of the discussions and resolutions of the Board of
Directors and they shall be signed by the chairman and the secretary.
ARTICLE 23
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23.1. The resolutions of the Board of Directors shall be adopted by a majority
of the members present, provided that they form a majority of the Board of
Directors and that a majority of the members of the Executive Committee is
present.
23.2. In the event of a tie vote, the chairman shall have the casting vote.
23.3. Unless one member insists on oral discussions, resolutions of the Board of
Directors may also be adopted by written approval of a motion by a
majority of the directors, all of whom must be informed of the motion.
Such resolutions must be entered in the minutes.
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ARTICLE 24
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The Board of Directors shall have the widest powers to manage the company. It
shall be authorised to pass all resolutions regarding the company's business
which are not attributed to or reserved for the General Meeting or other organs
of the company.
ARTICLE 25
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25.1. The Board of Directors may delegate all or any part of the management and
the representation of the company to one or more board members (managing
directors) or to third parties who need not necessarily be shareholders.
25.2. The Board of Directors shall appoint the proxies and other attorneys of
the company.
25.3. The Board of Directors shall grant individual or joint powers to sign on
behalf of the company.
25.4. At least one member of the Board of Directors, domiciled in Switzerland,
must have authority to represent the company.
ARTICLE 26
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The Board of Directors shall adopt its own rules of procedure.
C. THE EXECUTIVE COMMITTEE
ARTICLE 27
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27.1. The Board of Directors shall appoint from among its members an Executive
Committee of at least three and at most five members.
27.2. The Board shall appoint the members of the Executive Committee at the
proposal of the chairman. A vice-chairman shall be appointed to replace
the chairman if it is prevented from acting.
27.3. The chairman must be a member of the Executive Committee.
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27.4. The powers of the Executive Committee shall be defined in the Rules of
Procedure of the company.
D. THE AUDITORS
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ARTICLE 28
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28.1. The General Meeting shall elect one or more auditors. It may also
designate deputy auditors. At least one of the auditors must be domiciled
in Switzerland and have his registered office or a branch office entered
in the Commercial Register in Switzerland.
28.2. The auditors shall be elected for the period up to the next Ordinary
General Meeting. They shall be immediately eligible for re-election.
28.3. The auditors shall be required to attend the Ordinary General Meeting.
28.4. The auditors must comply with the provisions of Articles 728 et seq. of
the Code of Obligations.
28.5. The General Meeting may appoint every year a special auditor, which may be
re-elected, with the duty to proceed with the special verifications
(provided in particular by articles 652f, 653f and 653i of the Code of
Obligations) which are required in relation with capital increases.
SECTION IV
ANNUAL ACCOUNTS
AND DISTRIBUTION OF PROFITS
ARTICLE 29
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The company's financial year shall begin on 1 January and end on 31 December.
ARTICLE 30
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30.1. The annual accounts shall be drawn up in accordance with the provisions of
Articles 662 to 670 of the Code of Obligations.
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30.2. The accounts shall be closed on 31 December.
ARTICLE 31
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31.1. Each year, a sum of one-twentieth of the profit for the financial year
shall be set aside to constitute a general reserve until the said reserve
amounts to one-fifth of the paid-up share capital. If any of the reserve
is used, it shall again be made up from the profits in the same way.
31.2. The balance of the profits shall be distributed in accordance with the
resolutions of the General Meeting, upon the recommendation of the Board
of Directors.
31.3. The mandatory provisions of the law relating to reserves must be
respected.
ARTICLE 32
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The payment of the dividend shall take place at the time appointed by the Board
of Directors. Any dividend which is not claimed within five years of the date on
which it becomes due shall automatically revert to the company.
SECTION V
LIQUIDATION
ARTICLE 33
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33.1. If it is decided to wind up the company, the liquidation shall be effected
by the Board of Directors, unless the General Meeting resolves otherwise.
33.2. At least one of the liquidators must be domiciled in Switzerland and have
authority to represent the company.
33.3. The liquidators shall decide among themselves the method by which they
will sign for the company.
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ARTICLE 34
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34.1. During the liquidation, the powers of the organs of the company shall be
restricted to acts which are necessary for the liquidation process and
which, by their nature, do not fall within the competence of the
liquidators.
34.2. The General Meeting of Shareholders shall retain the right to approve the
liquidation accounts and to approve the acts of the liquidators.
34.3. The liquidator or liquidators may transfer the assets and liabilities of
the dissolved company to third parties against payment or other
consideration only by virtue of a resolution of the General Meeting.
SECTION VI
ANNOUNCEMENTS
ARTICLE 35
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Company notices shall be published in the Feuille Officielle Suisse du Commerce.
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