Aurinia Pharmaceuticals Inc. (AUPH) Earnings Call Transcript & Summary

Good morning, and welcome to the 2021 Aurinia Pharmaceuticals Inc. Annual General and Special Meeting. The meeting will now come to order. My name is Peter Greenleaf, and I'm the President and Chief Executive Officer of the corporation. Pursuant to the bylaws of the corporation, I will be acting as Chairman of the meeting today. Due to the public health impact of COVID-19 pandemic and to support the health and well-being of our shareholders, employees, management and directors, this meeting will be our second time hosting a completely virtual meeting of shareholders. In addition to tabling our financial statements, there are 8 motions that we will be voting on today. All of the motions will be voted on, we will announce our preliminary voting results, and the business of the meeting will officially come to close. I will ask Stephen Robertson, Corporate Secretary of the corporation to act as Secretary for this meeting, and I will ask Kyle Gould of Computershare Investor Services Inc. to act as Scrutineer for the meeting. Will the Secretary, please assure us that the annual General Meeting and Special meeting has been properly called?

As noted in the proxy materials delivered to shareholders, the record date for this meeting was the close of business on April 19, 2021. I have before me an affidavit of a representative of Computershare Trust company of Canada attesting that the notice calling this annual general and special meeting, together with the management information circular and proxy statement and the former proxy, were delivered in accordance with the Business Corporations Act of Alberta and applicable securities laws to all shareholders of record as of the close of business on April 19, 2021. Therefore, Mr. Chairman, this annual general and Special meeting has been properly called.

With the consent of the meeting, I will dispense with reading the formal notice of meeting that was sent to shareholders on May 10, 2021. Are there any objections?

We will pause for approximately 30 seconds to allow shareholders or proxy holders to submit any objections. Please also take this opportunity to submit any discussion points you may have with respect to any of the proposals for consideration at this meeting, which will be addressed at the appropriate time for each proposal. We will not otherwise be pausing during the annual general and special meeting. There are no objections.

According to the Corporation's Bylaws, a quorum of the meeting is 2 shareholders present in person or proxy holding in the aggregate, not less than 33.3333% percent of the outstanding shares of the corporation carrying the right to vote at this meeting. We have the necessary Quorum on April 19, 2021, the record date, there were approximately 128,120,927 -- let me try that again, 128,120,927 common shares issued and outstanding. The preliminary Scrutineer's report indicates that 149 shareholders representing in person or by proxy, 90,954,917 shares or approximately 70.99% of the shares issued and outstanding as of the record date are represented here today at this meeting. I adopt the Scrutineer's report on attendance and declare accordingly that a quorum is present. I now declare that the Annual General and Special Meeting is regularly called and properly constituted for the transaction of business. Before commencing with the business of the meeting, I would like to ask the secretary to explain the voting procedures to be followed at the meeting.

There is 1 outstanding class of shares in the corporation, common shares, which are entitled to vote. The holders of common shares are entitled to one vote for each common share held. Voting for each resolution will be by an online voting mechanism. Only registered shareholders or validly appointed proxy holders may vote. The online voting mechanism will be open for all resolutions at the same time, and we encourage you to enter your vote for all resolutions at this time. You may also wait into the conclusion of any discussion on each resolution prior to casting your vote. Voting for each matter will remain open until the Chairman declares the voting closed, which will occur after the discussion on each resolution. You will see a voting icon on your screen and the resolution wording will be displayed. To vote, select one of the voting options. Your response will be highlighted. A confirmation message will appear to show that your vote has been received. In order for your vote to be properly recorded, it is important that you remain connected to the Internet at all times, if you are not connected, your vote will not be recorded. If you previously voted by completing and delivering a proxy and a choice to specified in the proxy, you should not cast another vote unless you wish to revoke your proxy. Now let me explain the procedure for asking questions. Again, only registered shareholders or validly appointed proxy holders are permitted to ask questions. [Operator Instructions]. If you have a question related to proposals that are being considered at this meeting, again, we would ask that you submit them now for consideration at the appropriate time.

We have asked Stephen Robertson, a proxy holder, to make motions today, and Joe Miller, a proxy holder, will be seconding motions. This is intended to make the meeting flow more smoothly. Voting for all 8 proposals is now open. Please feel free to vote at any time prior to voting being closed for each respective matter. Before voting on proposal one, I'd like to table the audited financial statements of the corporation and the report of the auditors there on the fiscal year ended December 31, 2020. Copies of the audited financial statements and auditor's report were made available to shareholders and were filed in the corporation's annual report on Form 10-K under the Corporation's profile on SEDAR and EDGAR and posted on the Corporation's website on February 24, 2021. Additional copies are available by sending an e-mail request to us at [email protected]. Unless there are questions arising from the audited financial statements and auditor's report, I shall consider them received by shareholders as submitted to this meeting.

There are no questions at this time.

May we please have a motion that the number of directors -- may we please have a motion that the number of directors on the Board be fixed at 8?

So moved.

Is there any discussion on the motion?

There is no discussion at this time.

As there is no discussion, if you have not already, please cast your vote on the motion that the number of directors of the corporations be fixed at 8. The voting for this motion is now closed based on the votes available to me, and I declare the motion carried by the requisite majority. It is now in order to proceed with proposal 2. The election of directors for the upcoming year. The management information circular and proxy statement dated May 10, 2021, which was mailed to shareholders, contains the names of and information about management's 8 nominees to the Board of Directors. There are 8 positions to be filled. Each until the next annual meeting, and there were no further nominations that have been made in accordance with the advanced notice provisions of the bylaws of the corporation. So accordingly, may we please have a motion that George M. Milne, Peter Greenleaf; David R. W. Jayne, Joseph P. Hagen; Daniel G. Billen, R. Hector Mackay-Dunn; Jill Leversage and Timothy P. Walbert be elected to hold office until the next meeting of shareholders?

So moved.

I second the motion.

Is there any discussion on the motion?

There is no discussion at this time.

As there is no discussion, if you have not already, please cast your vote for the election of directors. Voting for each nominee will be conducted individually. Please scroll down to ensure you have voted on all 8 nominees. [Voting]

The voting for this motion is now closed. And based on the votes available to me, I declare that each of George M. Milne, Peter Greenleaf; David R. W. Jayne, Joseph P. Hagen, Daniel G. Billen, R. Hector Mackay-Dunn, Jill Leversage and Timothy P. Walbert are elected to hold office as Directors until the next annual meeting of shareholders. Proposal 3 is the appointment of auditors. May we please have a motion that PricewaterhouseCoopers LLP chartered professional accountants be appointed as auditors of the corporation, until the close of the 2022 Annual General Meeting of Shareholders or until a successor has been appointed by the corporation.

So moved.

I second the motion.

Is there any discussion on the motion?

There is no discussion at this time.

As there is no discussion, if you have not already, please cast your vote on the appointment of PricewaterhouseCoopers LLP, chartered professional accountants, as auditors of the corporation until the close of the 2022 Annual General Meeting of shareholders or until a successor is appointed. [Voting]

The voting for this motion is now closed and based on the votes available to me, I declare the motion carried by the requisite majority. Proposal 4 is the advisory vote on executive compensation. Accordingly, may we please have a motion to approve a nonbinding advisory basis a say-on-pay resolution regarding the corporation's executive compensation as set forth in the corporation's management information circular and proxy statement for this meeting?

So moved.

I second the motion.

Is there any discussion on this motion?

There is no discussion at this time.

As there is no discussion, if you have not already, please cast your vote to approve on a nonbinding advisory basis, the say on pay resolution regarding the corporation's executive compensation. [Voting]

The voting on this motion is now closed. And based on the votes available to me, I declare that the motion has not been carried by the requisite majority. Proposal 5 is the advisory vote on the frequency of the future advisory votes on say-on-pay resolutions. Accordingly, may we please have a motion to approve on a nonbinding advisory basis the frequency of future advisory votes on say-on-pay resolutions regarding the corporation's executive compensation?

So moved.

I second the motion.

Is there any discussion on the motion?

There is no discussion at this time.

As there is no discussion, if you have not already, please cast your vote to approve on a nonbinding advisory basis, the frequency of future advisory votes on say on pay resolutions. You may cast your vote on your preferred voting frequency by choosing the option of every year, every 2 years or every 3 years or to abstain. The voting for this motion is officially now closed based on the votes available to me, I declare the motion carried by the requisite majority that the preferred frequency for future advisory votes on executive compensation will be every year. Proposal 6 is to approve the corporation's amended and restated equity incentive plan as adopted by the Board of Directors. Accordingly, may we please have a motion to approve the corporation's amended and restated equity incentive plan as set forth in the management's information circular and proxy statement for this meeting?

So moved.

I second the motion.

Is there any discussion on the motion?

There is no discussion at this time.

As there is no discussion, if you've not already, please cast your vote on the corporation's amended and restated equity incentive plan. The voting for this motion is now closed. And based on the votes available to me, I declare the motion carried by the requisite majority. Proposal 7 is to approve and adopt the 2021 employee stock per share purchase plan. Accordingly, may we have a motion to approve and adopt the 2021 employee share purchase plan as set forth in the management information circular and proxy statement for this meeting?

So moved.

I second the motion.

Is there any discussion on the motion?

There is no discussion at this time.

As there is no discussion, if you've not already, please cast your vote on the approval of the corporation's 2021 employee share purchase plan. The voting for this motion is now closed and based on the votes available to me, I declare the motion carried by the requisite majority. Proposal is to confirm the corporation's amended and restated bylaw #2. Accordingly, may we please have a motion to confirm the corporation's amended and restated bylaw number two, to increase the quorum for shareholder meetings to 33.3333% as adopted by the Board of Directors as set forth in the management information circular and proxy statement for this meeting?

So moved.

I second the motion.

Is there any discussion for this motion?

There is no discussion at this time.

As there is no discussion, if you've not done so already, please cast your vote to confirm the corporation's amended and restated bylaw #2. [Voting]

The voting for this motion is now closed based on the votes available to me, I declare the motion carried by the requisite majority. I now declare all the polls closed. The scrutineers will tabulate the results, and the official results of the meeting will be available on sedar.com and sec.gov following today's meeting. This concludes all matters set out in the notice of meeting. Is there any further business?

There is no further business.

As there is no further business with the consent of the meeting, I declare the Annual General and Special Meeting of Corporation concluded. On behalf of management, our Board of Directors and all Aurinia's employees. I'd like to thank you for your continued support. Thank you, and please stay safe, everyone.