Lonza : Shareholder Information Brochure (English | Deutsch)

2023 Annual General Meeting of Lonza Group Ltd Friday, 5 May 23, at 10:00 CEST

Shareholder Information Brochure

Proposed Changes to the Articles of Association

A. Explanations

1.

Preliminary Remarks

On January 1, 2023, the majority of the corporate law revision in the Swiss Code of Obligations ("CO") came into force ("Corporate Law Reform"). The main goals of the Corporate Law Reform are the modernization of the corporate governance, in par-ticular the improvement of minority shareholder protection in connection with the conduct of shareholders' meetings as well as the promotion of gender equality on the Board of Directors and the Executive Board, and to give companies more flexibility re-garding their share capital. In addition, the Ordinance against Excessive Compensation in Listed Stock Corporations was incorporated in the CO, with selective amendments to the previous provisions. Companies must adapt their articles of association to the Corporate Law Reform until the end of 2024.

In line with the new provisions, the Board of Directors of Lonza Group Ltd ("Lonza") is submitting to the Annual General Meeting 2023 ("AGM") a revision of the Articles of Association of Lonza ("Articles") that both implements the requirements of the Corpo-rate Law Reform and takes into account current best practices in the area of corporate governance.

The proposed amendments to the Articles are explained below. Subsequently, each proposed amendment is listed and compared to the current provision. Deletions are shown in red strikethrough font and new additions are shown in blue font. References in this overview are to the renumbered Articles as proposed by the Board of Directors. Please note that the German version of the Articles is prevailing.

2. Agenda Item 9.1 - Purpose

Lonza as a company as well as its areas of business have developed substantially in the course of the last decades. A refined wording, which focuses on Lonza's core business of health care and related fields ensures that Lonza's purpose will be suitable in the distant future as well.

3. Agenda Item 9.2 - Capital Band

a)Replacement of authorized capital (Article 4ter(1))

Due to the Corporate Law Reform, the authorized capital (Article 4ter) will no longer be permitted but replaced by a flexible "capital band". The introduction of a capital band authorizes the Board of Directors to increase or reduce the share capital within a pre-defined band and within a period of up to five years, without the need for an approval by a shareholders' meeting. In comparison, under the authorized capital, the Board of Directors is only authorized to increase the share capital of the Company within two years, but not to reduce it.

Since the existing authorized capital of Lonza (Article 4ter) cannot be extended, the Board of Directors proposes to replace it by a capital band. Under the proposed capital band, the Board of Directors shall be authorized to conduct one or more increases and/or reductions of the share capital of Lonza until May 5, 2028, within the upper limit of CHF 85,635,000 (corresponding to a capital increase of approx. 15% of the current share capital) and the lower limit of CHF 67,050,000 (corresponding to a capital reduc-tion of approx. 10% of the current share capital). No material changes to the existing

1 conditional capital (Article 4bis para. 1) are proposed. The overall limitation on capital increases on a non-preemptive basis (combined dilution limitation) (Article 4quater) will remain at CHF 7,500,000 (corresponding to approx. 10% of the current share capital).

The capital band is intended to provide the Company with the ability to raise capital in an uncomplicated manner to finance growth projects and to secure the Company's solvency in the future when needed. This is intended to maintain Lonza's financing flexibility at a high level. The possibility to reduce the capital within the capital band allows namely for the cancellation of treasury shares repurchased by Lonza under a share buyback program, including its current share buyback program announced on 25 January 2023 of up to CHF 2 billion, without the need to convene a separate share-holders' meeting.

For the protection of shareholder rights, limitations have been added or lowered for (i) capital increases on a non-preemptive basis (combined dilution limitation) (10%, see Article 4quater - see details below in section (d)), and (ii) capital increases within the capital band for the specific purpose of participation of members of the board of directors, employees and other persons performing services for the benefit of Lonza (5%, see Article 4ter para. 2). These limitations are relative to the share capital of Lonza at any point in time. To avoid that the basis of calculation for the limitation is inflated for the only reason that several capital increases are conducted sequentially as com-pared to one single capital increase, each of the relative limitations is backed up by an absolute limit for capital increases:

Relative Limit for Capital Increases (At Any Time) 10% for capital increases on a non-preemptive basis 5% for capital increases within the capital band for participation purposes

Absolute Limit for Capital Increases (Cumulatively)

CHF 7,500,000 (approx. 10% of current share capital)

CHF 3,723,000 (approx. 5% of current share capital)

1

The only proposed change to Article 4bis para. 1 concerns the form of the exercise of rights as required by the new law.

The current and proposed capital authorizations of Lonza can be summarized as follows:

Before AGM 2023	After AGM 20232
Registered share capital of Lonza	100%	100%
(Art. 4)	74,468,752 Shares	74,468,752 Shares
Capital Increases Based on Art. 4bis para. 1 and Art. 4ter para. 1
Conditional capital	approx. 10%	approx. 10%
(Art. 4bis para. 1)	7,500,000 Shares	7,500,000 Shares
(unchanged)3
Authorized capital (before AGM 2023) /	approx. 10%	approx. 15%
max. capital increase within the capital band ("upper limit")	7,500,000 Shares	11,166,248 Shares
(after AGM 2023) (Art. 4ter para. 1)
Max. capital increase within the	n/a	the lower of 5%
capital band for participation purposes	and 3,723,000 Shares
(Art. 4ter para. 2)	(at any point in time)
Max. capital increase on a non-preemptive basis	approx. 10%	the lower of 10%
("combined dilution cap") (Art. 4quater)	7,500,000 Shares	and 7,500,000 Shares
Applicable to all capital increases based on Art. 4bis para. 1 and	(at any point in time)
Art. 4ter para. 1
Capital Reductions Within the Capital Band
Max. capital reduction within the capital band	n/a	approx. 10%
("lower limit") (Art. 4ter para. 1)	7,418,752 Shares
Duration
Duration of the conditional capital	unlimited	unlimited
(Art. 4bis para. 1)	(unchanged)
Duration of the authorized capital (before AGM 2023) /	2 years	5 years
capital band (after AGM 2023) (Art. 4ter para. 1)	until 6 May 2023	until 5 May 2028

2	For the purpose of a comparison, this column shows the situation in case agenda item 9.2 is approved by the AGM.
3	Since the AGM will not resolve on a material amendment of the conditional capital, this figure remains the same as last year.
b)	Capital increases (Article 4ter(2))

For the capital band to be effective, the Board of Directors must be authorized to de-termine the modalities of capital increases within the capital band. In particular, subject to the 10% combined dilution limitation (see section 3(d) below), the Board of Directors is authorized to limit or cancel shareholders' subscription rights in the event of a capital increase for the reasons set out in Article 4ter para. 2 lit. b, which have been slightly adjusted at this occasion in line with market practice.

c)Capital reductions and changes in par value (Article 4ter(3) and (4))

The necessary modalities for implementing capital reductions or for changing the par value of shares within the capital band (e.g. par value reduction in order to repay share capital to shareholders) are set out in para. 3 and 4 of Article 4ter.

d)Combined dilution limitation (Article 4quater)

The combined dilution limitation limiting the issuance of shares without subscription rights shall be complemented by a 10% limit at any time. This means that the threshold remains at 10% even if, for example, the share capital is reduced in the meantime. Cu-mulatively, the dilution may not exceed CHF 7,500,000 (corresponding to approx. 10% of the current share capital), which is the existing dilution limitation. This ensures thatthe 10% cap is not enlarged by future capital increases. As a result, the dilution limita-tion is set at the lower of (i) 10% of the share capital at any time and (ii) CHF 7,500,000, being approx. 10% of the current share capital.

The combined dilution limitation is a compromise that takes into account both the protection of shareholders against dilution and Lonza's need for the same flexibility as its global competitors to issue shares within a short period of time if required. With the combined cap at the lower of 10% and CHF 7,500,000, the protection of shareholders is strengthened further.

The combined dilution restriction limits the issuance of shares without subscription rights, irrespective of whether the Board of Directors increases the share capital under the capital band or issues financial instruments or other rights from the conditional share capital (convertible bonds and similar financial instruments) in the future.