The shareholders in Edgeware AB (publ) are hereby summoned to the annual general meeting on Friday, 4 May 2018 at 10 a.m. at Bygget Fest & Konferens, Norrlandsgatan 11, Stockholm.
Shareholders who wish to participate in the annual general meeting must
firstly be included in the shareholders’ register maintained by Euroclear Sweden AB as of Friday, 27 April 2018, and
secondly notify the company of their participation in the annual general meeting no later than on Friday, 27 April 2018.
The notification shall be in writing to Edgeware AB, Mäster Samuelsgatan 42, 111 57 Stockholm, Sweden, or via e-mail: firstname.lastname@example.org. The notification should state the name, personal/corporate identity number, address, telephone number and shareholding and, when applicable, information about representatives, counsels and assistants. When applicable, complete authorization documents, such as registration certificates and powers of attorney for representatives and counsels, shall be appended the notification.
Shareholders, whose shares have been registered in the name of a bank or other trust department or with a private securities broker, must temporarily re-register their shares in their own names with Euroclear Sweden AB in order to be entitled to participate in the annual general meeting. Shareholders wishing such re-registration must inform their nominee of this well before Friday, 27 April 2018, when such re-registration must have been completed.
Shareholders represented by proxy shall issue dated and signed power of attorney for the proxy. If the power of attorney is issued on behalf of the proxy or, should the right to vote for the shares be divided among different representatives, the representatives, together with information on the number of shares each representative is entitled to vote for. The proxy is valid for one year from the issuance or the longer period of validity stated in the proxy, however not more than five years from the issuance. If the proxy is issued by a legal entity, attested copies of the certificate of registration or equivalent authorisation documents, evidencing the authority to issue the proxy, shall be enclosed. The power of attorney in original and, where applicable, the registration certificate, should be submitted to the company by mail at the address set forth above well in advance of the annual general meeting. A proxy form is available on the company’s website, www.edgeware.tv, and will also be sent to shareholders that so request and inform the company of their postal address.
The shareholders are reminded of their right to ask questions to the board of directors and the CEO at the annual general meeting in accordance with Chapter 7, Section 32 of the Swedish Companies Act (Sw. aktiebolagslagen).
Number of shares and votes
There are, as of the day of this notice, 30,043,008shares in the company. As of the day of this notice, the company holds no own shares.
1. Election of a chairman of the meeting.
2. Preparation and approval of the voting list.
3. Approval of the agenda.
4. Election of one or two persons who shall approve the minutes of the meeting.
5. Determination of whether the meeting was duly convened.
6. Submission of the annual report and the auditors’ report and, where applicable, the consolidated financial statements and the auditors’ report for the group.
7. Resolutions regarding:
a. Adoption of the income statement and the balance sheet and, when applicable, the consolidated income statement and the consolidated balance sheet;
b. Allocation of the company’s profits or losses in accordance with the adopted balance sheet;
c. Discharge of the members of the board of directors and the managing director from liability.
8. Determination of the number of members of the board of directors and, where applicable, the number of auditors and deputy auditors.
9. Determination of fees for members of the board of directors and auditors.
10. Election of the members of the board of directors.
11. Election of auditors and, where applicable, deputy auditors.
12. Resolution regarding the principles for the appointment of the nomination committee.
13. Resolution regarding guidelines for remuneration and other terms of employment for the group management.
14. Resolution to adopt a new long-term incentive programme and issue of warrants.
15. Closing of the meeting.
Proposal regarding appropriation of the company’s result (item 7 b)
The board of directors and the managing director propose that the company’s results shall be carried forward and thus no dividend will be distributed.
Determination of the number of members of the board of directors and the number of auditors, fees to the board of directors and the auditors and election of members of the board of directors and election of auditors (items 1, 8, 9, 10 and 11)
The nomination committee, appointed in accordance with the principles established by the annual general meeting on 12 April 2017, consists of Daniel Blomquist (appointed by Creandum), Kent Sander (appointed by Amadeus Capital Partners) and Annika Andersson (appointed by Swedbank Robur Funds) and the chairman of the board of directors Michael Ruffolo. The nomination committee has appointed Daniel Blomquist as the nomination committee’s chairman. The nomination committee proposes that:
- Attorney at law Jesper Schönbeck, Vinge law firm, is proposed to chair the annual general meeting (item 1).
- The number of members of the board of directors shall be six (6) with no deputy members. The number of auditors shall be one (1) authorized accounting firm (item 8).
- That the fees to the board of directors shall amount to SEK 1,495,000 to be allocated with SEK 500,000 to the chairman of the board of directors and SEK 180,000 to each other member of the board of directors. Remuneration for committee work in the audit committee shall amount to SEK 60,000 to be allocated with SEK 30,000 to the chairman of the audit committee and SEK 15,000 each to the other two members of the audit committee. Remuneration for committee work in the remuneration committee shall amount to SEK 35,000 to be allocated with SEK 15,000 to the chairman of the remuneration committee and SEK 10,000 each to the other two members of the remuneration committee. Fees to board members may, following agreement with Edgeware, be invoiced through a company controlled by the board member, whereby the invoiced fee shall be determined so that cost neutrality for Edgeware is accomplished (item 9).
- Auditors’ fee is proposed to be on current account (item 9).
- Re-election of the members of the board Michael Ruffolo, Sigrun Hjelmqvist and Kent Sander, and election of Arnd Benninghoff, Tuija Soanjärvi and Jonas Hasselberg as new members of the board. Jason Pinto, Staffan Helgesson and Karl Thedéen has declined re-election. Re-election of Michael Ruffolo as chairman of the board (item 10).
- Re-election of the accounting firm Deloitte AB. The proposal is in accordance with the recommendation by the audit committee (item 11).
Arnd Benninghoff is currently CEO of MTGx and esports within the Modern Times Group, which is a role he has held since 2014. He also holds several advisory roles towards fast growing European media/technology actors. Previously, Arnd has e.g. held the position as Chief Digital Officer at ProSieben Sat1 Media AG and Managing Director at Seven Ventures GmbH. He is located in Munich, Germany. Arnd will amongst others bring deep experience from a client perspective of the fast-developing European broadcast and media scene, including cutting edge insights into the digital development of multiple sectors relevant to Edgeware.
Tuija Soanjärvi is since 2011 a Board Professional, who currently is a Board Member at e.g. Basware Corporation, Nixu Corporation and VR-Group Ltd. Previously Tuija has amongst others been a Board Member at Affecto Plc, Tecnotree Corporation, Vattenfall Group and Comptel Corporation. In several current and previous positions, she has held the role as Chair of the Audit Committee. Before becoming a Board Professional, Tuija held several senior CFO-positions at Itella, Elisa and Tieto. Tuija will bring in a combination of finance skills and insights into relevant telecom and technology sectors to the Board at Edgeware. Tuija is located in Espoo, Finland.
Jonas Hasselberg has since 2015 been Vice President and Head of the Consumer Division at Telia Sweden. In addition, he also since 2015 holds the position as a Board Member at Springworks AB. Previously he has held several senior executive positions in Sweden, Finland and the US at leading technology companies such as Microsoft, Nokia and Mycronic. In Jonas, Edgeware has the opportunity to bring on a Board Member with vast telecom experience as well as a person combining deep technology knowledge with a true commercial focus, vital in Edgeware’s journey going forward. Jonas is located in Stockholm, Sweden.
Further information, with regard to the proposed members of the board of directors, is available on www.edgeware.tv.
Resolution regarding the principles for the composition of the nomination committee (item 12)
The nomination committee proposes that the annual general meeting resolves to approve the nomination committee’s proposal for resolution regarding the nomination committee as set forth below.
Ahead of the annual general meeting 2019, the board of directors proposes that the nomination committee shall be composed of representatives of the three largest shareholders listed in the shareholders’ register maintained by Euroclear Sweden as of 31 August 2018 and the chairman of the board of directors, or another board member appointed by the board of directors who has good knowledge about Swedish Corporate Governance, who shall convene the first meeting of the nomination committee. The member that represents the largest shareholder shall be appointed chairman of the nomination committee, unless the nomination committee unanimously appoints someone else. However, the chairman of the board of directors may not be chairman of the nomination committee. If earlier than three months prior to the annual general meeting, one or several of the shareholders that have appointed representatives to the nomination committee no longer are among the three largest shareholders, representatives appointed by these shareholders shall resign and the shareholders who then are among the three largest shareholders may appoint their representatives. Should a member resign from the nomination committee before its work is completed, and the nomination committee consider it necessary to replace him or her, such substitute member is to represent the same shareholder or, if the shareholder is no longer one of the largest shareholders, the largest shareholder in turn. Changes of the composition of the nomination committee must be announced immediately. The members of the nomination committee shall not receive any remuneration. Edgeware is to pay any expenses that the nomination committee may incur in its work. The term of office for the nomination committee ends when the composition of the following nomination committee has been announced.
Resolution regarding guidelines for remuneration and other terms of employment for the group management (item 13)
The board of directors proposes that the remuneration of the executive management shall consist of fixed salary, variable remuneration, long-term share based or share related incentive program (LTI) and pension provisions. The total remuneration shall be based on market terms, be competitive, well balanced and not wage leading as well as contribute to good ethics and company culture. Fixed salary shall be based on the executive management’s competence and area of responsibility, be individual and shall normally be reviewed every year. Variable remuneration shall be linked to predetermined and measurable criteria based on the Company’s net sales. These criteria are designed with the aim of promoting long-term value creation. For the CEO the variable remuneration may not exceed
60 percent of the fixed annual salary, for the sales manager the variable remuneration may not exceed 205 percent of the fixed annual salary and for other members of executive management the variable remuneration may not exceed 65 percent of the fixed annual salary. The executive management may also be granted customary non-monetary benefits, such benefits shall however not constitute a material part of total remuneration.
The vesting period of the LTI-program must be at least three years. The LTI-program shall be based on shares or share related securities. The LTI shall ensure long-term incentives linked to Edgeware’s development. Every share based LTI shall require approval of shareholders before launch.
Pension benefits shall be premium based and constitute 4.5 percent of the pension qualifying salary up to 7.5 income base amounts and 30 percent on any excess amount.
The board of directors is entitled to deviate from the guidelines if a special justification exists in an individual case.
Resolution to adopt a new long-term incentive programme and issue of warrants (item 14)
The Board of Directors proposes that the General Meeting resolves on a long term incentive programme and issuance of warrants in accordance with the below (“LTI 2018”). LTI 2018 is proposed to include the CEO and up to approximately 30 – 40 other employees within Edgeware.
In total, no more than 800,430 warrants is proposed to be issued through LTI 2018, for Edgeware’s CEO, executive management and other key employees, in accordance with the below.
The warrants shall be able to be subscribed for by the wholly-owned subsidiary Edgeware Inc., which shall transfer the warrants to the participants. The transfer of the warrants to the participants shall be made at a price corresponding to the market value of the warrant (i.e. the warrant premium). Each warrant shall entitle the holder to subscribe for one new share. The warrants shall be issued free of charge to the wholly owned subsidiary Edgeware Inc. The full terms and conditions for the warrants are presented in the board of directors’ complete proposal.
Each warrant shall entitle the holder to subscribe for one new share for a period from 1 July 2021 through 30 November 2021 in Edgeware AB (publ). The exercise price shall correspond to 130 per cent of the average volume weighted Edgeware share price as quoted on Nasdaq Stockholm during the period 10 trading days calculated as from and including 7 May 2018. The exercise price, determined as set out above, shall be rounded to the nearest SEK 0.10, whereby SEK 0.05 shall be rounded downwards. The exercise price and the number of shares that each warrant entitles to subscription for shall be recalculated in the event of a split, consolidation, new share issue etc. in accordance with market practice. If the warrants are completely exercised the share capital will increase by SEK 40,021.50.
Transfer of warrants
The following terms and conditions shall be applied to the further transfer of the warrants.
The issued warrants (which may be subscribed for by the wholly owned subsidiary Edgeware Inc. with deviation from the shareholders’ pre-emptive rights) may be offered by Edgeware Inc. to Edgeware’s CEO, executive management and other key employees. The transfer of the warrants shall be made at a price corresponding to the market value of the warrants (the warrant premium), calculated according to the Black & Scholes valuation model. The valuation of the warrants shall be made by an independent appraiser or auditor firm. The company shall in connection with the transfer of the warrants to the participants reserve a pre-emption right regarding the warrants if the participant’s employment or assignment within the company is terminated or if the participant wishes to transfer its warrants.
The transfer of the warrants in accordance with the above-mentioned proposal may take place only to the extent that the total number of warrants according to the above-mentioned programme does not exceed 800,430 warrants.
Allocation of warrants
Individuals within Edgeware’s CEO, executive management and other key employees, whom the company has entered into a pre-emption agreement with, shall be entitled to be transferred warrants. The maximum allocation per person is shown in the table below. If over-subscribed, the Board of Directors may decide on allocation.
|Level||No of employees||Maximum number of warrants per employee||Total number of warrants|
|Other key employees||26||9,104||154,767|
Board members shall not be eligible to participate in the incentive programme.
The transfer of the warrants shall be made at a price corresponding to the market value of the warrants and therefore no social security contributions are to be paid by the group in relation to the issue and transfer of the warrants. The market value of the warrants is, in accordance with a preliminary valuation made based on a market value on the underlying share corresponding to SEK 20, approximately SEK 2.8 per warrant, assuming an exercise price of SEK 26 per share. This shall be viewed as a calculation example based on the then current share price. The Black & Scholes valuation model has been used for valuing the warrants, assuming a risk free interest of -0.11 per cent and a volatility of 34 per cent.
To encourage participation in the LTI 2017, the intention is that employees, except the CEO, who choose to participate in the programme will receive a premium subsidy in the form of extra salary of an amount, after tax, equivalent to 50 percent of the option premium paid. Payments are made in two installments, whereof 50 percent after 1 year and 50 percent after 2 years, provided continued employment. Edgewares costs of above extra salary payments amounts to approximately SEK 1.23 million.
The total costs, including other expenses for LTI 2018 related to fees to external advisors and costs for administration of the programme, are estimated to amount to approximately SEK two million during the term of the programme. LTI 2018 is expected to have limited effect on the key ratios of the Edgeware group.
Dilution of existing shares and votes
Based on the number of shares and votes outstanding in the company, the proposed incentive programme implies, upon exercise of all 800,430 warrants, a full dilution corresponding to approximately 2.7 per cent of the total number of shares and votes outstanding in the company. If all outstanding incentive programmes in the company are included in the calculation, the corresponding maximum level of dilution amounts to approximately 3.1 per cent.
Information about Edgeware’s current incentive programmes is available on the company’s website, www.edgeware.tv.
Background and motive
The Board of Directors considers it to be in the interest of the company and the shareholders that the company’s CEO, executive management and other key employees of Edgeware are made part of the company’s development by being offered warrants in a new incentive program. The reasons for the proposal are to create opportunity to retain and attract qualified personnel to the company and to increase motivation for Edgeware’s CEO, executive management and other key employees of the company by being involved in and working for a positive value increase on the company’s share during the period covered by LTI 2018.
Given the terms and conditions, size of allotment and other circumstances, the Board of Directors consider LTI 2018, in accordance with the below, to be reasonable and advantageous for the company and its shareholders.
Preparation of the proposal
In accordance with guidelines provided by the Board of Directors, LTI 2018 has been prepared by the company’s management team in consultation with external advisors and has been reviewed by the remuneration committee and at meetings of the Board of Directors during 2017 and 2018.
The resolution in this proposal requires the support of shareholders representing not less than
nine tenths (9/10) of votes cast as well as shares represented at the general meeting.
The annual report, the auditor’s report, any complete proposal to the general meeting and the auditor’s statement whether the board of directors’ guidelines for remuneration to group management have been applied will not later than on 13 April 2018 be held available at the company’s office at Mäster Samuelsgatan 42, 111 57 Stockholm, Sweden, and will be sent to the shareholders who so request and inform the company of their postal address.
Stockholm, April 2018
Edgeware AB (publ)
The Board of Directors
Richard Berg, General Counsel
+ 46 702-85 31 57. Richard.Berg@edgeware.tv
Steeve Fuhr, CFO
+ 46 702-177512. Steeve.Fuhr@edgeware.tv