NOTICE TO ANNUAL GENERAL MEETING (AS WELL AS SECOND MEETING FOR LIQUIDATION PURPOSES) IN FLEXENCLOSURE AB (PUBL) Shareholders of Flexenclosure AB (publ), reg. no. 556708-2028, (the Company ) are hereby invited to attend the Annual General Meeting to be held on Monday April 25, 2016 at 09.00 am CET at the Company s office at address Eriksbergsgatan 10, 114 30 Stockholm. NOTICE OF ATTENDANCE Shareholders who wish to attend the Annual General Meeting shall: i. be recorded in the share register maintained by Euroclear Sweden AB on Tuesday April 19, 2016, and ii. notify their intention to attend the meeting no later than Tuesday April 19, 2016 at 12.00 pm CET in writing to address Flexenclosure AB (publ), Eriksbergsgatan 10, 114 30 Stockholm, by telephone to Ramona Juslin at + 46 510 427 000 or by email to goran.bergstrom@flexenclosure.com. The notification should state the name, address, personal identification number or company registration number, telephone number, shareholdings and the number of any assistants to accompany the shareholder, if applicable. Shareholders with nominee registered shares through a bank or other nominee must, in order to be entitled to participate at the Annual General Meeting, in addition to notice of attendance, temporarily have their shares re-registered in their own name with Euroclear Sweden AB. Such re-registration must be duly effected no later than on Tuesday April 19, 2016. This implies that shareholders who wish to make such re-registration must inform their nominees well before such date. Shareholders represented by power of attorney must issue a signed and dated power of attorney in writing for their representative. The power of attorney should be submitted to the Company at the address above well before the Annual General Meeting. If the power of attorney is issued by a legal person, a certified copy of the certificate of registration of that legal person must be attached, or if such document does not exist, a corresponding document of authority. PROPOSED AGENDA 1. Opening of the meeting 2. Election of Chairman of the meeting 3. Preparation and approval of the voting list 4. Approval of the agenda 5. Election of one or two persons to verify the minutes 6. Determination of whether the meeting has been duly convened 7. Speech by the Chief Executive Officer 8. Presentation of the annual report and the auditor s report, and the consolidated financial statement and the auditor s report in respect thereof for 2015 9. Resolutions regarding: 1 (8)
(a) adoption of the income statement and balance sheet, consolidated income statement and consolidated balance sheet, (b) allocation of the Company s result according to the adopted balance sheet, (c) discharge from liability of the Board of Directors and the Chief Executive Officer. 10. Resolution regarding the number of Directors, deputy Directors and auditors 11. Resolution regarding remuneration to the Board of Directors and to the auditor 12. Election of Directors, deputy Directors and auditors 13. Resolution regarding Nomination Committee for the Annual General Meeting 2017 14. Presentation of the balance sheet for liquidation purposes and the auditor s report in respect thereof 15. Resolution regarding whether or not the Company shall enter into liquidation 16. Resolution regarding share split 2:1 17. Resolution regarding the adoption of new articles of association 18. Resolution on amendment of the general provisions of conversion warrants 19. Resolution regarding Company Code of Conduct 20. Resolution regarding establishment of incentive scheme for senior executives and key employees 21. Resolution regarding authorization for the Board of Directors to resolve upon, with or without deviation from the shareholders preferential rights, issuance of shares 22. Resolution regarding authorization for the Board of Directors to resolve upon, with deviation from the shareholders preferential rights, issuance of warrants and/or convertible bonds 23. Closing of the meeting NOMINATION COMMITTEE It is noted that Stiftelsen Industrifonden and Andra AP-Fonden have declined to appoint a representative each to the nomination committee. The Company s four largest shareholders currently consist of, without respect to Stiftelsen Industrifonden and Andra AP-Fonden, International Finance Corporation, Pegroco Invest AB (publ), AB Flexen Intressenter and Applied Vencap LLC. The Nomination Committee for the Annual General Meeting 2016 have consisted of Carsten Philipson (instead of Martin Spicer), appointed by International Finance Corporation, Per Grunewald, appointed by both Pegroco Invest AB (publ) and Applied Vencap LLC, Peter Sandberg, appointed by AB Flexen Intressenter and Jan Roxendal as independent Chairman. PROPOSED RESOLUTIONS Allocation of the Company s result according to the adopted balance sheet (item 9 (b)) The Board of Directors proposes that the year s result shall be carried forward. Resolution regarding the number of Directors, deputy Directors and auditors (item 10) The Nomination Committee proposes that the Board of Directors shall consist of seven (7) ordinary Directors without any deputy Director. It is proposed that the Company shall have a registered accounting firm as auditor. Resolution regarding remuneration to the Board of Directors and to the auditor (item 11) The Nomination Committee proposes that, for the period until the end of the next Annual General Meeting, a fee of SEK 250,000 shall be paid to the Chairman of the Board of Directors 2 (8)
and SEK 150,000 shall be paid to each of the other Directors. Fees are only payable to Directors who are not employed by the Company. Each Director shall be entitled to invoice such fee through a Company wholly-owned by the Director, provided that it is cost-neutral for the Company and that a written agreement has been entered into. Further, the Nomination Committee proposes that the auditor s fee shall be paid as per approved invoice. Election of the Directors, deputy Directors and auditor (item 12) It is noted that under the financial year 2015, Sofia Ericsson Holm has resigned as ordinary Director and Tore Tolke has resigned as deputy Director. It is further noted that Anne-Lie Lind has informed the nomination committee that she will not be available for re-election. The Nomination Committee proposes, for the period until the end of the next Annual General Meeting, re-election of Per Grunewald, Jan Roxendal, Andrew Bartley, Anil Raj and Viktor Kovacs as ordinary Directors. The Nomination Committee will, prior to the Annual General Meeting, propose two (2) additional persons to be elected as new ordinary Directors of the Company. It is proposed to re-elect Jan Roxendal as Chairman of the Board of Directors. The Nomination Committee proposes, for the period until the end of the next Annual General Meeting, re-election of the accounting firm Grant Thornton Sweden AB as auditor with Anders Meyer in charge. Resolution regarding Nomination Committee for the Annual General Meeting 2017 (item 13) The Nomination Committee proposes that the Annual General Meeting shall adopt the following principles for the appointment of a Nomination Committee for the Annual General Meeting 2017. The Chairman of the Board of Directors shall contact the three (3) largest shareholders recorded in the register of shareholder maintained by Euroclear Sweden AB or otherwise known to the Company as per 1 August 2016 and request that they each appoint one (1) member of the Nomination Committee. If such shareholder declines to exercise its right to appoint a member of the Nomination Committee, the thereafter largest shareholder recorded in the shareholders register or otherwise known to the Company on the date stated above, that has not already appointed a member of the Nomination Committee, shall be asked to do so, until three (3) members have been appointed by the shareholders. The Nomination Committee shall consist of these three (3) members, together with the Chairman of the Board of Directors. Thus, in total the Nomination Committee shall consist of four (4) members. Should a member of the Nomination Committee resign from the committee before the committee has completed its work and submitted its proposal to the Annual General Meeting, the shareholder having appointed the resigned member shall be entitled to appoint a successor, provided that such shareholder is still among the three (3) largest shareholders recorded in the shareholders register or otherwise known to the Company on the date of the resignation. If the shareholder having appointed the resigned member is not among the three (3) largest shareholders, the largest shareholder having not yet appointed a member shall be entitled to appoint a successor, in accordance with the principles set out above. 3 (8)
The Nomination Committee shall appoint a chairman among its members, who shall not be the Chairman of the Board of Directors. The names of the members of the Nomination Committee shall be announced on the Company s website not later than six (6) months prior to the Annual General Meeting 2017. The members of the Nomination Committee shall, notwithstanding that they are appointed by a specific shareholder, perform its task in the interest of all shareholders. A member of the Nomination Committee may not unduly disclose information that the member has obtained in the performance of its tasks for the Nomination Committee. The Nomination Committee shall submit proposals to the Annual General Meeting regarding the number of members of the Board of Directors, the name of the proposed Chairman of the Board of Directors and the proposed other members of the Board of Directors as well as the name of the proposed auditor. Further, the Nomination Committee shall submit proposals regarding the remuneration to each member of the Board of Directors as well as to the auditor. The Nomination Committee shall also propose principles for the election of the Nomination Committee for the Annual General Meeting 2018. The Nomination Committee s mandate shall last until a new Nomination Committee has been inaugurated. No remuneration is to be paid by the Company to the members of the Nomination Committee in this capacity. Resolution regarding whether or not the Company shall enter into liquidation (item 15) At the Extraordinary General Meeting held on December 18, 2015 (the first meeting for liquidation purposes), a balance sheet for liquidation purposes established by the Board of Directors on November 13, 2015 showed that the equity of the Company was less than half of the registered share capital. There was thus an equity deficit in the Company. The shareholders resolved at the said extraordinary general meeting, in accordance with the primary proposal of the Board of Directors, that the Company should continue its operations. According to the Swedish Companies Act (2005:551) the shareholders of the Company shall reconsider such decision on a second meeting for liquidation purposes to be held within eight (8) months from the date of the first meeting of liquidation purposes. The Board of Directors primary proposal Continued operations The Board of Directors will, prior to the Annual General Meeting 2016, prepare a new balance sheet for liquidation purposes according to Chapter 25 Section 14 and Chapter 25 Section 16 of the Swedish Companies Act (2005:551) (Sw. aktiebolagslagen) and have it reviewed by the Company s auditor, who will issue a report in respect thereof. Following a rights issue in the Company, resolved by the Board of Directors on December 23, 2015, pursuant to an authorization given by the shareholders at the annual general meeting on June 3, 2015, it is the Board of Directors view that the new balance sheet for liquidation purposes will show that the equity is completely restored. Hence, it is the Board of Directors view that there is no longer any equity deficit in the Company, and it is therefore the Board of Directors primary proposal that the Annual General Meeting shall resolve to continue the Company s operations. The balance sheet for liquidation purposes and the auditor s report in respect thereof will be presented at the Annual General Meeting. The Board of Directors secondary proposal Liquidation 4 (8)
The Board of Directors is, according to the Swedish Companies Act, obliged to present a complete proposal on liquidation of the Company. Consequently, if the Annual General Meeting does not resolve on continued operations, it is the Board of Directors secondary proposal that the Annual General Meeting shall resolve on liquidation of the Company, should the new balance sheet for liquidation purposes not show that the share capital in the Company is fully restored. For a valid resolution by the Annual General Meeting in accordance with item 15, it is required that the resolution is supported by shareholders representing more than half of the votes cast at the meeting. In the event of equal voting, the Chairman at the meeting has casting vote. Resolution regarding share split 2:1 (item 16) The Board of Directors proposes that the Annual General Meeting resolves to split the shares in the Company, so that each existing share is divided into two (2) shares. It is proposed that the record date at Euroclear Sweden AB for the share split shall be 2 May 2016. Due to the split, the number of total outstanding shares in the Company will increase from 4,764,086 shares to 9,528,172 shares and the quota value per share will be halved from SEK 3.105418 to SEK 1.552709. The resolution shall be conditional upon the Annual General Meeting adopting the new articles of association in accordance with the proposal in item 17 below. For a valid resolution by the general meeting in accordance with item 16, it is required that the resolution is supported by shareholders representing not less than two-thirds of both the votes cast and the shares represented at the general meeting. Resolution regarding the adoption of new articles of association (item 17) The Board of Directors proposes that the meeting resolves to adopt new articles of association, introducing the following material changes: (a) (b) (c) (d) The limits for minimum and maximum number of shares shall be changed from a minimum of 1,221,562 shares and a maximum of 4,886,248 shares to a minimum of 9,528,172 shares and a maximum of 38,112,688 shares, whereby the share capital limits shall be changed from a minimum of SEK 3,793,460.622910 and a maximum of SEK 15,173,842.491664 to a minimum of SEK 14,794,478.417948 and a maximum of SEK 59,177,913.671792. The Company shall only have one series of shares, such shares to carry one (1) vote each. Subsequently, all provisions which regards the different series of shares (e.g. voting right, conversion right and redemption right) shall be removed. The Board of Directors shall consist of not less than four (4) ordinary Directors and not more than eight (8) ordinary Directors, with not more than one (1) deputy Director. The following shall apply as regards notices to general meetings by the Company: Notice of a general meeting of shareholders shall be published in Post- och Inrikes Tidningar (the Official Swedish Gazette) as well as on the company s website. At the time of the notice, an announcement with information that the notice has been issued shall be published in a national daily newspaper, e.g. Dagens Nyheter, Svenska Dagbladet or Dagens Industri. 5 (8)
Notice to attend an ordinary general meeting or an extraordinary general meeting where adoption of new articles of association shall be resolved upon shall be issued not earlier than six (6) weeks and not later than four (4) weeks prior to the meeting. Notice to attend any other extraordinary general meeting shall be issued not earlier than six (6) weeks and not later than two (2) weeks prior to the meeting. For a valid resolution by the Annual General Meeting in accordance with item 17, it is required that the resolution is supported by shareholders representing not less than twothirds (2/3) of both the votes cast and the shares represented at the Annual General Meeting, and that owners to half of all the shares of series C and series D, respectively, and nine-tenth (9/10) of the shares of series C and series D, respectively, represented at the Annual General Meeting consent to the adoption of new articles of association. Resolution on amendment of the general provisions for conversion warrants (item 18) The Board of Directors proposes that the Annual General Meeting resolves to amend the general provisions for conversion warrants issued pursuant to a resolution by the extraordinary general meeting held 29 December 2014 whereby, inter alia, the warrants shall be exercisable into new ordinary shares, instead of C shares as currently stated. The resolution shall be conditional upon the Annual General Meeting adopting the new articles of association in accordance with the proposal in item 17 above. For a valid resolution by the general meeting in accordance with item 18, it is required that the resolution is supported by shareholders representing more than half of the votes cast at the meeting. In the event of equal voting, the Chairman at the meeting has casting vote. Resolution regarding Company Code of Conduct (item 19) The Board of Directors proposes that the Annual General Meeting resolves to adopt a Code of Conduct for the Company, to observe and abide to for all its and its subsidiaries operations. Resolution regarding establishment of incentive scheme for senior executives and key employees (item 20) The Board of Directors proposes that the Annual General Meeting resolves to establish an incentive scheme for current and future senior executives and key employees in the Company by issuance of warrants and approval of transferring such warrants, substantially in accordance with what is set out below. The Board of Directors proposes that the Annual General Meeting resolves that the Company shall, with deviation from the shareholders' preferential rights, issue warrants to be subscribed for by the Company s subsidiary as set forth below and to be transferred to participants in the incentive scheme in a number that corresponds to a dilution of five (5) percent calculated on the basis of outstanding shares including, if applicable, resolved but not completed issuance at the time of the subsidiary s transfer of the warrants. Each warrant entitles to subscription of one (1) new share in the Company. The right to subscribe for warrants shall be vested in the Company s wholly-owned subsidiary Flexenclosure International AB, reg. no. 556896-6617, with the right and obligation to, in accordance with the instructions of the Board of Directors of the Company and these terms, transfer such warrants to current and future senior executives and key employees of the Company. The warrants shall be issued free of charge to the subsidiary. The warrants may be exercised for subscription of shares not earlier than three (3) years from the issuance. 6 (8)
The reason for deviation from the shareholders' preferential rights is that the Board of Directors deems it essential for the Company, and that it is in both the Company s and the shareholders best interest, to offer some of the current and future senior executives and key employees of the Company an opportunity to take part of the Company s future value growth. A long-term and personal commitment for the senior executives and key employees can be expected to increase the motivation in the future work in the Company, stimulate greater interest for the business and the profit performance and increase the sense of connection to the Company. Further, the Board of Directors proposes that the Annual General Meeting resolves to approve that the subsidiary shall have the right and obligation, on one or more occasions and in accordance with the instructions of the Company s board of directors, to transfer or otherwise dispose of the warrants to senior executives and key employees of the Company in accordance with these terms. The transfer of the warrants shall be effected at a price equal to the estimated market value of the warrants at the time of transfer, calculated in accordance with a recognized valuation model (Black & Scholes). The calculation of the market value of the warrants shall be made by an independent well-reputable valuation company. The warrants which are transferred to senior executives and key employees at market price are not expected to involve any tax or social security contributions for the Company or salary costs for the Company. A resolution to establish the incentive scheme outlined above is subject to the rules of Chapter 16 of the Swedish Companies Act (2005:551), which requires that the resolution shall, in order to be valid, be supported by shareholders representing at least nine-tenth (9/10) of both the votes cast and the shares represented at the meeting. Resolution regarding authorization for the board to resolve upon, with or without deviation from the shareholders preferential rights, issuance of shares (item 21) The Board of Directors proposes that the Annual General Meeting resolves to authorize the Board of Directors to resolve upon, with or without deviation from the shareholders' preferential rights, on one or more occasions until the end of the next Annual General Meeting, the issuance of shares against payment in cash. The purpose of the authorization and the reasons for deviation from the shareholders' preferential rights is to broaden the ownership in the Company and to give the Board of Directors flexibility in its efforts to raise capital in order to fund the Company's continued growth. The Board of Directors, the Chief Executive Officer or such person as the Board of Directors or the Chief Executive Officer appoints, shall be authorized to make such minor adjustment to the resolution as may be necessary for registration with the Swedish Companies Registration Office. For a valid resolution by the Annual General Meeting in accordance with item 21, it is required that the resolution is supported by shareholders representing no less than twothirds (2/3) of both the votes cast and the shares represented at the meeting. Resolution regarding authorization for the board to resolve upon, with deviation from the shareholders preferential rights, issuance of warrants and/or convertible bonds (item 22) 7 (8)
The Board of Directors proposes that the Annual General Meeting resolves to authorize the Board of Directors to resolve upon, with deviation from the shareholders' preferential rights, on one or more occasions until the next Annual General Meeting, the issuance of warrants and/or convertible bonds against payment in cash or by set-off against a claim. The purpose of the authorization and the reasons for deviation from the shareholders' preferential rights is to give the Board of Directors flexibility in the continuous work to attract lenders to the Company. The right to subscribe for warrants and/or convertible bonds shall be vested in, in the Board of Director s view, strategically important lenders of the Company as part of one or several loan arrangements. The issue price and other terms for the issuance of new warrants and/or convertible bonds pursuant to this authorization shall be made on market terms and conditions, taking in regard the commercial terms of the full loan arrangement and the alternative cost of financing. The Board of Directors, the Chief Executive Officer or such person as the Board of Directors or the Chief Executive Officer appoints, shall be authorized to make such minor adjustment to the resolution as may be necessary for registration with the Swedish Companies Registration Office. For a valid resolution by the Annual General Meeting in accordance with item 22, it is required that the resolution is supported by shareholders representing no less than twothirds (2/3) of both the votes cast and the shares represented at the meeting. INFORMATION AT THE ANNUAL GENERAL MEETING The Board of Directors and the Chief Executive Officer shall at the Annual General Meeting, if any shareholder so requests and the Board of Directors deems that it can be made without significant harm to the Company, provide information regarding circumstances which may affect the assessment of a matter on the agenda and circumstances which may affect the assessment of the Company s financial situation. The information requirement also regards the Company's relation to other Group companies, the consolidated accounts and such circumstances regarding subsidiaries which are referred to in the previous sentence. AVAILABLE DOCUMENTS The annual accounts and auditor's report for the financial year 2015 together with a proxy form will be available to the shareholders at the Company s office at the address above and on the Company s website, www.flexenclosure.com, at least three (3) weeks before the Annual General Meeting and at the Annual General Meeting. A complete proposal for resolution in respect of items 15, 20, 21 and 22 will be available to the shareholders at the Company s office at the address above, at least two (2) weeks before the Annual General Meeting and at the Annual General Meeting. The documents will be sent free of charge to shareholders who requests it and who states its address. Stockholm in March 2016 Flexenclosure AB (publ) The Board of Directors 8 (8)