19 May 2020

Invitation to the Annual General Meeting in Vitec Software Group AB (publ)

The shareholders in Vitec Software Group AB (publ), 556258-4804, are hereby given notice to attend the Annual General Meeting on Tuesday June 23, 2020, at 17:30 p.m. a Vävenscenen, Väven, Västra Strandgatan 8, Umeå.

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Actions taken for the AGM with regards to the corona virus

The spread of the Covid-19 (corona) virus remains difficult to assess, and Vitec is closely following the development. With the purpose of protecting the health of shareholders, members of the Board of Directors and co-workers, several new decisions have been made regarding the company’s Annual General Meeting. The event will be adjusted as follows:

  • Registration is only from 17:00
  • No food or drink will be offered
  • Limited speeches at the meeting
  • The number of non-shareholders present will be limited
  • The AGM will be minimized in time, but without limiting the rights of the shareholders

Further, due to covid-19 and the authorities' recommendations and regulations to prevent infection, shareholders are urged to carefully consider not attending the meeting in person, but to attend by proxy. Vitec offers a service, free of charge, to enable shareholders to vote whilst not being physically present at the Annual General Meeting. This means that any shareholder registered to attend the Annual General Meeting can appoint Vitec to vote on their behalf.  

The proxy is available on our website www.vitecsoftware.com or by sending an e-mail to kjell.hedstrom@vitecsoftware.com - Vitec encourages shareholders to exercise their voting rights accordingly.

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Participation

Shareholders, who wish to participate in the Annual General Meeting, must be listed in the share register kept by Euroclear Sweden AB by Tuesday June 16, 2020, and must make notification of their and any advisors’ participation at the Annual General Meeting not later than Tuesday June 16, 2020. Notification of participation can be done:

  • On the website www.vitecsoftware.com

  • By Telephone +46-90 - 15 49 00, week days 08.00 – 17.00.

  • By mail to Vitec Software Group AB, "Annual General Meeting", Tvistevägen 47A, 907 29 Umeå.

The notification shall state name, personal ID number or corporate registration number, address and telephone number, number of shares held and names of any advisors. Shareholders whose shares are registered in the name of a nominee must, to be entitled to participate in the Annual General Meeting, request temporary registration of the shares in their own name. Shareholders must notify their nominee well before Tuesday June 16, 2020, as the temporary registration must be done by this date.

Shareholders who are represented by a proxy should include in the notification of participation the written proxy and a copy of the registration certificate or an equivalent document which shows who is authorized to sign for the shareholder. Proxy forms in Swedish and English can be found on the website, www.vitecsoftware.com

The company has a total of 32 573 216 shares and 62 723 216 votes. The company does not hold any of the shares. Shareholders are reminded of the right to, at the Annual General Meeting, ask questions to the Board of Directors and the Chief Executive Officer (CEO) in accordance with the Swedish Companies Act, Chapter 7, Section 32. The Annual General Meeting is held in Swedish.

Agenda

1. Election of Chairman of the Annual General Meeting

2. Preparation and approval of the voting list

3. Decision whether the Annual General Meeting can be live broadcasted via the Vitec website

4. Approval of the agenda

5. Election of one or two persons who shall approve the minutes of the meeting

6. Consideration of whether the meeting has been duly convened

7. Speech by the CEO

8. Speech by the Chairman of the Board of Directors

9.  Presentation of annual report and auditor’s report as well as the consolidated financial statement and the auditor’s report for the group

10. Resolutions regarding the adoption of the income statement and the balance sheet as well as the consolidated income statement and the consolidated balance sheet

11. Resolution regarding appropriation of the company’s profit or loss in accordance with the adopted balance sheet

12. Resolution regarding discharge from liability of members of the Board of Directors and the CEO

13. Resolution regarding number of Board members and deputy Board members and auditors

14. Determination of fees for the members of the Board of Directors and the auditors

15. Election of members of the Board of Directors and Chairman of the Board of Directors

16. Election of auditor

17. The Board of Directors’ proposal regarding guidelines for remuneration to senior executives

18. Proposal regarding composition of nomination committee

19. The Board of Directors’ proposal on authorization of the Board of Directors to resolve to issue new shares

20. The Board of Directors’ proposal on authorization of the Board of Directors to resolve for the company to acquire the company’s own shares

21. The Board of Directors’ proposal regarding personnel convertible debenture program 2020

22. The Board of Directors’ proposal regarding participation program 2020

23. The Board of Directors’ proposal for resolution to amend the Articles of Association

Election of Chairman of the Annual General Meeting (item 1)

The nomination committee proposes that Crister Stjernfelt is elected Chairman of the Annual General Meeting.

Resolution regarding appropriation of the company’s profit or loss in accordance with the adopted balance sheet (item 11)

The Board of Directors proposes an ordinary dividend for the financial 2019 of SEK 1,35 per share, to be paid through quarterly installments of SEK 0,3375 per share. The record dates for the quarterly dividends is proposed to be June 25, 2020, August 25, 2020, December 24, 2020, and Mars 25, 2021. With these record dates, quarterly installments are expected to be made on June 30, 2020, September 30, 2020, December 30, 2020 and Mars 30, 2021.

Resolution regarding number of Board members and deputy Board members and auditors (item 13)

The nomination committee proposes that the Board of Directors for the period running up until the end of the next Annual General Meeting shall be composed of five members with no deputy members and that one registered accounting firm is elected as auditor.

Determination of fees for the members of the Board of Directors and the auditor (item 14)

The nomination committee proposes that the total remuneration to the Board of Directors shall amount to SEK 1 050 000 (previously SEK 810 000) for the period running until the end of the next Annual General Meeting, whereof SEK 350 000 (previously SEK 270 000) shall constitute remuneration to the Chairman of the Board of Directors and SEK 175 000 (previously SEK 135 000) shall constitute remuneration to each of the other four members of the Board.

The nomination committee proposes that the auditor’s fee for the period running until the end of the next Annual General Meeting shall be paid in accordance with a submitted and approved invoice.

Election of members of the Board of Directors and Chairman of the Board of Directors (item15)

The nomination committee proposes re-election of the Board members Anna Valtonen, Birgitta Johansson-Hedberg, Jan Friedman, Kaj Sandart and Crister Stjernfelt. Crister Stjernfelt is proposed to be re-elected as Chairman of the Board.

Election of auditor (item 16)

The nomination committee proposes re-election of PricewaterhouseCoopers AB as auditor for the period running until the end of the next Annual General Meeting. PricewaterhouseCoopers AB has announced that Niklas Renström will be the responsible auditor.

The Board of Directors’ proposal regarding remuneration to senior executives (item 17)

The Board of Directors proposes that the Annual General Meeting resolves to adopt the following guidelines for remuneration to senior executives.

Who the guidelines cover and their applicability

These guidelines for remuneration to senior executives cover remuneration to the Board of Directors, the CEO, the deputy CEO and other senior executives. The guidelines are applicable to remuneration agreed, and amendments to remuneration already agreed, after the adoption of the guidelines by the Annual General Meeting 2020. Regarding employment conditions that are governed by rules other than Swedish, appropriate adjustments may be made in order to comply with such mandatory rules or local practice, whereby the overall purpose of these guidelines shall be met. These guidelines do not apply to any remuneration decided or approved by the general meeting.

The Board of Directors shall be entitled to temporarily deviate from these guidelines, in whole or in part, if special reasons justify doing so in an individual case and such deviation is necessary in order to meet the company’s long-term interests and sustainability or to ensure the company’s financial viability. If such a deviation occurs, it must be reported in the remuneration report before the next Annual General Meeting. These guidelines are applicable after the Annual General Meeting 2020. An issue regarding deviation from the guidelines shall be prepared by the remuneration committee and decided by the Board of Directors.

The guidelines’ promotion of the company’s business strategy, long-term interest and sustainability

Vitec is the leading software company within Vertical Market Software in the Nordic region. Vitec develop and deliver standard programs for different niches. Vitec’s business model is based on repetitive revenue and Vitec’s growth is mainly through the acquisition of mature software companies. For more information on the business model, growth strategy and sustainability see www.vitecsoftware.com.

The Board of Directors considers that it is critical for the successful implementation of the company’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the company is able to recruit and retain a highly competent management with capacity of achieving specified goals. To this end, it is necessary that the company can offer competitive remuneration to motivate senior executives to do their utmost.

Forms of remuneration etcetera

The remuneration and other terms of employment for senior executives shall be based on market terms. The total remuneration may consist of fixed base salary, pension and certain other benefits. The total remuneration consists of a gross remuneration. In addition, the general meeting may – regardless of these guidelines – resolve on share-related or share price-related remuneration. The gross remuneration is disposed of by each individual in accordance with the company’s policies, and should cover the company’s cost for:

  • salary, social security contributions and holiday allowance

  • pension and associated special payroll tax

  • any health or medical insurance

  • other benefits

Cash salary constitute a maximum of 90-95 percent of the total remuneration excluding share-related or share price-related remuneration and pensions and other benefits constitute a maximum of 30-40 percent of the total remuneration excluding share-related or share price-related remuneration.

Variable cash remuneration

Vitec does not offer variable cash remuneration to senior executives.

Share-related or share price-related remuneration

Senior executives can be offered share-related or share price-related remuneration. Incentive programs is intended to improve the participants’ commitment to the company’s development and shall be implemented on market-based terms. Resolutions on incentive programs related to shares and share prices must be passed at the Annual General Meeting and are therefore not covered by these guidelines.

Pension

The agreed retirement age for the CEO is 65 years and there is no agreed retirement age for other senior executives. All pensions benefits for senior executives are based on defined payments. This means that the company pays an individually agreed defined premium for senior executives. The company does not have any other pension obligations.

Notice of termination and severance pay

The notice period may not exceed 6 months upon notice from the company. The fixed base salary during the notice period and the severance pay may not, in total, exceed an amount corresponding to the fixed base salary for 18 months for the CEO and 6 months for other senior executives. The notice period may not exceed 3 months without the right to severance pay, in the event of termination by senior executives.

Salary and terms of employment for employees

In preparing the Board of Directors’ proposal for these remuneration guidelines, the salaries and terms of employment for the company’s employees have been taken into account. Information about employees’ total remuneration, components of their remuneration, as well as increases in remuneration and increases over time have been obtained and have constituted a part of the remuneration committee’s and the Board of Directors’ decision basis in their evaluation of the fairness of the guidelines and the limitations arising from them.

The resolution process

The Board of Directors shall prepare a proposal for new guidelines when there is a need for significant changes to the guidelines, however at least every four years. The Board of Directors’ proposal is prepared by the remuneration committee. The chairman of the Board of Directors may chair the remuneration committee. Other members of the remuneration committee who are elected by the Annual General Meeting must be independent in relation to the company and the senior executives. If the Board of Directors finds it more expedient, the entire Board can fulfill the tasks of the remuneration committee, provided that members of the Board who is part of the company management does not participate in the work.

The remuneration committee shall, inter alia, monitor and evaluate the application of the guidelines for remuneration to senior executives decided by the Annual General Meeting. When the remuneration committee has prepared the proposal, it is submitted to the Board of Directors for decision. The CEO or other senior executives shall not be present while the Board of Directors addresses issues related to remuneration and passes resolutions about them, insofar as they are affected by the issues.

If the Annual General Meeting resolves not to adopt guidelines when there is a proposal for such, the Board of Directors shall submit a new proposal no later than at the next Annual General Meeting. In such cases, remuneration shall be paid in accordance with the current guidelines or, if no guidelines exist, in accordance with the company’s practice.

External advisors are used in the preparation of these matters when deemed necessary.

Review of the guidelines

A review of the guidelines for remuneration to senior executives has been made as a result of the amendments to the Swedish Companies Act that came into force on June 10, 2019. The proposed changes are not expected to entail any significant change in the remuneration paid in accordance with the current guidelines. The company has not received any comments from the shareholders.

Proposal regarding composition of nomination committee (item 18)

The nomination committee proposes that a new nomination committee for the 2021 Annual General Meeting is appointed. The nomination committee shall consist of the Chairman of the Board of Directors and three, or in some cases four, additional members. Based on ownership statistics as of August 31, the Chairman of the Board of Directors shall contact the three largest shareholders and offer them to appoint one member each to the nomination committee. If a shareholder abstain, the right passes to the next largest shareholder. When the members are appointed, the Chairman of the Board of Directors shall call the nomination committee to a meeting.

The member appointed by the largest shareholder shall be Chairman of the nomination committee. If a change takes place in the company’s ownership structure after August 31, but earlier than two months before the Annual General Meeting, and if a new shareholder that is one of the three largest shareholders after this change expresses a wish to be included in the nomination committee, that shareholder shall have the right to either appoint another member or, if the nomination committee so decides, appoint a member to replace the member appointed by the smallest shareholder after the change in ownership. If a member resigns of a member is prevented from fulfilling his or her mandate, the shareholder who has appointed the member shall be asked to appoint a new member. If the shareholder abstain, the right passes to the next largest shareholder. The Board of Directors proposes that no remuneration be paid to the members of the nomination committee, but compensation for costs incurred shall be paid.

The nomination committee proposes that the Annual General Meeting decides that the instruction to the nomination committee shall be in accordance with the separate document that is kept available on the company’s website.

The Board of Directors’ proposal on authorization of the Board of Directors to resolve to issue new shares (item 19)

The Board of Directors proposes that the Annual General Meeting authorizes the Board of Directors, until the next Annual General Meeting, to be able to decide on new issue and/or issuance of convertible debentures with deviation from the shareholders’ preferential right and with or without a provision regarding contribution in kind or whether the shares shall be subscribed for with set-off rights. The authorization shall comprise a maximum of 2 500 000 Series B shares, with the current quota value, and may be exercised at one or more occasions within specified limits. Issues within the scope of the authorization are assumed to take place on market terms that are generally applied to similar types of issues.

The reason for the authorization

The reason for the authorization is to finance the acquisition of companies, assets and liabilities, product rights etcetera.

Adjustment authorization

The Board of Directors, or a person appointed by the Board of Directors, shall be authorized to make any minor adjustments to the above resolutions that may be necessary in connection with the registration with the Swedish Companies Registration Office and Euroclear Sweden AB respectively.

Majority requirements

A valid resolution under item 18 above requires that shareholders representing not less than two-thirds (2/3) of the votes cast as well as the shares represented at the Annual General Meeting approve the resolution.

The Board of Directors’ proposal on authorization of the Board of Directors to resolve for the company to acquire the company’s own shares (item 20)

The Board of Directors proposes that the Annual General Meeting authorizes the Board of Directors, for one or more occasions, until the next Annual General Meeting, on the acquisition of shares in the company. Acquisition of own shares is further limited by the fact that the company’s holding of own shares may not, at any time, exceed 2 percent of the total shares in the company. Acquisition of shares in the company will take place on Nasdaq Stockholm at a price within the quoted price range at each time. Payment for the shares shall be paid in cash. The authorization does not allow the company to trade its own shares for short term profit.

Furthermore, the Board of Directors’ proposal entails that, for one or more occasions, until the next Annual General Meeting, the Board of Directors is authorized to decide on the transfer of the number of own shares held by the company at each time. Transfer may be made in a different way than on Nasdaq Stockholm. Transfer may be made with or without deviation from the shareholders’ preferential right. Compensation for transferred shares shall be paid in cash, assets and/or liabilities or set-off.

The reason for the authorization

The reason for the authorization is to be able to adapt the company’s capital structure to the company’s capital needs from time to time in order to contribute to increased shareholder value, and to be able to transfer own shares as payment/financing in connection with acquisitions.

Adjustment authorization

The Board of Directors, or a person appointed by the Board of Directors, shall be authorized to make any minor adjustments to the above resolutions that may be necessary in connection with the registration with the Swedish Companies Registration Office.

Majority requirements

A valid resolution under item 19 above requires that shareholders representing not less than two-thirds (2/3) of the votes cast as well as the shares represented at the Annual General Meeting approve the resolution.

The Board of Directors’ proposal regarding personnel convertible debenture program 2020 (item 21)

The Board of Directors of Vitec Software Group AB (publ) proposes that the Annual General Meeting pass a resolution on the implementation of a personnel convertible debenture program 2020. The proposal is divided into the following items.

  1. Resolution regarding issue of convertible debentures

  2. Other matters related to the personnel convertible debenture program 2020

A. Resolution regarding issue of convertible debentures

The Board of Directors of Vitec Software Group AB (publ) proposes that the Annual General Meeting resolves to issue convertible debentures in accordance with the following.

1. Issue of convertible debentures

1.    Issue of convertible debentures

1.1 The Board of Directors proposes that the Annual General Meeting resolve that the company raise a convertible loan in a nominal amount not exceeding SEK 80 000 000 through a private placement in respect of not more than 8 000 convertible debentures, entailing an increase in the share capital of not more than SEK 66 667 upon full conversion of the convertible debentures. The resolution shall otherwise be governed by the following terms and conditions.

1.2 The right to subscribe for the convertible debenture shall vest in all employees of the group with derogation from the shareholders’ pre-emption rights. The right to subscribe is conditional upon the person being employed by the group as of June 23, 2020. In the event of oversubscription, the Board of Directors shall be able to prioritize employees who have not previously been offered to participate in similar programs.

1.3 The reason for derogation from the shareholders’ pre-emption rights is to implement an incentive program through which co-workers, by an own investment, becomes owners and participates in and works for a positive growth of value of the company’s share for the period that the program covers, and to ensure that the company can keep and recruit qualified and motivated personnel.

1.4 The nominal amount of the convertible debenture shall be SEK 10 000 or multiples thereof. The loan carries an annual interest rate of 0,3 percent in accordance with the complete terms and conditions.

1.5 The subscription price shall be equal to the nominal amount of the convertible debenture.

1.6 Subscription shall be made on the subscription list no later than three weeks from September 1, 2020. Payment shall be made no later than one week after the resolution to award convertible debentures. 

1.7 The Board of Directors shall be entitled to extend both the subscription period and the payment period.

1.8 The convertible debenture may be converted into shares during the period commencing September 1, 2023, up to and including September 31, 2023. The conversion price per share shall correspond to 120 percent of the volume weighted average price according to Nasdaq Stockholm’s official price list for the share during the 10 trading days that directly follows after August 3, 2020, however, at least SEK 120.

1.9 The convertible debentures that have been converted into shares shall carry a right to participate in dividends for the first time on the next record date for dividends which occurs after the conversion is completed.

1.10 In the event of bankruptcy or liquidation of the company, the convertible debentures will entitle to payment from the company’s assets after the company’s unsubordinated obligations and pari passu with other subordinated obligations, which are not expressly subordinated to this loan.

1.11 Other terms and conditions according to the complete terms and conditions.

B. Other matters in relation to the personnel convertible debenture program 2020

Costs

The participants will acquire the convertible debentures at market value. The financial costs of the personnel convertible debenture program 2020 consists of the interest running on the convertible debenture, which may amount to a maximum of the interest rate multiplied by the maximum issued amount of SEK 80 000 000. At a convertible interest rate of 0,3 percent and assuming full subscription, interest costs are calculated to amount to SEK 240 000 per year. In addition, the personnel convertible debenture program 2020 will entail certain limited costs in the form of fees to external advisers and administration regarding the program.

Effect on important key ratios

The proposed convertible debentures will cause the earnings per share to change in direct opposite proportion to the change in the number of shares conversion results in (the dilution). The dilution of the share capital, based on the number of shares and votes outstanding in the company, will entail a dilution corresponding to approximately 2,0 percent at full conversion. Thus, upon conversion of all convertible debentures, the company’s earnings per share will decrease by approximately 2,0 percent. The above applies, provided that no recalculation occurs in accordance with the complete terms and conditions. 

Dilution of existing shares and votes

Based on the number of shares and votes outstanding in the company, the personnel convertible debenture program 2020 implies, upon conversion of all 8 000 convertible debentures, a full dilution corresponding to approximately 2,0 percent of the total number of shares and votes outstanding in the company. If all outstanding and proposed incentive programs in the company are included in the calculation, the corresponding maximum level of dilution at the time of the Annual General Meeting amounts to approximately 3,9 percent.

Other share-related incentive programs 

Information about Vitec’s current incentive program is available in the annual report for the financial year 2019, page 98, and on the company’s website, www.vitecsoftware.com.

Adjustment authorization

The Board of Directors, or a person appointed by the Board of Directors, shall be authorized to make any minor adjustments to the above resolutions that may be necessary in connection with the registration with the Swedish Companies Registration Office and Euroclear Sweden AB respectively.

The background and rationale for the proposal

The Board of Directors wishes to introduce a personnel convertible debenture program to all employees in order to help the company secure and retain the services of such employees. In addition, the personnel convertible debenture program is introduced in order to provide incentives for employees to exert maximum effort for the success of the company and any affiliate and provide means by which the employees may become owners of the company and thereby benefit from the increase in value of the company’s share.

Preparation of the proposal

The basis for the personnel convertible debenture program 2020 has been prepared by the Board of Directors of the company. The work has been supported by external advisors and has been made in consultation with shareholders. The Board of Directors has thereafter decided to present this proposal for the Annual General Meeting. Except for the staff that have prepared the matter upon instruction from the Board of Directors, no employee that may be a participant of the personnel convertible debenture program 2020 has participated in the preparations of the program’s terms.

Majority requirements

The resolution by the Annual General Meeting regarding the implementation of the personnel convertible debenture program 2020 according to item A above requires that shareholders representing not less than nine-tenths of the votes cast as well as the shares represented at the general meeting approve the resolution.

The Board of Directors’ proposal regarding participation program 2020 (item 22)

The Board of Directors of Vitec Software Group AB (publ) proposes that the Annual General Meeting pass a resolution on the implementation of a participation program 2020. The proposal is divided into the following items.

  1. Resolution regarding issue and approval of transfer of warrants, series TO 2020:1

  2. Other matters related to the participation program 2020

A    Resolution regarding issue and approval of transfer of warrants, series TO 2020:1

The Board of Directors of Vitec Software Group AB (publ) proposes that the Annual General Meeting resolves to issue and to transfer warrants in accordance with the following.

1.   Issue of warrants

 

1.1 The Board of Directors proposes that the Annual General Meeting resolve to carry out a private placement in respect of not more than 400 000 warrants, entailing an increase in the share capital of not more than SEK 40 000 if the private placement is fully taken up. 

The resolution shall otherwise be governed by the following terms and conditions.

1.2 The right to subscribe for the warrants, with derogation from the shareholders’ pre-emption rights, shall vest in the wholly owned subsidiary Vitec AB, (”Subsidiary”), with right and obligation to transfer the warrants to co-workers in accordance with below. No oversubscription is allowed.

1.3 The reason for derogation from the shareholders’ pre-emption rights is to implement an incentive program through which senior executives shall be able to become long-term owners and participate in and work for a positive growth of value of the company’s share for the period that the program covers, and to ensure that the company can keep and recruit qualified and motivated personnel.

1.4 The warrants shall be issued at no consideration.

1.5 Subscription for the warrants shall take place within 1 week of the date of the resolution to issue warrants. The Board of Directors shall be entitled to extend the subscription period. 

1.6 Each warrant entitles the holder to subscribe for one new share in the company.

1.7 The warrants may be exercised to subscription for new shares during the period commencing on September 1, 2023, up to and including September 15, 2023.

1.8 The subscription price per share shall correspond to 120 percent of the volume weighted average price according to Nasdaq Stockholm’s official price list for the share during the 10 trading days that directly follows August 3, 2020, however, at least SEK 120.

1.9 The shares subscribed for based on the warrants shall carry a right to participate in dividends for the first time on the next record date for dividends which occurs after subscription is completed.

1.10 Other terms and conditions according to the complete terms and conditions.

 

2    Approval of transfer of warrants 
2.1    The Board of Directors proposes that the Annual General Meeting approves the Subsidiary’s transfer of warrants in accordance with the following.

 

2.2    The participation program 2020 is directed towards a maximum of 40 persons in Sweden, Finland, Norway and Denmark. The right to acquire warrants from the Subsidiary shall be vested in members of the group’s management teams and CEO’s of the company’s subsidiaries. The above-mentioned persons may acquire a maximum of 10 000 warrants per person. 

 

2.3 The warrants shall be transferred on market terms to participants in Sweden at a price which is established based on a calculated market value for the warrants, applying the Black & Scholes valuation model calculated by an independent valuation institute. The preliminary value is calculated to SEK 20 per warrant based on a share price of SEK 190.
 

Payment for allotted warrants shall be made in cash within ten days after application.

2.4  Warrants held by the Subsidiary that are not transferred to participants or that is repurchased from participants, may be cancelled through a decision by the Board of Directors, following consent from the Board of Directors of the Subsidiary. The cancellation shall be notified to the Swedish Companies Registration Office. 
 

2.5  It is proposed that a one-time payment is made to the participants in Sweden who acquire warrants. The intention is that the bonus amount, net after taxes, should correspond to 50 percent of the acquisition price (premium) for the warrants.

2.6 The Swedish participants who choose to acquire warrants shall pay the price specified in item 2.3 and receive a one-time payment in accordance with item 2.5. In order to adjust the terms and conditions for participants from Finland, Norway and Denmark who choose to acquire warrants, and thereby compensate for the difference in the respective countries’ tax legislation, either the price of the warrants shall be adjusted or a one-time payment shall be paid in order to match the terms and conditions applicable to participants in Sweden. The total one-time cost for the company including on-time payments according to item 2.5 has preliminary been calculated to SEK 3 million.
 

B. Other matters in relation to the participation program 2020

Costs

The participants will acquire the warrants at market value. Thus, the warrants will not entail any personnel costs for the company in addition to the one-time bonus payment described under items 2.5 and 2.6 above. However, the participation program 2020 will entail certain limited costs in the form of fees to external advisers and administration regarding the participation program 2020.

Effect on important key ratios

The company’s earnings per share will not be effected by the issue of warrants as the present value of the warrants’ exercise price exceeds the current market value of the share at the time of the issue of warrants.

Dilution of existing shares and votes

Based on the number of shares and votes outstanding in the company, the participation program 2020 implies, upon exercise of all 400 000 warrants, a full dilution corresponding to approximately 1,2 percent of the total number of shares and votes outstanding in the company. If all outstanding and proposed incentive programs in the company are included in the calculation, the corresponding maximum level of dilution at the time of the general meeting amounts to approximately 3,9 percent.

Other share-related incentive programs 

Information about Vitec’s current incentive program is available in the annual report for the financial year 2019, page 98, and on the company’s website, www.vitecsoftware.com.

Adjustment authorization

The Board of Directors, or a person appointed by the Board of Directors, shall be authorized to make any minor adjustments to the above resolutions that may be necessary in connection with the registration with the Swedish Companies Registration Office and Euroclear Sweden AB respectively.

The background and rationale for the proposal

The Board of Directors wishes to introduce a participation program to certain employees in order to help the company secure and retain the services of such employees. In addition, the participation program is introduced in order to provide incentives for employees to exert maximum effort for the success of the company and any affiliate and provide means by which the employees may become owners of the company and thereby benefit from the increase in value of the company’s share.

Preparation of the proposal

The basis for the participation program 2020 has been prepared by the Board of Directors of the company. The work has been supported by external advisors and has been made in consultation with shareholders. The Board of Directors has thereafter decided to present this proposal for the Annual General Meeting. Except for the staff that have prepared the matter upon instruction from the Board of Directors, no employee that may be a participant of participation program 2020 has participated in the preparations of the program’s terms.

Majority requirements

The resolution by the Annual General Meeting regarding the implementation of the participation program 2020 according to item A above requires that shareholders representing not less than nine-tenths of the votes cast as well as the shares represented at the general meeting approve the resolution.

The Board of Directors’ proposal for resolution to amend the Articles of Association (item 23)

The Board of Directors proposes that the Annual General Meeting passes a resolution to make some editorial changes to the Articles of Association mainly due to changes already made to the law. The proposed wording is stated below.

§ 1 Business name

The company’s business name is Vitec Software Group AB (publ). The company is public.

§ 11 Shareholders’ Meetings

Shareholders’ meetings shall be held in Umeå or Stockholm. The Annual General Meeting shall be held within six (6) months from the end of each financial year. The following business shall be addressed at the Annual General Meeting: 

1.         Election of Chairman of the Annual General 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.         Consideration of whether the meeting has been duly convened

6.         Presentation of annual report and auditor’s report as well as the consolidated financial statement and the auditor’s report for the group

7.         Resolutions regarding the adoption of the income statement and the balance sheet as well as the consolidated income statement and the consolidated     balance sheet

8.         Resolution regarding appropriation of the company’s profit or loss in accordance with the adopted balance sheet

9.         Resolution regarding discharge from liability of members of the Board of Directors and the CEO

10.      Resolution regarding number of Board members and deputy Board members and auditors

11.      Determination of fees for the members of the Board of Directors and the auditors

12.      Election of members of the Board of Directors and Chairman of the Board of Directors

13.      Election of auditor

14.      Other matters, which rest upon the Annual general Meeting, pursuant to the Swedish Companies Act or the Articles of Association

§ 14 CSD-registered companies

The company’s shares shall be registered in a securities register in accordance with the Swedish Central Securities Depositories and Financial Instruments (Accounts) Act (1998:1479).

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Documents

Full documents will be made available on www.vitecsoftware.com no later than June 2, 2020. The documents are also sent to shareholders who request it and who provide their postal address. Otherwise, complete proposals can be found under each item in the notice. The annual report and the auditor’s report, the auditors opinion regarding guidelines for remuneration to senior executives and the Board of Directors opinion in accordance with the Swedish Companies Act Chapter 19, Section 22, are available at the company and at www.vitecsoftware.com. The documents are also sent to shareholders who request it and who provide their postal address.

Umeå May 2020

Vitec Software Group AB (publ)

The Board of Directors

N.B. This English version of the notice to the Annual General Meeting is an unofficial translation. In case of any discrepancies in relation to the Swedish version of the notice, the Swedish version shall prevail.

For further information, please contact

Patrik Fransson, Investor Relations

patrik.fransson@vitecsoftware.com

+46-76-942859

About Vitec

Vitec is market leader for Vertical Market Software in the Nordic region. We develop and deliver standard niche software. Vitec grows through acquisitions of well-managed and well-established software companies. The Group's overall processes together with the employees' in-depth knowledge of the customer's local market enables continuous improvement and innovation. Our 800 employees are based in Denmark, Finland, Norway and Sweden. Vitec is listed on Nasdaq Stockholm and had net sales of SEK 1 156 million in 2019. Find more at www.vitecsoftware.com.