Invitation to the Annual General Meeting of shareholders of Betsson AB (publ)

The shareholders of Betsson AB (publ) (the ”Company”), are hereby invited to the Annual General Meeting of shareholders to be held on Tuesday, 15 May 2018 at 10.00 a.m. at Scandic Haymarket, Hötorget in Stockholm.

Notice to attend etc.

Shareholders who wish to attend the Annual General Meeting (the ”AGM”) must

  • be entered in the register of shareholders held by Euroclear Sweden AB by Tuesday, 8 May 2018; and
  • notify the Company of their intention to participate no later than on Wednesday, 9 May 2018.

Notice of participation in the meeting shall be made via the notification form available at www.betssonab.com. Notification may also be made by telephone on +46 (0)8-506 403 00. When giving notice of participation, the shareholder must state name, social security number or company registration number, address, telephone number and shareholding. Shareholders who are represented by proxy shall send such proxy together with registration certificate or corresponding documentation to the Company (anders.eriksson@betssonab.com) in connection with the notification to attend the AGM. Proxy forms for shareholders who wish to be represented by proxy will be made available on the Company’s website www.betssonab.com.

Shareholders who hold their shares through nominees (Sw. förvaltare) must request a temporary registration of the shares in their own name, with Euroclear Sweden AB. Shareholders who wishes to obtain such registration must contact the nominee regarding this well in advance of 8 May 2018.

Proposed Agenda

  1. Opening of the Meeting
  2. Election of a Chairman at the Meeting
  3. Preparation and approval of the register of shareholders entitled to vote at the Meeting
  4. Approval of the agenda
  5. Election of one or two persons to check the minutes
  6. Determination of whether the Meeting has been duly convened
  7. Statement by the Chief Executive Officer
  8. Presentation of the Annual Report and Auditor’s Report
  9. Resolution to adopt the Income Statements and Balance Sheets of the Parent Company and the Group
  10. Resolution on allocations concerning the Company’s earnings in accordance with the adopted Balance Sheet
  11. Resolution to discharge the members of the Board of Directors and the Chief Executive Officers from liability
  12. Determination of the number of members and deputy members of the Board of Directors and number of auditors and deputy auditors
  13. Determination of the fees to be paid to the members of the Board of Directors and the auditors
  14. Election of members of the Board of Directors and Chairman of the Board of Directors and auditor
  15. Establishment of a Nomination Committee
  16. Resolution concerning guidelines for the remuneration of senior executives
  17. Resolution on incentive programme
    1. Resolution on incentive programme based on tradable warrants mainly for employees in Sweden
    2. Resolution on incentive programme based on stock options
  18. Share split and automatic redemption procedure, to include
    1. resolution to implement a share split;
    2. resolution to reduce share capital through automatic redemption of shares; and
    3. resolution to increase share capital through a bonus issue
  19. Resolution to authorise the Board of Directors to resolve on the repurchase and transfer of Class B shares
  20. Resolution to authorise the Board of Directors to resolve on the issue of shares and/or convertible bonds
  21. Closing of the Meeting

Proposals

Election of the Chairman of the Meeting (item 2)

The Nomination Committee, comprised of John Wattin, appointed by the Hamberg family and Hamberg Förvaltning AB and Chairman of the Nomination Committee, Michael Knutsson, appointed by Knutsson Holdings AB, Christoffer Lundström, appointed by Novobis AB and the Lundström family and Patrick Svensk, Chairman of the Board of Directors of Betsson AB, proposes that Patrick Svensk be appointed Chairman of the Meeting.

Dividends (item 10)

As set out below, the Board of Directors has proposed a procedure for the redemption of shares which means a transfer of value in cash to the shareholders in about SEK 393.1million.

Election of the Board, Auditor etc. (items 12-14)

The Nomination Committee proposes that the Board of Directors shall consist of seven members without deputies. For the period until the end of the next AGM, the Nomination Committee proposes re-election of Patrick Svensk, Kicki Wallje-Lund, Jan Nord and Fredrik Carlsson as members of the Board of Directors. The Nomination Committee proposes election of Tristan Sjöberg, Mathias Hedlund and Johan Lundberg as new members of the Board of Directors. Current board member Pontus Lindwall will continue as CEO of the Company, but not as a board member. Martin Wattin has declined to stand for re-election. The Nomination Committee proposes that Patrick Svensk is elected as Chairman of the Board of Directors.

The Nomination Committee proposes the remuneration for the Board to be a total amount of SEK 3,970,000 to be allocated as follows: SEK 880,000 for the Chairman of the Board of Directors and SEK 440,000 for each of the other members of the Board of Directors. The proposed remuneration to members of the Remuneration Committee and the Audit Committee is SEK 210,000 and SEK 240,000, respectively, to be allocated amongst the members in the respective Committee. The remuneration for the Remuneration Committee and the Audit Committee is included in the total amount mentioned above.

The Nomination Committee also proposes that the AGM resolves to pay an additional remuneration to Patrick Svensk in the amount of SEK 303,781 as compensation for Patrick Svensk acting as Chairman of the Board of Directors as from 4 September 2017 until the AGM 2018.

The Nomination Committee proposes the fees for the auditors be paid according to approved invoices.

Pursuant to the EU Audit Regulation, the Audit Committee has conducted a tender process for the annual audit of the Company’s financial statements. Given the results of the tender, the Nomination Committee proposes that the registered auditing company Pricewaterhouse­Coopers AB is re-elected as auditor of the Company for the period until the end of the Annual General Meeting 2020. PricewaterhouseCoopers AB has informed the Company that, subject to the approval of the proposal from the Nomination Committee regarding auditor, the Authorized Public Accountant Niklas Renström will be the auditor in charge for the audit. The Nomination Committee’s proposal is consistent with the Audit Committee’s recommendation.

Establishment of a Nomination Committee (item 15)

The Nomination Committee proposes that the following principles shall apply for the establishment of the Nomination Committee in relation to the AGM 2019:

The Chairman of the Board shall no later than 30 September 2018 convene a meeting with the three by votes largest shareholders or known group of shareholders of the Company, who each shall have the right to appoint one member of the Nomination Committee. If any of the three largest shareholders or known group of shareholders renounce from their right to appoint a member of the Nomination Committee, the next largest shareholder or known group of shareholders is to be provided with the opportunity to appoint a member of the Nomination Committee. In addition, the Chairman of the Board of Directors shall be a member of the Nomination Committee. Neither the CEO nor any other member of the management shall be a member of the Nomination Committee. The Chairman of the Board shall convene the initial meeting of the Nomination Committee. A representative of the shareholders shall be elected as Chairman of the Nomination Committee. The term of office for the Nomination Committee is until a new Nomination Committee has been appointed. The names of the members of the Nomination Committee shall be announced no later than six months prior to the AGM 2019.

The Nomination Committee shall be constituted based on known ownership of the Company as of 31 August 2018. In the event of major changes in the shareholding of the Company after the establishment of the Nomination Committee, the composition of the Nomination Committee may be changed in accordance with the above principles. Such changes shall be made public immediately.

The Nomination Committee shall prepare and at the AGM present proposals regarding the election of Chairman of the Board of Directors along with other members of the Board of Directors, remuneration of the members of the Board of Directors divided between the Chairman and other members and, where appropriate, compensation for work in committees, election of and fees to the auditors, establishment of the principles regarding election of the Nomination Committee, and election of Chairman at the AGM.

The Nomination Committee shall, upon approval by the Chairman of the Board of Directors, be entitled to burden the company with costs, for example in respect of recruitment consultants or other costs necessary for the Nomination Committee to fulfil its duties.

Resolution concerning guidelines for the remuneration of senior executives (item 16)

The Board proposes that the AGM is approving the following guidelines for remunerating senior executives. Senior executives mean the management team of the group, consisting of the CEO, the CFO, the Vice President Corporate Communications and the Vice President Governance, Risk and Compliance of the parent company and the general counsel of the Group. Remuneration shall be paid on ordinary market and competitive terms in order to attract and retain competent senior executives. The remuneration consists of a fixed salary, variable salary, pensions and other fringe benefits.

The variable salary shall be payable provided that certain financial and other measurable objectives established by the Board have been met. The variable salary shall be depending on the extent to which the targets have been fulfilled or exceeded. If the financial targets have been exceeded at the highest level (“out-perform”), the cost for the group in respect of variable salary for the senior executives is estimated to approximately SEK 10.4 million including social security costs.

Ordinary retirement age shall be 65 years. Pension benefits shall be competitive and based on defined contribution plans.  

The notice period should normally be between six and twelve months if termination of the employment is made by the company and six months if the employment is terminated by the employee. In case of termination of employment by the Company, severance payment may be paid up to twelve months’ salary.

In case of special circumstances, the Board of Directors may deviate from these guidelines.

Resolution on incentive programmes (item 17)

The Board of Directors proposes that the AGM resolves to establish two incentive programmes under which the Company invites approximately 35 senior executives and other key employees to either purchase transferable options in the Company according to item 17 a) or be granted stock options in the Company according to item 17 b) below.

The rational for the proposed incentive programmes

The rationale for the proposed incentive programmes is to create conditions for retaining and recruiting competent managers to the Betsson Group, increase the motivation amongst employees, reward loyalty, and thereby increase shareholder value and the long-term value growth in the company.

Against this background, the Board of Directors is of the opinion that the adoption of the incentive programmes as set out below will have a positive effect on the Betsson Group’s future development and thus be beneficial for both the Company and its shareholders.

Preparation

Betsson’s Remuneration Committee has prepared the incentive programmes in consultation with external advisors and major shareholders. The incentive programmes have been reviewed by the Board at board meetings during the first months of 2018.

The proposed incentive programmes have the support of the Company’s major shareholders.

Resolution on incentive programme based on transferable options (item 17 a)

Summary

The Board of Directors proposes that the AGM resolves to establish an incentive programme under which the Company invites approximately 10 senior executives and other key employees to purchase transferable options in the Company at market value (the “Transferable Option Plan”).

The Transferable Option Plan is mainly intended for senior executives in Sweden, but it is proposed that the Board of Directors shall be authorised to resolve that also employees abroad may be offered to purchase transferable options.

The number of transferable options to be issued under the Transferable Option Plan shall not exceed 460,000 representing a dilution effect of approximately 0.32 per cent of the share capital and 0.16 per cent of the votes. There can be no over-subscription.

The terms of the transferable options

  1. The transferable options shall be offered to senior executives and other key employees of the Betsson Group.
  2. The price for the transferable options (the premium) shall correspond to the market value determined by an external valuation by applying a generally accepted valuation method. Payment for the transferable options shall be made in cash.
  3. Each transferable option entitles the holder to purchase one Class B share in the Company at an exercise price equal to 130 per cent of the average market price of the Company’s Class B share on Nasdaq Stockholm during the period from 22 June 2018 until 29 June 2018. The subscription price calculated in accordance with the above shall be rounded to the closest SEK 0.10, where SEK 0.05 shall be rounded down. The exercise price and the number of shares each option entitling the holder to purchase is subject to customary recalculations in accordance with the full terms of the transferable options.
  4. The options are exercisable during the period from 26 July 2021 until 13 August 2021. In order to be able to compare the terms of the transferable options with the terms of the stock options under item 17 b) below, the return on the transferable options will include a limitation. The terms of the transferable options shall contain a provision under which the number of options that a participant can exercise may not exceed an aggregate value, at the time of exercise, corresponding to the allotted number of options multiplied by 130 percent of the closing price for the Company's Class B shares on 29 June 2018. (The ceiling correspond to an increase of 160 percent from the share price when launching the program and an increase of 100 percent from the strike price level.)

The Company shall reserve a pre-emption right to repurchase the transferable options at market value if the holder’s employment within the Group is terminated or if the holder wishes to transfer its options.

Majority requirements

The Board of Directors’ proposal means that the AGM approves that the Company, with deviation from the shareholders’ preferential rights, transfers Class B shares to the participants at a fixed exercise price. Such transfers fall within the scope of Chapter 16 of the Swedish Companies Act (SFS 2005:551), which means that a resolution to approve the Transferable Option Plan is valid only where supported by shareholders holding not less than nine-tenth of both the votes cast and of the shares represented at the AGM.

Resolution on incentive programme based on stock options (item 17 b)

Summary

The Board of Directors proposes that the AGM resolves to establish an incentive programme (the "Stock Option Plan") for executives and other key employees who are employed in jurisdictions other than Sweden.

Employees who participate in the Stock Option Plan will receive allocation of stock options for no consideration. Participation in the Stock Option Plan requires an investment in Betsson shares.

The personal investment

In order to participate in the Stock Option Plan, the employees have to own Betsson shares. These shares can either be shares already held or shares purchased on the market in connection with notification to participate in the Stock Option Plan. The amount to be invested in Betsson shares shall correspond to the option premium that would have been paid if the participant participated in the Transferable Option Plan.

General terms and conditions

The stock options may be exercised to acquire Class B shares in the Company during the period from 26 July 2021 until 13 August until 2021.

Provided that the participant is still employed by the Betsson Group upon exercise of the options, each stock option entitles the employee to acquire one Class B share in the Company at an exercise price equal to 130 percent of the average closing price of the Company's Class B shares listed on Nasdaq Stockholm from and including 22 June 2018 to 29 June 2018. Furthermore, the participant must have retained the initial investment in Betsson shares to be able to exercise the stock options.

Detailed terms and administration

The Board of Directors, or a remuneration committee established by the Board of Directors, shall be responsible for preparing the detailed terms and conditions of the Stock Option Plan, in accordance with the above mentioned terms and guidelines. To this end, the Board of Directors shall be entitled to make adjustments in the Stock Option Plan to meet foreign regulations or market conditions. The Board of Directors may also make other adjustments if significant changes in the Betsson Group, or its markets, result in a situation where the decided terms and conditions of the Stock Option Plan no longer serve their purpose.

Furthermore, in case of special circumstances, the Board of Directors shall be authorised to resolve that stock options will be kept and exercised despite the fact that employment in the Betsson Group have ceased, for example due to illness.

Allocation and dilution

The Board of Directors proposes that the stock options are offered to a total maximum of 25 senior executives and other key employees who are employed abroad. The Stock Option Plan comprises a maximum of 940,000 stock options. Participants will be divided into different categories when determining the allocation of options.

Allocation of stock options may only occur to the extent that the total number of stock options under the Stock Option Plan and the Transferable Option Plan amounts to a maximum of 1,400,000 options, corresponding to a dilution of approximately 0.97 percent of the share capital and 0.48 per cent of the votes after dilution.

Scope and costs

The Stock Option Plan and any bonus payment as set out under item 17 a) will be accounted for in accordance with IFRS 2 which stipulates that the value is recorded as a personnel expense in the income statement during the vesting period. Based on the assumptions of a share price of SEK 63,12 (closing share price of a Class B share in the Company on March 29, 2018), a maximum participation and an annual employee turnover of 10 per cent among the participants of the Stock Option Plan, the cost for the Stock Option Plan is estimated to maximum SEK 2.6 million. The cost will be allocated over the years 2018-2021.

In order to limit the Company's costs, the terms of the Stock Option Plan and the Transferable Option Plan contain provisions under which the number of options that a participant can exercise may not exceed the aggregate value, at the time of exercise, corresponding to the allotted number of options multiplied by 130 percent of the closing price for the Company's Class B shares on 29 June 2018. (The ceiling correspond to an increase of 160 percent from the share price when launching the program and an increase of 100 percent from the strike price level.)

The annual cost of the Stock Option Plan and the Transferable Option Plan, including financing costs and social security costs, is estimated to approximately SEK 0,9 million given the above assumptions. This cost can be related to the Company’s total personnel costs, including social security costs, of SEK 786,4 million in 2017.

For information on Betsson’s other equity-related incentive programmes, reference is made to the annual report for 2017, note 32.

Delivery of shares

To ensure the delivery of Class B shares under the Stock Option Plan and the Transferable Option Plan, the Board of Directors will reclassify the appropriate number of Class C shares currently held by the Company into Class B shares. The Class B shares will subsequently be delivered to the participants under the Stock Option Plan and the Transferable Option Plan.

The Board of Directors proposes that the AGM resolves that a maximum of 1,400,000 Class B shares may be transferred to the participants in accordance with the terms of the Stock Option Plan and the Transferable Option Plan.

Majority requirements

The Board of Directors’ proposal means that the AGM approves that the Company, with deviation from the shareholders’ preferential rights, transfers Class B shares to the participants at a fixed exercise price. Such transfers fall within the scope of Chapter 16 of the Swedish Companies Act, which means that a resolution to approve the Stock Options Plan is valid only where supported by shareholders holding not less than nine-tenth of both the votes cast and of the shares represented at the AGM.

Share split and automatic redemption of shares (item 18)

The Board of Directors proposes that the AGM resolves on a procedure for the automatic redemption of shares in accordance with the proposal below. It is proposed that the resolutions are taken together as one resolution.

Resolution to implement a share split (item 18 a)

The Board of Directors proposes that the AGM resolves to implement a share split, whereby one share in Betsson (irrespective of what class of shares) is converted into two shares. One of these shares will be a so-called redemption share. The Board proposes that the record date for the share split shall be 23 May 2018.

A valid resolution according to the Board of Directors’ proposal above requires approval of shareholders representing at least two-third of both the votes cast and the shares represented at the Meeting.

Resolution to reduce the share capital through an automatic redemption of shares (item 18 b)

The Board of Directors proposes that the share capital shall be reduced by SEK 48,164,412.50 through the redemption of 16,260,000 Class A shares, 122,155,730 Class B shares and 6,077,508 Class C shares for repayment to the shareholders. The shares to be redeemed are those shares which are referred to as redemption shares after shares have been split as described in item 18 a) above. If the Board of Directors is utilising current authorisation to issue new shares, the number of shares being subject to redemption may increase. In respect of such subscription of new shares taking place prior to the record date for the share split pursuant to item 18 a) above, the proposal for reduction of the share capital shall be adjusted, whereby the reduction amount shall increase by SEK 1/3 for each such new share in the Company. In addition, the number of shares being subject to redemption shall increase correspondingly. In the event that exercise of options takes place under existing incentive programmes before the record date for the share split, the number of Class B shares will increase and the number of Class C shares will decrease as a result of the Board of Directors decides on the conversion of Class C shares into Class B shares. If such conversion occurs, the number of Class B shares subject to redemption as described above will increase by the number of shares that the Board of Directors decides to convert. Correspondingly, the number of Class C shares as set out above will decrease.

The price to be paid for each redemption share shall be SEK 2.84 being an amount exceeding the quota value of the shares by SEK 2.51. No redemption price shall be paid for any redemption shares of Class A, Class B or Class C that are held by the Company, whereby the share capital will be reduced and allocated to distributable equity. In the event that the Company at the time of the redemption of shares are still the holder of the number of shares that the Company currently owns, i.e. 1,084 Class B shares and 6,077,508 of Class C shares, the redemption amount will be of approximately SEK 393.1 million. The Board of Directors proposes that trading in redemption shares shall take place from 25 May 2018 up to and including 8 June 2018. The Board of Directors proposes that the record date for the redemption of shares shall be 12 June 2018. Payment is expected to be made through Euroclear Sweden AB on 15 June 2018.

Resolution to increase share capital through a bonus issue (item 18 c)

In order to achieve a timely and efficient redemption procedure, without having to obtain permission from the Swedish Companies Registration Office or the Court, the Board of Directors proposes to restore the Company’s share capital to its original amount by increasing the Company’s share capital by SEK 48,164,412.50 through a bonus issue by way of a transfer from the Company’s unrestricted equity to the Company’s share capital. No new shares will be issued in connection with the increase of the share capital. If the Board of Directors is utilising current authorisation to issue new shares and new shares are subscribed for prior to the record date for the share split according to item 18 a) above, the proposed resolution for the increase of share capital through a bonus issue shall be subject to adjustment whereby the issue amount shall increase by SEK 0.67 for each such share in the Company.

Resolution to authorise the Board of Directors to resolve on the repurchase and transfer of Class B shares (item 19)

The Board of Directors proposes that the AGM authorises the Board of Directors to resolve to repurchase, on one or several occasions prior to the next AGM, as many shares as may be purchased without the Company’s holding at any time exceeding 10 per cent of the total number of shares in the Company. The shares shall be acquired on a regulated market where shares in the Company are listed and only at a price within the price range registered at any given time, i.e. the range between the highest bid price and the lowest offer price, or through a public offer to all shareholders, whereby the purchase shall be made at a price equivalent to the lowest quoted share price at the time and a maximum of 150 per cent of the current quoted share price.

It is also proposed that the Board of Directors shall be authorised to resolve on the transfer of the Company’s own shares, as payment upon the acquisition of companies or businesses, at a price equivalent to the quoted share price at the time of transfer.

The authorisation to transfer own shares shall be limited whereby the Board of Directors may not resolve on the transfer of more than 14.4 million Class B shares also taken into consideration any shares issued by the Board of Directors under the authorisation pursuant to item 20 below.  

The purposes of these authorisations are to give the Board of Directors greater scope to act when working with the Company’s capital structure and to create flexibility in the Company’s opportunities to carry out acquisitions of companies and businesses.

A valid resolution according to the Board of Directors’ proposal above requires approval of shareholders representing at least two-third of both the votes cast and the shares represented at the Meeting.

Resolution to authorise the Board of Directors to resolve on the issue of shares and/or convertible bonds (item 20)

The Board of Directors proposes that the AGM authorises the Board to resolve, on one or several occasions prior to the next AGM, with or without preferential rights for existing shareholders, against cash payments, payment in kind or by way of set-off, to resolve to issue shares and/or convertible bonds, that involve the issue of or conversion into up to 14.4 million Class B shares, corresponding to a dilution of about 10.0 per cent of the share capital and of about 5.1 per cent of the shareholders’ votes.

The authorisation above shall be limited whereby the Board of Directors may not resolve to issue shares and/or convertible bonds that involve the issue of or conversion into more than 14.4 million Class B shares also taken into consideration any shares transferred by the Board of Directors under the authorisation pursuant to item 19 above.  

The purposes of the authorisation are to increase the financial flexibility of the Company and to enable the Company to use its own shares to make payments for any acquisitions of companies or businesses the Company may undertake or to settle any deferred payments in connection with such acquisitions. Share issues with payment in cash and with deviation from the shareholders’ preferential rights may only take place to finance the purchase price to be paid in cash in connection with acquisitions of companies or businesses. Share issues with payment by way of set-off and with deviation from the shareholders’ preferential rights may only take place in connections with payment of deferred payments in connection with acquisitions of companies or businesses. In connection with issues of shares or convertible bonds with deviation from the shareholders’ preferential rights, the starting point for the issue price shall be the prevailing market conditions at the time the shares and/or convertible bonds are issued.

A valid resolution according to the Board of Directors’ proposal above requires approval of shareholders representing at least two-third of both the votes cast and the shares represented at the Meeting.

Other

The Board of Directors’ complete proposals for resolutions in accordance with the above, including reports and statements related thereto in accordance with the Swedish Companies Act, will be available at the Company’s address as set out above and on the Company’s website www.betssonab.com and will also be sent to those shareholders who so request and provide their postal address.

According to Chapter 7, section 32 of the Swedish Companies Act, at a General Meeting the shareholders are entitled to require information from the Board of Directors and CEO regarding circumstances which may affect items on the agenda and circumstances which may affect the Company’s financial situation.

Number of shares and votes

As of 16 April 2018, the total number of shares in the Company was 144,493,238, representing a total of 290,833,238 votes, divided into 16,260,000 Class A shares representing 162,600,000 votes, 122,155,730 Class B shares representing 122,155,730 votes and 6,077,508 Class C shares representing 6,077,508 votes. On the same date, the Company held 1,084 Class B shares and 6,077,508 Class C shares, which may not be represented at the AGM.

Stockholm, April 2018

The Board of Directors


For further information, please contact:
Patrick Svensk, Chairman of the Board of Directors
+46 (0)8 506 403 00

Pia Rosin, VP Corporate Communication Betsson AB
+46 (0)73 600 85 00, pia.rosin@betssonab.com

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About Us

Betsson AB’s Core Business consists of owning and administering shareholdings in companies which, themselves or through partners, offer gaming to the end users via the internet. Betsson AB owns Betsson Malta which operates gaming to the end users either through their own websites or through partnerships. Betsson Malta offers Poker, Casino, Sportsbook, Scratch Cards, Bingo and Games. The customers come primarily from the Scandinavian countries and other parts of Europe. Betsson AB is listed on NASDAQ OMX Nordic Mid Cap List, (BETS).