Communiqué from extraordinary shareholders’ meeting, AudioDev AB (publ)

The shareholders of AudioDev AB (publ) held an extraordinary shareholders’ meeting in Malmö today, 5 December 2005. The shareholders’ meeting unanimously, except for the Swedish Shareholders' Association, who chose to abstain from voting, decided to approve the Board’s proposal to issue a promissory note and warrants, and to transfer those warrants. The decision taken at the meeting means that the company may issue a promissory note for a nominal value of SEK 1,000 together with 400,000 separable warrant rights for subscription to series B shares in the company. The right to sign the promissory note will, in a departure from shareholders’ preferential right, be given to AudioDev’s wholly owned subsidiary Adimo AB, which will transfer the warrants to leading employees as detailed below. The promissory note shall be signed and paid by 9 December 2005. The promissory note will incur three per cent annual interest and will become due for payment on 30 December 2005. Each warrant gives the right to subscribe to a new B series share in the company with a nominal value of SEK 0.50, for the period 1 January 2008 – 15 December 2009. The subscription price for the new issue shall be 120% of the average of the last buying price (on the Stockholm Stock Exchange) for B series shares in the company over the period 2–30 November 2005. The reason for the departure from shareholders’ preferential right is that the company believes it beneficial to the long-term development of the company that leading employees of the AudioDev Group are offered the opportunity of partnership through a carefully considered incentive scheme. Adimo AB shall allocate and, against payment of the theoretical market value of the warrants at the time of transfer (calculated using the Black & Scholes model), transfer warrants to leading employees of the AudioDev Group in accordance with the instructions of the Board of the company, according to the following guidelines: Existing leading employees (seven in total) shall be offered the opportunity to acquire 25,000 50,000 warrants each. Any future leading employees shall also be offered the opportunity to acquire 25,000 or 50,000 warrants in a similar way. Allocation to existing employees shall take place in December 2005. Allocation to future employees shall, where applicable, take place before the end of 2007. If the warrants are fully utilized under the terms applicable at the time of the decision the share capital may increase by a maximum of SEK 200,000, which is equivalent to a 2.3-per-cent dilution of the share capital and a 1.8-per-cent dilution in votes. The dilution effect has been calculated as the number of additional shares/votes, if fully utilized, in relation to the total existing number of votes/shares, plus the number of additional shares/votes, if fully utilized. No outstanding warrant programme exists.