Notice to attend the Annual General Meeting of G5 Entertainment AB (publ)

N.B. This English text is an unofficial translation of the Swedish original of the notice to attend the Annual General Meeting in G5 Entertainment AB (publ), and in case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail. 

The shareholders of G5 Entertainment AB (publ), reg. no 556680-8878 (the “Company”) are hereby summoned to attend the Annual General Meeting held at 08.30 am (CEST) on Monday June 8, 2020, at 7a Conference center, Strandvägen 7a, Stockholm, Sweden. Registration begins at 8.00 am (CEST). 

Notification 

Shareholders who wish to attend the annual general meeting must: 

• be recorded as shareholders in the share register maintained by Euroclear Sweden AB on Monday June 1, 2020; 
• no later than Monday June 1, 2020, preferably before 4 pm (CEST), have given notice of their participation and potential assistants to G5 Entertainment AB, Birger Jarlsgatan 18, 3 tr, 114 34 Stockholm or by e-mail to agm@g5e.se, stating full name, personal identification number or registration number, address, day-time phone number and, when applicable, information regarding any representative, proxy and/or a maximum of two assistants. 

Shareholders whose shares are nominee-registered must, in order to have the right to attend the Annual General Meeting, request to be temporarily registered in the share register kept by Euroclear Sweden AB. The shareholder must instruct their nominee thereof in due time prior to Monday, June 1, 2020, by which date such registration must be executed. 

Shareholders represented by proxy shall issue a written and dated power of attorney to the proxy signed by the shareholder. A power of attorney issued by a legal entity shall have a copy of registration certificate attached, or if such certificate does not exist, equivalent authorization document. A power of attorney form for shareholders who wish to participate the general meeting by proxy are available on the Company’s website (http://g5e.se/corporate). The power of attorney and the registration certificate may not be issued earlier than one year before the date of the general meeting, with the exception of the power of attorney specifies a longer period, up to a maximum of five years. The original power of attorney and any registration certificate must be available at the Annual General Meeting and copies of the documents should, in advance of the general meeting be sent to the Company at the address above.

Safety measures in connection with the annual general meeting due to covid-19

The Company cares for the health of its shareholders and employees. Due to the risk of spreading the covid-19 infection, the Company is taking certain precautionary measures so that consideration is given to the attendees’ health while upholding the opportunity for the shareholders to exercise their rights. 

The annual general meeting will be kept as short as possible, and no food or drinks will be offered. Furthermore, the general meeting will be recommended to pass a resolution that no guests, or others who are not legally entitled to attend the general meeting, are allowed to be present at the general meeting venue. The Company’s board of directors, management, legal advisors and employees will only attend to the extent required.

Shareholders who have symptoms themselves or who have been in an area of contagion, or who have been in contact with someone who has symptoms or has been in an area of contagion, are encouraged to not attend the general meeting in person, but to attend by proxy instead.  

Provisional legislation effective as from April 15, 2020 allows the Company’s board of directors to collect proxy forms from shareholders and to arrange postal voting. This means that shareholders who do not wish to attend the meeting in person can either vote by post or issue a power of attorney to a person specified in it to represent their shares at the general meeting in the matter specified in the power of attorney. The board of directors of the Company intends to arrange postal voting and to collect proxy forms from shareholders. More information regarding these options is provided on the Company’s website.

The Company closely monitors developments and, if necessary, additional measures for the annual general meeting will be published on the Company’s website.   

Agenda

1. Opening of the Annual General Meeting 
2. Preparation and approval of voting register 
3. Election of chairman of the general meeting 
4. Presentation and approval of the agenda 
5. Election of one or two persons to verify the minutes together with the chairman
6. Determination of whether the meeting has been duly convened 
7. Presentation by the CEO 
8. Presentation of the annual report and auditor’s report, as well as consolidated financial statements and auditor's report on the consolidated accounts
9. Resolution regarding: 
   1. Adoption of the income statement and balance sheet, as well as the consolidated income statement and consolidated balance sheet 
   2. Appropriations concerning the Company's profit and loss in accordance with the adopted balance sheet
   3. Discharge from liability for the board directors and the CEO 
10. Determination of the number of directors and auditors 
11. Determination of remuneration to the board of directors and auditors 
12. Election of board directors
13. Election of auditor
14. Resolution regarding composition of the nominating committee
15. Resolution regarding adoption of guidelines for remuneration to senior executives
16. Resolution of performance based, long-term share program for executive management and key employees 
17. Resolution of performance based, long-term share program for the Company’s CEO
18. Resolution to authorize the board of directors to resolve on issuance of class C shares
19. Resolution to authorize the board of directors to resolve to acquire own class C shares
20. Resolution to transfer own ordinary shares
21. Resolution to authorize the board of directors to resolve on issue of ordinary shares 
22. Resolution to authorize the board of directors to resolve to acquire and transfer own ordinary shares
23. Resolution to authorize the board of directors to resolve to repurchase warrants issued under the option program 2017/2020
24. Resolution to amend the Articles of Association
25. Resolutions on (a) reduction of the share capital by way of cancellation of own shares, and (b) increase of the share capital by way of bonus issue
26. Resolution to authorize the board of directors to undertake minor adjustments of the resolutions
27. Closure of the Annual General Meeting 

The nominating committee’s proposals to resolutions

The nominating committee of G5 Entertainment AB (publ) consists of Marianne Flink (chairman of the nominating committee and appointed by the shareholder Swedbank Robur Fonder), Jeffrey Rose (director of the board of the Company and appointed by the shareholder Wide Development Limited), Sergey Shults (appointed by the shareholder Proxima Limited), Petter Nylander (chairman of the board of the Company and appointed by the shareholder Purple Wolf Limited) and Markus Lindqvist (appointed by the shareholder Aktia Asset Management). The members are appointed by shareholders that on March 31, 2020 together represented approximately 29.0 percent of the voting power of all shares of the Company. The nominating committee proposes the following:

Item 3 - Election of chairman of the general meeting

The nominating committee proposes that the chairman of the board of the Company Petter Nylander is appointed as chairman of the Annual General Meeting.

Item 10 - Determination of the number of board directors and number of auditors

The nominating committee proposes that the board, for the period until the end of the next Annual General Meeting shall consist of six (6) directors and no deputies. The nominating committee proposes that a registered public accounting firm and a head auditor is appointed at the general meeting.

Item 11 - Determination of remuneration to the board of directors and auditors 

The nominating committee proposes that the remuneration to the board, for the period until the end of the next Annual General Meeting, shall unchanged amount to SEK 450,000 to the chairman of the board and SEK 250,000 each to the other directors appointed by the Annual General Meeting. A board director who at the same time is employed by the Company shall not receive any director's fee. The total remuneration to the board shall amount to SEK 1,450,000.

Further, the nominating committee proposes, for the period until the end of the next Annual General Meeting, in addition to directors' fees, shall be paid to the members of the Company's audit committee, whereby the fee to the chairman of the audit committee shall amount to SEK 80,000 and the fee to the other members of the audit committee shall amount to SEK 50,000 each.

Furthermore, the nominating committee proposes, for the period until the end of the next Annual General Meeting, in addition to directors' fees, shall be paid to the members of the Company's compensation committee, whereby the fee to the chairman of the compensation committee shall amount to SEK 50,000 and the fee to the other members of the compensation committee shall amount to SEK 30,000 each.

Further, it is proposed that remuneration to the auditor shall be paid according to current account and approved invoices. 

Item 12 - Election of board directors

As ordinary board of directors in the Company, the nominating committee proposes re-election of Petter Nylander, Johanna Fagrell Köhler, Stefan Lundborg, Jeffrey W. Rose and Vladislav Suglobov (also CEO). 

The nomination committee proposes election of Marcus Segal.

It is proposed that Petter Nylander is re-elected as chairman of the board.

Item 13 - Election of auditor

The nominating committee proposes, for the period until the end of the next Annual General Meeting, re-appointment of the registered public accounting firm PricewaterhouseCoopers AB (“PwC”) as the Company’s auditor. PwC has notified that in the event of their being re-appointed, Aleksander Lyckow will continuously be the auditor-in-charge.

Item 14 - Resolution regarding composition of the nominating committee

The nominating committee proposes the Annual General Meeting to resolve on the following principles for the composition of the nominating committee. 

The nominating committee shall consist of representatives of the five (5) largest, as regards to voting power, shareholders as of the last trading date in August, which is August 31 for the financial year 2020. In the event that any of the five (5) largest shareholders waives their right to appoint a representative, the sixth largest shareholder shall be asked to appoint a representative and so on, until the nominating committee consists of five members. 

The nominating committee shall perform the tasks ensuing from the Swedish Code of Corporate Governance. The nominating committee shall produce proposals on the following matters to be presented to the Annual General Meeting in 2021 for resolution. 

1. 1. 1. A proposal on the chairman of the meeting 
      2. A proposal on the board of directors
      3. A proposal on the chairman of the board
      4. A proposal on fees for the board directors and the chairman 
      5. A proposal on remuneration for work of board committees
      6. A proposal on auditors 
      7. A proposal on fee for the Company’s auditors
      8. A proposal on the composition of the nominating committee 

Members of the nominating committee must relinquish their places on the committee if the shareholder who originally appointed them is no longer one of the five largest shareholders, following which new shareholders, in order of the size of their holding, will be offered the opportunity to elect a member. However, unless there are exceptional circumstances, no changes will be made to the composition of the nominating committee if only minor changes to voting rights have taken place, or the change occurs later than three months prior to the Annual General Meeting. Changes in the composition of the nominating committee shall be announced via a separate press release as soon as possible.

The chairman of the board of the Company is responsible for contacting the largest shareholders and handle the formation of the nominating committee in accordance with the procedure described below. The chairman of the board of the Company is also responsible for convening the nominating committee, once all members are appointed, to their first meeting. The nominating committee shall appoint a chairman of the committee. The nominating committee shall be disclosed on the Company’s website, http://www.g5e.com/corporate/governance, no later than six (6) months before the next Annual General Meeting.

The largest shareholders, who are entitled to appoint a representative in the committee, shall receive a written request from the chairman of the board of the Company in which they are invited to appoint a representative in the committee, and the largest shareholders shall provide their response, whether the shareholder wants to appoint a representative or not in the committee, no later than seven days from the day on which the request was sent to the shareholder. The response from the major shareholders shall be: i) unconditional (i.e. the acceptance of the assignment may not be conditioned upon the fulfillment of certain conditions, events or similar), ii) final and binding, and iii) irrevocable (i.e. a shareholder who decides not to appoint a representative may not change such decision later on even though the change is made prior to the announcement to the market of the members of the committee). 

In case the response is not provided within the time limit stated above, the shareholder shall be considered to have unconditionally and irrevocably decided not to appoint any representative in the committee, and a response which contains a condition shall also be treated as a decision not to appoint any representative. In case a) a shareholder responds that it does not want to appoint any representative, b) provides a conditioned response; or c) following the expiry of the above time limit, such shareholder has unconditionally and irrevocably thereby waived its right to appoint a representative in the committee. The chairman of the board shall thereafter contact the sixth largest shareholder and so forth applying the same procedure to appoint a representative as set forth above. 

Requests and responses provided in accordance with the above shall be made in writing (an e-mail is considered to be made in writing), and shall be duly kept, and the board of the Company shall through the chairman of the board receive a copy of the documents. In case a request is sent by regular mail, the registered address of the shareholder in Euroclear Sweden AB will be used.

The period of office of the nominating committee shall extend until a new nominating committee has been appointed. The Company is responsible for costs associated with the nominating committee's work. The members of the nominating committee shall not receive any compensation from the Company. 

Should any of the members of the nominating committee voluntarily resign from the assignment before their task is completed, the shareholder who appointed that member must appoint a successor, provided that the shareholder is still one of the five largest owners in terms of votes that are represented in the nominating committee. Such event shall be consistent with the notice and response procedures and time limits described above, including without limitation reasonable time limits, irrevocable and unconditional responses, and such other reasonable procedures as the chairman of the committee may decide. Notice shall be given and records shall be kept as provided above.

In addition to what is stated above the Swedish Corporate Governance Code shall be applicable to the nominating committee and its tasks.  

The Board's proposals to resolutions

Item 9b - Resolution regarding appropriations concerning the Company's profit and loss in accordance with the adopted balance sheet

The board of directors proposes a share dividend for the financial year 2019 and that of the Company’s free equity SEK 2.50 for each share (in total SEK 22,553,375) is distributed and that the remaining earnings be carried forward (in total SEK 145,432,625). 

Item 15 - Resolution regarding adoption of guidelines for remuneration to senior executives

The board of directors proposes that the Annual General Meeting adopts the following guidelines for remuneration to senior executives. Taking into account new EU regulations on shareholders' rights that have been implemented through amendments to the Companies Act and the Swedish Code of Corporate Governance, the remuneration guidelines in the board of director's proposal differ from the guidelines adopted by the Annual General Meeting in 2019.

The guidelines apply to the Company’s CEO and other members of the group management of the Company. The guidelines do not include remuneration decided by the Annual General Meeting, such as long-term incentive programs. 

The guidelines shall apply to decided remunerations and amendments to already decided remunerations, after the guidelines have been adopted by the Annual General Meeting in 2020. 

The guidelines shall guide decisions made by the board of directors’ remuneration committee and the CEO regarding remuneration to senior executives and decisions made by the board of directors regarding remuneration to the CEO.

The guidelines’ promotion of the Company’s business strategy, long-term interests and sustainability 

The Company’s vision entails that the Company shall be “one of few” in the mobile gaming space. To achieve this, the Company focuses on developing competitive mobile games for its target audience and through efficient marketing efforts promoting them to the same. As the Company’s most valuable resource is its employees, a strong employee focus is a foundation for achieving the vision of the group. Achieving the vision requires that the Company can offer competitive compensation. The guidelines ensure that senior executives can be offered a competitive total compensation package. 

The Company also has long-term share-based incentive programs. The programs have been decided by the Annual General Meeting. The programs include the CEO, other senior executives and key individuals across the organization. The performance requirement of the share-based programs is the company’s shares price which in the long-term has a clear relationship to the long-term value creation of the business. For further information about the programs see note C13 in the annual report or at g5e.com/corporate. 

Variable compensation covered by these guidelines shall aim to promote the Company’s business strategy and long-term interests. 

Forms of compensation 

The Company shall offer compensation that is in line with the going rate in the market and is based on factors such as the importance of the work duties and the executive’s expertise, experience and performance, and may consist of fixed base salary, short-term variable compensation, pension benefits, insurance and other benefits. In addition, the general meeting can decide on share-based compensation, which is not covered by these principles. 

Fixed salary 

Fixed salary constitutes compensation for a work contribution at a high professional level that ultimately aims to create value for all stakeholders of the Company, including but not limited to our users, shareholders and employees. Fixed salary shall be competitive in the market and based on the expertise, experience and performance of the executive. Salaries are reviewed yearly. 

Variable compensation 

In addition to fixed salary, variable compensation may be payable. Variable compensation should primarily be based on the financial development of the company, measured in growth and operating margin for the group. A target range and a sum of normalized results are defined for both parameters. This in turn defines the result. The target ranges shall be adopted yearly by the Compensation Committee and the Board of Directors. The variable compensation is paid out based on quarterly results, but the full measurement period is the financial year. A part of the variable compensation may also be tied to discretionary targets that the board deems are important to achieve the long-term strategy of the group. The variable compensation is structured as follows:

The CEO’s variable compensation during the year may not exceed 80 per cent of the fixed salary, divided so that 60 per cent shall be based on the Company’s financial development and 20 per cent shall be based on targets determined by the board of directors. The COO’s variable compensation for the year may not exceed 70 per cent of the fixed salary, divided so that 60 per cent shall be based on the Company’s financial development and 10 per cent shall be based on targets determined by the board of directors. The variable compensation to other executive management may not exceed 60 per cent of the fixed salary and shall be based on the Company’s financial development.

Pension and other benefits 

The pension plan is to be in line with normal conditions in the market and the same for senior executives as for other employees. The pension premium shall be defined contribution. 

Other benefits shall be of limited scope and may include, for example, disability, life and health insurance, and a car and travel benefit. 

Cessation of employment 

The employment agreements with senior executives shall contain a notice period of at least three months for the employees and a maximum of 12 months from the Company. Upon termination by the Company a severance pay may at most be equal to the fixed monthly salary for 12 months. 

In addition, compensation may be payable for any noncompete obligation. Such payment shall compensate the executive for possible loss of income and shall only be made during the period that the executive lacks a right to severance pay. The monthly compensation shall amount to a maximum of 100% of the executive’s monthly income. The compensation shall be payable during the time that the noncompete obligation applies, which shall be a maximum of nine months after the end of employment. 

Procedure for review, implementation and decision on guidelines

The Board of Directors has established a Compensation Committee. The Committee’s duties include conducting preparatory work for the Board’s decisions on proposed guidelines for compensation of senior executives, compensation and other terms of employment for this group. The Board shall review the guidelines yearly and propose updated guidelines for decision by the Annual General Meeting. 

The guidelines shall apply until new guidelines have been adopted by a general meeting of shareholders. The Compensation Committee shall also monitor and evaluate ongoing programs and programs concluded during the year for variable compensation for members of the Executive management team, application of guidelines for compensation of senior executives, and applicable compensation structures and compensation levels at the Company. The Compensation Committee is independent in relation to the Company and the executive management team. In the board of director’s handling of and decisions on compensation-related matters, the CEO or other members of the Executive Committee are not present to the extent they are the subject of the matter at hand. 

Departures from the guidelines 

The board of directors may decide to temporarily depart from the guidelines entirely or partly if there are special reasons for doing so and a departure is necessary to safeguard the Company’s long-term interests, or to safeguard the Company’s financial situation. 

Changes compared to previous years

The proposed guidelines submitted to the 2020 Annual General Meeting do not entail any significant changes in relation to the Company’s existing compensation guidelines. The Company has not received any views from the shareholders. 

Item 16 – Resolution of performance based, long-term share program for executive management and key employees

The board want to implement a new share-based incentive program for the Company’s executive management and other key employees, alike the incentive program resolved by the annual general meeting on May 8, 2019. Thus, the board propose a performance based, long-term share program (“LTIP 2020”). The board is convinced that the proposed program will be beneficial to the Company’s shareholders as it will contribute to the possibilities to recruit and retain competent employees, is expected to increase the commitment and the motivation of the program participants and will strengthen the participants’ ties to the group and its shareholders. As stated in the principal terms and conditions below, LTIP 2020 is proposed to have a vesting period of approximately 3 years. The board proposes that the Company’s CEO, who is also a director of the board, shall be given the opportunity to participate in LTIP 2020. The proposal regarding the CEO’s participation in LTIP 2020 is presented in a separate item 17 below. 

The board’s proposal under this item 16 is conditional upon that the Annual General Meeting resolves in accordance with the proposed resolutions under items 17 – 20 below.  

Principal terms and conditions:

1. LTIP 2020 is proposed to include a maximum of 140 senior executives and other key employees in the Company or its subsidiaries. Participants are offered to be allotted, free of charge, ordinary shares in the Company (“Performance Shares”), provided that the participant remains employed by the Company or any of its subsidiaries until the date of publication of the Company’s interim report for the period January – March 2023, estimated to be released on May 3, 2023.

2. The allotment of Performance Shares relates to the development in the total shareholders return of investment of the Company’s ordinary share (“TSR”) calculated from the volume weighted average price of the Company’s ordinary share[1] for the period from June 9, 2020 up to and including June 15, 2020 compared to the volume weighted average price of the Company’s ordinary share for a corresponding measurement period following publication of the Company’s interim report for the period January – March 2023, estimated to be released on May 3, 2023 (the “Performance Period”). TSR is the development of the share price, plus dividend payments, expressed in percentage for a specific period.

3. In order for allotment of Performance Shares to take place, the TSR must exceed a minimum level of 95 percent for the entire Performance Period equal to 25 percent per year during the Performance Period (the “Threshold Level”). Maximum allotment is awarded if the TSR reach or exceed a level of 205 percent for the entire Performance Period equal to 45 percent per year during the Performance Period (the “Target Level”). 

4. Not more than 160,000 Performance Shares may be allotted under the program. Provided that the TSR increase reaches the Target Level, the participants may be allotted the following maximum number of Performance Shares per person within six groups:

• Group 1: Chief Operative Officer (COO) – 10,000 Performance Shares
• Group 2: approx. 4 key employees – 4,200 Performance Shares
• Group 3: approx. 15 key employees – 3,300 Performance Shares
• Group 4: approx. 23 key employees – 1,700 Performance Shares 
• Group 5: approx. 44 key employees – 500 Performance Shares
• Group 6: approx. 50 key employees – 250 Performance Shares

5. The invitation to participate in LTIP 2020 shall be provided by the Company no later than July 15, 2020. Application for participation shall be submitted to the Company no later than July 31, 2020. Additional senior executives and/or key employees, who have not started their employment prior to the last date of application for participation, may be invited to participate in LTIP 2020 provided that their employment has started on or before December 31, 2020 and that the board consider their participation consistent with the rationale of LTIP 2020.

6. The number of Performance Shares included in LTIP 2020 is subject to customary recalculation due to changes in the capital structure, such as bonus issue, consolidation or split of shares, new issue or reduction of the share capital or similar measures.

7. Before the number of Performance Shares to be allotted is finally determined, the board shall examine whether the allotment is reasonable considering the Company’s financial results and position, the conditions on the stock market as well as other circumstances, and if not, as determined by the board, reduce the number of shares to be awarded to the lower number of shares deemed appropriate by the board.

8. The board, or a committee established by the board for this purpose, will be responsible for the detailed drafting and management of LTIP 2020, within the scope of the principal terms and conditions as specified. The board shall thereupon be entitled to make adjustments to meet specific rules or market conditions abroad. The board shall also be entitled to make other adjustments provided that there are substantial changes in the group or its surroundings which would signify that conditions for allocation in accordance with LTIP 2020 are no longer appropriate. 

1. Participation in LTIP 2020 presupposes that such participation is legally and suitably possible and that the administrative costs and financial efforts are reasonable in the opinion of the board. 

10. The board is moreover entitled to introduce an alternative incentive solution for employees in countries where participation in LTIP 2020 is not appropriate. Such alternative incentive solution shall, as far as practicable, be formulated employing the same conditions as for LTIP 2020. 

The costs of LTIP 2020

The total costs of LTIP 2020 if the maximum number of Performance Shares is allotted are estimated to a maximum of SEK 10,395,823, which corresponds to approximately 5.8 percent of total employment costs for 2019. The costs will be allocated over the years 2020–2023. The costs have been calculated as the sum of salary costs, including social costs, and administration costs for the program. Administration costs are estimated to be maximum SEK 1,000,000. If no allotment of shares is made, expenses for salaries of approximately SEK 3.5 million and administration will arise. The salary costs have been calculated based on the value, at the start of the program, of the Performance Shares that may be allotted if the Target Level is reached, with a reduction of the present value of estimated dividend payments during a three-year period. The estimate on maximum costs assumes that Target Level is reached and that the number of participants that will end their employment with the group during the Performance Period is the same as the historical average. In the calculation, a share price per share of SEK 125.7 has been applied. The number of outstanding shares is estimated to increase with not more than 160,000 shares, which would correspond to a dilutive effect of approximately 1.77 percent in relation to the number of registered shares in the Company at the date of the notice.

Effect on certain key ratios

The costs and dilution are expected to have marginal effect on key ratios of the Company. The annual cost of LTIP 2020, including social charges, is estimated to be approximately SEK 1.4 million based on the above assumptions. This cost can be related to the Company’s total employment costs, including social charges, of SEK 179 million in 2019.

Delivery of shares within the framework of LTIP 2020 

In order to implement LTIP 2020 in a cost-efficient way, the board has considered various alternatives for delivery of ordinary shares to the participants in the program. In this respect, the board has found the most cost-efficient method to include the following steps: 

1. The board resolves on a directed new issue of class C shares to an assisting bank at an issue price corresponding to the quotient value of the shares (SEK 0.1 per share). For the purpose of this step 1), the board propose that the general meeting authorizes the board to resolve on issuance of class C shares as set out in item 18 below.
2. The board resolves to repurchase of own class C shares from the assisting bank at quotient value of SEK 0.1 per share. For the purpose of this step 2), the board proposes that the general meeting authorizes the board to resolve to acquire own class C shares as set out in item 19 below.
3. The Company will hold its own class C shares until the end of the Performance Period under LTIP 2020. When the number of shares to be delivered under LTIP 2020 has been calculated, the board will resolve to convert class C shares held by the Company into ordinary shares to the extent needed to fulfil the Company’s commitments under LTIP 2020, while remaining class C shares will be redeemed or kept by the Company to secure delivery of ordinary shares under other share-based incentive programs adopted by any general meeting. The possibility to convert and redeem class C shares is stated in the Company’s articles of association.  
4. The ordinary shares held by the Company following completion of the conversion of class C shares, are transferred, free of charge, to the participants in LTIP 2020 who, according to the terms and conditions for LTIP 2020, are entitled to receive ordinary shares in the Company. For the purpose of this step 4), the Board proposes that the general meeting resolves to transfer own ordinary shares as set out in item 20 below.

Preparation of the proposal

The proposal for LTIP 2020 has been prepared by the Company’s remuneration committee and the board with assistance from independent expertise and in consultation with major shareholders.

Vlad Suglobov, board director and CEO, has not participated in preparing the proposal.

Previous incentive programs in the Company

For a description of the Company’s other share or share price based incentive programs, please see note C13 in the Company’s annual report of 2019, and the Company’s website, www.g5e.com/corporate/share.

Other

The proposal under this item 16 is conditional upon that the Annual General Meeting resolves the board’s proposals in items 17 – 20 below.  

Majority requirement 

A valid resolution in respect of the board’s proposal at the general meeting requires that the resolution be supported by shareholders with more than half of the votes cast at the Annual General Meeting or, in the event of a tied vote, through the chairman exercising his casting vote.

Item 17 – Resolution on a performance based, long-term share program for the Company’s CEO

It is proposed that the Company’s CEO, who is also a director of the Company, shall be given the opportunity to participate in LTIP 2020 on the terms set out in item 16 above. The Company’s CEO may be allotted a maximum number of 10,000 Performance Shares of the 160 000 Performance Shares offered under LTIP 2020.

The proposal under this item 17 is conditional upon that the Annual General Meeting before has resolved in accordance with item 16 above and resolves in accordance with the proposals in items 18 – 20 below.

Majority requirement 

A valid resolution in respect of the board’s proposal at the general meeting requires that the resolution is supported by shareholders representing at least 9/10 of the number of votes cast and the number of shares represented at the Annual General Meeting. Any shares held by the Company’s CEO shall be disregarded in the voting.

Item 18 – Resolution to authorize the board of directors to resolve on issuance of class C shares 

The board proposes that the Annual General Meeting resolves to authorize the board, up until the end of the next Annual General Meeting, on one or more occasions, to increase the Company’s share capital by not more than SEK 16,000 through issuance of not more than 160,000 class C shares, each with a quotient value of SEK 0.1. With derogation from shareholders' pre-emption rights, a bank shall be entitled to subscribe for the new class C shares at a subscription price corresponding to the quotient value of the shares. The purpose of the authorization and the reason for derogating from shareholders' preferential rights in connection with the issue of class C shares is to ensure delivery of shares to participants in the proposed incentive program LTIP 2020 (items 16 - 17 above). 

The proposal under this item 18 is conditional upon that the Annual General Meeting before has resolved in accordance with items 16 - 17 above and resolves in accordance with the proposals in items 19 – 20 below.

Majority requirement 

A valid resolution in respect of the board’s proposal at the general meeting requires that the resolution is supported by shareholders representing at least 2/3 of the number of votes cast and the number of shares represented at the Annual General Meeting.  

Item 19 – Resolution to authorize the board of directors to resolve on acquisition of own class C shares 

The board proposes that the Annual General Meeting resolves to authorize the board, during the period until the end of the next Annual General Meeting, on one or more occasions, to acquire own class C shares. The acquisitions may only be made through a public offer directed to all holders of class C shares and shall comprise all outstanding class C shares. The number of shares acquired may not result in the Company holding at any time more than ten (10) percent of the total number of shares in the Company. The acquisitions shall be conducted at a purchase price corresponding to the quotient value of the share. Payment for acquired class C shares shall be made in cash. The purpose of the authorization to acquire own class C shares is to ensure that the Company’s is able to fulfil its obligations under the proposed incentive program LTIP 2020 (items 16 – 17 above). The board has issued an opinion in accordance with Chapter 19, Section 22 of the Companies Act.

The proposal under this item 19 is conditional upon that the Annual General Meeting before has resolved in accordance with items 16 - 18 above and resolves in accordance with the proposal in item 20.

Majority requirement 

A valid resolution in respect of the board’s proposal at the general meeting requires that the resolution is supported by shareholders representing at least 2/3 of the number of votes cast and the number of shares represented at the Annual General Meeting.  

Item 20 – Resolution to resolve on transfer of own ordinary shares 

The board proposes that the Annual General Meeting resolves to transfer ordinary shares in the Company as follows:

• A maximum of 160,000 ordinary shares in the Company may be transferred (or such higher number of ordinary shares that may follow from a recalculation resulting from a bonus issue, split, preferential issue or similar measure). 
• The ordinary shares may be transferred, free of charge, to participants in LTIP 2020 who, according to the terms and conditions for LTIP 2020, are entitled to receive ordinary shares in the Company. 
• Transfer of ordinary shares shall be made at the point in time and in accordance with the other conditions that the participants of LTIP 2020 are entitled to receive grants of ordinary shares.

The reason for deviating from shareholders’ pre-emption rights is that the transfer of shares is part of the execution of LTIP 2020. Thus, the board is of the opinion that it is beneficial to the Company to transfer shares in accordance with the proposal.

The proposal under this item 20 is conditional upon that the Annual General Meeting before has resolved in accordance with items 16 - 19.

Majority requirement 

A valid resolution in respect of the board’s proposal at the general meeting requires that the resolution is supported by shareholders representing at least 9/10 of the number of votes cast and the number of shares represented at the Annual General Meeting.

Item 21 - Resolution to authorize the board of directors to resolve on issue of ordinary shares 

The board proposes that the Annual General Meeting, until the end of the next Annual General Meeting, authorizes the board of directors, with or without deviation from the shareholders’ pre-emptive right, on one or more occasions, to resolve on issuance of ordinary shares. Payment may be made in cash, in kind, through a set-off, or on conditions following from Chapter 2, Section 5 of the Swedish Companies Act.

The number of shares issued pursuant to this authorization must correspond to a maximum of ten (10) percent of the share capital consisting of ordinary shares issued at the time of the 2020 Annual General Meeting. 

The objective of the authorization is to enable acquisitions of companies and to raise capital. Derogation from shareholders’ pre-emptive right shall be allowed if it is objectively regarded to be in the shareholders’ best interest to deviate from the pre-emptive right. Reasons for such a deviation may include that a rights issue runs the risk of not being fully subscribed, the costs and timing or a desire in the Company's interest to bring one or more major shareholders into the Company. The issue price shall be set at market level taken into account a customary discount. 

Majority requirement 

A valid resolution requires that shareholders at the meeting representing at least 2/3 of the numbers of shares and votes represented votes in favor of the proposal. 

Item 22 - Resolution to authorize the board of directors to resolve to acquire and transfer own ordinary shares

The board proposes that the Annual General Meeting, until the end of the next Annual General Meeting, authorizes the board of directors to resolve to acquire and transfer the Company’s own ordinary shares as follows.

Acquisitions may take place of at most the number of ordinary shares so that the Company's total shareholding of its own ordinary shares corresponds to a maximum of ten (10) per cent of all registered shares issued by the Company. Acquisitions may take place by trading on the regulated market place NASDAQ Stockholm. Payment for the shares acquired shall be made in cash. 

All ordinary shares held by the Company on the date of the board's decision may be transferred by trading on NASDAQ Stockholm or in other ways to a third party in connection with company acquisitions. Compensation for transferred shares shall be paid in cash, in kind, by set-off of a claim on the Company, or otherwise with conditions attached pursuant to Chapter 2, Section 5 of the Companies Act.

Acquisition and transfer of own ordinary shares may take place on one or more occasions during the period until the end of next Annual General Meeting, at a price per share that is within the price range registered at each occasion. If a transfer is made in another way than on NASDAQ Stockholm, the price is to be set so that it is not below market level, where however a discount at market level in relation to the traded share price may be applied.

The board's proposal for authorization is intended to provide the board with greater possibilities to adapt the capital structure of the Company to the capital requirement from time to time and thus be able to contribute to increased shareholder value. In addition, the authorization intends to enable the board to transfer shares in connection with acquisitions of companies through payment in the form of the Company's own shares or to use repurchased shares to settle the Company’s long term incentive program which entails a lower future dilution. The intention of the authorization does not allow the Company to trade in its own shares with the intention of generating short-term profits.

The board of directors has issued a statement pursuant to Chapter 19, Section 22 of the Swedish Companies Act. 

Majority requirement

A valid resolution requires that shareholders at the meeting representing at least 2/3 of the numbers of shares and votes represented vote in favor of the proposal. 

Item 23 - Resolution to authorize the board of directors to resolve to repurchase warrants issued under the option program 2017/2020

The board of directors proposes that the Annual General Meeting until the end of next Annual General Meeting authorizes the board of directors, on one or more occasions, to resolve to repurchase warrants issued under the share-based incentive plan adopted at the 2017 Annual General Meeting. The price for the repurchase of warrants shall correspond to the market value (which is to be based on the average volume-weighted price for the Company's ordinary share for a period close to the period of repurchase).

A repurchase of warrants in accordance with this resolution shall be conditional upon each individual option holder wishing to have warrants redeemed at the same time utilizes an equivalent amount of the total number of warrants for subscription of new shares. Thus, oversubscription can be avoided. Example: If the option holder wishes to have 50 percent of its warrants repurchased by the Company, the option holder must utilize the remaining 50 percent of warrants for subscription of new shares in the Company. If the option holder wishes to have 25 percent of its warrants repurchased by the Company, the option holder must utilize at least 25 percent of the total number of warrants for subscription of new shares in the Company. 

The board of directors shall be authorized to resolve on the more detailed terms for the implementation of the repurchase of warrants as well as the administrative measures that may be required to implement this resolution. 

The purpose of the repurchase of warrants is to avoid dilution of the Company’s shares as well as to offer the option holders the opportunity to acquire the value of the warrants. Repurchased warrants shall be held in custody of the Company and expire without further transfer. 

Item 24 – Resolution to amend the Articles of Association

As there is no requirement to include information regarding the record date in the Articles of Association, since this is regulated by the Companies Act (2005: 551), and as the current wording of paragraph 11 of the Articles of Association is not compatible with an expected change in the Companies Act which is expected to enter into force in 2020, the Board of Directors proposes that the Annual General Meeting resolves that paragraph 11 of the Articles of Association shall be amended as follows.

11 §. Aktieägare som vill delta i förhandlingarna vid bolagsstämma ska dels vara upptagen som aktieägare i utskrift eller annan framställning av hela aktieboken avseende förhållandena fem vardagar före stämman, dels anmäla sig till bolaget senast den dag som anges i kallelsen till stämman. Sistnämnda Denna dag får inte vara söndag, annan allmän helgdag, lördag, midsommarafton, julafton eller nyårsafton och inte infalla tidigare än femte vardagen före stämman. Aktieägare får ha med sig biträden vid bolagsstämman endast om han eller hon anmäler antalet biträden till bolaget i enlighet med det förfarande som gäller för aktieägares anmälan till bolagsstämman. Ombud behöver ej anmäla antalet biträden. Antalet biträden får vara högst två.

English translation

11 §. Shareholders wishing to attend the general meeting must be found on a printed copy or other presentation of the register of shareholders reflecting circumstances five (5) days before the meeting and must notify the Company of intent to participate no later than the day specified in the notice of meeting. The last-mentioned. This day cannot be a Sunday, other public holiday, Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and cannot be earlier than five (5) weekdays before the meeting. Shareholders may bring with them assistants provided that he or she notifies the number of assistants to the Company in accordance with the procedure applicable for shareholders’ notification to the general meeting. Agents must not report the number of assistants. The number of assistants may not exceed two. 

A valid resolution requires that shareholders at the meeting representing at least 2/3 of the numbers of shares and votes represented vote in favor of the proposal. 

Item 25 - Resolutions on (a) reduction of the share capital by way of cancellation of own shares, and (b) increase of the share capital by way of bonus issue

(a) Reduction of the share capital by way of cancellation of own shares

The board of directors proposes that the annual general meeting resolves to reduce the share capital by way of cancellation of own shares which have been repurchased by the board of director based on the authorization given at the annual general meeting in 2019. 

The reduction of the share capital shall be made with SEK 17,800 by way of cancellation of 178,000 shares. The purpose of the reduction is allocation to unrestricted equity to be used as resolved by the annual general meeting in accordance with item (b) below. 

The resolution to reduce the share capital under this item (a) may be effectuated without obtaining an authorization from the Swedish Companies Registration Office or, in disputed cases, a court of general jurisdiction, as the Company simultaneously effectuates a bonus issue, as set out under item (b) below, with an amount corresponding to no less than the amount the share capital is being reduced with, as set out above. Combined, these measures entail that neither the Company’s restricted equity nor its share capital is reduced.

(b) Increase of the share capital by way of bonus issue 

With the purpose of restoring the share capital after the proposed reduction of the share capital, as set out under item (a) above, the board of directors proposes that the annual general meeting on the same time resolves to increase the share capital by way of a bonus issue with an amount corresponding to SEK 17,800, which equals the amount the share capital is reduced with by way of cancellation of shares, as set out under item (a) above. The bonus issue shall be carried out with the amount being transferred from unrestricted equity without the issuance of new shares. 

The board of directors proposes that the resolutions under items (a) and (b) above will be voted on at the annual general meeting as one joint resolution.

Majority requirement

A valid resolution requires that shareholders at the meeting representing at least 2/3 of the numbers of shares and votes represented vote in favor of the proposal. 

Item 26 - Resolution to authorize the board of directors to undertake minor adjustments of the resolutions

The board proposes that the Annual General Meeting authorizes the board, the CEO or the person otherwise designated by the board, to undertake minor adjustments and clarifications of the resolutions made by the Annual General Meeting to the extent it is required for registration of the resolutions.   

Number of shares and votes in the Company 

At the date of this notice, the Company has a total of 9,281,350 shares outstanding, representing a total of 9,047,350 votes. At the date of submission of this notice to the Swedish Gazette, the Company holds 178,987 of its ordinary shares and 260,000 C-shares. 

Shareholders' right to request information 

Shareholders are informed of their right under Chapter 7, Section 32 of the Swedish Companies Act to request information at the Annual General Meeting in respect of circumstances that may affect the assessment of an item on the agenda and circumstances which may affect the assessment of the Company's financial situation. The board and the CEO shall provide such information if the board considers that this can be done without significant damage to the Company. The duty of disclosure also applies to the Company’s relationships with other companies in the group, the consolidated financial statements and such circumstances as mentioned above applicable to subsidiaries.

Shareholders have a right to ask the Company questions at the Annual General Meeting on the items and proposals to be considered at the Annual General Meeting.

Documents

Accounting documents, audit reports and other documents subject to the Annual General Meeting will be available at the Company’s office no later than three weeks before the general meeting and will be sent upon request in connection therewith to shareholders’ stating their postal address. At the stated time, the documents will also be available at the Company’s website www.g5e.com/corporate. All abovementioned documents will be presented at the Annual General Meeting. 

Stockholm, May 2020

G5 Entertainment AB (publ)

The Board of Directors

[1] The share price is determined from the listed settled prices according to Nasdaq Stockholm’s stock exchange list for shares in G5 Entertainment AB (publ), however, not less than the share’s quotient value being SEK 0.1. Days at which no paid price is quoted shall be excluded from the calculation of the volume weighted average price.  

For additional information, please contact:
Petter Nylander, Chairman, +46 76 52 50 955
Stefan Wikstrand, CFO, +46 76 00 11 11 5

The information was submitted for publication, through the agency of the contact person set out above, at 17.30 CET on October 31, 2019.

About G5 Entertainment
G5 Entertainment AB (publ) (G5) develops and publishes high quality free-to-play games for both smartphones and tablets that are family-friendly, easy to learn, and targeted at the widest audience of both experienced and novice players. The group distributes their games through the Apple, Google, Amazon, and Windows application stores. The company’s portfolio includes popular games like, Jewels of Rome®, Hidden City®, Mahjong Journey®, Homicide Squad®, The Secret Society® and Wordplay: Exercise your brain.

Through its head entity G5 Entertainment AB (Publ), G5 Entertainment Group is publicly listed on Nasdaq Stockholm’s main market mid cap segment under trade symbol G5EN.ST. G5 Entertainment has been ranked in Deloitte’s Top 500 Fastest Growing Tech Companies in Europe, the Middle East and Africa for 6 years in a row.

More information about G5 Entertainment can be found at http://www.g5e.com/corporate