NOTICE OF ANNUAL SHAREHOLDERS’ MEETING IN INCOAX NETWORKS AB

The English text is an unofficial translation. In case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail.

The shareholders of InCoax Network AB, Reg. No. 556794-1363, are hereby invited to attend the annual shareholders’ meeting to be held at the company’s premises at Utmarksvägen 4 in Gävle, on Friday 17 May 2019, at 1.00 p.m.

Right to participate and notification

Shareholders wishing to participate in the annual shareholders’ meeting must:

  • partly be listed in the company’s share register kept by Euroclear Sweden AB as of Saturday 11 May 2019; and
  • partly have given a notice of their intention to participate to the company no later than on Monday 13 May 2019, by mail to InCoax Networks AB, att: Bolagsstämma, Utmarksvägen 4, SE-802 91 Gävle, Sweden, by e-mail to marie.svensson@incoax.com or by telephone to +46(0)73-326 41 21. The notification should specify the shareholder’s complete name, personal identity number or company registration number, the number of shares held by the shareholder, address, telephone number during work hours and, when applicable, information on the number of advisors (2 at the most).

Trustee registered shares

Shareholders, whose shares are trustee-registered through a bank or other trustee must, in order to be entitled to participate in the shareholders’ meeting, temporarily register their shares in their own name in the company’s share register kept by Euroclear Sweden AB. Such re-registration of ownership must be implemented no later than as of Saturday 11 May 2019. Accordingly, shareholders must well in advance before Friday 10 May 2019 request the trustee thereof, as the record date occurs on a Saturday.

Proxy etc.

In case the shareholder should be represented by a proxy, the proxy must bring a written power of attorney, which is dated and duly signed by the shareholder, to the meeting. The validity term of the power of attorney may not be more than one year, unless a longer validity term is specifically stated in the power of attorney (however at the longest five years). If the power of attorney is issued by a legal entity, the representing proxy must also present an up-to-date registration certificate or equivalent document for the legal entity. In order to facilitate the entrance at the meeting, a copy of the power of attorney and other authorization documents should preferably be attached to the shareholder’s notification to participate in the meeting. A template power of attorney is available at the company’s website (www.incoax.com), and will be sent to shareholders who request it and state their address.

Proposed agenda

  1. Opening of the meeting.
  2. Election of Chairman of the meeting.
  3. Preparation and approval of the register of voters.
  4. Approval of the agenda.
  5. Election of one or two persons to confirm the minutes.
  6. Determination as to whether the meeting has been duly convened.
  7. Address by the CEO.
  8. Presentation of the Annual Report and Audit Report.
  9. Resolution on:
    a)         adoption on the profit and loss statement and balance sheet;
    b)         distribution of the company’s loss according to the adopted balance sheet; and
    c)          discharge from liability for the members of the board and the CEO.
  10. Determination of the number of board members, auditors and deputy auditors.
  11. Determination of remuneration for the board members and the auditor.
  12. Election of board members and auditor.
  13. Resolution on instruction and charter for the Nomination Committee.
  14. Resolution on authorization regarding new share issues.
  15. Resolution on implementation of a long-term incentive program.
  16. Closing of the meeting.

Proposed resolutions

Item 8 b): Resolution on distribution of the company’s loss according to the adopted balance sheet

The board of directors proposes that no dividends are paid and that total available funds of SEK 23,853,899 are carried forward to a new account.

Item 9: Determination of the number of board members, auditors and deputy auditors

Shareholders that together represent more than 58 per cent of all shares and votes in the company (after final registration with the Swedish Companies Registration Office (Sw. Bolagsverket) of the directed new share issue of 3,040,000 shares, which was resolved by the board of directors on 18 March 2019, pursuant to the authorization granted by the annual shareholders’ meeting on 17 May 2018) (the “Proposers”) propose that that five ordinary board members should be elected until the end of the next annual shareholders’ meeting. The board of directors proposes that one registered public accounting firm, without deputy auditor, should be elected as auditor until the end of the next annual shareholders’ meeting.

Item 10: Determination of remuneration for the board members and the auditor

The Proposers propose that remuneration to the board of directors shall be paid with SEK 300,000 to the Chairman of the board of directors (unchanged since previous year) and with SEK 150,000 to each of the other board members (unchanged since previous year). The board of directors proposes that remuneration to the auditor shall be paid in accordance with customary norms and approved invoice.

Item 11: Election of board members and auditor

The Proposers propose that Richard Tooby, Anders Nilsson, Pär Thuresson and Patrik Widlund are re-elected as ordinary board members and that Peter Agardh is elected as new ordinary board member. At last, it is proposed to re-elect Richard Tooby as Chairman of the board of directors. 

Peter Agardh, born 1967, is currently the CEO of the Agenta Group. Agenta provides consultancy and management solutions to institutional investors, and within the framework of his assignments, Peter has worked with several of the largest institutions in Sweden. Peter Agardh is founder and co-owner of the Agenta Group, and as a CEO of an authorized company since 2006, he has extensive experience of operating in a regulated environment. Peter Agardh holds indirectly 3,056,995 shares in the company via the company Saugatuck Invest AB. Peter Agardh is considered to be independent in relation to the company as well as its senior management but not in relation to major shareholders.

Information on the board members who are proposed for re-election can be found in the Annual Report and at the company’s website, www.incoax.com.

The board of directors proposes that the registered public accounting firm KPMG AB is elected as new auditor. KPMG AB has informed that the company’s present auditor, the authorized public accountant Mikael Larsson, will be appointed as the responsible auditor.

Item 12: Resolution on instruction and charter for the Nomination Committee

The board of directors proposes that the annual shareholders’ meeting resolves to appoint a Nomination Committee before coming election and remuneration and that an instruction and charter shall be adopted in accordance with the following substantial terms.

The Nomination Committee shall be comprised of four members, one representative for each of the three largest shareholders on the last banking day in September who wish to appoint a member and the Chairman of the board. The three largest shareholders in these instructions are the ownership grouped registered shareholders or in another way known shareholders as per the last banking day in September.

As soon as possible after the details of the largest shareholders on the final banking day in September are known, the Chairman of the board shall contact the three largest shareholders to find out whether they wish to appoint members of the Nomination Committee. If one or more of the three largest shareholders declines to appoint a member of the Nomination Committee, the Chairman of the board shall offer other major shareholders the opportunity to appoint a member of the Nomination Committee. If such an offer is made, it should be made to the largest shareholders in order (i.e. first to the fourth largest shareholder, then the fifth largest shareholder, and so on). This procedure shall continue until the Nomination Committee comprises four members including the Chairman of the board.

At its first meeting, the Nomination Committee shall appoint a Chairman among its members.

Information regarding the appointed Nomination Committee shall include the names of the three appointed members, together with the names of the shareholders who have appointed the members, and the information shall be announced no later than six months before the proposed annual shareholders’ meeting.

The Nomination Committee’s term shall run until such time as a new Nomination Committee has been elected.

If there is a change in ownership among the largest shareholders and a shareholder not previously entitled to appoint a member of the Nomination Committee thereby becomes a larger shareholder than one or more of the shareholders who have already appointed a Nomination Committee member, (“a new major owner”), the Nomination Committee shall, if the new major owner makes a request to appoint a member of the Nomination Committee, decide that the Nomination Committee member who represents the smallest shareholding after the shift should be dismissed and replaced by the member appointed by the new major owner. Should a new major owner wish to appoint a member of the Nomination Committee, the new major owner should notify the Chairman of the Nomination Committee. The notification should contain the name of the person the new major owner appoints as a member of the Nomination Committee. Notwithstanding what has been stated in the foregoing, unless special reasons exists, no changes of the composition of the Nomination Committee shall be made if only marginal changes in voting power has occurred or if the change occurs later than two months before the annual shareholders’ meeting.

If a member who represents a shareholder in the Nomination Committee should leave its assignment prematurely, the Nomination Committee shall without delay request that the shareholder who appointed the member appoint a new member. If no new member is appointed by the shareholder, the Nomination Committee shall offer other major shareholders the opportunity to appoint a member of the Nomination Committee. Such an offer shall be made to the largest shareholders in order (i.e. first to the largest shareholder who has not already appointed a member of the Nomination Committee or who has previously foregone that right, and then to the next largest shareholder who has not already appointed a member of the Nomination Committee or who has previously foregone that right, and so on). This procedure shall continue until the Nomination Committee is complete.

The Nomination Committee’s main responsibility is to submit proposals regarding election of Chairman at the annual shareholders’ meeting, election of and remuneration for the members of the board, election of and remuneration for the auditor, as well as principles for the appointment of the Nomination Committee and instructions for the Nomination Committee.

These principles for the Nomination Committee's appointment and instructions for the Nomination Committee shall be valid until further notice until a resolution on amendment is passed by a shareholders’ meeting.

Item 13: Resolution on authorization regarding new share issues

The board of directors proposes that the annual shareholders’ meeting resolves to authorize the board of directors, up until the next annual shareholders’ meeting, at one or several occasions, with or without deviation from the shareholders’ preferential rights and with or without provisions regarding contribution in kind, set-off or other conditions, to resolve on new share issues. The reason for why a deviation from the shareholders’ preferential rights should be possible is to enable the company to source working capital, to be able to execute acquisitions of companies or operating assets as well as to enable new issues to industrial partners within the framework of partnerships and alliances. The total number of shares that may be issued shall not exceed 1,373,494 shares, which corresponds to a dilution of approximately 10 per cent calculated on the number of outstanding shares in the company after final registration with the Swedish Companies Registration Office of the directed new share issue of 3,040,000 shares, which was resolved by the board of directors on 18 March 2019, pursuant to the authorization granted by the annual shareholders’ meeting on 17 May 2018.

In case the authorization is used for a new issue with deviation from the shareholders’ preferential rights, the issue shall be made on market terms.

Item 14: Resolution on implementation of a long-term incentive program

The board of directors proposes that the annual shareholder’s meeting resolves to implement a long-term incentive program for one senior executive and eight other employees in the company based on issue of warrants (the ”Warrants Program 2019/2022”).

To implement the Warrants Program 2019/2022, the board of directors proposes that the annual shareholders’ meeting resolves on directed issue of warrants, on the following terms and conditions:

  1. A maximum of 70,000 warrants shall be issued for the Warrants Program 2019/2022.
  2. With deviation from the shareholders’ preferential rights, the right to subscribe for the warrants shall only vest in one senior executive and eight other employees in the company following an offer from the board of directors in accordance with the following distribution:
Position Number of warrants
Chief Sales and Marketing Officer A maximum of 10,000 warrants.
Other participants (8 persons) A maximum of 60,000 warrants may be allocated to this group in the aggregate, and no participant may be offered more than 10,000 warrants.
  1. The participants in the Warrants Program 2019/2022 are partly new employees who do not participate in existing incentive programs since previously and partly selected employees who do not participate in existing incentive programs since previously or who already are participating in existing incentive programs but where the board of directors has found reasons to offer additional incentive programs. The overall reason for the implementation of the Warrants Program 2019/2022 and the deviation from the shareholders’ preferential rights are to be able to create possibilities for the company to retain competent staff by offering a long-term ownership engagement for employees. Such long-term ownership engagement is expected to contribute to an increased alignment of interests between the participants and the shareholders, and also promote a long-term commitment to the company’s development.
  2. Subscription of the warrants shall be made on a separate subscription list on 15 June 2019, at the latest, with a right for the board of directors to prolong this period.
  3. Right to subscribe for warrants under the Warrants Program 2019/2022 requires that the participant, at the time of subscription, holds a position in the company or has signed an agreement regarding it and has not, at such time, informed or been informed that the employment or assignment will be terminated.
  4. The participants can subscribe for a lower number of warrants compared to what the participants have been offered. Over-subscription cannot occur.
  5. The warrants shall be issued to the fair market value of the warrants at the time of subscription, which shall be determined by an independent valuation institute in accordance with the Black & Scholes valuation formula.
  6. Payment for the warrants shall be made against cash consideration no later than one week from the time of subscription, with a right for the board of directors to prolong this period.
  7. Each warrant entitles the right to subscribe for one new share in the company for a subscription price per share corresponding to 200 per cent of the volume weighted average price according to Nasdaq First North’s official price list for shares in the company during the period from and including 20 May 2019 to and including 3 June 2019. The subscription price shall be rounded to the nearest whole öre, whereupon 0.5 öre shall be rounded upwards.
  8. Subscription of shares by virtue of the warrants may be effected from and including 1 June 2022 to and including 30 June 2022.
  9. A share that has been issued by virtue of a warrant confers the right to dividend the first time on the record date for dividends that occurs immediately following effectuation of subscription to such extent that the share has been recorded in the company’s share ledger as interim share.
  10. Applicable terms for re-calculation and other terms and conditions for the warrants are set out in the complete terms and conditions for the warrants.
  11. In case all warrants are exercised for subscription of new shares, the share capital will increase with SEK 17,500.

Other information regarding the Warrants Program 2019/2022

As the warrants in the Warrants Program 2019/2022 will be issued to the participants at their fair market value, it is the company’s assessment that no social costs will occur for the company as a result of the Warrants Program 2019/2022. The costs related to the Warrants Program 2019/2022 will hence only be composed of limited costs for implementation and administration of the program.

As per the date of the notice, the number of shares in the company amounts to 9,961,442. After final registration with the Swedish Companies Registration Office of the directed new share issue of 3,040,000 shares, which was resolved by the board of directors on 18 March 2019, pursuant to the authorization granted by the annual shareholders’ meeting on 17 May 2018, the total number of shares in the company will amount to 12,361,442.  

In case all warrants issued in connection with the Warrants Program 2019/2022 are exercised for subscription of new shares, a total of 70,000 new shares will be issued, which corresponds to a dilution of approximately 0.56 per cent of the company’s share capital and votes after full dilution, calculated on the number of shares that will be added upon full utilization of all warrants issued under the Warrants Program 2019/2022 (after final registration with the Swedish Companies Registration Office of the directed new share issue of 3,040,000 shares, which was resolved by the board of directors on 18 March 2019, pursuant to the authorization granted by the annual shareholders’ meeting on 17 May 2018). The dilution is only expected to have a marginal effect on the company’s key ratio “Earnings per share before taxes” for the full year 2018.

Currently, there are incentive programs in the form of four warrants programs outstanding in the company. In case all outstanding incentive programs and the now proposed Warrants Program 2019/2022 are exercised in full, a total of 902,313 new shares will be issued, which corresponds to a total dilution of approximately 6.80 per cent of the company’s share capital and votes after full dilution, calculated on the number of shares that will be added upon full utilization of all outstanding incentive programs and the now proposed Warrants Program 2019/2022 (after final registration with the Swedish Companies Registration Office of the directed new share issue of 3,040,000 shares, which was resolved by the board of directors on 18 March 2019, pursuant to the authorization granted by the annual shareholders’ meeting on 17 May 2018).

The above calculations regarding dilution and impact on key ratios are subject to re-calculation of the warrants in accordance with the customary recalculation terms set out in the complete terms and conditions for the warrants.

The proposal for the Warrants Program 2019/2022 has been prepared by the board of directors in consultation with external consultants.

Particular majority requirements

For a valid resolution on the proposal pursuant to item 13, the proposal has to be supported by shareholders representing at least two-thirds of the votes cast as well as of all shares represented at the annual shareholders’ meeting. For a valid resolution on the proposal pursuant to item 14, the proposal has to be supported by shareholders representing at least nine-tenths of the votes cast as well as of all shares represented at the annual shareholders’ meeting.

Duty of disclosure at the annual shareholders' meeting

The shareholders are reminded of their right to request information at the shareholders’ meeting pursuant to chapter 7 section 32 of the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)).

Accounting documents and complete proposals

The Annual Report and the Audit Report and the complete proposals pursuant to items 12-14 will be available at the company’s office at Utmarksvägen 4, SE-802 91 Gävle, Sweden and at the company’s website (www.incoax.com) as from no later than three weeks before the annual shareholders’ meeting, and will also be sent to shareholders who request it and state their address. Copies of the documents will also be available at the annual shareholders’ meeting.

Processing of personal data

For information on how your personal data is processed, see https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.

Number of shares and votes in the company

As of the date of this notice to attend the annual shareholders’ meeting, the total number of shares and votes in the company amounts to 9,961,442. After final registration with the Swedish Companies Registration Office of the directed new share issue of 3,040,000 shares, which was resolved by the board of directors on 18 March 2019, pursuant to the authorization granted by the annual shareholders’ meeting on 17 May 2018, the total number of shares and votes in the company will amount to 12,361,442. The company does not hold any own shares.

____________________

Gävle in April 2019
InCoax Networks AB (publ)
The Board of Directors

This information was submitted for publication, through the agency of the contact person set out below, at 10.15 CET on April 16, 2019.

For more information:
Peter Carlsson, CEO, InCoax Networks AB
peter.carlsson@incoax.com
+46 70-8563427

About InCoax Networks AB (publ)
InCoax is innovating the future of broadband access. In:xtnd™ provides the next-generation smart and sustainable networking solutions to the world’s leading telecom and broadband service providers. For additional information about how we are saving the world from complicated, visit www.incoax.com. Augment Partners AB, tel. +46 8-505 651 72, info@augment.se is acting as the Company ́s Certified Adviser.