Notice to the Annual General meeting in Mycronic AB (publ)

The shareholders in Mycronic AB (publ) are hereby given notice of the Annual General Meeting to be held on Tuesday, May 9, 2023, at 5:00 p.m. at the company’s premises at Nytorpsvägen 9 in Täby. The entrance will open at 4:00 p.m.

Notification of participation in a guided tour of the company’s premises
After the Annual General Meeting, there will be an opportunity for the shareholders who participated physically at the general meeting to participate in a guided tour of Mycronic’s production premises. Those who wish to participate in the guided tour must no later than 12:00 p.m. on Wednesday, May 3, 2023, notify their intention to participate in the guided tour in one of the ways specified under the heading "Notification of physical participation or participation through a representative". There is a limited number of places on the guided tour. Participating in the guided tour therefore requires notification in advance in accordance with the above. The guided tour is free of charge. A guided tour takes approximately one hour. Mycronic takes ongoing measures to improve accessibility so that everyone can visit the company’s premises without obstructions. However, the guided tour of the production premises does require some mobility. It is not permitted to take photographs in the company’s premises during the guided tour.

In accordance with the provisions of Chapter 7, Section 4 a of the Swedish Companies Act and the company's Articles of Association, the Board has decided that shareholders before the meeting shall have the opportunity to exercise their voting rights by postal voting. Shareholders can thus choose to attend the meeting physically, by proxy or by postal voting.

Exercise of the right to vote

Shareholders who wish to exercise their voting rights at the Annual General Meeting must

• be recorded in the share register kept by Euroclear Sweden AB on Friday, April 28, 2023,
• notify their intention to participate to the company according to the instructions under the heading "Notification of physical participation or participation through a representative" or cast their postal vote according to the instructions under the heading "Instructions for postal voting" no later than 12:00 p.m. on Wednesday, May 3, 2023.

For shareholders who have their shares nominee-registered through a bank or other nominee, the following applies in order to be entitled to participate in the meeting. In addition to registering, such shareholders must re-register their shares in their own name so that the shareholder is registered in the share register kept by Euroclear Sweden AB as of the record date on Friday, April 28, 2023. Such re-registration may be temporary (so-called voting rights registration). Shareholders who wish to register their shares in their own name must, in accordance with the respective nominee's procedures, request that the nominee make such registration. Registration of voting rights requested by shareholders at such a time that the registration has been made by the nominee no later than Wednesday, May 3, 2023 will be taken into account in the preparation of the share register.

Notification of physical participation or participation through a representative

Anyone wishing to attend the meeting physically or through a representative must no later than 12:00 p.m. on Wednesday, May 3, 2023, notify the company in one of the following ways;

• On the website www.mycronic.com
• By telephone +46 8 518 01 551
• By mail to Computershare AB, “Mycronic’s Annual General Meeting”, P.O. Box 5267, 102 46 Stockholm, Sweden
• By e-mail to proxy@computershare.se

The notification shall state name, personal ID number or corporate registration number, address and telephone number, number of shares held and names of any advisors (maximum two).

Anyone who does not wish to attend in person or exercise their voting right by postal vote may exercise their right at the meeting by proxy with a written, signed and dated power of attorney. If the power of attorney has been issued by a legal entity, a copy of the registration certificate or equivalent authorization document for the legal entity must be attached.

To facilitate access to the meeting, proxies, registration certificates and other authorization documents should be sent to the company at the address Computershare AB, “Mycronic’s Annual General Meeting”, P.O. Box 5267, 102 46 Stockholm, Sweden no later than Wednesday, May 3, 2023.

Please note that notification of participation in the meeting must be made even if the shareholder wishes to exercise his or her voting rights at the meeting through a proxy. A submitted power of attorney does not apply as notification to the meeting.

Instructions for postal voting

Shareholders who wish to exercise their voting right by postal voting must use the postal voting form and follow the instructions available on the company's website www.mycronic.com. Postal voting forms can also be provided by post to shareholders who request it by phone +46 8 518 01 551, weekdays at 9:00 a.m. – 4:00 p.m.

Completed and signed postal voting forms can be sent either by post to Computershare AB, "Mycronic’s Annual General Meeting", P.O. Box 5267, 102 46 Stockholm, Sweden or by e-mail to proxy@computershare.se. The completed form must be received by Computershare no later than Wednesday, May 3, 2023.

Shareholders who are natural persons can also cast a postal vote electronically through verification with BankID via the company's website www.mycronic.com. Such electronic votes must be cast no later than Wednesday, May 3, 2023.

The shareholder may not provide the postal vote with special instructions or conditions. If this happens, the entire postal vote is invalid. Further instructions and conditions can be found in the postal voting form.

If a shareholder submits its postal vote by proxy, a written and dated power of attorney signed by the shareholder must be attached to the postal voting form. Proxy forms are available on the company's website www.mycronic.com. If the shareholder is a legal entity, a registration certificate or other authorization document must be attached to the form.

Anyone wishing to revoke a postal vote and instead exercise their right to vote by attending the meeting physically or by proxy must notify the secretariat of the meeting before the meeting opens.

Proposed Agenda for the Annual General Meeting

1. Election of Chairman of the Annual General Meeting

2. Preparation and approval of the voting list

3. Approval of the agenda

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

5. Consideration of whether the meeting has been duly convened

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

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

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

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

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

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

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

13. Election of auditor

14. Resolution regarding approval of the remuneration report

15. The Board of Directors’ proposal regarding guidelines for remuneration to members of the executive management

16. Proposal regarding composition of nomination committee

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

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

19. The Board of Directors’ proposal regarding Long Term Incentive Program 2023 (LTIP 2023)

This year’s nomination committee
The nomination committee for the 2023 Annual General Meeting is composed of Henrik Blomquist (Bure Equity), Patrik Jönsson (SEB Funds), Thomas Ehlin (the Fourth Swedish National Pension Fund) and Patrik Tigerschiöld (Chairman of the Board).

Item 1: Election of Chairman of the Annual General Meeting

The nomination committee proposes that the Chairman of the Board, Patrik Tigerschiöld, or the person appointed by the Board of Directors if he has an impediment to attend, is elected Chairman of the Annual General Meeting and that Niklas Larsson, Wistrand Advokatbyrå, or the person appointed by the Board of Directors if he has an impediment to attend, is elected keeper of the minutes of the Annual General Meeting.

Item 2: Preparation and approval of the voting list

The voting list proposed for approval is the voting list drawn up by the Chairman at the Annual General Meeting on behalf of the company, based on the general meeting’s share register and advance votes received, as verified and recommended by the person approving the minutes.

Item 3: Approval of the agenda

The Board of Directors proposes that the agenda, which is included in this notice to the Annual General Meeting, be approved as the agenda at the Annual General Meeting.

Item 4: Election of one or two persons who shall approve the minutes of the meeting

It is proposed that one person is appointed to approve the minutes. Patrik Jönsson, representing SEB Funds, or the person appointed by the Board of Directors if he has an impediment to attend, is proposed to be elected to approve the minutes of the Annual General Meeting together with the Chairman. The task of approving the minutes of the Annual general Meeting also includes verifying the voting list and that the advanced votes received are correct stated in the minutes of the Annual General Meeting.

Item 5: Consideration of whether the meeting has been duly convened

It is proposed that the general meeting approve the convening of the Annual General Meeting.

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

The Board of Directors proposes an ordinary dividend for the financial year 2022 of SEK 3.50 per share. Record date is proposed to be May 11, 2023 and disbursement day is estimated to be May 16, 2023.

Item 10: Resolution regarding number of Board members and deputy Board members and auditors

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

Item 11: Determination of fees for the members of the Board of Directors and the auditor

The nomination committee proposes a total remuneration to the Board of Directors amounting to SEK 3,520,000 for the period running until the end of the next Annual General Meeting. The nomination committee proposes a raise in remuneration to the Chairman of the Board to SEK 875,000, and a raise in remuneration to each of the six other members of the Board to SEK 350,000. Furthermore, the nomination committee proposes a raise in remuneration to the Chairman of the audit committee to SEK 135,000, and a raise in remuneration to each of the other members of the audit committee to SEK 80,000. In addition, the nomination committee proposes a raise in remuneration to the Chairman of the remuneration committee to SEK 110,000, and a raise of the remuneration to each of the other members of the remuneration committee to SEK 70,000.

The nomination committee also proposes that the auditor’s fee for the period running until the end of the next Annual General Meeting is taken on current account.

Item 12: Election of members of the Board of Directors and Chairman of the Board of Directors

The nomination committee proposes re-election of Patrik Tigerschiöld, Arun Bansal, Anna Belfrage, Katarina Bonde, Staffan Dahlström, Bo Risberg and Robert Larsson. The Nomination Committee furthermore proposes the re-election of Patrik Tigerschiöld as Chairman of the Board.

Item 13: Election of auditor

The nomination committee proposes re-election of Ernst & Young AB as auditor for the period
running until the end of the Annual General Meeting 2024. Ernst & Young has announced that the Authorized Public Accountant Anna Svanberg will be the responsible auditor.

Item 14: Resolution regarding approval of the remuneration report

The Board of Directors proposes that the Annual General Meeting resolves to approve the remuneration report in accordance with Chapter 8, Section 53 a of the Swedish Companies Act.

Item 15: The Board of Directors’ proposal regarding guidelines for remuneration to members of the executive management

The following guidelines for remuneration to members of the executive management are applicable to remuneration agreed, and amendments to remuneration already agreed, after the adoption of the guidelines by the 2023 Annual General Meeting. The guidelines encompass remuneration to the Board of Directors, the CEO and the executive management, however, these guidelines do not apply to any remuneration decided or approved by the Annual General Meeting.

The Board of Directors shall be entitled to temporarily depart from these guidelines, in whole or in part, if special reasons justify doing so in an individual case and such deviation is necessary in order to meet the company’s long-term interests or to ensure the company’s financial viability. If such a departure occurs, it must be reported in the remuneration report before the next Annual General Meeting. The guidelines pertain to the period starting from the 2023 Annual General Meeting. Any issue regarding departure from the guidelines shall be prepared by the remuneration committee and decided by the Board of Directors.

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

Mycronic's strategy is to be a market-leading solutions provider within defined niches of the electronics industry. We create value by focusing on innovations that help drive the transition to a more sustainable electronics industry. This strategy will allow us to achieve our vision of being the most trusted partner to the creators of tomorrow’s electronics – delivering value for employees, customers, shareholders and society.

The Board of Directors considers that it is critical for the successful implementation of the company’s business strategy and safeguarding of its long-term interests, that the company is able to recruit and retain members of the executive management with the competence and capacity to achieve specified goals. To this end, the company must offer competitive remuneration to motivate the executive management. Short-term variable pay covered by these guidelines shall be based on criteria that aim at promoting the company’s business strategy and long-term interests, and where the fulfillment of the criteria is determined by the method set out below.

Forms of remuneration, etc.

The remuneration and other terms of employment for members of the executive management shall be based on market terms. Total remuneration consists of base salary and variable pay, pension and other benefits. Long-term variable pay is excluded in the calculation of the total remuneration and the relative proportion of the remuneration components.

Fixed remuneration

In establishing the base salary for the CEO and members of the executive management, the scope and complexity of the position in question, as well as the individual’s performance is taken into account. The executive managements’ salaries are, like the other components of remuneration, subject to annual review by the Remuneration Committee, with the support of external salary statistics ensure that the salaries remain competitive. The base salary constitutes a maximum of 65 percent of total remuneration in the event of a maximum outcome of short-term variable pay.

Short-term variable remuneration

The remuneration is paid in accordance with goals achieved. The criteria, such as order intake, cost control or EBIT, are established in order to contribute to the company’s business strategy, long-term interests and thus to the company’s long-term value creation. The fulfillment of the criteria is determined through the company’s audited annual accounts. Short-term variable pay can amount to a maximum of 120 percent of base salary and 55 percent of total remuneration. Variable pay shall not be pensionable, unless otherwise provided by mandatory law or obligations in applicable collective bargaining agreements. The outcome is prepared by the Remuneration Committee and approved by the Board of Directors in connection with the end of the qualification period and the remuneration is thereafter paid out. The company has no contractual right to recover the remuneration.

Long-term variable remuneration

Members of the executive management can be offered incentive programs, which mainly should be share or share price-related. An incentive program is intended to improve the participants’ commitment to the company’s development and shall be introduced on market-based terms.

Resolutions on share or share price-related incentive programs must be passed at an Annual General Meeting and are therefore not covered by these guidelines.

Other long-term remuneration

There are already existing agreements on long-term variable pay linked to continued employment for certain members of the executive management.

Benefits

Pension

Members of the executive management employed in Sweden after 2012 are covered by the contribution-defined plan under ITP1. Members of the executive management employed prior to January 1, 2022 have a supplementary contribution-defined pension plan in addition to the ITP plan. The retirement age for members of the executive management employed in Sweden is 65 years. For members of the executive management employed outside of Sweden, locally competitive pension plans and retirement ages are applied.

Other benefits

Other benefits e.g. car benefits and health care plans are established based on them being competitive in the local market.

Pension and other benefits constitute a maximum of 40 percent of total remuneration in the event of a maximum outcome of short-term variable pay.

Special adjustments

Regarding employment conditions that are governed by rules other than those applying in Sweden, appropriate adjustments may be made in order to comply with such mandatory rules or local practice, whereby the overall purpose of these guidelines shall be met.

Notice of termination and severance pay

The employment or contractual agreements of members of the executive management shall be valid until further notice or for a specified period of time. For the CEO, in the event of termination by the company, a twelve months notice period and twelve months severance pay apply. For members of the executive management employed in Sweden, the mutual notice period is a maximum of six months. Upon termination by the company, six months’ severance pay also applies. During notice period, the current employment contract runs with associated benefits. In cases where severance pay would be paid, no other benefits will be paid after the expiry of the notice period. For other members of the executive management who are locally employed outside of Sweden, employment or contractual agreements shall comply with mandatory rules applicable in the relevant jurisdiction or local practice, entailing that e.g. other term of the employment (or term of contract as the case may be), other notice periods and other agreements on severance pay may be applicable in the individual case.

Salary and terms of employment

In preparing the Board of Directors’ proposal for guidelines on remuneration to members of the executive management, the salaries and terms of employment for the company’s other employees have been taken into account. Information about the executive managements’ total remuneration, components of their remuneration, as well as increases in remuneration and rates of increase over time have been obtained and have constituted a part of the Remuneration Committee’s and the Board of Directors’ decision basis in their evaluation of the fairness of the guidelines and the limitations arising from them.

The resolution process

The Board of Directors shall prepare a proposal for new guidelines when there is a need for significant changes to the guidelines, however at least every four years. The Board of Directors’ proposal is prepared by the Remuneration Committee. The Chairman of the Board of Directors may also be Chairman of the Remuneration Committee. In order to manage conflicts of interest, other members of the Remuneration Committee who are elected by the Annual General Meeting must be independent in relation to the company and members of the executive management.

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

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

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

Review of the guidelines

The guidelines for remuneration to members of the executive management were reviewed ahead of the 2023 Annual General Meeting and resulted in an adjustment from 110 to 120 percent of base salary for the maximum short-term variable pay.

Item 16: Proposal regarding composition of nomination committee

The nomination committee proposes that a new nomination committee for the 2024 Annual General Meeting is appointed by the Chairman of the Board – at the latest by the end of the third quarter of 2023 – contacting the three largest or otherwise known shareholders per August 31, 2023. The term of office shall run until a new nomination committee commences its service.

The composition of the nomination committee shall be published no later than six months before the company’s Annual General Meeting.

The responsibility of the nomination committee regarding the 2024 Annual General Meeting includes proposing (i) chairman of the meeting, (ii) the number of Board members, (iii) election of members of the Board and Chairman of the Board and remuneration to Board members and the Chairman of the Board and remuneration to members of Board committees, (iv) election of auditor and remuneration to auditor and (v) the process for appointment of a new nomination committee.

The nomination committee proposes that the Annual General Meeting decides that the instruction to the nomination committee shall be the same as last year.

Item 17: The Board of Directors’ proposal on authorization of the Board of Directors to resolve to issue new shares

The Board of Directors proposes that the Annual General Meeting authorizes the Board of Directors up until the 2024 Annual General Meeting, on one or several occasions, to resolve to issue new shares, with deviation from the shareholders’ preferential rights. Shares may be paid in kind, through set-off or with other conditions set forth in Chapter 13, Section 5, first paragraph item 6 in the Swedish Companies Act. The Board of Directors may otherwise set the terms of such share issuance. The authorization shall however not comprise a right for the Board to issue shares against cash payment and with deviation from the shareholders’ preferential rights. The issue price shall be determined on marketable grounds and the number of issued shares may not exceed ten percent of the total amount of outstanding shares in the company per the day of this notice.

The reason for the deviation from the shareholders’ preferential rights and the right to decide on payment through set-off, in kind or other condition as set forth in the Swedish Companies Act is to enable the company to issue shares in order to acquire shares, business or product rights.

Majority requirements

A valid resolution under item 17 above requires that shareholders representing not less than two-thirds (2/3) of the votes cast as well as the shares represented at the Annual General Meeting approve the resolution.

Item 18: The Board of Directors’ proposal on authorization of the Board of Directors to resolve for the company to acquire the company’s own shares

The Board of Directors shall be authorized, during the period until the 2024 Annual General Meeting, to decide to acquire the company’s own shares in accordance with the following.

1. Acquisition may only be made by a maximum of so many shares that, at any given time, the company’s own holdings do not exceed five percent of all shares in the company

2. Acquisition of shares in the company may only be made on Nasdaq Stockholm (the “Exchange”)

3. Acquisition of shares on the Exchange may only take place at a price within the price range recorded on the Exchange at any given time

4. The payment for the shares shall be paid in cash

5. The authorization may be used on one or several occasions up until the 2024 Annual General Meeting

The purpose of the above authorizations to acquire shares is to enable delivery of shares to participants in LTIP 2023 (the introduction of a new long term incentive program, LTIP 2023, is subject to a separate resolution in item 19 in the notice for the 2023 Annual General Meeting) and to be able to continuously adjust the company’s capital structure to the company’s capital requirements.

Shares that have been acquired by the company and which have not been reserved in order to secure the company’s delivery of shares under LTIP 2023 are intended to be canceled following a resolution thereof at the 2024 Annual General Meeting.

Majority requirements

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

Item 19: The Board of Directors’ proposal regarding Long Term Incentive Program 2023 (LTIP 2023)

Mycronic’s Board of Directors proposes that the Annual General Meeting passes a resolution on the implementation of a Long Term Incentive Program 2023 (LTIP 2023). This proposal is divided into four items:

1. Terms of LTIP 2023
2. Transfer of the company’s own shares under LTIP 2023 and hedging activities
3. Hedging of LTIP 2023 via an equity swap agreement with a third party
4. Other matters related to LTIP 2023

A. Terms of LTIP 2023

A.1 Introduction

The Board wishes to establish a long-term incentive program for certain key employees in order to encourage personal long-term ownership of Mycronic shares as well as to increase and enhance its ability to recruit, retain and motivate employees. The Board therefore proposes that the Annual General Meeting resolves to implement a long-term performance share program 2023 ("LTIP 2023"). The intention is also to use LTIP 2023 to unite the interest of the employees with the interests of shareholders.

Participants may, after a qualifying period, receive allotments of Mycronic ordinary shares without consideration. The number of allotted shares will depend on the fulfilment of certain performance targets. The term of LTIP 2023 is more than three years.

A.2 Basic features of LTIP 2023

LTIP 2023 will be directed towards certain key employees in the Mycronic Group. The participants are based in Sweden and other countries where the Mycronic Group is active. Each participant may be entitled, after a certain qualification period (defined below), provided continued employment during the entire period (except from “Good Leavers”), and depending on the fulfilment of certain performance targets linked to Mycronic’s Earnings Per Share (“EPS”), to receive allotment of Mycronic shares (”Performance Shares”). The participant shall not pay any consideration for the allotted Performance Shares. Performance Shares are Mycronic ordinary shares.

A.3 Participation in LTIP 2023

LTIP 2023 is directed towards a maximum of 85 employees, divided in three categories of participants:

Category  Maximum number of shares per person

A)  CEO (maximum 1 person)  7,200

B) Management Group (maximum 10 persons) 2,700

C) Other key employees (maximum 74 persons) 1,100

Any resolution on participation or implementation of LTIP 2023 shall be conditional on that it, in the Board’s judgement, can be offered with reasonable administrative costs and financial effects.

A.4 Allotment of Performance Shares

Allotment of Performance Shares within LTIP 2023 will be made during a limited period of time following the Annual General Meeting 2026. The period up to this date is referred to as the qualification period (vesting period). A condition for the participant to receive allotment of Performance Shares is that the participant remains an employee of the Mycronic Group during the full qualification period up until allotment. Allotment of Performance Shares also requires that the EPS performance targets are fulfilled. The Board shall establish a customary definition of Good Leavers and determine whether any allocation shall be made to participants who are considered Good Leavers.

The performance target is Mycronic’s EPS and the performance target shall be established by the Board. Partial fulfilment of the performance targets will result in partial allotment of Performance Shares. Performance under a certain level will result in no allotment. The EPS targets and the outcome will be communicated to the shareholders after the allotment of Performance Shares to participants.

Prior to the allotment of Performance Shares, the Board shall assess whether the allotment is reasonable in relation to the company’s financial results, position and performance, as well as other factors.

If significant changes take place within the Mycronic Group, or on the market, which, by the assessment of the Board, would mean that the terms for allocation/transfer of shares according to LTIP 2023 is no longer reasonable, the Board shall have the right to implement an adjustment to LTIP 2023, including, among others, the right to reduce the number of Performance Shares allocated/transferred, or not to allocate/transfer Performance Shares at all.

A.5 Implementation and administration etcetera

The Board, with the assistance of the remuneration committee, shall in accordance with the resolutions by the Annual General Meeting set forth herein be responsible for the detailed design and implementation of LTIP 2023. The Board may also decide on the implementation of an alternative cash based incentive for participants in countries where the allotment of Performance Shares is not appropriate, as well as if otherwise considered appropriate. Such alternative incentive shall to the extent practically possible be designed to correspond to the terms of LTIP 2023.

The intention is that the Board shall launch LTIP 2023 as soon as practically possible after the Annual General Meeting.

In the event that the general meeting does not resolve in accordance with item B with the required majority, the Company shall hedge itself against the financial exposure that LTIP 2023 is expected to entail, by the company entering into a share swap agreement with a third party in accordance with what is stated in item C below.

B. Transfer of the company’s own shares under LTIP 2023 and hedging activities.

B1. Number of shares

The Board proposes that the Annual General Meeting resolves that transfer of up to 115,600 Mycronic shares under LTIP 2023 may be made in accordance with the below. The number of shares is calculated on the basis of maximum participation and maximum fulfilment of performance requirements.

B2. Other conditions for transfer of Mycronic shares

Mycronic shares may be transferred to the participants in LTIP 2023.

Share transfers to participants in LTIP 2023 shall be made without the participants paying consideration and shall be carried out at the time and subject to the other conditions under which participants in LTIP 2023 have the right to be allotted shares.

The number of Mycronic shares that might be transferred under LTIP 2023 shall be subject to customary re-calculation principles and may, consequently, be subject to re-calculation due to a bonus issue, share split, dividends and/or other similar events. Resolutions resolved upon by the Annual General Meeting 2023 shall not be included in a re-calculation of the number of shares.

B.3 Grounds for the Board’s proposal and alternative hedging via an equity swap agreement with a third party etcetera

Since the Board believes that the most cost efficient and flexible method to transfer Mycronic shares under LTIP 2023 is obtained through transfer of own shares, the Board proposes that transfers are secured as described above in this item B. Should the necessary majority not be obtained for the proposal in item B, the Board will enter into a share swap agreement, in accordance with item C below.

Share swap agreement will also be relevant should this be more appropriate, for example due to the fact that the acquisition of own shares cannot be made to the extent required to be able to transfer shares under LTIP 2023.

The reason for the deviation from the shareholders’ pre-emption rights to acquire the own shares is that the company shall be able to secure the delivery of shares under LTIP 2023.

C. Hedge of LTIP 2023 via an equity swap agreement with a third party

In the event that the necessary majority is not obtained for item B above, the company will hedge itself against the financial exposure that LTIP 2023 is expected to entail, by the company entering into a share swap agreement with a third party, whereby the third party in its own name shall acquire and transfer shares in the company under LTIP 2023. The relevant number of shares shall correspond to the number of shares proposed under item B above.

The Board believes that the most cost efficient and flexible method to transfer Mycronic shares under LTIP 2023 is obtained through transfer of own shares pursuant to item B above. The cost of hedging by entering into an equity swap agreement with a third party is significantly higher and will be based on an interest base with an addition for the company’s lending costs, taking into account the structure of the share swap derivative.

D. Other matters in relation to LTIP 2023

D.1 Majority requirements etc.

The resolution according to item A above shall require a majority of more than half of the votes cast at the Annual General Meeting. A valid resolution under item B above requires that shareholders representing not less than nine-tenths of the votes cast as well as the shares represented at the Annual General Meeting approve the resolution.

D.2 Estimated costs, expenses and financial effects of LTIP 2023

LTIP 2023 will be accounted for in accordance with “IFRS 2 – Share‐based payments”. IFRS 2 stipulates that the share awards should be expensed as personnel costs over the qualification period and will be accounted for directly against equity. Personnel costs in accordance with IFRS 2 do not affect the company’s cash flow. Social security contributions will be recognized as an expense in the income statement through regular provisions in accordance with generally accepted accounting principles. The amount of these regular provisions will be revalued in line with the trend in the value of the right to Performance Shares, and the contributions payable on the allotment of Performance Shares.

Assuming a share price at the time of implementation of SEK 219, and that the performance targets are achieved so that 50 percent of the maximum number of Performance Shares vest, including a share price increase of 50 percent during the qualification period and an annual employee turnover of 5 percent, the total cost for LTIP 2023, including social security costs, is estimated to SEK 15.9 million before tax, corresponding to an estimated annual cost of SEK 5.3 million before tax.

Assuming that the performance targets are achieved so that 100 percent of the maximum number of Performance Shares vest, and otherwise the same assumptions as above, the total cost for LTIP 2023, including social security costs, is estimated to SEK 31.9 million before tax, corresponding to an estimated annual cost of SEK 10.6 million before tax.

LTIP 2023 will comprise maximum 115,600 shares in total, which corresponds to 0.12 percent of the total outstanding shares and votes in the company on a fully diluted basis.

The above calculations are based on a decision on hedging in accordance with item B.

In the view of the Board, the positive effects expected to arise from LTIP 2023, outweigh the costs associated with LTIP 2023.

D.3 The Board’s explanatory statement

An individual long-term ownership commitment among the participants in LTIP 2023 is expected to stimulate greater interest and motivation in the company’s business operations, results and strategy. Moreover, the Board wishes to increase the ability of Mycronic to retain important key employees. The Board believes that the implementation of LTIP 2023 will benefit Mycronic and its shareholders. LTIP 2023 will provide a competitive and motivation-improving incentive for executives and other key employees within the Group.

LTIP 2023 has been designed to reward the participants for increased shareholder value by allotting shares, based on the fulfilment of conditions in respect of results and operations. By linking the employees’ remuneration to the development of Mycronic’s results and value, the long-term value growth of Mycronic is rewarded. Based on these circumstances, the Board considers that the implementation of LTIP 2023 will have a positive effect on the Mycronic Group’s continued development, and will therefore be beneficial to the shareholders and Mycronic.

D.4 Other share-related incentive programs

The company’s share-related incentive programs are described on page 43 in the company’s annual and sustainability report.

D.5 Adjustment Authorization

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

D.6 Preparation of the item

The basis for LTIP 2023 has been prepared by the Board of the company. The work has been supported by external advisors and has been made in consultation with shareholders. The Board has thereafter decided to present this proposal for the general meeting. Except for the staff that have prepared the matter upon instruction from the Board, no employee that may be a participant of LTIP 2023 has participated in the preparations of the program’s terms.

¤¤¤

The financial statements and the audit report regarding the financial year 2022, as well as the nomination committee’s and the Board of Director’s complete proposals including related documentation will be available at the company at Nytorpsvägen 9 in Täby not later than by April 18, 2023, on the company website and will also be sent by post to shareholders requesting so and stating their postal address. The same applies to the Board of Directors report in accordance with Chapter 8, Section 53 a of the Swedish Companies Act (2005:551) and the auditor’s opinion in accordance with Chapter 8, Section 54 of the same law.

The total number of shares and votes in the company amounts to 97 916 509. The company holds 203,500 own shares. Shareholders are reminded of the right to, at the Annual General Meeting, ask questions to the Board of Directors and the Chief Executive Officer (CEO) in accordance with the Swedish Companies Act, Chapter 7, Section 32.

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

Täby in March 2023

Mycronic AB (publ)
 

The Board of Directors

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

For further information, please contact:

Anders Lindqvist
CEO and President
Tel: +46 8 638 52 00, e-mail: anders.lindqvist@mycronic.com

Pierre Brorsson

CFO & Sr VP Corporate Development 

Tel: +46 8 638 52 00, e-mail: pierre.brorsson@mycronic.com

Sven Chetkovich
Director Investor Relations

Tel: +46 70 558 39 19, e-mail: sven.chetkovich@mycronic.com

The information was submitted for publication on March 28, 2023, at 2:00 p.m. CET

About Mycronic

Mycronic is a Swedish high-tech company engaged in the development, manufacture and marketing of production equipment with high precision and flexibility requirements for the electronics industry. Mycronic’s headquarters are located in Täby, north of Stockholm and the Group has subsidiaries in China France, Germany, Japan, Mexico, the Netherlands, Singapore, South Korea, United Kingdom, United States and Vietnam. Mycronic is listed on Nasdaq Stockholm. www.mycronic.com