WRITTEN NOTICE OF ANNUAL GENERAL MEETING
WRITTEN NOTICE
Shareholders in Paynova AB (publ) are hereby called to the general meeting of shareholders (AGM) on Thursday 11 May 2006 at 6 p.m. at the Royal Swedish Academy of Engineering Sciences Conference Centre (IVA:s Konferenscenter), Grev Turegatan 16, Stockholm.
Registration
Shareholders wishing to attend the meeting must
(a) be entered in the share register kept by VPC AB by Friday 5 May 2006,
(b) register for participation in the general meeting of shareholders by 4 p.m. on Monday 8 May 2006 with Paynova AB, Box 30107, SE-104 25 Stockholm, Sweden, or by fax on +46 (0)8-517 100 29 or by e-mail on anm@paynova.com.
Shareholders may bring a maximum of two assistants to the meeting, provided the number of assistants is registered in accordance with the above-mentioned procedure for participation.
Shareholders whose shares are registered in the name of a nominee must have their shares temporarily registered in their own names in the share register in order to be eligible to participate in the meeting. This process must be completed by Friday 5 May 2006.
Proposed agenda
1. Election of chairman for the meeting.
2. Establishment and approval of voting list.
3. Approval of the agenda.
4. Election of one or two minutes-checkers.
5. Checking that the meeting has been duly convened.
6. Submission of the Annual Report and audit report, as well as the consolidated financial statements and consolidated audit report for 2005.
7. Decisions
8. a) on approving the income statement and balance sheet and the consolidated income statement and consolidated balance sheet
b) on allocations regarding loss in accordance with the approved balance sheet
c) on discharge from liability of Board members and the President.
9. Determining the number of Board members and Board deputies.
10. Determining the fees for the Board and auditors.
11. Election of Board of Directors.
12. Proposal regarding changes to §§ 5, 6, 7, 8, 10 and 11 of the Articles of Association.
13. Proposal regarding authorisation for the Board of Directors to make decisions regarding new issues of shares and/or convertible promissory notes and/or share warrants.
14. Proposal regarding introduction of a warrant scheme for employees.
15. Proposal regarding authorisation for the Board to raise financing.
16. Proposal regarding establishment of a nominations committee.
17. Conclusion of the meeting.
Proposed decisions
Allocations concerning loss (p.7)
The Board proposes that the loss of SEK 41,967,000 be carried forward to the new account.
Election of Board of Directors (p.10)
Shareholders representing over half the number of votes for all shares in the company propose that the Board of Directors continue to comprise seven ordinary members without deputy members, and that the following people be elected as Board members: Lars Guldstrand, also Chairman, and Dan Blomberg, Magdalena Bonde, Erik Hallberg, Bengt Holmqvist, Marie-Louise Kjellström and Ulf Risberg, all of whom are being re-elected.
Changes to §§ 5, 6, 7, 8, 10 and 11 of the Articles of Association (p.11)
The Board of Directors proposes that the Articles of Association be changed in a number of points to bring it into compliance with the new Swedish Companies Act. The main changes are:
· Information about the nominal value of the share in § 5 shall be deleted. Instead § 5 shall specify the highest and lowest number of shares permitted (15,000,000 and 60,000,000 respectively).
· The provision relating to Board Members’ one-year term of office in § 6 is to be deleted as unnecessary. At the same time, § 6 shall contain an addition to the effect that registered audit companies may also be selected as auditors.
· § 7 shall state that written notice of general meetings of shareholders shall always be given in the Post- och Inrikes Tidningar and Svenska Dagbladet publications.
· The text in § 8 shall be brought into line with the terminology of the new Swedish Companies Act; it shall be clarified that the agenda for the Annual General Meeting also includes election of deputy Board members; and the agenda shall include an addendum to the effect that registered audit companies may also be appointed auditors.
· The provision in § 10 that shareholders may bring no more than two assistants shall be deleted as unnecessary.
· The provision in § 11 regarding authorisation to exercise certain rights granted to shareholders shall be brought into compliance with the new Swedish Companies Act.
Authorisation for the Board of Directors to make decisions regarding new issues of shares and/or convertible promissory notes and/or share warrants (p.12)
The Board proposes that the AGM authorise the Board, on one or more occasions during the period up to the next AGM, to make decisions regarding new issues of shares and/or issues of convertible promissory notes and/or issues of share warrants against cash payment and/or with provisions concerning contribution in kind or offset or otherwise with conditions in accordance with Section 13 § 5 para. 1 p.6, Section 14 § 5 para. 1 p.6 or Section 15 § 5 para. 1 p.4 of the Swedish Companies Act and thereby to be able to deviate from the shareholders’ preferential rights. The number of shares that may be issued, the number of shares that may be obtained via conversion and the number of shares that may be obtained via warrants for new share subscription shall jointly amount at most to as many shares as are required to increase the company’s share capital by a maximum of SEK 260,000.
If the authorisation is exercised in full, this will entail a dilution of approximately 9.7 per cent of the share capital and the votes in the company after exercising all subscription and conversion rights, based on the currently registered share capital of SEK 2,415,526.
The aim of the authorisation is to enable the use of securities of the type to which the authorisation relates as means of payment in connection with acquisitions of companies, operations or assets, and to be able to offer ownership in the company to industrial investors in connection with strategic business partnerships.
Proposal regarding establishment of a warrant scheme for employees (p.13)
The Board proposes that the AGM decide to establish a warrant scheme for senior management figures and specialists, as well as other employees in the Group. The warrant scheme mainly entails offering all employees in the Group the opportunity to buy a total of a maximum of 1,000,000 share warrants at market price (premium). The Board believes that the benefit of the warrant scheme outweighs its cost.
In order to implement the scheme, the Board proposes that the meeting resolve that the company shall issue 1,000,000 share warrants. Each share warrant shall grant entitlement to subscribe to one new share. On full utilisation, this will entail an increase in the company’s share capital of at most SEK 100,000. Entitlement to subscribe to the share warrants shall, in a deviation from shareholders’ preferential rights, belong to a wholly-owned subsidiary of the company (“Subsidiary”). The Subsidiary shall not make any payment for the share warrants and is thereafter intended to transfer the share warrants to the management figures encompassed by the scheme for a sum equivalent to the calculated market value. The market value shall be measured in accordance with the Black & Scholes model.
New subscription of shares supported by share warrants may take place as of 1 September 2007 up to and including 30 November 2007. The price upon new subscription shall be SEK 22.50 per share. The usual conversion may take place. If the share warrants are exercised in full, this will entail a dilution of approximately 4 per cent of the total number of shares and votes in the company, based on the currently registered share capital of SEK 2,415,526.
The Board’s proposal requires the support of shareholders with a minimum of nine-tenths both of the votes cast and of the shares represented at the meeting.
Proposal regarding authorisation for the Board to raise financing (p.14)
The Board proposes that the AGM authorise the Board, on one or more occasions during the period up to the next AGM, to make decisions to raise financing of the kind covered by the provisions in Section 11 § 11 of the Swedish Companies Act (2005:551). Such financing shall be subject to market conditions. The background to the proposal is that the company shall be able to raise such financing on attractive terms for the company where, for example, the interest may depend on the company’s results or financial position. According to the provisions of the new Swedish Companies Act, which came into effect on 1 January 2006, financing with such conditions must now be decided by the general meeting of shareholders, or by the Board supported by authorisation from the general meeting of shareholders.
Proposal regarding establishment of a nominations committee (p.15)
The Board proposes that the AGM make a decision regarding the establishment of a nominations committee as follows:
The Chairman of the Board shall summon the five largest shareholders in the company, each of which will then appoint a member to the nominations committee. If any of the five shareholders relinquishes the right to appoint a member to the nominations committee, the next largest shareholder by size shall be given the opportunity to appoint a member to the nominations committee. The nominations committee shall be led by one of these members. If any of these members should sell a considerable part of their holding and cease to be a major shareholder entitled to appoint a member to the nominations committee, the shareholder’s member should step down from the nominations committee. The Chairman of the Board shall report to the nominations committee on aspects of the Board’s work which may be of importance to the nominations committee’s work, including for example an evaluation of the Board’s work, as well as requirements and particular expertise to be represented by the Board members.
The nominations committee shall draw up proposals relating to the issues listed below for presentation to the AGM for approval:
· Proposals regarding chairman for the AGM
· Proposals regarding number of Board members
· Proposals regarding members of the Board
· Proposals regarding Chairman of the Board
· Proposals regarding selection of auditors (where applicable)
· Proposals regarding fees to the Chairman of the Board, other Board members and auditors
· Proposals regarding remuneration for committee work or for special work by Board members in addition to that included in the Board fee
Documents
The Annual Report, audit report and other documents relating to the general meeting of shareholders shall be available from Paynova AB, Warfvinges väg 24, SE-104 25 Stockholm, tel. +46 (0)8-517 100 00 no later than two weeks prior to the meeting, and sent to shareholders on request and notification of postal address.
Stockholm, April 2006
The Board of Directors
About Paynova
Paynova offers an international, account-based payment service via the Internet. With Paynova as the only counterpart, e-retailers get a payment guarantee for around twenty payment options in 10 languages with 8 currencies in a security-certified interface (PCI). Consumers can open an account, a Paynova wallet, for free on the Internet to make purchases more secure and simpler, as well as look after transfers between family members, friends and acquaintances.
Paynova has an agreement with around 1,000 e-retailers. Most are found in the following prioritised segments: travel, retailing and media/network games. The company has been listed on NGM Equity since February 2004. For more information: www.paynova.com