Notice of annual general meeting in Sinch AB (publ)

The shareholders of Sinch AB (publ), 556882-8908 (“Sinch” or the “Company”) are hereby summoned to the annual general meeting on Thursday 16 May 2024 at 10:00 (CEST) at Lindhagensgatan 112 in Stockholm, Sweden. Entry and registration begins at 9:30 (CEST).

The board of directors has, pursuant to Chapter 7, Section 4 a of the Swedish Companies Act (2005:551) and the Company’s articles of association, decided that shareholders shall have the right to exercise their voting rights by post prior to the annual general meeting. Accordingly, shareholders may choose to participate at the annual general meeting in person, by proxy or through postal voting.

Right to attend the annual general meeting

Shareholders who wish to attend the annual general meeting must:

• be registered in the share register kept by Euroclear Sweden AB on Tuesday 7 May 2024 or, if the shares are registered in the name of a nominee, request that the shares are registered in the shareholder’s own name for voting purposes by the nominee not later than Friday 10 May 2024, and

• notify their intention to participate according to the instructions under the heading “Attendance in person or by proxy” not later than on Friday 10 May 2024, or submit a postal vote in accordance with the instructions under the heading “Voting by post” below in such manner that Computershare AB has received the postal vote by Friday 10 May 2024.

Shareholders with nominee-registered shares held via a bank or other nominee must request the nominee to register the shares in the shareholder’s own name in the share register kept by Euroclear Sweden AB in order to participate in the annual general meeting. As set out above, the nominee must have performed such registration with Euroclear Sweden AB by Friday 10 May 2024. Therefore, the shareholder must contact its nominee well in advance of this date and re-register their shares in accordance with the nominee’s instructions.

Attendance in person or by proxy

Shareholders who wish to participate at the annual general meeting in person or by proxy shall notify the Company of their intent to participate not later than Friday 10 May 2024. Notification of attendance can be made:

• electronically through the Company’s website (https://investors.sinch.com),
• by mail to Computershare AB, ”Sinch AGM”, Box 5267, SE-102 46 Stockholm, Sweden,
• by telephone +46-771-24 64 00, or
• by e-mail to proxy@computershare.se.

The notification is to include the shareholder’s full name, personal/corporate identification number, address, telephone number, and, if applicable, the number of accompanying advisors (not more than two) who are attending the annual general meeting.

Shareholders who do not wish to participate in person or exercise their voting rights by postal voting may exercise their voting rights at the annual general meeting through a proxy with a written, signed and dated power of attorney. If the power of attorney is issued by a legal entity, a copy of the certificate of registration or an equivalent authorization document for the legal entity must be enclosed.

Voting by post

Shareholders who wish to exercise their voting rights through postal voting shall use the postal voting form and follow the instructions that are available on the Company's website (https://investors.sinch.com) and at the Company’s offices, Lindhagensgatan 112, SE-112 51, Stockholm, Sweden. A completed and signed postal voting form may be sent by e-mail to proxy@computershare.se or by post to Computershare AB, “Sinch AGM”, Box 5267, SE-102 46 Stockholm, Sweden. Shareholders can also submit their postal votes electronically with BankID through the Company’s website (https://investors.sinch.com). Postal voting forms shall be received by Computershare AB by Friday 10 May 2024, at the latest.

Shareholders are not allowed to include special instructions or conditions in the postal voting form. If special instructions or conditions are included in the postal voting form, such postal vote becomes invalid. Further information and conditions can be found in the postal voting form.

If the shareholder submits a postal vote by proxy, a written, signed and dated power of attorney shall be enclosed with the postal voting form. A proxy form is available upon request and on the Company’s website (https://investors.sinch.com). If the shareholder is a legal entity, a copy of the certificate of registration or an equivalent authorization document for the legal entity must be enclosed with the postal voting form.

Proposed agenda

1. Opening of the meeting

2. Appointment of chairman of the meeting

3. Election of one or two persons to verify the minutes

4. Preparation and approval of the voting list

5. Approval of the agenda

6. Determination that the meeting has been duly convened

7. Presentation of the annual report and the auditors’ report as well as the consolidated annual report and the auditors’ group report

8. Resolution on:

a) adoption of the profit and loss statement and the balance sheet as well as the consolidated profit and loss statement and consolidated balance sheet;

b) appropriation of the Company’s profit or loss according to the adopted balance sheet; and

c) discharge from liability towards the Company of the members of the board of directors and the CEO (including the deputy CEO)

9. Resolution on the number of members of the board of directors and deputy members as well as auditors and deputy auditors

10. Resolution on remuneration to the board of directors and the auditors

11. Election of members of the board of directors, chairman of the board of directors and auditors

12. Resolution on guidelines for compensation to senior executives

13. Resolution on approval of the remuneration report

14. Resolution on authorization for the board of directors to resolve on new issues of shares

15. Resolution on implementation of a long-term incentive program 2024 (LTI 2024), issue and transfer of warrants to participants in LTI 2024 and issue of warrants to secure delivery of shares upon exercise of employee stock options granted under LTI 2024

16. Closing of the meeting

Appointment of chairman of the meeting (item 2)

The Company’s nomination committee, consisting of Jonas Fredriksson (who represents Neqst D2 AB), Thomas Wuolikainen (who represents the Fourth Swedish National Pension Fund), Patricia Hedelius (who represents AMF), Mikael Wiberg (who represents Alecta) and Erik Fröberg (chairman of the board of directors of the Company), proposes that the chairman of the board Erik Fröberg, or, in his absence, the person designated by the nomination committee, is appointed as chairman of the annual general meeting.

Election of one or two persons to verify the minutes (item 3)

The board of directors proposes Jonas Fredriksson, who represents Neqst D2 AB or, in his absence, the person designated by the board of directors, as, in addition to the chairman, person to verify the minutes.

Resolution on appropriation of the Company’s profit or loss according to the adopted balance sheet (item 8 b)

The board of directors proposes that no dividend is paid for the financial year 2023.

Resolution on the number of members of the board of directors and deputy members as well as auditors and deputy auditors, remuneration to the board of directors and the auditors and election of members of the board of directors, chairman of the board of directors and auditors (items 9–11)

The nomination committee proposes that the board of directors shall consist of six members, elected by the general meeting, with no deputy members, for the period until the close of the next annual general meeting and that the Company, in accordance with the recommendations of the audit committee, shall have a registered accounting company as auditor with no deputy auditors for the period until the close of the next annual general meeting.

The nomination committee proposes that annual remuneration shall be paid with SEK 700,000 to each of the members of the board of directors elected by a general meeting who are not employed by the Company and with SEK 1,500,000 to the chairman of the board of directors.

The nomination committee proposes that annual remuneration shall be paid with SEK 100,000 to each of the members of the audit committee and with SEK 250,000 to the chairman of the audit committee.

The nomination committee proposes that annual remuneration shall be paid with SEK 50,000 to each of the members in the remuneration committee and with SEK 100,000 to the chairman of the remuneration committee.

The nomination committee proposes re-election of Erik Fröberg, Renée Robinson Strömberg, Johan Stuart and Björn Zethraeus as members of the board of directors and the election of Mattias Stenberg and Lena Almefelt as new members of the board of directors for the period until the close of the next annual general meeting. Bridget Cosgrave and Hudson Smith have notified the nomination committee that they are not available for re-election.

The nomination committee proposes that Erik Fröberg shall be re-elected as chairman of the board of directors for the period until the close of the next annual general meeting.

A presentation of the proposed board members (including the nomination committee’s evaluation on independence) is available on the Company’s website (https://investors.sinch.com).

The nomination committee proposes, in accordance with the recommendations of the audit committee, re-election of the registered accounting company Deloitte AB as the Company’s auditor for the period until the close of the next annual general meeting and that remuneration to the auditor is paid in accordance with approved invoices.

Resolution on guidelines for compensation to senior executives (item 12)

The board of directors proposes no material changes to the guidelines for compensation to senior executives compared to the guidelines adopted at the 2023 annual general meeting. The board of directors’ complete proposal for guidelines for compensation to senior executives will be published on the Company’s website (https://investors.sinch.com) not later than on 25 April 2024.

Resolution on approval of the remuneration report (item 13)

The board of directors proposes that the annual general meeting resolves to approve the remuneration report pursuant to Chapter 8, Section 53 a of the Swedish Companies Act. The remuneration report will be published on the Company’s website (https://investors.sinch.com) not later than on 25 April 2024.

Resolution on authorization for the board of directors to resolve on new issues of shares (item 14)

The board of directors proposes that the annual general meeting authorizes the board of directors to, on one or several occasions, until the next annual general meeting, resolve on new issues of shares to be paid in cash, in kind or by way of set-off or otherwise on terms and conditions and that such new issue can be performed with deviation from the shareholders’ preferential rights. The issues are to be performed on market terms, taking into account any discount on market terms. The reason for the authorization and the reason for the possible deviation from the shareholders’ preferential rights is to enable capital raisings for the acquisition of companies, or parts of companies, and for the operations of the Company. The board of directors is entitled to resolve on share issues causing an increase of the Company’s share capital of at most 10 per cent of the Company’s registered share capital at the time the board of directors first utilizes the authorization.

Resolution on implementation of a long-term incentive program 2024 (LTI 2024), issue and transfer of warrants to participants in LTI 2024 and issue of warrants to secure delivery of shares upon exercise of employee stock options granted under LTI 2024 (item 15)

Background and reasons

Since the Company’s IPO in 2015, the Company has implemented several share-related incentive programs, of which two programs, LTI 2016 and LTI 2018, have reached full maturity with no more outstanding warrants or employee stock options. In addition, the incentive program LTI 2019 will expire by the end of the second quarter of 2024.

The board of directors considers it to be in the best interest of Sinch and its shareholders to implement an additional long-term incentive program (“LTI 2024”) for senior executives, key personnel and other employees in the group, in accordance with this proposal. LTI 2024 is proposed to include up to 625 current and future senior executives, key personnel and other employees within the Sinch group.

The proposal has been based on the assessment of the board of directors that it is important, and in the interest of all shareholders, to create even greater participation in the group’s development for current and future senior executives, key personnel and employees of the group. The board of directors also considers it important to be able to attract talent over time, to encourage continued employment and to maintain a satisfactory employee retention level.

In order to encourage participation in LTI 2024, the participants who will be offered to subscribe for warrants, may choose to receive a subsidy corresponding to the premium paid for the warrants. The subsidy will in such case be paid in connection with the participant’s notice of acquisition of warrants. However, the Company has the possibility to partially reclaim the subsidy if the participant’s employment or assignment within the group is terminated during the term of the program.

In view of the above, the board of directors proposes that the general meeting resolves to implement the LTI 2024 in accordance with items (a)–(d) below. The resolutions under items (a)–(d) are proposed to be conditional upon each other and for that reason it is proposed that all resolutions are to be passed as one resolution.

Item (a) – Proposal on implementation of LTI 2024

LTI 2024 comprises eight (8) Series. Series 1–6 consist of warrants (Sw. teckningsoptioner) to be transferred to members of the group management and selected key personnel, business unit management and key personnel and other personnel in Sweden. The warrants of Series 1 and Series 4 have a term of approximately 3.5 years, the warrants of Series 2 and Series 5 have a term of approximately four (4) years and the warrants of Series 3 and Series 6 have a term of approximately five (5) years. The holders can exercise the warrants to subscribe for shares during a period of six (6) months before the end of the term of each Series of warrants.

Series 7 of LTI 2024 comprises employee stock options which may be granted to employees of the Sinch group outside Sweden.

Series 8 of LTI 2024 comprises employee stock options which may be granted to members of the group management and selected key personnel, business unit management and key personnel and other personnel in Sweden.

The board of directors proposes that the general meeting resolves to issue not more than 17,100,000 warrants in total. Pursuant to the resolution in item (b), not more than 1,800,000 warrants may be issued in Series 1–6 (of which not more than 300,000 warrants may be issued in Series 1-6, respectively). Further, pursuant to the resolution in items (c) and (d), not more than 13,600,000 and 1,700,000 warrants may be issued in order to secure delivery of shares upon exercise of stock options to participants in, respectively, LTI 2024 Series 7 and 8.

The right to subscribe for the warrants of Series 1–8 shall vest in the wholly-owned subsidiary Sinch Holding AB (the “Subsidiary”), which shall transfer the warrants of Series 1–6 to members of the group management and selected key personnel, business unit management and key personnel and other personnel in Sweden, and hold warrants of Series 7 and 8 to secure delivery of shares upon exercise of stock options within the frame of LTI 2024 Series 7 and 8. Each warrant and stock option entitles the holder to subscribe for one (1) share in the Company. The warrants shall be issued without consideration to the Subsidiary.

Below is a description of the principal terms and conditions for each of the LTI 2024 Series 1–8.

Series 1–6 – Warrants

The Subsidiary will transfer the warrants in Series 1–6 to participants at a price corresponding to the market value of the warrants (the warrant premium).

Each warrant of, respectively, Series 1, 2 and 3 entitles the holder to subscribe for one (1) share in the Company during the exercise period for each respective Series at an exercise price corresponding to, respectively, 130 per cent, 140 per cent and 150 per cent of the volume-weighted average price for the Company’s share on Nasdaq Stockholm during the period from and including 20 May 2024 up to and including 24 May 2024 (rounded to the nearest full SEK 0.1, where SEK 0.05 shall be rounded up). However, the exercise price may not be less than the share’s quota value (currently SEK 0.01). Days without price quotation shall not be included in the calculation.

Each warrant of, respectively, Series 4, 5 and 6 entitles the holder to subscribe for one (1) share in the Company during the exercise period for each respective Series at an exercise price corresponding to, respectively, 130 per cent, 140 per cent and 150 per cent of the volume-weighted average price for the Company’s share on Nasdaq Stockholm during the period from and including 18 November 2024 up to and including 22 November 2024 (rounded to the nearest full SEK 0.1, where SEK 0.05 shall be rounded up). However, the exercise price may not be less than the share’s quota value (currently SEK 0.01). Days without price quotation shall not be included in the calculation.

The exercise periods for exercising the warrants for subscription of shares under each Series are as follows:

• Series 1: from and including 30 June 2027 up to and including 30 December 2027;
• Series 2: from and including 30 December 2027 up to and including 30 June 2028;
• Series 3: from and including 29 December 2028 up to and including 29 June 2029;
• Series 4: from and including 30 December 2027 up to and including 30 June 2028;
• Series 5: from and including 30 June 2028 up to and including 29 December 2028; and
• Series 6: from and including 29 June 2029 up to and including 28 December 2029.

The issued warrants of Series 1–6 shall, with deviation from the shareholders’ preferential rights, be subscribed for by the Subsidiary, whereafter the Subsidiary shall offer warrants to participants. The notification period, during which notice of acquisition of warrants shall be made by participants, shall indicatively start on or around 25 May 2024 for warrants of Series 1‑3 and on or around 23 November 2024 for warrants of Series 4-6. Transfer of warrants of Series 1–6 to participants shall be made at a price corresponding to the market value of the warrants (the warrant premium) calculated according to an established valuation model (the Black & Scholes model) and determined in connection with the first day of the respective notification period. The board of directors of the Company shall be authorized to postpone the notification periods during which notice of acquisition of warrants shall be made by participants. Warrants shall also be available to future new employees. For acquisitions made by future new employees, the terms shall be the same or equal to the terms that are set out in this resolution. This means, inter alia, that such acquisitions shall take place based on the market value of the warrants at such point in time, and that the board of directors shall set forth an equivalent notification period for new employees whose acquisitions take place after the initial notification period. The valuation of the warrants shall be made by an independent appraiser or audit firm.

Since the warrants are acquired by the participants at market value, there are no performance conditions that need to be fulfilled in order to be offered to acquire warrants or in order to exercise warrants for subscription of shares. However, the Company will, in connection with the transfer of the warrants to the participants, reserve a pre-emption right regarding the warrants if the participant’s employment or assignment within the group is terminated or if the participant wishes to transfer its warrants. In addition, the participant may choose to receive a subsidy corresponding to the premium paid for the warrants, which the Company has the possibility to partially reclaim if the participant’s employment or assignment within the group is terminated during the term of the program.

Series 7 – Employee stock options to participants outside Sweden

Each employee stock option entitles the employee to acquire one (1) share in the Company in accordance with the following terms and conditions:

• The employee stock options will be granted without consideration.
• Employee stock options may be granted to current and future employees of the Sinch group who work outside of Sweden.
• Each employee stock option entitles the holder to acquire one (1) share in the Company at an exercise price equal to the fair market value of the share, as determined by the closing price of the Company’s share on Nasdaq Stockholm on the last trading day immediately preceding the date of grant of each stock option. However, the exercise price may not be less than the shares’ quota value (currently SEK 0.01).
• Although the allocation of employee stock options is differentiated between employees with reference to, inter alia, position, responsibility and working performance, as well as participation and stock options or warrants held in previously established incentive programs of the Sinch group, there are no defined performance conditions that need to be fulfilled in order to be granted employee stock options. However, the employee stock options are subject to both performance and time-based vesting conditions as set out below.
• Provided that the holder’s employment within the Sinch group has not been terminated as of a vesting date, and whether and to what extent the Performance Criteria (as defined below) have been fulfilled as of the applicable vesting date, the employee stock options will vest on (i) the first anniversary of the date of grant (the “Initial Vesting Date”) with respect to 25 per cent of the total number of employee stock options granted to a participant, and (ii) the last day of each of the following twelve (12) calendar quarters (each a “Subsequent Vesting Date”), with respect to an additional 6.25 per cent per calendar quarter of the total number of stock options granted to a participant. The total vesting period, after which all granted stock options will have vested (as applicable), is four (4) years from the date of grant. The employee stock options become exercisable soon after each vesting date.
• On the Initial Vesting Date and on each Subsequent Vesting Date (as applicable), the latest available data for a full financial year will be used to determine whether and to what extent the Performance Criteria have been fulfilled as of the applicable vesting date.
• Upon vesting, unless the employee’s employment within the Sinch group ends sooner, employee stock options remain exercisable for a period of five (5) years from the date of grant. In the event the participant is prevented from exercising employee stock options due to the EU Market Abuse Regulation or other applicable laws or internal policies, Sinch’s board of directors may prolong the exercise period for such participants with a corresponding period, however not longer than eight (8) months.

Series 8 – Employee stock options to participants in Sweden

Each employee stock option entitles the employee to acquire one (1) share in the Company in accordance with the following terms and conditions:

• The employee stock options will be granted without consideration.
• Employee stock options may be granted to current and future employees of the Sinch group who work in Sweden.
• Each employee stock option entitles the holder to acquire one (1) share in the Company at an exercise price equal to the fair market value of the share, as determined by the closing price of the Company’s share on Nasdaq Stockholm on the last trading day immediately preceding the date of grant of each stock option. However, the exercise price may not be less than the shares’ quota value (currently SEK 0.01).
• Although the allocation of employee stock options is differentiated between employees with reference to, inter alia, position, responsibility and working performance, as well as participation and stock options or warrants held in previously established incentive programs of the Sinch group, there are no defined performance conditions that need to be fulfilled in order to be granted employee stock options. However, the employee stock options are subject to both performance and time-based vesting conditions as set out below.
• Provided that the holder’s employment within the Sinch group has not been terminated as of a vesting date, and whether and to what extent the Performance Criteria (as defined below) have been fulfilled as of the applicable vesting date, the employee stock options will vest on (i) the third anniversary of the date of grant (the “Initial Vesting Date”) with respect to 50 per cent of the total number of stock options granted to a participant, and (ii) the fourth anniversary of the date of grant (the “Subsequent Vesting Date”), with respect to 50 per cent of the total number of stock options granted to a participant. The total vesting period, after which all granted stock options will have vested (as applicable), is four (4) years from the date of grant. The employee stock options become exercisable soon after each vesting date.
• On the Initial Vesting Date and on the Subsequent Vesting Date, data for each of the financial years 2026 and 2027, respectively, will be used to determine whether and to what extent the Performance Criteria have been fulfilled as of the applicable vesting date.
• Upon vesting, unless the employee’s employment within the Sinch group ends sooner, employee stock options remain exercisable for a period of five (5) years from the date of grant. In the event the participant is prevented from exercising employee stock options due to the EU Market Abuse Regulation or other applicable laws or internal policies, Sinch’s board of directors may prolong the exercise period for such participants with a corresponding period, however not longer than eight (8) months.

Performance criteria for LTI 2024 Series 7 and 8

The vesting of the employee stock options in LTI 2024 Series 7 and 8 is dependent on the extent to which four performance criterion related to Gross Profit per share, Adjusted EBITDA per share, Reduction in greenhouse gas emissions, and Representation of female leaders in Sinch (the “Performance Criteria”, each a “Performance Criterion”) are met.

Each Performance Criterion will be applicable to 40 or ten (10) per cent of the stock options that have reached the Initial or Subsequent Vesting Date according to the table below:

Vesting will be based on the fulfilment of the Performance Criteria during the financial years 2024-2027 as per the table below. Example: employee stock options of Series 7 granted in June 2024 will reach its Initial Vesting Date in June 2025. The latest available data for a full financial year at this time is data for 2024 and therefore the Performance Criteria in column FY24 shall be applied. One year later at a Subsequent Vesting Date in June 2026 the latest available data for a full financial year is 2025 and therefore the Performance Criteria in column FY25 shall be applied, etc.

* Sinch shall reduce greenhouse gas emissions in line with the 1.5-degree target under the Paris Agreement. This target includes Scope 1 (direct emissions) and Scope 2 (indirect emissions from energy consumption).

Example calculation:

Series 7 employee stock options are granted on 25 May 2024. The Initial Vesting Date will be 25 May 2025. In this example calculation we assume that for 2024 (the latest full year for which applicable data is available) the results are as follows:

Gross Profit per share: SEK 11.56

Adjusted EBITDA per share: SEK 4.70

Reduction in greenhouse gas emissions: Target not reached

Representation of female leaders: 30%

The Performance Criteria is then calculated as follows:

Gross Profit per share:
The threshold SEK 11.28 for minimum vesting is met. In this example SEK 11.56 is the midpoint between the threshold and the target therefore 50% of the Performance Criterion is met.

Adjusted EBTDA per share:
Adjusted EBITDA per share is SEK 4.70 and is higher than the target (SEK 4.51) which implies that 100% of the Performance Criterion is met.

Reduction in greenhouse gas emissions:
Target not reached.

Representation of female leaders:
The actual number is 30% for 2024 and the target was 29%, i.e. this Performance Criteria is met.

Summary of Performance Criteria:
(50% x 40%) + (100% x 40%) + (0% x 10%) + (100% x 10%) = 70%
i.e. 70% of the employee stock options that could have vested at the Initial Vesting Date will have vested due to partial fulfilment of the Performance Criteria.

Catch-up of financial performance criterion

If any of the financial performance criteria (Gross Profit per share and EBITDA per share) has not been fulfilled, or has been partially fulfilled, on a given Initial or Subsequent Vesting Date but the financial performance criterion on a later Subsequent Vesting Date is fulfilled to a greater extent, vesting of the financial performance criterion for the earlier vesting dates shall be deemed to have been fulfilled to the same extent as on the later vesting dates, and the balance of the previously unvested employee stock options shall vest.

In the event of any corporate event or transaction involving the Company including, but not limited to, a merger, consolidation, separation, share split, reverse share split, spin-off, extraordinary dividend, mergers or acquisitions within the group, or any similar corporate event or transaction, the board of directors shall have the possibility to make reasonable adjustments to the financial performance criteria (Gross Profit per share and Adjusted EBITDA per share).

Preparation and administration

The board of directors shall be responsible for the design, interpretation and management of stock options granted under LTI 2024 within the framework of the above-mentioned principal terms and conditions. The board of directors has the right to make reasonable changes and adjustments in detailed terms and conditions of the framework for stock options under LTI 2024 as deemed necessary or appropriate due to differences in local legislation or practices or for administrative purposes. For holders of stock options who are members of the group management, the board of directors is entitled to (i) accelerate vesting of stock options in the event of a change of control situation where the holder is dismissed from his or her employment in connection therewith and (ii) permit extended vesting and exercisability during the severance period, e.g. in good leaver situations. The board of directors also has the right to adjust detailed terms and conditions of stock options in the event of significant changes within the group or its operational environment that entail that the framework established for stock options under LTI 2024 is no longer reasonable or appropriate, provided that such changes are not more favourable to the participant than the terms and conditions set forth in this resolution proposal.

Recalculation due to split, consolidation, new share issue etc.

The exercise price and the number of shares that each warrant or stock option entitles to subscription of shall be recalculated in the event of a split, consolidation, new share issue etc. in accordance with customary re-calculation terms or as set out in the detailed terms and conditions of warrants.

Allocation principles, etc.

The participants’ right to acquire warrants or to be granted employee stock options is differentiated between employees with reference to inter alia position, responsibility and working performance in the group. The participants have for this reason been divided into three (3) different categories:

Category A (not more than 25 persons): Members of the group management and selected key personnel

Category B (not more than 100 persons): Business unit management and key personnel

Category C (not more than 500 persons): Other personnel

Warrants may be transferred to members of the group management and selected key personnel, business unit management and key personnel and other personnel in Sweden. A precondition for being entitled to acquire warrants is that the participant enters into a pre-emption agreement with the Company and that the participant acquires an equal number of warrants of Series 1, 2 and 3, respectively, or an equal number of warrants of Series 4, 5 and 6, respectively. Pre-emption shall be made at market value. The warrants are otherwise freely transferable. The right to receive employee stock options of Series 7 shall be reserved for current and future employees of the Sinch group who work outside of Sweden, and employee stock options of Series 8 shall be reserved for current and future employees who work in Sweden.

The below allocation principles apply to the grant of warrants/stock options within each of the categories set out above.

In the event that all warrants and/or stock options within one or more categories are not transferred, such non-transferred warrants/stock options may be offered to employees in other categories. The maximum number of warrants and/or stock options per person within each category as set out above may however not be exceeded for any individual. Warrants may be transferred and stock options may be granted on one or more occasion.

Neither the Company’s board members, nor the founders, shall be eligible to participate in LTI 2024.

Item (b) – Proposal regarding issue and transfer of warrants of Series 1–6 to participants in LTI 2024 in Sweden

The board of directors proposes that the Company shall issue not more than 1,800,000 warrants for subscription of shares, whereof not more than 300,000 warrants in Series 1–6, respectively, whereby the Company’s share capital may be increased by not more than SEK 18,000 at full exercise of the warrants for subscription of shares, corresponding to approximately 0.21 per cent of the share capital in the Company as of the date of this proposal, being SEK 8,433,628.48.

The right to subscribe for the warrants shall, with deviation from the shareholders’ preferential rights, only vest in the Subsidiary, with the right and obligation to dispose of the warrants as set out in item (a) above. Each warrant entitles the holder to subscribe for one (1) share in the Company. The warrants will be issued without consideration to the Subsidiary.

In order to fulfil the commitments arising from LTI 2024, the board of directors proposes that the general meeting authorizes that the Subsidiary may transfer warrants to participants, assign warrants to a third party, or in another way dispose over the warrants, in accordance with item (a).

Detailed resolution proposals for each of the respective issues of warrants Series 1, 2, 3, 4, 5 and 6 including complete terms and conditions for the warrants, are set out in the board of directors’ comprehensive proposal (including its appendices).

Item (c) – Proposal on issue of warrants to secure delivery of shares upon exercise of employee stock options of Series 7

The board of directors proposes that the Company shall issue not more than 13,600,000 warrants in Series 7, whereby the Company’s share capital may be increased by not more than SEK 136,000 at full exercise of the warrants for subscription of shares, corresponding to approximately 1.58 per cent of the share capital in the Company as of the date of this proposal, being SEK 8,433,628.48.

The right to subscribe for the warrants shall, with deviation from the shareholders’ preferential rights, only vest in the Subsidiary, with the right and obligation to dispose of the warrants as further described above. Each warrant entitles the holder to subscribe for one (1) share in the Company during the period from and including the date of registration with the Swedish Companies Registration Office (Sw. Bolagsverket) up to and including 31 December 2033, at an exercise price equal to the shares’ quota value (currently SEK 0.01). The warrants shall be issued to the Subsidiary without consideration.

In order to fulfil the commitments arising from LTI 2024, the board of directors proposes that the general meeting authorizes that the Subsidiary may transfer warrants to a third party, or otherwise dispose over the warrants, in accordance with item (a).

A detailed resolution proposal for the issue of warrants Series 7, including complete terms and conditions for the warrants, is set out in the board of directors’ comprehensive proposal (including its appendices).

Item (d) – Proposal on issue of warrants to secure delivery of shares upon exercise of employee stock options of Series 8

The board of directors proposes that the Company shall issue not more than 1,700,000 warrants in Series 8, whereby the Company’s share capital may be increased by not more than SEK 17,000 at full exercise of the warrants for subscription of shares, corresponding to approximately 0.20 per cent of the share capital in the Company as of the date of this proposal, being SEK 8,433,628.48.

The right to subscribe for the warrants shall, with deviation from the shareholders’ preferential rights, only vest in the Subsidiary, with the right and obligation to dispose of the warrants as further described above. Each warrant entitles the holder to subscribe for one (1) share in the Company during the period from and including the date of registration with the Swedish Companies Registration Office (Sw. Bolagsverket) up to and including 31 December 2033, at an exercise price equal to the shares’ quota value (currently SEK 0.01). The warrants shall be issued to the Subsidiary without consideration.

In order to fulfil the commitments arising from LTI 2024, the board of directors proposes that the general meeting authorizes that the Subsidiary may transfer warrants to a third party, or otherwise dispose over the warrants, in accordance with item (a).

A detailed resolution proposal for the issue of warrants Series 8, including complete terms and conditions for the warrants, is set out in the board of directors’ comprehensive proposal (including its appendices).

Additional information regarding LTI 2024

Market value of warrants of Series 1–6

Based on a market value of the underlying share of SEK 25.00, the market value of the warrants of Series 1–6 is, in accordance with a preliminary valuation made by PwC, respectively, SEK 6.18, SEK 6.22, SEK 6.83, SEK 6.18, SEK 6.22 and SEK 6.83 per warrant of Series 1, 2, 3, 4, 5 and 6, assuming an exercise price of, respectively, SEK 32.50, SEK 35.00, SEK 37.50, SEK 32.50, SEK 35.00 and SEK 37.50 per share. The Black & Scholes valuation model has been used for the preliminary valuation of the warrants, assuming a risk-free interest of, respectively, 2.56, 2.51, 2.40, 2.56, 2.51 and 2.40 per cent for warrants of Series 1, 2, 3, 4, 5 and 6, and an estimated volatility during the term of the warrants of approximately 42 per cent.

Costs

Given that the warrants of Series 1–6 shall be transferred at a price corresponding to the market value of the warrants, the Company estimates that no social security costs will arise for the Company in connection with the transfer of warrants to the participants. Neither should any social security costs arise in connection to the exercise of the warrants.

The costs of the subsidy in LTI 2024 consist of the subsidy paid in connection with the participant’s notice of acquisition of warrants and the social security contributions payable on this subsidy. The total cost of the subsidy, including social security costs, are estimated to amount to approximately SEK 15 million (calculated based on the preliminary market value of warrants of Series 1-6 above, that the subsidy shall cover the full warrant premium (before any tax on such subsidy), a social security rate of 31.42%, that the maximum number of warrants are acquired and that all vesting conditions related to the subsidy are fulfilled). Against this subsidy, the premium paid for the warrants corresponds to a total value of approximately SEK 12 million (calculated based on the same assumptions as the estimated subsidy cost) which the Company will receive upon transferring the warrants, as a result of which the net charge on the Company’s equity consists of the social security contributions paid for the subsidy.

The employee stock options Series 7 and 8 are expected to incur accounting costs (accounted for in accordance with the accounting standard IFRS 2) as well as social security costs during the term of the stock options. According to IFRS 2, the employee stock option costs shall be recorded as a personnel expense in the income statement during the vesting period. The total costs for employee stock options Series 7 and 8, calculated in accordance with IFRS 2, are estimated to amount to approximately SEK 103 million during the term of the program (excluding social security costs). The estimated costs have been calculated based on, inter alia, the following assumptions: (i) a market price of the Company’s share of SEK 25 at the time of grant, (ii) an estimated future volatility in respect of the Company’s share during the term of the stock options of 42 per cent, (iii) that the maximum number of stock options encompassed by this resolution proposal are granted to participants, (iv) expected time to exercise in accordance with IFRS 2, (v) an annual turnover of personnel of approximately 10 per cent based on historical data, and (vi) that all vested stock options are exercised. Social security costs, which are expected to arise primarily in connection to the exercise of stock options, are estimated to amount to approximately SEK 13 million during the term of the program, based on inter alia the assumptions set out under items (i)–(vi) above as well as an average social security rate of 6.2 per cent and an annual increase in the market price of the Company’s share of 15 per cent during the vesting period.

Other costs related to the LTI 2024, including inter alia expenses related to fees to external advisors, external appraiser and administration of the incentive program, are estimated to amount to approximately SEK 2 million during the term of the program.

Based on the assumptions set out above, the total costs of the LTI 2024 are estimated to approximately SEK 133 million in total during the term of the program.

These costs shall be seen in relation to the total employee benefits expenses of the Sinch group, which during the financial year 2023 amounted to SEK 4,371 million.

Dilution

If all warrants/stock options within the frame of LTI 2024 are transferred or granted to participants and if all warrants/stock options are exercised, up to 17,100,000 shares may be issued, equivalent to a maximum dilution of approximately 1.99 per cent of the shares and votes of the Company. Upon full exercise of the warrants, the Company’s share capital will increase with SEK 171,000. Together with warrants and stock options which have been transferred or granted to participants in LTI 2019, LTI 2020, LTI II 2020, LTI 2021, LTI II 2021, LTI 2022 and LTI 2023 which are outstanding as of the date of this resolution proposal, including warrants that have been exercised but where the shares have not yet been registered, the maximum dilution will amount to approximately 5.59 per cent of the shares and votes of the Company. The dilution calculations have been based on the maximum number of shares and votes which may be issued upon exercise of warrants and stock options, divided by the total number of shares and votes in the Company after such issues (based on the number of shares issued in the Company as of the date of this resolution proposal, being 843,362,848 shares).

Motivation in respect of Series 7 stock option vesting and exercise conditions

According to the Rules on Remuneration laid down by the Stock Market Self-Regulation Committee (Sw. Aktiemarknadens Självregleringskommitté), the vesting period, or the period between the date of grant until the date when a warrant or stock option may be exercised shall, as a general rule, not be shorter than three (3) years and any deviations from this general rule shall be justified. As set out further above, vesting of Series 7 employee stock options will start on the first anniversary of the date of grant of the stock options to participants, and on the third anniversary of the date of grant, up to 75 per cent of the employee stock options granted to a participant may have vested (provided that all applicable vesting conditions have then been fulfilled). Further, the vested stock options become exercisable soon after they have vested. The reason for applying such terms, which are not in line with the recommendations of the Stock Market Self- Regulation Committee as set out above, is that the board of directors of the Company consider such terms to be in line with market practice for employee stock option programs in most of the countries where the intended participants in Series 7 of LTI 2024 operate. It is therefore, in the opinion of the board of directors, in the best interest of the Company and its shareholders to apply such terms in order to fulfil the objectives of LTI 2024.

Preparation of the proposal

This proposal in respect of LTI 2024 has been prepared by the Company’s remuneration committee and board of directors in consultation with external advisers.

The reason for the deviation from the shareholders’ preferential rights

The reason for the deviation from the shareholders’ preferential rights is to implement LTI 2024.

Majority requirements

Since the resolutions under items (a)–(d) are conditional upon each other and passed as one resolution, a resolution to approve the proposal is valid only when supported by shareholders holding not less than nine-tenths (9/10) of the votes cast as well as the shares represented at the general meeting (as the transfer of warrants to participants under items (b)–(d) require such majority).

Authorization

It is proposed that the board of directors, or a person appointed by the board of directors, shall be authorized to make such minor adjustments to this resolution that may be required for the registration with the Swedish Companies Registration Office (Sw. Bolagsverket) and Euroclear Sweden AB, and that the board of directors shall have the right to undertake minor adjustments to the incentive program due to applicable foreign rules and laws, applicable laws, regulations or market practice.

Overview of outstanding incentive programs

Since the Company’s IPO in 2015, the Company has implemented several share-related incentive programs, of which two programs, LTI 2016 and LTI 2018, have reached full maturity with no more outstanding stock options or warrants. An overview of all outstanding incentive programs is included in the table below.

Note: The total number of shares at AGM/EGM, size of program, and estimated dilution has been recalculated due to the 2021 share split.

* Based on 843,362,848 shares outstanding.

The dilution calculations above have been based on the maximum number of shares and votes which may be issued upon exercise of outstanding warrants and employee stock options, divided by the total number of shares and votes in the Company after such issues (based on the number of shares issued in the Company as of the date of this resolution proposal, being 843,362,848 shares).

The Company's outstanding share-related incentive programs will be described in detail in the 2023 annual report, note 9, and in the remuneration report for 2023.

Majority requirements

The resolution under item 14 above is valid only if the resolution is supported by shareholders representing at least two thirds (2/3) of the votes cast as well as of the shares represented at the annual general meeting. The resolution under item 15 above is valid only if the resolution is supported by shareholders representing at least nine tenths (9/10) of the votes cast as well as the shares represented at the annual general meeting due to, as is stated above, the resolutions under item 15 being conditional upon each other and passed as one resolution and the fact that some of these resolutions require such majority.

Available documents

The complete proposals and other documents which shall be made available prior to the annual general meeting will be made available at the at the Company’s office, Lindhagensgatan 112, SE-112 51, Stockholm, Sweden, and on the Company’s website (https://investors.sinch.com) not later than three weeks prior to the annual general meeting in accordance with the requirements of the Swedish Companies Act. The documents will be sent to shareholders who request it and who inform the Company of their mailing address. Such request can be sent to the contact details set out under the heading “Attendance in person or by proxy” above. All documents above will be made available and presented at the annual general meeting.

Shareholders’ right to request information

If a shareholder at the annual general meeting so requests and, according to the board of directors, it will not result in material damage to the Company or significant inconvenience to any individual, the board of directors and the CEO are obliged to provide information concerning conditions that could influence the assessment of an item on the agenda and conditions that could influence assessments of the financial position of the Company. This disclosure obligation applies equally to the Company’s relationship with other group companies, the consolidated accounts and such circumstances pertaining to subsidiaries as those referred to in the preceding sentence.

Processing of personal data

For information on how personal data is processed in connection with the annual general meeting, please refer to the privacy notices of Euroclear Sweden AB and Computershare AB which are available on their respective websites (www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf and www.computershare.com/se/gm-gdpr#English).

Other information

The Company has, as of the date of this notice, 843,362,848 outstanding shares and votes. The Company holds no treasury shares as of the date of this notice.

***

Stockholm in April 2024
Sinch AB (publ)
The board of directors