Notice and invitation to attend the Annual General Meeting of Sensys Gatso Group AB

06/04/2021 - The shareholders of Sensys Gatso Group AB (publ) reg no 556215-4459, (the “Company”) are hereby invited to the Annual General Meeting on Tuesday 11 May 2021.

Due to the extraordinary situation as a result of Covid-19 and in order to ensure the safety and health of shareholders and employees, the Company’s Board of Directors has resolved that the Meeting will be carried out through advance voting (postal voting) in accordance with the Act (2020:198) on temporary exceptions to facilitate the execution of general meeting in companies and other associations. No meeting with the possibility to attend in person or to be represented by a proxy will take place, i.e. the Meeting will be held without physical presence.

Information on the resolutions passed at the Meeting will be published on Tuesday 11 May 2021, as soon as the result of the advance voting has been finally confirmed.

Pre-conditions for participation
Shareholders wishing to participate in the Meeting shall be recorded as a shareholder in the share register kept by Euroclear Sweden AB as of Monday, 3 May 2021 and notify by casting its advance vote in accordance with the instructions under the heading Advance voting so that the advance voting form is received by the Company no later than Monday 10 May 2021.

A shareholder whose shares are nominee-registered must temporarily register the shares in his or her own name with Euroclear Sweden AB in order to be able to participate at the meeting. Such registration must be completed by Wednesday, 5 May 2021. This means that the shareholder must notify the administrator of his or her wish in this respect in good time ahead of this date.

Advance voting
The shareholders may only exercise their voting rights at the Meeting by voting in advance, so-called postal voting in accordance with section 22 of the Act (2020:198) on temporary exceptions to facilitate the execution of general meetings in companies and other associations. 

A special form shall be used for advance voting. The form is available on the Company’s website, www.sensysgatso.com. The advance voting form is considered as the notification of participation. 

The completed voting form must be received by the Company no later than on Monday 10 May 2021. The form shall in due time be submitted via mail to the Company at Sensys Gatso Group AB, Box 2174. 550 02 Jönköping or via e-mail to info@sensysgatso.com. The shareholder may not provide special instructions or conditions in the voting form. If so, the vote (i.e. the advance vote in its entirety) is invalid. 

In the advance voting form, shareholders can request that a resolution in one or some of the items on the proposed agenda below are deferred to a so-called continued general meeting, which must not solely be an advance voting meeting. Such continued general meeting to decide on a particular matter shall take place if the Meeting decides on it or if shareholders of at least one tenth of all shares in the Company request it.

If the shareholder votes in advance by proxy, a signed and dated power of attorney shall be enclosed to the form. Forms of power-of-attorney in Swedish and English are available on the Company’s website, www.sensysgatso.com. If the power-of-attorney is issued by a legal entity, a verified copy of the registration certificate or an equivalent authority document for the legal entity must be appended. The power-of-attorney and the registration certificate may not be older than one year. However, a longer period of validity may be specified on the power-of-attorney (although no longer than five years from the date of issue). 

Further instructions and conditions are included in the advance voting form. 

For questions about the advance voting or to have the advance voting form or any power-of-attorney sent by post, please contact the Company on phone number +46 36 34 29 80. 

Questions
Shareholders have the right to request information regarding items on the agenda or the Company’s financial situation in accordance with Chapter 7 Section 32 and 57 of the Swedish Companies Act. Questions shall be submitted in writing to the Company at Sensys Gatso Group AB (publ), Box 2174, 550 02 Jönköping, or via e-mail to investors@sensysgatso.com, no later than on Saturday 1 May 2021. The shareholder must state its name and social security number or registration number to have its question answered. In addition, the shareholder should also state its e-mail address or phone number. The questions and the answers will be available no later than on Thursday 6 May 2021 at the Company at Sensys Gatso Group AB, Vasavägen 3c in Jönköping, and on the Company’s website, www.sensysgatso.com, and will be sent to the shareholder if the shareholder’s address is known or has been provided by the shareholder along with the question. 

Proposed Agenda
1. Opening of the meeting.
2. Election of the chairman for the meeting.
3. Establishment and approval of register of voters.
4. Approval of the agenda.
5. Election of a member to review and approve the minutes.
6. Confirmation that the meeting has been properly called.
7. Presentation of the annual accounts and the auditor’s report together with the annual consolidated accounts and the auditor’s report for the Group.
8. Decision on the adoption of the Company’s income statement and the balance sheet and the consolidated income statement and the balance sheet for the Group.
9.  Decision on dispositions in respect of the Company’s profits/loss according to the adopted balance sheet.
10. Decision concerning the discharge from liability for the Members of the Board of Directors and the CEO.
11. Decision on approval of the remuneration report.
12. Establishment of the number of Members of the Board and Alternate Members, as well as the number of Auditors and deputy auditors.
13. Establishment of remuneration to the Members of the Board and the fees for the auditors.
14. Election of the member of the Board of Directors and the Chairman of the Board.
15. Election of auditors.
16. Decision on long-term incentive program for key executives and employees.
17. Resolution to authorise the Board of Directors to make decisions concerning the issuance of shares.
18. Resolution to authorise the Board of Directors to make decisions concerning acquisitions and transfers of the Company’s own shares.
19. Decision on amendment of the Articles of Association.
20. Conclusion of the meeting.
 

The Board of Directors, etc. (items 2, 12-15)
The nomination committee, which consisted of Timo Gatsonides (individual holdings), Per Wall (individual holdings), Jan Johansson (appointed by Inger Bergstrand), and Claes Ödman (Chairman of the Board), has submitted the following proposals regarding items 2, 12 - 15:

Chairman of the meeting: Claes Ödman, or if he is prevented, the person the Board proposes in his place.

Number of Board Members: six Board Members, with no alternate members 

Board Members: re-election of Claes Ödman, Jochem Garritsen, Pia Hofstedt, Kerstin Sjöstrand, Christina Hallin and Nishant Batra.

Chairman of the Board: Claes Ödman

Remuneration to Board Members: the remuneration to the Chairman of the Board will be paid in the amount of SEK 500,000. The remuneration to each of the other Board Members elected by the Annual General Meeting shall amount to SEK 250,000. Total Board remuneration thus amounts to SEK 1.750 million. The nomination committee recommends that the Board Members use 1/3 of their remuneration to buy shares in the Company. 

Auditor: Re-election of the auditing firm BDO AB with authorised auditor Johan Pharmanson appointed as principal auditor.

Auditor’s fee: in accordance with approved invoice, within the framework of the price estimation submitted.

Details concerning the proposed Board Members can be found on the Company’s website www.sensysgatso.com.

Establishment and approval of register of voters (item 3)
The register of voters proposed for approval is the register that has been established by the Company, based on the share register and received advance votes, and controlled and approved by the person elected to approve the minutes. 

Election of a member to review and approve the minutes (item 5)
Jan Johansson (representing Inger Bergstrand), or if he is prevented, the person instead appointed by the Board of Directors, are proposed to be elected to approve the minutes of the Meeting together with the Chair. The task of approving the minutes of the Meeting also includes verifying the register of voters and that the advance votes received are correctly stated in the minutes of the Meeting. 

The Board of Directors’ proposal concerning the allocation of the net profits/losses (item 9)
The Board proposes that no dividend be distributed to the shareholders.

Decision on approval of the remuneration report (item 11)
The Board of Directors proposes that the Meeting resolves to approve the Board of Directors’ report on remuneration pursuant to Chapter 8, Section 53a of the Swedish Companies Act. 

Decision on long-term incentive program for key executives and employees (item 16)
The Board of Directors proposes the introduction of a long-term incentive program for the Company’s executives and key employees in accordance with the following.

The Board of Directors proposes that the Meeting resolves to implement a long-term incentive program in the form of a stock option plan for to up to 50 key executives and employees (“LTIP 2021”) in accordance with item 16a below. 

LTIP 2021 is a program that spans over three award years and under which the participants will be granted, free of charge, options (“Options”) that entitle the acquisition of up to 44.0 million shares in the Company subject to three-year vesting periods, in accordance with the terms stipulated below. The 2021 grants will consist of up to 90 percent of awards, i.e. up to 39.6 million shares, and the balance will be granted separately in 2022 and 2023 to selected employees who join the Company or, in exceptional cases, have been promoted. 

As part of the implementation of LTIP 2021, a total of up to 55.0 million shares (including shares acquired through warrants for the hedging of social security costs) may be issued in accordance with item 16b below (of which a maximum of 90 percent, 49.5 million shares may be issued in 2021). The Board wishes to promote share ownership but also to minimise dilution and therefore intends to “net settle” exercised options, i.e. the participant receives the value of the option gain in shares. The expected share usage is hence significantly less.

If the Meeting does not approve the proposal to issue and transfer warrants in accordance with item 16b below, the Board of Director proposes that the Company shall enter into one or more equity swap agreements, in accordance with item 16c below, in order to ensure delivery of the shares under LTIP 2021.  

The Board of Directors intends to propose that the Annual General Meetings in 2022 and 2023 adopts similar proposals to ensure the delivery of the remaining 10 percent of the LTIP 2021 option grants to new employees and social security hedges during those financial years.

Proposal regarding adoption of a long-term incentive program for executives and key employees (item 16a)

The rationale for the proposal
LTIP 2021 is intended for the Company’s key executives and employees. At least 50% of the Options will be granted to employees outside of the management team. The Board of Directors of the Company believes that an equity-based incentive program is a central part of an attractive and competitive remuneration package, facilitating the recruitment, retention and share ownership of key executives and employees, whilst aligning the interests of participants with shareholders and thus promoting sustainable, long-term value creation for the Company. LTIP 2021 is adapted to the Company’s current position and needs. 

Allocation
The participants can be granted Options over a maximum of 44.0 million shares in total, of which 39.6 million shares may be used for grants in 2021. The remaining 4.4 million shares will, provided that the delivery of shares for Option grants are approved by the Annual General Meetings in 2022 and 2023, be granted during the 2022 and 2023 financial years to selected new and, in exceptional cases, promoted employees. The Board of Directors shall resolve upon the allocation of Options to individual participants subject to a maximum grant of 6 million shares to any one individual. The Board does not intend to make any other long-term incentive awards to the participants in LTIP 2021 before the end of 2023.

Conditions for Options
The following conditions shall apply for the Options.

  • The Options shall be granted free of charge to the participants.
  • The Board of Directors shall resolve upon the allocation of Options (the date of an Option grant being the “Grant Date”).
  • Each Option entitles the holder to acquire one share in the Company for a pre-determined exercise price. The exercise price will be 110 percent of the Volume Weighted Average Price (“VWAP”) of the Company’s shares traded on Nasdaq Stockholm during the ten trading days before the Grant Date. The calculated exercise price shall be converted to the nearest whole öre.
  • The Options shall vest over a three-year period, whereby all Options shall vest on the third anniversary of the Grant Date, provided that the participant, with some customary exceptions (including good-leaver provisions, retirement and permanent incapacity to work due to illness or accident), is still employed by Company at the time.
  • The latest point in time at which vested Options may be exercised shall be the fifth anniversary of the Grant Date.
  • The Options shall not constitute securities and shall not be able to be transferred or pledged. However, in the event of a participant’s death, the rights constituted by vested Options shall accrue to the beneficiaries of the holder of the Options.
  • At the Board of Directors’ sole discretion, the number of Options can be re-calculated in the event that changes occur in the Company’s equity capital structure, such as a bonus issue, merger, rights issue, share split or reverse share split, reduction of the share capital or similar measures, to achieve an outcome as neutral as possible for the participants.
  • In the event that the control over the Company changes so that one party, or several parties acting in concert, gains control over shares representing more than 50 percent of the total number of votes in the Company, all Options shall vest immediately.
  • The Options shall be governed by separate agreements with each participant. The Board of Directors shall be responsible for the preparation and management of LTIP 2021 within the above-mentioned guidelines. The Board of Directors has the right, within the framework of the agreement with each participant, to make the reasonable changes and adjustments of the terms and conditions of the Options that are deemed suitable or appropriate as a result of local employment law or tax law or administrative conditions. The Board of Directors has the right to, in extraordinary cases, limit the scope of, or prematurely terminate, LTIP 2021 in whole or in part.

Preparation and administration 
The Board of Directors is responsible for preparing the detailed terms and conditions of LTIP 2021, in accordance with the above mentioned terms and guidelines. 

Preparation of the proposal

LTIP 2021 has been initiated by the Board of Directors based on an evaluation of comparable incentive programs, carried out by an external consultant.

Proposal regarding issue and transfer of warrants (item 16b)

Issue and transfer of warrants
In order to ensure the delivery of shares granted in 2021 under LTIP 2021 and for the hedging of social security costs, the Board of Directors proposes that the Annual General Meeting resolves to issue a maximum of 11,000,000 warrants, whereby the Company’s share capital may be increased by not more than SEK 550,000 in accordance with the following:

  1. The right to subscribe for the warrants shall, with deviation from the shareholders’ pre-emptive rights, only vest with Sensys Gatso Sweden AB, a wholly-owned subsidiary of the Company. The reason for the deviation from the shareholders’ pre-emptive rights is the implementation of LTIP 2021. Sensys Gatso Sweden AB shall be entitled to transfer the warrants free of charge to the participants or to a financial intermediary in connection with exercise, or in another way dispose of the warrants in order to be able to secure the Company’s commitments and costs in relation to LTIP 2021.
  2. The warrants shall be issued free of charge and shall be subscribed for no later than 30 June 2021.
  3. The warrants may be exercised during the time period from the registration of the warrants with the Swedish Companies Registration Office (Sw. Bolagsverket) up to and including 31 December 2026.
  4. The exercise price for subscription for shares based on the warrants shall correspond to the share’s quota value.
  5. Shares issued upon exercise of warrants shall confer right to dividend in accordance with Clause 7 of the terms and conditions of the warrants.
  6. The Chairman of the Board of Directors shall be authorized to make such minor adjustments that may be required to register the issuance.

Dilution
The maximum number of shares that may be issued pursuant to an exercise of Options under LTIP 2021 is 55.0 million shares (including hedging of social security costs), technically corresponding to a maximum dilution of approximately 6 percent. However, to promote continued share ownership and to minimise dilution, the Company will seek to meet its obligations through “net settled” arrangements, where the participant receives the net value in shares. To illustrate this, if the Company grants the maximum 90% of options in 2021 when the share price is SEK 1.40, the exercise price will be 10% higher at SEK 1.54 and the total number of options will be 49.5 million, including a 25% hedge for social security. If the options are settled with a corresponding number of shares the dilution will be 5.4%. But if the option is “net settled”, only the value increase will need to be met. For example, at a 100% share price increase this would require 22.3 million shares, or 2.4% dilution over a three year period, equalling an average of 0.8% dilution per year. 

The Company currently has one outstanding share-based incentive plan. Upon the recruitment of the CEO, shareholders approved a one-off stock option plan with a similar structure to this proposal, which vested in 2020 remains exercisable until 2022.

Scope and costs of the program
LTIP 2021 will be accounted for in accordance with “IFRS 2 – Share‐based payments”. IFRS 2 stipulates that the Options shall be expensed as personnel costs over the vesting 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 costs will be expensed in the income statement according to UFR 7 during the vesting period.

Assuming a share price at the time of allocation of SEK 1.40 and that all Options are vested and exercised up-front, the annual cost for LTIP 2021 according to IFRS 2 is estimated to approximately SEK 6,23 million per year before tax and approximately SEK 18.69 million over the lifespan of the program. Within these amounts, the annual and total costs for Options granted in 2021 are estimated to be approximately SEK 5.57 million and SEK 16.71 million respectively. Since the social security costs associated with LTIP 2021 are covered by hedging measures through the issue of warrants, which will be exercised by a financial intermediary in connection with the exercise of the Options, the social security costs associated with LTIP 2021, estimated at 25 percent, will be fully covered. The hedging measures will instead result in an additional dilution of the Company’s current shareholders (which is included in the dilution calculations presented under the heading “Dilution” above). Further, the costs associated with the establishment and administration of LTIP 2021 are estimated to be a total of SEK 850,000 up to the vesting period. In addition, minor brokerage costs will arise in connection with the exercise of hedging warrants by a financial intermediary.

The costs associated with LTIP 2021 are expected to have a marginal effect on the Company’s key performance indicators.

Majority requirement
A valid resolution in respect of item 16b above requires that the proposal is supported by shareholders holding at least nine-tenths of both the votes cast and the shares represented at the Annual General Meeting.

Proposal regarding authorization for the board of directors to enter into equity swap arrangements to cover obligations under LTIP 2021 (item 16c)

Equity swap arrangements
The Board of Directors proposes that the Annual General Meeting authorizes the Board of Directors to pass a resolution, on one or more occasions, for the period up until the next Meeting, to direct the Company to enter into one or more equity swap agreements with a third party (e.g., a bank), on terms and conditions in accordance with market practice, to hedge the obligations of the Company under LTIP 2021. Under such equity swap arrangements, in exchange for certain fees paid by the Company, the third party acquires (in its own name) such number of shares in the Company as are necessary to cover the Company’s obligations under the LTIP 2021 and then, transfer (in its own name) such shares to the participants per the terms of the LTIP 2021.
 

Scope and costs of the program
LTIP 2021 will be accounted for in accordance with “IFRS 2 – Share‐based payments”. IFRS 2 stipulates that the Options shall be expensed as personnel costs over the vesting 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 costs will be expensed in the income statement according to UFR 7 during the vesting period.

Assuming a share price at the time of allocation of SEK 1.40 and that all Options are vested and exercised up-front, the annual cost for LTIP 2021 according to IFRS 2 is estimated to approximately SEK 6,23 million per year before tax and approximately SEK 18,69 million over the lifespan of the program. Within these amounts, the annual and total costs for Options granted in 2021 are estimated to be approximately SEK 5,57 million and SEK 16,71 million respectively.  Further, the costs associated with the establishment and administration of LTIP 2021 are estimated to a total of SEK 850,000. The costs associated with LTIP 2021 are expected to have a marginal effect on the Company’s key performance indicators.

The costs above do not include the costs for entering into equity swap arrangements with a third party.

Resolution to authorise the Board of Directors to make decisions concerning the issuance of shares (item 17)
The Board of Directors proposes that the Meeting authorises the Board of Directors, on one or more occasions during the period until the next Annual General Meeting, with or without deviation from the shareholders’ preferential rights, to make decisions concerning an issuance of new shares corresponding to no more than ten (10) percent of the total number of the Company’s outstanding shares as of the date of publication of this notice and invitation to attend the Annual General Meeting. This authorisation is to include the right to make a decision concerning the issuance of new shares with a provision on an issue in-kind, offset or otherwise with conditions in accordance with the Swedish Companies Act.

The reason for the proposal and the deviation from the shareholders’ preferential rights is to allow flexibility in connection with possible further acquisitions or the raising of capital. The basis for the subscription price shall be the market price of the share.

For a valid resolution and approval, a vote in agreement of at least two-thirds of the votes cast as well as those shares represented at the Meeting, is required.

Resolution to authorise the Board of Directors to make decisions concerning acquisitions and transfers of the Company’s own shares (item 18)
The Board of Directors proposes that the Meeting authorise the Board of Directors to make decisions, on one or more occasions during the period until the next Annual General Meeting, concerning the acquisition of the Company’s own shares (treasury shares) up to where, after the acquisition, the Company does not hold a total of more than five (5) percent of the total outstanding shares of the Company. The repurchases shall be made on the Nasdaq Stockholm exchange at a price within the currently registered share price range (known as the “spread”), i.e. the range between the highest bid price and lowest ask price, and otherwise in compliance with the rules laid down by the stock exchange’s rules. The purpose of the repurchase of its own shares is to adapt the Company’s capital structure to the Company’s capital requirements and, where appropriate, to be able to transfer shares in connection with financing of Company acquisitions and other types of strategic investments and acquisitions.

The Board of Directors proposes that the Meeting authorise the Board to make decisions, on one or more occasions during the period until the next Annual General Meeting, concerning the transfer of shares of the Company. The transfer of treasury shares may only be made as part of the purchase price for an acquisition or a merger, and at a maximum with the number of the Company’s own shares that the Company holds at any given time. Payment for the thus transferred shares may be made in-kind or via offsetting of claims against the Company, or otherwise with conditions. The reasons for Board of Directors authorisation to deviate from the shareholders’ preferential rights is to be able to implement, where appropriate, any Company acquisitions and other types of strategic investments and acquisitions in a cost-effective manner. 

For a valid resolution and approval, a vote in agreement of at least two-thirds of the votes cast as well as those shares represented at the Meeting, is required.

Decision on amendment of the Articles of Association (item 19)

The Board of Directors proposes that the Meeting resolves to amend the Articles of Association in accordande with the following:

Present wording

Proposed wording

§1 Company name

 

The name of the Company (Sw. firma) shall be Sensys Gatso Group Aktiebolag. The Company is a public limited liability company (publ).

§1 Company name

 

The name of the Company (Sw. företagsnamn) shall be Sensys Gatso Group Aktiebolag. The Company is a public limited liability company (publ). 

§11 Participation in shareholders’ meeting

 

To be entitled to attend a shareholders’ meeting, shareholders must notify the Company of their intention to attend such meeting not later than by 12 noon on the day stipulated in the notice convening the meeting. This latter-mentioned day may not be a Saturday, Sunday, public holiday, Midsummer Eve, Christmas Eve or New Year’s Eve, and may not be less than five workdays before the shareholders’ meeting.

 

Shareholders may be accompanied to shareholders’ meetings by a maximum of two assistants, provided the shareholder notifies the Company of the number of assistants in the manner stated in the preceding paragraph. 

§11 Participation in shareholders’ meeting

 

To be entitled to attend a shareholders’ meeting, shareholders must notify the Company of their intention to attend such meeting not later than on the day stipulated in the notice convening the meeting. This latter-mentioned day may not be a Saturday, Sunday, public holiday, Midsummer Eve, Christmas Eve or New Year’s Eve, and may not be less than five weekdays before the shareholders’ meeting.

 

Shareholders may be accompanied to shareholders’ meetings by a maximum of two assistants, provided the shareholder notifies the Company of the number of assistants in the manner stated in the preceding paragraph.

 

The Board of Directors may gather proxies according to the procedure stated in Chapter 7, Section 4, second paragraph of the Swedish Companies Act (2005:551).

 

The Board of Directors may before a shareholders’ meeting resolve that the shareholders shall be entitled to vote by post prior to the shareholders’ meeting.  

§12 Record date provision

 

The Company’s shares shall be registered in a record register in accordance with the Swedish Financial Instruments Accounts Act (1998:1479).

§12 Record date provision

 

The Company’s shares shall be registered in a record register in accordance with the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479).

For a valid resolution and approval, a vote in agreement of at least two-thirds of the votes cast as well as those shares represented at the Meeting, is required.

Documentation
The complete documents in accordance Swedish Companies Act, will be available at the Company at Vasavägen 3c in Jönköping and on its website, www.sensysgatso.com, no later than Tuesday, 20 April 2021 and will be sent immediately and free of charge for the recipient to those shareholders who so request and provide their postal address. The share register will be available at the Company at Vasavägen 3c in Jönköping. All documents, including the share register, will be made available in this way.

Shares and votes
There are a total of 921,776,405 shares in Sensys Gatso Group AB, providing an entitlement to the identical number of votes. The Company holds no treasury shares.

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

Jönköping, April 2021
The Board of Directors for Sensys Gatso Group AB (publ)

 

The information was submitted for publication, through the agency of the contact person set out above, at 19.00 on 6 April 2021.

 

 Release (pdf)

For further information:
Ivo Mönnink, CEO
Sensys Gatso Group AB
E investors@sensysgatso.com

Sensys Gatso Group AB is a global leader in traffic management solutions for nations, cities and fleet owners. Sensys Gatso Group has subsidiaries in Australia, Costa Rica, Germany, the Netherlands, Sweden and the USA, and a branch office in the United Arab Emirates and has 252 employees. The Sensys Gatso Group’s shares are listed on Nasdaq Stockholm.

Published: 06/04/2021