Right to participate in the Shareholders’ Meeting
Shareholders who wish to participate in the Shareholders’ Meeting must be
both listed in the register of shareholders maintained by VPC AB (the Swedish Securities Register Centre) not later than October 18, 2004,
and notify the Company of their intent to participate in the Shareholders’ Meeting not later than Friday, October 22, 2004 at 4.00 p.m.
Shareholders whose shares are registered in the names of nominees must temporarily re-register their shares in their own names in the share register in order to participate in the Shareholders’ Meeting. Shareholders who wish to re-register should therefore instruct their nominees in sufficient time prior to Monday, October 18, 2004, when re-registration must be completed.
Notification, etc.
Notification of participation at the Shareholders’ Meeting may be made in writing to Net Insight AB, Attn: Madelene Gummesson, Box 42093, SE-126 14 Stockholm, or by e-mail info@netinsight.net. Notification shall include the shareholder’s name, national registration/corporate registration number, the registered number of shares held, address, telephone number (daytime) and details of any assistants (a maximum of two), and in appropriate cases, information on representatives or proxies. In appropriate cases, the notification shall be accompanied by full authorisation documentation such as registration certificates and proxy forms.
Shareholders represented by proxies shall issue dated proxies to the representative. If the proxy is issued by a legal person, an attested copy of the registration certificate or equivalent for the legal person shall be presented. The proxy and the registration certificate shall not be more than one year old. The original of the proxy, together with any registration certificate should be sent by letter to the Company at the address given above in good time, prior to the Shareholders’ Meeting.
Proposed agenda
1 Election of the Chairman of the Meeting
2 Preparation and approval of the list of shareholders entitled to vote at the Meeting
3 Approval of the agenda
4 Election of one or two minutes-checkers
5 Determination of whether the Meeting has been duly convened
6 The Board’s proposal for the implementation of an Employee Stock Option Plan (see below)
Item 6: The Board’s proposal for the introduction of an Employee Stock Option Plan
A. The Board’s proposal for a resolution on the adoption of the Net Insight AB 2004 Stock Option Plan
The Board proposes that the Shareholders’ Meeting shall make a decision on the adoption of the Net Insight AB 2004 Stock Option Plan (”Employee Stock Option Plan”). The Employee Stock Option Plan includes terms and conditions which shall be the basis for any future decision, including that proposed below regarding the issue of employee stock options in Net Insight AB.
B.The Board’s proposal for a decision on the issue of Stock Options
The Board proposes that the Shareholders’ Meeting shall decide that so-called Employee Stock Options shall be issued under the Employee Stock Option Plan, to give the possibility of acquisition of not more than 6,700,000 shares of series B in Net Insight AB (the ”Company”). The Employee Stock Options shall be offered to permanent employees of the Company and its subsidiary company in accordance with the following principles: Category 1 – Managing Director – the opportunity to acquire not more than 1,200,000 shares; Category 2 – other senior management personnel (about 6 persons) – the opportunity to acquire not more than 800,000 shares per person; Category 3 – other key personnel in defined projects (about 10 persons) –the opportunity to acquire not more than 100,000 shares per person; Category 4 – managers and specialists – the opportunity to acquire not more than 30,000 shares per person; Category 5 – other employees – the opportunity to acquire not more than 15,000 shares per person. The number of shares that it shall be possible to acquire with the support of the Employee Stock Option is determined against the background of certain profit and development goals, decided upon by the Board in advance, being achieved at certain points of time. For competitive reasons, these goals will, however, not be divulged further.
Additionally, the Board shall have the right, in accordance with the conditions stated above, to offer Employee Stock Options to employees and later employees in the Net Insight Group and to foreign companies within the Net Insight Group for onward transfer to employees and later employees abroad.
Allocation to personnel outside Sweden requires that such allocation can be made legally, and that the Board considers that it can be implemented at reasonable administrative and/or financial cost.
If the Company receives back issued Employee Stock Options on account, for example, of the employee having left employment, the Company shall again have the right to issue these to employees in accordance with the principles stated above. However, under no circumstances can the stated time limits or total allocation be exceeded.
The Company’s Board members, appointed by the Annual General Meeting, do not have the right to receive Employee Stock Options.
An Employee Stock Option gives the option holder the opportunity to acquire shares of Series B in the Company at a price per share equivalent to not less than 150% of the average closing price of the B Share on the Stockholm Stock Exchange 20 business days immediately after the date of the Shareholders’ Meeting. The Employee Stock Options shall be received by the employee free of charge, and the duration shall be not more than four years. Utilisation of Employee Stock Options shall be made possible in steps. Employee Stock Options are not transferable, and normally expire for the employee immediately upon cessation of employment as regards that part which has not been earned and can be utilised, and otherwise after three months.
The Board considers that personal long-term owner involvement by the employee can be expected to stimulate increased interest in operations and profit trends, increase motivation and strengthen the feeling of solidarity with the Company. The Employee Stock Option plan is therefore considered to be advantageous for the Company and its shareholders.
C. The proposal by the Board for taking up a subordinated loan through the issue of promissory notes combined with detachable option for subscription for new shares and approval of transfer of options
In order to ensure that the Company can fulfil its commitments to its employees as regards exercising Employee Stock Options, and in order to establish a safeguard against possible cash-flow effects of social security contributions for the programme, the Board proposes that the Shareholders’ Meeting shall decide that the Company shall take up a subordinated loan of a nominal maximum SEK 100 through the issue of promissory notes combined with not more than 8,900,000 options for subscription to new shares of series B in the Company. As a result of this, the Company’s share capital may increase by a maximum of SEK 356,000, equivalent to about 3% of the total number of shares in the Company and about 2.8% of the total number of votes in the Company, upon full subscription. With respect also to outstanding options intended for previous stock option plans, issued during 2002 and 2003, the increase in share capital, with full subscription, can equal about 5.4% of the total number of shares and about 4.9% of the total number of votes in the Company.
Entitled to subscribe, with divergence from the shareholders’ preferential rights, is the Company’s subsidiary, Net Insight Consulting AB (”Consulting AB”), with the right and duty of the subsidiary company after subscription to separate the options and when required, by the employees through exercising the Company’s issued employee stock options, transfer options to employees provided that these are immediately used for subscription to shares (see Item B). Consulting AB shall also have the right to dispose of options in order to cover social security contributions for the Employee stock option plan.
The promissory note of a nominal maximum SEK100, combined with a maximum of 8,900,000 detachable warrants for subscription to 8,900,000 new shares of series B shall be issued at a price equivalent to the nominal amount of the promissory note. The promissory note shall run without interest, and fall due for payment on February 15, 2005.
The price at which subscription to a new share of series B can be made shall be equal to an amount of 145% of the average last price paid for the share on the Stockholm Stock Exchange 20 business days immediately after the date of the Shareholders’ Meeting. In exercising the Employee stock option, a further not less than 5% of the share’s average last price paid on the Stockholm Stock Exchange 20 business days immediately after the date of the Shareholders’ Meeting shall be paid by the holder of the option, for which reason, the total price for acquiring a share in accordance with the Employee stock option shall be at least 150% of the average last price paid on the Stockholm Stock Exchange 20 business days immediately after the date of the Shareholders’ Meeting.
Subscription for shares of series B on the basis of options, with which one (1) option gives the right to subscribe for one (1) share, can take place during the period from November 28, 2005 until December 15, 2008.
The following customary conversion terms, etc., apply to the issue
Subscription to and payment for promissory notes with options shall be made not later than November 15, 2004.
The reason for deviating from the shareholders’ preferential rights is that the Board proposed that the Shareholders’ Meeting should issue Employee Stock Options to employees in order to increase interest in the Company’s activities, and stimulate continued loyalty to the Company. A condition for reaching a decision on the issue of Employee Stock Options – formulated in the manner stipulated under B – is that the proposed issue of promissory notes combined with detachable warrants shall be made to Consulting AB.
The Board, or whomsoever the Board authorises, shall have the right to undertake such minor changes in the Shareholders’ Meeting’s decision as can be required in connection with the registration of the issue and any registration of the options with VPC AB (the Swedish Securities Register Centre).
For a decision by the Shareholders’ Meeting in accordance with the Board’s proposal as given above, it is required that the decision of the Shareholders’ Meeting shall be supported by shareholders representing at least nine-tenths of both the registered votes and the shares represented at the Shareholders’ Meeting.
D.Cancellation of issued options
The Board proposes that the Shareholders’ Meeting shall decide that the options issued under Item C, and which the Board considers are not required to ensure delivery of shares and social security contributions under the Employee Stock Option Plan, shall be cancelled as soon as possible.
E.Rules and authorisation for the Board
The Board proposes that the Shareholders’ Meeting shall decide to request the Board put into action the cancellation decision according to Item D above, and therewith take these measures required in order to fulfil the decision.
____________________________
The Board’s full proposal for the decision in the matter of Item 6 above in its full wording, including documents in accordance with Chapter 4, Section 4 of the Companies Act, will be made available as from Thursday, October 14, 2004 at the Company’s office, Net Insight AB, Västberga Allé 9, SE-126 14 Stockholm, and will be sent free of charge to those shareholders who request it and who give their postal address. The Board’s proposal will also be sent free of charge to all shareholders who notify themselves to the Shareholders’ Meeting and give their postal address, and will be kept available on the Company’s homepage: www.netinsight.se.
Stockholm, September 2004
Net Insight AB (publ)
The Board
For further information please contact:
Tomas Duffy, CEO, Net Insight AB.
Tel. +46 (0)8-685 04 00, e-mail: tomas.duffy@netinsight.net
Fredrik Trägårdh, CFO, Net Insight AB
Tel. +46 (0)8-685 06 01, e-mail fredrik.tragardh@netinsight.net