The shareholders of Cint Group AB (publ) ("Cint" or the "Company") are hereby given notice of an extraordinary general meeting to be held on 14 December 2022 at 10:00 CET at Convendum, Conference 1, Biblioteksgatan 29, SE-114 35 Stockholm. The entrance to the meeting will open at 09:30 CET.
The board of directors has decided, pursuant to the Company's articles of association, that shareholders shall also have the right to exercise their voting rights by postal voting. Shareholders may therefore choose to exercise their voting rights at the general meeting by attending in person, through a proxy or by postal voting.
Vote at the general meeting
Those who wish to exercise their voting rights at the general meeting must:
Notice of attendance for participating in person or through a proxy
Those who wish to participate in the general meeting in person or through a proxy shall give notice of attendance to the Company no later than on 8 December 2022 either:
The notice of attendance shall state name, date of birth or corporate identification number, address, telephone number and, where relevant, the number of accompanying advisors (not more than two).
Those who do not wish to attend the general meeting in person or exercise their voting rights by postal voting may exercise their voting rights at the general meeting through a proxy in possession of a written, signed and dated proxy form. A proxy form issued by a legal entity must be accompanied by a copy of a certificate of registration or a corresponding document of authority for the legal entity. To facilitate the registration at the general meeting, proxy forms, certificates of registration and other documents of authority should be submitted either by e-mail to [email protected] or by mail to Computershare AB, Box 5267, SE-102 46 Stockholm (Att. "Cint's EGM") no later than on 8 December 2022. Please note that notice of attendance must be given even if a shareholder wishes to exercise its rights at the meeting through a proxy. A submitted proxy form does not count as a notice of attendance. Template proxy forms in Swedish and English are available on the Company's website, www.cint.com.
Voting by post
Shareholders who wish to exercise their voting rights by postal voting shall use the voting form and follow the instructions available on the Company's website, www.cint.com, and at the Company's offices, Luntmakargatan 18, SE-111 37 Stockholm. The postal vote must be received by the Company no later than on 13 December 2022. The postal voting form shall be sent either:
Those who wish to withdraw a submitted postal vote and instead exercise their voting rights by participating in the general meeting in person or through a proxy must give notice thereof to the general meeting's secretariat prior to the opening of the general meeting.
If the shareholder votes by proxy, a power of attorney shall be enclosed with the voting form. A proxy form is available upon request and on the Company's website, www.cint.com. If the shareholder is a legal entity, a certificate of incorporation or other authorization document shall be enclosed with the voting form. Shareholders are not allowed to include special instructions or conditions in the postal vote. If special instructions or conditions are included, such postal voting forms become invalid. Further information and conditions can be found in the voting form.
For questions about the general meeting or to receive a postal voting form or proxy form by post, please contact Cint Group AB (publ), "EGM", Luntmakargatan 18, SE-111 37 Stockholm or send an e-mail to [email protected].
Proposed agenda
(a) the establishment of LTIP 2023; and
(b) delivery of shares under the LTIP 2023 through an issue and transfer of warrants of series 2023/2026
Item 2: Appointment of chair of the meeting
Carl Westerberg, lawyer at Gernandt & Danielsson law firm, or, in his absence, the person designated by the board of directors, is proposed as chair of the general meeting.
Item 3: Election of one person to verify the minutes
Andreas Nilsson, representing Cidron Ross S.à r.l., or in his absence, the person designated by the board of directors, is, in addition to the chair, proposed as person to verify the minutes.
Item 4: Preparation and approval of the voting list
The voting list that is proposed to be approved under item 4 on the agenda is the voting list that Computershare AB has prepared, on behalf of the Company, based on the general meeting share register, shareholders who have notified their attendance and are present at the general meeting and received postal votes.
Item 7(a): Resolution on the establishment of LTIP 2023
Background and purpose
The board of directors proposes that the general meeting resolves to establish a new long-term incentive program ("LTIP 2023"). In December 2021, Cint acquired Lucid to create a global leader in technology-enabled insights. Founded in Stockholm in 2000, Cint has deep roots in Sweden and quickly grew across Europe and into the US while Lucid, founded in New Orleans in 2010, had approximately 80 percent of its revenues from the Americas region. In combination, the Company earns around 60 percent of its revenues in the US and 35 percent from EMEA. Not surprisingly, Group Management and key employees are also balanced along similar lines, with a substantial majority of potential LTIP participants based out of the US. In fact, less than 10 percent of employees and only one member of group management is working out of Sweden.
Within this context, Cint is a global company listed in Stockholm with staff working out of 16 offices across the Americas, EMEA, Asia and Australia. With a rapidly growing company that relies on attracting and retaining from the borderless talent pool of the tech industry, the challenge for the Company in building an incentive program has been centred around balancing what employees can reasonably expect with the constraints of being a company listed on Nasdaq Stockholm. To find a workable solution, Cint started engaging with global compensation experts in the spring of 2022 and met with a group of institutional investors, including nine of the ten largest investors representing more than 50 percent of the shareholding in the Company, and proxy advisors in September and November to garner views.
The board of directors' proposed LTIP 2023 is based on the Company's wish to have a single and simple program. The purpose of the proposed incentive program is to reward the delivery of long-term, sustainable value to Cint's shareholders as part of a competitive total compensation package. It is also important to recognize that this is within a context that is not only global but also within an industry where equity incentives are used to compensate both outperformance and expected income.
The LTIP 2023 is proposed as the Company's ordinary annual program and, if approved by the general meeting, will be considered as the annual program for the financial year 2023 and consequently no additional program for the financial year 2023 will in such case be proposed to the annual general meeting 2023. The next annual program is intended to be proposed at the annual general meeting 2024.
Subject to the terms and conditions of the LTIP 2023, the Company will award restricted stock units ("RSUs") free of charge to members of the Company's Group Management and other employees (the "Participants") as allocated by the board of directors, pursuant to the following principles.
(i) none of the RSUs eligible to vest on the applicable Vesting Anniversary will vest if the EBITDA margin is less than the adjusted EBITDA margin for the financial year 2022 as set out in the Company's year-end 2022 report (the "2022 EBITDA margin");
(ii) one-fourth of the RSUs eligible to vest on the applicable Vesting Anniversary will vest if the EBITDA margin equals the 2022 EBITDA margin;
(iii) 100 percent of the RSUs eligible to vest on the applicable Vesting Anniversary will vest if the EBITDA margin equals or exceeds 25 percent.
In case of an EBITDA margin between the performance levels set out in item (ii) and (iii) above, i.e., an EBITDA margin between the 2022 EBITDA margin and 25 percent, a straight-line vesting between one-fourth and full vesting shall apply.
In case of overperformance, any RSUs that did not vest at previous Vesting Anniversaries may be subject to vesting if the EBITDA margin performance exceeds 25 percent during a subsequent financial year ("Overperformance Vesting"). Overperformance Vesting shall be calculated on the same basis as the straight-line vesting between item (ii) and (iii) above, i.e., for each 0.1 percent that the EBITDA margin exceeds 25 percent, a corresponding number of RSUs will vest as was the number of RSUs that did not vest for each 0.1 percent below the EBITDA margin of 25 percent. Accordingly, Overperformance Vesting will only be possible if the previous year(s) vesting is less than 100 percent and the maximum vested RSUs will not exceed 100 percent of the total number of RSUs awarded.
Any RSUs that are not vested at each Vesting Anniversary (and that are not subject to Overperformance Vesting) will lapse and be deemed forfeited without consideration.
The board of directors shall be entitled to determine that all or some of the vested RSUs should be cancelled or reclaimed (clawback) if the EBITDA margin outcome is the result of misstatement of the financial accounts or gross misconduct as well as reduce or delay vesting of RSUs if the EBITDA margin outcome does not reflect the underlying business performance of the Company as determined by the board of directors.
Delivery of shares and hedging
In order to ensure the delivery of shares to the Participants under the LTIP 2023, the board of directors proposes that the Company can hedge its obligations under the LTIP 2023 by entering into an equity swap arrangement with a third party, whereby the third party in its own name shall be entitled to acquire and transfer shares (including to the Participants) in accordance with the terms and conditions of the LTIP 2023.
In addition, the board of directors proposes that the general meeting resolves to issue up to 4,138,135 warrants of series 2023/2026 (see item 7(b) of the proposed agenda), which shall, if approved by the general meeting, be used as hedge instead of the equity swap arrangement described above to ensure delivery of shares to the Participants and cover any costs (including taxes and social security charges) under the LTIP 2023.
Dilution effect
The maximum dilution effect will be approximately 1.94 percent if all 4,138,135 warrants of series 2023/2026 are exercised for subscription of 4,138,135 new shares in the Company. If the warrant settlement method proposed under item 7(b) of the proposed agenda is not approved with the requisite majority and the Company's obligations under the LTIP 2023 are settled by way of an equity swap arrangement with a third party, no dilution effect will arise.
Costs
The costs for the LTIP 2023 are based on the IFRS 2 reporting standards and will be amortised over the Vesting Period. The board of directors has made a preliminary cost calculation for the LTIP 2023, which is based on a share price at award of SEK 59.00 and that a conservative three-quarters of the maximum number of RSUs is allocated and vested following the Vesting Period. On the basis of the above assumptions, the value of each RSU has, using a Black & Scholes simulation model been set at SEK 57.82.
In total, the above results in expected costs for the LTIP 2023 of approximately EUR 13.3 million, excluding costs for social security charges. With full vesting the costs would be approximately EUR 20 million. The costs for social security charges on the basis of an annual growth of the Cint share of 15 percent until the time for allocation is estimated at approximately EUR 1.6 million based on that three-quarters of the maximum number of RSUs is vested. With full vesting the costs for social security charges would be EUR 2.3 million.
Other share-based incentive programs in Cint
For information about other share-based incentive programs in Cint, please refer to the Company's annual report 2021 (see section "Long-term share-based incentive programs") and the Company's Q3 2022 report (see section "Long-term share-based incentive programs"). These main terms are also available on Cint's website www.cint.com. Other than as described therein there are no other share-based incentive schemes in Cint.
Preparation of the proposal
The LTIP 2023 has been prepared by the Company's remuneration committee and has been adopted by the board of directors.
Authorization
Each of the members of 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 programs due to applicable foreign rules and laws, applicable law, regulation, market practice or otherwise.
Vesting
According to the remuneration rules from the Swedish Corporate Governance Board (Sw. Kollegiet för svensk bolagsstyrning), it should be specified and motivated why the vesting period or period from the commencement of the agreement until a share may be acquired is less than three years.
As set out above, members of Group Management are required to hold vested shares for the full Vesting Period which is three years, and thus fulfils the requirement in the remuneration rules.
For other Participants, mainly located in the US and European countries other than Sweden, the RSUs for the LTIP 2023 vest with one-third on each Vesting Anniversary and the Vesting Period is accordingly partly shorter than three years. The reason for having a shorter Vesting Period than three years for other Participants is to ensure that the Company has a competitive offer as an employer and to meet the requirements of international tech talent which is instrumental for the Company's future success and development.
Majority requirement
A resolution in accordance with the board of directors' proposal regarding the establishment of the LTIP 2023 under this item 7(a) of the proposed agenda requires support from shareholders representing more than half of the votes cast at the general meeting.
Item 7(b): Resolution on delivery of shares under the LTIP 2023 through an issue and transfer of warrants of series 2023/2026
Under the LTIP 2023 proposed by the board of directors under item 7(a) of the proposed agenda, the Company has an obligation, subject to certain conditions, to deliver shares in the Company to the Participants in the LTIP 2023.
In order to secure the Company's obligation to deliver shares and to cover any costs (including taxes and social security charges), the board of directors proposes that the general meeting resolves to issue and transfer up to 4,138,135 warrants of series 2023/2026 on the terms and conditions set out below. The board of directors considers the warrant settlement method to be the preferred alternative to the equity swap arrangement with a third party included in item 7(a) of the proposed agenda since the costs for an equity swap arrangement are significantly higher than the costs for issuing and transferring warrants. If the general meeting resolves to approve the proposed warrant settlement method under this item 7(b) with the requisite majority, the board of directors intends to not utilise the equity swap arrangement proposed under item 7(a) above.
In order to secure the Company's obligation to deliver shares under the LTIP 2023, the board of directors proposes that the general meeting resolves to issue and transfer warrants of series 2023/2026 in the Company on the following terms and conditions:
The complete terms and conditions for the warrants of series 2023/2026, a transcript of the Company's articles of association and documents prepared pursuant to Chapter 14, section 8 of the Swedish Companies Act will be available at the Company and on the Company' website, www.cint.com, not later than three weeks prior to the general meeting.
The resolution shall be conditional upon that the general meeting resolves to establish the LTIP 2023 in accordance with the board of directors' proposal under item 7(a) of the proposed agenda.
A resolution in accordance with the board of directors' proposal requires support from shareholders representing not less than nine-tenths of both the votes cast and the shares represented at the general meeting.
Available documents
The complete proposals, together with ancillary documentation, will be made available at the Company's offices, Luntmakargatan 18, SE-111 37 Stockholm, in accordance with the requirements of the Swedish Companies Act and will be sent to shareholders who so request and who inform the Company of their mailing address. The documents will also be made available on the Company's website: www.cint.com. All documents above will be presented at the general meeting.
The shareholders register concerning the general meeting will also be available at the Company prior to the general meeting.
Shareholders' right to request information
Shareholders are reminded of their right pursuant to Chapter 7, Section 32 of the Swedish Companies Act to request that the board of directors and CEO provide information at the general meeting in respect of any circumstances which may affect the assessment of a matter on the agenda. The obligation to provide information also applies to the Company's relationship to other group companies. Information must be provided if possible to provide such information without significant harm to the Company.
Processing of personal data
For information on how personal data is processed in connection with the general meeting, see the privacy notices of Euroclear Sweden AB and Computershare AB available on their respective websites, www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf. and www.computershare.com/se/gm-gdpr.
Other information
The Company currently has 212,976,588 outstanding shares and votes. The Company holds no treasury shares.
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Stockholm, November 2022
Cint Group AB (publ)
The board of directors
Patrik Linzenbold
Head of Investor Relations
[email protected]
