Notice of annual general meeting of Embellence Group AB (publ)

Embellence Group’s annual general meeting will be carried out through advance voting (postal voting) only, pursuant to temporary legislation. No meeting with the possibility to attend in person or to be represented by a proxy will take place.  

Embellence Group welcomes all shareholders to exercise their voting rights at the annual general meeting through advance voting as described below. Information on the resolutions passed at the annual general meeting will be published on 3 May 2022, as soon as the result of the advance voting has been finally confirmed. Further, the chairman of the board of directors and the CEO will hold an information meeting for shareholders on 3 May 2022 at CEST 15:30-16:00. For more information on the information meeting, please see the company’s website, www.embellencegroup.com.

The shareholders may request in the advance voting form that a resolution on one or several of the matters on the proposed agenda below should be deferred to a so-called continued general meeting, which cannot be conducted solely by way of advance voting. Such general meeting shall take place if the annual general meeting so resolves or if shareholders with at least one tenth of all shares in the company so requests.

Preconditions for participation
For a person to be entitled to participate through advance voting in the annual general meeting, such person must:

firstly,      be registered in the share register maintained by Euroclear Sweden AB on Monday 25 April 2022,

secondly,      have notified its intention to participate no later than on Monday 2 May 2022 by casting its advance vote in accordance with the instructions under the heading “Advance voting” below so that the advance voting form is received by Embellence Group no later than that day.

Nominee-registered shares
Shareholders whose shares are registered in the name of a nominee through a bank or a securities institution must re-register their shares in their own names in order to be entitled to attend the annual general meeting. Such registration, which may be temporary, must be duly effected at Euroclear Sweden AB on Wednesday 27 April 2022, and the shareholders must therefore contact their nominees well in advance of this date.

Advance voting
The shareholders may exercise their voting rights at the annual general meeting only by voting in advance, so-called postal voting in accordance with Section 22 of the Act (2022:121) 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 www.embellencegroup.com under the heading “About us – Governance – Annual general meeting – Annual General Meeting 2022”. The advance voting form is considered as the notification of attendance to the general meeting.

The completed voting form must be received by Embellence Group AB (publ) no later than Monday 2 May 2022. The form may be submitted via e-mail to stamma@embellencegroup.com, or by post to Embellence Group AB (publ), “AGM 2022”, Ryssnäsgatan 8, SE-504 64 Borås, Sweden. If the shareholder votes in advance by proxy, a power of attorney shall be enclosed to the form. If the shareholder is a legal entity, a certificate of incorporation or a corresponding document shall be enclosed to the form. 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. Further instructions and conditions are included in the form for advance voting.

Number of shares and votes
As per the date of this notice there are a total of 22,583,877 shares outstanding in the company that entitle to one vote per share at the annual general meeting.

Proposed agenda

1. Election of chairman of the annual general meeting
2. Election of one or two persons to verify the minutes
3. Preparation and approval of the voting register
4. Approval of the agenda
5. Determination of whether the annual general meeting was duly convened
6. Presentation of the annual report and auditor’s report and the consolidated financial statements and auditor’s report for the group
7. Resolutions regarding
   1. adoption of the income statement and balance sheet and the consolidated income statement and consolidated balance sheet
   2. allocation of the company’s profit or loss according to the adopted balance sheet, and
   3. discharge from liability for board members and the managing director
8. Determination of the number of board members and auditors
9. Determination of fees for the board of directors and the auditors
10. Election of members of the board of directors

10.1 Morten Falkenberg (re-election)
10.2 Henrik Nyqvist (re-election)
10.3 Paul Steene (re-election)
10.4 Christina Ståhl (re-election)
10.5 Hanna Graflund Sleyman (new election)
10.6 Karin Dennford (new election)

11. Election of the chairman of the board of directors
    Morten Falkenberg (re-election)
12. Election of auditors and, where applicable, deputy auditors
13. Resolution to authorize the board of directors to resolve upon issue of shares
14. Resolution on a long-term incentive program (LTIP 2022) and issue of warrants
15. Resolution on a long-term incentive program for certain board members (Board LTIP 2022) and issue of warrants

Item 1 – Election of chairman of the annual general meeting
The nomination committee of Embellence Group, which consists of Morten Falkenberg (chairman of the board of directors), Jörgen Ekberg (appointed by Litorina), Karin Dennford (appointed by JCE Asset Management) and Jerker Adeberg (appointed by T-konsortiet AB), proposes that Rikard Lindahl, member of the Swedish Bar Association, from Advokatfirman Vinge, is elected chairman of the annual general meeting.

Item 2 – Election of one or two persons to verify the minutes
Ulf Gillberg (JCE Asset Management) and Thirza Hamrin (Litorina), or if one or both of them have an impediment to attend, the person or persons instead appointed by the board of directors, are proposed to be elected to approve the minutes of the annual general meeting together with the chairman. The task of approving the minutes of the annual general meeting also includes verifying the voting list and that the advance votes received are correctly stated in the minutes of the annual general meeting.

Item 3 – Preparation and approving of the voting list
The voting list proposed for approval under item 3 on the proposed agenda is the voting list drawn up by the company, based on the annual general meeting’s share register and advance votes received, as verified by the persons approving the minutes of the annual general meeting.

Item 7) b. – Resolution regarding allocation of the company’s profit or loss according to the adopted balance sheet
The board of directors proposes an ordinary dividend of SEK 0.80 per share. The record date for payment of the dividend shall be 5 May 2022. If the Annual General Meeting resolves in accordance with the proposal, the dividend will be paid to the shareholders on 10 May 2022.

Item 8 – Determination of the number of board members and auditors
The nomination committee proposes that the board of directors shall consist of six board members elected by the general meeting with no deputy members and that the number of auditors shall be one with no deputy auditors.

Item 9 – Determination of fees for the board of directors and the auditors
The nomination committee proposes that directors’ fees shall be paid with SEK 1,750,000 in total, with SEK 500,000 to the chairman of the board and SEK 250,000 to the other members of the board of directors that are not employed by the company or the group.

Furthermore, the nomination committee proposes that the fee to the auditor shall be paid in accordance with approved statement of costs.

Item 10 – Election of members of the board of directors
The nomination committee proposes that the board members Morten Falkenberg, Henrik Nyqvist, Paul Steene and Christina Ståhl are re-elected as board members and that Hanna Graflund Sleyman and Karin Dennford are elected as new members of the board for the period until the end of the next. It is noted that Mattias Letmark has declined re-election.

Hanna Graflund Sleyman is born 1978. Hanna Graflund Sleyman holds a Master of Science in Business and Economics from Stockholm School of Economics. Hanna Graflund Sleyman is currently the CEO of PDL Group and has previously, inter alia, been Commercial Manager/Head of Vendor Management at Amazon Sweden, Executive Director Asia Pacific at Daniel Wellington and CEO of Departments & Stores AB (NK) and a board member of Atrium Ljungberg AB, Brothers AB, Polarn O. Pyret AB and RNB Far East Limited. Hanna Graflund Sleyman holds no shares in Embellence Group. Hanna Graflund Sleyman is independent in relation to larger shareholders as well as the Company and its executive management.

Karin Dennford is born 1976. Karin Dennford holds a Master of Science in Advanced Finance from Gothenburg School of Business, Economics and Law at the University of Gothenburg. Karin Dennford is currently an Investment Director of JCE and board member of OctoFrost and member of a number of nomination committees. Karin Dennford has previously been a board member of Capital Advisors (Alcur fonder), Senior Private Banker at Nordea Private Wealth Management and Portfolio Manager at Nordea Investment Management. Karin Dennford holds no shares in Embellence Group. Karin Dennford is independent in relation to the Company and its executive management, but not in relation to larger shareholders.

Item 11 – Election of the chairman of the board of directors
The nomination committee proposes that Morten Falkenberg is re-elected chairman of the board of directors for the period until the end of the next annual general meeting.

Item 12 – Election of auditors and, where applicable, deputy auditors
The nomination committee proposes that the audit company PricewaterhouseCoopers AB is re-elected as auditor for the period up until the end of the next annual general meeting, with the request that Patrik Resebo acts as auditor in charge, in accordance with the board’s (which performs the tasks of the audit committee in full) recommendation.

Item 13 – Resolution to authorize the board of directors to resolve upon issue of shares
The board of directors proposes that the annual general meeting resolves to authorize the board of directors – at one or several occasions and for the period until the next annual general meeting – to increase the company’s share capital by issuing new shares to such extent equal to a dilution of not more than 20 percent, after full exercise of the hereby proposed authorization.

New issues of shares may be carried out with deviation from the shareholders’ preferential rights and with or without provisions for contribution in kind, set-off or other conditions. The purpose of the authorization is to increase the financial flexibility of the company and the general flexibility of the board of directors in connection with acquisitions. Should the board of directors resolve on a share issue with deviation from the shareholders’ preferential rights, the reason for this shall be to carry out and finance acquisitions of companies or assets. Upon such deviation from the shareholders’ preferential rights, the new issue shall be made at market terms and conditions.

The board of directors or the CEO shall be authorized to make such minor adjustments to the resolution of the annual general meeting that are necessary to register the authorization with the Swedish Companies Registration Office (Sw. Bolagsverket).

Item 14 – Resolution on a long-term incentive program (LTIP 2022) and issue of warrants
The board of directors proposes that the annual general meeting resolves to adopt an incentive program for certain senior executives and consultants through an issue of not more than 176,000 warrants with a right to subscribe for 176,000 new shares in the company (“LTIP 2022”).

The purpose of LTIP 2022

The purpose of LTIP 2022 is to connect the remuneration for certain senior executives and consultants within the Embellence Group with Embellence Group and Embellence Group’s long-term value creation and thus align their interests with those of the shareholders. LTIP 2022 will be a significant program for Embellence Group to motivate and keep the best talents, which is important for Embellence Group to reach long-term value creation for the shareholders.

Issue of warrants / allocation of warrants

The board of directors proposes that the annual general meeting resolves on an issue of not more than 176,000 warrants, entailing an increase of the share capital, at full exercise, of not more than SEK 440,000. Each warrant shall entitle to subscription for one (1) share.

LTIP 2022 includes not more than eight persons. The company’s board members shall not be included in LTIP 2022. The right to subscribe for warrants shall, by way of deviation from the preferential right of the shareholders, be vested in the certain senior executives who are employed or have consultancy assignments within the Group.

In case of over-subscription within a category, the number of warrants shall be reduced pro rata based upon the number of warrants each respective participant has subscribed for. However, no participant shall receive more warrants than the warrants per person/category stated above.

The reason for deviating from the shareholders' preferential right is to implement an incentive program and thereby a remuneration structure which connects the remuneration for the key employees of Embellence Group to Embellence Group and its long-term value creation and thus also align employees’ and consultants’ interests with those of the shareholders. LTIP 2022 will be a significant program for Embellence Group to motivate and keep its key persons, which is important to Embellence Group to reach long-term value creation for the shareholders.

Subscription of warrants shall be made on a subscription list until and including 20 May 2022. Payment shall be made no later than on 25 May 2022. The board of directors have the right to extend the subscription period and the payment period.

Each warrant shall entitle to subscription for one (1) share in the company. Subscription for shares in accordance with the terms of the warrants is possible during the period from and including 1 June 2025 up to and including 30 June 2025.

The subscription price per share shall correspond to 125 per cent of the volume-weighted average price for the company’s share during the time period from and including 4 May 2022 up to and including 17 May 2022, rounded to the nearest full ten cents (Sw. öre) whereby five cents shall be rounded up. However, the subscription price shall not be less than the share’s quota value. The subscription price and number of shares in which each warrant carries an entitlement to shall be recalculated in the event of split or reversed split of shares, new issue of shares etc. in accordance with market practice.

Shares subscribed for by exercise of the warrants shall entitle to dividend for the first time on the first record date for dividend which occurs after the subscription of shares, by exercising the warrants, is executed.

The board of directors, or the person appointed by the board of directors, is proposed to be authorised to make minor adjustments to the resolution mentioned above, as may be required in connection with the registration of the resolution with the Swedish Companies Registration Office (Sw. Bolagsverket).

Terms and conditions

The warrants shall be subscribed for on market terms at a price (premium) established on the basis of a market value of the warrants calculated by an independent valuation institute using the Black & Scholes valuation model. The value has preliminary been calculated to SEK 6.32 per warrant based on a subscription price per share of SEK 43.13.

In addition hereto, the terms and conditions that the board of directors has resolved upon and that are available for shareholders in accordance with what is set out in section “Other information”.

Pre-emption and termination of employment

A condition for a participant to be offered to subscribe for warrants, is that these persons have previously entered into a pre-emption agreement in which the participant shall be obligated to offer all warrants to the company, or in partial, if the employment or consultancy agreement is terminated or if the warrants shall be transferred or disposed to a third party.

Dilution

Based on the number of shares in Embellence Group as of the date of the notice to the annual general meeting, the dilution effect due to LTIP 2022 will amount to approximately 0.78 per cent. Based on the same assumption and taking into account the number of shares that may be added pursuant to shareholder’s proposal for Board LTIP 2022 (item 15), the dilution effect due to Board LTIP 2022 and LTIP 2022 may together amount to a maximum of approximately 0.97 per cent. Also considering the number of shares that may be issued pursuant to previous implemented incentive programs in Embellence Group, Board LTIP 2022 and LTIP 2022 the maximum dilution amount to approximately 6.28 per cent.

Impact of financial ratios and costs for the company etc.

LTIP 2022 is expected to have a marginal impact on the company’s financial ratios. The costs before taxes for the company associated with LTIP 2022 includes administrative costs and costs relating to social security fees. The total cost of LTIP 2022, assuming full participation, is expected to amount to approximately SEK 200,000 during a period of three years.

Preparation of the matter

The principles of LTIP 2022 have been prepared by the board of directors of the company. The proposal has been prepared with the assistance of external advisors and after consultation with shareholders.

Other share-related incentive programs etc.

For a description of the company’s other long-term incentive programs, please see note 31 in Embellence Group’s annual report 2021 and the company’s website, www.embellencegroup.com.

Item 15 – Resolution on a long-term incentive program for certain board members (Board LTIP 2022) and issue of warrants
The shareholder Litorina Coinvest 1 AB (“Litorina”) proposes that the annual general meeting resolves to adopt an incentive program for certain board members through an issue of not more than 44,000 warrants with a right to subscribe for 44,000 new shares in the company (“Board LTIP 2022”).

The purpose of Board LTIP 2022

The program is directed for one of the company’s current board members and the by the nomination committee proposed new board member. Both participants are independent in relation to larger shareholders as well as the Company and its executive management and does not, as of the date of the notice, hold any shares in Embellence Group. Litorina considers that a share-related incentive program is an important part of a competitive remuneration in order to attract, retain and motivate internationally qualified board members, which is important for Embellence Group to reach long-term value creation for the shareholders.

Issue of warrants / allocation of warrants

Litorina proposes that the annual general meeting resolves on an issue of not more than 44,000 warrants, entailing an increase of the share capital, at full exercise, of not more than SEK 110,000. Each warrant shall entitle to subscription for one (1) share.

Board LTIP 2022 includes a maximum of two persons, who shall thus have the right to subscribe for 22,000 warrants each. The right to subscribe for warrants shall, by way of deviation from the preferential right of the shareholders, accrue to one of the company’s current board members and the by the nomination committee proposed new board member.

In case of over-subscription, the number of warrants shall be reduced pro rata based upon the number of warrants each respective participant has subscribed for. However, no participant shall receive more warrants than the warrants per person stated above.

The reason for deviating from the shareholders’ preferential right is to implement an incentive program and thereby a remuneration structure which connects the remuneration for the board members of Embellence Group to Embellence Group and its long-term value creation and thus also align board members interests with those of the shareholders. LTIP 2022 will be a significant program for Embellence Group to attract, motivate and keep internationally qualified board members, which is important to Embellence Group to reach long-term value creation for the shareholders.

Offer to subscribe for the warrants shall be made as soon as practically possible after the annual general meeting and subscription of the warrants shall be made on a subscription list until and including 20 May 2022. Payment shall be made no later than on 25 May 2022. The board of directors have the right to extend the subscription period and the payment period.

Each warrant shall entitle to subscription for one (1) share in the company. Subscription for shares in accordance with the terms of the warrants is possible during the period from and including 1 June 2025 up to and including 30 June 2025.

The subscription price per share shall correspond to 125 per cent of the volume-weighted average price for the company’s share during the time period from and including 4 May 2022 up to and including 17 May 2022, rounded to the nearest full ten cents (Sw. öre) whereby five cents shall be rounded up. However, the subscription price shall not be less than the share’s quota value. The subscription price and number of shares in which each warrant carries an entitlement to shall be recalculated in the event of split or reversed split of shares, new issue of shares etc. in accordance with market practice.

Shares subscribed for by exercise of the warrants shall entitle to dividend for the first time on the first record date for dividend which occurs after the subscription of shares, by exercising the warrants, is executed.

The board of directors (however, not the board members that Board LTIP 2022 is directed to), or the person appointed by the board of directors, is proposed to be authorised to make minor adjustments to the resolution mentioned above, as may be required in connection with the registration of the resolution with the Swedish Companies Registration Office (Sw. Bolagsverket).

Terms and conditions

The warrants shall be subscribed for on market terms at a price (premium) established on the basis of a market value of the warrants calculated by an independent valuation institute using the Black & Scholes valuation model. The value has preliminary been calculated to SEK 6.32 per warrant based on a subscription price per share of SEK 43.13.

In addition hereto, the terms and conditions that the board of directors has resolved upon and that are available for shareholders in accordance with what is set out in section “Other information”.

Pre-emption and termination of employment

A condition for participants to be offered to subscribe for warrants is that these persons have previously entered into so-called pre-emption agreements in which the participants shall be obligated to offer all warrants to the company, or in partial, if the assignment as board member is terminated or if the warrants shall be transferred or disposed to a third party.

Dilution

Based on the number of shares in Embellence Group as of the date of the notice to the annual general meeting, the dilution effect due to Board LTIP 2022 will amount to approximately 0.19 per cent. Based on the same assumption and taking into account the number of shares that may be added pursuant to the board of directors’ proposal for LTIP 2022 (item 14), the dilution effect due to Board LTIP 2022 and LTIP 2022 may together amount to a maximum of approximately 0.97 per cent. Also considering the number of shares that may be issued pursuant to previous implemented incentive programs in Embellence Group, Board LTIP 2022 and LTIP 2022 the maximum dilution amount to approximately 6.28 per cent.

Impact of financial ratios and costs for the company etc.

Board LTIP 2022 is expected to have a marginal impact on the company’s financial ratios. The costs for the company associated with Board LTIP 2022 includes administrative costs. The total cost of Board LTIP 2022, assuming full participation, is expected to amount to SEK 200,000 during a period of three years.

Preparation of the matter

The principles of Board LTIP 2022 have been prepared by Litorina. The proposal has been prepared with the assistance of external advisors and after consultation with shareholders. Thus, the board of directors have not prepared the proposal.

Other share-related incentive programs etc.

For a description of the company’s other long-term incentive programs, please see note 31 in Embellence Group’s annual report for 2021 and the company’s website, www.embellencegroup.com.

Majority requirements
A resolution in accordance with item 13 above requires approval of at least two thirds (2/3) of the shares represented and votes cast at the general meeting. A resolution in accordance with items 14 and 15 above requires the approval of at least nine tenths (9/10) of the shares represented and votes cast at the general meeting.

Shareholders’ right to request information
The shareholders are reminded of their right to request information in accordance with Chapter 7 Section 32 of the Swedish Companies Act. The board of directors and the chief executive officer shall, if any shareholder so requests and the board of directors believes that it can be done without material harm to the company, provide information regarding circumstances that may affect the assessment of an item on the agenda, circumstances that may affect the assessment of the financial situation of the company or its subsidiaries and the company’s relation to another company within the group. A request for such information shall be made in writing to Embellence Group AB (publ), “AGM 2022”, Ryssnäsgatan 8, SE-504 64 Borås, Sweden or via e-mail to stamma@embellencegroup.com, no later than on 23 April 2022. The information will be made available at Embellence Group AB (publ), Ryssnäsgatan 8, SE-504 64 Borås, Sweden and on www.embellencegroup.com, under the heading “About us – Governance – Annual general meeting – Annual General Meeting 2022” on 28 April 2022 at the latest. The information will also be sent, within the same period of time, to the shareholder who has requested it and stated its address.

Other information
The annual report, the auditor’s report for the financial year 2021 and the remuneration report will be held available at the company’s office on Ryssnäsgatan 8, SE-504 64 Borås, Sweden and on the company’s website, www.embellencegroup.com, at least three weeks before the general meeting, together with the board of directors’ complete proposals. Further, the nomination committee’s proposal and motivated statement will be available on the address and website stated above at least four weeks before the general meeting. Copies of the documents will be sent to the shareholders who so requests and informs the company of their postal address.

For information on how your personal data is processed, see the integrity policy that is available at Euroclear’s webpage, www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.

This information was submitted for publication on 31 March 2022 at 12:00.  This is an in-house translation of the Swedish original wording. In case of differences between the English translation and the Swedish original, the Swedish version shall prevail.

Borås, March 2022
Embellence Group AB (publ)
The board of directors

For more information, please contact:
Olle Svensk, CEO
Telephone: +46 768 566 093
E-mail: olle.svensk@embellencegroup.com