Shareholders in Northgold AB, reg. no. 559273-9626 (the “Company”), are hereby convened to the Annual General Meeting on 18 June 2024, 09:30 CEST at Advokatfirman Schjødt, Hamngatan 27, in Stockholm. Registration for the Annual General Meeting will commence at 09:00 CEST.
Participation in the Annual General Meeting
Shareholders who wish to participate in the Annual General Meeting must (i) be recorded in the share register maintained by Euroclear Sweden AB on 10 June 2024 and (ii) no later than 12 June 2024 give notice by post to Northgold AB, Strandvägen 7A, 114 56 Stockholm or by e-mail to ir@northgoldab.com. When providing such notice, the shareholder should set forth the name, address, telephone number (daytime), personal/corporate identity number, the number of shares held and, when applicable, information about representatives and assistants.
If a shareholder is represented by proxy, a written, dated proxy for the representative must be issued, should the right to vote for the shares be divided among different representatives, the representatives, together with information on the number of shares each representative is entitled to vote for. A proxy form is available on the Company’s webpage, www.northgoldab.com. If the proxy is issued by a legal entity, a certificate of registration or equivalent certificate of authority should be enclosed. To facilitate the registration at the Annual General Meeting, the proxy and the certificate of registration or equivalent certificate of authority should be sent to Northgold AB, Strandvägen 7A, 114 56 Stockholm, or by e-mail to ir@northgoldab.com, so that it is received no later than on 12 June 2024.
Nominee-registered shares
A shareholder whose shares are held with a nominee must, through the nominee, register its shares in its own name so that the shareholder is registered in the share register kept by Euroclear Sweden AB as of 10 June 2024 to be entitled to participate in the Annual General Meeting. Such registration may be temporary (so called voting right registration). A shareholder who wishes to register its shares in its own name must, in accordance with the nominee's procedures, request that the nominee carries out such voting right registration. Voting right registrations completed no later than 12 June 2024 are taken into account when preparing the meeting's register of shareholders.
Proposed agenda
PROPOSALS FOR RESOLUTION
Resolution on allocation of the Company’s result according to the adopted balance sheet (item 8 b))
The board of directors proposes that the Company's result shall be carried forward.
Determination of fees to the board of directors and auditor (item 9)
The shareholder Magnus Minerals Oy (the "Shareholder") proposes that an aggregate annual fee of SEK 480,000 shall be paid to the board members, of which SEK 240,000 to the chairman of the board of directors and SEK 120,000 to each of the other board members elected by the Annual General Meeting.
The Shareholder proposes that fees to the auditors, for a period until the end of the next Annual General Meeting, are to be paid as per approved invoice.
Election of the board of directors and auditor (item 10)
The Shareholder proposes that the board of directors shall consist of three persons and no deputies. The Shareholder proposes that the number of auditors shall amount to one.
The Shareholder proposes re-election of Roberto Garcia Martinez, Henrik Löfberg and Benny Mattsson as board members until the end of the next Annual General Meeting. The Shareholder proposes re-election of Roberto Garcia Martinez as chairman of the board of directors.
The Shareholder proposes re-election of Baker Tilly MLT Kommanditbolag with the certified auditor Stein Karlsen as responsible auditor for a period until the end of the next Annual General Meeting.
Resolution to amend § 7 in the articles of association (item 11)
Due to a legislative change, which came into effect on 1 January 2024, it is now permitted for general meetings to be conducted entirely digitally. With the aim of utilizing the options provided by the Swedish Companies Act, regarding the possibility for general meetings to be conducted digitally, the board of directors proposes that a new second paragraph of § 7 in the articles of association is inserted as follows.
§ 7 second paragraph (proposed wording)
The board of directors may resolve that the general meeting can be held digitally.
The board of directors or the CEO shall have the right to make such minor adjustments to this resolution as may prove necessary in connection with registration with the Swedish Companies Registration Office.
A valid resolution requires the support of shareholders who represent at least two-thirds of both the votes cast and the shares represented at the Annual General Meeting.
Resolution to amend the limits for the share capital and the number of shares in the articles of association (item 12)
To achieve suitable limits for the share capital and the number of shares in the articles of association, the board of directors proposes that the general meeting resolves that the limits to the share capital and the number of shares in the articles of association be amended.
§ 4 in the articles of association is proposed to have the following wording.
Current wording
The share capital shall be not less than SEK 500,000 and not more than SEK 2,000,000. The number of shares shall be not less than 7,100,020 and not more than 28,400,080.
Proposed wording
The share capital shall be not less than SEK 1,000,000 and not more than SEK 4,000,000. The number of shares shall be not less than 15,000,000 and not more than 60,000,000.
Resolution on employee stock option program (item 13)
The board of directors proposes that the Annual General Meeting resolves on:
(A) implementation of employee stock option program for Seppo Tuovinen (Chief Executive Officer of the Company) – employee stock option program 2024; and
(B) hedging arrangements in respect of the employee stock option program 2024, consisting of a directed issue of warrants and approval to transfer the warrants.
Objectives and reasons for the proposal
The purpose of employee stock option program 2024 is to reward long term commitments of the participant and to ensure that the Company’s long term value increase is reflected in the remuneration for the participant of the program. In view of the terms proposed below, the size of the allotment and other circumstances, the board of directors assesses that employee stock option program 2024 is well-balanced and that it will be beneficial for the Company and its shareholders.
To secure the Company’s commitments under the employee stock option program 2024, the board of directors also proposes that the Annual General Meeting resolves on a directed issue of warrants and to approve the transfer of warrants in accordance with item B below.
Proposed resolution regarding implementation of employee stock option program 2024 (Item (13 A))
The board of directors proposes that the Annual General Meeting resolves to implement employee stock option program 2024, according to the following main principles:
Directed issue of warrants and approval of transfer of warrants to secure the Company’s commitments under employee stock option program 2024 (Item 13 (B))
To enable the Company’s delivery of shares pursuant to employee stock option program 2024 the board of directors proposes that the Annual General Meeting resolves on a directed issue of warrants and to approve the transfer of warrants on the following terms:
The reason for the deviation from the shareholders’ preferential right is that the issue forms part of the implementation of employee stock option program 2024. In view of what is set forth under Objectives and reasons for the proposal above, the board of directors is of the opinion that it is of benefit to the Company and its shareholders that Seppo Tuovinen is offered to participate in employee stock option program 2024.
The board of directors further proposes that the Annual General Meeting resolves to approve that the Company transfers warrants to the participant in employee stock option program 2024.
Finally, the board of directors proposes that the board of directors, or anyone appointed by the board of directors, should be authorised to make such minor adjustments to the above proposal that may be necessary in connection with the registration procedures with the Swedish Companies Registration Office, and possible registration of the warrants with Euroclear.
Costs and effects on important key ratios
Costs related to employee stock option program 2024 will be accounted for in accordance with K3 which stipulates that the allocated stock options shall be recorded as a personnel expense in the income statement during the vesting period. The calculation has been made based on the following assumptions: (i) a market price of Northgold's share of SEK 3.14, (ii) an expected dividend of 0 percent per year, and (iii) an employee turnover of 0 percent per year. In total, this can lead to maximum costs for the employee stock option program 2024 of approximately SEK 566,000, excluding social security costs. The costs for social security charges are estimated to a maximum of approximately SEK 177,837.
The expected annual costs of the employee stock option program 2024 would have corresponded to approximately 7 percent of Northgold’s total annual employee costs 2023.
The employee stock options do not have a market value since they are not transferable. However, the board of directors has calculated a theoretical value of the employee stock options using the Black & Scholes valuation model. The calculations have been based on the term of the employee stock options, the subscription price, an assumed share price of SEK 3.14 per share, an assumed average volatility of 69.6 percent, and an expected dividend of 0 percent per year. The calculations for Employee Stock Options of Series A have been based on an average risk-free interest rate of 2.461 percent, the calculations for Employee Stock Options of Series B have been based on an average risk-free interest rate of 2.313 percent and the calculations for Employee Stock Options of Series C have been based on an average risk-free interest rate of 2.308 percent. In accordance with this valuation, the value of the Employee Stock Options of Series A in the employee stock option program 2024 is approximately SEK 1.39 per option, the value of the Employee Stock Options of Series B is approximately SEK 1.26 per option and the value of the Employee Stock Options of Series C is approximately SEK 1.19 per option.
The board of directors' opinion is that the effect of employee stock option program 2024 on the Company's key ratios is marginal.
The board of directors deems that the positive effects on earnings that are expected to result from increased share ownership of Seppo Tuovinen outweighs the costs related to the employee stock option program 2024.
Dilution
Upon full exercise of all employee stock options, 450,000 new shares can be issued, which corresponds to a dilution of approximately 2.9 percent of the total number of shares and votes in the Company, however, subject to any potential adjustment which may occur under the terms and conditions for the warrants. Accordingly, the program offers the participant the possibility to increase his shareholding in the Company to the corresponding figure.
Preparation of the matter
The proposal regarding employee stock option program 2024 has been prepared by the board of directors in consultation with external advisors. Seppo Tuovinen has not participated in the preparation of the matter or the determination of the terms of employee stock option program 2024.
Other share related incentive programs etc.
The Company has no other ongoing share related incentive programs.
Authorization for the board of directors
The board of directors proposes that the Annual General Meeting authorizes the board of directors to execute the resolutions in accordance with the above and to ensure that the Company carries out the transfer of the warrants in accordance with the above.
Majority requirements
A decision according to the proposal is valid only when supported by shareholders holding not less than nine-tenths (9/10) of both the votes cast and of the shares represented at the Annual General Meeting.
Authorisation for the board of directors to resolve on new issues (item 14)
The board of directors proposes that the Annual General Meeting resolves to authorise the board of directors to, on one or several occasions until the next Annual General Meeting, with our without deviation from the shareholders' pre-emptive rights, against payment in cash, non-cash consideration or through set-off, resolve on new issues of shares, convertibles and/or warrants.
The board of directors or the CEO shall have the right to make the minor adjustments in this resolution that may be necessary in connection with registration of the resolution with the Swedish Companies Registration Office.
A valid resolution requires the support of shareholders who represent at least two-thirds of both the votes cast and the shares represented at the Annual General Meeting.
Shareholders’ right to request information
If a shareholder so requests and the board of directors considers it possible without this resulting in material damage to the Company, the board of directors and the CEO must provide information concerning conditions that could influence the assessment of items on the agenda, information concerning conditions that could influence assessments of the financial condition of the Company or subsidiaries as well as the Company’s relationship with another Group company.
Documents
Documents according to the Swedish Companies Act will be available for shareholders at the Company and on the Company’s website as above, no later than three weeks before the Annual General Meeting. All of these documents will also, without charge, be sent to shareholders who so request and state their address.
Processing of personal data
For information on how personal data is processed in connection with the Annual General Meeting, see the integrity policy that is available at Euroclear’s webpage,
https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.
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Stockholm in May 2024
Northgold AB
The board of directors
