Extraordinary General Meeting of Lundin Energy AB
16 June 2022
An Extraordinary General Meeting of Shareholders (the “EGM”) of Lundin Energy AB (“Lundin Energy” or the “Company”) was held today, Thursday 16 June 2022.
The EGM, which was held as a virtual (online) meeting combined with an option to vote by post in advance in accordance with the Swedish Act on Temporary Exemptions to Facilitate the Execution of General Meetings in Companies and Associations, resolved on the following matters related to the Company’s renewable energy business, which will remain listed on Nasdaq Stockholm following the combination of the Company’s E&P business with Aker BP (the “Combination”).
All of the resolutions set out below are conditional upon, and will take legal effect in connection with, the completion of the Combination, which is scheduled for 30 June 2022. More detailed information on the timetable for completion and payment of the merger consideration was published yesterday on 15 June 2022, see the press release on www.lundin-energy.com.
Amendment of Articles of Association, including a change of the Company’s name to Orrön Energy AB
The EGM resolved to amend the Articles of Association of the Company, entailing, among other things, a change of the Company’s name to Orrön Energy AB, and a possibility for the Board of Directors to (i) resolve to allow shareholders to vote by post and (ii) collect powers of attorneys, prior to future general meetings of the Company. In addition, it was resolved to align the object of the Company set out in the Articles of Association with the changes to the business of the Company.
New Board of Directors, annual fees and Board LTIP 2022
The EGM elected a new Board of Directors, consisting of Grace Reksten Skaugen (re-elected), C. Ashley Heppenstall (re-elected), Jakob Thomasen (re-elected), Aksel Azrac (new) and Daniel Fitzgerald (new). Grace Reksten Skaugen was elected new Chair of the Board of Directors.
The EGM resolved to remunerate the Chair and other members of the Board of Directors as follows: EUR 120,000 to the Chair of the Board of Directors, EUR 60,000 to each of the other members of the Board of Directors elected by the meeting (excluding the Chair of the Board of Directors and the intended new Chief Executive Officer Daniel Fitzgerald), EUR 10,000 to Chairs of Committees of the Board of Directors, and EUR 5,000 to other members of Committees of the Board of Directors (excluding Chairs of Committees of the Board of Directors) with the total fees for Committee work (including fees for Chairs of Committees) not to exceed EUR 50,000. These annual fees shall be paid pro rata in relation to the period between the date on which the election takes legal effect and the end of the Annual General Meeting 2023.
In addition, the EGM resolved to establish a one-off long-term share-related incentive plan in the form of a share option plan for members of the Board of Directors of the Company (“Board LTIP 2022”). Under Board LTIP 2022, the Nomination Committee may grant the members of the Board of Directors up to 1,125,000 board options free of charge (up to 450,000 to the Chair and up to 225,000 each to the other members, excluding the intended new Chief Executive Officer Daniel Fitzgerald). The value of the granted board options shall correspond to an amount equal to one year of the annual remuneration set out above, as determined using a customary valuation method. Each board option entitles the holder to either purchase one share in the Company at a price per share corresponding to 120 per cent of the volume weighted average price for the Company’s share on Nasdaq Stockholm during 18–22 July 2022 (or a later period of five trading days as determined by the Nomination Committee in accordance with the EGM resolution) or to “net equity settle” the board options and thereby receive a reduced number of shares, subject to the continued engagement as a member of the Board of Directors of the Company during a three-year vesting period. After the vesting period, the participants in Board LTIP 2022 are entitled to exercise all or part of the board options until 31 July 2029.
In order to secure the Company’s obligations under Board LTIP 2022, the EGM resolved that the Nomination Committee shall instruct the Company to enter 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 Board LTIP 2022. The Nomination Committee’s proposal to secure the delivery of share and cover costs through an issue and transfer of warrants was not approved with the requisite majority at the EGM.
Employee LTIP 2022
The EGM resolved to establish a long-term share-related incentive plan in the form of a share option plan for members of Group Management and other employees of the Company (“Employee LTIP 2022”). Under Employee LTIP 2022, the Board of Directors is entitled to grant employee options to all employees following the completion of the Combination. The Chief Executive Officer may be granted up to 2,800,000 employee options and other employees may be granted up to 1,400,000 employee options each (subject to the cap of 8,400,000 employee options in total). Each employee option entitles the holder to either purchase one share in the Company at a price per share corresponding to the volume weighted average price for the Company’s share on Nasdaq Stockholm during 18–22 July 2022 (or a later period of five trading days as determined by the Board of Directors in accordance with the EGM resolution) or to “net equity settle” the employee options and thereby receive a reduced number of shares, subject to the continued employment within the group during a three-year vesting period. After the vesting period, the participants in Employee LTIP 2022 are entitled to exercise all or part of the employee options until 31 July 2029.
In order to secure the delivery of shares to the participants and cover any costs (including taxes and social security charges) at exercise of employee options under Employee LTIP 2022, the EGM resolved to issue and transfer up to 8,560,000 warrants of series 2022:2. The warrants are issued free of charge and the subscription right rests with the Company itself. The subscription price at exercise of the warrants of series 2022:2 shall be equal to the quotient value of the Company’s share.
New Policy on Remuneration for Group Management
The EGM resolved to adopt a new Policy on Remuneration for Group Management to replace the Policy that was adopted at the Annual General Meeting 2020. The main changes to the Policy are (i) redefined categories of performance measures for the annual bonus plan, and (ii) long-term incentive redefined to accommodate the changes to the structure and business of the Company, calculated on a fair value basis.
Revised Nomination Committee Process
The EGM resolved to adopt a revised Nomination Committee Process to replace the Process that was adopted at the Annual General Meeting 2020. In the revised Process, the right to appoint members of the Nomination Committee shall be based on the shareholding in the Company as of 1 August each year (instead of 1 June). The purpose of the change is to facilitate the formation and work of the Nomination Committee following the completion of the Combination.
Board authorisation to issue shares and convertible debentures
The EGM resolved to authorise the Board of Directors to, at one or more occasions until the next Annual General Meeting, issue new shares and/or convertible debentures corresponding to in total not more than 28,500,000 new shares. If the Board of Directors decides to issue shares or convertible debentures with deviation from the shareholders’ preferential rights, the reason shall be to enable or facilitate acquisitions of companies or businesses or other major investments.
Minutes and complete resolutions
The minutes from the EGM, including the complete resolutions, will be available at the Company and on the Company’s website, www.lundin energy.com.