As set out in the stock exchange notice
published by on 16 December 2011, the Board of
directors has concluded to propose that ScanArc
is transformed into an investment company. The
Board consequently calls for an extraordinary
general meeting on 10 February 2012 at 10.00
CET at Thon konferansesenter, Vika Atrium,
Munkedamsveien 45, Oslo.
Following an overall assessment the Board and
its advisors have come to the conclusion that a
model with an employed CEO is preferable
compared to the initially proposed model, where
the intention was to hire the CEO from a
separate management company to be jointly owned
by the CEO and Chairman of the Board.
On this basis, the Board has, subject to
approval by the extraordinary general meeting,
entered into a new employment contract with the
present CEO, Ralf Schmidt. In addition, the
Board proposes that Ketil Sandhaug continues as
Chairman of the Board following a
transformation into an investment company.
The Board considers ScanArc, with its present
capital structure, to be well positioned to
invest into small or medium sized companies.
Furthermore, by offering proven operational and
strategic competence as well as capital,
ScanArc should be able to both invest at
attractive valuations and enhance value
creation. In addition, ScanArc is through its
stock exchange listing well positioned to
attract a relevant deal flow.
CEO, Ralf Schmidt, comments:
"The current capital market situation for
small and medium sized companies is challenging
and is expected to remain so during 2012.
Available investment candidates often also lack
the management resources to handle the
currently challenging business environment. A
thorough understanding of the strategic setting
and operational execution expertise at the CEO
level is of crucial importance when committing
capital."
ScanArc, with Ralf Schmidt as CEO and Ketil
Sandhaug as Chairman of the Board, is
considered to be able to offer the necessary
strategic and operational skills. Ralf Schmidt
has a proven track record from several
companies and industries and has experience
from Norsk Hydro ASA, McKinsey & Co, Dynal
Biotech AS and Axis Shield ASA in addition to
ScanArc. Ketil Sandhaug has an extensive
financial background and board experience from
several companies both listed and unlisted. He
is the majority owner of Geomatikk AS and
Geomatikk IKT AS.
As part of the transformation into an
investment company, the Board proposes that
incentive programs are established for the CEO
and the Chairman of the Board. The programs are
structured to be directly linked to the
development of the Company's share price
with a calculated reference price of NOK 1.86
per share based on the estimated total cash
reserves in the Company of MNOK 60.4 per 1
April 2011. These incentive programs are
subject to approval by the extraordinary
general meeting.
For the Chairman of the Board, the proposed
incentive program will be established through
the issuance of stock options vesting over the
next three years, with a strike price of NOK
1.86 adjusted for an annual increase of NIBOR +
2% ("hurdle rate"). For the CEO, the
incentive program is established in the form of
a bonus program based on the development of the
Company's share price over the next three
years. The bonus payments will be proportional
to the development of the Company's share
price above an annual increase of NIBOR +2%
("hurdle rate") with basis in a
calculated reference share price of NOK 1.86 as
per 1 April 2012.
Any payments of bonus to the CEO will be split
in three parts, of which 1/3 to be paid in
cash, 1/3 (after tax) to be reinvested in
shares in the Company, and 1/3 to be subject to
a claw-back mechanism reflecting the
developments in the share price over the
following two years.
The incentive program proposals for the CEO and
Chairman combined represents a total of 17.18%
of the upside from the estimated total cash
reserves in the Company at 1 April 2012,
adjusted for a "hurdle rate" of NIBOR
+ 2% per annum. The allocation of the combined
incentive program between the CEO and the
Chairman is 11.17% and 6.01% respectively.
Further details on the Board's proposals
and the incentive programs are set out in the
attached notice of the extraordinary general
meeting.
If no investments have been made by the end of
2012, the Board will, unless the shareholders
wish otherwise, propose to discontinue the
Company's operation as an investment
company and propose to proceed with the
pay-back of the maximum capital possible to the
shareholders. For this case, the employment
contract for the CEO includes a three months
notice period, and the entire options scheme
for the Chairman will lapse.
If the Board's proposal to transform the
Company into an investment company does not
receive the necessary 2/3 majority at the
extraordinary general meeting, the Board will
in connection with the Annual General Meeting
in 2012 propose that the Company repays the
majority of the capital to the shareholders and
thereafter evaluate the possibility to merge
the Company with another operational
entity.
The shareholders who have previously issued
pre-acceptances for a transformation of the
Company into an investment company, have
reconfirmed their pre-acceptances and their
aggregate shareholding is 46.7% as per the date
of this announcement.
Registration
For registration, please see the appendix
"Attendance form and proxy".
Oslo, 16 January 2012
For further information, please contact:
Ketil Sandhaug
Chairman of the Board, ScanArc ASA
Mob.: +47 952 25 554
Ralf Schmidt
CEO, ScanArc ASA
Mob.: +47 959 49 978
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