AGM Information • Mar 27, 2024
AGM Information
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Based on the authorization granted by the Annual General Meeting of Shareholders held on 25 M a r c h 2024, the Board of Directors (hereinafter "Board of Directors") of SSH Communications Security Corporation (hereinafter "SSH" or the "Company") has in its meeting on 25 March 2024 resolved that stock options to subscribe for new shares of the Company (hereinafter "Stock Options") are issued by SSH on the terms and conditions set forth below. The Stock Options will be issued to key personnel of SSH selected by the Board of Directors and to a wholly-owned subsidiary of SSH if so separately decided by the Board of Directors (the "Subsidiary").
The maximum total number of Stock Options issued shall be 980,000. The Stock Options entitle to Subscribe for a maximum total number of 980,000 new shares of SSH (share subscription hereinafter "Share Subscription" or "Subscription, to subscribe for shares hereinafter "Subscribe", subscriber of shares hereinafter "Subscriber").
The Stock Options will be issued under the following series:
| Series | Number of Stock Options |
|---|---|
| 2024A | 980,000 |
The Board of Directors shall have the right to convert Stock Options from one series to another.
The Board of Directors decides on the allocation and distribution of the Stock Options to selected key personnel of SSH and to the Subsidiary and from the Subsidiary further to selected key personnel of SSH as well as the timetable thereof. The Board of Directors shall also be entitled to decide upon the allocation, conversion from one series to another and distribution of Stock Options that have been returned to the Company or to the Subsidiary.
The Stock Options shall be issued free of charge.
The persons, to whom Stock Options are issued, shall be notified in writing by the Company about the offer of Stock Options and the number of Stock Options available to each such person. The Stock Options shall be delivered to the recipient when he or she has accepted the offer of the Board of Directors (the key employees of SSH who have become holders of SSH Stock Options 2024A in accordance with these terms and conditions hereinafter referred to as "Participants" and each a "Participant).
The Board of Directors shall be entitled to decide on the approval of the Subscriptions of the Stock Options.
The right of non-Finnish employees of SSH to Subscribe for the Stock Options (such as employees not generally liable for tax in Finland or not permanent residents of Finland) may be limited or their Subscription may be subject to additional terms and conditions on the basis of local securities laws, tax laws or other laws or regulations.
The Stock Options shall be issued in electronic form in the paperless book-entry securities system. The Stock Options shall be subject to a transfer restriction as described in Sections I.5 and III of these terms and conditions. The aforementioned transfer restriction shall be registered as a restriction in the book-entry securities system in the manner determined by the Board of Directors.
The Stock Options shall, in deviation from the shareholders' pre-emptive subscription right, be issued to key employees of SSH selected by the Board of Directors and at the discretion of the Board of Directors to the Subsidiary. The right to subscribe for the Stock Options is personal and may not be assigned. The shareholders' pre-emptive subscription right is proposed to be deviated from since the Stock Options are intended to form part of the incentive and commitment program of SSH's key personnel. This forms an especially weighty financial ground for the Company, also observing the interests of all the Company's shareholders, for the above deviation from the shareholders' pre-emptive subscription.
The Stock Options are allocated based on criteria determined by the Board of Directors. Offering the Stock Options is solely at the discretion of the Company. The Stock Options or the underlying shares do not constitute a part of the Participant's salary or benefit in kind or otherwise any part of the employment contract, nor should they be regarded as such. The Participant shall not be entitled to compensation on any ground based on the Stock Options during his/her employment or thereafter from any company belonging to SSH group.
The Board of Directors decides upon the allocation and distribution of the Stock Options, upon the time of the allocation and distribution as well as on the reallocation and redistribution or delivery to the Subsidiary of Stock Options which have been offered to key personnel but which have not been subscribed for by the key personnel to whom Stock Options have originally been offered or which have subsequently been returned to the Company from their holders as a result of termination of employment or due to other grounds.
Stock Options may not be transferred, pledged, or disposed of in any manner without the consent of the Company. The Board of Directors decides on the granting of the consent. If the Board of Directors permits the transfer or pledge of a Stock Option, the Participant is obliged to immediately inform the Company of the execution of the transfer or pledge in writing. The Board of Directors may also decide to set other restrictions to the disposability of the Stock Options in certain specified jurisdictions [for, among others, legal or administrative reasons].
Should a Participant cease to be employed by or at the service of SSH, for any reason other than death, retirement for statutory pension (such as statutory old-age pension or statutory pension due to permanent illness or disability) or retirement for supplementary old-age pension arranged by the Company, such person shall, without delay, offer to the Company or upon the Company's demand to the Subsidiary or to third party specified by the Company, free of charge, the Stock Options for which the Share Subscription period specified in Section II.2 had not commenced on
the last day of such person's employment or service. The Board of Directors may, however, also in case the employment of a Participant ceases due to other reason than the permitted reasons described above, due to a significant ground, decide that the Participant is entitled to keep the Stock Options subject to the offering obligation or a part of them.
Regardless of whether the Participant has offered his/her Stock Options to the Company, the Subsidiary or to the third party specified by the Company or not, the Company is entitled to inform the Participant in writing that the Participant has lost his/her Stock Options on the basis of the above-mentioned reasons. The Board of Directors shall in such case have the right at its discretion either to cancel such Stock Options, to transfer the Stock Options further to the Subsidiary or to a third party or to leave them waiting for a subsequent further transfer to a third party. The Company shall, irrespective of whether the Stock Options have been offered to the Company or to a party specified by the Company, to have all the Stock Options subject to the offering obligation recovered and transferred from the Participant's book-entry account to a book- entry account specified by the Company or, alternatively, to cancel the subject Stock Options without the consent of the Participant. The Company is, in addition, entitled to register the transfer restrictions and other respective restrictions concerning the Stock Options to the Participant's book-entry account without the consent of the Participant. The Board of Directors is entitled to offer such Stock Options further to key personnel employed by or at the service of SSH or to the Subsidiary.
Should the Participant cease to be employed by or at the service of the Company, the Board of Directors may decide that the Participant, in order to be able to utilize the Stock Options, has to exercise all or a part of the Stock Options before a specific date set by, and in the manner determined by, the Board of Directors.
Each Stock Option entitles its holder to Subscribe for one (1) new share in SSH. As a result of the Share Subscriptions, the number of shares of SSH may be increased by a maximum of 980,000 new shares and the share capital of SSH may as a result of the share subscriptions made with the Stock Options increase with the maximum of 29,400 euro. Out of the Share Subscription price the amount equalling the nominal value of the share shall be transferred to the share capital and the exceeding amount to the fund for invested non-restricted equity.
The Subsidiary shall not be entitled to subscribe for shares with the Stock Options.
The Share Subscription period shall be:
• for Stock Option 2024A: 23 February 2026 – 31 March 2028
Share Subscriptions shall take place at the head office of SSH or at the premises of a subscription agent determined by the Board of Directors. The Stock Options with which shares have been subscribed for shall be deleted from the Subscriber's book-entry account. Upon Subscription, payment for the shares subscribed for, shall be made to the bank account specified by the Company. The Share Subscription can, if so resolved by the Board of Directors, be conditional on
the Participant's satisfaction of taxes relating to the Share Subscription or other corresponding conditions determined by the Board of Directors.
The Board of Directors may suspend the Share Subscription for a specific period of time due to significant reasons. Whether such a significant reason is at hand shall be determined by the Board of Directors.
The Board of Directors shall decide on all procedural matters and measures concerning the Share Subscription.
The Subscription price for the shares ("Subscription Price") shall be:
• for stock option 2024A, the trade volume weighted average quotation of the Company's share on NASDAQ Helsinki Ltd. during the 30day trading period preceding 1 Mar 2024 (with said date not included in said period), added by 10%.
The Subscription Price shall, however, always be at least the nominal value of the share.
If the Company distributes dividend or otherwise funds from distributable equity funds during the afore-mentioned determination period of the Subscription Price, the value of the dividend or other distributed funds, proportioned to the number of shares, shall be deducted from such trading with the share, which is used as the basis for the determination of the Subscription Price and in which the dividend or other distributed funds have been left with the seller of the shares (as this is determined pursuant to the settlement rules of NASDAQ Helsinki Ltd. applied from time to time).
From the Subscription Price shall, as per the relevant record date, be deducted the amount of the dividend or funds distributed through a distribution of funds from the distributable equity fund decided after the end of the period for determination of the Share Subscription price but before Share Subscription.
Shares Subscribed for and fully paid shall notified for registration to the Finnish Trade Register without delay and latest without delay after the end of the financial year during which the Shares were Subscribed. The Subscribed Shares shall after their registration in the Finnish Trade Register be registered in the book-entry account of the Subscriber.
The shares Subscribed for with the Stock Options shall entitle to a dividend and other distribution of profit, if any, and the other financial and administrative rights attached to the share, commence when the increase of the share capital has been registered in the Finnish Trade Register.
Should the Company before the Share Subscription issue new shares, stock options or specific rights entitling to shares, a holder of Stock Options shall have the same or equal right as the shareholders. If the shareholders have the pre-emptive subscription right in such issue, the
equality is reached in the manner determined by the Board of Directors by adjusting the number of shares available for Subscription, the Subscription Price or both. If the issue is effected in deviation from the shareholders' pre-emptive subscription right, the holder of Stock Options shall not be entitled to participate in the issue by virtue of the Stock Options and the terms and conditions of the Stock Options shall not be amended in connection therewith.
If the Company reduces its share capital in proportion to the existing shareholdings before the Share Subscription for the purposes of distributing funds to its shareholders, a holder of Stock Options shall have the same or equal right as the shareholders and the Share Subscription right accorded by the terms and conditions of the Stock Options shall be adjusted correspondingly. A reduction of the share capital for other purposes shall not affect the Subscription rights pertaining to the Stock Options.
Should the Company be placed into liquidation before the Share Subscription, the holder of Stock Options shall be given an opportunity to exercise his/her Share Subscription right during a period to be determined by the Board of Directors, such period commencing no later than one month after the Company has decided on the placing into liquidation. If the Company is removed from the Finnish Trade Register without liquidation process or otherwise than as a result of a merger or demerger, the holder of Stock Options shall have no Subscription right.
If the Company decides to merge in whatever form or demerge, the holders of Stock Options shall be given the right to Subscribe for the shares before the merger or demerger with the Stock Options within a period of time determined by the Board of Directors. After the expiry of the above period determined by the Board of Directors no Subscription right shall exist. Alternatively, the Board of Directors may grant the holders of the Stock Options the right to subscribe for stock options issued, under the corresponding terms and conditions, by the receiving company or the company to be formed in a combination merger or demerger on the same principles that the shareholders have been given shares of the acquiring or new company, as set forth in the merger or demerger plan. The holder of Stock Options may in case of a merger or demerger require redemption of his/her Stock Options in accordance with the provisions stipulated in the Finnish Companies Act expect that they shall not have any such right in the above case in which the holders of Stock Options are offered the right to subscribe for stock options issued by the receiving company or the company to be formed in a combination merger or demerger in accordance with the provisions set forth further below.
If the Company, prior to the expiry of the Share Subscription period, resolves to acquire or redeem its own shares or specific rights to its share by an offer made to all shareholders in proportion to ownerships, the holders of Stock Options shall be made the same or an equivalent offer as the shareholders. In order to maintain the equality, the Board of Directors may decide, if necessary, either to change the number or Subscription price of the shares to be Subscribed for under the Stock Options, or both, or alternatively to allow the holders of Stock Options to exercise the right to Subscribe prior to the implementation of the acquisition or redemption, during a period to be determined by the Board of Directors. In other cases, acquisition or redemption of the Company's own shares or the acquisition or redemption of Stock Options to the Company shall not require the Company to take any action in relation to the Stock Options.
If a redemption right and redemption obligation to all of the Company's shares, as referred to in the Finnish Companies Act, arises to a shareholder, before the end of the Share Subscription period, on the basis that a shareholder possesses over 90% of the shares and votes in the
Company ("Redemption of Minority Shares"), or if the ownership of a shareholder reaches or exceeds such a level that the shareholder has under the Finnish Securities Markets Act the obligation to launch a public offer for the redemption of the remaining shares in the Company, the holders of Stock Options shall be entitled to use their right of Subscription by virtue of the Stock Options, within a period of time determined by the Board of Directors, or, if so decided by the Board of Directors, they shall be entitled to have an equal right to that of shareholders to sell their Stock Options to the redeemer or offeror, irrespective of the transfer restriction defined in Section I.5 above. Upon the occurrence of a Redemption of Minority Shares the holders of Stock Options shall have the corresponding obligation to that of the Company's shareholders to transfer all of their Stock Options for redemption by the party having the redemption right and the party having the redemption right shall have the right to redeem all the Stock Options simultaneously with and in the same procedure as the outstanding shares of the Company.
If the number of the Company's existing shares is changed while the share capital remains unchanged (except the situations set forth above in section II 6 or in this section II 7), the Share Subscription terms and conditions shall be amended so that the relative proportion of shares available for Subscription with the Stock Options to the total number of the Company's outstanding shares, as well as the aggregate Subscription Price, remain unchanged.
The Company's decision to cancel existing shares held by the Company itself, to issue new shares to the Company itself or to reduce share capital without distribution to shareholders shall not affect the terms and conditions of the Stock Options.
Converting the Company from a public company into a private company shall not affect the terms and conditions of the Stock Options.
Should the holder of Stock Options be entitled to exercise the Stock Options based on this Section II.7 in a situation in which the Subscription Price cannot yet be determined pursuant to these Terms and Conditions, the Subscription price for the shares shall be determined based on the last ended period for determination of the Subscription price pursuant to Section II.3.
The laws of Finland shall be applied to these terms and conditions and all aspects related to the Stock Options and Subscription. Any dispute, controversy or claim arising out of or relating to the Stock Options, or the breach, termination or validity thereof, will be finally settled by arbitration, in accordance with the Rules for Expedited Arbitration of the Finland Chamber of Commerce. The seat of arbitration will be Helsinki, Finland, and the language of the arbitration will be [Finnish or English].
Matters and procedures related to the Stock Options shall be resolved by the Board of Directors. The Board of Directors is entitled to decide on technical amendments to these terms and conditions resulting from incorporation of the Stock Options to the book-entry securities system as well as on other adjustments and changes to these terms and conditions which are not considered as substantial. The Stock Option documentation referred to in the Finnish Companies Act is available for inspection at the head office of SSH.
Page 6 of 7 The Participant and any transferee not permitted under these terms and conditions or not approved by the Board of Directors has an obligation to convey, without any consideration, and the Company shall be entitled to enforce and get transferred from such party/-ies to a party specified by the Company, free of charge, the Stock Options held by such party and at its discretion to cancel such Stock Options. The Board of Directors shall also have the right to implement and get transferred
without any consideration to a party specified by it Stock Option held by a party which breaches these terms and conditions, any regulations or instructions given by the Company based on these terms and conditions, applicable law or regulations given by authorities. The Company is entitled to apply for and effect a transfer of all Stock Options from the afore-mentioned Participant's or non-permitted transferee's (whichever is applicable) book- entry account to a book-entry account specified by the Company or, alternatively, cancel such Stock Options without the consent of the subject Participant or non-permitted transferee (whichever is applicable).
The Board of Directors will have a right to take any measures as it considers necessary to meet any legal payment or other liability in respect of the Stock Options, or to enhance administration of the Stock Options. The Company shall for such purpose have the right e.g. in order to fulfil its obligation to remit the payroll tax to deduct the necessary portion from the exercise of the Stock Options or from the proceeds received by the Participant from the sale of the Shares subscribed for with the Stock Options and the right to transfer, without the consent of the Participant, Stock Options from the book-entry account of the Participant to an account designated by the Company to be held on such account on behalf of the Participant.
The Participants are themselves responsible for the taxes and tax-related payments which relate to the Stock Options and the transfer and use thereof.
The Company processes the Stock Option holders' personal data for the purposes of operating the Stock Option plan in accordance with applicable data protection laws and the Company's privacy notice. By participating in the Stock Option plan, the Stock Option holder acknowledges that the Company and/or any third party appointed by the Company to administer the plan processes personal data for the purposes of operating the Stock Option plan. More information on the processing of personal data and the rights of the data subject can be obtained from the Company's personnel department.
These Stock Option terms and conditions have been prepared in the Finnish and in English languages. In case of any discrepancy between the Finnish and English terms and conditions, the Finnish terms and conditions shall prevail.
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