Regulatory filing

The Management Board of Agora S.A. with its registered office in Warsaw ("Company") presents drafts resolutions which the Management Board intends to submit to the Extraordinary General Meeting of the Company (the "General Meeting") called for 27 March 2020, 11:00 a.m., to be held in the Company’s building at 8/10 Czerska street in Warsaw.

“Resolution no. […]

on the election of the Chairperson

Pursuant to Article 409 § 1 of the Commercial Companies Code and § 6 item 3.1. of the Regulations of the General Meeting, the General Meeting of Shareholders hereby elects Mrs/Mr [·] as the Chairman of the General Meeting of Shareholders of Agora S.A.”

“Resolution no. […]

on the approving the agenda

Pursuant to § 10 item 2.1. of the Regulations of the General Meeting, the General Meeting hereby approves the announced agenda.”

“Resolution no. […]

on the appointment of members of the returning committee

The General Meeting hereby appoints Mrs/Mr [name & surname] and Mrs/Mr [·] to the returning committee.“

Justification to draft resolution no. […]

Resolutions no. [...] are resolutions of an order nature

"Resolution no. [...]

on the amendment of paragraph 19 sec. 2 point i) of the Company’s statute

Pursuant to Article 430 § 1 of the Commercial Companies Code the General Meeting decides to amend the Company’s statute as follows:

"§ 19 sec. 2 point i)

i) granting consent for the exercise by the Company, in a specific way, of voting rights at the shareholders meetings or general meetings of the Company’s subsidiaries within the meaning of the Act on Public Offering and implementing acts issued on the basis thereof, in case of voting on resolutions concerning remuneration or benefits referred to in point g) of this section,”

shall read as follows:

"§ 19 sec. 2 point i)

i) granting consent for the exercise by the Company, in a specific way, of voting rights at the shareholders meetings or general meetings of the Company’s subsidiaries within the meaning of the Act on Public Offering and implementing acts issued on the basis thereof, in case of voting on resolutions concerning remuneration or benefits referred to in point f) of this section,”

Justification to draft resolution no. […]

Resolution no. […] is a resolution concerning procedural matters, arising from an obvious typing mistake, consisting of the erroneous reference to point g) instead of point f) of section 2 of § 19 of the Company’s statute.

“Resolution no. […]

on the creation and introduction of a Stock Option Plan, issuance of registered Subscription Warrants pursuant to the disapplication of preemption rights of existing shareholders, conditional increase of the Company’s share capital pursuant to the disapplication of preemption rights of existing shareholders and amendment of the Company’s Statute related to the foregoing

The Extraordinary General Meeting of Agora S.A. with its registered office in Warsaw (“Company”), acting on the basis of Article 430, Article 448 and Article 453 § 2 of the Commercial Companies Code dated 15 September 2000 (“CCC”) resolves as follows:

§ 1

1. It is decided to create, adopt and carry out in the Company an incentive scheme for the Management Board of the Company and companies in relation to which the Company is the parent company within the meaning of Article 3 sec. 1 point 37 of the Accountancy Act (consolidated text of 17 January 2019 (Journal of Laws of 2019, item 351), as amended) (the “Subsidiaries”), executives and key persons in the Company and in the Subsidiaries on the terms specified in this resolution and on the terms specified by the Supervisory Board Company, pursuant to § 4 sec. 2 of this resolution (“Stock Option Plan”).

2. The Stock Option Plan will be carried out through the issuance, after the fulfillment of certain conditions, of Subscription Warrants which entitle their holders to subscribe for the New Issue Shares that will be issued as part of a conditional increase of the share capital of the Company pursuant to the disapplication of preemption rights of existing shareholders of the Company.

3. The Stock Option Plan will cover financial and non-financial goals set forth for the duration of the Stock Option Plan, i.e. from 1 July 2019 to 30 June 2023 (“Plan Duration”), in accordance with this resolution and as specified by the Supervisory Board Company, pursuant to § 4 sec. 2 of this resolution.

§ 2

1. The Company’s share capital is conditionally increased by not more than PLN 1,863,233 (in words: one million eight hundred sixty three thousand two hundred thirty three zlotys) through the issuance of not more than 1,863,233 (in words: one million eight hundred sixty three thousand two hundred thirty three) series G ordinary bearer shares with a nominal value of PLN 1.00 (in words: one zloty) each (“Series G Shares” or “New Issue Shares”).

2. The purpose of the conditional increase of the Company’s share capital is to grant rights to subscribe for the New Issue Shares to the holders of Subscription Warrants, which will be issued on the basis of this resolution. The adoption of a resolution concerning a conditional capital increase is motivated by the intention to introduce the Stock Option Plan based on Subscription Warrants in the Company.

3. The right to subscribe for New Issue Shares may only be exercised by the holders of the Subscription Warrants on the terms set out in this resolution and on the terms specified by the Supervisory Board Company pursuant to § 4 sec. 2 of this resolution.

4. Subject to the principles and restrictions set out by the Company’s Supervisory Board Company pursuant to § 4 sec. 2 of this resolution, the right to subscribe for New Issue Shares may be exercised by the holders of the Subscription Warrants no later than 31 December 2028.

5. The issue price of the New Issue Shares will amount to PLN 6.00 (in words: six zlotys) per share (“New Shares Issue Price”). The New Shares Issue Price will be covered by a cash contribution.

6. The New Issue Shares will participate in a dividend on the following principles:

6.1. The New Issue Shares, which were issued for the first time to a holder of Subscription Warrants in the period from the beginning of the fiscal year to the dividend date (inclusive), participate in profit starting from the distribution of profit for the previous financial year, i.e. from 1 January of the financial year directly preceding the year in which shares were issued;

6.2. The New Issue Shares, which were issued for the first time to a holder of Subscription Warrants on a day which occurs in the period following the dividend date until the end of the fiscal year, participate in profit starting from the distribution of profit for the fiscal year in which such shares were issued, i.e. from 1 January of such fiscal year.

In connection with the fact that the New Issue Shares may be issued as dematerialized shares, the above-referenced “issuance” shall be also understood as the registration of New Issue Shares in the register of shareholders or on the securities account of the relevant holder of the Subscription Warrants or on the general account.

7. The Company’s existing shareholders are fully deprived of the preemption right in relation to the Subscription Warrants and the New Issue Shares. In the shareholders’ opinion the disapplication of the preemption right in relation to the Subscription Warrants and the New Issue Shares is economically justified and it is in the best interest of the Company and its shareholders, which is justified by an opinion of the Management Board of the Company constituting Schedule no. 1 to this resolution.

§ 3

1. Subject to the registration of amendments to the Company’s Statute related to the conditional increase of the Company’s share capital referred to in § 6 of this resolution, not more than 1,863,233 (in words: one million eight hundred sixty three thousand two hundred thirty three) registered Series A Subscription Warrants (“Series A Subscription Warrants” or “Subscription Warrants”) shall be issued.

2. The issuance of Subscription Warrants will take place irrespective of the number of Subscription Warrants issued.

3. The Subscription Warrants will be issued either in the form of a document (and may be issued in the form of global warrant certificates) or in a dematerialized form through registration thereof in the register of Subscription Warrants.

4. The Subscription Warrants are issued free of charge.

5. The Subscription Warrants can be transferred by succession.

6. The Subscription Warrants may be acquired by members of the Management Board of the Company, management boards of the Subsidiaries and persons employed (including any persons which will be employed after the adoption of this resolution) in the Company and in the Subsidiaries (on the basis of an employment contract or on any other legal basis) and being executives or key persons in the Company or in the Subsidiaries, indicated by: (i) the Supervisory Board of the Company – with respect to members of the Management Board of the Company; and (ii) the Management Board of the Company – with respect to other persons (“Eligible Persons”), whereas the Supervisory Board or the Management Board may indicate Eligible Persons and the number of Subscription Warrants to be acquired by them also during the term of the Stock Option Plan, in respect of the Subscription Warrants which have not been previously allotted to Eligible Persons. The Supervisory Board of the Company and, the Management Board of the Company, as the case may be, is authorized to indicate Eligible Persons taking into account criteria such as their position, the importance of the position for the achievement of goals specified in the Stock Option Plan Regulations and other criteria adopted by the Supervisory Board or the Management Board. The Supervisory Board of the Company and the Management Board of the Company, as the case may be, are also authorized to supplement the list of Eligible Persons to include other persons employed in the Company or in the Subsidiaries (irrespective of the legal basis of such employment) meeting most of the above-mentioned criteria, including any persons which will be employed in the Company or in the Subsidiaries after the adoption of this resolution (“New Eligible Persons”, whereas any references to Eligible Persons in this resolution include also New Eligible Persons). While indicating the Eligible Persons, the Supervisory Board of the Company and the Management Board of the Company, as the case may be, will also indicate the number of Subscription Warrants intended for allotment, provided that particular Eligible Persons meet the Allotment Conditions.

7. Each Series A Subscription Warrant will entitle its holder to subscribe for 1 (one) Series G Share at the New Shares Issue Price.

8. The Supervisory Board of the Company is authorized to enter with Eligible Persons being members of the Management Board of the Company into agreements on participation in the Stock Option Plan (“Participation Agreements”) and offer Subscription Warrants to them if they meet the conditions of the Stock Option Plan, and the Management Board of the Company is authorized to enter into Participation Agreements with other Eligible Persons and to offer Subscription Warrants to them if they meet the conditions of the Stock Option Plan, on the terms set out in this resolution and in the Stock Option Plan Regulations. Offers to acquire Subscription Warrants may be addressed in aggregate to not more than 149 (in words: one hundred forty nine) persons (or, in the event of a change in the applicable laws, other number of persons which does trigger an obligation to prepare an issuance prospectus) and, as a consequence, an offer to acquire Subscription Warrants, and the subscription for shares as a result of the exercise of the Subscription Warrants will not require preparation of an issuance prospectus in accordance with the Regulation (EE) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC.

9. Subscription Warrants may be issued and offered by the Company no later than until 31 December 2028.

§ 4

1. Allotment of the Subscription Warrants to Eligible Persons who entered with the Company into an agreement on participation in the Stock Option Plan (“Plan Participants”) may occur on such terms, in such number and on such dates as indicated in this resolution, provided that the following conditions are jointly met: Loyalty Condition, Performance Goals and, if adopted, Individual Financial Goals and Individual Non-Financial Goals (hereinafter jointly referred to as the “Allotment Conditions”):

1.1.   with respect to any Plan Participant: (i) such Plan Participant shall remain in employment from the date of conclusion of the Participation Agreement until the end of the Plan Duration; (ii) the Plan Participant shall observe the statutory or contractual non-competition obligation in respect of the Company or a Subsidiary from the date of conclusion of the Participation Agreement until the end of the Plan Duration; and (iii) the Plan Participant shall observe the provisions of the Participation Agreement (“Loyalty Condition”); and

1.2. the Company shall achieve specific performance goals (jointly: “Performance Goals”), which are as follows:

1.2.1.  the allotment of Subscription Warrants entitling their holders to subscribe for 30% of the maximum number of New Issue Shares attributable to a given Eligible Person (“First Tranche”) will depend on the achievement of EBITDA of at least PLN 191,500,000.00 (in words: one hundred ninety one million five hundred thousand zlotys);

1.2.2.  the allotment of Subscription Warrants entitling their holders to subscribe for 30% of the maximum number of New Issue Shares attributable to a given Eligible Person (“Second Tranche”) will depend on the Company making, in the period between 1 January 2020 and 30 June 2023, distributions to the Company’s shareholders in the aggregate amount not less than PLN 93,160,000.00 (in words: ninety three million one hundred sixty thousand zlotys) on account of a dividend or a payment of consideration for the acquisition of the Company’s own shares, or both, however the dividend or remuneration for the acquisition of the Company’s own shares to be paid, respectively, for 2022 or 2023, i.e. until 30 June 2023, shall be accounted towards the above purpose in the amount adopted by way of the General Shareholders Meeting resolution on payment of a dividend or authorizing the Company to acquire its own shares for a certain amount, adopted until 30 June 2023, even if it has not been paid out by 30 June 2023.

1.2.3.  through payment of dividend 40% of the maximum number of New Issue Shares attributable to a given Eligible Person (“Third Tranche”) will depend on the average market price of the Company’s shares admitted to trading on a regulated market for the period from 1 January 2023 to 31 March 2023 (arithmetic average of daily average volume weighted prices) (“Market Share Price”) according to the following scheme:

a. if the Market Share Price is greater than or equal to PLN 24.55, the Subscription Warrants entitling their holders to subscribe for all New Issue Shares of the Third Tranche shall be allotted;

b. if the Market Share Price is lower than PLN 24.55 but greater than PLN 20.60, the Subscription Warrants entitling their holders to subscribe for such number of the New Issue Shares of the Third Transfer as constitutes the product of: (i) the maximum number of New Issue Shares of the Third Tranche, multiplied by (ii) a multiplier determined in accordance with the following formula, shall be allotted:

X = 80 p.p. + [((Market Share Price – 20.60) / 3.95) x 20 p.p.]

c. if the Market Share Price is equal to PLN 20.60, the Subscription Warrants entitling their holders to subscribe for 80% of the New Issue Shares of the Third Tranche shall be allotted;

d. if the Market Share Price is lower than PLN 20.60 but greater than PLN 18.62, the Subscription Warrants entitling their holders to subscribe for such number of the New Issue Shares of the Third Tranche as constitutes the product of: (i) the maximum number of the New Issue Shares of the Third Tranche, multiplied by (ii) a multiplier determined in accordance with the following formula, shall be allotted:

X = 60 p.p. + [((Market Share Price – 18.62) / 1.98) x 20 p.p.]

e. if the Market Share Price is equal to PLN 18.62, the Subscription Warrants entitling their holders to subscribe for 60% of the New Issue Shares of the Third Tranche shall be allotted;

f. if the Market Share Price is lower than PLN 18.62, the Subscription Warrants entitling their holders to subscribe for the New Issue Shares of the Third Tranche shall not be allotted;

where the capitalized terms have the following meaning:

EBITDA - means the operating result (EBIT) of the Group, shown in the profit and loss account, increased by: (i) amortization and write-offs for impairment of tangible and intangible fixed assets; (ii) costs of the Stock Option Plan (in each case it regards the values for the fiscal year 2022, calculated without taking into account the changes introduced by the International Financial Reporting Standard no. 16 leasing (“IFRS 16”)). The Supervisory Board, at the request of the Management Board, may adjust EBITDA so calculated for the impact of non-recurring events;
X - multiplier of the New Issue Shares of the Third Tranche (expressed as a percentage).
If the achievement of the Performance Goal related the Market Share Price were impossible or difficult due to the capital markets situation, the Supervisory Board may decide to allot Subscription Warrants pursuant to the Performance Goal related to the Market Share Price in such number and on such terms as it deems appropriate at its discretion, in a number not exceeding 60% of the Subscription Warrants attributable to the Performance Goal related to the Market Share Price, provided that the price of the Company's shares in the period between 1 January 2023 and 31 March 2023 compared to the period between 1 January 2019 and 31 March 2019 increased in percentage terms more than the sWIG80 index in the same periods. If the above-referenced index ceases to be published or if the Company ceases to be encompassed by such index in the period indicated above, the Supervisory Board will determine, by way of a resolution, another stock exchange index encompassing the Company, which will replace the above-mentioned index;

1.3.  with respect to the Plan Participants other than members of the Management Board of the Company, the Supervisory Board (which may delegate this authorization, in full or in part, to the Management Board) is authorized to determine additional individual goals (financial or non-financial) (“Individual Financial Goals” or “Individual Non-Financial Goals”) on the achievement of which the allotment of the Subscription Warrants or the number of the allotted Subscription Warrants will depend.

2. The Supervisory Board of the Company is authorized to: (i) specify the Allotment Conditions in more detail, and in particular to determine exceptions from the Loyalty Condition, on which the possibility of acquiring the Subscription Warrants or the number of the Subscription Warrants which an Eligible Person will be entitled to acquire will depend and (ii) the detailed principles and dates relating to the issuance, allotment and exercise of the Subscription Warrants through the adoption of the Stock Option Plan regulations, provided that the above-mentioned regulations to be adopted by the Supervisory Board Company should be consistent with this resolution.

§ 5

1. The Company will apply for admission and introduction of the New Issue Shares to trading on a regulated market of the Stock Exchange. The Management Board of the Company is authorized to take all necessary actions related to dematerialization of the New Issue Shares in Krajowy Depozyt Papierów Wartościowych S.A., and admission and introduction of the New Issue Shares to trading on a regulated market of the Stock Exchange immediately.

2. The New Issue Shares will be issued (at the Company’s option, in any case subject to the applicable laws in force at the time of issuance) in the form of a document or in dematerialized form. The Management Board of the Company is authorized to enter with an investment company or Krajowy Depozyt Papierów Wartościowych S.A. into an agreement for maintaining the register of warrants and New Issue Shares and to enter with Krajowy Depozyt Papierów Wartościowych S.A. into an agreement for dematerialization or registration of the New Issue Shares or an annex to the previous agreement for registration covering the New Issue Shares, and to take all other necessary actions related to the dematerialization thereof.

3.                    Some of the actions related to the realization of the Stock Option Plan may be performed by a brokerage house or another investment company conducting brokerage activity in Poland. The Management Board of the Company is authorized to enter into an agreement concerning the operation of the Stock Option Plan with an entity referred to above.

4. The Management Board is obliged to submit the list of the subscribed New Issue Shares to the Company’s Registry Court to update the entry concerning the share capital in accordance with Article 452 of the CCC.

5. The Management Board of the Company is authorized to take all other actions necessary to perform this resolution, except for any actions which are reserved to the authority of the Supervisory Board of the Company, unless the Supervisory Board Company authorizes the Management Board of the Company to take such actions.

§ 6

1. The Company’s Statute is amended such that following § 7 sec. 4 of the Company’s Statute the following sec. 5, 6 and 7 shall be added:

“5. The Company’s share capital was conditionally increased on the basis of resolution no. [●] of the Extraordinary General Shareholders Meeting of the Company dated 27 march 2020 by an amount not exceeding PLN 1,863,233 (in words: one million eight hundred sixty three thousand two hundred thirty three zlotys) through the issuance of not more than 1,863,233 (in words: one million eight hundred sixty three thousand two hundred thirty three) series G ordinary bearer shares with a nominal value of PLN 1.00 (in words: one zloty) each.

6. The purpose of the conditional share capital increase referred to in sec. 5 above is to grant rights to subscribe for Series G Shares to the holders of the Series A Subscription Warrants, issued by the Company on the basis of resolution no. [●] of the Extraordinary General Shareholders Meeting Company dated 27 march 2020.

7. The right to subscribe Series G Shares may be exercised by the holders of the Series A Subscription Warrants no later than on 31 December 2028 and in accordance with resolution no. [●] of the Extraordinary General Shareholders Meeting of the Company dated 27 march 2020”.

2. The consolidated text of the Company’s Statute including the foregoing amendments, as well as changes resulting from the Resolution No. [...] of 27 March 2020 of the Company's Meeting of Shareholders, with the wording consisting Schedule no. 2 to this resolution, is adopted.

§ 7

The Resolution shall take effect upon adoption hereof.”

Schedule no. 1 to the Resolution […]

Schedule no. 2 to the Resolution […]

Justification to draft resolution no. […]

The strategy of the Agora Group for 2018 - 2022, announced on 15 June 2018 (current report no. 19/2018), sets ambitious challenges for the management board of Agora S.A., managerial staff of the Agora Group and the entire organization related to a significant acceleration of the development of the entire organization and increase of its value. In line with the strategic assumptions EBITDA of the Agora Group in 2022 should grow up to more than PLN 200 million, and revenues up to more than PLN 1.6 billion.

Therefore, from the perspective of the interests of the entire Agora Group it is reasonable to work out and adopt an option program which would result in the reinforcement of bonds between the persons playing key roles for the implementation of the strategy and the Company. Further, it would make it possible to create an additional mechanism allowing the persons playing key roles for the realization of the Agora Group’s strategy to participate in the jointly achieved increase in profitability and fundamental value of the Company.

In the opinion of the management board of Agora S.A. the proposed option program ensures optimum conditions for increasing both the financial results of the entire capital group and the value of the Company in the long term through a close connection of economic interests of the persons covered by the program with the Group’s financial success and stock exchange value of Agora S.A.

"Resolution no. [...]

on the merger of Agora S.A. (“Surviving Company”) with Agora - Poligrafia sp. z o.o. (“Merged Company”) through the transfer of all assets of the Merged Company to the Surviving Company

Pursuant to Article 506 § 1 - § 3 of the Commercial Companies Code and § 15 sec. 2 a) of the Statute of Agora S.A., in connection with Article 516 § 1 second sentence of the Commercial Companies Code, the Extraordinary General Meeting of Agora S.A. resolves as follows:

1.      The General Meeting of Agora S.A. hereby decides to merge Agora S.A. (“Surviving Company”) with Agora - Poligrafia sp. z o.o. (“Merged Company”) through the transfer of all assets of the Merged Company to the Surviving Company and consents to the Merger Plan, which constitutes appendix no. 1 to this resolution and to the execution of the merger on the terms set out therein.

2.      The merger of the Surviving Company and the Merged Company will be executed without the share capital increase and amendment of the Statute of Agora S.A.

3.      The Management Board of the Surviving Company is authorized to take all legal and factual actions related to the merger procedure of the Surviving Company with the Merged Company.

4.      The resolution enters into force upon adoption thereof, whereas it will produce legal effects related to the merger from the date of registration of the merger by the relevant Registry Court.”

Schedule 1 to the Resolution no. […]

Justification to draft resolution no. […]

The decision on the merger of the company is justified by the need to consolidate assets in the Surviving Company. Until July 2019 the Merged Company conducted activities inter alia in respect of the provision of printing services, and employed staff specialized in printing activities. Presently, the Merged Company only manages its fixed assets and renders space rental services related exclusively to such assets, mainly to the Surviving Company and related companies. As of the end of February 2020 the last employment contract will be terminated in the Merged Company, and the management of its assets will be taken over by Agora S.A.

In view of the foregoing, the merger of the companies constitutes a natural consequence of the changes described above.  Its purpose is to simplify organizational structures of the Surviving Company’s capital group, which will facilitate management and eliminate unnecessary processes, and consequently reduce the costs of management of the Merged Company’s assets.