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VIVOPOWER INTERNATIONAL PLC
(incorporated and registered in England and Wales under number 09978410)
NOTICE OF ANNUAL GENERAL MEETING 2017
to be held at 9:30 am (London time) on 5 September 2017
at 91 Wimpole Street, London, England, W1G 0EF, United Kingdom
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Notice of the annual general meeting of VivoPower International Plc to be held at 9:30 am (London time) on 5 September 2017 at 91 Wimpole Street, London, England, W1G 0EF, United Kingdom is set out at Part 2 of this document.
It is important that your shares be represented and voted at the annual general meeting. If you cannot attend and you are a shareholder of record, please vote as soon as possible by completing and mailing the proxy card in accordance with the instructions included therein. We would appreciate if you could complete and return the proxy card before 1 September 2017, but in any event so as to arrive not later than 11:00 am (London time) on 1 September 2017.
If you decide to attend the annual general meeting, you will be able to vote in person, even if you have previously submitted your proxy. If you hold shares through a depositary, bank or broker, or indirectly in a savings plan, please refer to the proxy statement set out in Part 4 of this document for further information about voting your shares
VivoPower International Plc
(incorporated and registered in England and Wales under number 09978410)
To the holders of VivoPower International Plc Shares
Notice of Annual General Meeting
I am writing to you with details of our first annual general meeting to be held at 9:30 am (London time) on 5 September 2017 at 91 Wimpole Street, London, England, W1G 0EF, United Kingdom (the "AGM"). Detailed instructions on how to get to the venue are set out on page 14 of this document.
The formal notice of the AGM is set out on pages 3 to 4 of this document, which sets out the business to be considered at the meeting, together with explanatory notes to the resolutions on pages 5 to 9 of this document.
There are a number of items of business to which I would draw your attention.
A copy of the annual accounts and reports for the year ended 31 March 2017 is enclosed.
In addition, the Company is proposing to shareholders the adoption of a new long-term incentive plan. Background information on this new plan and details of its principal terms are also set out in this document.
Voting at the meeting
At the meeting itself, all resolutions will be put to a vote on a poll. Further details on voting are set out in the notes to the notice of AGM on pages 10 to 15 of this document.
If you would like to vote on the resolutions but cannot come to the AGM, you can appoint a proxy to exercise all or any of your rights to attend, vote and speak at the AGM by using one of the methods set out in the notes to the notice of AGM on pages 10 to 15 of this document. A proxy or voting form is enclosed with this notice of the AGM to enable you to exercise your voting rights accordingly.
The Board considers the resolutions are in the best interests of the Company and its shareholders as a whole and are therefore likely to promote the success of the Company. The directors unanimously recommend that you vote in favour of the resolutions as they intend to do in respect of their own beneficial holdings which amount in aggregate to 1,591,576 shares representing approximately 11.8% of the existing issued ordinary share capital of the Company (excluding treasury shares).
On behalf of the Board, I look forward to seeing as many of you as possible at the AGM.
Chairman of the Board of Directors of VivoPower International Plc
Notice of Annual General Meeting
Notice is hereby given that the first annual general meeting of VivoPower International Plc (the "Company") will be held at 9:30 am (London time) on 5 September 2017 at 91 Wimpole Street, London, England, W1G 0EF, United Kingdom to consider and, if thought fit, to pass resolutions 1 to 8 (inclusive) and 10 as ordinary resolutions and resolution 9 as a special resolution.
The board of directors of the Company (the "Board") considers that the resolutions will promote the success of the Company and are in the best interests of the Company and its shareholders as a whole and, accordingly, the Board recommends voting "For" each of the resolutions.
Resolution 1 - Laying of annual accounts and reports (ordinary resolution)
To receive the accounts and the reports of the directors and the auditors for the financial year ended 31 March 2017 (the "Annual Report").
Resolution 2 - Directors' remuneration report (ordinary resolution)
To approve the directors' remuneration report (excluding the part containing the directors' remuneration policy) for the financial year ended 31 March 2017 as set out on pages 23 to 41 of the Annual Report (the "Directors' Remuneration Report").
Resolution 3 - Directors' remuneration policy (ordinary resolution)
To approve the directors' remuneration policy, the full text of which is contained in the Directors' Remuneration Report and set out on pages 23 to 41 of the Annual Report (the "Directors' Remuneration Policy").
Resolution 4 - Re-appointment of auditors (ordinary resolution)
To re-appoint PKF Littlejohn LLP as auditors of the Company, to hold office until the conclusion of the next annual general meeting of the Company.
Resolution 5 - Remuneration of auditors (ordinary resolution)
To authorise the Company's audit committee to determine the remuneration of the auditors.
Resolution 6 - Re-election of Philip Comberg as a director of the Company (ordinary resolution)
To re-elect Philip Comberg as a director of the Company, who retires by rotation, for a term expiring on the third succeeding annual general meeting of the Company following his election.
Resolution 7 - Re-election of Gary Hui as a director of the Company (ordinary resolution)
To re-elect Gary Hui as a director of the Company, who retires by rotation, for a term expiring on the third succeeding annual general meeting of the Company following his election.
Resolution 8 - Allotment of share capital (ordinary resolution)
To consider and, if thought fit, pass the following as an ordinary resolution
THAT the directors be and are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company up to an aggregate nominal amount of US$1,560.00 provided that this authority shall, unless renewed varied or revoked expire on 31 July 2022 save that the Company shall be entitled to make offers or agreements before the expiry of such authority which would or might require shares to be allotted or such rights to be granted after such expiry and the directors shall be entitled to allot shares and grant rights pursuant to any such offer or agreement as if this authority had not expired.
Resolution 9 - Disapplication of statutory pre-emption rights (special resolution)
To consider and, if thought fit, pass the following as a special resolution:
THAT if Resolution 8 above is passed, the directors be and are hereby authorised pursuant to section 570 of the Companies Act 2006 to allot equity securities (within the meaning of section 560 of that Companies Act 2006) for cash pursuant to the authority conferred by Resolution 8 above as if section 561(1) of the Companies Act 2006 did not apply to any such allotment provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal amount of US$1,560.00, and shall expire on the expiry of the general authority conferred by Resolution 8 above, save that the Company shall be entitled to make offers or agreements before the expiry of such power which would or might require equity securities to be allotted after such expiry and the directors shall be entitled to allot equity securities pursuant to any such offer or agreement as if the power conferred hereby had not expired.
Resolution 10 - Approval of long-term incentive plan of the Company (ordinary resolution)
That the provisions of the 'VivoPower International Plc 2017 Omnibus Incentive Plan (the "Equity Incentive Plan") summarised in the Explanatory Notes to these resolutions at pages 5 to 9 of this document and set out in full at Appendix A be approved and the Board be authorized to make such modifications to the Equity Incentive Plan as they may consider appropriate for the implementation of the Equity Incentive Plan and to adopt the Equity Incentive Plan as so modified and to do all such other acts and things as they may consider appropriate to implement the Equity Incentive Plan.
BY ORDER OF THE BOARD
First Names Global Limited (Company Secretary):
London, 28 July 2017
91 Wimpole Street, London, England, W1G 0EF, United Kingdom
Registered in England and Wales No. 09978410
Explanatory Notes to Resolutions
The following pages give an explanation of the proposed resolutions. Resolutions 1 to 8 (inclusive) and 10 will be proposed as ordinary resolutions and will be passed if more than 50% of the shareholders' votes cast are in favour. Resolution 9 will be proposed as a special resolution. For resolution 9 to be passed, at least 75% of the shareholders' votes cast must be in favour.
Notes to Resolution 1 - Annual Report
Resolution 1 is to receive the accounts and the reports of the directors and the auditors for the financial year ended 31 March 2017. The directors are required to present to the meeting the annual accounts and reports that are contained in the Annual Report, including the strategic report, the directors' report and the auditor's report.
Notes to Resolutions 2 and 3 - Directors' Remuneration Report and Directors' Remuneration Policy
In accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 of the United Kingdom, the Directors' Remuneration Report contains:
Resolution 2 is an ordinary resolution to approve, by way of an advisory vote, the Directors' Remuneration Report other than the Directors' Remuneration Policy, which shareholders will be invited to approve by way of a binding vote pursuant to Resolution 3. Resolution 2 is an advisory vote only and does not affect the actual remuneration paid to any director.
The Company's auditors, PKF Littlejohn LLP, have audited those parts of the Directors' Remuneration Report which are required to be audited and their report can be found in the Annual Report. The Directors' Remuneration Report has been approved by the Board based on the recommendation of the RemCom and signed on its behalf by the Chairman.
Resolution 3 is an ordinary resolution to approve the Directors' Remuneration Policy which is set out in full in the Directors' Remuneration Report on pages 23 to 41 of the Annual Report.
Section 439A of the Companies Act 2006 requires that the Directors' Remuneration Policy is now subject to a separate resolution for shareholder approval. The vote is binding and once the Directors' Remuneration Policy is approved the Company will not be able to make a remuneration payment to a current or past director, unless that payment is consistent with the Directors' Remuneration Policy or has been approved by a resolution of the members of the Company.
Separate shareholder approval in respect of a new equity incentive plan of the Company is sought in Resolution 10.
The rationale behind the Directors' Remuneration Policy is set out in the Chairman of the RemCom's letter contained in the Directors' Remuneration Report (see pages 23 to 41 of the Annual Report).
If the Directors' Remuneration Policy is approved and remains unchanged, it will remain in effect for up to three years without further shareholder approval being required. If the Company wishes to change the Directors' Remuneration Policy within three years, it will need to put the revised policy to shareholders before it can implement the revised policy. The RemCom will review the Directors' Remuneration Policy after three years to determine whether it remains appropriate to advance the Company's strategy.
If the Directors' Remuneration Policy is not approved for any reason, the Company will, if and to the extent permitted by the Companies Act 2006, continue to make payments to directors in accordance with existing contractual arrangements and will seek shareholder approval again at the next annual general meeting or an earlier general meeting.
Notes to Resolutions 4 and 5 - Re-appointment of auditors and auditors' remuneration
Resolution 4 is to approve the re-appointment of PKF Littlejohn LLP as the auditors of the Company. The auditors will hold office until the conclusion of the next annual general meeting.
The audit committee has the direct and sole responsibility for the appointment, compensation, retention, oversight and replacement, if necessary, of the external, independent auditor of the Company. The audit committee also considers and makes recommendations to the Board, to be put to shareholders for approval at the AGM, in relation to the appointment, re-appointment and removal of the Company's external auditor and their remuneration, whether fees for audit or non-audit services, and that the level of fees is appropriate to enable an effective and high quality audit to be conducted.
The audit committee annually reviews the audit fee structure and terms of engagement. Fees paid for Company external auditor services for 2016 were US$175,000 (see the Annual Report page 58. In addition, the audit committee considers at least once every ten years whether the audit services contract should be put out to tender to enable the audit committee to compare the quality and effectiveness of the services provided by the incumbent auditor with those of other audit firms. Resolution 4, which is recommended by the audit committee, is to confirm the re-appointment of PKF Littlejohn LLP as the auditors of the Company to hold office until the next annual general meeting.
Resolution 5 is to authorise the audit committee to determine the remuneration of the auditors of the Company and the audit fees.
Notes to Resolutions 6 and 7 - Re-election of directors
Resolutions 6 and 7 deal with the re-election of certain of the directors of the Company.
In accordance with article 81 of the Company's articles of association, all of the Class A directors are standing for re-election by the shareholders at the AGM. If re-elected, each of the Class A directors will stand elected as a director of the Company (unless otherwise removed) for a term expiring on the third annual general meeting following his election. Philip Comberg was appointed as a director of the Company on 1 May 2016 and he is proposed for re-election by the shareholders at the AGM. He is recommended by the Board for re-election. Gary Hui was appointed as a director of the Company on 21 December 2016 and he is proposed for re-election by the shareholders at the AGM. He is recommended by the Board for re-election.
Biographies of each of the directors can be found on pages 16 to 17 of the Annual Report and on the Company's website. The Board has confirmed, following a performance review, that all directors standing for re-election continue to perform effectively and demonstrate commitment to their roles.
Notes to Resolution 8 - Allotment of share capital
Resolution 8 is an ordinary resolution and pertains to the directors' authority to allot shares in accordance with section 551 of the Companies Act 2006. If passed, the resolution will authorise the directors of the Company to allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company up to an aggregate nominal amount of US$1,560.00. The authority granted by this resolution would, unless renewed varied or revoked, expire on 31 July 2022.
The directors plan to exercise this authority in connection with the allotment of shares and/or grant rights to subscribe for such shares to consultants, advisors and non-executive officers of the Company (as opposed to employees) under the Equity Incentive Plan, which would not fall within the exemption from the requirement to obtain prior shareholder approval for such allotment or grant for employees' share schemes under section 549(2)(a) of the Companies Act 2006.
Notes to Resolution 9 - Disapplication of statutory pre-emption rights
Resolution 9 is a special resolution and pertains to the disapplication of statutory pre-emption rights under the Companies Act 2006. If directors of a UK company wish to allot shares in the company for cash (other than in connection with an employees' share scheme), the Companies Act 2006 requires that these shares be offered first to shareholders in proportion to their existing holdings. This resolution will, if passed, give the directors of the Company the power to allot shares pursuant to the authority to allot granted by resolution 8 without first offering them to existing shareholders in proportion to their existing holdings. The authority contained in resolution 9 will expire upon the expiry of the authority to allot shares conferred in resolution 8, that is 31 July 2022.
This disapplication is required in connection with the allotment of shares and/or grant rights to subscribe for such shares to consultants, advisors and non-executive officers of the Company (as opposed to employees) under the Equity Incentive Plan, which would not fall within the exemption from the statutory pre-emption provisions under the Companies Act 2006 for employees' share schemes under section 566 of the Companies Act 2006.
Notes to Resolution 10 - Approval of the Equity Incentive Plan
Resolution 10 is an ordinary resolution to approve the Equity Incentive Plan in the form presented to the AGM and any amendments that the Board may deem appropriate for its implementation. The key factors that have shaped the design of the proposed Equity Incentive Plan are set out below:
The main provisions of the Equity Incentive Plan are summarised below.
It is currently intended that the first awards over shares in the Company ("Plan Shares") pursuant to the Equity Incentive Plan will be made effective immediately after the AGM, assuming shareholders approve the Equity Incentive Plan at that meeting.
It is currently intended that awards under the Equity Incentive Plan will take the form of restricted stock units ("RSUs") or performance stock units ("PSUs"). Awards in the future under the Equity Incentive Plan may however also take the form of stock options, stock appreciation rights, restricted stock or stock bonus awards. Awards will be made over Plan Shares although cash awards may also be made.
Vesting of RSUs will be subject to service-based vesting and occur on an annual basis rateably over four years. Vesting of PSUs will occur at the end of a four-year performance period, subject to the attainment of certain performance goals. The RemCom will determine all of the vesting conditions which will apply to any awards granted under the Equity Incentive Plan.
Participants who leave the employment of the Company before the vesting of any RSUs or PSUs will normally lose the unvested proportion of their award, save in the following circumstances where a participant ceases to be an employee:
In such circumstances, the award shall continue to be capable of accelerated vesting. With respect to RSUs, the participant will become vested in that portion of RSUs that vest on the next vesting date. With respect to PSUs, the participant will become partially vested in the PSUs, at the end of the performance period based upon the actual achievement of the performance goals, multiplied by a fraction, the numerator of which is the number of calendar days the participant was employed with the Company during the performance period and the denominator of which is the total number of calendar days in the performance period.
Except as otherwise provided in an award agreement, in the event a participant's employment is terminated without cause within 12 months following a change in control (except an internal corporate reorganisation), all awards will vest as follows. In this case, the participant may receive all RSUs granted and outstanding. Additionally, the number of PSUs that can be received by a participant in respect of a PSU in such circumstances depends on (i) the target PSUs granted, (ii) the actual achievement of the performance goals through the change in control, or (iii) such other basis determined by the RemCom. Alternative arrangements may be made if the participants and the acquiring company agree.
The RemCom will oversee the administration and interpretation of the Equity Incentive Plan.
Awards may be granted to any of the employees of the Company or its subsidiaries, including the executive directors. Participation by the executive directors shall, unless and until approved otherwise by shareholders, be in accordance with the terms of the Directors' Remuneration Policy. No award may be made more than 10 years after shareholder approval of the Equity Incentive Plan.
Under award agreements entered into with each participant, the participant will acknowledge and agree that awards may be subject to clawback if such payments are made (i) on account of fraud or misconduct by the participant, (ii) following an accounting restatement or (iii) as may be required by any other general clawback policy of the Company which may exist or be adopted regarding repayment of incentive-based compensation, as may be in effect from time to time.
Any Plan Shares allotted when an award vests will rank equally with shares of the Company then in issue.
The Board may amend the Equity Incentive Plan and the RemCom may amend any award agreement, at any time, provided that no such amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement or as provided below. If an amendment would materially and adversely affect the rights of any participant it shall require the consent of the affected participant, unless such amendment is required in order to comply with applicable law. Under the Equity Incentive Plan, in the event of a conflict between the terms of an award agreement and an employment agreement between the Company and a Participant, absent language to the contrary the terms of such employment agreement shall be binding.
The RemCom may not take any action that is considered a "repricing" of options or share appreciation rights granted under the Equity Incentive Plan as defined by any applicable securities exchange or inter-dealer quotation system rules without the required shareholder approval.
The RemCom may amend the terms of the Equity Incentive Plan or outstanding awards without further shareholder approval in order to conform such terms with the requirements of local law or to obtain more favourable tax or other treatment for an overseas participant, the Company or its affiliates.