REC Silicon Annual Report 2019

REC Silicon Annual Report 2019 20 Board of Directors’ report on corporate governance The Board will continue to assess the capital structure based on the goals, strategies, risk profile, and the financial situation of the Company. At the Annual General Meeting (AGM) on May 9, 2019, the Board was granted the following authorities: • Authority to acquire treasury shares in the Company (up to a maximum of ten percent of the face value of the share capital) in connection with the Company’s share option program for its employees and/or to increase return on investment for the Company’s shareholders. As of December 31, 2019, the authorisation has not been used. • Authority to increase the share capital with up to NOK 279,400,000, which equals approximately ten percent of the existing share capital after the completion of the private placement. If the share capital is reduced, the authorisation shall be reduced accordingly. As of December 31, 2019, the authorisation has not been used. These authorities are restricted to defined purposes and each mandate was considered separately. They are valid until the AGM in 2020 or no later than 15months from the date of the 2019 AGM. For further information about the mandates given to the Board, reference is made to the minutes fromREC Silicon’s 2019 AGM, which are available on the Company’s website (www.recsilicon.com ). 4. EQUAL TREATMENTOF SHAREHOLDERS AND TRANSACTIONSWITH CLOSE ASSOCIATES The Company seeks to conform to the principles for equal treatment of shareholders and is generally cautious in transactions with shareholders, members of the Board of Directors, GroupManagement, or other related parties. In the event of a share capital increase based on authorisation from the general meeting, where the pre-emptive rights of shareholders are set aside, grounds will be provided in the stock exchange notice in which the share capital increase is announced. In 2019, REC Silicon completed a private placement to strengthen the Company’s liquidity, where the pre-emptive rights of the shareholders were set aside. The waiver of the preferential rights was considered necessary in the interest of time and successful completion. A contemplated subsequent offering directed towards all shareholders of the Company was considered, but not executed as the shares traded on the Oslo Stock Exchange, with sufficient trading volume, at prices below subscription price of the intended subsequent offering. In connection with the private placement, the share capital was reduced by reduction of the nominal value of the shares fromNOK 1 to NOK 0.10. At the time of the private placement, the Company’s shares traded below nominal value and the subscription price. Pursuant to Oslo Stock Exchange’s continuing obligations item2.4, the quoted price for a company’s share shall not be lower than NOK 1 for a 6-month period. Following completion of the share capital reduction and private placement, the AGM resolved to increase the share capital to facilitate a reverse share split and a suitable pricing of the Company’s shares. The shares were consolidated in the ratio of 10:1. For details on the share capital reduction, private placement and reversed share split, see stock exchange releases from2019. For significant transactions with closely related parties, the Company uses valuations and statements from independent third parties if the transaction is not to be considered by the General Meeting. There were no agreements in 2019 between the Group and its shareholders, directors, GroupManagement or other related parties that could be described as a material transaction. 5. FREELYNEGOTIABLE SHARES REC Silicon ASA has one class of shares and each share confers one voting right at the General Meetings. The Company’s shares are listed on the Oslo Stock Exchange, where they are freely transferable. There are no restrictions on owning, trading or voting for shares in the articles of association. 6. GENERAL MEETINGS The General Meeting is the Company’s highest authority, and open to all shareholders. The Company encourages shareholders to participate and exercise their rights. To attend and vote at the General Meeting, shares must be registered in the Central Securities Depository (VPS) by the fifth business day prior to the General Meeting. The AGM is held by the end of June every year in the municipality where the Company has its registered business address or in Oslo. The 2019 Annual General Meeting was held on May 9, 2019 in Oslo, with 37.87 percent of the Company’s shares represented. The Board, auditor, or shareholders representing at least 5 percent of the shares can call for Extraordinary General Meetings when deemed necessary. There were no such meetings in 2019. The notice of the General Meeting and supporting documents are made available on the Company’s website no later than 3 weeks prior to the date of the meeting. Shareholders may however request the documents by mail. Efforts are made to ensure that proposed resolutions and supporting information are sufficiently detailed and comprehensive to allow the shareholders to form a view on all matters to be considered at the meeting. The notice includes information about shareholders’ rights. The notice period, right to attend and agenda proposals are regulated in the Articles of Association. Shareholders are entitled to request that specific matters be placed on the agenda of a general meeting by giving written notice to the Board within 7 days prior to the time limit for notice of the General Meeting together with a proposal for resolution and reasons why the matter is proposed for consideration. If the notice has already been distributed, a new notice shall be distributed if the time limit for notice to the General Meeting has not expired. Shareholders wishing to participate at the General Meeting shall notify the Company within a specific time limit, and a minimum5 days prior to the General Meeting. Shareholders who have not given notice within the time limit may be denied participation at the meeting.