Glaston Corporation: Resolutions of the Extraordinary General Meeting

The Extraordinary General Meeting of Glaston Corporation was held on 26 February 2019 in Helsinki. In order to implement the transaction described in Glaston Corporation’s stock exchange release published on 25 January 2019 the Extraordinary General Meeting resolved, as proposed by the Board of Directors, to authorise the Board of Directors to resolve on the issuance of shares for the purposes of the directed share issue and the rights issue, all as further set out below.

The Extraordinary General Meeting also resolved on a reverse share split and thereto related redemption of shares pursuant to the proposal of the Board of Directors.

A reverse share split pursuant to Chapter 15, Section 9 of the Companies Act and thereto related redemption of shares in deviation from the proportional shareholdings of the shareholders

The Extraordinary General Meeting resolved that the number of shares in Glaston Corporation (hereinafter “Glaston” or the “Company”) will be reduced without reducing the share capital by merging each five shares in the Company to one share by means of the procedure provided in Chapter 15, Section 9 of the Limited Liability Companies Act (624/2006, as amended, the “Companies Act”).

The purpose of merging the shares is to increase interest in the Company’s share, to facilitate trade in the shares, and to increase flexibility in connection with a possible distribution of funds. The reverse share split does not affect the Company’s equity.

The reverse share split will be carried out by redeeming without compensation, in deviation from the proportional shareholdings of shareholders as set out in the Chapter 15, Section 9 of the Companies Act, from every shareholder a number of shares corresponding to the result of multiplying the number of shares on each book-entry account on the reverse split date by a coefficient of 4/5, i.e., for each existing five shares, four shares will be redeemed.

The number of shares owned by each shareholder will be determined separately for each book-entry account. In order to avoid share fractions, the number of shares redeemed from each shareholder will, if necessary, be rounded up to the nearest whole share.

The fractions of shares redeemed due to the rounding-up will be paid to the respective shareholders in cash as detailed below. If a shareholder owns less than five shares, all of the shares owned by the shareholder in the Company will be redeemed.

In such an event, the shares will be sold on behalf of the shareholder and the proceeds from the sale will be paid to the shareholder in the same way as the proceeds acquired from the sale of the fractions of shares redeemed due to the rounding-up. In other respects, the redemption will be carried out without compensation.

The shares redeemed without compensation as part of the reverse share split will be cancelled immediately in connection with the redemption, with the exception of the aforementioned fractions of shares redeemed due to the rounding-up. The total amount of shares to be redeemed without compensation and cancelled immediately is 154,906,508, excluding the fractions of shares redeemed due to the rounding-up.

The fractions of shares to be redeemed due to the rounding-up will be merged and sold without delay on the Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) securities exchange on behalf of the respective shareholders.

The proceeds acquired from the sale will be paid to the shareholders in proportion to the difference between the number of shares redeemed from each shareholder and the number of shares that would be redeemed without the rounding-up.

Interest will be paid on the proceeds for the period between the redemption and the time of payment of the proceeds pursuant to the applicable reference rate within the meaning of Section 12 of the Interest Act (633/1982, as amended).

The reverse split date, on the basis of which the shareholders’ right to proceeds acquired from the sale of shares redeemed due to the rounding-up is determined, is 28 February 2019. The reverse share split will be executed in the book-entry system after the close of trading on the reverse split date.

The cancellation of shares and the new total number of shares in the Company will be evidenced in the Trade Register on or about 1 March 2019 at the latest. Trading with the new total number of the Company’s shares will commence on Nasdaq Helsinki with a new ISIN code on or about 1 March 2019.

Proceeds acquired from the shares sold due to the rounding-up will be paid to shareholders entitled thereto on or about 8 March 2019. If necessary, the trading with the Company's share on Nasdaq Helsinki shall be temporarily interrupted in order to perform necessary technical measures in the trading facility after the reverse split date.

The Extraordinary General Meeting resolved to amend the authorisation given by the Annual General Meeting on 10 April 2018 on the issuance of shares as well as the issuance of option rights and other special rights entitling to shares in such manner that the reverse share split is taken into account therein in the above-mentioned proportion so that the authorisation would comprise a total of a maximum of 4,000,000 shares, which corresponds to approximately 10 per cent of the shares in the Company following the registration of the reverse share split.

If implemented, the arrangement will not require any measures from shareholders.

Decisions required by the Transaction (defined below) on the share issue authorisations to be granted to the Board of Directors

In accordance with the stock exchange release published on 25 January 2019, Glaston has signed an agreement to acquire Swiss Bystronic Maschinen AG and German Bystronic Lenhardt GmbH, as well as the subsidiaries owned by them, by means of a share acquisition from Conzzeta AG and Conzzeta Holding Deutschland AG for an enterprise value of EUR 68 million (the “Transaction”).

To finance part of the Transaction, the Company has negotiated with certain of its existing shareholders on a directed share issue of approximately EUR 15,000,000 (the “Directed Share Issue”) and on a share issue of approximately EUR 32,000,000 pursuant to the shareholders' pre-emptive subscription right (the “Rights Issue”).

Closing of the Transaction is expected in March/April 2019. The Directed Share Issue is intended to be completed in connection with closing of the Transaction, and the Rights Issue is expected to be launched during the second quarter of 2019.

The Company’s existing shareholders AC Invest Eight B.V., Hymy Lahtinen Oy, Ilmarinen Mutual Pension Insurance Company, and Varma Mutual Pension Insurance Company, together representing approximately 43.4 per cent of all the shares and votes in the Company (the “Anchor Investors”), have, provided that certain conditions are met, irrevocably undertaken to subscribe for shares in the Directed Share Issue and, with the exception of Ilmarinen, in the Rights Issue.

(a) Authorising the Board of Directors to decide on the Directed Share Issue

The Extraordinary General Meeting authorised the Board of Directors to resolve on the issuance of new shares or treasury shares held by the Company by way of a directed share issue, in derogation from the shareholders' pre-emptive subscription right. The proceeds received by the Company as a result of the Directed Share Issue will be used to finance part of the Transaction, wherefore the Company has a weighty financial reason to derogate from the shareholders' pre-emptive subscription right.

The issued shares will be offered for subscription to the Anchor Investors in accordance with their respective subscription undertakings. Taking into account the reverse share split resolved by the Extraordinary General Meeting pursuant to the proposal of the Board of Directors, the total number of shares issued in the Directed Share Issue may not exceed 7,600,000, which corresponds to approximately 19.6 per cent of all the shares in Glaston immediately after the completion of the reverse share split, and would correspond to approximately 16.4 per cent of all the shares in Glaston following the completion of the Directed Share Issue.

Due to the reverse share split resolved by the Extraordinary General Meeting pursuant to the proposal of the Board of Directors, the subscription price of EUR 0.405 per share in the Directed Share Issue mentioned in the notice to the General Meeting, which corresponds to the volume-weighted average price of the Glaston share on Nasdaq Helsinki in the five trading days immediately preceding the announcement of the Transaction, shall be adjusted to reflect the reverse split ratio.

The Board of Directors is authorised to decide on all other terms and conditions of the Directed Share Issue. The registration of the new shares issued in the Directed Share Issue is conditional upon the completion of the Transaction.

The authorisation is valid until 31 December 2019. The authorisation does not revoke the authorisation granted to the Board of Directors by the Annual General Meeting on 10 April 2018 on the issuance of shares as amended in the resolution of the Extraordinary General Meeting described above.

(b) Authorising the Board of Directors to decide on the Rights Issue

The Extraordinary General Meeting authorised the Board of Directors, conditional upon the completion of the Transaction, to resolve on the issuance of new shares or treasury shares held by the Company pursuant to the shareholders' pre-emptive subscription right in such manner that the shareholders have a primary right to subscribe for new shares pro rata to their existing holding in the Company. The proceeds received by the Company as a result of the Rights Issue will be used to finance part of the Transaction.

Taking into account the reverse share split resolved by the Extraordinary General Meeting pursuant to the proposal of the Board of Directors, the total number of shares issued in the Rights Issue may not exceed 46,000,000.

The authorisation includes the right of the Board of Directors to, in a possible secondary subscription, resolve upon the allocation of shares that at the end of the subscription period of the Rights Issue may remain unsubscribed for pursuant to the shareholders' pre-emptive subscription right to parties determined by the Board of Directors.

The Board of Directors decides on all other terms and conditions of the Rights Issue, including the subscription and payment period, the grounds for determining the subscription price and the subscription price as well as that the subscription price may also be paid fully or in part with assets other than money.

The authorisation is valid until 30 April 2020. The authorisation does not revoke the authorisation granted to the Board of Directors by the Annual General Meeting on 10 April 2018 on the issuance of shares as amended in the resolution of the Extraordinary General Meeting on the reverse share split described above, nor the share issue authorisation set forth above in item (a) in the resolution of the Extraordinary General Meeting.