Adcore – Renewed Warrants Program

2000-11-09

Notification to Attend

Shareholders intending to participate in the Extraordinary General Meeting must be included in the share register maintained by the Central Swedish Securities Depository VPC AB (“VPC”) on 14 November 2000, and must notify the company of their intention to attend by no later than 4 p.m. on Wednesday 22 November 2000 at the following address: Adcore AB, FAO: Caroline Martinsson, P.O. box 3216, 103 64 Stockholm, Sweden or on tel. + 46 (0)8 412 3016, by fax: +46 (0)8 412 3003 or e-mail caroline.martinsson@adcore.com

Temporary Registration of Ownership

In order to be entitled to participate in the Extraordinary General Meeting, shareholders whose shares are nominee-registered must arrange to be temporarily included in the share register kept by VPC. Such shareholders must notify the relevant fund manager thereof in good time before Tuesday 14 November 2000.

Agenda

1 The Meeting is declared open.

2 Appoint the Chairman of the Meeting.

3 Appoint one or two persons to verify the Minutes alongside the Chairman.

4 Prepare and approve the Voting List.

5 Confirm that the Meeting has been duly convened.

6 Approve the Agenda.

7 Present documentation in accordance with Chapter 4, § 4 and Chapter 5, § 3 of the Companies Act.

8 Present the Board’s proposal to resolve to issue subordinated debentures with detachable warrants conferring holders the right to subscribe for new shares and approve the transfer of the warrants.

9 The Meeting is declared closed.

The Board Recommends the Following Resolutions

The Board recommends that the Extraordinary General Meeting resolves to issue subordinated debentures with detachable warrants conferring holders the right to subscribe for new shares and approve the transfer of warrants to employees on the following primary terms.

A Information Highway Consulting AB, defined as the Subsidiary below, a wholly owned subsidiary of Adcore, or another company to be assigned by the Subsidiary, will subscribe for a subordinated debentures with a maximum nominal value of SEK 140,000 with 14,000,000 detachable warrants conferring holders the right to subscribe for new shares-warrants to be transferred to the employees in accordance with B and C below-waiving the preferential rights of existing shareholders. Subordinated debentures will be issued in multiples of a nominal value of SEK 1 at a price corresponding to the nominal amount plus a premium representing the estimated market value of the detachable warrants. The subordinated debentures will not accrue interest and will mature for payment on 31 January 2001. Each subordinated debenture will be associated with 100 detachable warrants. Each warrant will confer the holder with the right to subscribe for one share in the period 2 May 2003 – 30 May 2003 inclusive at a subscription price corresponding to an amount corresponding to approximately 160% of the average quoted price paid in the period 27 November – 1 December 2000 inclusive.

B After the subscription of subordinated debentures with detachable warrants has been effected, the Subsidiary will detach such warrants and transfer a maximum of 4,500,000 warrants to professionals employed by the Adcore group after 26 June 2000 and who have not previously been offered warrants in Adcore. Members of the group management and certain key employees (approximately 5 individuals) will be entitled to acquire a maximum of 50,000 warrants each and will be guaranteed allocation at the number subscribed for, Subsidiary CEOs and other senior executives (approximately 40 individuals) will be entitled to acquire a maximum of 25,000 warrants each and will be guaranteed allocation at the number subscribed for. Other key employees (approximately 45 individuals) will be entitled to acquire a maximum of 15,000 warrants each and will be guaranteed allocation at the number subscribed for. Other recently recruited employees (approximately 370 individuals) will be entitled to acquire a maximum of 5,000 warrants each and will be guaranteed allocation at the number subscribed for. Applications to acquire warrants will be submitted in the period 27 November 6 December 2000 inclusive. Handelsbanken Investment Banking will determine the price of the warrants on 1 December 2000 after the close of trading in Adcore shares, on the basis of the customary calculation model (Black & Scholes), in order to ensure that the price of the warrants is set at market terms. Payment will be made by no later than 12 January 2001. Furthermore, the Subsidiary will be entitled to transfer such warrants as are not transferred under the present offering to later employees or in connection with future promotions conforming to the parameters in terms of amounts outlined above and at a market price to be determined by an independent valuation institution at the time of such transfer.

C Furthermore, the Subsidiary will transfer a maximum of 9,500,000 warrants to employees that have acquired such warrants as have been issued following the resolution of the Shareholders’ Meeting on 6 June 2000 (“the old warrants”) conferring holders the right to subscribe for new shares in Adcore in the period 2 May 2003 – 30 May 2003 at a subscription price of SEK 125 per share. The transfer of new warrants will be subject to the provision that individuals entitled to acquire such warrants simultaneously divest, to the Subsidiary, old warrants at a number corresponding to the number of new warrants and at a price determined by Handelsbanken Investment Banking as of 1 December 2000 on the basis of the customary calculation model (Black & Scholes) in order to ensure that the price of warrants thus divested is on market terms, albeit subject to a maximum corresponding to the price of the new warrants issued in accordance with B above. Acquisitions of new warrants will only be effected subject to the provision that the relevant party remains in the employment of the Adcore group as of 6 December 2000 and has acquired warrants under the offering by the Adcore group. The Chief Executive Officer will be entitled to acquire a maximum of 250,000 new warrants and will be guaranteed allocation at that number. Members of the group management and certain key employees (approximately 20 individuals) will be entitled to acquire a maximum of 50,000 warrants each and will be guaranteed allocation at the number subscribed for. Subsidiary CEOs and other senior executives (approximately 85 individuals) will be entitled to acquire a maximum of 25,000 warrants each and will be guaranteed allocation at the number subscribed for. Other key employees (approximately 200 individuals) will be entitled to acquire a maximum of 15,000 warrants each and will be guaranteed allocation at the number subscribed for. Other employees (approximately 800 individuals) will be entitled to acquire a maximum of 5,000 warrants each and will be guaranteed allocation at the number subscribed for. The transfer will otherwise be effected on the same terms as are indicated under B above. Repurchased old warrants as well as other existing warrants of the Adcore group will be cancelled.

The Board’s motivation for the above proposal is that generating a personal long-term ownership commitment by the affected parties can be expected to stimulate increased interest in operations and earnings performance, boost motivation and enhance a feeling of belonging within the company. The warrants program resolved in May this year (the old warrants) no longer serves as an incentive, as the subscription price is as high as SEK 125. The subscription price for the old warrants was determined on the basis of an average share price of SEK 78.10; the current share price is considerably lower. Accordingly, the fact that the employees are being offered the opportunity to exchange old warrants for new instruments better adapted to the prevailing market conditions-with the exchange effected on market terms and the disposal of the old warrants-can be expected imply a loss (as of 6 November 2000 the market value of the old warrants was SEK 0.70 kronor against the acquisition price of SEK 8.60), implying that the company will be able to retain the positive effects of its incentive schemes, while the dilution effect for shareholders remains unchanged. The new warrants program is assessed to be significant in terms of Adcore’s ability to retain and recruit highly skilled professionals. Accordingly, the Board considers that the offering is beneficial to the company and its shareholders.

Upon full utilization of warrants the share capital will increase by SEK 1,400,000. Upon full utilization of warrants, the dilution effect corresponds to 8.8% of the capital and votes, after cancellation of warrants. Including outstanding incentives schemes, the dilution effect corresponds to approximately 9.5% of the capital and votes after cancellation of warrants.

In order to implement the above resolutions approval is required by at least 9/10 of the shareholders, in terms of votes submitted and shares represented at the Meeting.

The complete proposed resolution in accordance with the above as well as the Board’s and Auditor’s statements in accordance with Chapter 4, § 4 and Chapter 5, § 3 of the Companies Act can be obtained from the company upon request from 17 November 2000 onwards.

Latest modified: 2000-11-09