One Fifty One Public Limited Company (the Company )

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. If you have sold or transferred your entire holding of shares in One Fifty One Public Limited Company, please pass this document, together with the enclosed Form of Proxy, to the person through whom the sale or transfer was effected for transmission to the purchaser or transferee. One Fifty One Public Limited Company (the Company ) (incorporated and registered in Ireland under the Companies Act with registered number ) SHARE CAPITAL AND RELATED AUTHORISATIONS TO ENABLE IMPLEMENTATION OF AN IPO AND LISTING PROPOSED AMENDMENTS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION PROPOSED ADOPTION OF A LONG TERM INCENTIVE PLAN and NOTICE OF EXTRAORDINARY GENERAL MEETING

2 This Circular should be read as a whole. Your attention is drawn to the letter from Denis Cregan, Chairman of the Company, which contains a unanimous recommendation from the Board that you vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting ( EGM ). J&E Davy and Davy Corporate Finance (collectively referred to as Davy ), which is regulated in Ireland by the Central Bank of Ireland, is acting exclusively for the Company and no-one else in connection with the possible IPO and Listing. Davy will not regard any other person (whether or not a recipient of this document) as its customer or client or be responsible to any other person for providing the protections afforded to customers or clients of Davy nor for providing advice in relation to the transactions and arrangements described in this document. Davy is not making any representation or warranty, express or implied, as to the contents of this document. Davy has not approved the contents of, or any part of, this document and no liability or responsibility whatsoever is accepted by Davy for the accuracy of any information or opinions contained in this document or for the omission of any information from this document. Numis Securities Limited ( Numis ), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and no-one else in connection with the possible IPO and Listing. Numis will not regard any other person (whether or not a recipient of this document) as its customer or client or be responsible to any other person for providing the protections afforded to customers or clients of Numis nor for providing advice in relation to the transactions and arrangements described in this document. Numis is not making any representation or warranty, express or implied, as to the contents of this document. Numis has not approved the contents of, or any part of, this document and no liability or responsibility whatsoever is accepted by Numis for the accuracy of any information or opinions contained in this document or for the omission of any information from this document. Notice of the EGM of the Company, to be held at The Radisson Blu Royal Hotel, Golden Lane, Dublin 8 on 21 April 2016 at a.m. (or, if later, immediately following the conclusion or adjournment of the AGM convened to be held at a.m. on the same day and at the same location), is set out at the end of this document. Shareholders will find enclosed with this document a Form of Proxy for use in connection with the EGM. Whether or not Shareholders wish to attend the EGM, they are asked to complete the Form of Proxy in accordance with the instructions printed on the form and return it either by post or by hand as soon as possible but in any event so as to be received by the Company s Registrars, Computershare, at P.O. Box 954, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland and in any event, in order to be valid, so as to arrive not later than a.m. on 19 April The lodging of a Form of Proxy will not preclude a shareholder from attending and voting in person at the EGM. FORWARD-LOOKING STATEMENTS Certain statements contained in this Circular are or may constitute forward-looking statements. Such forward looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Forward-looking statements are typically identified by the use of forward-looking terminology such as believes, expects, may, will, would, should, intends, estimates, plans, assumes or anticipates or the negative of such words or other variations on them or comparable terminology, or by discussions of strategy which involve risks and uncertainties. Such risks, uncertainties and other factors include, among others: general economic and business conditions, changes in technology, government policy, regulation, ability to attract and retain personnel and natural and manmade disasters. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Circular. The Company assumes no obligation to update or correct the information contained in this Circular, whether as a result of new information, future events or otherwise, except to the extent legally required. The statements contained in this Circular are made as at the date of this document, unless some other time is specified in relation to them, and publication of this Circular shall not give rise to any implication that there has been no change in the facts set out in this document since such date. Nothing contained in this Circular shall be deemed to be a forecast, projection or estimate of the future financial performance of the Company except where expressly stated. PRESENTATION OF FINANCIAL INFORMATION Unless otherwise indicated, all references in this Circular to, euro or cent are to the lawful currency of participating member states of the European Union. In addition, certain percentages presented in this Circular reflect calculations based upon underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers. TIME All references in this Circular to times are to Dublin, Ireland times, unless otherwise stated. NO OFFER OF SHARES This document does not constitute an offer or solicitation to anyone to purchase or subscribe for any securities. This document is not a prospectus and does not contain an offer to the public to purchase or subscribe for securities within the meaning of the Prospectus (Directive 2003/71/EC) Regulations, 2005 of Ireland (as amended) and does not otherwise contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to in this document to any person in any jurisdiction, including the United States, Australia, Canada, the Republic of South Africa, Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. This document has not been approved by the Central Bank of Ireland or any regulatory authority and a copy of it has not and will not be delivered to the Registrar of Companies in Ireland. 2

3 DEFINITIONS The following definitions apply throughout this Circular and accompanying Form of Proxy, unless the context otherwise requires: AGM AIM Articles Board or Directors CDPQ Circular the annual general meeting of the Company to be held at a.m. at The Radisson Blu Royal Hotel, Golden Lane, Dublin 8 on 21 April 2016 (including any adjournment thereof); the market of that name operated by London Stock Exchange plc; the articles of association of the Company; the directors of the Company, whose names are set out on page 5 of this Circular; CDP Investissements Inc., a non-controlling shareholder and holder of subordinated debt in IPL; this document; Companies Act the Companies Act 2014; CREST Regulations Company EGM Notice ESM Existing Articles Extraordinary General Meeting or EGM Form of Proxy FSTQ IQ IPL IPO or initial public offering Latest Practicable Date Listing New Articles One51 or the Group Registrars Resolutions Shares Shareholder(s) the Companies Act, 1990 (Uncertificated Securities) Regulations, 1996 as amended enabling title to securities to be evidenced and transferred in dematerialised form; One Fifty One plc; the notice of EGM set out at the end of this Circular; the Enterprise Securities Market operated and regulated by The Irish Stock Exchange plc; the articles of association of the Company at the date of this Circular; the extraordinary general meeting of the Company convened for a.m. (or, if later, immediately following the conclusion or adjournment of the AGM convened to be held at a.m. on the same day and at the same location) on 21 April 2016, or any adjournment thereof, notice of which is set out at the end of this Circular; the form of proxy accompanying this Circular for use by Shareholders at the Extraordinary General Meeting; Fonds de solidarité des travailleurs du Québec (F.T.Q.), a non-controlling shareholder and holder of subordinated debt in IPL; Investissement Québec, a holder of subordinated debt in IPL; IPL Inc., a corporation existing under the laws of Québec, Canada; means a capital raise by the Company by placing with institutional and other investors (without an offer to the public) of Shares for cash in connection with a Listing; 23 March 2016, being the latest practicable date prior to the publication of this Circular; means admission to trading of Shares on AIM and/or ESM or on any other stock market, multilateral trading facility and/or investment exchange(s) which may be approved at any time by the Board for the purpose of the listing or admission to trading of Shares; the articles of association of the Company proposed to be adopted pursuant to Resolution 4 contained in the Notice of EGM at the end of this Circular; One Fifty One plc and its subsidiary undertakings; Computershare Investor Services (Ireland) Limited; the resolutions contained in the Notice of EGM at the end of this Circular; the ordinary shares of 0.01 each in the capital of the Company; and the holder(s) of Shares. 3

4 Directors: One Fifty One plc (incorporated in Ireland with limited liability under the Companies Act. Registered no ) Registered office: 151 Thomas Street, Dublin 8 Denis Cregan (Chairman) Alan Walsh* Pat Dalton* Rose Hynes Geoff Meagher Hugh McCutcheon (together the Board ) *Executive Director Company Secretary: Susan Holburn One Fifty One plc Extraordinary General Meeting 29 March 2016 Dear Shareholder One51 has emerged from a period of restructuring as a transformed Group with two key operating divisions of plastics and environmental services. The Group is now well-positioned for further growth and development and the Board continues to review options to raise capital to finance its growth strategy and improve shareholder liquidity. The Board is actively preparing for an IPO and Listing, and has engaged Davy and Numis as its financial advisers, but has not, at this time, definitively determined to proceed with an IPO or Listing. The purpose of this Circular is to ask Shareholders to authorise, pursuant to the Resolutions, a number of measures which would enable the Board to proceed with an IPO and Listing should market and other conditions permit and should the Board determine that that would be in the best interests of the Company and it s Shareholders. Shareholder approval is also sought for the establishment of a new long term incentive arrangement, the One51 plc Long Term Incentive Plan I enclose a notice convening an extraordinary general meeting of the Company (the EGM ) at which the Resolutions will be proposed, and invite you to join me on 21 April 2016 at a.m. at The Radisson Blu Royal Hotel, Golden Lane, Dublin 8, Ireland (or, if later, immediately following the conclusion or adjournment of the AGM convened to be held at a.m. on the same day and at the same location). Possible IPO and Listing Today, One51 is a leading manufacturer of rigid plastic products operating in three principal segments of the market: environmental containers, packaging and industrial products. In addition, the Group has a well-established UK and Irish environmental services business. The Group operates from 22 locations in five countries employing approximately 1,600 people. The Group has a clear, long-term strategy of targeting growth in both of its key operating divisions, with a principal focus on the plastics division. The strategy is to drive growth organically and by acquisition and through commitment to operational excellence. The Board has acknowledged Shareholders views that a stock exchange listing would better recognise and allow for the realisation of value by Shareholders and has, over the last number of years, implemented, on a progressive basis, measures to bring the Group in line with the financial reporting and other standards required of a listed company. Following the acquisition in 2015 of a majority stake in IPL, the Board believes that the Group is now at an appropriate stage to seek a stock exchange listing. While the Company s Shares currently trade on an informal grey market trading facility, that facility provides limited liquidity and inhibits both Shareholders ability to realise value and restricts the Company s ability to raise capital. The Board s ambition is to seek a stock exchange listing, in the near term, for the Company s Shares with a view to enhancing liquidity in the Shares and facilitating the raising by the Company of new capital for investment in line with its strategy. Timing of IPO and Listing The Board is actively preparing for an IPO and Listing but has not, at this time, definitively determined to proceed. The Board currently considers that any such IPO would comprise a placing of Shares with a number of institutional and other investors in conjunction with a Listing on the London Stock Exchange s AIM and the Irish Stock Exchange s ESM markets. The Company would propose to facilitate participation by existing shareholders in any such IPO on the basis that (as with the Company s successful capital raising in 2014 and in order to avoid the time-consuming and expensive process of preparing a prospectus) the minimum subscription amount required would be set at 100,000. A definitive decision to proceed with either an IPO or Listing would be highly dependent on prevailing stock market and economic conditions, the Group s performance and the Board s assessment at that time of the Company s and Shareholders interests. The Board does, however, consider that it is in the best interests of Shareholders to enable the Company to have flexibility in this respect and to have the ability to access the capital markets, at short notice, should circumstances become advantageous. 4

5 IPL arrangements In July 2015, One51 acquired a 66.67% majority stake in IPL, a producer of injection-moulded plastic products for the North American market with operations across Canada and the U.S. FSTQ, a development capital fund that channels the savings of Québecers into investments to help create and maintain jobs and further Québec s development, retained an 11.1% stake in IPL and CDPQ, a wholly-owned subsidiary of Caisse de dépôt et placement du Québec which is a long-term institutional investor that manages funds primarily for Canadian public and parapublic pension and insurance plans, acquired 22.2% of IPL. The acquisition was financed by a mixture of senior bank debt, subordinated debt and equity, with One51 contributing CAD $90 million of a total equity investment of CAD $135 million, the balance of CAD $45 million being contributed by CDPQ and FSTQ. Subordinated debt in an aggregate amount of CAD $45 million was provided to IPL by CDPQ, FSTQ and IQ. Under the IPL shareholder arrangements, One51 has a right on a One51 IPO or other liquidity event to acquire those shares in IPL held by CDPQ and FSTQ for fair market value plus a specified premium, that premium being 12.5% if the call right is exercised before 23 July In order to pre-position the Company for a possible IPO and Listing, the Company has entered into term sheets with the noncontrolling shareholders and subordinated debt holders in IPL, CDPQ and FSTQ under which it has agreed terms, in principle, and on a non-binding basis, for the exchange by CDPQ and FSTQ of their respective equity and subordinated debt investments in IPL for Shares in One51, as part of and contingent upon an IPO and Listing. On such exchange, the equity and subordinated debt investments in IPL would be exchanged for Shares, at the same price per Share and on the same terms as other investors in the IPO, with the equity in IPL being valued in accordance with the terms of the IPL shareholder arrangements. CDPQ has, in addition, provisionally agreed, on a non-binding basis, to subscribe 20 million for Shares on an IPO and Listing. Under the term sheets, it is envisaged that CDPQ would be entitled, following a Listing, to appoint up to two Directors to the Board of One51, dependent on the level of its shareholding in One51. The term sheets will terminate automatically if an IPO and Listing has not been concluded on or before September 30, 2016 (or such later date as One51 and CDPQ and FSTQ may agree). In summary, the term sheets envisage the exchange of CDPQ and FSTQ s shares in IPL (which were acquired in July 2015 for an aggregate of CAD $45 million but which are to be valued at fair market value together with applicable premium) and CDPQ, FSTQ and (it is envisaged) IQ s subordinated debt in IPL (in an initial aggregate amount of CAD $45 million together with any applicable premium) for Shares at the IPO price, as part of and contingent upon an IPO, coupled with a 20 million subscription by CDPQ for Shares in the IPO. With IPL representing over 50% of the Group s pro forma 2015 EBITDA, the Board considers that this proposed exchange of the noncontrolling interests in IPL into Shares on an IPO represents the optimal corporate structure for the Group for a successful IPO and Listing, and that CDPQ and FSTQ s long-term commitment will serve to underpin the marketing of an IPO to other investors. Shareholder authorisations required to proceed with an IPO and Listing The implementation of an IPO and Listing also requires Shareholders to have approved a number of measures including, principally, an increase in the authorised share capital of the Company, the grant of authority to the Directors to allot Shares in connection with an IPO and Listing and to do so without regard to statutory pre-emption rights and the making of amendments to the articles of association of the Company to render them suitable for use on Listing and to deal with certain other matters. Raising capital on the public market is challenging and would be subject to prevailing market, economic and many other conditions that are outside of the Company s control. Against that background, the Board believes that having the ability to access the public markets quickly and efficiently, when circumstances are considered advantageous, and without the delay (of more than three weeks) that would be associated with a requirement to obtain the approval of Shareholders at that time, would be in the best interests of the Company and its Shareholders. Securing the relevant Shareholder authorities at this time would remove some of the uncertainty associated with any capital raising process. Accordingly, while there is no certainty at this time that the Company will determine to proceed with the process to secure a Listing or implement an IPO, the Board is proposing that Shareholders authorise, pursuant to the Resolutions, those measures necessary to enable the Board to proceed with an IPO and Listing in the future should the Board determine that that would be in the best interests of Shareholders. Establishment of the One Fifty One plc Long Term Incentive Plan 2016 The Company also seeks authority for the introduction of the One51 plc Long Term Incentive Plan 2016 (the Plan ). The Plan is intended to replace the Company s current long term incentive schemes for executive directors and other executives with effect from a Listing. As part of the preparation for a possible IPO and Listing, the Company s Board and Remuneration Committee have carried out a review of management remuneration to ensure that, upon an IPO and Listing, the Company s arrangements will be aligned with its business strategy and current best practice for listed companies in Ireland. The Board and Remuneration Committee were advised by independent consultants, Mercer. Arising from that review, the Plan has been designed to strengthen the link between individual reward and the Company s performance by introducing performance measures (including return on capital employed and free cash flow) suitable for listed companies. 5

6 The Board and the Remuneration Committee believe that the adoption of the Plan is in the best interests of the Shareholders as it would, with effect from a Listing, better align the interests of the Company s executive directors and other executives with those of the Shareholders and support the recruitment, retention and motivation of key staff. Further detail on the reasons for, and background to, the proposed establishment of the Plan is included in the summary of the Resolutions in Part I of the Appendix to this Circular. A summary of the terms of the Plan is set out in Part III of the Appendix to this Circular. The Resolutions A summary of each of the Resolutions and of its effect, if passed, is included in Part I of the Appendix to this Circular. If passed, Resolution 1 (increase in authorised share capital) and Resolution 4 (amendment of the memorandum of association and adoption of new articles of association) would become effective at the conclusion of the EGM. All other Resolutions, if passed, would be effective only in connection with the implementation of an IPO or on a Listing becoming effective. Actions to be taken I enclose a notice convening an extraordinary general meeting of the Company (the EGM ) at which the Resolutions will be proposed, and invite you to join me on 21 April 2016 at a.m. (or, if later, immediately following the conclusion or adjournment of the AGM convened to be held at a.m. on the same day and at the same location) at The Radisson Blu Royal Hotel, Golden Lane, Dublin 8, Ireland. Your participation at the EGM is important for the Company, and I would encourage every shareholder to take part in the meeting, either by attending the EGM or (if you are not able to attend) by casting your vote by proxy. You will find a Form of Proxy accompanying this Circular for use in connection with the EGM. The Form of Proxy should be completed and returned as soon as possible to our Registrars, Computershare, at P.O. Box 954, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland and in any event, in order to be valid, so as to arrive not later than a.m. on 19 April The lodging of a Form of Proxy will not preclude a shareholder from attending and voting in person at the EGM. Recommendation The Board recommends that Shareholders vote in favour of the Resolutions as set out in the notice of the EGM. The Board believes that the Resolutions as set out in the Notice of EGM are in the best interests of the Company and its Shareholders as a whole, and the Board recommends that you vote in favour of the Resolutions, as the Directors intend to do in respect of their own shareholdings in the Company. Yours faithfully Denis Cregan Chairman 6

7 APPENDIX - PART I The Resolutions The Resolutions are summarised as follows: Resolution 1: Increase in Existing Authorised Share Capital Resolution 1, which is an ordinary resolution, proposes an increase in the Company s authorised share capital from 2,000,000 to 3,500,000 by the creation of 150,000,000 new Ordinary Shares of 0.01 each. This represents an increase of 75% of the existing authorised share capital of the Company as at the date of this document. At the Latest Practicable Date, the Company had 157,037,781 Shares in issue, with a further 9,881,003 authorised Shares reserved for issue on exercise of outstanding options and convertible instruments. This increase in the Company s authorised but unissued share capital is being sought in order to create sufficient authorised share capital to enable the issue of Shares pursuant to an IPO and for general corporate purposes. If passed, Resolution 1 will become effective at the conclusion of the EGM. Resolution 2: Directors Authority to Allot Securities in connection with an IPO Resolution 2, which is an ordinary resolution, proposes to authorise the Directors generally to allot relevant securities pursuant to and in accordance with section 1021 of the Companies Act 2014, up to the aggregate nominal amount of 1,500,000, in connection with an IPO. This general authority to allot relevant securities is necessary to enable the issue of Shares pursuant to an IPO. The actual number of Shares that would be issued in any IPO has not been fixed but, under this general authority, could not exceed 150,000,000 Shares (which would include those Shares which would be issuable to CDPQ, FSTQ and IQ on exchange of their respective equity and debt investments in IPL for Shares in One51 as part of and contingent upon an IPO) representing approximately 96% of the existing issued share capital of the Company. On its terms, this general authority to allot Shares may be used only in connection with an IPO and not for any other purpose. This general authority would be supplemental to, and would not replace, the share allotment authority being sought by the Directors at the AGM, to be held immediately prior to the EGM, on 21 April Unless previously renewed, revoked or varied by Shareholders, the authority will remain in full force and effect until it expires on 21 July 2017, unless before such expiry, the Company makes an offer or agreement which would or might require relevant securities to be allotted after such expiry, in which case the Directors may allot relevant securities in pursuance of such offer or agreement notwithstanding the authority conferred under Resolution 2 has expired. If passed, Resolution 2 will become effective at the conclusion of the EGM, provided that Resolution 1 is also passed. Resolution 3: Disapplication of Pre-emption Rights in connection with an IPO Resolution 3, which is a special resolution, proposes to dis-apply statutory pre-emption rights on the allotment of equity securities for cash in connection with an IPO. Generally, Irish company law requires that, if the Directors are to allot new Shares or other equity securities for cash (other than in connection with an employee share scheme), those Shares must first be offered to shareholders in proportion to their existing holdings. In conformity with the limitations prescribed by Resolution 2, the maximum number of Shares which could be issued pursuant to this Resolution is 150,000,000 Shares representing 96% of the existing issued share capital of the Company. Under its terms, the Directors may exercise this authority in connection with an IPO only and not for any other purpose. Unless previously renewed, revoked or varied by Shareholders, the authority will remain in full force and effect until it expires on 21 July 2017, unless before such expiry, the Company makes an offer or agreement which would or might require equity securities to be allotted after such expiry, in which case the Directors may allot equity securities in pursuance of such offer or agreement notwithstanding the authority conferred under Resolution 3 has expired. If passed, Resolution 3 will become effective at the conclusion of the EGM, provided that Resolutions 1 and 2 are also passed. Resolution 3 is a special resolution which requires the approval of not less than 75% of those Shareholders present and voting (in person or by proxy) at the EGM or, if a poll is called on the Resolution, the approval of not less than 75% of the votes cast at the EGM in order to be passed. Resolution 4: Amendment of the Existing Memorandum and Articles of Association Resolution 4, which is a special resolution, proposes, with immediate effect, certain amendments to the existing Memorandum of Association of the Company and the adoption of a new set of articles of association compatible with Listing and with provisions reflecting the enactment of the Companies Act The Companies Act 2014 (substantially all of the provisions of which became effective on 1 June 2015) has consolidated the previous Irish Companies Acts and many of the related statutory instruments into a single statute and has introduced significant reforms to Irish company law. In response, it has become best practice for Irish public companies to adopt revised articles of association to reflect 7

8 the new statutory context and to ensure that these changes to Irish company law will not have an unintended effect on the company by altering how the provisions in the articles of association are to be applied. The Company also proposes to use this opportunity to make additional amendments to the Articles of Association to remove those provisions of the Articles of Association that would be incompatible with Listing and to introduce provisions to bring the Articles into line with best practice for listed companies. A summary of the proposed changes is included in Part II of this Appendix to this Circular. A copy of the Memorandum and New Articles of Association is available at and may also be inspected (during normal business hours) at the registered office of the Company from the date of this Circular to the conclusion of the EGM and at the place of the meeting itself for at least 15 minutes prior to and during the meeting. If passed, Resolution 4 will become effective at the conclusion of the EGM, provided that Resolution 1 is also passed. Resolution 4 is a special resolution which requires the approval of not less than 75% of those Shareholders present and voting (in person or by proxy) at the EGM or, if a poll is called on the Resolution, the approval of not less than 75% of the votes cast at the EGM in order to be passed. Resolution 5: Directors Authority to Allot Securities following a Listing The Directors seek authority, as standard for listed public limited companies, to allot shares following a Listing becoming effective. Resolution 5, which is an ordinary resolution, proposes to authorise the Directors generally to allot relevant securities pursuant to and in accordance with section 1021 of the Companies Act 2014, up to an aggregate nominal amount equal to approximately onethird of the issued ordinary share capital of the Company as at the date a Listing first becomes effective. This authority is in line with applicable corporate governance guidelines. This general authority would, if it became effective, replace the share allotment authority being sought by the Directors at the AGM, to be held immediately prior to the EGM on 21 April Unless previously renewed, revoked or varied, the authority will remain in full force and effect until it expires at the conclusion of the next annual general meeting of the Company held after the date on which Listing first becomes effective or on the date which is 15 calendar months after that date (whichever shall be earlier), unless before such expiry, the Company makes an offer or agreement which would or might require relevant securities to be allotted after such expiry, in which case the Directors may allot relevant securities in pursuance of such offer or agreement notwithstanding the authority conferred under Resolution 5 has expired. If passed, Resolution 5 would become effective on the date of Listing provided that Resolutions 1 to 4 are also passed. The Directors have currently no intention to allot Shares pursuant to this authority. Resolution 6: Disapplication of Pre-emption Rights following a Listing The Directors seek authority, as standard for listed public limited companies, to dis-apply (on a limited basis) statutory pre-emption rights on the allotment of equity securities for cash following a Listing becoming effective. Resolution 6, which is a special resolution, proposes to dis-apply statutory pre-emption rights on the allotment of equity securities for cash following a Listing up to an aggregate nominal value equal to 5% of the nominal value of the issued share capital of the Company as at the date a Listing first becomes effective and in the event of a rights issue or other pre-emptive issue.this authority is in line with applicable corporate governance guidelines. Unless previously renewed, revoked or varied, the authority will remain in full force and effect until it expires at the conclusion of the next annual general meeting of the Company held after the date on which Listing first becomes effective or on the date which is 15 calendar months after that date (whichever shall be earlier), unless before such expiry, the Company makes an offer or agreement which would or might require equity securities to be allotted after such expiry, in which case the Directors may allot equity securities in pursuance of such offer or agreement notwithstanding the authority conferred under Resolution 6 has expired. If passed, Resolution 6 will become effective on the date of Listing, provided that Resolutions 1 to 5 are also passed. The Directors have currently no intention to allot Shares pursuant to this authority. Resolution 6 is a special resolution which requires the approval of not less than 75% of those Shareholders present and voting (in person or by proxy) at the EGM or, if a poll is called on the Resolution, the approval of not less than 75% of the votes cast at the EGM in order to be passed. Resolution 7: Approval of the One51 plc Long Term Incentive Plan 2016 The Directors seek authority, for the introduction of the One51 plc Long Term Incentive Plan 2016 (the Plan ). The Plan is intended to replace, with effect from a Listing, the Company s current long term incentive schemes for executive directors and other executives, including the One51 plc 2014 Share Option Scheme (the 2014 Scheme ), as approved by shareholders on 22 August As part of the preparation for a possible IPO and Listing, the Board and the Remuneration Committee have carried out a review of management remuneration to ensure that the Company s arrangements are aligned with its business strategy and current best practice for listed companies in Ireland. The Board and Remuneration Committee were advised by independent consultants, Mercer. Arising from that review, the Plan has been designed to strengthen the link between individual reward and the Company s performance by introducing performance measures (including return on capital employed and free cash flow) suitable for listed companies. 8

9 The terms of the Plan, as summarised in Part III of the Appendix to this Circular, substantially replicate the terms of the 2014 Scheme that it would replace on a Listing save with respect to the introduction of these new performance measures and with the introduction of provisions allowing for award of nil or nominal cost options. Under the terms of the Plan, the vesting of options awarded will be determined by reference to performance conditions set by the Remuneration Committee. For the initial awards of options awarded in the 42 days after the adoption of the Plan, vesting will be conditional on satisfaction (for up to 50% of the Shares subject to the option) of an earnings per share ( EPS ) performance condition, (for up to 25% of the Shares subject to the option) a free cash flow ratio ( FCFR ) performance condition and (for up to 25% of the Shares subject to the option) a return on capital employed ( ROCE ) performance condition, subject to accelerated vesting provisions. Further details of these performance conditions and applicable targets are included in the summary of the terms of the Plan set out in Part III of the Appendix to this Circular. Under the Plan, future awards of options would be subject to performance conditions considered by the Remuneration Committee to be no less challenging and aligned with the interests of Shareholders. Under the equivalent terms of the 2014 Scheme, in contrast, vesting of options is conditional on (for up to 50% of the Shares subject to the option) satisfaction of a share price performance condition and (for up to 50% of the Shares subject to the option) an EPS performance condition. Under the terms of the Plan, vested options cannot be exercised for a minimum period of two years from vesting (or, if vested options can be exercised, there will be a restriction on the disposal of the Shares acquired for that period). There is no equivalent provision under the terms or the 2014 Scheme. The Board and Remuneration Committee believe that the adoption of the Plan is in the best interests of the Shareholders as the Plan would, with effect from Listing, align the interests of the executive directors and other executives with those of the Shareholders and support the recruitment, retention and motivation of key staff. The Board and Remuneration Committee consider the performance conditions to be challenging and designed to incentivise the delivery of substantial increase in shareholder value, with full vesting requiring increase in all of earnings per share, return on capital employed and free cash flow ratio measures. The maximum percentage of share capital which could be issued under the Plan is limited, so that, over a period of 10 years, the aggregate number of Shares issued or issuable under options awarded under the Plan and any other share scheme(s) operated by the Company could not exceed 10% of the issued ordinary share capital of the Company. This is in line with the equivalent limit under the terms of the 2014 Scheme. Accordingly, adoption of the Plan will not increase the number of options available for award by the Company. In addition, a further flow control provides that the maximum percentage of share capital which could be issued under the Plan in any three year period is limited, so that, over that period of three years, the aggregate number of Shares issued or issuable under options awarded under the Plan and any other share scheme(s) operated by the Company could not exceed 3% of the issued ordinary share capital of the Company (disregarding for this purpose any option awarded before 31 December 2015). No decision has yet been taken by the Remuneration Committee as to the level of option awards that will be made on a Listing becoming effective, but it is anticipated that option awards will be made to the CEO (options with a value on award of up to 100% of basic salary) and CFO (options with a value on award of up to 80% of basic salary and other key executives effective from Listing. The Remuneration Committee will determine the level of initial awards to be awarded, following Listing becoming effective, having regard to the advice of its independent remuneration consultants, Mercer, and within the dilution limits set by the terms of the Plan. There are currently approximately 9.88 million options over Shares outstanding under the Company s existing share option schemes (representing approximately 6.3% of the issued share capital of the Company), of which approximately 3.80 million options were awarded under the One51 Group Share Option Scheme 2006 (the 2006 Scheme ) and 6.08 million options were awarded under the 2014 Scheme. Approximately 1.36 million options were exercised in the last 10 year period. All options awarded under the 2006 Scheme have vested. None of the options awarded under the 2014 Scheme have vested. Under the terms of the 2014 Scheme, as approved by shareholders on 22 August 2014, options awarded under the 2014 Scheme will vest if a resolution is passed by the Board to seek a Listing provided that the share price performance condition and the EPS performance condition set by the Remuneration Committee on award of the options, when calculated by reference to the completed accounting periods comprised in the proportion of the three year performance period which has then elapsed, are satisfied. Having regard to the Company s share price and EPS performance since the date of option awards, it is anticipated that all options outstanding under the 2014 Scheme will vest on Listing. Under the terms of the 2014 Scheme, the exercisability of such options would be limited; options that vest on Listing (other than options which have already vested or which would otherwise have vested in the ordinary course) may be exercised (to the extent of 60% of the Shares comprised in the options) at any time after notification to the participant of such vesting, (to the extent of a further 25% of the Shares comprised in the options) at any time after the first anniversary of admission, and (as to the balance of 15% of the Shares comprised in the options) at any time after 18 months from admission. The principal features of the Plan have been discussed with a number of the Company s larger shareholders. The Irish Association of Investment Managers ( IAIM ) were also invited to provide feedback. The maximum percentage of share capital which could be issued under the Plan and individual award limits comply with IAIM guidelines. The Directors are also seeking authority to be empowered to do all things that they consider necessary to implement the Plan, including the ability to adopt further plans based on it in order to make awards to employees outside Ireland. A summary of the terms of the Plan is set out in Part III of the Appendix to this Circular. A copy of the Plan is available at and may also be inspected (during normal business hours) at the registered office of the Company from the date of this letter to the conclusion of the EGM and at the place of the meeting itself for at least 15 minutes prior to and during the meeting. 9

10 1. Introduction APPENDIX PART II Explanation of proposed amendments to the Memorandum and Articles of Association The purpose of Resolution 4 is (a) to adopt a new set of articles of association compatible with Listing and with provisions reflecting the enactment of the Companies Act 2014 and (b) to make certain limited amendments to the existing Memorandum of Association of the Company reflecting the enactment of the Companies Act No change to the rights of the Ordinary Shares On adoption of the New Articles, the rights attaching to the Shares will not be changed. All Shares rank pari passu, and the rights attaching to the Shares (including as to voting and transfer) are and will be as set out in the Company s Articles of Association. Holders of Shares are entitled to receive duly declared dividends in cash or, when offered, additional Shares. In the event of any surplus arising on the occasion of the liquidation of the Company, shareholders would be entitled to a share in that surplus pro rata to their holdings of Shares. Holders of Shares are entitled to receive notice of and to attend, speak and vote in person or by proxy, at general meetings having, on a show of hands, one vote, and, on a poll, one vote for each Share held. Procedures and deadlines for entitlement to exercise, and exercise of, voting rights are specified in the notice convening the general meeting in question. 3. Companies Act 2014 The Companies Act 2014, substantially all of the provisions of which became effective on 1 June 2015, has consolidated the previous Irish Companies Acts and many of the related statutory instruments into a single statute and has introduced significant reforms to Irish company law. In response, it has become best practice for Irish public companies to adopt revised articles of association to reflect the new statutory context and to ensure that these changes to Irish company law will not have an unintended effect on the company by altering how the provisions in the articles of association are to be applied. All of these changes are intended, so far as practicable, to preserve the status quo. In particular: Instead of providing, as the previous Irish Companies Acts had, for a model set of Articles of Association that apply unless otherwise provided for, the Companies Act 2014 includes optional statutory provisions that apply to regulate a company unless its Articles of Association provide otherwise. As those provisions deal with matters that are dealt with in the Company s Articles of Association it is proposed that a new provision will be included in the opening clause of the revised Articles of Association dis-applying those optional sections of the Companies Act The Existing Articles of Association contain references to sections and definitions in the previous Irish Companies Acts. The New Articles of Association will update these statutory references to ensure that they refer to the corresponding provisions in, and terminology of, the Companies Act Section 228(1)(d) of the Companies Act 2014 is a new statutory restriction regarding the use of company property by directors but is not intended to change the applicable law. A new Article 84(b) is therefore incorporated in the New Articles to ensure that Directors can continue to use the Company s property, subject to such conditions as may be approved or delegated by the Board. Sections 228(1)(e) and 228(2) of the Companies Act 2014 are entirely new statutory provisions regarding directors ability to restrict the exercise of their powers but are not intended to change the law on directors duties. A new provision is therefore incorporated in Article 103 of the New Articles in order to make it clear that Section 228(1)(e) will not restrict anything that may be done by any Director in accordance with the authorisation of the Board or a Board committee. Under the Companies Act 2014, the directors or a company may use the power provided for in the Companies Act to send shareholders summary financial statements in lieu of the full statutory financial statements of the company. Article 83 has been amended to provide that, where the Directors elect to do so, any shareholder may request a full copy of the financial statements of the Company to be sent to him or her. Amendments Relevant to the Proposed Listing It is proposed, by adoption of the New Articles, to update and modernise the Existing Articles in line with best practice for listed companies in Ireland, to provide for matters such as electronic communications, electronic payment of dividends, dealing with payment of dividends in the form of shares, unclaimed dividends, untraced shareholders and the holding and conduct of general meetings and directors meetings. 10

11 The principal changes are as follows: Additional definitions relevant to a Listing are being inserted at Article 1 of the New Articles, including definitions of Approved Exchange, Approved Market and Relevant Exchange. The New Articles contain a detailed provision, at Article 4, enabling and facilitating the Shares to be held and transferred by electronic means through the CREST system. Those provisions of the Existing Articles (Article 8) providing the Directors with authority to allot Shares and empowering the Directors on a limited basis to allot Shares for cash without regard to statutory pre-emption rights will be removed, as the Directors propose to seek approval from shareholders on an annual basis at the Company s annual general meeting for such authorities. The transfer restrictions contained in Article 33A of the Existing Articles will be removed, as these provisions would be incompatible with a Listing. Article 33A restricts the acquisition of stakes of 15% or more in the Company by providing that no person shall alone (or with persons determined by the Directors to be acting in concert with him) acquire an interest in shares of the Company which, taken together with any other interest in shares of the Company, or rights over such shares held or acquired by him (or by persons determined by the Directors to be acting in concert with him), carry 15% or more of the voting rights attributable to interests in Shares of the Company or may increase such interest unless in either case the acquisition is an acquisition to which the Directors have given their written consent. The New Articles contain a new provision at Article 49(b) enabling the Directors to deal with fractions of Shares arising on a consolidation or subdivision. This is a standard matter in the articles of association of listed companies. The Directors have no current intention to effect a consolidation or sub-division of the Shares. Those provisions of the Existing Articles (Article 53) setting out the terms on which the Company may purchase its own Shares and re-issue any Shares so acquired will be removed, as the Directors propose to seek approval from shareholders on an annual basis at the Company s annual general meeting for such authorities. The New Articles contain a number of provisions designed to facilitate the conduct of general meetings. A new Article 53 is being inserted with regard to the postponement of general meetings whereby, if the Directors consider that it is impracticable or unreasonable to hold a general meeting on the date or at the time or place stated in the notice calling the meeting, they may postpone or move the meeting (or do both). A new Article 57 is being inserted with regard to security arrangements and orderly conduct permitting the Directors to direct attendees to general meetings to provide evidence of identity and refuse entry to parties failing to provide such evidence and allowing the chairman to take such actions as would promote the orderly conduct of the meeting. A new Article 58 is being inserted with regard to satellite meeting places whereby general meetings may be held in two or more locations. A new provision in Article 63 is being inserted allowing the Chairman to adjourn meetings where necessary so that the business of the meeting may be properly conducted. The New Articles clarify that, on a poll, a member need not cast all his votes or cast all the votes he uses in the same way (Article 67) and to clarify that a member may appoint multiple proxies in respect of shares held in different securities accounts (Article 74). The New Articles provide, as the Existing Articles do, that at each annual general meeting of the Company one-third of the Directors shall retire from office but clarify that each director shall present himself or herself for election at least once every three years (Article 94). The New Articles contain a number of provisions clarifying that the Directors may delegate their powers and discretions to any Director or committee consisting of one or more Directors (provided that a majority of the members of each committee shall consist of Directors) and to any local or divisional boards or agency that it may establish (Articles 88, 89 and 90). The New Articles contain a new provision (Article 105) clarifying that a Director shall not vote at a meeting of the Directors or a committee of Directors on any resolution concerning a matter in which he or she has, directly or indirectly, an interest which is material, subject to a limited range of exceptions. A Director shall not be counted in the quorum present at a meeting in relation to any such resolution on which he or she is not entitled to vote. The New Articles provide that the Company may specify any date (the record date ) as the date on which persons registered as the holders of shares shall be entitled to receipt of any dividend, distribution, interest, allotment, issue, notice, information, document or circular, and so that no change in the register of such holders after the record date shall invalidate the same (Article 132). The New Articles contain a number of provisions designed to facilitate the payment of dividends electronically (Article 127) and providing for the payment of shares in lieu of a cash dividend (Article 129). Consistent with the provisions of the Companies Act 2014, the New Articles allow for the service of notices, documents or information on members by electronic means, and are designed to improve the ability of the Company to serve notice in a modern and effective manner. Copies of documents (including the financial statements) may be sent using electronic communications, including by making them available on a website (instead of them being sent to him or her) provided that the member is notified of the publication of the documents on the website, the address of that website and how the documents may be accessed from the website (Article 137). 11