TIDMENET
RNS Number : 7874F
Ethernity Networks Ltd
19 November 2020
19 November 2020
ETHERNITY NETWORKS LTD
("Ethernity" or the "Company")
Notice of Extraordinary General Meeting
Ethernity Networks (AIM: ENET.L), a leading supplier of data
processing offload solutions running on programmable hardware and
used to accelerate telco/cloud networks, gives notice of an
Extraordinary General Meeting of the Company ("EGM"), to be held at
11.00 a.m. Israel time (9.00 a.m. UK time) on 29 December 2020 at
the Company's offices in Israel, to seek shareholder approval, in
compliance with the provisions of the Israeli Companies Law, for
the issue of certain shares and options to Directors of the
Company.
The Notice of EGM, together with a Form of Proxy (for
Shareholders) or Form of Direction (for Depositary Interest
holders), is expected to be despatched to Shareholders and
Depositary Interest holders later today, and will be available to
view on the Investor Relations section of the Company's website,
www.ethernitynet.com .
Set out below is the letter from the Chairman, extracted from
the Notice of EGM, setting out the background and reasons for the
EGM, detailing the resolutions to be voted on at the EGM and action
to be taken.
In light of the evolving COVID-19 situation and related public
health guidance and legislation (including restrictions on travel
and a prohibition on public gatherings), the Board of Directors
believes that it is in the best interests of the Company and its
shareholders that the EGM will be run as a closed meeting and
shareholders will not be able to attend. Shareholders and
Depositary Interest holders should accordingly vote by Form of
Proxy or by Form of Direction (as appropriate).
"Introduction
I am pleased to be writing to you with details of the
forthcoming Extraordinary General Meeting of the shareholders of
Ethernity Networks Ltd. to be held at the offices of the Company at
13A Hamelacha St., Lod Industrial Park, 7152025, Israel, at 11.00
a.m. Israel time (9.00 a.m. UK time) on 29 December 2020.
The formal notice of the Meeting is set out on pages 9 to 10 of
this document.
Background to and Reasons for the Meeting
As previously announced in the Company's ongoing updates
regarding funding and the impact of the COVID-19 situation, the
Company continues to apply cash conservation measures albeit
funding steps as announced have been completed.
A. Share Based Compensation to the Non-Executive Directors
Due to ongoing levels of contribution from Neil Rafferty,
non-executive Director, the call on his time has far exceeded his
contracted time. He has agreed to continue these additional
services for the second half of the financial year ending 31
December 2020 and has agreed to be remunerated for his contribution
through the issue of shares in lieu of cash, to be calculated with
reference to a price of 20p per share.
Additionally Neil Rafferty has agreed to a fee substitution via
compensation in shares of 50% of his monthly fees due for November
and December 2020. The number of shares to be issued is calculated
on the same basis as above.
The Company has also agreed an issue of shares, on similar terms
as to Neil Rafferty above with the exception of the 50% fee
substitution for November and December 2020, to be made to myself
as Chairman, as a termination award under the Company`s
Compensation Policy in recognition of work done.
The total amount of share based compensation in relation to the
above matter and the resultant number of shares to be issued, is as
follows:
-- Graham Woolfman, non-executive Chairman, is to receive
GBP33,000 @ 20p per share being 165,000 shares
-- Neil Rafferty, non-executive director, is to receive
GBP28,000 @ 20p per share being 140,000 shares.
In order to complete this allotment, as is required in terms of
the Israel Companies Law, 5759-1999 and the regulations promulgated
thereunder, any award or issue of shares or options to a director
requires the recommendation of the Remuneration Committee of the
Company to the Board. This recommendation was confirmed in a
meeting of the Remuneration Committee of the Company on the 9th of
November 2020, and the approval of the Board of Directors of the
Company in a meeting held on the 10th of November 2020 which
adopted and approved the Remuneration Committee's proposals subject
to approval by a disinterested majority of the shareholders in a
General Meeting.
Neil Rafferty in conformity with the requisite law and
governance did not participate in any decision by the Remuneration
Committee to recommend this proposal to the Board for approval, and
similarly neither Neil nor myself participated in any resolution by
the Board to approve our individual interests in the proposals.
Furthermore, as per the Company's adopted Compensation Policy,
these share awards will be subject to a lock-in period of one (1)
year from the date of allotment.
B. Award of Options to the Chief Financial Officer
A general award of options to employees of the Company was
approved by the Remuneration Committee on 9 November 2020 in
accordance with the terms of the Company's approved Israel Share
Option Plan (ISOP).
As part of this general award, following a meeting of the
Remuneration Committee on 9 November 2020, the Remuneration
Committee proposed to the Board that Mark Reichenberg be awarded
100,000 options at an exercise price of 20p. The Board has
subsequently approved this award in a resolution passed on 18
November 2020.
Under the Israeli Companies Law this award is subject to and
conditional upon the approval by shareholders in a General Meeting
of the Company.
These proposed options will vest equally in three parts on 19
November 2021 and thereafter on an annual basis. Subsequent to
approval of the additional grant, Mark Reichenberg will have
209,000 options, of which 81,750 are vested.
Actions to be taken in respect of the Meeting
WE STRONGLY ENCOURAGE SHAREHOLDERS TO VOTE ON ALL RESOLUTIONS BY
APPOINTING THE CHAIR OF THE MEETING AS YOUR PROXY, TO REGISTER ANY
QUESTIONS IN ADVANCE AND NOT TO ATT THE MEETING IN PERSON.
Shareholders are encouraged to submit their voting instructions
as soon as possible, even if they might intend to attend the EGM in
person should the Coronavirus (COVID-19) situation and the
Government of Israel's guidance change so as to permit this. See
below for details with regard to voting instructions.
Shareholders can submit questions to the Board in advance of the
EGM by emailing such questions to the Company Secretary, Mark
Reichenberg at markr@ethernitynet.com by no later than 9.00 a.m.
(UK time)/ 11.00 a.m. (Israel time) on 24 December 2020. We will
consider all questions received and endeavour to provide responses
to them at the EGM to the extent appropriate and practicable.
Any Shareholder or proxy appointed by a Shareholder who wishes
to attend the EGM by telephone is requested to contact Mark
Reichenberg (details above) in order to obtain details of how to
join the teleconference. Such Shareholders or proxies are requested
to provide in that email details of their registered shareholding
or proxy appointment in order that their entitlement to attend may
be verified.
Any Depository Interest Holder who wishes to join the EGM by
telephone is requested first to contact the Depositary at Link
Market Services Trustees Limited, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU or by email by using
nominee.enquiries@linkgroup.co.uk in order to request a Letter of
Representation no later than 5.00 p.m. (UK time) / 7.00 p.m.
(Israel time) on 18 December 2020. Any such Depository Interest
Holder is then requested to contact Mark Reichenberg as set out
above once they have received the Letter of Representation.
The health and well-being of our Shareholders and colleagues
remains our priority and the steps set out above are necessary and
appropriate ones given the current pandemic.
I would reiterate that the Board would encourage all
Shareholders and Depository Interest Holders in the strongest
possible terms to use their Form of Proxy or Form of Direction, as
relevant, and appoint the Chair of the EGM as their proxy. This
will allow their votes to count. The action to be taken in respect
of the Meeting depends on whether you hold your Ordinary Shares in
certificated form or as Depositary Interests.
Certificated Shareholders
Please check that you have received the following with this
document:
-- a Form of Proxy for use in respect of the Meeting; and
-- a reply-paid envelope for use in connection with the return
of the Form of Proxy (in the UK only).
You are strongly encouraged to complete, sign and return the
Form of Proxy in accordance with the instructions printed on it as
soon as possible but, in any event, so as to be received by post,
at Link Asset Services, PXS1, 34 Beckenham Road, Beckenham, BR3
4ZF, United Kingdom or, during normal business hours, by hand to
Link Asset Services, 34 Beckenham Road, Beckenham, Kent BR3 4TU, in
each case by no later than 9.00 a.m. (UK time) / 11.00 a.m. (Israel
time) on 24 December 2020.
This will enable your vote to be counted at the Meeting in the
event of your absence. The completion and return of the Form of
Proxy will not prevent you from attending and voting at the
Meeting, or any adjournment of the Meeting by telephone. However,
Shareholders are urged not to attend the Extraordinary General
Meeting in person.
Depositary Interest holders
Please check that you have received the following with this
document:
-- a Form of Direction for use in respect of the Meeting; and
-- a reply-paid envelope for use in connection with the return
of the Form of Direction (in the UK only).
You are strongly encouraged to complete, sign and return the
Form of Direction in accordance with the instructions printed on it
as soon as possible but, in any event, so as to be received by
post, at Link Asset Services, PXS1, 34 Beckenham Road, Beckenham
BR3 4ZF, United Kingdom or, during normal business hours by hand,
to Link Asset Services, 34 Beckenham Road, Beckenham, Kent BR3 4TU,
in each case by no later than 9.00 a.m. (UK time)/ 11.00 a.m.
(Israel time) on 23 December 2020.
This will enable your vote to be counted at the Meeting. The
completion and return of the Form of Direction will not prevent you
from attending the Meeting, or any adjournment of the Meeting by
telephone (subject to obtaining a valid Letter of Representation),
however you will not be able to vote at the meeting. Depositary
Interest holders are urged not to attend the Extraordinary General
Meeting in person.
Recommendation
The Directors of the Company believe that all of the proposals
to be considered at the Meeting are in the best interests of the
Company and its shareholders as a whole and, accordingly,
unanimously recommend that you vote in favour of all the proposed
resolutions as they intend to do in respect of their own beneficial
holdings amounting in aggregate, to 12,934,566 Ordinary Shares
representing approximately 31.01 per cent. of the Existing Ordinary
Shares, save that I shall abstain from voting my holding of 10,715
Ordinary Shares on Resolution 1 and Neil Rafferty shall abstain
from voting his holding of 7,143 Ordinary Shares on Resolution
2.
Conclusion
My resignation as Non-Executive Chairman of the Company was
announced on the 18th November 2020, and therefore I anticipate
that this will be the last General Meeting of the Company, which I
will Chair. I would like to take this opportunity to thank my Board
colleagues for their work and support during the period of my
appointment, as well as shareholders for their support of the
Company.
I wish the Company every success and look forward to following
its continued development.
Yours faithfully,
Graham Woolfman
Chairman"
For further information, please contact:
Ethernity Networks Tel: +972 8 915 0392
David Levi, Chief Executive Officer
Mark Reichenberg, Chief Financial Officer
Arden Partners plc (NOMAD and Broker) Tel: +44 207 614 5900
Richard Johnson / Benjamin Cryer
VSA Capital Limited (Joint Broker) Tel: +44 20 3005 5000
Andrew Monk, Corporate Broking
Simon Barton, Corporate Finance
Peterhouse Capital Limited (Joint Broker) Tel: +44 20 7562 0930
Lucy Williams / Duncan Vasey / Eran Zucker
About Ethernity Networks
Ethernity Networks (AIM: ENET.L) provides innovative,
comprehensive networking and security solutions that run on
programmable hardware and are used for accelerating
telecommunications networks. Ethernity's FPGA logic offers complete
Carrier Ethernet Switch Router data plane processing software with
a rich set of networking features, robust security, and a wide
range of virtual function accelerations to optimize
telecommunications networks. Ethernity's complete solutions quickly
adapt to customers' changing needs, improving time-to-market and
facilitating deployment of 5G, edge computing, and NFV.
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END
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