Gaming Innovation Group is committed to good corporate governance to ensure trust in the Company and to maximise shareholder value over time. The objective of the Company’s corporate governance framework is to regulate the interaction between the Company’s shareholders, the Board of Directors and the executive management.
Corporate governance report
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF GAMING INNOVATION GROUP INC. 27 December 2018
GAMING INNOVATION GROUP INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify as follows:
- The name of the corporation is Gaming Innovation Group Inc. (the “Corporation”). The Corporation was originally incorporated under the name Advanced Compression Technologies, Inc. and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on September 10, 1992 as a stock corporation. The Directors of the Corporation have been elected and qualified.
- Pursuant to Sections 242 and 245 of the Delaware General Corporation Law, this Restated Certificate of Incorporation restates and integrates and further amends the provisions of the Certificate of Incorporation of this corporation. This Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of Delaware.
- The text of the Restated Certificate of Incorporation as heretofore amended or supplemented is hereby restated and further amended to read in its entirety as follows:
Gaming Innovation Group Inc. (“GiG” or the “Company”) is a US corporation incorporated in the state of Delaware with corporate number 2309086. The headquarters is in Malta with operations in Denmark and Spain.
Being a Delaware company, GiG is subject to Delaware company legislation and regulation. In addition, certain aspects of the Norwegian Securities law and the Swedish Financial Instruments Trading Act apply to the Company due to its listing on both the Oslo Stock Exchange and on NASDAQ Stockholm, including the requirement to publish an annual statement of the Company’s policy of corporate governance.
The Company’s Board of Directors and management adheres to the Norwegian Code of Practice for Corporate Governance, last revised 17 October 2018 (the “Norwegian Code”) and the Swedish Corporate Governance Code, last revised 1 January 2020 (the “Swedish Code”), both referred to as “the Codes” in this document. The Swedish Code was applicable from the listing on NASDAQ Stockholm in March 2019. The Company has Norway as its home member state, and thus Norwegian regulations and the Norwegian Code will supersede in case of conflicts.
The Company aims for compliance in all essential areas of the Codes; however, as a Delaware company, there will be topics where the Codes are not fully complied with. The Codes are available at www.nues.no/eng and www.corporategovernanceboard.se
The application of the Codes is based on a “comply or explain” principle and any deviation from the Codes is explained under each item. The corporate governance framework of the Company is subject to annual review by the Board of Directors and the annual corporate governance report is presented in the Company’s annual report and on the Company’s website.
This corporate governance report is currently structured to cover all sections of the Norwegian Code of Practice as a base, with extended sections to cover the Swedish Corporate Governance Code. Further explanation describes the Company’s corporate governance in relation to each section of the respective Codes.
The Company complies with the Codes in all material respects; however, it deviates on the following topics: Board authorisation to issue new shares (section 3) and formulation of guidelines for use of the auditor for services other than auditing (section 15).
The Codes are in material respects complied with through the Company’s Certificate of Incorporation and By-Laws (combined Articles of Association) and the annual report.
As a Delaware corporation, the Company’s business is not defined in the Articles of Association. A description of the business is available on the Company’s website and in the annual report. The Company’s objectives, strategy and risk profile are described in more detail in the annual report and on the Company’s website.
Given the nature of GiG’s business, the Company is constantly working to improve its ethical and fair business practice. The Company is committed to being compliant with all the laws and regulations affecting its business. The Company has defined ethical and sustainability guidelines in accordance with the Company’s corporate values and as recommended by the Codes
The Codes are in material respects complied with. Apart from financing of normal operating expenses, GiG’s business model requires low tied-up capital in fixed assets and the Board of Directors considers the current capital as sufficient. The Board of Directors constantly assesses the Company’s need for financial strength based on the Company’s objectives, strategy and risk profile.
The Company has adopted a dividend policy under which, all else being equal, the Company will aim to pay a dividend according to continued self-imposed restrictions concerning financial solidity and liquidity, all of which should be complied with. To date, the Company has not paid any dividends to shareholders and no dividends are proposed by the Board of Directors for the year 2020.
According to common practice for Delaware companies, the Company has an authorised number of shares available which is higher than the current number of issued shares. The authorised number of shares has been approved by the shareholders in a shareholder meeting. In compliance with the Company’s Articles of Association and Delaware corporate law, the Board of Directors may issue shares up to this limit without any further shareholder approval. As at 31 December 2020, the number of authorised shares was 100,000,000 (par value USD 1.00) whereof 90,075,626 are issued and outstanding. The ISIN code is US36467X2062.
The Codes are in material respects complied with. The Company has only one class of shares, which is listed on both the Oslo Stock Exchange and NASDAQ Stockholm.
Under Delaware law, no pre-emption rights of existing shareholders exist, however the Company aims to offer pre-emption rights to existing shareholders in the event of increases in the Company’s share capital through private share issues for cash. If the Board of Directors carries out an increase in share capital by cash and waives to offer a pre-emption right to existing shareholders, this will be a minor increase, or if not, a justification will be publicly disclosed in connection with such increase in the share capital.
In case of any material transaction between the Company and shareholders, directors or senior management, or any related close associates, the Board of Directors will obtain satisfactory valuation in order to secure that a transaction is entered on arms-length conditions.
The Company is compliant with the Codes. The Company has no limitations on the ownership or sale of the Company’s shares. All GiG shares are freely negotiable and no form of restriction on negotiability is included in the Company’s Articles of Association.
The Codes are, in material respects, complied with as stated below. A shareholder meeting ensures the shareholders’ participation in the body that exercises the highest authority in the Company and in which the Company’s Articles of Association are adopted.
Notices for shareholder meetings with resolutions and any supporting documents are announced on the Oslo Stock Exchange, on Nasdaq Stockholm and on the Company’s website and sent by mail to all shareholders registered in the VPS according to the Company’s Articles of Association. The Company’s by-laws require a minimum of 10 days’ notice to the shareholders; however, the Company has given the shareholders longer notice when calling for shareholder meetings, and the Company aim to apply the Swedish Code for notice and other procedures regarding shareholder meetings.
The Company allows shareholders to vote by proxy and prepares a form of proxy that is sent to shareholders and nominates a person who will be available to vote on behalf of shareholders as their proxy. Shareholders are allowed to vote separately on each candidate nominated for election to the Company’s corporate bodies.
The Company has decided to apply the Swedish Code by using English only for all communication, including the notice, as the ownership structure warrants it and it is financially feasible given the financial situation of the Company. The same applies to the minutes of the meeting. The Swedish Code will be applied when verifying and signing the minutes of shareholder meetings. A shareholder, or a proxy representative of a shareholder, who is neither a member of the Board nor an employee of the Company is to be appointed to verify and sign the minutes of shareholder meetings.
The Company’s chairman attends shareholder meetings, and the Company further aims that the requirements in the Swedish Code regarding other members of the board, the CEO, the nomination committee and the Company’s auditors will be present at the annual general meeting. For the 2021 shareholder meeting, COVID-19 sets restrictions to normal practice.
|19 May 2020||Minutes|
|22 May 2019||Minutes|
|23 May 2018||Minutes|
|23 May 2017||Minutes|
|10 May 2016||Minutes|
|31 August 2016||Minutes|
|12 May 2015||Minutes|
|17 March 2015||Minutes|
|22 May 2014||Minutes|
The Codes are complied with. As a Delaware corporation, the governing law does not require a nomination committee; however, the Company has a nomination committee.
The nomination committee is responsible for reviewing the size, structure and composition of the Board, succession planning, the appointment of replacement and/or additional directors and for making the appropriate recommendations to the Board. In 2020, the nomination committee held individual one-to-one interviews with each member of the Board.
The annual shareholder meeting on 19 May 2020, decided that the nomination committee of Gaming Innovation Group shall consist of not less than three and not more than four members, to represent all shareholders and be appointed by the three largest shareholders at 31 August 2020. The members of the committee are: Mikael Riese Harstad (committee chair, nominated by Andre Lavold), Petter Moldenius (nominated by Henrik Persson Ekdahl) and Frode Fagerli (nominated by Myrlid AS).
Shareholders can reach the Nomination Committee by email on: [email protected]
The Company does not have a corporate assembly. For the board of directors, the Code of Practice is in material respects complied with. The annual shareholders meeting elect representatives to the Board. The resolution on the composition of the Board takes place with a simple majority. The Company seeks to nominate members of the Board representing all shareholders and independent from management. The current board of directors consists of five members, whereof three are independent of the Company’s main shareholders. All of the board members own shares in the Company, either directly or indirectly. As a Delaware company, the board members have unlimited periods, but the board members can be proposed, elected and re-elected at the Annual Shareholders Meeting. For the election of a new Board at the next annual shareholder meeting, the Company will aim to propose a composition that will be in line with the provisions in the Code of Practice. The Chairman of the Board is elected by the by the Board of Directors according to the Company’s by-laws.
For the Board of Directors, the Codes are in material respects complied with. The shareholder meeting elects representatives to the Board. The resolution on the composition of the Board takes place with a simple majority. The Company seeks to nominate members of the Board representing all shareholders and independent from management. All board members are, on a yearly basis, up for re-election.
The current Board of Directors consists of five members, whereof all are independent of the Company’s main shareholders. All board members own shares in the Company, either directly or indirectly. Information about the current board members, their expertise, independency and shareholdings can be found in the 2020 Annual Report and on the Company’s website.
As a Delaware company, the board members have unlimited periods, however the board members must be proposed, elected and re-elected at the annual shareholder meeting. The Chairman of the Board is formally elected by the Board of Directors according to the Company’s by-laws.
The Codes are in material respects complied with. The Board of Directors has the prime responsibility for the management of the Company and holds a supervisory position towards the executive management and the Company’s activities.
In addition to monitoring and advisory duties, the Board of Directors’ main tasks consist of participating in compiling the Company’s strategy and establishing the overall goals.
The Board of Directors appoints the CEO; the Swedish Code will be applied when it comes to appointing, evaluating and, if necessary, dismissing the CEO. The Board is to approve any significant assignments the CEO has outside the Company.
The Board of Directors will ensure that the Company’s six- or nine-month report is reviewed by the Company’s auditor according to the Swedish Code. There is no such equivalent rule in the Norwegian Code.
The Board of Directors appoints a remuneration committee and an audit committee and establishes an annual plan for its work, with internal allocation of responsibilities and duties.
The Board of Directors has evaluated its work through a questionnaire and individual interviews with the chair of the nomination committee. The evaluation report has been shared with the nomination committee and also discussed by the Board of Directors.
Members of the Board of Directors and senior management shall notify the Board of Directors in case of material direct or indirect interests in transactions entered into by the Company.
The Chairman of the Board is responsible for leading the work of the Board and to lead the board meetings. Continual contact with the CEO shall ensure that the Chairman of the Board monitors the Company’s development and that the Board receives the information required in order to be able to meet its commitments. The Chairman of the Board shall also represent the Company in matters concerned with ownership.
In 2020, the Board held 11 minuted meetings with all members present. The minutes were taken by the Group CFO, acting as secretary to the Board. At every Board meeting a business and financial update was given by the CEO.
The Codes are complied with. The Board of Directors constantly assesses the Company’s need for necessary internal control systems for risk management covering the size and complexity of the Company’s business.
The Company employs a risk management policy which is applicable across all departments within the organisation. The policy requires that all staff align their activities with the risk appetite of the business, and where risks are identified an escalation process is triggered where higher management assesses risks.
The Board of Directors has also established an independent audit committee which oversees the Company’s implementation of policies and procedures, as well as the reporting by the company of its financial affairs in the financial statements. The committee receives regular reports from the internal auditor on key risk areas which would have been subject to a detailed evaluation by the internal auditor. The internal auditor is independent and freely chooses areas to assess at his own discretion, generally focusing on business activities that could bring legal, security, financial or other operational risks.
In connection with the annual report, the most important areas of risk exposure and internal controls are reviewed
The Codes are complied with and variable remuneration for the Board is not allowed in the Norwegian Code, which the Company follows. The remuneration to board members is at a sufficiently competitive level in order to ensure the desired composition of the Board. The remuneration is resolved by the annual shareholder meeting and is a fixed amount and has no performance-related elements.
The annual shareholder meeting in May 2020 resolved the remuneration of the Board of Directors, including remuneration for the remuneration committee and the audit committee. Remuneration to the Board is listed in Note 32 in the 2020 Consolidated Financial Statements.
No board members have share options and no board members take part in incentive programmes available for management and/or other employees.
A general rule is that no members of the Board of Directors (or companies with which they are associated) shall take on specific assignments for the Company in addition to their appointment as Director. If such assignments are made, it shall be disclosed to the Board of Directors and the remuneration shall be approved by the Board of Directors.
The Codes are complied with. The remuneration for the CEO is set by the Board. The Board also establishes guidelines for the remuneration of other members of senior management, including both the level of fixed salaries, the principles for and scope of bonus schemes and any option grants. The Company have so far not issued a remuneration report, however the policy for remuneration to senior management and the amounts paid in 2020 are described in Note 32 and the Company’s incentive stock option programs are described in Note 24 in the 2020 Consolidated Financial Statements.
The Company has a remuneration committee, consisting of two directors, Petter Nylander (committee chair) and Henrik Persson Ekdahl. For the fiscal year 2020, the remuneration committee had three committee meetings with both members present in all meetings.
The Code of Practice is complied with. The Company assigns importance to informing its owners and investors about the Company’s development and economic and financial status. Prompt financial reporting reduces the possibility of leakage and contributes to the equal treatment of shareholders.
Responsibility for investor relations (IR) and price sensitive information rests with the Company’s CEO and Group CFO, including guidelines for the Company’s contact with shareholders other than through general meetings.
All information distributed to the Company’s shareholders is available through the Company’s website. Each year the Company publishes to the market the dates of reporting for planned major events.
The Company provides annualy a sustainability report that are made available on the Company’s website. The Company has not presented a separate remuneration report, but information on remuneration to the Board of Directors and management, and share option plans, are available in the annual report.
The Code of Practice is complied with. The Company has no restrictions in its Articles of Association regarding company take-overs, and the Board of Directors is pragmatic with respect to a possible takeover of the Company.
If a takeover bid is made for the Company, the Board of Directors will ensure that shareholders are given sufficient and timely information and make a statement prior to expiry of the bid, including a recommendation as to whether the shareholders should accept the bid or not. The main responsibility of the Board of Directors under such circumstances is to maximise value for the shareholders, while simultaneously looking after the interest of the Company’s employees and customers.
The Company has an audit committee consisting of two directors, Nicolas Adlercreutz (committee chair) and Kjetil Garstad. For the fiscal year 2020, the audit committee had five audit committee meetings with both members present in all meetings, and had meetings with the external auditors regarding the Q3-20 review and the annual financial statements and the auditors presented to the audit committee a review of its work and the Company’s internal procedures.
The Company has not developed any specific guidelines for the management’s opportunity to use the auditor for other services than audit. The auditors are used as advisors for general financial purposes and in connection with the preparation of tax returns and general tax advice.
The auditors did not participate in the board meeting which finally approved the annual financial statements for 2020, but participated in the audit committee meeting that approved the annual financial statements and the auditors’ comments were presented to the Board of Directors by the audit committee. The auditors have been available for questions and comments at the Board of Directors’ discretion.