Further guidance on the agenda for the EGM dated 27th June 2016

Published on June 17, 2016

Further guidance on the agenda for the EGM dated 27th June 2016

Statement from the Executive Chairman, Jeremy Harbour

“The following further guidance is being issued by the board ahead of the EGM on 27th June 2016, to enable members to make a more informed voting decision and to give some clarity around the scope of the powers the board is asking for.”

Proposed Agenda

1) A mandate for the Board of Directors to:

(i) make strategic acquisitions without further recourse to members provided that:

  • Companies are profitable and debt free
  • Companies are bought using only stock and that stock is only issued where there is a demonstrable price earnings arbitrage opportunity so that there is a concentration of shareholder value from the stock issue
  • Companies will be subject to rigorous due diligence procedures and must provide audited financial statements
  • CEOs will be subject to an executive due diligence process
  • Key shareholders will be subject to a lockup period of 360 days
  • Companies will be subject to the non-executive board approval so as to ensure the acquisitions are aligned with The Marketing Group’s growth plans
  • In the event of a conflict of interest, all conflicted directors will abstain from the vote and it will pass on a majority of the remaining directors

(ii) make opportunistic and tactical acquisitions within the Group to increase profitability provided that:

  • Such tactical acquisitions will only be carried out with the approval of the executive Board of Directors to ensure that this will be in the interests of the shareholders and if there is a demonstrable concentration effect on shareholder value from the stock issue
  • Key talent and customers are acquired for no more than three times earnings to be paid with additional shares
  • All mergers and acquisitions transactions will be made with shares instead of cash

2) Share bonus scheme

The reason people join our group is to de-risk, give them scale and liquidity. These desires all drive shareholder value. However, we also want to create an environment where the member companies are motivated to collaborate with each other and seek to grow the profits faster than otherwise forecast. It is for this reason that the board wishes to create a share based incentive scheme to the founding CEO’s of each subsidiary now and in the future, to be trialled for a two year period when it will again be put to shareholders for further ratification. Under this share bonus scheme, which will be correlated to the company’s operating performance, each company will have a target based on their previous full year audited EBIT, so that for every one euro currency equivalent that they are able to increase EBIT in the following years audited financial statements the scheme member will receive 3 euros value of shares at the prevailing share price at that time, to be calculated on the 30 day average stock price immediately prior to the release of the audited financial reports. The additional shares will be subject to a lockup period of 360 days, which will serve to create a jagged edge or laddered effect to the expiry of lockups, and also will slightly redistribute ownership towards the best performing subsidiaries, furthermore three euros of shares for one euro of additional profit is a relatively small reward compared to the additional share value that would be delivered through the uplift. The lockup and opportunity to get further bonuses for over performance we believe will provide a powerful inducement to drive value for all shareholders.

Notice of attendance at the Extraordinary General Meeting shall be made by sending an email to investorrelations [at] tmg-plc.com, attn: Hannah Middleton.

When giving notice of participation, the shareholder shall state name, personal identification number or company registration number, telephone number and number of shares represented at the Extraordinary General Meeting.

For more information, please contact

Hannah Middleton, Director and Communications Director
Phone: +65 8193 7625
E-mail: hannah.middleton@tmg-plc.com

Jeremy Harbour, Executive Chairman
Phone: +65 8661 1776
E-mail: jeremy.harbour@tmg-plc.com

The Marketing Group in brief

The Marketing Group plc was incorporated in May 2015 with the purpose of gathering successful marketing businesses under one roof. During the first quarter of 2016, the Company acquired four companies within the marketing sector; One9Ninety (social media), Black Marketing (LinkedIn marketing), Nice & Polite (creative content) and Creative Insurgence (brand activation). The Company comprises a series of independent marketing teams, each with specific expertise and innovative services. The consolidated group supports the subsidiaries with management and coordinating activities as well as a common operating platform. For more information, please visit the Company’s website tmg-plc.com. The Company’s share is listed on Nasdaq First North Stockholm and Mangold Fondkommission AB, +46 8 5030 1550, is the Company’s Certified Adviser and liquidity provider