Helsinki, Finland -
March 17, 2004
The Board of Directors hereby summons the shareholders to the Annual General Meeting on April 27, 2004
THE PROPOSALS OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING
IN 2004
- The Board of Directors proposes that no dividend shall be paid. It
is proposed that the net profit of the financial year shall be entered
to the shareholders equity.
- The proposal of the Board of Directors to amend the Articles of
Association by removing the section 15.
- The Board of Directors shall be re-authorised to decide on the issue
of shares.
- The proposal of the Board of Directors for an acceptance of the
merger plan and a merger of Applied Computing Research (ACR) Oy to the
Company and an increase of the share capital relating to the
assignment of the consideration of merger.
- The proposal of the Board of Directors about a nullification of the
shares which shall be transferred to the Company in connection with
the merger and about lowering of the tied equity.
- It is furthermore proposed that EUR 15,000,000.00 shall be
transferred from the premium fund to a fund belonging to the free
equity.
THE PROPOSAL OF THE BOARD OF DIRECTORS FOR MEASURES OWING TO THE
PROFIT SET OUT IN THE CONSOLIDATED BALANCE SHEET
The Company has no distributable earnings. The Board of Directors
shall propose to the Annual General Meeting of the Shareholders on
April 27, 2004 that no dividend shall be paid. The Board of Directors
proposes that the net profit of EUR 6,687,849.73 shall be entered into
the shareholders equity into the profit and loss account of the
company.
THE PROPOSAL OF THE BOARD OF DIRECTORS FOR AMENDING THE ARTICLES OF
ASSOCIATION BY REMOVING THE STIPULATION OF SECTION 15
The Board of Directors proposes to the Annual General Meeting of the
Shareholders that the stipulation of section 15 shall be completely
removed from the Articles of Association. It is now stipulated in the
section 15 that the shareholder whose share of ownership has with
certain conditions reached or exceeded 1/3 or half of all shares
issued has an obligation to redeem the shares of the company.
THE PROPOSAL OF THE BOARD OF DIRECTORS TO DECIDE ON AN INCREASE OF THE
SHARE CAPITAL BY AN ISSUE OF NEW SHARES, STOCK OPTIONS, AN OPTION LOAN
OR A CONVERTIBLE BOND
The Board of Directors proposes that the General Meeting of the
Shareholders shall authorise the Board of Directors to decide on an
increase of the share capital by an issue of new shares, and/or issue
of an option loan of convertible bond and/or issue of stock options,
through one or more issues so that the share capital can be increased
by such new issue and on the base of convertible bond and option loan
by a maximum aggregate amount of EUR 165,000.00 by issuing a maximum
number of 5,500,000 new shares with a nominal value of three cents
(EUR 0.03) each at a price defined by the Board of Directors and in
other respects on conditions determined by the Board of Directors.
The Board of Directors proposes furthermore to the General Meeting of
the Shareholders that the General Meeting authorises the Board of
Directors to decide on the persons entitled to subscribe to shares and
that the authorisation includes a right to deviate from the
shareholders pre-emptive rights to the share subscription on the
basis, that there is an important financial reason on part of the
company to do so, such as an expansion of ownership of shares,
strengthening of the companys capital structure, financing of
business acquisitions, carrying out of co-operational arrangements, or
motivating the personnel. The proposal for the authorisation is also
proposed to be included in the right of the Board of Directors to
decide on the basis of defining the subscription price and the final
amount of the subscription price. The Board of Directors is not
entitled to deviate from the shareholders pre-emptive right in favour
of the persons belonging to the inner circle of the company. New
shares can also be subscribed to with property given as capital
contribution, by set off or otherwise on specific terms and
conditions. It is proposed that the authorisation is effective until
April 27, 2005.
THE PROPOSAL OF THE BOARD OF DIRECTORS TO APPROVE THE MERGER PLAN AND
THE MERGER WHEREIN THE APPLIED COMPUTING RESEARCH (ACR) OY SHALL MERGE
TO SSH COMMUNICATIONS SECURITY CORP AND THE INCREASE OF SHARE CAPITAL
IN CONNECTION WITH THE ASSIGNMENT OF THE CONSIDERATION OF THE MERGER
The Board of Directors proposes that the Annual General Meeting of the
Shareholders shall adopt the terms of merger signed on March 8, 2004.
According to these terms of merger all assets and liabilities of the
parent company Applied Computing Research (ACR) Oy are transferred
without a liquidation procedure to SSH Communications Security Corp.
The implementation of the merger is planned to be registered on
October 31, 2004.
The merging parent company owns a total of 16,942,487 shares of SSH
Communications Security Corp (approx. 61.09 per cent of all shares).
The merging company does not possess any other significant assets or
liabilities at the moment of the implementation of the merger. The
main reasons for the merger are to dissolve the group structure and an
increase of transparency relating to the holding of the shares.
According to the terms of merger, the consideration of the merger
shall be paid as proposed by the Board of Directors in the merger plan
by issuing new shares of SSH Communications Security Corp. The payment
of consideration requires an increase of the share capital by a total
of EUR 508,274.61, which furthermore means an issue of a total of
16,942,487 new shares. The aggregate subscription price of these new
shares, EUR 1,642,511.53 equals to the total acquisition cost of the
shares of the acquiring company owned by the company being acquired.
The company being acquired shall undertake not to transfer the shares
of the acquiring company during the merger procedure. Furthermore, the
shareholders of the company being acquired, Mr. Tatu Ylönen
(shareholding: approx. 84.67 %) and Mr. Tero Kivinen (shareholding:
approx. 15.33 %), have committed themselves not to transfer the shares
of the company being acquired, unless the merger is interrupted.
A PROPOSAL OF THE BOARD OF DIRECTORS FOR CONDITIONAL NULLIFICATION OF
OWN SHARES TO BE TRANSFERRED FROM THE COMPANY BEING ACQUIRED (APPLIED
COMPUTING RESEARCH (ACR) OY) AND THE DECREASE OF THE TIED EQUITY IN
CONNECTION WITH THIS CONDITIONAL NULLIFICATION OF OWN SHARES
The Board of Directors shall propose that the General Meeting of the
Shareholders should resolve to decrease the share capital and the
premium fund without remuneration by nullifying 16,942,487 own shares
which shall be transferred to SSH Communications Security Corp as a
result of the proposed merger with the parent company Applied
Computing Research (ACR) Oy. The share capital shall in that case be
decreased by the total value of the shares to be nullified (EUR
508,274.61) which amount shall be transferred to the premium fund. The
shares to be received within the merger and to be entered into the
fixed assets (the acquisition cost: EUR 1,642,511.53), shall be
entered off as proposed by the Board of Directors by decreasing the
premium fund.
The reason for the decrease of the share capital of the company is the
nullification of own shares which shall be acquired in the merger with
Applied Computing Research (ACR) Oy. The nullification of own shares
shall make it possible to later acquire own shares of the company.
After the transfer of the consideration of the merger, the persons
belonging to the inner circle of SSH Communications Security Corp
shall own 47.20 % (76.03 % of the votes and the shares out) of all
shares of the company. After the nullification of the shares acquired
within the merger, the persons belonging to the inner circle of the
company shall own 76.03 % of all shares and votes. This information
relating to the persons acquiring shares as the consideration in the
merger are the following: before the nullification of the shares to be
transferred within the merger 40.23 % of all shares of the company
(64.81 % of the votes and the shares out) and 64.81 % of the shares
and the votes after the nullification of the mentioned shares. The
aforementioned holdings of the persons belonging to the inner circle
equal to the current situation. However, these above mentioned
holdings may be changed because of possible new subscriptions
subscribed for under the existing option rights and other changes in
the share capital.
The decrease of the share capital shall not in practise affect the
holdings of other shareholders of the company or division of the
voting power in the company, because the shares to be nullified shall
be in the possession of the company at the moment of the
implementation of the proposed decision.
This resolution to decrease the share capital and other tied equity of
the company is conditional and will be carried out only with the
following pre-conditions: 1) The merger of SSH Communications Security
Corp and Applied Computing Research (ACR) Oy shall be implemented, and
2) there shall remain on the moment of the decrease of the share
capital a full coverage to the tied equity and other non-distributable
assets as stipulated by the Companies Act (Chapter 6, Section 4) after
the implementation of the decrease of the share capital. The
implementation of the merger is planned to be registered on October
31, 2004. It is furthermore planned that the shares in question (a
total of 16,942,487) shall be transferred to the company on that
moment.
The decrease of the share capital and other tied equity shall not
affect the rights arising from the options granted by the Company and
they shall not affect any changes to any terms of any option plan of
the company.
THE PROPOSAL OF THE BOARD OF DIRECTORS TO DECREASE THE PREMIUM FUND
AND TO TRANSFER THE DECREASED AMOUNT TO THE FUND BELONGING TO FREE
EQUITY
The Board of Directors proposes that the General Meeting of the
Shareholders would resolve to decrease the premium fund of the Company
with an amount of EUR 15,000,000.00 and to transfer this amount with
the permission granted by the registration authority to the fund
belonging to the free equity of the company.
This enables the acquiring of own shares in the future and ensures the
decreasing of the share capital.
APPENDICES:
1. The proposal of the Board of Directors to amend the Articles
of Association by removing the section 15.
2. The proposal of the Board of Directors to decide on the
increase of the share capital by an issue of new shares, or stock
options, or an option loan or a convertible bond and the statement of
the Auditors.
3. The merger plan between SSH Communications Security Corp and
Applied Computing Research (ACR) Oy, signed between the legal
representatives of these two companies and a statement of an
independent authority.
4. The proposal of the Board of Directors for the conditional
nullification of own shares which shall be transferred from the
company being acquired and decreasing of the tied equity and the
statement of the Auditors.
5. The proposal of the Board of Directors to decrease the
premium fund and to transfer that amount transferred from the premium
fund to the free equity.
Copies of financial statements, the terms of merger, the other
proposals of the Board of Directors and other documents required to be
displayed under the Finnish Companies Act are available for inspection
by shareholders for one week prior to the General Meeting at the
Company head office (Fredrikinkatu 42, 00100 Helsinki, room 517).
APPENDICES:
THE PROPOSAL OF THE BOARD OF DIRECTORS TO AMEND THE ARTICLES OF
ASSOCIATION BY REMOVING THE SECTION 15
The Board of Directors proposes to the Annual General Meeting of the
Shareholders that section 15 shall be completely removed from the
Articles of Association.
It is now stipulated in the section 15 that the shareholder whose
share of ownership has with certain conditions reached or exceeded 1/3
or half of all shares issued has an obligation to redeem the shares of
the company.
The Board of Directors proposes that the mentioned stipulation
included in the section 15 in the Articles of Association shall be
completely removed, because there is no more need for such a
stipulation as was the case when it was included in the Articles of
Association before the listing of the company to the main list of
Helsinki Exchange and when it was necessary to secure the success of
the listing. The Board of Directors wants to improve the free
interchange ability of the shares. The section of the Articles of
Association proposed to be removed has prevented the interchange
ability. Additionally, it is necessary for the implementation of the
objectives of the terms of merger that the section 15 of the Articles
of Association will be removed.
According to the section 15 of the Articles of the Association, the
decision of the General Meeting of the Shareholders shall be valid
only, if it has been supported by the shareholders, who possess at
least three quarters of all votes given and the shares being
represented in the General Meeting of the Shareholders.
Helsinki, March 16, 2004.
The Board of Directors
THE PROPOSAL OF THE BOARD OF DIRECTORS TO DECIDE ON AN INCREASE OF THE
SHARE CAPITAL BY AN ISSUE OF NEW SHARES, OR BY AN ISSUE OF STOCK
OPTIONS OR AN OPTION LOAN OR A CONVERTIBLE BOND
The Board of Directors proposes that the General Meeting of the
Shareholders shall reverse the earlier authorisations from the unused
parts and shall authorise the Board of Directors to resolve on an
increase of the share capital by an issue of new shares, and/or an
issue of an option loan or a convertible bond and/or an issue of stock
options, through one or more issues so that the share capital can be
increased by such a new issue and on the basis of convertible bonds
and option rights by a maximum aggregate amount of EUR 155,000.00 by
issuing a maximum number of 5,500,000 new shares with a nominal value
of three cents (EUR 0.03) each at a price defined by the Board of
Directors and in other respects on conditions determined by the Board
of Directors. This number of shares equals to approx. 19.6 per cent of
the currently registered share capital and the total aggregate amount
of votes.
The Board of Directors proposes furthermore to the General Meeting of
the Shareholders that the General Meeting shall authorise the Board of
Directors to decide on the persons entitled to subscribe shares, stock
options and/or convertible bonds and that the authorisation includes a
right to deviate from the shareholders pre-emptive right to the share
subscription if there exists an important financial reason on part of
the company for doing so, such as expansion of ownership of shares
and/or strengthening of the companys capital structure, financing
acquisitions and/or other business transactions, carrying out of co-
operation arrangements, or motivation of personnel. The proposal for
authorisation is proposed to include the right of the Board of
Directors to decide also on the grounds for defining the subscription
price, the final amount of the subscription price as well as other
terms and details. The Board of Directors may not deviate from the
shareholders pre-emptive right in favour of a person belonging to the
inner circle of the company. The issue of new shares can be conducted
with property given as capital contribution, by set off or otherwise
on certain conditions. It is proposed that the authorisation shall be
effective until April 27, 2005.
Helsinki, March 16, 2004
The Board of Directors
THE STATEMENT OF THE AUDITORS
To the Annual General Meeting of SSH Communications Security Corp
As our opinion in accordance with Chapter 4, Section 4 a, Paragraph 2
and Section 12 b, Paragraph 1 of the Finnish Companies Act, on the
Company Boards proposal, dated on March 16, 2004, to increase the
share capital by an issue of new shares and/or to issue a bond with
warrants or a convertible bond and/or to issue stock options, we, the
authorized public accountants of SSH Communications Security Corp
hereby state that the proposed reasons by the Board for the deviation
from the pre-emptive subscription right follow the Finnish Companies
Act.
Helsinki, March 16, 2004
Pricewaterhouse Coopers Oy
Authorized Public Accountants
Henrik Sormunen
APA
THE MERGER PLAN, SIGNED BY AND BETWEEN THE LEGAL REPRESENTATIVES OF
SSH COMMUNICATION SECURITY CORP AND APPLIED COMPUTING RESEARCH (ACR)
OY
The Board of Directors of Applied Computing Research (ACR) Oys and
the Board of Directors of SSH Communications Security Corp have
adopted the following terms of merger:
1. The merger
Applied Computing Research (ACR) Oy (the company being acquired) shall
merge to SSH Communications Security Corp (the acquiring company). All
assets and liabilities of the company being acquired shall be
transferred within the merger without a liquidation procedure to the
acquiring company.
2. Information about the merging companies
The company being acquired:Applied Computing Research (ACR) Oy
Address: Fredrikinkatu 42, 0100 Helsinki
Domicile: Helsinki
Business ID-number: 0978476-1
The acquiring company: SSH Communications Security Corp
Address: Fredrikinkatu 42, 0100 Helsinki
Domicile: Helsinki
Business ID-number: 1035804-9
3. An account of the reasons of the merger
The Company being acquired owns approx. 61.09 % of the shares and
votes of the acquiring company. Therefore, these two companies are
forming a group as meant in the Finnish Companies Act. The company
being acquired has been the parent company of the mentioned group. The
main reason and objective of the merger is to dissolve this group
structure between now merging companies.
Transparency is also pursued by dissolving the above mentioned group
structure. Furthermore, it is in the intention of the parties to
achieve clarity in the decision making by transferring some holding of
the shares straight to those persons who have had (because of the
holding of shares in the parent company) a significant de facto
influence to the decision making of the acquiring company. The shares
of the acquiring company are publicly listed and traded on the main
list of Helsinki Exchange. It is important for the acquiring company
and a development of its business to get the major shareholder Mr.
Tatu Ylönen to own as a private shareholder the shares of the
acquiring company in the future. It is in the opinion of the now
merging companies that this change of Mr. Ylönens status as a
shareholder shall implement to the practise those principles, which
were aimed for by the Corporate Governance -Guidelines for publicly
listed companies (published on December 2003).
According to the estimations of the merging companies, the functional
possibilities of the acquiring company can be improved in the long run
through dissolving the group structure. This would improve the chances
for gaining new capital from the market. As defining the value for the
shares also becomes clearer, the chances for using own shares as a
consideration in company acquisitions will be better. Additionally, it
will by making a personal shareholding possible, give the share
markets a better chance to follow the shareholding changes of the
principal shareholders.
There are commercial reasons to dissolve the group structure between
the company being acquired and the acquiring company.
4. The shares of the acquiring company owned by the company
being acquired and its subsidiaries
The company being acquired owns shares of the acquiring company as
follows:
The amount of shares 16,942,487
The aggregated nominal value (EUR) 508,274.61
The initial outlay as entered to the balance sheet (EUR)
1,642,511.53
The portion of all shares of the acquiring company 61,09 %
The above described shares of the acquiring company shall be
transferred to the own ownership of the acquiring company as a result
of the merger.
The subsidiaries of the company being acquired do not own any shares
of the acquiring company.
5. Consideration and an increase of the share capital of the
acquiring company
The share capital of the company being acquired is divided to six
hundred (600) shares. Mr. Tatu Ylönen owns 508 shares and Mr. Tero
Kivinen 92 shares of these shares. These shareholders of the company
being acquired shall receive a total of 16,942,487 shares of the
acquiring company as a consideration of merger. The shares as the
consideration shall be distributed between the shareholders as
follows:
Ylönen 14 344 639 84,67 %
Kivinen 2 597 848 15,33 %
Total 16 942 487 100,00 %
Both shareholders of the company being acquired belong to the
acquiring companys inner circle referred to in the Companies Act
(Chapter 1, Section 4). Before a transfer of the consideration, the
shareholders of the company being acquired own 3.75 % of all shares of
the acquiring company. After the transfer of the consideration, the
shareholders of the company being acquired shall own 40.24 % (64.82 %
of the votes and the shares out) of all shares of the company.
According to the aforementioned, the share capital of the acquiring
company shall be increased by EUR 508,274.61 in connection with the
merger by issuing 16,942,487 new shares. The total nominal value of
these new shares to be issued is EUR 508,274.61. These new shares are
belonging to the same lot as the other shares of the acquiring
company. The shares issued as consideration of the merger shall
entitle their holders to full dividend from the financial year ending
December 31, 2004 and they shall also bear other rights of
shareholders after the registration of the increase of the share
capital.
The aggregate subscription price of the new shares EUR 1,642,511.53 is
an amount which equals to the aggregated book initial outlay of the
shares of the acquiring company owned by the company being acquired.
An amount of EUR 1,134,236.92 of the subscription price shall be
entered to the premium fund of the acquiring company.
According to the Finnish Companies Act (Chapter 14, Section 17.2), the
shareholders of the company being acquired shall become shareholders
of the acquiring company on the moment when the implementation of the
merger shall is registered.
Allocation of the consideration shall be begun on the merging day, or
if that day is not a banking day, on the next possible banking day.
The shares of the acquiring company have been affiliated to the book-
entry system. After the merger has been implemented, the issuing into
the book-entry system of the new shares to be issued as the
consideration of the merger shall be taken care of by the acquiring
company. The acquiring company shall give separate instructions to the
shareholders of the company being acquired concerning the entries into
the book-entry system. Also, the acquiring company together with the
shareholders of the company being acquired shall take care of the
entries of those shares that shall be issued as the consideration. The
shares shall be entry in their book-entry accounts. After the
implementation of the merger has been registered, the acquiring
company shall apply for permission for the new shares that were issued
as the consideration of the merger to be taken as an object in public
trade without delay.
6. An account concerning a determination of the consideration
and the essential valuation problems relating to the determination
The company being acquired currently owns a total of 16,942,487 shares
of the acquiring company. These shares are approx. 61.09 % of all
shares and votes of the acquiring company. In addition to this, the
company being acquired do not have any other significant assets or
liabilities on the moment of an implementation of the merger.
The shareholders of the merging company have owned via the merging
company approx. 61.09 % of all shares and votes of the acquiring
company. It is purposed, that the merger does not affect to the
mentioned holding. Therefore, the amount of shares to be issued as the
consideration (16,942,487 shares) has been determined to match the
amount of shares of the acquiring company owned by the company being
acquired.
There are no valuation problems relating to the determination of the
consideration.
7. An account of capital loans
The merging company has not emitted subordinated loans meant in
chapter 14, section 4, sub-item 1, paragraph 4 of the Companies Act.
The acquiring company has a subordinated loan, which the
Valtiokonttori (State Treasury) /Teknologian Kehittämiskeskus (The
National Technology Agency of Finland) has granted. The amount of the
loan is 245.218 euros and the loan period is eight (8) years starting
from 13.11.1998. The repayment will happen after four (4) free years
in such a way that in each of the following four years it is possible
to pay 88.298,66 euros at maximum. The interest of the loan is one (1)
percentage unit lower than the basic rate of interest of the Bank of
Finland, however, at least three (3) percentage units. The condition
for the repayment of the loan is that after the repayment the tied
equity of the company and other non-distributable assets will have a
full cover. Interest can be paid for the loan according to how much
the company has distributable assets. The company has entered the
interest of the loan into the yearly costs.
8. An account of the special benefits and rights
No special benefits or rights are, in connection with the merger,
given to the members of Board of Directors, Managing Directors,
auditors or the authorised auditor acting as an independent authority.
9. The Option rights, convertible bonds and other rights
corresponding to the right of a shareholder
The company being acquired has not given option rights, convertible
loans or other rights corresponding to the right of a shareholder.
10. Amendments of the Articles of Association of the acquiring
company
It is not necessary to amend the Articles of Association of the
acquiring company because of the merger.
11. A Proposal on the planned date for the registration of
implementation of the merger
The registration of implementation of the merger is planned to be
carried out on October 31, 2004.
12. Miscellaneous
The company being acquired agrees not to transfer the shares of the
acquiring company owned by the company being acquired during the
merger procedure.
The shareholders of the company being acquired Mr. Tatu Ylönen and Mr.
Tero Kivinen agree not to transfer the shares of the company being
acquired, unless the merging procedure is interrupted.
The company being acquired is obliged to pay all debts as were entered
to its consolidated balance sheet on December 31, 2003 before
implementation of the merger.
The company being acquired shall guarantee that it will not contract
more debts before the implementation of the merger. This guarantee
does not concern the accounts payable with minor importance.
The Direct costs affected in connection with the merger shall be
covered from the assets of the company being acquired.
13. Approval of the merger
These terms of merger with annexes shall be taken for submission of
the General Meetings of the Shareholders of the company being
acquired and the acquiring company.
The terms of merger have been drafted for and signed as four (4)
copies, one (1) for each company participating to the merger and to
the persons who have committed themselves to the merger.
Helsinki, March 8, 2004
SSH Communications Security Corp
The Board of Directors
_______________________ _______________________
Tomi Laamanen Tapio Kallioja
_______________________ _______________________
Timo Ritakallio Tatu Ylönen
Applied Computing Research (ACR) Oy
The Board of Directors
_______________________ _______________________
Tero Kivinen Tero Mononen
_______________________
Tatu Ylönen
We shall commit ourselves to the obligations arising from the terms of
merger, clause 12 above.
_______________________________________________________
Tatu Ylönen Tero Kivinen
A STATEMENT OF AN INDEPENDENT AUTHORITY
To the shareholders of SSH Communications Security Corp:
The Board of Directors of Applied Computing Research (ACR) Oy and SSH
Communications Security Corp has resolved to propose to the General
Annual Meeting of the Shareholders that it would resolve about a
merger wherein Applied Computing Research (ACR) shall merge to SSH
Communications Security Corp.
The Board of Directors of the companies to be merged have devised the
terms of merger dated on March 8, 2004. I have appraised validity and
adequacy of the information included to the terms of merger according
to the good principles of accounting and as stipulated by the Finnish
Companies Act.
According to the terms of merger a total of 16,942,487 new shares of
SSH Communications Security Corp shall be issued as the consideration
of the merger. The proposal about the amount of shares to be issued as
the consideration of the merger is based on the grounds presented in
terms of merger by the Boards of Directors of the merging companies.
I, acting as an independent authority and approved auditor, shall
present as my statement according to the Companies Act, Chapter 16,
Section 6.1, that the terms of merger includes valid and adequate
information as stipulated by the Companies Act about matters which may
essentially affect to the appraisal of the reason of the merger, an
estimation of the assets to be transferred to the acquiring company
and to the estimation of the value of the consideration and its
distribution. The value of the assets to be transferred to the
acquiring company corresponds to the amount of consideration to be
paid in connection with the merger (the amount based on the increase
of the share capital and the premium fund which shall be entered to
the balance sheet of the company.
As I see it, the merger should not endanger the payments of the
existing liabilities of SSH Communications Security Corp.
Helsinki, March 8, 2004
Juhani Loukusa
APA
A PROPOSAL OF THE BOARD OF DIRECTORS ABOUT CONDITIONAL NULLIFICATION
OF THE OWN SHARES WHICH SHALL BE TRANSFERRED FROM THE COMPANY BEING
ACQUIRED (APPLIED COMPUTING RESEARCH (ACR) OY) AND THE DECREASE OF THE
TIED EQUITY IN CONNECTION WITH THIS CONDITIONAL NULLIFICATION OF THE
OWN SHARES
SSH Communications Security Corp shall own some of its own shares as a
result of the merger between SSH Communications Security Corp and
Applied Computing Research (ACR) Oy. The combined nominal value of
these shares and the voting rights granted by them shall exceed five
(5) percentages calculated from the share capital of the company and
the voting rights related to the all shares of the company. Therefore,
SSH Communications Security Corp has an obligation arising from the
Finnish Companies Act (Chapter 7, Section 8) to transfer or nullify
the majority of these shares during a period of three (3) years
starting from the transfer of these shares to the company as a result
of the merger. Because of essential income tax liabilities affected
by possible transfer of the own shares, the Board of Directors
considers, that it is reasonable to nullify these own shares without
transferring them.
The Board of Directors shall propose, that the General Meeting should
resolve to decrease the share capital and the premium fund without
remuneration by nullifying 16,942,487 own shares which shall be
transferred to SSH Communications Security Corp as a result of the
proposed merger with the parent company Applied Computing Research
(ACR)Oy. The share capital shall then be decreased by the aggregated
value of the shares to be nullified (EUR 508,274.61) which amount
shall be transferred to the premium fund. The shares, to be received
within the merger and to be entered into the fixed assets (the
acquisition cost: EUR 1,642,511.53), shall be entered off as proposed
by the Directors of the Company by decreasing the premium fund.
The reason for the decreasing of the share capital of the company is
the nullification of the own shares which shall be acquired in the
merger with Applied Computing Research (ACR) Oy. The nullification of
the own shares shall make it possible to later acquire own shares of
the company.
After the transfer of the consideration of the merger, the persons
belonging to the inner circle of SSH Communications Security Corp
shall own 47.20 % (76.03 % of the votes and the shares out) of all
shares of the company. After the nullification of the shares acquired
within the merger, the persons belonging to the inner circle of the
company shall own 76.03 % of all shares and votes. This information
relating to the persons acquiring shares as the consideration in the
merger are the following: before the nullification of the shares to be
transferred within the merger 40.23 % of all shares of the company
(64.81 % of the votes and the shares out) and 64.81 % of the shares
and the votes after the nullification of the mentioned shares. The
aforementioned holdings of the persons belonging to the inner circle
shall equal to the current situation. However, these above mentioned
holdings may be changed because of possible new subscriptions
subscribed for under the existing option rights and other changes in
the share capital.
The decrease of the share capital shall not affect in practise to the
holdings of other shareholders of the company or to division of voting
power in the company, because the shares to be nullified shall be in
the possession of the company on the moment of the implementation of
the proposed decision.
It is proposed that the resolution about the decrease of the tied
equity and the nullification of the own shares should be registered to
the Trade Register within one (1) month after the resolution of the
General Meeting so, that the resolution would concurrently be
registered with the registration of the implementation of the merger
between SSH Communications Corp and Applied Computing Research (ACR).
It is not needed to acquire an approval under the Companies Act
(Chapter 6, Section 2 and Chapter 12, Sections 3 and 3 a) for the
decrease of the share capital and the premium fund by acting under
this proposition, because the share capital shall be increased by an
amount which equals to the decreased amount.
This resolution to decrease the share capital and other tied equity of
the company is conditional and will be carried out only with the
following pre-conditions: 1) The merger of SSH Communications Security
Corp and Applied Computing Research (ACR) Oy shall be implemented, and
2) there shall remain on the moment of the decrease of the share
capital a full coverage to the tied equity and other non-distributable
assets as stipulated by the Companies Act (Chapter 6, Section 4) after
the implementation of the decrease of the share capital.
The decrease of the share capital and other tied equity shall not
affect to the rights arising from the options granted by the company
and they shall not affect any changes to any terms of any option plan
of the company.
Helsinki, March 8, 2004
The Board of Directors
THE STATEMENT OF THE AUDITORS
Related to the proposal of the Board of Directors of SSH
Communications Security (dated on March 8, 2004) to decrease the share
capital and the premium fund, we shall provide as the auditors of the
company and on the grounds of the Companies Act, Chapter 6, Section
3.2 our statement about the reasons to decrease the share capital and
the premium fund as mentioned in the proposal of the Board.
We have appraised, according to the good manners of accounting and
according to the provisions of the Companies Act, the reasons of the
decrease of the share capital and the premium fund mentioned in the
proposal of the Board of Directors. We shall provide as our statement
that the reasons included to the proposal of the Board of Directors
are accordant with the Companies Act.
Helsinki, March 8, 2004
PricewaterhouseCoopers Oy
Authorised Public Accountants
Henrik Sormunen
APA
CEO
Arto Vainio
Tel: +358 20 500 7400
Investor Relations/CFO
Mika Peuranen
Tel: +358 20 500 7419
E-mail: 
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