Notice of Annual General Meeting

27 July 2020

Approval of Whitewash Resolution under Rule 9 of the
Irish Takeover Rules

VR Education (AIM: VRE; Euronext Growth: 6VR), a leading virtual reality (‘VR’) technology company focused on the education and enterprise training space, announces that the Company's Annual General Meeting will be held at 11:00 a.m. on Friday, 21 August 2020 at Unit 9, Cleaboy Business Park, Old Kilmeaden Road, Waterford, X91 AX83, Ireland.

The Company’s Annual Report and Accounts for the year ended 31 December 2019 (‘2019 Annual Report’) was posted to shareholders on 30 June 2020, and copies of the 2019 Annual Report, together with the Notice of Annual General Meeting and Form of Proxy, are available from the Company's investor relations website at www.vreducationholdings.com.

In addition to the other resolutions, a resolution is being proposed at the Annual General Meeting to seek a waiver from the independent shareholders of the requirements of Rule 9 of the Irish Takeover Code to allow certain options to be exercised in light of the recent investment by HTC as announced on 20 May 2020.  Further details are contained in the extract of the Chairman’s Letter set out below this announcement.

In light of the public health advice in response to the COVID-19 pandemic, including to limit travel and public gatherings, and the importance of the health and safety of Shareholders, staff and others, the Company strongly encourages all Shareholders to submit their Form of Proxy or CREST Proxy Instruction, appointing the chairman of the Annual General Meeting as proxy, rather than attend the Annual General Meeting in person which, given the COVID-19 pandemic, cannot be facilitated. Only the formal business of the Resolutions will be carried out at the Annual General Meeting and no update will be provided. 

 

For further information, please contact:

VR Education Holdings plc
Richard Cooper, Chairman
David Whelan, CEO
Séamus Larrissey, CFO		 Tel: +353 87 665 6708
[email protected]
Cairn Financial Advisers LLP (Nominated Adviser)
James Caithie / Liam Murray / Ludovico Lazzaretti		 Tel: +44 (0) 20 7213 0880
Shard Capital Partners LLP (Joint Broker)
Damon Heath / Erik Woolgar		 Tel: +44 (0) 20 7186 9952
Davy (Joint Broker & Euronext Growth Advisor)
Fergal Meegan / Ronan Veale / Barry Murphy		 Tel: +353 1 679 6363
Buchanan (Financial PR)
Henry Harrison-Topham / Chris Lane / Tilly Abraham		 Tel: +44 (0)20 7466 5000
[email protected]

 

Notes to Editors

VR Education, together with its wholly owned subsidiary, is an early stage VR software and technology group based in Waterford, Ireland, dedicated to transforming the delivery methods of education and corporate training by utilising VR technologies to deliver fully immersive virtual learning experiences.  The Group's core focus is the development and commercialisation of its online virtual social learning and presentation platform called ENGAGE, which provides a platform for creating, sharing and delivering proprietary and third-party VR content for educational and corporate training purposes.

In addition to the ongoing development of the ENGAGE platform, the Group has also built two downloadable showcase VR experiences, being the award-winning Apollo 11 VR experience and the Titanic VR experience.

On 12 March 2018, VR Education listed on the AIM market of the London Stock Exchange and on the Enterprise Securities Market, a market regulated by Euronext Dublin.  For further information, please visit www.vreducationholdings.com.

The following information has been extracted without material adjustment from the Notice of Annual General Meeting sent to VR Education’s shareholders (the ‘Circular’) dated 27 July 2020.  Copies of the Circular will be available free of charge to the public at https://immersivevreducation.com

NOTICE OF ANNUAL GENERAL MEETING AND APPROVAL OF WHITEWASH UNDER RULE 9 OF THE IRISH TAKEOVER RULES

In light of the public health advice in response to the COVID-19 pandemic, including to limit travel and public gatherings, and the importance of the health and safety of Shareholders, staff and others, the Company strongly encourages all Shareholders to submit their Form of Proxy or CREST Proxy Instruction, appointing the chairman of the Annual General Meeting as proxy, rather than attend the Annual General Meeting in person which, given the COVID-19 pandemic, cannot be facilitated.  Only the formal business of the Resolutions will be carried out at the Annual General Meeting and no update will be provided.

1. Introduction and background

On 19 May 2020, HTC agreed to invest €3,000,000 in the Company and pursuant to the investment holds 48,284,102 new Ordinary Shares, being approximately 20% of the enlarged issued share capital of the Company.

Further to the recent notice of general meeting of the Company dated 19 May 2020, HTC is an indirect wholly owned subsidiary of, and is engaged in investment activities on behalf of, HTC Corporation.  HTC Corporation, having a market capitalisation of NT$24,687,000,000 and over 3,000 employees, is listed on the Taiwan Stock Exchange.  HTC Corporation designs, manufactures, assembles, processes, and sells smart mobile devices, equipment and has significant interest in VR and mobile computing with extensive business reach in the greater Chinese market and globally.  With the global spread of COVID-19, HTC Corporation, a global leader in VR technology and equipment, and VR Education are working closely together to help alleviate current commercial and education issues created by the widespread self-isolation enforced by governments worldwide.

The Company has in place a share incentive plan (from initial admission of the Company to the AIM market of the London Stock Exchange and the Euronext Growth Market as regulated by Euronext Dublin) as adopted in March 2018 permitting the issue of options in respect of up to 10% of the Company's Ordinary Shares, in which the Company's employees, consultants, contractors and directors (including non-executive directors) are entitled to participate (the “ESOP”).

A list of the current holders of options pursuant to the ESOP and the relevant number of Ordinary Shares relating to such options are detailed in the table below.  Note that all option holders are employees of the Company save as indicated

Name

Options in respect of Ordinary Shares

Employees

2,554,586

Richard Cooper (Chairman)

1,000,000

Séamus Larrissey (Director)

910,940

Total Options Granted

4,465,526

 

The Company has an outstanding pool of 14,848,115 Ordinary Shares over which options pursuant to the ESOP may be granted. Assuming full issuance and exercise of the outstanding option pool, the issued share capital of the Company on a fully diluted basis would be €260,734.149 made up of 260,734,149 Ordinary Shares.

2. Dispensation from Rule 9 of the Takeover Rules

Under Rule 9 of the Takeover Rules, any person or persons acting in concert, whether by a series of transactions over a period of time or not, who:

  1. acquires 30% or more of the Ordinary Shares will be required to make a Mandatory Offer; or
  2. holds 30% or more of the Ordinary Shares is prohibited from acquiring more than 0.05% of the Ordinary Shares during any 12-month period, without making a Mandatory Offer.

HTC and the Company's Directors collectively hold 127,372,444 Ordinary Shares.  The aggregate shareholding of the Directors is 79,088,342 Ordinary Shares, as further detailed in the table below.

Director

Number of

Ordinary Shares held

Percentage of

Ordinary Shares

David Whelan

38,665,000

16.02%

Sandra Whelan

38,665,000

16.02%

Richard Cooper (held by Huntress (CI) Nominees Limited)

1,070,400

0.44%

Michael Boyce (held by HSDL Nominees Limited)

499,942

0.21%

Tony Hanway (held by Davycrest Nominees a/c 0138862)

100,000

0.04%

Seamus Larrissey

88,000

0.04%

Total

79,088,342

32.76%

 

Under the Takeover Rules, the Company being an associated company of HTC due to HTC’s 20% shareholding in the Company, the Directors are presumed to be persons acting in concert with, inter alia, HTC.  The aggregate percentage shareholding of HTC and the Directors is 52.76% of the issued share capital of the Company.  As HTC and the Directors are presumed to be acting in concert, the Company's directors and HTC are together limited, in aggregate, to acquiring 0.05% of the Ordinary Shares in any 12-month period to avoid triggering a Mandatory Offer.

Were the (i) Company to issue further options to the Company's Directors pursuant to the ESOP which options were subsequently exercised, or (ii) options previously issued to Directors pursuant to the ESOP exercised, there is a risk that the 0.05% threshold would be breached and, as a result, under Rule 9 of the Takeover Rules, the Concert Party would be required to make a Mandatory Offer, unless such Mandatory Offer is waived by the Panel. Equity compensation as part of a Director's remuneration package is market standard practice and has the benefit of aligning the Director's interests with Shareholders' interests.  Where the Company is unable to issue equity compensation to its Directors this could:

  1. curtail the Company's ability to attract and retain competent independent Directors; and
  2. result in Shareholders and / or proxy advisory firms taking a negative view of the Company's Director compensation arrangements,

     

    furthermore:

  3. any options currently held (or indeed awarded in future) by the Company's Directors may not be exercisable in accordance with the terms thereof without triggering a Mandatory Offer.

Therefore, the Company has sought from the Panel a waiver in respect of Rule 9 of the Takeover Rules.

The table below sets out the Concert Party maximum holding of Ordinary Shares (subject to the option grant limits as prescribed by the ESOP) on the assumption that all outstanding options were granted to and subsequently exercised by the Directors:

Name

Number of Ordinary Shares held

Options

Total

% of Units

HTC

48,284,102

48,284,102

18.70%

David Whelan

38,665,000

38,665,000

14.98%

Sandra Whelan

38,665,000

38,665,000

14.98%

Richard Cooper
(held by Huntress (CI)
Nominees Limited)

1,070,400

1,000,000 (currently held)

2,070,400

0.80%

Michael Boyce
(held by HSDL
Nominees Limited)

499,942

499,942

0.19%

Tony Hanway
(held by Davycrest
Nominees a/c 0138862)

100,000

100,000

0.04%

Séamus Larrissey

88,000

910,940 (currently held)

998,940

0.39%

Remaining Options to Directors

14,848,115

14,848,115

5.75%

Total Concert Party Holding

55.83%

Total Shareholding

241,420,508

Total Option Pool
available to Directors
(excludes options issued
to staff members already)

16,759,055

Fully Diluted Share Capital
(excluding adviser warrants
and options issued already
to staff members)

258,179,563

 

It is not currently the Company’s intention to award any additional options pursuant to the ESOP to the Directors.  It is envisaged that future grants, to the extent approved by the Board, shall be awarded to attract and retain competent employees and independent directors (to the extent required).

3. Waiver in respect of Rule 9 of the Takeover Rules

The Panel has agreed to provide a waiver in respect of Rule 9.1 of the Takeover Rules in respect of any mandatory offer obligation which may be incurred by the Concert Party by reason of an increase in their aggregate percentage shareholding of up to 55.83% as a result of the exercise by the Directors of options granted and to be granted to them, pursuant to the ESOP and on the basis as outlined in the table above, subject to the following conditions:

  1. the passing of the Whitewash Resolution, on a poll vote, by a majority of the Independent Shareholders of the Company to approve the maximum potential shareholding of the Concert Party of 55.83% of the issued Ordinary Shares in the capital of the Company; and
  2. the approval by the Panel of a circular to Shareholders which complies with the whitewash guidance note of Rule 9, as appropriate. This circular has been so approved (in this respect only) by the Panel.

4. Annual General Meeting and the Whitewash Resolution

A notice convening the Annual General Meeting is set out in the Appendix to this Circular, at which the Whitewash Resolution will be proposed.

The Annual General Meeting will take place on 21 August 2020.

The Whitewash Resolution is being proposed as an ordinary resolution and requires a simple majority of the votes of Independent Shareholders cast to be cast in favour on a poll in order for it to be passed.

5. Effect of not approving the Whitewash Resolution

Should Shareholders not vote in favour of the Whitewash Resolution set out in the Appendix to this Circular, the Company would be restricted from issuing options to the Company's Directors pursuant to the ESOP and existing options would not be exercisable in accordance with the terms thereof.  As you will be aware, equity compensation as part of a Director's remuneration package is market standard practice and has the benefit of aligning the Director's interests with Shareholders' interests.

If you are in any doubt about the contents of this document or as to the action you should take, you are recommended immediately to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant, or other independent financial adviser authorised pursuant to FSMA, or, in the case of Shareholders in a territory outside Ireland and the United Kingdom, from another appropriately authorised independent financial adviser.

6. Action to be taken in respect of the Annual General Meeting

For Shareholders who hold their Ordinary Shares in certificated form, you will find enclosed with this document a Form of Proxy for use by such Shareholders at the Annual General Meeting.  In light of the COVID-19 pandemic, you are requested to complete and sign the Form of Proxy and return it to the Company’s Registrars – Computershare, 3100 Lake Drive, Citywest Business Campus, Dublin 24, Ireland – so as to arrive no later than 48 hours before the time appointed for the Annual General Meeting.  The return of the Form of Proxy will not prevent you from attending the Annual General Meeting and voting in person should you wish to do so.

Alternatively, for those who hold Ordinary Shares in CREST, a Shareholder may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Computershare.  In each case the proxy appointment must be received by no later than 48 hours before the time appointed for the Annual General Meeting.  The completion and return of either an electronic proxy appointment notification or a CREST Proxy Instruction (as the case may be) will not prevent a Shareholder from attending and voting in person at the Annual General Meeting or any adjournment thereof, should such Shareholder wish to do so.

The Company strongly encourages all Shareholders to submit their Form of Proxy or CREST Proxy Instruction, appointing the chairman of the Annual General Meeting as proxy, rather than attend the Annual General Meeting in person.

7. Recommendation

The Board is proposing the Whitewash Resolution – a waiver of Rule 9 of the Takeover Rules by the Panel – for consideration by the Independent Shareholders.  As this waiver is in respect of general offer obligations under the Takeover Rules which HTC and the Directors collectively may incur, the Directors are not permitted to give any recommendation to the Independent Shareholders in respect of this resolution.

Instead, the Board confirms that Davy Corporate Finance has advised the Company that it (i) considers the authorities, which are being proposed in the Whitewash Resolution, to be in the best interests of the Company and the Independent Shareholders as a whole; and (ii) recommends that the Independent Shareholders vote in favour of the Whitewash Resolution. In providing this advice Davy Corporate Finance has taken into account the Board’s commercial assessment of the transactions which could be undertaken if this resolution were approved.

Subject to the Independent Shareholders approving the transactions provided for in the Whitewash Resolution, the Irish Takeover Panel has agreed to waive any obligation of the Concert Party to make an offer under Rule 9 of the Takeover Rules that might result from the transactions.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

Publication and Posting of this Circular and Form of Proxy

27 July 2020

Latest time and date for receipt of Forms of Proxy

11 a.m. on 19 August 2020

Annual General Meeting

11 a.m. on 21 August 2020

Notes:

  1. Each of the above times and/or dates is subject to change at the absolute discretion of the Company, Cairn and Davy. If any of the above times and/or dates should change, the revised times and/or dates will be announced through a Regulatory Information Service.

All of the above times refer to London time unless otherwise stated.

Definitions

“Act”

the Companies Act 2014

“Board”

the board of directors of the Company

“Cairn”

Cairn Financial Advisers LLP

“Concert Party”

Directors and HTC

“Davy”

J&E Davy, trading as Davy, including its associate Davy Corporate Finance

“Directors”

the directors of the Company

“ESOP”

has the meaning ascribed thereto in the letter from the Chairman of the Company

“HTC”

H.T.C. (B.V.I.) Corporation having its registered address at No. 88, Sec. 3, Zhongxing Rd., Xindian District, New Taipei City 231, Taiwan, a wholly-owned subsidiary of HTC Corporation

“HTC Corporation”

HTC Corporation having its registered address at 23 Xinghua Road, Taoyuan 330, Taiwan, R.O.C., listed on the Taiwan Stock Exchange

“Independent Shareholders”

all the holders of Ordinary Shares other than HTC and the Directors

“Ordinary Shares”

ordinary shares of €0.001 each in the capital of the Company

“Mandatory Offer”

a general offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights in the Company in accordance with Rule 9 of the Takeover Rules

“Panel”

the Irish Takeover Panel, established pursuant to the Irish Takeover Panel Act 1997

“Shareholders”

holders of Ordinary Shares

“Takeover Rules”

the Irish Takeover Panel Act 1997, Takeover Rules 2013

“Waiver”

the waiver from the Panel in respect of Rule 9 of the Takeover Rules, as further discussed in section 3 of the letter from the Chairman of the Company

“Whitewash Resolution”

the ordinary resolution to be passed by the Independent Shareholders’ in respect of Rule 9 of the Takeover Rules