Max Stock Announces Unilateral waiver of management fees; control of the Company and a new shareholders' agreement

CAESAREA, Israel, Feb. 9, 2023 /PRNewswire/ -- Max Stock Limited (TASE: MAXO) (the "Company") today reported the following update given to it by its controlling shareholders:

1.  Control of the Company

On February 8, 2023, Moose Holdco Ltd. ("Moose Holdco") and Ori Max Ltd. ("Ori Max") entered into a new shareholders' agreement (the "New Shareholders Agreement") in place of the shareholders' agreement dated September 10, 2020, whose primary terms and conditions are described in section 3.6 of the Company's prospectus (Ref. No: 2020-01-092029) (the "Prospectus" and the "Old Shareholders Agreement", respectively). Prior to the execution of the New Shareholders Agreement, Mr. Evan Charles Neumann (through a company wholly owned by him), irrevocably gave notice that he would no longer be party to an agreement between the Company's shareholders.

Accordingly, the Company no longer sees Mr. Evan Charles Neumann as part of the Company's core of control, and the Company's current controlling shareholders include Mr. Ori Max and Moose Holdco¹ (the "controlling shareholders", or with respect to this report - the "parties").

2.  Reduction of Management Fees

Moose Holdco unilaterally informed the Company that it is unilaterally and irrevocably waiving half of the management fees it is entitled to under the management agreement,² whereby, commencing as of January 1, 2023, each calendar quarter, Moose Holdco shall be entitled to quarterly management fees totaling ILS 250,000 per calendar quarter³. The rest of the terms of the management agreement shall remain unchanged.

3.  The New Shareholders Agreement

The primary terms of the New Shareholders Agreement, are as follows:

3.1.  Company's board of directors - The Company's board of directors shall include up to 8 directors. Voting by the shareholders for the appointment of directors shall be in accordance with the following mechanism:

3.1.1. Ordinary directors - (a) each party holding at least fifteen percent (15%) of the Company's outstanding share capital may recommend two directors; (b) a party holding 10%-15% may recommend one director; and (c) the party holding a greater number of Company shares may recommend an additional director.

3.1.2. External directors - a party holding at least 10% of the Company's capital may recommend one external director. In the event that any of the parties hold less than 10% of the Company's capital, then the party who holds at least 10% of the Company's shares may appoint the two external directors.

3.1.3. Independent directors - (a) at any time each one of the parties hold at least 10% of the Company's shares, then the identity of the independent director shall be consensually established; and (b) in the event that any of the parties hold less than 10% of the Company's shares, the party holding more than 10% may recommend the independent director.

3.2.  General meetings - the controlling shareholders shall hold a preliminary meeting prior to each one of the Company's general meetings (other than with respect to resolutions regarding the appointment of directors and controlling shareholder transactions).

Resolutions at the preliminary meeting shall be adopted through a majority of participating votes, save for extraordinary resolutions, which shall require a majority of 90% of all the parties' (actual) cumulative voting rights in the Company, inter alia, in connection with changes with capital, changing the incorporation documents, engagements with the CEO/directors and amending the remuneration policy.

3.3.  Controlling shareholder transactions - each party holding at least 10% of the Company's capital shall have a veto right on transactions with the other party / in which the other party has a personal interest in approving.

3.4.  Effectiveness of the shareholders' agreement - the New Shareholders Agreement became effective on its execution date and shall conclude upon the earlier of the following events: (1) When Moose Holdco's holdings decline to less than 10% of the Company's capital; (2) When Ori Max's holdings decline to less than 5% of the Company's capital; (3) When the parties fail to appoint even a single director (of the directors which are not external directors); and (4) When the Company becomes a private company.

3.5.  Non-competition - there has been no change to the non-competition and non-solicitation clause described in the Prospectus⁴.

This is an English translation of a Hebrew immediate report that was published on February 9, 2023 (Ref. No: 2023-01-013354 (hereinafter: the "Hebrew Version")). This English version is only for convenience purposes. This is not an official translation and has no binding force. Whilst reasonable care and skill have been exercised in the preparation hereof, no translation can ever perfectly reflect the Hebrew Version. In the event of any discrepancy between the Hebrew Version and this translation, the Hebrew Version shall prevail

About Max Stock
Max Stock is Israel's leading extreme value retailer, currently present in 56 locations throughout Israel. We offer a broad assortment of quality products for customers' everyday needs at affordable prices, helping customers "Dream Big, Pay Small". For more information, please visit https://ir.maxstock.co.il

Company Contacts:
Talia Sessler,
Chief Corporate Development and IR Officer
[email protected]

¹ For additional details regarding the holding structure of Moose Holdco see Note 1 to the Company's immediate report dated January 5, 2023 (Ref. No: 2023-01-003283), hereby included by way of reference.
² For more information about the management services agreement Moose Holdco has entered into with the Company, see Regulation 21 of the Company's 2021 annual report (Ref. No: 2022-01-028347) (the "2021 Report")), hereby included by way of reference.
³ Or a pro-rated share of this amount for any part of a calendar quarter in which the management agreement is effective, plus VAT (rather than ILS 500,000 for each calendar quarter).

For additional details, see section 3.6 of the Prospectus.

SOURCE Max Stock Limited