Pre-Annual General Meeting Information • Apr 14, 2020
Pre-Annual General Meeting Information
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If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should immediately seek your own advice from an independent financial adviser authorised under the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your shares in the Company, please pass this document together with the accompanying form of proxy to the purchaser or transferee, or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares.
Notice of the Annual General Meeting of the Company to be held at the Company's offices in the Boardroom at Avebury House, 201-249 Avebury Boulevard, Milton Keynes, Buckinghamshire, MK9 1AU on Thursday 21 May 2020 at 12 noon is set out in this document.
Due to the COVID-19 pandemic, and in line with Government rules, we encourage all shareholders to complete and submit a proxy form or vote using the internet, in accordance with the instructions printed on the enclosed form. The proxy form must be completed, signed and received by 12 noon on Tuesday 19 May 2020.
You are advised to refer to the Company's website essentraplc.com where the latest information relating to the Company is available.
Notice is hereby given that the 2020 Annual General Meeting ("AGM") of Essentra plc (the "Company") will be held at the Company's offices in the Boardroom at Avebury House, 201-249 Avebury Boulevard, Milton Keynes, Buckinghamshire, MK9 1AU on Thursday 21 May 2020 at 12 noon.
A form of proxy for use in connection with this meeting is enclosed with this document. Please fill in the proxy form and return it to the registrars as soon as possible. They must receive it by 12 noon on Tuesday 19 May 2020. Alternatively you may vote using the internet. You will be asked to consider and pass the resolutions below.
The Board considers that all the resolutions to be put to the AGM are in the best interests of the Company and its shareholders as a whole. The Board will be voting in favour of them in respect of their own shareholdings and unanimously recommends that you do so as well.
All resolutions will be put to vote on a poll. This will result in a more accurate reflection of the views of shareholders by ensuring that every vote is recognised. On a poll, each shareholder has one vote for every share held.
Resolutions 1 to 12 (inclusive) will be proposed as ordinary resolutions.
Resolutions 13 to 16 (inclusive) will be proposed as special resolutions.
The Board be generally and unconditionally authorised to allot shares in the Company and to grant rights to subscribe for or convert any security into shares in the Company:
(a) up to a nominal amount of £21,934,598 (such amount to be reduced by the nominal amount allotted or granted under paragraph (b) below in excess of such sum); and (b) comprising equity securities (as defined in section 560(1) of the Companies Act 2006) up to a nominal amount of £43,869,196 (such amount to be reduced by any allotments or grants made under paragraph (a) above) in connection with an offer by way of a rights issue: (i) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and (ii) to holders of other equity securities as required by the rights of those securities or as the Board otherwise considers necessary, and so that the Board may impose any limits or restrictions and make any arrangements which it considers necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter, such authorities to apply until the end of next year's AGM (or, if earlier, until the close of business on 21 July 2021) but, in each case, during this period the Company may make offers and enter into agreements which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after the authority ends and the Board may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not ended.
That if resolution 12 is passed, the Board be given power to allot equity securities (as defined in the Companies Act 2006) for cash under the authority given by that resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such power to be limited:
That if resolution 12 is passed, the Board be given the power, in addition to any power granted under resolution 13, to allot equity securities (as defined in the Companies Act 2006) for cash under the authority granted under paragraph (a) of resolution 12 and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such power be:
(a) limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of £3,290,189; and (b) used only for the purposes of financing a transaction which the Board of the Company determines to be an acquisition or other capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this notice or for the purposes of refinancing such a transaction within six months of its taking place, such power to apply until the end of next year's AGM (or, if earlier, until the close of business on 21 July 2021) but, in each case, during this period the Company may make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the power ends and the Board may allot equity securities (and sell treasury shares) under any such offer or agreement as if the power had not ended.
That the Company be authorised for the purposes of section 701 of the Companies Act 2006 to make one or more market purchases (as defined in section 693(4) of the Companies Act 2006) of its ordinary shares of 25 pence each ("Ordinary Shares"), such power to be limited:
(a) to a maximum number of 26,321,517 Ordinary Shares; (b) by the condition that the minimum price which may be paid for an Ordinary Share is the nominal amount of that share and the maximum price which may be paid for an Ordinary Share is the highest of: (i) an amount equal to 5% above the average market value of an Ordinary Share for the five business days immediately preceding the day on which that Ordinary Share is contracted to be purchased; and (i) the higher of the price of the last independent trade and the highest current independent bid on the trading venues where the purchase is carried out, in each case, exclusive of expenses; such power to apply until the end of next year's AGM (or, if earlier, 21 July 2021) but in each case so that the Company may enter into a contract to purchase Ordinary Shares which will or may be completed or executed wholly or partly after the power ends and the Company may purchase Ordinary Shares pursuant to any such contract as if the power had not ended.
That a general meeting other than an Annual General Meeting may be called on not less than 14 clear days' notice.
Registered Office: Avebury House 201–249 Avebury Boulevard Milton Keynes, Buckinghamshire MK9 1AU
Registered in England and Wales No. 05444653
The following documents will be available for inspection at the Company's registered office at Avebury House, 201–249 Avebury Boulevard, Milton Keynes, Buckinghamshire MK9 1AU between 8.30 am and 5.00 pm on any weekday (Saturdays, Sundays and public holidays excluded) from the date of this Notice until the date of the AGM from 15 minutes before the AGM until it ends:
In view of COVID-19, shareholders are advised to contact the Company Secretary before travelling to inspect the documents, in the event that it may not be possible to access the premises and to allow alternative arrangements to be made. Please email [email protected].
1. Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A shareholder may appoint more than one proxy in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A proxy need not be a shareholder of the Company.
A proxy form which may be used to make such appointment and give proxy instructions accompanies this notice.
If you do not have a proxy form and believe that you should have one, or if you require additional forms, please contact Computershare Investor Services Plc on 0370 703 6394.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's Register of members in respect of the joint holding (the first named being the most senior).
2. To be valid, any proxy form or other instrument appointing a proxy must be received by post (during normal business hours only), by hand at Computershare Investor Services Plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or, if you prefer, electronically via the internet at computershare.com or, if you are a CREST member, via CREST, in each case no later than Tuesday 19 May 2020 or not less than 48 hours before any adjourned meeting.
5. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a "Nominated Person") may, under an agreement between him/her and the shareholder by whom he/ she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
6. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 2 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.
8.As at 30 March 2020 (being the last business day prior to the publication of this Notice), the Company holds 913,991 shares as treasury shares within the meaning of section 724 of the Companies Act 2006, representing approximately 0.35% of the total ordinary share capital of the Company in issue (excluding treasury shares). The Company's issued share capital consists of 264,129,170 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 30 March 2020 are 263,215,179.
9. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that the CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, were applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
accounts and reports were laid in accordance with section 437 of the Companies Act 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required under section 527 of the Companies Act 2006 to publish on a website.
The notes on the following pages give an explanation of the proposed resolutions.
Resolutions 1 to 12 are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the resolution.
Resolutions 13 to 16 are proposed as special resolutions. This means that for each of those resolutions to be passed, at least three-quarters of the votes cast must be in favour of the resolution.
Resolution 2 seeks shareholder approval for the Remuneration Committee Chairman's letter and the Annual Report on Remuneration as set out in the 2019 Annual Report.
In accordance with the UK Corporate Governance Code all of the Directors will retire at the AGM and, with the exception of Lorraine Trainer, all directors are offering themselves for election or re-election.
Biographies of the Directors seeking election or re-election, together with an explanation of their contribution and importance to the Company's long-term sustainable success to the Company, can be found on pages 8
to 10 of this Notice and at essentraplc. com. The Board is satisfied that each of the Directors standing for election or re-election continues to perform effectively, displays relevant skills and knowledge and demonstrates commitment to his or her role.
The Board has decided to put PricewaterhouseCoopers LLP forward to be re-appointed as the Auditor.
Paragraph (a) of this resolution would give the Directors the authority to allot ordinary shares or grant rights to subscribe for or convert any securities into ordinary shares up to an aggregate nominal amount equal to £21,934,598 (representing 87,738,393 ordinary shares of 25p each). This amount represents approximately one-third of the issued ordinary share capital (excluding treasury shares) of the Company as at 30 March 2020, the latest practicable date prior to publication of this Notice.
In line with guidance issued by the Investment Association, paragraph (b) of this resolution would give the Directors authority to allot ordinary shares or grant rights to subscribe for or convert any securities into ordinary shares in connection with a rights issue in favour of ordinary shareholders up to an aggregate nominal amount equal to £43,869,196 (representing 175,476,786 ordinary shares), as reduced by the nominal amount of
any shares issued under paragraph (a) of this resolution. This amount (before any reduction) represents approximately two-thirds of the issued ordinary share capital (excluding treasury shares) of the Company as at 30 March 2020, the latest practicable date prior to publication of this Notice.
The authorities sought under paragraphs (a) and (b) of this resolution will expire at the earlier of 21 July 2021 and the conclusion of the AGM of the Company held in 2021.
The Directors have no present intention to exercise either of the authorities sought under this resolution. However, if they do exercise the authorities, the Directors intend to follow Investment Association recommendations concerning their use (including as regards the Directors standing for re-election in certain cases).
As at 30 March 2020 913,991 ordinary shares were held by the Company in Treasury representing 0.35% of the issued ordinary share capital (excluding treasury shares).
Resolutions 13 and 14 will be proposed as special resolutions, each of which requires a 75% majority of the votes to be cast in favour. They would give the Directors the authority to allot ordinary shares (or sell any ordinary shares which the Company elects to hold in treasury) for cash without first offering them to existing shareholders in proportion to their existing shareholdings.
The power set out in resolution 13 would be, similar to previous years, limited to allotments or sales in connection with pre-emptive offers and offers to holders of other equity securities if required by the rights of those shares or as the Board otherwise considers necessary, or otherwise up to an aggregate nominal amount of £3,290,189 (representing 13,160,758 ordinary shares). This aggregate nominal amount represents approximately 5% of the issued ordinary share capital of the Company (excluding treasury shares) as at 30 March 2020, the latest practicable date prior to publication of this Notice.
In respect of the power under resolution 14(b), the Directors confirm their intention to follow the provisions of the Pre-Emption Group's Statement of Principles regarding cumulative usage of authorities within a rolling three-year period where the Principles provide that usage in excess of 7.5% of the issued ordinary share capital of the Company (excluding treasury shares) should not take place without prior consultation with shareholders.
Resolution 14 is intended to give the Company flexibility to make non pre-emptive issues of ordinary shares in connection with acquisitions and other capital investments as contemplated by the Pre-Emption Group's Statement of Principles. The power under resolution 15 is in addition to that proposed by resolution 13 and would be limited to allotments or sales of up to an aggregate nominal amount of £3,290,189 (representing 13,160,758 ordinary shares) in addition to the power set out in resolution 14. This aggregate nominal amount represents an additional 5% of the issued ordinary share capital of the Company (excluding treasury shares) as at 30 March 2020, the latest practicable date prior to publication of this Notice.
The power under resolutions 13 and 14 will expire at the earlier date of 21 July 2021 and the conclusion of the AGM of the Company held in 2021.
Authority is sought for the Company to purchase up to 10% of its issued Ordinary Shares (excluding any treasury shares), renewing the authority granted by the shareholders at previous Annual General Meetings. The Company purchased no Ordinary Shares in the period from the last Annual General Meeting to 30 March 2020 under the existing authority.
The Directors have no present intention of exercising the authority to make market purchases, however the authority provides the flexibility to allow them to do so in the future. The Directors will exercise this authority only when to do so would be in the best interests of the Company, and of its shareholders generally, and could be expected to result in an increase in the earnings per share of the Company.
Ordinary Shares purchased by the Company pursuant to this authority may be held in treasury or may be cancelled. The Directors will consider holding any Ordinary Shares the Company may purchase as treasury shares. The Company currently has 913,991 Ordinary Shares in treasury. The minimum price, exclusive of expenses, which may be paid for an Ordinary Share is its nominal value. The maximum price, exclusive of expenses, which may be paid for an Ordinary Share is the highest of (i) an amount equal to 5% above the average market value for an Ordinary
Explanatory Notes to the Notice of Annual General Meeting continued
Share for the five business days immediately preceding the date of the purchase and (ii) the higher of the price of the last independent trade and the highest current independent bid on the trading venues where the purchase is carried out at the relevant time.
The Company has options outstanding over 7,312,413 Ordinary Shares, representing 2.78% of the Company's ordinary issued share capital (excluding treasury shares) as at 30 March 2020. If the existing authority given at the 2019 AGM and the authority now being sought by resolution 15 were to be fully used, these would represent 2.53% of the Company's ordinary issued share capital (excluding treasury shares) at 30 March 2020, the latest practicable date prior to the publication of this Notice.
The authority will expire at the earlier date of 21 July 2021 and the conclusion of the AGM of the Company held in 2021.
The Companies (Shareholders' Rights) Regulations 2009 have increased the notice period required for general meetings of the Company to 21 days unless shareholders approve a shorter notice period, which cannot, however, be less than 14 clear days. AGMs will continue to be held on at least 21 clear days' notice.
Before the coming into force of the Companies (Shareholders' Rights) Regulations on 3 August 2009, the Company was able to call General Meetings other than an AGM on 14 clear days' notice without obtaining such shareholder approval. In order to preserve this ability, resolution 16 seeks such approval.
The approval will be effective until the Company's next AGM, when it is intended that a similar resolution will be proposed.
The shorter 14 clear days' notice period will not be used as a matter of routine for such meetings, but only where such flexibility is merited by the business of the meeting and thought to be in the interests of shareholders as a whole.
Note that the changes to the Companies Act 2006 mean that, in order to be able to call a general meeting on less than 21 clear days' notice, the Company must make a means of electronic voting available to all shareholders for that meeting.
Essentra is continuing to monitor the developments surrounding COVID-19 and will consider all appropriate guidelines issued by the UK Government ahead of the AGM and Essentra urges shareholders to do the same. You should vote through the use of proxies or voting electronically on the Resolutions as described in this Notice of Meeting and are asked to adhere to Government rules with regards to travel and gatherings. Please check the Company's website essentraplc.com for the latest information.
Personal data provided by shareholders at or in relation to the AGM (including names, contact details, votes and shareholder Reference Numbers) will be processed in line with the Company's privacy policy which is available at essentraplc.com/privacy.
Chairman Appointed: 23 December 2015 Committees: 2 3 5
Paul brings a wealth of experience to Essentra gained in increasingly senior operational and strategic executive roles alongside serving on a number of Boards in a non-executive capacity for more than 20 years. Paul continues to use his experience to oversee the development of Essentra's strategy and the effectiveness of its operations as the Company continues to focus on delivering longterm sustainable value for all our stakeholders. Paul's outstanding track record underscores the breadth of experience he brings to the Company.
Paul joined the Board as Chairman designate in December 2015 and was appointed Chairman following the 2016 AGM. Paul is also Chairman of McCarthy & Stone and a number of smaller private limited companies. Paul was previously Chairman of the FTSE 250 company John Laing Infrastructure Fund, Greenenergy – the second largest private company in the UK – and Knight Square Holdings. From 2002 – 2010, Paul was Chief Executive of the support services company VT Group plc and from 1990-1997, Chief Executive of Graseby plc. He was previously also the Group Managing director of Balfour Beatty, President of the Society of maritime Industries, the BSA and the Engineering Employers Federation.
Chief Executive Appointed: 2 January 2017 Committees: 2 4
Paul has spent more than two decades working in a variety of executive positions for international manufacturing companies and combines strong commercial and operational leadership with a detailed understanding of company turnarounds. Paul has an outstanding record of driving growth through acquisition and development and delivery of clear vision and corporate strategy leading to material improvements in financial performance. Whilst working at Coats Paul built the momentum to position the business as an innovative and global industry leader. Paul's extensive understanding of international manufacturing transformation and strategy execution is highly relevant to Essentra as it continues to strive for long-term growth.
Paul joined Essentra from Coasts Group plc ("Coats") – the world's leading industrial thread manufacturer – where he was Group Chief Executive, from January 2020. Prior to this he was Group Chief Executive of the global performance materials business Low & Bonar PLC, prior to which he was Managing Director of Unipart International, the leading European automotive aftermarket supplier. Since January 2015, Paul has served as a Non-Executive Director of Tate & Lyle plc and was appointed as the Senior Independent Director in July 2019.
He was previously a Non-Executive Director of Brammer plc from 2006 to 2010.
Lily brings considerable corporate finance and accounting experience to working within the manufacturing and engineering sectors for nearly 20 years. Lily began her career with a Chinese investment firm before emigrating to Australia to complete an MBA.
She brings a proven track record of international experience in our sectors which, together with her strong people focus, are a good match for us as we continue to restore Essentra to sustainable, profitable growth.
Chief Financial Officer, Xaar Plc Group, a FTSE listed inkjet technology developer and manufacturer of industrial inkjet printheads, before which she was Chief Financial Officer, Smiths Detection at Smiths Group Plc.
Directors' Biographies continued
Senior Independent Director Appointed: 23 April 2015 Committees: 1 2 3
Tommy has considerable experience in international sales, marketing, distribution and business support services, built up over a successful career as Chief Executive of DCC plc, headquartered in Dublin. Tommy brings significant experience to Essentra, particularly in growing diverse businesses both organically and via acquisition. Other areas of expertise include governance, risk and compliance from his role as Chief Executive. This proven track record brings a strong commercial perspective to the Board, his knowledge of Essentra, now as longest standing Board member, and his Senior Independent Director responsibilities, make him a valuable member.
Tommy was the Chief Executive of DCC plc from May 2008 to his retirement in 2017.
Non-Executive Director Appointed: 1 June 2019 Committees: 1 2 3 4
Nicki brings extensive advisory experience to Essentra, having provided Board counsel to many UK and international businesses for more than 25 years as an executive remuneration consultant. Through her exposure to a variety of different industries Nicki is already making a substantive commercial contribution to the Board both in terms of experience, skills and competency. Her extensive experience in remuneration and in depth knowledge corporate governance regarding remuneration matters, make her an invaluable member of the Board particularly with regard to the role as Chairman of the Remuneration Committee, to which she will be appointed after the 2020 AGM.
Nicki has been a Partner of Deloitte LLP since 2011 until her retirement in early 2019, and led the Deloitte 'Women on Boards' programme, as well as teaching a number of programmes for Non-Executive Directors. Nicki is a Chartered Accountant and combines her Board work with advice on senior executive career strategy and development as a Partner in Stork & May, a career strategy advisor. Additionally, Nicki was previously a member of the Remuneration Committee of the Institute of Chartered Accountants England and Wales.
Non-Executive Director Appointed: 1 June 2017 Committees: 1 2 3 4 5
Mary brings a wealth of accounting, finance and international management to Essentra. Mary's focus on finance, risk and compliance is significant to Board discussions as we continue to focus on the strength and corporate governance improvement programme, as reflected in her position as the Chairman of the Audit and Risk Committee. From 1 January 2019 Mary was appointed as the Board Employee Champion and has been instrumental in bringing the 'Voice of the Employee' to the Boardroom.
Mary is a Chartered Accountant and was a Partner of Deloittes LLP from 1987 to 2013. Mary is currently a Non-Executive Director of Travelzoo plc and the Chair of their Audit & Risk Committee and also a Non-Executive Director and Chair of the Audit Committee for Mitie plc. Mary has previously served as a Non-Executive Director of Ferrexpo plc, Cape plc – a global industrial services company, and of London 2012 – the London Development Agency, Woodford Investment Managers, Crown Agents Ltd and Crown Agents Bank Ltd, Non-Executive Director and Chair of the Audit & Risk Committee of the Department of Transport, Chair of the Oversight Committee of Saranac Partners, a wealth management partnership.
Non-Executive Director Appointed: 1 June 2017 Committees: 2 3 4 5
Ralf brings extensive international executive experience in the packaging industry gained over many years and through living and working across three continents. His considerable experience in financial, commercial and strategic roles continues to make Ralf a valuable member of the Board. Ralf's has considerable interest, passion and experience in improving ESG matters and has been appointed as the Chair of the Sustainability Committee. This interest will be an asset to Essentra. Additionally Ralf has been appointed as the second Non-Executive Director to lead the Board Employee Champion programme. With his understanding of various working cultures, the Board believes Ralf brings a lot of value to this specific agenda point.
Ralf is currently a Non-Executive Director of AptarGroup Inc – leader in the global packaging dispensing systems industry and of Huhamaki Oyj – global specialists in food packaging. Aptar is headquartered in Crystal Lake, Illinois and listed on the NYSE. Huhtamaki is listed on the Helsinki NASDAQ and headquartered in Helsinki. Ralf is currently supporting Private Equity firms as senior advisor and operating partner.
From 2010-2017 he was a member of Amcor's executive team and President for the Asia and Pacific Flexible Packaging Business Group. Prior to which he worked in a number of increasingly senior operational, strategic and management roles.
He was previously a Non-Executive Director of AMVIG, a tobacco packaging leader in China, listed on the Hong Kong Stock Exchange.
Essentra plc Avebury House 201–249 Avebury Boulevard Milton Keynes Buckinghamshire MK9 1AU United Kingdom
Telephone: +44 (0)1908 359100 Fax: +44 (0)1908 359120 Email: [email protected] essentraplc.com
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