AGM Information • Nov 7, 2013
AGM Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you have sold or otherwise transferred all of your Associated British Foods plc shares, please send this document, together with the accompanying documents (but not the personalised Form of Proxy), as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee.
Notice of the annual general meeting of Associated British Foods plc to be held at 11.00 am on Friday 6 December 2013 at Congress Centre, 28 Great Russell Street, London WC1B 3LS is set out in this document.
A Form of Proxy for use at the annual general meeting is enclosed. To be valid, the Form of Proxy should be completed and returned in accordance with the instructions to Equiniti at Aspect House, Spencer Road, Lancing BN99 6DA as soon as possible but in any event so as to arrive not later than 11.00 am on Wednesday, 4 December 2013.
Notice is hereby given that the seventy-eighth annual general meeting of Associated British Foods plc (the 'Company') will be held at Congress Centre, 28 Great Russell Street, London WC1B 3LS on Friday 6 December 2013 at 11.00 am to transact the following business:
To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:
To receive the accounts and the reports of the directors and the auditors thereon for the year ended 14 September 2013.
To receive and approve the directors' Remuneration report for the year ended 14 September 2013.
That a final dividend of 22.65p per ordinary share be paid on 10 January 2014 to holders of ordinary shares on the register of shareholders of the Company at the close of business on 6 December 2013.
To re-elect Emma Adamo as a director.
To re-elect John Bason as a director.
To re-elect Timothy Clarke as a director.
To re-elect Lord Jay of Ewelme as a director.
To re-elect Javier Ferrán as a director.
To re-elect Charles Sinclair as a director.
To re-elect Peter Smith as a director.
To re-elect George Weston as a director.
To appoint KPMG LLP as auditors of the Company (the 'Auditors') to hold office from the conclusion of this meeting until the conclusion of the next general meeting at which accounts are laid before the shareholders.
To authorise the directors to determine the Auditors' remuneration.
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To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
THAT the directors be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company ('Rights'):
provided that this authority shall expire on the date of the next annual general meeting of the Company or, if earlier, on 31 December 2014, save that the Company shall be entitled to make offers or agreements before the expiry of such authority which would or might require shares to be allotted or Rights to be granted after such expiry and the directors shall be entitled to allot shares and grant Rights pursuant to any such offer or agreement as if this authority had not expired; and all unexercised authorities previously granted to the directors to allot shares and grant Rights be and are hereby revoked.
To consider and, if thought fit, to pass the following two resolutions as special resolutions:
THAT, subject to the passing of Resolution 14 above, the directors be and they are hereby empowered pursuant to section 570 and section 573 of the Companies Act 2006 to allot equity securities (within the meaning of section 560 of that Act) for cash either pursuant to the authority conferred by Resolution 14 above or by way of a sale of treasury shares as if section 561(1) of that Act did not apply to any such allotment provided that this power shall be limited to:
and shall expire upon the expiry of the general authority conferred by Resolution 14 above, save that the Company shall be entitled to make offers or agreements before the expiry of such power which would or might require equity securities to be allotted after such expiry and the directors shall be entitled to allot equity securities pursuant to any such offer or agreement as if the power conferred hereby had not expired.
THAT a general meeting, other than an annual general meeting, may be called on not less than 14 clear days' notice.
To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
THAT:
By order of the board
Company Secretary 5 November 2013
Weston Centre 10 Grosvenor Street London W1K 4QY Registered in England and Wales Company No. 00293262
A final dividend for the year ended 14 September 2013 of 22.65p per ordinary share is recommended by the directors and is put to shareholders for their approval. If approved, the dividend will be paid on 10 January 2014 to holders of ordinary shares on the register of shareholders of the Company at the close of business on 6 December 2013 making a total dividend in respect of the year ended 14 September 2013 of 32.0p per ordinary share. In accordance with the Articles of Association of the Company, the shareholders cannot resolve to pay an amount greater than that recommended by the directors.
In accordance with the UK Corporate Governance Code (the 'Code') which recommends that all directors should be subject to annual election by shareholders, all of the Company's directors will be subject to re-election at this year's annual general meeting.
In proposing the re-election of the non-executive directors, the Chairman has confirmed that, following formal performance evaluation, each individual continues to make an effective and valuable contribution to the board and demonstrates commitment to the role. Details of the board evaluation process in relation to the directors can be found at page 49 of the annual report for the financial year ended 14 September 2013.
This year, when reviewing the independence of non-executive directors, the board took account of the fact that, as at 3 November 2013, Tim Clarke has served nine years as a director of the Company. The Code provides that length of service is a factor to consider when determining the independence of non-executive directors. The board has given careful consideration to this matter and has concluded that Tim Clarke remains independent. The length of Tim Clarke's service and the consequent knowledge and experience he brings to the role are greatly valued by the board. It is the board's view that Tim Clarke continues to demonstrate the qualities of independence in carrying out his role as a non-executive director and Senior Independent Director, supporting the executive team in an objective and independent manner. Biographical details of all the directors can be found on pages 44 and 45 of the
annual report for the financial year ended 14 September 2013.
Resolution 14 deals with the directors' authority to allot shares.
At the last annual general meeting of the Company held on Friday 7 December 2012, the directors were given authority to allot ordinary shares in the capital of the Company
The authority granted on Friday 7 December 2012 expires at the end of this year's annual general meeting.
In December 2008, the Association of British Insurers ('ABI') revised its guidelines on directors' authority to allot shares (in line with the recommendations of the report issued in November 2008 by the Rights Issue Review Group). The guidelines state that ABI members will permit, and treat as routine, resolutions seeking authority to allot shares representing up to two-thirds of the Company's issued share capital. The guidelines provide that the extra routine authority (that is the authority to allot shares representing the additional one third of the Company's issued share capital) can only be used to allot shares pursuant to a fully pre-emptive rights issue.
In light of these guidelines, the board considers it appropriate that directors be granted authority to allot shares in the capital of the Company up to a maximum nominal amount of £29,800,000 representing the guideline limit of approximately two-thirds of the Company's issued ordinary share capital as at 4 November 2013 (the latest practicable date prior to publication of this Notice). Of this amount, £14,900,000 (representing approximately one third of the Company's issued ordinary share capital) can only be allotted pursuant to a rights issue. The power will last until the conclusion of the next annual general meeting in 2014 or, if earlier, 31 December 2014.
The directors have no present intention of exercising this authority.
As at the date of this Notice the Company does not hold any ordinary shares in the capital of the Company in treasury.
Resolution 15 will give the directors authority to allot shares in the capital of the Company pursuant to the authority granted under Resolution 14 above for cash without complying with the pre-emption rights in the Companies Act 2006 in certain circumstances. In the light of the ABI guidelines described in relation to Resolution 14 above, this authority will permit the directors to allot:
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The directors have no present intention of exercising this authority. This authority will expire as with the general authority in Resolution 14 other than for pre-existing entitlements.
Resolution 16 is a resolution to allow the Company to hold general meetings (other than annual general meetings) on not less than 14 clear days' notice.
Before the introduction of the Companies (Shareholders' Rights) Regulations 2009 in August 2009, the minimum notice period permitted by the Companies Act 2006 for general meetings (other than annual general meetings) was 14 days. One of the amendments made to the 2006 Act by the Regulations was to increase the minimum notice period for general meetings of listed companies to 21 days, but with an ability for companies to reduce this period back to 14 days (other than for annual general meetings) provided that two conditions are met. The first condition is that the company offers a facility for shareholders to vote by electronic means. This condition is met if the company offers a facility, accessible to all shareholders, to appoint a proxy by means of a website. (Please refer to note 7 of this Notice of Meeting on page 5 of this document for details of the Company's arrangements for electronic proxy appointment.) The second condition is that there is an annual resolution of shareholders approving the reduction of the minimum notice period from 21 days to 14 days.
The board is therefore proposing Resolution 16 as a special resolution to approve 14 days as the minimum period of notice for all general meetings of the Company other than annual general meetings. The approval will be effective until the Company's next annual general meeting, when it is intended that the approval be renewed. The board will consider on a case-by-case basis whether the use of the flexibility offered by the shorter notice period is merited, taking into account the circumstances, including whether the business of the meeting is time-sensitive.
Review of remuneration structure The existing Associated British Foods Executive Share Incentive Plan 2003 (the 'ESIP 2003'), the Company's only executive share plan, expires in December 2013. The last grant of allocations under the ESIP 2003 will be made in November 2013. The Company is therefore proposing to introduce the new Associated British Foods Long Term Incentive Plan (the 'LTIP') to replace the ESIP 2003.
A summary of the rules of the LTIP is set out in the Appendix to this document on pages 7 and 8.
The rules of the LTIP will be available for inspection during the hours and at the locations set out in note 11 of this Notice of Meeting on page 6 below.
The board considers the Resolutions are likely to promote the success of the Company and are in the best interests of the Company and its shareholders as a whole. The directors unanimously recommend that you vote in favour of the Resolutions as they intend to do in respect of their own beneficial holdings which amount in aggregate to 3,954,594 shares representing approximately 0.5% of the existing issued ordinary share capital of the Company.
A member entitled to attend and vote at the meeting may appoint another person(s) (who need not be a member of the Company) to exercise all or any of his/ her rights to attend, speak and vote at the meeting. A member can appoint more than one proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights attaching to different shares held by him.
A proxy does not need to be a member of the Company but must attend the meeting to represent you. Your proxy could be the Chairman, another director of the Company or another person who has agreed to attend to represent you. Your proxy will vote as you instruct and must attend the meeting for your vote to be counted. Appointing a proxy does not preclude you from attending the meeting and voting in person.
A Form of Proxy (or notification of availability if registered to receive shareholder communications electronically) which may be used to make this appointment and give proxy instructions has been sent to all members who appeared on the register of members at the close of business on 30 October 2013. Details of how to appoint a proxy are set out in the notes to the Form of Proxy. If you do not have a Form of Proxy
and believe that you should have one, or if you require additional forms, please contact Equiniti, Aspect House, Spencer Road, Lancing BN99 6DA (Tel: 0871 384 2282 (UK only – calls to this number cost 8p per minute (excluding VAT) plus network extras) or +44 (0)121 415 7047 (from outside the UK); Textel: 0871 384 2255. Lines open 8.30 am to 5.30 pm, Monday to Friday). As an alternative to completing a hard copy Form of Proxy, proxies may be appointed electronically in accordance with the paragraph below.
In order to be valid, an appointment of proxy must be returned (together with any authority under which it is executed or a copy of the authority certified or in some other way approved by the directors) by one of the following methods:
and in each case must be received by the Company not less than 48 hours before the time of the meeting, excluding non-working days.
Please note that the Company takes all reasonable precautions to ensure no viruses are present in any electronic communication it sends out, but the Company cannot accept responsibility for loss or damage arising from the opening or use of any email or attachments from the Company and recommends that shareholders subject all messages to virus checking procedures prior to use. Any electronic communication received by the Company, including the lodgement of an electronic proxy form, that is found to contain any virus will not be accepted.
To change your proxy instructions you may return a new proxy appointment using the methods set out above. Where you have appointed a proxy using the hard copy Form of Proxy and would like to change the instructions using another hard copy Form of Proxy, please contact Equiniti, Aspect House, Spencer Road, Lancing BN99 6DA (Tel: 0871 384 2282 (UK only – calls to this number cost 8p per minute (excluding VAT) plus network extras) or +44 (0) 121 415 7047 (from outside the UK); Textel: 0871 384 2255. Lines open 8.30 am to 5.30 pm, Monday to Friday). Where two or more valid separate appointments of proxy are received in respect of the same share in respect of the same meeting, the one which is last sent shall be treated as replacing and revoking the other or others.
CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so by utilising the procedures described in the CREST Manual on the Euroclear website (www.euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed (a) voting 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. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a 'CREST Proxy Instruction') must be properly authenticated in accordance with Euroclear UK & Ireland Limited's ('EUI') specifications and must contain the information required for such instructions, as described in the CREST Manual. Regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, in order to be valid, the CREST message must be transmitted so as to be received by the issuer's agent (ID number – RA19) by the latest time(s) for receipt of proxy appointments specified in the Notice of Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in regulation 35(5) (a) of the Uncertificated Securities Regulations 2001.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. 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(s), to procure that his 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, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
As at 4 November 2013 (being the latest business day prior to the publication of this Notice), the Company's issued voting share capital consists of 791,674,183 ordinary shares, carrying one vote each. Therefore the total voting rights in the Company are 791,674,183.
A copy of this Notice has been sent for information only to persons who have been nominated by a member to enjoy information rights under section 146 of the Companies Act 2006 (a 'Nominated Person'). The rights to appoint a proxy cannot be exercised by a Nominated Person: they can only be exercised by the member. However, a Nominated Person may have a right under an agreement between him and the member by whom he was nominated to be appointed as a proxy for the meeting or to have someone else so appointed. If a Nominated Person does not have such a right or does not wish to exercise it, he may have a right under such an agreement to give instructions to the member as to the exercise of voting rights.
A member of the Company which is a corporation may authorise a person or persons to act as its representative(s)
at the annual general meeting. In accordance with the provisions of the Companies Act 2006, each such representative may exercise (on behalf of the corporation) the same powers as the corporation could exercise if it were an individual member of the Company, provided that they do not do so in relation to the same shares. It is no longer necessary to nominate a designated corporate representative.
The following documents will be available for inspection during normal business hours (Saturdays, Sundays and public holidays excepted) at the registered office of the Company and will be available at the place of the meeting from 15 minutes before the start of the meeting until its conclusion:
The content of this Notice of Meeting, details of the total number of shares in respect of which members are entitled to exercise voting rights at the meeting, the total voting rights that members are entitled to exercise at the meeting, and, if applicable, any members' statements, members' resolutions or members' matters of business received by the Company after the date of this Notice will be available on the Company's website (www.abf.co.uk).
To be entitled to attend and vote at the meeting, members must be registered in the register of members of the Company at 6.00 pm on Wednesday 4 December 2013 (or, if the meeting is adjourned, at 6.00 pm on the date which is two days prior to the adjourned meeting). Changes to entries on the register after this time shall be disregarded in determining the rights of persons to attend or vote (and the number of votes they may cast) at the meeting or adjourned meeting.
Members satisfying the thresholds in section 527 of the Companies Act 2006 can require the Company to publish a statement on its website setting out
any matter relating to (a) the audit of the Company's accounts (including the auditors' report and the conduct of the audit) that are to be laid before the meeting; or (b) any circumstances connected with an auditor of the Company ceasing to hold office since the last annual general meeting, that the members propose to raise at the meeting. The Company cannot require the members requesting the publication to pay its expenses. Any statement placed on the website must also be sent to the Company's auditors no later than the time it makes its statement available on the website. The business which may be dealt with at the meeting includes any statement that the Company has been required to publish on its website.
The Company must cause to be answered at the meeting any question relating to the business being dealt with at the meeting which is put by a member attending the meeting, except in certain circumstances, including if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered or if to do so would involve the disclosure of confidential information.
Voting on all resolutions will be conducted by way of a poll rather than a show of hands. This is a more transparent method of voting as member votes are to be counted according to the number of shares held. In line with many other public companies we will be asking shareholders who attend the annual general meeting in person or by proxy to vote on the resolutions at the annual general meeting using a hand-held electronic voting system. This will record all votes cast for each resolution and display them on a screen providing immediate detailed results for shareholders to see. As soon as practicable following the annual general meeting, the results of the voting at the meeting and the numbers of proxy votes cast for and against and the number of votes actively withheld in respect of each of the resolutions will be announced via a Regulatory Information Service and also placed on the Company's website (www.abf.co.uk).
You may not use any electronic address provided in this Notice of Meeting to communicate with the Company for any purposes other than those expressly stated.
Employees (including executive directors) of the Company and its subsidiaries ('Participants') may be granted conditional rights to receive ordinary shares in the Company ('Shares') which will be transferred to the Participant following vesting ('Allocations').
Allocations may only be granted within a period of 42 days commencing on (i) the date on which the LTIP is adopted or (ii) the date of announcement by the Company of its interim or final results (or as soon as practicable thereafter if the Company is restricted from being able to grant Allocations during such period). An Allocation may be granted at other times to a new employee, or if the board determines that exceptional circumstances exist which justify the grant of the Allocation.
Allocations may not be granted more than ten years after the LTIP is adopted.
Nothing is payable by Participants for the grant of Allocations.
Allocations are non-transferable (other than to a Participant's personal representatives following his death).
Participants are not entitled to receive any dividends declared in respect of Shares subject to an Allocation (or equivalent payments) prior to Shares being transferred to the individual following vesting.
4.1 Individual limit The maximum market value of the Shares over which a Participant may be granted an Allocation in any financial year of the Company shall not exceed an amount equal to three times the Participant's basic salary, normally calculated as at the start of the financial year (or the date on which a new employee commences employment).
The number of Shares that may be subject to Allocations and other outstanding options or awards granted within the previous ten years and the number of Shares issued for the purpose of options and awards granted within the previous ten years under any employees' share scheme adopted by the Company, may not exceed 10% of the Company's ordinary share capital in issue immediately prior to the proposed date of grant. This limit is reduced to 5% for Allocations, options and awards granted under discretionary schemes.
Any Allocation, option or award which the board has determined or which is granted on terms that it will only be satisfied with existing Shares will not be subject to or counted in calculating this limit. Treasury shares will count as new issue shares for the purposes of this limit for so long as institutional investor bodies consider that they should be so counted.
The board will specify prior to the date of grant the performance measures and targets which are to apply to Allocations. The performance measures will be assessed over a period of not less than three years ('Performance Period'). There will be
no provision for retesting. If the board determines that the level of vesting based on the performance measures is not appropriate in the circumstances it may reduce the vesting amount.
The board may alter a performance target if events happen that cause it to consider that the performance target is no longer a fair measure of the Company's performance, or if the Participant changes role such that the board determines that the performance target is no longer appropriate, provided that the revised target may not be materially less challenging.
6.1 Normal vesting In normal circumstances, Allocations will vest three years after the date of grant, provided that the Participant remains in office or employment with the Company or any subsidiary (the 'Group'), and to the extent that the relevant performance targets have been met. Where a first Allocation is granted to a new employee, that Allocation may be granted on terms that it will vest at the same time as other Allocations granted in the same financial year.
Where the vesting of an Allocation would be prohibited due to regulatory or other legal reasons, vesting shall be delayed.
If the board so determines, the vesting of an Allocation may be satisfied in whole or in part by a cash payment as an alternative to the issue or transfer of Shares.
In the event of a Participant ceasing to hold office or employment with the Group, or giving or receiving notice of cessation, prior to the start of the final year of the Performance Period the Allocation shall lapse, unless the board determines otherwise.
Where the date of cessation or notice occurs on or after the start of the final year of the Performance Period the board may determine that the Allocation shall not lapse where the reason for the cessation or notice is permanent disability, redundancy, retirement, the sale of a business or subsidiary, or death.
In the event that a Participant ceases to hold office or employment or gives or receives notice in circumstances where the Allocation does not lapse, an Allocation will normally continue and vest on the normal vesting date, unless the board brings forward vesting to the date of cessation. The extent of vesting shall be determined by reference to the Company's achievement of the performance measures, and the number of Shares in respect of which an Allocation vests will, unless the board determines otherwise, be prorated to reflect the time elapsed to the date of cessation.
The board may determine that Allocations will vest on the occurrence of certain corporate events, including a change of control of the Company, by way of offer or scheme of arrangement, and the voluntary winding-up of the Company.
In the event of a demerger of a substantial part of the Group's business, a special dividend or a similar event affecting the value of the Shares to a material extent, Allocations may vest or may be adjusted accordingly.
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The extent of vesting shall be determined by reference to the Company's achievement of the performance measures, and the number of Shares in respect of which an Allocation vests will, unless the board determines otherwise, be prorated to reflect the time elapsed to the date of the relevant event.
In the event of an internal reorganisation or where the board so agrees with an acquiring company, Allocations will be rolled over into awards over shares in the acquiring company of equivalent value.
Allocations may be adjusted following any variation of share capital of the Company.
The board may apply clawback where at any time within two years of vesting it determines that the financial results of the Company were misstated, or an error was made in assessing performance, that caused an Allocation to vest to a greater degree than it should have done. The board may also apply a clawback if it is discovered that the Participant committed, at any time prior to vesting, an act or omission that justified, or would have justified, summary dismissal.
The board may at any time alter or add to all or any of the provisions of the LTIP in any respect, provided that any change to the advantage of present or future Participants relating to eligibility, scheme limits, the basis of individual entitlement to, and the terms of, Shares or cash provided under the plan or the provisions for the adjustment of Allocations in the event of a variation of the Company's share capital must be approved in advance by the Company's shareholders in general meeting.
Any alteration or addition which is necessary or desirable in order to comply with or take account of the provisions of any proposed or existing legislation, law or other regulatory requirements or to take advantage of any changes in legislation, law or other regulatory requirements, or to obtain or maintain favourable taxation, exchange control or regulatory treatment of the Company, any subsidiary or any Participant or to make minor amendments to benefit the administration of the LTIP do not need prior approval of the Company's shareholders. No alterations to the disadvantage of Participants' subsisting rights can be made by the board without the approval of Participants holding Allocations over 75% of the total Shares subject to Allocations, or 75% of Participants attending a meeting called in respect of the proposed alteration.
Benefits under the LTIP are non-pensionable.
28 Great Russell Street London WC1B 3LS T +44 (0) 20 7467 1318 F +44 (0) 20 7467 1313 [email protected] www.congresscentre.co.uk
Weston Centre 10 Grosvenor Street London W1K 4QY Tel + 44 (0) 20 7399 6500 Fax + 44 (0) 20 7399 6580
www.abf.co.uk
Notice of Meeting | Appendix
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