AGM Information • Feb 24, 2017
AGM Information
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Welcome to NCC AB's Annual General Meeting (AGM) Wednesday April 5, 2017, at 4:30 p.m. (CET) Location: Kungliga Musikhögskolan (Royal College of Music), Valhallavägen 105, Stockholm. Registration at the Meeting will begin at 3:30 p.m. (CET) when refreshments will be served.
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The nearest subway station is Stadion (Red Line No. 14). The No. 4 and No. 72 bus lines stop at the Royal College of Music.
To be entitled to participate in the business of the AGM, shareholders shall:
Shareholders whose shares are held in the name of a trustee with a bank or a stockbroker must temporarily re-register the shares in their own name at Euroclear Sweden AB to be entitled to participate in the AGM. Such registration must be completed no later than Thursday, March 30, 2017, and must be requested from the trustee in ample time prior to this date.
Notification can be made by regular mail to NCC AB, c/o Euroclear Sweden AB, Box 191, SE-101 23 Stockholm, via NCC's website www.ncc.se or by telephone to +46 8 402 92 54. Notification shall include name, personal identification number (corporate registration number), address and telephone number, as well as, where appropriate, the number of advisors who will accompany the shareholder. If participation is to be based on a power of attorney, such a document must also be submitted in connection with notification of intention to attend the AGM. A form for notifying power of attorney is available on NCC's website www.ncc.se/arsstamma2017 and will be sent free of charge to those shareholders who request such a form and notify their regular mail address.
of the Board's account of the work conducted by the Board.
well as a proposal that the Board be assigned, by approaching the government, to make the government aware of the desirability to amend the Companies Act and thus make such representation possible.
"A former government minister may not be appointed a member of the Board until two years have passed from the time the person concerned stepped down from his/her assignment.
"Other publicly elected, fully remunerated politicians may not be appointed a member of the Board until one year has passed from the time the person concerned stepped down from his/her assignment, unless extraordinary reasons give rise to an alternative course of action."
27. A proposal by an individual shareholder that the Board be tasked, by approaching the government, to bring to its attention the need of the introduction of a nationwide period of quarantine for politicians.
The Nomination Committee elected by the 2016 AGM has submitted the following motions regarding items 2 and 12-15.
ceives SEK 1,100,000 and each other non-executive member receives SEK 500,000. The proposed fees concerning the Chairman and for each non-executive member are accordingly unchanged. The proposition represents an increase of SEK 500,000 in total director fees, since it is proposed that the Board of Directors be expanded by one member. It is proposed that fees be paid to members of the Audit Committee, whereby the chairman of the Committee will receive SEK 175,000 and each other Committee member will receive SEK 125,000. The auditors will be remunerated in return for approved invoices.
in respect of 2017 be reduced by 10 percentage points to 50 percent of fixed salary for the CEO and to 30-40 percent of fixed salary for other members of the EMG.
The Board proposes that the AGM resolve to introduce a long-term performance-based incentive program for senior executives and key personnel within the NCC Group ("LTI 2017"). In all significant respects, the structure of this program complies with the long-term performance-based incentive program adopted by the AGM on April 12, 2016. The Board is of the opinion that incentive programs of this type are of benefit to the company's long-term development. The purpose of LTI 2017 is to ensure a focus on the company's long-term profitability and growth and to minimize the number of worksite accidents.
It is proposed that LTI 2017 encompasses a total of approximately 180 participants within the NCC Group. LTI 2017 is a three-year performance-based program under which the participants will be allotted, free of charge, performance-based share awards that provide entitlement to Series B shares and to performancebased synthetic shares that provide entitlement to cash remuneration in accordance with the terms, conditions and principles described below. In view of the introduction of LTI 2017, the maximum short-term variable remuneration payable to the CEO and other members of the EMG will be adjusted in the manner stipulated in Item 17 above. For other participants in LTI 2017, the maximum short-term variable remuneration will be reduced by 5 to 10 percentage points.
Share awards and synthetic shares are subject to the following terms and conditions:
• Share awards and synthetic shares will be allotted free of charge a certain time after the AGM.
• Share awards or synthetic shares may not be transferred or pledged.
• Each share award provides the holder with entitlement, free of charge, to receive one Series B share in the company three years after allotment of the share award ("the Vesting Period").
• Following the Vesting Period, each synthetic share will entitle the holder to receive cash payment corresponding to the price of the NCC Series B share at the date of payment.
• A prerequisite for entitlement to receive shares on the basis of share awards or receive cash payment on the basis of synthetic shares, subject to certain exceptions, is that the participant is still employed by the NCC Group on the day of the 2020 AGM.
• In order to equate the participants' interests with those of the shareholders, the company will compensate the participants for dividends paid for the 2017, 2018 and 2019 fiscal years, insofar as such dividends exceed the level stipulated in NCC's dividend policy, by paying them a corresponding cash amount.
• Share awards or synthetic shares may be issued by the company or other Group companies.
The number of shares and the cash amount that is finally received depends on the extent to which certain predetermined targets are achieved during the Vesting Period. The targets that are proposed for LTI 2017 pertain to the operating margin and growth for the NCC Group during the years 2017-2019 in relation to earnings and growth targets set by the Board, as well as a reduction in the number of worksite accidents by year-end 2019. Performance targets for allotment of shares and the payment of cash include both a threshold that has to be achieved for any allotment or payment to be made at all, and a ceiling, above which no additional allotment or payment will occur. The outcome between the threshold and the ceiling is linear. The performance targets will be measured during the period January 1, 2017 through December 31, 2019.
The participants are divided into three categories: CEO and other members of the EMG, business area management, and other key personnel. The number of share awards and synthetic shares that a participant may be allotted depends on the participants' gross annual salary and the category to which the participant belongs.
For each participant, the Board will establish an allotment value relative to the participant's annual salary. The allotment value is 50 percent of annual salary for the CEO, 30 percent of annual salary for other members of the EMG and either 15 percent or a maximum of 30 percent of annual salary for other key personnel. The share price that is to form the basis for calculating the number of share awards and synthetic shares is to correspond to the average last price paid during a period of ten trading days immediately following the date of the 2017 AGM when the share is traded. The individual allotment value is thereafter divided by the share price in order to arrive at the total number of awards per participant, of which half will be allotted in the form of share awards and half in the form of synthetic shares.
The purpose of LTI 2017 is to ensure a focus on NCC's long-term profitability, growth and to provide prerequisites for retaining and recruiting key personnel, to provide competitive remuneration and to enhance the community of interests among shareholders and key personnel by encouraging the ownership of shares in the company. An additional reason for LTI 2017 is to minimize the number of worksite accidents in the NCC Group. Against this background, the Board of Directors believes that the introduction of LTI 2017 will have a positive impact on the Group's continued development and that LTI 2017 will thus benefit both the shareholders and the company.
Within the framework of the specified terms, conditions and guidelines, the Board is to be responsible for the more detailed design and management of LTI 2017. In this connection, the Board is to be entitled to make any adjustments required to fulfill special regulations or market conditions outside Sweden.
The Board is also to be entitled to make any other adjustments should material changes occur in the NCC Group or its business environment that would entail that the decided terms and conditions for allotment and the opportunity to exercise the share awards or the synthetic shares in accordance with LTI 2017 no longer be deemed viable. Prior to finally determining allotment of Series B shares on the basis of share awards and payment on the basis of synthetic shares, the Board will assess whether the outcome of LTI 2017 is reasonable. This assessment will be conducted in relation to the company's financial earnings and position, conditions in the stock market and other circumstances and, should the Board decide that it is not reasonable, the number of shares to be allotted and the cash payment will be reduced.
LTI 2017 has been initiated by the NCC Board and formulated in accordance with the guidelines decided for LTI 2016. The change that is proposed is that a changed financial performance target be introduced, which is intended to contribute to achievement of NCC Group's strategic growth and profitability objectives.
Assuming a share price of SEK 225.4 and the maximum outcome in accordance with LTI 2017 in terms of both shares and cash amount, it is estimated that the cost of LTI 2017, including costs for social security fees, will be SEK 74.1 M, corresponding to the value of approximately 0.4 percent of the total number of shares in the company on December 31, 2016. At 50 percent fulfillment of the targets and a share price of SEK 225.4, the total cost of LTI 2017, based on the above principles, is estimated at SEK 37.0 M. At maximum outcome, including costs for social security fees, LTI 2017 could encompass 0.8 percent of the total number of shares in the company.
The value that a participant may receive at maximum allotment of Series B shares and maximum cash payment is capped at an amount per share that corresponds to 400 percent of the share price, calculated on the basis of the average last price paid during a period of ten trading days immediately following the date of the 2017 AGM, a period when the share is traded ex-rights to dividends.
In order to secure delivery of Series B shares and to cover costs, including costs for social security fees and payments on the basis of synthetic shares, in accordance with LTI 2017, the Board proposes that the AGM resolve to authorize the Board to make decisions on one or several occasions during the period up to the following AGM to buy back no more than 867,486 Series B shares. The shares are to be acquired on Nasdaq Stockholm and may only be acquired at a price within the registered span of share prices at the particular time, by which is meant the span between the highest price paid and the lowest asked price. The shares are to be paid for in cash.
In order to secure delivery of Series B shares in accordance with LTI 2017, the Board proposes that the AGM resolve to permit the transfer, free of charge, of no more than 300,000 Series B shares to the participants of LTI 2017, in accordance with the terms and conditions for LTI 2017. The reason for disapplying the shareholders' preferential rights is that the transfer of Series B shares to the program participants is a feature of implementation of LTI 2017 and it is thus adjudged to be beneficial for NCC. The number of shares that may be transferred to the participants of LTI 2017 will be subject to recalculation in accordance with the terms and conditions of LTI 2017.
It is also to be possible to transfer a maximum of 500,000 Series B shares via Nasdaq Stockholm to cover costs, mainly for compensation for dividends, social security fees and payments based on the synthetic shares, pursuant to outstanding long-term performance-based incentive programs (LTI 2014, LTI 2015 and LTI 2016) and LTI 2017. Transfers under this item, via Nasdaq Stockholm, are to be effected prior to the next AGM at a price within the registered span of prices for NCC's Series B share at the particular time.
The Annual Report, audit report, Board of Directors' complete motions concerning Items 17 and 18, and the Board's statement pursuant to the above motions concerning the distribution of unappropriated earnings and the buyback of own shares will be available at the Company's office as of latest March 14, 2017, at the following address: NCC AB, Legal Affairs, Vallgatan 3, SE-170 80 Solna, Sweden, and can be sent to shareholders upon request. The Annual Report, motions and the statement will also be available on the Group's website www.ncc.se/arsstamma2017.
The Board of Directors and the CEO shall, if a shareholder so requests and the Board of Directors considers it possible without this resulting in material damage to the company, provide information concerning, firstly, conditions that could influence the assessment of an item on the agenda, secondly, conditions that could influence assessments of the financial condition of the company or subsidiaries and, thirdly, the company's relationship to other Group companies.
A resolution is required for adoption of the Board's motion under Item 18. For the resolution to be valid, it must be supported by shareholders representing at least nine-tenths of both the votes cast and the shares represented at the AGM.
For a resolution concerning the individual shareholder's proposals under Item 25 to be valid, the resolution must be supported by shareholders representing at least two-thirds of both the votes cast and the shares represented at the AGM, as well as half of all Series A shares in the company and at least nine-tenths of the Series A shares represented at the AGM. For a resolution concerning the individual shareholder's proposal under Items 26 to be valid, the resolution must be supported by shareholders representing at least two-thirds of both the votes cast and the shares represented at the AGM.
As of February 28, 2017, there were a total of 108,435,822 NCC shares outstanding, representing a total of 230,702,028 voting rights, comprising 13,585,134 Series A shares representing 135,851,340 voting rights and 94,850,688 Series B shares representing 94,850,688 voting rights, including 362,222 Series B shares held in treasury and representing 362,222 voting rights.
Solna, February 2017 NCC AB (publ) Board of Directors
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