AGM Information • Mar 22, 2017
AGM Information
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The shareholders in Scandi Standard AB (publ), corporate identification number 556921-0627, are hereby given notice to attend the annual general meeting to be held on Tuesday 25 April 2017 at 1.00 p.m. CET at IVA:s Konferenscenter, Grev Turegatan 16 in Stockholm. The registration opens at noon CET.
Shareholders who wish to attend the annual general meeting must:
Notice of attendance may be given by telephone +46 (0) 8 402 90 55 on weekdays between 9.00 a.m. and 4.00 p.m. CET or on the company's website, www.scandistandard.com.
Notice of attendance may also be given i writing to: Scandi Standard AB (publ) c/o Euroclear Sweden AB P.O. Box 191 SE-101 23 Stockholm Sweden
The notice of attendance shall state name, date of birth or corporate identification number, address, telephone number and, where relevant, the number of attending advisors (not more than two).
The annual general meeting will be held in Swedish.
In order to be entitled to participate in the annual general meeting, shareholders having their shares registered in the name of a nominee must, in addition to give notice of attendance, have their shares registered in their own name so that he or she is entered in the share register kept by Euroclear Sweden AB not later than on Wednesday 19 April 2017. Such registration may be temporary.
Those who do not attend the annual general meeting in person may exercise his or her rights at the meeting through a proxy in possession of a written, signed and dated proxy form.
A proxy forms issued by a legal entity must be accompanied by a copy of a certificate of registration or a corresponding document of authority for the legal entity. In order to facilitate the registration at the annual general meeting, proxy forms, certificates of registration and other documents of authority should be submitted to the company at the address above no later than on Wednesday 19 April 2017.
Please note that a notice of attendance must be given even if a shareholder wishes to exercise its rights at the meeting through a proxy. A submitted proxy form does not count as a notice if attendance.
Template proxy forms in Swedish and English are available on the company's website, www.scandistandard.com.
The Nomination Committee's proposal for board members:
The Nomination Committee's proposal for chairman:
The nomination committee proposes that Advokat Sven Unger is elected chairman of the meeting.
The board of directors proposes that the annual general meeting resolves on a dividend of SEK 1.35 per share and that Thursday 27 April 2017 shall be the record day for the dividend. Assuming the proposed date will be the record date, the dividend is expected to be disbursed by Euroclear Sweden AB on Wednesday 3 May 2017.
The dividend proposed by the board of directors corresponds to a total amount of SEK 80,186,325.30, based on a dividend to all outstanding shares in the company as of 17 March 2017 except for shares in the company held by the company itself
and is therefore be subject to change if the company repurchases additional shares before the record date.
The Nomination Committee proposes that the annual general meeting resolves on the following amendments to Section 7. c-d in the instruction of the Nomination Committee:
Should a shareholder, among the four contacted, abstain from its right to appoint a member or fail to appoint a member within the prescribed time, the right to appoint a member shall transfer to the subsequent largest shareholder by voting power provided such shareholder has not already appointed a member of the Nomination Committee or previously abstained from such right .
1 The shareholding statistics used shall be sorted by voting power (grouped by owners) and cover the 25 largest in Sweden direct registered shareholders, i.e. shareholders having registered an account with Euroclear Sweden AB in their own name or shareholders holding a custody account with a nominee that have reported the identity of the shareholder to Euroclear Sweden AB.
d. the Nomination Committee, to reflect the ownership structure in the Company, at its own discretion resolves to offer places on the Nomination Committee to shareholders or shareholders' representatives who in addition to the four nominating shareholders, are largest by voting power or follow immediately after to them, provided that such shareholder has not already appointed a member of the Nomination Committee or previously abstained from such right.
The assignment includes provision of proposals for:
According to the articles of association, the board shall consist of no less than three and no more than eight board members, without deputies. To better reflect the ownership structure of the company, the Nomination Committee proposes that the number of board members elected by the Annual General Meeting of Shareholders shall be increased to nine as opposed to the current eight without deputies and that § 6 of the articles of association be amended accordingly.
| Proposed wording: |
|---|
| § 6 |
| The board of directors shall consist of not less than |
| three and not more than nine members without |
| deputy directors. |
The board of directors proposes that § 11 of the articles of association is amended to reflect the new name of the Swedish central securities depositories and financial instruments accounts act.
| Current wording: | Proposed wording: |
|---|---|
| § 11 | § 11 |
| The company's shares shall be registered with a central security depository register, pursuant to the Swedish financial instruments accounts act (SFS 1998:1479). |
The company's shares shall be registered with a central security depository register, pursuant to the Swedish central securities depositories and financial instruments accounts act (SFS 1998:1479). |
| Item 10: Determination of the number of members of the board of directors |
According to the articles of association, the board shall consist of no less than three and no more than eight board members, without deputies. To better reflect the ownership structure of the company, the Nomination Committee proposes that the number of board members elected by the Annual General Meeting of Shareholders shall be increased to nine as opposed to the current eight without deputies and that § 6 of the Articles of Association be amended accordingly.
It is important that board fees are maintained at an appropriate level to make it possible to recruit the best possible international competence to the board of directors of Scandi Standard and to make it possible to keep such competence. The Nomination Committee has, using independently prepared benchmarking, compared the board fees in Scandi Standard with board fees in other mid-market comparable companies on Nasdaq Stockholm. The Nomination Committee has concluded that compared with the board fees in companies of equal size and complexity, the proposed fees are in line.
Consequently, the Nomination Committee proposes that total fees to the board members, for the period until the next Annual General Meeting, shall be increased to SEK 2,750,000. The fee to the chairman of the board shall remain SEK 550,000 and the individual fee payable to the other eight non-employed board members elected by the Annual General Meeting shall remain SEK 275,000.
The Nomination Committee proposes that total fees to committees of the board, for the period until the next Annual General Meeting, shall remain SEK 330,000. This
comprises an individual annual fee of SEK 130,000 for the Chairman of the Audit Committee, SEK 50,000 for each of the two other members of the Audit Committee, SEK 50,000 for the chairman of the Remuneration Committee and SEK 25,000 for each of the two other members of the Remuneration Committee. The Nomination Committee considers that the fees for committee work are reasonable.
The Nomination Committee proposes that the following persons be elected.
Chairman of the board:
(j) Per Harkjaer (re-election)
Öystein Engebretsen (new board member)
Born: 1980
Education: BI Norwegian School of Management (Sandvika/Oslo), Master of Science in Business, Major in Finance.
Other appointments: Member of the board of directors in Projektengagemang Sweden AB.
Holdings in the company: 3,000 shares.
Principal work experience: Investment AB Öresund, Investment manager, Member of the board of directors of Investment AB Öresund, Project manager at Viking Sverige AB and HQ Bank, Corporate Finance.
In the composition of the board of directors, the Nomination Committee considers, among others, necessary experience and competence, the value of diversity, age, gender balance, reflection of the ownership structure of the company and renewal and assesses the appropriateness of the number of members of the board.
The Nomination Committee takes into account the competence and experience of each individual member along with the individual member's contribution to the board work as a whole in its appraisal of qualifications and performance of the individual board members. The Nomination Committee considers it important that board members can devote the necessary time and care required to fulfil their tasks as board members in Scandi Standard, and has therefore also familiarized itself with the proposed Board members' engagements outside of Scandi Standard and the time they require.
The Nomination Committee considers that the current Board and Board work is well functioning and that the board fulfils high expectations in terms of composition and that the Board as well as the individual board members fulfil high expectations in terms of expertise. All Board members contribute meritoriously with their respective expertise. The Nomination Committee has noted that board members in Scandi Standard have high board meeting attendance and that they are well prepared at the meetings. Based on thorough discussions and assessments, the Nomination Committee considers that the proposed Board well balances the desire to reflect the ownership structure of the company while taking continuity into account. Moreover, the Nomination Committee considers that the proposed board members have sufficient skills and time to fulfil their tasks as board members of Scandi Standard.
Information regarding the proposed board members is presented in Exhibit 2 of the Nomination Committee proposal, which can be found on Scandi Standard's website, www.scandistandard.com.
In terms of applicable Swedish independence requirements, the Nomination Committee has made the following assessments.
According to the articles of association, Scandi Standard shall have no less than one and no more than two auditors with no more than two deputies. As auditor and, when applicable deputy auditor, shall an authorized public accountant or a registered public accounting firm be elected. The Nomination Committee proposes that Scandi Standard shall have one auditor without deputy auditor.
The Nomination Committee proposes that the auditor fees be paid against approved account.
The Nomination Committee proposes that PricewaterhouseCoopers AB be reelected as auditor for the period as of the end of the Annual General Meeting 2017 until the end of the Annual General Meeting 2018.
The board of directors proposes that the annual general meeting resolves to approve the board of director's proposal regarding guidelines for remuneration for the senior management as set forth below which shall apply until the annual general meeting 2018.
In this context, the senior management means the managing director of the company and the executives in the company and other group companies who, from time to time, are reporting to the managing director or the CFO and who are also members of the senior management, as well as members of the board of directors of the company that has entered into an employment or consulting agreement.
Salaries and other terms and conditions of employment shall be sufficient for the company to recruit and retain skilled senior managers at a reasonable cost. The remuneration to the senior managers shall consist of a fixed salary, variable salary, pension and other benefits, and it shall be based on principles of performance, competitiveness and fairness. Each senior manager shall be offered a fixed salary in line with market conditions and based on the senior manager's responsibility, expertise and performance. All senior managers may, from time to time, be offered variable salary (cash bonuses). The variable salary shall be based on a set of financial and personal objectives determined in advance by the board of directors. The variable salary may not amount to more than 75% of the fixed annual salary (in this context, fixed annual salary means cash salary earned during the year, excluding pension, supplements, benefits and similar). To the extent a board of
director performs work for the company, in addition to board work, a market-based consulting fee may be paid.
In addition, the annual general meeting may resolve on long-term incentive programs such as share and share price-related incentive programs. These incentive programs shall be intended to contribute to long-term value growth and provide a shared interest in value growth for shareholders and employees. Agreements regarding pensions shall, where applicable, be premium based and shall be designed in accordance with the level and practice applicable in the country in which the member of senior management is employed. Fixed salary during notice periods and severance payment, including payments for any restrictions on competition, shall in aggregate not exceed an amount equivalent to the fixed salary for two years. The total severance payment shall for all members of the management be limited to the existing monthly salary for the remaining months up to the age of 65.
The board of directors resolve upon principles for remuneration of the senior management based upon the guidelines adopted by the annual general meeting. The board of directors may resolve to deviate from the guidelines if the board of directors, in an individual case, is of the opinion that there are special circumstances justifying that.
Salaries and other terms and conditions of employment in Scandi Standard AB (publ) ("Scandi Standard") and any of its subsidiaries (Scandi Standard and its subsidiaries are hereinafter jointly referred to as the "Group") shall be sufficient for the Group to recruit and retain skilled employees at reasonable costs to the Group. Remuneration shall be based on principles of performance, competitiveness and fairness. The board of directors of Scandi Standard has decided to propose to the annual general meeting the below Long Term Incentive Program 2017 ("LTIP 2017") for key employees, which is intended to contribute to long term value growth and provide a shared interest in value growth between shareholders and employees.
Performance share rights shall be allotted free of charge to the participants of LTIP 2017, who are key employees in the Group, in relation to a fixed percentage of their base salary. After a three-year vesting period commencing in connection with the implementation of LTIP 2017 and provided that certain conditions are fulfilled, the participants may exercise their performance share rights through which they will be allotted shares in Scandi Standard free of charge.
In order to ensure the delivery of shares under LTIP 2017 and for the purpose of hedging social security charges under LTIP 2017, the board of directors proposes that the board of directors be authorized to acquire a maximum of 294,773 shares in Scandi Standard on Nasdaq Stockholm. In addition, the board of directors proposes that the annual general meeting resolves to transfer a maximum of 251,386 own shares to the participants of LTIP 2017 in accordance with the terms of LTIP 2017.
The intention is that a program similar to LTIP 2017 shall be adopted annually, at the annual general meetings the coming years.
The board of directors proposes that the annual general meeting resolve on the implementation of LTIP 2017 principally based on the terms and conditions set out below.
LTIP 2017 comprises a maximum of 22 participants divided into four (4) categories.
The participants shall free of charge be allotted performance share rights entitling to allotment of shares in Scandi Standard. The number of performance share rights allotted to a participant shall be calculated as a percentage of the relevant participant's base salary plus any social security charges attributable to such amount divided by 53.58, which was the average share price during the period 6 March 2017 to 17 March 2017. The percentage of the base salary forming the basis for allotment of performance share rights depends on which category the participant belongs to, in accordance with the following:
The above percentages will be adjusted so that participants who have been employed with the Group for less than a year will receive less than 100 percent of the numbers illustrated above.
Provided that the conditions set out in item 2 below are fulfilled, the performance share rights shall entitle to allotment of shares in Scandi Standard in accordance with what is described below. Allotment of shares on the basis of performance share rights shall be made at the earliest three years after the implementation of LTIP 2017 (the "Vesting Period").
Following the Vesting Period, each performance share right shall entitle to allotment of up to one (1) share. The conditions for allotment of shares are described in the following.
In order for performance share rights to entitle to allotment of shares, it shall be required that the relevant participant remains employed and has not given or been given notice of termination of employment within the Group during the Vesting Period. If this condition is not fulfilled, no shares shall be allotted. However, in case a participant's employment has terminated prior to the end of the Vesting Period due to such participant's death or disability or if the employer has given notice of termination of the participant's employment without cause (including, for the avoidance of doubt, notice of termination due to redundancy/shortage of work (Sw. arbetsbrist)), 1/3 of the right to allotment of shares shall be vested at each anniversary of the implementation of LTIP 2017.
In addition, allotment of shares shall be conditional upon satisfaction of a financial target set by the board of directors of Scandi Standard, being the compound annual growth rate of earnings per share ("EPS CAGR").
The EPS CAGR shall be calculated by the board of directors on the basis of the Group's quarterly financial statements, which are adjusted for non-comparables. EPS for the financial year 2016 was SEK 2.50.
In order for full allotment of shares to occur, the average EPS CAGR during the period 1 January 2017 – 31 December 2019 must be at least 12.5 percent. If the average EPS CAGR during the period 1 January 2017 – 31 December 2019 is 5 percent, the participants shall be allotted shares for 25 percent of their performance share rights. If the average EPS CAGR during the period 1 January 2017 – 31 December 2019 is more than 5 percent but less than 12.5 percent, the participants shall receive linear allotment. If the average EPS CAGR during the period 1
January 2017 – 31 December 2019 is less than 5 percent, no shares shall be allotted.
In addition to what has been stated above, the following terms and conditions shall apply for the performance share rights:
The board of directors, or a certain committee appointed by the board of directors, shall be responsible for determining the detailed terms and the administration of LTIP 2017, within the scope of the terms and guidelines given by the general meeting. By way of example, the board of directors shall be authorized to decide that, despite the conditions under item 2 above being fulfilled, no allotment of shares shall be made to a participant in case of fraud, other criminal activity or gross misconduct by such participant.
In connection with any rights issues, splits, reverse splits and similar dispositions, the board of directors shall be authorized to recalculate EPS CAGR as well as the number of shares that the performance share rights shall entitle to.
In case a public offer for all shares in Scandi Standard is completed resulting in the offeror owning more than 90 percent of the shares in Scandi Standard, the board of directors shall be authorized to resolve upon the close-down of LTIP 2017, including but not limited to approving earlier execution of performance share rights, amending the vesting requirements and shorten the periods for application of the EPS CAGR thresholds for determination of to which extent the performance requirement is fulfilled.
If delivery of shares cannot be accomplished at reasonable costs, with reasonable administrative effort and without regulatory problems, the board of directors shall be authorized to decide that the participants may instead be offered a cash-based settlement.
Further, the board of directors shall be authorized to decide on other adjustments in the event that major changes in the Group, the market or otherwise in the industry would occur, which would entail that resolved conditions for allotment and the possibility to use the performance share rights under LTIP 2017 would no longer be appropriate.
The board of directors proposes that the annual general meeting resolve to authorize the board of directors to acquire maximum 294,773 shares for the following purposes:
Acquisitions shall be made on Nasdaq Stockholm on one or several occasions and until the next annual general meeting at a price within the band of prices applying on the exchange. The full proposal regarding authorization for the board of directors to acquire own shares is included in item 17 b. of the notice.
Further, the board of directors proposes that the annual general meeting resolves to transfer a maximum of 251,386 shares acquired in accordance with the foregoing. Transfers shall be made to the participants of LTIP 2017 in accordance with the terms of LTIP 2017. The full proposal regarding transfers of own shares is included in item 17 c. of the notice.
Assuming 100 percent vesting, full fulfilment of the EPS requirement and a share price at the time of exercise of the performance share rights of SEK 56.50, LTIP 2017 will result in the allocation of 251,386 shares in Scandi Standard, representing a value of SEK 16,654,699.
LTIP 2017 will cause costs for the Group in the form of social security charges. Social security charges shall be expensed and allocated to the periods during which the participants' services were performed. The social security charges are expected to amount to in average approximately 17 percent of the market value of the shares allocated upon exercise of the performance share rights.
The board of directors has proposed that the effect on cash flow that may arise as a result of social security charges payable when the performance share rights are exercised be hedged by way of acquisitions of own shares in the market.
In addition, the performance share rights will give rise to accounting costs in accordance with IFRS 2. These costs shall be determined on the allotment date and be allocated over the Vesting Period. In accordance with IFRS 2, the theoretical value of the performance share rights shall form the basis of the calculation of these costs. The theoretical value shall not be re-valued in subsequent reporting periods, although adjustments shall be made in conjunction with every financial report for the performance share rights that have not been vested. In this manner, the accumulated costs at the end of the Vesting Period will correspond to the number of performance share rights that fulfil the conditions.
No new shares will be issued in Scandi Standard due to LTIP 2017. However, Scandi Standard will need to acquire 294,773 own shares, corresponding to approximately 0.5 percent of the outstanding shares and votes in Scandi Standard in order to secure delivery of shares under LTIP 2017 and to secure and cover social security charges.
The costs for LTIP 2017 are expected to have a marginal effect on the Group's key ratios.
The board of directors considers the existence of effective share-related incentive programs for key employees of Scandi Standard to be of material importance for the development of Scandi Standard. The proposed program creates a common Group focus for the key employees in the different parts of the Group. By linking the key employees' remuneration to Scandi Standard's earnings, long term increase in value is rewarded and thus an alignment of interest of the key employees and shareholders is achieved.
In light of these circumstances, the board of directors considers that LTIP 2017, with regard to the terms and conditions, the size of the allotment and other circumstances, is reasonable and advantageous for Scandi Standard and its shareholders.
The proposal has been prepared by the remuneration committee in consultation with the board of directors and external advisors. The resolution to propose LTIP 2017 to the annual general meeting has been taken by the board of directors.
The AGM 2016 adopted a long-term incentive plan for 19 senior executives and key employees, which has essentially the same design as the now proposed LTIP 2017. A maximum of 209,976 shares may be awarded under LTIP 2016.
A resolution in accordance with the board of directors' proposal regarding the implementation of LTIP 2017 requires support from shareholders representing more than half of the votes cast at the meeting.
A resolution in accordance with the board of directors' proposal regarding authorization to the board of directors to acquire shares requires support from shareholders representing at least 2/3 of the votes cast as well as shares represented at the meeting.
A resolution in accordance with the board of directors' proposal regarding resolution to transfer shares to the participants of LTIP 2017 requires support from shareholders representing at least 9/10 of the votes cast as well as shares represented at the meeting.
The board of directors proposes, for the purposes of (1) securing delivery of shares to the participants of LTIP 2017 at exercise of the performance share rights, and (2) securing and covering costs that can be triggered by the LTIP 2017 (e.g. social security charges and tax), that the annual general meeting resolves to authorize the board of directors to, on one or several occasions and until the next annual general meeting, resolve on acquisition of shares in the company, in accordance with the following.
The board of directors has issued a reasoned statement pursuant to Chapter 19, Section 22 of the Swedish Companies Act.
The board of directors proposes that, in order to secure delivery of shares at exercise of the performance share rights under LTIP 2017, the annual general meeting resolves to transfer own shares to the participants in LTIP 2017 in accordance with the following.
Transfers of a maximum of 251,386 own shares may occur on the following terms and conditions.
The rationale for the proposed transfers of own shares and for the deviation from the shareholders' preferential rights is to enable delivery of shares to the participants in LTIP 2017.
A resolution in accordance with item 9(a) and 9(b) and item 17(b) above requires that the annual general meeting's resolution is supported by at least two thirds of the votes cast as well as the shares represented at the meeting.
A resolution in accordance with item 17(c) above requires that the annual general meeting's resolution is supported by at least nine tenth of the votes cast and the shares represented at the meeting.
At the date of this notice, the total number shares and votes in the company amounts to 60,060,890. The company holds 663,612 of its own shares, corresponding to 663,612 votes.
The board of directors and the managing director shall, if any shareholder so requests and the board of directors believes that it can be done without material harm to the company, provide information regarding circumstances that may affect the assessment of an item on the agenda and circumstances that can affect the
assessment of the company's or its subsidiaries' financial situation and the company's relation to other companies within the group.
The complete proposals and other documents that shall be made available prior to the annual general meeting pursuant to the Swedish Companies Act will be made available at the company and at the company's website, www.scandistandard.com, no later than three weeks prior to the annual general meeting. The documents will also be sent free of charge to shareholders who so request and provide their address to the company.
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Stockholm in March 2017 The board of directors
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