AGM Information • Mar 26, 2015
AGM Information
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Press release, 26 March 2015
Shareholders of Semcon AB (publ), corporate registration number 556539-9549, are hereby invited to attend the Annual General Meeting at 3 p.m. on Tuesday 28 April 2015 at the company's office on Lindholmsallén 2, Göteborg, Sweden.
Shareholders wishing to participate in the Annual General Meeting shall be registered in the Shareholders' Register held by Euroclear Sweden AB as of Wednesday 22 April 2015 and have notified the company of their intention to attend by 4 p.m. on Wednesday 22 April 2015. Shareholders may be accompanied by at most two assistants, provided that the company is notified of this by the above date. Notification of participation at the Annual General Meeting shall be made in writing to Semcon AB, att. Annika Tedenhag, 417 80 Göteborg, Sweden, by email to [email protected] or by telephone to +46 736-840799. Notification should include the shareholder's name, social security number or corporate registration number, shareholdings, address, telephone number (business hours) and name(s) of assistant(s).
Shareholders whose shares are registered in the name of a trustee and who would like to participate in the Annual General Meeting must temporarily re-register their shares in their own name. Re-registration must be requested from the trustee and be executed at Euroclear Sweden AB by Wednesday 22 April 2015 at the latest. Shareholders who desire such re-registration must notify their trustees well in advance of this date.
If a shareholder sends a representative the representative shall bring a written, signed and dated power of attorney (original) to the Annual General Meeting. The power of attorney may not be more than one year old, unless a longer period of validation (no more than five years) is stated in the power of attorney. If the power of attorney is issued by a legal entity, a certified copy of the registration certificate, or other document demonstrating the signatory's authority to sign for the legal entity, must be included. To make entry to the meeting easier, copies of the power of attorney and other necessary documents must have reached the company by 22 April 2015 at the latest via the above email or postal addresses and be attached to the notification of attendance at the meeting. Forms granting power of attorney are available in Swedish and English on the company's website, www.semcon.com and may also be ordered from the addresses and telephone number used for notification of attendance at the meeting.
There are 18,112,534 shares and votes in the company. All shares are ordinary shares. The company owns 142,718 of the total shares. The company's own shares do not entitle to voting at the Annual General Meeting.
The Nominations Committee, appointed in accordance with the procedure decided by the 2014 Annual General Meeting, comprises Gabriel Berg (JCE Group) chairman of the Nominations Committee, Evert Carlsson (Swedbank Robur fonder), Frank Larsson (Handelsbanken Fonder) and Semcon AB's Chairman Kjell Nilsson, who together represent around 37 per cent of the votes associated with all the shares in the company. The Nominations Committee proposes Kjell Nilsson as chairman of the Annual General Meeting.
The Board proposes that a dividend of SEK 2.50 per share be paid out and that all remaining profits at the Annual General Meeting's disposal be carried forward. It is proposed that the record date for the dividend be 30 April 2015. If the Annual General Meeting votes in accordance with the proposal, payment is expected to be made via Euroclear Sweden AB on 6 May 2015.
The Nominations Committee proposes that there be five Board members and no deputies.
Item 13 – Decision regarding number of auditors and deputy auditors or registered public accounting firms The Nominations Committee proposes that a registered public accounting firm be appointed auditor of the company.
The Nominations Committee proposes, similarly to last year, that a total fee of SEK 1,610,000 shall be paid to Board members elected by the meeting, of which SEK 550,000 to the chairman and SEK 265,000 to each of the other members elected by the meeting. The Nominations Committee further proposes that no special fees be paid for work on Board committees.
The Nominations Committee proposes that the fee paid to auditors be made on open account, approved by the company.
The Nominations Committee proposes the re-election of Kjell Nilsson, Marianne Brismar, Gunvor Engström and Håkan Larsson as Board members and the election of Tore Bertilsson as a Board member. The Nominations Committee proposes that Kjell Nilsson be re-elected as chairman. Board member Joakim Olsson has declined re-election. Kjell Nilsson was President and CEO between 2008 – 2012 and cannot be considered independent in relation to the company and the senior management team, but he can be considered independent in relation to the major shareholders. Tore Bertilsson is not considered independent in relation to major shareholders since he is a Board member of a company that is a major shareholder in the company but he can be considered independent in relation to the company and the senior management team. The other proposed Board members can be considered independent in relation to the company, the senior management team and the major shareholders. The Nominations Committee's justifications for these proposals and information about the proposed Board members are available on the company's website, www.semcon.com.
The 2014 Annual General Meeting elected Deloitte AB as auditors of the company up to the time of the end of the 2015 Annual General Meeting. The Nominations Committee proposes that the registered public accounting firm Deloitte AB be re-elected as the company's auditor for a period of one year.
The nominations committee proposes, like last year, that the company shall have a nominations committee, that no remuneration be paid to the nominations committee although the company shall pay the costs of the nominations committee, and that there be a nominations process with the following content. The nominations committee shall comprise the chairman of the Board and three, or in some cases four, additional members. Based on the shareholder statistics on 31 August, the chairman of the Board shall contact the three largest shareholders (based on number of votes) and ask each of them to appoint one member of the nominations committee. If a shareholder declines this offer, the offer shall be made to the next largest shareholder. The member proposed by the shareholder holding the most votes shall act as chairman of the nominations committee. If there are changes in the shareholder structure after 31 August and earlier than two months before the Annual General Meeting, and if a shareholder consequently becomes one of the three largest shareholders and wishes to be represented on the nominations committee, then this shareholder
shall have the right to either appoint an additional committee member or, if the nominations committee so decides, to appoint a representative to replace the representative of the shareholder who has the least number of votes after the ownership changes. If a member of the nominations committee resigns or is unable to fulfill his or her obligations, then the chairman shall without delay ask the shareholder to appoint a new representative within a reasonable time. If the shareholder declines to replace a representative the place on the committee shall be offered to the next largest shareholder who has not already appointed a representative or who has refrained from doing so. The nominations committee shall perform the duties that from time to time arise in accordance with Swedish Corporate Governance Code. The duties of the nominations committee include making proposals for (i) chairman of the Annual General Meeting, (ii) chairman of the Board and other Board members, (iii) fees and other remuneration for Board assignments for each Board member, (iv) fees for auditors, (v) selection of auditors and (vi) fees for members of the nomination committee and proposals for the nomination process in general.
The Board proposes that the meeting establish guidelines for determining salaries and other remuneration to senior executives with the following main content. The company shall have a remuneration level and other employment terms that are needed to recruit and keep senior executives with the right skills and capabilities to achieve the company's objectives. Total remuneration – made up of various components such as fixed salary, bonus, participation in share-linked incentive scheme, pension benefits and other remuneration and benefits – shall be reasonable, competitive and market-based, and shall be decided with regard to, among other things, performance, position and importance for the Group. A fixed salary shall be paid for fulfilled work and shall normally be reviewed once a year. A bonus shall be offered, but shall be primarily based on results and bonus targets, established once a year, and be a maximum of 6 months' salary. Senior executives shall be given the right to arrange individual pension solutions under certain provisions via salary or bonus waivers. Pension solutions shall be premium-based. Notice of resignation from key decision-makers shall be a minimum of 6 and maximum of 12 months. Notice of dismissal from the company's side shall be at most 12 months. Dismissal salary and severance compensation combined shall not exceed 12 months' salary. In addition, other remuneration and benefits may be offered to facilitate possibilities to complete work assignments. The Board has the right to deviate from these guidelines in individual cases if there is good reason. To ensure continuity, the Board's proposals are in line with previous years' remuneration principles and agreements.
The reason for the proposal, and for deviating from preferential rights for shareholders, is that the Board of Semcon AB (hereafter called "Semcon" or "the Company") wants to create conditions for keeping and recruiting senior executives and key personnel in and to the Semcon Group by increasing the shareholdings of these people. When employees own Semcon shares it can be expected to stimulate an increased interest in the business and the development of earnings, raise motivation, increase solidarity with the Company (and subsidiaries) and create a Group-wide focus. With this background it is considered that a decision to establish a long-term performance-related share savings scheme in accordance with the proposal ("Performancerelated Share Savings Scheme 2015") will have a positive effect on the continued development of the Semcon Group and thereby give benefits both to shareholders and the employees of the Semcon Group who participate in the scheme. Performance-related Share Savings Scheme 2015 will involve shares corresponding
to a maximum of 1.34 per cent of the total number of issued shares and votes. In summary, around 110 senior executives and key personnel in the Semcon Group will be offered the opportunity to participate in the scheme that will run for a 12-month period once it is implemented. Participation shall be conditional on the individual's investment in the purchase of ordinary shares corresponding to an amount that is at most 5 per cent of the participant's gross salary. Provided that the acquired shares are held by the employee for three years, the employee shall be allocated free-of-charge a corresponding number of ordinary shares ("Matching Shares") and – provided that the performance requirements stated below are met – an additional one to four ordinary shares ("Performance Shares") for each acquired share. The conditions that are set, in addition to the requirement that the employee shall retain the acquired shares for three years, for the allocation of Performance Shares shall be based on the following: Semcon's average annual percentage increase in earnings per share ("EPS") between 2014 and 2017 shall be at least 5 per cent. The base value for the calculation of the increase in EPS shall be the EPS for 2014. The maximum amount of Performance Shares shall be allocated if the average increase in EPS is equal to, or more than, 15 per cent. No allocation of Performance Shares in accordance with this point shall be made if the average annual increase in EPS is equal to or less than 5 per cent. The Matching of Performance Shares in the event of an average annual increase in EPS between 5 and 15 per cent shall be linear. The Board may, after participation in the scheme and the initial effects of it have been assessed, address whether new shares savings schemes will be proposed in future Annual General Meetings following the 2015 Annual General Meeting.
The Board has considered various methods for transferring shares to employees in Performance-related Share Savings Scheme 2015; such as acquisition and transfer of the company's own shares and a share swap agreement with third party. The Board considers that the acquisition and transfer of the company's own shares is the most cost-effective and flexible method for transferring shares in Performance-related Share Savings Scheme 2015. The Company's current holding of its own shares amounts to 142,718 shares. These shares will be used in Performance-related Share Savings Scheme 2015, but this amount is not sufficient to complete the scheme in full. The Board therefore proposes that a further maximum 100,000 ordinary shares shall be acquired for transfer to participants in Performance-related Share Savings Scheme 2015, see the heading "Proposal for decision" below for more details. Since costs in connection with a share swap agreement significantly exceed the costs for the acquisition and transfer of the company's own shares, it is proposed as the main alternative that the financial exposure is secured through the acquisition and transfer of the company's own shares.
A preliminary cost calculation for Performance-related Share Savings Scheme 2015 is based on the assumption of a 100% participation in the scheme, an assessment of a 5 per cent staff turnover among participants per year and that each participant makes their own investment corresponding to the highest permitted amount. The value of Matching Shares and Performance Shares has been calculated based on a share price (price as of 25 March 2015) of SEK 61 at the start of the scheme minus the current value of the estimated dividend for fiscal years 2015-2017. Estimated payroll overhead have been based on an assumed average share price at the time of allocation of SEK 81, meaning an annual share price increase of 10 per cent. The overall effect on the income statement is estimated at around SEK 6 to 15 million, including payroll overhead and administration costs, unevenly spread over the years 2015-2019. The effect is dependent on the allocation of Performance Shares, where SEK 15 million represents the calculated cost upon full allocation of Performance Shares and SEK 6 million represents the calculated cost without allocation of Performance Shares. The costs shall be seen in relation to the total salary costs for 2014 for companies within the Semcon Group, which amounted to SEK 1,718 million, including payroll overhead. Of the above-mentioned total costs it is estimated that compensation costs, corresponding to the value of shares transferred to employees, will
be around SEK 3 to 10 million. In addition, administration costs are estimated at a maximum of SEK 1 million. The cost for payroll overhead is estimated at between SEK 2 to 5 million. In the event that a share swap agreement is initiated to secure commitments in the scheme, costs are calculated to increase by around SEK 1 million.
There are 18,112,534 issued shares in the Company. As of 31 December 2014 the Company owned 142,718 of its own shares. Establishing Performance-related Share Savings Scheme 2015 requires a further 100,000 ordinary shares, corresponding to 0.55 per cent of the total number of outstanding shares. Of the total 242,718 ordinary shares required for Performance-related Share Savings Scheme 2015, only the company's own shares/existing shares will be used and all ordinary shares may be transferred free-of-charge to employees, which may lead to a dilution in earnings per share of 1.34 per cent. The dilution effect on shares is independent of the share price at the time of matching as they will be transferred free-of-charge to the employee.
This proposal has been prepared by the Board with the help of external advisors. Furthermore, certain larger shareholders have been informed about the proposal. In addition to staff who has prepared the proposal for the Board, no employee who may be included in Performance-related Share Savings Scheme 2015 has participated in the formulation of its conditions. The CEO has not participated in preparation of the proposal.
The Board proposes that the Annual General Meeting establish Performance-related Share Savings Scheme 2015 comprising at most 242,718 ordinary shares, primarily in accordance with the following guidelines:
scheme (Category 3). The Board shall have the right to permit advance matching, i.e. despite the fact that the three-year requirement for holding shares or the employment requirement has not been fulfilled, although only in "good leaver" situations.
The Company's current holding of its own shares is not sufficient to implement Performance-related Share Savings Scheme 2015. Consequently, the Board proposes that the Annual General Meeting votes to authorize the Board up to the time of the next Annual General Meeting on one or more occasions to decide to purchase the Company's own ordinary shares on the following terms:
corresponds to the exchange price for ordinary shares in the Company at the time of the offer plus a maximum of twenty per cent.
In order to meet the Company's commitments to participants in Performance-related Share Savings Scheme 2015 the Board proposes that the Annual General Meeting votes to transfer a maximum of 242,718 of the company's own shares in the Company on the following terms:
In the event that the necessary majority for a valid decision relating to the proposals in Items B and C above is not achieved, the Board proposes that the Annual General Meeting votes to allow the Company to enter a share swap agreement with a third party in order to secure delivery of shares to participants in Performancerelated Share Savings Scheme 2015, whereby the third party under its own name shall acquire and transfer ordinary shares in the Company to employees covered by Performance-related Share Savings Scheme 2015. Third party acquisition of shares shall take place via Nasdaq Stockholm.
The reason for the proposal, and the reason for deviating from preferential rights for existing shareholders, is that the Board wishes to create cost-efficient and flexible opportunities for making payments for acquisitions of companies or businesses or parts thereof. The Board proposes that the Annual General Meeting authorize the Board up to the time of the next Annual General Meeting, on one or more occasions, to decide on the new issue of ordinary shares in the company on the following conditions:
4) The subscription price shall correspond to the share's assessed market value at the time of issue.
5) Payment for the shares shall be in capital contributed in kind through settlement of a receivable.
On full utilization of the authorization to issue new shares, the total number of shares and votes in the company can increase by 1,811,253, representing dilution of around ten per cent of current shares and votes.
The reason for the proposal, and the reason for deviating from preferential rights for existing shareholders, is that the Board wishes to create cost-efficient and flexible opportunities for improving the company's capital structure and thereby increase share value, and for making payments for, or financing, acquisitions of companies or businesses or parts thereof.
The Board proposes that the Annual General Meeting authorize the Board up to the time of the next Annual General Meeting on one or more occasions to decide on the acquisition of ordinary shares in the company on the following conditions:
The Board proposes that the Annual General Meeting authorizes the Board up to the time of the next Annual General Meeting, on one or more occasions, with deviation from shareholders' preferential rights, to decide on the transfer of ordinary shares in the company on the following conditions:
1) Transfers shall only be made to use ordinary shares as liquidity for acquisition of companies or businesses or parts thereof.
2) Transfers on each occasion may be of the total number of ordinary shares owned by the company.
3) Transfers shall be at a price corresponding to the share's assessed market value in connection with transfer.
4) Payment for ordinary shares shall be in capital contributed in kind or through settlement of a receivable.
5) The Board has the right to set other conditions for transferring shares.
For a decision to be valid in accordance with Item 20 B above it is required that the proposal be voted for by shareholders owning at least two thirds of both the votes cast and those shares represented at the meeting. For a decision to be valid in accordance with Item 20 C above it is required that the proposal be voted for by shareholders owning at least nine tenths of both the votes cast and those shares represented at the meeting. For a decision relating to the proposal in Items 21 and 22 to be valid requires the respective proposal to be supported by shareholders with a minimum of two-thirds of the voting rights and shares represented at the meeting.
The Board and CEO shall, at the request of any shareholder at the Annual General Meeting, and if the Board deems that it can be done without inflicting material damage to the company, provide information on circumstances that can affect the assessment of matters on the agenda, conditions that can affect the assessment of the company's or subsidiaries' financial situation, or the company's relationship to other Group companies.
The annual report containing the auditors' report for 2014, the auditors' statement in accordance with chapter 8 § 54 of the Companies Act, the Nominations Committee's complete proposals in accordance with Items 19-22, and the Board's statement in accordance with chapter 18 § 4 and chapter 19 § 22 of the Companies Act, are all available on the company's website, www.semcon.com. They will also be available from the company at the above address and will be sent free of charge to shareholders who request them and indicate their postal address.
Göteborg, March 2015 The Board of Directors, Semcon AB (publ)
For more information, please contact: Björn Strömberg, CFO, Semcon AB, 031-721 00 00
This information is such that Semcon AB must publish according to laws governing the securities market and/or laws governing trading in financial instruments. This information was published at 3.30 pm on 26 March 2015.
Semcon is a global company active in the areas of engineering services and product information. The Group has around 3,000 employees with experience from many different industries. Semcon develops products, plants and information solutions along the entire development chain and also provides many other products and services including quality control, training and methodology development. Semcon increases customers' sales and competitive strength by providing them with innovative and solid engineering solutions. The Group had sales of SEK 2.7 billion 2014 with activities at more than 40 sites in Sweden, Germany, the UK, Brazil, Hungary, India, China, Spain and Norway.
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