The shareholders of Clas Ohlson AB (publ) are hereby notified of the Annual General Meeting (“AGM”) to be held on Saturday, 8 September 2012 at 11:00 a.m. at the company’s central warehouse in Insjön. Registration will begin at 9:45 a.m. A light lunch will be served after the AGM.
Registration and notification
Shareholders who intend to participate in the AGM shall:
• be listed in Euroclear Sweden AB’s printed shareholder register by Monday, 3 September 2012,
• notify the company of their intention to participate in the AGM not later than Monday, 3 September 2012; by post: Clas Ohlson AB (publ), SE-793 85 Insjön, Sweden, by fax: +46 (0)247-444 25, by telephone: +46 (0)247-444 00, by e-mail: firstname.lastname@example.org or via the company’s website http://om.clasohlson.com.
Registration must include the shareholder’s name, address, daytime telephone number, civil registration number/corporate registration number and the number of shares represented. Shareholders or their proxies are entitled to be accompanied by not more than two advisors. The advisors must be registered in advance in the same manner as the shareholder. Information submitted in connection with the registration will be computerised and used exclusively for the AGM.
Shareholders who, through a bank or another trustee, have trustee-registered shares must temporarily re-register the shares in their own names to be entitled to participate in the AGM. To ensure that this registration is entered in the shareholder register on Monday, 3 September 2012, shareholders must request well in advance of this date that their trustees conduct such registration.
Shareholders who wish to exercise their voting rights at the AGM by proxy must issue a dated power of attorney for the proxy in writing. Prior to the AGM, the original power of attorney should be sent to the above-stated address. A power-of-attorney form is available for downloading at www.clasohlson.se or alternatively will be sent to those shareholders who so request and who provide their postal address.
Number of shares and voting
The number of Class A shares in the company totals 5,760,000, each carrying 10 votes, corresponding to 57,600,000 votes, and the number of Class B shares totals 59,840,000, each carrying one vote, corresponding to 59,840,000 votes. Accordingly, there are a total of 65,600,000 shares and 117,440,000 voting rights in the company. The company holds 2,312,192 Class B treasury shares.
1. Opening of the AGM
2. Election of Chairman of the AGM (see below)
3. Preparation and approval of voting list
4. Approval of the agenda
5. Election of one or two minutes checkers
6. Determination that the Meeting has been duly convened
7. Presentation of the Annual Report and Auditors’ Report and the Consolidated Accounts and the Auditors’ Report on the Consolidated Accounts for 2011/2012
8. CEO’s address
9. Chairman of the Board’s report on the work of the Board and the Remuneration and Audit Committees
10. Question time
11. Resolution concerning the adoption of the Income Statement and Balance Sheet and the Consolidated Income Statement and Consolidated Balance Sheet for 2011/2012
12. Resolution concerning the disposition of the company’s profits in accordance with the balance sheet adopted for 2011/2012 and determination of the record date for the dividend (see below)
13. Resolution concerning the discharge of Board Members and the CEO from liability for the 2011/2012 financial year.
14. Determination of the number of Board Members, auditors and deputy auditors to be elected by the AGM (see below)
15. Determination of the fees to be paid to Board Members and the auditors, and remuneration for committee work (see below)
16. Election of Board Members, Chairman of the Board, auditors and any deputy auditors (see below)
17. The Board of Directors’ motion concerning adoption of guidelines for remuneration and other terms of employment for senior management (see below)
18. The Board of Directors’ motion concerning adoption of a long-term incentive plan (“LTI 2013”) (see below)
19. The Board of Directors’ motion concerning a resolution authorising the Board of Directors to make decisions on the company’s acquisition of treasury shares and motion concerning a resolution to transfer treasury shares (see below)
20. Closing of the AGM
Item 2, Election of Chairman of the AGM
The Nomination Committee proposes that Elisabeth Salander Björklund be elected Chairman of the AGM.
Item 12, Resolution concerning the disposition of the company’s profits in accordance with the balance sheet adopted for 2011/2012 and determination of the record date for payment of the dividend
The Board of Directors proposes that the retained earnings at the disposal of the AGM, in an amount of SEK 760,007,562, be allocated so that SEK 278,800,000 be paid as a dividend (SEK 4.25 per share) and that SEK 481,207,562 be carried forward. It is proposed that the record date for payment of the dividend be 12 September 2012. If the AGM votes in accordance with this motion, it is estimated that the dividend will be distributed by Euroclear Sweden AB on 17 September 2012.
Items 14-16, Resolutions concerning the number of Board Members, auditors and deputy auditors to be elected by the AGM, the fees to be paid to Board Members and the auditors, and remuneration for committee work and election of Board Members, Chairman of the Board, auditors and any deputy auditors
The company’s Nomination Committee, which was formed in accordance with a resolution on the nomination procedure passed at the AGM of 11 September 2010 and which comprises Johan Held (Chairman), Carl von Schantz, Göran Sundström, Johan Ståhl and Anders Moberg, proposes the following resolutions concerning Items 14-16.
The Nomination Committee proposes that the number of Board Members be eight and that no Deputy Board Members be appointed (Item 14).
The Nomination Committee proposes that director fees (including fees for committee work) be paid in an amount of SEK 2,987,500 and be distributed as follows: SEK 600,000 annually to the Chairman of the Board and SEK 300,000 annually to each non-executive Board Member elected by the AGM. The Nomination Committee also proposes that remuneration of non-executive members of the Audit Committee be paid in a total amount of SEK 275,000 annually, of which SEK 137,500 is to be paid to the chairman of the Audit Committee and SEK 68,750 to each of the other two members of the committee, and that remuneration of non-executive members of the Remuneration Committee be paid in a total amount of SEK 312,500 annually, of which SEK 125,000 is to be paid to the chairman of the Remuneration Committee and SEK 62,500 to each of the other three members of the committee. The fee may be paid as salary or in return for an invoice. The fees to be invoiced are to be adjusted to take into account social security fees and VAT with the aim of achieving full cost neutrality for the company. It is proposed that remuneration of the auditor, during the auditor’s period in office, be paid on current account in return for an invoice approved by the company (Item 15).
The Nomination Committee proposes re-election of Anders Moberg, Klas Balkow, Björn Haid, Cecilia Marlow, Lottie Svedenstedt, Urban Jansson, Edgar Rosenberger and Sanna Suvanto-Harsaae. It is also proposed that Anders Moberg continue to serve as Chairman of the Board. The Nomination Committee also proposes that Öhrlings PricewaterhouseCoopers AB be elected as auditor with Annika Wedin as the auditor in charge until the end of the next AGM (Item 16).
Information regarding other Board members is available in the Annual Report and on Clas Ohlson’s website.
Item 17, The Board of Directors’ motion concerning adoption of guidelines for remuneration and other terms of employment for senior management
For the CEO and other members of senior management, the remuneration principles approved by the AGM of 10 September 2011 are applied. The Board of Directors proposes that corresponding principles be approved by the AGM to apply for the period until the close of the 2013 AGM.
The principles shall be applied to employment contracts signed after the AGM and apply to revisions of current employment contracts made after this date. Remuneration of the CEO is to be approved by the Board based on proposals by the Remuneration Committee. Remuneration of other senior management is to be determined by the Remuneration Committee based on proposals by the CEO.
The Board of Directors is of the opinion that the total remuneration package shall consist of basic and performance-based remuneration. The basic salary forms the core of the total remuneration package. The performance-based remuneration shall represent a strong incentive for senior management to continue the development of the company, thus creating added value for shareholders.
The general principles governing remuneration of senior management are to be based on the position held, individual performance, the Group’s financial results and the remuneration being competitive in the country of employment. The combined remuneration of senior management shall consist of basic salary, variable salary in the form of a short-term incentive based on annual performance objectives, long-term incentives based on performance over several years, pension and other benefits. The principles also regulate the terms and conditions for termination of employment and for severance pay.
Clas Ohlson shall strive to offer a competitive total level of remuneration, with a focus on performance-based payments. This means that variable remuneration may comprise a significant portion of the total remuneration. The aim is for basic remuneration to be in line with the median of the comparable market, while total remuneration, when the company meets or exceeds its objectives, shall be in the upper quartile of the market.
The basic salary shall comprise the basis for total remuneration. The salary shall be related to the relevant market and reflect the extent of the responsibilities included in the position. The development of basic salary shall depend on how well work is performed and how well the employee develops his/her competencies to assume future work assignments involving greater responsibility. The basic salary shall be reviewed annually to ensure that it is market-based and competitive.
Variable remuneration (Short Term Incentive "STI")
In addition to basic salary, members of senior management will qualify for STI for performance that exceeds one or several predetermined performance levels during a financial year. The aim of the STI is to promote long-term value creation in the company. Clearly defined performance targets are to be decided annually by the Board or by individuals elected by the Board. The performance targets may be connected to operational, financial or personal results. Remuneration from the STI plan is to be subject to a ceiling, enabling Clas Ohlson to calculate maximum remuneration levels from the starting date. Insofar as performance does not match the lowest performance level, no STI will be paid. STI will depend on the position held and may not exceed 50 per cent of salary if the ceiling is achieved, which also represents the maximum outcome of STI. STI payment is also conditional upon the performance on which the payments are based being proved sustainable over time. The company is to be entitled to reclaim remuneration paid out on the basis of information that later proves to be obviously incorrect.
The cost of the STI paid to senior management is estimated to range from between SEK 0 to SEK 8.9 M. This amount includes the anticipated cost of social security fees.
On an annual basis, the Board of Directors will evaluate whether a long-term incentive programme (for example based on shares or share price) is to be proposed to a general meeting or not. The Board proposes that the AGM approve a long-term incentive programme; see Item 18 below.
Pension agreements will, as a rule, be defined-contribution schemes and formulated in accordance with levels and practice applicable in the country in which the member of senior management is employed. The value of the benefit shall be in line with what is regarded as the norm for the country in question.
Other benefits may accrue in accordance with the terms applicable to the country in which the member of senior management is employed. However, such benefits may not constitute a major proportion of the total remuneration.
Period of notice and severance pay
Members of senior management will be offered terms in accordance with the legislation and practice applicable to the country in which the person concerned is employed. During the period of notice, the combined value of basic salary and severance pay may not exceed an amount corresponding to basic salary for two years. A member of senior management is to be prohibited from working in a competing business during the period of notice. In certain cases, prohibition of competition in return for continued remuneration may be applied for a maximum period of 24 months following expiry of the period of notice.
Authorisation of the Board to disregard the guidelines
The Board is entitled to disregard the guidelines adopted by the AGM if warranted in specific cases.
Previously approved but as yet unpaid remuneration
The main terms and conditions for remuneration of senior management in the current employment contracts are presented in Note 6 of the Annual Report for 2011/2012.
Item 18, The Board of Directors’ motion concerning adoption of a long-term incentive plan (“LTI 2013”)
Resolutions pursuant to this Item 18 are contingent on the AGM passing resolutions in accordance with the Board’s proposals under Item 19 below.
The Board of Directors proposes that the AGM resolve to adopt a long-term incentive plan (“LTI 2013”) with primarily conditions corresponding to those applying for LTI 2012, as adopted by the AGM of 10 September 2011. The purpose of the proposed incentive plan is to constitute part of the total remuneration package and to create conditions to retain and recruit skilled personnel to the Group. It is proposed that LTI 2013 encompass a maximum of 45 people, comprising members of senior management and other key personnel regarded as having considerable potential to influence Clas Ohlson’s long-term development (“Participants”).
LTI 2013 has been designed because it is considered desirable that in future the Participants will become shareholders of Clas Ohlson to a greater extent than today, which is expected to have a positive impact on their long-term work performance. LTI 2013 has also been designed to ensure that the remuneration paid to the Participants will be competitive in comparison with other comparable companies in the industry.
LTI 2013 entails that the Participants acquire at market price Class B shares in the company at a value corresponding to at least 5 per cent and a maximum of 10 per cent of their basic annual salary during the period 1 to 10 May 2013 (“Acquisition Period”). Allotment of options and share awards will occur five days after the Acquisition Period has ended (“Start Day”). The private investment will then be matched by the company, in the form of a free-of-charge allotment of conditional share awards and performance-based employee stock options.
A condition for exercising the share awards and employee stock options is that the employee retains his/her invested shares and that, with certain exceptions, also retains his/her employment from the Start Day up to 30 April 2016 (“Qualification Period”). For each Class B share acquired by the employee within the framework of LTI 2013, the company will allot a share award plus a number of preliminary employee stock options. Matching will be based on the number of shares invested in by the employee at the ordinary stock-market price prevailing when the shares are purchased. The scope of LTI 2013 may never exceed 653,000 B shares or 859,000 B shares if costs for social security fees are included.
Each share award provides the holder with entitlement to obtain one Class B share in the company free of charge. Share awards do not provide entitlement to compensation for dividends on underlying shares during the Qualification Period. The share awards are not transferable and may be issued by the company or by other Group companies.
Each exercisable employee stock option provides the holder with entitlement to acquire one Class B share in the company. The acquisition price for shares acquired upon exercise of the options shall correspond to 110 per cent of the volume-weighted average price paid for the company’s Class B share as established on the NASDAQ OMX Stockholm AB over a period of 10 trading days prior to the start of the Acquisition Period. The earliest date for exercising the employee stock options will be 15 June 2016 and the latest date will be 24 April 2020. When exercising the employee stock options, any rules concerning bans on trading must be observed, where applicable. The employee stock options do not provide entitlement to compensation for dividends on underlying shares during the Qualification Period. The employee stock options are not transferable and may be issued by the company or by other Group companies.
The number of exercisable employee stock options for the acquisition of shares depends on the number of Class B shares that the employee has acquired and the fulfilment of certain goals, as established by the Board of Directors, for the company’s development, growth and earnings during the Qualification Period. The levels to be established comprise a threshold, target and ceiling. The levels correspond to: five employee stock options/acquired Class B shares at the threshold level, 10 employee stock options/acquired Class B shares at the target level and 15 employee stock options/acquired Class B share at the ceiling level. Vesting of employee stock options between the threshold and ceiling levels occurs linearly. Should the threshold level not be attained, no employee stock options will be allotted.
Insofar as the share price varies at the date of acquisition, LTI 2013 could theoretically end up comprising more shares than those stated in the proposed scope. In such cases, allotment will be reduced proportionately in accordance with principles decided by the Board of Directors.
LTI 2013 will be reported in accordance with IFRS 2 – Share-based payment.
Based on unchanged dividends, the market conditions currently prevailing and the maximum outcome for LTI 2013’s criteria, the initial cost for LTI 2013, in accordance with IFRS 2, will not exceed SEK 13.2 M. To this should be added costs for social security fees, which will be calculated in greater detail in the Board of Directors’ complete motion concerning LTI 2013.
The Board of Directors proposes a buy-back programme in accordance with Item 19 (see below) so that, as described above, the company will be provided with an opportunity to transfer treasury shares to the Participants and also use the repurchased shares as liquidity for securing payment of future social security fees pertaining to LTI 2013. The administrative work required for handling the programme must be reasonable in relation to the programme’s design and scope and be subject to approval by the Board of Directors. The intention is that no new shares will be issued as a result of the programme.
Item 19 – The Board of Directors’ motion concerning a resolution authorising the Board of Directors to make decisions on the company’s acquisition of treasury shares and motion concerning a resolution to transfer treasury shares
The Board of Directors’ motion in accordance with this Item 19 is conditional upon the AGM first passing resolutions in accordance with Item 18 above.
A. Acquisition of treasury shares
The Board of Directors proposes that the AGM resolve to authorise the Board, during the period up to the next AGM, to make decisions concerning the company’s acquisition of shares in the company as follows.
• A maximum of 859,000 Class B shares may be acquired.
• The shares must be acquired on NASDAQ OMX Stockholm AB.
• Shares obtained through trading on a regulated market may only be acquired at a price per share that at every point of time is within the registered span of share prices.
• Payment for the shares must be made in cash.
Acquisitions may occur to safeguard the company’s commitments (including social security fees) resulting from the proposed and approved incentive programme.
B. Transfer of treasury shares
The Board of Directors proposes that the AGM resolve a transfer of shares in the company as follows.
• A maximum of 653,000 Class B shares may be transferred.
• Entitlement to receive shares shall accrue to the Participants, with each Participant entitled to receive at most the number of shares that result from the future conditions for LTI 2013.
• The Participants will be entitled to exercise their right to acquire shares no earlier than 15 June 2016 and no later than 24 April 2020.
• The Participants’ entitlement to receive shares is subject to fulfilment of all of the conditions established for the programme.
• Transfer of share awards issued in accordance with LTI 2013 will occur free of charge.
• Transfer of shares based on options issued in accordance with LTI 2013 will occur at a price corresponding to 110 per cent of the volume-weighted average price paid for the company’s Class B share as established on NASDAQ OMX Stockholm AB over a period of 10 trading days prior to the start of the Acquisition Period.
• In accordance with the terms and conditions for the programme, the number of shares that may be subject to transfer under LTI 2013 may become subject to recalculation due to such events as bonus issues, splits and rights issues.
• Payment for acquired shares must be made no earlier than 15 June 2016 and no later than 11 May 2020.
The transfer of treasury shares and the reason for disapplying the shareholders’ pre-emptive rights are a feature of the incentive programme resolved under Item 18.
Shareholders’ right to request information
At the AGM, where the Board of Directors deems it possible without occasioning material damage to the company, shareholders of the company are entitled to request information concerning matters that could impact the assessment of an item on the agenda or the financial position of the company, including any subsidiaries, (i.e. the right to request information pursuant to Chapter 7, Section 32 of the Swedish Company’s Act).
To be valid, resolutions by the AGM in accordance with Item 19 A above must be supported by shareholders representing at least two thirds of both the votes cast and the shares represented at the AGM. To be valid, resolutions by the AGM in accordance with Item 19 B above must be supported by shareholders representing at least nine tenths of both the votes cast and the shares represented at the AGM.
The Nomination Committee’s complete proposals concerning resolutions under Items 2, 14-16 and the Board of Directors’ complete motions concerning resolutions under Items 12 and 17 are presented above.
The Board of Directors’ complete motions concerning resolutions under Items 18-19 above and the accounting documentation and audit report pertaining to the 2011/2012 financial year, the Board of Directors’ statement in accordance with Chapter 18, Section 4 of the Swedish Companies Act concerning the distribution of profits and in accordance with Chapter 19, Section 22 of the Swedish Companies Act concerning authorisation for the acquisition of treasury shares, as well as the auditor’s statement pursuant to Chapter 8, Section 54 of the Swedish Companies Act concerning guidelines for remuneration of senior management will be made available at the company no later than 17 August 2012 and will also be sent by post to shareholders who provide their postal address.
All of the documents specified under the above heading will be made available in an electronic format on the company’s website, www.clasohlson.se, as of 17 August 2012.
Clas Ohlson AB (publ)
Board of Directors