Bilia’s Annual General Meeting 2018
At the AGM on 10 April 2018, at 2 p.m., the following matters will be considered:
- Dividend at SEK 4.50 per share,
- Election of Board and public accounting firm,
- Remuneration to the Board and auditor,
- Unchanged guidelines for remuneration to the Group Management,
- Long-term incentive program for senior officers and other key persons,
- Mandate for the Board of Directors to make decisions on the acquisition and transfer of own shares
The complete notice of the AGM is given below:
The shareholders of Bilia AB (publ) are hereby given notice of the Annual General Meeting to be held at 2 p.m. on Tuesday, 10 April 2018, at the IVA Conference Center, Grev Turegatan 16, Stockholm.
Notification of attendance and right to participate in the meeting
Shareholders wishing to participate in the AGM must:
- be registered in the share register kept by Euroclear Sweden AB on 4 April 2018
- notify Bilia AB of their intention to attend by not later than Wednesday, 4 April 2018
Notification can be made either:
- by telephone at +46 10 497 73 04 (or +46 10 497 70 00)
- by mail to Bilia AB, Box 9003, SE-400 91 Gothenburg, Sweden
- via the notification form on Bilia’s website www.bilia.com (does not apply to legal entities)
The following information is required:
- name
- personal or corporate identity number
- address and telephone number
- name of any accompanying assistants
Confirmation of participation:
- will be sent to shareholders who have given notice of their attendance
- must be brought to the meeting by the shareholders
Shareholders who are represented by one or more proxies are urged to include a proxy form (in original) along with the notification to attend. The proxy form must be dated and may not have a period of validity of more than five years. Anyone representing a legal entity must also present a copy of the registration certificate or other document showing the person(s) authorised to sign on behalf of the legal entity.
Shareholders whose shares have been registered to a nominee must temporarily re-register the shares in their own name with Euroclear Sweden AB in order to participate in the meeting. Such re-registration must be completed by not later than Wednesday, 4 April 2018. The nominee (bank or stockbroker) must be instructed to effect such voting right registration in a timely manner prior to 4 April 2018.
Proposed agenda
1 Opening of the meeting
2 Election of chairman for the meeting
3 Approval of electoral register
4 Approval of agenda
5 Election of persons to verify the minutes
6 Determination of whether the meeting has been duly convened
7 Information from Managing Director
8 Presentation of Bilia AB’s annual accounts, audit report and consolidated accounts for 2017
9 Adoption of Bilia AB’s Income Statement and Balance Sheet as well as Consolidated Statement of Comprehensive Income and Consolidated Statement of Financial Position, all per 31 December 2017
10 Distribution by the AGM of the earnings available for distribution
11 Discharge of the members of the Board of Directors and the Managing Director from liability
12 Determination of the number of Board members to be elected by the AGM
13 Determination of fees for the Board of Directors
14 Election of Board members and Chairman
15 Determination of audit fee and choice of auditor
16 Guidelines for remuneration to the Group Management
17 Decision on long-term incentive programme
18 Decision on mandate for the Board of Directors to make decisions on the acquisition and transfer of own shares
19 Other business
20 Conclusion of the meeting
Proposals
Item 10:
The Board of Directors proposes that the earnings available for distribution be disposed of as follows: a cash dividend of SEK 4.50 (4.00) per share with a record date of 12 April 2018. The dividend is expected to be paid by Euroclear Sweden on 17 April 2018. The remaining amount will be carried forward to a new account.
Item 2, 12–15:
The Nominating Committee includes Tim Floderus (Chairman), Eva Cederbalk, Helen Fasth Gillstedt and Mats Qviberg. The Nominating Committee proposes the following:
(2) Election of Mats Qviberg as chairman of the meeting.
(12) 10 Members of the Board.
(13) It is proposed that a fee of SEK 350,000 be paid to the Chairman of the Board and
SEK 350,000 to the Deputy Chairman. It is proposed that the other members receive SEK 220,000 each. Further, it is proposed that the chairman of the Audit Committee receive SEK 120,000 and that the members of the Audit Committee receive SEK 60,000 each. It is proposed that the chairman of the Compensation Committee receive SEK 25,000 and that the members of the Compensation Committee receive SEK 10,000 each.
The above fee proposal entails an increase compared with last year of SEK 15,000 each for the Chairman and Deputy Chairman of the Board and of SEK 10,000 each for other members, an increase of SEK 40,000 for the chairman of the Audit Committee and
SEK 20,000 each for other members of the Audit Committee, and an unchanged fee for the chairman and other members of the Compensation Committee.
(14) The Nominating Committee proposes re-election of the following members: Ingrid Jonasson Blank, Gunnar Blomkvist, Anna Engebretsen, Jack Forsgren, Laila Freivalds, Mats Holgerson, Jan Pettersson, Mats Qviberg and Jon Risfelt. Gustav Lindner has declined re-election.
Election of Nicklas Paulson.
Nicklas Paulson, born 1970, new Managing Director of Investment AB Öresund.
Mr. Paulson has long experience from investment banking and corporate finance. His most recent position was with Carnegie Investment Bank AB. He has previously worked at Alfred Berg, ABN AMRO and Swedbank Markets. Mr. Paulson has a Master’s degree in business and economics from Stockholm University. In view of his post in Investment AB Öresund, Mr. Paulson is regarded as being dependent in relation to Bilia’s major shareholders. Mr. Paulson holds no other posts.
Further, Mats Qviberg is proposed as Chairman of the Board.
Subject to approval by the AGM, the Board of Directors has announced its intention to appoint Jan Pettersson as Deputy Chairman.
More information on proposed Board members is available at www.bilia.com and in the annual report.
(15) Fees to auditors shall be paid as billed, upon approval.
Re-election of KPMG AB as the public accounting firm for the period up to the 2019 Annual General Meeting.
An account of the work of the Nominating Committee and its reasoning can be found at www.bilia.com
Item 16: Guidelines for remuneration to the Group Management
The Board of Directors proposes that last year’s guidelines for remuneration to the Group Management be adopted unchanged, which means:
Fixed salary; shall be on market terms and competitive and ensure that Bilia is able to recruit skilled senior executives.
Variable salary; shall be monetary and always primarily related to Bilia’s profitability, but with a maximum limit. This maximum limit is determined in relation to the basic salary. The
goals may be financial or non-financial and shall always be clear and measurable and subject to review by the Board of Directors. The remuneration is primarily based on the Group’s earnings and to a limited extent on individual goals. The company’s customer satisfaction survey has been accorded increased importance in setting bonus goals. In the case of members of the Group Management who are employed in subsidiaries, the variable remuneration is based to a limited extent on the Group’s earnings and primarily on the respective subsidiary’s earnings. Remuneration is paid if the annual profit of the respective company/Group reaches set goals and if specific individual goals are achieved.
The company’s cost for variable salary may not exceed 50% of the fixed salary for members of the Group Management. Variable salary is dependent on goal fulfilment, which means that variable remuneration may be omitted entirely.
Pensions; shall always be premium-based for the sake of predictability with regard to the company’s future cost obligations
Other benefits; mainly refers to company car
Termination and severance pay; In the event of termination by the company, certain members of the Group Management are entitled to continue receiving a salary for no more than 24 months, less any income from other service during the last 12 months. The first
12 months comprise salary during the period of notice, and the last 12 months comprise severance pay.
The guidelines apply to employment agreements entered into after the Annual General Meeting and in the event of any changes in existing terms. Information on remuneration to members of the Group Management is provided in the Annual Report, note 9, and in the Director’s Report.
No departure has been made from the terms adopted by the previous Annual General Meeting. The Board of Directors further proposes that departures may be made from the above guidelines if the Board decides that special reasons warrant such departure in any given case.
Item 17 (a-d): Proposed decision on long-term incentive programme
The Board of Directors proposes that the Annual General Meeting resolve to adopt a long-term competitive incentive programme in the form of a share saving programme for senior officers and other key persons within the Bilia Group in accordance with item 17 (a) below (“the Programme”). The decision according to item 17 (a) shall be conditional on the AGM’s decision regarding measures to guarantee the incentive programme, either in accordance with the proposal under item 17 (b) below or in accordance with the proposal under item 17 (c) below.
The purpose of the Programme is to motivate and retain competent key persons in the Bilia Group, to attract new employees and to provide added incentives for employees to achieve and surpass Bilia’s financial goals. The Programme has been designed based on the assumption that it is desirable for senior officers and other key persons within the Bilia Group to be shareholders in Bilia. Participation in the Programme requires that the participant has contributed via private investment as described in 17 (a) below. The Programme also promotes employee loyalty and thereby long-term value growth in Bilia. Consequently, the Board of Directors believes that adoption of the Programme will have a positive effect on the future development of the Bilia Group and is therefore beneficial for both Bilia and its shareholders.
Adoption of the incentive programme (17 (a))
Main features of the Programme
The Board of Directors proposes that the AGM resolve to adopt a long-term incentive programme in the form of a share saving programme. It is proposed that the Programme include approximately forty (40) key persons in the Bilia Group (“Participants”), roughly broken down as follows:
- Thirty (30) Participants in Sweden,
- Six (6) Participants in Norway, and
- Four (4) Participants altogether in Germany, Luxembourg and Belgium.
The Participants in the Programme must have invested in the Group by acquiring shares in Bilia AB (publ) (“Savings Shares”). Subsequently, the Participants will be given an opportunity to acquire, free of cost, shares within the framework of the Programme, so-called “Performance Shares”, under the terms stipulated below (the “Rights”).
Private investment
In order to participate in the Programme, the Participant must have made a private investment consisting of the acquisition of Savings Shares. The shares must have been acquired at market price between 30 April 2018 and 31 May 2018 for the purpose of being allocated to the Programme. The highest number of shares which a Participant may allocate to the Programme amounts to a rounded-off number of shares corresponding to no more than 10% of the Participant’s gross salary, based on the 2017 salary level. The lowest number of Savings Shares a Participant must acquire in order to participate in the Programme shall correspond to a market value of at least twenty-five thousand kronor
(SEK 25,000). For each Savings Share held within the Programme, Bilia will allot three (3) performance rights to the Participant, whereby the Participant, provided that certain performance measures are achieved, is allotted one (1) Performance Share per right.
General terms
- Allotment of Performance Shares will take place provided that the Participant, with certain exceptions, has, from the start of the Programme up until 31 March 2021 (the “Vesting Period”) kept his original Savings Shares and that the Participant, with certain exceptions, is still employed within the Bilia Group. The Programme will start as soon as is feasible after the AGM has adopted the Board’s proposal to this effect.
- Cost-free allotment of Performance Shares is, with the exception of what is stated in the point above, conditional on the performance goal established by the Board of Directors being met. Allotment per Participant is the same for all Participants. The maximum number of Performance Shares allocated within the framework of the Programme is 200,000. Maximum allotment of Performance Shares requires that the goals established by the Board of Directors regarding total shareholder return on Bilia’s shares and increased earnings per share are met. Allotment of one (1) Performance Share occurs if the total shareholder return on Bilia’s shares has been positive during the term of the Programme. Calculation of the total shareholder return shall be based on the average volume-weighted closing price of the Bilia share during the trading days in May 2018, which shall be compared with the average volume-weighted closing price during the trading days in March 2021, adjusted for dividends paid during the term of the Programme. One (1) additional Performance Share is allotted to the Participant if earnings per share in 2020 has increased by 10% compared with earnings per share in 2017. One-half (0.5) additional Performance Share is allotted to the Participant if earnings per share in 2020 has increased by 20% compared with earnings per share in 2017.
One-half (0.5) additional Performance Share is allotted to the Participant if earnings per share in 2020 has increased by 30% compared with earnings per share in 2017.
Terms for the Rights
The following terms shall apply for the Rights under the Programme, in addition to what is stated above:
- The Participant must acquire the Savings Shares during the period 30 April 2018 to 31 May 2018.
- The Rights must be earned during the Vesting Period.
- Rights cannot be transferred or pledged.
- Each Right entitles the Participant, under certain conditions, to obtain three (3) Performance Shares, after the end of the Vesting Period, provided that the Participant, with certain exceptions, has been employed in Bilia during the Vesting Period and still has his/her original Savings Shares in Bilia.
- If the Board of Directors determines that the terms for allotment of Performance Shares are no longer reasonable in the light of, for example, major changes in Bilia, the Group or the market, the Board is entitled to make adjustments of the Programme.
- The Board is entitled to adopt more detailed terms for the Programme.
- The Programme shall consist of no more than 260,000 shares (including shares required to guarantee social security contributions for the Programme as explained below). Based on the assumption of full investment, this means about 200,000 Performance Shares. It is assumed that some 60,000 shares will be sold on the market to cover the costs of social security contributions.
- The number of Performance Shares shall be recalculated in the event that a bonus issue (with the issue of new shares), a stock split or reverse stock split, a rights issue or other similar events occur in in Bilia during the Vesting Period.
Allotment of Performance Shares under the Programme
In order to implement the Programme in a cost-effective and flexible manner, the Board of Directors has considered different methods for securing delivery of Performance Shares under the Programme. The Board has thereby found that the most cost-effective alternative is to guarantee delivery by transfer of own shares held by Bilia. The Board of Directors therefore proposes that the AGM resolve as the main alternative, in accordance with item 17 (b) below, to transfer own shares.
In the event a majority cannot be achieved for item 17 (b) below, the Board of Directors proposes that it be resolved that Bilia may enter into an equity swap agreement with a third party in accordance with item 17 (c) below.
Costs for the Programme
Costs for the Programme are calculated in accordance with IFRS 2 and recognised in the income statement. The cost is recognised on a straight-line bases over the Vesting Period.
Costs have been calculated with the following assumptions: a share price of SEK 85 at the time of the investment, a share price increase of 10% during the term of the Programme, which entails a positive total shareholder return at the end of the Programme, that the approximately 40 Participants invest the maximum permitted amounts in the Programme, and that all Savings Shares remain at the end of the Programme. This entails an annual cost for the Programme of SEK 2.6 M if earnings per share in 2020 has increased by 10% compared with earnings per share in 2017 and SEK 4 M with maximum goal fulfilment.
Social security contributions must also be paid and can be estimated to amount to a weighted nominal percentage of 28%. The Participants reside in, and are tax residents of, Sweden, Norway, Germany, Luxembourg and Belgium. With an assumed distribution of shares between these countries, and with other conditions as stipulated above, the annual social security contributions are estimated to amount to SEK 1.1 M and SEK 1.6 M with maximum goal fulfilment.
Effects of the Programme on important key ratios and share dilution
The Programme is estimated to comprise a total of no more than 260,000 shares, including measures to guarantee social security contributions, excluding Savings Shares, which is equivalent to about 0.3% of Bilia’s total number of shares outstanding.
Outstanding rights to shares under previous long-term incentive programmes amount to about 0.1% of Bilia’s total number of shares outstanding. The effect of existing incentive programmes, including the Programme, on important key ratios is only marginal. For a description of Bilia’s other long-term incentive programmes, see the company’s Annual Report for 2017 and the company’s website, www.bilia.se.
Drafting process
The Board’s decision to propose that the AGM resolve to approve the Programme as described above was made at a Board meeting of 8 March 2018. The proposal was drafted by the Board’s Compensation Committee in consultation with the Board and with the support of external advisers.
Proposal for decision regarding transfer of own shares to Participants in the Programme (item 17 (b))
The Board of Directors proposes that, in order to guarantee delivery of Performance Shares, the AGM resolve that Bilia A shares previously acquired and now held by Bilia can be transferred to Participants within the framework of the Programme.
The Board further proposes that the AGM resolve that no more than 200,000 shares can be transferred to Participants under the Programme. The number of shares that can be transferred is subject to recalculation due to a intervening bonus issue, stock split, rights issue and/or similar events.
Equity swap agreement with third party (item 17 (c))
In the event the necessary majority cannot be achieved for item 17 (b) above, the Board of Directors proposes that the AGM resolve to guarantee the expected financial exposure due to the Programme by allowing Bilia to enter into an equity swap agreement on market terms with a third party, whereby the third party can, in its own name, acquire and transfer Bilia shares to the Participants.
Proposed resolution to authorise the Board of Directors to approve transfer to cover social security contributions for the Programme (item 17 (d))
In order to cover social security contributions that arise in conjunction with transfers of shares to the Participants under the Programme, the Board of Directors proposes that the AGM authorise the Board to approve transfers of own shares under the following terms:
- Transfer shall be made on Nasdaq Stockholm (the ”Stock Exchange”).
- Transfer can be made, on one or more occasions prior to the 2019 Annual General Meeting, of no more than 60,000 shares held by Bilia.
- Transfer of shares on the Stock Exchange can only be made at a price per share that lies within the noted price range at any given time.
- Transfer can only be made in exchange for cash payment.
The maximum number of shares that can be transferred/acquired on the Stock Exchange may be recalculated in the event a bonus issue (with the issue of new shares), stock split or reverse stock split occurs in Bilia, or if another event occurs that has occasioned recalculation of the number of shares to be transferred to the Participants under the Programme.
The Board of Directors intends to propose at future Annual General Meetings as well that the AGM authorise the Board to approve transfer or own shares on the Stock Exchange to cover social security contributions that arise under the Programme.
Terms
The Board’s proposal that the AGM resolve to implement the Programme is conditional on the AGM’s also deciding to adopt measures to guarantee the incentive programme as stipulated above. The Board’s proposal that the AGM resolve to approve transfer of own shares is similarly conditional on the AGM’s decision to approve the Programme and authorisation of transfer of own shares to cover social security contributions.
Majority required for decision
A valid decision for item 17 (a) above requires that the proposal be approved by shareholders holding more than one-half (1/2) of both the votes cast and the shares represented at the meeting. A valid decision for item 17 (b) above requires that the proposal be approved by shareholders holding at least nine-tenths (9/10) of both the votes cast and the shares represented at the meeting. A valid decision for item 17 (c) above requires that the proposal be approved by shareholders holding more than one-half (1/2) of both the votes cast and the shares represented at the meeting. A valid decision for item 17 (d) above requires that the proposal be approved by shareholders holding more than two-thirds (2/3) of both the votes cast and the shares represented at the meeting.
Item 18: Acquisition or transfer of own shares
The Board of Directors proposes that the Annual General Meeting authorise the Board to make decisions regarding the acquisition and transfer of own shares. The purpose of the authorisation is to give the Board greater freedom in its work with the company’s capital structure and to make it possible, if deemed appropriate, to acquire enterprises using the company’s shares as payment or to increase liquidity in the company’s share.
The Board of Directors considers that company shares can, from the viewpoint of the shareholders, be an appropriate means of payment (full or partial) in conjunction with business combinations, whereby the preferential rights of the shareholders must for obvious reasons be waived. The Board’s proposal entails the following:
Acquisition: The Board of Directors may, on one or more occasions up until the 2019 AGM, decide to acquire a number of Bilia shares such that the company’s own holding does not exceed 1/10th of the number of shares in the company at any given time. The consideration paid for the shares shall be on market terms and buy-back shall be possible by cash purchase on NASDAQ Stockholm at a price within the range noted at that particular time and otherwise subject to existing regulations.
Prior to deciding to exercise the Board’s mandate regarding acquisition of own shares, the Board makes an assessment of the current capital situation and future capital needs with regard to the growth of the Bilia Group, both organic and by acquisition.
Transfer: The Board of Directors may, on one or more occasions up until the 2019 AGM, decide to transfer all or a portion of the Bilia shares which the company holds at any given time. Such transfer of shares may take place by waiving the preferential rights of the shareholders at a price equivalent to the current market price, or an average of the current market price during a period of no more than 10 trading days in conjunction with the transfer, and with a price deviation of no more than 10%. The shares may be transferred on NASDAQ Stockholm, or used as payment in conjunction with business combinations.
Disclosure of information
Shareholders are entitled to request that the Board of Directors or Managing Director disclose particulars at the Annual General Meeting on circumstances that may influence the assessment of an item of business on the agenda and circumstances that may influence the assessment of the company’s or the Group’s financial situation.
The total number of shares and votes in the company is currently 102,799,952. All Bilia shares are of Series A; no Series B shares have been issued. Bilia holds 1,849,000 of its own shares.
Proxy form, accounting documents and Audit Report, auditor’s opinion, the Compensation Committee’s evaluation of remuneration to the Group Management, and the Board’s complete proposals for a decision under item 17 of the agenda will be available at Bilia on Norra Långebergsgatan 3 in Gothenburg and at www.bilia.com (click on the tab “The Company” and then on “Corporate Governance” and “General Meeting”) and can be sent to shareholders on request. The documents will also be available at the AGM.
The AGM venue opens at 1 p.m.
Welcome!
Gothenburg, March 2018
Board of Directors