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NOTIFICATION ETC.
Shareholders who wish to attend the Annual General Meeting
shall be entered in the share register maintained by Euroclear Sweden AB on Thursday 26 April 2018,
shall give notice of their attendance to Ahlsell no later than Thursday 26 April 2018. Notification shall be made on the company’s website www.ahlsell.com, by telephone +46 (0) 8 402 92 23 or by post to Ahlsell AB, “Årsstämma 2018”, c/o Euroclear Sweden AB, P.O. Box 191, SE-101 23 Stockholm. The notification shall state name, personal identification number or company registration number, address, telephone number and accompanying advisors, if any (not more than two).
Shareholders whose shares are registered in the name of a nominee must temporarily re-register the shares in their own name in order to be entitled to attend and vote at the Annual General Meeting. Such re-registration must be effected with Euroclear Sweden AB on Thursday 26 April 2018, which means that the shareholder must inform its nominee well before this date.
Shareholders attending by proxy or a representative should send powers of attorney in original, certificates of incorporation and any other documents of authorisation to the company at the address above well before the Annual General Meeting. A template proxy form is available on the company’s website, www.ahlsell.com. Shareholders cannot vote or in other ways attend the Annual General Meeting by remote access.
PROPOSED AGENDA
a) adoption of the income statement and the balance sheet and the consolidated income statement and the consolidated balance sheet,
b) disposition of the company’s profit in accordance with the adopted balance sheet, and
c) whether the Board members and the CEO should be discharged from liability
PROPOSED RESOLUTIONS
Ahlsell’s Nomination Committee has submitted proposals in accordance with items 2, 11-13 and 18 on the agenda. The Nomination Committee consists of Tomas Ekman (Keravel S.à.r.l., a company indirectly owned by CVC European Equity Fund V and CVC European Equity Tandem Fund), Peter Guve (AMF Försäkring), Mikael Wiberg (Alecta Pensionsförsäkring) and Helen Fasth Gillstedt (Handelsbanken Fonder). Kenneth Bengtsson, the Chairman of the Board of Directors, is a co-opted member of the Nomination Committee.
Item 2 – Election of Chairman of the meeting
The Nomination Committee proposes that Kenneth Bengtsson, the Chairman of the Board of Directors, is elected Chairman of the Annual General Meeting.
Item 10 b – Resolution regarding disposition of the company’s profit in accordance with the adopted balance sheet
The Board of Directors proposes that the Annual General Meeting resolves on a dividend to the shareholders of SEK 1.65 per share and that the record date for the dividend shall be Monday 7 May 2018. If the Annual General Meeting resolves in accordance with the proposal, the dividend is expected to be distributed to the shareholders on Friday 11 May 2018.
Item 11 – Determination of the number of Board members and auditors
The Nomination Committee proposes that the Board of Directors shall consist of nine ordinary members without deputies. The Nomination Committee further proposes that the number of auditors shall be one.
Item 12 – Determination of remuneration to be paid to the Board members and the auditors
The Nomination Committee proposes that an annual remuneration of SEK 1,050,000 (previously SEK 1,000,000) shall be paid to the Chairman of the Board of Directors, SEK 615,000 (previously SEK 600,000) to the deputy Chairman of the Board of Directors and SEK 410,000 (previously SEK 400,000) to each of the other Board members elected by the Annual General Meeting who are not employed by the company. The Nomination Committee has further proposed that an unchanged annual remuneration of SEK 150,000 shall be paid to the Chairman of the Audit Committee and SEK 100,000 to each of the other members of the Audit Committee. The Nomination Committee furthermore proposes that an unchanged annual remuneration of SEK 100,000 shall be paid to the Chairman of the Remuneration Committee and SEK 50,000 to each of the other members of the Remuneration Committee.
The Nomination Committee proposes that remuneration to the company’s auditor shall be paid in accordance with approved invoices.
Item 13 – Election of Board members and auditors
The Nomination Committee proposes that Kenneth Bengtsson, Peter Törnquist, Johan Nilsson, Magdalena Gerger, Satu Huber, Gustaf Martin-Löf, Terje Venold and Søren Vestergaard-Poulsen are re-elected as Board members for the period until the end of the next Annual General Meeting. Furthermore, the Nomination Committee proposes that Susanne Ehnbåge is elected as new Board member. As previously communicated, Charlotta Sund has announced that she will not be available for re-election.
The Nomination Committee further proposes that Kenneth Bengtsson is re-elected as Chairman of the Board of Directors and that Peter Törnquist is re-elected as Vice Chairman of the Board of Directors.
A report on the Nomination Committee’s proposals and further information regarding the proposed Board members is available on the company’s website, www.ahlsell.com.
The Nomination Committee further proposes, in accordance with the audit committee’s recommendation, that the registered accounting firm KPMG AB is re-elected as auditor until the end of the next Annual General Meeting. KPMG AB will appoint Joakim Thilstedt to be auditor in charge.
Item 14 – Resolution regarding authorisation for the Board of Directors to resolve on acquisition and transfer of shares in Ahlsell
The Board of Directors proposes that the Annual General Meeting resolves to authorise the Board of Directors to, on one or more occasions for the period until the next Annual General Meeting, resolve on an acquisition of a maximum number of shares so that the company’s holding following the acquisition does not exceed 10 per cent of all the shares in Ahlsell at any time. The acquisition shall be conducted on Nasdaq Stockholm at a price that is within the price range for the share price prevailing at any time, that is, the range between the highest ask price and the lowest bid price. In the event that the acquisitions are effected by a stock broker as assigned by the company, the share price may, however, correspond to the volume weighted average price during the time period within which the shares were acquired, even if the volume weighted average price on the day of delivery to Ahlsell falls outside the price range. Payment shall be made in cash.
Furthermore, the Board of Directors proposes that the Annual General Meeting authorises the Board of Directors to, on one or more occasions for the period until the next Annual General Meeting, resolve on a transfer of shares in Ahlsell. The number of shares transferred may not exceed the total number of shares held by Ahlsell at any time. Transfers may be conducted on or outside Nasdaq Stockholm, including a right to resolve upon deviations from the shareholders’ pre-emption right. The transfer of shares on Nasdaq Stockholm shall be conducted at a price within the registered price range at the time of the transfer. The transfer of shares outside Nasdaq Stockholm shall be made at a price in cash or value in property received that corresponds to the share price at the time of the transfer of the Ahlsell shares that are transferred, with the deviation, if any, that the Board of Directors deems appropriate in each case.
The purpose of the authorisation regarding acquisition and transfer of shares in Ahlsell is to enable financing of acquisitions of companies and businesses by payment in shares in Ahlsell and to continuously be able to adjust the capital structure of Ahlsell and thereby create added value to the shareholders as well as to enable that costs and delivery are secured in connection with the implementation of Ahlsell’s incentive programs.
Item 15 – Resolution regarding remuneration guidelines to members of the group management
The Board of Directors proposes that these guidelines for remuneration are to be applied in relation to the CEO and other members of the group management of Ahlsell (the “Group Management”).
Ahlsell strives to offer a total remuneration that is on market terms in order to attract and retain a highly competent management. The total remuneration, which varies according to the performance of the individual and the group, may consist of the components that are set out below.
Fixed salary constitutes the basis for the total remuneration. The salary shall be competitive and reflect the responsibilities of the position. The fixed salary is revised annually.
Variable salary is primarily based on the group’s growth in profit, profitability and cash flow. The variable part may not exceed 80 per cent of the fixed salary.
Another part of the Group Management’s remuneration are long-term incentive programs resolved upon by the General Meeting. At an Extraordinary General Meeting held on 16 October 2016 the shareholders resolved to implement long-term incentive programs. The programs consist of a warrant program for the executive management and a share savings program for the executive management as well as a wider range of employees. The Board of Directors is evaluating on an annual basis whether long-term incentive programs are to be proposed to the General Meeting and, if that is the case, whether such proposed long-term incentive programs shall involve transfer of shares in Ahlsell. Incentive programs shall comprise the executive management and/or a wider range of employees in the company that are deemed to considerably influence the company’s profits and growth. Incentive programs shall ensure a long-term commitment for the development of the company and be implemented on market terms. The Board of Directors intends to propose to the 2018 Annual General Meeting the implementation of a call option program for the executive management and a share savings program for the executive management and other key employees.
Retirement pension, disability benefits and medical benefits shall be designed so that they reflect the rules and practice on the market. If possible, the pension shall be premium-based. Other benefits may be provided to individual members or the entire Group Management and be designed in relation to market practice. These benefits shall not constitute a material part of the total remuneration.
Members of the Group Management have a notice period of six months if the senior executive resigns and are entitled to a notice period of not more than 18 months if the company terminates the employment. No severance pay is paid if a member of the Group Management resigns. Upon termination by the company, the members of the Group Management have no right to severance payment during the notice period in addition to salary and other employment benefits.
The Board of Directors shall be entitled to deviate from the guidelines for remuneration set out above if there are special reasons in an individual case. In such a case, the Board of Directors shall give an account for the reason for deviation from the guidelines at the next Annual General Meeting.
The Remuneration Committee appointed by the Board of Directors prepares and draws up proposals for remuneration to the CEO which it presents to the Board of Directors for decision. The CEO makes a proposal to the Remuneration Committee for a decision on a remuneration structure for other members of the Group Management. The Board of Directors shall be informed of the decision of the Remuneration Committee.
Item 16 – Resolution regarding implementation of a long-term share savings program
The Board of Directors proposes that the Annual General Meeting resolves to introduce a long-term share savings program as follows:
A.1 Background
Prior to the listing of Ahlsell's shares on Nasdaq Stockholm in 2016, it was resolved to introduce a long-term share based incentive program. The Board of Directors now proposes to introduce a new long-term share savings program 2018 (“SSP 2018”) with similar structure as the previous incentive program for Ahlsell's senior executives and a number of key employees.
The primary reasons for SSP 2018 are to encourage a widespread ownership among Ahlsell's key employees, recruit and retain qualified and talented employees, strengthen the link between the objectives of key employees and those of Ahlsell, and increase motivation. In accordance with the previous incentive program, SSP 2018 will create a group-wide focus among the participants on increased growth, operating margin and total return on the Ahlsell-share.
SSP 2018 comprises approximately 120 employees in Ahlsell. Participation in SSP 2018 requires the participants to acquire or hold a minimum number of shares in Ahlsell (“Savings Shares”). Participants that retain Savings Shares in SSP 2018 until the end of the program in June 2021 and continue to be employed by Ahlsell during this time may receive up to three (3) shares for each Savings Share free of charge (“Performance Shares”). The number of Performance Shares that may be received will be determined based on the fulfilment of a number of defined performance targets during the vesting period July 2018 – June 2021.
The maximum number of shares in Ahlsell that may be allocated under SSP 2018 shall be limited to 1,461,000, which represents approximately 0.33 per cent of the total number of shares in the company.
A.2 Basic terms for SSP 2018
SSP 2018 is intended for Ahlsell's executive management and a number of other key employees who the Board of Directors considers to have a direct or indirect impact on the company's result and development. Participation in SSP 2018 requires the members of Ahlsell's executive management and other key employees to acquire or hold a minimum number of Savings Shares in Ahlsell and that such Savings Shares are allocated to SSP 2018. The Savings Shares may be acquired specifically for the purposes of SSP 2018, or be shares already held by the participant, provided that these have not been allocated to a previous incentive program. Purchase of Savings Shares may not be made during such period when trading in the shares of Ahlsell is prohibited pursuant to the company's policies or Regulation (EU) No 596/2014 of the European Parliament and of the Council dated 16 April 2014 on market abuse (Market Abuse Regulation), or other corresponding legislation prevailing at any time, but may in such event be made at a later time when such circumstances no longer exist.
Participants that retain their Savings Shares until and including allocation and remain employed by Ahlsell during the same period, will be allocated up to three (3) Performance Shares for each Savings Share. The number of Performance Shares that may be allocated will be determined based on the fulfilment of a number of defined performance targets during the vesting period July 2018 – June 2021. Allocation of Performance Shares to the participants are granted free of charge.
The right to Performance Shares will be granted to the participants following the Annual General Meeting 2018 in connection with, or shortly thereafter, an agreement is made between the participant and the company regarding participation in SSP 2018. The Board of Directors shall be entitled to offer participation in SSP 2018 to new key employees until and including November 2018. Allocation of Performance Shares, if any, will, except for in exceptional circumstances, occur after the announcement of the company's interim report for the second quarter 2021.
The participants are not entitled to transfer, pledge or dispose of the right to Performance Shares or to perform any shareholders' rights regarding the right to Performance Shares during the vesting period. The company will not compensate the participants in SSP 2018 for dividends made in respect of the shares that the respective right to Performance Shares entitles to.
A.3 Participation in SSP 2018
The Board of Directors shall decide on the terms and conditions for participation in SSP 2018 including the investment level for each key employee. The investment for the approximately 120 participants corresponds in average to approximately 15-20 per cent of the fixed annual salary before tax for each participant.
The two categories of participants for SSP 2018 are:
| Category (maximum number of participants) | Savings Shares, approximate portion of the total number of shares in SSP 2018 per category (%) | Performance Shares, maximum number per Savings Share after the three-year vesting period |
| A.1 CEO and other members of Ahlsell's executive management (8) | 25 | 3x |
| A.2 Other key employees (112) | 75 | 3x |
The Board of Directors shall decide on the maximum number of Savings Shares for each category and participant within the limits of the maximum number of shares in SSP 2018. Participating members of Ahlsell's executive management and other key employees are given the opportunity to invest at different levels depending on salary and position and consequently their ability to influence the company's earnings.
A decision to allow participation in SSP 2018 requires that it can be made with reasonable administrative and financial efforts according to the Board of Directors’ assessment.
A.4 Allocation of Performance Shares
Allocation of Performance Shares under SSP 2018 will occur after the announcement of the company's interim report for the second quarter 2021. Allocation may be postponed, either for all participants or some participants, or with respect to certain Performance Shares for some participants. As a main rule, a condition for a participant to have the right to be allocated Performance Shares, is that the participant continues to be an employee within the Ahlsell Group (and has not resigned or been dismissed) during the vesting period until allocation and that the participant has kept all of his/her Savings Shares during this period.
There are three performance targets that each can entitle to up to one third of one Performance Share for the period July – June during the years 2018/2019, 2019/2020 and 2020/2021. The performance targets take into account Ahlsell's financial targets and relates to (i) sales growth, (ii) EBITA margin, and (iii) shareholder return.
The Board of Directors has set what it considers to be adequate, relevant and challenging performance target levels as follows below. Of the maximum three (3) Performance Shares that the participant may receive for each Savings Share, one (1) Performance Share relates to the performance target regarding sales growth, one (1) relates to the EBITA margin and one (1) relates to shareholder return.
| Performance Share | Measurement | Performance targets |
| Sales growth | Annual growth during the period July – June less GDP growth(GDP growth measured as GDP growth in Sweden, Finland and Norway weighted according to the relative proportion of Ahlsell's sales in each respective country) | < 2%: no vesting2-3%: 25% vested >3-4%: 50% vested >4-5%: 75% vested >5%: full vesting |
| EBITA margin | Rolling three-year average adjusted EBITA margin(Measured on the three twelve months periods immediately preceding the time of measurement) | < 8.5%: no vesting 8.5-9.0%: 25% vested >9.0-9.5%: 50% vested >9.5-10.0%: 75% vested >10.0%: full vesting |
| Shareholder return | Total shareholder return during the period July – June (change of the share price plus dividend yield) less the return on Nasdaq Stockholm SIX Return Index.(Measured on the twelve months period immediately preceding the time of measurement) | < 1%: no vesting1-2%: 1/3 vested >2-3%: 2/3 vested >3%: full vesting |
Before allocation of Performance Shares, the Board of Directors shall evaluate if the allocation is reasonable in relation to the company's financial efforts, position and development, as well as other factors. The Board of Directors shall under certain circumstances have the right to reduce the final allocation of Performance Shares or, in whole or in part, terminate the program prematurely without compensation to the participants if significant changes occur in the company or in the environment it operates.
The Board of Directors shall have the right to establish divergent terms for the program regarding, inter alia, the vesting period and allocation of Performance Shares, e.g. in the event of termination of employment during the vesting period. The applicable principle is that the participant forfeits the rights under SSP 2018 if he/she ceases to be employed in Ahlsell before allocation, unless the participant qualifies as a so-called good leaver or the board considers that there are specific reasons in the individual case.
The number of shares that may be allocated to the participants are limited such that the total value of the Performance Shares may not exceed nine (9) times the amount that the participant invested in Savings Shares at the start of the program. The number of shares that may be allocated under SSP 2018 shall, under the conditions that the Board of Directors determines, be subject to adjustment where the company implements a bonus issue, a reverse share split, a share split, a rights issue or similar measures, taking into account customary practice for corresponding incentive programs.
A.5 Introduction and administration, etc.
The Board of Directors or a specific committee appointed by the Board of Directors shall, in accordance with the decision by the general meeting, be responsible for the detailed formulation and administration of SSP 2018, within the scope of the terms and directions set out herein, prepare the necessary documentation for the participants and to administer SSP 2018 and/or engage an external administrator for the management of SSP 2018.
The Board of Directors may also decide to introduce an alternative cash based incentive program for participants in such countries in which purchase of Savings Shares or allocation of Performance Shares is not appropriate and in other cases when it is deemed appropriate. In connection with delivery of shares to participants in SSP 2018, the Board of Directors shall also have the right to offer cash settlement in order to cover the participant’s taxation costs upon vesting. Any alternate incentive program shall, as far as practically possible, be designed to comply with the terms and conditions of SSP 2018.
A.6 Hedging through share swap agreement
Ahlsell will enter into a share swap agreement with a third party (bank), whereby the third party shall be able to, in its own name, acquire and transfer shares to the participants in order to fulfil the company's obligations to deliver shares under SSP 2018. Such a share swap agreement with a third party may also be used for the purpose to cover social security costs that accrue under SSP 2018.
B.1 Estimated costs, expenses and financial effects of SSP 2018
SSP 2018 will be reported in accordance with "IFRS 2 – Share-based Payment". According to IFRS 2, the allocation of shares shall be treated as staff costs during the qualification period and shall be recorded directly in equity. According to IFRS 2, staff costs will not impact the company's cash flow. During the qualification period, social security costs will be expensed in the profit and loss account in accordance with "UFR 7 IFRS 2 – Social security contributions for listed enterprises".
The estimated maximum total cost for Ahlsell (including social security costs but excluding the interest cost for the share swap agreement (see below)) for SSP 2018 over its duration from June 2018 until and including July 2021, based on the assumption that all participating key employees make maximum investments, a share price of SEK 52 less the proposed dividend of SEK 1.65 per share in accordance with the Board of Directors’ proposal to the 2018 Annual General Meeting, an annual increase in the share price for the Ahlsell-share by 10 per cent, 5 per cent employee turnover and 50 per cent vesting on the performance levels concerning sales growth and EBITA margin as well as 100 per cent vesting on the performance level concerning shareholder return, is approximately SEK 39 million, based on IFRS accounting principles. In the event that vesting and/or level of investment is different, the total cost might be different from an accounting perspective.
The interest cost of the share swap agreement is estimated to approximately SEK 1.6 million on an annual basis based on market conditions as of 5 March 2018 and a three-year maturity. In addition, the share swap agreement may lead to both positive and negative cash flows, which, while not affecting the profit and loss account, will be booked directly against equity and may be recorded as a liability in the balance sheet.
SSP 2018 comprises 1,461,000 Performance Shares, which represents approximately 0.33 per cent of the total number of outstanding shares and votes in the company.
The Board of Directors considers the expected positive effects following SSP 2018 to outweigh the costs related to SSP 2018.
B.2 Effects on key ratios
The total cost of the incentive program, which theoretically can amount to a maximum of approximately SEK 103 million, excluding the interest cost for the share swap agreement, will decrease the company's EBITA with the same amount during a period of just over three years from June 2018 until and including July 2021. This maximum cost is based on conservative assumptions such as the share price increasing three-fold, that all performance targets are fulfilled, that all participants in SSP 2018 remain employed and hold their Savings Shares throughout the vesting period, as well as an assumption of social security costs of 23 per cent.
B.3 Preparation of the proposal
The principles of SSP 2018 have been prepared by Ahlsell's Board of Directors. The proposal has been prepared together with external advisors and after consultation with shareholders. The Board of Directors has thereafter decided to present this proposal to the Annual General Meeting. Besides the officials who have participated in the preparation of the proposal as instructed by the Board of Directors, no employee that may participate in the program has participated in the formulation of these terms and conditions.
B.4 Other share based incentive programs
Please refer to Ahlsell's Annual Report for 2017, note 3 or the company's website www.ahlsell.com for a description of other share based incentive programs. In addition, the Board of Directors has proposed the Annual General Meeting 2018 to resolve on implementation of a long-term call option program.
B.5 The proposal by the Board of Directors and reasons for the proposal
Referring to the description above, the Board of Directors proposes the Annual General Meeting to resolve on the implementation of SSP 2018.
The Board of Directors wishes to increase the possibility to recruit, retain and motivate employees as well as to encourage long-term ownership in Ahlsell. In addition, SSP 2018 is expected to contribute to an increased interest and motivation for Ahlsell's operations, result and strategic goals. SSP 2018 has been designed to reward the participants for an increased shareholder value. Allocation in SSP 2018 requires the participants to hold shares in Ahlsell or invest in Ahlsell shares at market price. By linking the employees' compensation to Ahlsell's result and value growth, the long-term value growth of the company will increase. Therefore, the Board of Directors is of the opinion that the implementation of SSP 2018 will have a positive impact on the Ahlsell Group's continued development and thus will benefit the employees as well as the company and the shareholders.
B.6 Majority requirements
A resolution in accordance with Item A above is valid when supported by shareholders holding more than half of the votes cast at the Annual General Meeting.
Item 17 – Resolution regarding implementation of a long-term call option program
The Board of Directors proposes that the Annual General Meeting resolves to introduce a long-term call option program 2018/2022 as follows.
A.1 Background
Prior to the listing of Ahlsell's shares on Nasdaq Stockholm in 2016, it was resolved to introduce a long-term warrant based incentive program. The Board of Directors now proposes to introduce a long-term call option program 2018/2022 (“CO 2018/2022”) to approximately ten senior executives in Ahlsell, including members of the company's executive management, which the Board of Directors considers to have a material impact on the company's result.
The primary reason for CO 2018/2022 is that the senior executives in Ahlsell shall take part of and contribute to a positive value growth of the company's shares during the term of the proposed program through their own investment. In accordance with the previous long-term warrant program, the purpose of CO 2018/2022 is for Ahlsell to retain and recruit competent and talented senior executives, align the interests of the senior executives and the shareholders in Ahlsell as well as to increase motivation.
The number of call options in Ahlsell to be allocated under CO 2018/2022 is limited to 447,000, representing approximately 0.10 per cent of the total number of shares in the company.
A.2 Basic terms for CO 2018/2022
a) The number of call options in Ahlsell to be transferred is limited to 447,000, representing approximately 0.10 per cent of the total number of shares in the company. Each call option entitles to purchase of one (1) share in the company during the period 1 June 2021 until and including 31 May 2022. Application for purchase of call options according to A.2 e) below or exercise of a call option to purchase shares may not be made during such period when trading in the shares of Ahlsell is prohibited pursuant to the company's policies or Regulation (EU) No 596/2014 of the European Parliament and of the Council dated 16 April 2014 on market abuse (Market Abuse Regulation), or other corresponding legislation prevailing at any time. In such event, the application period may be prolonged for the same period as the trading restriction has had an adverse effect on the application period.
b) The purchase price for the shares at exercise of a call option shall be 120 per cent of the average volume-weighted price paid for the Ahlsell share on Nasdaq Stockholm during the period 4 May 2018 until and including 18 May 2018 or such other corresponding period decided by the Board of Directors in the event that the circumstances mentioned in A.2 a) above exist (the “Exercise Price”). In the event Ahlsell's share price exceeds 170 per cent of the abovementioned average price paid (the “Cap”) at the time of exercise of the call options, the number of shares to which each call option entitles to purchase of shall be reduced such that the total value of each call option at the time of exercise does not exceed the difference between the Cap and the Exercise Price.
c) Approximately ten senior executives shall have the right to purchase call options from Ahlsell. The Board of Directors in Ahlsell finally decides on the maximum investment for each individual senior executive in CO 2018/2022, taking into consideration the senior executive’s investment level in the share savings program SSP 2018. Further, the number of call options per participant shall be decided with regard to the senior executive's responsibility and position. The right to purchase call options shall only accrue to those who have not resigned or been given notice of termination at the end of the application period. Call options may also be offered to new senior executives until and including November 2018. The terms and conditions for such purchases shall be the same or corresponding to the terms and conditions in this resolution, which, inter alia, means that the purchase price shall correspond to the market value at the time of purchase. It is a requirement that participation can be made with reasonable administrative and financial efforts according to the Board of Directors’ assessment.
d) Transfer of call options to senior executives outside of Sweden is dependent on the tax effects, that no legal obstacles exist, and that, in the assessment of the Board of Directors of Ahlsell, such transfer and later delivery of shares can be made with reasonable administrative and financial resources. The company's Board of Directors shall have the right to make such adjustments of CO 2018/2022 that are caused by applicable foreign rules and legislation.
e) Application for purchase shall be made at the latest on or around 25 May 2018. The Board of Directors of Ahlsell has the right to decide on a postponed last day for application for new senior executives whose purchases are made after the end of the initial application period.
f) Those who are entitled to purchase call options shall apply for purchase in amounts corresponding to either the highest number of call options offered to them or part thereof. If such person does not purchase any or part of the call options offered to her/him, such call options that are not purchased shall be allocated between those who have applied in writing to purchase additional call options pro rata to the number of call options that they initially applied for.
g) Call options that are held by Ahlsell and that have not been transferred to participants or have been repurchased from participants, or otherwise will not be used in CO 2018/2022, may be cancelled by the company's CEO after decision by the Board of Directors.
h) The call options shall be transferred to participants on market conditions at a purchase price based on an estimated market value of the call options at the time of purchase using a well-established option valuation model calculated by an independent valuation institute, based on the average volume-weighted price paid for the Ahlsell share on Nasdaq Stockholm during the period 4 May 2018 until and including 18 May 2018 or such other corresponding period decided by the Board of Directors in accordance with A.2 b) above. Ahlsell's Board of Directors shall decide a new market price in a corresponding manner for purchases made by new senior executives after the end of the initial application period.
i) Based on a price for the Ahlsell share of SEK 52.00, less the proposed dividend of SEK 1.65 per share, and on the other market conditions as of 5 March 2018, the value of each call option has been estimated at SEK 1.93 by an independent valuation institute, which amounts to a total value for all call options of approximately SEK 0.86 million.
j) The call options shall be governed by market conditions including a right for Ahlsell to repurchase the call options if the participant's employment in the company cease or if the participant wishes to transfer the call options to a party other than the company or if the participant does not want to exercise all of the purchased call options. Such repurchase shall be made at the market value of the call options. Repurchase of call options may not be made during such period when trading in the shares of Ahlsell is prohibited pursuant to the company's policies or Regulation (EU) No 596/2014 of the European Parliament and of the Council dated 16 April 2014 on market abuse (Market Abuse Regulation), or other corresponding legislation prevailing at any time.
k) Ahlsell shall also have the right to repurchase the call options at market value and, in connection with delivery of shares to participants, to offer cash settlement in order to cover the participant’s taxation costs upon vesting.
l) The number of shares to which each call option entitles to purchase of and the Exercise Price may be adjusted in the event of, inter alia, a bonus issue, a reversed share split, a share split, a rights issue or similar measures, taking into account customary practice for corresponding incentive program.
m) The complete terms and conditions for the call options are available on Ahlsell's website www.ahlsell.com.
B.1 Hedging through share swap agreement
Ahlsell will enter into a share swap agreement with a third party (bank), whereby the third party shall, in its own name, acquire and transfer shares to the participants in order to fulfil the company's obligations to deliver shares under CO 2018/2022.
B.2 Costs for the company etc.
The participants in CO 2018/2022 will purchase the call options at market value, which means that the call options will not result in any staff costs for Ahlsell in Sweden. However, one participant is liable for taxes in Norway and one in Finland, which is expected to slightly increase the costs for social security charges and an increased health care fee for the company in relation to these participants.
The interest cost of the share swap agreement is estimated to approximately SEK 0.5 million on an annual basis based on market conditions as of 5 March 2018 and a three-year maturity. Further, the share swap agreement may lead to both positive and negative cash flows, which, while not affecting the profit and loss account, will be booked directly against equity and may be recorded as a liability in the balance sheet.
B.3 Administration
The Board of Directors of Ahlsell shall be responsible for the detailed formulation and administration of CO 2018/2022 within the scope of the terms and conditions set out herein.
B.4 Preparation of the proposal
The principles of CO 2018/2022 have been prepared by Ahlsell's Board of Directors. The proposal has been prepared together with external advisors and after consultation with shareholders. The Board of Directors has thereafter decided to present this proposal to the Annual General Meeting. Except for the officials who have participated in the preparation of the proposal as instructed by the Board of Directors, no employee that may participate in the program has participated in the formulation of these terms and conditions.
B.5 Other share based incentive programs etc.
Please refer to Ahlsell's annual report for 2017, note 3 or the company's website www.ahlsell.com for a description of other share based incentive programs. In addition, the Board of Directors has proposed the Annual General Meeting 2018 to resolve on implementation of a new long-term share savings program.
B.6 The proposal by the Board of Directors and reasons for the proposal
Referring to the description above, the Board of Directors proposes the Annual General Meeting to resolve on the implementation of CO 2018/2022.
The Board of Directors wishes to increase the possibility to recruit, retain and motivate employees as well as to encourage long-term ownership in Ahlsell. In addition, CO 2018/2022 is expected to contribute to an increased interest and motivation for Ahlsell's operations, result and strategic goals. CO 2018/2022 has been designed to reward the participants for an increased shareholder value. Allocation in CO 2018/2022 requires the participants to make their own investment. By linking the employees' compensation to Ahlsell's share price, the long-term value growth of the company will increase. Therefore, the Board of Directors is of the opinion that the implementation of CO 2018/2022 will have a positive impact on the Ahlsell Group's continued development and thus will benefit the employees as well as the company and the shareholders.
B.7 Majority requirements
A resolution in accordance with Item A above is valid when supported by shareholders holding more than half of the votes cast at the Annual General Meeting.
Item 18 – Resolution regarding rules of procedure for the Nomination Committee
The Nomination Committee proposes that the Annual General Meeting resolves on the rules of procedure for the Nomination Committee as follows:
(b) Ahlsell shall have a Nomination Committee composed of four members appointed by the four largest shareholders that desires to participate in the nomination process. In addition to these four members, the Chairman of the Board of Directors shall be a co-opted member of the Nomination Committee.
(c) The Nomination Committee shall be formed pursuant to Item a) based on shareholding statistics maintained by Euroclear Sweden AB, or other reliable information regarding the shareholding which the company has access to, as per the last banking day in August the year before the Annual General Meeting.
(d) The Chairman of the Board of Directors shall, as soon as aforementioned information regarding ownership becomes available, contact a representative of each of the four largest shareholders in the company, which then shall have the right to appoint one member each of the Nomination Committee. If the shareholder cannot be reached with reasonable efforts or within a reasonable time period expresses its wishes to participate in the nomination procedure, the right to appoint a member of the Nomination Committee within a reasonable time period will be assigned to the largest shareholder next in line.
(e) The members of the Nomination Committee shall be announced no later than six months prior to the Annual General Meeting. The name of the shareholder that has appointed a member shall be published. The Nomination Committee’s term of office commences at the time of publication of its formation and ends at the time of publication of the next formed Nomination Committee.
(f) The Nomination Committee shall appoint a Chairman of the Nomination Committee. The Chairman of the Nomination Committee shall not be a member of the company’s Board of Directors. The Nomination Committee enjoys a quorum upon attendance of more than half of the total number of members.
(g) If one or more shareholders who have appointed a member of the Nomination Committee ceases to be one of the four largest shareholders of the company more than two months prior to the Annual General Meeting, the member(s) appointed by aforementioned shareholder(s) shall, upon a request addressed to the Nomination Committee’s Chairman from the new shareholder who instead has become one of the four largest shareholders, leave his/hers assignment in the Nomination Committee and such new shareholder that is among the four largest shareholders shall instead have the right to appoint a member of the Nomination Committee.
(h) A shareholder that has become one of the four largest shareholders later than two months prior to the Annual General Meeting shall, instead of having the right to appoint a member of the Nomination Committee, have the right to appoint a representative who shall be a co-opted member of the Nomination Committee.
(i) If a member of the Nomination Committee resigns for other reasons than pursuant to Item f) before the work has been finalized, a substitute member shall be appointed by the same shareholder that appointed the resigning member. Changes in the composition of the Nomination Committee shall be made public as soon as such changes have taken place.
(j) The duties of the Nomination Committee are to propose the Chairman of the Board of Directors, other members of the Board of Directors, the Chairman of the General Meeting and the company´s auditor, as well as to propose fees and other remuneration to each of the members of the Board of Directors and the auditor and potential changes in the rules of procedure for the Nomination Committee. The Nomination Committee shall perform its duties in accordance with the Swedish Corporate Governance Code and thus particularly aim at an appropriate composition of the company’s Board of Directors characterized by diversity and breadth of the appointed members’ qualifications, experience and background.
(k) The Nomination Committee shall forward to Ahlsell all information necessary in order for Ahlsell to be able to fulfill its publication obligations. Ahlsell shall upon the Nomination Committee’s request provide human resources, such as a secretary to the Nomination Committee, in order to facilitate the Nomination Committee’s work. If necessary, Ahlsell shall also cover reasonable expenses for external consultants or similar that the Nomination Committee considers vital in order for the Nomination Committee to perform its duties.
MISCELLANEOUS
Number of shares and votes
As of the date of this notice, there is a total number of 436,302,187 shares in Ahlsell and each share represents one vote. As of the same date, Ahlsell holds 7,000,000 of its own shares, corresponding to approximately 1.6 per cent of the total number of shares and votes in Ahlsell, which cannot be represented at the Annual General Meeting.
Special majority requirements
The resolution under item 14 is valid only if supported by shareholders holding not less than two-thirds of both the votes cast and the shares represented at the Annual General Meeting.
Shareholders’ right to request information
The Board of Directors and the CEO 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, 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 and the consolidated accounts.
Documentation
The accounts, the auditor’s report, the statement of the remuneration committee’s evaluation in accordance with the Swedish Corporate Governance Code, the Nomination Committee’s reasoned statement regarding its proposal for the Board of Directors etc. and information regarding the proposed Board members as well as the auditor’s report regarding whether the previously adopted guidelines for remuneration to the senior executives have been complied with together with thereto related documents such as the reasoned statement of the Board of Directors pursuant to Chapter 18, Section 4 and Chapter 19, Section 22 of the Swedish Companies Act (2005:551) will be available at Ahlsell’s premises at Liljeholmen, visiting address Rosterigränd 12, Stockholm, Sweden, and on Ahlsell’s website, www.ahlsell.com, no later than on Thursday, 12 April 2018 and will be sent to those shareholders who so request and state their address. All of the above-mentioned documents will be presented at the Annual General Meeting. Questions may be submitted in advance to Ahlsell AB, 117 98 Stockholm, or by e-mail: arsstamma@ahlsell.se.
_________________
Stockholm, March 2018
Ahlsell AB (publ)
the Board of Directors
Other information
Schedule for the Annual General Meeting:
3.00 p.m. CET - The doors open for shareholders.
4.00 p.m. CET - The Annual General Meeting commences.
For further information please contact:
Karin Larsson, Head of IR and external communications
+46 8 685 59 24, karin.larsson@ahlsell.se
Ahlsell is the Nordic region’s leading distributor of installation products, tools and supplies for installers, construction companies, facility managers, industrial and power companies and the public sector. The unique customer offer covers more than one million individual products and solutions. The Group has a turnover of over SEK 27 billion and is listed on Nasdaq Stockholm. About 97 percent of revenue is generated in the three main markets of Sweden, Norway and Finland. With about 5,500 employees, more than 220 branches and three central warehouses, we constantly fulfil our customer promise: Ahlsell makes it easier to be professional!
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