Notice of Annual General Meeting in Atlas Copco AB
March 17, 2020
Stockholm, Sweden, March 17, 2020: Atlas Copco AB will hold the Annual General Meeting Thursday April 23, 2020 at 4.00 p.m. at Aula Medica, Nobels väg 6, Solna, Sweden. Due to the COVID-19 (Corona-virus), Atlas Copco has decided to put health and safety first and shorten the Annual General Meeting 2020 as much as possible.
Registration will start later than previous years i.e. 3.00 PM. There will be no food or refreshments served. The CEO-address will be shortened. The awards ceremony that normally takes place after the meeting is cancelled.
Due to instructions from Swedish authorities, shareholders are encouraged to appoint a proxy holder to vote on their behalf instead of being physically present at the meeting. Shareholders can appoint a proxy holder and give instructions on how to vote through Euroclear. For more information on that possibility, offered free of charge by Euroclear, please see www.euroclearproxy.se.
Please see the full Notice below, or visit www.atlascopcogroup.com/agm.
For more information please contact:
- Håkan Osvald, Senior Vice President, General Counsel +46 8 743 8995 [email protected]
- Sara Liljedal, Media Relations Manager +46 8 743 8060 or +46 72 144 1038 [email protected]
Atlas Copco Group
Great ideas accelerate innovation. At Atlas Copco we have been turning industrial ideas into business-critical benefits since 1873. By listening to our customers and knowing their needs, we deliver value and innovate with the future in mind.
Atlas Copco is based in Stockholm, Sweden with customers in more than 180 countries and about 39 000 employees at year-end. Revenues of BSEK 104/10 BEUR in 2019.
Unofficial Translation
Notice of Annual General Meeting in Atlas Copco AB
The Shareholders of Atlas Copco AB (the “Company”) are invited to attend the Annual General Meeting (the “Meeting”) Thursday April 23, 2020 at 4.00 p.m. (CEST) at Aula Medica, Nobels väg 6, Solna, Sweden. Registration starts at 3.00 p.m.
RegistrationShareholders, intending to participate in the Meeting, must
- be recorded in the register of shareholders kept by Euroclear Sweden AB (“Euroclear”) on Friday April 17, 2020, and
- notify the Company in writing of their intent to participate in the Meeting no later than Friday April 17, 2020, to the registration address Atlas Copco AB, “Årsstämma”, c/o Euroclear Sweden AB, Box 191, SE-101 23 Stockholm, or by telephone +46 8 402 90 43 work days between 9.00 a.m. to 4.00 p.m. or on the Company’s website www.atlascopcogroup.com/agm
- Opening of the Meeting and election of Chair
- Preparation and approval of voting list
- Approval of agenda
- Election of one or two persons to approve the minutes
- Determination whether the Meeting has been properly convened
- Presentation of the Annual Report and the Auditor’s Report as well as the Consolidated Annual Report and the Consolidated Auditor’s Report
- The President & CEO’s speech and questions from Shareholders to the Board of Directors and the Management
- Decisions regarding
a) approval of the Profit and Loss Account and the Balance Sheet and the Consolidated Profit and Loss Account and the Consolidated Balance Sheet
b) discharge from liability of the Board members and the President & CEO
c) the allocation of the Company’s profit according to the approved Balance Sheet
d) record date for dividend
- Determination of the number of
- Board members and deputy members, and
- auditors and deputy auditors or registered auditing company
- Election of
- Board members,
- Chair of the Board, and
- Auditors and deputy auditors or registered auditing company
- Determining the remuneration,
- in cash or partially in the form of synthetic shares, to the Board of Directors, and the remuneration to its committees, and
- to the auditors or registered auditing company
- The Board’s proposals regarding
a) guiding principles for the remuneration of executives
b) a performance based personnel option plan for 2020
- The Board’s proposal regarding mandates to
a) acquire series A shares related to personnel option plan for 2020
b) acquire series A shares related to remuneration in the form of synthetic shares
c) transfer series A shares related to personnel option plan for 2020
d) sell series A shares to cover costs related to synthetic shares to Board members
e) sell series A and B shares to cover costs in relation to the performance based personnel option plans for 2015, 2016 and 2017
- Closing of the Meeting
Item 8 c) and d) - The Board of Directors’ proposals regarding dividend and record date
The Board proposes that the dividend for 2020 is decided to be SEK 7.00 per share to be paid in two equal instalments of SEK 3.50. The record date for the first instalment is proposed to be April 27, 2020 and for the second instalment October 26, 2020. If the Meeting decides as proposed, the first instalment is expected to be distributed by Euroclear on April 30, 2020 and the second instalment on October 29, 2020.
Item 1, 9 and 10 - Proposals from the Nomination Committee regarding Chair of the Meeting, number of Board members, Chair, and other Board members and registered auditing company
The Nomination Committee, consisting of Petra Hedengran, the Chair of the Nomination Committee, Investor AB, Jan Andersson, Swedbank Robur Fonder, Ramsay Brufer, Alecta and Hans Ek, SEB fonder, who together represent more than 29% of the total number of votes in the Company, as well as Hans Stråberg, the Chair of the Board, propose as follows:
Item 1: That Hans Stråberg is elected Chair of the Meeting.
Item 9: That nine Board members be elected. That one registered auditing company be elected.
Item 10: Board members: Re-election of Staffan Bohman, Tina Donikowski, Johan Forssell, Sabine Neuss, Mats Rahmström, Hans Stråberg, and Peter Wallenberg Jr and new election of Anna Ohlsson-Leijon och Gordon Riske. That Hans Stråberg is elected Chair of the Board. That Ernst & Young AB is elected as the new auditing company which also is the Audit Committee’s recommendation.
Information regarding all proposed Board members is available on www.atlascopcogroup.com/agm
Item 11 – Proposal from the Nomination Committee regarding remuneration to the Board of Directors and for committee work and audit fee
Remuneration of SEK 2,450,000 (2,325,000) to the chair and SEK 780,000 (740,000) each to the other Board members not employed by the Company. To the chair of the Audit Committee SEK 325,000 (315,000) and SEK 205,000 (200,000) each to the other members. To the chair of the Remuneration Committee SEK 130,000 (125,000) and SEK 95,000 (90,000) each to the other members, and remuneration of SEK 100,000 (100,000) to each Board member who, in addition to the above, participates in a committee in accordance with a decision of the Board of Directors.
To further enhance the interest for the long term development of the Company, the Nomination Committee proposes that each nominated Board member shall have the possibility to choose between receiving 50% of the remuneration in the form of synthetic shares and the rest in cash and to receive the whole remuneration in cash.
The Board proposes that the obligation of the Company to pay an amount corresponding to the synthetic shares as described above shall be hedged through the purchase of own series A shares. Repurchased shares can be sold on the market in connection with the payment to the Board member in compliance with a request for mandate. The economic difference for the Company if all Board members choose to receive a part of their fee in the form of synthetic shares compared to receive the whole remuneration in cash is assessed to be very limited due to the hedging.
Audit fee is proposed to be as per approved invoice.
Item 12 – The Board’s proposals regarding:
a) guiding principles for the remuneration of senior executives
b) a performance based personnel option plan for 2020
12 a) guiding principles for the remuneration of executives
The Board proposes below guiding principles for executive remuneration. The proposal corresponds in principle with the guidelines decided by the Meeting in previous years, but to comply with new requirements in law, the current proposal is more comprehensive than previous years.
Guidelines for executive remuneration in Atlas Copco
The CEO and the other members of the Group Executive Management fall within the provisions of these guidelines. These guidelines do not apply to any remuneration decided by the general meeting.
The guidelines’ promotion of the company’s business strategy, long-term interests and sustainability
The Atlas Copco Group’s business strategy is available in the annual report which can be accessed at www.atlascopcogroup.com.
The successful implementation of the company’s business strategy and its sustainable long-term interests requires that the company can offer market competitive salaries to recruit and retain employees with the right competence.
Salary and employment conditions for employees
The total remuneration to employees shall be market competitive. The remuneration components, increase and growth rate over time shall be considered by the remuneration committee and the Board when the guidelines are decided.
Types of remuneration, etc.
The remuneration shall consist of: a base salary, variable compensation (excluding such decided by the general meeting), pension benefits and other benefits. The general meeting may, and has over a number of years, irrespective and independent of these and previous guidelines resolved on share and share price related remuneration i.e. long term incentive.
- Base salary
The base salary for the CEO and other members of the Group Executive Management will be based on competence, area of responsibility, experience and performance. The Group uses an international reputable assessment system for the annual salary review.
- Variable compensation
The variable compensation shall be measured over a period of one year and may amount to not more than 100 percent of the annual base salary. In addition further variable compensation may be awarded in extraordinary circumstances, provided such arrangements are limited in time and is only made on an individual basis either for the purpose to recruiting or retaining executives, or as remuneration for performance beyond the individual’s ordinary tasks. Such remuneration may not exceed an amount corresponding to 50 percent of the annual base salary. Any resolution on such remuneration shall be made by the Board based on a proposal from the remuneration committee.
The variable compensation shall be linked to predetermined and measurable criteria which can be financial or non-financial and which shall contribute to the company’s long-term and sustainable development.
The Board shall make an assessment, on the proposal from the remuneration committee, how well the CEO has met the criteria of variable compensation once the measurement period has expired. The CEO is responsible for the corresponding evaluation regarding the other executives.
- Pension benefits
For the CEO and other members of the Group Executive Management, pension benefits, including health insurance (Sw: sjukförsäkring), shall be premium defined. Variable cash remuneration shall not qualify for pension benefits. Premiums may amount to not more than 35 percent of the base salary.
- Other benefits
Other benefits may include, for example, life insurance, medical insurance (Sw: sjukvårdsförsäkring) and company car. Costs for such benefits may not amount to more than 10 percent of the base salary.
Mandatory law, other regulations and expatriate terms
Nothing in these guidelines can restrict the application of any mandatory law and other regulations. For employment relations governed by rules other than Swedish due adjustment may be made taking into account, to the extent possible, the overall purpose of these guidelines.
Termination of employment
A member of the Group Executive Management may terminate its employment with a six month notice period. When a termination is made by the company the employee shall be entitled to severance pay, based on number of years served with the company and age up to not more than two times the base salary.
The decision-making process to determine, review and implement the guidelines
The Board shall prepare a proposal for new guidelines at least every fourth year and submit it to the general meeting for decision. The remuneration committee established by the Board shall continuously review and assess the guidelines as well as the implementation of such. A member of the Group Executive Management shall not attend the process of or decision which may affect such member.
Deviations from the guidelines
The Board may resolve to deviate from the guidelines, in whole or in part, if in a specific case there are special reasons for the deviation and the board deems a deviation is needed to serve the company’s long-term interests or to ensure the company’s financial viability. As set out above, the remuneration committee’s tasks include preparing the Board’s resolutions in remuneration-related matters. This includes any resolutions to deviate from these guidelines.
12 b) a performance based personnel option plan for 2020
In the opinion of the Board it is important, and it is also in the best interest of the Shareholders, that key personnel in Atlas Copco have a long term interest in a good value development of the shares of the Company and align their performance in a manner that enhances such a development. In particular this applies to the group of key personnel that consists of the senior executives and the division presidents. It is also the assessment of the Board that a share related option program increases the attractiveness of Atlas Copco on the global market and enhances the possibility to recruit and keep key personnel in the Group.
Scope and main principles
Granting
The Board asks for the right to decide on the issuing of performance stock options that can give a maximum of 335 key personnel in the Group the possibility to acquire a maximum of 2,653,352 series A shares.
Issuing
The issuing is dependent on the value increase of the Group expressed as Economic Value Added during 2020. In an interval of SEK 1,800,000,000 the issue varies linear from zero to 100% of the maximum number. The size of the plan and the limits of the interval have been established by the Board and are compatible with the goals in the long term business plan of the Group.
The issue of performance stock options is maximized to the following number per person within the respective key group:
category 1 – the President & CEO: 147,669 (183,823) options
category 2 – Business Area Executives (4): 29,195 (34,900) options
category 3 – other members of the Group management and division presidents (27): 17,228 (21,467) options
category 4 – other key personnel (303): 6,349 (10,525) options
The Board shall decide which persons shall be included in category 4 based on position, qualification and individual performance. The issuing of options will take place not later than March 20, 2021.
The Board shall have the right to introduce an alternative incentive plan for key personnel in such countries where the granting of options is not feasible. Such alternative incentive solutions (SAR) shall, to the extent possible, have terms and conditions corresponding to the ones applicable to the performance stock option plan.
The term of the performance stock options
The term of the options shall be seven years from the date of granting. The options are not transferable.
Exercise
The options are exercisable earliest three years from granting. The right to exercise only applies during the period a person is deemed employed.
Exercise price
The exercise price shall be set to an amount corresponding to 110% of the average of the closing rates at Nasdaq Stockholm of series A shares during a period of ten business days next following the date of the publishing of the full-year summary for 2020.
Maximized outcome
A single payment/assignment of shares under the stock option plan can never exceed four times the value of the exercise price.
Recalculation
In case there should be a decision at a general shareholders meeting regarding, for example, a reduction or increase of outstanding shares or a dividend beyond the dividend policy of the Company a recalculation can take place to preserve the value of the options.
A decision regarding such recalculation shall be taken by the Board.
Theoretical Value for the Recipient
A theoretical value on a personnel option has been established based on the Black & Scholes model for valuating options. As a base for the calculation, among other factors, a share price of SEK 357.52 and an expected volatility of 30% have been used. The theoretical value is calculated to amount to SEK 65.01 per personnel option or in total a maximum of SEK 173,000,000 for the whole plan.
Requirement for senior executives and division presidents regarding own investment
As prerequisite for the full participation of the senior executives and division presidents (32 persons) in the personnel stock option plan 2020 applies that they have invested 10% of their respective base salary for 2020, before tax, in series A shares of the Company (20% for expatriates with net salary). The investment may be by purchase of new or pre-owned shares, however, not by shares that are obtained as part of the participation in the stock option plan for 2018 and 2019. The participation in the plan corresponds proportionally to the investment made. Those who have chosen to invest in series A shares will get, in addition to the proportional participation in the plan, the right to acquire, three years after the investment year, the number of shares (matching shares) that corresponds to the number of shares acquired under 2020 at a price of 75% of the market value upon which the exercise price for the shares in the 2020 plan was based, subject to continued employment and continued ownership of the shares. If the number of the acquired shares has been reduced, the right to matching shares is reduced on a share by share basis. The theoretical value for this is calculated to be SEK 110.56 per matching share or in total approximately SEK 3,450,000.
Delivery of shares
The personnel options shall give the right to acquire already issued series A shares.
Item 13 – The Board’s proposal regarding mandates to:
a) acquire series A shares related to personnel option plan for 2020
b) acquire series A shares related to remuneration in the form of synthetic shares
c) transfer series A shares related to personnel option plan for 2020
d) sell series A shares to cover costs related to synthetic shares to Board members
e) sell series A and B shares to cover costs in relation to the performance based personnel option plans for 2015, 2016 and 2017
In order for the resolutions by the Meeting in accordance with 13 a), b), d) and e) above to be adopted, the resolutions must be supported by Shareholders holding at least two-thirds of the votes cast as well as of the shares represented at the Meeting. In order for the resolution by the Meeting in accordance with 13 c) above to be adopted, the resolution must be supported by Shareholders holding at least nine tenths of both the votes cast as well as of the shares represented at the Meeting. Should majority votes not be achieved, the intention of the Company is to hedge the financial exposure in connection with the 2020 personnel option plan and secure delivery of shares by entering into an equity swap agreement with a financial institution.
13 a) acquire series A shares related to personnel option plan for 2020
The Board proposes that the Board is granted the mandate until the next Annual General Meeting to decide, on one or more occasions, on the acquisition of shares in the Company as follows:
1. Acquisition of not more than 3,350,000 series A shares
2. The shares may only be acquired on Nasdaq Stockholm
3. The shares may only be acquired at a price per share within the registered trading interval, at any given point in time.
The acquisition is made with the intention to limit the economic risk caused by an increase of the share value during the period the performance stock options remain outstanding, to be able to fulfil future delivery obligations under personnel option and matching share agreements, to cover alternative solutions and cash settlements as well as to cover, primarily, social charges.
13 b) acquire series A shares related to remuneration in the form of synthetic shares
The Board proposes that the Board is granted the mandate until the next Annual General Meeting to decide, on one or more occasions, on the acquisition of shares in the Company as follows:
1. Acquisition of not more than 15,000 series A shares
2. The shares may only be acquired on Nasdaq Stockholm
3. The shares may only be acquired at a price per share within the registered trading interval, at any given point in time.
The acquisition is made with the intention to hedge the obligation of the Company to pay remuneration, including social charges, to a Board member who has chosen to receive 50% of the remuneration in synthetic shares.
13 c) transfer series A shares related to personnel option plan for 2020
The Board further proposes that the Meeting decides to transfer shares in the Company in relation to the Company’s personnel option plan 2020, including the share saving/matching share part, according to the following:
1. A maximum of 2,700,000 series A shares may be transferred. Right to acquire shares is to be granted the persons participating in the Company’s proposed performance stock option plan 2020, with a right for each participant to acquire the maximum number of shares stipulated in the terms and conditions of this plan. The participant’s right to acquire shares is conditional upon all terms and conditions of the Company’s performance stock option plan 2020 being fulfilled. Shares are to be transferred on the terms and conditions stipulated by the plan, meaning inter alia, that what is stated therein regarding price and time during which the participants are to be entitled to use their right to acquire shares is also applicable to the transfer. Participants are to pay for the shares within the time and on the terms stipulated in the performance stock option plan 2020.
2. With respect to the number of shares that may be transferred under the Company’s performance stock option plan, customary terms for recalculation as a result of bonus issue, share split, rights issues and similar measures apply in accordance with the terms and conditions of the plan.
As reason for the deviation from the Shareholders’ right of first refusal and as the base for the transfer price in connection with the transfer of own shares, the Board states that the transfer of own shares is a part of the proposed performance stock option plan for 2020.
13 d) sale of series A shares to cover costs related to synthetic shares to Board members
The Board proposes that the Board is granted the mandate until the next Annual General Meeting to decide, on one or more occasions, to sell not more than 10,000 series A shares in the Company to cover the costs of giving a counter value of earlier issued synthetic shares and to, primarily, cover social charges.
Shares proposed to be sold were acquired based on mandates given at the Annual General Meeting each respective year to acquire the share for the stated purpose. The sale shall take place on Nasdaq Stockholm at a price within the registered price interval at any given time.
As reason for the deviation from the Shareholders’ right of first refusal and as the base for the price in connection with the sale of own shares, the Board states that the sale of own shares is a part of the previously adopted decision regarding synthetic shares to the Board.
13 e) sale of series A and B shares to cover costs in relation to the performance based personnel option plans for 2015, 2016 and 2017
The Board proposes that the Board is granted the mandate until the next Annual General Meeting to sell, at one or more occasions, a maximum of 7,000,000 series A and B shares, in connection with the exercise of rights under the above mentioned performance stock option plans and related costs in order to cover costs, primarily cash settlements in Sweden, SAR and social costs.
Shares proposed to be sold were acquired each respective year based on mandate given at that year’s Annual General Meeting to acquire the shares for the stated purpose. The sale shall take place on Nasdaq Stockholm at a price within the registered price interval at any given time.
As reason for the deviation from the Shareholders’ right of first refusal and as the base for the price in connection with the sale of own shares, the Board states that the sale of own shares is an integrated part of the previously adopted performance stock option plans. Due to current legislation, this has to be re-approved annually.
Shares and Votes
The Company has issued in total 1,229,613,104 shares of which 839,394,096 are series A shares and 390,219,008 are series B shares. On March 17, 2020 out of such shares the Company holds 15,368,592 series A shares and 8,899 series B shares. Series A shares have one vote and series B shares have one tenth of a vote whereas the non-represented shares held by the Company corresponds to 15,369,481.9 votes as per March 17, 2020.
Information at the Annual General Meeting
If a Shareholder so requires and the Board believes that the information can be given without causing substantial harm to the Company, the Board and the President & CEO shall give information regarding an item on the agenda or circumstances that might affect the evaluation thereof or circumstances that could affect the evaluation of the economic position of the Company or a subsidiary Company or the Company’s relation to another Company within the Group.
If a Shareholder wishes to submit questions in advance, such should be sent to: Atlas Copco AB, Attn: General Counsel, SE-105 23 Stockholm or to [email protected].
Documentation
All information that the Company has to make available and present for the Meeting will be available at the Meeting, is available on www.atlascopcogroup.com/agm and with the Company and will be sent free of charge to the Shareholders who so request and state their address from March 17, 2020.
Processing of personal data
For information on how your personal data is processed, see https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf
Nacka, March 2020
Atlas Copco AB (publ)
The Board of Directors