Company Announcement No. 08-2016:
The Board of Directors hereby calls the Annual General Meeting to be held on Tuesday 5 April 2016 at 16.00 (CET) at Tivoli Congress Center, Arni Magnussons Gade 2-4, DK-1577 Copenhagen V.
Agenda:
1. The Board of Directors report on the company's activities in 2015
2. Presentation and approval of the 2015 Annual Report
3. Approval of the Board of Directors' fees:
a. Final approval of fees for 2015
The Board of Directors proposes final approval of the fees for 2015 which were pre-approved by the General Meeting in 2015. The fees are based on a base fee of DKK 400,000 (the "Base Fee") with twice that amount to the Vice Chairman and 3 times that amount to the Chairman. Furthermore, an additional fee corresponding to 25% of the Base Fee shall be paid to any board member that also serves as an ordinary member of a board committee, while the chairman of any such committee shall receive an additional fee corresponding to 50% of the Base Fee. The Chairman and Vice Chairman of the Board of Directors shall not be entitled to receive committee fees. The total remuneration to the members of the Board of Directors for 2015 amounts to DKK 5.3m, cf. note 36 in the Annual Report (page 136).
b. Preliminary determination of fees for 2016
The Board of Directors proposes unchanged principles for the fees in respect of 2016. The fees for 2016 will be presented to the General Meeting in 2017 for final approval.
In addition, the company pays expenses, including travel and transportation costs, associated with the services on the Board of Directors, and the company may also pay foreign social taxes and similar taxes levied by foreign authorities in relation to the fees.
4. Distribution of profits or covering of losses in accordance with the approved Annual Report
The Board of Directors proposes that a dividend of DKK 4 per share be paid out, corresponding to a total dividend distribution of DKK 205m for 2015.
5. Election of members to the Board of Directors
The Board of Directors proposes re-election of Mr Vagn Ove Sørensen, Mr Torkil Bentzen, Mr Sten Jakobsson, Mr Tom Knutzen and Ms Caroline Grégoire Sainte Marie as members of the Board of Directors. In addition, the Board of Directors proposes election of Mr Marius Jacques Kloppers and Mr Richard Robinson Smith (Rob Smith) as new members of the Board of Directors.
Mr Martin Ivert does not seek re-election.
Information about management positions and other background information in respect of each candidate is set out in the attached appendix 1, and the information is also available at the company's website, www.flsmidth.com.
6. Appointment of auditor
The Board of Directors proposes that Deloitte Statsautoriseret Revisionspartnerselskab be reappointed as the company's auditor.
7. Proposals from the Board of Directors
The Board of Directors submits the following proposals:
7.1 - Amendment of the Articles of Association - change from bearer shares to registered shares
Due to changes in legislation the Board of Directors proposes to amend the Articles of Association to the effect that the company's shares are changed from being issued to the bearer to being issued in the name of the holder. The possibility of issuing new bearer shares has been repealed in 2015, meaning, inter alia, that the Board of Directors' authorisation to increase the company's share capital, cf. Article 4a of the Articles of Association, cannot be exercised unless the shares are changed to being registered.
a. Amendment of Articles 4 and 4a
On this background, the Board of Directors proposes to amend the wording of Article 4, paragraph 3, 1st sentence, to the following:
"The shares are negotiable shares registered in the name of the holder."
As a consequence hereof, it is also proposed to adjust the wording of Article 4a, paragraph 4, 1st sentence, which is linked to the Board of Directors' authorisations to increase the company's share capital, to the following:
"In the case of a share capital increase pursuant to paragraphs 1 and 2, the new shares shall be issued in the name of the holder."
b. Amendment of Article 5
As a consequence of the above, it is proposed to amend the wording of Article 5, paragraph 3, to the following since it is not a requirement to give notice of general meetings via the IT system of the Danish Business Authority if the shares are registered in the name of the holder:
"General Meetings shall be called via the Company website, www.flsmidth.com. General meetings shall also be called by written communication to all shareholders who have so requested."
The proposed amended Articles of Association is attached hereto as appendix 2 and is also available at the company's website, www.flsmidth.com.
7.2 - Amendment of the Articles of Association - update of the Board of Directors' authorisation to increase the company's share capital
The Board of Directors proposes that the existing authorisation in Article 4a of the Articles of Association to increase the company's share capital is extended so that it is applicable until and including 1 April 2021.
Article 4a, paragraph 1, 3rd sentence and paragraph 2, 3rd sentence, will hereafter have the following wording:
"The authorisation shall apply for the period until and including 1 April 2021."
The proposed amended Articles of Association is attached hereto as appendix 2 and is also available at the company's website, www.flsmidth.com.
7.3 - Amendment of the Articles of Association - authorisation for distribution of extraordinary dividends
The Board of Directors proposes that a new Article 5, paragraph 11 be inserted in the Articles of Association authorising the Board of Directors to distribute extraordinary dividends, subject to the statutory limitations set out in the Danish Companies Act.
The purpose of this authorisation is to provide the Board of Directors with the possibility of distributing dividend more than one time per year.
The new Article Article 5, paragraph 11 will be worded as follows:
"The Board of Directors is authorised to distribute extraordinary dividends."
The proposed amended Articles of Association is attached hereto as appendix 2 and is also available at the company's website, www.flsmidth.com.
7.4 - Approval of updated guidelines for incentive pay
FLSmidth & Co. A/S has set guidelines for incentive pay to the members of the company's Board of Directors and Group Executive Management. The Board of Directors proposes that the updated guidelines for incentive pay be approved by the General Meeting.
In 2016, the Board of Directors has launched a market aligned long-term incentive program based on performance shares. The program provides a variable incentive framework which is closely linked to the company's results and thereby also the value creation for the shareholders. The new program is part of the strategy to be prepared for the upturn in the market. However, to further support this strategy the Board of Directors finds that a stronger focus on variable remuneration for the Group Executive Management in FLSmidth is needed. When comparing with the surrounding market, where the trend in recent years has been a shift in the pay mix from fixed towards more variable pay, the Board of Directors finds solid strategical reasons to suggest increases in the maximum levels for both short-term and long-term incentive programs. This will provide the Board of Directors with the possibility of focusing even more on pay for performance for the Group Executive Management which is the signal the Board of Directors wants to send. In this connection it is proposed to increase the maximum value of the individual performance share grants to a maximum of 35% of the base salary (including pension, if any). For the short-term incentive program the maximum level is proposed to be 50%. In addition, the proposal includes deletion of the section regarding share options since the possibility of granting share options to Group Executive Management has ceased with effect from 2016.
The proposed updated version of the guidelines for incentive pay is attached hereto as appendix 3 and is also available at the company's website, www.flsmidth.com.
7.5 - Treasury shares
The Board of Directors proposes that it be authorised until the next Annual General Meeting to let the company acquire treasury shares equivalent to a total of 10% of the company's share capital at the time of the authorisation, provided that the company's total holding of treasury shares at no point exceeds 10% of the company's share capital. The consideration may not deviate more than 10% from the official price quoted on Nasdaq Copenhagen at the time of acquisition.
8. Any other business
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Adoption requirements
The proposals set out in agenda items 7.1, 7.2 and 7.3 must be adopted by at least 2/3 of the votes as well as 2/3 of the share capital represented at the General Meeting. The remaining proposals on the agenda can be adopted by a simple majority of votes.
Size of the share capital and the shareholders' voting rights
The company's share capital amounts to nominally DKK 1,025,000,000 and is divided into shares of DKK 20. Each share of DKK 20 entitles the holder to 20 votes.
The registration date is Tuesday 29 March 2016.
Shareholders holding shares in the company on the registration date have the right to attend and vote at the Annual General Meeting. The number of shares held by the shareholder is calculated at the registration date based on the shares held by the shareholder according to the share register and any notifications of ownership received by the company for entry into the share register. Attendance at the General Meeting is also subject to the shareholder having timely obtained an admission card as described below.
Admission card
Shareholders wishing to attend the Annual General Meeting must request an admission card. The request must be received by the company no later than Friday 1 April 2016 at 23.59 (CET). Admission cards may be ordered via FLSmidth's InvestorPortal at www.flsmidth.com/agm or by submitting the registration form, which can be downloaded from www.flsmidth.com/agm. If the form is used, it must be sent to VP Investor Services, Weidekampsgade 14, P.O.Box 4040, DK-2300 Copenhagen S (fax: +45 4358 8867 or a scanned version via email to vpinvestor@vp.dk). The form must be received within the deadline. An admission card can also be ordered for an adviser.
Proxy
Proxies must be submitted electronically via FLSmidth's InvestorPortal at www.flsmidth.com/agm (requires electronic password) or in writing by using the proxy/postal vote form that can be downloaded from the company's website, www.flsmidth.com/agm. If the form is used, the completed and signed form must be received by VP Investor Services, Weidekampsgade 14, P.O.Box 4040, DK-2300 Copenhagen S (fax: +45 4358 8867, email: vpinvestor@vp.dk) no later than Friday 1 April 2016 at 23.59 (CET).
Postal vote
Postal votes must be submitted electronically via FLSmidth's InvestorPortal at www.flsmidth.com/agm (requires electronic password) or in writing by using the proxy/postal vote form that can be downloaded from the company's website, www.flsmidth.com/agm. If the form is used, the completed and signed form must be received by VP Investor Services, Weidekampsgade 14, P.O.Box 4040, DK-2300 Copenhagen S (fax: +45 4358 8867, email: vpinvestor@vp.dk) no later than Monday 4 April 2016 at 16:00 (CET). Once a postal vote has been submitted it cannot be withdrawn.
Further information
Until and including the day of the Annual General Meeting, the company's website, www.flsmidth.com/agm, will provide additional information about the General Meeting, including the 2015 Annual Report, information about the total number of shares and voting rights on the date of the notice, the notice with the agenda and the complete proposals, including appendices, the proxy/postal vote form for the Annual General Meeting and the Articles of Association. The 2015 Annual Report is only available in English, and this is the official version, which will be filed with the Danish Buisness Authority. A condensed version of the annual report, "Årsprofil 2015", is available in Danish.
This information will also be available for inspection by the shareholders at the company's head office at Vigerslev Allé 77, DK-2500 Valby, from 14 March 2016.
Questions from shareholders
Shareholders may submit questions regarding the agenda or the documents, etc. to be used at the Annual General Meeting in writing to FLSmidth & Co. A/S, Vigerslev Alle 77, DK-2500 Valby, or via email to corpir@flsmidth.com.
Electronic voting
Electronic voting (e-voter) will be used if one or more items on the agenda are put to vote. E-voters will be handed out at the entrance to the Annual General Meeting.
Webcast
The entire Annual General Meeting will be webcasted live on the company's website, www.flsmidth.com/agm, and the webcast will also subsequently be available at the website. Webcast will only cover the podium.
Parking at Tivoli Congress Center
Tivoli Congress Center is located at Arni Magnussons Gade 2-4, DK-1577 Copenhagen V, and can be reached by car and public transportation. There is a limited number of parking spaces in the car park under Tivoli Congress Center. The entrance to the car park is from Kristian Erslevs Gade. There is a charge for parking.
After the Annual General Meeting the company will serve light refreshments.
Valby, March 2016
FLSmidth & Co. A/S
The Board of Directors
