SAMPO PLC STOCK EXCHANGE RELEASE 28 February 2006 at 9:00
NOTICE OF ANNUAL GENERAL MEETING
Sampo plc's shareholders are invited to the Annual General Meeting to be held on Wednesday, 5 April 2006 at 4 p.m. at the Aalto hall of Kulttuuritalo, address Sturenkatu 4, Helsinki. Registration of the persons who have given prior notice to attend and distribution of voting tickets will commence at 2.30 p.m.
The following matters will be on the agenda of the Meeting:
1. The Annual General Meeting matters specified in Article 20 of the Articles of Association
2. Proposal by the Board of Directors to reduce the share capital through cancellation of Sampo A shares held by the company
Sampo plc's ("Sampo") Annual General Meeting resolved on 11 April 2005 to authorize the Board of Directors to repurchase Sampo's own shares. According to the resolution, Sampo A shares may be repurchased to be cancelled.
By virtue of the authorization to repurchase Sampo's own shares granted by the Annual General Meeting to the Board of Directors, Sampo has repurchased a total of 7,000,000 of its own A shares, representing approximately 1.23 per cent of the company's share capital and approximately 1.22 per cent of all votes.
The Board of Directors will propose that the company's share capital be reduced by the total counter-book value of Sampo shares held by Sampo, approximately EUR 1,177,315.50, and that this sum be transferred from the share capital to the premium reserve. The reduction in share capital will be implemented without consideration by the cancellation of 7,000,000 Sampo A shares repurchased by Sampo, resulting in a corresponding reduction in the total number of A shares. As a result thereof, the company's capital and reserves will not be reduced.
The purpose of the reduction in share capital is to cancel the aforementioned A shares repurchased and held by Sampo. The proposed cancellation therefore only concerns those Sampo shares that are held by Sampo. The reduction in the share capital will have no effect on the holdings of the other shareholders of Sampo or on their voting power among them.
The reduction in share capital will have no effect on the options issued by Sampo nor the rights attached to these.
Shares and shares to be subscribed for on the basis of options issued earlier that are held by persons belonging to the inner circle of Sampo, as referred to in the Finnish Companies Act, Chapter 1, Section 4, Paragraph 1, together represent approximately 31.1 per cent of the company's current share capital and 31.6 per cent of the total number of votes. After the proposed reduction in share capital the corresponding figure will be approximately 31.4 per cent of company's share capital and 32.0 per cent of the total votes.
Sampo's Board will decide upon other issues pertaining to the reduction in share capital.
The Board of Directors will propose that the company's share capital be reduced by the total counter-book value of Sampo shares held by Sampo, approximately EUR 1,177,315.50, and that this sum be transferred from the share capital to the premium reserve. The reduction in share capital will be implemented without consideration by the cancellation of 7,000,000 Sampo A shares repurchased by Sampo, resulting in a corresponding reduction in the total number of A shares. As a result thereof, the company's capital and reserves will not be reduced.
The purpose of the reduction in share capital is to cancel the aforementioned A shares repurchased and held by Sampo. The proposed cancellation therefore only concerns those Sampo shares that are held by Sampo. The reduction in the share capital will have no effect on the holdings of the other shareholders of Sampo or on their voting power among them.
The reduction in share capital will have no effect on the options issued by Sampo nor the rights attached to these.
Shares and shares to be subscribed for on the basis of options issued earlier that are held by persons belonging to the inner circle of Sampo, as referred to in the Finnish Companies Act, Chapter 1, Section 4, Paragraph 1, together represent approximately 31.1 per cent of the company's current share capital and 31.6 per cent of the total number of votes. After the proposed reduction in share capital the corresponding figure will be approximately 31.4 per cent of company's share capital and 32.0 per cent of the total votes.
Sampo's Board will decide upon other issues pertaining to the reduction in share capital.
3. Proposal by the Board of Directors for a long-term share-based incentive scheme "Sampo 2006" for the key management personnel of the Sampo Group
The Board of Directors proposes that the Annual General Meeting of Sampo plc ("Sampo") resolve on the approval of the share-based incentive scheme "Sampo 2006".
The share-based incentive scheme "Sampo 2006" involves the Key Management Personnel of Sampo, including the Managing Director, or its subsidiaries as decided by the Board of Directors of Sampo. The scheme is intended for securing continuity, with consideration to the earlier incentive schemes, their expiration and the current long-term incentives for such persons. The share-based incentive scheme covers the years 2006 - 2010, whereby the first possible instalment would be paid in December 2008.
Within the share-based incentive scheme, the maximum number of Sampo A shares distributable as a reward is 1,500,000.
The precondition for a reward payable pursuant to the share-based incentive scheme is that the special provisions set out in these terms and conditions and their Appendix be fulfilled wholly or partly. The amount of the reward eventually payable is based on the share price development of the Sampo A share as well as on the development of If Group's insurance margin and/or the Sampo Bank Group's return on equity (ROE) at fair value. In addition, the scheme includes a limitation of maximum value according to which the amount of the reward payable will be cut in a manner provided in the terms and conditions in the event that the share price of Sampo increases by more than 160 per cent during a specific performance period. The person receiving the reward shall also be employed by the Sampo Group at the time of such payment.
The eventual reward will be paid in 2008, 2009 and 2010. The shares to be distributed as a reward are subject to a two-year lock-up as provided in the terms and conditions. However, the Board of Directors of Sampo has the right to decide to pay the reward partly or wholly in cash instead of shares.
4. Proposal by the Board of Directors to authorize the Board of Directors to repurchase Sampo shares
The Board of Directors proposes that the Annual General Meeting of Sampo plc ("Sampo") authorize the Board to resolve to repurchase Sampo A shares having a counter-book value of EUR 0.17 per share (not an exact value), using funds available for profit distribution, as follows:
Sampo A shares can be repurchased in one or more lots up to an amount the total counter-book value of which or the number of votes attached to which, combined with Sampo shares already held by Sampo and its subsidiary undertakings, is at maximum 5 per cent of Sampo's registered share capital or the number of votes attached to all shares.
By virtue of the authorization, A shares can be repurchased in the following ways:
a) through an offer made to all holders of A shares, the price and terms of the offer being uniform and defined by the Board and in proportion to the shareholdings of shareholders; or
b) through public trading in the Helsinki Stock Exchange, in which case the shares will not be bought in proportion to the holdings of shareholders. In implementing the repurchase of Sampo shares, normal derivative, stock lending or other contracts may be made as permitted by the laws and regulations. The share price will be based on the public trading price of Sampo shares. The share price will be paid to the sellers of the shares in accordance with the rules of the Helsinki Stock Exchange and the regulations concerning share transaction payment times and other terms of payment in force at any particular time.
A shares can be repurchased for the implementation of Sampo Group's share-based incentive systems and/or to be cancelled.
A share repurchase will decrease the company's distributable unrestricted capital and reserves.
As the maximum amount of shares to be repurchased by virtue of the proposed authorization will be 5 per cent of Sampo's share capital or of the votes attached to all shares, the repurchase of A shares will not significantly affect the division of the shareholdings or voting rights of the company's other shareholders.
Shares and shares to be subscribed for on the basis of options issued earlier that are held by persons belonging to the inner circle of Sampo, as referred to in the Finnish Companies Act, Chapter 1, Section 4, Paragraph 1, together represent, according to the information available to the Board, approximately 31.1 per cent of Sampo's share capital and approximately 31.6 per cent of the total number of votes. The number is based on the currently outstanding share capital of Sampo, shareholdings of the said persons, and previously issued options assuming the options to be fully exercised. If there is no change in the aforementioned inner-circle holdings during the validity period of the authorization and if Sampo repurchases the maximum amount of shares authorized, the corresponding percentages after the share repurchase will be approximately 32.6 per cent of the company's share capital and approximately 33.2 per cent of the total number of votes.
The holder of all Sampo B shares has given consent to the repurchase of A shares.
The authorization will be valid for one year from the Annual General Meeting until 5 April 2007. The authorization to repurchase Sampo's own shares given by the Annual General Meeting on 11 April 2005 and which will end on 11 April 2006 will be replaced by this authorization.
As the maximum amount of shares to be repurchased by virtue of the proposed authorization will be 5 per cent of Sampo's share capital or of the votes attached to all shares, the repurchase of A shares will not significantly affect the division of the shareholdings or voting rights of the company's other shareholders.
Shares and shares to be subscribed for on the basis of options issued earlier that are held by persons belonging to the inner circle of Sampo, as referred to in the Finnish Companies Act, Chapter 1, Section 4, Paragraph 1, together represent, according to the information available to the Board, approximately 31.1 per cent of Sampo's share capital and approximately 31.6 per cent of the total number of votes. The number is based on the currently outstanding share capital of Sampo, shareholdings of the said persons, and previously issued options assuming the options to be fully exercised. If there is no change in the aforementioned inner-circle holdings during the validity period of the authorization and if Sampo repurchases the maximum amount of shares authorized, the corresponding percentages after the share repurchase will be approximately 32.6 per cent of the company's share capital and approximately 33.2 per cent of the total number of votes.
The holder of all Sampo B shares has given consent to the repurchase of A shares.
The authorization will be valid for one year from the Annual General Meeting until 5 April 2007. The authorization to repurchase Sampo's own shares given by the Annual General Meeting on 11 April 2005 and which will end on 11 April 2006 will be replaced by this authorization.
Annual General Meeting documents
Copies of the Financial Statements and the proposals of the Board of Directors together with appendices will be available for shareholders to view from 27 March 2006 at Sampo plc, Group Legal Affairs, Unioninkatu 22, 6th floor, Helsinki. In addition, the proposals of the Board with attachments including the terms and conditions of the share-based incentive scheme can be viewed on Sampo's Internet pages at www.sampo.com/agm. Copies of these documents will be sent to shareholders on request. Sampo plc's annual report for 2005 will be published during week 12.
Right to attend and vote at the Annual General Meeting
In order to attend and have the right to vote at the Annual General Meeting, shareholders
1) must be registered in the company's Shareholder Register, held by the Finnish Central Securities Depository Ltd, on Friday, 24 March 2006; and
2) must give prior notice to attend the Meeting by 4 p.m. on Monday 3 April 2006.
Any shareholder whose shares have not been transferred to the book-entry system shall have the right to participate in the Annual General Meeting provided that the shareholder was registered in the company's Shareholder Register by 12 September 1997 and that the shareholder has registered for the Annual General Meeting no later than 4 p.m. on Monday 3 April 2006. In this case the shareholder must, upon arrival at the Annual General Meeting, present his/her share certificate or other proof that the ownership of the shares has not been transferred to a book-entry account.
The Annual General Meeting will be conducted in the Finnish language. In the meeting room simultaneous translation will be available into the English and, when relevant, Finnish languages.
The Annual General Meeting will be conducted in the Finnish language. In the meeting room simultaneous translation will be available into the English and, when relevant, Finnish languages.
Registration in the Shareholder Register
Any shareholder whose shares have been entered in his/her personal book-entry account is registered in the company's Shareholder Register. Those shareholders whose shares are registered under a nominee and who wish to participate in the Annual General Meeting and exercise their voting rights should temporarily register in the Shareholder Register no later than the record date for the Annual General Meeting, 24 March 2006.
Registering for the Annual General Meeting
A shareholder may register for the Annual General Meeting either a) through Sampo's Internet pages at www.sampo.com/agm;
A shareholder may register for the Annual General Meeting either a) through Sampo's Internet pages at www.sampo.com/agm;
b) by telephone to +358 10 513 6034 from Monday to Friday 8 a.m. - 4 p.m. (Finnish time);
c) by fax to +358 10 513 2744; or
d) by letter to Sampo plc/Equity Issues, P.O.Box 1023, FI-00075 SAMPO.
Registration through the Internet, by telephone, by letter or by fax should arrive at the company before the deadline for registration, which is 4 p.m. on Monday 3 April 2006.
We kindly request that any powers of attorney be sent in original to Sampo plc's Equity Issues unit at the address shown above in point d) before the deadline for registration.
Payment of dividends
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.60 per share be paid for 2005. The dividend will be paid to those shareholders who, on the record date for payment of dividends (Monday, 10 April 2006), are registered in the company's Shareholder Register kept by the Finnish Central Securities Depository Ltd. The Board will propose to the Annual General Meeting that the dividend be paid on Wednesday 19 April 2006.
For those shareholders who have not transferred their share certificates to the book-entry system by the record date for payment of dividends, the dividend will be paid after the transfer of their shares to the book-entry system.
For those shareholders who have not transferred their share certificates to the book-entry system by the record date for payment of dividends, the dividend will be paid after the transfer of their shares to the book-entry system.
Composition of the Board of Directors and election of the auditor
After hearing the major shareholders, the Nomination and Compensation Committee of Sampo plc's Board of Directors proposes to the Annual General Meeting that eight members be elected to the Board, and that Tom Berglund, Anne Brunila, Georg Ehrnrooth, Christoffer Taxell, Matti Vuoria and Björn Wahlroos, all current members, be re-elected for a term continuing until the close of the next Annual General Meeting. In addition, the Nomination and Compensation Committee proposes that CEO Jussi Pesonen and Director General Jukka Pekkarinen be elected as new members for a term continuing until the close of the next Annual General Meeting.
The Nomination and Compensation Committee of Sampo plc's Board of Directors proposes that the members elect Georg Ehrnrooth as the new Chairman of the Board. The CVs of the proposed persons can be viewed at the Internet address www.sampo.com/ir
The Audit Committee of Sampo plc's Board of Directors has announced that it will propose the continued election of one auditor for the company and that Ernst & Young Oy be elected as the auditor until the closing of the following Annual General Meeting.
Helsinki, 17 February, 2006
SAMPO PLC
BOARD OF DIRECTORS
DISTRIBUTION:
Helsinki Stock Exchange
The principal media
Financial Supervision
www.sampo.com