NOTICE TO CONVENE the Annual General Meeting of FL
Post# of 301275
Company Announcement No. 4-2017
The Board of Directors hereby calls the Annual General Meeting to be held on Thursday 30 March 2017 at 16.00 (CET) at Tivoli Congress Center, Arni Magnussons Gade 2-4, DK-1577 Copenhagen V.
Agenda:
- The Board of Directors' report on the company's activities in 201 6
- Presentation and approval of the Annual Report for 2016
- Approval of the Board of Directors' fees:
a. Final approval of fees for 2016
The Board of Directors proposes unchanged approval of the fees for 2016 that were pre-approved by the General Meeting in 2016.
The fees are based on a base fee of DKK 400,000 (the " Base Fee ") with twice that amount to the Vice Chairman and three times that amount to the Chairman. Furthermore, an additional fee corresponding to 25% of the Base Fee shall be paid for membership 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 do not receive committee fees.
The total remuneration to the members of the Board of Directors for 2016 amounts to DKK 5.9m, cf. note 6.1 in the Annual Report (page 117).
b. Preliminary determination of fees for 2017
The Board of Directors proposes to increase the fee level for 2017. The Base Fee has not been adjusted since the General Meeting in 2009. The increase is proposed in consideration of the complexity of the issues dealt with in FLSmidth & Co. A/S and the fact that the company needs to be able to attract competence from across the globe.
Against this background, the Board of Directors proposes that the following fee structure for 2017 is approved by the General Meeting:
The Base Fee for 2017 shall be DKK 450,000. The Vice Chairman and the Chairman shall continue to receive twice and three times the Base Fee, respectively, for their extended duties. Board members who are also member of a board committee shall be entitled to an additional fee, which for ordinary committee members shall be DKK 125,000, whereas the additional fee for committee chairmen shall be DKK 225,000. The Chairman and the Vice Chairman of the Board of Directors will not receive committee fees.
In addition to the above-mentioned fees, the company pays expenses, including travel and transportation costs, associated with the services rendered for 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.
The fees for 2017 will be presented to the General Meeting in 2018 for final approval.
- Distribution of profits or covering of losses in accordance with the approved Annual Report
The Board of Directors proposes that a dividend of DKK 6 per share be paid out, corresponding to a total dividend distribution of DKK 307m for 2016.
- Election of members to the Board of Directors
The Board of Directors proposes that Mr Vagn Ove Sørensen, Mr Tom Knutzen, Ms Caroline Grégoire Sainte Marie, Mr Marius Jacques Kloppers and Mr Richard Robinson Smith (Rob Smith) are re-elected as members of the Board of Directors.
In addition, the Board of Directors proposes that Ms Anne Louise Eberhard is elected as a new member of the Board of Directors.
Mr Torkil Bentzen and Mr Sten Jakobsson do not seek re-election for the Board of Directors.
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 on the company's website, www.flsmidth.com.
- Appointment of auditor
The audit committee has completed a tender process, in which emphasis was placed on the audit firm's understanding of risk, the strength and depth of global audit competences, industry understanding and price. Against this background, the audit committee has selected two candidates of which Ernst & Young Godkendt Revisionspartnerselskab (CVR no. 30 70 02 28) ("Ernst & Young") is recommended for election as it is assessed that Ernst & Young on balance will be able to deliver the best service compared to the chosen criteria.
In accordance with the recommendation by the audit committee, the Board of Directors proposes that Ernst & Young be elected as the company's auditor. The audit committee has informed the Board of Directors that it has not been influenced by third parties nor has it been subject to any contractual obligation restricting the General Meeting's choice of certain auditors or audit firms.
- Proposals from the Board of Directors
The Board of Directors submits the following proposals:
7.1 - Amendment of the Articles of Association - company announcements in English
The Board of Directors proposes that a new Article 5, paragraph 9, be inserted in the Articles of Association stating that the Board of Directors may decide to prepare company announcements in English only.
The new Article 5, paragraph 9, will be worded as follows:
"Company announcements may be prepared in English only, if decided by the Board of Directors."
The proposed amended Articles of Association is attached hereto as appendix 2 and is also available on the company's website, www.flsmidth.com.
7.2 - Amendment of the Articles of Association - introduction of electronic communication
The Board of Directors proposes to insert a new Article in the Articles of Association regarding introduction of electronic communication in connection with all communication between the company and the shareholders.
With this Article, the following wording is inserted as a new Article 10a in the Articles of Association:
" Electronic Communication
Article 10a
The Company uses electronic document exchange and electronic mail (electronic communication) in its communication with the shareholders.The Company may at all times choose to communicate by ordinary post instead.
Electronic communication may be used by the Company for convening annual and extraordinary General Meetings, including distribution of the agenda and complete proposals, proxies, statements by the Board of Directors and auditors, interim reports, annual reports as well as all other announcements and documents which, in accordance with the Company's Articles of Association or the Danish Companies Act, must be exchanged between the Company and the shareholders as well as general information from the Company to the shareholders.
Information regarding the requirements for the systems in use as well as the procedure with the Company in respect of electronic communication will be published on the Company's website.
The Company shall request an email address from the shareholders to which announcements etc. may be sent. It is the responsibility of the shareholders to ensure that the Company is in possession of the correct email address."
Furthermore, as a consequence of the above it is prosposed that the following is added to the current wording of Article 5, paragraph 3:
", cf. Article 10a below regarding the use of electronic communication."
The proposed amendments to the Articles of Association are set out in appendix 2 attached hereto, which is also available on the company's website, www.flsmidth.com.
7.3 - 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.
7.4 - Approval of updated guidelines for incentive pay
The Board of Directors proposes that the company's guidelines for incentive pay, cf. section 139 of the Danish Companies Act, be updated and approved by the General Meeting.
The Board of Directors finds that an increased focus on variable remuneration for the company's Group Executive Management is needed. When benchmarking against the neighbouring market, where the trend in recent years has been a shift in the pay composition from fixed towards more variable pay, the Board of Directors finds solid strategical reasons to suggest increases in the maximum levels for both the long-term and the short-term incentive programmes. This will provide the Board of Directors with the possibility to focus increasingly on pay-for-performance for the Group Executive Management, which is the signal the Board of Directors wishes to send. For the long-term incentive programme it is proposed to increase the maximum value of the individual performance share grants from 35% to a maximum of 50% of the base salary (including pension, if any), and for the short-term incentive programme it is proposed to increase the maximum level from 50% to 75% of the base salary (including pension, if any).
The proposed updated version of the guidelines for incentive pay is attached hereto as appendix 3 and is also available on the company's website, www.flsmidth.com .
8. Any other business
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Adoption requirements The proposal set forth in item 7.2 of the agenda must be adopted by at least 2/3 of the votes cast as well as 2/3 of the share capital respresented at the Annual 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, divided into shares of DKK 20. Each share of DKK 20 entitles the holder to 20 votes. The registration date is Thursday 23 March 2017.
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 24 March 2017 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.
As something new FLSmidth & Co. A/S will send out admission cards to the Company's shareholders by email. In order to receive an admission card electronically the shareholders email address must be registered at FLSmidth's InvestorPortal at www.flsmidth.com/agm. Following registration the shareholder will receive an electronic admission card, which must be presented at the Annual General Meeting by using e.g. a smartphone or tablet. Alternatively, shareholders may instead bring a printed version of the admission card. If a shareholder fails to bring the admission card, entry to the Annual General Meeting may be obtained by way of presentation of appropriate proof of identification. Electronic voting (e-voter) will be handed out at the entrance to the Annual General Meeting.
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 24 March 2017 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 Wednesday 29 March 2017 at 12:00 (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 Annual Report for 2016, 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 Annual Report for 2016 is only available in English, and this is the official version, which will be filed with the Danish Buisness Authority.
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 Wednesday 8 March 2017.
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, February 2017 FLSmidth & Co. A/S
The Board of Directors
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