Annual General Meeting of Shareholders in Securitas AB29 March 2010
The shareholders of Securitas AB are hereby invited to attend the Annual General Meeting (“AGM”) to be held at 4.00 p.m. CET on Tuesday 4 May 2010 in “Vinterträdgården” at the Grand Hôtel, Stockholm, entry via “Royal Entré”, Stallgatan 6. Registration for the AGM begins at 3.00 p.m. CET.
A. NOTICE OF ATTENDANCE
Shareholders who wish to attend the AGM must:
(i) be recorded in the share register maintained by Euroclear Sweden AB, made as of Tuesday 27 April 2010;
(ii) notify Securitas AB of their intent to participate in the AGM at the address: Securitas AB, ”AGM”, P.O. Box 7842, SE-103 98 Stockholm, Sweden, by telephone +46 10 470 31 30, by telefax +46 10 470 31 31 marked “Securitas AGM” or via the company website www.securitas.com/agm2010, by Tuesday 27 April 2010, at the latest, preferably before 4 p.m. On giving notice of attendance, the shareholder shall state name, personal identity number or equivalent (corporate identity number), address and telephone number. A proxy form is available on the company website www.securitas.com/agm2010 and will be sent by mail to shareholders informing the company of their address and their wish to receive a copy of the proxy form. Proxy and representative of a legal person shall submit papers of authorisation prior to the AGM. As confirmation of the notification, Securitas AB will send an entry card to be presented at registration for the AGM.
In order to participate in the proceedings of the AGM, owners with nominee-registered shares must request their bank or broker to have their shares temporarily owner-registered with Euroclear Sweden AB. Such registration must be made as of Tuesday 27 April 2010 and the banker or broker should therefore be notified in due time before said date.
Proposal for Agenda
1. Opening of the Meeting.
2. Election of Chairman of the Meeting.
3. Preparation and approval of the voting list.
4. Approval of the agenda.
5. Election of one or two person(s) to approve the minutes.
6. Determination of compliance with the rules of convocation.
7. The President’s report.
8. Presentation of
(a) the Annual Report and the Auditor’s Report and the Consolidated Financial Statements and the Group Auditor’s Report,
(b) the statement by the auditor on the compliance with the guidelines for remuneration to management applicable since the last AGM, and
(c) the Board’s proposal for appropriation of the company’s profit and the Board’s motivated statement thereon.
9. Resolutions regarding
(a) adoption of the Statement of Income and the Balance Sheet and the Consolidated Statement of Income and the Consolidated Balance Sheet as per 31 December 2009,
(b) appropriation of the company’s profit according to the adopted Balance Sheet,
(c) record date for dividend, and
(d) discharge of the Board of Directors and the President from liability for the financial year 2009.
10. Determination of the number of Board members.
11. Determination of fees to Board members and auditors.
12. Election of Board members.
13. Election of members of the Nomination Committee.
14. Determination of guidelines for remuneration to executive management.
15. Resolutions regarding
(a) the implementation of an incentive scheme, including hedging measures, either through
(b) (i) the authorization of the Board to resolve on acquisition of treasury shares on the stock exchange, and
(ii) the transfer of treasury shares to participants of the incentive scheme
(iii) the entering into of a share swap agreement
16. Closing of the Meeting
Election of Chairman of the Meeting (item 2 on the agenda)
The Nomination Committee elected by the AGM 2009 consisting of Gustaf Douglas (Investment AB Latour, etc.), Mikael Ekdahl (Melker Schörling AB), Marianne Nilsson (Swedbank Robur Fonder), Per-Erik Mohlin (SEB Fonder/SEB Trygg Liv) (replacing Mats Tunér, SEB Fonder) and Magnus Landare (Alecta) has proposed that Melker Schörling, Chairman of the Board, shall be elected Chairman of the AGM 2010.
Proposal for Dividend (items 9 (b) and (c) on the agenda)
The Board proposes that a dividend of SEK 3 per share be declared. As record date for the dividend, the Board proposes 7 May 2010. If the AGM so resolves, the dividend is expected to be distributed by Euroclear Sweden AB starting 12 May 2010.
Proposals for Election of Board Members and Resolution regarding Fees to the Board Members and the auditor (items 10-12 on the agenda)
At the AGM 2010, the Nomination Committee will, in connection with the election of Board members and resolution regarding fees to the Board Members and the auditor, present and motivate the below proposals and also report on its activities. In connection with the notice, the reasoned statement of the Nomination Committee will be held available at the company website, www.securitas.com/agm2010.
The Nomination Committee has proposed the following:
The number of Board members shall be nine, with no deputy members. The Nomination Committee proposes re-election of the Board members Fredrik Cappelen, Carl Douglas, Marie Ehrling, Annika Falkengren, Stuart E. Graham, Alf Göransson, Fredrik Palmstierna, Melker Schörling and Sofia Schörling-Högberg, for the period up to and including the AGM 2011, with Melker Schörling as Chairman of the Board.
Fees to the Board members for the period up to and including the AGM 2011 shall amount to SEK 4,875,000 in total (including fees for committee work) to be distributed between the Board members as follows: the Chairman of the Board shall receive SEK 1,000,000, the Deputy Chairman shall receive SEK 725,000 and each of the other Board members, except the President, shall receive SEK 450,000. As consideration for the committee work, the Chairman of the Audit Committee shall receive SEK 200,000, the Chairman of the Remuneration Committee shall receive SEK 100,000, the members of the Audit Committee each SEK 100,000 and the members of the Remuneration Committee each SEK 50,000.
The AGM 2008 appointed the accounting firm PricewaterhouseCoopers AB, Stockholm as auditor, with authorised public accountant Peter Nyllinge as auditor in charge, for a period of four years. The auditor’s fees are proposed to be paid as per agreement.
Proposal for Election of Members of the Nomination Committee (item 13 on the agenda)
Shareholders jointly representing approximately 26.7 per cent of the shares and approximately 48,5 per cent of the votes in the company propose the AGM to adopt the following resolution:
The Nomination Committee in respect of the AGM 2011 shall have five members. Gustaf Douglas (Investment AB Latour, etc.), Marianne Nilsson (Swedbank Robur Fonder), Per-Erik Mohlin (SEB Fonder/SEB Trygg Liv) and Mikael Ekdahl (Melker Schörling AB) shall be re-elected and Lars Rosén (Länsförsäkringar) shall be elected new member. Gustaf Douglas shall be elected Chairman of the Nomination Committee. If a shareholder, represented by a member of the Nomination Committee, is no longer one of the major shareholders of Securitas, or if a member of the Nomination Committee is no longer employed by such shareholder, or for any other reason leaves the Committee before the AGM 2011, the Committee shall have the right to appoint another representative of the major shareholders to replace such member.
Proposal for Guidelines for Remuneration to Management (item 14 on the agenda)
The Board’s proposal for guidelines for remuneration to management principally entails that the total remuneration shall be competitive and in accordance with market conditions. The benefits shall consist of fixed salary, possible variable remuneration and other customary benefits and pension. The variable remuneration shall have an upper limit and be related to the fixed salary. The variable remuneration shall be based on the outcome in relation to set targets and be in line with the interests of the shareholders. Pension benefits shall be fee-based and pension rights shall be applicable as from the age of 65, at the earliest. The variable remuneration shall not be pension qualifying unless local regulations provide otherwise.
The Board shall have the right to deviate from the guidelines in individual cases if there are particular grounds for such deviation.
Proposal for Incentive Scheme (item 15 on the agenda)
Background and motives
There is currently no share related incentive scheme in the Securitas group. Redesigning the existing bonus structure would enable the group to gradually have approximately 2,500 of Securitas top managers as shareholders, thus strengthening the employee ownership in Securitas future success and development to the benefit of all shareholders. The Board is of the opinion that these benefits may be achieved by further developing the existing performance-based cash bonus schemes into also comprising a share related part, which is the reason for proposing the implementation of the incentive scheme starting 2010.
The proposal principally entails that 1/3 of any annual bonus earned under the performance based cash bonus schemes, after a 20 per cent increase of the potential maximum amount, would be converted into a right to receive shares, with delayed allotment and subject to continued employment. In connection herewith, the salaries will be frozen during 2010 (to the extent possible with regard to local rules and undertakings). Thereafter the salaries will be subject to customary revisions. It is the assessment of the Board that the scheme will increase the group’s attractiveness as an employer.
(a) Implementation of an incentive scheme
The Board proposes that the AGM resolves on a share and cash bonus scheme in accordance with the following main principles (the “Incentive Scheme”). Approximately 2,500 Securitas employees now participating in the Securitas cash bonus schemes will participate in the Incentive Scheme and thereby be entitled to receive a part of the yearly bonus in the form of shares in Securitas, provided that certain predetermined and measurable performance criteria, which currently apply under the cash bonus schemes, are met. The principles already applicable under the existing bonus schemes, within the scope of the adjusted principles on remuneration to senior executives adopted by the AGM, will continue to apply. The existing principles include clearly measurable, performance based targets that are set as close to the local business as possible and aim for long term profitability of the group. In connection with the implementation of the Incentive Scheme, the bonus potential will be increased by 20 per cent compared with the maximum bonus potential within the existing cash bonus schemes. Provided that the applicable performance criteria are met, the yearly bonus will be determined at the outset of 2011 and be payable by (i) 2/3 in cash at the outset of 2011 and (ii) 1/3 in shares of series B (the “Bonus Shares”) at the outset of 2012. The number of shares to which each participant will be entitled shall be determined by the ratio between the available bonus and the share price at the time of determination of the bonus. Distribution of Bonus Shares in accordance with (ii) is subject to the following two conditions, and to what is stated in this item 15 (b) (ii) below: (1) if the total accrued bonus amounts to less EUR 3,900, the whole bonus will be paid out in cash in accordance with (i) above, and (2) the employee must remain employed by Securitas as of the last day of February 2012, except where an employee has left his/her employment due to retirement, death or long-term disability, in which case the employee shall have a continued right to receive Bonus Shares.
Prior to the distribution of Bonus Shares, the employee will not be awarded any shareholder rights (e.g. voting rights or rights to dividend) connected to the Bonus Shares. At distribution of the Bonus Shares, the employee shall however be entitled to additional shares up to a value corresponding to any dividend decided per share corresponding to the total number of Bonus Shares during the period from payment of the cash bonus until distribution of the Bonus Shares. The Board shall be entitled to resolve on a reduction of the distribution of Bonus Shares if distribution in accordance with the above conditions – considering Securitas’ result and financial position, other circumstances regarding the group’s development and the conditions on the stock market – would be clearly unreasonable. Participation in the Incentive Scheme presumes that such participation is lawful and that such participation in Securitas’ opinion can take place with reasonable administrative costs and economic efforts. The Board shall however be entitled to implement an alternative incentive solution for employees in such countries where participation in the Incentive Plan is not advisable, which alternative solution shall, as far as practically possible, correspond to the terms of the Incentive Scheme.
The Board shall be responsible for the particulars and the handling of the Incentive Scheme within the frame of the above principal guidelines and shall also be entitled to make such minor adjustments which may prove necessary due to legal or administrative circumstances
(b) Hedging Measures
(i) Authorization of the Board to resolve on acquisition of treasury shares on the stock exchange
In order to enable the delivery of Bonus Shares in accordance with the Incentive Scheme, the Board of Directors proposes that the AGM authorizes the Board to resolve, on one or several occasions, until the AGM 2011, on acquisition of treasury shares of series B. Acquisition of shares shall take place on the NASDAQ OMX Stockholm Exchange at a price within the price interval that may be registered at any given time, referring to the interval between the highest purchase price and the lowest selling price. A maximum of 2 000 000 shares (estimated based on historical actual bonus payments and adjusted to the present number of bonus eligible managers and an estimated share price of SEK 77) may be acquired to secure the delivery of Bonus Shares.
(ii) Transfer of treasury shares to participants of the Incentive Scheme
In order to enable the delivery of Bonus Shares in accordance with the Incentive Scheme, the Board of Directors proposes that the AGM resolves on transfer of a maximum of 2 000 000 Securitas shares of series B (corresponding to the repurchased shares under (i) above). The right to acquire shares shall accrue to participants in the Incentive Scheme, with a right to acquire the maximum number of shares according to the terms of the Incentive Scheme. The transfer of shares shall take place free of charge and shall be executed as soon as reasonably possible following the entitlement of the participants to receive Bonus Shares under the Incentive Scheme. In the event the maximum amount of treasury shares set forth in this item (b) is insufficient to cover the amount of shares required for delivery of Bonus Shares to participants of the Incentive Scheme, Securitas shall be entitled to either pay an amount corresponding to such failing number of shares in cash in connection with payment of the cash bonus in accordance with a (i) above, or take such further hedging measures as are necessary to enable the delivery of all Bonus Shares.
(iii) Entry into a share swap agreement
In case the requisite majority is not achieved as regards the resolution on items (i) - (ii) above, it is proposed that the financial exposure of the Incentive Scheme be hedged by the entry of Securitas into a share swap agreement with a third party, whereby the third party in its own name shall acquire and transfer shares in the company to employees participating in the scheme. The cost for the swap will not exceed 0.3 per cent on the share purchase cost which would correspond to SEK 462 000 assuming a purchase of 2 000 000 shares at SEK 77.
Resolutions and voting majority
The proposals according to (a) and b (i)-(ii) above shall be adopted as one single resolution with observance of the majority rules stated in Chapter 16 of the Swedish Companies Act, meaning that the resolution shall be supported by shareholders representing at least nine tenths of both the number of votes cast and the shares represented at the AGM in order to be valid.
The alternative proposal according to (a) and b (iii) above shall be adopted as one single resolution and must be supported by shareholders representing more than half of the votes cast, or, in case of equal voting, by the opinion supported by the Chairman of the Board.
Effect on important key ratios
The number of shares in Securitas AB amounts to 365,058,897. The Incentive Scheme may lead to acquisition of a maximum of 2 000 000 shares as defined in (b) (i) above, which is equivalent to 0.56 per cent of the total number of outstanding shares and 0.38 per cent of the total number of votes in Securitas. Such acquisition may have a positive impact on the earnings per share because of less outstanding shares. One year after the acquisition of the shares, those shares are to be transferred free of charge to the participants, which will have a negative impact on the earnings per share. The number of shares will consequently remain unchanged, but the earnings per share could be negatively impacted, to the extent the Incentive Scheme causes increased costs. Since the Incentive Scheme is based on the conversion of part of the existing cash bonus to a share bonus and meant to be a means to freeze salaries for the participants (to the extent that this is possible), the negative impact on the earnings of Securitas will be mitigated. The actual effect of this is difficult to assess as it is based on many variable factors.
If the AGM resolves on b (iii) as the method of transferring the shares, there will be no impact on the earnings per share, other than the increased costs that the Incentive Scheme could cause.
C. AVAILABLE DOCUMENTATION ETC.
The following documentation will be available at the company and on the company website www.securitas.com/agm2010 at the latest as from 20 April 2010 and will also be available at the AGM: (i) the accounting material and the Auditor’s Report, including the Board’s proposal for guidelines for remuneration to management, (ii) the statement of the auditor on the compliance of the guidelines for remuneration to management applicable since the last AGM, (iii) the complete proposal by the Board with respect to appropriation of profit and the Board’s motivated statement thereon, and (iv) the complete proposal of the Board with respect to the Incentive Scheme, including statement regarding acquisition of treasury shares. In addition hereto, copies of the documentation under (i) – (iii) will be sent to the shareholders who so request and copies of the documentation under (iv) will automatically be sent to all shareholders who notify the company of their intent to participate in the AGM.
The total number of shares in the company amounts to 365,058,897, of which 17,142,600 are shares of series A and 347,916,297 shares of series B. The total number of votes in the company amounts to 519,342,297.
Stockholm in March 2010
SECURITAS AB (publ)