Apr 16, 2015 8:00 AM CET
The shareholders of Tele2 AB (publ) are hereby invited to the Annual General Meeting on Tuesday 19 May 2015 at 10.00 a.m. CET at the Hotel Rival, Mariatorget 3 in Stockholm.
Shareholders who wish to attend the Annual General Meeting shall
Shareholders shall in the notice to attend state name, personal identification number or company registration number, address, phone number and advisors, if applicable. Shareholders whose shares are registered in the names of nominees must temporarily re-register such shares in their own name in order to be entitled to attend the Annual General Meeting. In order for such re-registration to be completed on Tuesday 12 May 2015 the shareholder must inform their nominees well before this day. Shareholders attending by a proxy or a representative should send documents of authorisation to the mail address above, well before the Annual General Meeting. A template proxy form is available on the company's website www.tele2.com. Shareholders cannot vote or, in other way, attend the Annual General Meeting by remote access.
RESOLUTIONS PROPOSED BY THE NOMINATION COMMITTEE
Election of Chairman of the Annual General Meeting (item 2)
The Nomination Committee proposes that the lawyer Wilhelm Lüning is elected to be the Chairman of the Annual General Meeting.
Determination of the number of members of the Board and election of the members of the Board and the Chairman of the Board (items 13 and 15)
The Nomination Committee proposes that the Board shall consist of eight members.
The Nomination Committee proposes that Mike Parton, Lorenzo Grabau, Irina Hemmers, Mia Brunell Livfors, Erik Mitteregger, Carla Smits-Nusteling and Mario Zanotti shall be re-elected as members of the Board, and that Eamonn O’Hare shall be elected as new member of the Board.
The Nomination Committee proposes that Mike Parton shall be re-elected as Chairman of the Board.
Determination of the remuneration to the members of the Board and the auditor (item 14)
The Nomination Committee proposes that SEK 1,430,000 is to be allocated to the Chairman of the Board and SEK 550,000 to each of the other members of the Board. For work within the Committees of the Board, the Nomination Committee proposes a total of SEK 724,000 of which for work within the Audit Committee SEK 210,000 shall be allocated to the Chairman and SEK 105,000 to each of the other three members. For work within the Remuneration Committee SEK 79,000 shall be allocated to the Chairman and SEK 40,000 to each of the other three members. The proposed increase in remuneration is equivalent to an approximate increase of 5 percent for each Board member as well as each member of the Committees of the Board. As a result of the proposed increase, the total remuneration to the Board for the period until the close of the next Annual General Meeting will increase from SEK 5,729,000 to SEK 6,004,000. The Nomination Committee is of the opinion that the proposed increase is reasonable, in light of the principally unchanged remuneration levels over the past years, the increased activity of the Board and its Committees in working to oversee the Company’s audit and remuneration work, as well as the active management of the Company’s portfolio of operations. The Nomination Committee further notes that the proposed remuneration to the Board is in line with the remuneration to the Boards of its Swedish and international peers.
The Nomination Committee proposes that remuneration to the auditor shall be paid in accordance with approved invoices.
Approval of the procedure of the Nomination Committee (item 16)
The Nomination Committee proposes that the work of preparing proposals to the 2016 Annual General Meeting regarding the Board and auditor, in the case that an auditor should be elected, and their remuneration, Chairman of the Annual General Meeting and the procedure for the Nomination Committee shall be performed by a Nomination Committee.
The Nomination Committee will be formed during September 2015 in consultation with the largest shareholders of the Company as per 31 August 2015. The Nomination Committee will consist of at least three members appointed by the largest shareholders of the Company who have wished to appoint a member. The Chairman of the Board will also be a member of the Committee and will act as its convenor. The members of the Committee will appoint the Committee Chairman at their first meeting.
The Nomination Committee is appointed for a term of office commencing at the time of its formation and ending when a new Nomination Committee is formed. If a member resigns during the Committee term, the Nomination Committee can choose to appoint a new member. The shareholder that appointed the resigning member shall be asked to appoint a new member, provided that the shareholder still is one of the largest shareholders in the Company. If that shareholder declines participation on the Nomination Committee, the Committee can choose to ask the next largest qualified shareholder to participate. In the event of changes to the ownership structure of the Company, the Committee can choose to change its composition in order to ensure the Committee reflects the ownership of the Company. However, unless there are special circumstances, the composition of the Nomination Committee may remain unchanged following changes in the ownership structure of the Company that are either minor or occur less than three months prior to the 2016 Annual General Meeting. In all cases, the Nomination Committee shall consist of at least three members appointed by shareholders.
The Nomination Committee shall have the right to upon request receive personnel resources such as secretarial services from the Company, and to charge the Company with costs for recruitment consultants and related travel if deemed necessary.
Information with respect to the election of auditor
The registered accounting firm Deloitte AB was elected auditor at the 2012 Annual General Meeting for a term of office of four years. Accordingly, the task of appointing an auditor is scheduled to occur at the 2016 Annual General Meeting. Deloitte AB has appointed the authorised public accountant Thomas Strömberg as auditor-in-charge.
RESOLUTIONS PROPOSED BY THE BOARD
Dividend (item 11)
The Board proposes an ordinary dividend of SEK 4.85 per share and an extraordinary dividend of SEK 10.00 per share, i.e. a total dividend of SEK 14.85 per share. The record date for dividend is proposed to be on Thursday 21 May 2015. If the Annual General Meeting resolves in accordance with the proposal the dividend is estimated to be paid out to the shareholders on Tuesday 26 May 2015.
Guidelines for remuneration to senior executives (item 17)
The Board proposes the following guidelines for determining remuneration for senior executives.
The objectives of Tele2’s remuneration guidelines are to offer competitive remuneration packages to attract, motivate, and retain key employees within the context of an international peer group. The aim is to create incentives for the management to execute strategic plans and deliver excellent operating results, and to align management’s incentives with the interests of the shareholders. Senior executives covered by the proposed guidelines include the CEO and members of the Leadership Team ("senior executives").
Remuneration to the senior executives should comprise annual base salary, and variable short-term incentive (STI) and long-term incentive (LTI) programs. The STI shall be based on the performance in relation to established objectives. The objectives shall be related to the company's overall result and the senior executives’ individual performance. The STI can amount to a maximum of 100 percent of the annual base salary.
Over time, it is the intention of the Board to increase the proportion of variable performance-based compensation as a component of the senior executives’ total compensation.
The Board is continually considering the need of imposing restrictions in the STI program by making payments, or a proportion thereof, of such variable compensation conditional on whether the performance on which it was based has proved to be sustainable over time, and/or allowing the company to reclaim components of such variable compensation that have been paid on the basis of information which later proves to be manifestly misstated.
Other benefits may include e.g. company car and for expatriated senior executives e.g. housing benefits for a limited period of time. The senior executives may also be offered health care insurances.
The senior executives are offered defined contribution pension plans. Defined contributions for pensions to the CEO can amount to a maximum of 25 percent of the annual salary (base salary and STI). For the other senior executives defined contributions for pensions can amount to a maximum of 20 percent of the senior executive's annual salary (base salary and STI).
The maximum period of notice of termination of employment shall be 12 months in the event of termination by the CEO and six months in the event of termination by any of the other senior executives. In the event of termination by the company, the maximum notice period during which compensation is payable is 18 months for the CEO and 12 months for any of the other senior executives.
Board members, elected at General Meetings, may in certain cases receive a fee for services performed within their respective areas of expertise, outside of their Board duties. Compensation for these services shall be paid at market terms and be approved by the Board.
Under special circumstances, the Board may deviate from the above guidelines. In such a case, the Board is obligated to give account of the reason for the deviation during the following Annual General Meeting.
In accordance with the Swedish Corporate Governance Code the Remuneration Committee within the Board monitors and evaluates the application of the guidelines for remuneration to the senior executives established by the Annual General Meeting. Also, the company's auditor has, pursuant to Ch 8 Sec 54 of the Companies Act (2005:551), provided a statement with respect to whether there has been compliance with the guidelines for remuneration to the senior executives which have been applied during 2014. The Boards’ evaluation and the auditor's review states that Tele2 during 2014 has complied with the guidelines for remuneration which has been adopted by the Annual General Meeting.
Incentive programme (items 18(a)-(d))
The Board proposes that the Annual General Meeting resolves to adopt a retention and performance based incentive programme for senior executives and other key employees within the Tele2 group in accordance with items 18(a)-(d) below. All resolutions are proposed to be conditional upon each other and are therefore proposed to be adopted in connection with each other.
Adoption of an incentive programme (item 18(a))
Summary of the programme
The Board proposes that the Annual General Meeting resolves to adopt a retention and performance based incentive programme (the "Plan"), based on the same structure as last year. The Plan is proposed to include in total approximately 200 senior executives and other key employees within the Tele2 group. The participants in the Plan are in general required to hold Tele2 shares. These shares can either be shares already held or shares purchased on the market in connection with the notification to participate in the Plan. The participants will thereafter be granted free of charge retention and performance rights on the terms stipulated below.
In the event delivery of shares under the Plan cannot be achieved at reasonable costs, with reasonable administrative efforts or due to market conditions, participants may instead be offered a cash-based settlement.
In order to participate in the Plan, the employees have to own Tele2 shares. These shares can either be shares already held, provided that the shares are not used as investment shares under the equity-related incentive programmes for the years 2013 or 2014, or shares purchased on the market in connection with notification to participate in the Plan. The maximum number of shares that the employee can hold under the Plan will correspond to approximately 8-14 per cent of the employee’s annual base salary as further described below. For each Tele2 share held under the Plan, the participants will be granted retention and performance rights by the company.
General terms and conditions
Subject to fulfilment of certain retention and performance based conditions during the period 1 April 2015 – 31 March 2018 (the "Measurement Period") and the participant maintaining at the release of the interim report January – March 2018 the invested shares and, with certain exceptions, the employment within the Tele2 group, each right entitles the participant to receive one Tele2 Class B share. In order to align the participants’ and the shareholders’ interests, the company will compensate the participants for any dividends paid on the underlying share by increasing the number of shares that each retention and performance right entitles to at the end of the vesting period. It can be noted that the participants in the Plan will not be compensated for ordinary and extra ordinary dividend proposed at the Annual General Meeting 2015.
Retention and performance conditions
The rights are divided into Series A (retention rights) and Series B and C (performance rights). The number of shares the respective participant will receive depends on which category the participant belongs to and on the fulfilment of the following defined retention and performance based conditions:
Series A Tele2’s total shareholder return on the share (TSR) during the Measurement Period exceeding 0 per cent as entry level.
Series B Tele2’s average normalised return of capital employed (ROCE) during the Measurement Period being at least 9 per cent as entry level and at least 12 per cent as the stretch target.
Series C Tele2’s total shareholder return on the shares (TSR) during the Measurement Period being equal to the average TSR for a peer group comprising Elisa, Iliad, Millicom International Cellular, TalkTalk Telecom Group, Telenor, TeliaSonera and TDC as entry level, and exceeding the average TSR for the peer group with 10 percentage points as the stretch target.
The determined levels of the conditions include an “entry” level and a “stretch” target with a linear interpolation applied between those levels as regards the number of rights that vest. The entry level constitutes the minimum level which must be reached in order to enable vesting of the rights in the relevant series. If the entry level is reached, the number of rights that vests is proposed to be 100 per cent for Series A and 20 per cent for Series B and C. If the entry level is not reached for a certain series, all retention or performance rights (as applicable) in that series lapse. If stretch target for Series B and Series C is met, all retention or performance rights (as applicable) vest in the relevant series. The Board intends to disclose the outcome of the retention and performance based conditions in the annual report for the financial year 2018.
Retention and performance rights
The retention and performance rights shall be governed by the following terms and conditions:
Granted free of charge after the Annual General Meeting 2015.
Vest three years after grant (vesting period).
May not be transferred or pledged.
Each right entitles the participant to receive one Tele2 Class B share after the three year vesting period, if the participant, with certain exceptions, maintains the employment within the Tele2 group and the invested shares at the release of the interim report for the period January – March 2018.
Preparation and administration
The Board, or a committee established by the Board for these purposes, shall be responsible for preparing the detailed terms and conditions of the Plan, in accordance with the mentioned terms and guidelines. To this end, the Board shall be entitled to make adjustments to meet foreign regulations or market conditions. The Board may also make other adjustments if significant changes in the Tele2 group or its operating environment would result in a situation where the decided terms and conditions of the Plan no longer serve their purpose. The Board’s possibility to make such adjustments does not include the grant of continued participation for senior executives in the company’s long-term incentive programmes after the termination of their respective employments.
In total, the Plan is estimated to comprise up to 320,000 Tele2 shares held by the participants entitling to allotment of up to 1,476,000 rights whereof 320,000 retention rights and 1,156,000 performance rights. The participants are divided into different categories and in accordance with the above, the Plan will comprise the following number of shares and maximum number of rights for the different categories:
the CEO: may acquire up to 8,500 shares within the Plan, entitling the holder to allotment of 1 Series A right and 3.5 rights each of Series B and C per invested share, which entitles the holder to receive a maximum of 8,500 Series A rights and 29,750 rights each of Series B and C;
senior executives and certain key employees (approximately 12 individuals): may acquire up to 4,500 shares each within the Plan, entitling the holder to allotment of 1 Series A right and 3 rights each of Series B and C per invested share, which entitles the holder to receive a maximum of 4,500 Series A rights and 13,500 rights each of Series B and C;
category 1 (approximately 44 individuals in total): may acquire up to 2,000 shares each within the Plan, entitling the holder to allotment of 1 Series A right and 1.5 rights each of Series B and C per invested share, which entitles the holder to receive a maximum of 2,000 Series A rights and 3,000 rights each of Series B and C;
category 2 (approximately 53 individuals in total): may acquire up to 1,500 shares each within the Plan, entitling the holder to allotment of 1 Series A right and 1.5 rights each of Series B and C per invested share, which entitles the holder to receive a maximum of 1,500 Series A rights and 2,250 rights each of Series B and C; and
Scope and costs of the Plan
The Plan will be accounted for in accordance with IFRS 2 which stipulates that the rights should be recorded as a personnel expense in the income statement during the vesting period. Based on the assumptions of a share price of SEK 88.25 (closing share price of the Tele2 Class B shares on 31 March 2015 of SEK 103.10 less deduction for the proposed ordinary and extra ordinary dividend of SEK 4.85 per share and SEK 10 per share), a maximum participation, an annual employee turnover of 7 per cent among the participants of the Plan, an average fulfilment of performance conditions of approximately 50 per cent, and full vesting of retention rights, the cost for the Plan, excluding social security costs, is estimated to approximately SEK 53 million. The cost will be allocated over the years 2015-2018. At a 100 per cent fulfilment of the performance conditions the cost is approximately SEK 70 million.
Social security costs will also be recorded as a personnel expense in the income statement by current reservations. The social security costs are estimated to around SEK 29 million with the assumptions above, an average social security tax rate of 33 per cent and an annual share price increase for Tele2’s Class B shares is 10 per cent during the vesting period.
The participant’s maximum profit per right in the Plan is limited to SEK 329, which equals four times the average closing share price of the Tele2 Class B shares during February 2015 with deduction for the proposed ordinary and extra ordinary dividend. If the value of the Tele2 Class B shares exceeds SEK 329 at vesting, the number of Class B shares that each right entitles the participant to receive will be reduced correspondingly. The maximum dilution is up to 0.40 per cent of outstanding shares, 0.29 per cent of votes and 0.22 per cent in terms of costs for the Plan as defined in IFRS 2 divided by Tele2’s market capitalisation, excluding the ordinary and extra ordinary dividend proposed to the Annual General Meeting 2015. Together with rights granted under the shares based incentive programmes for the years 2012, 2013 and 2014, the maximum dilution is up to 1.10 per cent of outstanding shares and 0.78 per cent of votes.
If the maximum profit of SEK 329 per right is reached, all invested shares are retained under the Plan and a fulfilment of the performance conditions of 100 per cent, the maximum cost of the Plan as defined in IFRS 2 is approximately SEK 86 million and the maximum social security cost is approximately SEK 160 million.
For information on Tele2’s other equity-related incentive programmes, reference is made to the annual report for 2014, note 34.
Effect on key ratios
If the Plan had been introduced in 2014 with the assumptions above, the impact on basic earnings per share would have resulted in a dilution of 0.3 per cent or from SEK 5.86 to SEK 5.84 on a pro forma basis.
The annual cost of the Plan including financing costs and social charges is estimated to approximately SEK 29 million given the above assumptions. This cost can be related to the company’s total personnel costs, including social charges, of SEK 3,117 million in 2014.
Delivery of shares under the Plan
To ensure the delivery of Tele2 Class B shares under the Plan as well as other outstanding equity-related incentive programmes, the Board proposes that the Annual General Meeting resolves to authorise the Board to resolve on a directed issue of Class C shares to Nordea Bank AB (publ) in accordance with item 18(b), and further to authorise the Board to subsequently resolve to repurchase the Class C shares from Nordea Bank AB (publ) in accordance with item 18(c). The Class C shares will then be held by the company, whereafter the appropriate number of Class C shares will be reclassified into Class B shares and subsequently be delivered to the participants under the Plan as well other outstanding equity-related incentive programmes.
The Board further proposes that the Annual General Meeting resolves that a maximum of 1,800,000 Class B shares may be transferred to the participants in accordance with the terms of the Plan. These shares can either be Class B treasury shares held by the company or Class B shares held by the company after reclassification from Class C shares.
The rationale for the proposal
The objective of the proposed Plan is to create conditions for retaining competent employees in the Tele2 group. The Plan has been designed based on the view that it is desirable that senior executives and other key employees within the group are shareholders in the company. Participation in the Plan requires a personal investment in Tele2 shares, be it shares already held or shares purchased on the market in connection with the Plan.
By offering an allotment of performance rights which are based on profits and other retention and performance based conditions, the participants are rewarded for increased shareholder value. Further, the Plan rewards employees’ loyalty and long-term value growth in the company. Against this background, the Board is of the opinion that the adoption of the Plan as set out above will have a positive effect on the Tele2 group’s future development and thus be beneficial for both the company and its shareholders.
Tele2’s Remuneration Committee has prepared this Plan in consultation with external advisors and major shareholders. The Plan has been reviewed by the Board at board meetings during the end of 2014 and the first months of 2015.
The above proposal is supported by major shareholders.
Authorisation to issue Class C shares (item 18 (b))
The Board proposes that the Annual General Meeting resolves to authorise the Board, during the period until the Annual General Meeting 2016, to increase the company’s share capital by not more than SEK 2,875,000 by the issue of not more than 2,300,000 Class C shares, each with a ratio value of SEK 1.25. With disapplication of the shareholders' preferential rights, Nordea Bank AB (publ) shall be entitled to subscribe for the new Class C shares at a subscription price corresponding to the ratio value of the shares. The purpose of the authorisation and the reason for the disapplication of the shareholders' preferential rights in connection with the issue of shares is to ensure delivery of Class B shares to participants under the Plan as well as other outstanding equity-related incentive programmes.
Authorisation to resolve to repurchase own Class C shares (item 18(c))
The Board proposes that the Annual General Meeting resolves to authorise the Board, during the period until the Annual General Meeting 2016, to repurchase its own Class C shares. The repurchase may only be effected through a public offer directed to all holders of Class C shares and shall comprise all outstanding Class C shares. The purchase may be effected at a purchase price corresponding to not less than SEK 1.25 and not more than SEK 1.35 per share. Payment for the Class C shares shall be made in cash. The purpose of the repurchase is to ensure the delivery of Class B shares under the Plan as well as other outstanding equity-related incentive programmes.
Transfer of own Class B shares (item 18(d))
The Board proposes that the Annual General Meeting resolves that Class C shares that the company purchases by virtue of the authorisation to repurchase its own Class C shares in accordance with item 18(c) above, following reclassification into Class B shares, may be transferred to participants in the Plan as well as participants in other outstanding equity-related incentive programmes in accordance with the approved terms.
The Board further proposes that the Annual General Meeting resolves that a maximum of 1,800,000 Class B shares may be transferred to participants in accordance with the terms of the Plan. These shares can either be Class B treasury shares held by the company or Class B shares held by the company after reclassification from Class C shares.
Authorisation for the Board to resolve on repurchase of own shares (item 19)
The Board proposes that the Board is authorised to pass a resolution on repurchasing the company's own shares if the purpose is to retire shares through a decrease of the share capital in accordance with the following conditions:
The purpose of the authorisation is to give the Board flexibility to continuously decide on changes to the capital structure during the year and thereby contribute to increased shareholder value.
The Board shall be able to resolve that repurchase of own shares shall be made within a repurchase program in accordance with the Commission's Regulation (EC) no 2273/2003, if the purpose of the authorisation and the repurchase only is to decrease the company's share capital.
RESOLUTION PROPOSED BY SHAREHOLDERS
Proposal from shareholder (item 20)
Shareholder Nina Tornberg proposes that Tele2 in the future shall re-pay customers that have paid incorrect invoices within three (3) business days, instead as the current 21 business days.
Shares and votes
There are a total number of 448,783,339 shares in the company, whereof 20,260,910 Class A shares, 427,223,429 Class B shares and 1,299,000 Class C shares, corresponding to a total of 631,131,529 votes. The company currently holds 1,735,334 of its own Class B shares and 1,299,000 of its own Class C shares corresponding to 3,034,334 votes which cannot be represented at the Annual General Meeting.
Special majority requirements and conditions with respect to the proposed resolutions in items 18 and 19
Resolutions under items 18(b), 18(c) and 19 are valid only if supported by shareholders holding not less than two-thirds of both the votes cast and the shares represented at the Annual General Meeting.
Resolution under item 18(d) is valid only if supported by shareholders holding not less than nine-tenth of both the votes cast and the shares represented at the Annual General Meeting.
Items 18(a)-18(d) are conditional upon each other and are therefore proposed to be adopted as one resolution supported by a majority of shareholders holding not less than nine-tenths of both the votes cast and the shares represented at the Annual General Meeting.
The Board, or the person that the Board will appoint, shall be authorised to make the minor adjustments in the Annual General Meeting's resolutions as may be required in connection with registration at the Swedish Companies Registration Office and Euroclear Sweden.
The annual report, the reasoned statement of the Board pursuant to Ch 18 Sec 4 and Ch 19 Sec 22 of the Companies Act (2005:551), the report on the results of the Remuneration Committee's evaluation according to the Swedish Code of Corporate Governance , the Auditor's statement pursuant to Ch 8 Sec 54 of the Companies Act (2005:551), the Nomination Committee's motivated statement explaining its proposals regarding the Board and information on the proposed members of the Board are available at the company's website www.tele2.com, at the company's premises at Skeppsbron 18 in Stockholm and will be sent to those shareholders who so request and state their postal address or email address.
The documentation can be ordered by telephone at +46 (0) 771-246 400 or in writing at the address Tele2 AB c/o Computershare AB, P.O. Box 610, SE-182 16 Danderyd, Sweden.
Shareholders' right to request information
The Board and the Chief Executive Officer shall, if any shareholder so requests and the Board believes that it can be done without material harm to the company, provide information regarding circumstances that may affect the assessment of an item on the agenda, circumstances that can affect the assessment of the company's or its subsidiaries' financial situation and the company's relation to other companies within the group and the consolidated accounts.
Stockholm, April 2015
TELE2 AB (PUBL)
Schedule for the Annual General Meeting:
The doors open for shareholders at 9.00 a.m. CET.
The Annual General Meeting commences at 10.00 a.m. CET.
The Annual General Meeting will mainly be held in Swedish. As a service to the shareholders, simultaneous interpretation from Swedish to English as well as from English to Swedish will be provided. This service may be requested when attendance to the Annual General Meeting is notified.
The information is of such character, which Tele2 AB (publ) shall disclose in accordance with the Securities Market Act (2007:528) and/or the law on Trading with Financial Instruments (1991:980). The information was distributed for disclosure at 8.00 a.m. CET on 16 April 2015.
For more information, please contact:
Lars Torstensson, EVP Group Communication and Strategy, Tele2 AB, Phone: +46 702 73 48 79.
Viktor Wallström, Head of Public Relations, Tele2 AB, Phone: +46 703 63 53 27
|TELE2 IS ONE OF EUROPE'S FASTEST GROWING TELECOM OPERATORS, ALWAYS PROVIDING CUSTOMERS WITH WHAT THEY NEED FOR LESS. We have 14 million customers in 9 countries. Tele2 offers mobile services, fixed broadband and telephony, data network services and content services. Ever since Jan Stenbeck founded the company in 1993, it has been a tough challenger to the former government monopolies and other established providers. Tele2 has been listed on the NASDAQ OMX Stockholm since 1996. In 2014, we had net sales of SEK 26 billion and reported an operating profit (EBITDA) of SEK 5.9 billion.|