ITAB Shop Concept AB (publ) hereby gives notice of its Annual General Meeting to be held on Wednesday 7 May 2014 at 3 pm in ITAB’s offices at Instrumentvägen 2 in Jönköping, Sweden.
Shareholders wishing to attend the Annual General Meeting must be registered in the shareholder register maintained by the securities register centre Euroclear Sweden AB (formerly VPC AB) on Wednesday 30 April 2014, and they must notify the company of their intention to attend the AGM no later than 4 pm on Wednesday 30 April 2014 by writing to ITAB Shop Concept AB, PO Box 9054, SE-550 09 Jönköping or by telephoning +46 36 31 73 00 or by e-mailing firstname.lastname@example.org. Shareholders whose shares are registered in the names of trustees must have their shares temporarily re-registered in their own names before Wednesday 30 April 2014 to be eligible to attend the AGM. When signing up shareholders must give their name, national ID or corporation number, address, telephone number, the number of shares held and the names of any accompanying assistants (maximum two). Shareholders represented by proxy should issue a proxy form for the proxy. The proxy form should be lodged together with the notice of attendance. A certificate of registration must be attached if the proxy form is being completed by a legal person.
1. Opening address
2. Election of chairman of the AGM
3. Adoption of agenda
4. Creation and adoption of voters’ list
5. Election of members to certify the minutes
6. Establish that the Meeting has been duly convened
7. Presentation of the annual financial statements and auditor’s report along with consolidated financial statements and consolidated auditor’s report for 2013
8. Decision on the adoption of income statement and statement of financial position along with consolidated income statement and consolidated statement of financial position
9. Decision on allocation of the company’s profit in accordance with the adopted statement of financial position and decision on closing day
10. Decision on discharge from liability of the Board of Directors and CEO
11. Determination of the number of Board members and deputies
12. Determination of remuneration of the Board of Directors and auditors
13. Election of Board members, chairman and auditors
14. Election of nominations committee
15. Decision on granting the Board of Directors authority to make decision on new share issue
16. Decision on the company’s right to acquire and transfer own shares
17. Decision on guidelines for remuneration of senior executives
18. Decision on amendment to the Articles of Association
19. Decision on share split
20.Decision on issuing convertible bonds to employees
19. Conclusion of meeting
Chairman of the Annual General Meeting (Item 2)
The nominations committee, comprising Anders Rudgård (Chairman), Fredrik Rapp and Johan Storm propose that Fredrik Rapp be appointed Chairman of the Annual General Meeting.
Dividend (Item 9)
The Board of Directors proposes a dividend of SEK 3.00 per share for the financial year 2013. The closing day will be Friday 12 May 2014. Subject to the Meeting’s approval of the proposal, it is expected that dividends will be remitted by Euroclear Sweden AB on Wednesday 15 May 2014.
Board of Directors and remuneration (Items 11–13)
The nominations committee proposes:
a) that the number of elected Board members be seven and that no deputies be elected;
b) that remuneration of Board members shall total SEK 1,200,000, with SEK 300,000 allocated to the Chairman of the Board and SEK 150,000 to each of the other members of the Board;
c) that remuneration for work on the nominations committee shall be SEK 30,000 for the committee chairman and SEK 15,000 for each committee member and that remuneration for work on the audit committee and remuneration committee shall total a maximum of SEK 100,000 per committee, to be distributed between the committee members, by SEK 40 000 to the respective chairman and SEK 30 000 each to the respective committee's other members;
d) that remuneration of the auditors be paid on a current account basis in return for invoices reviewed and approved by the Board;
e) re-election of the ordinary Board members Tord Johansson, Anna Benjamin, Anders Moberg, Fredrik Rapp, Stig-Olof Simonson, Lottie Svedenstedt and election of Sune Lantz;
f) re-election of Tord Johansson as Chairman of the Board and election of Fredrik Rapp as the vice chairman of the Board;
g) that the registered public accounting firm Ernst & Young will be selected as auditors for a term of one year.
Information about the nominated Board members along with an account of the nominations committee’s work can be found at www.itab.se.
Nominations committee (Item 14)
The meeting shall elect a nominations committee whose duty it is to nominate a chairman of the Board and other Board members for the Annual General Meeting in 2015, or when necessary, and to propose remuneration of the Board, committees and auditors. The nominations committee shall also nominate auditors as and when necessary. It is proposed that the term of office shall last until the Annual General Meeting in 2015. If a Board member were to step down from the nominations committee before its work has been completed, it is being proposed that the remaining members of the committee be asked to appoint a new member.
A proposal has come from the largest shareholders, Tord Johansson and Pomonagruppen AB, who jointly represent 81.42 per cent of the votes and 53.88 per cent of the capital in ITAB, prior to the 2015 Annual General Meeting that Anders Rudgård and Johan Storm be appointed as members of the Nominations Committee. A proposal has come from Tord Johansson who represents 53.10 per cent of the votes and 24.25 per cent of the capital in ITAB that Fredrik Rapp be appointed as member of the Nominations Committee. The proposed Nominations Committee consists of Anders Rudgård as Chairman, Fredrik Rapp and Johan Storm.
Authorisation for new share issue (Item 15)
The Board proposes that the meeting authorize the Board to make one or more decisions in the period up until the next Annual General Meeting to issue new shares to a maximum of one tenth of the company’s issued shares and/or convertible bonds convertible for a maximum of one tenth of the company’s issued shares – in the form of a full conversion using the conversion price applicable at the time of the conversion. An issue may be undertaken with or without pre-emption rights for shareholders. Pre-emption rights for shareholders may not be offered if a private placement would be more beneficial to the company due to timing, business reasons or other reasons. Decisions on new share issues may also stipulate that subscription be subject to payment in kind or payment by cash in lieu. The reasons for granting authorization to make decisions on new issues are to increase the company’s financial flexibility and to allow the company to make business acquisitions. The terms and conditions of an issue, including the issue price, shall be based on a market evaluation in which the issue price in each case is set as close to the market value as possible, less any discount that may be required to generate interest in the offering.
Purchase and transfer of own shares (Item 16)
The Board proposes that the Annual General Meeting authorize the Board of Directors to decide on the purchase and transfer of own shares. The authorization is intended to give the Board more room for maneuver in dealing with the company’s capital structure and, if deemed appropriate, facilitate a incentive program for the Group’s employees or the acquisition of businesses paid for with company shares. The Board may, on one or more occasions, make such decisions to be implemented before the Annual General Meeting in 2015. The purchase of own shares shall amount to no more than one tenth of the total number of shares issued by the company and shall take place on the stock exchange or by offerings to shareholders. The purchase of own shares may only take place within the price range recorded at the Stockholm stock exchange at any given time, i.e. the interval between the highest purchase price and the lowest selling price. The number of own shares transferred may not exceed the number of shares acquired at the time of transfer according to the above, and the shares should be transferred on the stock exchange or by disregarding the shareholders’ preemption rights in connection with the fulfillment of commitments under the incentive program for employees or the acquisition of business, whereby payment may be made by means other than cash. Own shares may not be transferred at less than the quoted price at the time of the transfer. A decision on the above requires the vote of shareholders representing at least two thirds of both votes cast and the number of shares represented at the Annual General Meeting.
Principles for remuneration of senior executives (Item 17)
The Board proposes that the meeting adopt principles for remuneration and other terms of employment for senior executives. Senior executives are the Group Management team, currently comprising the CEO, Deputy CEO and CFO. The Board’s proposal is in line with remuneration principles adopted in previous years and is based on existing agreements between the company and the respective Directors. The issue of remuneration is handled by the remuneration committee. The principles shall apply to agreements entered into after the Annual General Meeting’s decision and to cases where changes are made to existing agreements after this date.
The Board’s proposal implies that remuneration and other terms of employment for senior executives shall be in line with market standards. In addition to a basic salary, senior executives may receive a limited variable remuneration that is result-based and pegged to set targets. The variable part of the remuneration may not exceed three months’ pay. Senior executives shall be granted market-rate, premium-based pension terms and conditions. The reciprocal period of notice between the company and other senior executives shall be six months. A severance package equivalent to 18 months’ pay for the CEO and six months’ pay for other senior executives shall be payable if the company were to terminate their employment. Severance pay is offset against other income. No severance pay will be paid in the event of notice being given by the executive. The Board shall be entitled to disregard these principles in individual cases should there be particular grounds for doing so.
The Board of Director's proposal on amendment of the Articles of Association (point 18)
The Board proposes that the first paragraph, third sentence in § 4 in the Articles of Association be amended by removing the current wording and be replaced by the following: ”Share from class A can be issued to a minimum number of 7,800,000 and a maximum of 31,200,000 and class B shares to a minimum number of 16,200,000 and a maximum of 64,800,000.”
The Board also proposes that § 5 in the Articles of Association be amended by removing the current wording and be replaced by the following: ”The number of shares shall be not less than 24,000,000 and not more than 96,000,000.”
The Board of Director's proposal on a share split (point 19)
The Board of Directors of ITAB Shop Concept AB proposes that the Annual General Meeting on 7 May 2014 decide to increase the number of shares by splitting each share into 2 shares (share split 2:1).
The record date at Euroclear Sweden AB for carrying out the share split shall be 23 May 2014. After the share spilt is implemented, the number of shares will rise from 16,953,205 to 33,906,410, of which 7,800,000 class A and 26,106,410 class B. One class A share entitles the holder to 10 votes and one class B share to one vote. The proposed share spilt means that the share's nominal value (the share capital divided by the number of shares) is changed from SEK 2.50 to SEK 1.25.
The Board of Directors also proposes that the Board, or whoever the Board authorises, shall have the right to make minor adjustments in the decision, which may be necessary when registering the decision at the Swedish Companies Registration Office or Euroclear Sweden AB.
The Board of Director's proposal on a decision to issue convertible bonds to employees (point 20)
The Board proposes that the Annual General Meeting decide to issue convertible bonds to a maximum total nominal value of SEK 30,000,000 spread over a maximum of 200,000 bonds. It is proposed that the bonds run from 1 July 2014 to the end of 30 June 2018. Disregarding the shareholders’ pre-emption rights, only permanent employees of ITAB Shop Concept AB (publ) and its subsidiaries may subscribe to the issue. Permanent employees also include individuals who by the end of the subscription period have signed an agreement on future permanent employment.
The subscription period shall be 22 May 2014 to the end of 2 June 2014. Payment for subscribed and allocated bonds shall be made in cash no later than 1 July 2014.
The bonds shall bear a yield from 1 July 2014. The yield shall be paid annually in arrears and shall be equivalent to STIBOR 90 days (as defined in the complete terms and conditions for ITAB Shop Concept convertible bonds 2014/2018), plus an addition of 2.00 percentage points.
Shares issued on the grounds of Conversion, with the exceptions set out in the complete terms and conditions for ITAB Shop Concept convertible bonds 2014/2018, shall have the right to the first dividend payment on the closing day for dividends that follows after the Conversion has been implemented.
Conversion to class B shares may take place from 1 June 2018 to the end of 11 June 2018. Each convertible bond may be converted to one (1) new class B share using a conversion rate equivalent to 115% of the quoted volume-weighted average closing price for class B shares on the NASDAQ OMX Stockholm from 12 May to the end of 16 May 2014. The calculated conversion rate shall be rounded off to the nearest whole Swedish krona with SEK 0.50 increments being rounded down. The conversion rate shall be no lower than SEK 125, however. In the case that the conversion rate as established above would be set at an amount that would result in an increase in the share capital exceeding SEK 500,000 after full conversion at the conversion rate, the highest loan amount shall be reduced so the maximum increase in the share capital will be SEK 500,000. A fully subscribed issue will increase the share capital by a maximum of SEK 500,000, which will dilute the share capital by around 1.2% and the number of votes by 0.4% based on the current number of outstanding shares.
The convertible bonds will be issued with a nominal value equivalent to the conversion rate. The subscription price shall be equivalent to the nominal value of the convertible bonds.
The subscription shall not exceed the permitted maximum in respect of the loan amount and the permitted share capital increase. The offering shall be limited to maximum 15,000 convertible bonds for each permanent employee. Those entitled to subscribe are guaranteed at least 150 convertible bonds. In the event of oversubscription, those entitled to subscribe will receive their guaranteed allotment in the first instance. Any allotment beyond the guaranteed allotment shall be pro rata based on the number of convertibles stated and allocated one lot at a time until all convertibles have been allotted. Allocation is decided by the Board of Directors.
The reason for disregarding the shareholders’ pre-emption rights is that the company’s employees are a highly valuable asset. Personal, long-term ownership involvement by employees is expected to encourage increased interest in the business and its performance, thus increasing motivation. It would be an advantage for the company to be able to offer employees an opportunity to contribute to the Group’s development in a way that also benefits the shareholders. It is the Board’s view that the proposed convertible bond programme is reasonable, taking into account the terms and size of the allocation.
Taking into account that the convertibles will be subscribed by employees at an estimated market price, it is deemed that the convertible debenture scheme will not result in any costs apart from some minor costs for drawing up and administration. However, the dilution effect of ITAB Shop Concept Convertible Bonds 2014/2018 may affect the earnings per share pursuant to accounting standard IAS 33.
Prior to drawing up the proposed terms and conditions for ITAB Shop Concept convertible bonds 2014/2018, the Board asked Elleme AB to carry out an assessment partly of the debt part of the convertible bonds, partly of the value of the conversion rights using the so-called Black & Scholes method based on factors such as a volatility ratio of 30% for the company’s listed class B shares. The issue price of the convertible bonds is determined on the basis of said assessment in relation to the market value at the time of the issue.
The Board of Directors also proposes to the Annual General Meeting that the Chairman of the Board and the Chief Executive Office be authorised to make minor adjustments in the decision, which may be necessary when registering the decision at the Swedish Companies Registration Office or Euroclear Sweden AB.
A decision on the above requires the vote of shareholders representing at least nine tenths of both votes cast and the number of shares represented at the meeting.
The annual financial statements and auditor’s report will be available from the company’s offices and website www.itab.se. The annual financial statements and documents will be sent to all shareholders prior to the meeting. Shareholders are reminded of their right to request information pursuant to chapter 7 § 32 of the Swedish Companies Act.
At the time of writing this notice the company’s share capital stood at SEK 42,383,013 spread over 16,953,205 shares, of which 3,900,000 were class A shares and 13,053,205 were class B shares, equivalent to a total of 52,053,205 shares. One class A share entitles the holder to 10 votes and one class B share to one vote.
Jönköping April 2014
ITAB Shop Concept AB (publ)
The Board of Directors