Husqvarna Group: Notice of Annual General Meeting of Husqvarna AB (publ)
The shareholders of Husqvarna AB (publ) are hereby invited to participate in the 2023 Annual General Meeting ("AGM"), which will be held on Tuesday, April 4, 2023 at the Elmia Congress Centre, Hammarskjöld Hall, Elmiavägen 15 in Jönköping, Sweden from 16:00 - 18:00 (CET).
A. General Information
Shareholders may participate in the AGM either (1) by attending the meeting venue in person or by proxy, as described in Section B below, or (2) via the "Advanced Voting" procedures described in Section C below. In either case, to be eligible to participate, a shareholder must be registered in the register of shareholders maintained by Euroclear Sweden AB as of Monday, March 27, 2023. Any shareholder whose shares are registered in the names of a bank or other nominee must temporarily register their shares in their own name not later than on Monday, March 27, 2023 (in accordance with the applicable nominee's routines and internal timelines). Voting right registrations completed not later than Wednesday, March 29, 2023 are taken into account when preparing the share register.
The AGM Agenda (including all items proposed to be approved by the shareholders) is set forth in Section D below. For a valid resolution under all agenda items except elections, a shareholder majority of half of the votes cast at the AGM is required. For elections, the person(s) receiving the highest number of votes is elected.
Further explanation regarding the proposals for certain agenda items in set forth in Section E below.
At the time of the issue of this Notice of AGM, the total number of shares in the Company amounts to 110,106,194 A-shares and 466,237,584 B-shares, corresponding to
156,729,952.4 votes in total. The Company holds no A-shares or B-shares as of the date of this notice.
The Board of Directors and the CEO shall, upon request of a shareholder, and provided that the Board of Directors deems this can be done without causing major harm to the Company, inform about matters which might affect the assessment of an item on the agenda or circumstances affecting Husqvarna's or its subsidiaries' financial situation or about Husqvarna's relation to another Group entity, or in relation to the consolidated Annual Report.
B. Participation at the Meeting VenueIn order to participate in the AGM at the meeting venue (in person or by proxy), a shareholder must notify the Company of their intention to do so no later than Wednesday, March 29, 2023. Such notice may be given by any of the following means:
via the Company's website, www.husqvarnagroup.com,
by telephone at +46 36 14 70 10 between 9:00 a.m. and 4:00 p.m. (CET) weekdays, or
by mail to Husqvarna AB, c/o Euroclear Sweden AB, P.O. Box 191, SE-101 23 Stockholm, Sweden.
The notification to attend in person (or by proxy) must include the shareholder's name, personal or company registration number, address, telephone number and information on the number of assistants (maximum two) that will be attending, if any.
Shareholders wishing to participate at the AGM through an authorized representative (i.e., "proxy") must submit a valid, signed and dated power of attorney, via mail, to Husqvarna AB, c/o Euroclear Sweden AB, P.O. Box 191, SE-101 23 Stockholm, Sweden. If the shareholder is a legal entity, a registration certificate or equivalent authorization document must also be enclosed. In order to facilitate the registration at the AGM, the power of attorney, as well as a registration certificate and other authorization documents, should be received by the Company at the above address no later than March 29, 2023. Power of Attorney (proxy) forms are available on the Company's website at www.husqvarnagroup.com.
C. Participation by "Advance Voting"
Shareholders may also participate in the AGM by means of the "Advance Voting" procedures described in this Section C. The exercise of voting rights in accordance with such Advance Voting procedures will be considered as a notification from the shareholder to attend the meeting.
Advance voting will be available as of Tuesday, February 28, 2023 until Wednesday, March 29, 2023. A shareholder can vote in advance by completing an advance voting form via any of the following three methods:
1. Website Voting: Voting may be done electronically through signing with BankID on the Company's website www.husqvarnagroup.com.
2. Email Voting: Voting may be submitted by completing the advance voting form available on the Company's website www.husqvarnagroup.com and then emailing such form to the following email address [email protected],together with any power of attorney and/or other authorization documents (See Section A above).
3. Regular Mail: Voting may be submitted by completing the advance voting form available on the Company's website www.husqvarnagroup.com and after completion sending a physical copy (i.e., printed out) of such form, together with any power of attorney and/or other authorization documents (See Section A above) to the following address, Husqvarna AB, "Advance voting 2023 AGM", c/o Euroclear Sweden AB, P.O. Box 191, SE-101 23 Stockholm, Sweden.
A shareholder cannot give any other instructions than selecting one of the options specified at each point in the advance voting form. A vote (i.e. the advance voting form in its entirety) is invalid if the shareholder has modified the form to provide specific instructions or conditions or if pre-printed text is amended or supplemented.
For "Website Voting", "Email Voting" and "Regular Mail" voting described above, the last day to complete such voting is Wednesday, March 29, 2023. For, the email or regular mail (as applicable), together with any required power of attorney and other authorization documentation, must have been received by Husqvarna no later than on Wednesday, March 29, 2023. If received later, the voting form will be disregarded.
For questions regarding advance voting, please contact Euroclear Sweden AB,
ph.+46 36 14 70 10, between 9:00 a.m. and 4:00 p.m. (CET) weekdays.
D. AGM Agenda
The proposed agenda for the AGM is as follows:
1. Opening of the AGM
2. Election of Chair of the Meeting
3. Preparation and approval of the voting list
4. Approval of the agenda
5. Election of one or two minute-checkers
6. Determination as to whether the Meeting has been duly convened
7. Resolutions concerning
a) adoption of the Profit and Loss Statement and the Balance Sheet as well as the Consolidated Profit and Loss Statement and the Consolidated Balance Sheet
b) proposed distribution of earnings (allocation of the Company's profit or loss pursuant to the adopted Balance Sheet)
c) discharge from liability of the Directors and the CEO
8. Determination of the number of Directors and Auditors to be elected
a) number of Directors
b) number of Auditors
9. Determination of remuneration to the Directors
10. Election of Directors and Chair of the Board
a) individual election of Directors
b) election of Chair of the Board
11. Election of, and remuneration to, external Auditors
a) election of external Auditors
b) determination of remuneration to external Auditors
12. Resolution to approve the Remuneration Report
13. Resolution regarding the adoption of a long-term incentive program (LTI 2023)
14. Resolution on authorization to enter into equity swap arrangements to cover obligations under LTI 2023 and any previously resolved LTI programs
15. Resolution on authorization to resolve on the issuance of new shares
16. Closing of the Meeting
E. Explanation of Certain AGM Proposals
Election of Chair of the Meeting (Agenda Item #2)
The Nomination Committee proposes that Björn Kristiansson be elected Chair of the AGM, or, if he is unable to attend the meeting, any other person proposed by Husqvarna's Nomination Committee.
Preparation and approval of the voting list (Agenda Item #3)
The voting list that is proposed to be approved is the voting list that will have been prepared by Euroclear Sweden AB, based on the general meeting share register and votes received, checked by the minute-checkers.
Election of one or two minute-checkers (Agenda Item #5)
The Board of Directors proposes that two minute-checkers be elected, and that Henrik Didner, Didner & Gerge Fonder AB and Claes Boustedt, L E Lundbergföretagen AB are elected, or, if someone or both of them are unable to attend the meeting, any other person proposed by Husqvarna's Nomination Committee.
Proposed distribution of earnings (Agenda Item #7b)
The Board of Directors proposes a dividend for financial year 2022 of SEK 3.00 per share, to be paid in two installments, firstly SEK 1.00 per share with Thursday, April 6, 2023 as the first record day, and secondly SEK 2.00 per share with Friday, October 6, 2023 as the second record day. Assuming the AGM resolves in accordance with the Board of Directors' proposal, the estimated (i) last day for trading in Husqvarna shares with right to the applicable part of the dividend payment (ii) applicable record day, and (iii) date for payment from Euroclear Sweden AB for each of the installments are as follows:
First Second Installment(SEK 2.00 per share)
1.00 per share)
Last day Tuesday, April 4, Wednesday, October 4, 2023
Record Day Thursday, April 6, Friday, October 6, 2023
Payment Thursday, April Wednesday, October 11, 2023
Date 13, 2023
Determination of Number of Directors (Agenda Item #8a)
The Nomination Committee proposes that the Board of Directors shall be comprised of eight Directors to be elected by the AGM, which is a reduction by one from the prior year's AGM (at which 9 Directors were elected). This is due to the fact that the former Board member and CEO of the Company, Henric Andersson, passed away in February 2023 and a permanent successor has not yet been identified. The Nomination Committee is of the opinion that the Board should normally include the CEO. Therefore, the Board of Directors reserves the right to call an extraordinary general meeting for the purpose of increasing the size of the Board and to elect the CEO as an additional Board Member.
Determination of Number of Auditors (Agenda Item #8b)
The Nomination Committee proposes that the external auditors be comprised of one audit firm.
Determination of remuneration to the Directors (Agenda Item #9)
The Nomination Committee proposes that Directors elected by the AGM and not employed by the Company receive the following basic compensation for their board work in 2023 (plus applicable additional remuneration for committee work):
Proposal 2023 2022 Percentage Increase
Chair of the Board SEK 2 250 000 SEK 2 175 000 3.4%
Director SEK 650 000 SEK 630 000 3.2%
Audit Committee SEK 290 000 SEK 280 000 3.6%
Audit Committee SEK 185 000 SEK 180 000 2.8%
People & SEK 150 000 SEK 145 000 3.4%
People & SEK 90 000 SEK 85 000 5.9%
In addition to the compensation described above, and reimbursement for travel expenses, the Nomination Committee proposes that the following compensation be paid to elected Directors for each physical meeting attended in Sweden (no change from prior year):
Residence of Director Per Meeting Compensation
Nordic Countries None
Europe (non-Nordic) SEK 10,000
Outside of Europe USD 3,500
The Nomination Committee declares its expectation that each elected Director engage themselves financially in Husqvarna by acquiring Husqvarna shares within a period of five years, corresponding to approximately one year's remuneration, calculated before tax.
Election of Individual Directors (Agenda Item #10a)
The Nomination Committee proposes the re-election of:
1. Tom Johnstone,
2. Ingrid Bonde,
3. Katarina Martinson,
4. Bertrand Neuschwander,
5. Daniel Nodhäll,
6. Lars Pettersson, and
7. Christine Robins.
In addition, the Nomination Committee proposes the election of
8. Torbjörn Lööf, as a new Director.
The proposed Directors are presented in more detail on the Company's website.
Election of Chair of the Board (Agenda Item #10b)
The Nomination Committee proposes that Tom Johnstone be re-elected Chair of the Board.
Election of external Auditors (Agenda Item #11a)
The Nomination Committee proposes, in accordance with the Audit Committee recommendation, the re-election of KPMG as external Auditors for the period from the 2023 AGM up until the end of the 2024 AGM. KPMG has informed that the registered auditor-in-charge will be authorized public accountant Joakim Thilstedt.
Determination of remuneration to external Auditors (Agenda Item #11b)
The Nomination Committee proposes that the external Auditors' fee shall be paid on the basis of approved invoices.
Adoption of a long-term incentive program (LTI 2023) (Agenda Items #13)
Summary of the program
The Board of Directors proposes that the 2023 AGM resolves to adopt a performance-based long-term incentive program ("LTI 2023") in line with the following description. The program is based on the same principles as the incentive program granted in 2022 (LTI 2022).
LTI 2023 is proposed to be offered to a maximum of 135 senior managers within the Husqvarna Group and offers participants the opportunity to receive "performance share awards". Subject to the fulfilment of certain performance targets and conditions during a three-year vesting period, performance share awards to be granted in 2023 will vest and give right to Husqvarna B-shares in accordance with the following.
Participants in LTI 2023 will be granted a number of performance share awards based on such participant's annual target income (fixed salary plus variable salary at a target level) in 2023.The number of performance share awards that vest and give rights to receive B-shares further depends on the fulfilment of certain levels of increase of the Company's value creation (defined as Earnings Before Interest and Tax - Average Net Assets x Weighted Average Cost of Capital), weight 90%, and certain levels for reducing the company's carbon dioxide emissions, weight 10%, during the calendar years 2023-2025, as determined by the Board of Directors. These levels are "Entry", "Target" and "Stretch". Entry constitutes a minimum level which must be exceeded in order for the performance share awards to vest and give right to B-shares. The levels correspond to the following number of B-shares, with a linear progression between each level:
Entry: 10% of annual target income / the share price SEK[[]]
Target: 33% of annual target income / the share price SEK
Stretch: 66% of annual target income / the share price SEK
If the price for the B-shares would increase more than 200% during the three year vesting period, the number of performance share awards that vest and give right to B-shares will be limited to the value of the maximum allocation at Stretch level at a share price increase of 200% from grant of share awards to vesting (vesting period). This limitation enables control and predictability over the maximum scope and cost of the program.
Additional terms & conditionsThe performance share awards shall be governed by the following terms and conditions:
Shares are allotted free of charge
Are vested three years after grant (vesting period)
Vesting of performance share awards and allotment of B-shares in Husqvarna requires that the participant is then, with certain exceptions, still employed by the Husqvarna Group
Carry no right to compensation for dividends on underlying shares
Design and administration
The Board of Directors, or a committee established by the Board, shall be responsible for the detailed design and administration of LTI 2023, in accordance with the presented terms and guidelines. To this end, the Board of Directors shall be entitled to make adjustments to meet domestic or foreign regulations or market conditions. The Board of Directors may also make other adjustments if significant changes in the Husqvarna Group, or its environment, would result in the resolved terms and conditions for LTI 2023 no longer being appropriate to apply.
In accordance with the above principles and assumptions, LTI 2023 will comprise the following number of B-shares for the different categories of participants: the CEO, approximately 142,000 B-shares, other members of Group Management, each approximately an average of 47,000 B-shares, corresponding to a total of approximately 376,000 B-shares, and other participants, each approximately an average of 19,000 B-shares, corresponding to a total of approximately 2,394,000 B-shares. The above stated numbers are calculated assuming the attainment of performance level Stretch as described above.
Scope and costs of LTI 2023
LTI 2023 is estimated to comprise a maximum of 2.9 million B-shares, which corresponds to 0.5% of the total number of outstanding shares. The Company has approximately 576 million shares outstanding. The issued and outstanding rights to shares in accordance with the Company's previous outstanding incentive programs (LTI 2020, LTI 2021 and LTI 2022) correspond to approximately 0.9% of the total number of outstanding shares. The Company's incentive programs' effect on important key figures is only marginal. Information on LTI 2020, LTI 2021 and LTI 2022 can be found in the Annual Report for 2022, note 4, and on the Company's website, www.husqvarnagroup.com.
LTI 2023 will be accounted for in accordance with IFRS 2 - Share-based Payment. IFRS 2 stipulates that the performance share awards should be expensed as personnel costs over the vesting period and will be reported directly against equity. Estimated social security charges will be recorded as a personnel expense in the income statement by current reservations. The cost for LTI 2023 is estimated to amount to SEK 113m before tax, if the performance level Target is reached, and is allocated over the years 2023-2026. The corresponding cost at performance level Stretch is estimated to SEK 226m. Financing costs and social security charges are included in the estimated amounts. The estimation of cost above is based on the assumptions that the share price is SEK 80 at the time of grant of the performance share awards, that the annual share price increase for the Company's B-shares is 5%, that social security charges amount to 20% and that the annual employee turnover is 5% among the participants of LTI 2023.
In order to ensure delivery of Husqvarna B-shares under LTI 2023 and to limit the costs, including social security charges, for LTI 2023, the Board of Directors will adopt hedging measures, such as equity swap agreements with third parties, under which the third party would in its own name buy and transfer Husqvarna B-shares to the participants in accordance with LTI 2023 provided that the AGM resolves in accordance with Agenda Item 13 on the agenda. The hedging options are described below under Agenda Item 14 on the agenda. The intention is to not issue new shares as a result of LTI 2023.
The rationale for the proposal
The purpose of LTI 2023 is to influence and award long term performance, align shareholders' and managements' interest, attract and retain key employees and provide variable remuneration instead of fixed salary. In light of the above, the Board of Directors believes that adopting LTI 2023 will have a positive effect on the development of the Husqvarna Group and consequently that it will be beneficial to both the shareholders and the Company.
LTI 2023 is based on the same principles as LTI 2022 and has in accordance with guidelines set out by the People & Sustainability Committee been prepared by Group Management in consultation with external advisors, taking into consideration evaluations of previous incentive programs. LTI 2023 has been reviewed at meetings of the Board of Directors in 2022 and 2023.
Authorization to enter into equity swap arrangements to cover obligations under LTI 2023 and any previously resolved LTI programs (Agenda Item #14)
The Board of Directors proposes that the 2023 AGM authorizes the Board of Directors to pass a resolution, on one or more occasions, for the period up until the next AGM, to direct the Company to enter one or more equity swap agreements with a third party (e.g., a bank), on terms and conditions in accordance with market practice, to hedge the obligations of the Company under LTI 2023 and any previously resolved incentive programs (the "Covered Programs"). Under such equity swap arrangements, in exchange for certain fees paid by the Company, the third party acquires (in its own name) such number of Husqvarna B-shares as are necessary to cover the Company's obligations under the Covered Programs and then, transfer (in its own name) such shares to the participants per the terms of the Covered Programs.
Authorization to resolve on the issuance of new shares (Agenda Item #15)
The Board of Directors proposes that the 2023 AGM authorizes the Board to resolve to issue not more than 57,634,377 B-shares, which represents 10% of the total number of shares in the Company, against payment in kind, on one or several occasions, during the period until the next AGM.
The price for the new shares shall be based on the market price of the Company's B-shares. The purpose of the authorization is to facilitate acquisitions where the consideration will be paid with own shares.
Information on the proposed Board of Directors of Husqvarna AB as well as the proposed external auditor and the Nomination Committee's Explanatory Statement etc. are available on the Company's website, www.husqvarnagroup.com. The Annual Report and the Audit Report as well as the Auditors report on the guidelines adopted regarding remuneration are presented by being available on the Company's website, www.husqvarnagroup.com. They will, on request, be sent to shareholders at the address provided. The share register will be available at Husqvarna AB, Regeringsgatan 28, SE-111 53 Stockholm, Sweden.
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Stockholm in February 2023
Husqvarna AB (publ)
THE BOARD OF DIRECTORS
 Corresponding to the average closing price of Husqvarna's B-share at Nasdaq Stockholm during December 2022, January 2023 and February 2023.