Report on the work of the Nomination Committee of Billerud Aktiebolag (publ) ahead of the 2006 Annual General Meeting, including the Committee’s proposals for nominations to the Board, etc.
Background
At the 2005 Annual General Meeting of Billerud AB (publ) (“Billerud”) its was decided to set up a Nomination Committee to propose nominations to the next Annual General Meeting (AGM) concerning chairman of the AGM, Board members, Chairman of the Board, and fees for the Board and auditors.
In the autumn of 2005 the Chairman of the Board, Ingvar Petersson, contacted the largest shareholders in Billerud in order to set up a Nomination Committee. The composition of this Committee was announced on 28 October 2005. Information about the Nomination Committee has been available on the company’s website since this date.
The Nomination Committee comprises the following members:
Michael M.F. Kaufmann, Frapag Vermögensverwaltung,
Cecilia Lager, SEB Fonder and SEB Trygg Liv samt
Torsten Johansson, Handelsbanken Kapitalförvaltning.
Cecilia Lager has been the chairman of the Nomination Committee.
Ingvar Petersson, Chairman of the Board of Billerud, has been the secretary of the Nomination Committee.
Together, the three owner representatives represent around 20% of the votes in Billerud.
The Nomination Committee has held three meetings for which minutes were kept, and communication has also taken place via telephone and email. Shareholders can communicate with the Nomination Committee via the company’s website, where there is a special section, “Nomination Committee” under the heading “Corporate Governance”. The committee has however not yet received any proposals or opinions from other shareholders.
As mentioned above, the Nomination Committee has had the task of proposing nominations for chairman of the AGM, Board members including Chairman of the Board, and fees for Board members and auditors, to be voted upon at the 2006 AGM.
Furthermore, the Nomination Committee has decided, in accordance with the Swedish code of corporate governance, to make proposals regarding the following issues to the 2006 AGM:
- remuneration for committee work
- procedures for appointment of Nominations Committee for 2007 AGM
Proposals made unanimously by the Nomination Committee for decision and election by the AGM
Chairman of the meeting
It is proposed that Ingvar Petersson be elected chairman of the 2006 AGM.
Number of Board members
The Nomination Committee proposes that the Board comprise seven members, including Chairman of the Board and Vice Chairman of the Board.
Board members
The Nomination Committee has received a report from the Chairman of the Board describing the work of the Board as a whole and in committee. In addition, the Nomination Committee has considered an internal assessment of Board members and their work on the Board.
Shareholder Frapag Vermögensverwaltung has notified the committee that, considering its considerable shareholding in Billerud, it would like to be represented by two Board members.
Following the assessment of the Board, the Nomination Committee considers that having more than seven Board members elected by the AGM is not suitable for establishing effective performance by the Board.
Board members Björn Björnsson and Mats Pousette have declined re-election.
With consideration to the above, the Nomination Committee have decided the following:
The following ordinary Board members are proposed for re-election: Ingvar Petersson, Gunilla Jönson, Michael M.F. Kaufmann, Per Lundberg, Yngve Stade and Meg Tivéus.
It is proposed that Ewald Nageler be elected as a new Board member. Ewald Nageler is the CFO of Frapag Industrieholding AG.
The Nomination Committee considers that the proposed composition of the Board covers the key areas for Billerud and that, together, the Board should have the necessary experience and background that will benefit the development of the company.
Chairman and Vice-Chairman of the Board
It is proposed that Ingvar Petersson be re-elected as Chairman. It is proposed that Michael M.F. Kaufmann be elected as Vice-Chairman.
Board fees
It is proposed that SEK 400,000 (unchanged) be paid to the Chairman, and that SEK 200,000 (unchanged) be paid to ordinary Board members who are not employees of the Billerud Group. It is proposed that SEK 300,000 be paid to the Vice-Chairman.
Remuneration for committee work
It is proposed that a total of SEK 200,000 (unchanged) be divided as decided by the Board to members of committees formed by the Board.
Auditor fees
It is proposed that that remuneration to the auditors during the mandate period be paid by current account.
Procedures for appointing the Nomination Committee
The Nomination Committee proposes that procedures for the appointment of the Nomination Committee for the 2007 AGM be as follows:
The Nomination Committee shall comprise three members. The Chairman of the Board shall be the secretary of the Nomination Committee. During the autumn of 2006 the Chairman of the Board shall contact the major shareholders (judged by size of shareholding) regarding the formation of a Nomination Committee. The names of the members of the Nomination Committee, and the names of the shareholders they represent, shall be published six months before the 2007 Annual General Meeting and be based upon the known shareholding immediately before the announcement. Unless Committee members decide otherwise, the chairman of the Nomination Committee shall be the member representing the largest shareholder (judged by size of shareholding). The Committee forms a quorum when more than half of its members are present.
If during the Committee’s mandate period one or more shareholders represented on the Nomination Committee are no longer among the largest shareholders, then their representatives shall resign their positions and the shareholder or shareholders who have become among the largest shareholders shall have the right to appoint their representatives. Unless there is good reason, no changes shall be made to the composition of the Nomination Committee if only marginal changes in shareholding have been made, or the changes take place later than two months before the AGM that will decide on proposals made by the Committee.
Shareholders who appoint members to the Nomination Committee have the right to dismiss their representative and appoint a new one. Equally, the shareholder whose representative requests to leave the Committee before its work is completed has the right to replace such a representative. Changes to the composition of the Nomination Committee shall be published as soon as they take place.
The Nomination Committee shall produce proposals for the following items to be decided by the 2007 Annual General Meeting:
(a) proposal for chairman of the Meeting,
(b) proposals for Board members,
(c ) proposal for Chairman and Vice-Chairman of the Board,
(d) proposals for Board fees and distribution between Chairman of the Board, Vice-Chairman and other members, and possible remuneration for committee work,
(e) proposal for fees to auditors,
(f) proposal for procedures for appointing the Nomination Committee.
The Nomination Committee shall make available to Billerud the information described in points 1.4.1, 2.1.3, 2.3.2, 2.3.3, 5.1.4 and 5.3.1 of the Swedish code of corporate governance, so that Billerud can meet the requirements of the code.
Furthermore, the Nomination Committee shall in performing its duties meet the requirements set by the Swedish code of corporate governance for nominations committees, and Billerud shall at the request of the Nominations Committee provide human resources, such as secretary of the Committee, in order to facilitate the Committee’s work. As necessary Billerud shall also pay reasonable costs for external consultants and similar which are considered necessary by the Committee for it to perform its duties.
Stockholm 15 March 2006
Cecilia Lager (Chairman), Torsten Johansson and Michael M.F. Kaufmann
Ingvar Petersson (Secretary)
Information regarding the nominees as per 2.2.3 of the Swedish Code of Corporate Governance