UPM-Kymmene Corporation Notice to general meeting 31 January 2018 at 12:00 EET
Notice of the Annual General Meeting
Notice is given to the shareholders of UPM-Kymmene Corporation of the Annual General Meeting to be held on Thursday, 5 April 2018 starting at 14.00 (EET) at Messukeskus, Messuaukio 1, Helsinki, Finland (Kokoustamo entrance). The reception of attendees who have preregistered for the meeting and the distribution of voting tickets will commence at 13.00 (EET).
A. Matters on the agenda of the Annual General Meeting
- Opening of the meeting
- Calling the meeting to order
- Election of persons to scrutinise the minutes and to supervise the counting of votes
- Recording the legality of the meeting
- Recording the attendance at the meeting and adoption of the list of votes
- Presentation of the Financial Statements, the Report of the Board of Directors and the Auditor's Report for the year 2017
- Review by the President and CEO
- Adoption of the Financial Statements
- Resolution on the use of the profit shown on the balance sheet and the payment of dividend
The Board of Directors proposes that a dividend of EUR 1.15 per share be paid based on the balance sheet to be adopted for the financial year ending 31 December 2017. The dividend will be paid to a shareholder who is registered in the Company's shareholders' register held by Euroclear Finland Ltd on the dividend record date 9 April 2018. The Board of Directors proposes that the dividend be paid on 19 April 2018.
- Resolution on the discharge of the members of the Board of Directors and the President and CEO from liability
- Resolution on the remuneration of the members of the Board of Directors
The Board of Directors' Nomination and Governance Committee proposes that the remuneration of the members of the Board of Directors remain unchanged and that the Chairman of the Board of Directors be paid an annual base fee of EUR 190,000, Deputy Chairman of the Board EUR 135,000 and other members of the Board EUR 110,000.
The Nomination and Governance Committee further proposes that the annual committee fees remain unchanged and that the members of the Board of Directors' committees be paid annual fees as follows:
- Audit Committee: Chairman EUR 35,000 and members EUR 15,000
- Remuneration Committee: Chairman EUR 20,000 and members EUR 10,000
- Nomination and Governance Committee: Chairman EUR 20,000 and members EUR 10,000.
No annual fees shall be paid to a member of the Board of Directors belonging to the executive management of the Company.
The annual base fee is proposed to be paid in Company shares and cash so that 40% will be payable in the Company shares to be purchased on the Board members' behalf, and the rest in cash. The Company will pay any costs and transfer tax related to the purchase of the Company shares. Shares thus purchased may not be transferred within two years from the purchase date or until the director's membership in the Board has ended, whichever occurs first. The annual committee fees are proposed to be paid in cash.
In addition, the Board of Directors' Nomination and Governance Committee proposes that travel and lodging expenses incurred from meetings held elsewhere than in a director's place of residence will be paid against invoice.
- Resolution on the number of members of the Board of Directors
The Board of Directors' Nomination and Governance Committee proposes that the number of members of the Board of Directors be resolved to be the current ten (10).
- Election of members of the Board of Directors
The Board of Directors' Nomination and Governance Committee proposes that the following incumbent directors be re-elected to the Board: Berndt Brunow, Henrik Ehrnrooth, Piia-Noora Kauppi, Jussi Pesonen, Ari Puheloinen, Veli-Matti Reinikkala, Suzanne Thoma, Kim Wahl and Björn Wahlroos. The committee further proposes that Ms Marjan Oudeman be elected as a new director to the Board. The directors are elected for a one-year term and their term of office will end upon closure of the next Annual General Meeting. All director nominees have given their consent to the election. The nominees' biographical details are available on the corporate website under www.upm.com/agm2018.
Ms. Wendy E. Lane, UPM's director since 2005, has informed that she will not stand for re-election. Having served as a non-executive director for 13 years and played a part in UPM's remarkable transformation from a global paper producer to a versatile Biofore company, she feels the Board would benefit from some refreshment and she will, in turn, focus on other engagements.
The new director nominee Ms Marjan Oudeman (born 1958) is a Dutch citizen and holds master's degrees in law (LL.M.) and business administration (MBA). Ms Oudeman has extensive professional experience in leading multinational business operations for AkzoNobel NV, Tata Steel Europe, Corus Group Plc. and Hoogovens Group NV. During her over 30-year career in these corporations she has also gained valuable experience in performance improvement, financing and financial reporting, restructurings, strategic planning, organisational development and corporate governance. She ended her professional career as President of the Executive Board of the Utrecht University in 2017 in order to concentrate on her non-executive director positions in Statoil ASA (Norway), SHV Holdings NV (the Netherlands), Solvay SA (Belgium) and Aalberts Industries NV (the Netherlands), where she also chairs the Audit Committee. Ms Oudeman has also been a Supervisory Board member of ABN AMRO Bank (2009-2015) and the Dutch Railways (2005-2013), and is currently a member of the Supervisory Boards in Concertgebouw NV and Het Rijksmuseum.
The Board of Directors has assessed the director nominees' independence based on the Finnish Corporate Governance Code's independence criteria and other factors and circumstances to be taken into account in the overall evaluation from both the standpoint of the company and the nominees. The Board has also taken into account information provided by the nominees.
According to the evaluation carried out by the Board, all director nominees are independent of the Company's significant shareholders as none of the Company shareholders holds more than 10 percent of the Company's shares or votes attached thereto. In addition, according to the Board's director-specific overall evaluation, all non-executive director nominees are independent of the Company including Berndt Brunow, Veli-Matti Reinikkala and Björn Wahlroos, although they have been, if re-elected, non-executive directors for 10 consecutive years or more. Based on the Board's overall evaluation of these director nominees' independence, their independence is not compromised due to their long service history, and no other factors or circumstances have been identified that could impair their independence. As the President and CEO of the Company, Jussi Pesonen is not independent of it. According to the Board Charter, the President and CEO may not be a member of any of the Board committees.
- Resolution on the remuneration of the auditor
The Board of Directors' Audit Committee proposes that the remuneration of the Company's auditor be paid against invoices approved by the Board of Directors' Audit Committee.
For the year 2017, the Company's auditor was paid EUR 2.3 million as audit fee, EUR 0.1 million for audit-related services, EUR 0.3 million for tax services and EUR 0.5 million for other non-audit services.
- Election of auditor
The Board of Directors' Audit Committee proposes that PricewaterhouseCoopers Oy, a firm of authorised public accountants, be re-elected as the Company's auditor for a term that will continue until the end of the next Annual General Meeting. PricewaterhouseCoopers Oy has notified the Company that Authorised Public Accountant (KHT) Merja Lindh, who has held this position since 8 April 2014, would continue as the lead audit partner.
- Authorising the Board of Directors to decide on the repurchase of the Company's own shares
The Board of Directors proposes that the Board be authorised to decide on the repurchase of a maximum of 50,000,000 of the Company's own shares. The proposed maximum number of shares corresponds to 9.4 per cent of the Company's registered number of shares at the time of the proposal. The authorisation would also include the right to accept the Company's own shares as a pledge.
The Company's own shares will be repurchased in public trading otherwise than in proportion to the existing shareholdings of the Company's shareholders at the market price quoted at the time of purchase on the trading places where the Company's shares or certificates entitling to its shares are traded, using the Company's unrestricted shareholders' equity.
The shares will be repurchased to be used as a consideration in potential mergers or acquisitions, to finance investments or other business-related transactions, to develop the Company's capital structure, or as a part of the Company's incentive plans, or to be retained by the Company as treasury shares, transferred or cancelled.
The Board shall decide on all other matters related to the repurchase of the Company's own shares. The authorisation is proposed to be valid for 18 months from the date of the resolution of the Annual General Meeting. If this authorisation is granted, it will revoke the repurchase authorisation granted by the Annual General Meeting on 29 March 2017.
- Resolutions on the partial amendment of the Articles of Association
The Board of Directors proposes that article 2 (Field of Activity), article 8 (Auditor) and article 10 (Notice of the General Meeting of Shareholders) of the Articles of Association be amended and that article 12 (Obligation to redeem shares in different voting right situations) be removed from the Articles of Association.
The Board of Directors proposes that article 2 be amended to reflect the Company's businesses more closely, article 8 be amended to correspond to the responsibility for the auditor oversight referred to in the amended Finnish Auditing Act (1141/2015), article 10 be amended to the effect that the entire notice of the General Meeting will be published only on the corporate website in line with the prevailing market practice, and that article 12 be removed from the Articles of Association as obsolete and difficult to apply in practice. The current and proposed new wordings of the above mentioned articles of the Articles of Association are available on the corporate website under www.upm.com/agm2018.
- Authorising the Board of Directors to decide on charitable contributions
The Board of Directors proposes that the Board be authorised to decide on contributions not exceeding a total of EUR 500,000 for charitable or corresponding purposes and that the Board be authorised to determine the recipients, purposes and other terms and conditions of the contributions. Contributions would be primarily granted under the Company's Biofore Share and Care programme whose focus areas are reading and learning, engaging with communities, responsible water use and bioinnovations. The authorisation is proposed to be valid until the next Annual General Meeting.
- Closing of the meeting
B. Documents of the Annual General Meeting
The proposals for the resolutions on the matters on the agenda of the Annual General Meeting as well as this notice are available on UPM-Kymmene Corporation's website at www.upm.com/agm2018. The Annual Report of UPM-Kymmene Corporation, including the Company's Financial Statements, the Report of the Board of Directors and the Auditor's Report, is available on the above-mentioned website as of 28 February 2018. The proposals for the resolutions and the Financial Statements are also available at the venue of the Annual General Meeting. The minutes of the Annual General Meeting will be available on the above-mentioned website as of 19 April 2018 at the latest.
C. Instructions for the participants of the Annual General Meeting
- The right to participate and registration
Each shareholder, who is registered on 22 March 2018 in the shareholders' register of the Company held by Euroclear Finland Ltd, has the right to participate in the Annual General Meeting. A shareholder, whose shares are registered on his/her personal Finnish book-entry account, is registered in the shareholders' register of the Company.
A shareholder, who is registered in the shareholders' register of the Company and who wishes to participate in the Annual General Meeting, shall preregister for the meeting no later than 27 March 2018 by 16.00 (EET) by giving a prior notice of attendance, which shall be received by the Company no later than on the above-mentioned date and time.
Such notice can be given:
a) on the corporate website www.upm.com/agm2018;
b) by telephone 020 770 6861 from Monday to Friday from 9.00 to 16.00 (EET) or
c) by ordinary mail to UPM-Kymmene Corporation, Legal Function, PO Box 380 (Alvar Aallon katu 1), FI-00101 Helsinki.
In connection with the prior notice of attendance, a shareholder shall notify his/her name, personal/business identification number, address, telephone number, the name of a possible assistant and the name and personal identification number of a possible proxy representative. The personal data is used only in connection with the Annual General Meeting and processing of related registrations.
2. Holders of nominee registered shares
A holder of nominee registered shares has the right to participate in the Annual General Meeting by virtue of such shares, based on which he/she on the record date of the Annual General Meeting, i.e. on 22 March 2018, would be entitled to be registered in the shareholders' register of the Company held by Euroclear Finland Ltd. The right to participate in the Annual General Meeting requires, in addition, that the shareholder on the basis of such shares has been temporarily preregistered in the shareholders' register held by Euroclear Finland Ltd by 10.00 (EET) on 29 March 2018 at the latest. As regards nominee registered shares, this constitutes a due registration for the Annual General Meeting.
A holder of nominee registered shares is advised to request without delay necessary instructions regarding the temporary registration in the shareholders' register of the Company, the issuing of proxy documents and preregistration for the Annual General Meeting from his/her custodian bank. The account manager of the custodian bank has to register a holder of nominee registered shares, who wishes to participate in the Annual General Meeting, temporarily in the shareholders' register of the Company by the time stated above at the latest.
3. Proxy representative and powers of attorney
A shareholder may participate in the Annual General Meeting and exercise his/her rights at the meeting by way of proxy representation. A proxy representative shall produce a dated proxy document or otherwise in a reliable manner demonstrate his/her right to represent the shareholder at the Annual General Meeting.
Holders of ADRs may authorise the ADR depositary bank, Citibank N.A., to act as a proxy representative and exercise their rights according to the shares represented by their respective ADRs.
When a shareholder participates in the Annual General Meeting by means of several proxy representatives representing the shareholder with shares at different book-entry accounts, the shares by which each proxy representative represents the shareholder shall be identified in connection with the registration for the Annual General Meeting.
Possible proxy documents should be submitted in originals to UPM-Kymmene Corporation, Legal Function, PO Box 380 (Alvar Aallon katu 1), FI-00101 Helsinki, Finland, prior to the end of the preregistration period.
4. Other information
Pursuant to Chapter 5, Section 25 of the Finnish Limited Liability Companies Act, a shareholder who is present at the Annual General Meeting has the right to request information with respect to the matters to be considered at the meeting.
On the date of the notice of the Annual General Meeting, 31 January 2018, the Company has 533,735,699 shares representing the same number of votes.
Helsinki, 31 January 2018
Board of Directors
UPM, Media Relations
Mon-Fri 9:00-16:00 EET
tel. +358 40 588 3284
UPM leads the forest-based bioindustry into a sustainable, innovation-driven and exciting future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Paper ENA and UPM Plywood. UPM provides sustainable and safe solutions to the growing global consumer demand. Products are made of renewable and recyclable materials. The group employs around 19,100 people worldwide and its annual sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM - The Biofore Company - www.upm.com