Proposals of the Board of Directors of Ahlstrom Corporation to the Annual General Meeting convening on March 27, 2013

Proposals of the Board of Directors of Ahlstrom Corporation to the Annual General Meeting convening on March 27, 2013

Ahlstrom Corporation STOCK EXCHANGE RELEASE January 31, 2013 at 12.15

Distribution of profits

The distributable funds in the balance sheet of Ahlstrom Corporation as per December 31, 2012 amount to EUR 526,131,945.20.

Upon the recommendation of the Board's Audit Committee, the Board of Directors proposes to the Annual General Meeting that, for the fiscal year that ended on December 31, 2012, a dividend of EUR 0.63 per share be paid from the retained earnings. As per January 31, 2013, the number of shares of the Company amounts to 46,670,608 based on which the maximum amount to be distributed as dividend would be EUR 29,402,483.04. However, no dividend will be paid based on shares owned by the Company or its subsidiaries on the record date.

The dividend will be paid to shareholders registered in the Register of Shareholders held by Euroclear Finland Ltd on the record date, April 3, 2013. The Board proposes that the dividend be paid on April 10, 2013.

Upon the recommendation of the Board's Audit Committee, the Board of Directors further proposes that EUR 75,000 be reserved to be used for donations at the discretion of the Board of Directors.

Composition of the Board of Directors and Board remuneration

Upon the recommendation of the Board's Nomination Committee, the Board of Directors proposes that the number of Board members be seven. The Board members are elected for the period ending at the close of the next Annual General Meeting.

In addition, upon the recommendation of the Nomination Committee, the Board of Directors proposes that Lori J. Cross, Esa Ikäheimonen, Pertti Korhonen, Anders Moberg and Peter Seligson be re-elected. The current member Sebastian Bondestam, who has been a member of the Board of Directors of Ahlstrom Corporation since 2001, has informed that he is no longer available for re-election. Therefore it is proposed that Robin Ahlström, born in 1946, and Daniel Meyer, born in 1967, be elected as new members of the Board.

Robin Ahlström (M.Sc. (Econ), Stanford and Svenska Handelshögskolan) is Chairman of the Board of A. Ahlström Osakeyhtiö. He has been working in various executive positions in finance until 2005, most lately as Group President of Alfred Berg, Stockholm in Sweden. He is Industrial Advisor of Altor AB, as well as board member of Antti Ahlström Perilliset Oy, Strongshold AB, Niam AB, Naxs AB, Nacs AS and Newsec Oy.

Daniel Meyer (HND, International trade) has been working for the Bayer Group in various positions since 1992, most recently as Executive Vice President and Member of the Executive Committee of Bayer Materialscience AG. He is Head of the business unit Coatings, Adhesives and Specialties and the Head of the Development Businesses & Functional Films. Further he is the functional Head for Industrial Marketing and the regions NAFTA and Latin Americas. In 2008 he was President & CEO of Lyttron GmbH, a startup of the Bayer Group.

All the nominees are considered independent of the Company and of the significant shareholders of the Company, except for Peter Seligson and Robin Ahlström, who are not independent of the company's significant shareholder Antti Ahlström Perilliset Oy, where they are board members. Peter Seligson has been a member of the Board of Directors of Ahlstrom Corporation since 2001. Prior to this, from 1999 to 2001, Mr Seligson was a member of the Board of Directors of A. Ahlstrom Corporation, which as a result of a full demerger was dissolved in 2001.

The nominees have given their consent to the election and have stated as their intention, should they be elected, to elect Pertti Korhonen Chairman and Peter Seligson Vice Chairman of the Board. Peter Seligson has informed that he is no longer available for re-election next year. CVs of the proposed Board members are available on the website of the Company (www.ahlstrom.com).

Upon the recommendation of the Nomination Committee, the Board of Directors proposes that the remuneration of the Board members remains unchanged. The remunerations are as follows:

Chairman     EUR 84,000 per year
Vice Chairman   EUR 63,000 per year
Members     EUR 42,000 per year

In addition, the proposed remuneration for attendance at Board meetings is EUR 1,500 per meeting for Board members residing outside Finland. As regards the permanent Board committees and the Nomination Board, the proposed remuneration for attendance at committee and the Nomination Board meetings is EUR 1,500 per meeting. Travel expenses are reimbursed in accordance with the Company's travel policy.

Auditor and Auditor's remuneration

Upon the recommendation of the Audit Committee, the Board of Directors proposes that PricewaterhouseCoopers Oy be re-elected as Ahlstrom's auditor and that the auditor's remuneration be paid according to invoicing. PricewaterhouseCoopers Oy has designated Authorized Public Accountant Eero Suomela as the Responsible Auditor.

Authorizations to repurchase and distribute the Company's own shares as well as to accept them as pledge

The Board of Directors proposes that the Annual General Meeting authorizes the Board of Directors to resolve to repurchase and to distribute the Company's own shares as well as to accept them as pledge in one or more instalments on the following conditions:

The number of shares to be repurchased or accepted as pledge by virtue of the authorization shall not exceed 4,000,000 shares in the Company, yet always taking into account the limitations set forth in the Companies' Act as regards the maximum number of shares owned by or pledged to the Company or its subsidiaries. The shares may be repurchased only through public trading at the prevailing market price by using unrestricted shareholders' equity. The rules and guidelines of NASDAQ OMX Helsinki Oy and Euroclear Finland Ltd shall be followed in the repurchase.

The authorization includes the right for the Board of Directors to decide upon all other terms and conditions for the repurchase of the Company's own shares, or their acceptance as pledge, including the right to decide on the repurchase of the Company's own shares otherwise than in proportion to the shareholders' holdings in the Company.

By virtue of the authorization, the Board of Directors has the right to resolve to distribute a maximum of 4,000,000 own shares held by the Company. The Board of Directors will be authorized to decide to whom and in which order the own shares will be distributed. The Board of Directors may decide on the distribution of the Company's own shares otherwise than in proportion to the existing pre-emptive right of shareholders to purchase the Company's own shares. The shares may be used e.g. as consideration in acquisitions and in other arrangements as well as to implement the Company's share-based incentive plans in the manner and to the extent decided by the Board of Directors. The Board of Directors also has the right to decide on the distribution of the shares in public trading for the purpose of financing possible acquisitions. The authorization also includes the right for the Board of Directors to resolve on the sale of the shares accepted as a pledge. The authorization includes the right for the Board of Directors to resolve upon all other terms and conditions for the distribution of the shares held by the Company.

The authorizations for the Board of Directors to repurchase the Company's own shares, to distribute them as well as to accept them as pledge are valid for 18 months from the close of the Annual General Meeting but will, however, expire at the close of the next Annual General Meeting, at the latest.

Establishment of a Shareholders' Nomination Board

The Board of Directors proposes that the Annual General Meeting resolves to establish for an indefinite period a Shareholders' Nomination Board to prepare proposals to the Annual General Meeting for the election and remuneration of the members of the Board of Directors and the remuneration of the Board committees and the Nomination Board. In addition, the Board proposes the adoption of the attached Charter of the Shareholders' Nomination Board.

According to the proposal, the Nomination Board comprises representatives of the three largest shareholders of the Company and, in addition, of the Chairman of the Company's Board of Directors and a person nominated by the Company's Board of Directors as members. The right to nominate the shareholder representatives lies with those three shareholders whose share of all the voting rights in the Company is on May 31 preceding the next Annual General Meeting the largest on the basis of the shareholders' register of the Company held by Euroclear Finland Ltd. However, holdings by a shareholder who, under the Finnish Securities Market Act, has the obligation to disclose its shareholdings (flagging obligation) that are divided into several funds or registers, will be summed up when calculating the share of all the voting rights, provided that such shareholder presents a written request to that effect to the Chairman of the Company's Board of Directors no later than on May 30 preceding the next Annual General Meeting. Further, holdings by a group of shareholders, who have agreed to nominate a joint representative to the Nomination Board, will be summed up when calculating the share of all the voting rights, provided that the shareholders in question present a joint written request to that effect together with a copy of such an agreement to the Chairman of the Company's Board of Directors no later than on May 30 preceding the Annual General Meeting. Should a shareholder not wish to use its nomination right, the right transfers to the next largest shareholder who would otherwise not have a nomination right.

The Chairman of the Board of Directors convenes the first meeting of the Nomination Board and the Nomination Board elects a chairman from among its members. The Nomination Board shall submit its proposals to the Board of Directors annually, latest on January 31 preceding the next Annual General Meeting.

Helsinki, January 31, 2013

The Board of Directors

Appendix: Charter of the Shareholders' Nomination Board

Charter of Ahlstrom Corporation's Shareholders' Nomination Board

  1. Purpose of the Nomination Board 

Ahlstrom Corporation's (the "Company") Shareholders' Nomination Board is a body of the Company's shareholders, responsible for preparing annually proposals to the Annual General Meeting for the election and remuneration of the members of the Board of Directors and the remuneration of the Board committees and the Nomination Board. The Nomination Board is also responsible for ensuring that the Board of Directors and its members maintain and represent a sufficient level of expertise, knowledge and competence for the needs of the company.

In its work, the Nomination Board shall comply with applicable laws and regulations (including the rules of NASDAQ OMX Helsinki Ltd and the Finnish Corporate Governance Code).

This Charter regulates the nomination and composition of the Nomination Board as well as defines the tasks and duties of the Nomination Board.

  1. Nomination and Composition of the Nomination Board 

The Nomination Board consists of five members, three of which represent the Company's three largest shareholders who, on May 31 preceding the next Annual General Meeting, hold the largest number of votes calculated of all shares in the Company. The Chairman of the Board of Directors and a person nominated by the Company's Board of Directors shall be the other two members of the Nomination Board.

The largest shareholders of the Company on May 31 are determined on the basis of the shareholders' register of the Company held by Euroclear Finland Ltd. Pursuant to this shareholding, the Chairman of the Board of Directors shall request the three largest shareholders of the Company each to nominate one member to the Nomination Board. In case two of these shareholders own an equal number of shares and votes and the representatives of both such shareholders cannot be appointed to the Nomination Board, the decision shall be made by drawing lots.

Holdings by a shareholder, who under the Finnish Securities Market Act has the obligation to disclose its shareholdings (flagging obligation) that are divided into several funds or registers will be summed up when calculating the share of all the voting rights, provided that the shareholder presents a written request to that effect to the Chairman of the Company's Board of Directors no later than on May 30 preceding the next Annual General Meeting.

Further, holdings by a group of shareholders, who have agreed to nominate a joint representative to the Nomination Board, will be summed up when calculating the share of all the voting rights, provided that the shareholders in question present a joint written request to that effect together with a copy of such an agreement to the Chairman of the Company's Board of Directors no later than on May 30 preceding the next Annual General Meeting.

Should a shareholder not wish to use its nomination right, the right transfers to the next largest shareholder who would otherwise not have a nomination right.

The Chairman of the Board of Directors convenes the first meeting of the Nomination Board and the Nomination Board shall elect a chairman from among its members at the notice of which the Nomination Board convenes thereafter.

The composition of the Nomination Board shall be published by the Company through a stock exchange release once the members of the Nomination Board have been appointed and the chairman has been elected.

The appointed representative of a shareholder shall resign from the Nomination Board, if such shareholder transfers more than half of its shareholding and as a result thereof no longer is amongst the Company's ten largest shareholders. The Nomination Board may appoint a new member to the Nomination Board to replace the prematurely vacated seat and shall decide on appointing new members in case the number of Nomination Board members decreases to less than three during the members' term of office. The Nomination Board shall offer the vacant seats that are to be filled to the shareholders of the Company (in the order of shareholders' number of votes calculated of all shares in the Company) who do not have a member appointed to the Nomination Board.

The Nomination Board has been established for an indefinite period. The term of office of the members of the Nomination Board expires at the closing of the next Annual General Meeting following the appointment.

  1. Duties of the Nomination Board 

The duties of the Nomination Board shall include:

a) to prepare and present to the Annual General Meeting a proposal on the remuneration of the members of the Board of Directors as well as a proposal on the remuneration of the Board committees and the Nomination Board;

b) to prepare and present to the Annual General Meeting a proposal on the number of the members of the Board of Directors;

c) to prepare and present to the Annual General Meeting a proposal on the members of the Board of Directors; and

d) to seek for prospective successors for the members of the Board of Directors.

  1. Decision-making 

The Nomination Board shall constitute a quorum when more than half of its members are present. No decision shall be made unless all members have been reserved the possibility to consider the matter and to participate in the meeting.

Decisions of the Nomination Board shall be unanimous. If consensus cannot be reached, members of the Nomination Board may present their own proposals to the Annual General Meeting individually or jointly with other members of the Nomination Board.

All decisions of the Nomination Board shall be recorded in minutes. The minutes shall be signed by the Chairman of the Nomination Board together with at least one Nomination Board member.

  1. Tasks of the Chairman of the Nomination Board 

The Chairman of the Nomination Board shall direct the activities of the Nomination Board in order for the Nomination Board to achieve its objectives efficiently and take duly into account the expectations of the shareholders and the interests of the Company.

The Chairman shall:

a) convene and chair the meetings of the Nomination Board;

b) supervise that the scheduled meetings of the Nomination Board are duly convened; and

c) convene unscheduled meetings in case necessary and in any event, within 14 days from a request by a Nomination Board member to that effect.

  1. Preparation of the Proposal on the Board Composition 

The Nomination Board shall prepare a proposal to be presented to the Annual General Meeting on the composition of the Board of Directors. However, any shareholder of the Company may also make a proposal directly to the Annual General Meeting in accordance with the Finnish Companies Act.

The Nomination Board shall take into consideration the independence requirements and other requirements under applicable laws and regulations (including the Finnish Corporate Governance Code and the rules of NASDAQ OMX Helsinki Ltd).

The Nomination Board shall in its preparations of the proposal on the composition of the new Board of Directors also take into account the results of the annual performance evaluation of the Company's Board of Directors conducted in accordance with the Finnish Corporate Governance Code. The Nomination Board may also employ the services of an outside consultant in the quest for suitable candidates.

  1. Proposals to the Annual General Meeting 

The Nomination Board shall submit its proposals to the Board of Directors at the latest on January 31 preceding the next Annual General Meeting. The proposals of the Nomination Board will be published through a stock exchange release and included in the notice to the Annual General Meeting. The Nomination Board shall also present and explain its proposals to the Annual General Meeting.

The Nomination Board shall assess its work annually and it shall also provide a report on how it conducted its work. The report shall be published in the Company's Corporate Governance Statement.

  1. Confidentiality 

The Nomination Board members and the shareholders they represent shall keep the information regarding the proposals to the Annual General Meeting confidential until it has made the final decision and the proposals have been published by the Company. The Chairman of the Nomination Board shall have the right at his/her discretion to decide whether the Company should enter into non-disclosure agreements with the shareholders with respect to their representative in the Nomination Board.

  1. Amending the Charter and Authorization 

The Nomination Board shall review this Charter annually and propose possible changes to the next Annual General Meeting for adoption. The Nomination Board is authorized to execute necessary technical updates and amendments to this Charter.

This Charter has been prepared in Finnish, Swedish and English. In the event of any discrepancies, the Finnish version shall be decisive.

Ahlstrom in brief
Ahlstrom is a high performance fiber-based materials company, partnering with leading businesses around the world to help them stay ahead. Our products are used in a large variety of everyday applications, such as filters, medical gowns and drapes, diagnostics, wallcoverings, flooring and food packaging. We have a leading market position in the businesses in which we operate. In 2012, Ahlstrom's net sales from the continuing operations (excluding Label and Processing business) amounted to EUR 1 billion. Our 3,800 employees serve customers in 28 countries on six continents. Ahlstrom's share is quoted on the NASDAQ OMX Helsinki. More information available at www.ahlstrom.com.

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