Neles Corporation: Notice to the Annual General Meeting 2022

Neles Corporation, Stock exchange release, February 23, 2022, at 10.15 a.m. EET

Notice is given to the shareholders of Neles Corporation (“Neles” or “the Company”) to the Annual General Meeting to be held on Tuesday, March 22, 2022 at 10.00 a.m. EET at Neles Corporation’s headquarters, Vanha Porvoontie 229, 01380 Vantaa, Finland. In order to prevent the spread of the COVID-19 pandemic, the Annual General Meeting will be held without shareholders’ and their proxy representatives’ presence at the meeting venue.

The Board of Directors of the Company has resolved on the exceptional procedure for the meeting based on the legislative act concerning temporary deviations from the Finnish Companies Act (375/2021) approved by the Finnish Parliament on 27 April 2021, which entered into force on 8 May 2021. The Company has resolved to take actions enabled by the act in order to hold the meeting in a predictable manner, taking into consideration the health and safety of its shareholders, personnel and other stakeholders.

Shareholders and their proxy representatives may participate in the meeting and exercise their shareholder rights only by voting in advance as well as by submitting counterproposals and questions in advance. Instructions for shareholders are presented in this notice under Section C of this notice and on the Company's website.

A. Matters on the agenda of the Annual General Meeting

1.    Opening of the meeting

The greeting of the Chair of the Board of Directors to the shareholders will be available in Finnish on Neles Corporation’s website at the address www.neles.com/agm no later than on February 23, 2022 at 10 a.m. EET.

2.    Calling the meeting to order

Seppo Kymäläinen, attorney-at-law, will act as the Chair of the Annual General Meeting. In case Seppo Kymäläinen would not be able to act as the Chair of the meeting for a weighty reason, the Board of Directors will name another person it deems most suitable to act as the Chair.

3.    Election of person to scrutinize the minutes and to supervise the counting of votes

Elisa Erkkilä, General Counsel of the Company, will scrutinize the minutes and supervise the counting of votes at the Annual General Meeting. Should Elisa Erkkilä be prevented from scrutinizing the minutes and supervising the counting of votes due to a weighty reason, the Board of Directors will name another person it deems most suitable to act in that role.

4.    Recording the legality of the meeting

5.    Recording the attendance at the meeting and adoption of the list of votes

The shareholders who have voted in advance within the advance voting period and who have the right to participate in the Annual General Meeting pursuant to Chapter 5, Sections 6 and 6a of the Finnish Companies Act will be recorded to have been represented at the Annual General Meeting. The list of votes will be adopted according to the information provided by Euroclear Finland Oy.

6.    Presentation of the Financial Statements, the Consolidated Financial Statements, the Report of the Board of Directors, and the Auditor’s Report for the year 2021

Because participation in the Annual General Meeting is possible only in advance, the Company’s Annual Report, which was published on February 23, 2022, and included the Financial Statements, Consolidated Financial Statements, the Report of the Board of Directors, and the Auditor’s Report, is deemed to have been presented to the Annual General Meeting.

The Annual Report, including the Financial Statements, Consolidated Financial Statements, the Report of the Board of Directors, and the Auditor’s Report, is available on Neles Corporation’s website at the address www.neles.com/agm.

A video recording of the President and CEO’s review will be available in Finnish on Neles Corporation’s website at the address www.neles.com/agm no later than on February 23, 2022 at 10 a.m. EET.

7.    Adoption of the Financial Statements and the Consolidated Financial Statements

8.    Resolution on the use of the profit shown on the balance sheet and the payment of dividend

The Company’s distributable funds on December 31, 2021, totaled approximately EUR 411 million.

The Board of Directors proposes that a dividend of EUR 0,266 per share be paid based on the balance sheet to be adopted for the financial year, which ended December 31, 2021. The dividend shall be paid to shareholders who on the dividend record date March 24, 2022, are registered in the Company’s shareholders’ register held by Euroclear Finland Oy. The dividend shall be paid on March 31, 2022. All the shares in the Company are entitled to a dividend except for the shares held by the Company on the dividend record date.

9.    Resolution to authorize the Board of Directors to resolve upon an extra distribution of funds

Based on the combination agreement regarding the merger between Neles and Valmet Oyj ("Valmet"), Neles may prior to the execution of the merger distribute to its shareholders an extra distribution of funds in the amount of up to EUR 2.00 per share either as dividend or return of equity from the Company's fund for invested unrestricted equity or a combination of the two.

Neles' Extraordinary General Meeting on September 22, 2021, authorized the Board of Directors to resolve on the aforementioned distribution of funds. The said authorization is in force until the opening of the Annual General Meeting 2022 of Neles. As the merger between Neles and Valmet has not yet been executed due to the length of regulatory review processes, it is necessary to renew the authorization at the Annual General Meeting.

Therefore, the Company's Board of Directors proposes to the Annual General Meeting that the Annual General Meeting would authorize the Board of Directors to resolve, before the execution of the merger, on a distribution of funds not exceeding EUR 2.00 per share to be paid either as dividend from the Company's retained earnings or return of equity from the Company's fund for invested unrestricted equity or a combination of the two.

The authorization would be in force until the opening of the next Annual General Meeting of the Company.

The Company will separately publish its Board of Directors' resolution to distribute funds based on the authorization and will simultaneously confirm the record and payment dates applicable to the extra distribution. Funds paid based on the authorization will be paid to shareholders who are registered as shareholders in the Company's shareholders' register on the record date of the distribution of funds.

10. Resolution on the discharge of the members of the Board of Directors and the President and CEO from liability for the financial year ended on December 31, 2021

11. Presentation and adoption of the remuneration report

Because participation in the Annual General Meeting is possible only by voting in advance, the Company’s remuneration report, which was published on February 23, 2022, and describes compliance with the Company's remuneration policy and provides information on remuneration of the Company's governing bodies during the financial period 2021, is deemed to have been presented to the Annual General Meeting. The Annual General Meeting’s resolution on the remuneration report is advisory.

The remuneration report is available on Neles Corporation’s website at the address www.neles.com/agm

12. Resolution on the remuneration of members of the Board of Directors

Fixed annual remuneration

The Shareholders’ Nomination Board proposes to the Annual General Meeting that the same fixed annual remuneration be paid to the members of the Board of Directors as in the previous term. The remuneration to be paid would be calculated pro rata to the length of the term of office based on the following annual remuneration:

  1. Chair of the Board: EUR 115,000
  2. Vice-Chair of the Board: EUR 65,000
  3. Other members of the Board of Directors: EUR 50,000 each

An additional annual remuneration is proposed for the members of the Board of Directors that are elected as members of the Audit Committee and the Remuneration and HR Committee, as follows:

  1. Chair of the Audit Committee: EUR 15,000
  2. Members of the Audit Committee: EUR 7,500 each
  3. Chair of the Remuneration Committee: EUR 7,500
  4. Members of the Remuneration Committee: EUR 3,750 each

Meeting fees

The Shareholders' Nomination Board further proposes that a meeting fee of EUR 800 be paid for each virtual Board and Committee meeting (e.g., by a conference call or meeting application). If physical presence of the Board member is required, the meeting fees be paid as follows:

  1. a fee of EUR 800 be paid to the members of the Board that reside in the Nordic countries
  2. a fee of EUR 1,600 be paid to the members of the Board that reside in other European countries
  3. a fee of EUR 3,200 be paid to the members of the Board that reside outside Europe

The fixed annual remuneration and the meeting fees will be paid in cash. Possible travel expenses will be reimbursed according to the travel policy of the Company.

13. Resolution on the number of members of the Board of Directors

The Shareholders' Nomination Board proposes to the Annual General Meeting that the number of members of the Board of Directors shall be six.

14. Election of members of the Board of Directors

The Shareholders' Nomination Board proposes to the Annual General Meeting that:

  1. Jaakko Eskola be re-elected as the Chair 
  2. Anu Hämäläinen be re-elected as Vice-Chair 
  3. Niko Pakalén, Teija Sarajärvi, Jukka Tiitinen and Mark Vernon be re-elected as Board members.

The proposed members of the Board of Directors are presented on Neles’ website at www.neles.com/investors/governance/board

The proposed Board members have all given their consent to be elected.

All proposed Board members have been assessed to be independent of the Company. Apart from Jukka Tiitinen and Niko Pakalén, the proposed Board members are independent of significant shareholders. Jukka Tiitinen has been assessed to be dependent on Valmet Oyj due to his position of Area President, North America of Valmet Oyj. Niko Pakalén has been assessed to be dependent on Cevian Capital Partners Ltd due to his position of Partner at Cevian Capital AB.

15. Resolution on the remuneration of the Auditor

Based on the recommendation of the Board of Directors’ Audit Committee, the Board of Directors proposes that the remuneration to the auditor be paid against the invoice approved by the Audit Committee.

16. Election of the Auditor

Based on the recommendation of the Board of Directors’ Audit Committee, the Board of Directors proposes that Ernst & Young Oy, authorized public accountants, be re-elected auditor of the Company. Ernst & Young Oy has notified that Mr. Toni Halonen, APA, would act as principal auditor of the Company.

The Audit Committee has prepared its recommendation in accordance with the EU Audit Regulation (537/2014) and arranged a selection procedure. The recommendation of the Audit Committee is included in the proposal of the Board of Directors available on the Company's website www.neles.com/agm.

17. Authorizing the Board of Directors to decide on the repurchase of the Company’s own shares

The Board of Directors proposes to the Annual General Meeting that the Board of Directors be authorized to decide on the repurchase of the Company's own shares as follows.

The number of own shares to be repurchased shall not exceed 5,000,000 shares, which corresponds to approximately 3.3 percent of all the shares in the Company. Own shares can be repurchased also otherwise than in proportion to the shareholdings of the shareholders (directed repurchase). Own shares can be repurchased using the unrestricted equity of the Company at a price formed in public trading on the date of the repurchase or otherwise at a market-based price.

Shares may be repurchased in order to develop the Company’s capital structure, in order to finance or carry out acquisitions, investments or other business transactions, or in order to use the shares as part of the Company’s incentive schemes.

The repurchased own shares may be held by the Company, cancelled, or transferred further.

The Board of Directors decides on all other matters related to the repurchase of own shares. The authorization is effective until June 30, 2023, and it cancels the authorization given by the Annual General Meeting on March 26, 2021, to decide on the repurchase of the Company's own shares.

18. Authorizing the Board of Directors to decide on the issuance of shares and the issuance of special rights entitling to shares

The Board of Directors proposes to the Annual General Meeting that the Board of Directors be authorized to decide on the issuance of shares as well as the issuance of special rights entitling to shares referred to in Chapter 10, Section 1 of the Companies Act as follows.

The number of shares to be issued either directly or based on special rights entitling to shares shall not exceed 15,000,000 shares in aggregate, which corresponds to approximately 10 per cent of all of the shares in the Company.

The Board of Directors decides on all the conditions of the issuance of shares and of special rights entitling to shares. The authorization concerns both the issuance of new shares as well as the transfer of treasury shares. The issuance of shares and of special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue).

The authorization is effective until June 30, 2023, and it cancels the authorization given by the Annual General Meeting on March 26, 2021.

19. Closing of the meeting

B. Documents of the General Meeting

The proposals for resolutions on the matters on the agenda of the Annual General Meeting, this notice as well as the Annual Report of Neles Corporation, including the Financial Statements, Consolidated Financial Statements, the Report of the Board of Directors, the Auditor’s Report and remuneration report, are available on Neles Corporation’s website at the address www.neles.com/agm. A copy of the Annual Report will be delivered to shareholders upon request. The minutes of the Annual General Meeting will be available on the above-mentioned website from April 5, 2022, at the latest.

C. Instructions for the participants in the Annual General Meeting

To prevent the spread of the Covid-19 pandemic, the meeting will be organized so that it is not possible for shareholders or their representatives to participate at the meeting venue in person. It is also not possible for shareholders and their representatives to participate in the meeting through real-time technical connection. Shareholders and their representatives can only participate in the meeting and use their shareholder rights by voting in advance as well as by making counterproposals and presenting questions in advance by following the instructions presented below.

1. The right to participate in the Annual General Meeting

Each shareholder who is registered on the record date of the Annual General Meeting, March 10, 2022, in the shareholders’ register of the Company held by Euroclear Finland Oy 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 may not participate in the Annual General Meeting by any other means than by voting in advance in the manner instructed below as well as by submitting counterproposals and questions in advance.

2. Registration and voting in advance

The registration period and advance voting period commence on March 1, 2022, at 10.00 a.m. EET, after the deadline for delivering counterproposals to be put to a vote has expired. A shareholder, who is registered in the Company's shareholders’ register and who wishes to participate in the Annual General Meeting by voting in advance must register for the meeting by giving a prior notice of participation and by delivering his/her votes no later than on March 16, 2022, at 2.00 p.m. EET, by which time the notice and votes need to be received by the Company.

In connection with the registration, a shareholder shall provide the requested information, including his/her name, personal identification number or business identity code, address, and telephone number as well as the name and personal identification number of a possible proxy representative. The personal data submitted to Neles Corporation and Euroclear Finland Oy by shareholders is used only in connection with the Annual General Meeting and with the processing of related registrations.

Shareholders who have a Finnish book-entry account, may register and vote in advance on certain matters on the agenda of the Annual General Meeting during the period from March 1, 2022, at 10.00 a.m. EET until March 16, 2022, at 2.00 p.m. EET by the following means:

a) through Neles Corporation’s website at the address www.neles.com/agm

For natural persons, the electronic voting in advance requires secured strong electronic authentication and the shareholder may register and vote by logging in with his/her Finnish online banking codes or a mobile certificate.

For shareholders that are legal persons, no strong electronic authentication is required. However, shareholders that are legal persons must notify their book-entry account number and other required information. If the shareholders that are legal persons use the electronic Suomi.fi e-authorization, registration requires a strong electronic authentication of the authorized person, which works with bank IDs or a mobile certificate.

The conditions and other instructions for electronic voting are available on these websites; or

b) by email or regular mail

A shareholder may send the advance voting form available on Neles Corporation’s website or corresponding information to Euroclear Finland Oy by email at yhtiokokous@euroclear.eu or by regular mail to Euroclear Finland Oy, Yhtiökokous/Neles P.O. Box 1110, FI-00101 Helsinki, Finland.

The advance voting form is available on the Company’s website at the latest from March 1, 2022, 10:00 a.m. EET onwards. A representative of a shareholder must in connection with delivering the voting form produce a dated proxy authorization document or otherwise in a reliable manner demonstrate his/her right to represent the shareholder at the Annual General Meeting.

If a shareholder participates in the Annual General Meeting by sending votes in advance by email or by regular mail to Euroclear Finland Oy, the delivery of the votes before the end of the registration and advance voting period shall constitute due registration for the General Meeting, provided that it includes the above-mentioned information required for registration and advance voting.

Terms and instructions relating to advance voting may also be found on Neles Corporation’s website at the address www.neles.com/agm.

3. Use of proxy representative and powers of attorney

A shareholder may participate in the Annual General Meeting and exercise the shareholder rights by way of proxy representation. A proxy representative of a shareholder may only participate by voting in advance in the manner instructed above.

A proxy representative shall produce a dated proxy document or otherwise in a reliable manner demonstrate his/her right to represent the shareholder.

If a shareholder participates in the Annual General Meeting by means of several proxy representatives representing the shareholder with shares held at different securities accounts, the shares by which each proxy representative represents the shareholder shall be identified in connection with the registration.

Proxy documents are requested to be delivered by email to the address yhtiokokous@euroclear.eu or by mail to the address Euroclear Finland Oy, Yhtiökokous/Neles, P.O. Box 1110, FI-00101 Helsinki, Finland, before the end of the registration period, by which time the proxy documents must be received by Euroclear Finland Oy.

Shareholders that are legal persons can also use the electronic Suomi.fi authorization service instead of the traditional proxy in Euroclear Finland’s general meeting service. In this case, the shareholder that is legal person authorizes an assignee nominated by it in the Suomi.fi service at www.suomi.fi/e-authorizations using the authorization topic “Representation at the General Meeting”. The assignee must identify himself or herself with strong electronic authentication in Euroclear Finland's general meeting service when registering, after which the electronic mandate is automatically checked. The strong electronic authentication works with personal banking IDs or a mobile certificate. More information on www.suomi.fi/e-authorizations and the Neles’ internet pages at www.neles.com/agm  

4. 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, March 10, 2022, would be entitled to be registered in the shareholders’ register of the Company maintained by Euroclear Finland Oy. The right to participate in the Annual General Meeting requires, in addition, that the shareholder on the basis of such shares has been registered into the temporary shareholders’ register maintained by Euroclear Finland Oy by March 17, 2022, at 10:00 a.m. EET, at the latest. As regards nominee registered shares, this constitutes due registration for the Annual General Meeting.

A holder of nominee registered shares is advised to request, without delay, the necessary instructions regarding the registration in the shareholders’ register of the Company, the issuing of proxy authorization documents and registration for the Annual General Meeting from his/her custodian bank.

The account management organization of the custodian bank shall register a holder of nominee registered shares wishing to participate in the Annual General Meeting to be temporarily entered into the shareholders' register of the Company by the above specified time at the latest. In addition, the account management organization of the custodian bank shall also arrange voting in advance on behalf of the holder of nominee registered shares within the registration period applicable to nominee registered shares.

5. Counterproposals

Shareholders who hold at least one hundredth of all the shares in the Company have the right to make a counterproposal to the resolution proposals on the agenda of the Annual General Meeting, which will be put to a vote. Such counterproposals must be delivered by email to the address agm@neles.com or by mail to the address Neles Corporation, AGM, P.O. Box 304, FI-01301 Vantaa, Finland by no later than on February 28, 2022, at 12.00 noon EET, by which time the counterproposals must be received. Shareholders submitting a counterproposal must in connection with delivering the counterproposal present sufficient evidence of their shareholdings.

The counterproposal will be addressed by the Annual General Meeting on the precondition that the shareholder has the right to participate in the Annual General Meeting and that the shareholder holds shares corresponding to at least one hundredth of all the shares in the Company on the record date of the Annual General Meeting. If the counterproposal is not addressed by the Annual General Meeting, votes in favor of the counterproposal will be disregarded.

The Company will publish possible counterproposals to be put to a vote on Neles Corporation’s website at the address www.neles.com/agm by no later than March 1, 2022, 10.00 a.m. EET.

6. Questions

A shareholder may submit questions pursuant to Chapter 5, Section 25 of the Companies Act with respect to the matters to be considered at the meeting until March 8, 2022, at 4.00 p.m. EET, by email to the address agm@neles.com or by mail to the address Neles Corporation, AGM, P.O. Box 304, FI-01301 Vantaa, Finland. Such questions by shareholders and responses by the Company's management to such questions as well as counterproposals other than those to be put to a vote will be available on Neles Corporation’s website at the address www.neles.com/agm on March 11, 2022, at 4.00 p.m. EET, at the latest. As a precondition to submitting questions and counterproposals, the shareholder must provide sufficient information of his/her shareholding.

7. Other Information

The information concerning the Annual General Meeting required under the Companies Act and the Securities Markets Act is, available on the Company's website at www.neles.com/agm

On the date of the notice, February 23, 2022, the total number of shares and votes in Neles Corporation is 150,348,256. The total amount includes 150,361 own shares held by the Company. Such own shares held by the Company do not have voting rights.

Changes in shareholding after the record date of the Annual General Meeting do not affect the right to participate in the Annual General Meeting or the number of voting rights held in the Annual General Meeting.

Vantaa, February 23, 2022

NELES CORPORATION

Board of Directors

For more information, please contact:

Elisa Erkkilä, General counsel, Neles Corporation, Tel. +358 40 754 4411 

Neles is one of the leading providers of mission-critical flow control solutions and services for process industries. With our global team of experts and innovative solutions, we help our customers to improve their process performance and ensure the safe flow of materials. Neles is listed on the Nasdaq Helsinki in Finland and had sales of about EUR 611 million in 2021. Neles employs about 2,950 people in approximately 40 countries.

www.neles.com,  twitter.com/nelesflow

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