Notice of Raute Corporation's Annual General Meeting

RAUTE CORPORATION STOCK EXCHANGE RELEASE 9 MARCH 2023 AT 10:10 EET


NOTICE OF RAUTE CORPORATION’S ANNUAL GENERAL MEETING

Raute Corporation’s shareholders are invited to attend the company’s Annual General Meeting, which will be held on Thursday, March 30, 2023, at 6:00 p.m. at Sibelius Hall, Ankkurikatu 7, Lahti, Finland. The reception of the registered participants will begin at 5:00 p.m.

Shareholders who have registered for the Annual General Meeting can follow the Annual General Meeting online. Instructions for watching the online stream are available on the company’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/. It is not possible to ask questions, make counter-proposals, address the meeting otherwise or vote via the online stream. Following the meeting via the online stream is not considered participation in the Annual General Meeting or exercise of shareholder rights.

Shareholders have the opportunity to pose questions in advance concerning matters on the meeting’s agenda. More detailed instructions for shareholders can be found in this notice under section C. Instructions for those attending the Annual General Meeting.

A. MATTERS ON THE AGENDA OF THE ANNUAL GENERAL MEETING

At the Annual General Meeting, the following matters will be considered:

1. Opening of the meeting

2. Calling the meeting to order

3. Election of persons to scrutinise the minutes and to supervise the counting of votes

4. Recording the legality of the meeting

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

6. Presentation of the Financial Statements, Consolidated Financial Statements, Board of Directors’ Report and Auditor’s Report for the financial year January 1−December 31, 2022

- Presentation of the review by the President and CEO

- Answers to questions posed in advance (to the extent possible)

The Financial Statements, Board of Directors’ Report and Auditor’s Report will available on the company’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/ on March 9, 2023 at the latest.

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 distribution of dividend

The Board of Directors proposes to the Annual General Meeting that no dividend be distributed for the financial year 2022 and that the loss for the financial year be transferred to retained earnings.

9. Resolution on discharging the members of the Board of Directors and the President and CEO from liability

10. Advisory resolution on the adoption of the remuneration report for governing bodies

The Board of Directors proposes the approval of the remuneration report for governing bodies. Pursuant to the Finnish Companies Act, the resolution is advisory.

The remuneration report will be available for viewing on the company’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/ on March 9, 2023 at the latest.

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

The Nomination Committee proposes that the remuneration paid to the Chair of the Board be EUR 48,000 and to the Board members EUR 24,000 for the term of office, as before. Travel expenses are proposed to be compensated according to the company’s travel policy in force.

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

The Nomination Committee proposes that altogether seven (7) members be elected to the company’s Board for the next term of office, which expires at the end of the next Annual General Meeting.

13. Election of the members of the Board of Directors

The Nomination Committee proposes that Ms. Laura Raitio, Licentiate in Technology, be re-elected as Chair of the Board of Directors and Mr. Mika Mustakallio, M.Sc. (Econ.), as Vice Chair of the Board of Directors. It also proposes that Mr. Joni Bask, M.Sc. (Eng.), Mr. Ari Harmaala, Engineer (Construction Technology), Mr. Petri Perttula, M.Sc. (Eng.), Mr. Ari Piik, B.Sc. (Econ.), and Mr. Patrick von Essen, M.SC (Eng.) be re-elected as members of the Board of Directors.

These individuals have consented to their proposed election.

Presentations of the individuals proposed and evaluations of their independence can be found on the company’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/.

14. Resolution on the remuneration payable to the auditor

The Board of Directors proposes that the auditors’ remuneration be paid on the basis of reasonable invoice as approved by the company.

15. Election of the auditor

The Board of Directors proposes that the audit firm PricewaterhouseCoopers be re-elected as the company’s auditor, with Authorised Public Accountant Mikko Nieminen as the principal auditor.

16. Measures aiming to support the company’s targeted growth and strengthen the company’s capital structure

In a stock exchange release published on the date of this notice, March 9, 2023, the company has announced that the company’s Board of Directors has decided to initiate measures which aim to support the company’s targeted growth and strengthen the company’s capital structure. The measures consist of a directed share issue and a rights issue and, as supplementary to the share issues, possibly a junior loan. The aggregate amount of these measures is estimated to be approximately EUR 13–16 million. The measures have been described in more detail in the above-mentioned stock exchange release.

Due to the above, the Board of Directors proposes to the Annual General Meeting that the Annual General Meeting resolve on the combination of the share classes, a directed share issue and authorising the Board of Directors to decide on a rights issue as set out below. The directed share issue expands the company’s shareholder base, as a result of which the Board of Directors also proposes the establishment of a shareholders’ nomination board as set out below.

The resolutions proposed in this item 16 form a single whole, the approval of which requires that all the relevant proposals are approved in a single resolution.

Combination of the share classes and related amendment to the Articles of Association

As at the date of this notice, the company has two classes of shares. Pursuant to the company’s Articles of Association, the company’s shares are divided into ordinary shares and A shares. The ordinary shares are entered in the K series and the A shares are entered in the A series. The K shares and the A shares differ from one another, so that every share of the K series entitles in the General Meeting to twenty (20) votes and a share of the A series to one (1) vote. Both share classes carry equal rights to distribution of funds by the company. On the date of this notice, there are 991,161 ordinary shares and 3,272,033 series A shares in the Company. The series A shares are subject to trading on the official list of Nasdaq Helsinki Ltd. The ordinary shares have not been subject to trading.

The Board of Directors proposes that the company’s share classes be combined to the effect that after the combination all shares are of the same class and carry equal rights in the company, including one (1) vote in General Meetings. The Board of Directors estimates that the combination of the share classes is likely to increase interest in the company as an investment as well as improve the liquidity of the company’s shares.

In connection with the combination of the share classes, the existing ordinary shares, which have not been subject to trading, are converted to the effect that they have equal rights as series A shares and are in the only share class in the company after the combination of the share classes (the “Conversion Shares”) at the conversion rate of 1:1 so that one ordinary share is converted to one Conversion Share. The company intends to apply for the admission of the Conversion Shares to trading on the official list of Nasdaq Helsinki Ltd, whereby the trading in the shares begins as soon as possible after the publication of the prospectus drawn up, inter alia, for the rights issue discussed below.

Below in this item 16, the term “series A shares” refers both to the existing series A shares and to the shares in the single share class after the combination of the share classes, unless expressly otherwise stated.

In connection with the combination of the class shares, the company’s Articles of Association will be partially amended, as described below.

The shareholders whose shares represent 79.3 percent of all ordinary shares and votes vested therein have in advance and in writing undertaken to vote in favour of the proposed resolutions related to the combination of share classes, directed share issue and rights issue, and given their consent to the combination of the share classes.

The Board of Directors requested a fairness opinion from Evli Plc. In accordance with the fairness opinion, the proposed combination of the share classes at the conversion ratio of 1:1 is fair from a financial viewpoint to the holders of ordinary shares and to the holders of the existing series A shares.

Combination of the share classes

The Board of Directors proposes that the Annual General Meeting resolve on the combination of the company’s share classes without increasing the share capital to the effect that after the combination, all shares are of the same class and carry equal rights in the company, including one (1) vote in General Meetings. The combination will be implemented by amending the Articles of Association in the manner proposed below in this section to the effect that the provisions concerning the different share classes are removed from the Articles of Association.

The combination of the share classes enters into force when the amendment to the Articles of Association described below is registered with the Trade Register. This is expected to happen on or about April 3, 2023.

The combination of the share classes will not require any actions from shareholders.

Amendment of the Articles of Association

In order to implement the combination of the share classes, the Board of Directors proposes that the Annual General Meeting resolve to amend the company’s Articles of Association by removing the provisions concerning the different share classes. The proposed amendments are as follows:

1. Existing Article 2 of the Articles of Association is removed.
2. Existing Article 3 of the Articles of Association is removed.
3. Existing Article 4 of the Articles of Association is removed.
4. The numbering of Articles 5–13 is amended to the effect that the numbering of the Articles of Association remains consecutive after the removals stated in sections 1. to 3. above.

The Articles of Association in their amended form (including both the amendments proposed under this agenda item and under item 19) are attached to this notice as Appendix 1.

Directed share issue

The Board of Directors proposes that the Annual General Meeting resolve on a directed share issue as follows:

1. In the share issue, a maximum of 900,000 new series A shares in the company is offered for subscription. The shares represent a maximum of approximately 21.1 percent of all shares in the company.
2. The right to subscribe for shares is granted to selected investors approved by the Board of Directors in accordance with the subscription commitments they have given. The purpose of the directed issue is to support the company’s targeted growth in accordance with the company’s strategy, improve the company’s financial position and to strengthen its capital structure. The directed share issue and the new equity financing to be acquired thereby, together with the other measures aimed at strengthening the company’s capital structure as described in the stock exchange release published on the date of this notice March 9, 2023, enables obtaining financing which is significant from the point of view of the company’s strategic objectives. The Board of Directors of the company finds that the directed share issue is an essential contributor in fulfilling the company’s strategic objectives. Therefore, there is a weighty financial reason for the company to deviate from the pre-emptive right of the shareholders.
3. The subscription price of one share is at maximum EUR 7.68, which represents a discount of 15.1 percent compared to the volume-weighted average trading price of the company’s series A share during the 10 trading days preceding the date of this notice and a discount of 12.5 percent compared to the closing price on the day preceding the date of this notice. The subscription price will be reviewed on the date of completion of the issue so that the final subscription price does not, however, exceed the volume-weighted average trading price of the company’s series A share on the trading day preceding the completion date of the directed share issue. The subscription price is based on a book building process with institutional investors. The proceeds raised in the share issue will be entered in full in the reserve for invested non-restricted equity.

The Board of Directors is authorised to decide on the payment period and the subscription period of the shares. The Board of Directors is also authorised to decide on any other terms and conditions of the share issue and to see to the practical measures related to the share issue.

Authorisation of the Board of Directors to decide on a rights issue

The Board of Directors proposes that the Annual General Meeting authorise the Board of Directors to decide on a share issue where a maximum of 1,750,000 new series A shares in the company is offered for subscription. The shares represent a maximum of approximately 33.9 percent of all shares in the company after the directed share issue discussed above, assuming that the maximum number of shares under the proposal is issued.

The company’s shareholders have the right to subscribe for shares in proportion to their existing shareholdings in the company. If the shares are not fully subscribed for, the company’s Board of Directors has the right to decide on offering the unsubscribed for shares for subscription to the company’s shareholders or other persons in the proportion it sees fit.

The Board of Directors is authorised to decide on other terms and conditions of the share issue and to see to the practical measures related to the share issue.

The authorisation is effective until September 30, 2023.

Establishment of a Shareholders’ Nomination Board

The Board of Directors proposes that the General Meeting resolve to establish a permanent shareholders’ nomination board to prepare the election and remuneration of the Board of Directors (the “Nomination Board”) and confirm the charter for the Nomination Board in accordance with Appendix 2 of this notice.

The main terms of the charter are following:

-          The duties of the Nomination Board are to (i) prepare and present a proposal to the General Meeting for the number of members of the Board of Directors, (ii) prepare and present a proposal to the General Meeting for the Chair, Vice Chair and other members of the Board of Directors, (iii) prepare and present a proposal to the General Meeting for the remuneration of the members of the Board of Directors (including the Chair and the Vice Chair) in accordance with the remuneration policy for governing bodies, (iv) respond in the General Meeting to the shareholders’ questions concerning the proposals prepared by the Nomination Board, (v) prepare and see to it that the company has up to date principles on the diversity of the Board of Directors and (vi) see to the successor planning for the members of the Board of Directors.

-          The Nomination Board has three members. The Chair of the company’s Board of Directors participates in the work of the Nomination Board as an expert without the right to participate in the Nomination Board’s decision making.

-          The members of the Nomination Board are appointed by the three largest shareholders, each of whom has the right to appoint one member.

-          The number of shares owned by the shareholders is determined on the basis of the company’s shareholder register in accordance with the situation on the last business day of the August preceding the Annual General Meeting, in a manner set forth in more detail in the charter.

-          The Nomination Board must make its decisions unanimously. If unanimity cannot be reached, the Nomination Board must inform the Board of Directors of this without delay.

The Board of Directors proposes that the appointment of members of the first Nomination Board be carried out in deviation from the charter as follows:

-          The number of shares owned by the shareholders is determined on the basis of the company’s shareholder register in accordance with the situation on the last business day of June 2023.

-          The shareholders must present their written requests under sections 2. (a) and (b) of the charter no later than on the last business day of June 2023.

-          The chairperson of the Board of Directors requests each of the three largest shareholders to appoint a member to the Nomination Board so that the nomination takes place no later than on the last business day of July 2023.

The charter of the Nomination Board shall be complied with in all other respects also in the appointment of the first Nomination Board.

The term of the members of the first Nomination Board ends upon the appointment of new members of the Nomination Board in 2024.

17. Authorising the Board of Directors to resolve on the acquisition of own shares

The Board of Directors proposes that the Annual General Meeting authorise the Board to resolve on the repurchase of a maximum of 500,000 of Raute Corporation’s series A shares using assets from the company’s non-restricted equity, which would lead to a decrease in the company’s distributable funds.

In this agenda item, the term “series A shares” refers both to the existing series A shares and to the shares in the single share class after the combination of the share classes proposed under item 16 above.

The authorisation would entitle the Board to acquire the company’s series A shares to be used for the development of the company’s capital structure, as consideration for funding or carrying out any acquisitions or other arrangements, or to be otherwise disposed of or cancelled.

The purchase consideration paid for shares purchased by virtue of the authorisation shall be based on the price of the series A share in public trading such that the minimum price of acquired shares is the lowest market price quoted in public trading during the term of validity of the authorisation and, correspondingly, the maximum price is the highest market price quoted in public trading during the term of validity of the authorisation.

The authorisation includes the right to acquire shares other than in proportion to the holdings of the shareholders. A targeted repurchase of the company’s own shares can take place, for example, by acquiring shares in public trading in markets where, according to the regulations, the company is permitted to engage in the trade of its own shares. Repurchasing shares in public trading as mentioned above, or otherwise in a targeted way, requires that the company has a weighty financial reason to do so.

The Board of Directors is authorised to decide on other terms and conditions related to share repurchases.

This authorisation shall replace the authorisation granted by the Annual General Meeting of March 31, 2022, and is effective until the end of the next Annual General Meeting, or at the most for 18 months following the decision of the Annual General Meeting.

18. Authorising the Board of Directors to resolve on a share issue and the issuance of special rights entitling to shares

The Board proposes that the Annual General Meeting authorise the Board to resolve on an issue of Raute Corporation’s series A shares and the issuance of special rights entitling to shares referred to in Chapter 10, Section 1 of the Finnish Companies Act in one or several instalments. The Board of Directors is authorised to resolve on all conditions of the share issue or the issuance of special rights, including the recipients and the sum of possible consideration to be paid.

In this agenda item, the term “series A shares” refers both to the existing series A shares and to the shares in the single share class after the combination of the share classes proposed under item 16 above.

The Board of Directors may, by virtue of the authorisation, resolve to issue either new shares or treasury shares held by the company. The aggregate maximum number of shares that can be issued is 1,000,000 series A shares. Any shares to be issued based on special rights entitling to shares are included in the above-mentioned aggregate number of shares.

The Board proposes that the authorisation include the right to deviate from the shareholders’ pre-emptive rights, provided that the company has a weighty financial reason to do so. A targeted issue may be free only if a weighty financial reason exists in terms of the company, while taking into account the interests of all the shareholders. As proposed, the authorisation can be used, with the restrictions presented above, to fund or carry out acquisitions or other arrangements or for other purposes decided by the Board of Directors.

The authorisation is effective until the end of the next Annual General Meeting, or at the most for 18 months following the decision of the Annual General Meeting. The authorisation does not revoke the authorisations regarding the share issues proposed under agenda item 16 above.

19. Amending the Articles of Association to enable remote meetings

The Board of Directors proposes that the General Meeting decide to amend the company’s Articles of Association so that the Articles of Association will in future enable convening General Meetings without a meeting venue as a so-called remote meeting. The Board of Directors therefore proposes that a new Article 14 (after the amendments proposed under agenda item 16 above, Article 11) will be added to the end of the Articles of Association, which reads as follows:

“The Board of Directors may decide that a General Meeting be organised without a meeting venue so that the shareholders will exercise their power of decision during the meeting in full and in real time by the use of telecommunication connections and technical means (remote meeting).”

The Articles of Association in their amended form (including both the amendments proposed under agenda item 16 above and under this item) are attached to this notice as Appendix 1.

20. Closing the meeting

B. DOCUMENTS OF THE ANNUAL GENERAL MEETING

The aforementioned proposals for resolution on the list of items for the Annual General Meeting, the Remuneration Report, this Notice of the Annual General Meeting and the company’s Financial Statements, the Board of Directors’ Report and the Auditor’s Report will be available on Raute’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/ on March 9, 2023 at the latest. The proposals for resolution and other above-mentioned documents will also be available at the Annual General Meeting. The minutes of the Annual General Meeting will be available on the above-mentioned website by April 13, 2023 at the latest.

C. INSTRUCTIONS FOR THOSE ATTENDING THE ANNUAL GENERAL MEETING

1. The right to participate and registration

To be entitled to attend the Annual General Meeting, shareholders must be registered in the shareholders’ register maintained by Euroclear Finland Ltd on March 20, 2023. A shareholder whose shares are registered in his or her personal Finnish book-entry account is registered in the shareholder register of the company.

Registration for the Annual General Meeting will begin on March 10, 2023 at 9:00 a.m.  A shareholder registered in the shareholders’ register who wishes to participate in the Annual General Meeting must register for the meeting by no later than 4:00 p.m. on March 24, 2023. The registration must arrive before the end of the registration period. Registration for the meeting can take place:

-        online via the company’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/,

-        in writing to Raute Corporation, Annual General Meeting 2023, P.O. Box 69, 15551 NASTOLA, Finland,

-        by email to eija.salminen@raute.com, or

-        by calling Eija Salminen at 050 3801517 on business days during 8:30 a.m.– 4:30 p.m.

Online registration requires strong authentication by the shareholder or his/her legal representative or proxy representative using Finnish or Swedish banking codes or a mobile certificate.

In connection with the registration, a shareholder is required to provide the requested personal information, such as their name, birth date/personal identification number or business identity code, address, telephone number and email as well as the name of a proxy representative or assistant, if any, and the birth date of the proxy representative. The personal data given to Raute Corporation or Innovatics Ltd by shareholders is only used in connection with the General Meeting and with the processing of related necessary registrations.

Shareholders, or their representative or proxy representative, must be able to prove their identity and/or their right to represent a shareholder at the meeting location if required.

Additional information on electronic registration is available by telephone during the registration period of the General Meeting by calling Innovatics Oy at +358 10 2818 090 on business days between 9:00 a.m. and 12:00 noon and between 1:00 p.m. and 4:00 p.m.

2. Holders of nominee-registered shares

Holders of nominee-registered shares are entitled to participate in the Annual General Meeting by virtue of the shares based on which they would have the right to be registered in the shareholders’ register maintained by Euroclear Finland Oy on the record date March 20, 2023. Participation furthermore requires that the shareholder is, by virtue of these shares, temporarily registered in the shareholders’ register maintained by Euroclear Finland Oy by no later than 10.00 a.m. on March 27, 2023. For nominee-registered shares, this constitutes registration for the Annual General Meeting. Shareholding changes that take place after the record date of the Annual General Meeting do not affect the right to participate in the meeting or the number of votes held by the shareholder.

Holders of nominee-registered shares are invited to request the necessary instructions concerning registration in the temporary shareholders’ register, the issuing of proxy forms, voting instructions and registering for the meeting well in advance from their custodian banks. The account manager of the custodian bank shall temporarily register the holder of nominee-registered shares who wishes to attend the Annual General Meeting into the company’s shareholder register at the latest by the time specified above. Additional information also available on the company’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/.

3. Use of proxy representatives and proxy forms
 

A shareholder is entitled to participate and exercise his or her rights as a shareholder in the Annual General Meeting through a proxy representative. Proxy representatives must present a dated proxy form or otherwise be able to reliably show that they are entitled to act in this capacity on behalf of a shareholder. The form Proxy Document for a General Meeting (including voting instructions) is available on the company’s website at www.raute.com/investors/governance/general-meetings/annual-general-meeting-2023/. If a shareholder is represented in the Annual General Meeting by more than one proxy representative, who represent the shareholder’s shares in different securities accounts, notification of the shares based on which the proxies represent the shareholder must be given in connection with registration.

The proxy documents, if any, are requested to be delivered primarily as attachments in connection with electronic registration, or alternatively by post to the address Raute Corporation, Annual General Meeting 2023, P.O. Box 69, 15551 NASTOLA, Finland, or by e-mail to eija.salminen@raute.com before the registration ends. In addition to delivering the proxy, a shareholder or his/her representative must take care of registering for the Annual General Meeting as described above in this notice.

The right of representation can be proven by using the Suomi.fi e-Authorizations service available in the electronic registration service.

4. Following the Annual General Meeting via video link

Shareholders who have registered for the Annual General Meeting but are not attending the meeting in person have the opportunity to follow the meeting in real time via a video link. The speeches of the Chair of the Board of Directors and the President and CEO, as well as presentation material related to the other matters to be addressed at the meeting will be recorded. Speech requests and voting are not possible via the video link. A link to the video broadcast and detailed instructions for following the meeting will be sent via email before the meeting to shareholders who have registered for the meeting.

5. Other instructions and information

The meeting will be held in Finnish.

Shareholders have the opportunity to pose questions in advance concerning matters on the meeting’s agenda. Questions should be sent via email to ir@raute.com, and they must arrive no later than March 24, 2023, by 10:00 a.m. Any possible questions posed in advance are not questions under the Finnish Companies Act, and posing such questions does not mean using the shareholder’s right to request information under the Finnish Companies Act. The company will, to the extent possible, try to answer the questions posed in advance at the meeting.

Pursuant to Chapter 5, Section 25 of the Finnish Companies Act, a shareholder who is present at the shareholders’ meeting has the right to request information with respect to the matters to be considered at the meeting.

On the date of this notice, March 9, 2023, Raute Corporation has 991,161 series K shares (ordinary share, 20 votes/share), representing 19,823,220 votes, and 3,272,033 series A shares (1 vote/share), representing 3,272,033 votes, i.e. a total of 4,263,194 shares and 23,095,253 votes.

Lahti, March 9, 2023

RAUTE CORPORATION
Board of Directors

Appendices:
Appendix 1 Amended Articles of Association of Raute Corporation
Appendix 2 Charter of the Shareholders’ Nomination Board

FURTHER INFORMATION:
Laura Raitio, Chair of the Board of Directors, mobile number +358 50 386 0004

DISTRIBUTION:
Nasdaq Helsinki Ltd, main media, www.raute.com

RAUTE IN BRIEF:

Raute is a technology and service company that operates worldwide. Raute’s customers are companies operating in the wood products industry that manufacture veneer, plywood, LVL (Laminated Veneer Lumber) and sawn timber. Its technology offering covers the entire production process for veneer, plywood and LVL and special measurement equipment for sawn timber. As a supplier of mill-scale projects, Raute is a global market leader both in the plywood and LVL industries. Additionally, Raute’s full-service concept includes technology services ranging from spare parts deliveries to regular maintenance and equipment modernizations. Raute’s head office is located in Lahti, Finland. The company’s other production plants are located in Kajaani, Finland, the Vancouver area of Canada, the Changzhou area of China and in Pullman, Washington, USA. Raute’s net sales in 2021 were EUR 158.3 million. The Group’s headcount at the end of 2022 was 778. More information about the company can be found at www.raute.com.