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Relationship with Shareholders
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Danfoss’ share capital amounts to 1,024m DKK and is divided into two share classes: A-shares account for 425m DKK and B-shares for 599m DKK. A-shares entitle the holder to ten votes for every 100 DKK share (nominal value) while B-shares entitle the holder to one vote for every 100 DKK share (nominal value). The holders of A-shares also have pre-emptive rights to A-shares in the event of any increases in share capital. Otherwise no shares have special rights.
The Bitten and Mads Clausen Foundation and the Clausen family jointly own all A-shares and a number of B-shares corresponding to 99.5% of the votes. The remaining votes are assigned to employees shares. At the end of 2008, Danfoss had approximately 6,500 registered, named employee shareholders, of which approximately one quarter are no longer employed at Danfoss. Around three quarters of shareholders reside in Denmark, while the remaining shareholders live outside Denmark. The employee shareholders and senior management own about 3% of the share capital and hold about 0.5% of the votes. All employee shares are B-shares.
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Bitten and Mads Clausen Foundation
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The largest shareholder in Danfoss A/S is the Bitten and Mads Clausen Foundation. Through its ownership, the Foundation ensures that the visions and ideas of founder Mads Clausen are continued. The Foundation was established on December 23, 1971 by Mrs Bitten Clausen and is run by a Board of Directors made up of nine members. Three of the members are the descendants of Bitten and Mads Clausen, and three members are found outside of the family.
The final three members are employee-elected Board members.
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Own shares
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Own shares are primarily used as security for the procurement of shares in connection with the Board’s options.
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Listing at VP Securities Services
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In 2006, Danfoss A/S shares were registered with VP Securities Services (VP). This registration is due to the fact that the frozen employee shares sold in 2001 were released on January 1, 2007. With the shares no longer frozen, shareholders can freely move the shares from their current depository at Danske Bank to a depository at another bank. After the release, registration at VP is therefore the only practical way for Danfoss to follow any movement in the shares and so be aware of which depositories the shares are kept in. Following VP listing, shares in Danfoss A/S are covered by the regulations that apply to shares listed at VP (these regulations can be found on VP’s website: www.vp.dk).
In order for the shares to be registered at VP, there must be no limitations on the realisation of the shares – in other words the shares may be freely traded. As the Danfoss A/S Articles of Association contained various limitations on
the realisation of shares, these have now been removed from the Articles of Association. For shareholders this means that the shares may now be freely sold, including to parties other than the Bitten and Mads Clausen Foundation.
Changes to the Articles of Association also mean that the clause concerning the preemptive rights to shares of the Bitten and Mads Clausen Foundation has been removed. This also applies to the duty of purchase incumbent on Danfoss A/S, if the foundation does not wish to buy back shares. However, the Bitten and Mads Clausen Foundation will be willing, as before, to buy shares in Danfoss A/S at the current price. This price is set once a year at the Annual General Meeting. To ensure that Danfoss A/S will continue to be owned by the Clausen family and the Bitten and Mads Clausen Foundation in the future, the major shareholders have mutually entered into a shareholder agreement.
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