Notification of annual general meeting of Clas Ohlson AB (PUBL)

The shareholders of Clas Ohlson AB (publ) are hereby notified of the Annual General Meeting (“Annual General Meeting”) to be held on Saturday, 13 September 2008 at 11:00 a.m. at the company’s central warehouse in Insjön. Registration will begin at 9:45 a.m. A light lunch will be served after the Annual General Meeting. Registration and notification Shareholders who intend to participate in the Annual General Meeting shall: • be listed in VPC AB’s printed shareholder register by Monday, 8 September 2008, • notify the company of their intention to participate in the Annual General Meeting not later than 4:00 p.m. on Wednesday, 10 September 2008; by post: Clas Ohlson AB (publ), SE-793 85 Insjön, Sweden, by fax: +46 (0)247-444 25, by telephone: +46 (0)247-444 00, or by e-mail: ir@clasohlson.se. Registration must include the shareholder’s name, address, daytime telephone number, civil registration number/corporate registration number and the number of shares represented. Shareholders or their proxies are entitled to be accompanied by not more than two advisors. The advisors must be registered in advance in the same manner as the shareholder. Information submitted on the registration will be computerized and used exclusively for the Annual General Meeting. Trustee-registered shares Shareholders who, through a bank or another trustee, have trustee-registered shares must temporarily re-register the shares in their own names to be entitled to participate in the Annual General Meeting. To ensure that this registration is listed in the shareholder register on Monday, 8 September 2008, shareholders must request in ample time before this date that their trustees conduct such registration. Proxies Shareholders who wish to exercise their voting rights at the Annual General Meeting by proxy must issue a dated power of attorney for the proxy in writing. The power of attorney may not be more than one year old. Prior to the Annual General Meeting, the original power of attorney should be sent to the above stated address. A power of attorney form is available for download via www.clasohlson.se and will be sent to those shareholders who so request and who provide their mailing address. Number of shares and voting On 8 September 2008, five days prior to the Annual General Meeting, the total number of Series A shares in the company amounts to 5,760,000 carrying 10 votes per share, corresponding to 57,600,000 votes, and the total number of Series B shares was 59,840,000 carrying one vote per share, corresponding to 59,840,000 votes. Accordingly, there are a total of 65,600,000 shares and 117,440,000 voting rights in the company. Proposed agenda 1. Opening of the Annual General Meeting 2. Election of Chairman of the Annual General Meeting (see below) 3. Preparation and approval of voting list 4. Approval of the agenda 5. Election of one or two minutes checkers 6. Determination that the Meeting has been duly convened 7. Presentation of the Annual Report and Auditors’ Report and the Consolidated Accounts and the Auditors’ Report on the Consolidated Accounts for 2007/2008 8. CEO’s address 9. Chairman of the Board’s report on the work of the Board and the Remuneration and Audit Committees 10. Question time 11. Resolution concerning the adoption of the Income Statement and Balance Sheet and the Consolidated Income Statement and Consolidated Balance Sheet for 2007/2008 12. Resolution concerning the disposition of the company’s profits in accordance with the balance sheet adopted for 2007/2008 and determination of the record date for the dividend (see below) 13. Resolution concerning the discharge of Board Members and the CEO from liability for the 2007/2008 financial year. 14. Determination of the number of Board Members, Deputy Board Members, auditors and deputy auditors to be elected by the Annual General Meeting (see below) 15. Determination of the fees to be paid to Board Members and the auditor, and remuneration for committee work (see below) 16. Election of Board Members, Chairman of the Board, any Deputy Board Members, auditor/s and any deputy auditors (see below) 17. The Board of Directors’ motion concerning adoption of guidelines for remuneration and other terms of employment for senior executives (see below) 18. The Board of Directors’ motion concerning the Nomination Committee (see below) 19. The Board of Directors’ motion concerning amendment of the Articles of Association (see below) 20. The Board of Directors’ motion concerning adoption of a long-term incentive plan (“LTI 2009”) (see below) 21. The Board of Directors’ motion concerning a resolution authorizing the Board of Directors to make decisions on the company’s acquisition and transfer of treasury shares, and motion concerning a resolution to transfer treasury shares (see below) 22. Closing of the Annual General Meeting Item 2, Election of Chairman of the Annual General Meeting The Nomination Committee proposes that Bo Berggren be elected Chairman of the Annual General Meeting. Item 12, Resolution concerning the disposition of the company’s profits in accordance with the balance sheet adopted for 2007/2008 and determination of the record date for the dividend The Board of Directors and the CEO propose that the retained earnings at the disposal of the Annual General Meeting, in an amount of SEK 1,089,727,109, be allocated so that SEK 328,000,000 be paid as a dividend (SEK 5 per share) and that SEK 761,727,109 be carried forward. It is proposed that the record date for the dividend be 17 September 2008. If the Annual General Meeting votes in accordance with this motion, it is estimated that the dividend will be distributed by VPC AB on 22 September 2008. Items 14-16, Resolutions concerning the number of Board Members, Deputy Board Members, auditors and deputy auditors to be elected by the Annual General Meeting, the fees to be paid to Board Members and the auditor, and remuneration for committee work and election of Board Members, Chairman of the Board, any Deputy Board Members, auditor/s and any deputy auditors The company’s Nomination Committee, which has been formed in accordance with a motion passed at the Annual General Meeting of 8 September 2007 and which comprises Elisabet Salander Björklund, Chairman, Per Karlsson and Lars Öhrstedt, proposes the following resolutions concerning Items 14-16. The Nomination Committee proposes that the number of Board Members be seven, that no Deputy Board Members be appointed and that an auditor be appointed without any deputy auditor (Item 14). The Nomination Committee proposes that director fees be paid in an amount of SEK 2,250,000 and be distributed as follows: SEK 500,000 to the Chairman of the Board and SEK 250,000 to each of the Board Members elected by the Annual General Meeting and who are not employees of the company. The Nomination Committee also proposes that remuneration of members of the Audit Committee who are not employees of the company be paid in a total amount of SEK 250,000 annually, of which SEK 125,000 is to be paid to the chairman of the Audit Committee and SEK 62,500 to each of the other members of the committee, and that remuneration of members of the Remuneration Committee who are not employees of the company be paid in a total amount of SEK 250,000 annually, of which SEK 125,000 is to be paid to the chairman of the Remuneration Committee and SEK 62,500 to each of the other members of the committee. It is proposed that remuneration of the auditor, during the auditor’s period in office, be paid on current account in return for an invoice approved by the company (Item 15). The Nomination Committee proposes re-election of Anders Moberg, Klas Balkow, Björn Haid, Cecilia Tufvesson-Marlow, Lottie Svedenstedt, Elisabet Salander Björklund and Urban Jansson. It is proposed that Anders Moberg remain Chairman of the Board. The Nomination Committee also proposes that Öhrlings PricewaterhouseCoopers AB be elected auditor, with Annika Wedin as auditor-in-charge for the period until the close of the Annual General Meeting held during the fourth financial year after the election of auditor (Item 16). The Board of Directors’ motion concerning adoption of guidelines for remuneration and other terms of employment for senior executives For the CEO and other senior executives, the remuneration principles approved by the Extraordinary General Meeting of 10 April 2008 apply. The Board of Directors proposes that corresponding principles, subject to the addition of LTI 2009, as described in Item 20 below, be approved by the Annual General Meeting for the period until the close of the 2009 Annual General Meeting. Item 18, the Board of Directors’ motion concerning the Nomination Committee The Board of Directors proposes that the Nomination Committee, whose task is to propose Board Members and auditors at forthcoming General Meetings where Board Members and auditors, as well as fees and other remuneration for such assignments are to be appointed/decided, be re-elected: Elisabet Salander Björklund, Per Karlsson and Lars Öhrstedt. The Board of Directors proposes that fees to the Nomination Committee be paid in an amount of SEK 125,000 to the chairman and SEK 62,500 to each other committee member. Item 19, the Board of Directors’ motion concerning amendment of the Articles of Association The Board of Directors proposes that Article 9 of the Articles of Association be amended so that the notice convening General Meetings be issued through an announcement in Post- och Inrikes Tidningar, Svenska Dagbladet (rather than Dagens Industri) and Falukuriren. Item 20, The Board of Directors’ motion concerning adoption of a long-term incentive plan ("LTI 2009") The Board of Directors proposes that the Annual General Meeting resolve to adopt a long-term incentive plan (“LTI 2009”) that will essentially be subject to conditions corresponding to those that apply for LTI 2008, as adopted by the Extraordinary General Meeting of 10 April 2008. The purpose of the proposed incentive plan will be to create conditions to retain and recruit skilled personnel to the Group. It is proposed that LTI 2009 encompass a maximum of 40 people, comprising senior executives and other key personnel who are regarded as having considerable potential to influence Clas Ohlson’s long-term development (“Participants”). LTI 2009 has been designed because it is considered desirable that the Participants become shareholders of Clas Ohlson to a greater extent than today, which is expected to have a favourable impact on their long-term work performance. LTI 2009 has also been designed to ensure that the remuneration paid to the Participants be competitive in comparison with other comparable companies in the industry. LTI 2009 entails that the Participants acquire at market price Class B Clas Ohlson AB shares at a value corresponding to at least 5% and a maximum of 10% of their fixed annual salary during the period 1 to 11 May 2009 (“Acquisition Period”). Allotment of options and share rights will occur five days after the Acquisition Period has ended (“Start Day”). The private investment will then be matched by the company, in the form of a free-of-charge allotment of conditional share rights and performance-based employee stock options. A condition for exercising the share rights and employee stock options is that the employee retains his/her invested shares and that, with certain exceptions, retains his/her employment from the Start Day up to 30 April 2012 (“Qualification Period”). For each Class B share acquired by the employee within the framework of LTI 2009, the company will allot a share right plus a number of preliminary employee stock options. Matching will be based on the number of shares that the employee invests in at the ordinary stock-market price prevailing when the shares are purchased. The scope of LTI 2009 can never exceed 715,000 shares (930,000 shares if costs for social security fees are included). Each share right provides the holder with entitlement to obtain one Class B share in the company free of charge. Share rights do not provide entitlement to compensation for dividend on underlying shares during the Qualification Period. Share rights are not transferable and may be issued by the company or by other Group companies. Each employee stock option that may be exercised provides the holder with entitlement to acquire one Class B share in the company. The acquisition price for shares acquired upon exercise of the options shall correspond to 110% of the average of the volume-weighted average price paid for the company’s Class B share as established on the Nordic Exchange in Stockholm over a period of 10 trading days prior to the start of the Acquisition Period. The earliest date for exercising the employee stock options will be 20 June 2012 and the latest date will be 30 April 2016. When exercising the employee stock options, any rules concerning bans on trading must be observed, where applicable. The employee stock options do not provide entitlement to compensation for dividend on underlying shares during the Qualification Period. The employee stock options are not transferable and may be issued by the company or by other Group companies. The number of employee stock options that may be exercised for the acquisition of shares depends on the number of Class B that the employee has acquired and the fulfilment of certain goals for the company’s development, as established by the Board of Directors, growth and earnings during the Qualification Period. The levels to be established comprise a threshold, target and ceiling. The levels correspond to: five employee stock options/acquired Class B shares at the threshold level, 10 employee stock options/acquired Class B shares at the target level and 15 employee stock options/acquired Class B share at the ceiling level. Vesting of employee stock options between the threshold and target levels occurs linearly. In the event that the threshold level is not attained, no employee stock options will be allotted. Insofar as the share price varies at the date of acquisition, LTI 2009 could theoretically end up comprising more shares than those stated in the proposed scope. In such cases, allotment will be reduced proportionately in accordance with principles decided by the Board of Directors. LTI 2009 will be reported in accordance with IFRS 2 – Share-based payment. Based on unchanged allotment, the market conditions currently prevailing and the maximum outcome for LTI 2009’s criteria, the initial cost, in accordance with IFRS 2, for LTI 2009 will not exceed SEK 11.6 M. To this should be added costs for social security fees, which will be calculated in greater detail in the Board of Directors’ complete motion concerning LTI 2009. The Board of Directors proposes a buy-back programme in accordance with Item 21 (see below) so that, as described above, the company will be provided with an opportunity to transfer treasury shares to the Participants and also use the repurchased shares as liquidity for securing payment of future social security fees pertaining to LTI 2009. The administrative work required for handling the programme must be reasonable in relation to the programme’s design and scope and be subject to approval by the Board of Directors. The intention is that no new shares will be issued due to the programme. Item 21 – the Board of Directors’ motion concerning a resolution authorizing the Board of Directors to make decisions concerning the company’s acquisition and transfer of treasury shares, and motion concerning the transfer treasury shares The Board of Directors’ motion in accordance with Item 21 is conditional upon the Annual General Meeting first passing resolutions in accordance with Item 20 above. A. Acquisition of treasury shares The Board of Directors proposes that the Annual General Meeting resolve to authorize the Board, during the period up to the next Annual General Meeting, to make decisions concerning the company’s acquisition of shares in the company as follows. • A maximum of 930,000 Class B shares may be acquired. • The shares must be acquired on the Nordic Exchange in Stockholm. • Shares acquired through trading on the Exchange may only occur at a price per share that at every point of time is within the registered span of share prices. • Payment for the shares must be made in cash. Acquisitions may occur to ensure the company’s commitments (including social security fees) resulting from LTI 2009 (see Item 20). B. Transfer of treasury shares The Board of Directors proposes that the Annual General Meeting resolve to authorize the Board, during the period up to the next Annual General Meeting, to make decisions concerning the company’s transfer of treasury shares as follows. • The Class B treasury shares held at the time of the Board of Directors’ decisions may be transferred. • The shares may be transferred via the Nordic Exchange in Stockholm. • Shares transferred through trading on the Exchange may only occur at a price per share that at every point of time is within the registered span of share prices. • Payment for the shares must be made in cash. The reason underlying the Board of Directors’ motion is to provide the company with an opportunity to continuously adapt the number of shares acquired to ensure commitments within the framework of LTI 2009 (see Item 20). C. Transfer of treasury shares as a result of the plan in accordance with Item 20 The Board of Directors proposes that the Annual General Meeting resolve a transfer of shares in the company as follows. • A maximum of 715,000 Class B shares may be transferred. • Entitlement to receive shares shall accrue to the Participants, with each Participant entitled to receive a maximum of the number of shares that result from future conditions for LTI 2009. • The Participants will be entitled to exercise their right to acquire shares no earlier than 20 June 2012 and no later than 30 April 2016. • The Participants’ entitlement to receive shares is subject to fulfilment of all of the conditions established for the plan. • Transfer of share rights issued in accordance with LTI 2009 will occur free of charge. • Transfer of shares based on options issued in accordance with LTI 2009 will occur at a price corresponding to 110% of the average of the volume-weighted average price paid for the company’s Class B share as established on the Nordic Exchange in Stockholm over a period of 10 trading days prior to the start of the Acquisition Period. • In accordance with the terms and conditions for the plan, the number of shares that may be subject to transfer under LTI 2009 may be subject to recalculation due to such events as bonus issues, splits and rights issues. • Payment for acquired shares must be made no earlier than 20 June 2012 and no later than 15 May 2016. The transfer of treasury shares and the reason for disapplying the shareholders’ pre-emptive rights are pursuant to the incentive plan resolved under Item 20. Majority requirements To be valid, resolutions by the Annual General Meeting in accordance with the Board of Directors’ motion under Item 19 above require that the resolution be supported by shareholders representing at least two thirds of both the votes cast and the shares represented at the Annual General Meeting. To be valid, resolutions by the Annual General Meeting in accordance with Item 21 A-B above must be supported by shareholders representing at least two thirds of both the votes cast and the shares represented at the Annual General Meeting. To be valid, resolutions by the Annual General Meeting in accordance with Item 21 C above must be supported by shareholders representing at least nine tenths of both the votes cast and the shares represented at the Annual General Meeting. Complete proposals The Nomination Committee’s complete proposals concerning resolutions under Items 2, 14-16 and the Board of Directors’ complete motions concerning resolutions under Items 12, 18 and 19 are presented above. The Board of Directors’ complete motions concerning resolutions under Items 17, 20 and 21 above and the accounting documentation and audit report pertaining to the 2007/2008 financial year, the Board of Directors’ statement in accordance with Chapter 18, Section 4 of the Swedish Companies Act concerning the distribution of profits and in accordance with Chapter 19, Section 22 of the Swedish Companies Act concerning authorization for the acquisition of company shares, as well as the auditor’s statement pursuant to Chapter 8, Section 54 of the Swedish Companies Act concerning guidelines for remuneration of senior executives will be made available at the company no later than from 29 August 2008 and will also be sent by post to shareholders who provide their postal address. All of the documents specified under the above heading will be made available in an electronic format on the company’s website, www.clasohlson.se, as of 29 August 2008. August 2008 Clas Ohlson AB (publ) Board of Directors