Notice of annual general meeting of Hembla AB (publ)
N.B. This is an in-house translation.
The shareholders of Hembla AB (publ), reg. no. 556498-9449, are hereby summoned to the annual general meeting on Thursday 16 May 2019 at 2.00 p.m. at Advokatfirman Vinge’s office on Stureplan 8 in Stockholm, Sweden.
Right to attend the general meeting
Shareholders who wish to attend the general meeting must be registered in the share register maintained by Euroclear Sweden AB on Friday 10 May 2019, and must also notify the company of their intention to attend the meeting no later than Friday 10 May 2019.
The notification must be made in writing to Hembla AB (publ), Engelbrektsplan 1,
SE-114 34 Stockholm or by e-mail to firstname.lastname@example.org. The notification must state the shareholder’s name, personal identity number/registration number, shareholding, address, telephone number and information about the attendance of any assistants (maximum two) and, if applicable, information about any proxies. Information submitted in connection with the notification will be computerised and used exclusively for the general meeting. See below for additional information on the processing of personal data.
Shareholders represented by proxy must submit a dated power of attorney. If the power of attorney is executed by a legal person a certified copy of the certificate of registration or equivalent should be attached. The power of attorney and the certificate of registration may not be older than one year, however, the power of attorney may be older provided that the power of attorney according to its wording is valid for a longer period, although not more than five years. The original power of attorney and the certificate of registration should be sent to the company at the address mentioned above in good time prior to the general meeting. A proxy form is available at the company’s webpage www.hemblagroup.se/en and will also be sent to shareholders who so request and state their postal address.
Shareholders whose shares are registered in the name of a nominee through a bank or a securities institution must temporarily re-register their shares in their own names in order to be entitled to attend the general meeting. Such registration must be duly effected in the share register maintained by Euroclear Sweden AB on Friday 10 May 2019, and the shareholders must therefore advise their nominees in advance of this date.
Number of shares and votes
As of the day of this notice, there are a total of 92,087,447 shares in Hembla, of which 6,136,989 are shares of series A, corresponding to 30,684,945 votes, and 85,950,458 are shares of series B, corresponding to 85,950,458 votes. As per the date of this notice Hembla holds no treasury shares.
- Opening of the meeting.
- Appointment of chairman of the general meeting.
- Preparation and approval of the voting list.
- Approval of the agenda.
- Election of one or two persons to approve the minutes.
- Determination of whether the general meeting has been duly convened.
- Presentation by the managing director.
- Presentation of the annual report and the auditor’s report as well as the consolidated financial statements and consolidated auditor’s report.
- Approval of the profit and loss account and balance sheet as well as consolidated income statement and consolidated balance sheet.
- Resolution regarding allocation of the company’s result according to the adopted balance sheet.
- Resolution on whether to discharge the board and the managing director from liability.
- Determination of the number of members of the board and deputy members.
- Determination of the number of auditors and deputy auditors.
- Determination of remuneration to the members of the board and the auditors.
- Election of board of directors and chairman of the board.
The nomination committee proposes:
15.1 James Seppala (re-election)
15.2 Melissa Pianko (re-election)
15.3 Karolina Keyzer (re-election)
15.4 Fredrik Brodin (re-election)
15.5 Donatella Fanti (re-election)
15.6 Chairman of the board: James Seppala (re-election)
- Election of auditors.
The nomination committee proposes:
16.1 Ingemar Rindstig (re-election)
16.2 Mikael Ikonen (re-election)
- Resolution on principles for the appointment of the nomination committee.
- Resolution on guidelines for remuneration to the management.
- Resolution regarding authorization for the board of directors to resolve to issue new shares.
- Resolution regarding authorization for the board of directors to resolve to repurchase and transfer of own shares.
- Resolution on the adoption of a long-term incentive program in the form of warrants.
- Closing of the meeting.
The nomination committee’s proposals
Items 2 and 12-17 – Board composition, auditor, remuneration, etc.
The nomination committee, composed of Johannes Wingborg (appointed by Länsförsäkringar Fondförvaltning AB), Carl Gustafsson (appointed by Didner & Gerge Fonder AB) and
James Seppala (appointed by Vega Holdco S.à.r.l. and chairman of the board), has submitted the following proposals for resolution.
- Jesper Schönbeck, member of the Swedish Bar Association, is proposed to be appointed chairman of the annual general meeting (item 2).
- The board of directors is proposed to consist of five board members and no deputy board members (item 12).
- The number of auditors is proposed to be two without deputies (item 13).
- Remuneration to the board of directors is proposed to be SEK 325,000 (250,000) to each board member that is not a representative or employee of the major shareholder. If the nomination committee’s board proposal is adopted Fredrik Brodin and Karolina Keyzer will receive remuneration, whilst James Seppala, Melissa Pianko and Donatella Fanti will not receive any remuneration (item 14).
- The auditors’ fees shall be paid as per approved account (item 14).
- James Seppala, Melissa Pianko, Karolina Keyzer, Fredrik Brodin and Donatella Fanti are proposed for re-election as members of the board for the period until the end of the next annual general meeting. James Seppala is proposed to be re-elected as chairman of the board (item 15.1-6). For information about the board members who are proposed for election, please see the company’s website, www.hemblagroup.se/en.
- Ingemar Rindstig and Mikael Ikonen are proposed to be re-elected as the company’s auditors for the period until the end of the next annual general meeting, which is in accordance with the board of directors’ recommendation (item 16.1-2).
Item 17 – Principles for the appointment of the nomination committee
The nomination committee proposes that the general meeting resolves to decide on principles for electing a nomination committee in accordance with the following.
The chairman of the board shall be appointed member of the nomination committee and shall be instructed to, after consultation with the three largest shareholders of the company with respect to voting rights as per 30 September 2019, appoint three members in total. The names of the members shall be made public not later than six months before the following annual general meeting. The nomination committee shall among themselves appoint one member to act as chairman. The appointed chairman may not be the chairman of the board.
In the event a shareholder represented by a member of the nomination committee is no longer one of the largest shareholders of the company, with respect to voting rights, or in the event a member of the nomination committee is no longer employed by such shareholder or for any other reason resigns from the nomination committee before the next annual general meeting, the other members of the nomination committee shall, after consultation, have the right to appoint another representative for the larger shareholders to replace such member.
The nomination committee’s duties in preparation for the annual general meeting entails preparing the election of chairman and other directors of the board, election of auditor, election of chairman of the annual general meeting, matters regarding fees and questions in connection thereto.
The board of directors’ proposals
Item 10 – Resolution regarding the allocation of the company’s results
The board of directors proposes that no dividends shall be paid for the financial year 2018.
Item 18 – Resolution on guidelines for remuneration to the management
The board of directors proposes guidelines for remuneration and other terms of employment for management as set forth below.
For management, the company shall apply competitive remuneration in line with market practice and other terms of employment in relation to responsibility, authority, competence and experience. In addition to base salary, management shall be entitled to receive variable remuneration, which shall be based on performance.
The variable remuneration is capped at 70 per cent of the base salary for the CEO and the other members of management. The notice period between the company and management shall be not more than six months and severance pay shall amount to not more than 18 monthly salaries (based on the base salary) for the CEO and 12 monthly salaries (based on the base salary) for other members of management. Prior to the age of 62, no right to pension shall apply. The CEO is covered by a premium based pension plan according to which the agreed contribution can amount to not more than 35 per cent of the base salary.
Other members of management resident in Sweden are covered by the ITP plan, on top of which certain additional premium based contributions can be paid. The board of directors shall each year reflect on whether a share price related incentive program shall be proposed to the general meeting or not. All share price related incentive programs shall be resolved upon by the general meeting. If a board member is employed by the company, remuneration shall be paid to that board member according to these guidelines, and the board member shall not be entitled to any separate remuneration for the work as a board member. If a board member performs services to the company in addition to the work on the board, the remuneration paid shall be in line with market practice and the kind of work performed and effort made shall be taken into consideration.
These guidelines shall include all persons who for the period during which the guidelines apply are a part of the group management, other persons in a managerial position directly subordinated to the CEO as well as board members of the company. The guidelines apply to agreements entered into following the resolution of the annual general meeting and also where amendments are made to existing agreements after this point in time. The board of directors has the right to deviate from the guidelines if special reasons in an individual case are at hand, provided the deviation is accounted for and motivated afterwards.
Item 19 – Resolution regarding authorization for the board of directors to resolve to issue new shares
The board of directors proposes that the general meeting resolves to authorize the board of directors to, up until the next annual general meeting, on one or several occasions, with or without deviation from the shareholders’ preferential rights, against cash payment or against payment through set-off or in kind, or otherwise on special conditions, resolve to issue new shares. However, such share issues shall not entail that the company’s registered share capital or the number of shares in the company is increased by more than 10 per cent in total. The purpose of the authorization is to enable the board of directors to acquire businesses or real estate, or to improve the company’s working capital position.
Item 20 – Resolution regarding authorization for the board of directors to resolve to repurchase and transfer own shares
The board of directors proposes that the general meeting resolves to authorize the board of directors to, up until the next annual general meeting, on one or several occasions, resolve to repurchase as many own shares as may be purchased without the company’s holding at any time exceeding 10 per cent of the total number of shares in the company. The shares shall be purchased on Nasdaq Stockholm and only at a price per share within the price range applicable at any given time, i.e. the range between the highest purchase price and the lowest selling price.
The board of directors also proposes that the meeting resolves to authorize the board of directors to resolve, on one or several occasions until the next annual general meeting, to transfer (sell) own shares. Transfers may be carried out on Nasdaq Stockholm at a price within the price range applicable, i.e. the range between the highest purchase price and the lowest selling price. Transfers may also be made in other ways, with or without deviation from the shareholders’ preferential rights, against cash payment or against payment through set-off or in kind, or otherwise on special conditions. Upon such transfers made in other ways than on Nasdaq Stockholm, the price shall be established so that it is not below market terms. However, a “discount” to the stock market price may apply, in line with market practice. Transfers of own shares may be made of up to such number of shares that is held by the company at the time of the board of director’s resolution regarding the transfer.
The purpose of the authorization to repurchase own shares is to promote efficient capital usage in the company, to provide flexibility with regard to the company’s possibilities to distribute capital to its shareholders and to enable hedging of the company’s obligations under its incentive programs. The purpose of the authorization to transfer own shares is to enable the board to make corporate and real estate acquisitions or to raise working capital or broaden the shareholder base.
Item 21 – Resolution on the adoption of a long-term incentive program in the form of warrants
The Board of Directors proposes that the annual general meeting resolves to issue not more than 500,000 warrants to a subsidiary of the company for subsequent transfer to key persons and members of the executive management of the Hembla AB group, within the scope of a long-term incentive program (“LTIP 2019”) in accordance with the following.
Allotment, transfer and the terms and conditions for the warrants in general
LTIP 2019 will encompass not more than 55 key persons and members of the executive management of the Hembla AB group. Furthermore, future key persons and members of the executive management within the Hembla AB group can be invited to participate. In order to be entitled to participate in the incentive program, participants must have entered into a pre-emption agreement with a company within the Hembla AB group.
The Board of Directors proposes that not more than 500,000 warrants may be issued under LTIP 2019. The company’s wholly-owned subsidiary Holmiensis Bostäder AB shall be entitled to subscribe for all warrants. The warrants shall be issued free of charge to Holmiensis Bostäder AB and thereafter be transferred to participants of LTIP 2019. The transfer of warrants to participants shall be made at a price corresponding to the market value of the warrants, based on the Black & Scholes-formulae. The valuation of the warrants shall be made by an independent financial adviser or accounting firm. Transfer of warrants to participants of LTIP 2019 shall be made in accordance with the following.
Not more than 55 individuals within the Hembla AB group will be offered warrants under LTIP 2019. Allocation will be resolved by the Board of Directors between two categories of participants, “Top Management” (approximately 10 individuals), and “Other key persons” (approximately 45 individuals), and the maximum number of warrants that may be acquired per participant in the program shall not exceed 200,000 warrants. Hembla’s CEO and the directors of the Board of Directors will not receive allocation in LTIP 2019.
Each warrant entitles to subscription of one class B share in Hembla during the period from and including 1 June 2022 up to and including 31 August 2022 at an exercise price equal to 135 per cent of the volume-weighted average price of the company’s class B share during the period of ten trading days falling immediately before the relevant allocation date, however as a minimum the quota value of the share. The calculated exercise price shall be rounded off to nearest even tenth of a krona, whereupon 0.05 krona will be rounded up.
The number of shares that each warrant entitles to subscribe for as well as the strike price shall be recalculated in the event of a share split, share consolidation, share issue, etc. in accordance with customary conversion conditions. The warrants may, in accordance with customary terms and conditions, be exercised prior to the exercise period in the event of, for example, compulsory acquisition of shares, liquidation or merger whereupon Hembla will merge into another company.
The last day for acquisition of warrants shall be the day prior to the annual general meeting 2020. For participants who subscribe after the first grant date, acquisitions must be made at the current market value on such later allocation day. The Board of Directors shall be able to cancel warrants that have not been transferred to participants or that have been repurchased from participants.
Holmiensis Bostäder AB shall, in connection with the transfer of warrants to participants of LTIP 2019, and with certain exceptions, reserve a pre-emption right regarding the warrants if the participant’s employment or assignment in the group ends or if the participant wishes to transfer the warrants prior to the warrants being exercisable.
Dilution, costs, etc.
The warrant issue entails a dilution effect of approximately 0.5 per cent of the share capital and the votes in the company if the proposed warrants are exercised in full. Considering also the shares which may be issued pursuant to previously implemented incentive programs in the company, the maximum dilution amounts to approximately 4.5 per cent. For information regarding the company’s existing incentive programs, please refer to the company’s annual report for 2018 and the company’s website www.hemblagroup.se/en.
The warrants will be transferred at market value and therefore no social security contributions are to be paid by the group in relation to the issue of the warrants. However, the loan arrangement described below will have a financial impact on the company’s balance sheet of a maximum of SEK 5.1 million. It is estimated that other costs for LTIP 2019 will not exceed SEK 0.25 million for the duration of LTIP 2019. Accordingly, LTIP 2019 is expected to have a marginal effect on the company’s key ratios.
The market value of the warrants corresponds to approximately SEK 10.2 per warrant, assuming a share price of the company’s class B share of SEK 182 per share and a strike price corresponding to SEK 245.70 per share, based on the Black & Scholes-formulae.
To encourage participation in LTIP 2019, individuals who choose to participate in the program will be offered the opportunity to borrow an amount at market terms, equal to 100 per cent of the market value of the warrants to be purchased.
The rationale behind LTIP 2019
The Board of Directors considers it to be in the interest of the company and the shareholders that key persons and members of the executive management of Hembla are made part of the company’s development by being offered warrants in a new incentive program. The reasons for the proposal are to create opportunity to retain and attract qualified personnel to the company and to increase motivation for key persons and members of the executive management by being involved in and working for a positive value increase on the company’s share during the period covered by LTIP 2019.
Given the terms and conditions, size of allotment and other circumstances, the Board of Directors considers the Board of Directors’ proposal for LTIP 2019 to be reasonable and advantageous for the company and its shareholders.
Preparation of the proposal
LTIP 2019 has been prepared by the Board of Directors in consultation with external advisors. In addition, the proposal has been prepared by the Board of Directors at board meetings during spring 2019.
Resolutions in accordance with items 19 and 20 require approval of at least two thirds (2/3) of the shares represented and votes cast at the general meeting. A resolution in accordance with item 21 requires approval of at least nine tenths (9/10) of the shares represented and votes cast at the general meeting.
The shareholders are reminded of their right to request information in accordance with Chapter 7 Section 32 of the Swedish Companies Act. The annual report and the auditor’s report for the financial year 2018, the board of directors’ complete proposals and statements, as well as the auditors’ statement in accordance with Chapter 8 Section 54 of the Swedish Companies Act, will be held available at the company’s office on Engelbrektsplan 1 in Stockholm and on the company’s website, www.hemblagroup.se/en, at least three weeks before the meeting. Further, the nomination committee’s motivated statement will be available on the address stated above as well as on the website stated above at least four weeks before the meeting. Copies of the documents will be sent to the shareholders who so request and who inform the company of their postal address. Hembla has its registered office in Stockholm.
For information on how your personal data is processed, see the integrity policy that is available at Euroclear’s webpage www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.
Stockholm, April 2019
Hembla AB (publ)
The board of directors
Hembla is a property company focusing on residential properties in the Greater Stockholm region and other growth areas. The company’s business concept is to own property portfolios slated for a gradual renovation of apartments in conjunction with the natural turnover of tenants. This can take place quickly and cost-efficiently thanks to extensive experience from the company's renovation method which, among other things, means that no evacuation needs to take place. In addition to this, the company creates value through the development of building rights in existing portfolios. The market value of the company’s properties amounted to SEK 31,091 million on 31 December 2018. The total rental value amounted to SEK 1,903 million annually on 31 December 2018. The economic occupancy rate is high – vacancies are virtually non-existent. Hembla is listed on Nasdaq Stockholm.