Notice of annual general meeting of D. Carnegie & Co AB (publ)

Mon, Apr 10, 2017 20:30 CET

The shareholders of D. Carnegie & Co AB (publ) are hereby summoned to the annual general meeting on Wednesday 10 May 2017 at 2.00 p.m. at Advokatfirman Vinge’s office at Norrlandsgatan 10, in Stockholm.

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 Thursday 4 May 2017, and must also notify the company of their intention to attend the meeting no later than Thursday 4 May 2017 at 4.00 p.m.

The notification must be made in writing to D. Carnegie & Co AB (publ), Engelbrektsplan 1,
SE-114 34 Stockholm or by e-mail to info@dcarnegie.se. The notification must state the shareholder’s name, personal identity number/registration number, shareholding, address, day time telephone number and information about the attendance of any assistants (maximum two) and, if applicable, information about any proxies.

Proxy

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 www.dcarnegie.se and will also be sent to shareholders who so request and state their postal address.

Nominee-registered shares

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 Thursday 4 May 2017, and the shareholders must therefore advise their nominees in advance of this date.

Number of shares and votes

In the company, on the day of this notice, there are a total of 5,369,866 shares of series A that hold five (5) votes per share at the general meeting and 71,938,910 shares of series B that hold one (1) vote per share at the general meeting. Thus, there are a total of 77,308,776 shares and 98,788,240 votes in the company.

Proposed agenda

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 directors from liability
Resolution regarding amendments of the articles of association
Determination of the number of directors and deputy directors and the number of auditors and deputy auditors
Determination of remuneration to the directors and the auditors
Election of the directors and chairman as well as auditors
Appointment of a 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 plan
Closing of the meeting

Items 2 and 13-15 – Proposal from nomination committee

The nomination committee proposes:

that Jesper Schönbeck, member of the Swedish bar association, shall be appointed chairman of the general meeting. (Item 2)
that the board of directors shall consist of seven (7) directors and no deputy directors. The number of auditors shall be two without deputies. (Item 13)
that remuneration to the board of directors shall be paid SEK 250,000 each, for Rolf Buch, Svein Erik Lilleland, Karolina Keyzer and Fredrik Brodin as well as that James Seppala, Jean-Christophe Dubois and Melissa Pianko shall not receive any remuneration (consistent with current practice). Further, the previous board members Mats Höglund and Eva Redhe shall receive an extraordinary fee of SEK 100,000 for work in the board of directors during 2016. Following a separate agreement with the company, a board member may invoice the fees for board work, together with statutory social security contributions and value added tax, through a company owned by the board member, subject to the precondition that such payment is cost neutral to the company. The auditors’ fees shall be paid as per approved current account. (Item 14)
that James Seppala and Svein Erik Lilleland are re-elected and Karolina Keyzer, Rolf Buch, Jean-Christophe Dubois, Melissa Pianko and Fredrik Brodin are elected as directors of the board for the period until the end of the next annual general meeting and that James Seppala is re-elected as chairman of the board. For information about the board members proposed for re-election, please see the annual report. (Item 15)

Karolina Keyzer (born 1966)

Karolina Keyzer has a Master in Architecture from KTH Royal Institute of Technology. She has previously worked at the architect firm Wingårdhs (1997-2010), where she was also part of its management team. At Wingårdhs, she was project leader for a number of large projects in the Stockholm region, e.g. Victoria Tower in Kista and the Friends Arena Hotel in Solna. During 2010-2016, she was employed as a city architect in Stockholm. Since 2016, she is the CEO of OKK+, a company that she also is the founder of. She is a board member of Birthe and Per Arwidsson Foundation, Färgfabriken, Strategic Advisory Board KTH School of Architecture and the Swedish Architectural Association.

Rolf Buch (born 1965)

Rolf Buch has studied mechanical engineering and business administration. Rolf has previously been a member of the management board of Bertelsmann SE and the CEO of Arvato AG. During his time at Arvato, the company grew into a global BPO service provider with more than 60,000 employees in over 40 countries and developed into the fastest growing business division of Bertelsmann SE. Since April 2013, he is the CEO of Vonovia SE, a listed company which owns and manages around 333,000 residential units in Germany and that is valued at approximately € 27 billion.

Jean-Christophe Dubois (born 1968)

Jean-Christophe Dubois has a degree in engineering from the Ecole Centrale de Marseille and a Master in Finance from ESCP. Jean-Christophe has held multiple leadership positions at the Archon Group, Goldman Sachs' European real estate and distressed loan management platform. At present, he is a Managing Director in the Real Estate group of Blackstone London. Jean-Christophe is involved with portfolio management, asset management and transaction activities with a focus on Blackstone’s residential businesses in Europe (including over 40,000 residential units in Spain).

Melissa Pianko (born 1976)

Melissa Pianko has a MBA from Stanford University and a BA from Columbia University. Previous, she has worked at Goldman Sachs. Before joining Blackstone in 2016, Melissa was an Executive Vice President at Gotham Organization, Inc, a privately held New York City based residential-focussed real estate development firm. At present, Melissa is a Managing Director in the Real Estate Group of Blackstone New York. Melissa is involved in the asset management of Blackstone's US residential investments, including Stuyvesant Town–Peter Cooper Village (approximately 11,000 residential units). Further she is on the Board of Advisors to the NYU Furman Center, the Boards of Directors of the JCC in Manhattan and the 42nd Street Development Corp.

Fredrik Brodin (born 1967)

Fredrik Brodin has a Master in Engineering from KTH Royal Institute of Technology. Further, he has more than 20 years of experience in the real estate industry with a focus on Stockholm. He was previously the CEO of Cartera AB, the CEO of StayAt Hotel Apartments until 2005 and the CEO of Mengus (2005-2007). Fredrik has also been the Head of Real Estate of D. Carnegie AB (April to October 2014) and has had various positions in the Kvalitena group of companies (2007-2014). Since 2014, he is the CEO Stendörren Fastigheter AB (publ). Since 2000, he is a member of the board and the advisory board of Åke Sundwall Bygg AB.

that Ingemar Rindstig and Mikael Ikonen are re-elected as the company’s auditors for the period until the end of the next annual general meeting. (Item 15)

Item 10 – Resolution regarding the allocation of the company’s results

The board of directors proposes that the distributable assets, SEK 2,015,356,386, shall be carried forward and that no dividend shall be made.

Item 12 – Resolution regarding amendments of the articles of association

Due the nomination committee’s proposal with regard to the number of board members, the board of directors proposes that the general meeting resolves to amend the articles of association in respect of the limits of the board of directors, which means that the clause will be worded as follows:

The Board of Directors shall have three to seven regular members. The board members are elected annually at the annual general meeting of shareholders for the period lasting until the end of the next annual general meeting of shareholders.

One or two authorised public accountants are appointed at the annual general meeting of shareholders to audit the Company’s annual report and financial statements as well as the management on the part of the board of directors and the CEO. A registered public accounting firm can also be appointed to be the auditor.

In accordance with the proposal that was presented by the shareholders at the annual general meeting 2016, the board of directors proposes that the meeting resolves to amend the articles of association, whereby the reference to a time (4 p.m.) for notification of attendance at the general meeting in 8§ is taken out. The clause will thereafter be worded as follows:

Invitations to the general meeting of shareholders shall be announced in the Swedish official gazette, “Post- och Inrikes Tidningar”, and the invitation shall be kept available on the Company’s website. Notice that the invitation has been extended shall be announced in Dagens Nyheter at the time of the invitation.

Invitations to annual general meetings of shareholders and invitations to extraordinary general meetings of shareholders where amendments to the Articles of Association will be on the agenda shall be issued no earlier than six weeks and no later than four weeks prior to the meeting. Invitations to an extraordinary general meeting of shareholders shall be issued no earlier than six weeks prior to the meeting and no later than three weeks prior to the meeting. To attend and participate in the general meeting of shareholders, shareholders shall be listed in a print-out or other representation of the entire share register on the record date with regard to the circumstances five weekdays prior to the meeting and shall submit an application to the Company no later than the date specified in the invitation to the meeting. The latter date may not be a Sunday or other public holiday, a Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve, and may not fall on a date earlier than the fifth weekday before the meeting.

The shareholder may only bring advisers to the general meeting of shareholders if the shareholder gives the Company notice of the number of advisers accompanying him/her no later than on the date listed in the invitation.

Item 16 – Appointment of nomination committee

The nomination committee proposes that the general meeting resolves to establish a nomination committee in accordance with the below. 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 2017, appoint three additional members. The names of these members shall be made public not later than six months before the annual general meeting 2018. The nomination committee shall among themselves appoint one of the members of the committee 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 annual general meeting 2018, 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 2018 comprise of 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.

Item 17 – 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 for the CEO shall be based on the group’s profit per share and for other members of management shall be based on improvements within each person’s area of responsibility in respect of profit per share, turnover, operating net income and asset turnover ratio and the outcome of individual activity plans. The variable remuneration is capped at 50 per cent of the base salary for the CEO and capped up to 70 per cent of the base salary for other members of management. The notice period between the company and management shall be not more than 6 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.

For information on remuneration paid to executive management, please see note 3 in the annual report 2016.

Item 18 – Resolution regarding authorization for the board of directors to resolve to issue new shares

The board of directors proposes that the meeting authorizes the board of directors to resolve to issue of new shares on one or several occasions until the next annual general meeting, with or without preferential rights for the shareholders, against cash payment or against payment through set-off or in kind, or otherwise on special conditions. However, such issue of shares must never result in the company’s issued share capital or the number of shares in the company at any time, being increased by more than a total of 10 per cent. The purpose of the authorization is to enable the board to make corporate and real estate acquisitions or to raise working capital or broaden the shareholder base.

Item 19 – Resolution regarding authorization for the board of directors to resolve to repurchase and transfer of own shares

The board of directors proposes that the meeting authorizes the board of directors to resolve to repurchase, on one or several occasions until the next annual general meeting, 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, i.e. the range between the highest purchase price and the lowest selling price.

The board of directors also proposes that the meeting authorizes 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 preferential rights for the shareholders, against cash payment or against payment through set-off or in kind, or otherwise on special conditions. Upon such transfers, 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 as 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 as regards the company’s possibilities to distribute capital to its shareholders and to enable hedging of the company’s obligations under its incentive programmes. 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 20 – Resolution on the adoption of a long term incentive plan

The Board of Directors proposes that the annual general meeting resolves on a long-term incentive program and issuance of warrants in accordance with the below (“LTIP 2017”).

Background and motive

The Board of Directors considers it to be in the interest of the company and the shareholders that the executive management of D. Carnegie & Co 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 the executive management of the company by being involved in and working for a positive value increase on the company’s share during the period covered by LTIP 2017.

Given the terms and conditions, size of allotment and other circumstances, the Board of Directors consider LTIP 2017, in accordance with the below, to be reasonable and advantageous for the company and its shareholders.

Allotment, transfer and regarding the terms and conditions for the warrants

In total, no more than 2,730,000 warrants is proposed to be issued through LTIP 2017 for the executive management in accordance with the below. The warrants will be issued in three series with one-third of the total number of warrants in each series. Entitled to subscribe for all warrants is the wholly owned subsidiary Holmiensis Bostäder AB, which will transfer the warrants to employees in the company. The warrants shall be issued free of charge to Holmiensis Bostäder AB.

Transfer of warrants to participants shall be made at a price corresponding to the market value of the warrant (i.e. the warrant premium) determined using the Black & Scholes-formula. The valuation of the warrants shall be made by an independent financial adviser or accounting firm. Transfer of warrants to participants in LTIP 2017 shall be made in accordance with the allocation below.

The participants will be divided into two different categories for the purpose of resolving on the grant of warrants:

The CEO of the company is entitled to not more than 840,000 warrants, and
Other senior executives in the group (ten persons) are entitled to not more than 1,890,000 warrants, whereof each participant is entitled not more than 252,000 warrants.

Not more than a total of 2,730,000 warrants may be allotted within LTIP 2017.

Each warrant of series 1 entitles to subscription of one share in D. Carnegie & Co during the period from and including 15 May 2020 up to and including 30 September 2022. Each warrant of series 2 entitles to subscription of one share in D. Carnegie & Co during the period from and including 1 May 2021 up to and including 30 September 2022. Each warrant of series 3 entitles to subscription of one share in D. Carnegie & Co during the period from and including 1 May 2022 up to and including 30 September 2022. All three warrant series has an exercise price corresponding to the average volume weighted share price of D. Carnegie & Co as quoted on Nasdaq Stockholm’s official price list during the period 2 - 8 May 2017 with an addition of SEK 50. The calculated exercise price shall be rounded off to nearest even tenth of a krona, whereupon 0.05 krona will be rounded up.

The exercise price and number of shares that each warrant entitles to subscribe for shall be recalculated in the event of a share split, share consolidation, new 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 D. Carnegie & Co will merge into another company.

Right to hold and exercise the warrants assumes that the holder is employed in the company up until the moment when the warrants may be exercised. In connection with the transfer of warrants to the participants, Holmiensis Bostäder AB will reserve the right to buy back the warrants if the participant’s employment or assignment in the company ends or if the participant wants to reassign the warrants. However, the buyback right only applies to warrants that are not already exercisable. As an example, if an employment ceases after four years and the employee holds 45,000 warrants, Holmiensis Bostäder AB will not have the right to buy back 30,000 warrants (the warrants of series 1 and series 2) but only the 15,000 warrants in series 3 that are not yet exercisable. This will not apply in case the employment is terminated for cause. In such case the company shall have the right to buy back all the warrants not yet exercised.

Dilution effect, costs, etc.

The Board of Directors’ proposal to resolve on issuance of warrants entails a dilution effect corresponding to a maximum of approximately 3.5 per cent of the shares and votes in the company if the proposed warrants are exercised in full. For information regarding the company’s existing incentive programs, please refer to the company’s annual report for 2016 and the company’s website (www.dcarnegie.se). LTIP 2017 is expected to have a marginal effect on the company’s key ratios, and is not expected to be followed by further warrant programs for participants in LTIP 2017 in the next 5 years.

The subscription price at the transfer of warrants will correspond to the market value of the warrants, with no costs pertaining to employees or social costs will arise for the company in connection with the issue of warrants. However, the loan arrangement described below will have a financial impact of on the company of a maximum of SEK 0.1 million. It is estimated that the other costs for LTIP 2017 will not exceed SEK 1.0 million for the duration of LTIP 2017 (not taking into account any cash compensation to be paid under the below described loan arrangements which can amount to a maximum of SEK 5.1 million).

The market value of the warrants, according to a preliminary valuation based on the market value of the underlying share corresponding to the share price of the company’s share on 21 March 2017, is SEK 4.10 per warrant, assuming a strike price of SEK 155 per share. The Black & Scholes-formulae has been used for the valuation.

To encourage participation in the LTIP 2017, employees who choose to participate in the program will be offered the opportunity to borrow an amount, equal 70 percent of the market value of the warrants to be purchased, from the company at market terms. The remaining 30 percent of the market value of the warrants to be purchased shall be paid by the participant in cash. Further, participants who borrow less than 70 percent of the market value of the warrants to be purchased will receive cash compensation from the company. The compensation amount to SEK 100,000 (as a gross salary payout) for every SEK 100,000 that the participant chooses not to draw under the loan. In total, if all participants lend the full amount, the employees lending will amount to approx. SEK 3.9 million. The CEO will not be offered to borrow from the company.

Preparation of the proposal

The proposal has been prepared and unanimously approved by the Board of Directors and the Board of Directors will execute the resolution to issue the warrants.

_____________________

Majority requirements

Resolutions in accordance with items 12, 18 and 19 require approval of at least two thirds (2/3) of the shares represented and votes cast at the general meeting and resolution in accordance with item 20 above requires approval of at least nine tenths (9/10) of the shares represented and votes cast at the general meeting.

Complete proposals

The shareholders are reminded of their right to require 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 2016, as well as the complete proposals and opinions in accordance with 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.dcarnegie.se, at least three weeks before the meeting. Further, the Nomination Committee’s motivated statement will be available at the address stated above as well as at 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.

Stockholm, April 2017

D. Carnegie & Co AB (publ)

The board of directors

About D. Carnegie & Co

D. Carnegie & Co 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 SEK16,998 million on 31 December 2016. The total rental value amounted to SEK 1,379 million annually on 31 December 2016. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.