General Meeting of icelandic group hf.
Held on 23 March 2007 at 4 pm
Annual General Meeting of Icelandic Group hf. will be
held at Nordica Hotel, Suðurlandsbraut
on March 23rd 2007 and will start at 4:00 pm.
Presentation of the Board’s annual report for 2006.
Presentation of financial statements for 2006.
Decision on the profit or loss of the year 2006 shall be
Decision on fees payable to members of the Board.
Election of Board of Directors.
Election of auditors.
Motion for Remuneration Policy.
Motion for new Articles of Association of Icelandic Group
containing the following material changes:
Provisions in Article 4 regarding electronic participation
in shareholder’s meetings and electronic shareholder’s meetings.
Provision in Article 4.13 regarding the Remuneration
Policy added to the agenda of the Annual General Meeting.
Provision in Article 5 regarding information in the
notification of candidature.
Provision regarding the length of notification period in
Article 4.17 changed so that the minimum notification period is reduced from
two weeks to one.
Changes to the terms listed in Article 15 regarding the
company’s authorization to take on a loan with special conditions.
Otherwise, the new Articles of Association only
differ from the older ones regarding the structure of Articles and wording.
Shareholders or others who wish to stand for
election to the Board of Directors are reminded that they must submit written
notification to that effect to the Board, at least five days before the annual
addition to a candidate’s name, an identity number and address, information
about main occupation, other directorships, education, experience and holdings
of share capital in the company shall be stated in the notification of
candidature. Furthermore, all interest links with the principal business
parties and competitors of the company as well as with shareholders holding
over 10% shares in the Company shall be disclosed. Only those who have submitted such notice are eligible for election to
proposals must be submitted to the board at least seven days before the general
agenda, final submissions and financial statements will be available for inspection
by shareholders at Icelandic Group's headquarters seven days before the annual
meeting. The documents will also be posted for inspection at www.icelandic.is.
and other documents will be available at Nordica
Hotel, from 2.00 PM on the day of the Annual General Meeting.
Reykjavík, March 8th 2007
The Board of Directors,
Icelandic Group hf.
Proposals of the Board of Directors of
icelandic group hf. to the company’s Annual General Meeting on 23 March 2007
Proposal of the company's Board of Directors on the disposals of losses
for the preceding fiscal year
Board of Directors of Icelandic Group hf. proposes
that the Annual General Meeting, held on 23 March 2007, approve that no
dividends be paid and that the loss for thee preceding fiscal year shall be
allocated to decrease the Company’s equity.
Proposal on remuneration to the members of the Board of the Company for
the upcoming term
Annual General Meeting of Icelandic Group hf., held
on 23 March 2007, agrees that the remuneration of the Board of Directors in
2007 will not be altered and will be as follows:
Chairman of the Board ISK 200,000 per month, other Directors ISK 100,000
Directors ISK 30,000 per meeting they attend, though a maximum amount of ISK
100,000 per month.
Candidates for the Board of Directors
of candidature for the Board of Directors shall be submitted at least five days
before the Annual General Meeting. Information on candidates will be published
at least two days before the Annual General Meeting.
Proposal of the company's Board of Directors on auditing firm
proposed that KPMG hf., reg. no. 590975-0449, Borgartun 27, 105 Reykjavik,
be re-elected as the Company’s auditing firm for 2007.
Proposal on a Remuneration Policy
Remuneration Policy for Icelandic Group hf.
The object of this Remuneration
Policy is that an employment for Icelandic Group hf.
is desirable for first class personnel and thereby guaranteeing the company a
position among the best in the world. In order to do so it is necessary that
the Board of Directors of the Company is in a position to offer competitive
wages and other payments, such as bonuses and stock options at an international
- Remuneration Policy Committee
The Remuneration Committee shall
consist of three of the members of the Board of Directors of the Company
elected by the Board. The Committee shall work in accordance with a mandate
resolved by the Board.
The Committee shall be
advisory to the Board of Directors and the management regarding the terms of
employment for the ranking employees and regarding the Remuneration Policy. The
Board shall also supervise that the terms of employment for the ranking
employees are in line with the Employment Policy and report to the Board of
Directors annually thereof in connection with the annual general meeting of the
- Board of Directors – terms of employment
Board members shall receive a fixed
monthly payment in accordance with the decision of the annual general meeting
of the company, as stipulated in article 79 of the Act on Public Limited
Companies. The Board of Directors shall submit a proposal on the fee for the
upcoming operating year and shall take into account the time board members spend
on their duties, the responsibility involved and the Company’s operations in
Board members shall receive a fixed
fee for each meeting they attend in the Board’s subcommittees. The fee shall be
decided by the annual general meeting of the company.
– Chief Executive officer – terms of employment
A written employment contract shall
be made between the company and the Chief Executive Officer. His terms of
employment shall be competitive on an international standard.
The amount of the salary and other
payments to the CEO shall be decided on the basis of his education, experience
and previous occupation. Other terms of employment shall be specified in the
contract, along with pension payments, vacation rights, benefits and terms of
notice. An initial payment at recruitment is permitted.
When deciding on the terms of
notice special clauses adverting to the extension of the term of notice in
proportion with the CEO’s period of employment are
permitted. Furthermore, the contract shall specify the terms of notice.
salary shall be revised annually. At such revision the committee shall value
the performance of the CEO, wages in comparable companies and the progress and
operations of the company in general.
In general no additional retirement
or termination payments to those stipulated in the employment contract shall be
agreed upon in the case of termination. However special circumstances may lead
to a separate termination agreement is concluded with the CEO of which contents
may be retirement or termination payments.
- Managing directors – terms of employment
The CEO recruits the managing
directors of the company after consulting with the Board of Directors. The same
aspects as stipulated in article 4 shall apply when deciding on their terms of
- Acknowledgements to the management
The Remuneration Committee is
authorized to propose to the Board of Directors that the management should be
rewarded in addition to their set terms of employment in the form of delivery
of shares, performance based payments, stock options or any payment having to
do with company shares or the future value of such shares, loan contracts,
pension fund contributions, retirement or redundancy payments.
The status of the relevant member
of management or employee, responsibility and future prospects and the main
objectives of this Policy shall be taken into consideration when deciding
whether he should be granted rewards in addition to his set terms of employment.
A stock option shall in general only be exercisable by a person employed by the
company at the time of exercise.
- Other employees
The managing directors shall, when
applicable, take the above into consideration when deciding on the terms of
employment of other employees.
In the annual general meeting of
the shareholders the Board of Directors shall disclose to the shareholders the
terms of employment of the CEO, managing directors and board members of the Company.
The Board of Directors shall disclose the total amount paid in salaries in any
form in the previous financial year, payments from other companies within the
Group, and stock options and all other forms of payment pertaining to stock in
the company and retirement payments, if any.
- Approval of the Remuneration Policy and other matters
The Remuneration Policy shall be
presented to the shareholders in the annual general meeting for their approval.
The Remuneration Policy shall be subject to annual review.
The Remuneration Policy is binding
for the Board of Directors in regards to stock options and any payment under
which directors are remunerated in shares, share options or any other right to
acquire shares or to be remunerated on the basis of share price movements and
any substantial change in such schemes as per paragraph 2 Art. 79. a of the Act on Public Limited Companies. In all other
aspects the policy shall be viewed as guidelines. The Board of Directors shall
note in the minutes of its meeting any major deviation from the Remuneration
Policy and such deviation shall be well justified. The Board of Directors shall
inform the annual general meeting of such a deviation.
Exposition with the
Remuneration Policy for Icelandic Group hf.
Act no. 89/2006 added
Article 79 to the Act on Public Limited Companies. The article requires the
Board of Directors to set forth a Remuneration Policy prior to the general
meeting of the shareholders where it is put to a vote. The Remuneration Policy
shall stipulate the salary and other payments to the CEO and other ranking
employees as well as the Board of Directors. The Act also states that the
Remuneration Policy shall include all fundamentals on terms of employment of
ranking employees and Board members along with the company’s policy on contacts
with ranking employees and board members. It shall moreover include details on
if, how, under what circumstances and within what limits the management and
directors can receive additional awards in the form of delivery of shares,
performance based payments, stock options and any and all payment having to do
with company shares or the future value of such shares, loan contracts, pension
funds, retirement or redundancy payments.
The before mentioned
legislative change was made on the grounds of Commission Recommendation
2004/913/EC of 14 December 2004 fostering an appropriate regime for the
remuneration of directors of listed companies.
With this Remuneration Policy,
hereby submitted to the annual general meeting of the shareholders, the Board
of Directors of Icelandic Group hf. aims to set forth
a Remunerations Policy that will enable the company to attract leading managers
and thereby guaranteeing the company’s competitiveness on an international
basis and is in compliance with law and regulations.
Proposals on amendments to the Articles of Association
Proposals on amendments to the Company’s Articles of Association which are attached
hereto. The amendments mainly involve
rearrangements of articles and amendments to the wording of the current
Articles, but the amended Articles contain the following amendments to the
subject matter thereof:
electronic participation in shareholders’ meetings and electronic shareholders’
The amendments are to be found in
clauses 4.2-4.8 which read as follows:
“The right to attend Shareholders’ Meetings shall fall
to the Shareholders, Shareholders’ agents, the Company’s auditors, and the CEO
even though not a Shareholder. Furthermore, the Board of Directors can invite
experts to attend individual meetings if their opinion or assistance is
The Board of Directors shall be authorized to decide
that Shareholders may take part in the procedures at meetings in an electronic
manner without being physically present at the meeting place. Provided the
Board of Directors is of the opinion that there is available suitably secure
equipment to enable the Shareholders to take part in procedures at meetings
without attending meetings in person. In the event the Board of Directors
decides to exercise this authorization, this shall be specifically stated in
the announcement of the meeting.
Shareholders who intend to utilize such electronic
participation shall announce this to the Company’s office with five days’ notice
and present written questions about the agenda or files presented to which they
request replies at the meeting.
The Shareholders shall have access to instructions for
the participation in a Shareholders’ Meeting in an electronic manner, along
with a password and the necessary software for such participation. The keyed in
password in a computer program shall be equivalent to the signature of the
Shareholder in question and be deemed his confirmation of his participation in
the Shareholders’ Meeting.
The Board of Directors shall be authorized to decide
that a Shareholders’ Meeting be held exclusively in an electronic form.
In the event the Board of Directors decides that a
meeting should be held exclusively in an electronic manner using the
appropriate equipment, and thus to offer the Shareholders the opportunity to
participate in the procedures and voting of the meeting, the announcement of
the meeting shall include information on the technical equipment in question,
in addition to information on how Shareholders shall go about announcing their
participation, and where they can obtain information, instruction and a
password for the participation in the meeting. The keyed in password in a
computer program shall be equivalent to the signature of the Shareholder in
question and be deemed his confirmation of his participation in the
In the event the Board of Directors does not find it
possible to offer the Shareholders the opportunity to participate in a
shareholders’ meeting in an electronic manner, the Shareholders shall be given
the opportunity to cast their votes about proposals made, or take part in
elections, by letter.”
that proposals on a Remuneration Policy will be on the agenda of annual general
meetings, in addition to the current agenda.
It is proposed that a
new segment be added as item 4 and it reads as follows:
“The Board of
Directors’ proposal for a Remuneration Policy”.
the shortening of the notice period for shareholders’ meeting from a minimum of
two weeks to the minimum of one week.
Article 4.17 reads as
“Shareholders’ Meetings shall be announced at least one
week’s notice and at the latest at four weeks’ notice. It is desirable that the
Annual General Meeting be called at two week’s notice if the Board of Directors
deems this possible while it shall be authorized to announce the meeting at one
information to be in the notification of candidacy submitted by candidates for
election to the Board of Directors.
Article 5 on candidacy to
the Board of Directors reads as follows:
“Those who intend
to stand for election to the Board of Directors shall notify this to the Board
at least 5 days before the Shareholders’ meeting. The notification of the
candidacy for the election to the Board of Directors, in addition to the name
of the candidate, shall include his ID No., home address, information on his
primary occupation, other administration posts, education, experience and his
shareholdings in the Company. Furthermore, information shall also be provided
on any conflict of interest with the Bompany's main
business partners or competitors, as well as Shareholders holding more than a
10% share in the Company.
Board of Directors shall examine the notifications of candidatures and offer to
all the candidates, in a verifiable manner, the opportunity to amend any
drawbacks to their notifications within a specified time. In the
event no amendments has been made to a notification of
candidacy within the time limit, the Board of Directors shall decide on its
validity. It shall be possible to refer the conclusion of the Board of
Directors to a Shareholders’ Meeting which shall make the final decision on the
validity of a candidacy.
Information on the candidates for the election to the
Board of Directors shall be made available to the Shareholders at the Company’s
office not later than 2 days before the Shareholders’ Meeting.”
Involves the Company’s authority to take on credit on
The Board of Icelandic
Group hf. submits the following proposal to the
Company’s Annual General Meeting in relation to the Board’s authority to take
on a subordinated credit on specific conditions which entitles the creditor to
convert his claim into shares in the Company, in accordance with Section VI of
the Act on Public Limited Companies no. 2/1995.
This loan is
subordinated and shall give way to all other claims except claims for the
refund of equity.
The proposal also involves
the authorisation to increase the Company’s share capital by up to ISK
5,000,000,000 and that the Board will be authorised, in accordance with article
48 of the Act on Public Limited Companies, to amend Article 2 of the Company’s
Articles of Association in accordance with the capital increase resulting from
The Board’s proposal
reads as follows:
Plc.’s Annual General Meeting, held on 23rd March 2007, resolves, with
reference to Section VI of the Companies Act, specifically Art. 48, to grant to
the Company’s Board of Directors an authorization to take out a loan which
grants the creditor the right to convert his claim against the Company into
shares in the Company. The Company shall be authorized to sign loan documents in
the aggregate amount of up to ISK 5,000,000,000, or the equivalent amount in
euros, the loan period being up to 5 years. The debt shall be subject to REIBOR
annual interest, in addition to a 5% interest premium. However, the interest
shall be calculated in LIBOR, in addition to a 5% interest premium if the
amount of the loan is in euros. On the due date of the interest, one half of
the accrued and unpaid interest shall be paid, while the other half shall be
added to the principal and be settled on the day of final payment which shall
be 31st December 2011. In the calculation of the interest the basis shall be
the principal in addition to the interest which shall be added to the principal
as stated above.
be a subordinated loan, being subordinate to all other claims against the
borrower with the exception of the claim of the repayment of the share capital.
Upon bankruptcy, or the liquidation of the borrower, the loan shall be repaid
after all other general claims while before claims as to the repayment of share
During the period from
1st December 2011 to 31st December 2011 the lender shall be authorized to
change the principal of the debt, in addition to accrued interest, into shares
in Icelandic Group Plc. In the same manner the lender, on due dates of the
interest (for the first time on 31st December 2007), may change the entire loan
or part of it, however at least a minimum of 20% of the principal of the debt,
and accrued interest, into share capital.
The lender shall also be
authorized to convert the principal of the debt, in addition to interest, to
shares in Icelandic Group Plc. before certain arrangements by, or relating to,
the Company are effected, such as the raising or reduction of share capital,
further obligations under convertible loans, the issue of subscription rights,
the distribution of dividend and/or another type of distribution of the
Company’s funds to the Shareholders, take place. The lender shall be notified
of such proposed arrangements with reasonable notice so as to enable him to
exercise this right.
With reservation on the
recalculation of the conversion price as prescribed below, the conversion price
shall be ISK 7.30 per share.
In the event the lender
chooses to convert his claim into shares in Icelandic Group Plc.,
he shall notify the Company of this in writing. The Board of Directors of the
Company shall, as soon as possible, issue shares in the Company for the benefit
of the lender at no cost to him so as to satisfy the right of conversion.
In the event the claim is
converted into shares in Icelandic Group Plc., a full
settlement shall be deemed to have taken place when the borrower has issued new
shares in Icelandic Group Plc. in the name of the lender. The shares will be
issued in an electronic form in keeping with Art. 2.6 of the Company’s Articles
of Association, and the Company shall be considered to have satisfied its
obligations when the shares have been entered into the computer system of the
Icelandic Securities Depository in the ID No. of the lender.
be ensured in the credit terms that individual arrangements taken by, or
related to, the Company, such as the raising or reduction of its share capital,
further obligations in connection with convertible loans, the issue of
subscription rights, the distribution of dividend and/or any other type of
distribution of the Company’s funds to its Shareholders, does not affect the
value of the right of conversion. Thus, the conversion price shall be
recalculated and updated in such instances in such manner that it is changed
proportionately to the changes in the price and/or the value of the Company’s
shares due to such measures, all for the purpose of not reducing the value of
the right of conversion. The further implementation of such adjusted conversion
price shall be stated in the loan documents to be signed by the Company in
connection with individual lenders, the Company’s Board of Directors being
fully authorized to negotiate with the lenders on further terms of such
implementation. At the same time, the Board of Directors shall be authorised to
change the Company’s Articles of Association so that the final implementation
of the increment is clearly stated in the Company’s Articles of Association.
event the borrower's share capital is raised during the loan period, the lender
shall not have any priority rights with respect to new shares. The lender shall
in other respects not enjoy the right as a Shareholder in the Company until he
has exercised his right of conversion and the new shares have been recorded in
the computer system of the Icelandic Securities Depository in the ID No. of the
event the borrower is liquidated during the loan period, including by a merger
or a division, before the loan has been changed into shares, or has been paid,
care should be taken that the condition of the obligation according to the loan
will remain in such manner that the obligation is subordinated to the
borrower’s other debts (while on an equal footing with other subordinated loans
taken under this authorisation), and above the position of the Company’s share
respects than stated above, the decision on the reduction of the Company’s
share capital, the issue of convertible bonds, loans or subscription rights,
shall not affect the legal status of the lender prior to his claim being
converted into share capital.
Company’s Board of Directors shall be authoriSed to
raise the Company’s share capital by up to ISK 5,000,000,000 in nominal value
so as to satisfy the aforementioned obligation. The Shareholders waive their
priority rights to subscribe for shares issued under this authoriSation.
The new shares shall grant rights in the Company from the day of the recording
of the increase.
aforementioned authorisation for the Board of directors shall remain valid
until 23rd March 2008.”
If the proposal will be
approved it will be implemented into the Articles of Association as Article 15,
replacing Article 12.01 in the current Articles of Association.
Most of the proposals
for amendments to the Articles of Association are pursuant to Act on Public
Limited Companies no. 2/1995, cf. Act no. 89/2006. Subject
to the following, the amendments only involve rearrangements of articles and
amendments to the wording of the Articles of Association for clarification
The proposal on
amendments of Article 15 (now Article 12.01) entails that the Board of
Directors be authorised to take on credit in the Company’s name, where the
amount of which, including incurred interest, may be converted into shares in
the Company. The conversion price shall be ISK 7.30 per share, but the
conversion price shall, however, be subject to adjustments due to certain
arrangements by the Board and/or the Company, such as capital increase/
decrease, disbursement of dividends, etc. The objective is to insure that the
value of the conversion right is not diminished by such arrangements. Further
implementation of such adjustments to the conversion price, i.e. the methods
used for the re-calculation thereof, shall be determined in the terms of each
The proposal entails an
amendment to Article 12.01 of the current Articles of Association which was
approved at a shareholders’ meeting held on 16 January 2007. There are mainly
three amendments proposed. Firstly, the proposal entails that the Board of
Directors is authorised to take on the convertible credit, subject to further
terms, but Article 12.01 only prescribes that the Company is authorised to do
so. Secondly, the proposal entails that the conversion price be subject to
adjustment due to certain arrangements, as prescribed above. Finally, the
proposal entails that the Board is authorised to increase the share capital of
the Company by up to ISK 5,000,000,000 to fulfil the Company’s obligations
under the convertible loans, but this authorisation previously amounted to ISK
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