Front page General Meeting of Shareholders Extraordinary shareholders’ meeting 31.10.2008

Extraordinary shareholders’ meeting 31.10.2008

Extraordinary shareholders’ meeting 31.10.2008

Extraordinary General Meeting of the shareholders of AS Merko Ehitus, held on 31 October 2008 decided:

1. Election of additional members of the supervisory board

To elect, in addition to the current supervisory board members, as new members of the supervisory board of AS Merko Ehitus Indrek Neivelt and Olari Taal.

2. Remuneration of supervisory board members 

To remunerate the supervisory board members as follows:

The monthly remuneration to be paid to the chairman of the supervisory board is 55,000 EEK. The monthly remuneration to be paid to supervisory board members is 50,000 EEK. Subject to submission of relevant expense receipts, supervisory board members shall be compensated for reasonable costs and expenses incurred by them in the discharge of their duties, incl. transport, travel and training expenses and other expenses.

The new terms of remuneration of supervisory board members shall take effect as from the date following the date of adoption of the general meeting’s pertinent resolution.

3. Termination of current authorisation agreements signed with supervisory board members

To terminate the currently effective authorisation agreements signed with supervisory board members.

4. Appointment of a representative of AS Merko Ehitus for termination of authorisation agreements signed with supervisory board members 

To appoint the chairman of the management board, Tiit Roben, as the representative of AS Merko Ehitus for termination of the agreements referred to in clause 3 above.

5. Amendment of the Articles of Association

To amend the articles 25, 26 and 27 of the Articles of Association and to approve the new version of the Articles of Association of AS Merko Ehitus.

The amendments of the Articles of Association described in clause 5 shall take effect upon their registration in the commercial register.

6. Deciding on the conclusion of transactions with supervisory board members 

To give its consent to the election of supervisory board members to the group’s directorate and to the conclusion of authorisation agreements between supervisory board members and AS Merko Ehitus in case there should be a need to engage supervisory board members as members of the group’s directorate, on the following terms:

  1. The monthly remuneration to be paid to the chairman of the group’s directorate is 35,000 EEK. The monthly remuneration to be paid to members of the group’s directorate is 30,000 EEK. The amount of remuneration paid to members of the group’s directorate may be increased annually to the extent corresponding to the change in the consumer price index, but not less than 10 per cent. In addition, the chairman of the group’s directorate is entitled to a bonus of 0.4 per cent, and members of the group’s directorate to a bonus of 0.35 per cent, of the Company’s profit before income tax less the respective minority share. Bonus payments are made after approval of the annual report for the respective financial year by the general meeting of shareholders. A maximum of 75 per cent of the bonus can be paid to the members of the group’s directorate in advance.
  2. A member of the group’s directorate shall not compete with the Company within one year after termination of his or her activities as a member of the group’s directorate. If a member of the group’s directorate resigns on his or her own initiative, or if a member is removed before the expiry of his or her term of office, or if the term of office of a member expires and a new authorisation or employment contract is not signed with the member, the member will be paid compensation in the amount of the average annual income of a member of the group’s directorate. If, during the effective term of the non-competition obligation, a member of the group’s directorate has received the written consent of the supervisory board of the Company to engage in an activity that can be regarded as competing with the activities of the Company, the unpaid portions of compensation will not be paid. A member of the group’s directorate is not entitled to receive compensation if the member has been removed from the group’s directorate with good reason due to his or her violation of law, the articles of association or conditions of service, or failure to perform his or her duties.
  3. Members of the group’s directorate shall be granted the following benefits: a) use of a company car both for the discharge of their duties and outside of working hours; b) use of a mobile phone both for the discharge of their duties and outside of working hours; c) signing of a life insurance contract at the cost of the Company, with the Company being the beneficiary.
  4. Subject to submission of relevant expense receipts, members of the group’s directorate shall be compensated for reasonable costs and expenses incurred by them in the discharge of their duties, incl. transport, travel and training expenses.

7. Appointment of a representative of AS Merko Ehitus for conclusion of transactions between supervisory board members and AS Merko Ehitus 

To appoint the chairman of the management board, Tiit Roben, as the representative of AS Merko Ehitus for signing of the agreements referred to in clause 6 above.

The management board of AS MERKO EHITUS (registry code 11520257) hereby calls a special general meeting of shareholders of AS MERKO EHITUS, having its seat at Järvevana tee 9G, Tallinn, 11314. The general meeting will be held on Friday 31 October 2008 at 2.30 p.m. in the Vega conference hall of the Nordic Hotel Forum (Viru väljak 3, Tallinn).

The set of shareholders entitled to take part in the general meeting will be determined as at 11.59 p.m. on 21 October 2008. Registration for the general meeting will start at 2 p.m. on 31 October 2008.

The special general meeting is called on the initiative of the supervisory board. The reason for calling the general meeting is the need to streamline the management structure of AS MERKO EHITUS.

Agenda of the extraordinary meeting and proposals of the supervisory board of AS Merko Ehitus regarding the agenda items:

  1. Election of additional members of the supervisory board
    The supervisory board proposes that, in addition to the current supervisory board members, Indrek Neivelt and Olari Taal be elected as new members of the supervisory board of AS MERKO EHITUS. The term of authority of the new supervisory board members will commence as from the adoption of a respective resolution of the general meeting.
  2. Remuneration of supervisory board members
    The supervisory board proposes that the supervisory board members be remunerated as follows:
    The monthly remuneration to be paid to the chairman of the supervisory board is 55,000 EEK. The monthly remuneration to be paid to supervisory board members is 50,000 EEK. Subject to submission of relevant expense receipts, supervisory board members shall be compensated for reasonable costs and expenses incurred by them in the discharge of their duties, incl. transport, travel and training expenses and other expenses.
    The new terms of remuneration of supervisory board members shall take effect as from the date following the date of adoption of the general meeting’s pertinent resolution.
    The reason for introducing the new system of remuneration is changing the remuneration system of supervisory board members so that the members will be paid a fixed amount of remuneration each month, simplifying the current system.
  3. Termination of current authorisation agreements signed with supervisory board members
    The supervisory board proposes that the currently effective authorisation agreements signed with supervisory board members be terminated. This resolution is necessitated by the introduction of the new rate of remuneration of supervisory board members.
  4. Appointment of a representative of AS MERKO EHITUS for termination of authorisation agreements signed with supervisory board members
    The supervisory board proposes that the chairman of the management board, Tiit Roben, be appointed as the representative of AS MERKO EHITUS for termination of the agreements referred to in clause 3 above.
  5. Amendment of the articles of association
    The supervisory board proposes that:
    5.1. Article 25 be changed and formulated as follows: “The supervisory board shall plan the activities of the Company, organise the management of the Company and supervise the activities of the management board. The supervisory board shall notify the general meeting of the results of a review. The supervisory board is among other things competent to: 25.1 approve the strategy of the Company; 25.2 approve the Company’s 3-year development plan; 25.3 approve the Company’s annual budget; 25.4 approve the Company’s management structure; 25.5 review the results of the Company’s performance; 25.6 review and evaluate the annual report of the Company; 25.7 decide on the conclusion of transactions and conduct of legal disputes between the Company and its management board members, as well as appoint the Company’s representative in such transactions and disputes.”
    5.2. Article 26 be changed and formulated as follows: “The supervisory board shall give orders to the management board for organisation of the management of the Company. Consent of the supervisory board is required by the management board for conclusion of transactions which fall beyond ordinary course of the Company’s business. Consent of the supervisory board is required by the management board for conclusion of transactions, which bring about: 26.1 making of investments into new lines of business and making of investments which exceed the sums earmarked for investments in the annual budget; or 26.2 setting or winding up of a business abroad, including foundation or acquisition of companies, branches or permanent business establishments abroad or dissolution, closure or transfer thereof; or 26.3. setting or winding up of a subsidiary with a share capital of over 500,000 euros; or 26.4. acquisition or divestment of minority holdings in companies, which do not directly support the principal activity of the Company; or 26.5 granting of loans to third parties or securing of an obligation of a third party, except if the transaction entails granting of a loan to a subsidiary or associated company or securing of an obligation of a subsidiary or associated company. The provisions of the Commercial Code §317 (1) 1)-7) will not be additionally applied in definition of the transactions beyond ordinary course of business.” The above amendment is necessary for changing the responsibilities of the supervisory board such that it would be a body primarily responsible for strategic management. The approval, or withholding of approval, of major transactions performed in ordinary course of business would be the responsibility of the group’s directorate to be set up by the supervisory board (see the next proposal for amendment of the articles of association).
    5.3. Article 27 be changed and formulated as follows: “The supervisory board may set up a group’s directorate, which stands independent of the supervisory board. The principal function of the group’s directorate shall be developing positions regarding the Group’s strategy and business as well as granting or denial of authorisations to the management board for conclusion of transactions defined by the supervisory board. The transactions defined by the supervisory board as transactions subject to authorisation by the group’s directorate are not regarded as transactions beyond ordinary course of business, for the conclusion of which the management board requires prior consent of the supervisory board. The formation and competence of the group’s directorate, election of the members of the group’s directorate as well as work organisation and other issues related to the group’s directorate shall be stipulated in the rules of the group’s directorate enacted by a resolution of the supervisory board. The supervisory board shall exercise supervision over the activities of the group’s directorate.”
    This amendment is necessary for enhancing supervision over the conclusion of transactions with the assets of the Company by the management board, since, pursuant to the proposal for amendment of the articles of association set forth in clause 5.2 above, the management board would not need the consent of the supervisory board for the conclusion of certain transactions anymore.
    The amendments of the articles of association described in clause 5 shall take effect upon their registration in the commercial register.
  6. Deciding on the conclusion of transactions with supervisory board members
    The supervisory board proposes that consent be given to the election of supervisory board members to the group’s directorate referred to in clause 5.3 above and to the conclusion of authorisation agreements between supervisory board members and AS MERKO EHITUS in case there should be a need to engage supervisory board members as members of the group’s directorate.
    Information on the terms of remuneration contained in the authorisation agreements is available on the website of AS MERKO EHITUS.
  7. Appointment of a representative of AS MERKO EHITUS for conclusion of transactions between supervisory board members and AS MERKO EHITUS
    The supervisory board proposes that the chairman of the management board, Tiit Roben, be appointed as the representative of AS MERKO EHITUS for signing of the agreements referred to in clause 6 above.

On registration, shareholders as legal entities are requested to submit an extract from a relevant (commercial) register, with whom the legal entity has been registered (Estonian legal entities are requested to submit a copy of the registry card B, which may not be older than 15 days), which sets out a person’s right to represent the shareholder (at law) along with the person’s identification document; other representatives shall submit proper authorisation letters (granted by transaction) along with an extract from a relevant (commercial) register and an identification document of the representative. Shareholders as natural persons are requested to submit a passport or identity card; their representatives are requested to submit additionally proper authorisation letters.

The documents of a foreign legal entity (except authorisation letter) shall be legalised or apostilled by the Ministry of Foreign Affairs or a foreign mission of the Republic of Estonia.

The draft articles of association, information regarding the proposed new members of the supervisory board, and the terms of remuneration contained in the authorisation agreements will be available for examination from 23 October 2008 at http://www.merko.ee/. The aforementioned documents will be available for examination from 23 October 2008 at the seat of AS MERKO EHITUS situated at Järvevana tee 9G, Tallinn, on workdays from 8 a.m. to 5 p.m.

Questions concerning the items on the agenda can be asked by an email to merko[A]merko.ee. The questions and answers will be posted on the website of AS MERKO EHITUS.