|
AS Tallink Grupp, Stock Exchange Release
22.12.2006
ADDITIONAL INFORMATION TO THE GENERAL MEETING
An Explanatory Letter to the points of agenda of the General Meeting
Increase of the share capital by bonus issue and the amendment of the Articles of Association of AS Tallink Grupp:
To support the expansion of AS Tallink Grupp and new investments, the share capital was increased by additional contributions several times during the financial year 2005/2006. As a result the company's balance sheet reflects considerably large amount of share premium. In order to have the shareholders' equity to reflect the shareholders' investments adequately, it has been proposed to the general meeting to increase the share capital on the account of share premium and the retained profits. In addition to better reflect the equity structure, the larger share capital creates a stronger basis to achieve the future objectives as well as to increase trust between business partners, banks and the company.
According to the balance sheet as of 31.08.2006, it is possible to increase the share capital on the account of share premium and the retained profits without additional monetary contributions i.e by bonus issue.
In order to conduct a bonus issue it is necessary to amend the section in the Articles of Association of AS Tallink Grupp providing the minimum- and maximum amount of the share capital. The requirement is provided in § 341 section 3 of the Commercial Code according to which the amendment of the Articles of Association must be resolved before the increase of the share capital is resolved. According to the current Articles of Association the minimum capital is 1 365 000 000 EEK and the maximum capital is 5 460 000 000 EEK. In order to conduct the mentioned bonus issue for the increase of the share capital up to 6 738 170 400 EEK it is necessary to increase the minimum- and maximum amount of the share capital. According to the proposal of the Supervisory Board the new minimum capital would be 5 000 000 000 EEK and the maximum amount would be 20 000 000 000 EEK.
At the bonus issue the proportion of shares of each shareholder who is entered into the list of shareholders as of 31.01.2007 shall increase equally to the nominal values of his/her shares in the share capital given that one share grants the right to gain three new shares. Also, according to the proposal, it shall be resolved by the General Meeting that the shares issued by the bonus issue shall be entitled to dividends from the financial year starting from the 1st of September 2006.
No special subscription application shall be presented nor any other procedure must be fulfilled by the shareholders in order to participate in the increase of the share capital by bonus issue. The entries for the three new shares for one existing share shall be done automatically in the Central Register of Securities based upon the application of AS Tallink Grupp.
Share options:
AS Tallink Grupp has grown considerably during the past financial year due to the acquisition of the Superfast vessels and Silja Oy Ab. As a result new employees have joined the group in which Tallink is a new working environment where they should be well motivated in assisting the company achieve future success. To ensure motivation, it is proposed to tie key employees with the performance of the share price which should reflect the result of the activities of the company.
The Supervisory Board of AS Tallink Grupp proposes to authorize the Supervisory Board to issue share options to a maximum of 90 persons upon the following conditions in order to motivate the key employees of AS Tallink Grupp and its subsidiaries:
The Supervisory Board of AS Tallink Grupp is entitled to issue up to 4 000 000 (four million) share options whereas each share option grants its owner the right to buy 1 (one) share of AS Tallink Grupp. The persons to be granted the option and the amount of the shares to be sold to them shall be determined by the Supervisory Board of AS Tallink Grupp from amongst the group's key employees. Employees under contract as well as the members of the Management Board shall be considered the key employees. No options shall be granted to the Supervisory Board of AS Tallink Grupp. The transfer of granted options is not permitted.
For the fulfillment of the conditions of the share options 4 000 000 (four million) AS Tallink Grupp shares shall be issued or purchased. The Supervisory Board shall decide if the fulfillment of the conditions of a share option is conducted by issue of new shares or with own shares purchased from the secondary market.
Maximum 260 000 shares may be granted through options to one person.
The options granted may be used during 17th of January 2008 until 17th of April 2008 based on the corresponding application from the owner of an option.
A person whose contractual relationship is ended with AS Tallink Grupp or its group of companies before the right of option is granted shall lose the rights of option unless the Supervisory Board of AS Tallink Grupp decides otherwise. The Supervisory Board of AS Tallink Grupp is entitled to determine further terms for the termination of the usage of the share option.
The exercise price of a share option shall be fixed as follows:
a) In case new shares are issued for the compliance with the conditions of a share option, then the price fixed for the option shall not be less than an average weighted price on the market on a day preceding the day when the conditions for the share option were determined. In case no transactions were made with the shares of AS Tallink Grupp at that specific day then the exercise price for the share option shall be the weighted average of the day when the transactions were last made.
b) In case no new shares are issued for the compliance with the conditions of a share option, then the fixed exercise price may not be lower than the average weighted price of the purchased shares.
In case the Tallinn Stock Exchange authorises, then the Supervisory Board may change the exercise price for a share option.
In case new shares will be issued for the compliance with the conditions of the share option, then these shares shall be entitled to dividends for the financial year beginning on 1 September 2007, if the distribution of dividends will be decided.
The Supervisory Board of AS Tallink Grupp proposes to exclude the shareholders from exercising the pre-emptive subscription right to subscribe for the shares issued in order to fulfill the conditions of the share option.
The right of the Supervisory Board to increase the share capital:
According to the Commercial Code § 349 the Supervisory Board may be granted the right to increase the share capital, if provided within the Articles of Association, up to 3 years to increase the share capital by monetary contributions whereas the Supervisory Board may not increase the share capital by more than half of the share capital at the time when this right is granted to the Supervisory Board. According to the amendment to the Articles of Association the Supervisory Board of AS Tallink Grupp shall have the competence in two year's time beginning from 01.03.2007 to increase the share capital by 400 000 000 EEK i.e by 40 000 000 shares. This right gives the company a flexible oportunity to involve further capital in the future in order to support the future development of the company. At the same time it is possible to fulfill the conditions of the share option using this right to increase the share capital
Acquisition of own shares (share buy-back)
For the optimization of the company's working capital and free cash flows, it is proposed to grant the company the right to acquire the shares of AS Tallink Grupp in one year time beginning from the corresponding authorization. The total nominal values of the share purchased by the company shall not exceed 5 % of the share capital and the price payable for one share shall not be more than the highest price on the Tallinn Stock Exchange for the share of AS Tallink Grupp on the day when the share is aquired. Own shares shall be paid for from the assets that exceed the share capital, reserve capital and issue premium. Own shares may be held for a maximum of one year after their purchase.
Supervisory Board report of AS Tallink Grupp concerning the Annual Report of 01.09.2005 - 31.08.2006
During the past financial year the Supervisory Board of AS Tallink Grupp adopted the resolutions at its meetings and written resolutions in all together 20 times. The most important resolutions were the following: - in accordance with resolution of General Meeting of Shareholders to increase the share capital by issuing the new shares, the Supervisory Board determined the issue premium upon the issue of new shares at 72 kroons and 50 cents per share;
- the resolution of Management Board in regards to entering into Shipbuilding Agreement with Aker Finnyards to build a new vessel with delivery date in the first half of year 2008 was approved;
- the sale of m/s Tallink Autoexpress was approved;
- the purchase of three fast ferries Superfast VII, Superfast VIII, Superfast IX and related miscellaneous
assets was approved;
- Silja Oy Ab 100% share purchase transaction was approved. In order to facilitate the finalization of the abovementioned transaction and for the fulfillment of the payment obligation stipulated in the share purchase transaction the proposal to the General Meeting was made to amend the Articles of Association and increase the share capital;
- due to the expiration of the term the member of the Management Board, Mr Enn Pant was elected and nominated as the chairman of the Management Board;
- for the fulfillment of the terms stipulated at the Silja Oy Ab share acquisition transaction the proposal was made to the General Meeting to amend the Articles of Association and to increase the share capital;
- the members of the Management Board Mr Antti Pankakoski and Mr Lembit Kitter were elected; The Supervisory Board has regularly reviewed the overviews of the economic activities and financial results of the public limited company.
The Supervisory Board of AS Tallink Grupp reviewed the Annual Report of 01.09.2005 - 31.08.2006 and the profit distribution proposal of accounting year at its meeting of 18th of December 2006. The Supervisory Board approves the Annual Report of 01.09.2005 - 31.08.2006 and profits distribution proposal prepared by Management Board. The Supervisory Board also approves the activities of the Management Board during the period under review.
Toivo Ninnas
Chairman of the Supervisory Board
AS Tallink Grupp
Information concerning the candidate of the member of the Supervisory Board
KALEV JÄRVELILL (born 1965) graduated from the Faculty of Economics, University of Tartu, Estonia, in 1993. He was the Vice Chancellor of the Ministry of Finance of Estonia from 1994 to 1995 and the General Director of Estonian Tax Board from 1995 to 1998.
Kalev Järvelill was elected as a member of the management board of AS Tallink Grupp in 1998.
Mr Järvelill is also a member of the supervisory boards of AS Infortar, AS HTG Invest, AS Hansatee Cargo, AS Tallink Baltic, AS Tallink Scandinavian, AS V.S & I, Silja Line Eesti AS, OÜ Linandell, OÜ Vara HTG, OÜ HT Hulgi Tolliladu, OÜ TLG Hotell, OÜ TLG Meedia and a member of the management board of AS Tallink.
Kalev Järvelill owns directly and indirectly a total of 10,02% of the shares of AS Tallink Grupp
Specification of auditors
The leading auditor Andres Root is the chairman of the supervisory board and a partner of Auditors Company KPMG Baltics AS. He is a sworn auditor since 1990. Andres Root is a member of the Professional Commission of Authorized Public Auditors. He has acted as a counsel to the key clients of KPMG in the fields of the international financial reporting standards, legislation on accountancy and the Estonian tax legislation and taxation. Andres Root does not own any shares of AS Tallink Grupp.
The executive auditor Eero Kaup is a sworn auditor since 1998. His main competency lays with the international accountancy standards (IFRS), US GAAP, consolidated financial reports and the assessment of companies. During the years 2001- 2002 Eero Kaup worked with KPMG in USA enabling him to participate in audits of the world's leading companies. Eero Kaup does not own any shares of AS Tallink Grupp.
The Estonian kroon (EEK) is fixed against the euro at 1 EUR = 15.6466 EEK
The project with the amendments to the Articles Of Association is available at the company's website www.talllink.com
For additional information please contact:
Janek Stalmeister
Financial Director
AS Tallink Grupp
Tartu mnt. 13,
10145 Tallinn, Estonia
Tel. +372 6409 800
Fax. +372 6409 810 |