AF Gruppen — AGM Information 2014

Apr 24, 2014

Notice of Annual General Meeting 2014

The Annual General Meeting of AF Gruppen ASA will be held on Thursday 15 May 2014 at 10.00 in the company's offices at Innspurten 15, Oslo.

Agenda

Item		Enclosure no.:
1.	Opening of meeting by Board Chairman Tore Thorstensen, and registration of shareholders attending. In accordance with Article 6 of the Articles of Association, the chairman of the board also chairs the meeting.
2.	Election of at least one person to countersign the minutes.
3.	Approval of the notice and the proposed agenda.
4.	Briefing on operations.
5.	Briefing on the work of the Board, work of the Audit Committee and work of the Compensation Committee.	1 and 2
6.	Review of the Board of Directors' statement on the determination of fixed pay and other remuneration for senior employees, cf. section 6- 16a of the Public Limited Liability Companies Act.	3
7.	Adoption of the annual accounts and annual report for 2013, including the consolidated accounts and distribution of dividends, and discussion of the statement on corporate governance.
8.	Approval of auditor's fees.
9.	Determination of Directors' fees for the 2013 financial year.	4
10.	Election of the Board and the Nominating Committee.	4
11.	Determination of the Nominating Committee's fees for the 2013 financial year.
12.	Authority to the Board to purchase treasury shares.
13.	Authority to carry out private placing to employees.
14.	Amendment to articles of association
15.	Option programme

* * * * *

AF Gruppen ASA has a share capital of NOK 4,404,432.95 made up of 88,088,659 shares, each with a face value of NOK 0.05. Each share gives the right to one vote at the Company's General Meetings. As at the date of this notice, AF Gruppen owns no treasury shares.

The shareholders have the following rights in connection with general meetings:

• Right to attend general meetings, either in person or by proxy.
• Right to express themselves at general meetings and right to bring one adviser and give them the right to express themselves.
• Right to demand details from board members and the CEO on matters that can have a bearing on the assessment of (i) the approval of the annual accounts and annual report, (ii) issues that are submitted to the shareholders for a decision and (iii) the company's financial position, including on the activity in other companies in which the company participates, and other issues to be dealt with by the General Meeting, unless the details that are demanded would cause disproportionate damage to the company.
• Right to propose alternatives to the Board's proposals for the issues to be dealt with by the General Meeting.

The shares are listed ex dividend on 16 May 2014. The dividend will be paid on 28 May 2014.

If you wish to appoint a proxy to represent you at the Annual General Meeting, please use the attached proxy form. Appointing a proxy must be done in writing.

Registration for the Annual General Meeting must be in the company's hands no later than Tuesday 13 May 2014. Shareholders who have not registered by this deadline may be refused entry to the Annual General Meeting. Please use the registration slip you have been sent or notify us by telephone by calling 22 89 11 00 if you wish to attend the General Meeting.

This notice of meeting and enclosures and 2013 Annual Report are available on the company's website: www.afgruppen.com.

In accordance with Article 6 of the Articles of Association, the appendices to the notice of meeting are not sent by post to the shareholders. Shareholders who wish to receive a copy of the 2013 Annual Report may contact the company c/o Lars Chr. Paulsen, tel. +47 900 25 969 or lars.paulsen@afgruppen.no

Oslo, 24 April 2014 AF Gruppen ASA

Tore Thorstensen Board Chairman

Appendices: Registration slip Proxy form Report from the Audit Committee Report from the Compensation Committee Board of Directors' statement on the determination of fixed pay and other remuneration to senior executives Report from the Nominating Committee

Details of Items 7, 8, 9,11, 12, 13, 14 and 15 on the agenda:

Item 7. Adoption of annual accounts and annual report for 2013, including the consolidated accounts and the distribution of dividends

The Board proposes that the Annual General Meeting adopt the annual accounts and annual report.

It is proposed that a divided of NOK 6.00 per share be paid, whereof an ordinary dividend of NOK 2.60 per share and an extraordinary dividend of NOK 3.40 per share. Of the NOK 6.00 dividend, NOK 4.70 will be distributed as repaid capital.

A dividend will not be paid for treasury shares.

Item 8. Approval of auditor's fees.

The Board proposes payment of the auditor's fees as invoiced.

Item 9. Determination of the Directors' fees for the 2013 financial year

The Nominating Committee proposes the following fees:

Chairman of the Board		NOK 380,000
Other board members		NOK 190,000
Committee Chairman
Compensation Committee	NOK	55,000
Audit Committee	NOK	65,000
Committee members
Compensation Committee	NOK	40,000
Audit Committee	NOK	45,000

Item 11. Determination of the Nominating Committee's fees for the 2013 financial year

The Board proposes the following annual fee for the Nomination Committee:

Chairman	NOK 35,000
Members	NOK 31,500

Item 12 Authority to the Board to purchase treasury shares

At the Annual General Meeting held on 15 May 2013, the Board was authorised to purchase treasury shares up until the Annual General Meeting in 2014, although not after 30 June 2014. The Board proposes that this authority be renewed until the Annual General Meeting in 2015, although not after 30 June 2015.

The Board Proposes that the Annual General Meeting authorise the Board to purchase treasury shares within the limitations allowed by the Public Limited Liability Companies Act. The purpose of this authority is to give the Company an opportunity to purchase shares in situations where this would be in the Company's interest.

It is proposed that the Annual General Meeting adopt the following resolution:

"The Board is authorised to acquire the Company's own shares, including the establishment of charges created by agreement.

The highest nominal value of the shares the company may acquire is NOK 440,443, although at all times within the limitations set in section 9-2 of the Public Limited Liability Companies Act. The smallest amount that may be paid for a share is NOK 0.05. The highest amount that may be paid for a share is NOK 150.

When buying and selling treasury shares the company should seek to achieve the most favourable price possible. The Board is free with respect of the methods used to acquire and dispose of treasury shares, though always with the provision that the general principle of equal treatment of shareholders must be observed. For the sale of shares to employees and officers, shares may be sold at a discount of up to 20% under the prevailing market price. Acquisition and disposal of treasury shares may thus occur, for example, with settlement in cash, with settlement by means other than cash or as settlement in connection with a merger or demerger.

The company's share capital is NOK 4,404,432.95 made up of 88,088,659, shares, each with a face value of NOK 0.05. If the share capital or face value of the shares is changed, the amounts specified in the second to fourth sentences shall be changed correspondingly.

This authority to the Board replaces the former authority dated 15 May 2013 and will apply until the date of the Annual General Meeting in 2015, although not after 30 June 2015."

Item 13. Authority to carry out private placing to employees

In the last few years all of AF Gruppen's employees have been given an opportunity to buy shares at a 20% discount in relation to the average share price during the subscription period. It is desirable that similar opportunities are provided in 2014.

As of today's date, the Company owns no treasury shares. In order to obtain a sufficient number of shares to enable this sale of shares to employees, it may be necessary to issue new shares. Therefore, the Board asks the Annual General Meeting to authorise it to issue a limited number of shares for employees so that employees may buy shares in the Company in 2014.

The Board proposes that the Annual General Meeting adopt the following resolution, cf. the Public Limited Companies Act, Sections 10-14 to 10-19:

The Board is authorised to increase the share capital by issuing new shares.

The share capital may be increased by a total of up to NOK 50,000 through the issuing of up to 1,000,000 shares, each with a face value of NOK 0.05. The authority can be exercised through one or more issues. The statement of the share capital and number of shares in Article 4 of the Articles of Association shall be changed correspondingly.

The authority may only be used to issue shares in connection with the company's share programme and incentive programme for employees in the Group.

The Board may decide to deviate from the shareholders' pre-emptive right to subscribe for shares under section 10-4 of the Public Limited Companies Act.

The authorisation is valid until the date of the Annual General Meeting in 2015, but not later than 30 June 2015.

Item 14 Amendment of Articles of Association

The Board will propose to the Annual General Meeting to amend Section 2 of the Articles of Association from

Section 2 Objects

The company's objects include all types of business operations, including participation in other undertakings.

to

Section 2 The Company's business operations

The Company's business operations shall be contracting and industrial operations and everything in connection with this. This also includes participation in other undertakings.

Item 15 Option programme

At the Annual General Meeting in May 2011, a three year option programme for employees of AF Gruppen was adopted, with the distribution of a maximum of 6,000,000 options in the years 2011-2014.

In March 2014, 5,755,679 options were redeemed by 1,240 employees. The option scheme has been very well received by all groups of employees. It has been particularly positive that the scheme covered all employees. On redemption, a number chose to sell shares, while 612 employees kept 2,989,499 shares, corresponding to a share value of NOK 125 million.

As one of several tools for achieving AF Gruppen's future objectives, the Board is of the opinion that the previous option schemes have been successful. The Board therefore believes it will be appropriate to continue the option scheme for employees. From experience, such a scheme will motivate to increased efforts, ensure stability as well as ensuring that the group remains an attractive employer for the employees.

The Board therefore proposes that a new option program is implemented for all employees of AF Gruppen. It is proposed that the maximum number of shares that can be distributed over the three year period is 4,500,000.

• Each option entitles the holder to acquire a share in AF Gruppen ASA.
• The option scheme will cover all employees.
• The Board is authorised to distribute the options between the different employee groups.
• It is proposed to introduce the incentive scheme in 2014 with allotments up to 2016.
• It shall be a condition of exercising awarded options that the option holder is still employed in the group on 1 March 2017.
• The options shall not be transferable.
• It is proposed that the employee shall pay NOK 1.- per option.
• The price of exercising the option shall be determined by the board in accordance with the share's market value.
• In the event of oversubscription, distribution will be curtailed in proportion.
• There shall be adjustments for dividends that exceed 50% of net earnings per share.

For other conditions, refer to the proposal for adoption below.

Redemption of options will lead to employer's national insurance contributions for the Company to the extent that the shares' market value on redemption exceed the redemption price plus option premium.

The total accounting cost of the option programme is estimated at NOK 32.5 million divided over the option period 2014-2017, based on Merton's option price model (excluding employer's national insurance contributions) and a market price of NOK 73.

The maximum number of options may constitute 5.1 % of the total number of shares as at 1 April 2014. Any dilution of existing shares will depend on the market price at the date of the option.

The Board proposes that the General Meeting adopts the following resolution:

An option scheme shall be established for all employees of AF Gruppen. The maximum number of options that can be granted is 4,500,000. Each option entitles the holder to acquire a share in AF Gruppen ASA. The option scheme entails an annual allotment of options for 2014, 2015 and 2016, with the allotting starting in 2014. The Board is authorised to distribute the options between the different employee groups.

The employee must pay NOK 1.- per option to acquire options. The exercise price is determined as the share's market value.

Exercise of options shall occur in the course of the first quarter of 2017 as decided by the Board. It is a condition of exercising options that the holder is still employed by the group on 01 March 2017.

The Board is given authority to prepare the detailed guidelines for the scheme within the framework that has been given.

The General Meeting will ensure that the Board has the necessary authority at all times to issue new shares and/or acquire treasury shares, so that the Company's obligations to the employees in accordance with the option scheme can be fulfilled.

Registration

for

General Meeting of AF Gruppen ASA on 15 May 2014

The undersigned, the holder of .........…………..... shares in AF Gruppen ASA, will attend the company's General Meeting on 15 May 2014 at 10:00 p.m.

Place......................................., date ...... /........2014

.......................................................

Signature

..................................................... Name in capital letters

Authorization to the Annual General Meeting of AF Gruppen ASA

The undersigned, the holder of …………………………. shares in AF Gruppen ASA, hereby authorizes

............................................................ to attend and vote for my shares in (block letters)

AF Gruppen ASA at the Annual General Meeting on 15 May 2014.

Check the relevant item if voting against the proposed resolution:

Item 3	Approval of the notice and the proposed agenda	Vote against
Item 7	Adoption of annual accounts and annual report	Vote against
	Item 9 Determination of the Director's fees	Vote against
	Item 10 Election of the Board and the Nomination Committee	Vote against
	Item 11 Determination of the Nomination Committee's fees	Vote against
	Item 12 Authority to the Board to purchase treasury shares	Vote against
	Item 13 Authority to carry out private placing to employees	Vote against
	Item 14 Amendments to articles of association	Vote against
	Item 15 Option programme	Vote against

Comments:

…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
place, date /2014
Signature
Name in block letters

Attachment 1

Report from the Audit Committee 2013/2014

The Company's Audit Committee is made up of three shareholder-elected board members.

Carl Henrik Eriksen (Chairman) Mari Broman Hege Bømark

Company CFO Sverre Hærem participates at all Committee meetings. The Company's auditor, Asbjørn Ler, participated at 5 meetings.

The purpose of the Audit Committee is to assist the Group Board with management and performance of the Board's supervisory responsibility pursuant to Sections 6-12 and 6-13 of the Public Limited Liability Companies Act. The Audit Committee's mandate is adopted by the Group Board and described in the "Mandate for the Group Board's Audit Committee".

The following tasks are included in the Audit Committee's mandate:

• Assess the Group's financial and account reporting
• Evaluate the auditing, nominate an auditor for election and explain the auditor's fees broken down by auditing and other services to the Annual General Meeting.
• Assess the Company's internal controls,
  • including:
  • o the Group's management of risk
  • o the Group's internal control functions and authority matrix
  • o the Group's cash management
  • o the Group's ability to perform assessments, improve, execute and follow up investment decisions
  • o organisational matters related to financial reporting and control in the Group

The Audit Committee has held six meetings since the last Annual General Meeting. The Audit Committee has reviewed the following matters:

• Account reporting:
• o Plan the annual report
• o Preliminary results for 2013
• o Annual accounts for 2013
• o Impairment test of intangible assets
• o Evaluation and weighting of annual report
• o Bill from the Ministry of Finance on limited deductions for interest costs and implications for corporate account solutions at AF
• Audit
• o Interim audit including:
  • Project understanding
  • Accounting management
  • Risk management
• o Review of audit for 2013
• o Assessment of auditor's fees
• o Assessment of auditor's independence
• Internal control
• o Review of new version of web-based project management system
• o Risk management in AF Gruppen with experience from past 6 years
• o Corporate actions;
  • Barriers for critical operations
  • Customer and supplier orientation

The Audit Committee has provided its recommendation for the issues it has dealt with for final resolution by the Board.

Oslo, 27/03/2014 Carl Henrik Eriksen

Report from the Compensation Committee 2013/2014

The Company's Compensation Committee (CC) is made up of two shareholder-elected board members:

• Peter Groth (Chairman)
• Tore Thorstensen

The Company's CEO, Pål Egil Rønn, participates in the meetings.

The purpose of the Compensation Committee is to be a preparatory body for the Board in matters that concern the evaluation of the fixed pay and other remuneration determined for the CEO, in addition to being an advisor to the CEO in connection with determining the terms for members of the Corporate Management Team.

The Compensation Committee's mandate is adopted by the Group Board and described in the "Mandate for the Compensation Committee".

The Committee's work consists of questions related to fixed pay, bonuses, options, severance pay, early retirement and retirement pensions,

The following tasks are included in the Compensation Committee's mandate:

• Evaluate whether the remuneration of the CEO and the rest of the Corporate Management Team is appropriate and adapted to the operations.
• Prepare and recommend proposals for the compensation of the CEO, including adjustment of the fixed pay, bonuses and other incentive schemes and present these to the Board for evaluation and a decision.
• Prepare and present the employees' participation in any new issues, share programmes, etc. to the Board.
• Present guidelines for the remuneration of senior executives to the Board, which will be presented to the Annual General Meeting for their information/approval after review by the Board.
• Prepare and present other significant personal matters that are related to the compensation of senior executives to the Board.

The Compensation Committee has held four meetings since the last General Meeting. The following matters have been reviewed:

• A summary of the bonus, share purchase and option schemes employed by AF since they were first introduced, including the calculation models for bonuses, how shares have been acquired (by AF), scope of the schemes by quantity/NOK, and any support schemes related to the financing of exercising purchases and redemption of options. This summary should be prepared so that it is informative for discussions by the Board, and the short version will be presented to the Annual General Meeting.
• A schedule for the Compensation Committee and Board related to the current and future schemes, so that the management and Compensation Committee can be prepared when this topic is on the Board's agenda for discussion and a decision.
• Proposal to the Annual General Meeting concerning continuing the current share purchase programme into

Attachment 2

2014/2015, and authorisation to carry out private placing to employees in connection with the company's share programme and incentive programme for employees.

• Proposal concerning the same performance-based bonus for executive vice presidents in 2014 as in 2013. The bonus is dependent on the results in the individual business areas.
• New option scheme 2014-2017. The programme is unique since all employees have an opportunity to participate in. The scheme is intended to motivate employees to take a long-term perspective with respect to both their own employment and their contributions to the Company on all levels. The scheme will enable younger employees with a promising future in AF to become shareholders.
• Possible funding schemes for the option shares for the 2011-2014 programme. Discussion of such schemes with the largest shareholders based on the scheme that was used in 2011.
• AF's future strategy and corporate structure, and the relevant implications that this may have for future bonus and share programmes.
• The total scope of the share scheme related to the employees' fixed pay, bonus and option schemes in a longer time perspective.

Oslo, 10/04/2014 Peter Groth

Board of Directors' statement on the determination of fixed pay and other remuneration to senior executives

The Board of Directors has prepared the following statement on the determination of fixed pay and other remuneration to senior executives pursuant to Section 6-16a of the Public Limited Liability Companies Act.

Senior executives are defined as the Corporate Management Team, which consists of the CEO and executive vice presidents.

1. Determination of fixed pay and other remuneration for senior employees

Main principles

• o The salaries of senior executives are made up of a fixed component, the base salary, and a variable component in the form of a bonus. The sum total of the base salary and bonus constitutes the total remuneration the employees receive for their services.
• o The scope of the variable component of the remuneration depends on to what degree the defined economic targets are achieved.
• o The total remuneration that is offered shall be competitive in relation to comparable positions and the market.
• o The Compensation Committee is the Board of Directors' advisor for the evaluation of the terms for senior executives.

Determination of the CEO's remuneration

The Board of Directors determines the CEO's remuneration in consultation with the Compensation Committee. The CEO has otherwise the same employment terms and notice period as other employees. There are no agreements relating to severance pay or early retirement.

Determination of the remuneration of executive vice presidents

The Board of Directors establishes guidelines for the remuneration of senior executives in consultation with the CEO. There are no agreements relating to severance pay or early retirement.

Bonus

Bonuses for senior executives are based on the EVA (Economic Value Added) model. EVA is a method of calculating and analysing value creation in the Group and in economic units below group level. Bonuses based on the EVA model for senior executives are linked to the Group's value creation during the financial year. If the result target is met, the bonus payment will normally amount to up to

8 months' salary, although this is not an absolute upper limit.

Of the total bonus earned, 25% can be used to buy shares at a 20% discount and the remainder is paid in cash. The lock-in period for the shares is one year.

Purchase of treasury shares

Shares can be sold to senior executives, subject to the approval of the Board of Directors at a 20 % discount on the prevailing market price. Shares are offered to senior executives in the same way as to other employees.

Options

On 13.05.2011, the Annual General Meeting adopted an option scheme that includes all the employees in AF Gruppen. The option scheme is to provide an incentive for all the employees in the

Group. The purpose of the programme was to encourage long-term commitment and greater involvement in the Group's activities. It is believed that the Group's future objectives will best be achieved when the interests of the Group and its employees coincide.

The options scheme meant that the Group's employees were given the opportunity to buy options each year in 2011, 2012 and 2013. This was accomplished by granting the individual employee a certain number of options annually. Employees were granted a specific number of options each year, all of which had to be accepted.

Each option entitled the holder to purchase a share in AF Gruppen ASA.

The employees paid NOK 1.00 per option. The exercise price was set at the market value of the shares on 31 December of the previous year, with, however, a minimum price of NOK 45.60 before deductions for extraordinary dividends.

1,240 employees redeemed 5,755,679 options in March 2014.

Retirement benefit scheme and payments in kind

Senior executives participate in the Group's retirement benefit scheme and receive payments in kind in the form of allowances for work travel, data connections and mobile telephones on par with that of other employees.

2. Compensation policy in force in 2013

Determination of the CEO's remuneration

The terms for the CEO were set by the Board of Directors. The remuneration paid in 2012 was in accordance with the agreements entered into, and a bonus was paid for the 2011 financial year in addition to the salaries for 2012.

Determination of the remuneration of executive vice presidents

The terms for the executive vice presidents were set by the CEO in consultation with the Board of Directors. The remuneration paid in 2012 was in accordance with the agreements entered into. A bonus was paid for the 2011 financial year. Executive vice presidents' bonuses are paid on the basis of the EVA achieved in the Group.

• 3. Effect of changes to the compensation schemes agreed on in 2013 There have been no changes in the compensation schemes in 2013, which differ from 2012.
• 4. Guidelines for the determination of fixed pay and other remuneration for 2014 The determination of fixed pay will follow the same principles in 2014 as in 2013.

For further information, please refer to notes 7 and 29 in the annual report.

Recommendations of the Nominating Committee

1. The Nominating Committee's work

The Nominating Committee has met with all the board members and the CEO in order to evaluate the Board's work on behalf all the Company's shareholders. In addition, there has been a written evaluation of the Board, which has formed the basis for discussions with the Board members.

At the Annual General Meeting in 2009 the Articles of Association were amended so that up to two alternate members with the right to attend board meetings could be elected. The Nominating Committee recommends that this arrangement be maintained, but that no alternates are elected this time.

2. Election of Board members and the Board Chairman

Shareholder-elected Board members are up for election every year. The Nominating Committee submits the following proposal to the General Meeting:

The following individuals should be elected as Board members for one year:

Broman, Mari (re-election) Bømark, Hege (re-election) Groth, Peter (re-election) Siraj, Daniel (new) Thorstensen, Tore (re-election)

Alternates: No alternatives will be elected for next year.

The Nominating Committee proposes that the Annual General Meeting elect Tore Thorstensen as the Board Chairman.

3. Remuneration for the Board and Nominating Committee for the election period until the Annual General Meeting for the 2013 financial year

The Nominating Committee submits the following remuneration proposal for approval:

Board members : Chairman : Deputy member(s) per meeting :	NOK 190,000 NOK 380,000 NOK 20,000
Committee members
- Compensation Committee. :	NOK 40,000
- Audit Committee :	NOK 45,000
Committee Chairman
- Compensation Committee. :	NOK 55,000
- Audit Committee :	NOK 65,000

The Board proposes the following for adoption concerning the remuneration of the

Nominating Committee: Members :	NOK 31,500
Chairman of Nomination Committee :	NOK 35,000

Attachment 4

4. Nomination Committee

The Board submits the following proposal to the Annual General Meeting:

The following shall be elected to the Nominating Committee for one year:

Arne Baumann Tor Øivind Fjeld Jan Fredrik Thronsen

It is proposed that Arne Baumann be re-elected chair.

Oslo, 9 April 2014

Chair

Arne Baumann Tor Øivind Fjeld Jan Fredrik Thronsen

Brief personal details of the Committee's

proposed candidates for the new election: Board:

Daniel Siraj (38) is EVP for residential development and real estate with OBOS bbl, and is managing director of OBOS Nye Hjem AS and OBOS Fornebulandet. Before he joined OBOS in 2005, he was city government secretary for trade and urban development in Oslo municipality. He was formerly a member of the board and deputy chairman in BWG Homes ASA, and is/was member of the board of Basale AS, OBOS Forretningsbygg AS and Mika AS.

Education: Law degree from the University of Oslo.