25 March 2011 р.
IFS annual general meeting (AGM), March 25, 2011
The annual general meeting (AGM) of stockholders in Industrial and Financial Systems, IFS AB (publ), approved the proposed dividend to stockholders of SKr 3.00 per share. The record day for the dividend shall be Wednesday, March 30, 2011. The dividend is expected to be distributed on Monday, April 4, 2011. The AGM resolved to discharge the members of the board and the chief executive officer from liability for fiscal year 2010.
BOARD OF DIRECTORS, AUDITORS, AND FEES
Anders Böös (chairman), Ulrika Hagdahl, Birgitta Klasén, Neil Masom, Bengt Nilsson (deputy chairman), and Alastair Sorbie (president and CEO) were re-elected to the board. It was resolved that directors’ fees (including remuneration for work on the audit committee) totaling SKr 2.25 million be paid, of which SKr 1 million be paid to the chairman of the board and SKr 275,000 to each of the other directors apart from the chief executive officer (CEO). It was resolved that a fee of SKr 100,000 be paid to the chairman and a fee of SKr 50,000 be paid to other directors for work on the audit committee. Auditors’ fees will be paid according to approved invoices.
REMUNERATION OF CORPORATE MANAGEMENT AND INCENTIVE PROGRAM
The AGM resolved to apply the following guidelines for remuneration to senior executives, including the CEO (the ‘corporate management’), which primarily entail that the remuneration and conditions of employment of corporate management shall be on market terms and competitive in respect of the executive’s position, responsibility, competence, and experience. In summary, the guidelines provide that the total remuneration paid to the corporate management shall consist of a basic salary, variable remuneration, an incentive program, pension contributions, and other benefits. Variable remuneration shall be linked to predetermined measurable criteria designed to promote long-term value generation in the company. The relationship between basic salary and variable remuneration shall be proportionate to the executive’s responsibility and powers, and vary according to position. Variable remuneration paid to corporate management, including the CEO, shall not exceed 50 percent of the basic salary. If less than 80 percent of the targets are achieved, no variable remuneration shall be paid. If targets are fully achieved, the total remuneration paid by the company to corporate management can amount to a maximum of approximately SKr 11 million, of which the variable annual remuneration for 2011 amounts to approximately SKr 3 million. If targets are exceeded, variable remuneration to the corporate management can amount to a maximum of approximately SKr 4 million for 2011.
The retirement age shall be 65, but the CEO and the company are entitled to invoke the right to retirement at the age of 62. If the company terminates the employment, the period of notice is normally 6–12 months; if the executive terminates the employment, the period of notice is normally 3–6 months. If the company terminates an executive’s employment, severance pay corresponding to a maximum of 12 months’ salary may be paid in exceptional cases. The basic salary during the period of notice together with severance pay shall not exceed an amount corresponding to two years’ basic salary. The board of directors shall have the right to deviate from the above guidelines in individual cases if there is good reason to do so. The guidelines are available in their entirety on the company website.
The AGM resolved to establish an incentive program which entails that the company offers senior executives and key personnel the opportunity to acquire warrants in the company. The warrants will be valued at market price. To stimulate participation in the program, it is proposed that for each warrant acquired at market price, the participants may be allotted a maximum of additional three warrants free of charge. The number of warrants that participants can be allotted free of charge is dependent on the outcome of performance conditions linked to the company’s earnings-per-share target during 2011 in accordance with predetermined criteria established by the board. Each warrant shall be exercisable to subscribe for one issued Series-B share during an exercise period from the day after the release of the first quarterly report 2014 until and including June 29, 2016, at a subscription price corresponding to 110 percent of the volume-weighted average price paid for the company’s share on the Nasdaq OMX Stockholm Exchange between April 20, 2011 and April 29, 2011. Warrants allotted free of charge may be exercised only on the condition that the warrants acquired at market price have been retained by the participant until the first day of the exercise period.
The proposal entails the issue of not more than 265,000 warrants. If all 265,000 warrants are exercised to subscribe for shares, the company’s capital stock will increase by SKr 5,300,000, corresponding to approximately 1.0 percent of the capital stock and 0.7 percent of the voting rights after dilution. Together with the warrants issued at the respective AGMs in 2008, 2009, and 2010, the four programs, on full subscription, can entail a dilution of approximately 2.9 percent of the existing capital stock and of approximately 1.9 percent of the voting rights. However, to minimize dilution and share price exposure resulting from the incentive program, the board intends to purchase Series-B shares in the company, on the basis of mandates granted by the AGM, in an amount corresponding to the number of warrants issued within the framework of the incentive program. The board shall be responsible for the exact wording and management of the incentive program within the framework of the given terms and conditions, and guidelines. In connection with this, the board shall have the right to make adjustments to fulfill particular legislation or market conditions internationally.
The purpose of the incentive program is to create conditions for retaining and recruiting competent personnel and to increase employee motivation. The board considers that the introduction of a participation program will benefit the group and the company’s shareholders.
RESOLUTION CONCERNING THE REDUCTION OF CAPITAL STOCK
In accordance with the authorization granted by the preceding AGM, the board repurchased 500,000 of its own Series-B shares during 2010. The AGM resolved to reduce the capital stock of the company by SKr 10,000,000 by withdrawing the repurchased Series B shares without repayment. The reduction amount shall be allocated to the company’s reserve fund to be used as the AGM determines.
RESOLUTION TO AUTHORIZE THE BOARD TO RESOLVE TO REPURCHASE SHARES
The AGM authorized the board to resolve, on one or more occasions until the next AGM, to acquire a total number of Series-B shares in such an amount that the company’s stockholding on each occasion does not exceed 10 percent of the total number of shares in the company. The shares shall be acquired through the Nasdaq OMX Stockholm Exchange in compliance with stock exchange regulations and only at a price within the registered interval on each occasion, by which is meant the interval between the highest buying price and the lowest selling price. The purpose of the authorization is to accord the board a greater opportunity to continuously adjust the company’s capital structure and thereby contribute to increased shareholder value, for example, by minimizing the effects of dilution and share price exposure resulting from the incentive program adopted by the AGM or any subsequent incentive programs that may be adopted.
The AGM resolved to establish a nomination committee that, based on the ownership structure as per August 31, 2011, consists of five members: the chairman of the board, a representative of the company’s principal owner in terms of voting rights, a representative of each of the largest institutional shareholders in the company in terms of voting rights, and a representative of the founders of the company. The representative of the principal owner shall convene and chair the nomination committee unless the members agree otherwise. The names of the members of the nomination committee and the shareholders they represent shall be published no later than six months before the AGM of 2012.
The composition of the nomination committee may be changed during its term of office in the event of a change in ownership such that a shareholder that appointed a member of the nomination committee no longer represents the largest share ownership and that the change in ownership is so substantial that the holding of the shareholder in question, in respect of voting rights, thereby falls below the holding of another shareholder by one percentage point.
In preparation of the AGM 2012, the nomination committee shall submit proposals for resolution in the following issues:
- Chairman of the AGM
- Chairman of the board of directors and other members of the board of directors of IFS
- Directors’ fees and other remuneration for boar assignments for each of the board members and remuneration for committee work where required.
- Auditors’ fees
- Rules and principles for establishing a nomination committee and its duties for the AGM of 2013.
The nomination committee shall not be remunerated. Members shall, however, to a reasonable extent be reimbursed for customary expenses related to their work.
AMENDMENT TO THE ARTICLES OF ASSOCIATION OF THE COMPANY
The AGM resolved to amend the articles of association of the company pursuant to the regulations introduced into the Swedish Companies Act as of January 1, 2011 pertaining to a simplified AGM notification procedure, as well as to lower the limits for the company’s share capital and for the maximum and minimum number of shares in the company.
IFS is a public company (XSTO: IFS) founded in 1983 that develops, supplies, and implements IFS Applications™, a component-based extended ERP suite built on SOA technology. IFS focuses on agile businesses where any of four core processes are strategic: service & asset management, manufacturing, supply chain and projects. The company has 2,000 customers and is present in more than 50 countries with 2,700 employees in total. Net revenue in 2010 was SKr 2.6 billion.
IFS discloses the information provided herein pursuant to the Financial Instruments Trading Act (1991:980) and/or the Securities Markets Act (2007:528). The information was submitted for publication on March 25, 2011 at 4:30 p.m. (CET).