9 March 2010 р.
IFS shareholders’ annual general meeting
Shareholders in Industrial and Financial Systems IFS AB (publ.) are hereby called to the ordinary shareholders’ annual general meeting (AGM) on Thursday, March 25, 2010, at 3:00 p.m., at Courtyard by Marriott, Rålambshovsleden 50, in Stockholm, Sweden.
Shareholders intending to take part in the AGM must be registered in the stock register maintained by Euroclear Sweden AB (formerly VPC AB) no later than Friday March 19, 2010. They must also submit their application to IFS no later than Monday March 22, 2010 at 12:00 noon.
Notice of attendance shall be made by telephone at: +46 8 587 845 00 or via the company’s website www.ifsworld.com/sweden. When notifying the company, please provide name, personal registration or corporate registration number, if applicable, address, telephone number, stockholding, and information regarding any assistants (not more than two). If participation is by proxy, the proxy must be submitted to the company together with the notice of attendance. Proxy forms for shareholders wishing to participate in the AGM by proxy will be available from the corporate website at www.ifsworld.com or can be acquired by calling +46 8 587 845 00.
Shareholders who have deposited their stock with trustees must provisionally register their stock in their own name in order to take part in the AGM and exercise their voting rights. Shareholders who wish to re-register must notify their stockbrokers of this well in advance of March 19, 2010.
1. The meeting is called to order.
2. Election of chairman for the meeting.
3. Drawing up and approval of the register of voters.
4. Approval of the agenda.
5. Election of one or two members to verify the minutes.
6. Determine that the meeting has been duly convened.
a) Chairman of the board’s statement
b) Chief executive officer’s statement.
8. Presentation of the annual report and the auditor’s report as well as the consolidated statement of income and the consolidated balance sheet.
9. Resolution to approve the statement of income and the balance sheet as well as the consolidated statement of income and the consolidated balance sheet.
10. Resolution on allocations concerning Group income in accordance with the approved balance sheet.
11. Resolution to discharge the members of the board and the chief executive officer from liability.
12. Determine the number of members of the board and deputies
13. Determine remuneration for the board and the auditors.
14. Election of board members, the chairman of the board and auditors.
15. Resolution concerning guidelines for the remuneration of corporate management.
16. Proposal concerning the establishment of a nomination committee.
17. Resolution concerning the reduction of capital stock
18. Resolution to authorize the board to resolve to repurchase shares.
19. Resolution concerning incentive program
20. The meeting is closed.
Chairman of the AGM (Item 2)
The nomination committee, comprised of Gustaf Douglas, Ulf Strömsten (Catella Kapitalförvaltning), Lars Bergkvist (Lannebo Fonder), Bengt Nilsson, and Anders Böös (chairman of the board of IFS), proposes that Anders Böös be appointed to chair the AGM.
Disposition of earnings (Item 10)
The board proposes that a dividend of SKr 2.00 be paid. Tuesday March 30, 2010, is proposed as the record day. Should the AGM resolve in accordance with the board’s proposal, the dividend is expected to be distributed by Euroclear AB on Tuesday, April 6, 2010.
The board of directors, chairman of the board and auditors (Items 12 – 14)
The nomination committee proposes that until the end of the next AGM the board of directors shall consist of six members without deputies and that directors’ fees (including fees for work on the audit committee) totaling SKr 2.25 million shall be paid, of which the chairman of the board shall continue to be paid SKr 1 million, and each of the other directors apart from the chief executive officer (CEO) shall continue to be paid SKr 275,000. It is proposed that an unchanged fee of SKr 100,000 be paid to the chairman and an unchanged fee of SKr 50,000 be paid to other directors for work on the audit committee.
The nomination committee proposes that Anders Böös, Ulrika Hagdahl, Birgitta Klasén, Neil Masom, Bengt Nilsson, and Alastair Sorbie be re-elected to the board. Jacob Palmstierna, board director since 2004, has declined re-election. The nomination committee proposes that no new director be elected as a replacement. Moreover, the nomination committee proposes that Anders Böös remain chairman of the board and that Bengt Nilsson remain deputy chairman of the board.
The nomination committee proposes that the AGM re-elect as company’s auditors, Öhrlings PricewaterhouseCoopers AB, until the period up to the AGM 2014. It is the responsibility of the auditors to appoint the principal auditor. Öhrlings PricewaterhouseCoopers AB has appointed Lars Wennberg as principal auditor and Nicklas Kullberg as co-responsible auditor. The nomination committee further proposes that the AGM resolve that auditors’ fees be paid to the company’s auditors according to approved invoices.
The above proposals by the nomination committee are supported by shareholders who represent approximately 55 percent of the voting rights in the company, including the Douglas family, Förvaltnings AB Wasatornet, Anders Böös via companies, Bengt Nilsson via companies, Catella Kapitalförvaltning, and Lannebo Fonder.
Resolution concerning guidelines for the remuneration of corporate management (Item 15)
The board proposes that the AGM resolve that the following guidelines for remuneration of the president and other members of corporate management be applied, which in essence are based on the previous year’s guidelines:
The guidelines deal with remuneration and other terms and conditions of employment of the senior executives of the IFS Group, including the company's chief executive officer (CEO), jointly referred to as 'corporate management’ below.
The principles apply to employment contracts entered into after the resolution is adopted by the AGM and to changes made to existing terms and conditions after this point in time.
Remuneration of corporate management in IFS shall be aligned with market terms and conditions, shall be individual and differentiated, and shall support the interests of the stockholders. Remuneration principles shall be predictable, both in terms of costs for the company and benefits for the individual, and shall be based on factors such as competence, experience, responsibility and performance.
Total remuneration paid to corporate management shall consist of a basic salary, variable remuneration, an incentive program, pension contributions, and other benefits. The total annual monetary remuneration paid to each member of corporate management, i.e., basic salary and variable remuneration, shall correspond to a competitive level of remuneration in the respective executive's country of residence.
The basic salary shall be on market terms and related to the executive’s position, responsibility, competence, and experience
Variable remuneration shall be linked to predetermined measurable criteria designed to promote long-term value generation in the company. The relationship between basic salary variable remuneration shall proportionate to the executive’s responsibility and powers. Variable remuneration varies according to position.
The basis for the variable remuneration of the CEO and other corporate management executives is established by the board and is based on profitability goals set by the board for each year. When determining variable remuneration paid in cash to corporate management, the board shall also consider introducing restrictions that:
- place conditions on part of such remuneration such that the performance on which the payments are based shall prove to be sustainable over time, and
- entitle the company to reclaim remuneration paid out on the basis of information that later proves to be obviously incorrect.
The limits for the maximum outcome for variable remuneration paid in cash shall be established. For 2010, variable remuneration shall not exceed 100 percent of the basic salary. Variable remuneration of corporate management for fiscal 2010 shall not exceed SKr 7.246 million.
Long-term incentive program
The AGM of 2008 resolved to introduce an incentive program for corporate management. The AGM of 2009 resolved to introduce an additional incentive program in accordance with corresponding principles and conditions. As detailed in Item 19 below, the board proposes that the AGM adopt an additional incentive program for corporate management and other key personnel in Group corresponding to those adopted in 2008 and 2009. As outlined in Item 19, it is proposed that, to stimulate participation in the program, it is proposed that employees will receive one warrant free of charge for each warrant acquired at market price. It is proposed that the president and other members of corporate management and key personnel in the Group to whom these guidelines apply will be entitled to subsidized warrant premiums in accordance with the conditions applying to other employees included in the incentive program.
It is the intention of the board in coming periods to evaluate and review the principles for long-term incentive programs.
Other benefits are chiefly related to company cars and telephones and shall, where they exist, constitute a limited portion of the remuneration and be competitive in the local market.
Pension benefits shall correspond to a competitive level in the respective executive’s country of residence. The CEO is entitled to a premium-based pension plan with a premium that is 20% of the basic salary. The retirement age for the CEO is 65, but the CEO and the company are entitled to invoke the right to retirement for the CEO at the age of 62. In such a case, the CEO shall receive the equivalent of 60 percent of the basic salary until he is 65. Other senior executives are included in IFS’ premium-based special pension plan or corresponding pension plans. The retirement age for other executives in corporate management is 65.
Period of Notice and Severance Payment
If the company terminates the employment, the period of notice is normally 1 year; if the executive terminates the employment, the period of notice is 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. In such an event, the board shall inform the immediately following AGM and explain the reason for the deviation.
The establishment of a nomination committee (Item 16)
The board proposes that the AGM establish a nomination committee as of August 31 and until a new nomination committee is appointed consisting of the following five members: the chairman of the board, a representative of the company’s principal owner, a representative of each of the largest institutional shareholders in the company and a representative of the founders. If the representative of the company’s principal owner or the representatives of the two largest institutional shareholders waive their right to appoint a member of the nomination committee, such right shall be transferred to the shareholder who represents the largest shareholding after the above-mentioned shareholders.
If, after the nomination committee has been constituted, stockholders that appointed a committee member are no longer entitled to inclusion in the nomination committee because of a change of more than one percentage point in the internal relationship between stockholders, the committee member in question shall resign from the committee and a new member shall be appointed in accordance with the procedure detailed above. The same procedure applies to the replacement of a director who resigns from the nomination committee on his or her own initiative before the work of the committee has been completed. Stockholders who appointed members of the nomination committee are entitled to remove such member and appoint a new member to the nomination committee.
The representative of the principal owner shall convene and chair the nomination committee unless the members agree otherwise. The composition of the nomination committee shall be announced as soon as the nomination committee has been appointed, but not later than six months before the AGM.
The nomination committee shall discharge its duties in the interests of all the stockholders and shall prepare and submit to the AGM proposals concerning the election of the chairman of the AGM, the chairman of the board and other directors, directors’ and auditors’ fees (including fees for committee work) and the procedures for establishing a nomination committee and issues pertaining to this. Where appropriate, the nomination committee shall submit proposals concerning the election of auditors. The proposals of the nomination committee shall be presented in the notification convening the AGM and shall be published on the company’s website. In connection with the publication of the AGM notification, the nomination committee shall present on the company’s website a statement justifying its proposals pertaining to board directorship. In connection with this, information about the board directors shall be made available. At the AGM, the nomination committee shall also present a report pertaining to how its work has been carried out and shall present and justify its proposals.
It is proposed that the nomination committee not be remunerated. Members shall, however, to a reasonable extent be reimbursed for customary expenses related to their work.
Resolution concerning the reduction of capital stock (Item 17)
In accordance with the authorization granted by the preceding AGM, the board has resolved that the company shall repurchase 250,000 of its own Series B shares during the period up to the AGM. The acquisition price shall not exceed SKr 20 million. The board of directors has previously announced that the repurchased shares are intended to be cancelled. The board therefore proposes that the AGM resolve to reduce the capital stock of the company by the total quota value (of SKr 20 per share) of the repurchased shares at the time of the AGM, but not by more than SKr 5 million by withdrawing the total number of repurchased shares without repayment. The reduction amount shall be allocated to the company’s reserve fund to be used as the AGM determines.
A valid resolution to adopt the board’s proposal under Item 17 requires that it be supported by shareholders representing at least two thirds of the shares and votes represented at the AGM.
Resolution authorizing the board to resolve to repurchase shares (Item 18)
The board proposes that the AGM authorize 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.
Resolution concerning incentive program (Item 19)
The board proposes that the AGM resole to establish an incentive program which entails that the company offers corporate management and key personnel the opportunity to subscribe for warrants in the company. The warrants will be valued at market price. To stimulate participation in the program, it is proposed that employees will receive one warrant free of charge for each warrant acquired at market price.
The proposal entails the issue of not more than 265,000 warrants. Each warrant carries the right to acquire one Series B share at an initial subscription price corresponding to 110 percent of the average price paid for the company’s share on the NASDAQ OMX Stockholm Exchange between April 22, 2010 and May 5, 2010. After one year, the exercise price shall be adjusted to 120 percent of the average price and after two years to 130 percent of the average price. It is proposed that the warrants have a term of approximately three years.
The right to subscribe for warrants shall accrue to wholly owned subsidiaries, which will transfer the warrants to current and future members of corporate management and key personnel within the Group. The company CEO shall be assigned no more than 79,500 warrants, employees in corporate management no more than 53,000 warrants each, and other senior executives and key personnel no more than 26,500 warrants each.
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 AGM in 2008 and at the AGM in 2009, the three programs, on full subscription, can entail a dilution of approximately 2.4 percent of the existing capital stock and of just under 1.7 percent of the voting rights.
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.
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.
A valid resolution to adopt the participation program requires that it be supported by shareholders representing at least nine tenths of the shares and votes represented at the AGM.
Finally, it is proposed that the AGM authorize the board of directors, the chief executive officer or other person appointed by the board to make such amendments to resolutions that may be required in connection with registration with the Swedish Companies Registration Office (Bolagsverket).
The complete list of proposals for resolution above, including the statement by the board in respect of profit allocation, the company’s annual report and auditor’s report for fiscal 2009 will be available for inspection as of March 11, 2010, at the company’s head office at Teknikringen 5, Linköping, at the company’s office in Stockholm, and via the company’s website, www.ifsworld.com. The information will be sent upon request to any shareholders who submit their postal addresses.
At the time the present notification was issued, there was a total of 26,952,923 outstanding shares in the company, representing a total of 3,947,789.9 votes, of which 1,391,664 Series A shares represent 1,391,664 votes and 25,561,259 Series B shares represent 2,556,125.9 votes. Of these, the company owns 104,241 Series B shares, representing 10,424.1 votes as of February 22, 2010.
IFS is a public company (OMX STO: 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 2009 was SKr 2.6 billion.The information is that which IFS is required to declare by the Securities Business Act and/or the Financial Instruments Trading Act. The information was submitted for publication on March 9, 2010, at 11:00 a.m. CET