Nomination committee 2008

In accordance with the decision by the Annual General Meeting in April 2007, Husqvarna shall have a Nomination Committee consisting of representatives of each of the four largest shareholders in terms of voting rights, and the Chairman of the Husqvarna Board.

Composition

The Nomination Committee shall consist of one representative of each of the four largest shareholders in the company with regard to the number of votes held, together with the Chairman of the Board of Directors.

The names of the four representatives and the names of the shareholders they represent shall be announced at the latest six months before the Annual General Meeting 2008 and shall be based on the known number of votes as of August 31, 2007. The term of office for the Nomination Committee shall be for the period until a new Nomination Committee has been appointed. Unless the members of the Nomination Committee agree otherwise, the Chairman of the Nomination Committee shall be the member that represents the largest shareholder with regard to the number of votes held.

If during the term of office of the Nomination Committee, one or more of the shareholders having appointed a representative to the Nomination Committee no longer is among the four largest shareholders with regard to the number of votes held, representatives appointed by these shareholders shall resign and the shareholder or shareholders who then are among the four largest shareholders with regard to the number of votes held, may appoint their representatives. If there are only marginal changes in the number of votes held or if the change occurs later than three months before the Annual General Meeting, no changes shall be made in the composition of the Nomination Committee unless there are special circumstances. A shareholder who has appointed a representative as member of the Nomination Committee has the right to dismiss such member and appoint a new representative as member of the committee. Changes in the composition of the Nomination Committee shall be announced as soon as they have occurred.

The members of the Nomination Committee for the AGM in 2008 are Petra Hedengran, Investor AB (chairman), Fredrik Lundberg, Lundbergföretagen, Ramsay Brufer, Alecta, Stefan Roos, SEB Fonder and Lars Westerberg, Chairman of the Husqvarna Board.

As of August 31, 2007, Investor's shareholding in Husqvarna corresponded to 24.6% of the voting rights in the company, Lundbergföretagen's to 10.2%, Alecta's to 5.9%, and SEB Fonder's to 3.6%.

The Nomination Committee will prepare proposals for the AGM in 2008, including proposals for Board members, fees to the Board members, fees to the auditors, and the tasks and composition of the Nomination Committee for the AGM in 2009.

Proposals

Shareholders who wish to submit proposals to Husqvarna's Nomination Committee should send:

Tasks

The Nomination Committee's tasks include preparing a proposal to the AGM 2008 regarding the following issues:

  • Chairman of the AGM
  • Board members
  • Chairman of the Board
  • Remuneration for Board members, including the Chairman, as well as remuneration for committee work
  • Auditors' fees
  • Nomination Committee for the next accounting year

 

The Nomination Committees' proposals to the Husqvarna AB Annual General Meeting on April 23, 2008

Item 2 - Election of Chairman of the Meeting

The Nomination Committee proposes that Lars Westerberg is elected chairman of the Annual General Meeting.

Item 9 - Determination of the number of Directors

The Nomination Committee proposes that the Board of Directors shall comprise nine Directors without Deputies.

Item 10 - Determination of the remuneration payable to each Director of the Board and the Auditor

A. Determination of remunerations payable
The Nomination Committee proposes a total Board remuneration of SEK 5,345,000 to be divided in accordance with the following: SEK 1,600,000 to the Chairman of the Board, SEK 460,000 to each of the Directors elected by the General Meeting and not employed by the Company. The Chairman of the Remuneration Committee shall receive SEK 100,000 and the two members SEK 50,000 each. The Chairman of the Audit Committee shall receive SEK 175,000 and the two members shall receive SEK 75,000 each.

The Nomination Committee proposes that the Auditor's fee shall be paid on the basis of approved invoice. B. Payment of remuneration to the Board of Directors in the form of synthetic shares
The Nomination Committee proposes that part of the remuneration to the Board Directors for their assignment, excluding remuneration for committee work, may be paid by allocation of synthetic shares. Each Director shall have the option to choose between receiving 50% of the remuneration in cash and 50% in the form of synthetic shares or to receive 75% in cash and 25% of the remuneration in the form of synthetic shares. Directors being non-Swedish tax subjects can choose to receive 100% of the remuneration in cash. However, if the total remuneration is obtained in cash, such Director is expected to invest 25% of the net remuneration after tax in the Company's shares. The number of synthetic shares allocated to the Director is determined based on a volume-weighted average of the quoted price of series B shares on the OMX Nordic Exchange Stockholm during five trading days immediately following the announcement of the Company's first quarterly report of the year, when the Director is elected or re-elected.
The right to synthetic shares incurs a right to receive, during the fifth calendar year after the beginning of the Board Director's tenure at each of four occasions, an amount, for 25% of the allocated synthetic shares, an amount in cash per synthetic share that corresponds to the quoted price of series B shares in the Company on the OMX Nordic Exchange Stockholm at each point in time for payment.

The synthetic shares are regarded as accrued continuously during the tenure, with 25% quarterly. Each Director holding synthetic shares shall be credited additional synthetic shares corresponding to dividends paid on series B shares in the Company.
In the event that a Director resigns prior to four full years' tenure, a cash payment may be requested during the year after the resignation.
The Company's payment obligations for synthetic shares shall be hedged by the Company; either by way of re-purchased shares, which may be sold in the market in connection with payments to the Board Directors or by hedge arrangements with a bank. The financial impact on the Company of synthetic share program compared to payment in cash, is, according to the Nomination Committee, very limited, if properly hedged.

Item 11 - Election of Directors

The Nomination Committee proposes re-election of the Directors Lars Westerberg, Bengt Andersson, Peggy Bruzelius, Börje Ekholm, Tom Johnstone, Anders Moberg, Gun Nilsson, Robert F. Connolly and election of Ulf Lundahl. Ulf Lundahl is born 1952, is the executive vice president and deputy president of LE Lundbergföretagen AB and is a member of the board in i.e. Holmen AB and Indutrade AB. Peder Ramel has declined re-election.
The Nomination Committee considers that the nine Board Members proposed by the Nomination Committee are very well suited for carrying out Husqvarna's Board work over their coming term of office.
The Nomination Committee proposes that Lars Westerberg is appointed chairman of the Board.

Item 12 - Nomination Committee

The Nomination Committee proposes:

1. That the Company shall have a Nomination Committee consisting of one representative of each of the four largest shareholders in the Company with regard to the number of votes held, together with the Chairman of the Board of Directors. The names of the four representatives and the names of the shareholders they represent shall be announced at the latest six months before the Annual General Meeting 2009
known number of votes as of August 29, 2008. The term of office for the Nomination Committee shall be for the period until a new Nomination Committee has been appointed. Unless the members of the Nomination Committee agree otherwise, the Chairman of the Nomination Committee shall be the member that represents the largest shareholder with regard to the number of votes held.

2. That if, during the term of office of the Nomination Committee, one or more of the shareholders having appointed a representative to the Nomination Committee no longer is among the four largest shareholders with regard to the number of votes held, representatives appointed by these shareholders shall resign and the shareholder or shareholders who then are among the four largest shareholders with regard to the number of votes held, may appoint their representatives. If there are only marginal changes in the number of votes held or if the change occurs later than three months before the Annual General Meeting, no changes shall be made in the composition of the Nomination Committee unless there are special circumstances. A shareholder who has appointed a representative as member of the Nomination Committee has the right to dismiss such member and appoint a new representative as member of the committee. Changes in the composition of the Nomination Committee shall be announced as soon as they have occurred.

3. That the Nomination Committee shall prepare the below proposals to be submitted to the Annual General Meeting 2009 for resolution:

  1. Proposal regarding Chairman of the Annual General Meeting;
  2. Proposal regarding number of Directors and Directors on the Board;
  3. Proposal regarding Chairman of the Board of Directors;
  4. Proposal regarding Directors' fees and remuneration for committee work; stating the distribution between each member of the Board of Directors;
  5. Proposal regarding Auditor's fees; and
  6. Proposal regarding Nomination Committee for the Annual General Meeting of 2010.

4. That the Nomination Committee, when performing its duties, shall fulfill the tasks that rest upon the Nomination Committee under the Swedish Code on Corporate Governance including, i.a. to provide the Company with certain information in order to enable the Company to fulfill its information obligation under the Code and for the Company to, upon request of the Nomination Committee, provide personnel resources such as secretary function for the Nomination Committee to facilitate the work of the committee. If needed, the Company shall also be able to pay reasonable costs for external consultants that the Nomination Committee deems necessary in order for the Committee to be able to fulfill its assignment.

Report on Husqvarna AB's Nomination Committee's work for the 2008 Annual General Meeting.

Background

In accordance with the decision by the Annual General Meeting in April 2007, Husqvarna shall have a Nomination Committee consisting of representatives of each of the four largest shareholders in terms of voting rights, and the Chairman of the Board.

The four largest shareholders have appointed the following representatives who, together with Husqvarna's Board Chairman, will form the Nomination Committee.

The Nomination Committee's members are:

  • Petra Hedengran, Investor AB, Chairman of the Nomination Committee
  • Ramsay J. Brufer, Alecta
  • Fredrik Lundberg, L E Lundbergföretagen
  • Stefan Roos, SEB
  • Lars Westerberg, Chairman of the Husqvarna Board

The Nomination Committee has been given the task to prepare and present the following proposals to the 2008 Annual General Meeting:

  • Chairman of the Annual General Meeting
  • Members of the Board of Directors
  • Chairman of the Board of Directors
  • Board fees (split between the Chairman, other Board Members and for committee work)
  • Nomination Committee for the Annual General Meeting 2009
  • Audit fees

Nomination Committee's work and proposals

The Nomination Committee held three meetings and had contacts between meetings. The Nomination Committee has been presented with an evaluation of the Board and its work. To assess the extent to which the current Board meets the demands on the Board in light of the Company's current position and future direction, the size and composition of the Board in terms of, among other things, industry experience and expertise, has been discussed.

No proposals for Board Members have been submitted to the Nomination Committee by anyone other than the members of the Nomination Committee.

In addition, the Nomination Committee has discussed the issue of the Board Members' independence. The proposal for the composition of the Board meets the requirements of the OMX Nordic Exchange Stockholm and the Swedish Code of Corporate Governance for independent Board Members.

The Nomination Committee proposes that the current Board Members are re-elected except for Peder Ramel who has declined re-election. The Nomination Committee proposes a new election of Ulf Lundahl, Executive Vice-President, L E Lundbergföretagen. The Nomination Committee considers that the nine Board Members proposed by the Nomination Committee are very well suited for carrying out Husqvarna's Board work over their coming term of office.

In the opinion of the Nomination Committee, it is advantageous for the Company and its shareholders that Members of the Board are shareholders or have a corresponding exposure against the development of the market price of the Husqvarna-share. Earlier, the Nomination Committee has recommended the Board Members to invest 25% of the net remuneration after taxes in shares in the Company, with the purpose of further enhancing the Board Members long term interest for the Company's financial development. The Nomination Committee proposes that up to 50% of the fees to Board members, excluding remuneration for committee work, shall be paid in the form of synthetic shares. Such shares are not financial instruments in a legal sense, but a cash remuneration based on the trading price of Husqvarna B-shares. This means that fees to Board members would be linked to the long-term development of the Company. In the opinion of the Nomination Committee this would be more beneficial to the Company than conventional fees.

Assuming that the Company's commitment to synthetic shares is hedged, e.g. by repurchase of own shares or through an agreement with a bank, in the judgement of the Committee the synthetic shares would not involve significant additional cost in comparison with conventional fees.

The synthetic shares would be paid during the fifth year after the Board Member taking office in an amount corresponding to the average trading price of B-shares in connection with the payment. Four payments would be made during the fifth year, each corresponding to 25% of the shares.

At an Extraordinary General Meeting on January 27, 2006, PricewaterhouseCoopers AB was appointed as the Company's external Auditor, with Anders Lundin as auditor-in-charge, for the period until the Annual General Meeting in 2010. Regarding Auditors' fees, the Nomination Committee proposes that the Meeting decides that fees shall be paid on the basis of an approved invoice, since the fees are not known in advance.

The Nomination Committee therefore proposes the following for decision:

  • Unchanged number of Board Members to be elected by the AGM (nine).
  • Re-election of Lars Westerberg, Bengt Andersson, Peggy Bruzelius, Börje Ekholm, Tom Johnstone, Anders Moberg, Gun Nilsson and Robert F. Connolly. Peder Ramel declines re-election.
  • Election of Ulf Lundahl, Executive Vice-President, L E Lundbergföretagen.
  • Re-election of Lars Westerberg as Chairman of the Board, and proposed Chairman of AGM.
  • Increase of fees to Board members by SEK 100,000 to SEK 1.6m for Chairman and by SEK 22,500 to 460,000 for other members.
  • Part of fees to be paid in synthetic shares, according to the above.
  • Unchanged principles for appointment of Nomination Committee for AGM 2009, Appendix 1 hereto.

Information about all persons proposed as Members of Husqvarna AB's Board, and the Nomination Committee's evaluation of each Member's independence, can be found on the Company's website.

The Nomination Committee, March 2008

Appendix 1

The Nomination Committee proposes:

That the Company shall have a Nomination Committee consisting of one representative of each of the four largest shareholders in the Company with regard to the number of votes held, together with the Chairman of the Board of Directors. The names of the four representatives and the names of the shareholders they represent shall be announced at the latest six months before the Annual General Meeting 2009 and shall be based on the known number of votes as of August 29, 2008. The term of office for the Nomination Committee shall be for the period until a new Nomination Committee has been appointed. Unless the members of the Nomination Committee agree otherwise, the Chairman of the Nomination Committee shall be the member that represents the largest shareholder with regard to the number of votes held.

That if, during the term of office of the Nomination Committee, one or more of the shareholders having appointed a representative to the Nomination Committee no longer is among the four largest shareholders with regard to the number of votes held, representatives appointed by these shareholders shall resign and the shareholder or shareholders who then are among the four largest shareholders with regard to the number of votes held, may appoint their representatives. If there are only marginal changes in the number of votes held or if the change occurs later than three months before the Annual General Meeting, no changes shall be made in the composition of the Nomination Committee unless there are special circumstances. A shareholder who has appointed a representative as member of the Nomination Committee has the right to dismiss such member and appoint a new representative as member of the committee. Changes in the composition of the Nomination Committee shall be announced as soon as they have occurred.

That the Nomination Committee shall prepare the below proposals to be submitted to the Annual General Meeting 2009 for resolution:

  • Proposal regarding Chairman of the Annual General Meeting;
  • Proposal regarding number of Directors and Directors on the Board;
  • Proposal regarding Chairman of the Board of Directors;
  • Proposal regarding Directors' fees and remuneration for committee work; stating the distribution between each member of the Board of Directors;
  • Proposal regarding Auditor's fees;
  • Proposal regarding Nomination Committee for the Annual General Meeting of 2010.

That the Nomination Committee, when performing its duties, shall fulfil the tasks that rest upon the Nomination Committee under the Swedish Code on Corporate Governance including, i.e., to provide the Company with certain information in order to enable the Company to fulfil its information obligation under the Code and for the Company to, upon request of the Nomination Committee, provide personnel resources such as secretary function for the Nomination Committee to facilitate the work of the committee. If needed, the Company shall also be able to pay reasonable costs for external consultants that the Nomination Committee deems necessary in order for the Committee to be able to fulfil its assignment.