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Item 17

Item 17 - The Board’s proposal regarding Incentive Program and on transfer of the Company’s own shares

The Board proposes that the Meeting resolves to introduce a cash-based option programme for the Company’s President and other members of the management group and certain key employees (in total about 20 persons). The call option program shall comprise of a maximum of 2,240,000 options, each of which will carry entitlement to receive a cash amount corresponding to the listed share price of the company’s B share, less the exercise price at the time of exercise of the option.

Motivation

A well balanced incentive program which entitles management and key employees to participate in the Company’s value growth will increase the motivation of the participants in the program and facilitate for the company to recruit and maintain qualified staff in a business where the competition for qualified personnel is hard. The participants in the program shall be encouraged to share the same objective as the Company’s shareholders by taking part in the value growth but also by taking a personal risk by acquiring the options at market value. The board is of the opinion that an effective share related incentive program is highly significant for the Company’s development and that the program is advantageous to the Company and its shareholders.

Value of the options

The value of the options shall be assessed by Carnegie Investment Bank in accordance with the generally accepted valuation model (Black & Scholes).
Based on a share price for the IBS B-share of SEK 14.24 and on other market conditions on April 4, 2008 the option value would be about SEK 1.62, which would give a total value for the options of about SEK 3.6 million.

Current share related incentive programs

The Company currently has no other share related incentive program.

Costs for the program and dilution

The options will be transferred at a market price. The proceeds from the option premiums will increase book equity. The Company will only incur minor administrative costs for the program. To compensate for the cash flow effect from a potential exercise of the options, it is the Company’s intention that the Company in connection with the exercise of the options sells a corresponding number of the shares held by the company. In reality this means that the Company’s book equity in the event of an execution of the options will be increased by the sum of the exercised options exercise price. The potential surplus between the share price at the time of exercise less the exercise price will be for the benefit of the participants. If the options are fully exercised and a corresponding number of own shares are sold this means that the number of outstanding shares will increase by 2,240,000, representing 2.8 per cent of the outstanding shares and 2.0 per cent of the votes of the company.

Further regarding the options

Considering among other things the pending recruitment of a new president the board proposes that the program shall not be executed until said recruitment has been finalised. The board shall execute the program prior to the expiry of the present fiscal year.

Invitation for acquisition of and entering into an agreement regarding the options shall be decided by the Board according to the following terms and conditions.

  1. An offer to acquire options shall be given to the Company’s President and other members of the management group and certain key employees (in total about 20 persons), comprising a maxiumum number of options per person between 70,000 and 210,000.
  2. It shall be possible to acquire the options at an assessed market price in accordance with the generally accepted valuation model (Black & Scholes).
  3. The call option program shall comprise a maximum of 2,240,000 options, each of which will carry entitlement to receive a cash amount corresponding to the listed share price of the company’s B share, less the exercise price at the time of exercise of the option.
  4. The duration for the call options shall be at most three years and 14 days from the time of the Board’s resolution to execute the program. 
  5. The options may be exercised during the last 14 days of the duration of the program. 
  6. The exercise price shall be determined as a price equal to 150 per cent of the average volume weighed closing price for the company’s B-share at the OMX Nordic Exchange during a period of 10 trading days following the Board’s resolution to execute the program. 
  7. The options will be cash settled and will not entitle to delivery of B shares in the company.
  8. The options shall be fully transferable and are after acquisition not linked to employment.
  9. The issue of options shall take place by an agreement being concluded between the Company and the employee substantially in accordance with the above main terms and conditions.
  10. The Board shall be responsible for the detailed design and management of the option Program within the framework of the main terms and guidelines set out above.

Sale and transfer of own shares

As stated above the intention is that the company, in conjunction with the exercise of the options, with waiver of the preferential rights of shareholders, the Company may transfer a maximum of 2,240,000 B shares in the Company at a sales price which is equivalent to the above mentioned exercise price. As exercise of the options is not possible until 2011 the board will prepare and present a more detailed proposal regarding the sale and transfer of own shares at the annual general meeting in 2011.

Preparation of the proposal

The proposal has been prepared together with external advisers, has been processed by the Remuneration Committee and approved by the Board.