Lagercrantz 2008/09

Average number of employees

	2008/09	Of whom men	2007/08	Of whom men
Parent Company
Sweden	9	78%	10	80%
Other Group companies
Sweden	407	73%	384	74%
Denmark	184	47%	198	45%
Norway	39	74%	40	73%
Finland	82	43%	80	44%
United Kingdom	4	50%	8	63%
Germany	24	67%	24	67%
Poland	27	74%	18	61%
Other countries	6	67%	7	43%
Total in Group companies	773	64%	759	61%
Group total	782	64%	769	61%

Salaries, other compensation and social benefits

	Salaries and compensation	Social benefits	Salaries and compensation	Social benefits
Parent Company	12	7	14	7
(of which pension cost)		(3)¹		(3)
Other Group companies	325	97	303	85
(of which pension cost)		(17)		(19)
Group total	337	104	317	92
(of which pension cost)		(20)²		(22)

¹ Of the Parent Company’s pension costs 1 (1) refers to the group Board of Directors and President. The group also includes executive vice presidents and presidents of subsidiaries. ²Of the Group’s pension costs, 4 (4) refers to the group Board of Directors and President, as well as to Presidents in subsidiaries. The Group’s pension obligations to this group amount to 0 (1).

Salaries and other compensation by country and among directors, etc. and other employees

	2008/09		2007/08
	Board of Directors and President	Other employees	Board of Directors and President	Other employees
Parent Company
Sweden	6	6	5	9
(of which bonus, etc.)	(0)	(0)	(1)	(2)
Other Group companies in Sweden	9	134	11	123
(of which bonus, etc.)	(1)	(2)	(1)	(3)
Total Sweden	15	140	16	132
	(1)	(2)	(2)	(5)
Outside Sweden
Denmark	8	92	8	88
(of which bonus, etc.)	(3)	(3)	(1)	(3)
Norway	3	20	2	21
(of which bonus, etc.)	(0)	(0)	(–)	(0)
Finland	3	29	3	23
(of which bonus, etc.)	(0)	(1)	(0)	(1)
United Kingdom	2	3	1	3
(of which bonus, etc.)	(0)	(0)	(–)	(–)
Germany	1	11	1	11
(of which bonus, etc.)	(–)	(0)	(0)	(1)
Poland	2	5	1	4
(of which bonus, etc.)	(0)	(0)	(0)	(1)
Other countries	1	2	1	2
(of which bonus, etc.)			(–)	(–)
Group companies outside Sweden, total	20	162	17	152
(of which bonus, etc.)	(3)	(4)	(1)	(6)
Group total	35	302	33	284
(of which bonus, etc.)	(4)	(6)	(3)	(11)

The Group Board of Directors and Presidents includes directors, presidents and executive vice presidents.

Gender distribution in management

	3/31/2009 Proportion of women	3/31/2008 Proportion of women
Parent Company
Board of Directors	20%	20%
Other members of senior management	0%	0%
Group total
Board of Directors in parent company and subsidiaries	6%	3%
Other members of senior management	3%	0%

Absence due to illness

Data refer to the Swedish companies	2008/09	2007/08
Total absence due to illness as a proportion of regular working hours	4 %	4 %
Proportion of total absence referring to continuous absence due to illness for 60 days or more	60 %	56 %
Absence due to illness by gender
Men	3 %	4 %
Women	7 %	5 %
Absence due to illness by age category
29 years or younger	3 %	5 %
30–49 years	4 %	3 %
50 years or older	6 %	7 %

In the Parent Company total absence due to illness was 1 (1) percent. Absence due to illness by category is not reported for reasons of integrity.

Principles for compensation to the Board of Directors and other members of senior management

Fees paid to the Chairman of the Board of Directors and to members of the Board of Directors were set by the Annual Meeting. No separate fees are paid for committee work. In accordance with Annual Meeting resolution, compensation to the President & CEO and other members of senior management consists of basic salary, variable compensation, other benefits, pension and financial instruments. The total compensation shall be adjusted to conditions on the market and competitive and should be in line with responsibility and authority. The variable portion of the compensation shall be maximised at and never exceed the fixed salary. The variable portion of the compensation should also be based on outcome relative to set goals and on individual performance. The retirement age shall be 60−65 years and in addition to an ITP plan only defined contribution pension plans may be offered. In the case of termination, a severance payment in a maximum amount of one year’s salary may be offered in addition to salary during the period of notice. In addition to the incentive programme proposed to the Annual General Meeting, no other share-based or share-price-related programmes will be offered.

As far as compensation to the President and other members of senior management is concerned, the Board of Directors has appointed a compensation committee consisting of the Chairman of the Board of Directors and the Vice Chairman of the Board of Directors, with the President as reported. The task of the committee is to evaluate and suggest principles of compensation for members of senior management to the Board of Directors. The Board of Directors submits proposals to the Annual Meeting for resolution. The proposal to the 2009 Annual General Meeting is set forth in the Board of Directors Report.

Compensation and other benefits, Parent Company 2008/09

SEK thousand	Basic salary, directors fee	Variable compensation	Other compensation	Other benefits	Pension cost	Total
Chairman of the Board of Directors
Anders Börjesson	400					400
Directors
Tom Hedelius	300					300
Pirkko Alitalo	200					200
Lennart Sjölund	200					200
President & CEO
Jörgen Wigh	2,146		88	95	650	2,979
Executive Vice Presidents
Niklas Enmark	1,226			90	255	1,571
Magnus Söderlind	1,371		58	132	349	1,910
Other members of senior management
3.5 persons	3,730	88	25	326	1,113	5,282
Total	9,573	88	171	643	2,367	12,842

Compensation and other benefits, Parent Company 2007/08

SEK thousand	Basic salary, directors fee	Variable compensation	Other compensation	Other benefits	Pension cost	Total
Chairman of the Board of Directors
Anders Börjesson	350					350
Directors
Tom Hedelius	250					250
Pirkko Alitalo	175					175
Lennart Sjölund	175					175
President & CEO
Jörgen Wigh	1,962	511		91	550	3,114
Executive Vice President
Niklas Enmark	1,141	256		91	244	1,732
Other members of senior management
3.5 persons	5,462	1,051		500	1,646	8,659
Total	9,515	1,818	0	682	2,440	14,455

Other members of senior management consist executives with division responsibility. For the composition of the management group, refer to section Management. Compensation to this group, which in 2008/2009 consisted of 3.5 (5) persons, was covered by the resolution of the 2008 Annual Meeting dealing with principles of compensation of members of senior management. The Compensation Committee has verified compliance with the resolution of the Annual Meeting and conformity of the compensation with market conditions has been confirmed by comparing with compensation in other similar listed companies.

Pensions

The retirement age for the President & CEO is 60 years. The retirement age of other members of senior management is 65 years. Pension is paid equivalent to the ITP plan, which is a defined contribution plan.

Severance payment

The period of notice for the President is 12 months when termination is at the initiative of the Company and 6 months when termination is at the initiative of the President. In the case of termination at the initiative of the Company, the President is entitled to a severance payment of the equivalent of one year’s salary in addition to salary during the period of notice. No severance payment is payable in the case of termination at the initiative of the President. The severance payment is not prorated against other income. The period of notice for the other members of Group management is 6–12 months when termination is at the initiative of the Company and up to 6 months when termination is at the initiative of the employee. In the case of termination at the initiative of the Company, members of Group management are entitled to a severance payment of the equivalent of up to one year’s salary, in addition to salary during the period of notice. No severance payment is payable in the case of termination at the initiative of the employee. The severance payment is not prorated against other income.

Option programme

A three-year call option programme for members of senior management was resolved by the 2006 Annual General Meeting. The call option programme will consist of call options for shares repurchased by Lagercrantz Group where each option gives its holder the right to acquire one repurchased class B share after 3.25 years, with a potential for redemption after three years. The share was acquired at a redemption price determined as percentage mark-up to the average market price of the share during ten trading days after the Annual General Meeting in accordance with quoted paid prices. The programme covered members of senior management with a direct possibility of affecting the Group’s income.. The members of the Board of Directors did not have the right to acquire call options, with the exception of the Company’s President & CEO.

One prerequisite for being awarded call options is that the employee has concluded a special pre-emption agreement with the Company. Preemption shall occur at the market value at the time of termination of employment, a tender offer for all outstanding shares of the Company by a third party and in cases when the call options are to be transferred to a third party. In all other respects the call options are freely transferable. The premiums for the call options have been equivalent to the market value of the call options in accordance with external valuation applying the generally accepted valuation method (the Black & Scholes model).

For the purpose of encouraging participation, a subsidy will be payable up to the equivalent to the premium paid. The employee will be responsible for paying income tax on the amount of the subsidy, which thereby will only be equivalent to a part of the premium paid. Payment of the subsidy is paid two years after the issue resolution provided the option holder still was in employment of the Group at this point in time and still owns the options. Call options equivalent to a maximum of 3.0 percent of the total number of shares outstanding, including class A and class B shares, and also including shares held in treasury, may be issued. Since call options have been awarded every year, loyal employees have been rewarded and market price increases and decreases were managed more effectively with better risk diversification.

The award resolved by the 2006 Annual Meeting for 2006 comprised 27 persons and a total of 255,000 call options. Awards varied between 5,000 and 37,600 options per person. The President & CEO acquired 37,600 and other members of Group management acquired 112,900. The measuring period to determine the average share price, which was SEK 28.81, was 31 August–13 September 2006. The redemption price for the shares resolved was 125 percent of the average price, was set as SEK 36.00. The market value of the call options was set to be SEK 2.90 per option by an independent valuation institute. The cost for the 2006 programme amounted to MSEK 1.0 mostly related to the subsidy, with only a marginal effect on earnings per share. About MSEK 0.2 of the cost was charged to earnings for 2006/07. The effect on equity was zero.

The award resolved by the 2007 Annual Meeting for 2007 comprised 27 persons and a total of 260,000 call options. Awards varied between 5,000 and 43,300 options per person.. The President & CEO acquired 43,300 and other members of Group management acquired 111,500. The measuring period to determine the average share price, which was SEK 35.48, was 3 September–14 September 2007. The redemption price for the shares resolved was 125 percent of the average price, was set as SEK 44.40. The market value of the call options was set to be SEK 3.50 per option by an independent valuation institute. The cost for the 2007 programme amounted to about MSEK 1.0 mostly related to the subsidy, with only a marginal effect on earnings per share. MSEK 0.5 of the cost is charged to the 2007/08 result. The effect on equity was MSEK 0.8.

The award resolved for 2008 by the 2008 Annual Meeting covered 27 persons and a total of 180,500 call options. The awards varied between 3,500 and 29,600 options per person. The President & CEO acquired 29,600 and other members of senior management 102,100. The measuring period to determine the average share price, which was SEK 29.41 was 4 September–17 September 2008. The redemption price for the call options, which was set at 125 percent of the average share price, was set as SEK 36.80. The market value of the call options was set to be SEK 2.10 per option by an independent valuation institute. The cost of the 2008 programme amounted to about MSEK  0.6 mostly related to the subsidy, with only a marginal effect on earnings per share. MSEK 0.3 of the cost is charged to the 2008/09 result. The effect on equity was MSEK 0.2.

Fees and reimbursement to auditors

	Group		Parent Company
	2008/09	2007/08	2008/09	2007/08
KPMG
Audit assignments	3	3	0.6	0.6
Other assignments	1	1	0.1	0.3
Other auditors
Audit assignments	0	0	–	–
Other assignments	0	0	–	–

By audit assignment is meant examination of the annual accounts and the administration by the Board of Directors and the President, other tasks the Company’s auditors are obligated to perform, and advice or other assistance prompted by such examination or the performance of such tasks. Everything else is other assignments.

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