Annual Report 2009 - Husqvarna Group

Report by the Board of Directors Husqvarna Annual Report 2009 37
The Husqvarna share
At year-end the share capital in Husqvarna amounted to
SEK 1,153m (770), comprising 147,570,030 A-shares
(98,380,020) and 428,773,748 B-shares (286,756,875). The
increase in the number of shares refers to the rights issue.
Each A-share carries one vote, and each B-share 1/10 of a
vote. All shares entitle equal rights in terms of the company’s
assets and earnings.
There are no restrictions on transfer of shares, voting rights
or the right to participate in the AGM. Nor is the company
party to any significant agreements which might be affected,
changed or terminated if control of the company were to
change as a result of a public bid for acquisition of shares in
the company.
The company is not aware of any agreements between
shareholders which might limit the right to transfer shares.
In addition, there are no stipulations in the Articles of Association
regarding appointment or dismissal of Board members or
agreements between the company and Board members or
employees which require remuneration if such persons leave
their posts, or if employment is terminated as a result of a public
bid to acquire shares in the company, except as outlined in
Note 24.
As of 31 December 2009 the largest shareholders were
Investor AB with 28.9% (28.7) of the votes and LE Lundbergföretagen
with 14.4% (13.1) of the votes. For more information
on major shareholders, see page 99.
Repurchase of own shares
The Annual General Meeting 2009 authorized the Board to
acquire B-shares totaling up to 3% of the total number of
shares, and to pay for the shares in cash.
The shares may be purchased on the NASDAQ OMX Stockholm
in order to hedge the company’s obligations, including
employer contributions, pursuant to the long-term incentive
programs for 2007, 2008 and 2009.
The company has the right to adjust on an ongoing basis the
number of shares that it holds as a hedge of the company’s
obligations pursuant to the implemented incentive programs.
The participants in the incentive programs shall be entitled to
receive a maximum number of shares in accordance with the
conditions of the programs, and transfers of shares under the
programs will be made without consideration.
There were no repurchases of own shares during 2009. As of
31 December 2009, Husqvarna owned 2,723,128 (2,919,000)
re-purchased B-shares corresponding to 0.47% (0.76) of the
total number of outstanding shares.
Long term incentive program for 2009
The Annual General Meeting 2009 adopted a new performance-based
long-term incentive program based on parameters
similar to those in the programs for 2008 and 2007.
The program comprises approximately 40 senior managers.
The conditions involved investment by the participants in
Husqvarna B-shares at market price. The employee is required
to purchase Husqvarna B-shares corresponding to a minimum
value of SEK 20,000 and a maximum of 6% of his or her annual
target income (fixed salary plus variable salary on target level).
For each B-share purchased the company will allocate one
share award plus performance-based stock options, if the lowest
performance target level, the development of the Group’s
earnings per share during the period in 2009–2011, is
achieved. Each share award entitles the employee to one
B-share free of charge, three years after the grant subject to
reaching certain perfomance criteria.
Each stock option entitles the holder to purchase one
B-share at a price of SEK 48. The stock options may be exercised
after three years at the earliest and eight years at the latest
from the day of the grant. The number of stock options
that may be granted depends on the number of B-shares that
the employee has purchased, as well as the development of
the company’s earnings per share in 2009–2011.
The program comprises a maximum of 1,926,000 B-shares.
If all share awards and a maximum of granted stock options
are fully exercised, it is estimated that the 2009 program will
comprise no more than 0.34% of the share capital.
Legal matters
Husqvarna is involved in disputes in its ordinary course of business.
On the basis of currently known circumstances, Husqvarna
estimates that none of the disputes in which the Group
is presently involved or which have been settled recently have
had, or may have, a material effect on Husqvarna’s financial
position or profitability. A description of current legal matters
is given in Note 22.
Verdict in the case regarding gas explosion in Belgium
In a judgment of 22 February 2010, the criminal court of Tournai
in Belgium dismissed all claims against Husqvarna in a case
regarding a gas explosion on Husqvarna’s property in Ghislenghien,
Belgium.
Husqvarna Belgium has together with 13 other indicted
companies, authorities and private persons been prosecuted
in the criminal court of Tournai for potentially having contributed
to the accident. The hearings were held between June
and November 2009.
The explosion occurred in July 2004 and caused the loss of
24 lives and injured 132 people. Substantial damage was
caused to the Husqvarna plant and neighboring property. The
explosion was caused by the bursting of a sub-surface industrial
gas pipe.
Husqvarna settles engine-capacity lawsuit in the US
On 1 March 2010, Husqvarna and a number of other parties
reached a settlement in a lawsuit in a Federal District Court in
Illinois, USA, regarding alleged inaccurate specification of
engine capacity in lawn mowers. The lawsuit, which has been
pending since 2004, will thus be withdrawn.
The other parties are manufacturers or sellers of lawn mowers
or engines for lawn mowers. The settlement includes more
than 65 similar or parallel lawsuits in all 50 states in the US.