The Nomination Committee proposes that the individual fee to the Boardmembersand the fee to the Chairman of the Board of Directors be increased.Further, theNomination Committee proposes that the fees for work on the Committees oftheBoard be unchanged.
It is important that the Board fees are maintained at an appropriate leveltomake it possible to recruit the best possible competence to the Board ofDirectors of Ericsson. The Nomination Committee has compared the Board feesinEricsson with the Board fees in other Nordic and European companies as wellasBoard fees in certain U.S. high-tech companies. The Nomination Committeehasconcluded that compared with the Board fees in companies of equal size andcomplexity, Ericsson's Board fees are lower. When assessing the level offees itmust be considered that the Ericsson group has customers in more than 180countries and that sales amount to more than SEK 200 billion.
Against this background, the Nomination Committee considers well-justifiedtheproposed increases of the individual Board fee from SEK 875,000 to SEK900,000and of the fee to the Chairman of the Board from SEK 3,750,000 to SEK3,850,000.
The Nomination Committee considers that the fees for Committee work arereasonable, and proposes that these fees remain unchanged.
The proposal of the Nomination Committee implies all in all an increase ofthefees of less than 2.5 percent compared with the total fees to the Boardmembersfor Board and Committee work resolved by the Annual General Meeting 2012.
Fees in the form of synthetic shares
With the purpose of further increasing the mutual interest in the CompanyofDirectors and shareholders, the Nomination Committee proposes that theDirectorsshould, as previously, be offered the possibility of receiving part of theBoardfees in the form of synthetic shares. A synthetic share constitutes aright toreceive payment of an amount which corresponds to the market value of ashare ofseries B in the Company on NASDAQ OMX Stockholm at the time of payment.
The Nomination Committee therefore proposes that the Annual General Meetingofshareholders 2013 resolve that part of the fees to the Directors, inrespect oftheir Board assignment (however, not in respect of Committee work), may bepaidin the form of synthetic shares, on the following terms and conditions.
* A nominated Director shall be able to choose to receive the fee inrespect of his or her Board assignment, according to the following four alternatives:
i. 25 percent in cash - 75 percent in synthetic shares
ii. 50 percent in cash - 50 percent in synthetic shares
iii. 75 percent in cash - 25 percent in synthetic shares
iv. 100 percent in cash.
* The number of synthetic shares to be allocated shall be valued to anaverage of the market price of shares of series B in the Company on NASDAQ OMX Stockholm during a period of five trading days immediately followingthe publication of Ericsson's interim report for the first quarter of 2013.The synthetic shares are vested during the term of office, with 25 percentper quarter of the year.
* The synthetic shares give a right to, following the publication of Ericsson's year-end financial statement in 2018, receive payment of acash amount per synthetic share corresponding to the market price ofshares of series B in the Company at the time of payment.
* An amount corresponding to dividend in respect of shares of series B inthe Company, resolved by the Annual General Meeting during the holdingperiod, shall be disbursed at the same time as the cash amount.
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