Note 4 - Employees and personnel costs

Average number of employees

The average number of employees of the Group, as well as wages, salaries and other remunerations are shown in the following table. The average number of employees has been calculated by placing the number of hours in attendance in relation to the normal working time for each country. The information on the number of full-year employees and on wages, salaries and other remunerations refers to the period from
May 1–April 30, of each year.

	2006/07		2007/08		2008/09
	Average number	Of whom	Average number	Of whom	Average number	Of whom
	of employees	men	of employees	men	of employees	men
Parent Company
Hemtex AB	466	30	561	34	540	34
Subsidiaries
Hemtex Oy, Finland	75	4	120	7	144	5
Hemtex A/S, Denmark	44	6	44	10	50	9
Hemtex AS, Norway	17	—	32	—	39	3
Group total	602	40	757	51	773	51

Gender distribution in company management
	2006/07		2007/08		2008/09
	No. of men	No. of women	No. of men	No. of women	No. of men	No. of women
Parent Company
Board of Directors	4	3	3	3	3	3
Other senior executives	5	2	4	3	4	3
Total, Group
Board of Directors	13	3	12	3	12	3
Other senior executives	6	4	4	5	5	4

Salaries, other remunerations and social expenses
	2006/07		2007/08		2008/09
		Social fees		Social fees		Social fees
	Salary and	(of which	Salary and	(of which	Salary and	(of which
	other	pension	other	pension	other	pension
	remunerations	expenses)	remunerations	expenses)	remunerations	expenses)
Parent Company	142,500	55,099	177,412	69,818	175,982	65,483
		(9,629)		(16,343)		(11,099)
Subsidiaries	35,304	6,047	55,821	10,861	73,499	13,720
		(4,112)		(7,081)		(8,852)
Group	177,804	61,146	233,233	80,679	249,481	79,203
		(13,741)		(23,424)		(19,951)

The Group’s pension costs for the company management (nine persons) amount to SEK 3,856,000 (2,584,000). For the Board of Directors (six persons), pension costs amount to SEK 0 (0).

The Hemtex Group currently has both defined-benefit and defined-contribution plans. All employees in Sweden are covered by the Alecta ITP supplementary employment pension plan, which is a defined-benefit plan but is recognized as a defined-contribution plan in accordance with a statement from the Swedish Financial Accounting Standards Council’s Emerging Issues Task Force (URF 3). At present, Alecta is unable to provide such information that would make it possible to recognize this ITP plan as a defined-benefit plan. Pensions in Finland and Denmark are defined-contribution pension plans. Obligations regarding expenses for defined-contribution plans are recognized as an expense in the income statement when they occur.

Salaries and other remunerations by country
	2006/07		2007/08		2008/09
	Board of Directors		Board of Directors		Board of Directors
	and senior executives	Other	and senior executives	Other	and senior executives	Other
	(14 persons)	employees	(15 persons)	employees	(15 persons)	employees
Parent Company
Hemtex AB	7,952	134,548	9,769	167,642	11,074	164,908
Subsidiaries
Hemtex Oy, Finland	729	17,632	747	28,412	960	38,184
Hemtex A/S, Denmark	—	11,608	—	12,799	—	15,697
Hemtex AS, Norway	—	5,335	—	13,864	611	18,047
Group	8,681	169,123	10,516	222,717	12,645	236,836

Absence due to illness in the Parent Company

Absence due to illness during May 1 – April 30, for each year.

	2006/07	2007/08	2008/09
Total absence due to illness	4.2%	5.6%	5.0%
Long-term absence due to illness	1.6%	2.3%	1.6%
Absence due to illness, men	1.1%	1.5%	1.3%
Absence due to illness, women	4.2%	5.9%	5.2%
Employees, 29 or younger	2.8%	3.5%	3.5%
Employees, 30–49 years old	4.2%	6.0%	5.3%
Employees, 50 or older	7.1%	12.3%	9.6%

Benefits for the Board of Directors and senior executives

Board of Directors

The Chairman and members of the Board who were elected by the Annual General Meeting are paid fees as per decision by the Annual General Meeting.

The Chairman’s fee for the 2008/2009 fiscal year amounts to
SEK 340,000 (300,000). Other external members’ fees for the fiscal year amount to a total of SEK 850,000 (825,000). Fees for the Remuneration Committee amount to SEK 100,000 (100,000), in accordance with decision by the Annual General Meeting. From November 10, 2008 until February 28, 2009, Board member Kia Orback Pettersson assumed the position as acting President. The remuneration was invoiced in the form of consulting remuneration totaling SEK 1,000,000. Remuneration totaling SEK 165,000 for operative work conducted during the period November 2008–February 2009 was paid to Chairman Mats Olsson.

Remuneration and other benefits to members of the Board in 2008/2009

	Board-	Fee
	Remuneration	Committee	Other
Mats Olsson, Chairman	340	50	165
Ingmar Charleson	170	—	—
Bodil Eriksson	170	25	—
Mats Holgerson	170	—	—
Kia Orback Pettersson	170	25	1,000
Marita Granberg Ramprecht	170	—	—
Total	1,190	100	1,165

Remuneration and other benefits to members of the Board in 2007/2008

	Board-	Fee
	Remuneration	Committee	Other
Mats Olsson, Chairman	300	50	—
Hans Andersson	150	—	—
Ingmar Charleson	150	—	—
Bodil Eriksson	150	25	—
Kia Orback Pettersson	150	25	—
Lars Nilsson*	75	—	—
Marita Granberg Ramprecht	150	—	—
Total	1,125	100	—

* Lars Nilsson resigned for health reasons in January 2008.

Remuneration Committee

A Remuneration Committee that discusses, decides on and presents recommendations on wages, salaries, other employment terms and incentive programs for the President and Group management has been appointed from within the Board. The Remuneration Committee reports to the Board. The members of the Remuneration Committee are Mats Olsson, who is the Chairman, Bodil Eriksson and Kia Orback Pettersson.

President

Göran Ydstrand assumed the position of President on March 1, 2009. The remuneration paid from March-April 2009 includes remunerations for work carried out by Göran Ydstrand prior to assuming the position of President. Göran Ydstrands fixed monthly salary is SEK 235,000. No variable remuneration was paid in the fiscal year 2008/2009.

In addition, the President has a taxable residence and travel benefits, car benefit and healthcare insurance. In accordance with ITP 2, the President is covered by pension benefits with a retirement age of 60. The pension premium shall amount to 38.75% of the fixed salary exceeding 7.5 income base amounts. The President is also entitled to enter additional work-pension solutions with premiums of 8.75% of the fixed salary, to be paid between the ages of 60–65. Pension-based salary comprises the basic salary plus an average of the variable remuneration during the past three years.

Göran Ydstrand is entitled to salary during an 18-month notification period in the event of termination by Hemtex. In the event of termination by the President, there is a six-month notification period. In the event that the President assumes a position outside Hemtex during the period of notification, the remuneration received by the President shall be deducted from the remuneration paid by Hemtex. The President is bound by a non-competition agreement for a period of one year following termination of employment. As remuneration for this, Hemtex shall pay remuneration equivalent to 70% of the monthly salary applicable at the time of termination during the period of non-competition. In the event of significant ownership structure changes or major organizational changes enacted by the owners or the Board, the President is entitled to leave Hemtex with immediate effect and receive 24-months salary in severance pay.

Outgoing President

Anders Jansson was President until November 10, 2008. Salary paid until November 2008 amounted to SEK 1,645,000, after which a monthly salary of SEK 255,000 is being paid until 2010. No variable remuneration was paid in the fiscal year 2008/2009. In addition to salary, Anders Jansson has a taxable car benefit and healthcare insurance.

The pension expense for the fiscal year 2008/2009 amounted to SEK 1,436,000 (833,000). These pension benefits are based on a general pension plan with surcharges for a pension premium on 12% of the current pension-based salary. Pension-based salary is defined as basic salary plus an average of the variable remuneration during the past three years. The retirement age is 60.

Severance pay, recruitment costs and consulting fees totaling SEK 13.2 M in conjunction with the replacement of the President were charged to earnings for the year. SEK 11.2 M in severance pay, SEK 0.8 M in recruitment costs and SEK 1.2 M in consulting fees were charged to earnings.

Other members of company management

Basic salaries for the other eight (seven) members of the company management team amounting to SEK 7,730,000 (6,651,000) were paid. Bonuses amounted to SEK 0 (0). Bonuses comprise a maximum of 40% of fixed salaries. Pension expenses for the fiscal year totaled SEK 2,420,000 (1,751,000). Pension benefits are based on the national pension scheme. Pensionable salary is defined as the basic salary plus an average of the variable remuneration during the past three years. All members of company management have a company car. The retirement age is 65. In the event of termination of employment by the employer, salary payment will continue unchanged for 12 months. In the event of termination of employment by the employee, salary payment will continue for six months.

Remuneration and other benefits for other senior executives in 2008/2009
		Variable		Pension	Other
2008/2009	Basic salary	remuneration	Other benefits	expenses	remuneration	Total
President, Göran Ydstrand ¹	705	—	6	—	—	711
President, Anders Jansson ²	2,920	—	92	1,436	—	4,448
Other senior executives ³	7,730	—	445	2,420	—	10,595
Total	11,355	—	543	3,856	—	15,754

1) Göran Ydstrand assumed the position on March 1, 2009.
2) Anders Jansson stepped down as President on November 10, 2008.
3) Company management 2008/2009 (excluding the President), Stefan Ahlén, Gunnel Bergström, Carita Degerman, Olof Fredman, Marita Hansson, Dag C Myhrene, Lena Nyberg and Tommy Svensson.


Remuneration and other benefits for other senior executives in 2008/2009
		Variable		Pension	Other
2007/2008	Basic salary	remuneration	Other benefits	expenses	remuneration	Total
President, Anders Jansson	2,740	—	103	833	—	3,676
Other senior executives ¹	6,651	—	459	1,751	—	8,861
Total	9,391	—	562	2,584	—	12,537

1) Company management 2007/2008 (excluding the President), Stefan Ahlén, Gunnel Bergström, Carita Degerman, Olof Fredman, Marita Hansson, Dag C Myhrene and Tommy Svensson.

Incentive program 2007–2010

At the Annual General Meeting on September 5, 2007, it was decided to introduce long-term incentive programs for senior executives within the Hemtex Group through the issue of warrants and employee stock options in Hemtex AB. Costs of SEK 0 (0.3) for employee stock options were charged to the fiscal year in accor-dance with IFRS 2 and UFR 7.

Within the framework for both programs, a total of seven senior executives acquired 120,000 warrants at market price and an allocation of 120,000 employee stock options free of charge. Each option/warrant entitles the holder to one new share subscription. The President has 30,000 warrants and 30,000 employee stock options. Other company executives have 15,000 warrants and 15,000 employee stock options each.

With regard to entitlement to exercise employee stock options, this is presuming the increases stated in the conditions pertaining to earnings per share are achieved during the fiscal years 2007/2008–2009/2010 for the Group.

Employee stock options are not transferrable and the exercise of employee stock options assumes that the options holder is still employed by the Hemtex Group. Entitlement to exercise employee stock options also assumes that the Group increased earnings per share during the fiscal years 2007/2008–2009/2010, according to adopted annual reports (profit for the year divided by a weighted average number of shares during the year) compared with the preceding fiscal year, so that the profit increase per share during each fiscal year corresponds to at least an increase in earnings per share according to the table below.

	Profit increase	Share of options
Period	per share, %	that can be redeemed
Fiscal year 2007/2008	15	1/3
Fiscal year 2008/2009	15	1/3
Fiscal year 2009/2010	15	1/3

If the target for the 2007/2008 fiscal year is achieved, one third of employee stock options could be exercised and this does not depend on the achievement of the targets for the 2008/2009 and 2009/2010 fiscal years. The corresponding principle pertains to the remaining fiscal years. If the targets for the 2007/2008 fiscal year are not achieved but the aggregated target for the 2007/2008 and 2008/2009 fiscal years are achieved, the holder is entitled to exercise two thirds of all employee stock options. The corresponding principle pertains to the remaining fiscal years. In accordance with generally accepted conditions, employee stock options may be exercised earlier in the event of compulsory redemption of shares, merger or liquidation through which the company is merged with another company, etc. In the event of premature redemption, the number of employee stock options that can be redeemed shall be based on the increase in earnings per share stated in the Annual Report for the period that elapsed until the event that led to the premature redemption.

Hemtex has chosen the Black & Scholes model for warrant evaluation. The market price established on October 5, 2007, which was paid for each warrant, amounted to SEK 15.80 per warrant, which resulted in SEK 1,896,000 being paid in October 2007 to Hemtex AB. The issue price established after the control period, September 12–25, amounted to SEK 151 per share. The subscription period for shares supported by paid warrants and allocated employee stock options may occur during the period, June 1 until July 31, 2010.

The maximum dilution effect for the incentive program is estimated to amount to a maximum of 0.82% of the share capital (meaning the same percentage dilution by the number of votes), assuming full exercise of all warrants and employee stock options. More detailed information on the incentive program is available on the company’s website under the corporate governance section.

		Option program	Redemption price
Program	No. of options	(SEK/share)	(SEK/share)	Subscription period
Warrants	120,000	15.8	151	Jun 1–Jul 31 2010
Employee stock options	120,000	—	151	Jun 1–Jul 31 2010