Axfood — AGM Information 2013

Feb 7, 2013

NOTICE OF ANNUAL GENERAL MEETING OF AXFOOD AKTIEBOLAG

The shareholders of Axfood Aktiebolag (publ), reg. no. 556542-0824, are hereby invited to attend the Annual General Meeting (AGM) to be held at 5 p.m. on Wednesday, 13 March 2013. Location: Cirkus, Djurgårdsslätten 43-45, Stockholm. Registration for the AGM will open at 4 p.m.

Right to participate and notification

Shareholders who wish to participate in the proceedings of the Annual General Meeting must

• be registered as shareholders in the register of shareholders maintained by Euroclear Sweden AB as per 7 March 2013, and
• notify the Company of their intention to attend the Meeting not later than Thursday, 7 March 2013. Application can be made via the Company's website: www.axfood.se. Application may also be made in writing to: Axfood AGM, c/o Euroclear Sweden, Box 7841, SE-103 98 Stockholm, Sweden, or by phone at +46-8-402 90 51. Notification must include the shareholder's name and personal identity number or company name and company registration number, and the number of any assistants accompanying the shareholder to the Meeting (maximum of two). Please also include the shareholder's address and phone number.

Nominee-registered shares

Shareholders whose shares are registered in the name of a nominee through a bank or other nominee must, in order to be allowed to attend the AGM, request to have their shares temporarily re-registered in their own names in the register of shareholders by 7 March 2013. Shareholders interested in such re-registration should inform their respective nominees of such request well in advance of this date.

Proxies, etc.

Shareholders who are represented by proxy must issue a power of attorney for their proxy. If the power of attorney has been issued by a legal entity, copies of authorization documents (certificate of registration or similar) must be attached. To facilitate registration for the Annual General Meeting, the power of attorney, in original, and any authorization documents should sent by post well in advance of the Annual General Meeting to the following address: Axfood AGM, c/o Euroclear Sweden, Box 7841, SE-103 98 Stockholm, Sweden. Proxy forms can be downloaded from Axfood's website: www.axfood.se.

Proposed agenda

• 1. Calling to order of the Annual General Meeting
• 1. Election of a chairman to preside over the Annual General Meeting
• 1. Drawing-up and approval of the voting list
• 1. Approval of the agenda
• 1. Election of one or two persons to check the minutes
• 1. Resolution as to whether the Annual General Meeting has been duly convened
• 1. Presentation of the annual report and auditor's report, of the consolidated accounts and auditor's report for the Group, and of the auditor's report on the audit work
• 1. CEO's address and questions from the shareholders
• 1. Resolution concerning adoption of the income statement and balance sheet, and the consolidated income statement and consolidated balance sheet
• 1. Resolution concerning disposition of the Company's profit in accordance with the adopted balance sheet and the record date for payment of the dividend
• 1. Resolution on discharge from liability of the directors and president
• 1. Report on the Nominating Committee's work and proposals
• 1. Determination of the number of directors and deputy directors to be elected by the Annual General Meeting
• 1. Determination of directors' and auditors' fees
• 1. Election of the Chairman of the Board, other directors and deputy directors
• 1. Determination of guidelines for appointment of the Nominating Committee, etc.
• 1. Determination of guidelines for compensation of senior executives
• 1. Resolution on employee purchases of shares in subsidiaries
• 1. Conclusion of the Annual General Meeting

Proposals from the Board of Directors and the Company's nominating committee

Point 2 – AGM chairman

The Nominating Committee nominates Fredrik Persson, Chairman of the Board, to serve as chairman to preside over the Annual General Meeting.

With respect to Axfood's nominating committee ahead of the 2013 Annual General Meeting, it was appointed in accordance with the guidelines that were decided on for the 2012 Annual General Meeting. The members of the Nominating Committee are Göran Ennerfelt (Axel Johnson Aktiebolag), Kristin S. Genton (Reitangruppen AS), Marianne Flink (Swedbank Robur funds), Johan Strandberg (SEB funds) and Jonas Hillhammar (Axfood's Shareholder Association). Göran Ennerfelt has been appointed to serve as chair of the Nominating Committee. Fredrik Persson, Chairman of the Board of Axfood, has been a co-opted member of the Nominating Committee.

Point 10 – Disposition of profit and record date for payment of the dividend

The Board of Directors proposes a dividend of SEK 12.00 per share and that the record date for entitlement to the dividend shall be 18 March 2013. Given the proposed record date, dividends are expected to be paid out via Euroclear Sweden AB on 21 March 2013. The last day for trading in the Company's stock including the right to the dividend is 13 March 2013.

Retained profits of KSEK 3,392,260 are at the disposal of the Annual General Meeting, of which the Board of Directors – in accordance with the above – proposes that a total of KSEK 629 612 be distributed to the shareholders (52,46,678 x 12), and that SEK 2,762,648 be carried forward.

Points 13-15 – Number of directors and deputy directors, directors' fees, Chairman of the Board and other directors and deputy directors

The Nominating Committee proposes the following:

• Point 13 Seven AGM-elected directors and no deputies
• Point 14 Directors' fees in an amount and allocation that is unchanged from the preceding year, totalling SEK 2,400,000, of which SEK 525,000 payable to the Chairman, SEK 375,000 to the Vice Chairman, and SEK 300,000 to each of the other nonexecutive directors, and no fees for committee work

Auditor's fee payable in accordance with approved invoice

Point 15 Re-election of Fredrik Persson as Chairman of the Board

Re-election of directors Antonia Ax:son Johnson, Peggy Bruzelius, Odd Reitan, Marcus Storch and Annika Åhnberg

New election of Lars Olofsson as director on the Company's board

Lars Olofsson (b. 1951) has a degree in economics from Lund University. He was active in the food retail sector from 1976 to 2008, including service with Nestlé, where he held executive positions in various Nestlé group companies for more

than 30 years, serving as Executive Vice President from 2001 to 2008. Most recently, from 2009 until mid-2012, he served as CEO and Chairman of Carrefour S.A., Europe's largest, and the world's second-largest, retail company. Lars Olofsson's very extensive international experience in the food and food retail sectors will bring valuable knowledge to the Company for its business and development.

Point 16 – Guidelines for appointment of the Nominating Committee, etc.

The Nominating Committee proposes that the Annual General Meeting adopt the following guidelines for appointment of the Nominating Committee, etc. The proposal corresponds to the guidelines adopted by the 2012 Annual General Meeting.

The shareholder who, based on ownership statistics compiled by Euroclear Sweden AB as per 31 August 2013, owns the most shares and votes in the Company shall, after consulting with the three subsequently largest shareholders, appoint a nominating committee consisting of five persons. The Nominating Committee's composition shall be publicly announced not later than in connection with publication of the third quarter interim report for 2013.

The Nominating Committee is tasked with submitting recommendations for the following ahead of the Annual General Meeting:

• The number of directors and deputy directors, and where applicable, auditors and deputy auditors
• Directors' and auditor's fees, and any special fees for committee work
• Directors and, where applicable, auditors
• Chairman of the Board
• A chairman to preside over the Annual General Meeting
• Guidelines for appointment of the Nominating Committee, etc.

The Nominating Committee appoints a committee chair from among its members. The Nominating Committee's mandate period applies until a new nominating committee has been appointed. If a member of the Nominating Committee leaves the Committee before its work has been completed, or if a significant change takes place in the ownership structure after the Nominating Committee has been constituted, a replacement shall be appointed through such a procedure in which the departing member was appointed. Changes in the Nominating Committee's composition shall be publicly announced on the Company's website. The Nominating Committee's recommendations shall be publicly announced in conjunction with publication of the Notice of the Annual General Meeting.

In connection with its assignment in general, the Nominating Committee shall fulfil the duties which, according to the Swedish Code of Corporate Governance, are incumbent upon the Company's nomination process, and at the request of the Committee, the Company shall provide personnel resources, such as a secretarial function for the Committee, to facilitate the Committee's work. Where needed, the Company shall also agree to bear reasonable costs for external consultants which are deemed by the Committee to be necessary for the Committee to fulfil its assignment.

Point 17 – Guidelines for compensation of senior executives

The Board proposes that the Annual General Meeting adopt the following guidelines for compensation of senior executives. The proposal corresponds to the guidelines that were adopted by the 2012 Annual General Meeting.

Axfood shall offer compensation in line with the going rate in the market that is based on factors such as the importance of the individuals' work duties as well as their competence, experience and performance, and the compensation shall consist of the following components:

• Fixed based salary

• Short-term variable compensation

• Long-term variable compensation

• Retirement benefits
• Other benefits
• Severance terms

Drafting of compensation matters is conducted as follows. The level of compensation shall be set by a special compensation committee established within the Board. However, the CEO's compensation and other terms of employment are set by the Board in its entirety. At the start of the year, the Compensation Committee sets the targets for the outcomes for variable salary (for the CEO, these are set by the Board). In addition, the Compensation Committee sets the retirement benefits for the members of the Executive Committee, with the exception of the CEO, for whom the Compensation Committee only provides a recommendation to the Board for adoption.

The Executive Committee currently consists of eleven persons including the CEO.

Fixed base salary

The members of the Executive Committee shall be paid a base salary in the form of a fixed, cash monthly salary that is attractive compared with the going rate in the market. This fixed base salary constitutes compensation for a committed work contribution at a high professional level that creates value-added for Axfood's customers, owners and employees.

Variable compensation

In addition to their base salary, the members of the Executive Committee shall be offered short-term and long-term variable compensation, both of which are based on the achievement of Axfood's targets for:

• earnings,
• sales growth, and
• personal objectives for the financial year.

Short-term variable compensation shall be paid in the form of annual, variable compensation. Long-term variable compensation shall support the long-term objectives of the Executive Committee's decision-making.

The variable compensation (the sum of short- and long-term compensation) shall have a cap as follows:

• 70% of the base salary paid out during the year for the CEO, and
• 40%-55% of the base salary paid out during the year for the other members of the Executive Committee.

The sum of the variable compensation for the CEO and the other current members of the Executive Committee can amount to a maximum of approximately SEK 14 m. In the event the Executive Committee increases in number, the level of variable salary may exceed this amount. The right to variable salary is forfeited in the event the executive gives notice prior to payment.

Retirement benefits

Axfood applies a retirement age of 65 for members of the Executive Committee.

For the CEO and one other member of the Executive Committee, a provision is made and funding is secured through insurance premiums, respectively, in an amount equivalent to 35% of their annual base salary. For other members of the Executive Committee, the basic retirement benefit consists of the so-called ITP plan. As a supplement to this is a defined contribution pension corresponding to 25% of salary amounts between 30 and 50 times the Base Amount, which is funded through insurance; for this part, however, one member of the

Executive Committee has a solution corresponding to ITP, department 1. Older pension agreements are adapted as far as possible to the plan outlined above.

Other benefits and severance pay

In cases where the Company serves notice, a notice period of a maximum of 12 months is applied. In addition, severance pay may be payable for a maximum of 12 months. For the CEO and all other members of the Executive Committee, deduction shall be made for other earned income during the time termination pay or severance pay is received. A notice period of six months applies in the event an executive gives notice.

The members of Axfood's Executive Committee receive – in addition to liability insurance – customary benefits for persons in corresponding positions, such as a company car benefit and healthcare insurance, and in certain cases also a travel benefit and housing benefit.

Information on previously decided compensation

Previous Annual General Meetings have adopted guidelines for compensation of members of the Executive Committee for the time extending up until the 2013 Annual General Meeting. In addition to base salary, variable salary was to be payable that was tied to Axfood's targets for earnings and sales growth as well as the achievement of personal objectives. In accordance with the adopted principles, a certain portion of this variable compensation has been withheld until the 2013 Annual General Meeting. However, the amounts have been expensed in the respective financial years. Withheld variable compensation for previous years will be paid out after the 2013 Annual General Meeting.

The guidelines adopted by the 2012 Annual General Meeting have been adhered to.

All previously decided compensation that has not yet been paid out is within the scope described above.

The Board's authorization

The Board is authorized to depart from these guidelines if in an individual case there are special reasons for doing so.

Point 18 – Employee purchases of shares in subsidiaries

The Board proposes that the Annual General Meeting resolve to adopt the following proposal concerning the opportunity for employees to purchase shares in subsidiaries.

Purpose and background

The Axfood Group operates approximately 246 food retail stores in Sweden, of which 67 are Hemköp stores in the wholly owned subsidiary Hemköpskedjan AB. In addition to these are 114 Hemköp stores that are run by independent franchisees. The franchise concept has a central role in the Axfood Group's business. It is therefore important that the Axfood Group's franchisees have a high level of personal involvement in running their businesses efficiently and profitably in well-run stores. In this way, the franchisees' interests are aligned with the Axfood Group's interest in strengthening the Group's brands in the food retail market. It is also important that franchisees are persons who are judged to be capable of running the business in accordance with the Axfood Group's business concept. If the Axfood Group is given the right to designate employees at existing Hemköp stores as future franchisees, favourable conditions are created for the Axfood Group to achieve these objectives. At the same time, this promotes long-term value creation and profit growth in the Axfood Group in that the Group can attract, retain and motivate suitable store managers, and develop and defend key store locations.

Proposal

Against this background, the Board proposes that the Annual General Meeting resolve that employees of the Axfood Group be given the opportunity to purchase shares in store companies in Hemköpskedjan. The employees who shall have the right to purchase shares are store managers (presidents) of store companies that are run and/or established within Hemköpskedjan.

The proposal covers a maximum of ten Hemköp stores with estimated, combined annual sales of approximately SEK 400-500 m. By comparison, the Axfood Group had sales of SEK 36 bn in 2011.

The proposal entails that Hemköpskedjan AB initially transfers the operations of a pertinent store to a newly formed and wholly owned stock company (i.e., incorporates the business). The store manager of one of the above-mentioned ten Hemköp stores thereafter, as a first step, purchases a maximum of nine per cent (9%) of the shares in the store company, plus an irrevocable call option (step 1). The call option gives the store manager the right, but not an obligation, within a certain period of time – not to exceed five years – to purchase the rest of the shares in the store company, except for one (1) share to be retained by the Axfood Group. Exercise of the option to purchase the rest of the shares (step 2) requires that the store manager, during this time, has acted in accordance with the corresponding requirements that apply for Hemköpkedjan's franchise concept.

The share purchases shall be made at fair market value. Payment shall be made in cash. Step 1 shall be carried out before the 2014 Annual General Meeting of Axfood Aktiebolag (publ).

Fairness Opinion

The Board has obtained a Fairness Opinion from Deloitte AB on the proposed programme from a financial standpoint. Deloitte's opinion is that the valuation methodology of the proposed programme is fair for the Company's shareholders from a financial standpoint as per the date of issue of the Fairness Opinion.

Other

The proposed resolution has been prepared by the Board in its entirety. The Board believes that only administrative costs (pertaining to the Fairness Opinion and continuing consulting) will arise for the Axfood Group in connection with the programme.

The 2012 Annual General Meeting voted in favour of a corresponding resolution to transfer shares to employees of subsidiaries. Up until the date of this AGM notice, one store manager had purchased shares in his store company.

If this proposal is adopted by the Annual General Meeting, it is the Board's intention to return with similar proposals at future Annual General Meetings of the Company.

Majority rules

A resolution by the Annual General Meeting in favour of the Board's proposal in accordance with point 18 requires that it has the support of shareholders representing at least nine-tenths of the number of votes and shares represented at the Annual General Meeting.

Shares and votes

On the day this notice was issued, the Company had a total of 52,467,678 shares in issue with one vote each.

Documents

The Nominating Committee's proposals are complete as rendered in this notice. The Nominating Committee's reasoned statement regarding its recommendation to the Board and information about the nominated directors on the persons nominated to serve as directors, etc., are available at the Company's head offices at Hemvärnsgatan 9, Solna, and on the Company's website, www.axfood.se.

The Annual Report and audit report will be available at the Company's head offices and on the Company's website, at the addresses provided above, not later than 20 February 2013. The

same applies for the auditor's statement on the guidelines for compensation of senior executives, which were adopted by the 2012 Annual General Meeting.

The Board's proposals are complete as rendered in this notice. The Board's statement on disposition of profit is included in the Annual Report. The Fairness Opinion as laid out in point 18 is available at Axfood's head offices and on the Company's website, at the addresses provided above.

All of the documents referred to above will be sent upon request to shareholders who provide their postal address.

All of the documents will also be available at the Annual General Meeting.

As a service to the shareholders, this notice will be sent to all shareholders in conjunction with its publication at the address of the shareholder recorded in the shareholder register.

A printed copy of the Annual Report will be sent to shareholders upon request approximately one week before the Annual General Meeting.

Disclosures at the Annual General Meeting

The Board of Directors and President shall, if requested by any shareholder and if the Board is of the opinion that it can be done without causing material harm to the Company, provide disclosures about conditions that may impact assessment of an item of business on the agenda, about conditions that may impact assessment of the Company's or a subsidiary's financial situation, and about the Company's relationship with other Group company.

Stockholm, February 2013

Axfood Aktiebolag (publ) The Board of Directors