Lagercrantz Group — AGM Information 2017

Jul 21, 2017

Notice to attend the Annual General Meeting of Lagercrantz Group AB (publ)

The shareholders of Lagercrantz Group AB (publ) ("the Company") are hereby given notice to attend the Annual General Meeting to be held at 4.00 p.m., on Tuesday, 29 August 2017, at IVA's Conference Centre, Grev Turegatan 16 in Stockholm.

NOTICE OF PARTICIPATION

Shareholders who wish to participate in the proceedings of the Annual General Meeting (AGM) must:

• 1) be entered under their own name (not in the name of a trustee) in the shareholders' register maintained by Euroclear Sweden AB no later than Wednesday, 23 August 2017.
• 2) give notice via the website www.lagercrantz.com, or by telephone +46 8 700 66 75 to the Company's head office with address Lagercrantz Group AB (publ), P.O. Box 3508, SE-103 69 Stockholm, Sweden, or by e-mail to info@lagercrantz.com no later than by 3.00 p.m., on Wednesday, 23 August 2017.

The notice must contain the shareholders' name, civic registration number (corporate identify number), address, telephone number and the number of shares represented as well as any attending assistants. Information provided in the notice of participation will only be processed for purposes of the AGM 2017.

Registered participants will receive an entrance card for the AGM by post, no later than the day before the AGM.

Shareholders whose shares are registered with a trustee must temporarily register their shares in their own name in order to exercise their voting rights at the AGM. Such re-registration must be completed no later than Wednesday, 23 August 2017. Requests for such registration must be made to the trustee a few business days before Wednesday, 23 August 2017 in order for the registration to be completed in time.

Where participation is based on a proxy, the proxy must be submitted to the Company well in advance of the AGM. The proxy must not be issued earlier than five years prior to the date of the AGM. Proxies for legal entities must also submit a certified copy of a certificate of incorporation or equivalent legitimacy papers. The Company provides a proxy form to shareholders, which is available at the Company's head office or on the website: www.lagercrantz.com.

At the AGM, shareholders have the right to ask questions about the Company, the Company's financial position and about the matters and proposals to be brought before the AGM.

PROPOSED AGENDA

• 1. Opening of the AGM.
• 1. Election of Chairman of the AGM.
• 1. Preparation and approval of the voting list.
• 1. Approval of agenda.
• 1. Election of one or two persons to verify the minutes.
• 1. Determination of whether the AGM has been duly convened.
• 1. Presentation of:
• a) the Annual Accounts and the Consolidated Financial Statements and the report on the work of the Board of Directors and the committees of the Board of Directors, and
• b) the Audit Report and the Audit Report for the Group and the statement on remuneration principles for senior executives.
• 1. Address by the President and Chief Executive Officer.
• 1. Resolutions regarding:
• a) adoption of the Income Statement and the Balance Sheet and the Consolidated Income Statement and the Consolidated Balance Sheet,
• b) appropriation of the Company's profit in accordance with the adopted Balance Sheet, and
• c) discharge from liability for the members of the Board of Directors and the President.
• 1. Report on and resolution regarding the principles and work of the Election Committee.
• 1. Resolution regarding the number of Board members.
• 1. Resolution regarding fees for the Board of Directors and the Auditors.
• 1. Election of Board members.
• 1. Election of Chairman of the Board of Directors.
• 1. Election of Auditors until the AGM 2018.
• 1. Proposal by the Board of Directors for principles of remuneration and other terms of employment for senior executives.
• 1. Proposal by the Board of Directors for a resolution regarding the issuance of call options on repurchased shares and assignment of repurchased shares to managers and senior executives in the Group.
• 1. Authorisation for the Board of Directors to take decisions on purchase and assignment of own shares.
• 1. Other matters arising.
• 1. Closing of the AGM.

PROPOSAL OF THE ELECTION COMMITTEE FOR RESOLUTIONS WITH RESPECT TO ITEMS 2, 10-15 ABOVE:

The Election Committee, which as of 31 December 2016, represented 55.2% percent of the votes in the Company, submits the following proposal for resolution. For information regarding the composition of the Election Committee and its work during the year, please refer to Lagercrantz Group's website: www.lagercrantz.com

2 Chairman of the AGM

Anders Börjesson

10 Election Committee's principles

The Election Committee proposes that the AGM 2017 approve that the same principles adopted at the previous AGM 2016 should also apply to the next Election Committee, with the addition of a diversity policy according to the recommendations of the Swedish Corporate Governance Board:

The Board considering the company's operations, phase of development and circumstances in general should have an appropriate composition characterised by versatility and breadth as regards the competencies, experience and background of the members elected by the general meeting of shareholders. A uniform gender distribution shall be aimed for.

11 The number of Board members

The Election Committee proposes to the AGM that the Board of Directors shall continue to be composed of eight members.

12 Fees for the Board of Directors and Auditors

Total directors' fees of SEK 2,000,000 to be distributed as follows:

• To the Chairman of the Board of Directors: SEK 500,000
• To other Board members not employed by the Company: SEK 250,000 per Board member.

The fee per Board member is unchanged from previous years.

The fee payable for work as part of the Company's Remuneration Committee is proposed to be SEK 50,000 per Board member.

Board members may, by special arrangement with the Company and insofar as applicable legislation and prevailing jurisprudence so permit, invoice their fees plus social security contributions and value added tax from a company owned by the Board member, or from their private business, provided that such payment is cost neutral for the Lagercrantz Group.

Audit fees will be paid according to approved invoice.

13 Election of Board members

Re-election of Anna Almlöf, Marika Rindborg Holmgren, Anders Börjesson, Lennart Sjölund, Roger Bergqvist, Peter Hedelius, Fredrik Börjesson and Jörgen Wigh.

Detailed descriptions of the members of the Board of Directors proposed for reelection are found on the Company's website.

14 Election of Chairman of the Board of Directors

Re-election of Anders Börjesson.

15 Election of Auditors until AGM 2018

KPMG AB with auditor in charge, Håkan Olsson Reising, for the period until the end of the next AGM.

PROPOSAL OF THE ELECTION COMMITTEE FOR RESOLUTIONS WITH RESPECT TO ITEMS 9, 16-18 ABOVE:

9 Appropriation of the Company's profit in accordance with the adopted balance sheet

The Board of Directors proposes a dividend to the shareholders of SEK 2.00 per share and that Thursday, 31 August 2017 shall be the record day for receiving the dividend. If the AGM adopts the proposal, the dividend is expected to be remitted by Euroclear Sweden AB on Tuesday, 5 September 2017 to shareholders recorded in the share register on the record day.

16 Principles for remuneration and other terms of employment for senior executives

The proposal of the Board of Directors for principles means that remuneration to the President and other senior executives may consist of basic salary, variable remuneration, pension, other benefits and financial instruments.

The total remuneration shall be market-related and competitive, and should be commensurate with responsibility and authority. The annual variable portion of the remuneration should be maximised at about 40 percent of the fixed salary. The variable portion of the remuneration should also be based on outcomes in relation 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 will normally be offered. In the event of termination of employment, termination benefits equivalent to a maximum of one annual salary may be offered, in addition to salary during the period of notice. In addition to existing incentive programmes and the programme proposed to the AGM, no other share-based or share-price-related programmes will be offered.

In individual cases and where special reasons exist, the Board of Directors may depart form the above guidelines.

17 Proposal for resolution regarding the issuance of call options on repurchased shares and assignment of repurchased shares to managers and senior executives

The Board of Directors proposes that the AGM 2017 pass a resolution on the establishment of a call option programme for managers and senior executives of the Lagercrantz Group. The purpose of the programme is to allow management staff in the Lagercrantz Group, through their own investment, to benefit from and strive for an increase in the value of the Company's shares, thereby more closely aligning the interests of managers and shareholders in the Company. The purpose of the programme is to also contribute to increasing the long-term share ownership of management staff in the Company.

The proposal is that the Company shall issue call options on repurchased Class B shares in the Company on the following principal terms and conditions:

• (i) Number of call options − that can be issued − shall be no more than 675,000.
• (ii) The right to acquire call options will accrue to managers and senior executives in the Lagercrantz Group in Sweden, Denmark, Finland, Norway, Germany, the UK and Poland in accordance with item (vii) below. Subscription for call options shall take place from 18 September 2016 until 29 September 2017. Payment for acquired call options shall be made no later than 6 October 2017.
• (iii) Each call option shall entitle its holder to acquire one (1) repurchased Class B share in the Company at a redemption price of 120 percent of the average value for each of the trading days during the period from 4 September 2017 until 15 September 2017, calculated from the average of the highest and lowest price paid according to Nasdaq Stockholm's official quotation for Class B shares in the Company. Days without a quotation of the price paid shall be excluded from the calculation. The redemption

price may be recalculated during the term of the call option programme under certain conditions.

• (iv) The premium for the call options shall be equivalent to the market value of the call options in accordance with an external valuation applying the generally accepted valuation method (the Black & Scholes model)
• (v) Acquisition of Class B shares in the Company by exercising call options may occur on three occasions: (i) during the two week period from the date when the Company publishes its Interim Report for the period 1 April 2018 – 30 September 2019, (ii) during the period 18 May – 30 May 2020 after the Company publishes its Interim Report for the period 1 April 2019 – 31 March 2020, and (iii) during the period 28 September – 2 October 2020.
• (vi) Upon full subscription of the call options, up to 675,000 Class B shares in the Company (subject to any recalculation), equivalent to approximately 1.0 percent of the total number of shares outstanding (of Class A as well as Class B) and approximately 0.7 percent of the total number of votes in the Company, may be acquired within the framework of the call option programme. .
• (vii) The programme shall cover a maximum of 50 managers and senior executives in the Lagercrantz Group in Sweden, Denmark, Finland, Norway, Germany, UK and Poland. The proportion between the number of call options offered to the employee shall vary depending on the responsibility and position of the employee. Half of the allocation may be to senior executives at Group level and half of them may fall to subsidiary managers.
• (viii) The Board of Directors will ultimately decide which persons shall be included in each respective category according to the principles set forth in item (vii) above, and how many call options employees in each category are to be offered to acquire.
• (ix) A person entitled to an allocation of call options may acquire up to 150% of the originally offered number of call options, if another entitled person decides to wholly or partly decline the offer of call options. For call options acquired as described in this section, no extra compensation shall be paid in accordance with item (xiii) below. .
• (x) With the exception of the Company's President, the members of the Board of Directors are not entitled to acquire call options within the framework of the call option programme.
• (xi) Issuance of call options to employees outside of Sweden will depend on prevailing tax effects, that no legal obstacles exist and that the Board of Directors is of the opinion that such allocations can be made by expending reasonable administrative and financial resources.
• (xii) Call options are freely assignable with regard to the pre-emption agreement with the Company. Call options acquired are to be offered under the pre-emption agreement at market value. The Company is entitled to repurchase issued call options.
• (xiii) For the purpose of encouraging participation in the call option programme, extra compensation in the form of cash gross salary will be paid to the

participants, equivalent to the option premium paid. Payment of the extra compensation will take place two (2) years after the resolution on the adoption of this call option programme, provided that the option holder on this date has not resigned or been served with notice and still owns the call options.

• (xiv) The costs for the programme are estimated to be approximately MSEK 6, after corporate taxes (calculated based on conditions prevailing as of 10 July 2017). The costs mainly consist of the extra compensation as described above and of the social security contributions payable thereon. These costs also include administrative costs for retaining external consultants and suppliers of administrative services in connection with drawing up the call option programme. The programme is expected to have a marginal effect on the Company's earnings per share. The extra compensation is equivalent to the option premium of a total amount of approximately MSEK 6 that the Company will receive upon assignment of the call options. The programme therefore does not entail any net charge against the Company's equity.
• (xv) The proposal by the Board of Directors implies that the AGM also approves that the Company, in a departure from the preferential rights of shareholders, assigns up to 675,000 of the Company's repurchased Class B shares at the determined redemption price in connection with any exercise of the call options (subject to any recalculation).
• (xvi) The reason for the departure from the preferential rights of shareholders is to allow management staff in the Lagercrantz Group, through their own investment, to benefit from and strive for, an increase in the value of the Company's shares, thereby more closely aligning the interests of managers and shareholders in the Company. The purpose of the programme is also to contribute to increasing the long-term share ownership of management staff in the Company. The programme also aims to motivate managers and senior executives to remain employed in the Group.
• (xvii) Finally, the proposal of the Board of Directors means that the AGM approves that Class B shares acquired by the Company in accordance with prior authorisations may be assigned for the purpose of ensuring delivery of shares through the proposed call option programme.

The company currently (as of July 2017) has three outstanding option programmes, each one with a term of approximately three years, in which managers and senior executives in the Lagercrantz Group acquired call options on repurchased Class B shares in the company during 2014, 2015 and 2016. The outstanding number of call options, after completed repurchases, amounts to 1,310,075 options in total and is equivalent to approximately 1.9% of the total number of shares and approximately 1.3% of the total number of votes in the company.

The proposal for the call option programme was prepared by the Company's Remuneration Committee in consultation with the Company's Board of Directors. The decision to propose the issuance of call options on repurchased shares was made by the Board of Directors.

The decision on issuance of call options and assignment of repurchased shares, for this reason, in accordance with this item, requires that the AGM's resolution is supported by shareholders holding not less than nine tenths of the votes and number of shares represented at the AGM. .

18 Authorisation for the Board of Directors to take decisions on acquisition of and assignment of own shares

The Board proposes that the AGM resolve to authorise the Board, on one or more occasions until the next AGM, to acquire as many Class B shares, such that the Company's holding of own shares at any given time does not exceed 10 percent of all shares in the Company. Purchases shall be made via Nasdaq Stockholm within the prevailing price range at any given time (i.e. the spread between the highest buying price and lowest selling price).

The Board of Directors also proposes that the AGM resolve to authorise the Board of Directors until the next AGM to sell the Company's holdings of its own Class B shares, in connection with acquisition of companies or businesses, outside of Nasdaq Stockholm, at a price deemed equivalent to market value. The authorisation may be exercised on one or more occasions, but not longer than until the next AGM, and covers all holdings of the Company's own shares at the time of the decision of the Board of Directors. The authorisation includes the right for the Board of Directors to decide on a departure from the preferential rights of shareholders.

The purpose of acquiring and selling the Company's own shares is to allow the Board of Directors to adapt the Group's capital structure, as well as to enable the future acquisition of companies and businesses with payment using the Company's own shares, and to ensure the delivery of shares in connection with the Company's outstanding incentive programmes at any given time.

Acquisition and sale of own shares in accordance with this authorisation shall be carried out with due observance of Nasdaq Stockholm's rules for issuers.

The decision on an authorisation according to this item requires that the AGM's resolution is supported by at least two thirds of the votes and number of shares represented at the AGM.

*** The financial statements and audit report, and the complete proposal by the Board of Directors for resolutions with respect to items 9 and 16-18 of the agenda, and statements in accordance with Chapter 18, Section 4 and Chapter 19, Section 22, of the Swedish Companies Act, and a statement by the auditor pursuant to Chapter 8, Section 54 of the Swedish Companies Act, and the Remuneration Committee's evaluation of the application of the guidelines approved by the AGM for remuneration to senior executives will be available at the Company from Tuesday, 8 August 2017 and will be posted to shareholders who so request and provide their postal address. The 2016/17 Annual Report was published in early July 2017. Documents as described above, the proposal of the Election Committee to the AGM, and the Remuneration Committee's evaluation of incentive programmes and application of the guidelines for remuneration to senior executives will also be made available on the Company's website: www.lagercrantz.com.

The share capital as of 30 June 2017 amounted to MSEK 48.9 distributed among 3,263,802 Class A shares and 66,256,125 Class B shares, providing a total of 69,519,927 shares, of which the Company had repurchased 1,491,100 Class B shares as of 30 June 2017. Class A shares carry ten votes while Class B shares carry one vote. The number of votes in the Company amounts to 97,359,445, taking repurchased shares into account. Both classes of shares carry the same rights to share in the Company's assets and profit.

Stockholm, 21 July 2017

The Board of Directors Lagercrantz Group AB (publ)

For additional information, please contact: Bengt Lejdström, CFO, + 46 8 700 66 70.