Notice convening the Annual General Meeting of SAS AB

Shareholders in SAS AB (publ) (hereinafter the "Company") are hereby invited to attend the Annual General Meeting on Thursday 12 March 2020. The Annual General Meeting will be held at 2:00 p.m. at the Company's Head Office, Frösundaviks allé 1, Solna, Sweden. The meeting venue will open at 1:15 p.m. for registration. Registration of participants at the meeting ends when the meeting is called to order.

Instructions to holders of common shares registered with Euroclear Sweden AB in Sweden (other than holders of common shares registered with VP Securities A/S, the Danish Central Securities Depository, or with Verdipapirsentralen, the Norwegian Central Securities Depository)

Shareholders who wish to attend the Annual General Meeting must be registered in the share register of the Company maintained by Euroclear Sweden AB on Friday 6 March 2020, and must notify the Company no later than Friday 6 March 2020, preferably before 4:00 p.m., through the Company's website www.sasgroup.net (under "About SAS/Corporate Governance") or by telephone to +46709971058 on weekdays between 9:00 a.m. and 4:00 p.m. Notification may also be made at the following address: SAS AB (publ), Attn: SAS Investor Relations, Britta Eriksson/STODL, SE-195 87 Stockholm.

Shareholders whose shares are registered in the name of a nominee must temporarily have their shares registered in the shareholder's own name to be entitled to participate in the Annual General Meeting. This registration process with Euroclear Sweden AB must be completed by Friday 6 March 2020. This means that shareholders must notify their nominees in sufficient time prior to this date.

Instructions to holders of common shares registered with VP Securities A/S in Denmark Shareholders of common shares in Denmark who wish to attend the Annual General Meeting must notify VP Investor Services A/S (VP) of this in writing through filling in and signing relevant form to the following address: Weidekampsgade 14, P.O. 4040, DK-2300 København S, Denmark, per email to [email protected] or through VP InvestorPortalen at www.sasgroup.net (under "About SAS/Corporate Governance") or www.vp.dk/gf, by 3:00 p.m. on Thursday 5 March 2020.

The following rules also apply to participation. Shareholders who wish to attend the Annual General Meeting must be registered in the share register of the Company maintained by Euroclear Sweden AB by Friday 6 March 2020. Accordingly, shareholders whose common shares are registered with VP Securities A/S in Denmark must request that VP temporarily registers the common shares in the shareholder's own name with Euroclear Sweden AB to be entitled to participate in the Annual General Meeting.

A request for such reqistration along with a notification of attendance at the Annual General Meeting must be submitted in sufficient time and no later than 3:00 p.m. on Thursday 5 March 2020 to VP through Internet as set out above or at the address above. Forms for notification of attendance and proxy forms are provided by VP and are available at www.sasgroup.net (under "About SAS/Corporate Governance") and will also be sent out to registered shareholders who have notified their email address to the Company. The registration application should include the account operating institution in Denmark (with the custody account number) with which the shareholder's common shares are deposited.

Shareholders whose common shares are already registered in the name of the owner with Euroclear Sweden AB may send in a notification of attendance to the Company at a later date, but no later than Friday 6 March

2020, preferably before 4:00 p.m., in the manner prescribed above.

Instructions to holders of common shares registered with Verdipapirsentralen (VPS) in Norway

Shareholders of common shares in Norway who wish to attend the Annual General Meeting must notify Nordea Bank Abp, filial Norge, Securities Services - Issuer Services, of this in writing to P.O. Box 1166 Sentrum, NO-0107, Oslo, Norway, Attn: René Herskedal or by email to [email protected], by 3:00 p.m. on Thursday 5 March 2020 at the latest.

The following rules also apply for participation. Shareholders who wish to attend the Annual General Meeting must be registered in the share register of the Company maintained by Euroclear Sweden AB by Friday 6 March 2020. Accordingly, shareholders whose common shares are registered with VPS in Norway must request that Nordea Norway temporarily register the common shares in the shareholder's own name with Euroclear Sweden AB to be entitled to participate in the Annual General Meeting.

A request for such registration along with a notification of attendance at the Annual General Meeting must be submitted in sufficient time and no later than 3:00 p.m. on Thursday 5 March 2020, to Nordea Norway at the address above. Forms for notification of attendance and proxy forms are provided by Nordea Norway and are available at www.sasgroup.net (under "About SAS/Corporate Governance") and will also be sent out to registered shareholders who have notified their email address to the Company.

Instructions applicable to all shareholders

Shareholders with shares registered in more than one country should state this when submitting their notifications. Shareholders or their representatives may be accompanied by no more than two assistants at the Annual General Meeting. Assistants to shareholders will be admitted to the Annual General Meeting only if the shareholder notifies the number of assistants in accordance with the notification instructions provided above for shareholders' participation in each country.

Shareholders represented by proxy must issue a dated written proxy for their representative. If possible, the proxy should be based on the proxy form provided by the Company. The proxy in original should be sent in sufficient time prior to the Annual General Meeting and no later than Friday 6 March 2020, to one of the addresses provided in this notice. Representatives of a legal entity must also submit a certified copy of the registration certificate or equivalent authorizing documentation. At the Annual General Meeting, a list is to be prepared of the present shareholders, representatives and assistants with details of the number of shares and votes each shareholder or proxy represents at the Annual General Meeting (voting list). A list of shareholders, proxies and assistants who have submitted notification of their attendance with the stated details (list of participants) will be distributed at the registration for the Annual General Meeting.

Admission cards for the Annual General Meeting

Admission cards, to be presented when entering the Annual General Meeting venue, will be sent out around 9-10 March 2020 to all shareholders who have submitted a notification of attendance in accordance with the instructions above.

Number of shares and votes in the Company

The Company has at the time of publication of this Notice issued 382,582,551 common shares, O subordinate shares and O shares of series C, equivalent to a total of 382,582,551 votes. No shares are held by the Company itself.

Proposed agenda

1. Meeting is called to order.
1. Election of a chairperson for the meeting.
1. Preparation and approval of the voting list.
1. Approval of the agenda.
1. Election of two persons to verify the minutes.
1. Determination of whether the meeting has been duly convened.
1. Presentation of the annual accounts and auditors' report as well as the consolidated accounts and consolidated auditors' report.
1. Report on the work of the Board, the Remuneration Committee and the Audit Committee, followed by the CEO's address and in conjunction with this, the opportunity for shareholders to put questions to the Board and Group Management.
1. Resolutions on:
2. a. the approval of the income statement and balance sheet and the consolidated income statement and consolidated balance sheet,
3. b. the dispositions of the Company's earnings in accordance with the approved balance sheet, and
4. c. discharge from liability for the Board members and the CEO.
1. Resolutions on:
2. a. the number of Board members,
3. b. remuneration for Board members, and
4. c. remuneration for the auditor.
1. Election of Board members and Chairman of the Board.
1. Election of auditor.
13 Resolution on the Nomination Committee and the Instruction for the Nomination Committee.
1. Resolution on the Board's proposed guidelines for remuneration of senior executives.
1. Resolution on the Board's proposal on:

A. implementation of a long-term incentive plan and

B. hedging arrangements in respect of the Plan, consisting of.

I. authorization for the Board of Directors to resolve on directed issue of redeemable and convertible series C shares;

II. authorization for the Board of Directors to resolve on repurchase of all issued redeemable and convertible series C shares;

III. transfers of own common shares to Participants; and

IV. entering into an equity swap agreement with a third party to primarily hedge the cash amount to be paid under the Cash Component; or

C. entering into an equity swap agreement with a third party if required majority for approval of the proposal in item B. is not reached.

Meeting is adjourned.

PROPOSALS FOR RESOLUTIONS

The Board's proposal on a dividend (item 9b)

The Board proposes that no dividend be paid to SAS AB's shareholders for the financial year 1 November 2018 - 31 October 2019.

The Nomination Committee's proposals regarding General Meeting Chairman, Board, Auditor, Remuneration, Nomination Committee, etc. (items 2, 10 a-c, 11, 12 and 13)

The Nomination Committee, which consists of the Chairman of the Board Carsten Dilling and the shareholder representatives Åsa Mitsell, Ministry of Enterprise and Innovation, for the Swedish government (Chairman); Peder Lundquist, Ministry of Finance, for the Danish government; Jacob Wallenberg, for the Knut and Alice Wallenberg Foundation and Gerald Engström, representing himself and Färna Invest AB, makes the following proposals:

Election of Chairman for the General Meeting Attorney-at-law Eva Hägg.

Resolution on the number of Board members The number of Board members elected by the Annual General Meeting shall consist of eight Board members, with no deputies.

Resolution on remuneration to Board members

It is proposed that the fees for the period until the end of the next Annual General Meeting shall amount to SEK 642.600 for the Chairman of the Board and, if any. SEK 428.400 for the First Vice Chairman and the Second Vice Chairman respectively, and SEK 326,400 for each of the other Board members elected by the Annual General Meeting and ordinary employee representatives.

It is also proposed that each deputy for ordinary employee representatives receive a study fee of SEK 1,000 per Board meeting and an attendance fee of SEK 3,500 for each Board meeting they attend.

In addition to this remuneration, it is proposed that remuneration be paid for work on the Board Remuneration Committee in the amount of SEK 81,600 for the Remuneration Committee Chairman and SEK 27,540 each for the Remuneration Committee's other members, as well as for work on the Board's Audit Committee, in the amount of SEK 102,000 for the Audit Committee Chairman and SEK 51.000 for each of the Audit Committee's other members

Resolution on remuneration to the Company's auditor

The fees for the Company's auditor shall be paid in accordance with approved invoice.

Flection of Board members and Chairman of the Board

It is proposed to re-elect the current eight Board members Carsten Dilling, Dag Mejdell, Monica Caneman, Liv Fiksdahl, Lars-Johan Jarnheimer, Kay Kratky, Sanna Suvanto-Harsaae, and Oscar Stege Unger.

Furthermore, it is proposed that Carsten Dilling be re-elected as Chairman of the Board.

Election of Auditor

It is proposed to re-elect KPMG AB as auditor, in accordance with the Audit Committee's recommendation

Resolution on the Nomination Committee lt is proposed that the Annual General Meeting resolve that a Nomination Committee be elected that is tasked in accordance with the proposal for Instruction for the Nomination Committee.

The Nomination Committee shall comprise five members.

The Nomination Committee shall comprise the Chairman of the Board and the following shareholder representatives: Åsa Mitsell, Ministry of Enterprise and Innovation, for the Swedish government; Peder Lundquist, Ministry of Finance, for the Danish government; Jacob Wallenberg, for the Knut and Alice Wallenberg Foundation, and Gerald Engström, representing himself and Färna Invest AB.

lt is furthermore proposed that the Annual General Meeting adopts instructions for the Nomination Committee, including provisions regarding election of Chairman of the Nomination Committee, replacement of members during their terms of office and replacement of shareholder representative owing to a substantial reduction in shareholding, and other provisions concerning the Nomination Committee's composition and work to apply for the Nomination Committee appointed by the Annual General Meeting and for its mission until the end of the next Annual General Meeting. The instruction is consistent with the current instruction.

The Board's proposed guidelines for remuneration of senior executives (item 14)

The Board of Directors proposes guidelines for remuneration to the CEO and other members of Group Management. The guidelines also encompass any remuneration to Board members, other than Directors' fees. The quidelines apply to remuneration agreed after the Annual General Meeting 2020 and amendments to agreed remuneration made thereafter. The guidelines do not apply to remuneration resolved by the general meeting. For employments governed by rules other than Swedish, pension benefits and other benefits may be duly adjusted for compliance with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these quidelines.

How the guidelines advance the company's business strategy, long-term interests and sustainability

Successful implementation of the company's business strategy and safeguarding the company's long-term interests, including its sustainability, require the company to recruit and retain highly qualified employees. In order to do so, SAS must offer competitive total remuneration, which these guidelines enable. Total remuneration should be on market terms and competitive and relate to responsibility and authority.

For information about the company's business strategy, see the SAS website (https://www.sasgroup.net/en/strategicpriorities/).

Types of remuneration, etc.

Remuneration shall be on market terms and may consist of the following components: fixed salary, any variable salary according to separate agreements, pension and other benefits. The general meeting can also, irrespective of these quidelines, resolve on, among other things, share and share pricerelated remuneration.

Fixed salary

The fixed salary shall consist of fixed cash salary. The fixed salary shall reflect the position requirements with respect to qualifications, responsibilities, complexity and the manner in which it serves to reach the business objectives. The fixed salary shall also reflect the performance of the senior executive and thus be individual and differentiated.

Variable salary

In addition to fixed salary, senior executives reporting to the CEO may, according to separate agreements, receive variable salary when fulfilling agreed performance criteria and provided that their fixed salaries are frozen for review for a certain period after payment of the variable salary. Any variable salary shall consist of an annual variable cash salary and may amount to a maximum of 20 percent of the fixed annual salary. Criteria fulfillment for awarding variable salary shall be measured over a period of one year.

The variable salary shall be linked to one or several predetermined and measurable criteria, which can be financial, such as EBT, CASK and PASK, or non-financial, such as CO2 emissions, safety, employee engagement and customer satisfaction. Less than 30 percent of the variable cash remuneration shall depend on non-financial criteria. By linking the remuneration to senior executives to the company's earnings as well as sustainability, the criteria contribute to the company's business strategy, long-term interests and competitiveness.

To which extent the criteria for awarding variable cash remuneration has been satisfied shall be determined when the measurement period has ended. For financial objectives, the evaluation shall be based on the latest financial information made public by the company.

The terms for variable remuneration shall be designed so that the Board of Directors, under exceptional financial conditions, may limit or refuse to pay variable remuneration if such a measure is deemed reasonable

Further variable cash remuneration may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are limited in time and only made on an individual basis, either for the purpose of recruiting or retaining executives, or as remuneration for extraordinary performance beyond the individual's ordinary tasks. Such remuneration may not exceed an amount corresponding to 20 percent of the fixed annual cash salary and may not be paid more than once each year per individual. Any resolution on such remuneration shall be made by the Board of Directors based on a proposal from the Remuneration Committee.

Pension

For the CEO, pension benefits, including health insurance, shall be defined contribution with premiums not exceeding 40 percent of the fixed annual salary. For other members of Group Management, pension benefits, including health insurance, shall be defined contribution unless the senior executive is subject to defined benefit pension under mandatory collective agreement provisions. Premiums for defined contribution pensions are not to exceed 30 percent of the fixed annual salary. Variable remuneration shall qualify for pension benefits to the extent required by mandatory collective agreement provisions applicable to the senior executive (applies to Sweden and defined contribution pension). In such case, the premiums for defined contribution pensions shall not exceed 36 percent of the fixed annual salary, as a result of pension provisions for variable salary.

Other benefits

Other benefits, which may include, for example, company car, travel benefits and health insurance, shall be on market terms and only constitute a limited part of the total remuneration. Premiums and other costs associated with such benefits may amount to a maximum of 10 percent of the fixed annual salary.

Termination of employment

For the CEO and other members of Group Management, the notice period shall be six months in case of termination by the senior executive. In case of termination by the company the maximum notice period shall be 12 months. In case of termination by the company, severance pay may be payable in an amount corresponding to a maximum of one year's fixed salary less any remuneration received from new employments or assignments.

Additionally, remuneration may be paid for non-compete undertakings. Such remuneration shall compensate for loss of income and shall only be paid in so far as the previously employed executive is not entitled to severance pay. The remuneration shall be based on the fixed salary at the time of termination of employment and amount to not more than 60 percent of the fixed salary at the time of termination of employment, unless otherwise provided by mandatory collective agreement provisions, and be paid during the

time the non-compete undertaking applies, however not for more than 18 months following termination of employment.

Fees to Board members

SAS Board members elected by the general meeting may, in specific cases and for limited time, be remunerated for services beyond Board work within their respective areas of competence. A fee on market terms for these services (including services rendered by a company wholly owned by a Board member) shall be paid, provided that such services contribute to the implementation of SAS' business strategy and long-term interests, including its sustainability. Such consultant's fee may, for each Board member, in no case exceed the annual Directors' fee

Salary and employment conditions for employees

In the preparation of the Board of Directors' proposal for these remuneration guidelines, salary and employment conditions for employees of the company have been taken into account by including information on the employees' total income, the components of the remuneration and increase and growth rate over time, in the Remuneration Committee's and the Board of Directors' basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable

Preparation and decision-making process

The Board of Directors has established a Remuneration Committee The Committee's duties include preparing principles for remuneration to Group Management and the Board of Directors' decision to propose guidelines for remuneration to senior executives. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the general meeting for resolution. The quidelines shall be in force until new guidelines have been adopted by the general meeting. The Remuneration Committee shall also monitor and evaluate programs for variable remuneration to Group Management, the application of the guidelines to senior executives as well as the current remuneration structures and compensation levels in the company. Remuneration to the CEO shall be decided by the Board of Directors in line with approved policies following preparation and recommendation by the Remuneration Committee. Remuneration to other senior

executives shall be decided by the CEO in line with approved policies and after consultation with the Remuneration Committee. The members of the Remuneration Committee are independent in relation to the company and Group Management. The CEO and other members of Group Management do not participate in the Board of Directors' discussions and decisions on remunerationrelated matters that pertain to them.

Derogation from these guidelines

The Board of Directors may decide to derogate from these guidelines, in whole or in part, if in a specific case there is special cause and such a derogation is necessary to safequard the company's long-term interests, including its sustainability, or to ensure the company's financial viability. As stated above, the Remuneration Committee's duties include preparing the Board of Directors' decisions on remuneration matters, including decisions to derogate from these guidelines.

The Board's proposed implementation of a long-term incentive plan in accordance with (A) and hedging arrangements in respect thereof in accordance with (B) or (C) (item 15)

Background

The Board of Directors proposes that the Annual General Meeting 2020 resolves on the implementation of a long-term incentive plan (the "Plan") under (A) below and hedging arrangements in respect thereof under (B) or (C) below. The proposed Plan corresponds to the long-term incentive plan that was adopted by the Annual General Meeting 2019. The intention of the Board of Directors is to propose long-term incentive plans ahead of future Annual General Meetings as well.

The proposed Plan gives all permanent employees of the SAS Group the opportunity to become shareholders in SAS, provided that certain future conditions are fulfilled.

SAS_has and will continue to invest in the renewal of the aircraft fleet, which means that the invested capital increases considerably. This entails increased profit requirements to secure return on the invested capital («ROIC») exceeding 12 percent, which is SAS' average total cost of capital. In this context SAS wishes to create an incentive plan with a clear link to

value creation and alignment of the employees' and the shareholders' interests.

All employees contribute and are key for SAS" future development and success. In an increasingly competitive market, SAS must continue to be an attractive employer. SAS wishes to create an incentive plan that in principle includes all employees and that together with other measures to create engagement in the Company, contributes to SAS' success by creating shareholder engagement among the employees. According to the Board of Directors' assessment, an incentive plan, with the principal terms and conditions set out below, will create value for the Company's shareholders and contribute to SAS' long-term development as a company.

Making the SAS employees shareholders in the Company will have a positive impact on the employees' engagement and will make the employees feel more involved with the Company and the Company's performance, and thereby increasing their willingness and incentive to work and remain within SAS. The Board of Directors finds it important and in all shareholders' interest that employees of the group have a long-term interest of the Company having a good share price performance. The Board of Directors of SAS is confident that increased engagement through the proposed Plan will have a positive impact on both the financial performance and the culture within SAS. The combination of engagement and ownership among the employees will provide a strong foundation for the journey towards sustainable profitability to the benefit of all stakeholders.

The Board of Directors' proposal regarding the Plan has been prepared by the Board of Directors and its Remuneration Committee in consultation with major shareholders.

A. Resolution on implementation of the Plan

The Board of Directors proposes that the Annual General Meeting 2020 resolves on the implementation of the Plan in accordance with the principal terms and conditions set out below.

Terms and conditions for the Plan

(a) It is proposed that the Plan be open to all full-time and part-time employees (with the exception of senior executives) as per 29 February 2020 within the SAS Group, approximately 13,000 individuals1 (the "Participants").

(b) Under the Plan, each Participant will, as soon as practically possible after the Annual General Meeting 2020, receive a certain number of rights ("Performance Rights") that each may entitle the Participant to receive not more than one (1) common share (the "Share Component") and a certain maximum cash amount (the "Cash Component") free of charge following the expiration of the vesting period of approximately three years, which expires on the date of the announcement of the interim report for the first quarter November 2022 -January 2023 (the "Vesting Period"), provided that the conditions under item (d) and (e) below are fulfilled. The total nominal value of the Performance Rights that each Participant will receive, will initially amount to approximately SEK 20,000 (evenly distributed between the Share Component and the Cash Component). The number of Performance Rights that each Participant receives will be calculated as SEK 10,000 divided by the volume weighted average price paid for the SAS common share on Nasdaq Stockholm during the 5 trading days immediately preceding SAS' Annual General Meeting 2020. The amount to be paid under the Cash Component will correspond to the value of the Share Component under each Performance Right when the Share Component is delivered to the Participant (in order to compensate for the tax effect that the Participant may be subject to upon delivery of common shares under the Share Component of the Plan). Participants that are part-time employees will receive a reduced number of Performance Rights in proportion to the level of employment.
(c) The number of common shares and the cash amount that each Performance Right entitles to after the expiry of the Vesting Period will depend on to which extent the conditions under item (d) and (e) below are fulfilled, and may be

subject to reduction or adjustment under items (g), (i), (j) and (m) below.

(d) The number of common shares that the Share Component in each Performance Right entitles to after the expiry of the Vesting Period will: (i) depend on to which extent the below performance target, linked to SAS' return on invested capital ("ROIC")2, is fulfilled during the financial year 2019/20 (i.e. 1 November 2019 – 31 October 2020) (the "Performance Period"); and (ii)require that the Annual General Meeting 2021 resolves that a cash dividend is to be paid to holders of common shares. To which extent the performance target under (i) above is fulfilled, is determined by the Board of Directors when the year-end report for the financial year 2019/20 is announced.

For any allotment of common shares to be made under the Share Component after the expiry of the Vesting Period, the ROIC must exceed 12 percent during the Performance Period. Maximum allotment (corresponding to one (1) common share per each Performance Right when the Plan is launched) will be received at a ROIC during the Performance Period of 15 percent or higher. If the ROIC outcome is between 12 percent and 15 percent a proportionally reduced allotment of common shares under the Share Component will be made.

Since the amount to be paid under the Cash Component is to correspond to the value of the Share Component, this amount will be subject to change accordingly.

(e) A condition for the Performance Rights to entitle the Participant to allotment of the Share Component and the Cash Component is, with certain specific exceptions, that the Participant has been employed full-time or part-time within the SAS Group for the duration of the

² ROIC is currently defined as SAS' EBIT plus the standard interest portion corresponding to 33 percent of net operating leasing costs in relation to average shareholders' equity, net financial debt and net capitalized leasing costs (x7).

¹ Approximately 10,000 FTE.

whole Vesting Period, and that the Participant has not terminated his/her employment.

(f) the Cash Component for each Performance Right may be made only after the expiry of the Vesting Period, unless the Board of Directors in an individual case decides otherwise.
(g) If the combined value of the Share Component and the Cash Component for the Performance Rights an individual Participant has received under the Plan exceeds SEK 60,000 following the expiration of the Vesting Period, the allotment of common shares under the Share Component (and thereby also the Cash Component) shall be reduced to such extent that the value amounts to maximum SEK 60,000 per Participant (depending on employment rate).
(h) The Board of Directors shall be entitled to decide that the Performance Rights shall in whole or in part be cash-settled for all or some Participants, e.g. if it is deemed to be justified by administrative or regulatory purposes.
(i) or in the market occur which, in the opinion of the Board of Directors, would result in a situation where the conditions for allotment of the Share Component and/or the Cash Component under the Plan becomes unreasonable, the Board of Directors shall be entitled to make adjustments to the Plan, including, among other things, be entitled to resolve on a reduced allotment of the Share Component and/or the Cash Component, or that no Share Component and/or Cash Component shall be allotted at all.
(j) Based on the share price in connection with the announcement of the notice, the Plan is expected to comprise approximately 6,429,000 common shares in SAS under the Share Component. The Plan shall however comprise no more than 7,142,857 commonshares in SAS under the Share Component. In addition, the Cash Component of the Plan comprises of a

value equivalent to the same number of common shares in SAS, which is intended to be hedged by an equity swap agreement with a third party. The equity swap agreement is intended to be entered in order to cover the cash flow effects associated with the Plan which, besides the Cash Component, primarily is social security charges. The total dilution effect of the Plan (i.e. which is related to the Share Component) is in any case limited to a maximum of 1.83 percent (corresponding to 7,142,857 shares based on the number of issued shares as per the day of this notice). If the total allotment of common shares to the Participants would exceed this, a proportionally reduced allotment will be made so the dilution does not exceed this limit.

(k) The Board of Directors shall be entitled to resolve on the detailed terms and conditions for the Plan. The Board of Directors may, in that regard, make necessary adjustments to satisfy certain regulations or market conditions outside Sweden.
(I) Participation in the Plan presupposes that such participation is legally possible in the various jurisdictions concerned and that the administrative costs and financial efforts are reasonable in the opinion of the Board of Directors. The Board of Directors may resolve on the implementation of an alternative incentive solution for employees in countries where participation in the Plan is not appropriate, for example for employees outside of Sweden, Norway or Denmark. Such alternative incentive solution shall to the extent practically possible and appropriate be designed to correspond to the terms of the Plan.
(m) The number of common shares under the Share Component of each Performance Right will be subject to recalculation as a result of intervening bonus issues, splits, dividends, preferential rights issues and/or other similar corporate events. Since the amount to be paid under the Cash Component shall correspond to the value of the Share Component, this amount will change accordingly.

Costs for the Plan etc.

The costs for the Plan, which are charged in the profit and loss account, are calculated according to accounting principles for sharebased payments (IFRS 2 and for synthetic share programs) and are distributed over the Vesting Period. The calculation has been made based on the following assumptions: (i) an unchanged value of the Share Component of the Performance Rights of SEK 14.00 (based on the closing price for the SAS common share as of 4 February 2020) during the term of the Plan, (ii) fulfilment of the performance target of 50 percent, (iii) a total employee turnover of 10 percent during the Vesting Period and (iv) average social security charges of 20 percent.

Based on the assumptions above, the accounting effect of the program during the Vesting Period is estimated to total MSEK 108 (costs related to share-related remuneration of MSEK 90 and social security charges of MSEK 18), which is estimated to only have a marqinal effect on key performance indicators such as the EBIT margin and the equity/assets ratio.

If the cap of SEK 60,000 per FTE is met, the highest level for the performance target is reached, all Participants remain in the Plan and the SAS share price has increased with 200 percent, the total maximum accounting effect during the Vesting Period is MSEK 720 (share-related remuneration of MSEK 600 and social security charges of MSEK 120).

Depending on which hedging alternative used (if any), the cash flow effect is calculated according to the following: The cash flow effect totals MSEK 100 for 2020 if series C shares are issued in combination with an equity swap agreement. The cash flow effect totals MSEK 200 for 2020 if only an equity swap agreement is used. If no hedging is made, the maximum effect on cash flow totals MSEK 600 and arises when the Vesting Period expires (in 2023). Notwithstanding the hedging alternatives, a cash flow effect for social security charges of not more than MSEK 120 will also apply when the Vesting Period expires.

Based on the assumptions above and that the highest level for the performance target is reached, the annual costs for the Plan over three years, including social security charges, corresponds to approximately 2.4 percent of SAS' total annual employee costs. In addition to the abovementioned costs, the Plan is expected to result in costs for external advice and administrative costs related to transfer of shares. These costs combined are expected not to exceed MSEK 8.

Hedging arrangements

The Board of Directors has considered different methods for hedging the financial exposure and for transfer of shares to the Participants under the Plan, in order to implement the Plan in a cost-effective and flexible manner. The Board of Directors has found the most costeffective alternative to be a combination of arrangements, which also limits the dilution as far as possible, and thus proposes that the Annual General Meeting as a main alternative for the hedging of the Share Component resolves on (i) an authorization for the Board of Directors to resolve on directed issue of redeemable and convertible series C shares and (ii)an authorization for the Board of Directors to resolve on repurchase of all issued redeemable and convertible series C shares, as well as (iii) on transfers of own common shares free of charge to Participants. For the hedging of the financial exposure of the Cash Component it is proposed, as a main alternative, that the Annual General Meeting resolves on (iv) for SAS to enter into an equity swap agreement with a third party, whereby the third party in its own name acquires common shares in SAS and allocates a cash amount corresponding to the share price when common shares under the Share Component are allotted to the Participants. For the purpose of minimizing the dilution which the Plan results in, the equity swap agreement, to the extent it is not required to be used for delivery of the Cash Component, shall also enable transfers of common shares to the Participants and to cover the cash flow effects associated with the Plan, which, besides the Cash Component, consist primarily of social security charges. SAS will in such case keep the corresponding number of repurchased shares until they are required for delivery obligations under future incentive Plans. The detailed terms and conditions for the Board of Directors' main alternative are set out in item B. below.

Since the Plan, in principle, is not expected to give rise to any initial social security payments for the SAS Group, the Board of Directors has decided not to propose to the Annual General Meeting 2020 to resolve on transfers of own common shares on a regulated market in order to cover the cash flow effects in respect of social security payments. However, prior to the transfers of common shares to the Participants, the Board of Directors intends to propose to the Annual General Meeting 2022 that transfers be made of own common shares on a regulated market in order to cover such costs.

Should the majority required under item B. below not be reached, the Board of Directors proposes that SAS shall be able to enter into an equity swap agreement with a third party in respect of both the Share Component and the Cash Component, in accordance with item C. below.

B. Hedging arrangements in respect of the Plan

l. Authorization for the Board of Directors to resolve on directed issue of redeemable and convertible series C shares

The Board of Directors proposes on authorization for the Board of Directors to resolve on issue of redeemable and convertible series C shares, on one or several occasions, until the next Annual General Meeting.

The issue shall be effected on the following terms:

(a) An increase of the SAS share capital with no more than MSEK 100.
(b) The number of series C shares that may be issued may amount to no more than 7,142,857 shares.
(c) The new shares shall with deviation from the shareholders' preferential right to subscribe for shares — be subscribed for only by an external party who has been informed in advance.
(d) The price to be paid for each new share shall correspond to the higher of the quotient value and the market value of the share at the time of the subscription of the shares
(e) The new shares shall be subscribed for during the period 15 March - 30 June 2020, with a right for the Board of Directors to extend the subscription period. Oversubscription is not permitted.
(f) Payment for shares subscribed for shall be effected at subscription of the shares.
(g) The new shares shall be entitled to dividends from and including the financial year 2020/21.
(h) The new shares will be subject to restrictions as set forth in Chapter 4, Section 6 (conversion provision) and Chapter 20, Section 31 (redemption provision) of the Swedish Companies Act (SFS 2005:551).

II. Authorization for the Board of Directors to resolve on repurchase of all issued redeemable and convertible series C shares

The Board of Directors proposes on authorization for the Board of Directors to resolve on repurchase of all issued redeemable and convertible series C shares in SAS on the following terms:

(a) Repurchase may be made through a public offer directed to all owners of series C shares in SAS.
(b) The authorization is valid and may be exercised on one or several occasions until the Annual General Meeting 2021.
(c) The number of series C shares permitted to be repurchased shall amount to no more than 7,142,857
(d) Repurchase of shares shall be made at a lowest price per share of 100 percent and a highest price of 105 percent of the higher of the quotient value and the market value, applicable at the time of the subscription of shares according to item B.(I) above.
(e) Payment for shares repurchased shall be made in cash.
(f) The Board of Directors shall be authorized to establish additional terms for the repurchase.
(g) Repurchase shall also include a socalled interim share, designated by Euroclear Sweden AB as a "paid subscription share" (Sw. BTA) relating to a series C share.

The repurchase of own shares is an integrated part of the hedging arrangements for the Plan. The reason for the proposed possibility to repurchase own shares is that SAS shall be able to fulfil its obligations pursuant to the Plan in a cost-effective manner. The Board of Directors has issued a statement in accordance with Chapter 19, Section 22 of the Swedish Companies Act.

III. Resolution on transfers of own common shares to Participants

The Board of Directors proposes that 7,142,857 common shares, which have been issued and repurchased in accordance with items B.(I) and B.(II) above, following conversion to common shares, may be transferred under the Plan.

Transfers of SAS' own common shares to the Participants may be made on the following terms:

(a) Transfers may be made only of commonshares in SAS, whereby a maximum of 7,142,857 common shares in SAS may be transferred free of charge to the Participants.
(b) Right to acquire common shares in SAS free of charge shall - with deviation from the shareholders' preferential rights be granted to such persons within the SAS Group who are Participants.
(c) Transfers of common shares in SAS shall be made free of charge at the time and on the other terms that the Participants are entitled to be allotted shares.
(d) The number of common shares in SAS that may be transferred under the Plan will be subject to recalculation as a result of intervening bonus issues, splits, rights issues and/or other similar corporate events.

IV. Resolution on entering into an equity swap agreement with a third party to primarily hedge the cash amount to be paid under the Cash Component

The Board of Directors proposes that the Annual General Meeting resolves that the expected financial exposure of the Plan shall be hedged by SAS being able to enter into an

equity swap agreement with a third party on terms in accordance with market practice, whereby the third party in its own name shall be entitled to acquire and transfer common shares in SAS corresponding to the value of the number of shares that are to be delivered to the Participants under the Share Component, and for the part of the equity swap agreement that does not need to be used for delivery of the Cash Component, to also be used to enable delivery of common shares in SAS to the Participants and in order to cover the cash flow effects associated with the Plan which, besides the Cash Component, primarily is social security charges.

C. Resolution on entering into an equity swap agreement with a third party if required majority for approval of the proposal in item B. is not reached

As main alternative to hedge the expected financial exposure of the Plan, the Board of Directors has proposed item B. (I)-(IV) above, in accordance with the rationale given under Hedging arrangements above.

Should the majority required under item B. above not be reached, the Board of Directors proposes that the Annual General Meeting instead resolves that the expected financial exposure of the Plan shall be hedged by SAS being able to enter into an equity swap agreement with a third party on terms in accordance with market practice, whereby the third party in its own name shall be entitled to acquire and transfer common shares in SAS and deliver cash amounts to the Participants.

Majority requirements

The Annual General Meeting's resolution according to item A. above requires a majority of more than half of the votes cast. A valid resolution under item B. above requires that shareholders representing at least nine-tenths of the votes cast as well as of the shares represented at the Annual General Meeting approve the resolution. A valid resolution under item C. above requires a majority of more than half of the votes cast.

Authorization for the CEO

The Board of Directors proposes that the CEO shall be authorized to make the minor adjustments to the above resolution regarding the directed issue of redeemable and convertible series C shares in connection with the registration thereof with the Swedish Companies Registration Office and Euroclear Sweden AB.

The Company's annual accounts, auditor's report, consolidated accounts and consolidated auditor's report, the complete proposals and required Board statements in accordance with above, the auditor's statement on the guidelines for remuneration for senior executives in the 2018/2019 financial year and proxy forms will be available at the Company and on the Company's website www.sasgroup.net (under "About SAS/Corporate Governance") no later than from 20 February 2020. The documents will be sent to shareholders who so request at the Company's address SAS AB (publ), SAS Investor Relations, Attn. Britta Eriksson/STODL, SE-195 87 Stockholm, stating their address. The documents will also be available at the Annual General Meeting venue before the meeting is called to order.

If a shareholder so requests, and if the Board of Directors determines it can be made without significant harm to the Company, at the Annual General Meeting, the Board of Directors and the CEO shall provide information on circumstances that may affect the assessment of an agenda item and/or the Company's financial situation. The same applies to the consolidated group accounts and other group companies.

The notice of this Annual General Meeting, including a proxy form will be distributed by email to all registered shareholders who have notified their e-mail address to the Company. The notice will also be held available at the Company's website www.sasgroup.net (under "About SAS/Corporate Governance"). The notice will further be sent by regular mail free of charge to shareholders who so request at the Company's address SAS AB (publ), SAS Investor Relations, Attn. Britta Eriksson/STODL, SE-195 87 Stockholm, stating their address.