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Performance Share Programme 2014

Rationale for the proposal

The Board of Directors considers it to be of great importance and in all share holders’ best of interests that key personnel in the ÅF Group have long-term interest in prosperous share value development. It is therefore proposed that the Annual General Meeting resolves to adopt a Share Performance Programme – PSP 2014.

The purpose of PSP 2014 is to stimulate continued loyalty and good efforts. Furthermore, the Board believes that incentive programmes increase the ÅF Group’s attractiveness as an employer. To take part in PSP 2014 the employee must invest their own money.

PSP 2014 will comprise a maximum 0.5 percent of the total amount of shares and 0.4 percent of the total amount of votes. The number of shares involved in similar current programmes, including shares to cover social security contributions, totalled approximately 330,000 shares as per 1 March 2014, corresponding to approximately 0.8 percent of the total amount of shares and approximately 0.6 percent of the total amount of votes.

Preparation of the proposal

PSP 2014 has been prepared by the Remuneration Committee in consultation with external experts and the Board of Directors. The proposal has been approved by the Board of Directors. The CEO has not participated in the Board’s preparation and proposal.

The Board of Director’s proposal

In order to implement the Share Performance Programme 2014, the Board estimates that a total of 210,000 shares will be required, of which 160,000 will be transferred to participants in the programme and 50,000 will be used to cover the costs of the programme, mainly in the form of social security contributions. As exchange rate fluctuations can affect the number of shares required, the Board proposes that up to 250,000 class B shares may be acquired and transferred to employees within the ÅF Group, and that in addition it shall be possible to transfer a portion of the total number of these shares on the NASDAQ Stockholm Exchange to cover social security contributions and other costs.

a) Approximately 160 key employees in the ÅF Group, with reservation to what is said in section c) below, will be offered the opportunity to participate in PSP 2014.

b) Employees who participate in PSP 2014 may, during the 12-month period from the implementation of the programme, save an amount equivalent to a maximum of 5 percent of their gross salary for the purchase of the company’s class B shares on the NASDAQ OMX Stockholm exchange. If the employee retains the shares purchased for three years after the date of respective investment opportunity and if the employee has been continuously employed by the ÅF Group during the entire three-year period, the employee will be entitled to the corresponding number of class B shares, free of consideration.

In addition to the direct matching described above, the participants will be offered performance-matching, if the performance goals pursuant to section d) are met, in accordance with the following:

• Circa 150 business area managers, section managers and certain specialists may receive performance-matching corresponding to four shares for each saved share.

• Circa 10 employees in the ÅF Group management may receive performance-matching corresponding to five shares for each saved share.

• The CEO may receive performance-matching corresponding to six shares for each saved share.

c) Prerequisites to participate in PSP 2014 are that such participation may lawfully be carried out and that such participation, in the company’s opinion, entails reasonable administrative costs and economical efforts. The Board of Directors may establish an alternative incentive programme for employees in countries where participation in PSP 2014 is not convenient. Such alternative incentive programme shall, as far as reasonable possible, be arranged on equivalent terms as PSP 2014.

d) The conditions for performance-matching for key employees are the following.

The mean annual increase in earnings per share (EPS) for the ÅF share during the period 1 July 2014 up to and including 30 June 2017 shall be at least 5 percent.

The base value for the calculation of the increase in EPS is constituted from the EPS values for the third and fourth quarter of 2013 and the first and second quarter of 2014. The maximum number of performance-matched shares (i.e. four to six shares) will be vested if the mean annual increase in EPS is equal to or in excess of 15 percent. No vesting of performance-matched shares will be made if the mean annual increase in EPS is less than 5 percent. Matching of shares in the event of a mean annual increase in EPS between 5 and 15 percent will be made on a straight-line basis.

The Board of Directors may adjust the performance goals for significant occurrences of one-off character, which affect the ÅF Group’s business, the number of total shares in the company or which otherwise have an effect on the possibilities to reach the performance goals.

e) Before the number of performance shares to be matched is finally settled, the Board of Directors shall establish whether the performance-matching is reasonable in relation to the company’s financial results and standing and the situation on the stock market and otherwise, and, if the Board of Directors finds that so is not the case, decide to reduce the number of performance shares to be matched to the lower amount of shares that the Board of Directors finds suitable.

Costs

The overall effect on the income statement is estimated to total approximately SEK 48 million, unevenly divided over the years 2014 – 2017. The costs shall be seen in relation to total personnel costs for ÅF, which in 2013 amounted to SEK 4,460 million including social security contributions. The calculations are based on the assumption that the shares made available under the terms of PSP 2014 will be fully subscribed.

The compensational costs, corresponding to the value of the matching shares transferred to employees, are calculated to approximately SEK 37 million. The compensational costs are allocated over the programme’s duration 2014 – 2017.

Administrative costs are calculated to a maximum of SEK 400,000.

Dilution and impact on financial ratios

There are 39,102,485 shares in the company. As of 1 March 2014 the company held 384,014 shares to cover future matching costs. It is estimated that approximately 210,000 class B shares are required to implement PSP 2014, corresponding to 0.5 percent of the total amount of shares and 0.4 percent of the total amount of votes in the company.

Out of the estimated 210,000 class B shares required for PSP 2014, approximately 160,000 shares will be transferred free of charge to employees, causing a 0.5 percent dilution of earnings per share. The approximated 50,000 shares to be sold on theNASDAQ Stockholm Exchange to cover social security contributions will however not cause a dilution of earnings per share as they are sold at prevailing market prices.

Authorisation to acquire and transfer the company’s shares

To carry out PSP 2014, it is proposed that the Board of Directors is authorised to make purchases and transfers of the company’s class B shares on one or more occasions before the 2015 Annual General Meeting. Purchases may only be made on the NASDAQ OMX Stockholm exchange and at a price within the current registered price range on the purchase date. A maximum of 250,000 class B shares may be purchased to transfer to the participants of PSP 2014 and to cover related costs.

The authorisation also extends to the right to acquire or transfer a larger number of shares as a consequence of a share split, new issue or similar measures. The numbers of shares above have been calculated to allow for the fact that changes in exchange rates may affect the number of shares included in the programmes.