Notice of Annual General Meeting of Saab AB

The shareholders in Saab Aktiebolag are invited to attend the Annual General Meeting in Annexet, Ericsson Globe, Entré 2, Globentorget 10, Stockholm, Sweden, on Wednesday, 5 April 2017, at 15.00 (CET).

Admission and registration will commence at 13.30 (CET). For information about buses, please see www.saabgroup.com/arsstamma.

RIGHT TO PARTICIPATE AND NOTIFICATION

Only the shareholders that are recorded in the Shareholders' Register issued by Euroclear Sweden AB on Thursday, 30 March 2017 are entitled to participate in the Annual General Meeting after submitting notification to the Company.

Shareholders who have their shares registered in the name of a nominee must temporarily be recorded in the Shareholders’ Register in their own names (so called registration of voting rights) to be entitled to participate in the meeting subject to notification to the Company. In order to be recorded in the Shareholders’ Register on Thursday, 30 March 2017, shareholders must request such registration with their bank or trustee well in advance of that date. Please note that this procedure also applies to shareholders using bank custody accounts.

Shareholders wishing to attend the Annual General Meeting must notify Saab no later than Thursday, 30 March 2017

-       by telephone +46 13 18 20 55 (weekdays between 9 and 17 (CET)),

-       by post under address Saabs Årsstämma, Box 7839, SE-103 98 Stockholm, Sweden, or

-       via the Company’s website www.saabgroup.com/arsstamma.

Notification to the Company must include the shareholder's name, personal- or corporate identification number (if applicable), address and telephone number, and notification of the number of possible assistants. If the shareholder is represented through a Power of Attorney, a registration certificate or other authorisation document, these documents should be sent to Saab AB, CEO Office, Box 12062, SE-102 22 Stockholm, Sweden, well in advance of the Annual General Meeting. A proxy form is available on the Company’s website, www.saabgroup.com/arsstamma.

The Annual General Meeting will be conducted in Swedish.

AGENDA

  1. Election of Chairman of the Meeting

2. Approval of the Voting list

3. Approval of the Agenda

4. Election of persons to verify the Minutes

5. Question as to whether the Meeting has been duly convened

6. Presentation of the Annual Report and the Auditor’s report, the Consolidated Annual Report and the Consolidated Auditor’s report as well as the Auditor’s statement regarding whether the guidelines for remuneration to senior executives have been complied with

7. Speech by the President

8. Resolutions on

a)    Approval of the parent Company’s Income Statement and Balance Sheet, and the Consolidated Income Statement and Balance Sheet

b)    Allocations of profit according to the approved Balance Sheet and record date for dividend

c)    Discharge from liability for the Board Members and the President

9. Determination of the number of Board Members and deputy Board Members

10. Determination of fees for the Board and the Auditor

11. Election of Board Members and deputy Board Members

a)    New election of Danica Kragic Jensfelt

b)    New election of Daniel Nodhäll

c)    New election of Erika Söderberg Johnson

d)    Re-election of Håkan Buskhe

e)    Re-election of Sten Jakobsson

f)     Re-election of Sara Mazur

g)    Re-election of Bert Nordberg

h)   Re-election of Cecilia Stegö Chilò

i)     Re-election of Marcus Wallenberg

j)      Re-election of Joakim Westh

k)    Re-election of Marcus Wallenberg as Chairman of the Board

12. Resolution on the Board’s proposal on guidelines for remuneration and other terms of employment for senior executives

13. Resolution on the Board’s proposal on a Long-term Incentive Program 2017/2018 and acquisition and transfer of own shares

a)    Implementation of LTI 2017/2018 – Share Matching Plan 2018, Performance Share Plan 2018 and Special Projects Incentive 2017

b)    Authorization for the Board of Directors to resolve on acquisitions of shares and resolution on transfers of own shares to the participants in LTI 2017/2018

c)    Equity swap agreement with third party

14. Resolution on the Board’s proposal on acquisition and transfer of own shares

a)    Authorization for the Board of Directors to resolve on acquisition of own shares

b)    Authorization for the Board of Directors to resolve on transfer of own shares in connection with acquisitions of companies

c)    Transfer of own shares to cover costs as a result of previous years’ implementation of incentive programs

15. Closing of the Annual General Meeting

PROPOSED RESOLUTIONS:

THE BOARD’S PROPOSAL FOR DIVIDEND AND RECORD DATE (item 8 b)

The Board proposes a dividend of 5.25 SEK per share. Friday, 7 April 2017 is proposed as record date. Provided that the Shareholders’ Meeting resolves according to this proposal, payment of the dividend is expected to be made from Euroclear Sweden AB on Wednesday, 12 April 2017.

THE NOMINATION COMMITTEE’S PROPOSALS FOR CHAIRMAN OF THE ANNUAL GENERAL MEETING, BOARD OF DIRECTORS AND FEES (items 1, 9, 10 and 11)

The Nomination Committee consists of Petra Hedengran, Investor AB (Chairman), Peter Wallenberg Jr, Knut and Alice Wallenberg’s Foundation, Jan Andersson, Swedbank Robur Funds, Anders Algotsson, AFA Försäkring and Marcus Wallenberg, Chairman of the Board of Saab AB.

The Nomination Committee proposes the following resolutions.

-      Advokat Sven Unger, member of the Swedish Bar Association, as Chairman of the Annual General Meeting. (Item 1)

-      Ten Board Members and no deputy Board Members. (Item 9)

-        An increase of the Board fees to 1,550,000 (1,430,000) SEK to the Chairman, to 640,000 (610,000) SEK to the Deputy Chairman and to 570,000 (560,000) SEK to each of the other Board Members elected by the Shareholders’ Meeting and not employed by the Company. An increase of compensation for work in the Audit Committee to 225,000 (200,000) SEK to the Chairman of the Audit Committee, and to 150,000 (135,000) SEK to each of the other Audit Committee Members. Unchanged compensation for work in the Remuneration Committee with 135,000 SEK to the Chairman of the Remuneration Committee and 80,000 SEK to each of the other Remuneration Committee Members. (Item 10)

-      Auditor’s fees to be paid according to approved invoice. (Item 10)

-      Re-election of the following Board Members: Håkan Buskhe, Sten Jakobsson, Sara Mazur, Bert Nordberg, Cecilia Stegö Chilò, Marcus Wallenberg and Joakim Westh. New election of Danica Kragic Jensfelt, Daniel Nodhäll and Erika Söderberg Johnson. The following Board Members have declined re-election: Johan Forssell, Per-Arne Sandström and Lena Treschow Torell. (Item 11)

Danica Kragic Jensfelt is Professor and Vice-Dean at the School of Computer Science and Communication at the Royal Institute of Technology (KTH) as well as Director of the Centre for Autonomous Systems at KTH. She is also Board member of FAM AB and the Institute for Future Studies. Danica holds a M.Sc. in Mechanical Engineering and a Ph.D. in Computer Science and is a Docent in Computer Science. She is born 1971.

Daniel Nodhäll is Head of Listed Core Investments and member of the Management Group at Investor AB. He is also Board member of Husqvarna AB, as well as member of the Audit Committee, and he has earlier been Board member of Kunskapsskolan Education Sweden AB. Daniel has also been Investment Manager, Head of Capital Goods at Investor AB. Daniel Nodhäll has a M.Sc. in Economics and Business from the Stockholm School of Economics and is born 1978.

Erika Söderberg Johnson is Chief Financial Officer (CFO) and member of the Executive Management at Biotage AB. Moreover, she is Board member in Sectra AB and MedCap AB, as well as chairman of the Audit Committee for both of these companies. Erika has earlier been, inter alia, CFO at Karo Bio AB, Affibody AB and Global Genomics AB and advisor within Investment Banking at Enskilda, SEB. Erika has a M.Sc. in Economics and Business from the Stockholm School of Economics and is born 1970.

Information on the Board Members, proposed for re-election, is available on the Company’s website.

-       Re-election of Marcus Wallenberg as Chairman of the Board of Saab AB. (Item 11)

THE BOARD’S PROPOSAL ON GUIDELINES FOR REMUNERATION AND OTHER TERMS OF EMPLOYMENT FOR SENIOR EXECUTIVES (item 12)

Background and reasons

The Remuneration Committee has evaluated the application of the guidelines for remuneration to senior executives of Saab AB that were resolved at the Annual General Meeting 2016 and the current remuneration structures and remuneration levels in the Company. The Remuneration Committee is of the opinion that the guidelines that were resolved in 2016 achieve their purposes to facilitate the recruitment and retention of senior executives.

The Remuneration Committee has recommended the Board of Directors to propose to the Annual General Meeting to adopt principles of remuneration with in principle the same content as those that were resolved at the Annual General Meeting in 2016. Certain clarifications are proposed in the guidelines concerning miscellaneous terms.

In light of the above, the Board of Directors proposes that the Annual General Meeting resolves on the following guidelines for remuneration and other terms of employment for senior executives.

Guidelines

The senior executives comprise the President and other members of the Group Management. The members of this group are presented on the Company’s website. In some special cases, these guidelines may also comprise Board Members of Saab AB, as described below.

Saab shall offer market terms, enabling the Company to recruit and retain senior executives. To the greatest extent possible, remuneration structures shall be characterised by predictability with respect to both the cost for the Company and the benefit for the employee. They shall be based on factors such as position, competence, experience and performance. Benchmarking shall be made regularly relative to comparable industries and markets.

The Board’s proposal is based mainly on agreements in effect between Saab AB and individual executives. No board fees are to be paid to members of the Group Management for participation on the boards of the business areas or Saab subsidiaries.

The Remuneration Committee is responsible for developing and reviewing remuneration and other employment terms for the Group Management.

The Board shall be entitled to divert from the guidelines, if there are reasonable grounds to do so in an individual case.

These guidelines apply from the Annual General Meeting 2017.

Fixed remuneration

Cash remuneration shall consist of fixed salary. The fixed salary shall be reviewed annually as per 1 January for all members of the Group Management. The fixed salary shall be at market terms and based on factors such as position, competence, experience and performance.

Variable remuneration

Saab’s operations are mainly characterised by the development of technically advanced products and systems. Products are marketed, further developed, produced and maintained during long periods of time, in some cases three to four decades, which generally entails substantial investments and long-term customer relations all over the world. Consequently, it is important that senior executives have a long-term view and a long-term commitment in the Company’s operations and profits. Therefore long-term incentive is especially well suited to Saab and its shareholders. The long-term variable remuneration consists of share based incentive programs.

The President and senior executives are entitled to participate in the long-term share based incentive programs resolved by the Shareholders’ Meeting.

In extraordinary cases, agreements of a one-time nature for variable cash remuneration may be made, provided that such agreements are made solely on an individual basis for recruitment or retention purposes only, or as compensation for extraordinary efforts beyond the individual’s ordinary assignment, and that such remuneration shall never exceed the amount of the fixed annual salary and shall not be paid more than once a year per individual. Resolutions on such remuneration shall be made by the Board based on a proposal from the Remuneration Committee.

Variable cash remuneration shall not be paid in other cases.

Incentive programs proposed to the Annual General Meeting 2017

The Board of Directors proposes that the Annual General Meeting 2017 resolves on a long-term incentive program, consisting of Share Matching Plan 2018, Performance Share Plan 2018 and Special Projects Incentive 2017.

The terms and estimated cost for the long-term incentive program are presented in the Board’s complete proposal to the Annual General Meeting.

Other benefits

All members of the Group Management may be entitled to other benefits in accordance with local practice. The benefits shall contribute to facilitating the executive’s discharge of his or her duties. These benefits shall not constitute a material part of the total compensation and shall be equivalent to what is considered reasonable in relation to market practice. Other benefits may for example be a company car, travels, overnight accommodation and medical insurance.

Pension

For pension agreements entered into after 1 January 2005, the pension age is minimum 62 years. In addition to the ITP agreement, the pension is premium based and provisions are made annually. For the President, the provision is equivalent to maximum 35 per cent of the fixed salary. For other senior executives the percentage is based on a set of regulations in the so-called Saab plan. According to this plan, the percentage is dependent on the number of years remaining until the age of retirement upon joining the plan. The aggregate insurance balance should cover a targeted pension from 65 years of age of approximately 32.5 per cent of salary levels between 20 and 30 basic income amounts and approximately 50 per cent of segments above 30 basic income amounts.

All senior executives may also be entitled to strengthened disability pension and survivors’ pension.

Miscellaneous terms

All executives in the Group Management, including the President, may terminate their employment with a maximum of six months’ notice. If the employment is terminated by Saab, the notice period is six months, and after the notice period, severance equal to one year’s salary is paid. An additional year’s salary is payable if no new employment has been obtained during the first 18 months from the time the notice of termination was served.

With respect to employment agreements made after 1 January 2005, and in cases where Saab terminates the employment, a maximum severance pay of 18 months can be payable in addition to the normal six-month notice period. The notice period and severance pay in total shall not exceed 24 months.

Any income from severance pay will normally be deducted against income from other employment during the corresponding time.

Consultant fees to Board Members

Saab AB Board Members, elected by the Shareholders’ Meeting, may in special cases receive a fee for services performed within their respective areas of expertise, separately from their Board duties and for a limited period of time. Compensation for these services shall be paid at market terms.

Information in the Annual Report note 10

Note 10 of the Annual Report includes a description of existing remunerations for senior executives, including fixed and variable compensation, long-term incentive programs and other benefits.

THE BOARD’S PROPOSAL ON A LONG-TERM INCENTIVE PROGRAM 2017/2018 AND ACQUISITION AND TRANSFER OF OWN SHARES (item 13)

Background and reasons for the proposals

The Shareholders’ Meeting of Saab AB (“Saab”) has, for a number of years, resolved on long-term Share Matching Plan for all employees and Performance Share Plan for senior executives and other key employees. The Board of Directors finds it important and in all shareholders’ interest that employees of the Group have a long-term interest in a good value development of the share in the Company. The Board of Directors has also implemented a policy with a requirement of certain shareholdings for senior executives. In light of this, the Board of Directors proposes to the Annual General Meeting the below long-term incentive program for employees (“LTI 2017/2018”). The proposed terms and conditions for LTI 2017/2018 correspond to the terms and conditions imposed by LTI 2014, supplemented by a program related to special projects.

From a historical perspective, the Company has an exceptionally high order backlog, including certain special projects with important milestones. Executing these special projects is one of the Company’s greatest challenges over the coming years and is a step in the Company’s efforts to take the Company to the next level in terms of turnover. This is also a significant part of achieving long-term financial goals. Meeting this challenge requires both that Saab can retain the best competencies and their loyalty, and that the Company’s management and other key employees continue to deliver results and performance at a very high level. In order to attract and motivate the relevant target group, it is therefore proposed that the Performance Share Plan is complemented by a Special Projects Incentive for up to 45 key employees. With this addition, the terms and conditions of LTI 2017/2018 are deemed effective. The proposed LTI 2017/2018 now consists of three parts, a Share Matching Plan, a Performance Share Plan and a new Special Projects Incentive. LTI 2017/2018 is proposed to comprise a maximum of 1,340,000 shares of series B in Saab.

LTI 2017/2018 enables present and future employees to become shareholders in Saab and includes a requirement of own investment in shares in Saab. The purpose of the program is to stimulate employees to continued long-term commitment and continued good performance as well as to increase the Group’s attractiveness as an employer. In view of this, LTI 2017/2018 is considered to have a positive effect on Saab’s future development and thus be of advantage to both the shareholders and the employees in the Saab Group.

It is the intention of the Board of Directors to propose long-term incentive programs also to future Annual General Meetings, where performance targets may concern events during the entire financial year when the program is adopted.

Costs, dilution and effects on key figures

The total effect on the income statement is estimated to approximately 469 MSEK unevenly distributed over the years 2017-2021. The costs shall be compared with the Saab Group’s total remuneration costs 2016, including social security costs, amounting to 10 416 MSEK.

The calculations are based on assumptions that all available shares in the LTI 2017/2018 will be utilized.

Effects on the Income Statement and the Cash Flow

Compensation costs, corresponding to the value of shares transferred to employees, is estimated to approximately 364 MSEK. The compensation costs are distributed over the years 2017-2021.

Social security charges, as a result of transfer of shares to employees at an assumed average share price at 350 SEK, are estimated to amount to approximately
105 MSEK. The social security costs are distributed over the years 2017-2021.

The expenditure for acquiring own shares affecting the cash flow is estimated to maximum 469 MSEK at an assumed share price of 350 SEK and a maximum of 1,340,000 shares.

Dilution and effects on key figures

The Company has approximately 109 million issued shares. As per 31 December 2016, the Company held 2 744 821 own shares of series B. In order to implement the LTI 2017/2018 a total of 1,340,000 shares of series B are required, corresponding to approximately 1.2 per cent of the total number of issued shares.

As calculated as per 31 December 2016, the number of shares to be transferred within the scope of the ongoing long-term incentive programs 2013, 2014 and 2015, including shares to cover social security costs, amounts to approximately 1,726,000 shares corresponding to approximately 1,6 per cent of the total number of issued shares. The long-term incentive program 2016 comprises 1,340,000 shares, corresponding to approximately 1.2 per cent of the total number of issued shares, and is not included in the above calculation as it was launched in January 2017.

Out of the 1,340,000 shares of series B required for the LTI 2017/2018, approximately 1,040,000 shares may be transferred to employees free of consideration, which could cause a dilutive effect of approximately 1 per cent on earnings per share. The remaining 300,000 shares are intended to be transferred on Nasdaq Stockholm in order to cover social security costs.

Hedge

As the main alternative, the Board of Directors proposes that the Annual General Meeting resolves to authorize the Board of Directors to resolve on acquisitions of own shares of series B on Nasdaq Stockholm, which subsequently may be transferred to the participants in Saab’s long-term Share Matching Plan, Performance Share Plan and Special Projects Incentive as well as transferred on Nasdaq Stockholm to cover certain costs associated with LTI 2017/2018, mainly social security costs. Furthermore, the Board of Directors proposes that the Shareholders’ Meeting resolves on transfer of own shares of series B, free of consideration, to the participants of LTI 2017/2018. The detailed terms and conditions for the Board of Directors’ main alternative are presented below.

In the event that the required majority under items 13 b).I and 13 b).II below is not reached, the Board of Directors proposes that Saab should be able to enter into an equity swap agreement with a third party, in accordance with item 13 c) below.

Preparation of the proposal

The LTI 2017/2018 has been prepared by the Remuneration Committee and in consultation with the Board of Directors. The proposal has been adopted by the Board of Directors.

The Board of Directors’ proposal

The Board of Directors’ proposal for the resolution below entails that the Annual General Meeting resolves a) to implement LTI 2017/2018, b) to authorize the Board of Directors to resolve on acquisitions of own shares on Nasdaq Stockholm and that the acquired shares may be transferred, free of consideration, to the participants in LTI 2017/2018, or, in the event that the required majority under b) is not reached, c) that Saab shall be entitled to enter into an equity swap agreement with a third party.

13 a) Implementation of LTI 2017/2018

LTI 2017/2018 comprises of three parts, Share Matching Plan 2018, Performance Share Plan 2018 and Special Projects Incentive 2017.[1] Participation in LTI 2017/2018 requires own investment in shares in Saab. Investment made under the Performance Share Plan 2018 counts also as a basis for participation in the Share Matching Plan 2018, however, only up to an amount of maximum 5 per cent of the cash base salary.

Share Matching Plan 2018

The Board of Directors proposes that the Annual General Meeting resolves on a long-term Share Matching Plan 2018 comprising a maximum of 900,000 shares of series B in Saab, according to the principal guidelines below:

1)    All permanent employees within the Saab Group, including employees who are covered by Performance Share Plan 2018 and/or Special Projects Incentive, with the exception of what is mentioned in item 3) below, will be offered to participate in the Share Matching Plan 2018.

2)    Employees who participate in the Share Matching Plan 2018 can during a twelve-month period save up to a maximum of 5 per cent of the cash base salary for the purchase of shares of series B on Nasdaq Stockholm. If the purchased shares are retained by the employee for three years from the date of investment and employment within the Saab Group has not been terminated during the entire three-year period, the employee will be allocated by the Saab Group the corresponding number of shares of series B free of consideration. The Board of Directors may grant limited exemptions from the requirement of employment during the full three-year period.

3)    Participation in the Share Matching Plan 2018 presupposes that such participation is legally possible as well as possible with reasonable administrative cost and financial efforts according to the assessment of the Company. The Board of Directors shall be entitled to implement an alternative incentive solution for employees in such countries where participation in Share Matching Plan 2018 is not advisable. Such alternative incentive solution shall, as far as practically possible, correspond to the terms for the Share Matching Plan 2018.

Performance Share Plan 2018

The Board of Directors proposes that the Annual General Meeting resolves on a long-term Performance Share Plan 2018 for a number of key employees, comprising a maximum of 360,000 shares of series B in Saab. The principal guidelines of the proposal are set out below.

1)    Up to 175 key employees, including the President, with the exception of what is mentioned in item 4) below, will be offered to participate in the Performance Share Plan 2018.

2)    Employees who participate in the Performance Share Plan 2018 can during a twelve-month period save up to a maximum of 7.5 per cent of the cash base salary to purchase shares of series B on Nasdaq Stockholm. If the purchased shares are retained by the employee for three years from the date of investment and employment within the Saab Group has not been terminated during the entire three-year period, the employee will be entitled to matching of performance shares, free of consideration, as set out below. The Board of Directors may grant limited exemptions from the requirement of employment during the full three-year period.

Group 1                   Up to 142 employees in Management Teams, certain specialists and Project Managers may be entitled to a performance match of up to two shares for   each purchased share.

Group 2                     Up to 20 Senior Managers may be entitled to a performance match of up to four shares for each purchased share.

Group 3                     Up to 12 members of the Group Management may be entitled to a performance match of up to five shares for each purchased share.

Group 4                     The President may be entitled to a performance match of up to seven shares for each purchased share.

3)    The number of performance shares is linked to the performance targets established by the Board of Directors. The conditions for the performance matching are based on three independent targets: Organic sales growth[2], EBIT margin[3] and free cash flow[4]. The relative apportionment between the targets is:

  • Up to 30 per cent of the maximum allotment is attributable to organic sales growth during the financial year 2018.
  • Up to 40 per cent of the maximum allotment is attributable to EBIT margin during the financial year 2018.
  • Up to 30 per cent of the maximum allotment is attributable to free cash flow during the financial year 2018.

The performance targets will be established by the Board of Directors with a minimum level and a maximum level for each performance target. The Board of Directors will resolve on the outcome of the performance matching after the end of the one-year performance measuring period, i.e. the financial year 2018. Information about the performance targets will be provided in the annual report for the financial year 2018. If the maximum levels for the performance targets are reached or exceeded, the performance matching will amount to (and not exceed) the maximum number of 360,000 shares. If the performance outcome falls short of the maximum level but exceeds the minimum level, a linear proportioned performance matching will occur. No performance matching will occur if the performance outcome amounts to or falls short of the minimum level. Performance shares are allotted three years after the investment under item 2) above, i.e. normally during 2021 and in February 2022.

4)    Participation in the Performance Share Plan 2018 presupposes that such participation is legally possible as well as possible with reasonable administrative cost and financial efforts according to the assessment of the Company. The Board of Directors shall be entitled to implement an alternative incentive solution for employees in such countries where participation in Performance Share Plan 2018 is not advisable. Such alternative incentive solution shall, as far as practically possible, correspond to the terms for the Performance Share Plan 2018.

5)    Before the performance matching is finally determined, the Board of Directors shall verify whether the performance matching is reasonable considering the Company’s financial results and position, conditions on the stock market and other circumstances. If the Board of Directors considers otherwise, it shall reduce the number of performance shares to be matched to the lower number of shares deemed appropriate by the Board of Directors.

Special Projects Incentive 2017

The Board of Directors proposes that the Annual General Meeting resolves on a long-term Special Projects Incentive 2017 for a number of key employees, comprising a maximum of 80,000 shares of series B in Saab. The Special Projects Incentive 2017 constitutes a complement to the Performance Share Plan 2016[5]. The principal guidelines of the proposal are set out below.

1)    Up to 45 key employees, including the President, with the exception of what is mentioned in item 5) below, will be offered to participate in the Special Projects Incentive 2017.

2)    Participation in the Special Programs Incentive 2017 presupposes savings under the Performance Share Plan 2016 or under the Share Matching Plan 2016 for purchasing shares of series B. For the President and for members of the Group Management, allotment of performance shares requires saving by an amount equivalent to 7.5 per cent of the cash base salary under the Performance Share Plan 2016 (i.e. maximum saving). For selected Heads of Business Unit and other specially selected key employees, allotment of performance shares requires participation in the Performance Share Plan 2016, or (if the individual is not covered by the Performance Share Plan 2016), participation in the Share Matching Plan 2016. Participants in the Special Projects Incentive 2017 will be entitled to allotment of performance shares, free of consideration, as set out below.

Group A   
Under the Special Projects Incentive 2017, the President may be entitled to allotment of performance shares corresponding to up to 52.5 per cent of the cash base salary for the financial year 2017. The total value of allotted performance shares under the Performance Share Plan 2016 and the Special Projects Incentive 2017 may not exceed 75 per cent of the cash base salary for the financial year 2017 (based on the share price in connection with the Board of Directors’ resolution on allotment of performance shares). If the total potential outcome of the Performance Share Plan 2016 and the Special Projects Incentive 2017 exceeds
75 per cent, performance matching of the actual outcome shall be made in accordance with the Performance Share Plan 2016 and allotment of performance shares in the Special Projects Incentive 2017 shall be reduced so that the total outcome does not exceed 75 per cent.

Group B   
Under the Special Projects Incentive 2017, up to 12 members of the Group Management may be entitled to allotment of performance shares corresponding to up to 37.5 per cent of the cash base salary for the financial year 2017. The total value of allotted performance shares under the Performance Share Plan 2016 and the Special Projects Incentive 2017 may not exceed 60 per cent of the cash base salary for the financial year 2017 (based on the share price in connection with the Board of Directors’ resolution on allotment of performance shares). If the total potential outcome of the Performance Share Plan 2016 and the Special Projects Incentive 2017 exceeds 60 per cent, performance matching of the actual outcome shall be made in accordance with the Performance Share Plan 2016 and allotment of performance shares in the Special Projects Incentive 2017 shall be reduced so that the total outcome does not exceed 60 per cent.

Group C   
Under the Special Projects Incentive 2017, up to 32 selected Heads of Business Unit and other specially selected key employees may be entitled to allotment of performance shares corresponding to up to
15 per cent of the cash base salary for the financial year 2017.

3)    The conditions for allotment of performance shares are based on the achievement of eight equally weighted performance targets, consisting of operational targets and milestones within Saab’s product areas Gripen, airborne radar systems (AEW&C) and submarines. The performance targets may be related to e.g. product design review, customer design review, partial deliveries or system implementation. Each performance target represents 12.5 per cent of the total performance targets. The performance measuring period is the financial year 2017. All participants will be allotted performance shares based on the achievement of the same performance targets.

4)    The Board of Directors will resolve on whether or not the performance targets have been met and on the allotment of performance shares after the end of the one-year performance measuring period, i.e. the financial year 2017. Information about the performance targets will be provided in the annual report for the financial year 2017. Allotment of performance shares and assessment regarding the limitation of maximum allotment in accordance with item 2) above will be based on the volume-weighted average price for the Saab share during the ten trading days immediately following the day for the announcement of the year-end report for 2017. If all performance targets in the Special Programs Incentive 2017 are met, up to 80,000 performance shares may be allotted, however with potential reduction in accordance with item 2) above. If not all but at least one performance target is met, a proportional allotment of performance shares will be made in relation to the number of reached performance targets, however with potential reduction in accordance with item 2) above. Performance shares in the Special Projects Incentive 2017 will be delivered in spring 2020. Delivery of performance shares is conditional on that the employment within the Saab Group has not been terminated during the period up until delivery in spring 2020, and that the employee is still participating in the Performance Share Plan 2016 or the Share Matching Plan 2016. The Board of Directors may grant limited exemptions from the requirement of employment during the abovementioned period.

5)    Participation in the Special Projects Incentive 2017 presupposes that such participation is legally possible as well as possible with reasonable administrative cost and financial efforts according to the assessment of the Company. The Board of Directors shall be entitled to implement an alternative incentive solution for employees in such countries where participation in Special Projects Incentive 2017 is not advisable. Such alternative incentive solution shall, as far as practically possible, correspond to the terms for the Special Projects Incentive 2017.

6)    Before the allotment of performance shares is finally determined, the Board of Directors shall verify whether the allotment is reasonable considering the Company’s financial results and position, conditions on the stock market and other circumstances. If the Board of Directors considers otherwise, it shall reduce the number of performance shares to be allocated to the lower number of shares deemed appropriate by the Board of Directors.

13 b) Authorization for the Board of Directors to resolve on acquisitions of shares and resolution on transfers of own shares to the participants in LTI 2017/2018

13 b).I - Authorization for the Board of Directors to resolve on acquisitions of shares of series B in Saab on Nasdaq Stockholm

The Board of Directors proposes that the Annual General Meeting authorizes the Board of Directors to resolve on acquisitions of own shares of series B in Saab on Nasdaq Stockholm in accordance with the following conditions.

  • Acquisitions of shares of series B in Saab may only be effected on Nasdaq Stockholm.
  • A maximum of 1,340,000 shares of series B in Saab may be acquired to secure delivery of shares to participants in Saab’s long-term Share Matching Plan, Performance Share Plan and Special Projects Incentive and for subsequent transfers on Nasdaq Stockholm to cover certain costs associated with LTI 2017/2018, mainly social security costs.
  • Acquisitions of shares of series B in Saab on Nasdaq Stockholm may only be made at a price within the price range (spread) on Nasdaq Stockholm applicable from time to time, meaning the spread between the highest purchase price and the lowest selling price prevailing and disseminated by Nasdaq Stockholm from time to time.
  • The authorization may be utilised on one or several occasions, however, only until the Annual General Meeting 2018.

13 b).II - Resolution on transfers of acquired own shares of series B to participants in LTI 2017/2018

Transfers of shares of series B in Saab may be made on the following terms and conditions.

  • Transfers may be made only of shares of series B in Saab, whereby no more than 1,340,000 shares of series B in Saab may be transferred, free of consideration, to participants in LTI 2017/2018.
  • Right to acquire shares of series B in Saab free of consideration shall, with deviation from the shareholders’ preferential rights, be granted to such persons within the Saab Group who are participants in LTI 2017/2018. Further, subsidiaries of Saab shall, with deviation from the shareholders’ preferential rights, be entitled to acquire shares of series B in Saab free of consideration, whereby such company shall be obligated to, in accordance with the terms and conditions of LTI 2017/2018, transfer the shares to such persons within the Saab Group who participate in LTI 2017/2018.
  • Transfers of shares of series B in Saab shall be made free of consideration at the time and on the other terms and conditions that participants in LTI 2017/2018 have the right to acquire shares, i.e. normally during the financial years 2020-2021 and in February 2022.
  • The number of shares of series B in Saab that may be transferred under LTI 2017/2018 may be subject to recalculation as a result of an intervening bonus issue, split, rights issue and/or other similar corporate events.

13 c) Equity swap agreement with third party

In the event that the required majority under item 13 b) above cannot be reached, the Board of Directors proposes that the Annual General Meeting resolves that the expected financial exposure of LTI 2017/2018 shall be hedged by Saab entering into an equity swap agreement with a third party on terms and conditions in accordance with market practice, whereby the third party in its own name shall acquire and transfer shares of series B in Saab to employees who participate in LTI 2017/2018. Additional costs for such equity swap agreement amount to approximately 12 MSEK.

Conditions

The General Meeting’s resolution to implement LTI 2017/2018 in accordance with item 13 a) above is conditional upon the General Meeting resolving either in accordance with the proposal to authorize the Board of Directors to resolve on acquisitions of shares of series B in Saab on Nasdaq Stockholm and resolution on transfers to participants in LTI 2017/2018 of acquired own shares of series B in Saab in accordance with item 13 b) above, or that an equity swap agreement with a third party may be entered into in accordance with item 13 c) above.

Majority requirements

The General Meeting’s resolution to implement LTI 2017/2018 under item 13 a) above requires that more than half of the votes cast are in favour of the proposal. The resolution to authorize the Board of Directors to acquire shares on Nasdaq Stockholm and the resolution on transfers to participants in LTI 2017/2018 under items 13 b).I and 13 b).II above require that the resolution is supported by shareholders representing at least nine-tenths of the votes cast and votes represented at the meeting. The resolution that Saab may enter into an equity swap agreement with a third party under item 13 c) above requires that more than half of the votes cast are in favour of the proposal.

Other

For a description of Saab’s other share-related incentive programs, reference is made to note 10 in Saab’s Annual Report for the financial year 2016.

THE BOARD’S PROPOSAL ON ACQUISITION AND TRANSFER OF OWN SHARES (item 14)

14 a) Authorization for the Board of Directors to resolve on acquisition of

own shares

The Board of Directors proposes that the Annual General Meeting authorizes the Board of Directors to, for the period until the next Annual General Meeting, resolve on acquisitions of own shares in accordance with the following conditions.

  • Acquisitions shall be limited to the Company’s shares of series B.

  • Acquisitions shall take place on Nasdaq Stockholm.
  • Acquisitions may only be made at a price per share within the price range (spread) applicable from time to time, meaning the spread between the highest purchase price and the lowest selling price prevailing and disseminated by Nasdaq Stockholm from time to time.
  • A maximum number of shares may be acquired so that the Company’s holding at any time does not exceed 10 per cent of the total number of shares in the Company.
  • The authorization may be utilized on one or several occasions up to the next Annual General Meeting.

The purpose of the authorization is to be able to adjust the Company’s capital structure and thereby contribute to an increased shareholder value as well as to enable a continuous use of acquired shares in connection with potential acquisitions of companies and for the Company’s share-related incentive programs.

14 b) Authorization for the Board of Directors to resolve on transfer of own shares in connection with acquisitions of companies

The Board of Directors proposes that the Annual General Meeting authorizes the

Board of Directors to, for the period until the next Annual General Meeting, resolve on transfers of own shares in connection with or as a result of any acquisition of companies, in accordance with the following conditions.

  • Transfers may be made on Nasdaq Stockholm at a price per share within the price range (spread) applicable from time to time, meaning the spread between the highest purchase price and the lowest selling price prevailing and disseminated by Nasdaq Stockholm from time to time.
  • Transfers may take place as set out in Chapter 19, Sections 35-37 of the Swedish Companies Act, i.e. in other ways than on the Stock Exchange.
  •  Transfers in connection with acquisitions of companies or business shall take place at a price that closely corresponds to the market value of the Company’s share at the time of the resolution on the transfer.
  • No more than the number of shares of series B that the Company holds at the time of the Board of Directors’ resolution may be transferred based on this authorization.
  • The authorization includes the right to resolve on deviation from the shareholders’ preferential rights and that payments could be made other than in cash.
  • The authorization may be utilized on one or more occasions before the next Annual General Meeting.

The purpose of the authorization is to provide the Board of Directors with increased scope for action in connection with financing of acquisitions of companies.

The reason for deviating from the shareholders’ preferential rights is to enable alternative forms of payment for acquisitions of companies or business.

14 c) Transfer of own shares to cover costs as a result of previous years’

implementation of incentive programs

The Board of Directors proposes that the Annual General Meeting resolves on transfers of own shares as a result of the previous years’ implementation of incentive programs on the following terms.

The Board of Directors proposes that the Annual General Meeting resolves that the Company shall have the right to, prior to the Annual General Meeting 2018, transfer a maximum of 1,200,000 shares of series B, in order to cover certain costs, mainly social security costs, that may arise in relation to Share Matching Plan 2013, 2014, 2015 and 2016 as well as Performance Share Plan 2013, 2014, 2015 and 2016. Transfers of the shares shall be effected at Nasdaq Stockholm at a price within the price range (spread) applicable from time to time, meaning the spread between the highest purchase price and the lowest selling price prevailing and disseminated by Nasdaq Stockholm from time to time.

Majority requirements

Resolutions in accordance with item 14 a), 14 b) and 14 c) above require that shareholders representing at least two-thirds of the votes cast as well as the shares represented at the meeting are in favour of the proposal.

SHARES AND VOTES

As of 24 February 2017, the Company has in total 109,150,344 shares, of which 1,907,123 are shares of series A with ten votes per share and 107,243,221 are shares of series B with one vote per share, which together represent 126,314,451 votes. As of the same day, the Company holds 2,683,069 own shares of series B, corresponding to 2,683,069 votes that cannot be represented at the Annual General Meeting.

INFORMATION AT THE ANNUAL GENERAL MEETING

The Board of Directors and the President shall, if any shareholder so requests and the Board of Directors believes that it can be done without material harm to the Company, provide information regarding circumstances that may affect the assessment of an item on the agenda, circumstances that can affect the assessment of the Company’s or its subsidiaries’ financial situation and the Company’s relation to other companies within the Group. Shareholders that wish to submit questions in advance may send them to Saab AB, CEO Office, Box 12062, SE-102 22 Stockholm, Sweden.

DOCUMENTS

The Board’s statement pursuant to Chapter 19, Section 22 in the Swedish Companies Act considering the proposals under items 13 b) and 14 a) is available at the Company, Saab AB, CEO Office, Box 12062, SE-102 22 Stockholm, Sweden, and on the website of the Company www.saabgroup.com/arsstamma.

Accounting documents and the Audit Report are available at the Company, Saab AB, CEO Office, Box 12062, SE-102 22 Stockholm, Sweden, and on the website of the Company www.saabgroup.com/arsstamma as from 13 March 2017. The Auditor’s statement pursuant to Chapter 8, Section 54 pursuant to the Swedish Companies Act regarding remuneration guidelines to senior executives is also available at the Company and on the Company’s website (as above) as from 6 March 2017.

The documents will be sent free of charge to shareholders who request them and state their address.

Linköping in February 2017

The Board of Directors in Saab Aktiebolag (publ)

For further information, please contact:
Saab Press Centre,
+46 (0)734 180 018
presscentre@saabgroup.com

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Saab serves the global market with world-leading products, services and solutions within military defence and civil security. Saab has operations and employees on all continents around the world. Through innovative, collaborative and pragmatic thinking, Saab develops, adopts and improves new technology to meet customers’ changing needs. 


[1] As from the Annual General Meeting 2017, the programs are named with the year that corresponds to when the participants’ savings occur and, with regard to the performance programs, the year of the performance period.

[2] Adjusted for acquisitions and divestments, and exchange rates differences.

[3] Adjusted for acquisitions and divestments, and non-recurring items.

[4] Adjusted for acquisitions and divestments, and non-recurring items.

[5] Performance Share Plan 2016 was adopted by the Annual General Meeting 2016 and the performance period is the financial year 2017, which is the same performance period as for the Special Projects Incentive 2017.