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Valid principles for the nomination committee

At the annual general meeting on May 3, 2018, the shareholders adopted the following principles for the selection of the Nomination Committee:

Duty of the Nomination Committee

The company will have a Nomination Committee whose duty is to consult on, and submit proposals, for resolution by the Annual General Meeting (AGM), and where appropriate, Extraordinary General Meetings (EGM) regarding election and remuneration issues, and where appropriate, procedural issues for the following Nomination Committee. The Nomination Committee will propose:

  • A chairman of the AGM;
  • Candidates for the post of Chairman and other members of the Board;
  • Fees and other compensation for service on the Board of Directors to each of the Directors;
  • Fees to members of internal committees within the Board of Directors;
  • Election and compensation of the company’s auditors; and
  • Principles for the Nomination Committee.

In its evaluation of the Board of Directors’ appraisal, and in its proposal, the Nomination Committee will especially consider the requirement of versatility and breadth in the Board of Directors, and the requirement to endeavor to achieve an even gender balance. Regardless of how appointed, the members of the Nomination Committee will protect the interests of all the company’s shareholders.

Members of the Nomination Committee

The Nomination Committee, which is to be appointed for the period until a new Nomination Committee has been appointed, will have four members, of which three will be appointed by the three largest shareholders of the company in terms of votes, and the fourth will be the Chairman of the Board. In cases where the Chairman of the Board is one of the three largest shareholders, in his/her capacity as shareholder, the Chairman will put his/her place at the disposal of the Committee, and the next-largest shareholder will be offered the entitlement to appoint a member of the Nomination Committee. As soon as reasonably possible after the end of the third quarter, the Chairman of the Board should contact the three largest shareholders in terms of votes recorded in the share register maintained by Euroclear Sweden AB and request that within a reasonable time in the circumstances, although not more than 30 days, they state the name of the individual such shareholder wishes to appoint as a member of the Nomination Committee. If one of the three largest shareholders does not wish to exercise its entitlement to appoint a member of the Nomination Committee, the next shareholder in turn will be offered the entitlement to appoint a member of the Nomination Committee. In the case where several shareholders decline their entitlement to appoint members of the Nomination Committee, the Chairman of the Board should not need to contact more than eight shareholders, unless this is necessary to compose a Nomination Committee of at least three members. Unless otherwise agreed between the members, that member appointed by the largest shareholder in terms of votes will be appointed Chairman of the Nomination Committee. The Chairman of the Board or other Director may never serve as Chairman of the Nomination Committee.

If a shareholder that has appointed a representative of the Nomination Committee ceases to be one of the company’s three largest shareholders in the year, that representative elected by such shareholder will leave the Nomination Committee. Instead, a new shareholder among the three largest shareholders will be entitled to appoint a member of the Nomination Committee independently and at its own discretion. However, no marginal differences to shareholdings, or changes to shareholdings arising later than three months prior to the AGM, should cause any changes to the composition of the Nomination Committee, unless in special circumstances.

If a member of the Nomination Committee leaves before the Nomination Committee has completed its assignment for reasons other than those stated in the above paragraph, that shareholder that appointed such member should be entitled to appoint a replacement member independently and at its own discretion. If the Chairman of the Board leaves the Board, his/her replacement should also replace the Chairman of the Board on the Nomination Committee.

Changes to the composition of the Nomination Committee should be published immediately.

Information on the members of the Nomination Committee

The Chairman of the Board will ensure that the names of the members of the Nomination Committee, and the names of the shareholders that have appointed them, have been uploaded to the company’s website by no later than six months prior to the AGM.

If a member leaves the Nomination Committee in the year, or if a new member is appointed, the Nomination Committee will ensure that such information, including the corresponding information on the new member, should be uploaded to the website.

Shareholders’ entitlement to submit proposals to the Nomination Committee

Shareholders should be entitled to submit proposals for Directors for the Nomination Committee’s consideration. The Nomination Committee will provide the company with information on how shareholders can submit proposals to the Nomination Committee. Such information should be published on the company’s website.

As part of his/her service on the Nomination Committee, the Chairman of the Board should keep the Nomination Committee informed of the work of the Board of Directors, the need for special qualifications and skills, etc., which may be significant to the work of the Nomination Committee.

Nomination Committee’s proposal, work and compensation

When consulting on its proposals, the Nomination Committee should consider that the Board of Directors should have an expedient composition considering the company’s operations, developmental phase and other circumstances, featuring versatility and breadth in terms of Directors’ competence, experience and background. It should endeavor to achieve an even gender balance.

The Nomination Committee should provide the company with proposals for Directors in good time for the company to present its proposal in the convening notice for the AGM where an election is to be held.

In tandem with the convening notice being issued, the Nomination Committee should provide a reasoned statement regarding its proposals for the composition of the Board of Directors on the company’s website. The Nomination Committee should especially reason its proposal against the background of the requirement of endeavoring to achieve an even gender balance. This statement should also include a brief review of how the work of the Nomination Committee has been conducted. If a resigning Chief Executive officer is proposed as Chairman of the Board close to departure from the position of Chief Executive Officer, this should be subject to special explanation.

The Nomination Committee should ensure that the following information on candidates nominated for election or re-election to the Board of Directors is published on the company’s website by no later than sending the convening notice for the AGM:

  • Year of birth, main education and professional experience;
  • Assignment within the company and other significant assignments;
  • Personal or related physical persons’ or legal entities’ holdings of shares and other financial instruments of the company;
  • whether, according to the Nomination Committee, a Director can be considered as independent of the company and management or major shareholders of the company. If a Director is considered independent when there are circumstances, which pursuant to the Swedish Code of Corporate Governance, that may imply that the member should be considered non-independent, the Nomination Committee should explain its position; and
  • On re-election, which year the Director was elected to the Board of Directors.

Nomination Committee’s report on its work

At the AGM, at least one member of the Nomination Committee, and wherever possible, all members, should attend the AGM. At the AGM, or other shareholders’ meetings where an election is held, the Nomination Committee should submit a review of how it has conducted its work and explain its positions considering what has been stated above regarding the composition of the Board of Directors. The Nomination Committee should specially explain the proposal against the background of the above requirement of endeavoring to achieve an even gender balance.

Remuneration and expenses

The company should not pay fees to any member of the Nomination Committee. The company should meet all reasonable expenses associated with the work of the Nomination Committee. If necessary, the Nomination Committee may appoint external consultants to identify candidates with relevant experience, and the company shall meet the expenses for such consultants. The company will also provide the staff necessary to support the work of the Nomination Committee.

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