Long Term Incentive schemes

Senior executives in the Sweco Group may be offered various forms of incentive schemes on market-based terms. The motive for share-based incentive schemes is to achieve an increase and spread of share ownership/exposure among senior executives. A long-term personal share ownership commitment among key personnel can be expected to stimulate greater interest in the Company’s operations and profit growth and to increase motivation and alignment with the Company’s goals.

Decisions regarding share-based incentive schemes shall always be approved by an Annual General Meeting or Extraordinary General Meeting.

Share saving scheme 2018
The costs for the 2018 Share Savings Scheme are based on the IFRS 2 reporting standard and will be amortized over three years.

The Board of Directors has made a preliminary cost calculation for the 2018 Share Savings Scheme, which is based on a SEK 260 price per share at final allocation, that Matching Shares and the maximum number of Performance Shares are allocated following the Retention Period, an estimated annual staff turnover of 5 percent, that each participant invests in Savings Shares to the maximum permitted amount and expected dividends during the period. The value of the Matching Shares and the Performance Shares have been calculated based on a share price of SEK 188.60 per share at the implementation of the scheme, an estimate of the future volatility of the company’s share and the shares of the group of benchmark companies as decided by the Board of Directors, as well as the correlations between the respective total yields of these shares. Based on the above assumptions, the value of each Matching Share has been calculated to SEK 151.40 and the value of each Performance Share has been calculated to SEK 59.20.

In total, this results in a maximum cost for the 2018 Share Savings Scheme of approximately SEK 10.5 million, excluding costs for social security contributions. The cost for social security contributions based on an annual appreciation of the Sweco share of 10 percent until the time of allocation is approximately SEK 8 million. These costs should be viewed in relation to Sweco’s costs for salaries and compensations, which during 2017 amounted to SEK 10,299 million including social security contributions. Administrative costs for the 2018 Share Savings Scheme are estimated to no more than SEK 1 million.

Share saving scheme 2017
The annual general meeting 2017 resolved, as proposed by the Board of Directors, to implement the 2017 Share Savings Scheme, comprising up to 176,400 class B shares in Sweco (where of up to 140,000 shares for allocation to the participants and up to 36,400 shares to cover costs related to social security contributions), on the following main conditions.

Up to 100 senior executives and other key personnel will be offered to participate in the 2017 Share Savings Scheme. The 2017 Share Savings Scheme principally corresponds to the share savings scheme decided by the annual general meetings of 2011-2016. Participation in the 2017 Share Savings Scheme requires the participants to acquire Class B shares in Sweco ("Savings Shares") with their own funds at market rates through Nasdaq Stockholm up to an amount corresponding to 5 to 10 percent of each participant's fixed annual salary for 2017. If a participant retains ownership to the Savings Shares until the time of the announcement of the results for the financial year 2020 and the participant remains employed on the same, equivalent or higher position in the Sweco group, then each Savings Share entitles the participant to without consideration receive one class B share in Sweco ("Matching Share") and – provided that certain performance criteria regarding the total yield of the Sweco share set by the Board of Directors are met – an additional one to four class B shares in Sweco ("Performance Shares").

To enable the implementation of the 2017 Share Savings Scheme, the annual general meeting resolved to authorize the Board of Directors to, prior to the next annual general meeting, resolve to acquire up to 140,000 treasury class B shares on the stock exchange to secure delivery of the Matching Shares and Performance Shares to the participants in the scheme, as well as to authorize that the Board of Directors acquire and transfer up to 36,400 class B shares on the stock exchange to cover costs related to social security contributions. The annual general meeting also resolved to approve the transfer, without consideration, of up to 140,000 class B shares to the participants of the 2017 Share Savings Scheme in the period during which they are entitled to receive Matching and Performance Shares.

The share based incentive scheme began during the fall of 2017. For more information about the previous share savings schemes, see Incentive schemes.

Share saving scheme 2016
The annual general meeting in 2016 resolved to implement an incentive scheme on market terms named the "2016 Share Savings Scheme". The 2016 Share Savings Scheme is aimed at a maximum of 100 participants and includes a maximum of 205 000 Sweco B-shares. The Shares Savings Scheme includes a possibility for the company to purchase and sell redemption shares in order to cover costs for social security contributions, whereby the Share Savings Scheme includes a maximum of 259 000 shares.

A total of 56 senior executives and other key employees participated in the 2016 Share Savings Scheme. The participants have purchased approximately 26,000 class B Sweco shares with their own funds at market rates over Nasdaq Stockholm. A maximum of 86 000 shares can be issued to the participants if the predetermined goals are fulfilled (excluding the shares to cover social security contributions).

Pursuant to IFRS 2 provisions, the cost of the 2016 Share Savings Scheme is estimated at approximately SEK 20 million (including social fees) and will be expensed on a straight-line basis over the retention period.

Share saving scheme 2015
The annual general meeting 2015 resolved, as proposed by the Board of Directors, to implement the 2015 Share Savings Scheme, comprising up to 159,000 class B shares in Sweco (whereof up to 126 000 shares for allocation to the participants and up to 33 000 shares to cover costs related to social security contributions), on the following main conditions. Up to 80 senior executives and other key personnel will be offered to participate in the 2015 Share Savings Scheme. The 2015 Share Savings Scheme corresponds to the share savings scheme decided by the annual general meeting in 2011, 2012, 2013 and 2014. Participation in the 2015 Share Savings Scheme requires the participants to acquire Class B shares in Sweco (“Savings Shares”) with their own funds at market rates through Nasdaq Stockholm up to an amount corresponding to 5 to 10 percent of each participant’s fixed annual salary for 2015. If a participant retains ownership to the Savings Shares until the time of the announcement of the results for the financial year 2018 and the participant is still employed by the Sweco group, then each Savings Share entitles the participant to without consideration receive one Class B share in Sweco (“Matching Share”) and – provided that certain performance criteria regarding the total yield of the Sweco share set by the Board of Directors are met – an additional one to four class B shares in Sweco (“Performance Shares”).

To enable the implementation of the 2015 Share Savings Scheme, the annual general meeting resolved to authorize the Board of Directors to, prior to the next annual general meeting, resolve to acquire up to 126,000 treasury class B shares on the stock exchange to secure delivery of the Matching Shares and Performance Shares to the participants in the scheme, as well as to authorize that the Board of Directors acquire and transfer up to 33,000 class B shares on the stock exchange to cover costs related to social security contributions. The annual general meeting also resolved to approve the transfer, without consideration, of up to 126,000 class B shares to the participants of the 2015 Share Savings Scheme in the period during which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2015 Share Savings Scheme is to enhance the ability to retain and recruit key personnel and that the participants’ individual long term commitment to ownership is expected to stimulate increased interest in the business and its profitability, increase motivation as well as their affinity with Sweco. The proposed conditions of the 2015 Share Savings Scheme correspond to those applicable to the 2014 Share Savings Scheme.

Share saving scheme 2014
The annual general meeting 2014 resolved, as proposed by the Board of Directors, to implement the 2014 Share Savings Scheme, comprising up to 155,000 Series B shares in Sweco (whereof up to 123 000 shares for allocation to the participants and up to 32 000 shares to cover costs related to social security contributions), on the following main conditions. Up to 80 senior managers and other key personnel will be offered to participate in the 2014 Share Savings Scheme. The 2014 Share Savings Scheme corresponds to the share savings scheme decided by the annual general meeting in 2013. Participation in the 2014 Share Savings Scheme requires the participants to acquire Series B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ OMX Stockholm up to an amount corresponding to 5 to 10 percent of each participant's fixed annual salary for 2014. If a participant retains ownership to the Savings Shares until the time of the announcement of the results for the financial year 2017 and the participant is still employed by the Sweco group, then each Savings Share entitles the participant to without consideration receive one Series B share in Sweco ("Matching Share") and - provided that certain performance criteria regarding the total yield of the Sweco share set by the Board of Directors are met - an additional one to four Series B shares in Sweco ("Performance Shares").

To enable the implementation of the 2014 Share Savings Scheme, the annual general meeting resolved to authorize the Board of Directors to, prior to the next annual general meeting, resolve to acquire up to 123,000 treasury Series B shares on the stock exchange to secure delivery of the Matching Shares and Performance Shares to the participants in the scheme, as well as to authorize that the Board of Directors acquire and transfer up to 32,000 Series B shares on the stock exchange to cover costs related to social security contributions. The annual general meeting also resolved to approve the transfer, without consideration, of up to 123,000 Series B shares to the participants of the 2014 Share Savings Scheme in the period during which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2014 Share Savings Scheme is to enhance the ability to retain and recruit key personnel and that the participants’ individual long term commitment to ownership is expected to stimulate increased interest in the business and its profitability, increase motivation as well as their affinity with Sweco. The proposed conditions of the 2014 Share Savings Scheme correspond to those applicable to the 2013 Share Savings Scheme.

Share saving scheme 2013
The annual general meeting 2013 resolved, as proposed by the Board of Directors, to implement the 2013 Share Savings Scheme, comprising up to 244,000 Series B shares in Sweco (whereof up to 194 000 shares for allocation to the participants and up to 50 000 shares to cover costs related to social security contributions), on the following main conditions. Up to 80 senior managers and other key personnel will be offered to participate in the 2013 Share Savings Scheme. The 2013 Share Savings Scheme corresponds to the share savings scheme decided by the annual general meeting in 2012. Participation in the 2013 Share Savings Scheme requires the participants to acquire Series B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ OMX Stockholm up to an amount corresponding to 5 to 10 percent of each participant's fixed annual salary for 2013. If a participant retains ownership to the Savings Shares until the time of the announcement of the results for the financial year 2016 and the participant is still employed by the Sweco group, then each Savings Share entitles the participant to without consideration receive one Series B share in Sweco ("Matching Share") and - provided that certain performance criteria regarding the total yield of the Sweco share set by the Board of Directors are met - an additional one to four Series B shares in Sweco ("Performance Shares").

To enable the implementation of the 2013 Share Savings Scheme, the annual general meeting resolved to authorize the Board of Directors to, prior to the next annual general meeting, resolve to acquire up to 194,000 treasury Series B shares on the stock exchange to secure delivery of the Matching Shares and Performance Shares to the participants in the scheme, as well as to authorize that the Board of Directors acquire and transfer up to 50,000 Series B shares on the stock exchange to cover costs related to social security contributions. The annual general meeting also resolved to approve the transfer, without consideration, of up to 194,000 Series B shares to the participants of the 2013 Share Savings Scheme in the period during which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2013 Share Savings Scheme is to enhance the ability to retain and recruit key personnel and that the participants’ individual long term commitment to ownership is expected to stimulate increased interest in the business and its profitability, increase motivation as well as their affinity with Sweco. The proposed conditions of the 2013 Share Savings Scheme correspond to those applicable to the 2012 Share Savings Scheme.

Share saving scheme 2012
The annual general meeting 2012 resolved, as proposed by the Board of Directors, to implement the 2012 Share Savings Scheme, comprising up to 250,000 Series B shares in Sweco (whereof up to 198 000 shares for allocation to the participants and up to 52 000 shares to cover costs related to social security contributions), on the following main conditions. Up to 80 senior managers and other key personnel will be offered to participate in the 2012 Share Savings Scheme. The 2012 Share Savings Scheme corresponds to the share savings scheme decided by the annual general meeting in 2011. Participation in the 2012 Share Savings Scheme requires the participants to acquire Series B shares in Sweco ("Savings Shares") with their own funds at market rates through NASDAQ OMX Stockholm up to an amount corresponding to 5 to 10 percent of each participant's fixed annual salary for 2012. If a participant retains ownership to the Savings Shares until the time of the announcement of the results for the financial year 2015 and the participant is still employed by the Sweco group, then each Savings Share entitles the participant to without consideration receive one Series B share in Sweco ("Matching Share") and - provided that certain performance criteria regarding the total yield of the Sweco share set by the Board of Directors are met - an additional one to four Series B shares in Sweco ("Performance Shares").

To enable the implementation of the 2012 Share Savings Scheme, the annual general meeting resolved to authorize the Board of Directors to, prior to the next annual general meeting, resolve to acquire up to 198,000 treasury Series B shares on the stock exchange to secure delivery of the Matching Shares and Performance Shares to the participants in the scheme, as well as to authorize that the Board of Directors acquire and transfer up to 52,000 Series B shares on the stock exchange to cover costs related to social security contributions. The annual general meeting also resolved to approve the transfer, without consideration, of up to 198,000 Series B shares to the participants of the 2012 Share Savings Scheme in the period during which they are entitled to receive Matching and Performance Shares.

The main rationale for the 2012 Share Savings Scheme is to enhance the ability to retain and recruit key personnel and that the participants’ individual long term commitment to ownership is expected to stimulate increased interest in the business and its profitability, increase motivation as well as their affinity with Sweco. The proposed conditions of the 2012 Share Savings Scheme correspond to those applicable to the 2011 Share Savings Scheme.

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