Notice of Annual General Meeting 2016 of AB Fagerhult (publ)

Shareholders of AB Fagerhult (publ), Corporate Identity Number 556110-6203, are
hereby given notice of the Annual General Meeting of the Company to be held on
Thursday, 21 April 2016 at 5:00 p.m. in Fagerhult, Habo, Sweden.
A.     REGISTRATION

Shareholders wishing to take part in the Annual General Meeting (AGM) must be
registered in the shareholders’ register kept by Euroclear Sweden AB no later
than Friday, 15 April 2016 and register their attendance with Fagerhult no later
than 15 April 2016.

Registration can be done by e-mail at arsstamma@fagerhult.se, by telephone on
+46 (0)8-522 359 75 or by postal mail to AB Fagerhult, SE-566 80 Habo, Sweden.
When registering shareholders, are required to indicate their name,
personal/corporate identity number, address, telephone number, registered
shareholding along with information on any proxies and assistants. Persons
attending the AGM under a power of attorney are required to submit the power of
attorney to Fagerhult before the meeting.

Holders of nominee-registered shares must, to be entitled to attend the AGM,
temporarily have their shares registered in their own name through their nominee
to ensure that they are registered in the shareholders’ register well before 15
April 2016.

Information on documents that will be presented at the AGM are available on the
Company’s website, www.fagerhultgroup.com.


B.     AGENDA

 1. Opening of the AGM
 2.
Election of a Chairman for the AGM

 3.
Preparation and approval of the list of voters

 4.
Approval of the agenda

 5.
Election of minute-checkers

 6.
Determination of whether the AGM has been duly convened

 7.
Presentation of the annual report and audit report and the consolidated accounts
and consolidated audit report

 8.
Presentation by the CEO

 9.
Resolution on adoption of the income statement and balance sheet and the
consolidated income statement and balance sheet

10.
Resolution on the distribution of the Company’s profit or loss according to the
adopted balance sheet

11.
Resolution on release from liability for Directors and the CEO

12.
Determination of the number of Directors and Deputy Directors

13.
Determination of fees to be paid to the Directors and auditors

14.
Election of a Chairman of the Board and other Directors

15.
Election of auditors

16.
Authorisation of the Board of Directors to buy back shares of the Company during
the period until the next AGM

17.
Authorisation of the Board of Directors to transfer treasury shares during the
period until the next AGM

18.
Principles for the composition of the Nomination Committee

19.
Determination of principles for remuneration to senior management

20.
Resolution on a performance-based share-savings plan for senior management

21.
Other items

22.
Closure of the AGM

Item 2 Election of a Chairman for the AGM

A Nomination Committee consisting of Gustaf Douglas, Investment AB Latour, Eric
Douglas, Investment AB Latour, Björn Karlsson representing the Svensson family,
Göran Espelund, Lannebo Fonder and Jan Svensson, Chairman of AB Fagerhult,
proposes that Jan Svensson be appointed to chair the AGM.

Item 10 Proposed dividend

The Board of Directors proposes that a dividend of SEK 3.50 per share, or a
total of MSEK 132.5, be paid and that the remaining funds, MSEK 185.3, be
carried forward. The proposed record day is 25 April 2016. If the shareholders
attending the AGM approve the proposal, it is estimated that the dividend will
be distributed by Euroclear Sweden AB on 28 April 2015.

Item 12 Proposal for the number of Directors

The Nomination Committee proposes that the AGM appoint seven Directors with no
Deputy Directors.

Item 13 Proposal for fees to be paid to the Directors and auditors

The Nomination Committee proposes that fees be paid to the members of the Board
of Directors, including for Committee work, be as follows: SEK 500,000 to the
Chairman of the Board, SEK 375,000 to the Vice Chairman and SEK 250,000 to each
of the other non-executive Directors. It is thus proposed that total Directors’
fees of SEK 1,875,000 be paid. It is proposed that fees be paid to the auditors
on the basis of approved invoices, as in previous years. It is proposed that no
fees be paid for Committee work.

Item 14 Proposal for election of a Chairman of the Board and other Directors

The Nomination Committee, representing owners holding approximately 63 per cent
of the capital and votes, proposes that the regular Directors Jan Svensson, Eric
Douglas, Björn Karlsson, Fredrik Palmstierna, Johan Hjertonsson, Catherina Fored
and Cecilia Fasth be re-elected to the Board. It is proposed that Jan Svensson
be appointed Chairman and Eric Douglas Vice Chairman.

Item 15 Election of auditors

The Nomination Committee proposes that PricewaterhouseCoopers AB be appointed
auditors for the period until the next AGM.

Items 16 & 17 Purchase and transfer of shares

The Board of Directors proposes that the AGM resolve to authorise the Board to
purchase, during the period until the next AGM, shares up to a maximum of 10 per
cent of all outstanding shares of the Company at any given time. Shares may be
purchased on Nasdaq Stockholm at a price which is within the registered spread,
defined as the spread between highest bid price and lowest ask price. Purchases
may be made on one or several occasions.

The Board of Directors further proposes that the AGM authorise the Board, during
the period until the next AGM, to sell treasury shares by other means than on
Nasdaq Stockholm in connection with a company or business acquisition. The
authorisation may be used on one or several occasions and covers all treasury
shares held by the Company at the time of the Board’s decision. The
authorisation also includes a right to disapply the pre-emption rights of
existing shareholders and to apply or not apply provisions on non-cash payment
or payment by set-off.

The purpose of the authorisation is partly to enable adaptations to the Group’s
capital structure and partly to enable future company or business acquisitions
through payment in the form of treasury shares. Such transfer may be effected at
a price in money or received assets, which, in case of an acquisition, have a
value corresponding to the quoted price of the shares at the time of transfer.
By holding treasury shares, the Company is also able to secure obligations under
the performance-based share-savings plan for senior management proposed in item
20, including equivalent plans from previous years. A resolution of the AGM
adopting the Board’s proposal under this item requires the approval of
shareholders representing at least two-thirds of the votes cast and represented
at the AGM.

Item 18 Proposal regarding principles for the composition of the Nomination
Committee

The Nomination Committee also proposes that the AGM adopt principles for the
composition of the Nomination Committee for the 2017 AGM, primarily as follows:

AB Fagerhult is to have a Nomination Committee comprising a representative of
each of the three largest shareholders or owner groups in terms of the number of
votes, and also the Chairman of the Board.

The Nomination Committee is to be formed after the Chairman of the Board has
identified the three largest shareholders in the Company in terms of the number
of votes that are to make up the Nomination Committee along with the Chairman.
The identity of these shareholders is to be based on the shareholders’ register
and list of nominees maintained by Euroclear Sweden AB and refer to those
shareholders registered under their own names or as members of an owner group as
per 30 September.

If one of the three largest shareholders waivers their right to appoint a
representative, this right is then transferred to the next shareholder that has
the largest shareholding on the same date.

The names of the three members and the names of the shareholders that they
represent are to be published not later than in connection with the Company’s
interim report for the third quarter, and the name of the people who can be
contacted to discuss Nomination Committee matters is also to be published. The
mandate period of the Nomination Committee is until a new Nomination Committee
is appointed.

Item 19 Proposal for principles for remuneration to senior management

The Board of Directors proposes that the AGM approve the following guidelines
for remuneration to senior management. Senior management refer to the CEO and
Group management.

Remuneration to the CEO and other senior management consists of basic salary,
variable remuneration, other benefits and pensions. The balance between basic
salary and variable remuneration is to be in proportion to the employee’s
responsibilities and authority.

For the CEO, annual variable remuneration is capped at six months’ salary. The
variable salary is based on the Group’s earnings per share. For other senior
management, annual variable remuneration is capped at 30-40 per cent of basic
salary. Variable remuneration is set in relation to the Group’s earnings per
share as well as individual targets.

The CEO and other senior management are covered by a long-term incentive scheme
in the form of a performance-based share-savings plan (see also item 20).

The retirement age of the CEO and other senior management is 65. For the CEO,
pension contributions representing 35 per cent of the fixed annual salary are
paid. Pension benefits for other senior management are paid within the framework
of applicable supplementary pension plans (ITP) for salaried employees.

For the CEO, the notice period for termination of employment is six months if
termination is initiated by the Company and six months if initiated by the CEO.
If termination is initiated by the Company without reason for termination, the
CEO is entitled to severance pay corresponding to 12 months’ salary. Severance
pay is deducted against other earned income. For other senior management, the
notice period is 12 months if initiated by the Company, and six months if
initiated by the employee. No separate agreements exist regarding retirement
age, future pension or severance pay.

The Board of Directors shall have the right to depart from these guidelines if
there are special reasons for this.

Item 20 Proposal of the Board of Directors of AB Fagerhult (publ) for a
resolution on a performance-based share-savings plan and the transfer of
repurchased shares under the plan

The Board of Directors proposes that the AGM resolve to approve a performance
-based share-savings plan (“2016 Performance-based Share-Savings Plan”) for AB
Fagerhult (publ) (“Fagerhult”) as well as the transfer of repurchased shares as
part of the 2016 Performance-based Share-Savings Plan, in accordance with a) and
b) below. If the AGM resolves to approve the 2016 Performance-based Share
-Savings Plan, the Board intends to subsequently present information on target
levels and outcomes at the 2018 AGM.

a)         2016 PERFORMANCE-BASED SHARE-SAVINGS PLAN

1.1 2016 Performance-based Share-Savings Plan in brief

The reasons for the proposed the 2016 Performance-based Share-Savings Plan is to
strengthen the Company’s ability to recruit and retain employees, spread and
expand share ownership among the employees and create a shared focus in the
Group for the employees concerned. Through a share-based incentive scheme, the
employees’ remuneration can be tied to the Company’s future earnings and capital
growth. This places the emphasis on long-term capital growth, ensuring that
shareholders and the employees concerned have the same goal.

The 2016 Performance-based Share-Savings Plan is based on similar principles as
the performance-based share-savings plan adopted at the AGMs of Fagerhult in
2012, 2013, 2014 and 2015. The plan covers up to 30 members of senior management
and key individuals in the Fagerhult Group. To participate in the plan,
participants will be required to invest in Fagerhult shares. After the vesting
period, the participants will be allocated shares of Fagerhult free of charge
subject to fulfilment of certain terms and conditions. These “performance share
awards” will entitle participants to receive shares of Fagerhult provided that
they have remained employees of Fagerhult during the vesting period and held
their full investment in Fagerhult shares during that period. The allocation of
shares is also subject to achievement of a financial performance target set in
relation to Fagerhult’s average earnings per share in the financial years 2016
and 2017.

1.2 Participants in the 2016 Performance-based Share-Savings Plan

The 2016 Performance-based Share-Savings Plan covers up to 30 members of senior
management and key individuals of the Fagerhult Group, divided into three
categories. The first category comprises the Company’s CEO, the second category
comprises the other six members of Group management and the third category
consists of around 23 other key individuals in the Fagerhult Group. Additional
senior management and key individuals that have been recruited but have not yet
begun their employment at Fagerhult before the deadline for enrolment in the
plan may be offered to participate on condition of commencement of employment
(whereby the number of persons in the various categories may be adjusted).

1.3 Private investment and allocation of Performance Share Awards

To be entitled to participate in the plan, participants will be required to
acquire shares of Fagerhult at market price (“Savings Shares”) for a value
representing at least 25 per cent and no more than 100 per cent of the
participant’s pre-tax monthly salary for March 2016. If the participant has
access to insider information and is therefore prevented from acquiring shares
of Fagerhult in connection with enrolment in the plan he or she will be required
to complete the acquisition of shares as soon as possible, but before the next
AGM.

For category 1, i.e. the Chief Executive Officer of the Company, each Savings
Share entitles the holder to five performance share awards (“Performance Share
Awards”). For category 2, consisting of the remaining six members of Group
management, each Savings Share entitles the holder to four Performance Share
Awards. For category 3, consisting of around 23 other key individuals, each
Savings Share entitles the holder to three Performance Share Awards. Allocations
of Fagerhult shares will be made no earlier than the day after publication of
Fagerhult’s interim report for the first quarter of 2019 and, normally, no later
than two weeks thereafter (“Vesting Period”).

1.4 Terms and conditions for Performance Share Awards

Performance Share Awards are subject to the following terms and conditions:

  · Performance Share Awards are allocated free of charge.
  · Each Performance Share Award entitles the holder to obtain one Fagerhult
share free of charge provided that the participant remains an employee of the
Fagerhult Group and has not sold any of the Savings Shares which he or she
originally held during the Vesting Period. The allocation of shares is also
subject to achievement of a financial performance target.
  · Participants do not have the right to transfer, pledge or sell Performance
Share Awards or to exercise any shareholder rights in respect of their
Performance Share Awards during the Vesting Period.
  · The gain per allocated share is limited to SEK 435 (excluding any
compensation which participants may receive in any extraordinary dividends),
which is three times the average closing price for the Company’s shares in
February 2016. If the gain were to exceed this limit, the number of Fagerhult
shares allocated to each participant will be reduced accordingly.

1.5 Performance Share Awards

The number of Performance Share Awards entitling the holder to an allocation of
shares is contingent on achievement of a target range, as defined by the Board
of Directors, for Fagerhult’s average earnings per share in the financial years
2016 and 2017. The outcome will be measured on a straight-line basis between a
defined minimum level and a defined maximum level. If the minimum level of the
target range is not achieved, the Performance Share Awards will not entitle the
holder to any shares, and if the maximum level of the range is achieved, each
Performance Share Award will entitle the holder to one share.

1.6 Design and administration

The Board of Directors, or a committee specially appointed by the Board, will be
responsible for the precise design and administration of the 2016 Performance
-based Share-Savings Plan as well as the detailed terms and conditions applying
between Fagerhult and participants in the plan, subject to the terms and
conditions and guidelines described herein. In connection therewith, the Board
will have the right to define divergent terms and conditions for the plan in
respect of aspects such as the Vesting Period and allocation of Fagerhult shares
in the event of termination of employment during the Vesting Period that is due
to early retirement, for instance. The Board will also have the right to make
adjustments for the purpose of meeting specific rules or market conditions
outside Sweden. In the event that it is not possible to deliver shares at
reasonable cost and with a reasonable administrative input to persons outside
Sweden, the Board will have the right to instead offer cash settlement to a
participant. In certain cases, the Board will have the right to reduce the final
allocation of Fagerhult shares or wholly or partly terminate the plan ahead of
schedule without compensation to the participants in case of significant changes
in the Company or in the market.

1.7 Scope

The number of Savings Shares depends on the price of Fagerhult shares at the
time of purchase. The maximum number of shares of Fagerhult that may be
allocated under the 2016 Performance-based Share-Savings Plan is limited to
240,000, or roughly 0.6 per cent of the total outstanding number of shares and
votes. In accordance with the precise rules to be defined by the Board of
Directors, the number of shares covered by the 2016 Performance-based Share
-Savings Plan may become subject to restatement due to a bonus issue, reverse
share split or share split, rights issue or similar action taken by Fagerhult,
having regard to generally accepted practice for equivalent incentive schemes.
The number of shares may also be restated for the purpose of compensating
participants in case of payment of an extraordinary dividend. Any restatement of
the number of shares may also result in the restatement of the limit on the gain
per share.

1.8 Hedging measures

To ensure delivery of Fagerhult shares under the 2016 Performance-based Share
-Savings Plan, the Board proposes that it be authorised to apply alternative
methods for the transfer of Fagerhult shares under the plan. It is thus proposed
that the Board have the right to transfer repurchased Fagerhult shares to
participants or to conclude a share swap agreement with a third party for the
purpose of meeting its obligations under the plan (pursuant to b) below). To the
extent that delivery of Fagerhult shares is ensured through a share swap
agreement, it is proposed that the Board have the right to transfer shares
repurchased on Nasdaq Stockholm for the purpose of funding potential costs
related to the agreement and plan. The Board considers that the first
alternative, i.e. the transfer of repurchased Fagerhult shares to the
participants, is the most cost-effective and flexible method for delivery of
Fagerhult shares and for covering certain costs, primarily social security
contributions.

1.9 Estimated costs for and value of the 2016 Performance-based Share-Savings
Plan

Performance Share Awards cannot be pledged or transferred to other parties. It
is, however, possible to calculate an estimated value for each right. The Board
has estimated the average value of each Performance Share Award at about SEK
158.00. The estimate is based on generally accepted valuation models using the
closing price for Fagerhult shares on 7 March 2016, the SEK 435 limit on the
gain per share, performance data for Fagerhult shares and estimated future
dividends. Assuming that all persons that have been offered to participate in
the plan choose to do so, a 50 per cent achievement of the financial performance
target and estimates of staff turnover, the total estimated value of the
Performance Share Awards is approximately SEK 6.9 million. The value represents
around 0.1 per cent of Fagerhult’s stock market capitalisation on 7 March 2016.

Costs will be recognised as personnel costs in the income statement over the
Vesting Period, in accordance with IFRS 2 Share-based Payment. In accordance
with UFR 7, social security contributions will be charged to the income
statement over the Vesting Period. The size of these costs will be calculated
based on Fagerhult’s share price performance during the Vesting Period and the
allocation of Performance Share Awards. Based on an annual share price growth of
10 per cent over the term of the plan and a Vesting Period of around three (3)
years, the cost of the 2016 Performance-based Share-Savings Plan, including
social security contributions, is estimated at around SEK 10.1 million, which on
an annual basis represents about 0.3 per cent of Fagerhult’s total personnel
costs in the 2015 financial year.

1.10 Effects on key performance indicators

In case of full participation in the 2016 Performance-based Share-Savings Plan,
Fagerhult’s personnel costs are expected to increase by around SEK 3.5 million
on an annual basis. On a pro forma basis for 2015, these costs represent a
negative impact on Fagerhult’s operating margin of about 0.09 percentage points
and a decrease in earnings per share of about SEK 0.07.

The Board deems, however, that the positive effects on earnings that are
expected to result from increased share ownership among senior management and
persons in senior managerial positions, which may be further increased through
the plan, outweighs the costs related to the 2016 Performance-based Share
-Savings Plan.

1.11 Drafting of the proposal

The 2016 Performance-based Share-Savings Plan was initiated by the Board of
Directors of Fagerhult and has been formulated in consultation with external
advisors. The plan has been drafted in the Board’s Remuneration Committee and
discussed at Board meetings in the first few months of 2016.

1.12 Other incentive schemes in Fagerhult

At Fagerhult’s AGMs in 2012, 2013, 2014 and 2015 it was resolved to introduce
performance-based share-savings plans, which are largely designed in the same
way as the present 2016 Performance-based Share-Savings Plan. For a description
of the performance-based share-savings plans adopted at the AGMs in 2012, 2013,
2014 and 2015, see the Company’s 2015 Annual Report. Apart from these, there are
no other previous share-based incentive schemes in Fagerhult that the Company is
participating in and paying for.

1.13 Resolutions proposed by the Board of Directors

With reference to the above description, the Board of Directors proposes that
the AGM resolve to introduce the 2016 Performance-based Share-Savings Plan.

1.14 Majority requirement

The Board’s proposed resolution on the introduction of the 2015 Performance
-based Share-Savings Plan requires the support of shareholders representing more
than half of the votes cast at the AGM.

b)         TRANSFER OF SHARES UNDER 2015 PERFORMANCE-BASED SHARE-SAVINGS PLAN

1.1 Background

To be able to implement the 2016 Performance-based Share-Savings Plan in a cost
-effective and flexible manner, the Board of Directors has considered different
methods for ensuring delivery of Fagerhult shares to participants in the 2016
Performance-based Share-Savings Plan. In view of these considerations, the Board
intends, in the first hand, to ensure delivery of Fagerhult shares under the
2016 Performance-based Share-Savings Plan by transferring treasury shares held
by Fagerhult to the participants. Such transfer of repurchased Fagerhult shares
is subject to qualified majority voting. To the extent that the Board’s proposed
resolution on the transfer of repurchased shares to the participants does not
obtain the required majority, the Board intends, in the second hand, to conclude
a share swap agreement with a third party to ensure delivery of Fagerhult shares
to the participants.

To the extent that delivery of Fagerhult shares is ensured through a share swap
agreement, it is proposed that the Board have the right to transfer shares
repurchased on Nasdaq Stockholm in order to fund potential costs related to the
agreement and plan. Such transfer of repurchased Fagerhult shares is subject to
qualified majority voting. If the required majority is not obtained, the Board
intends to conclude a share swap agreement and fund the agreement by other means
than the transfer of repurchased shares.

1.2 The Board’s proposed resolution on transfer of repurchased shares to
participants

Accordingly, the Board of Directors proposes, in the first instance, that the
AGM resolve to approve the transfer of repurchased shares on the following
terms:

(i) A maximum of 240,000 Fagerhult shares may be transferred to participants in
the 2016 Performance-based Share-Savings Plan (or such higher number as may
result from restatement due to a bonus issue, reverse share split or share
split, rights issue or similar action by Fagerhult, in accordance with generally
accepted practice for equivalent incentive schemes).

(ii) Shares will be transferred without payment at the time when and on the
terms and conditions under which participants in the 2016 Performance-based
Share-Savings Plan are entitled to receive allocations of shares.

The reasons for disapplication of the pre-emption rights of existing
shareholders is that the transfer of shares forms part of the implementation of
the 2016 Performance-based Share-Savings Plan. Therefore, and in view of what is
stated above, the Board considers that it will be to the benefit of Fagerhult to
transfer shares in accordance with the proposal.

The Board intends, prior to the 2019 AGM, to propose that the AGM resolve to
authorise the transfer of up to 60,000 shares out of Fagerhult’s total holding
of repurchased shares of the Company on Nasdaq Stockholm to the extent that the
shares are not required for fulfilment of Fagerhult’s obligation to deliver
shares to the participants in accordance with the terms and conditions for the
2016 Performance-based Share-Savings Plan. Such transfer will be made for the
purpose of covering costs such as social security contributions for the 2016
Performance-based Share-Savings Plan.

1.3 The Board’s proposed resolution on transfer of repurchased shares on Nasdaq
Stockholm

If the Board’s proposal in section 1.2 has not obtained the necessary majority,
the Board proposes, in the second hand, that the AGM resolve to authorise the
transfer of repurchased shares on the following terms and conditions. Up to
240,000 Fagerhult shares may, on one or several occasions during the period
until the next AGM, be transferred on Nasdaq Stockholm for the purpose of
funding potential costs related to the share swap agreement or to the 2016
Performance-based Share-Savings Plan (or such higher number of Fagerhult shares
as may result from restatement due to a bonus issue, reverse share split or
share split, rights issue or similar action by Fagerhult, in accordance with
generally accepted practice for equivalent incentive schemes). Transfers must be
made within the registered spread at any given time.

The reasons for disapplication of the pre-emption rights of existing
shareholders is that the transfer of shares forms part of the implementation of
the 2016 Performance-based Share-Savings Plan. Therefore, and in view of what is
stated above, the Board considers that it will be to the benefit of Fagerhult to
transfer shares in accordance with the proposal.

1.4 Majority requirement

The Board’s proposed resolution pursuant to section 1.2 above requires the
support of shareholders representing at least nine-tenths of the votes cast and
the shares represented at the AGM. The Board’s proposed resolution pursuant to
section 1.3 above, which applies only to the extent that the proposed resolution
pursuant to section 1.2 has not obtained the necessary majority, requires the
support of shareholders representing at least two-thirds of the votes cast and
shares represented at the AGM. The Board’s proposal pursuant to the present
section b is subject to approval by the AGM of the Board’s proposal on the 2016
Performance-based Share-Savings Plan (section a above).

C.     INFORMATION AT THE AGM

The Board of Directors and CEO shall, if requested by a shareholder, and if the
Board considers that this can be done without material damage to the Company,
disclose information on circumstances which could influence the assessment of an
agenda item, circumstances which could influence the assessment of the Company’s
or a subsidiary’s financial situation and the Company’s relationship to another
company in the Group. Those wishing to submit questions in advance may do so by
writing to AB Fagerhult at the same postal address as that indicated above for
registration for the AGM.

D.     NUMBER OF SHARES AND VOTES IN THE COMPANY

At the time of this notice, the total number of shares and votes in the Company
is 38,550,000. AB Fagerhult currently holds 686,949 treasury shares,
representing 686,949 votes, which cannot be represented at the AGM.

____________

Habo, March 2016

AB Fagerhult (publ)

The Board of Directors
Fagerhult is one of Europe’s leading lighting groups with approximately 2,700
employees and operations in more than 20 countries. We create modern products
and exciting, energy-efficient and environmentally-adapted lighting
installations, successfully integrated into their individual environments. The
Group includes such strong brands as Fagerhult, Ateljé Lyktan, LTS, Whitecroft
Lighting, Designplan Lighting, Eagle Lighting, I-Valo, Arlight, Lighting
Innovation and LED Linear. AB Fagerhult is listed on the Nasdaq OMX Nordic
Exchange in Stockholm.