MEDA AB (publ) NOTICE OF ANNUAL GENERAL MEETING 2014

Notice is hereby given that the Annual General Meeting (AGM) of Meda AB, corporate ID 556427-2812, will be held at 5.00 PM on Wednesday, May 7, 2014 at Meda’s headquarters at Pipers väg 2A, Solna, Sweden. Registration starts at 4.00 PM.

Right to participate

Shareholders who wish to participate in the AGM shall:

1. Be registered in the share database held by Euroclear Sweden AB by Wednesday, April 30, 2014.

2. Have sent notification of attendance to Meda by Wednesday, April 30, 2014.

To be entitled to vote at the AGM, shareholders whose shares are registered in the names of nominees shall have temporarily registered their shares in their own names so they are officially registered as shareholders with Euroclear Sweden AB by Wednesday, April 30, 2014. Consequently, shareholders should notify nominees well in advance of this registration date.

Notification of AGM attendance

Notification of AGM participation shall be made via mail to Meda AB, Annual General Meeting, Box 7835, 103 98 Stockholm, Sweden, via phone at +46-8-402 90 49, or company’s website www.meda.se. The notification must specify the shareholder’s name, Swedish civil registration number or corporate ID, address, number of shares, phone number (daytime), and information about any accompanying assistants (at most two). If participating by proxy, please submit the original proxy document to Meda before the AGM. The expiry date of the proxy document may be no more than five years from its issue. If the proxy is issued by a legal entity, a notarized copy of the registration certificate for the legal entity shall also be submitted. The proxy form is available at www.meda.se, and will be sent upon request to shareholders who request the form and specify an address.

Admission cards

Admission cards that entitle shareholders to participate in the AGM will be sent out in advance. Admission cards should be received by shareholders no later than Friday, May 5, 2014. If a shareholder has not received an admission card before the AGM, a new admission card can be requested at the information desk outside the AGM upon presentation of proper identification.

Bus transportation to and from the AGM will be arranged from Stockholm’s Östra station and Stockholm’s Central Station. Buses will be available at 3:45 PM and depart shortly thereafter. Preregistration is required. When registering for the AGM, indicate if bus transportation is desired.

Proposed agenda

1. Opening of the AGM.

2. Election of AGM chairperson.

3. Establishment and approval of the voting list.

4. Approval of the agenda.

5. Election of one or two persons to verify the minutes.

6. Consideration whether the AGM was duly convened.

7. Presentation of the annual accounts, the consolidated annual accounts and the auditors’ report.

8. CEO statement.

9. Questions from shareholders.

10. Decisions regarding:
    
    - Adoption of the income statement and balance sheet, and the consolidated income statement and consolidated balance sheet.
    
    - Disposition of company earnings as per the adopted balance sheet.
    
    - Discharge of the board members and CEO from liability.

11. Determination of the number of board members and deputy board members to be appointed by the AGM.

12. Determination of board remuneration and auditors fees.

13. Election of board members and auditors.

14. Election of board chairman.

15. Resolution concerning principles for appointment of the nomination committee.

16. Resolution concerning remuneration guidelines for senior executives.

17. Resolution concerning authorization of the board to decide on issuing new shares.

18. Resolution concerning authorization of the board to decide on the acquisition and transfer of treasury shares.

19. The proposal of the Board regarding a long-term performance-based incentive program.

20. Any other business.

21. Closing of the AGM.

Proposed resolutions

Item 10: Proposed dividend and record date for the dividend.

The board proposes a dividend of two (2) krona and 50 öre per share (SEK 2.50) (previously SEK 2.25), and that the record date for the dividend shall be May 12, 2014. If AGM participants approve this proposal, the dividend is expected to be distributed under the direction of Euroclear Sweden AB on May 15, 2014. The last day for trading Meda shares that include dividend rights is therefore May 7, 2014.

Item 2 and items 11-14: proposed AGM chairman, board members, remuneration and more

As per the 2013 AGM resolution, shareholders appointed a nomination committee in preparation for the 2014 AGM. The nomination committee has consisted of Lars Backsell, B&E Participation AB; Evert Carlsson, Swedbank Robur Funds; Anders Oscarsson, AMF; Bert-Åke Eriksson, chairman of Meda; Karl-Magnus Sjölin, nomination committee chairman, Stena Sessan.

For item 2 in the agenda, the nomination committee will propose that:

-      Bert-Åke Eriksson is appointed as AGM chairman.

For agenda items 11-14, the nomination committee will propose that:

-      The board shall consist of eight (8) members (unchanged) and that no deputy members be appointed (unchanged).

-      The board remuneration shall be fixed at SEK 3,425,000 (2,850,000). Of this amount, the chairman shall receive SEK 800,000 (750,000), and each of the other board members who are not employed by the Group shall receive SEK 375,000 (350,000).

-      For work in the audit committee, remuneration shall be set to SEK 200,000 (unchanged), of which 100,000 (unchanged) for the committee chairman and SEK 50,000 kronor (unchanged) to each of the regular members.

-      For work in the remuneration committee, remuneration shall be set to SEK 200,000 (100,000), of which 100,000 (50,000) for the committee chairman and SEK 50,000 (25,000) to each of the other members.

-    Remuneration shall be able to be paid to a company designed by the board member under the condition that such payment does not involve any additional costs for the company.

-      Remuneration to the auditor shall be paid as per invoice for review of accounts and company administration, and the Group audit.

-      These board members be re-elected:

Peter Claesson

Peter von Ehrenheim

Marianne Hamilton

Tuve Johannesson

Karen Sörensen

Lars Westerberg

Bert-Åke Eriksson has declined reelection to the Board.

-      These board members be newly elected:

Martin Svalstedt

Guido Oelkers

Martin Svalstedt was born in 1963 and holds a Master of Science in Business Administration and Economics. Svalstedt is since 12 years CEO of Adactum AB, Stena sphere’s investment company. He has significant experience from a wide variety of businesses and is currently Chairman of the Board of Gunnebo AB and Ballingslöv AB.

Guido Oelkers was born in 1965 and is a German citizen. Oelkers holds a PhD in strategic management. He is currently the CEO of BSN Group, Hamburg, has previously been CEO of Gambro AB, and has experience from several international assignments.

-      Martin Svalstedt be appointed Chairman of the Board

-      PricewaterhouseCoopers AB be appointed as auditing firm until the end of the next AGM.

Shareholders, who together represent about 32% of all votes in the company, have stated that they intend to vote in favor of these proposals.

Item 15: Establishment of principles for appointment of the Nomination committee

The nomination committee proposes that the AGM resolves to follow these guidelines regarding the appointment of the nomination committee.

Meda’s nomination committee shall consist of the board chairman and one representative of each of the four largest shareholders.

The board chairman of Meda will contact the four largest shareholders, based on information in the Euroclear Sweden AB shareholders database as of the last working day in August. Within fourteen (14) days of being contacted, the owners shall submit a decision as to whether they wish to participate in the nomination work or not. If any of the four largest shareholders declines to exercise the right to appoint a member to the nomination committee, then the next largest shareholder shall be given the opportunity to appoint a member and shall submit a decision within one week as to whether they wish to participate or not.

When the committee is appointed (no later than 7 months before the AGM), then Meda must publicly announce the names of the four owner representatives and the shareholders whom they represent. If, at that point, four owners have not registered their interest in participating in the nomination committee, the committee may then consist of fewer members.

The nomination committee’s term of office extends until a new committee is appointed.

The nomination committee chairman shall be the committee member who represents the largest shareholder unless committee members agree otherwise. The nomination committee’s first meeting will be opened by the board chairman. If a member leaves the committee before his/her work is completed, then the owner that appointed the member has the right to appoint a new committee member. Nomination committee members will receive no remuneration.

If a significant change occurs in Meda’s ownership structure and a shareholder which after this significant ownership change becomes one of the four largest shareholder expresses the desire to be a nomination committee member, then the committee shall offer the shareholder a place on the committee by either deciding to replace the smallest shareholder (with the least number of votes) on the committee by this shareholder or to increase the committee’s size by yet another member – but not to more than six members.

Changes in the nomination committee’s composition must be announced as soon they occur.

The committee’s task is to prepare and submit proposals to the AGM for:

• An AGM chairman

• Board chairman and board members

• Board remuneration with specifications for board chairman and other members plus          remuneration for possible committee work

• An auditor, deputy auditor (as needed), and auditors’ fees

• Principles for appointment of the nomination committee

The nomination committee shall have the right to charge the company for costs that are necessary for the committee to fulfill its obligations, such as costs for recruitment consultants and other consultants.

In conjunction with its assignment, the nomination committee shall comply with the Corporate Governance Code concerning nomination committee responsibilities.

Item 16: Establishment of remuneration guidelines for senior executives

The board proposes that the 2014 AGM approves these remuneration guidelines for senior executives. The guidelines reflect Meda’s need to be able to recruit and motivate qualified employees with compensation that is competitive in various countries. The Group’s executive management team consists of the CEO and senior executives who represent the top functions that report directly to the CEO.

Guidelines for remuneration and other employment terms for Meda’s senior executives are based on agreements already entered between Meda and its senior executives and mean

1. that Meda shall strive to offer its executives market-based remuneration/compensation,

2. that the criteria shall be based on the significance of responsibilities, competence requirements, experience and performance, and

3. that the remuneration will consist of:

• Fixed basic salary

• Short-term variable pay

• Long-term variable pay

• Pension benefits

• Other benefits and severance terms and conditions

Distribution between basic salary and variable pay must be in proportion to the executive’s responsibility and authority levels.

Short-term variable pay is performance-based – partly on Group profit and partly on individual qualitative parameters. Variable pay may not exceed 80% of the fixed basic salary for the CEO and 50% of the fixed basic salary for other senior executives.

Long-term variable pay may include a share-related incentive program.

Pension benefits shall reflect current common market terms. Pension-based salary is made up of basic salary and variable salary. Other benefits primarily consist of leasing cars. Other benefits may also include commonly accepted benefits in conjunction with employment or the move abroad of the senior executive. Such benefits may include temporary housing, education fees, moving expenses, tax filing assistance and similar benefits.

Basic salary during the period of notice for termination and severance pay shall together not exceed an amount equivalent to two years´ basic salary.

The remuneration committee shall prepare matters concerning remuneration to Group executives for resolution by the board. If there are justifiable reasons, the board may deviate from the above remuneration principles for senior executives.

Item 17: Authorization of the board to decide on issuing new shares

The board proposes that the AGM authorizes it to decide on the increase of the company’s share capital by share issues of Class A and/or Class B shares on one or more occasions during the period until the next AGM. Authorization shall cover a maximum of 30,224,306 shares (corresponding to a dilution effect of a maximum of about 10% of share capital and votes based on the total number of votes in the company at the time of the 2014 AGM).

The proposal would authorize the board to decide on payment in kind, offset, or other terms as specified in chapter 13, section 5, paragraph 1, item 6 in the Companies Act, on deviation from shareholders’ preferential rights and on any other terms and conditions for the issues. The authorization does not extend to decisions regarding cash issues. Prevailing market conditions will determine the issue rate.

The reason for the authorization to deviate from preferential rights and decide on issues – with or without provisions specified in chapter 13, section 5, paragraph 1, item 6 in the Companies Act – is that Meda would be able to issue shares as purchase-price payments linked to acquisitions of other companies, parts of companies, product rights, or other assets that the board deems to be of value for the company’s operation.

For a resolution according to the boards’ proposal in this item 17, the AGM resolution must be supported by shareholders representing at least two-thirds of the votes and of the shares represented at the meeting.

P. 18 – Authorization of the Board to decide on acquisition and transfer of treasury shares  

The Board proposes that the AGM authorize it to, on one or more occasions, decide on the acquisition or transfer of class A treasury shares, as follows: Shares may only be acquired from NASDAQ OMX Stockholm at a price within the current share price interval. When acquiring shares, the company may hold no more than ten percent of the total shares and votes in the company. Treasury shares may be transferred on NASDAQ OMX Stockholm at a price within the current share price interval. Transfer may be made of as many treasury shares as the company holds at that time.

The transfer of shares may, pursuant to the AGM decision as per item 19.11 below, also be used to buy back shares for delivery, directly or indirectly, of shares to be used in the incentive program proposed in item 19, including the right to transfer shares that deviate from shareholders’ preferential rights. For this case, the terms will be those specified in the incentive program, which include payment-free transfers to participants in the program.

The authorization is valid no longer than until the 2015 AGM.

The purpose of the proposal is to facilitate the adaption of the company’s capital structure and thus increase shareholder value. Pursuant to the decision of the AGM in item 19.11 below, the purpose is also to ensure the supply of shares for the incentive program proposed in item 19 of the agenda.

For a valid resolution to be made regarding the board’s proposal in item 18, the AGM resolution must be supported by shareholders representing at least two-thirds of votes and of the shares represented at the meeting.

P. 19 – The proposal of the Board regarding a long-term performance-based incentive program

The Board of Directors believes it to be an advantage to the company if key individuals within the Group have a long-term interest in the healthy growth of company shares and focus their work on promoting such development. This applies in particular to key individuals such as Group management, country managers, and certain other senior executives.

It is also the opinion of the Board that a share-related incentive program would increase the attractiveness of the Group as an employer on the global market, making it easier to recruit and retain qualified key individuals. Such a program would also, upon maturity, lead to the participants becoming shareholders and growing their own shareholdings in the company.

The Board therefore proposes that the AGM approves a long-term performance-based incentive program according to the following main guidelines.

1.                   The program proposes to provide no more than 120 key individuals with the opportunity to be allocated payment-free company shares of series A (“shares”).

2.                   Shares for a total value of no more than SEK 110 million will be able to be allocated, but no more than those representing 0.6% of the company’s total outstanding shares at the time of allocation, currently 1,813,458 shares.

3.                   The number of shares that may be allocated shall be related to the degree to which certain target objectives relating to organic growth, the EBITDA margin and cash flow have been reached during 2014. The results of these will be published in the company’s annual report for 2014, as well as on the company’s web site. Shares will be allocated as soon as the results of the target objectives have been determined. The allocation means no transfer of shares to participants. The maturity period for the program is three years. The shares may be transferred first in 2017, according to item 5 below.

4.                   Participants in the program may be allocated at most the number of shares per person that corresponds to the number of shares that will be allocated to the participant’s main group as specified in the program, and as follows:

a.                   The CEO – 4.5%, although no more than SEK 5,000,000

b.                   Group management, about 11 individuals – 23.5%, although no more than SEK 2,346,000 per person

c.                   Country managers, about 35 individuals – 37.3%, although no more than SEK 1,173,000 per person

d.                   Certain other senior executives, about 65 individuals – 34.7%, although no more than SEK 587,000 per person

The specified amounts indicate the current market value of the shares at the time of allocation. The market value may have increased or decreased by the time of transfer. When determining the division of shares within each main group, the Board shall keep in mind that the cost of the program shall give as positive effects as possible for shareholders.

5.                   If the transfer criteria are fulfilled, shares shall be transferred without cost in 2017. Transfer of shares presumes that the individuals covered by the program are employed on a permanent basis at the time of transfer. Exceptions from this rule may be determined in individual cases, such as in case of death, disability, retirement or disposal of the unit in which the participant is employed.

6.                   Participants shall not make any payment for their rights in this program.

7.                   To equivocate the participants’ interest with the shareholders’, participants shall receive compensation corresponding to the dividend paid during the three-year vesting period until the time of transfer. Compensation will only be made for dividend determined after the time of allocation.

8.                   The Board shall have the right to introduce alternative incentive solutions for key individuals in countries where participation in the program is not suitable due to local conditions. An alternative incentive solution shall, as far as is practically possible, follow similar conditions and under the conditions that it can be done with reasonable administrative costs and financial efforts.

9.                   Costs for the program are calculated using the financial accounting standard found in IFRS 2, and divided over the years 2014-2017. The program does not include any pension obligations. Assuming that the target objectives for allocation of shares are achieved at 50%, that the number of participants who will leave the Group before the transfer time corresponds to the historic staff turnover for key individuals in the Group, and that the share price at the time of allocation is SEK 100 and increases by 10% each year until the time of transfer, the total annual cost for the program, including social fees, will amount to about SEK 20 million.

10.                 The Board shall have the right to make decisions on the terms that it might find suitable for program’s application and execution of the AGM’s decision. Small deviations from these guidelines shall be able to be made if the Board in individual cases determines there is special reason to do so. Before the allocation or transfer of shares, the Board shall analyze if the allocation and/or transfer is reasonable in relation to the company’s growth, earnings, position and development compared with competitors and other factors. If significant changes take place within the Meda Group, or on the market, which, by the assessment of the Board, would mean that the terms for allocation/transfer of shares according to the program is no longer reasonable, the Board shall have the right to implement an adjustment to the program, including, among others, the right to reduce the number of shares allocated/transferred, or not to allocate/transfer shares at all.

11.                 After evaluating various methods to ensure the company’s ability to deliver shares according to the program, the Board proposes that the AGM decide on the transfer of bought-back treasury shares to the participants in the program as follows:

a. At most 1,813,458 Class A shares may be transferred.

b. The right to receive shares applies to the participants who, according to the program, shall have the right to receive shares, with the right for each individual to receive at most the number of shares that each individual is entitled to, according to the program.

c. The participant’s right to receive shares can be used as transfer of shares shall be done according to the program, that is in 2017.

d. Participants shall receive the shares free of cost during the period specified in the terms of the program.

e. The number of shares that may be transferred may be recalculated according to the program terms, among others as a result of issues, reverse stock-split, stock split, or other changes to the capital structure.

The reason for the proposal and for the deviation from shareholders’ preferential rights during the transfer of shares is to enable the company to transfer shares to participants in the program according to the terms adopted for the program.

12.                 As an alternative to using bought-back treasury shares as per item 19.11 above, delivery of the shares as per the program can be secured by the company entering a share swap agreement or other similar agreement with a third party. This alternative will be brought up if the requisite voting quorum to approve the decision as per item 19.11 is not achieved.

Other share-related incentive programs in the company are described separately and in the company’s annual report.

This proposal has been prepared by the remuneration committee and the Board of Directors with the support of external advisors and in consultation with specific major shareholders. The Board has then decided to present this proposal to the AGM. Aside from the employees who have prepared the question according to instructions from the Board and remuneration committee, no employees who may be covered by the program have participated in determining the terms of the program.

A valid resolution to establish the program specified in items 1-10, a majority is required of more than half of the votes cast by the AGM. A valid resolution as per the board's proposal in item 11 requires that the decision is supported by at least nine-tenths of the votes cast as well as represented shares at the AGM. To reach a valid resolution to ensure the program via a share swap agreement or similar as specified in item 12, a majority is required of more than half of the votes cast by the AGM.

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Additional information

At the time of publication of this notification, the number of shares and votes in Meda totaled 302,243,065. Only class A shares have been issued. The company holds no treasury shares.

On or before 16 April 2014, the board’s complete proposal, its 2013 annual accounts, documentation as per Chapter 18, section 4 and auditor statement as per Chapter 8 section 54 of the Swedish Companies act and the nomination committee’s reasoned opinion on the proposed board will be made available at company headquarters at Pipers väg 2, Solna, Sweden and on its site (www.meda.se). The documentation will be sent by mail to shareholders who request it and submit their mailing addresses; it will also be available at the AGM.

On the request of a shareholder the board and the CEO shall provide information at the AGM concerning conditions that could influence the assessment of an item on the agenda, the company’s financial situation, or a subsidiary’s financial situation or its relations to another Group company, provided that the board deems that disclosure its possible without causing material damage to the company.

Solna, Sweden, April 2014

The Board of Directors

Meda Aktiebolag (publ)