Invitation
Annual General Meeting of Shareholdersof LEM HOLDING SA
Tuesday, 9 June 2020, at 15:30 (CEST)

2020

Invitation to the Annual
General Meeting of
Shareholders 2020 of
LEM HOLDING SA

life
energymotionLEM’s Board of Directors is pleased to announce
the Annual General Meeting of Shareholders.

Date and time

Tuesday, 9 June 2020
at 15:30 (CEST)

Place

Avenue Beauregard 1, 1700 Fribourg/Freiburg

Special Notice

As a result of the exceptional circumstances due to the COVID-19(Coronavirus) pandemic, the Annual General Meeting of Shareholders
2020 of LEM HOLDING SA cannot take place in the usual format.
This year’s Annual General Meeting will therefore be held in accordancewith the requirements of the Ordinance 2 of the Swiss Federal Councilof 13 March 2020 on Measures to Combat the Coronavirus.
Unfortunately this means that shareholders are not permitted toattend in person and therefore you may only exercise your voting rights
by instructing the Independent Representative.

LEM Invitation to the Annual General Meeting of Shareholders 20203

Agenda and proposals
1

Explanation: The Board of Directors proposes the distribution of an
ordinary dividend of CHF 40 per share. Net of the Swiss withholding
tax of 35%, this is an ordinary net cash dividend of CHF 26 per share.
The shares will be traded ex-dividend as of 16 June 2020. The net
dividend will be paid on 18 June 2020.
Shares held by LEM HOLDING SA or any of its subsidiaries are notentitled to dividends.

Reporting for financial year 2019/20– Management report– Consolidated financial statements of the LEM Group– Annual financial statements of LEM HOLDING SA– Compensation report– Auditors’ reports

3

1.1 Approval of the management report, the consolidated financial
statements of the LEM Group, the annual financial statements of
LEM HOLDING SA as at 31 March 2020
Proposal: The Board of Directors proposes that the management report,
the consolidated financial statements of the LEM Group and the annual
financial statements of LEM HOLDING SA be approved.
1.2 Consultative vote on the compensation report 2019/20
Proposal: The Board of Directors recommends that the compensation
report as per pages 53 to 58 of the Financial Report be accepted(non-binding consultative vote).
Explanation: The compensation report contains the principles
governing the compensation paid to the Board of Directors andthe Executive Management and reports on the amounts paid to themembers of both bodies for the financial year 2019/20.

2

Appropriation of available earnings anddistribution

Proposal: The Board of Directors proposes that the total available
earnings for the financial year 2019/20 of LEM HOLDING SA be
allocated as follows:in CHF thousands

Balance brought forward from previous financial year
Variation of treasury shares

35’079402

Net profit of the financial year

77’983

Total available earnings

113’464

Proposal of the Board of Directors
Ordinary dividend 1
Balance to be carried forward(45’600)
67’864

Dividend-bearing shares are all shares issued except for treasury shares held by LEM HOLDING SA andits subsidiaries as of the record date. The amount of CHF 45’600 presented is calculated on the total
number of shares issued as of 31 March 2020. If the total amount of the ordinary dividend is higher orlower, the difference will be balanced through the appropriation of the available earnings reserve.

1

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LEM Invitation to the Annual General Meeting of Shareholders 2020

Discharge of the Board of Directors
and the Executive Management

Proposal: The Board of Directors proposes that the members of theBoard of Directors and the Executive Management be granted discharge
for the financial year 2019/20.

4

Approval of the compensationof the Board of Directors

Proposal: The Board of Directors proposes that the shareholders approvea maximum aggregate amount of compensation of the members of theBoard of Directors for the term of office from the Annual General Meeting2020 until the Annual General Meeting 2021 of CHF 1’100’000.
Explanation: The proposed maximum aggregate amount of CHF
1’100’000 is composed of the following (non-binding) components:– Gross fixed compensation of CHF 910’000 based on the grossBoard of Directors membership fees (CHF 250’000 for the
Chairman and CHF 80’000 for each member) and the Committee
membership fees (CHF 40’000 for the Committee’s chairman and
CHF 20’000 for each member) for the six members of the Boardof Directors proposed for re-election under agenda item 6 below.
For further details on the compensation system of the Boardof Directors, please refer to the Compensation Report 2019/20,
pages 53 to 58 of the Financial Report; plus
– Related employer contributions to social security; plus
– Reserve amount, which allows for flexibility in the event of extraordinary events such as significant additional workload of all or
certain members of the Board of Directors that requires additional
compensation, including membership in ad hoc committees,or an increase in mandatory social security contributions due toa change of applicable contribution rates.
Members of the Board of Directors do not receive any variable compensation. The actual payout to the members of the Board of Directors forthe term of office from the Annual General Meeting 2020 until the
Annual General Meeting 2021 will be disclosed in the compensation
report 2020/21.

LEM Invitation to the Annual General Meeting of Shareholders 20205

5

Approval of the compensationof the Executive Management

The approval of the compensation of the members of the Executive
Management is divided into three separate votes:
1. The first approval relates to the gross short-term variable compensation
to be paid to the members of the Executive Management under the
Leadership for Results (L4R) plan – short-term incentive for financial
year 2019/20 (retrospective approval).
2. The second approval relates to the maximum gross long-term variable
compensation to be granted to the members of the Executive
Management under the Leadership for Results (L4R) plan – long-term
incentive for financial year 2020/21 (prospective approval) to be
paid out in July 2023.
3. The third approval relates to the maximum fixed compensation of themembers of the Executive Management for the period from 1 October
2020 to 30 September 2021 (prospective approval).
5.1 Vote on the aggregate amount of short-term variable compensationof the Executive Management for financial year 2019/20
Proposal: The Board of Directors proposes that the shareholders approvean aggregate amount of short-term variable compensation of the members of the Executive Management for the preceding completed financial
year 2019/20 of CHF 659’811.
Explanation: The proposed amount of CHF 659’811 is composed of thefollowing components:– Gross short-term variable compensation of the membersof the Executive Management for the financial year 2019/20
of CHF 605’331; plus
– Related employer contributions to social security of CHF 54’480.

5.2 Vote on the maximum aggregate amount of long-term variable
compensation of the Executive Management for financial year
2020/21
Proposal: The Board of Directors proposes that the shareholders approvea maximum aggregate amount of long-term variable compensation to
be granted to the members of the Executive Management for financial
year 2020/21 of up to CHF 1’200’000.
Explanation: The proposed maximum amount of CHF 1’200’000 iscomposed of the following (non-binding) components:– Maximum gross long-term variable compensation under the
Leadership for Results (L4R) plan of the members of the
Executive Management. This maximum amount assumes that all
performance targets will be reached at the maximum possiblelevel under the L4R LTI (Long-Term Incentive) plan rules of
CHF 1’100’000; plus
– Estimated related employer contributions to social security of
CHF 100’000.
The L4R LTI plan is an annual long-term incentive plan, which is basedon the performance of LEM evaluated over a period of three consecutive
fiscal years. The performance criterion is the cumulated economic value
added (EVA) over these three fiscal years. For further details, pleaserefer to the compensation report 2019/20, pages 53 to 58 of the
Financial Report.
The actual payout to the members of the Executive Management
for grants awarded during financial year 2020/21 will be disclosed in
the compensation report 2022/23.

For further details, please refer to the compensation report 2019/20,
pages 53 to 58 of the Financial Report.

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LEM Invitation to the Annual General Meeting of Shareholders 2020

LEM Invitation to the Annual General Meeting of Shareholders 20207

5.3 Vote on the maximum aggregate amount of fixed compensationof the Executive Management for the period from 1 October 2020
to 30 September 2021
Proposal: The Board of Directors proposes that the shareholders approvea maximum aggregate amount of fixed compensation for the membersof the Executive Management for the period from 1 October 2020 to
30 September 2021 of up to CHF 1’830’000.
Explanation: The proposed maximum amount of CHF 1’830’000 iscomposed of the following (non-binding) components:– Gross base salaries of the members of the Executive Managementof CHF 1’500’000; plus
– Related employer contributions to social security and pension
fund of CHF 330’000.
The actual payout to the members of the Executive Management forthe period from 1 October 2020 to 30 September 2021 will be disclosed
in the compensation reports 2020/21 and 2021/22, respectively.

6

Re-elections of members of the Board of
Directors, re-election of the Chairman of theBoard of Directors

Proposal: The Board of Directors proposes the re-election of– Ilan Cohen as member– Ulrich Jakob Looser as member– Ueli Wampfler as member– Werner Carl Weber as member– François Gabella as member– Andreas Hürlimann as member and Chairman (one single vote)to the Board of Directors for a term of office of one year extending until
completion of the next Annual General Meeting.

7

Re-elections to the Nomination & Compensation
Committee

Proposal: The Board of Directors proposes the re-election of– Ulrich Jakob Looser– Andreas Hürlimannto the Nomination & Compensation Committee for a term of office of one
year extending until completion of the next Annual General Meeting. In
case of re-election, Ulrich Jakob Looser will be appointed as chairman of
the Nomination & Compensation Committee.
Re-elections of the proposed nominees will be held individually.

8

Re-election of the Independent Representative

9

Re-election of the statutory auditors

Proposal: The Board of Directors proposes the re-election of thelaw firm Hartmann Dreyer, Attorneys-at-law, Boulevard de Pérolles 7,1701 Fribourg/Freiburg, Switzerland, as Independent Representative
for a term of office of one year extending until completion of thenext Annual General Meeting.

Proposal: The Board of Directors proposes the re-election of Ernst &Young Ltd., Lancy, as statutory auditors for the financial year 2020/21.

10 Amendment to the Articles of Incorporation

Proposal: The Board of Directors proposes to move the registeredoffice of the Company from Fribourg to Plan-les-Ouates and to amend
the Article 2 of the Articles of Incorporation as follows:
Old version: Original version in French:
Le siège de la société est à Fribourg.

Re-elections of the proposed nominees will be held individually.

Free translation in English:
The registered office of the company is in Fribourg.

Explanation: The mandates of all members of the Board of Directors will
expire at the end of the Annual General Meeting of 9 June 2020.

New version: Original version in French:
Le siège de la société est à Plan-les-Ouates.

For further details on the nominees as well as their qualifications, seebiographies in the corporate governance report 2019/20, pages 43 to
52 of the Financial Report.

Free translation in English:
The registered office of the company is in Plan-les-Ouates.
Explanation: The change in the registered office from Fribourg to Planles-Ouates is the opportunity to merge two locations into one. Such achange of the registered office requires an amendment to the Articles
of Incorporation.

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LEM Invitation to the Annual General Meeting of Shareholders 2020

LEM Invitation to the Annual General Meeting of Shareholders 20209Organizational information

Annual report

The annual report 2019/20 is available in two documents. The firstis the Annual Review, which is effectively the management report on
the year’s performance. The second is the Financial Report, consistingof the consolidated financial statements of the LEM Group, the annual
financial statements of LEM HOLDING SA, the compensation report,
the corporate governance report and the reports of the statutory
auditors. Both documents can be accessed on LEM’s website(https://www.lem.com/en/investors and select > Financial Reports).
A hard copy of the full annual report is sent to shareholders upon request
to LEM HOLDING SA, c/o areg.ch ag, Fabrikstrasse 10, 4614 Hägendorf,
Switzerland. The full annual report is also available for inspection from
19 May 2020 at the registered office of LEM HOLDING SA, which islocated at avenue Beauregard 1, 1700 Fribourg/Freiburg, Switzerland.
The annual report 2019/20 is only available in English.

Written proxies and voting instructions

The enclosed registration form may be used as power of attorney to
the Independent Representative and for voting instructions. Both haveto be returned by enclosed envelope not later than 4 June 2020 to
LEM HOLDING SA, c/o areg.ch ag, Fabrikstrasse 10, 4614 Hägendorf,
Switzerland. To the extent you do not provide specific instructions to
the Independent Representative, you instruct the Independent
Representative to vote your shares in favor of the proposals of the Boardof Directors with respect to the items listed on the agenda. The same
shall apply for additional or alternative proposals to the agenda items
included in this invitation and for new agenda items.

Electronic proxies and voting instructions

Alternatively, shareholders have the possibility to cast their votes
by issuing electronic proxies and voting instructions to the
Independent Representative via Netvote: www.netvote.ch/lem.
Shareholders may provide or change any voting instructions they havecommunicated electronically until but not later than 4 June 2020 at
23:59 (CEST). The e-voting fact sheet and requisite login data are partof the enclosed meeting materials supplied to the shareholders.
Please follow the instructions.

Voting entitlement

Those shareholders entered in the share register on 28 May 2020,
17:00 (CEST) are entitled to vote.
From 28 May 2020, 17:00 (CEST) up to and including 9 June 2020, no
entries will be made in the share register which would create a right tovote at this year’s Annual General Meeting. Shareholders who sell partsor all of their shares before the Annual General Meeting are no longer
entitled to vote to that extent.

Proxies to the Independent Representative

Due to the exceptional circumstances of the Coronavirus pandemic,
shareholders are not permitted to attend the Annual General
Meeting 2020 of LEM HOLDING SA in person. Shareholder voting
rights can only be exercised by the Independent Representative,
Hartmann Dreyer, Attorneys-at-law, Boulevard de Pérolles 7,
P.O. Box 736, CH-1701 Fribourg/Freiburg, Switzerland.

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LEM Invitation to the Annual General Meeting of Shareholders 2020

LEM Invitation to the Annual General Meeting of Shareholders 202011

Correspondence

We kindly request that shareholders submit any correspondence inconnection with the Annual General Meeting by priority mail to
LEM HOLDING SA, c/o areg.ch ag, Fabrikstrasse 10, 4614 Hägendorf,
Switzerland.

Invitation

This invitation will be published in the Swiss Commercial Gazetteon 19 May 2020.
Fribourg/Freiburg, 19 May 2020
On behalf of the Board of Directors of LEM HOLDING SA

Andreas Hürlimann,
Chairman of the Board of Directors
LEM HOLDING SA
Avenue Beauregard, 1
1700 Fribourg/Freiburg
Switzerland
Phone: +41 26 460 10 30
www.lem.com

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LEM Invitation to the Annual General Meeting of Shareholders 2020

Leading the world inelectrical measurement,
LEM engineers the bestsolutions for energy
and mobility, ensuring that
our customers’ systems
are optimized, reliable
and safe.

LEM HOLDING SA
Avenue Beauregard, 1
1700 Freiburg/Fribourg
Switzerland
Phone: +41 26 460 10 30
www.lem.com