The board of directors of Sandvik AB proposes that the Annual General Meeting resolve on a long term incentive program for 2012 encompassing approximately 350 senior executives and key individuals within the Group, on substantially the same terms and conditions as the 2011 long term incentive program.

Participants are offered allotment of employee stock options that entitle the holder to acquire Sandvik shares after three years at a set exercise price, on condition that certain performance targets are met. For some executives in more senior positions, a personal investment in Sandvik shares will also be required to gain entitlement to allotment of employee stock options and matching rights, which entitle the holder to acquire Sandvik shares after three years at a set exercise price.

LTI 2012 comprises a maximum of 12,000,000 Sandvik shares, corresponding to about 1% of the total number of shares on December 31st 2011, and will be secured in the form of share swaps with a third party, thus resulting in no dilution effect. Assuming a share price of SEK 100, expected volatility of 40% and a five year term, the cost of LTI 2012 is estimated to approximately SEK 258 million.