Scandinavian Tobacco Group A/S: Notice convening the Annual General Meeting

Company Announcement 4/2020

Copenhagen, 2 March 2020

notice convening THE annual general meeting of Scandinavian Tobacco Group A/S

In accordance with Article 7 of the Articles of Association, notice is hereby given of the annual general meeting of Scandinavian Tobacco Group A/S (the "Company") to be held on

Thursday 26 March 2020 at 4.30 p.m.
at IDA Conference, Kalvebod Brygge 31-33, DK-1780 Copenhagen V

Agenda
In accordance with Article 8.2 of the Articles of Association, the agenda of the meeting is as follows:

1. Report of the Board of Directors on the Company’s activities during the past financial year
   
   
2. Adoption of the audited annual report
   
   The audited annual report is available on www.st-group.com.
   
   
3. Appropriation of profit or loss as recorded in the adopted annual report
   
   

                  The Board of Directors proposes to the general meeting that the Company pays for the financial year 2019 a dividend of DKK 6.10 per share of DKK 1.

            4.    Adoption of the remuneration of the Board of Directors and Board committees

                  The Board of Directors proposes that the remuneration of the Board of Directors for the financial year 2020 be as follows:

1. Ordinary members of the Board of Directors shall be paid a base annual fee of DKK 400,000
2. The chairman shall receive three times the base annual fee
3. The vice-chairman shall receive two times the base annual fee
4. The chairman of the Audit Committee shall receive a fee corresponding to 75 percent of the base annual fee
5. Other members of the Audit Committee shall receive a fee corresponding to 37.5 percent of the base annual fee
6. The chairman of each of the Remuneration Committee and Nomination Committee shall receive a fee corresponding to 25 percent of the base annual fee
7. The members of each of the Remuneration Committee and Nomination Committee shall receive a fee corresponding to 12.5 percent of the base annual fee
   
   The fees for the chairmen and members of the committees are in addition to their fee as chairman, vice-chairman or member of the Board of Directors. In addition to the above, the Company may also pay social contributions and similar fees that it may be charged by foreign authorities in relation to the fees paid to members of the Board of Directors. Further, the Company may pay travel expenses and other expenses related to the work as a member of the Board of Directors.
    
8. Election of members to the Board of Directors

                  Pursuant to Article 11.1 of the Articles of Association, all members of the Board of Directors elected by the general meeting are elected for one year at a time.
The Board of Directors proposes re-election of the all of the Board members:
Nigel Northridge (Chairman), Henrik Brandt (Vice-chairman), Dianne Neal Blixt, Luc Missorten, Anders Obel, Marlene Forsell and Claus Gregersen.
Information about the nominated candidates is enclosed and is also available at the Company’s website (www.st-group.com).

            6.    Election of auditor(s)

                  Pursuant to Article 16.1 of the Articles of Association, the auditor elected by the general meeting is up for election. The Board of Directors proposes to re-elect PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab in accordance with the Audit Committee’s recommendation. The Audit Committee has not been influenced by any third party and no clause of a contract entered into with a third party has been imposed upon it, which restricts the general meeting’s choice of certain auditors or audit firms.

            7.    Any proposals by the Board of Directors and/or shareholders


                  The Board of Directors has not received any proposals from the shareholders. The Board of Directors has submitted the following proposals:
                   
            7A. Extension of authorisations to the Board of Directors to increase the Company’s share capital without pre-emptive subscription rights for the existing shareholders
             
                  The Board of Directors proposes that the existing authorisations to increase the Company’s share capital without pre-emptive rights for existing shareholders set out in Articles 5.1-5.2 of the Company’s Articles of Association, which expire 31 December 2020, be extended for a period of 5 years, i.e. until 26 March 2025. Except for the period, there are no other changes to the articles.
                  The revised wording of the proposed authorisations in Articles 5.1-5.2 shall be as follows:
                   
                   "5.1                    In the period until 26 March 2025, the board of directors is authorised on one or more occasions to increase the share capital by cash contribution; contribution in kind; and/or conversion of debt by issuance of new shares of no more than nominally DKK 10,000,000. The subscription is to be made at market price.
                    
                                             The new shares shall be negotiable instruments and shall be issued in the names of the holders and recorded in the names of the holders in the company’s register of shareholders. The negotiability of the new shares shall not be subject to restrictions. The pre-emption rights of the existing shareholders shall not apply to the new shares. The new shares shall carry the same rights as the company’s existing shares.
                   
                   5.2                     In the period until 26 March 2025, the board of directors is authorised on one or more occasions to increase the share capital by cash contribution by issuance of new shares of no more than nominally DKK 1,000,000 in connection with subscription of shares by the company’s or its subsidiaries’ officers or employees at a subscription price below market price.
                                             
                                            The new shares shall be negotiable instruments and shall be issued in the names of the holders and recorded in the names of the holders in the company’s register of shareholders. The negotiability of the new shares shall not be subject to restrictions. The pre-emption rights of the existing shareholders shall not apply to the new shares. The new shares shall carry the same rights as the company’s existing shares.”
                   
            7B. Extension of authorisation to the Board of Directors for the Company to acquire own shares
            
                  The Board of Directors proposes that the existing authorisation for the Company to acquire own shares set out in Article 6.1 of the Company’s Articles of Association, which expire 31 December 2020, be extended for a period of 5 years, i.e. until 26 March 2025. Except for the period, there are no other changes to the article.
                  The revised wording of the proposed authorisation in Article 6.1 shall be as follows:
                  

6. authorised to allow the company to acquire its own shares of a maximum amount of nominally DKK 10,000,000 at a price deviating by no more than 10% from the listed price at the time of the acquisition.”
    
7. Amendment of agenda set out in the Articles of Association

             
                  The Board of Directors proposes that new item 3 is added to the agenda set out in Article 8.2 of the Company’s Articles of Association due to the introduction of a new section 139b in the Danish Companies Act concerning remuneration reports. Except for new item 3, there are no other changes to the article.
                  The revised wording of the proposed agenda in Article 8.2 shall be as follows:
                   
                  "The agenda of the annual general meeting shall include the following items:
             
                  1. The report of the board of directors on the company’s activities during the past financial year.
                  2. Adoption of the audited annual report.
                  3. Presentation of and indicative voting on the remuneration report.
                  4. Adoption of the remuneration for the board of directors and any board committees.
                  5. Appropriation of profit or loss as recorded in the adopted annual report.
                  6. Election of directors.
                  7. Election of auditor(s).
                  8. Any proposal by the board of directors and/or shareholders.”

            7D. Approval of the revised remuneration policy
             
                  The Board of Directors proposes that the general meeting approves a revised remuneration policy. The revised remuneration policy applies to the Company’s Board of Directors and Executive Management and has been prepared in accordance with sections 139 and 139a of the Danish Companies Act and the most recent Recommendations on Corporate Governance issued by the Danish Committee on Corporate Governance.
                  The remuneration policy replaces the Company’s current remuneration policy adopted at the general meeting held on 15 January 2016.
                  If approved, the revised remuneration policy will apply to agreements on remuneration and incentive pay entered into in the financial year 2020 and subsequent financial years.
                  The full wording of the revised remuneration policy for the Company is attached as Annex 1 to this notice of meeting.
                  If the revised remuneration policy is approved, the reference to the current guidelines for incentive pay in Article 13.1 of the Company’s Articles of Association will be deleted.

VOTING REQUIREMENTS

Adoption by the general meeting of the proposals in items 7A, 7B and 7C on the agenda requires adoption by at least 2/3 of both the votes cast and the share capital represented at the general meeting. The other proposals on the agenda may be adopted by a simple majority of votes, see Article 10.2 of the Articles of Association.


REGISTRATION, ADMISSION AND PROXY

Registration date
In accordance with Article 9.4 of the Articles of Association, a shareholder’s right to participate in the general meeting and the number of votes, which the shareholder is entitled to cast, is determined in accordance with the number of shares held by such shareholder on 19 March 2020 at 11.59 pm (the registration date). The shares held by each shareholder are determined at the registration date on the basis of the shareholdings registered in the share register and in accordance with any notices on shareholding received, but not yet registered, by the Company in the share register as of the registration date.


Deadline for notice of attendance
A shareholder or its proxy wishing to attend the general meeting must give notice thereof and order admission cards on the Investor Portal at the Company’s website, www.st-group.com, or by printing the admission card order form found on the website and submitting it to Computershare A/S, Lottenborgvej 26D, 2800 Kongens Lyngby, e-mail gf@computershare.dk, so that it is received by Computershare no later than 20 March 2020 11.59 pm.


Admission card
Admission cards will be issued electronically only. Thus, admission cards will not be distributed by ordinary mail. Please register the email address, to which the electronic admission card should be sent, on the Investor Portal at the Company’s website, www.st-group.com, when you request the admission card.

Shareholders who have ordered admission cards for the general meeting have the following options:

• print the admission card and bring it to the general meeting, or
• bring the admission card on a smartphone or tablet, or
• collect the admission card at the general meeting upon presentation of proper ID.
  
  

Proxy and postal votes
If you are prevented from attending the general meeting, you may appoint a proxy to cast the votes carried by your shares. The proxy can be submitted directly via the Investor Portal on the Company’s website, www.st-group.com, or by printing the proxy form at the website and submitting it, duly signed and dated, to Computershare A/S, Lottenborgvej 26D, 2800 Kongens Lyngby, e-mail gf@computershare.dk. The proxy must be submitted so that it is received by Computershare no later than 20 March 2020 at 11.59 pm.

Shareholders may also vote by post directly on the Investor Portal on the Company’s website, www.st-group.com, no later than 25 March 2020 at 11.59 pm. Alternatively, shareholders can submit the printed, signed and dated postal vote form found at the website to Computershare A/S, Lottenborgvej 26D, 2800 Kongens Lyngby, e-mail gf@computershare.dk. Vote by post must be received by Computershare A/S no later than 25 March 2020 at 11.59 pm. Once a vote by post has been received, the vote cannot be revoked by the shareholder.

Language

In accordance with Article 9.7 of the Articles of Association the general meeting will be conducted in English. Shareholders may choose to speak in Danish or English. 
 

SHARE CAPITAL AND VOTING RIGHTS

The Company’s share capital is DKK 100,000,000, divided into 100,000,000 shares of DKK 1 each. Article 9.1 of the Articles of Association stipulates that each share of nominally DKK 1 shall carry one vote at the general meeting.

AGENDA ETC.

The complete, unabridged text of the documents to be submitted to the general meeting, including the total number of shares and voting rights as at the date of the notice, the agenda with the full text of all proposals to be submitted to the general meeting, the forms to be used for voting by proxy and by post, as well as the audited annual report and the proposed remuneration policy are available at the Company’s website, www.st-group.com.


RIGHT TO INQUIRE

According to Article 9.6 of the Articles of Association, the shareholders have the right to ask questions in writing to the Company’s management about matters of significance to the assessment of the annual report and the general position of the Company or the assessment of any matter to be resolved at the general meeting. Shareholders may also ask questions to the management of the Company at the general meeting.

PERSONAL DATA

In connection with the general meeting, the Company collects, processes and retains certain personal data. In this respect reference is made to the Company’s Privacy Policy and Cookie Policy, which are available on the Company’s website (www.st-group.com).

Scandinavian Tobacco Group A/S

The Board of Directors

For further information, please contact:


For investor enquiries:
Torben Sand, Head of Investor Relations
phone: +45 5084 7222 or torben.sand@st-group.com


For media enquiries:
Simon Mehl Augustesen, Director of Group Communications
phone: +1 484-379-8725 or simon.augustesen@st-group.com

CANDIDATES FOR THE BOARD OF DIRECTORS

Nigel Northridge (Chairman)
Independent
Born in 1956
Nationality: Irish
Joined the board in 2016 and was elected Vice-Chairman in 2016 and Chairman in 2017. Chairman of the Remuneration Committee and the Nomination Committee.
Educational background:
·HND in Business Studies from Northern Ireland Polytechnic, Sullivan Upper School, Belfast
Competencies:

• Long professional experience as an executive director in the international tobacco industry
• Experience as executive and non-executive director in managing publicly listed companies
• Sales and marketing of fast-moving consumer goods

Selected former employment positions:

• CEO of Gallaher Group PLC 2000-2007
• Held a number of sales, marketing and then general management positions within the group of Gallaher Tobacco Ltd. (subsequently Gallaher Group PLC) in the UK and overseas, before being appointed to the board of directors in 1993, a position held 1993-2000

Directorships and other offices:
      ·Non-Executive Chairman of Belfast City Airport and director of Board of London Irish Holdings Ltd.

Henrik Brandt (Vice-chairman)
Independent
Born in 1955
Nationality: Danish
Joined the board in 2017 and was elected Vice-chairman in 2017. Member of Remuneration Committee and Nomination Committee.
Educational background:

• MBA from Stanford University
• Master of Science (Econ), Copenhagen Business School

Competencies:

• Extensive executive and non-executive experience in leading international, publicly listed, private, and private equity businesses
• Sales and marketing of fast-moving consumer goods
• Strategic business development

Selected former positions:

• President and CEO Royal Unibrew A/S 2008-2017
• President and CEO of Unomedical a/s 2003-2008
• President and CEO of Sophus Berendsen A/S 1999-2002
• CEO of House of Prince A/S and Group Executive of Skandinavisk Tobakskompagni A/S 1992-1999
• President and CEO of Fritz Hansen A/S 1989-1992
• President and CEO of Kevi A/S 1987-1989

Directorships and other offices:

• Chairman of the board of Toms Gruppen A/S, Rockwool International A/S, Fritz Hansen A/S, Intervare A/S (and its subsidiary nemlig.com A/S) and Danish Bake Holding ApS (Ole & Steen)
• Member of the board of Ferd Holding as, Gerda & Victor B. Strands Foundation and Gerda & Victor B. Strand Holding A/S

Dianne Neal Blixt
Independent
Born in 1959
Nationality: American
Joined the board in 2016. Member of the Audit Committee
Educational background:

• Master’s degree in Business Administration and Finance from University of North Carolina at Greensboro

Competencies:

• Significant experience in business analysis
• Financial management and reporting expertise
• Considerable insight into the US tobacco industry

Selected former positions:

• Member of the board of directors of Lorillard, Inc. 2011-2015
• Executive Vice President and Chief Financial Officer of Reynolds American, Inc., 2004-2007
• Various positions in Reynolds American and its subsidiaries 1988-2003
• Executive Vice President and Chief Financial Officer of R. J. Reynolds Tobacco Holdings, Inc. 2003-2004

Directorships and other offices:

• Chairperson of the board of the National Sports Media Association
• Member of the board of directors of Ameriprise Financial Services, Inc. and director on the board for the non-profit entity Reynolda House Museum of American Art

Luc Missorten
Independent
Born in 1955
Nationality: Belgian
Joined the board in 2016. Member of the Audit Committee, the Remuneration Committee and the Nomination Committee.
Educational background:

• Law degree from the Catholic University of Leuven
• Certificate of Advanced European Studies from the College of Europe, Bruges
• Master of Laws from the University of California, Berkeley

Competencies:

• Executive and non-executive general management experience
• Substantial experience in financial management of international corporations

Selected former positions:

• CEO of Corelio NV 2007-2014
• Group CFO and Executive Vice President for Finance at UCB S.A. 2004-2007
• Executive Vice President and CFO at Inbev S.A. (now ABI) 1995-2003

Directorships and other offices:

• Chairman of the board of Ontex Group NV.
• Member of the board of Barco NV, Recitel NV/SA, GIMV NV and Mateco Sarl

Anders Obel
Independent
Born in 1960
Nationality: Danish
Joined the Board in 2018
Educational background:

• BSc in Economics and Business Administration from Copenhagen Business School

Compentencies:

• Extensive experience in management of industrial and investment companies
• Strategic business development
• Economic and financial expertise

Selected former positions:

• Member of the board of directors of Forenet Kredit f.m.b.a., Nykredit Holding A/S and Nykredit Realkredit 2009-2017
• Member of the board of directors of Scandinavian Tobacco Group A/S 2010-2016
• Vice President at Gemini Consulting/Cap Gemini 1996-2002
• Various positions, including Manager, at Hambros Bank Plc., 1985-1996

Directorships and other offices:

• CEO at C.W. Obel A/S
• Chairman of the board of C.W. Obel Bolig A/S, C.W. Obel Ejendomme A/S, Obel-LFI Ejendomme A/S, Semco Maritime A/S, Semco Maritime Holding A/S, Goodvalley A/S, Anders Christen Obel ApS and Haxholm v/Anders Christen Obel
• Vice Chairman of the board of Fritz Hansen A/S and Skandinavisk Holding A/S
• Member of the board of Scandinavian Tobacco Group’s Gavefond, Erhvervsinvest Management A/S, Minkpapir A/S, PAL-CUT A/S, C.W. Obels Fond, Danmark-Amerika Fondet, Fonden Det Obelske Jubilæumskollegium, Mullerupgaard- og Gl. Estrupfonden, Høvdingsgaard Fonden, Skjørringefonden, Woodmancott Fonden, Kilsmark A/S and Rexholm A/S

Marlene Forsell
Independent
Born in 1976
Nationality: Swedish
Joined the board in 2019. Chairman of the Audit Committee.
Educational background:

• Master of Science degree in Business Administration and Economics from Stockholm School of Economics

Competencies:

• Extensive experience with and insight into financial matters
• Enterprise performance management
• Reporting processes in listed companies
• Considerable insight into the tobacco industry

Selected former positions:

• Senior Vice President and CFO of Swedish Match AB 2013-2018
• Member of the board of Scandinavian Tobacco Group A/S 2014-2017
• Various positions in the Swedish Match group, including Vice President Group Reporting and Vice President Business Control 2004-2013
• Analyst Ernst & Young 2001-2004

Directorships and other offices:

• Member of the board of Kambi Group plc, Lime Technologies AB and Nobia AB

Claus Gregersen
Not independent
Born in 1961
Nationality: Danish
Joined the board in 2019. Member of the Remuneration Committee and the Nomination Committee.
Educational background:

• Bachelor of Commerce degree (HD) in Business Finance from Copenhagen Business School

Competencies:

• Board experience from international, private and public enterprises
• Management experience from Danish and international enterprises
• Extensive experience with M&A, capital markets, strategic development, risk management and operations

Selected former positions:

• CEO and Country Manager at Carnegie Investment Bank 2010-2017
• Partner, Select Partners, Asset Management 2005-2010

Directorships and other offices:

• CEO of Chr. Augustinus Fabrikker Aktieselskab
• Chairman of the board of Vækstfonden, Skandinavisk Holding A/S, Skodsborg Sundhedscenter A/S, Kurhotel Skodsborg A/S, Rungsted Sundpark A/S and Skodsborg Sundpark A/S
• Vice-Chairman of the board of Jeudan A/S
• Member of the board of Gyldendal A/S, Fritz Hansen A/S, Tivoli A/S, Axcel Future, Scandinavian Tobacco Group’s Gavefond and Søren Gyldendal Fonden
• Member of the management of CAF Invest A/S, Ejendomme af 1. januar 2012 ApS and CG61 ApS

Attachment

• Notice AGM with Annex, 2 March 2020