Scandinavian Tobacco Group A/S - Notice Convening the Annual General Meeting

                                                

Company Announcement 14/2024

Copenhagen, 12 March 2024

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 4 April 2024 at 4.30 pm. (CEST)

at the office of Kromann Reumert, Sundkrogsgade 5, 2100 Copenhagen Ø

Follow the general meeting via webcast

Instead of attending in person, our shareholders have the opportunity to follow the general meeting via live webcast transmission on the Investor Portal (available on the website ). The general meeting and the webcast will commence on 4 April 2024 at 4.30 pm. (CEST). Please note that it is not possible to participate actively in the general meeting, i.e. ask questions or vote, if you follow the general meeting via webcast.

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 .

3.   Appropriation of profit as recorded in the adopted annual report

The Board of Directors proposes to the general meeting that the Company pays for the financial year 2023 a dividend of DKK 8.40 per share of DKK 1.

4.   Presentation of the Company’s remuneration report for an advisory vote

The remuneration report is available on .

5.   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 2024 be as follows:

To align with general market practice, the Board of Directors proposes that the fee to the chair of the Remuneration Committee and Nomination Committee, respectively, is increased from 25 percent to 50 percent of the base annual fee, and that the fee to the other members of the Remuneration Committee and Nomination Committee, respectively, is increased from 12.5 percent to 25 percent of the base annual fee. Other than these proposed changes, the proposed fees are unchanged from 2023.

Consequently, the Board of Directors proposes the following remuneration of the Board of Directors:

• Ordinary members of the Board of Directors shall be paid a base annual fee of DKK 440,000
• The chairman of the Board of Directors shall receive three times the base annual fee
• The vice-chairman of the Board of Directors shall receive two times the base annual fee
• The chair of the Audit Committee shall receive a fee corresponding to 75 percent of the base annual fee
• Other members of the Audit Committee shall receive a fee corresponding to 37.5 percent of the base annual fee
• The chair of each of the Remuneration Committee and Nomination Committee shall receive a fee corresponding to 50 percent of the base annual fee
• Other members of the Remuneration Committee and Nomination Committee, respectively, shall receive a fee corresponding to 25 percent of the base annual fee
  
  
  
  The fees for the chair 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, in accordance with the Company’s Remuneration Policy, also pay social contributions and similar fees that 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.

Subject to his re-election, Henrik Amsinck (the Board member with special IT competences) shall receive separate supplementary remuneration corresponding to 25 percent of the base annual fee for a specific ad hoc task in relation to the Company’s project “OneProcess” (global roll out of ERP SAP S/4HANA).

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



                  The Board of Directors has not received any proposals from the shareholders.

                  6A. Reduction of the Company’s share capital

                  The Board of Directors proposes that the Company’s share capital is reduced.

                  On 10 November 2023, the Company announced a share buy-back programme with the purpose to adjust the Company’s capital structure and meet obligations relating to the group’s share-based incentive programme. The programme will end no later than 28 February 2025.

                  Some of the treasury shares acquired are proposed to be cancelled resulting in the share capital being reduced by treasury shares of a nominal value of DKK 1,000,000 allocated to nominally DKK 1,000,000 own shares with a nominal value of DKK 1 each. After the reduction, the nominal value of the Company’s share capital will be DKK 86,000,000.

                  Pursuant to section 188 of the Danish Companies Act, notice is hereby given that the purpose of the capital reduction is to cancel part of the Company’s portfolio of treasury shares. According to the practice of the Danish Business Authority, this is comparable to a capital reduction for distribution to shareholders, see section 188(1)(2) of the Danish Companies Act. The Company has repurchased the treasury shares that are proposed to be cancelled for the total sum of DKK 118,846,043. This means that in addition to the nominal capital reduction amount, a total of DKK 117,846,043 has been paid out to the Company’s shareholders.

                  Prior to the implementation of the capital reduction, the Company’s creditors will be requested to file within a period of 4 weeks any claims they may have against the Company. The request will be published via the Danish Business Authority’s IT system. The capital reduction will be implemented after expiry of the said 4-week deadline, unless the capital reduction cannot be implemented at such time under the provisions of the Danish Companies Act.

                  Adoption of the proposal implies the following amendment of Article 3.1 of the Articles of Association taking effect upon completion of the capital reduction:

                                            “3.1        The company's share capital is nominally DKK 86,000,000, divided into shares of DKK 1 or any multiple thereof.”

                  6B. Adoption of an amendment to the Articles of Association to amend the Indemnification Scheme for members of the Board of Directors and the Executive Management as adopted at the general meeting in 2023.

                  The Board of Directors proposes that the general meeting adopts amendments to Article 13.3 of the Company's Articles of Association to include a time limit for the indemnification scheme and to clarify that the maximum coverage included in an indemnification agreement shall be within the maximum limit permitted under Danish law. Adoption of the proposal implies that the wording of Article 13.3 in the Articles of Association will be amended and replaced by the following wording (amendments marked in bold):

“13.3

Any indemnification offered under the Indemnification Scheme to any Indemnitee is subject to the company entering into an indemnification agreement with the Indemnitee setting out the terms and conditions, including a maximum coverage, of the indemnification. The maximum coverage must be within the maximum limit permitted under Danish law. The Indemnification Scheme is, and any indemnification agreement shall be made, exclusively for the benefit of the individual Indemnitee, including his/her death estate and compulsory heirs, but no other persons. Any such indemnification agreement shall terminate and cease to have any further effect not later than on the 10th anniversary of the Indemnitee ceasing to hold a position as member of the board of directors or executive management of the company.”

                  6C. Approval of the Remuneration Policy

                  The Remuneration Policy must be approved by the general meeting at least once every four years. The Company’s current Remuneration Policy was adopted at the annual general meeting held on 26 March 2020, and subsequently amended most recently at the annual general meeting held on 13 April 2023.

                  The proposed revised Remuneration Policy includes the following amendments to the Company’s current Remuneration Policy:

- a possibility to deviate from the Remuneration Policy in extraordinary circumstances (section 2.4, first paragraph)

- a mandate to amend KPI targets and calculated results under the short-term incentive plan (section 4.4, sixth paragraph) and long-term incentive plan (section 4.5, seventh paragraph)

                  - value of PSUs granted to an executive at the time of the grant will not exceed 150% (from currently 100%) of the annual base salary, even assuming a maximum level of performance (section 4.5, third paragraph)

                  - gross misconduct as an additional basis for clawback of remuneration (section 4.6, first paragraph)

- increased the share-holding requirements for other members of the Executive Management than the CEO from 30% to 50% of base salary (section 4.7), and

- a few clarifying sentences and minor editorial amendments.



If approved, the proposed revised Remuneration Policy will apply to agreements on remuneration and incentive pay entered into in the financial year 2024 and subsequent financial years.

                  The full wording of the proposed revised Remuneration Policy is attached as Annex 1 to this notice.

7.   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.

Claus Gregersen has decided not to stand for re-election. The Board of Directors proposes re-election of the following Board members: Henrik Brandt (Chairman), Henrik Amsinck, Dianne Blixt, Marlene Forsell and Anders Obel. The Board of Directors further proposes election of Jörg Biebernick.

Information about the nominated candidates is enclosed and is also available at the Company’s website ().

8.   Election of auditor(s)

Pursuant to Article 15.1 of the Articles of Association, the auditor elected by the general meeting is up for election annually.

The Board of Directors proposes, in accordance with the Audit Committee’s recommendation, to re-elect PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab. 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.

The Board of Directors further proposes to elect PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab to provide a statement of assurance on the contents of the sustainability reporting in the management’s statement in the annual report for the financial year 2024.

VOTING REQUIREMENTS

Adoption of the proposals in items 6A and 6B 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 28 March 2024 at 11.59 pm. (CET) (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 in person must give notice thereof and order admission cards on the Investor Portal at the Company’s website, , no later than 1 April 2024 11.59 pm. (CEST), or by printing the admission card order form found on the Company’s website, , and submitting it to Computershare A/S, Lottenborgvej 26D, 2800 Kongens Lyngby, email , so that it is received by Computershare A/S no later than 1 April 2024 11.59 pm. (CEST).



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, , 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

You may appoint a proxy to cast the votes carried by your shares. The proxy must be received by Computershare A/S no later than 1 April 2024 at 11.59 pm. (CEST). The proxy can be submitted electronically via the Investor Portal on the Company’s website, , or by printing the proxy form at the Company’s website, , and submitting it, duly signed and dated, to Computershare A/S, Lottenborgvej 26D, 2800 Kongens Lyngby, email .

Shareholders may also vote by post. Vote by post must be received by Computershare A/S no later than 3 April 2024 at 11.59 pm. (CEST). Vote by post can be submitted electronically on the Investor Portal on the Company’s website, . 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, email . 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 present at the meeting may choose to speak in Danish or English.



SHARE CAPITAL AND VOTING RIGHTS

The Company’s share capital is nominally DKK 87,000,000, divided into 87,000,000 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 (which includes the sustainability reporting) and the remuneration report are available at the Company’s website, .



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 ().

Scandinavian Tobacco Group A/S

The Board of Directors

For further information, please contact:

Torben Sand, Head of Investor Relations and Communication

phone: or

CANDIDATES FOR THE BOARD OF DIRECTORS

Henrik Brandt (Chairman)

Independent

Born in 1955

Nationality: Danish

Joined the board in 2017 and was elected Vice-Chairman. Was elected Chairman in 2022.

Chairman of the Nomination and Remuneration Committees.

Educational background:

• MBA from Stanford University
• Master of Science in Economy, Copenhagen Business School

Competencies:

• Extensive executive and non-executive experience in leading international, publicly listed 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 (now Berendsen A/S) 1999-2002
• CEO of House of Prince A/S (1990-1999) 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, Fritz Hansen A/S, Intervare A/S (and its subsidiary nemlig.com A/S) and Gerda & Victor B. Strand Holding A/S
• Member of the board of Gerda & Victor B. Strands Fond/Toms Gruppens Fond and Ferd Holding AS

Henrik Amsinck

Independent

Born in 1961

Nationality: Danish

Joined the Board in 2021.

Educational background:

• Master of Science in Business Economics, Aarhus University
  
  
  
  

Competencies:

• Executive experience from contributing to the running of large, international and global corporations
• Extensive experience with strategy development, change and program management
• Considerable insight into digital transformation, global IT management and cyber security & compliance
• Experience with retail and online business

Selected former positions:

• CIO and Corporate Management Member in the LEGO Group, 2007-2021
• CIO and board member, TDC Totalløsninger A/S & TDC A/S, 2005-2007
• Finance and IT Director, Management Board Member, AAK A/S, 2004-2005
• CIO, Aarhus Oliefabrik A/S, 1999-2004

Directorships and other offices:

• Member of the board of DSB (Member of the Audit Committee), Eltronic A/S, and Falck Digital Technology Poland Sp. z.o.o.
• CEO and board member of Falck Digital Technology Denmark A/S
• CIO of Falck Danmark A/S
  
  
  
  

Jörg Biebernick

Independent

Born in 1968

Nationality: German

New candidate for the Board of Directors

Educational background:

• Advanced Management Program, Columbia Business School
• Diplom Kaufmann, Koblenz School of Corporate Management

Competencies:

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

Selected former positions:

• Various positions within Imperial Brands plc, including President Europe (2020-2022), Interim CEO (2020), Chairman of the Board of Reemtsma Sigarettenfabriken GmbH (2021-2022) 2017-2022
• President Latin America, Kimberley-Clark Corporation 2014-2017
• Vice President Consumer Goods Category, SCA 2012-2013
• Division Vice President & General Manager EMEA, Georgia Pacific LLC 2007-2012
• Various positions in marketing and innovation, Procter & Gamble 1992-2006
  
  
  
  

Directorships and other offices:

• CEO of Paulaner Brauerei Gruppe GmbH & Co. KGaA
  
  
  
  

Dianne Blixt

Independent

Born in 1959

Nationality: American

Joined the board in 2016.

Member of the Audit, Nomination and Remuneration Committees.

Educational background:

• Master’s degree in Business Administration and Finance, 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:

• Member of the board of Ameriprise Financial Services, Inc. (Chairperson of the Compensation Committee, Member of the Audit and Risk Committee and Member of the Executive Committee), Triad Business Bank (Member of the Operating Risk Committee and Member of the Audit Committe), and Winston-Salem Police Foundation (Treasurer)
  
  
  
  
  
  

Marlene Forsell

Independent

Born in 1976

Nationality: Swedish

Joined the board in 2019.

Chairman of the Audit Committee.

Educational background:

• Master of Science in Business Administration and Economics, 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 (Chairman of the Audit Committee), Lime Technologies AB (Chairman of the Audit Committee), Nobia AB (Chairman of the Audit Committee), InDex Pharmaceuticals Holding AB (not for re-election at 2024 AGM), AddSecure AB (Chairman of the Audit Committee), and Viedoc Technologies AB
  
  
  
  

Anders Obel

Independent

Born in 1960

Nationality: Danish

Joined the Board in 2018.

Member of the Audit Committee.

Educational background:

• Bachelor of Science in Economics and Business Administration, Copenhagen Business School
  
  
  
  

Competencies:

• 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:

• 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 (Member of the Audit Committee and the Nomination Committee, and Chairman of the Remuneration Committee), Woodmancott Fonden 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 STG’s Gavefond, Minkpapir A/S, Palcut A/S, C.W. Obels Fond, Danmark-Amerika Fondet (Danmarks amerikanske selskab), Fonden Det Obelske Jubilæumskollegium, Mullerupgaard- og Gl. Estrupfonden, Høvdingsgaard Fonden, Skjørringefonden, Aktieselskabet Dampskibsselskabet Orient’s Fond, Kilsmark A/S, Rexholm A/S, A/S Motortramp, Skovselskabet af 13. December 2017 A/S and Ejendomsselskabet Amaliegade 49 A/S
• CEO of C.W. Obel A/S, Anders Christen Obel ApS and Det Obelske Familiefond

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