Company Announcement 15/2023
Copenhagen, 21 March 2023
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 13 April 2023 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 http://investor.st-group.com). The general meeting and the webcast will commence on 13 April 2023 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 www.st-group.com.
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 2022 a dividend of DKK 8.25 per share of DKK 1.
4. Presentation of the Company’s remuneration report for an advisory vote
The remuneration report is available on www.st-group.com.
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 2023 be as follows (unchanged from 2022):
- 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 chairman 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 chairman of each of the Remuneration Committee and Nomination Committee shall receive a fee corresponding to 25 percent of the base annual fee
- 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, 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.
Additionally, 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 9 March 2022, 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 was completed on 28 February 2023.
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 6,000,000 allocated to nominally DKK 6,000,000 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 87,000,000.
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 in 2022 and 2023 repurchased treasury shares for an average price of DKK 126.82 per share of nominally DKK 1. This means that in addition to the nominal capital reduction amount, a total of DKK 775,363,888 has been paid out to the Company’s shareholders since the initiation of the share buy-back programme in March 2022.
Prior to the implementation of the capital reduction, the Company’s creditors will be requested to file any claims they may have against the Company within a period of 4 weeks. 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 87,000,000, divided into shares of DKK 1 or any multiple thereof.”
6B. Adoption of an amendment to Articles of Association to include an indemnification scheme for members of the Board of Directors and the Executive Management
The Board of Directors proposes that the general meeting adopts an amendment to the Company's Articles of Association to implement an indemnification scheme for members of the Board of Directors and the Executive Management in accordance with applicable Danish law (the ”Scheme”).
In accordance with normal practice, Scandinavian Tobacco Group A/S has taken out a Directors’ & Officers’ (D&O) liability insurance that, among other things, cover the liability that the members of the Board of Directors and Executive Management may incur towards third parties in the discharge of their duties. Due to the developments in the insurance market, it has proved increasingly difficult for Scandinavian Tobacco Group A/S to take out such insurances with a sufficient coverage at a reasonable premium.
It is considered to be in the best interest of the Company and its shareholders that the members of the Board of Directors and the Executive Management, subject to certain conditions, are offered indemnification against claims raised by third parties against them in the discharge of their duties, inter alia to ensure that the Company can continue to retain and attract suitable directors and officers and take such decisions as are in the best interests of the Company and its shareholders. Any indemnification offered under the Scheme will be secondary to any D&O liability insurance taken out by the Company.
Adoption of the proposal implies that a new Article 13 will be included in the Articles of Association which will read as follows:
"13.1 As a supplement to and secondary to any insurances taken out by the company, including any Directors' and Officers' liability insurance or other insurances covering the claim, the company shall, subject to compliance with applicable laws and otherwise on such terms and conditions as shall be decided by the board of directors acting in accordance with applicable laws and these Articles of Association, indemnify and hold harmless any member of the board of directors and executive management of the Company (the Indemnitees) from and against claims raised by any third party arising out of such Indemnitee's discharge of his/her duties as a member of the board of directors or the executive management of the company, provided, however, that such indemnity shall not apply if the claim is caused by the Indemnitee's fraud, willful misconduct or gross negligence or the Indemnitee having acted disloyally towards the company (the Indemnification Scheme).
13.2 The indemnification includes that the company will indemnify and hold the Indemnitees harmless from any taxes levied on the Indemnitees due to any indemnification actually made under the Indemnification Scheme and reasonable expenses incurred in defending claims.
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 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.
13.4 The board of directors is authorized to implement, manage, and administer the Indemnification Scheme.”
As a consequence of inserting a new Article 13 in the Company’s Articles of Association, the numbering of the subsequent Articles will be changed accordingly.
6C. Adoption of an amendment to Remuneration Policy to include an indemnification scheme for members of the Board of Directors and the Executive Management
For the reasons described in connection with the proposal in item 6B, the Board of Directors proposes that the general meeting adopts an amendment to Scandinavian Tobacco Group A/S' Remuneration Policy to implement an indemnification scheme for members of the Board of Directors and the Executive Management in accordance with applicable Danish law.
The Scheme
It is proposed that the Company's Remuneration Policy is amended to reflect that the general meeting has decided to implement an indemnification scheme for members of the Board of Directors and the Executive Management in accordance with applicable laws. In addition to the proposal to include the Scheme in the Company's Articles of Association, it is proposed to make the Scheme part of the Company's Remuneration Policy. Consequently, the Scheme will be subject to the regulation of the Remuneration Policy, including section 139(2) of the Danish Companies Act, whereby the Remuneration Policy (including the Scheme) shall be presented to the general meeting for approval upon material changes and at least every four years.
Proposal to amend the Remuneration Policy
The Board of Directors proposes that the following wording is included in the Company's Remuneration Policy in a new section 2.5:
"2.5 Directors’ and Officers’ (D&O) liability insurances and indemnity scheme
In order to attract and retain qualified members of the Company's Board of Directors and Executive Management and otherwise to advance and safeguard the interests of the Company and its shareholders, it is the Company’s policy to take out customary D&O liability insurances covering each member of the Board of Directors and the Executive Management. In addition, the Company may, subject to applicable laws and on such terms and conditions as shall be decided by the Board of Directors acting in accordance with applicable laws and Article 13 of the Company's Articles of Association, agree to indemnify and hold harmless any member of the Board of Directors and Executive Management from and against any claims raised by any third party arising out of such director's or officer's discharge of his/her duties as a member of the Board of Directors or the Executive Management, provided, however, that such indemnity shall not apply if the claim is caused by such director's or officer's fraud, willful misconduct or gross negligence or such director or officer having acted disloyally towards the Company. Any indemnification offered under the indemnity scheme will be (i) made only for the benefit of the relevant directors and officers (including his/her death estate and compulsory heirs, but no other persons) and (ii) secondary to the D&O liability insurances taken out by the Company and any other insurances that covers the claim(s). The Board of Directors is authorized to implement, manage, and administer the indemnification scheme.”
The amended Remuneration Policy showing the proposed amendment is attached as Annex 1 to this notice. If the Board of Directors' proposal under item 6B is not adopted, the reference in the above text to "Article 13 of the Company's Articles of Association" shall be considered deleted and not part of the proposal.
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.
The Board of Directors proposes re-election of the following Board members: Henrik Brandt (Chairman), Henrik Amsinck, Dianne Blixt, Marlene Forsell, Claus Gregersen and Anders Obel.
Information about the nominated candidates is enclosed and is also available at the Company’s website (www.st-group.com).
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.
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 6 April 2023 at 11.59 pm. (CEST) (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, www.st-group.com, no later than 10 April 2023 11.59 pm. (CEST), or by printing the admission card order form found on the Company’s website, www.st-group.com, and submitting it to Computershare A/S, Lottenborgvej 26D, 2800 Kongens Lyngby, email gf@computershare.dk, so that it is received by Computershare A/S no later than 10 April 2023 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, 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
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 10 April 2023 at 11.59 pm. (CEST). The proxy can be submitted electronically via the Investor Portal on the Company’s website, www.st-group.com, or by printing the proxy form at the Company’s website, www.st-group.com, and submitting it, duly signed and dated, to Computershare A/S, Lottenborgvej 26D, 2800 Kongens Lyngby, email gf@computershare.dk.
Shareholders may also vote by post. Vote by post must be received by Computershare A/S no later than 12 April 2023 at 11.59 pm. (CEST). Vote by post can be submitted electronically on the Investor Portal on the Company’s website, www.st-group.com. 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 gf@computershare.dk. 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 93,000,000, divided into 93,000,000 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, the sustainability report and the remuneration report 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:
Torben Sand, Head of Investor Relations and Communication
phone: +45 5084 7222 or torben.sand@st-group.com
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 (Econ), 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 Danish Bake Holding ApS (Ole & Steen)
- Member of the board of Ferd Holding as, Gerda & Victor B. Strands Fond/Toms Gruppens Fond and Gerda & Victor B. Strand Holding A/S
Henrik Amsinck
Independent
Born in 1961
Nationality: Danish
Joined the Board in 2021.
Educational background:
- M. Sc. 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, LEGO GmbH and LEGO India, Private Limited
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 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:
- Member of the board of Ameriprise Financial Services, Inc. (Chairperson of the Compensation Committee, Member of the Audit Committee, Member of the Executive Committee), Triad Business Bank (Member of the Executive Committee), the National Sports Media Association (Member of the Finance and Governance Committee) and Reynolda House Museum of American Art (Chairperson of the Strategy Committee, Member of the Finance Committee)
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 (Chairman of the Audit Committee), Lime Technologies AB (Chairman of the Audit Committee), Nobia AB (Chairman of the Audit Committee), InDex Pharmaceuticals Holding AB and AddSecure AB (Chairman of the Audit Committee)
Claus Gregersen
Not independent
Born in 1961
Nationality: Danish
Joined the board in 2019. Member of the Nomination and Remuneration Committees.
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:
- Chairman, The Danish Growth Fund (Vækstfonden) 2018-2020
- CEO and Country Manager at Carnegie Investment Bank 2010-2017
- Partner, Select Partners, Asset Management 2005-2010
Directorships and other offices:
- Chairman of the board of Skandinavisk Holding A/S, Skodsborg Sundhedscenter A/S, Kurhotel Skodsborg A/S, Skodsborg Sundpark A/S, The Scandinavian ApS and STG’s Gavefond
- Member of the board of Jeudan A/S (Member of the Risk and Audit Committee), Gyldendal A/S (Member of the Remuneration Committee and the Nomination Committee), Fritz Hansen A/S, Tivoli A/S (Member of the Audit Committee), Axcelfuture, Aktive Ejere and Søren Gyldendal Fonden
- CEO of Chr. Augustinus Fabrikker Aktieselskab and CAF Invest A/S
Anders Obel
Independent
Born in 1960
Nationality: Danish
Joined the Board in 2018. Member of the Audit Committee.
Educational background:
- BSc in Economics and Business Administration from 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, 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 and Anders Christen Obel ApS
OVERVIEW OF PROPOSED CHANGES TO THE ARTICLES OF ASSOCIATION
| Article | Current text | Proposed text |
| 3.1 | The company's share capital is DKK nominally 93,000,000, divided into shares of DKK 1 or any multiple thereof. | The company's share capital is nominally DKK 87,000,000, divided into shares of DKK 1 or any multiple thereof. |
| New 13 | N/A | 13.1 As a supplement to and secondary to any insurances taken out by the company, including any Directors' and Officers' liability insurance or other insurances covering the claim, the company shall, subject to compliance with applicable laws and otherwise on such terms and conditions as shall be decided by the board of directors acting in accordance with applicable laws and these Articles of Association, indemnify and hold harmless any member of the board of directors and executive management of the Company (the Indemnitees) from and against claims raised by any third party arising out of such Indemnitee's discharge of his/her duties as a member of the board of directors or the executive management of the company, provided, however, that such indemnity shall not apply if the claim is caused by the Indemnitee's fraud, willful misconduct or gross negligence or the Indemnitee having acted disloyally towards the company (the Indemnification Scheme). 13.2 The indemnification includes that the company will indemnify and hold the Indemnitees harmless from any taxes levied on the Indemnitees due to any indemnification actually made under the Indemnification Scheme and reasonable expenses incurred in defending claims. 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 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. 13.4 The board of directors is authorized to implement, manage, and administer the Indemnification Scheme. |
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