Proposals by the Nominating Committee of Swedish Match AB to the Annual General Meeting on 27 April 2010 including a motivated statement regarding the Board of Directors to be elected by the AGM.
The Nominating Committee shall, in accordance with a resolution by the 2009 Annual General Meeting, comprise five members. The Annual General Meeting resolved to mandate the Chairman of the Board to contact the largest known shareholders in the Company in order of size until four representatives had been appointed to make up the Nominating Committee together with the Chairman of the Board.
The Chairman of the Board has contacted the largest shareholders in accordance with the instruction of the Annual General Meeting, and the members of the Nominating Committee held its first, preparatory, meeting on 18 November 2009.
In addition to the Chairman of the Board, Conny Karlsson, the Nominating Committee comprises the following members: Mads Eg Gensmann (Parvus Asset Management), William Lock (Morgan Stanley Investment Management) Andy Brown (Cedar Rock Capital) and KG Lindvall (Swedbank Robur Fonder AB). Conny Karlsson is the only one of the members who is also a Member of the Board of the Company. Mads Eg Gensmann has acted as the Chairman of the Nominating Committee. The Company’s General Counsel, Fredrik Peyron, has acted as Secretary to the Nominating Committee.
The Nominating Committee has worked in accordance with the Swedish Code of Corporate Governance and the Instructions for Swedish Match AB’s Nominating Committee adopted by the 2009 Annual General Meeting. As per March 24, 2010, the Nominating Committee has held two meetings since the 2009 Annual General Meeting.
Report on the work of the Nominating Committee
The Nominating Committee will give an account of how it has conducted its work at the Annual General Meeting.
The Nominating Committees proposals
Meeting Chairman
The Nominating Committee proposes Attorney Sven Unger be appointed Chairman to lead the meeting.
Number of Board members
The Nominating Committee will propose that the number of Board members to be appointed by the Annual General Meeting shall be seven, with no deputies appointed.
Proposal for Board of Directors, Chairman of the Board and deputy Chairman of the Board
The Nominating Committee will propose re-election of the present Board members Conny Karlsson, Charles A. Blixt, Andrew Cripps, Karen Guerra, Arne Jurbrant, Kersti Strandqvist and Meg Tivéus. Further, the Nominating Committee will propose Conny Karlsson as the Chairman of the Board and Andrew Cripps as the deputy Chairman of the Board.
All proposed Board members are independent in relation to the company, the company management and major owners.
Motivated statement regarding the composition of the Board of Directors
During the autumn 2009 the Board of Directors commissioned an external consultant to conduct an evaluation of the Board of Directors as regards the conduct and functioning of the Board’s work. The Chairman of the Board has informed the Nominating Committee about the outcome of the evaluation. The evaluation has given the Nominating Committee a basis from which to assess the competence and experience of the Board Members and the requirements for the future. This has guided the Nominating Committee's work.
The Nominating Committee is of the opinion that the present Board possesses a broad competence with appropriate diversification. The Board has longstanding experience from international businesses on both the European and the American markets. The Nominating Committee has made particular note of the Board´s collective experience in the fast-moving consumer goods markets and the tobacco industry.
The Nominating Committee considers that the proposed Board of Directors has the appropriate composition with regard to the company’s operations, phase of development and other relevant circumstances. It exhibits diversity and breadth of qualifications, experience and background.
Compensation to the Board
The Nominating Committee will propose that the fees to the Board of Directors be paid as follows for the period until the close of the 2009 Annual General Meeting: the Chairman shall receive 1,575,000 SEK, the deputy Chairman shall receive 745,000 SEK and the other Board Members elected by the General Meeting shall each receive 630,000 SEK. It will further be proposed that the Board, as compensation for committee work carried out, be allotted 230,000 SEK to the Chairmen of the Compensation Committee and the Audit Committee respectively and 115,000 SEK respectively to the other members of these committees, although totaling no more than 920,000 SEK. Board employed by the Swedish Match Group shall not receive any compensation. The proposed fees to Board members and the Chairman and the fees for Committee work are unchanged from the fees decided at the 2009 Annual General Meeting.
All Board Members who receive Directors’ fees will continue to acquire shares in the Company for an amount corresponding to the fee (excluding committee fees), after deductions for income tax. All such shares will be retained for a period of at least 12 months after the acquisition of the shares and half of the shares will be retained for at least 24 months.
Appointment of the Nominating Committee
The Nominating Committee will propose that the method of appointing the Nominating Committee shall be unchanged. It will be proposed that the Chairman of the Board’s shall receive a mandate to contact the four largest known shareholders in the Company and ask them each to appoint a representative who will, together with the Chairman of the Board, comprise the Nominating Committee for the period until a new Nominating Committee has been appointed in accordance with a mandate from the 2011 Annual General Meeting. If any of the four largest known shareholders refrain from nominating a representative to the Company’s Nominating Committee, the next shareholder by size shall be contacted, until a Nominating Committee comprising four members and the Chairman of the Board can be constituted. The names of the members of the Nominating Committee shall be published no later than six months prior to the 2011 Annual General Meeting. The four largest shareholders are identified on the basis of the known numbers of votes in due time before the date falling six month before the Annual General Meeting.
No compensation shall be payable to the members of the Nominating Committee. Any expenses incurred in the course of the Nominating Committee’s work shall be borne by the Company.
Instructions for Swedish Match AB’s Nominating Committee
The Nominating Committee proposes that the Meeting should adopt the Instructions for Swedish Match AB’s Nominating Committee which are identical to those adopted by the 2009 Annual General Meeting. The Nominating Committee shall provide proposals regarding (i) the election of the Chairman and other Members of the Board, and determination of the Directors’ fees to be divided between the Chairman and other Members, and any remuneration for committee work, (ii) the election of and payment of fees to auditors, when applicable, (iii) the election of a Chairman of the Annual General Meeting; and (iv) the election of a new Nominating Committee or proposal for criteria on how the Chairman and members of the Nominating Committee are to be appointed.
Proposed resolution by the Annual General Meeting
Information about all persons proposed as members of the Board of Directors of Swedish Match AB may be found on the Company´s website at
www.swedishmatch.com and will, without charge, be sent to the shareholders upon request.
The Nominating Committee, March 2010