Swedish AB (publ) is a public Swedish limited liability company listed on the NASDAQ OMX . The objective of the Company’s operations, as stated in the Company’s Articles of Association, is to directly or indirectly conduct business relating to the development and manufacture of and trade in products, and and to carry out other activities that are related to these businesses. governance report

Swedish Match is subject to a variety of affairs are exercised at General Meetings. of the four largest shareholders who wish rules that affect its governance including The Company’s shareholders were informed to appoint a representative to the Commit- the Company’s Articles of Association, the of their legal rights to have issues addressed tee. The four largest shareholders are identi­ Swedish Companies Act, the Rule Book for at General Meetings through the Company’s fied on the basis of the known numbers of Issuers on the NASDAQ OMX Stockholm, website at www.swedishmatch.com. Each votes in due time before the date falling six the Swedish Code of Corporate Gover- share entitles the holder to one vote at a months before the coming Annual General nance, and other applicable laws and regu- General Meeting. Resolutions adopted by Meeting. lations. The Articles of Association, adopted General Meetings are generally resolved by Pursuant to instructions established by the general meeting of share­holders, are a simple majority. However, according to by the General Meeting, the Nominating available on the Company’s website at the Swedish Companies Act, certain matters Committee’s duties are to prepare and sub- www.swedishmatch.com. are to be decided by a qualified majority. mit proposals to the General Meeting con- Swedish Match applies the Swedish Code The Annual General Meeting must be cerning the election of the Chairman of the of Corporate Governance, which is available held within six months of the close of the Annual General Meeting, the election of the on the NASDAQ OMX website at fiscal year. At the Annual General Meeting, Chairman and other members of the Board, www.nasdaqomx.com. The Company is not resolutions are adopted concerning such directors’ fees divided among the Chairman reporting any deviations from the Code for matters as dividends, approval of the of the Board and other Board members, and 2009, except with regard to the Code’s reg- Annual Report, discharge of the Board of any fees for committee work, as well as, if ulation that auditors shall review the Com- Directors and the President from personal applicable, the election of and fees to be paid pany’s half-year or nine-month report. The liability, election and compensation of the to the auditors. reason for this deviation is that the Board of Chairman and members of the Board of In the autumn of each year the Board of Directors, with reference to the Company’s Directors and, where applicable, auditors, Directors commissions an external consul- stable operations, is of the opinion that the guidelines for determination of compensa- tant to conduct an evaluation of the Board extra cost that would be incurred by such a tion payable to senior executives, and other as regards the conduct and functioning review is not warranted and that sufficient matters of importance to the Company. of the Board’s work. The Chairman of the control is achieved through the Company’s The Annual General Meeting for 2009 Board informs the Nominating Committee internal reporting and control systems. was held on April 28, 2009. The minutes of about the outcome of the evaluation. This This Corporate Governance Report, with the meeting are available on the Company’s evaluation gives the Nominating Commit- the exception of the report on internal con- website at www.swedishmatch.com. tee a basis from which to assess the compe- trol, has been examined by the Company’s tence and experience of the Board Members auditors but does not represent part of the Nominating Committee and the requirements for the future. formal Annual Report. The Nominating Committee is established The Nominating Committee shall meet according to the principles resolved by the as often as necessary to discharge its duties, General Meeting Annual General Meeting each year. Pursu- and at least once per year. Proposals to the The General Meeting constitutes the highest ant to the decision of the Annual General Nominating Committee can be submit- governing body in a limited liability com- Meeting 2009 the Nominating Commit- ted to the Nominating Committee’s secre- pany, and shareholders’ rights to participate tee shall include the Chairman of the Board tary, the General Counsel of Swedish Match. in resolutions regarding the Company’s of Directors and one representative of each The 2009 Annual General Meeting decided

100 / Swedish Match 2009 corporate governance

that no fees should be paid to the members GOverNANCe Of the SweDiSh MAtCh GrOup of the Nominating Committee, but that any expenses of the Nominating Committee were to be borne by the Company. generaL Board of presIdent MeetIng dIrectors Nominating Committee for the AGM 2009 The Nominating Committee for the Annual General Meeting in 2009 comprised the ­following five persons; Michael Allison Nominating Compensation Audit Disclosure (Morgan Stanley Investment Management), Committee Committee Committee Committee William N. Booth (Wellington ­Management Company), Andy Brown (Cedar Rock ­Capital), Mads Eg Gensmann (Parvus Asset Management), and the Chairman of than two months prior to the AGM, so that Guerra, Arne Jurbrant, Kersti Strandqvist, the Board. Mads Eg Gensmann served as the Nominating Committee can consider and Meg Tivéus. During the year, ­Kenneth ­Chairman of the Nominating Committee. proposals received with due care. Ek, Eva Larsson, and Joakim Lindström The Committee held three meetings dur- served as employee representatives on ing the period between the 2008 and 2009 Proposals shall be submitted to: the Board, with Håkan Johansson, Eeva Annual General Meetings combined with Swedish Match AB Kazemi Vala, and Gert-Inge Rang as depu- informal contacts and discussions between The Nominating Committee ties. Detailed information about individual the members. A report on the work of the c/o General Counsel Board members and deputies is provided on Nomination Committee was presented to SE-118 85 Stockholm, pages 106–107. the AGM 2009. E-mail: nominating.committee@ swedishmatch.com Board meetings Nominating Committee for The Board of Directors convenes for six the AGM 2010 Board of Directors ordinary meetings and one statutory meet- The Nominating Committee for the Annual Board composition ing per year. In addition to the scheduled General Meeting in 2010 was announced According to the Articles of Association, Board meetings, the Board is called to addi- in a press release on October 27, 2009 with the Company’s Board of Directors must tional meetings convened at the discretion the following members, in addition to consist of at least five and at most ten of any director or of the President. the Chairman of the Board; Andy Brown ­directors, apart from those persons who, The auditors participate in the Board (Cedar Rock Capital), Mads Eg Gensmann pursuant to law, may be appointed accord- meeting at which the annual accounts for the (Parvus Asset Management), KG ­Lindvall ing to other arrangements. At the end of fiscal year are presented in order to commu- ( Robur Funds), and William Lock 2009, the Swedish Match Board of Directors nicate their observations from the audit. The (Morgan Stanley Investment Management). consisted of seven members elected by the auditors also met with the Board without the Mads Eg Gensmann serves as Chairman of General Meeting plus three employee repre- presence of the President or any other mem- the Nominating Committee. sentatives and their three deputies in accor- ber of the executive management. dance with the Trade Union Representatives Contacting the Nominating Committee ­(Status at the Workplace) Act. Responsibilities of the Board of Directors Shareholders may submit its proposals to During the year, the Board of Directors The Board of Directors is primarily respon- the Company’s Nominating Committee at consisted of the following directors elected sible for establishing the Swedish Match any time. However, any proposal should by the General Meeting: Conny Karlsson, strategic and financial Long-Range Plan, be submitted to the Committee no later Charles A. Blixt, Andrew Cripps, Karen monitoring the performance of the oper-

101 ations on an ongoing basis, ensuring that sion of responsibilities between the Board of All of the meetings held during the year fol- there is a satisfactory process for monitor- Directors and the President, and the guide- lowed an approved agenda. Prior to each ing the Company’s compliance with laws lines for financial reporting to the Board. meeting, a proposed agenda and, where and regulations, reviewing and approving The working procedures stipulate that the applicable, documents relevant to the items the financial accounts, and taking decisions Company shall have an Audit Committee on the agenda were sent to the Board. The regarding investments and divestments. and a Compensation Committee. Company’s auditors attended the Board The Board of Directors appoints and meeting in February to present the audit issues instructions for the President and Activities of the Board of Directors report and observations from the audit. monitors his work. The Board also deter- during 2009 In conjunction with the Board’s meetings mines the President’s salary and other com- The number of Board meetings during 2009 in June, the Board visited the Company’s pensation within the framework of the was seven, of which six were scheduled manufacturing facility in Houthalen, guidelines established at General Meetings. meetings and one was a statutory meeting. ­Belgium. The Board of Directors is responsible The Board of Directors elected at the 2009 for ensuring that the Group’s organization Annual General Meeting held its 2009 statu- Chairman of the Board is appropriate for its purpose, and conducts tory meeting on the same day as the Annual The Chairman of the Board is responsi- ongoing evaluations of the financial posi- General Meeting, when decisions were ble for organizing and directing the Board’s tion of the Company, of management guide- made concerning the working proce- work and ensuring that the Board ­fulfills its lines, and of the investment of company dures for the Board and instructions for obligations. Through regular contact with funds. The Board also safeguards the Com- the ­Compensation and Audit Commit- the President, the Chairman of the Board pany’s financial accounting, internal con- tees. In addition, customary decisions were monitors the Company’s operations and trol and the quality of its financial report- made concerning the election of the secre- development, ensures that the Board of ing through the system for internal control tary (General Counsel Fredrik Peyron) and Directors continuously receives the infor- described in detail in the section entitled authorized signatories, and the appoint- mation required for upholding the quality “Report on internal control” on page 105. ment of members of the Compensation and of the Board’s work, and monitors that this Audit Committees. work is performed in compliance with the Working procedures for the Board In addition to a financial review of Swedish Companies Act. of Directors the business and distribution of surplus The Chairman’s other responsibilities The working procedures for the Board of funds, the Board during the year devoted include forwarding the owners’ opinions to Directors are established annually at the considerable time to the Company’s the Board of Directors. During 2009, Conny statutory Board meeting. The working pro- strategy and organization, management Karlsson served as Chairman of the Board. cedures include instructions relating to the benefit structures and to divestments and role of the Chairman of the Board, the divi- acquisitions. Audit Committee The Audit Committee is appointed annu- ally by the Board of Directors. In 2009, the members were Meg Tivéus, (Chairman), Andrew Cripps, and Kersti Strandqvist. Composition of the Board of Directors and committees and number of meetings and attendance during 2009 Although the Committee’s work is primar- ily of a preparatory and advisory nature, the Audit Compensation Board of Committee Committee Directors Board of Directors delegates decision-mak- Total number of meetings 5 7 7 ing authority on specific issues to the Com- Conny Karlsson 7 7 mittee. The Committee is responsible for Charles A. Blixt 7 7 overseeing procedures for accounting and Andrew Cripps 5 7 financial reporting and for the organiza- Karen Guerra 6 Arne Jurbrant 7 6 tion of internal control. It also oversees the Kersti Strandqvist 5 7 audit of the Group’s accounting records. Its Meg Tivéus 5 7 reviews focus on the quality and integrity of Kenneth Ek 7 the Group’s financial statements and related Eva Larsson 7 disclosure, the performance of the Com- Joakim Lindström 7 Håkan Johansson 7 pany’s internal control function and inde- Eeva Kazemi Vala 7 pendent auditors, the independent audi- Gert-Inge Rang 7 tors’ qualifications and independence, the Group’s compliance with applicable laws

102 / Swedish Match 2009 corporate governance

and regulations and, as required, related Compensation Committee (ii) the allotment of options, within the party transactions. In conjunction with the The Compensation Committee is appointed framework for the call option program, Audit Committee’s review of the financial annually by the Board of Directors. Mem- as resolved by the Annual General reports, the members of the Audit Commit- bers in 2009 were Conny Karlsson, Chair- Meeting; tee also discuss accounting issues relating man, Arne Jurbrant, and Charles A. Blixt. (iii) payment of funds to the Company’s to the Company’s financial reporting. The The Company’s President presents reports profit-sharing system in Sweden, pursu- Audit Committee also establishes guidelines on certain issues, but is not a member of ant to the rules stipulated by the Board by which services other than auditing may the Committee and is not present when the for the Swedish profit-sharing system; be secured from the Company’s auditors. Committee prepares decisions regarding (iv) salary and other compensation which, The Audit Committee also discusses other compensation to the President. within the framework of the guidelines important issues relating to the Company’s The Committee’s duties are to prepare resolved by the Annual General Meet- financial reporting and reports its observa- and submit to the Board proposals for deci- ing, shall be paid to, and other terms of tions to the Board. sions on the following issues: employment that shall apply for, mem- Decision-making powers have been del- (i) guidelines to be proposed to the Annual bers of Group Management Team other egated to the Committee by the Board per- General Meeting, for the determina- than the President; taining to: tion of salaries and other compensation, (v) approval of significant engagements (i) advance approval of non-audit services as well as other terms of employment outside the Company with respect to to be provided by the auditors; for the Company’s President and other other members of the Group Manage- (ii) advance approval of transactions between members of Group Management Team; ment Team than the President; and the Company and related parties; (ii) any share-related incentive programs; (vi) study fees paid to the employee repre- (iii) matters pertaining to special review of (iii) salary and other compensation as well sentatives on the Board. interim reports by auditors, and as other terms of employment for the The Committee’s Chairman kept the (iv) the need for a separate review function Company’s President, including annual Board of Directors informed on an ongoing (internal audit). salary review; basis about the Committee’s work and deci- The Chairman of the Committee kept (iv) other compensation and employment sions during the year. the Board of Directors informed on an term matters which, by law or other The Committee shall meet as often as ongoing basis of the work and decisions ­regulations, the Swedish Code of Cor- necessary but at least twice annually. The of the Committee throughout the year. porate Governance or established prac- number of meetings held during 2009 was Prior to the 2009 Annual General Meeting, tice shall be resolved by the General seven including two by means of correspon- the Audit Committee evaluated the audi- Meeting or the Board of Directors; and dence. tors’ work and informed the Nominating (v) approval of significant engagements During 2009, the Committee devoted ­Committee of the results of the evaluation. ­outside the Company with respect to special attention to determination of vari- In consultation with Committee mem- the President. able compensation for 2008 to be paid in bers, the Chairman of the Committee shall The Board of Directors has delegated 2009, proposals to the Board concerning decide where and how frequently the Com- decision-making authority to the Commit- adjustments to the President’s salary and mittee shall meet. The number of meetings tee for the following issues: variable compensation for 2010, determi- in 2009 was five including one by telephone. (i) calculation and payment of variable nation of salaries and variable compen- The Company’s auditors participated in all of ­salary to the Company’s President and sation for other members of the Group the meetings of the Audit Committee in 2009 other members of the Group Manage- ­Management Team for 2010 and pro­posals and, in connection with two of these meet- ment Team; for long term incentive programs. In addi- ings, also met with the Committee without tion, the Committee submitted a proposal the presence of Company representatives to the Board, prior to the 2009 Annual ­General Meeting, to have the Company MeMBerS Of the COMMitteeS Of the BOArD Of DireCtOrS 2009 issue call options in respect of the 2008 options program and a proposal for guide- lines for the determination of salary and coMpensatIon coMMIttee aUdIt coMMIttee other remuneration paid to the President Conny Karlsson Meg tivéus and other members of the Group Manage- (chairman) (chairman) ment Team. Charles A. Blixt Andrew Cripps Arne Jurbrant Kersti Strandqvist

103 Evaluation of the work of the Board of ­member of the Board elected by the General Vice President Group Human Resources; Directors Meeting. In addition, a total of 920,000 SEK Bo Aulin, Senior Executive Advisor (until The Board of Directors shall ensure that was granted for committee work, with the May 31, 2009); Henrik Brehmer, Senior its work is evaluated annually. During the Chairman of the Compensation and Audit Vice President Corporate Communications; autumn of 2009, the Board’s work was eval- Committees receiving 230,000 SEK each Rich Flaherty, President of North America uated with the assistance of an indepen- and other members serving on these com- Division, until August 31, 2009 and there- dent consulting company. The Nominating mittees receiving 115,000 SEK each. after President of US Sales Division; Len- Committee was informed of the result of the For further information about Directors’ nart Freeman, Executive Vice President and evaluation. fees for 2009, see Note 7 Personnel, page 66. President of Swedish Match International; Martin Källström, President of North Independence of Board members Management Europe Division from May 1, 2009 until All of the Board members are considered President August 31, 2009 and thereafter President to be independent under the rules of the The President is appointed by the Board of Smokefree Division; Lars Olof Löfman, Swedish Code of Corporate Governance of Directors, and manages the Company’s Senior Vice President of Global Smokefree in relation to the Company’s major share- operations within the framework estab- Products until August 31, 2009 and there- holders and in relation to the management lished by the Board. The President’s duties after President of Other Operations; Jonas and the Company. include responsibility for ensuring that the Nordquist, President of Scandinavia Sales Board of Directors receives objective, com- Division from September 1, 2009; Fredrik Compensation to the Board of Directors prehensive and relevant information prior Peyron, Senior Vice President Legal Affairs; The Nominating Committee submits pro- to Board meetings, enabling the Board to Joakim Tilly, CFO and Senior Vice Presi- posals to the General Meeting regarding reach well-founded decisions. The President dent Group Finance and IT, and Torbjörn compensation to the Board of Directors. also submits reasoned proposals for deci- Åkeson, acting President of North Europe The Meeting then votes on the matter. sions by the Board. On a monthly basis, the Division (until April 30, 2009). Directors’ fees were paid during 2009 President provides Board members with the pursuant to the resolution of the Annual information required to monitor the posi- Compensation to Group Management General Meeting in 2009. No compensation tion, liquidity and development of the Com- The 2009 Annual General Meeting estab- for Directorship work was paid to Directors pany and the Group, while also providing lished certain guidelines for determin- employed by the Swedish Match Group. the Chairman with ongoing information ing salary and other compensation to the Pursuant to a resolution adopted by the regarding the operations of the Company ­President and other members of the Group 2009 Annual General Meeting, compen- and the Group. During 2009 Lars Dahlgren Management Team. For information on the sation to the Board for the period from served as President and CEO. guidelines established at the Annual General the 2009 Annual General Meeting up to Meeting, see Note 7 Personnel, page 66. and including the 2010 Annual General Group Management Team For information concerning compensa- Meeting amounted to 1,575,000 SEK to the In 2009, the Swedish Match Group Man- tion and other benefits to the Group Man- Chairman of the Board, 745,000 SEK to the agement Team consisted of Lars Dahlgren, agement Team and the Company’s options deputy Chairman and 630,000 SEK to each President and CEO; Mats Adamson, Senior program, see Note 7 Personnel, page 66.

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groUp fUnctIons

Group finance & it Group human resources Legal Affairs Corporate Communications

sMoKefree scandInavIa Us saLes sWedIsH MatcH otHer dIvIsIon saLes dIvIsIon InternatIonaL operatIons dIvIsIon

Lights and Cigar Smokefree operations Swedish distribution operations

104 / Swedish Match 2009 corporate governance

Audit and auditors Report on internal control system of controls. Furthermore the foun- The auditors are elected by the General The Board of Directors is responsible for dation of the annual evaluation of effective- Meeting. According to the Articles of Asso- internal control pursuant to the ­‌Swedish ness of the internal control structure is the ciation, the number of authorized public Companies Act and the Swedish Code of annually updated risk assessment of each auditors must be one or two with a maxi- Corporate Governance. This report on Group company. mum of one or two deputy auditors or one internal control was prepared in accordance or two auditing firms. with the Swedish Code of Corporate Gov- Control activities The accounting firm KPMG AB was ernance and is limited to internal control Based on the framework of Group policies elected by the General Meeting as the over financial reporting. The report is a sep- and instructions the Division president is ­Company’s external auditors for the period arate section in the Corporate Governance charged with the responsibility to establish from 2008 up to and including the Annual Report. The report on internal control is the internal controls over financial report- General Meeting in 2012. Thomas Thiel, not a part of the official Annual Report and ing. Control activities are established in all authorized public accountant, serves as has not been examined by the Company’s business processes and systems supplying auditor in charge. ­auditors. information to the financial reports in The duties of the external auditors order to safeguard the reliability of the include reviewing the management of the Control environment information. Board and President and the Company’s The basis for internal control over finan- annual accounts and accounting records. cial reporting is the control environment Information and communication The external auditors report continuously that has been documented and commu- Management has established communica- to the Board’s Audit Committee and, in nicated in governing documents such as tion channels and forums to allow for an ­conjunction with preparation of the annual internal policies on business ethics, dele- effective information flow relating to busi- accounts, they also report their observa- gation of authority, related party transac- ness conditions and changes affecting the tions from the audit to the Board. During tions and fraud response. In addition a set financial reporting. 2009, in addition to auditing, KPMG AB of policies and instructions for accounting provided consultancy services to the Group, and reporting, as well as for internal control Monitoring ­primarily with regard to testing of IT-con- and IT security, have been established. All The Group monitors compliance with gov- trols, due-diligence reports and tax services. policies are regularly updated and distrib- erning documents in the form of inter- For information concerning compensa- uted through a system where key individ- nal policies and instructions, and evalu- tion to the Swedish Match auditors during uals confirm implementation within their ates the effectiveness of the control struc- 2009, see Note 8 Audit fees, page 70. area of responsibility. Fundamental to cre- ture. The Group Internal Audit department, ating an effective control environment is the which reports directly to the CFO and the Disclosure Committee establishment of clear decision-making and Audit Committee, conducts the evaluation The President has appointed a Disclosure review structures. Swedish Match has estab- of internal controls. Committee whose primary responsibil- lished a system of regular review meetings Financial reports are provided on a ity is to ensure that all external reporting, between Group, Division and local manage­ monthly, quarterly and annual basis to including interim reports, annual reports ment where the Group values are reinforced. Division and Group management through and press releases whose content could have a common reporting and consolidation an impact on the share price or that con- Risk assessment system. Management, financial as well as tains financial information, is prepared in The Group applies a risk assessment and operating management, reviews the finan- accordance with the Group’s prevailing rou- risk management method to ensure that cial information to validate complete- tines. Members of the Committee during the risks to which the Group is exposed ness and accuracy. The Board receives 2009 were the Company’s Senior Execu- are managed within the established frame- monthly reports, and the financial status of tive Advisor, Bo Aulin, (until May 31, 2009), work. Based on the risk assessment the the Group is discussed at every scheduled and the heads of Corporate Communica- Group defines a standardized system of Board meeting. The Disclosure Committee tions, Investor Relations, Group Report- controls to ensure that essential risks per- monitors the sufficiency of financial reports ing and Tax (from June 1, 2009), and Legal taining to financial reporting are properly with regard to disclosure requirements. Affairs. The head of Legal Affairs served as ­mitigated. These standardized controls are the Chairman of the Committee. reviewed and updated annually. In addi- tion each Group company is charged with Stockholm, February 24, 2010 the responsibility to assess company spe- cific risks and identify additional key inter- The Board of Directors of nal controls not covered by the standardized Swedish Match AB

105 Board of Directors

Charles A. Blixt Born 1951. J.D. and B.A. Board member since 2007. Member of the Compensation Committee. Other Board Assignments: Corporate Board memberships Targacept Inc. (NASDAQ: TRGT) and Krispy Kreme Doughnuts, Inc. (NYSE: KKD). Also Board member of Salem Academy and College Board of Trustees. Previous positions: Interim General Counsel, Krispy Kreme Doughnuts; Executive Vice President and General Counsel, RJ Reynolds Tobacco Holdings; Executive Vice President and General Counsel, Reynolds American Inc. Charles A. Blixt Own and related parties´ shares: 7,090

Andrew Cripps Born 1957, B.A., University of Cambridge. Board member since 2006. Deputy Chairman and member of the Audit Committee. Other Board Assignments: Non-executive Director and Chairman of Audit Committee of Booker Group plc. Non-executive director and Chairman of the Remuneration Committee of Molins Plc. Non-executive Director and Chairman of the Audit Committee of Helphire Group plc. Previous positions: Non-executive director, Trifast Plc; Director, Carreras Group Ltd; Head of Acquisitions and Head of Strategy Development, British American Tobacco; Director of Corporate Finance, Rothmans International; Managing Director, Rothmans Holdings BV; President, Ed. Laurens International SA. Chartered Accountant. Own and related parties´ shares: 12,200 Andrew Cripps

Conny Karlsson Karen Guerra Arne Jurbrant

Conny Karlsson Born 1955, MBA. Chairman Karen Guerra Born 1956. BSc. Board Arne Jurbrant Born 1942, MBA. Board since 2007. Board member since 2006. Chairman member since 2008. member since 2002. Member of the of the Compensation Committee. Other Board Assignments: Non Executive Compensation Committee. Other Board Assignments: Board member of Director with Samlerhuset Group BV, a Other Board Assignments: Member of the TeliaSonera AB and CapMan OYJ. private European direct marketing company. IF L/MTC Foundation. Previous positions: President, Duni AB; Marketing Previous positions: Non Executive Director Previous positions: CEO, Kraft Foods Nordic Director, Procter & Gamble UK; Marketing Director and member of the Remuneration Region; President, Kraft Freia Marabou and Regional Director, Procter & Gamble Committee, Inchcape PLC; Non Executive Nordic Region; President, General Foods Scandinavia; Marketing Director, Procter & Gamble Director, More Group PLC; President, Colgate Sweden/Denmark; President, General Foods E&SO. Palmolive France SAS; Chairman and Denmark; Sales Manager, General Foods; Own and related parties´shares: 21,000 Managing Director, Colgate Palmolive UK Ltd; Marketing Manager, General Foods Sweden; Marketing Manager Pepsi-Cola Holland and Product Manager, Pripps Bryggerier; Ireland, Pepsi Cola International. President’s assistant, Pripps Bryggerier. Own and related parties´ shares: 3,100 Own and related parties´ shares: 15,233 (including endowment assurance)

Holdings of own and related parties shares as of December 31, 2009. For a detailed 106 / Swedish Match 2009 report of remuneration and benefits to the Board of Directors, refer toN ote 7, page 66. corporate governance

Changes in the Board of Directors during 2009 Kersti Strandqvist There were no changes in the Board of Directors Meg Tivéus during 2009.

Kersti Strandqvist Born 1963, M. Meg Tivéus Born 1943, MBA. Board member Independence in relation to the Sci., Techn. Lic., Master of Strategic since 1999. Chairman of the Audit Committee. 2009 Board of Directors Marketing. Board member since 2005. Other Board Assignments: Chairman of All Board members are, as defined in the Member of the Audit Committee. Vice Folktandvården in Stockholm, Frösunda LSS AB Swedish Code of Corporate Governance, President Feminine Care within SCA and Sprit och Vinleverantörerna. Board member independent of the Company and its Personal Care. of Cloetta AB, Billerud AB, Apoteket Farmacci AB management and of the Company’s major Previous positions: Business Area and Fonder AB. shareholders. Manager Baby Care, SCA Personal Care; Previous positions: President and CEO, Svenska Director R&D Incontinence Care, SCA Spel AB; Vice President, Posten AB; Division Hygiene Products; Technical Manager Manager, Holmen AB; Division Manager, Åhléns Secretary to the Board of Directors Sourcing, SCA Hygiene products; AB; Director, AB Nordiska Kompaniet; Product Fredrik Peyron General Counsel. Senior Vice Marketing Manager, Elf Atochem (France); Manager, Modo AB; Project Manager, McCann President, Legal Affairs since 2007. various positions in R&D and sales, Neste Gunther & Bäck. Chemicals (Sweden, Finland, Belgium). Own and related parties´ shares: 12,000 Own and related parties´ shares: 8,100

Employee representatives Employee representatives (deputies)

Kenneth Ek Eva Larsson Joakim Lindström Håkan Johansson Eeva Kazemi Vala Gert-Inge Rang

Kenneth Ek Born 1953. Board member since 1999. Appointed by the Håkan Johansson Born 1963. Deputy member since 2004. Appointed Council for Negotiation and Co-operation (PTK) within Swedish Match. Board by the Swedish Trade Union Confederation (LO) within Swedish Match. member of the Swedish Association of Management and Professional Staff Module Technician at Swedish Match distribution facilities in Gothenburg. (Ledarna) at the plant in Gothenburg and Kungälv, Sweden. Works with Previous positions: Module Technician, Swedish Match distribution facilities strategic technical projects at Swedish Match plant in Gothenburg/Kungälv. in Malmö, Line Operator at Svenska Tobaks AB in Malmö. Previous positions: Technical Manager; Electrical Manager; Electrician, Own and related parties´ shares: 0 Swedish Match AB. Eeva Kazemi Vala Born 1949. Deputy member since 2004. Appointed by Own and related parties´ shares: 0 the Council for Negotiation and Co-operation (PTK) within Swedish Match. Eva Larsson Born 1958. Board member since 1999. Appointed by the Chairman of Unionen for Swedish Match in Stockholm/Solna. Works with Swedish Trade Union Confederation (LO) within Swedish Match Industries. Exports of pipe tobacco and snus. Chairman of the trade union association at the match plant in Tidaholm, Previous positions: Market Coordinator Pipe tobacco, Market Research Sweden. Insurance Manager for insurance policies of persons employed Manager, Marketing Assistant, Research Chemist, Bioanalyst, Swedish Match ­under collective agreements at Swedish Match match plant in Tidaholm. North Europe Division. Stockholm University, Casco AB and Karolinska Institutet. Previous positions: Line Operator, Swedish Match match plant in Tidaholm. Own and related parties´ shares: 1,500 Own and related parties´ shares: 0 Gert-Inge Rang Born 1954. Deputy member since 2007. Appointed by the Joakim Lindström Born 1965. Board member since 1999. Appointed Council for Negotiation and Co-operation (PTK) within Swedish Match. Chairman by the Swedish Trade Union Confederation (LO) within Swedish Match. of the Swedish Association of Management and Professional Staff (Ledarna) at Chairman and member of the nomination body of the Swedish Food the factory in Vetlanda, Sweden. Supervisor, Splint department at Swedish ­Workers’ (Livs) trade union association in Solna, Stockholm, Sweden. Match Industries in Vetlanda. ­Module technician at Swedish Match distribution facility in Solna. Previous positions: Supervisor, Swedish Match Industries in Vetlanda. Previous positions: Module Technician, Swedish Match distribution facility Own and related parties´ shares: 1,000 in Solna. Own and related parties´ shares: 0 AUDITORS KPMG AB Senior Auditor: Thomas Thiel. Born 1947. Authorized Public Accountant. Swedish Match Auditor www.swedishmatch.com since 2004. Thomas Thiel’s other auditing assignments For updated information on Board members and their shareholdings and options, include , Axfood, Folksam, PEAB, Ratos, 107 please refer to the Company’s website. Skandia, SKF and Stena. Group Management

Lennart Freeman

Lennart Freeman Executive Vice President of Swedish Match AB since 2005. President of Swedish Match International since November Lars Dahlgren 2008. Joined Swedish Match in 1975. Member of Group Management Team since 1999. Born 1951, MBA. Lars Dahlgren President and CEO of Swedish Match AB since 2008. Joined Swedish Match Previous positions: President, Swedish Match in 1996. Member of Group Management Team since 2004. Born 1970, M. Sc. Business and North America; President, Swedish Match Economics from Stockholm School of Economics. Division; Managing Director Cricket Previous positions: Chief Financial Officer and SeniorV ice President, Swedish Match AB; Vice Lighters, Swedish Match Lights Division. President Group Finance, Swedish Match AB; Finance Director, Swedish Match Philippines; Several marketing and business development Financial analyst, SBC Warburg. positions within various tobacco and lights Own and related parties´ shares: 5,400 operations, Swedish Match. Call options: 156,358 Own and related parties´ shares: 300 Call options: 274,595

Mats Adamson Senior Vice President, Group Human Resources since 2007. Joined Swedish Match in 1994. Member of Group Management Team since 2007. Born 1959, Human Resources Executives Program from Stockholm School of Economics Executive Education. He also holds a rank of Major within the Swedish Armed Forces. Previous positions: Vice President Human Resources, Swedish Match North Europe Division; Director Human Resources, Eesti Tubakas AS. Own and related parties´ shares: 650 Call options: 74,993 Mats Adamson Richard Flaherty

Richard Flaherty President of US Sales Henrik Brehmer Senior Vice President, Division since September 2009. Joined Corporate Communications since 2007. Swedish Match in 2000. Member of Group Employed and Member of Group Management Management Team since 2008. Born 1958, Team since 2007. Born 1964, Bachelor Human BA Economics, JD Law, LLM Taxation. Resources Management and Business Previous positions: Chief Operating Officer, Administration. Background as an Officer in Swedish Match North America Division OTP; the Swedish Armed Forces. Chief Financial Officer, Swedish Match North Previous positions: Vice President Corporate America Division; Chief Financial Officer, Communications, AB in Sweden and Bumble Bee Seafoods; Commercial Director, UK; Senior Vice President Investor Relations Unilever. and Group Communication, Securitas AB in UK. Own and related parties´ shares: 0 Own and related parties´ shares: 0 Call options: 131,088 Call options: 45,130

Henrik Brehmer

108 / Swedish Match 2009 corporate governance

Martin Källström President of Smokefree Division. Employed and Member of Group Management Team since May 2009. Born 1961. BSc, School of Business, Economics and law at Göteborg University. Previous positions: Vice President Category Management, Personal Care SCA Group. Prior to this he has, over the past 25 years, served in several leading positions both in Sweden and internationally at SCA Personal Care division. Own and related parties´ shares: 0 Call options: 0

Martin Källström Joakim Tilly

Joakim Tilly Chief Financial Officer and Senior Vice President, Group Finance and IT since 2008. Joined Swedish Match in 1994. Member of Group Management Team since 2008. Born 1970, M. Sc. Business and Economics from Stockholm School of Economics. Previous positions: Senior Vice President Group Finance ,Swedish Match AB; Vice President Group Finance, Swedish Match AB; CEO and CFO, Netgiro International; CFO, Swedish Match Division. Own and related parties´ shares: 0 Call options: 58,097

Lars Olof Löfman Jonas Nordqvist

Lars Olof Löfman President of Other Jonas Nordquist President of Operations. Joined Swedish Match in 1987. Scandinavia Sales Division. Joined Swedish Member of Group Management Team since Match in May 2006. Member of Group Changes in the Group 2004. Born 1956, MSc Eng, Controller DIHM. Management Team since September 2009. Previous positions: President, Swedish Match Born 1971, M. Sc. Electrical Engineering from Management Team North Europe Division; Vice President Royal Institute and Technology and M. Sc. during 2009 Production & Development, Swedish Match Business and Economics from Stockholm North Europe Division; Vice President School of Economics. Martin Källström was appointed President of Previous positions: CFO, Swedish Match Operations, Swedish Match Snuff Division; Smokefree Division and Lars Olof Löfman North Europe Division, Head of Siemens Plant and Production Manager, Swedish President of Other Operations. Jonas Mobile Phones, Siemens Division in India; Match AB. Nordquist was appointed President of various management positions in Germany Own and related parties´ shares: 1,400 Scandinavia Sales Division and Richard and India, Siemens AG. Flaherty President of US Sales Division. Call options: 132,170 Own and related parties´ shares: 0 Call options: 32,748 Holdings of own and related parties shares and call options as of December 31, 2009. For a detailed report of remuneration and benefits to senior Fredrik Peyron General Counsel and executives, refer to Note 7, page 66. Senior Vice President, Legal Affairs since 2007. Joined Swedish Match in 2000. Member of Group Management Team and Secretary to the Board since 2007. Born 1967, Bachelor of Laws (LLB). Previous positions: Vice President Corporate Affairs, Swedish Match AB; Legal Counsel, Akzo Nobel AB; Associate, Mannheimer Swartling Advokatbyrå. Own and related parties´ shares: 1,500 Call options: 76,036

www.swedishmatch.com For updated information on members of the Group Fredrik Peyron Management Team and their shareholdings and call options, refer to the Company’s website.

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