AGM Information • Dec 2, 2010
AGM Information
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If you are in any doubt as to the action you should take, you are recommended to seek immediately your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000. If you have sold or otherwise transferred all of your shares in Marston's PLC, please send this document, and the accompanying form of proxy, at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee.
Marston's PLC Marston's House Brewery Road Wolverhampton WV1 4JT
There are six key points that you should note about this last year and for the future.
First, Marston's has progressed well on all the main strategic fronts set out at the time of our rights issue in 2009; these are to build around 25 new pubs each year, to develop our tenanted and leased estate, to enhance the local franchise of our beers, to reduce debt, and to generate higher returns on capital invested.
At this moment, not much is getting worse, and a lot more is getting better.
Second, there is good evidence of high appeal to consumers across all three trading divisions. Alongside positive sales, the delivery of good margins indicates effective execution.
Our new-build pubs exceeded expectations; the roll-out of the new Retail Agreements for our tenanted pubs has developed good momentum; solid progress was achieved in stabilising our leased estate; and our ales performed well in a difficult beer market.
The team at Jennings Brewery, Cockermouth did a splendid job after the catastrophic floods in supplying our customers in the Lake District, and in restoring the brewery.
Third, a final dividend of 3.7 pence is proposed, making a total for the year of 5.8 pence. Dividend cover has increased to 1.7 times.
Fourth, the Board has made, and proposes changes to its composition. Robin Rowland, Chief Executive of YO! Sushi, joined in September 2010. His great and very relevant experience in food retailing will help in the execution of our plans. We welcome him. Derek Andrew will stand down from Marston's on 30 September 2011 after 30 years, we thank him and wish him good speed in his next ventures. We will then reduce the number of executive directors from five to three: Stephen Oliver will step down from the Board and will be responsible for the management of Marston's Beer Company and Marston's Pub Company. Miles Emley retires as Chairman of the Audit Committee on 3rd December 2010, and Neil Goulden takes over.
Fifth, in May 2010 the Financial Reporting Council recommended that Boards are reviewed by external advisers, and that Directors stand for re-election annually; this latter we propose to you for the AGM in January 2011. Marston's has conducted annual Board appraisals for many years, and in 2010 we engaged Blackwood to conduct a review from an external perspective.
Finally, the trading environment is not easy. We share the concerns of our customers about the imminent VAT rise and about economic confidence. We see the stirrings of other inflationary elements, beyond the immediately visible rise in fuel costs: commodity prices forcing up food and now material costs. We have contracts to mitigate these effects in the immediate future, but these are finite. Business rates continue to rise without reference to underlying trading or the costs of living. We do not yet see the benefits of proposed de-regulation after years of the burden of imposed costs. The tone of recent government announcements on alcohol has yet to recognise the benefits of well-ordered pubs and the positive role they play in society.
Nevertheless, despite these challenges, we have good momentum which we aim to sustain through 2011, and we have a clearly defined strategy for continuing profitable development in the future.
Our formal notice of meeting is set out opposite. It includes resolutions for the re-election or election of all Directors in line with the recommendation I have already mentioned and an explanation of all the resolutions is given on pages 5 to 7. The Board considers that each of these resolutions is in the best interests of the Company and the shareholders as a whole. The Directors unanimously recommend that all shareholders vote in favour of all resolutions, as the Directors intend to do in respect of their own beneficial holdings.
David Thompson Chairman 2 December 2010
Our Annual Report and Accounts 2010 can be accessed directly at http://annualreport2010.marstons.co.uk. Or via www.marstons.co.uk by clicking on Marston's PLC/Investors/Reports, Results & News/Financial Reports.
Notice is hereby given that the one hundred and twentythird Annual General Meeting ("AGM") of Marston's PLC (the "Company") will be held at Walsall Football Club, Banks's Stadium, Bescot Crescent, Walsall, West Midlands, WS1 4SA on 28 January 2011 at 12 noon for the following purposes:
This power applies in relation to a sale of shares which is an allotment of equity securities by virtue of section 560(3) of the Act as if, in the first paragraph of this resolution, the words "pursuant to the authority conferred by resolution 17 in this Notice" were omitted.
By order of the Board
Anne-Marie Brennan Company Secretary 2 December 2010
Registered No. 00031461, England Registered Office: Marston's House Brewery Road Wolverhampton WV1 4JT
Resolutions 1 to 17 (inclusive) are proposed as ordinary resolutions, which mean that for each of those resolutions to be passed, more than half the votes cast must be in favour of the resolution. Resolutions 18 to 20 (inclusive) are proposed as special resolutions, which mean that for each of those resolutions to be passed, at least three-quarters of the votes cast must be cast in favour of the resolution.
The Directors are required to present to shareholders at the AGM the Company's audited accounts and the Directors' and Independent Auditors' reports for the 52 week period ended 2 October 2010.
Shareholders are being asked to approve a final dividend of 3.7 pence per ordinary share for the 52 week period ended 2 October 2010. Subject to approval of the declaration of the final dividend at the AGM, the dividend will be paid on 1 February 2011 to the holders of ordinary shares whose names are recorded on the register of members at the close of business on 17 December 2010.
The Board has decided that, in recognition of the new UK Corporate Governance Code (the "New Code"), every Director will stand for election or re-election at the AGM. Biographical details of each Director appear on pages 26 and 27 of the Annual Report and Accounts 2010.
David Thompson has been Non-executive Chairman since 2002 and has extensive knowledge of the Company, its markets and its people. He also brings to the Board his valuable experience as Non-executive Director in several other UK companies. Mr Thompson cannot be considered independent under the New Code, as he previously served on the Board as an Executive Director.
Robin Hodgson, the Senior Non-executive Director, led a review by the Non-executive Directors of David Thompson's performance during the year and reported that he continues to be an effective and committed Chairman. The Board is also satisfied that the time demands of his outside commitments do not interfere with his role as Chairman.
In respect of the other Non-executive Directors, Rosalind Cuschieri brings to the Board her extensive experience of the food and retail sector, having been Commercial Director at Warburtons and now being CEO of Lightbody Ventures.
Miles Emley is currently Chairman of St Ives PLC, after a career in finance including directorships at leading City banks. There is an annual evaluation of Board effectiveness, this year assisted by external facilitators. As Mr Emley has served more than nine years, he was subject to a more detailed review. The Board is satisfied that he remains independent in character and judgement and, accordingly, that he is an effective and suitable candidate for re-election.
Neil Goulden was, until recently, Executive Chairman at Gala Coral Group, having been CEO at Allied Leisure and prior to that, having held senior positions in Compass and Ladbrokes. He also sits on the Boards of a number of public bodies — including the Low Pay Commission.
Robin Hodgson has a wealth of experience and knowledge derived from a career in banking, directorships in finance and industrial companies and service as an MP. He is currently Chairman of Nova Capital Management.
Andrew Andrea, Derek Andrew, Alistair Darby, Ralph Findlay and Stephen Oliver are all standing for re-election as Executive Directors. Details of their service contracts with the Company appear on pages 37 and 38 of the Annual Report and Accounts 2010.
The Board is of the opinion, and the Chairman has confirmed, that following formal performance evaluation, each Director continues to make an effective and valuable contribution and demonstrates commitment to his or her role. The Board is satisfied that each Non-executive Director remains independent in character and judgement and that there are no relationships or circumstances likely to affect his or her character or judgement. It unanimously recommends the re-election of all of the above Directors.
Robin Rowland is standing for election as a Non-executive Director following his appointment on 1 September 2010. He brings to Marston's his experience in rolling out the Yo! Sushi brand of restaurants over the last decade. Further biographical details appear on page 27 of the Annual Report and Accounts 2010. When reviewing the recommendation of the Nomination Committee to appoint him, the Board anticipated that Mr Rowland would make an effective and valuable contribution to the Board and concluded that he is independent in character and judgement. Accordingly, it unanimously recommends his election.
The Company is required to appoint auditors at each AGM at which audited accounts are presented to shareholders. Resolution 14 proposes the re-appointment of PricewaterhouseCoopers LLP as the Company's Independent Auditors until the conclusion of the 2012 AGM. It is normal practice for a company's directors to be authorised to determine the level of the auditors' remuneration for the ensuing year. Resolution 15 proposes to give such authority to the Directors.
UK listed companies are required to put before shareholders in general meeting a resolution inviting shareholders to approve the Directors' Remuneration Report.
This report, which can be found on pages 37 to 44 of the Annual Report and Accounts 2010, gives details of the Directors' remuneration for the period ended 2 October 2010 and sets out the Company's overall policy on Directors' remuneration. As required by the Directors' Remuneration Report Regulations 2002, the Company's Independent Auditors, PricewaterhouseCoopers LLP, have audited those parts of the Directors' Remuneration Report capable of being audited and their report can be found on page 46 of the Annual Report and Accounts 2010.
This resolution seeks authority for the Directors to allot shares in the Company up to an aggregate nominal amount of £14,028,559, being approximately one third of the Company's issued ordinary share capital as at 2 December 2010, excluding the 30,162,339 ordinary shares held in treasury as at 2 December 2010 (this representing 5.29% of the Company's issued ordinary share capital). The authority contained in this resolution will expire at the conclusion of the 2012 AGM or at the close of business on the date which is 15 months following the passing of this resolution (whichever is earlier).
The Directors consider that this authority is desirable to allow the Company to retain flexibility, although they have no present intention of exercising this authority.
This resolution seeks authority for the Directors to issue equity securities (as defined in the Act) in the Company for cash or to sell treasury shares for cash as if the pre-emption provisions of section 561(1) of the Act did not apply. Other than in connection with a rights or other similar issue, the authority contained in
this resolution will be limited to an aggregate nominal amount of £2,104,283, being 5% of the Company's issued ordinary share capital as at 2 December 2010, excluding the 30,162,339 ordinary shares held in treasury as at 2 December 2010 (this representing 5.29% of the Company's issued ordinary share capital). The authority contained in this resolution will expire at the conclusion of the 2012 AGM or at the close of business on the date which is 15 months following the passing of this resolution (whichever is earlier). The Directors confirm that they have no present intention of exercising this authority.
In accordance with The Pre-Emption Group's Statement of Principles available on www.pre-emptiongroup.org.uk, the Directors also confirm their intention that no more than 7.5% of the issued ordinary share capital of the Company (excluding treasury shares) will be issued for cash on a non pre-emptive basis during any rolling three year period.
In certain circumstances, as permitted by the Act, it may be advantageous for the Company to purchase its own ordinary shares and this resolution seeks authority from shareholders to empower the Directors to make limited on-market purchases. The resolution limits this authority to a maximum number of ordinary shares that may be acquired of 57,065,327, being 10% of the Company's issued ordinary share capital as at 2 December 2010, excluding the 30,162,339 ordinary shares held in treasury as at 2 December 2010 (this representing 5.29% of the Company's issued ordinary share capital) and sets the minimum and maximum prices that can be paid (exclusive of expenses). The authority conferred by this resolution will expire at the conclusion of the 2012 AGM or 18 months from the date of the passing of this resolution (whichever is earlier).
The Directors have no present intention of exercising the authority to purchase the Company's ordinary shares but will keep the matter under review. Further, the Directors will only exercise this authority after taking into account the effects on earnings per share and the benefit to shareholders generally.
Any shares purchased under this authority may either be cancelled or held as treasury shares (treasury shares may subsequently be cancelled, sold for cash or used to satisfy options issued to employees pursuant to the Company's employee share schemes). The authority sought by this resolution is intended to apply equally to ordinary shares which are to be held by the Company as treasury shares.
As at 2 December 2010 there were options over 10,073,604 ordinary shares in the capital of the Company which represent 1.77% of the Company's issued ordinary share capital (excluding treasury shares) at that date. If the authority to purchase the Company's ordinary shares were to be exercised in full, these options would represent 1.96% (2009: 1.29%) of the Company's issued ordinary share capital (excluding treasury shares).
Under the Act general meetings (other than annual general meetings) may be called on 14 clear days' notice. However, The Companies (Shareholders' Rights) Regulations 2009, which came into force on 3 August 2009, increased the notice period required for general meetings of a company to 21 clear days. Companies do have the ability to reduce this notice period to not less than 14 clear days, provided that they offer facilities for shareholders to vote and appoint proxies by electronic means and that, annually, shareholder approval is obtained to reduce the minimum notice period from 21 clear days to 14 clear days. Annual general meetings must continue to be held on at least 21 clear days' notice.
The Directors are, therefore, proposing this resolution to seek such shareholder approval for 14 clear days to be the minimum period of notice for all general meetings of the Company, other than annual general meetings. It is intended that the shorter notice period would not be used as a matter of routine for such meetings but only where flexibility is merited by the business of the meeting and is thought to be in the interests of shareholders as a whole. The approval will expire at the conclusion of the Company's 2012 AGM, when it is intended that renewal of this authority will be sought.
Notes 1 to 14 below give further explanation as to the proxy, voting and attendance procedures at the AGM.
If more than one proxy appointment is returned in respect of the same holding of shares, either by paper or electronic communication, that proxy received last by Equiniti before the latest time for the receipt of proxies will take precedence. To be valid, the completed form(s) of proxy and any power of attorney or other authority under which it is/they are executed (or a certified copy thereof) must be deposited with Equiniti or received via www.sharevote.co.uk or lodged via the CREST proxy service (in each case) not later than 12 noon on 26 January 2011, or 48 hours before the time appointed for holding any adjourned AGM.
*Calls to this number cost 8p per minute from a BT landline, other providers' costs may vary. Non UK callers should dial +44(0) 121 415 7047. Lines are open 8.30am to 5.30pm, Monday to Friday.
No other methods of communication will be accepted. In particular, you may not use any electronic address provided either in this Notice or in any related documents (including, without limitation, the Annual Report and Accounts 2010 and the form(s) of proxy) to communicate with the Company for any purpose other than those expressly stated in this Notice or in such other related documents.
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