Circular to Pick n Pay Shareholders Notice of General Meeting Form of Proxy

Transcription

1 Circular to Pick n Pay Shareholders Notice of General Meeting Form of Proxy

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3 This circular is important and requires your immediate attention If you are in any doubt as to what action to take, please consult your broker, CSDP, banker, attorney, accountant or other professional adviser immediately. If you have disposed of all of your Pick n Pay shares, you should hand this circular to the purchaser of such shares or to the broker, CSDP, banker, attorney or agent through whom the disposal was effected. Action required 1. If you are a Certificated Pick n Pay Shareholder or an Own-Name Dematerialised Pick n Pay Shareholder and you are unable to attend the General Meeting to be convened at the registered office of the Company at 101 Rosmead Avenue, Kenilworth, Cape Town, Western Cape, South Africa, on Wednesday, 12 February 2014 at 16:00, but you wish to be represented thereat, you must complete and return the attached form of proxy in accordance with the instructions contained therein, to be received by the Transfer Secretaries no later than 16:00 on Monday, 10 February 2014 (48 hours before the meeting). 2. If you are Dematerialised Pick n Pay Shareholder, other than an Own-Name Dematerialised Pick n Pay Shareholder, and you wish to attend or be represented at the General Meeting, you must inform your CSDP or broker of your intention to attend the General Meeting and obtain the necessary letter of representation from your CSDP or broker to permit you to attend the General Meeting. If you do not wish to attend or be represented at the General Meeting, you must provide your CSDP or broker with your voting instructions in the manner, and by the cut-off date and time, in terms of the custody agreement entered into between you and your CSDP or broker. Pick n Pay Stores Limited Incorporated in the Republic of South Africa Registration number: 1968/008034/06 Share code: PIK ISIN code: ZAE Circular to Pick n Pay shareholders Regarding the adoption of the Pick n Pay Stores Limited Forfeitable Share Plan; and the election of Audrey Mothupi, David Friedland and John Gildersleeve as non-executive Directors of the Company; and incorporating a notice of General Meeting of Pick n Pay shareholders; the curricula vitae of Audrey Mothupi, David Friedland and John Gildersleeve; and form of proxy for Certificated Pick n Pay Shareholders and Own-Name Dematerialised Pick n Pay Shareholders. Investment Bank and Sponsor Date of issue: 14 January 2014 Copies of this Circular (in English only) may be obtained from the registered office of Pick n Pay at the address as set out in the Corporate information section of this Circular from 14 January 2014 to 12 February

4 Contents CORPORATE INFORMATION 3 SALIENT DATES AND TIMES 4 DEFINITIONS 5 CIRCULAR TO PICK N PAY SHAREHOLDERS 9 PICK N PAY STORES LIMITED FORFEITABLE SHARE PLAN 9 1. Introduction and rationale 9 2. Salient features of the FSP Purpose Participants Rights of participants Basis of awards and awards levels Performance conditions and vesting Manner of settlement Limits and adjustments Consideration Termination of employment Change of control Variation in share capital Liquidation Amendments 13 Appointment of directors Directors responsibility statement Consents Documents for inspection 14 BOARD OF DIRECTORS curricula VITAE 15 NOTICE OF GENERAL MEETING 17 FORM OF PROXY (Insert) 2

5 Corporate information Company Secretary and Registered Office Pick n Pay Stores Limited Registration number: 1968/008034/ Rosmead Avenue Kenilworth Cape Town 7708 PO Box 23087, Claremont, 7735 Transfer Secretaries Computershare Investor Services Proprietary Limited Registration number: 2004/003647/07 70 Marshall Street Johannesburg 2001 PO Box 61051, Marshalltown, 2107 Sponsor Investec Bank Limited Registration number: 1969/004763/ Grayston Drive Sandton 2196 PO Box , Sandton, 2146 Adviser PriceWaterhouseCoopers Inc Registration number: 1998/012055/21 1 Waterhouse Place Century City Cape Town 7441 PO Box 2799, Cape Town,

6 Salient dates and times 2014 Record date to receive Circular and notice of General Meeting Circular and notice of General Meeting posted to shareholders on Last day to trade in Pick n Pay shares in order to be recorded in the securities register to participate in and vote at the General Meeting Record date to be entitled to attend, participate in and vote at the General Meeting by close of trading on Forms of proxy for the General Meeting to be lodged by 16:00 on General Meeting of Pick n Pay Shareholders at 16:00 on Results of General Meeting to be released on SENS Friday, 3 January Tuesday, 14 January Friday, 31 January Friday, 7 February Monday, 10 February Wednesday, 12 February Thursday, 13 February Notes: (a) (b) (c) All dates and times may be changed by Pick n Pay and/or may be subject to the obtaining of certain regulatory approvals. Any change will be published on SENS. Shareholders should note that as transactions in Pick n Pay shares are settled in the electronic settlement system used by Strate, settlement of trades takes place five business days after such trade. Therefore, Shareholders who acquire shares after Friday, 31 January 2014 will not be eligible to participate in and vote at the General Meeting. All times given in this Circular are local times in South Africa. (d) If the General Meeting is adjourned or postponed, forms of proxy submitted for the initial General Meeting will remain valid in respect of any adjournment or postponement of the General Meeting. 4

7 Definitions In this Circular and its annexures, unless otherwise stated or the context indicates otherwise, the words and expressions in the first column shall have the meanings stated opposite them in the second column, and words and expressions in the singular shall include the plural and vice versa, words importing natural persons shall include juristic persons and unincorporated associations of persons and vice versa, and any reference to one gender shall include the other gender. Accept the completion of a Notice of Acceptance by an Employee, and the delivery thereof and Accepted or Acceptance shall be construed accordingly; the Act Allocated Award Award Letter Board Business Day Capitalisation Issue Cash Salary the Companies Act No 71 of 2008, as amended or varied from time to time; shall mean one share per Performance Share comprising an Award; an award of a specified number of Performance Shares to an Employee in terms of the Pick n Pay Stores Limited Forfeitable Share Plan (FSP); a letter sent by the Company, or its nominee, on the recommendation of the Employer Company, to an Employee informing the Employee of the Award to him; the Board of Directors of Pick n Pay Stores Limited; any day on which the JSE is open for the transaction of business; a capitalisation issue as contemplated in section 47 of the Act; the basic salary of an Employee, excluding all allowances, including but not limited to special, car, housing and phone allowances, and excluding all contributions to retirement, provident, medical aid and such like schemes; Certificated shareholders Pick n Pay Shareholders who have not dematerialised their Pick n Pay Ordinary Shares and who hold Certificated Pick n Pay Ordinary Shares; this Circular this Circular to Pick n Pay Shareholders, dated 14 January 2014 and the attachments hereto, incorporating a notice of the General Meeting and form of proxy; Company Pick n Pay Stores Limited (Registration Number 1968/008034/06); Company Secretary CPI CSDP the secretary of the Company as appointed in terms of the Act from time to time; Consumer Price Index; a Central Securities Depository Participant, accepted as a participant in terms of the Custody and Administration of Securities Services Act, 2004 (Act 36 of 2004), as repealed and replaced by the Financial Markets Act, 2012 (Act 19 of 2012), as amended; 5

8 Definitions continued Date of Termination of Employment Dematerialised Pick n Pay Shares Dematerialised Shareholder Directors Documents of Title Employee Employer Company Employment Condition Employment Period(s) Escrow Agent Existing Share Scheme Financial Year FSP General Meeting Group HEPS IFRS the date upon which a Participant is no longer permanently employed by any Employer Company, being the date upon which the termination of permanent employment of a Participant with any Employer Company takes effect; Pick n Pay Ordinary Shares which have been dematerialised in terms of the requirements of Strate through a CSDP or broker, title to which is no longer represented by share certificates or other physical Documents of Title; a Pick n Pay Shareholder who holds Dematerialised Pick n Pay Ordinary Shares; the directors of Pick n Pay Stores Limited from time to time; valid share certificates, certificated transfer deeds, balance receipts or any other proof of ownership of Pick n Pay Ordinary Shares which is acceptable to the Board; any person holding permanent salaried employment or office with any Employer Company, excluding any non-executive director of the Group; a company in the Group which employs a Participant; the condition of continued employment with the Group for the duration of the Employment Period, as specified in the Award Letter; the period(s) commencing on the Award Date and ending on the date as specified in the Award Letter (both dates included) during which the Participant is required to fulfil the Employment Condition; the person or entity appointed by the Company from time to time to hold Performance Shares on behalf of the Participants; the Pick n Pay 1997 Employee Share Option Scheme, as governed by the Pick n Pay Employee Share Purchase Trust, as may be amended from time to time; the financial year of the Company running from the beginning of March to the end of February each year, as amended from time to time; the Pick n Pay Stores Limited Forfeitable Share Plan, as amended from time to time; a general meeting of Pick n Pay Shareholders to be held at the registered office of Pick n Pay at 101 Rosmead Avenue, Kenilworth, Cape Town, 12 February 2014 at 16:00; the Company and its Subsidiary/ies from time to time, and the expression member of the Group shall be construed accordingly; Headline Earnings per Share; International Financial Reporting Standards; 6

9 the JSE JSE Listings Requirements Liquidation Date Notice of Acceptance Own-Name Dematerialised Shareholder Participants JSE Limited, a public company duly registered and incorporated in South Africa with limited liability under registration number 2005/022939/06, licensed as an exchange under the Securities Services Act No 36 of 2004, as amended; the Listings Requirements of the JSE from time to time in force; the date on which any application for the final liquidation of the Company is successful; a written or electronic notice completed by an Employee, in the format provided by the Company, in respect of the Acceptance of an Award; Dematerialised Pick n Pay Shareholders that have instructed their CSDP to hold their Pick n Pay Ordinary Shares in their own name on the Pick n Pay sub-register; an Employee to whom an Award has been made under this FSP and who has Accepted such Award including the executor of Employee s deceased estate; Performance Condition(s) a condition(s) of Vesting of an Award of Performance Shares, as set out in the Award Letter; Performance Period(s) Performance Shares Pick n Pay or the Company Pick n Pay Shareholder RemCom Retirement Rights Issue Rules Securities Services Act the period(s) in respect of which the Performance Conditions are to be satisfied, as stated in the Award Letter; the Shares registered in the name of the Participant, the Vesting of which is subject to the fulfilment of the Performance Condition(s) and Employment Condition as specified in the Award Letter; Pick n Pay Stores Limited incorporated in the Republic of South Africa, registration number 1968/008034/06, a public company incorporated according to the company laws of South Africa, the Pick n Pay Shares being listed on the JSE; a holder of Pick n Pay Ordinary Shares; the remuneration committee of the Board of Directors, the members of which do not hold any executive office within the Group; in relation to a Participant, the normal retirement as determined by Company policy; the offer of any securities of the Company to all ordinary shareholders of the Company pro rata to their holdings at the record date; the Rules of the FSP, as amended from time to time; the Securities Services Act 2004 (Act 36 of 2004), as repealed and replaced by the Financial Markets Act 2012 (Act 19 of 2012); 7

10 Definitions continued Senior Management SENS Share(s) South Africa Strate Subsidiary Transfer Secretaries Vest Vesting Date those Employees holding positions in the senior management structure of Employer Company who have been selected, from time to time, by RemCom to participate in the FSP; Stock Exchange News Service of the JSE; an ordinary share in the capital of the Company; the Republic of South Africa; Strate Limited (Registration number 1998/022248/06), a public company incorporated in South Africa and the electronic clearing and settlement system used by the JSE to settle trades; a company which is a subsidiary of the Company within the meaning of the Act; Computershare Investor Services Proprietary Limited, a private company duly incorporated under registration number 2004/003647/07; the Performance Shares of a Participant no longer being subject to any restrictions or potential forfeiture, and Vesting and Vested shall be construed accordingly; and the date on which Vesting occurs. 8

11 Directors G Ackerman^ R Brasher J Ackerman S Ackerman-Berman D Friedland^# J Gildersleeve*^# H Herman*^ A Jakoet A Mothupi*^# L Phalatse*^ D Robins^ B van der Ross*^ R van Rensburg J van Rooyen*^ Pick n Pay Stores Limited Incorporated in the Republic of South Africa Registration number: 1968/008034/06 Share Code: PIK ISIN code: ZAE ^ Non-executive * Independent # Appointed by the Board; to be presented for election by shareholders Circular to Pick n Pay shareholders PICK N PAY STORES LIMITED FORFEITABLE SHARE PLAN 1. INTRODUCTION AND RATIONALE In line with local and global best practice, Pick n Pay Stores Limited ( Pick n Pay, or the Company ) intends to adopt a new share incentive plan, namely the Pick n Pay Stores Limited Forfeitable Share Plan (FSP) for executive Directors and Senior Management. The rationale behind the introduction of the FSP is to align Participants closely with shareholders, with the Company s Performance Conditions governing the vesting of Awards. Further, through the delivery of real shares, Participants will be shareholders in the Company. The proposed FSP aligns with King III recommendations as it is less leveraged than option-type plans, therefore mitigating the risk of unjustified windfalls. The Company currently operates the 1997 Employee Share Option Scheme, under which the Company issues: Long-service share options; Status share options; and Binary share options. All the share options are issued under long-term incentive plans. The binary share options plan for Senior Management lapses in May It is considered improbable that the eligibility hurdle will be met. The FSP is intended to take the place of the binary share options plan. Binary issues have been made to Richard Brasher and Richard van Rensburg, with exercise dates based on the time they joined the Company as executive directors. The extent of their participation in the FSP will take into account the market benchmarks of executive remuneration and the expected value of the current binary issues. 9

12 Circular to Pick n Pay shareholders continued 2. SALIENT FEATURES OF THE FSP 2.1 Purpose Best practice indicates a move away from the use of option-type plans only, to the use of full share plans either alone, or in conjunction with the existing option-type plans. Full share plans, like the FSP, are less leveraged and have less upside than option-type plans, but provide more certain outcomes. FSP instruments aid retention and provide more certainty as these instruments are less volatile than option-type instruments. This instrument therefore supports the Company s policy of retaining the talent and expertise required for its business strategy, and drives behaviour and performance other than share price growth. The FSP will provide selected Employees of the Employer Companies with the opportunity of receiving Shares in the Company through an Award of Forfeitable Shares. The FSP will be used primarily as an incentive to Participants to deliver the Group s business strategy over the long term. It can also be used as a retention mechanism and as a tool to attract prospective Employees. The FSP will provide Participants with the opportunity to share in the success of the Company and provide direct alignment between Participants and shareholders. 2.2 Participants Approximately 200 executive Directors and Senior Management will be eligible to participate in the FSP. The RemCom may, in its discretion, call upon the Employer Companies to make recommendations as to which of their respective Employees they wish to incentivise, retain the services of or attract the services of, by making an Award of Forfeitable Shares. It is envisaged that the first Award of Performance Shares will be made to approximately 50 executive Directors and Senior Managers. 2.3 Rights of Participants Under the FSP, Participants will become owners of the Forfeitable Shares from the settlement date, shortly after the award date and will immediately benefit from dividends and have shareholder voting rights in respect of the Forfeitable Shares over the vesting period. The shares cannot be disposed of by the Participant prior to the Vesting Date and will be subject to forfeiture restrictions until the Vesting Date. Forfeitable Shares will be awarded in the form of Performance Shares. Performance Shares are subject to predetermined Performance Conditions and continued employment (Employment Condition). The Employment Condition stretches over three years. 2.4 Basis of awards and awards levels In line with the requirements of King III and best practice that regular, annual Awards are made on a consistent basis to ensure long-term shareholder value creation, annual Awards of Forfeitable Shares will be made under the FSP. The number of Performance Shares awarded to a Participant will primarily be based on the Participant s annual salary, grade, performance, retention and attraction requirements and market benchmarks. The Award levels will be decided by the RemCom each time that Awards are granted, by taking into account the particular circumstances at that time. Annual allocations will be benchmarked and set to a market-related level of remuneration while considering the overall affordability thereof to the Company. 10

13 2.5 Performance conditions and vesting Performance Shares will be subject to predetermined Performance Conditions and the Employment Condition for Vesting. It is envisaged that for the first Award of Performance Shares, the Performance Condition will constitute Headline Earnings Per Share (HEPS) growth, measured over a three-year Performance Period. The proposed vesting scale for this first Award, to be reviewed by the RemCom at the time of Allocation, based on the HEPS performance of the Group over the three-year Performance Period (FY15 to FY17, with FY14 as baseline), is as follows: Cumulative HEPS growth for the Group of 8% per annum, 30% of the Awards will Vest; Cumulative HEPS growth for the Group of 10% per annum, 60% of the Awards will Vest; and Cumulative HEPS growth for the Group of 12% per annum, 100% of the Awards will Vest. Linear Vesting will be applied for performance between the above levels. The RemCom will set appropriate Performance Conditions, Performance Periods, Employment Conditions and Employment Periods, as relevant, for each Award, taking into account the business environment at the time of making the Awards, and, where considered necessary, in consultation with shareholders. These will be agreed with the Participant in terms of the Award Letter. The Performance Conditions are subject to the overriding condition that the return on capital employed (ROCE) must be greater than the weighted average cost of capital (WACC) over the Vesting Period. The RemCom will determine the number of Performance Shares to be issued annually based on the achievement of the profit targets set by the Company under the short-term incentive scheme for the preceding year. In line with corporate governance principles, Performance Conditions will not be retested if they are not met at the end of the Performance Period, and to the extent that they are not satisfied, Awards will lapse at this time. 2.6 Manner of settlement The rules of the FSP will be flexible in order to allow for settlement in any of the following manners: By way of a market purchase of Shares; Use of treasury Shares; and Issue of Shares. The exact method of settlement will be determined by the RemCom, although the preference will be a market purchase of shares which will cause no dilution to shareholders. It is envisaged that the initial annual Award of Forfeitable Shares will be from a fresh issue of Shares, and subsequent annual Awards of Forfeitable Shares will be settled by way of Shares purchased in the market. In order to effect any forfeiture of Awards, the Forfeitable Shares will be held by an Escrow Agent on behalf of the Participant until the Vesting Date. 11

14 Circular to Pick n Pay shareholders continued 2.7 Limits and adjustments Company Limit The maximum aggregate number of Share Options and Forfeitable Shares which may at any time be Allocated in respect of this FSP together with the Company s Existing Share Scheme to all Participants shall not exceed (sixty-three million, eight hundred and ninety-two thousand, eight hundred and forty-four) Shares. This represents approximately 13.3% (thirteen point three percent) of the Shares, which is the current authorised limit under the Existing Share Scheme. In instances where the Company issues Shares from unissued share capital in order to settle Share Options and/or Forfeitable Shares, no more than (forty-eight million, thirty-nine thousand, seven hundred and thirty-two) Shares shall be issued for this purpose. This represents approximately 10% (ten percent) of the Shares. Shares issued by the Company or Shares held in treasury which are used to settle the FSP, will be included in the Company Limit. Shares allocated under the FSP, which are not subsequently settled to a Participant as a result of the forfeiture thereof, will be excluded in calculating the Company Limit. Similarly, any Shares purchased in the market in settlement of the FSP will be excluded. The RemCom must, where required, adjust the Company Limit, to take account of a sub-division or consolidation of the Shares of the Company Individual Limit The maximum number of Shares allocated to any Participant in respect of all Vested and unvested Awards under the FSP together with the Company s Existing Share Scheme shall not exceed (four million, eight hundred and three thousand, nine hundred and seventy-three) Shares. This represents approximately 1% (one percent) of the Shares. The auditors, or other independent advisers acceptable to the JSE, shall confirm to the JSE in writing that any adjustment made in terms of this paragraph has been properly calculated on a reasonable and equitable basis, in accordance with the rules of the FSP and must be reported on in the Company s financial statements in the year during which the adjustment is made. The issue of Shares as consideration for an acquisition or a vendor consideration placing will not be regarded as a circumstance that requires any adjustment to the Company Limit and the Individual Limit. 2.8 Consideration The Participant will give no consideration for the Award or settlement of Forfeitable Shares. 2.9 Termination of employment Participants terminating employment due to resignation or dismissal on grounds of misconduct, poor performance, dishonest behaviour or fraudulent conduct or on the basis of abscondment will be classified as bad leavers and will forfeit all unvested FSP Awards. Participants terminating employment due to death, ill health, disability, injury, retrenchment, retirement (except to the extent that it constitutes bad leaver termination as set out above), or the sale of a subsidiary company, will be classified as good leavers and a portion of the FSP Award will Vest on date of termination of employment. This portion will reflect the number of months served since the Award date to the date of termination of employment over the total number of months in the Employment Period and the extent to which the Performance Conditions (if applicable) have been met. The remainder of the Award will lapse. 12

15 2.10 Change of control In the event of a change of control of the Company occurring before the Vesting Date of any Award, a portion of the Award will Vest. This portion will reflect the number of months served since the Award date to the change of control date over the total number of months in the Employment Period and the extent to which the Performance Condition (if applicable) has been met. The portion of the Award which does not Vest as a result of the change of control will continue to be subject to the terms of the Award Letter, unless the RemCom determines otherwise. Awards will not Vest as a consequence of an internal reconstruction or similar event which is not a change of control as defined in the rules of the FSP. In this case the RemCom shall make such adjustment to the number of Awards or convert Awards into awards in respect of shares in one or more other companies, provided the Participants are no worse off Variation in share capital In the event of a variation in share capital such as a capitalisation issue, sub-division of Shares, consolidation of Shares etc, Participants shall continue to participate in the FSP. The RemCom may make such adjustment to the Award or take such other action to place Participants in no worse a position than they were prior to the happening of the relevant event and to provide that the fair value of the Award immediately after the event is materially the same as the fair value of the Award immediately before the event. The issue of Shares as consideration for an acquisition or a vendor consideration placing will not be regarded as a circumstance that requires any adjustment to Awards Liquidation If the Company is placed into liquidation, other than for purposes of reorganisation, an Award of Forfeitable Shares shall ipso facto lapse as from the Liquidation Date Amendments The RemCom may alter or vary the Rules of the FSP as it sees fit, however, in the following instances, the FSP may not be amended without the prior approval of the JSE and a resolution by the shareholders of 75% of the voting rights: the category of persons who are eligible for participation in the FSP; the number of Shares which may be utilised for the purpose of the FSP; the individual limitations on benefits or maximum entitlements; the basis upon which Awards are made; the amount payable upon the Award, settlement or Vesting of an Award; the voting, dividend, transfer and other rights attached to the Awards, including those arising on liquidation of the Company; the adjustment of Awards in the event of a variation of capital of the Company or a change of control of the Company; and the procedure to be adopted in respect of the Vesting of Awards in the event of termination of employment. 13

16 Circular to Pick n Pay shareholders continued Appointment of DirectorS Audrey Mothupi, David Friedland and John Gildersleeve have been appointed as non-executive Directors by the Board of the Company. Audrey Mothupi and John Gildersleeve are independent non-executive Directors. David Friedland, previously an external auditor to the Company, will be considered independent from 1 March The Board proposes the election by shareholders of Audrey Mothupi, David Friedland and John Gildersleeve as non-executive Directors of the Company. The curricula vitae of Audrey Mothupi, David Friedland and John Gildersleeve are presented on pages 15 and 16. Accordingly, shareholders are requested to consider and, if deemed fit, to elect Audrey Mothupi, David Friedland and John Gildersleeve to the Board of Directors of the Company by way of passing the ordinary resolutions set out in the attached Notice of General Meeting. 3. DIRECTORS RESPONSIBILITY STATEMENT The Directors, whose names appear on page 9 of this Circular, collectively and individually accept full responsibility for the accuracy of the information given in this Circular, and certify that, to the best of their knowledge and belief, there are no facts, the omission of which would make any statement in this Circular false or misleading and that they have made all reasonable enquiries to ascertain such facts and that this Circular contains all information required by the JSE Listings Requirements. 4. CONSENTS The sponsor to Pick n Pay has provided its written consent to act in the capacity stated and to their name being used in this Circular, and have not withdrawn their consent prior to the publication of this Circular. 5. DOCUMENTS FOR INSPECTION Copies of the following documents will be available for inspection at the registered office of Pick n Pay during normal business hours on any weekday (official public holidays in South Africa excluded) from Tuesday, 14 January 2014, up to and including Wednesday, 12 February 2014: The Forfeitable Share Plan; The curricula vitae of Audrey Mothupi, David Friedland and John Gildersleeve; and A signed copy of this Circular. By order of the Board Debra Muller Company Secretary 14 January 2014 Cape Town 14

17 Board of Directors curricula vitae Comprehensive curricula vitae of all Directors can be found in the 2013 Integrated Annual Report, which is published on the Pick n Pay website, or which can be requested from the Company Secretary at demuller@pnp.co.za. Audrey Mothupi Non-executive director Audrey holds a BA (Hons) from Trent University, Peterborough, Canada. Commencing her career in 1995 as a management consultant for a Swiss-based consulting firm, Genrho South Africa Proprietary Limited, CH & RSA, Audrey became a founding partner of Dicke & Wicharz, Cachalia & Mothupi Managing Consulting RSA, before moving to Monitor Company as a management consultant in 1998 until Audrey was head of strategy at SABC for two years for the Public Broadcasting Service, which comprises 15 radio stations as well as SABC 1 and 2, before joining Liberty Life, within the Standard Bank Group, where she achieved the position of Chief Executive: Group Strategic Services, taking overall responsibility for group strategy, human resources, legal, marketing, communications and corporate affairs. In April 2011, Audrey moved to Standard Bank. In November 2012, she was appointed as head of inclusive banking, taking responsibility for the provision of banking services to unbanked communities, a business that looked after seven million of Standard Bank s 10 million customers. During this period, she turned around a loss-making division to profitability. Under her leadership, the division was awarded the 2013 BAI-Finacle Global Banking Innovation Award for innovation in society and community impact. Audrey has recently joined Systemic Logic Group, an advisory/innovation company, as the Chief Executive Officer. Audrey serves as a trustee of the Liberty Education Foundation. She is Chair of the Orange Babies of South Africa, an organisation focused on reducing the risk of HIV transmission from HIV-positive pregnant women to their children, and care of orphans and vulnerable children in South Africa. Audrey is also a Fellow of the African Leadership Initiative as part of the Aspen Leadership Network. Audrey lives in Gauteng and is the proud mother of two daughters, Melita (15) and Zoya (10). 15

18 Board of Directors curricula vitae continued David Friedland Non-executive director After studying at UCT and completing his traineeship with Arthur Andersen in the Cape Town office, David qualified as a chartered accountant (CA(SA)) in He was promoted to international partner in Responsibilities included being the audit engagement partner on several companies listed on the JSE, as well as large owner-managed companies, principally in the retail sector. Head of both audit and risk in the Cape Town offices after the Andersen practice in South Africa was absorbed by KPMG, David served as the lead/relationship partner on several retail-listed and large owner-managed businesses, including the Pick n Pay Group of Companies. David was appointed to the boards of Investec Limited and Investec PLC in March 2013, and serves as Investec s global audit committee chairman. He remains resident in Cape Town. Associated with Pick n Pay as an external auditor since 1977, David was audit engagement partner from 2000 to 2007, after which time he maintained contact with the Group in his capacity as lead partner of Pick n Pay s external auditors, KPMG. In addition to his directorships of Investec Limited and Investec PLC, David is a director of PresLes Proprietary Limited, and of The Foschini Group, and serves as a trustee and protector on five trusts and foundations. John Gildersleeve Non-executive director John joins Pick n Pay as a non-executive director after many years of experience in retail, and as a director and chairman of various companies in the United Kingdom. During his 20 years as an executive director of Tesco, John was responsible for personnel, marketing, store development and commercial operations. He was closely associated with Tesco s international expansion, initially into the Republic of Ireland and Hungary, and subsequently into Poland, the Czech Republic, Slovakia, Thailand, Malaysia, Taiwan, Korea and Japan. John served as the non-executive chairman of the Carphone Warehouse Group PLC. He was a director and subsequently the non-executive chairman of EMI Group PLC. John also chaired the Gallaher Group Limited. Previous directorships include Lloyds TSB Bank PLC, East Hearts Research Limited, New Look Retail Group, WM Low & Company PLC and Vodafone Group PLC. John is currently chairman of British Land Company PLC, the second-largest property company in the United Kingdom. He also serves as the deputy chairman of both Carphone Warehouse PLC and Talk Talk PLC, and as chairman of Freston Road Ventures LLP. Resident in the United Kingdom, John will be travelling to South Africa to attend Board meetings. 16

19 Pick n Pay Stores Limited Incorporated in the Republic of South Africa Registration number: 1968/008034/06 Share code: PIK ISIN code: ZAE Notice of General Meeting Notice is hereby given that a general meeting (General Meeting) of the shareholders of Pick n Pay Stores Limited will be held at the registered office of the Company at 101 Rosmead Avenue, Kenilworth, Cape Town, on Wednesday, 12 February 2014 at 16:00 for the purpose of considering and, if deemed fit, passing with or without modification the resolutions set out in this notice of General Meeting or at any postponement or adjournment of the General Meeting. ELECTRONIC PARTICIPATION Please note that the Company intends to make provision for shareholders of the Company, or their proxies, to participate in the General Meeting by way of electronic communication. In this regard, the Company will make video-conferencing facilities available at the following two locations: The Conference Centre at Pick n Pay Office Park,101 Rosmead Avenue, Kenilworth, Cape Town (which is the location for the General Meeting); and The Conference Centre at Pick n Pay Office Park, 2 Allum Road, Kensington, Johannesburg. Should you wish to participate in the General Meeting by way of electronic communication as aforesaid, you or your proxy will be required to attend either of the above mentioned locations on the date of the General Meeting. The locations will be linked to each other by means of a real-time video feed during the General Meeting. The real-time video feed will enable all persons to participate electronically in the General Meeting, to communicate concurrently with each other without an intermediary, and to participate reasonably effectively in the General Meeting. Please note that the cost of the video-conferencing facilities will be for the account of the Company. The Board of Directors of the Company has determined that the record date for the purpose of determining which shareholders of the Company are entitled to receive notice of the General Meeting is Friday, 3 January 2014 and the record date for purposes of determining which shareholders of the Company are entitled to participate in and vote at the General Meeting is Friday, 7 February Accordingly, only shareholders who are registered in the register of members of the Company on 7 February 2014 will be entitled to participate in and vote at the General Meeting. All references to the Company s Memorandum of Incorporation in this notice of General Meeting refer to the Company s Memorandum of Incorporation which was adopted by special resolution under the Companies Act at the 44th Annual General Meeting of the shareholders of the Company held on 15 June Ordinary resolutions require the approval of at least 50% of the voting rights plus 1 vote exercised on the resolutions. Special resolutions require the approval of at least 75% of the voting rights exercised on the resolutions. 17

20 Notice of general meeting continued The purpose of the General Meeting is for the following business to be transacted and for the following special and ordinary resolutions to be proposed: 1. SPECIAL RESOLUTION NUMBER 1 Resolved that the Pick n Pay Stores Limited Forfeitable Share Plan (FSP), a copy of which has been initialled by the Chairman of the General Meeting for purposes of identification and tabled at this General Meeting, the salient features of which are set out in section 2 of this Circular to which this notice is attached, be and is hereby approved and that the Directors of the Company be and are hereby authorised to take all such steps as may be necessary for the establishment and carrying into effect of the FSP, including the allotment and issue of shares in the capital of the Company on the terms and conditions set out in the FSP, to Participants of the FSP, including executive Directors of the Company, be and is hereby approved. Reason for and effect of special resolution number 1 The reason for special resolution number 1 is that the Directors of the Company consider it to be in the best interests of the Company that an FSP be adopted so as to ensure that appropriate incentives are granted to employees of the Company and its subsidiaries to encourage and motivate continued growth and profitability within the Company and to promote the retention of the Company s employees. 2. ORDINARY RESOLUTION NUMBER 1 Resolved that, subject to the passing of special resolution number 1, and in accordance with the Memorandum of Incorporation, (sixty-three million, eight hundred and ninety-two thousand, eight hundred and forty-four) Pick n Pay Ordinary Shares in the authorised but unissued ordinary share capital of the Company, be placed under the control of the Directors in order to issue these shares in accordance with and for the purposes of the FSP and the 1997 Employee Share Option Scheme. Reason for and effect of ordinary resolution number 1 Ordinary resolution number 1, if passed, will have the effect of enabling the Directors to allot and issue Pick n Pay Ordinary Shares for purposes of the FSP. 3. ORDINARY RESOLUTION NUMBER 2 Curricula vitae of Directors to be elected are presented on pages 15 and 16. Audrey Mothupi, David Friedland and John Gildersleeve, being eligible, offer themselves for election as non-executive Directors of the Company. The Board recommends the election of the above Directors. Accordingly, shareholders are requested to consider, and, if deemed fit, to elect Audrey Mothupi, David Friedland and John Gildersleeve by way of passing the separate ordinary resolutions set out below: Ordinary resolution number 2.1 Appointment of Audrey Mothupi as Director Resolved that Audrey Mothupi be and is hereby elected as a Director of the Company. Ordinary resolution number 2.2 Appointment of David Friedland as Director Resolved that David Friedland be and is hereby elected as a Director of the Company. 18

21 Ordinary resolution number 2.3 Appointment of John Gildersleeve as Director Resolved that John Gildersleeve be and is hereby elected as a Director of the Company. Reason for and effect of ordinary resolution number 2 It was announced in the 2013 Annual Report that the composition of the Board was under review. It is considered that the election of Audrey Mothupi, David Friedland and John Gildersleeve will balance the composition of the Board, promote rigorous debate, reduce the possibility of conflicts of interest and promote objectivity. Ordinary resolution numbers 2.1, 2.2 and 2.3, if passed, will result in Audrey Mothupi, David Friedland and John Gildersleeve being elected as non-executive Directors of the Company in terms of the Companies Act. 4. ORDINARY RESOLUTION NUMBER 3 Resolved that, subject to the passing of special resolution number 1 and ordinary resolution numbers 1 and 2.1, 2.2 and 2.3, any one Director or the Company Secretary be and are hereby authorised to do all such things and sign all documents and take all such action as they consider necessary to implement the resolutions set out in the notice convening this General Meeting at which this ordinary resolution will be considered. Reason for and effect of ordinary resolution number 3 Ordinary resolution number 3, if passed, will enable the Directors or the Company Secretary to action what is required in terms of the FSP and the appointment of Audrey Mothupi, David Friedland and John Gildersleeve as Directors. ENTITLEMENT TO ATTEND AND VOTE AT THE GENERAL MEETING IN PERSON OR BY PROXY If you hold certificated shares (i.e. have not dematerialised your shares in the Company) or are registered as an Own-Name Dematerialised Shareholder (i.e. have specifically instructed your Central Securities Depository Participant (CSDP) to hold your shares in your own name in the Company sub-register) then: you may attend and vote at the General Meeting; alternatively you may appoint an individual as a proxy, (who need not also be a shareholder of the Company) to attend, participate in and speak and vote in your place at the General Meeting by completing the attached form of proxy and returning it to the registered office of the Company or to the transfer secretaries, Computershare Investor Services Proprietary Limited, the details of which are set out in the corporate information section of the Circular on page 3, by no later than 16:00 on Monday, 10 February 2014, being 48 hours prior to the time appointed for the holding of the General Meeting. Please note that your proxy may delegate his/her authority to act on your behalf to another person, subject to the restrictions set out in the attached form of proxy. Please also note that the attached form of proxy must be delivered to the registered office of the Company or to the transfer secretaries, Computershare Investor Services Proprietary Limited as aforesaid, before your proxy may exercise any of your rights as a shareholder at the General Meeting. Please note that any shareholder of the Company that is a company may authorise any person to act as its representative at the General Meeting. Please also note that section 63(1) of the 2008 Companies Act, requires that persons wishing to participate in the General Meeting (including the aforementioned representative) provide satisfactory identification before they may so participate. Please note that if you are the owner of dematerialised shares (i.e. have replaced the paper share certificates representing the shares with electronic records of ownership under the JSE s electronic settlement system, 19

22 Notice of general meeting continued Share Transactions Totally Electronic (STRATE)) held through a CSDP or broker (or their nominee) and are not registered as an Own-Name Dematerialised Shareholder then you are not a registered shareholder of the Company, but your CSDP or broker (or their nominee) would be. Accordingly, in these circumstances, subject to the mandate between yourself and your CSDP or broker: if you wish to attend the General Meeting you must contact your CSDP or broker and obtain the relevant letter of representation from it; alternatively if you are unable to attend the General Meeting but wish to be represented at the meeting, you must contact your CSDP or broker and furnish it with your voting instructions in respect of the General Meeting and/or request it to appoint a proxy. You must not complete the attached form of proxy. The instructions must be provided in accordance with the mandate between yourself and your CSDP or broker within the time period required by your CSDP or broker. CSDPs, brokers or their nominees recorded in the Company s sub-register as holders of dematerialised shares held on behalf of an investor/beneficial owner in terms of STRATE should, when authorised in terms of their mandate or instructed to do so by the owner on behalf of whom they hold dematerialised shares in the Company, vote by either appointing a duly authorised representative to attend and vote at the General Meeting or by completing the attached form of proxy in accordance with the instructions thereon and returning it to the registered office of the Company or to the transfer secretaries, Computershare Investor Services Proprietary Limited, the details of which are set out on page 3 of the report, by no later than 16:00 on Monday, 10 February 2014, being 48 hours prior to the time appointed for the holding of the General Meeting. By order of the Board Debra Muller Company Secretary 14 January 2014 Cape Town TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited 70 Marshall Street Johannesburg, 2001 PO Box 61051, Marshalltown,

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