Recommendations of the Election Committee to the 2007 Annual General Meeting of Oslo Børs Holding ASA and Oslo Børs
1 Election
1.1 The Election Committee's task
In accordance with the guidelines approved by the General Meeting, the Election Committee's mandate is initiated by the Chairman of the Board. The term of office of two members of the Board of Directors is due to expire in 2007. Furthermore, the term of office of one member of the Control Committee and two members of the Election Committee are due to expire. The Election Committee has in addition considered whether any other changes are needed, on the principle that the Annual General Meeting is free to elect such persons as it may wish regardless of which members are at the end of their term of office.
The boards of directors of Oslo Børs Holding and VPS Holding ASA (VPS) announced on 19 March 2007 that they had entered into a letter of intent for a merger, with Oslo Børs Holding as the acquiring company. The announcement stated that the parties had agreed that the chairman of the board of VPS, Leif Teksum, should be elected as the chairman of the merged company, and that the chairman of the board of Oslo Børs, Halvor Stenstadvold, should be the deputy chairman. According to the provisional timetable indicated in the announcement, the merger will be considered by an Extraordinary General Meeting to be held in June 2007, with the merger taking effect in September 2007. The Election Committee has assumed that in addition to considering the merger proposal, the Extraordinary General Meeting will consider nominations for the members of the board of the merged company.
The Election Committee has considered it appropriate to defer certain specific proposals for changes since these can best be dealt with together with the proposal for the merger. Further information in this respect can be found in the relevant sections below.
1.2 The Board of Directors
The term of office of the following shareholder-elected members of the Board of Directors of Oslo Børs Holding and Oslo Børs expires this year:
Svein Støle
Benedicte Schilbred Fasmer
The term of office of the other members, namely Halvor Stenstadvold (Chairman), Mari Thjømøe, Maria Borch Helsengreen, Georg Størmer and Ottar Ertzeid, will expire in 2008.
The guidelines for the Election Committee require due consideration to be paid to the following aspects:
- That the Board collectively should have sufficient expertise and experience to handle both its routine operational and administration responsibilities and the strategic challenges that the company faces. In addition to ensuring the availability of suitable expertise, the Committee is asked to pay attention to factors such as the balance of age and gender.
- That the candidates are sufficiently independent of the company’s management, and that the Board as a whole is sufficiently independent of any single shareholder and individual customers/members of the exchange.
- That the candidates have sufficient time in relation to their other appointments and employment to carry out their duties as a member of the Board.
Furthermore, the Committee shall ensure that the company fulfils the obligations in the Public Limited Liability Companies Act which require that a Board of Directors with six to eight shareholder-elected members shall have a minimum of three members of each gender.
The Committee has asked the company’s 20 largest shareholders whether they have any specific proposals or views on the candidates to be proposed by the Committee. The responses received have led in part to further contacts, and in part have been taken into account in the Committee’s deliberations.
At the Committee's request, the Chairman of the Board has reported his impressions of how the current Board functions and has indicated the composition and mix of expertise that he believes the Board should have. The Committee has also received a report of the Board’s own evaluation of its work. The Committee has also asked the President of Oslo Børs for her views on the expertise the Board should represent.
The Committee notes that while the company needs Board members who understand its business well, it also benefits from some degree of turnover among the members. In the Committee’s experience, the current Board works well. Since a number of new members joined the Board in both 2005 and 2006, the Committee is of the opinion that it is expedient for the current composition of the Board to continue.
The Committee therefore proposes that Svein Støle and Benedicte Schilbred Fasmer are re-elected.
Information on the background of Svein Støle and Benedicte Schilbred Fasmer can be found in the Annual Report, which also provides information on the members not due for re-election this year.
The Committee assumes that the candidates for election will be the same for the parent company Oslo Børs Holding ASA as for the wholly owned subsidiary Oslo Børs ASA.
As mentioned above, the Election Committee assumes that the proposed merger with VPS will lead to proposals for changes in the composition of the Board of Directors.
1.3 The Control Committee
The term of office of one member of the Control Committee, Anne Kristin Einarsrud, expires at the 2007 Annual General Meeting. Inger Johanne Lund and Knut Nyerrød are not due for re-election in 2007. Ian Kenworthy has asked to be released from his appointment to the Control Committee.
In formal terms, the Control Committee is a corporate body of Oslo Børs ASA rather than of the parent company Oslo Børs Holding. However, since in practical terms the Control Committee must also be seen as a corporate body reporting to the Annual General Meeting of Oslo Børs Holding, the Election Committee has been asked to propose candidates for the Control Committee. The Control Committee comprises three full members, including its Chairman, together with one attending deputy member. The Election Committee assumes that the Control Committee will not be affected by the proposed merger between the holding companies.
On the basis of its evaluation of the overall expertise and experience represented by the Control Committee, the Election Committee proposes that Finn Berg Jacobsen is elected as a new Chairman of the Control Committee for a two-year term of office, and that Anne Kristin Einarsrud is re-elected for a further two-year term of office. The Election Committee proposes that the current Chair of the Control Committee, Inger Johanne Lund, is elected as a member of the Committee for a two-year term of office.
Finn Berg Jacobsen is a state authorised public accountant, and was formerly a partner and chief executive of Arthur Andersen in Norway. Since 2005, he has worked as an independent adviser, principally in the areas of financial restructuring, corporate governance and internal control. From 2001 to 2005, he was Deputy Chief Executive Officer of Aker Kværner ASA with responsibility for group staff functions, and was the group’s CFO for two periods. He is a member of the board and chairman of the audit committee for both Entra Eiendom ASA and Alpharma Inc (Fort lee, New Jersey). His previous experience includes chairing the Stock Exchange Accounting Commission, and he has chaired the Oslo Børs Control Committee for two previous periods. Finn Berg Jacobsen has advised the Committee that he has sufficient time to carry out the duties involved, has satisfactory credentials and is willing to accept the appointment if offered.
2 The Election Committee
The Election Committee comprises at least three members and possibly up to three specified deputy members, all of whom are elected for a three-year term of office.
The terms of office of Johan Solbu Braaten and Mai-Lill Ibsen expire this year. The terms of office of Harald Norvik (Chairman) and Olaug Svarva both expire in 2009.
The composition of the Election Committee following a merger with VPS will need to be evaluated on the basis of the shareholder composition of the merged company. The Election Committee therefore considers it most expedient to recommend that the Election Committee continue with its current composition until the merger takes place. This means that the Committee proposes that Johan Solbu Braaten and Mai-Lill Ibsen are re- elected.
3 Remuneration
The Election Committee shall also propose the remuneration for the elected officers of Oslo Børs ASA and Oslo Børs Holding ASA.
The Election Committee has compared the current non-executive directors’ fees paid to the shareholder-elected members of the Board with the non-executive fees paid by other companies. The Committee has decided that the particular responsibility of the stock exchange for supervision and control of the market and the demands it makes on the members of its Board should be given greater weight. Board members are currently members of the boards of both Oslo Børs Holding and Oslo Børs. The proposed merger may cause changes to the scale of work and responsibility of these appointments, and it will be appropriate to review the overall level of remuneration in the light of these changes. The Election Committee therefore considers it most expedient that a comprehensive review of remuneration shall be carried out as part of the merger process.
The Committee therefore proposes that the current remuneration continues without change:
Board of Directors:
Chairman NOK 245,000 per year
Deputy Chairman NOK 179,000 per year
Member NOK 129,000 per year
Employee representative NOK 68,000 per year
Deputy employee representative NOK 3,000 per meeting
In addition, the following fees are proposed for meetings in addition to the regular meetings of the company’s corporate bodies as follows:
Chairman NOK 5,000 per meeting/meeting day
Member NOK 4,000 per meeting/meeting day
The remuneration payable to any member for additional duties is limited to 50% of the fixed annual fee payable to the member in question.
Regular meetings of the company’s corporate bodies include Board Meetings, General Meetings, meetings with the company’s management and meetings with the Election Committee and Control Committee. Meetings in addition to the regular meetings of the company’s corporate bodies include meetings of sub-committees of the Board, meetings with the official authorities, meetings with other companies and exchanges and international collaboration on behalf of Oslo Børs. Additional remuneration is stipulated by the Chairman based on a request by the member in question. Additional remuneration for the Chairman of the Board will be authorised by the Chairman of the Election Committee.
Control Committee:
Chairman NOK 111,000 per year Member/Deputy Member NOK 78,000 per year
Oslo, 26 March 2007
Harald Norvik (Chairman) Mai-Lill Ibsen
Johan Solbu Braaten Olaug Svarva
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