To the shareholders of Norske Skogindustrier ASA

Transcription

1 To the shareholders of Norske Skogindustrier ASA The annual general meeting ( AGM ) of Norske Skogindustrier ASA will be held at on Thursday 12 April 2007 in the company s business offices at Oksenøyveien 80, NO-1326 Lysaker, Norway. The agenda is as follows: 1. To adopt the annual report and accounts of Norske Skogindustrier ASA and the group for To cover the annual loss for 2006, including declaration of dividend for Norske Skogindustrier ASA The company s present dividend policy reads as follows: Norske Skog wishes to pay a competitive and stable dividend to its shareholders, measured in Norwegian kroner per share. As an average over a business cycle, the dividend should correspond to per cent of cash flow from operations, less financial expenses and tax paid. The board recommends that the general meeting declare a dividend of NOK 5.50 per share for 2006, payable to the company s shareholders at the date of the AGM, 12 April This payout will be charged to retained earnings. 3. To approve the declaration concerning guidelines for determining the remuneration of senior executives Pursuant to the new provision in section 6-16 a of the Norwegian Act on Public Limited Companies, ref section 5-6, paragraph 3, the AGM must consider the board s declaration concerning the determination of pay and other remuneration of senior executives for the coming fiscal year. A consultative vote must be held on the board s guidelines for determining the remuneration of senior executives, while the AGM must approve the guidelines on allocating shares, subscription rights, options and other forms of remuneration relating to shares in or the development of the share price for Norske Skog. The board s declaration is included as note 19 to the annual accounts for Norske Skogindustrier ASA, and accompanies the notice sent to all shareholders with a known address as an appendix to this notice (appendix 9 to item 5). 4. To reduce the share premium reserve by transfer to free equity The board proposes that the company s share premium reserve (restricted equity) be reduced by NOK 7 billion through a transfer to other equity. This proposal is intended to increase flexibility in relation to the company s capital structure. No other considerations need to being given weight with respect to the reclassification/capital reduction. The share premium reserve is being reduced in conformity with the rules on reducing share capital specified in section 3-2, paragraph 4 of the Norwegian Act on Public Limited Companies, ref chapter 12, and is therefore conditional on notice being given to creditors.

2 The auditor s confirmation that the company s restricted equity will be fully covered after the reduction is appended to this notice. The board moves as follows: (i) (ii) That the share premium reserve of Norske Skogindustrier ASA be reduced by NOK , from NOK to NOK , and that the amount of the reduction be transferred to other equity. The amount of the reduction relates exclusively to earlier premiums paid by the company s shareholders. That the changes specified in paragraph (i) take effect when the reduction in the share premium reserve is registered with the Norwegian Register of Business Enterprises. 5. To approve and implement an internal reorganisation of Norske Skogindustrier ASA (demerger) The board proposes that real property in Norway not related to production be demerged into a new wholly-owned sub-group for property development. The overall reasoning for this reorganisation is to permit a stronger focus on the management and development of the properties covered by the proposed demerger. The reorganisation will be implemented as a two-stage process. Step one is a demerger of Norske Skogindustrier ASA (the Demerger) and stage two is a subsequent demerger/merger (the Demerger/merger) whereby the properties are transferred to various subsidiaries of the sub-group. The board s demerger plan dated 1 March 2007, with appendices, the board s report concerning the demerger, statements by independent experts (on the capital reduction and increase) and the statement by the corporate assembly, are appended to this notice. In purely technical terms, the Demerger will require an amendment to article 4 of the articles of association with the majority required for such an amendment (more than three-quarters). It follows from the subsequent Demerger/merger that the AGM approve both a reduction in the capital and an increase by the same amount at the same meeting. The Demerger and Demerger/merger represent two transactions which are mutually interdependent and must be carried out simultaneously. The board moves the following resolutions and amendments to the articles of association: (i) That the demerger plan be approved Approval of the demerger plan dated 1 March 2007 for the demerger of Norske Skogindustrier ASA. (ii) That the share capital be reduced through the Demerger As a result of the Demerger, the share capital of Norske Skogindustrier ASA is reduced by NOK , from NOK to NOK , through a write-down of the nominal value of the shares by NOK , from NOK 10 per share to NOK per share, and the share premium reserve by NOK , from NOK to NOK

3 793.With effect from the moment when the Demerger takes effect pursuant to company law, article 4 of the articles of association for Norske Skogindustrier ASA will be amended to read: The company's share capital amounts to NOK , divided into shares each with a nominal value of NOK The company's shares will be registered with the Norwegian Central Securities Depository (VPS). (iii) That the share capital be increased through the Demerger/merger As part of the Demerger/merger, the following resolution on increasing the share capital is moved: That the share capital of Norske Skogindustrier ASA be increased by NOK , from NOK to NOK through a write-up of the nominal value of the shares by NOK , from NOK per share to NOK 10 per share, and the share premium reserve by NOK , from NOK to NOK Settlement for the amount of the increase will take the form of receivables by Norske Skogindustrier ASA in Norske Skog Eiendom AS, Klosterøya AS, Eidsverket AS, Ranheim Eiendomsutvikling AS, Oxenøen Utvikling AS and Oxenøen Eiendom AS equal to the book equity transferred to these companies through the demerger of NSI 004 AS. The write-up of the nominal value applies to all the shares in Norske Skogindustrier ASA. As a result of the capital increase, article 4 of the articles of association for Norske Skogindustrier ASA will be amended to read: The company's share capital amounts to NOK , divided into shares each with a nominal value of NOK 10. The company's shares will be registered with the Norwegian Central Securities Depository (VPS). 6. To amend article 5 of the articles of association concerning the term of office of directors The election committee proposes to the AGM that article 5, paragraph 1 of the articles of association be amended to reduce the term of office from two years to one. The amendment to paragraph 2 is a consequence of this. Following the amendment, article 5 will read: The company s board of directors will consist of a minimum of seven and a maximum of 10 directors. Directors are elected by the corporate assembly for a term of one year. No person can be elected to the board after reaching the age of 70. The corporate assembly will elect the chair and deputy chair of the board each year. The corporate assembly will determine the remuneration payable to directors. The board of directors is responsible for appointing a chief executive, to be known as the president and chief executive officer, and for determining his/her

4 remuneration. The board of directors can authorise its members, the chief executive or certain other designated employees to sign for the company. As the principal explanation for its proposal, the nomination committee emphasises the need for greater flexibility in selecting and structuring the board in terms of experience and expertise. In its work on the composition of the board, the committee must also take account of the need for continuity. 7. To determine the remuneration of the members of the corporate assembly The remuneration committee, which comprises the members of the election committee together with a member appointed by and from the employee representatives in the corporate assembly, recommends that the AGM approve an increase in the remuneration for serving on the corporate assembly of NOK per annum for the chair, bringing the total to NOK per annum, and by NOK 200 per meeting day for the other members and alternate members of the corporate assembly, members of the election committee and members of the remuneration committee, bringing the total to NOK per meeting day. 8. To approve the auditor s fee 9. To elect the members and alternate members of the corporate assembly The company s election committee has recommended Idar Kreutzer, Helge Evju, Ann Kristin Brautaset, Kirsten C. Idebøen and Turid Fluge Svenneby for re-election as members of the corporate assembly. It has recommended Øyvind Birkeland for election as a member of the corporate assembly. Svein Haare, Hege Huse, Kjersti Narum and Siv Fagerland Christensen are recommended for election as alternate members in the order listed. 10. To elect three members to the election committee Pursuant to article 7 of the present articles of association, the election committee consists of the chair of the corporate assembly and three members elected by the general meeting for one year at a time. The election committee has recommended the re-election of Ole H Bakke and Gunn Wærsted and election of Idar Kreutzer. 11. To renew the mandate for the board to purchase the company s own shares Norske Skogindustrier ASA sells shares from its own holding to the employees every year, and also uses its own shares in partial settlement of bonus schemes. It is therefore appropriate that the board be given a renewed mandate to buy shares in the market to meet the above-mentioned requirements. The board moves that the general meeting adopt the following resolution: That the board be mandated to purchase the company s own shares up to a nominal value of NOK , subject to the restriction that no more than 10% of the outstanding shares may be purchased at any time. The shares must be purchased at the price quoted on the stock exchange. The board is free to purchase and sell shares in whichever way the board finds most appropriate, provided that the general principles of equal treatment of shareholders are respected. This mandate is granted for the period up to the next annual general meeting.

5 Information Pursuant to article 8 of the present articles of association, the AMG will be called and chaired by Idar Kreutzer, chair of the corporate assembly. The election committee s explanation for its recommendations and the presentation of the person nominated for election as a new member of the corporate assembly will be sent to all shareholders with a known address as an appendix to this notice. The board s proposal for the annual accounts for Norske Skogindustrier ASA and the group, the directors report and the auditor s report are appended to this notice as appendix 9 to item 5. The annual report for 2006 also includes this information as well as the corporate assembly s recommendation on the board s proposal for the annual accounts of Norske Skogindustrier ASA and the group, and the corporate assembly s recommendation on the board s proposal for coverage of the net loss. The annual report will be sent to all shareholders with a known address at least 14 days before the general meeting and will also be available at Shareholders wishing to attend the general meeting, either in person or by proxy, must complete and return the attached attendance form, specifying any proxies, by on Tuesday 10 April The form can also transmitted electronically via Norske Skog s web site, but this method cannot be used to specify proxies. If the attendance form has not been received by the deadline, as specified in article 8 of the present articles of association, the person concerned may be refused admission to the general meeting. Admission cards will be issued at the door. To confer entitlement to attend the meeting, a share must be registered in the name of the real owner with the Norwegian Central Securities Depository (VPS), or the owner must in some other way have given notice of and received approval for their purchase. Lysaker, 12 March 2007 Idar Kreutzer Chair, corporate assembly

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7 Recommendation from the election committee to amend article 5 of the articles of association concerning the term of office of directors Background As notified at the AGM in 2006, the election committee has discussed a possible change in the term of office of directors from two years as at present to one year. Article 5 in Norske Skog s articles of association currently reads as follows: The company s board of directors will consist of a minimum of seven and a maximum of 10 directors. Directors are elected by the corporate assembly for terms of two years. No person can be elected to the board after reaching the age of 70. The corporate assembly will elect the chair and deputy chair of the board for terms of one year. The corporate assembly will determine the remuneration payable to directors. The board of directors is responsible for appointing a chief executive, to be known as the president and chief executive officer, and for determining his/her remuneration. The board of directors can authorise its members, the chief executive or certain other designated employees to sign for the company. Assessments The advantage of a one-year term of office is that it gives the election committee more flexibility in selecting and replacing members of governing bodies. At the same time, the committee will have greater opportunities to structure the board and corporate assembly in terms of experience and expertise from a broader perspective. In its work on the composition of the board, the committee must also take account of the need for continuity. Formal requirements Pursuant to article 9 of the articles of association, amendments to the articles must be made by the general meeting. A valid resolution requires a three-fourths majority of the votes cast, and these votes must represent three-fourths of the share capital represented at the general meeting. Resolution: The election committee proposes to the AGM of Norske Skogindustrier ASA that article 5 of the articles of association concerning the term of office of directors be amended to read as follows: The company s board of directors will consist of a minimum of seven and a maximum of 10 directors. Directors are elected by the corporate assembly for a term of one year. No person can be elected to the board after reaching the age of 70. The corporate assembly will elect the chair and deputy chair of the board each year. The corporate assembly will determine the remuneration payable to directors. The board of directors is responsible for appointing a chief executive, to be known as the president and chief executive officer, and for determining his/her remuneration. The board of directors can authorise its members, the chief executive or certain other designated employees to sign for the company.

8 Recommendation from the remuneration committee concerning the determination of fees General The election committee is required to advise the AGM on issues relating to fees for serving on the company s governing bodies. When considering such issues, the committee is designated the compensation committee and enlarged with a member appointed by and from the employee representatives in the corporate assembly. The remuneration committee has comprised Idar Kreutzer (chair), Helge Evju, Ole H. Bakke and Gunn Wærsted plus Harald Bjerge, an employee-elected member of the corporate assembly. The committee has held two meetings during the winter of In accordance with previous decisions by the general meeting, most recently on 20 April 2006, the annual fee for the chair of the corporate assembly amounts to NOK Members of the corporate assembly, the election committee and the remuneration committee (including observers and alternates) receive a fee of NOK per meeting. Expenses incurred in connection with meetings are paid in accordance with the government scale for such allowances. Assessment In the remuneration committee s view, the prevailing fees are reasonably proportionate to the responsibility and commitment involved in membership of the corporate assembly. In conformity with earlier recommendations, the committee recommends regular adjustments to the fees in order to avoid the need for major upward leaps. The remuneration committee accordingly recommends an increase in the fees corresponding to three-four per cent. The remuneration committee recommends to the general meeting that the fee for the corporate assembly s chair be increased by NOK to NOK per year. It recommends that the fee for other members be increased by NOK 200 to a total of NOK per meeting day. The fee for the chair covers meetings of the election committee, the remuneration committee and other meetings in which the chair participates. The change is proposed to take effect from 12 April The remuneration committee moves the following: Recommendation: 1. That the fee for the chair of the corporate assembly be set at NOK per year with effect from 12 April This fee covers meetings of the election committee, the remuneration committee and other meetings in which the chair participates. 2. That the fee for other members of the corporate assembly, the election committee and the remuneration committee be set at NOK per meeting day with effect from 12 April That travel and accommodation expenses be paid in accordance with the government scale for such allowances. 10

9 Recommendation from the election committee on the election of members of the corporate assembly Election of members of the corporate assembly The election committee of Norske Skog is appointed pursuant to the articles of association. Pursuant to the articles, it will comprise the chair of the corporate assembly and three members elected by the general meeting for one year at a time. The election committee has consisted of Idar Kreutzer (chair), Helge Evju, Ole H. Bakke and Gunn Wærsted. Wærsted is not a member of the corporate assembly or board of directors. The nomination committee has held nine meetings. Discussions have been pursued by the election committee with the chair of the board, which have included the provision of information about the board s self-assessment. The company s chief executive has also briefed the election committee on the development of the company, and the election committee has consulted the representative of the employees. Meetings with all directors up for election have been held. Shareholder elected members of the corporate assembly has also been consulted for re-election. Meetings with other potential candidates for the board have also been held. The election committee has sought advice from the largest Norwegian and foreign shareholders concerning candidates for the board and corporate assembly and possible other considerations of significance for the election committee s work. The election committee makes its recommendation after analysing the company s requirements and with regard to the desire for the broadest possible knowledge, experience, commitment and representativeness in the company s governing bodies. One goal is to ensure that the composition of the corporate assembly provides good representation of the company s shareholders. The nomination committee has given weight to the need for both continuity and new recruitment. The following shareholder-elected members of the corporate assembly are due for reelection in 2007: Idar Kreutzer, Helge Evju, Ann Kristin Brautaset, Kristin C. Idebøen, Turid Fluge Svenneby and Svein Aaser Mr Aaser has given notice that he wishes to withdraw from the corporate assembly. Recommendation Pursuant to the articles of association, members of the corporate assembly are elected for a two-year term. (The date or period when each member was first elected or was previously a member is shown in brackets.) The nomination committee recommends the re-election of: Idar Kreutzer (1997), Helge Evju ( , 2006), Ann Kristin Brautaset (2004), Kristin C. Idebøen (2003) and Turid Fluge Svenneby (2005). The nomination committee recommends the election as a new member of: Øyvind Birkeland Shareholder-elected alternate members of the corporate assembly are elected every year, and the nomination committee recommends that they be re-elected in the numbered order: 11

10 1. Svein Haare (2000), 2. Hege Huse (2004), 3. Kjersti Narum (2006) and 4. Siv Fagerland Christensen (2003). Election of three members of the election committee The election committee takes the view that its composition should ensure the broadest possible contact with the company s shareholder interests. Continuity in the committee should also be ensured. Recommendation That the following be elected as members of Norske Skog s election committee: Ole H. Bakke (2006), Idar Kreutzer (2001) and Gunn Wærsted (2005) In addition, the chair of the corporate assembly is a member of the election committee and its chair. Oslo, 1 March Idar Kreutzer Helge Evju Ole H. Bakke Gunn Wærsted (Chair)(Sign.) (Sign.) (Sign.) (Sign.) 12

11 Presentation of new candidate for election to governing bodies of Norske Skogindustrier ASA Øyvind Birkeland (Corporate assembly) Place of residence: Tønsberg Education: Present position: Elected posts: MSc business economics, Norwegian School of Economics and Business Administration (NHH) Executive vice president, DnB NOR Chair, nomination committee, Guarantee Fund for Securities Companies, various internal directorships 13

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