Extraordinary Meeting of Shareholders of TOMRA SYSTEMS ASA
Time of meeting: Tuesday, 10 December 1999 at 1:30 p.m.
Place of meeting: Tomra Systems ASA offices, Drengsrudhagen 2, Asker, Norway.
Registration: Opens at 12:30 p.m.
The Extraordinary Meeting of Shareholders will cover the following issues:
1.Approval of the Notice and the Agenda.
2.Election of two shareholders to co-sign the meeting's protocol.
3.Split of shares - one new share for every old share.
4.Change of the company's share option program.
We welcome all Shareholders to attend the Shareholders Meeting.
The enclosed material contains the proxy and registration forms.
Appendix to the Notice of the Extraordinary Meeting of Shareholders of TOMRA SYSTEMS ASA, to be held 10 December 1999.
Proposal 3 Split of shares; one new share for each old share
The Board of Directors proposes to split the shares in two by issuing one new share for each old share through splitting the par value per share from NOK 4,00 to NOK 2,00. The split will be effective for shares traded after 10 December 1999 which is the last inclusive date, with Monday 13 December 1999 as the first day of trading of shares at the new par value.
As a consequence of the share split, the following change of §4 in the Articles of Association is suggested: " The share capital is NOK 166,695,332 divided into 83,347,666 shares of NOK 2,00 par value. The shares in the company shall be registered in the Norwegian Registry of Securities".
Proposal 4 Change of the company's share option program
TOMRA's share option programs have historically been linked to challenging performance criteria. The Board of Directors is of the opinion that performance targets are important in order to avoid free rides and to ensure the motivational element.
There are no established international accounting standards that require reflection of option programs in the profit and loss statement.
Oslo Stock Exchange introduced early November 1999 changes in Norwegian accounting standards for listed companies through linking these to US Generally Accepted Accounting Principles. This was introduced without leaving the listed companies any opportunity to express their opinion.
US GAAP opens for different accounting treatment of fixed and variable (performance based) option plans. The effect of linking Norwegian programs to US GAAP can be substantial dependant on whether the program is adapted to US practice or not. TOMRA's variable plans will have a material negative impact on the reported profit, which could be misleading to the reader.
The option cost can not be deducted for tax purposes according to the existing Norwegian tax law.
US GAAP treatment of variable plans gives TOMRA a theoretical material negative impact on the reported profit. US companies have adapted to these requirements through establishing fixed option plans without performance criteria combined with strict performance targets for each employee to reach in order to keep their job and thereby also their options.
Current Norwegian labour laws make such adaptations impossible for Norwegian companies. It is probably not even desirable to move in this direction, despite the newly introduced principles from the Oslo Stock Exchange. The new accounting standard will therefore give Norwegian companies a competitive disadvantage compared to foreign companies that are not forced to follow US GAAP.
Against the best interest of our shareholders, which is to maintain option plans with performance criteria, the Board recommends that the performance criteria is removed from TOMRA's option plans on a preliminary basis. The Board therefore asks for authorisation to execute the changes in current option plans, as the Board finds necessary.
<br>TOMRA SYSTEMS ASA <br> <br>Jan Chr. Opsahl (sign.) <br>Chairman of the Board