EX-10.1



 





Exhibit 10.1




 






INTEGRATION AGREEMENT




 






between




Norsk Hydro ASA




and




Statoil ASA




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CONTENTS




	 	 	 	 	 	 	 	 	 
	 	1.	 	 	Introduction
	 	 	3	 
	 	2.	 	 	Main elements of the merger
	 	 	3	 
	 	3.	 	 	Information and verification
	 	 	5	 
	 	4.	 	 	the Merged company
	 	 	5	 
	 	5.	 	 	The employees
	 	 	6	 
	 	6.	 	 	Planning and execution of the merger
	 	 	6	 
	 	7.	 	 	Restrictions on the Conduct of business during the term of the Integration Agreement
	 	 	7	 
	 	8.	 	 	Conditions for the execution of the merger
	 	 	7	 
	 	9.	 	 	Confidentiality and information
	 	 	7	 
	 	10.	 	 	Termination of the Integration Agreement
	 	 	8	 
	 	11.	 	 	Disputes
	 	 	8	 






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INTEGRATION AGREEMENT




This Integration Agreement (the “Integration Agreement”) is entered into between Norsk
Hydro ASA (“Hydro”) and Statoil ASA (“Statoil”) concerning a merger of Hydro’s
petroleum activities (as defined below) and Statoil (the “Merger”).




	1.	 	INTRODUCTION
	 
	1.1	 	Background





After preliminary discussions between Hydro and Statoil (hereinafter jointly referred to as the
“Parties” and individually as a “Party”), the Parties decided to enter into
negotiations to investigate the possibility for a merger between the Hydro Group’s activities
within oil, gas and wind energy together with Hydro’s interest in Naturkraft AS and its shares in
Hydro IS Partner (the “Petroleum Activities” or “Hydro’s Petroleum Activities”) and
Statoil into one company (the “Merged Company”) based on the principle of a merger of
equals. After having conducted such negotiations, the Parties have agreed to undertake the Merger
on the terms and conditions set forth herein.



The Merged Company will be a competitive global participant in the petroleum industry, and be the
world’s the largest offshore operator. The Merged Company will have greater ability than each of
the Parties separately to secure further growth in an environment increasing competition for new
resources and increasing technical complexity in available projects.




	1.2	 	The purpose of this Integration Agreement





This Integration Agreement shall form the basis for the development of a joint plan for the merger
(the “Merger Plan”) in order to execute the Merger, which shall be based on and supplement
the regulations in this Integration Agreement.




	2.	 	MAIN ELEMENTS OF THE MERGER
	 
	2.1	 	The merger and general principles for execution





The transaction is a merger of equals between Hydro’s Petroleum activities and Statoil based on the
principle of a merger of equals.




	2.2	 	Method of implementation





The Merger will be implemented by a demerger of Hydro’s Petroleum Activities with Statoil as the
assignee company pursuant to the rules set out in chapter 14 of the public limited companies act
(the “PLCA”), whereupon Statoil will issue shares as demerger consideration to Hydro’s
shareholders.



The Merger is assumed to be executed with fiscal continuity.




	2.3	 	Further specification of the object of the Merger





All assets, rights and obligations related to the Hydro’s Petroleum Activities, including all of
Hydro’s shares and interests in companies included in Hydro’s Petroleum Activities, are included in
the Merger.



The assets, rights and obligations which are to be transferred to the Merged Company, and the
procedure for such transfer are set out in Annex 1. All other assets, rights and
obligations will remain in Hydro after the Merger and be part of Hydro’s continued operations.




	2.4	 	Financial conditions for the Merger





Hydro’s shareholders will receive 0.8622 shares in the Merged Company as consideration for each
share they own in Hydro. It will not be issued shares as consideration for shares owned by Hydro.



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When entering into this Integration Agreement, Statoil has 2,160,276,715 outstanding shares (not
taking into account shares which Statoil owns temporarily in connection with its share savings
scheme for employees) and Hydro has 1,226,175,885 outstanding shares. After Statoil and Hydro have
executed redemption of 14,291,848 and 16,871,506 shares respectively belonging to the Norwegian
government in accordance with the agreements regarding repurchase schemes for shares, they will
have 2,145,984,867 and 1,209,304,377 outstanding shares respectively. At the implementation of the
Merger by registration in the Register of Business Enterprises (the “Implementation”),
Statoil’s shareholders will own 67.3% and Hydro’s shareholders will own 32.7% of the shares in the
Merged Company.



The exchange ratio is based on the following financial conditions:




	(i)	 	Hydro’s Petroleum Activities shall be allocated a Net Interest-bearing Debt (as defined in
Annex2) of NOK 0 as per 1 January 2007.
	 
	(ii)	 	Statoil shall before the Implementation distribute an ordinary dividend of NOK 9.12 per
share.
	 
	(iii)	 	Hydro shall before the Implementation distribute an ordinary dividend of NOK 5.0 per share.
This dividend shall be charged to the Petroleum Activities.
	 
	(iv)	 	Neither Statoil nor shall, except as otherwise stated above, distribute any dividend on its
shares before the Implementation.
	 
	(v)	 	In the period from the approval of the Merger Plan by the general meetings up until the
Implementation, Hydro shall acquire 16,871,506 shares and Statoil shall acquire 14,291,848
shares from the Norwegian government and delete such number of own shares that the
government’s ownership percentage remains unchanged. The acquisition and deletion of shares
shall be made in accordance with established practice and the agreements regarding repurchase
schemes for shares entered into with the government. Otherwise none of the Parties shall,
without the prior consent from the other Party, acquire or sell own shares or change its share
capital prior to the Implementation, except for acquisition and sale of the same number of
shares as part of the implementation of a share investment scheme for the employees in
accordance with established practice.






	2.5	 	Time schedule





The parties shall prepare a joint Merger Plan based on this Integration Agreement which shall be
approved by each of the Parties’ board of directors no later than 31 March 2007. If it is not
possible to complete the Merger Plan within this deadline, the Parties shall agree on an extension
of the deadline of up to one month, provided that there is reasonable grounds to believe that it
will be possible to present the Merger Plan to the respective general meetings for approval no
later han 31 July 2007.



The Merger Plan shall be submitted for approval to the general meetings of Statoil and Hydro as
soon as possible, and no later than four months after the boards of directors have approved the
Merger Plan.



The Implementation of the Merger by registration in the Register of Business Enterprises shall,
contingent upon all necessary governmental approvals having been given, take place without undue
delay after the period for creditor’s objections has elapsed and all other necessary conditions for
the Implementation in accordance with the Merger Plan has been fulfilled.




	3.	 	INFORMATION AND VERIFICATION





The exchange ratio is based on a joint assessment of the value of Hydro’s Petroleum Activities and
Statoil. The Parties have exchanged information prior to entering into this Integration Agreement
in order to perform such assessment. The purpose of this information exchange was to clarify all
essential elements and assumptions for the exchange ratio, cf. section 2.4.



Prior to the approval of the Merger Plan, the Parties shall conduct a due diligence of Hydro’s
Petroleum Activities and Statoil (the “Due Diligence Review”) with the purpose of
confirming that the information exchanged prior to entering into this Integration Agreement, taken
together with



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publicly available information at this time, gave an adequate description of Hydro’s Petroleum
Activities and Statoil (the “Information Assumption”).



Prior to the Due Diligence Review, the parties shall enter into an agreement regarding the
execution of such review, including which material is to be reviewed and how the review shall be
executed to minimize the inconvenience for the affected businesses.



If the Due Diligence Review does not reveal discrepancies from the Information Assumption of such a
nature that it is anticipated that they taken together would have had a material impact on the
determination of the financial conditions for the Merger defined in section 2.4, the conditions for
the Merger shall remain unaltered.



Hydro shall, up until the Implementation, supply Statoil such continuous information as deemed
necessary to enable Statoil to verify whether the distribution of assets, rights and obligations is
implemented according to the agreement.




	4.	 	THE MERGED COMPANY
	 
	4.1	 	Name and logo





After the Implementation, the Merged Company shall have a new name and a new logo. The new name and
the new logo shall be approved by the boards of directors in both Hydro and Red. The change of name
and logo shall not prevent the use of Red’s present name and logo in connection with the Merged
Company’s activities within the business area “energy and retail” to the extent this is considered
appropriate.




	4.2	 	Place of business and location





The place of business of the Merged Company shall be in Stavanger. Group functions shall be located
both in Oslo and Stavanger, and the chief executive officer shall have offices in both locations.




	4.3	 	The board of directors of the Merged Company





The board of directors of the Merged Company shall consist of 10 members, of which three members
shall be elected among the employees. The chairman of the board of the Merged Company shall be
Eivind Reiten. The election committee of Hydro shall nominate two and the election committee of
Statoil shall nominate four of the other members of the board.



The board of directors shall be elected for the period up until the ordinary general meeting of the
Merged Company in the spring 2010.




	4.4	 	The management of the Merged Company





The CEO of the Merged Company shall be Helge Lund.



The composition of the remaining senior management of the Merged Company will be determined by the
current CEOs and boards of directors of Hydro and Statoil in accordance with the principle of
merger of equals.



The management structure and management systems of the Merged Company shall be based principally on
Statoil’s existing model.




	4.5	 	Other corporate bodies





The Merged Company shall have a corporate assembly. One third of the members of the corporate
assembly shall be elected by and among the employees. The election committee of Hydro shall
nominate the number of members which, by rounding downwards will represent 40% of the other
members, while the election committee of Statoil shall nominate the rest of the members.



The Merged Company shall have an election committee consisting of four members. The election
committee of Hydro and Statoil shall each nominate two of the members of the election committee.



5









 





The members of the corporate assembly and the election committee shall be elected for the period up
until the ordinary general meeting of the Merged Company in the spring 2010.




	4.6	 	Representatives of the employees in the board of directors and the corporate assembly





The Parties will arrange for the election of employee representatives for the Merged Company’s
corporate assembly and board of directors as soon as possible after the Implementation, with the
aim of having employee representatives in these corporate bodies with background from Hydro and
Statoil reflecting the principle of merger of equals.




	5.	 	THE EMPLOYEES





The employment of the affected employees will be transferred in accordance with the rules and
regulations in the Employment Protection Act and other relevant labour legislation.



The principle of merger of equals shall be reflected in connection with the appointment of
positions and assignment of duties. To the extent seniority is emphasised in such or any other
situation, seniority in the Hydro Group and the Statoil Group respectively shall be considered
equal in the Merged Company.



Moreover, the Parties will attach importance to providing information to and to consult with the
employees and their representatives in connection with the execution of the Merger.




	6.	 	PLANNING AND EXECUTION OF THE MERGER





The Parties shall, as soon as possible after entering into this Integration Agreement, establish a
project for the integration under the leadership of Hilde M. Aasheim in close cooperation with a
person appointed by Statoil, who, to the extent this will not be in conflict with competition laws,
shall plan the integration of the involved activities. The integration project shall be executed
based on the principle of merger of equals and other principles laid down in this agreement.



The Parties shall to the extent necessary exchange information and otherwise cooperate with the aim
to as soon as possible fulfil the conditions for the execution of the Merger stated in section 8.




	7.	 	RESTRICTIONS ON THE CONDUCT OF BUSINESS DURING THE TERM OF THE INTEGRATION AGREEMENT





None of the Parties — or any company controlled by any of the Parties — shall, from the time of
entering into this Integration Agreement and for as long as this agreement is not terminated, act
in contradiction to the terms and conditions set forth herein, including the regulations regarding
the financial conditions in section 2.4, and neither Statoil nor Hydro’s Petroleum Activities
shall, without the prior written consent from the other Party, decide or undertake major
investments, disposals or changes to its business or capital structure, or perform other acts or
omissions which are of major importance to the Merger or which falls outside the scope of ordinary
course of business. The above does not preclude acts or omissions assumed by this Integration
Agreement or which are necessary to execute the Merger.



Neither Statoil nor Hydro shall perform any actions with the aim of someone putting forward an
offer or proposal which will be detrimental to the execution of the Merger or will reduce the
probability for the Merger being approved by their respective general meetings. Each of the Parties
shall immediately inform the other Party of inquiries received regarding possible offers or
proposals of such nature]




	8.	 	CONDITIONS FOR THE EXECUTION OF THE MERGER





Each of the Parties’ obligation to execute the Merger is contingent upon:




	(i)	 	The Due Diligence Review not revealing discrepancies from the Information Assumption as
described in section 3, fourth paragraph with regard to the other Party.





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	(ii)	 	No incidents, changes, occurrences or developments with regard to the other Party occurring
prior to the approval of the Merger Plan by the respective general meetings which materially
alter the foundation of the Merger.
	 
	(iii)	 	Approval of the Merger Plan from the general meetings in Hydro and Red.
	 
	(iv)	 	The Parties obtaining all necessary approvals from public authorities to execute the Merger,
and that these approvals do not contain conditions which will have a material negative impact
for the Merged Company.
	 
	(v)	 	Possible third party approvals which may be necessary for the Implementation of the Merger
are given.
	 
	(vi)	 	All conditions for continuance of Statoil’s listing on the Oslo Stock Exchange and the New
York Stock Exchange respectively have been, or with a reasonable degree of certainty will be,
fulfilled.






	9.	 	CONFIDENTIALITY AND INFORMATION





All information received from the other Party in connection with the entering into of the
Integration Agreement and the further process of the Merger, and which is not publicly known, shall
be treated confidential and shall not be used for other purposes than those provided for in the
Integration Agreement. This does not prevent submission of such information according to rules and
regulations. In such cases the Party which is obliged to give such information shall, if possible,
consult the other Party before such information is given.



The Parties agree on a joint disclosure of the negotiations of the Merger on Monday 18 December,
2006 before 09.00 p.m., Oslo time. A subsequent joint press conference shall be held at a time to
be agreed upon. The Integration Agreement is not confidential after the Parties have conducted such
joint press conference.



Information to the public and the relevant stock exchanges related to the Merger shall be given
jointly by the Parties.




	10.	 	TERMINATION OF THE INTEGRATION AGREEMENT





The Integration Agreement shall be terminated and shall be replaced by the Merger Plan at the time
the Merger Plan is approved by the boards of directors of Statoil and Hydro.



The Integration Agreement shall also terminate if it is terminated due to it not being possible to
fulfil the conditions for the Merger or due to substantial breach.



The Parties shall cooperate on the information given in connection with a possible termination of
the Integration Agreement. When preparing and presenting the information, both Parties’ views and
interests shall be taken into consideration.




	11.	 	DISPUTES





Disagreement in connection with the Integration Agreement shall be settled amicably. Disputes
shall, if the Parties do not agree otherwise, be settled by arbitration in Oslo. The arbitration
proceedings and the award of the arbitration tribunal shall be subject to the regulations in
section 9.



Oslo, 18 December 2006




	 	 	 
	For Statoil ASA

	 	For Norsk Hydro ASA
	 
	/s/ Helge Lund

	 	/s/ Eivind Reiten
	 
	 

	 	 
	Helge Lund

	 	Eivind Reiten
	Konsernsjef

	 	Konsernsjef






7









 





 






ANNEX 1

Principles for split of the Hydro Group




 






Wiersholm, Mellbye & Bech, advokatfirma AS — M.N.A.

Ruseløkkveien 26. P O Box 1400 Vika, N-0115 Oslo, Norway. T: +47 210 210 00. F: +47 210 210 01. www.wiersholm.no

Bank Account No: 6011.05.43908. Reg. No: 981 371 593 MVA




 









 






	1.	 	INTRODUCTION





The activities in Hydro and its subsidiaries (the “Hydro Group”) comprise at present the
two core business areas Aluminium and Oil & Energy, together with Hydro Other Businesses and
Hydro’s insurance company (“Hydro Captive”). Hydro Other Businesses comprises the
activities Hydro Polymers, Hydro IS Partner, Hydro Production Partner, Industry- and Business Parks
and Shared Services.



The Merger presupposes a demerger of the Hydro Group’s activities within oil, gas and wind power,
the interest in Naturkraft AS and its shares in Hydro IS Partner AS (the “Petroleum
Activities” or “Hydro’s Petroleum Activities”) with Statoil as the assignee company.
The Petroleum Activities are mainly organised in the business area Oil & Energy, but certain
related activities which shall be included in the Merger are organised in other business areas.



This annex 1 includes further specifications of the principles for the split between the Petroleum
Activities and Hydro’s other activities.




	2.	 	PRINCIPLES AND PROCEDURE FOR THE SPLIT
	 
	2.1	 	General principle





Hydro’s Petroleum Activities shall be demerged and combined with Statoil into one company. The
activities which are not included in the transfer shall remain in Hydro after the Merger.



Hydro’s Petroleum Activities comprise all assets, rights and obligations, including employees,
which completely or essentially relate to the Hydro Group’s activities in the areas of exploration,
production, processing, marketing and sale of, together with research and development related to,
oil and gas, including all shares and interests which Hydro owns in companies with such activities.
Further, the Hydro Group’s activities within wind power, Hydro IS Partner and certain other smaller
areas of activities are included. On the other hand, the Hydro Group’s activities within
hydroelectric power and associated trading activities, solar energy and Co2-quotas or Hydro Captive
are not included in Hydro’s Petroleum Activities.




	2.2	 	Technical implementation of the Merger





The Merger shall with regard to Hydro’s Petroleum Activities be implemented by demerging these
activities from Hydro with Statoil as assignee company, whereupon Hydro’s shareholders will receive
consideration in the form of shares in the Merged Company (the “Merger”).



Hydro’s Petroleum Activities are mainly operated through subsidiaries. The most important of these
subsidiaries, Hydro Produksjon AS, also has other substantial activities, while the rest of the
subsidiaries included in Hydro’s Petroleum Activities do not have other substantial activities.



To enable a practical implementation of the Merger there shall, prior to or at the same time as the
Implementation (as defined in the Integration Agreement), be carried out (a) a demerger of Hydro
Produksjon AS resulting in a transfer of all of this company’s assets, rights and obligations
related to the Petroleum Activities to a newly established limited company wholly owned by Hydro,
and (b) intra-group transfers within the Hydro Group of assets, rights and obligations, and
transfer of shares in other companies which are included in Hydro’s Petroleum Activities, which are
not already owned through an uninterrupted chain of ownership consisting solely of companies
included in Hydro’s Petroleum Activities, in such a way that all assets, rights and obligations,
including shares, will be owned by Hydro at the Implementation directly or through such
uninterrupted chains of companies included in Hydro’s Petroleum Activities.



To implement the agreed distribution of assets, rights and obligations between the Petroleum
Activities and Hydro’s other activities, it may be necessary to conduct intra-group transfers
against consideration. The transfer of value as a result of such paid consideration between the
Petroleum Activites and Hydro’s other activities shall be compensated by a corresponding demerger
claim between the Merged Company and Hydro, which will fall due immediately after the
Implementation.




	2.3	 	Financial Effective Date





The financial effective date of the Merger shall be 1 January 2007 (the “Effective Date”).



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This principle implies that all assets, rights and obligations related to the Petroleum Activities
which exist on the Effective Date or which materialise later and have not ceased to exist at the
Implementation, are allocated to the Petroleum Activities with regard to the Merger.




	3.	 	DISTRIBUTION OF ASSETS, RIGHTS AND OBLIGATIONS
	 
	3.1	 	Introduction





This section 3 specifies how the assets, rights and obligations of the Hydro Group shall be
distributed, and accordingly, what will be included in the Merger from the Hydro Group.



Rights and obligations do not only cover rights and obligations towards third parties, but also
rights and obligations between the remaining and the demerged part of the Hydro Group based on
intra-group transactions as if they were separate companies from the Effective Date.




	3.2	 	Transfer of assets, rights and obligations





All assets, rights and obligations which completely or essentially relate to the Petroleum
Activities in the Hydro Group are included in the Merger. This is the case regardless of whether
they are known or unknown, conditional or unconditional.



This includes among other rights and obligations which relate to employment, business agreements,
claims, operating related debt, intellectual property rights, disputes, sureties and guarantees,
taxation and environmental matters.



All cash and bank deposits shall, together with the syndicated credit facilities, be allocated to
Hydro’s other activities. All bond loans shall be allocated to the Petroleum Activities.



The Merged Company shall take all reasonable steps to relieve Hydro and Hydro’s remaining
subsidiaries from their responsibility towards third parties in relation to the assets, rights and
obligations which are subject to transfer. In cases where this is not obtainable, the Parties shall
enter into agreement on how this shall be handled between Hydro and the Merged Company.




	3.3	 	Further on Net Interest-Bearing Debt and demerger claim





To the extent assets, rights and obligations included in Net Interest-Bearing Debt and which are
transferred in accordance with the regulations in the Merger Plan otherwise would represent a Net
Interest-Bearing Debt which would deviate from what is set out in clause 2.4 of the Integration
Agreement, this shall be settled through a demerger claim which shall bear market interest from 1
January 2007 and which falls due at the Implementation.




	3.4	 	Further on taxation issues





The main principle for distribution of the assets, rights and obligations set out in clause 3.2
implies that the Merged Company assumes all historical and future rights and obligations related to
the Petroleum Activities. This also includes all historical and future rights and obligations
related to taxation issues linked to Hydro’s Petroleum Activities. Any rights related to payments
which have been made and any liability for possible changes in taxation from previous years shall
be allocated to the Merged Company if the taxation is related to the Petroleum Activities.



If changes are made in the taxation related to internal pricing, including allocation of corporate
costs, between Hydro’s Petroleum Activities and Hydro’s other activities, Hydro shall, if the
change results in an increase in taxation of Hydro’s Petroleum Activities, compensate the Merged
Company with an amount corresponding to the reduction in taxation of Hydro’s other activities,
however limited to the increase in taxation of the Petroleum Activities. Accordingly, the Merged
Company shall compensate Hydro after the same principles if the change results in an increase in
taxation of Hydro’s other activities.



If changes are made in the taxation of Hydro Produksjon AS which result in a different distribution
of financial items between Hydro’s Petroleum Activities and Hydro’s other activities, Hydro shall
compensate the Merged Company for any reductions in the taxation of Hydro’s other activities as a
consequence of such changes and the Merged Company shall compensate Hydro for any reductions in the
taxation of Hydro’s Petroleum Activities as a consequence of such changes, however limited to the
corresponding increase of taxation of the other party.



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	3.5	 	Further on employment and pension issues in Hydro





The majority of the employees in the Norwegian part of Hydro’s Petroleum Activities are employed by
Hydro. All employees in Hydro who at the Effective Date have their primary relationship to the
Petroleum Activities shall as a part of the Merger be transferred to the Merged Company.



The employees in the unit “Projects” are part of the Petroleum Activities except for the
approximately 50 employees in “Light Metals & Energy” which are part of Hydro’s other activities
and thus shall not be transferred to the Merged Company.



The employees in “Hydro Shared Services” who have their primary relationship to the Petroleum
Activities, i.e. approximately half of 120 employees, shall be transferred to the Merged Company.



Some of the employees in corporate functions in Hydro are performing work partly related to Hydro’s
Petroleum Activities and partly related to Hydro’s other activities. This includes approximately
250 employees in the Corporate Centre in Norway, including the employees in “Facility Management”,
but not including the employees in Hydro Captive. Of these approximately 250 employees, it is the
Parties’ intention that approximately 105-110 employees, including approximately 50 employees from
“Facility Management”, shall be transferred to the Merged Company as a part of the Merger based on
their functions and qualifications, and also taking into account the need for labour in the
respective businesses. The same applies for employees in corporate functions abroad, where the
intention of the Parties is that of a total of approximately 60 employees, approximately 10-15
shall be transferred to the Merged Company. The specific allocation of the employees shall take
place after consultation with the involved employees and in accordance with the relevant
legislation.



The Merged Company assumes from the Effective Date the responsibility for all pension issues,
including both the company pension scheme in Hydro’s Pension Fund and Hydro’s other pension
schemes, related to the active employees who are transferred to the Merged Company and related to
all pensioners who at the time the person ceased to be an active employee had its primary
relationship to the Petroleum Activities. For pensioners who at the time the person ceased to be an
active employee performed work partly related to Hydro’s Petroleum Activities and partly related to
Hydro’s other activities, the pension obligations shall be distributed between Hydro and the Merged
Company in accordance with the proportion of division of Hydro in the demerger, which again shall
be based on the distribution of Hydro’s total net worth.



Hydro’s company pension scheme shall be split in accordance with the regulations in the act dated
24 March 2000 no. 16 regarding company pension scheme section 14-2(1) first sentence, cf. section
14-1. Possessions shall to the extent possible be transferred in the form of assets from Hydro’s
Pension Fund to the pension scheme which assumes the pension obligations. The composition of the
assets which are transferred shall to the extent possible reflect the current composition of assets
in Hydro’s Pension Fund.




	3.6	 	Further on IT/IS





As a part of the Merger, the shares in Hydro IS Partner AS (“BISP”) are transferred to the
Merged Company. The rights and obligations of BISP, including those related to employees and
pensions together with existing contractual relations, will as a main rule remain unchanged after
the transfer. BISP shall continue as Hydro’s IT/IS-supplier after the Merger based on the existing
(with any adjustments made) frame -, delivery- and project agreements between BISP and Hydro’s
other activities. These agreements, together with the regulation below, regulates in more detail
the delivery obligations, the right to termination and the possibility to re-allocate resources to
Hydro after the transfer.



Immediately after the Effective Date, the Parties shall establish a committee related to
IT/IS-activities, consisting of representatives from Hydro and Statoil. The committee shall
consider how the IT/IS-activities in the Merged Company and Hydro shall be planned and executed in
an appropriate manner after the Merger, and shall also take into consideration the
IT/IS-requirements related to Hydro’s other activities. After the Merger the committee shall
consist of representatives from the Merged Company and Hydro’s other activities.



Hydro has the right to acquire at book value hardware, applications, software and other specified
assets to be identified by the Parties in connection with the integration process, which currently
are owned by BISP but which are critical for Hydro’s other activities.. Such systems and assets
will mainly be related to financial activities and systems for production of hydroelectric power
and associated trading which are included in Hydro’s other activities. In connection with such
transfer



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of assets and systems, it may also be desirable to transfer employees from BISP to Hydro’s other
activities in accordance with the labour legislation. Hydro’s right to acquire said assets
according to this paragraph is contingent upon such transfer not having a substantial negative
impact for BISP ability to deliver IT/IS-services to the Petroleum Activity.



The Parties shall further in connection with the integration process identify which of the external
agreements BISP has entered into that shall be transferred to Hydro.



Hydro undertakes, for a period of two years from the Implementation, not to recruit employees in
BISP without the prior written consent from the Merged Company, except employment based on
applications received in connection with public advertisement of the positions.




	3.7	 	Further on Hærøya Research Centre





All assets, rights and obligations, including those related to employee- and pension issues,
related to the Oil & Energy Research Centre and also other activities at Hærøya Research Centre
which completely or essentially relate to the Petroleum Activities shall, as part of the Merger, be
transferred to the Merged Company.




	3.8	 	Corporate Costs





Costs related to Hydro’s corporate centre shall from the Effective Date to the Implementation be
distributed between Hydro’s Petroleum Activities and Hydro’s other activities in accordance with
the allocation principles used by Hydro. The share of the costs which in accordance with the
allocation principles is not allocated to specific business areas (i.e. shareholders costs) shall
be distributed in accordance with the proportion of division of Hydro in the demerger,
which again shall be based on the distribution of Hydro’s total net worth.




	3.9	 	Further on assets, rights and obligations related to former activities





Assets, rights and obligations related to former activities which are no longer part of the Hydro
Group (including environmental- and pension obligations related to the former agri- and magnesium
activities), shall be distributed between the Petroleum Activities and Hydro’s other activities in
accordance with the proportion of division of Hydro in the demerger, which again shall be based on
the distribution of Hydro’s total net worth.




	3.10	 	Industriforsikring AS





The shares in Industriforsikring AS shall remain in Hydro after the Merger. However, after the
Merger Industriforsikring AS shall demerge (a) all rights and obligations related to insurance of
the Petroleum Activities, including rights and obligations in connection with the membership in
OIL, and (b) a proportionate part of Industriforsikring AS’ assets. The Merged Company shall, after
the demerger of Industriforsikring AS has been executed, acquire the company which is demerged from
Industriforsikring AS for a cash amount equal to this company’s value adjusted equity.




	3.11	 	Founders- and subscription certificates





Hydro has issued founders- and subscription certificates which in case of an increase of the share
capital, provided that this is permitted under existing Norwegian legislation, give the holders a
preferential right to subscribe at the terms of subscription determined by the company. The
preferential right does not apply if the share capital increase is initiated to distribute shares
to third parties as consideration for contribution of assets to the company.



The rights of the holders of the founders- and subscription certificates shall be extended to the
Merged Company after the Implementation. The Merged Company is responsible to secure the holders’
rights towards this company, either through maintaining such rights in this company, or by paying
redemption consideration to the holders equal to the actual value of the certificates, cf. public
limited companies act section 14-9, cf. section 13-19.




	3.12	 	Costs in connection with the Merger





All external costs incurred or to be incurred by the Hydro Group in connection with the planning,
negotiation and execution of the Merger and associated division of the Hydro Group shall be a part
of the Petroleum Activities to be transferred in the Merger. This principle includes among other
expenses related to advisors, expenses incurred in connection with transfer of loans and any
obligations to pay taxes or charges occurring in connection with the division of the Hydro Group,



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including in connection with any underlying transactions to be performed as part of the division.
However, the principle is only applying to expenses related to elements which have been made known
to Statoil before the Implementation.




	3.13	 	The responsibility of the Parent companies





Hydro and the Merged Company shall be responsible for the obligations of their respective
subsidiaries in accordance with the regulations in the Master Agreement and the Merger Plan towards
the other party and its subsidiaries .




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