The Group’s directors and executive officers are considered related parties.

Directors and executive officers of TANDBERG and their immediate relatives control 1.42 percent¹ of the shares of TANDBERG asa.

Compensation, shareholdings and loans to executive officers in 2006 were as follows:

Fredrik Halvorsen has an outstanding loan of USD 615,000. The loan is interest-free. Imputed interest is included in other benefits as part of taxable income.

The following executive officers have an agreement for compensation in the case of termination: Fredrik Halvorsen – 12 months salary, Geir Langfeldt Olsen and Odd Johnny Winge – 6 months salary.

Other benefits specified in the Norwegian Accounting Act § 7-31b, other than those mentioned above, are not applicable for the key management personnel.

The table below provides movements of restricted share allocations for the management team:

At the TANDBERG Annual General Meeting on 23 March 2006 it was approved to grant up to 1,500,000 shares for the purpose of a performance based long-term share-based incentive program for the top management of TANDBERG. The incentive plan is designed to act as a three year management incentive and retention tool which aligns management interests with those of the shareholders. As stated at the Annual General Meeting, the plan is subject to meeting defined personal and specific company performance objectives as well as objectives designed to ensure significant shareholder value creation. Contingent on all performance objectives being met, these shares, referred to as restricted shares, will become vested and will transfer at NOK1 to the individuals in February 2009. A change of ownership with commanding control during the period causes the Share Incentive Program to be triggered and shares to be vested.

The Board of Directors received the following remuneration in 2006:

In addition, Jan Chr. Opsahl received USD 7,790 (NOK 50,000) and Amund Skarholdt received USD 3,895 (NOK 25,000) for committee work.

The Chairman of the Board has a defined contribution pension plan. In accordance with the plan, he is entitled to receive annual payments of USD113,527 (NOK728,616) from April 2009 until April 2024.

The Board of Directors has in accordance with the Public Limited Liability Companies Act § 6-16a outlined policies regarding the compensation of the Executive Committee.

The company has designed its executive compensation program around two objectives: (a) attracting, motivating, and retaining the right people, and (b) ensuring alignment of management’s interest with the long-term interest of shareholders. Executive compensation packages comprise a combination of base salary, bonus, and long-term incentive compensation. A combination of objective and subjective factors are used in making pay decisions for each executive officer of the Company. Additional information about these factors is provided below for the different components of executive compensation.

Base Salary. The Compensation Committee outlines the following factors for the base salary of the Executive Team: (a) competitive pay practices, (b) job scope and responsibility, and (c) evaluation of business and individual performance. Possible merit increases in base salary are reviewed every 12 months or longer. Base salary of executives who are promoted or change jobs within the Executive Team may also be adjusted.

Bonus and other benefits. Quarterly and annual bonuses to the Executive Team link compensation to the Company’s, business unit’s, and individual’s performance. Relevant measures considered by the Board in defining and evaluating the executive officers’ performance include: financial measures such as revenue growth and profit target achievement, and non-financial measures such as strategic vision, innovation, management effectiveness, and embodiment of the Company’s core values and culture. Members of the Executive Team may receive other benefits in the form of loans, housing and car allowances that are appropriate for the Executive Team member’s particular situation, e.g., in conjunction with a foreign assignment or special requirements of a new role.

Long-term incentive compensation. Currently this element in the compensation framework is covered through a share incentive program. At the TANDBERG Annual General Meeting on 23 March 2006, approval was granted to provide up to 1,500,000 shares for a long-term share-based performance incentive program for the company’s extended management team. This three-year program is designed to act as an incentive and retention tool which aligns management’s interests with those of shareholders. Vesting of restricted shares is subject to achievement of defined personal and company objectives (including revenue growth and profit targets) as well as objectives for ensuring significant shareholder value creation. Contingent on all performance objectives being met, the restricted shares vest at NOK1 per share to the Executive Management Team in February 2009. Shares were allocated based on an evaluation of job scope and responsibility as well as individual performance. New members of the Executive Team, or executives who are promoted or change jobs within the Team, will be entitled to a pro-rated allocation of shares for the remaining period of the program.

Pensions. Members of the Executive Team participate in the regular pension program available for all other employees in the location where they are based, if not otherwise separately approved by the Compensation Committee.

Severance. The company provides termination packages that are fair and reasonable, reflecting the tenure, roles, scope of responsibility and cause of termination.

The Group’s ultimate parent company is TANDBERG asa. The consolidated financial statements include the financial statements of TANDBERG asa and the subsidiaries listed in the following table:

Transfer prices between subsidiaries are set on an arms length basis in a manner similar to transactions with third parties.