The Board of Directors of Nyherji has decided to adopt a new business model and structure for the company. The goal is to sharpen the company's focus by clearly defining the specialisations of its subsidiaries in particular fields while integrating and increasing efficiency in company operations. The principal changes are as follows: • Nyherji hf. will be the parent company of six main subsidiaries. Nyherji hf. will also be responsible for sales and product development of computer and technical equipment. • Each subsidiary will specialise in a defined area of services, software or consultancy, with the goal of meeting client needs in that specialist field. • The subsidiaries will be: o Skyggnir ehf., specialising in the field of IT systems optimisation, communications solutions integration and operating services. o Sense ehf., for digital solutions, such as for audio and video equipment. o TM Software ehf., focusing on more extensive software development and systems integration. o Applicon ehf., focusing on business software, financial solutions and specialised sector-based solutions. o A new company will be established for the entire group's joint support services and will, in the future, offer such services to other clients. o ParX ehf., which will continue to specialise in the field of quality business consultancy. • The operation will, for the most part, move to Urdarhvarf 6 in Kópavogur, where TM Software is currently located, although the company will continue to have operations in Nyherji's premises at Borgartún 37. • The new business model of the Nyherji group will be implemented in November. The principal tasks of the employees of Nýherji and its subsidiaries involve working closely with clients in achieving greater flexibility, lowering costs or other benefits in their operation. The changes mean that focus on these goals will be sharpened even further to ensure that employees achieve optimal results in co-operation with clients. Nyherji has a staff of around 550, 500 of whom are employed by its subsidiaries and 50 in the parent company. Overseas employees number approximately 180 and, as a result, there are a total of around 730 people working for Nyherji and its subsidiaries. Important step in Nyherji's development Since it was established in 1992, Nyherji has been one of Iceland's most dynamic companies in the field of information technology. The company emerged as a result of the merger of IBM á Íslandi and Skrifstofuvélar-Sund hf. It has been listed on the stock exchange in Iceland since 1997. The last few years have seen significant changes in Nyherji's operations based, on the one hand, on the company's policy of expansion through the acquisition of technology, consultancy and software companies and, on the other hand, on the substantial internal growth of the company's core operations. In October 2005, Nyherji acquired the Danish company Applicon AS, a specialist consulting company in the field of SAP software. At the same time, Nyherji's own consultancy work in SAP and related software here in Iceland was transferred to a separate subsidiary, Applicon ehf. In March 2007, Nyherji bought the company Link ehf., which subsequently took over the Sony Setrid in Kringlan. Around that time, the Sense retail outlet opened, offering digital solutions and equipment for homes and companies. In January 2008, Applicon in Sweden contracted to buy the company Marquardt & Partners AB, which later merged with Applicon in Sweden to form an organisation with almost 40 consultants. An Applicon company was established in the UK offering SAP consulting. At the end of January this year, Nyherji signed an agreement to acquire the company TM Software hf. which, along with subsidiaries offers a diverse range of solutions in the field of operational services and software. TM Software hf., with its workforce of 230, is located in the new buildings at Urdarhvarf 6 in Kópavogur. The wide range of operations now provided by Nyherji and its subsidiaries in Iceland brings a need for changes in the business model and structure of the Nyherji group. The objective of the changes is to operate separate companies that focus on customer needs in well-defined and demarcated fields. In the Nyherji group's business model, each subsidiary provides quality solutions and specialist knowledge to meet the needs of customers and implements those solutions in a satisfactory manner for each client. Companies in the new business model: 1. Nyherji hf. will operate as the parent company with six main subsidiaries in Iceland along with other subsidiaries abroad. The company will also sell computers and related equipment from leading manufacturers such as IBM, Lenovo, Avaya, Canon, Cisco and others, as previously. Nyherji will have a staff of 50. Nyherji's senior executives are: Thórdur Sverrisson, Managing Director of Nyherji and Chairman of the Boards of the company's main subsidiaries. Thórdur has been Managing Director of Nyherji since 1 April 2001. His previous position was Director of Transport for Hf. Eimskipafélags Íslands. He holds a degree in business administration from the University of Iceland and postgraduate qualifications from Gothenburg University. Emil Einarsson will be Director of Sales and Marketing and therefore responsible for supply and services at Nyherji. He will also co-ordinate commercial links with the group's largest customers. Emil has been Director of Sales at Nyherji hf. since 2005. He has worked for the company since it was established in 1992, and before that he worked for IBM á Íslandi. He holds a degree in business administration from the University of Iceland, and an MBA from George Washington University. Gudmar Gudmundsson is Director of Finances for the parent company and all subsidiaries. Gudmar has been Director of Finance for TM Software hf. since 1999. Gudmar has a business administration degree from the University of Iceland. In addition to his position as Director of Custom Solutions for Skyggnir ehf., Thorvaldur Jacobsen will work on foreign commercial development for Nýherji and Skyggnir. He sits on the board of Dansupport A/S, and will be responsible for co-ordinating and developing co-operation between the different companies. Nyherji hf. expects earnings to be approximately ISK 3.5bn with a staff of 50. Nyherji hf. operations will be based at Urdarhvarf 6. 2. Skyggnir ehf. has provided hosting and operating services. All technical and services departments currently operating within Nyherji will be transferred to Skyggnir ehf. The company will specialise in meeting the needs of clients in the form of consulting, hosting and operation services, and equipment installation and maintenance services. Skyggnir's aim is to create unsurpassed operational and service-oriented benefits for clients from IT solutions. Nyherji's server services, network and telecom services, workshop and software services will be moved there. Nyherji's senior executives are: Fridrik Th. Snorrason will be Managing Director of Skyggnir ehf. He has worked for Nyherji since 2003, most recently as Director of Business Development. Before that he was Marketing Manager for the company. Fridrik has an MSc in international relations from the London School of Economics and a BA in the same subject from the University of Wisconsin in Madison. Thorvaldur Jacobsen will be Director of the Custom Solutions Department. Thorvaldur has worked for Nyherji since 2002, becoming Director of Core Solutions in 2005. His previous position was Sales Manager for Teymi hf. and Opin Kerfi hf. He holds a degree in electrical engineering and a BSc in computer science from the University of Iceland, and an MSc in engineering from the University of Texas in Austin. The Director of Operational Services will be Sigurdur Thórarinsson, who has worked for TM Software since 2004. Sigurdur has an MSc in industrial engineering from the University of Washington and in mechanical and industrial engineering from the University of Iceland. Skyggnir ehf. expects earnings to be approximately ISK 2.5bn with a staff of 210. Skyggnir hf. operations will be based at Urdarhvarf 6. 3. Sense ehf. All Links ehf. business and Nyherji operations that have been carried out under the Sense brand will now become part of Sense ehf. Sense will run consulting and design departments, technical services and a similarly named retail outlet in Hlídarsmári. The Sony Setrid in Kringlan, a distribution centre and sales department in Akralind. The company acts as commercial agent for Sony, NEC, Panasonic and Creston control equipment, and handles sales and distribution of their products along with products from Canon, Bose and others for individuals, companies and resellers. One of Sense's principal objectives is to design and develop comprehensive technological solutions that are simple to use. Erling Ásgeirsson will be Managing Director of Sense ehf. He was formerly Nyherji's Director of User Solutions, and has been a senior manager since 1992. Erling's previous position was as a technology specialist for IBM á Íslandi. He has electronics qualifications. Sense ehf. expects annual income to be approximately ISK 2bn with a staff of 40. Sense will be based at Hlídarsmári 3 and Akralind 8, Kópavogur. 4. TM Software ehf. will merge with Origo ehf. and the company will operate under the name TM Software ehf. In addition, operations involving IBM software within Nyherji and part of Microsoft services at Applicon and Skyggnir will be transferred to TM Software. TM Software specialises in providing its clients with custom solutions, network solutions and the integration of large software systems. TM Software was established in 1986 under the name TölvuMyndir. Ágúst Einarsson will be Managing Director of TM Software. He has worked for TM Software since 2003, and became leader of the company at the beginning of 2007. Before that, he managed TrackWell Software, SAP and the IBM department at Nyherji. Ágúst holds an MSc in industrial engineering from Aalborg University and a BSc in mechanical engineering from the same university. TM Software has two subsidiaries. eMR ehf. specialises in meeting the needs of clients in the healthcare services field through offering extensive patient registration systems, and server and operation systems for pharmacists. The Managing Director of eMR ehf. is Hákon Sigurhansson. SimDex ehf., a Nyherji subsidiary, will also become a TM Software subsidiary. SimDex has developed and sold specialist software, including telecoms solutions, all around the world. The Managing Director of SimDex ehf. is Agnar Jón Ágústsson. TM Software and its subsidiaries expect their annual income to reach ISK 1.1bn with a staff of over 90 people. TM Software ehf. and its subsidiaries will be based at Urdarhvarf 6. 5. Applicon ehf. specialises in the field of business software and financial solutions built especially on SAP software. Applicon will continue to have a clear vision of fulfilling the needs of its clients for business software and financial solutions built on SAP and related software such as Calypso and Microsoft software. Kristján Jóhannson is Managing Director of Applicon. He was Nyherji's Director of Software Solutions from 1998, and prior to that he was a senior manager for Hf. Eimskipafélag Íslands and an economist dealing with international affairs for VÍS. Kristján holds an MSc and a business administration degree from the University of Aarhus in Denmark. Vigor ehf., a TM Software subsidiary, will become a subsidiary of Applicon ehf., and will continue to offer business software solutions such as software systems for the Icelandic energy sector. The Managing Director of Vigor is Sigurdur Bergsveinsson. Applicon and its subsidiary expect their income to amount to approximately ISK 1.7bn with a staff of more than 90 people. The companies will be based at Borgartún 37. 6. Joint services. A new company will be established to handle all financial and human resources services for Nyherji and its subsidiaries. This company's basic operation will be based on applying the standardised and quantifiable business process Business Process Outsourcing, and the company's plans for the near future include offering this service to other clients that are not part of the group. The company will also manage buildings and canteens for Nýherji and its subsidiaries, and be responsible for operating the company's distribution centre. Thorsteinn Thorsteinsson will be Managing Director of the new company. He was formerly Managing Director of business consultancy ParX ehf. Thorsteinn has worked for ParX and its predecessor IBM Business Consulting Services and for PricewaterhouseCoopers since 1998. Prior to that he worked for Eimskip and also for Danyard Aalborg in Denmark. Thorsteinn holds a master's degree in business administration from Aalborg University. Financial services will be under the management of Thor Konrádsson and Sturla J. Hreinsson will take control of human resources matters. 7. ParX ehf., IBM business consultants, will continue to provide quality business consulting and specialise in fulfilling the needs of clients for advice in the field of policy formulation and management structure, financial, human resources and marketing consultancy. ParX ehf. will continue to work from Borgartún 37. Kristinn Hjálmarsson will be Managing Director of ParX. He has worked for the company and its predecessor IBM Business Consulting Services and PricewaterhouseCoopers since 2000. Kristinn has a master's degree in change management from Hawaii Pacific University and a BA in philosophy from the University of Iceland. No changes to Nyherji's foreign operations No changes will be made to the structure of Nyherji's foreign operations. The company has subsidiaries in Denmark, Sweden and the UK. Denmark: Applicon AS specialises in software consulting and services for SAP business software users, and Applicon Solutions AS develops software solutions in the SAP field. The combined workforce of the two companies is 85. Dansupport AS offers internal computer system services, hosting and related services, similar to the services offered by Skyggnir ehf. Sweden: Applicon Consulting AB specialised in services for financial institutions and banks, especially implementations of SAP and Calypso software. United Kingdom: Applicon Solutions Ltd. in London provides solutions and service for financial institutions and companies with related operations, along with other services. A total of 180 people work for the subsidiaries in the above-mentioned countries, and the total income of the companies is expected to be ISK 2.8bn this year. These changes, which will be implemented in phases during the next few weeks, will be completed by the end of November. The implementation of Nyherji's new business model is an important element in the company's policy to provide quality solutions built on its staff's in-depth knowledge and broad experience in the fields of information technology, business and administration. The company aims to be one of the Nordic countries' leading enterprises in these fields, and these changes are a vital step in that direction.