Sparebanken Sør — AGM Information 2021

Mar 4, 2021

Members of the Board of Trustees Members of the Board Representatives from the administration Independent auditor Kristiansand, 4

th March 2021

Notice of meeting of the Board of Trustees in Sparebanken Sør

Date: 25th March 2021 Time: 17:00 p.m. Place: via Microsoft Teams

The Board of Trustees meeting will be held virtually via Microsoft Teams due to the current coronavirus situation. Invitation to the Teams meeting will be sent shortly. Any written election will be executed electronically by sending an e-mail to an e-mail address that will be provided at the meeting.

Even if you may not be a registered Teams user, you will be able to attend the meeting using the invitation.

Agenda:

• 1 Call to order by Chair of Board of Trustees Jorunn Aarrestad
• 2 Roll call by secretary Liv Sivertsen
• 3 Appointment of two representatives to co-sign the minutes by Chair of Board of Trustees Jorunn Aarrestad
• 4 Approval of the agenda by Chair of Board of Trustees Jorunn Aarrestad
• 5 The status of the business by CEO Geir Bergskaug

6	Annual report and accounts 2020	Attached
	- Annual accounts and sustainability report
	- Audit report
	- Determination of audit fee
7	Statement of determination of fees and other remunerations to senior employees in Sparebanken Sør by Chair of the Board Stein Hannevik	Attached
8	Election of chair and deputy chair to the Board of Trustees by Chair of the Nomination committee Birgitte Midgaard	Attached
9	Remuneration to the Technology committee by Chair of the Nomination committee Birgitte Midgaard	Attached

• 10 Information of the Depositors election to The Board of Trustees 2021 by Chair of the Nomination committee for Depositors Birgitte Midgaard
• 11 12 13 14 Information of the EC holders election to The Board of Trustees 2021 by Chair of the Nomination committee for the EC holders Alf Albert Election of member to the Nomination committee for EC-holders by Chair of the Nomination committee for the EC holders Alf Albert Delegated powers for purchase of own equity certificates Attached Attached Attached

Delegation of powers to issue senior non-preferred debt

If you are unable to attend the meeting, please inform on email to lgs@sor.no, or phone 38 17 06 86.

Kristiansand, 4 th March 2021

Stein Hannevik Chair of the Board

Sparebanken Sør Att: Styrets formann Stein Hannevik

Kristiansand, 2. mars 2021

Revisjonshonorar for regnskapsåret 2020

Vårt revisjonshonorar for regnskapsåret 2020 for Sparebanken Sør (morbank) er kr 652 000,ekskl. mva. som vi ber om å få fastsatt på selskapets forstanderskapsmøte. Honoraret er i samsvar med gjeldende engasjementsbrev knyttet til revisjonsoppdraget.

Med vennlig hilsen PricewaterhouseCoopers AS

Reidar Henriksen Statsautorisert revisor (elektronisk signert)

Revisjonshonorar til Forstanderskapet 2020

Signers:

Name Henriksen, Reidar Method BANKID_MOBILE Date 2021-03-03 13:38

This document package contains: - Closing page (this page) -The original document(s) -The electronic signatures. These are not visible in the document, but are electronically integrated.

This file is sealed with a digital signature. The seal is a guarantee for the authenticity
of the document.

Sak 7

Declaration on the determination of salaries and other remunerations to senior executives at Sparebanken Sør

This declaration provides the basis for the Board's work, following discussions at the Board of Trustees meeting on 25 March 2021.

Basis for the company's executive salary policy

The Board of Sparebanken Sør views its employees as the bank's most important resource, and wishes to offer competitive terms in order to attract and retain skilled employees.

The bank's personnel policy covers several issues, including salary and pension terms, working environment, various development programmes and more traditional welfare benefits. The executive salary policy is included in the bank's personnel policy.

Who is covered by the guidelines

The guidelines for determining the CEO's salary are determined by the Board. Remunerations for executive directors in the management group is determined by the CEO in consultation with the bank's Remuneration Committee. The Remuneration Committee is the Board's preparatory committee for all matters regarding salaries and other remunerations.

Basic principles of the bank's executive salary policy

The fixed salaries of bank executives are considered moderate, but competitive. This is also the basis for the Board's assessment of various other benefits, as a natural part of the total compensation package for executives. The bank's continued growth and profitability relies on employee contributions for continued business development and improved profitability.

Fixed salary

Fixed salary (gross annual salary before tax and before any calculation of variable pay and other supplementary benefits) is the most important part of the executive salary. The Board considers the salary of the CEO and other members of the management group to be well established internally, and comparable to similar banks. The CEO has an agreement for one year of severance pay in the event of termination before the end of the agreed service period.

Pension

The CEO and other senior executives are members of the bank's collective pension scheme. Members of the management group have additional agreements regarding compensation schemes for the accrual of pension benefits for salaries higher than 12 G. There are also agreements for early retirement schemes for the Chief Executive Officer, Deputy Chief Executive Officer and Chief Risk Officer.

Benefits in kind and other specific schemes

Senior executives will normally receive benefits in kind that are common for comparable positions, i.e., free phone, laptop, free Wi-Fi connection and use, newspapers, company car or car allowance, and free parking. The bank's loan scheme is the same for all employees. Employees may loan up to 5 times their gross annual salary and up to NOK 4 million on subsidised terms, provided they have satisfactory security. Senior executives have the same opportunities as other employees to participate in the bank's savings scheme, which includes discounts under the provisions of the Tax Act for the purchase of equity certificates in Sparebanken Sør.

Variable pay and other incentive schemes

The Board believes it is necessary to offer different incentive schemes to ensure long-term value creation, and has chosen to continue its performance-based bonus scheme. All employees are included in the bonus scheme, with the exception of the internal audit manager. The maximum achievable bonus is set at one and a half times a month's salary.

Board remuneration

Employees will not receive board remuneration for board positions they have accepted as part of their work for group companies. This does not apply to employee representatives.

To: The Board of Trustees No 8

Election of chair and deputy chair to the Board of Trustees

The nomination committee discussed on 6 th January 2021 the election of chair and deputy chair to the Board of Trustees.

Jorunn Aarrestad, the current chair, was asked whether she wanted to run for re-election, to which she agreed. The nomination committee unanimously supported the proposal to recommend Jorunn Aarrestad as chair to the Board of Trustees.

Terje Spilling, the current deputy chair, did not seek re-election.

The nomination committee asked Nina Gumpen Hansen, representative of the equity certificate holders, whether she wanted to run for the position of deputy chair, to which she agreed. The nomination committee unanimously supported the proposal to recommend Nina Gumpen Hansen as deputy chair to the Board of Trustees.

The nomination committee's proposal for resolution Decision: Jorunn Aarrestad is elected chair to The Board of Trustees, for the period 2021 – 2022. Nina Gumpen Hansen is elected deputy chair to The Board of Trustees, for the period 2021 – 2022.

Birgitte Midgaard Chair of the Nomination committee

To: The Board of Trustees No 9

Remuneration to the Technology committee

The nomination committee discussed the matter on 6 th January 2021.

The nomination committee recommends remuneration of the Technology committee at the same level as the Allowance committee:

Chair, annual	Kr. 10.000
Chair, per meeting		Kr. 3.200
Member, annual		Kr. 5.300
Member, per meeting		Kr. 3.200

The nomination committee's proposal for resolution Decision:

The Board of Trustees decides that the Technology committee is given the same remuneration as the Allowance committee.

Birgitte Midgaard Chair of the nomination committee

To: The Board of Trustees No 12

Election of member for the Nomination committee of EC holders

There must be elected a replacement for Mr. Svein Bringsjord who no longer satisfy the requirements for eligibility - the Bank's Statute § 9-1. The committee's decisions on proposed candidate to the nomination committee of EC holders have been unanimous.

Proposal for resolution: Eldbjørg Dahl, the term of office is 2021 – 2022.

The nomination committee's proposal for resolution

Decision:

Eldbjørg Dahl is elected member of the Nomination committee of EC holders, for the period 2021 – 2022.

Kristiansand, 4 th March 2021

Alf Albert Chair of Nomination committee of EC holders

To: The Board of Trustees

Board of Trustees, 25 March 2021

13 2021 Delegated powers for purchase of own equity certificates

According to the decision of continuation and expansion of the employee stock purchase plan for employees in Sparebanken Sør, the bank will have to purchase its own equity certificates in the open market.

Such purchases requires delegated powers from the bank's Board of Trustees and approval from Finanstilsynet (The Financial Supervisory Authority of Norway). The expected amount to be repurchased is dependent on the extent of the plan, and the number of employees who wishes to particiate, and is estimated to be NOK 15 million.

It is recommended that the board makes the following decision:

Repurchases of own equity certificates can be made in connection with the continuation and extension of the employee stock purchase programme. The equity certificates will be resold to the plan's participants in accordance with more closely specified requirements made by the board.

The bank's administration is given delegated powers to purchase the equity certificates in the capital markets. Such purchases necessitates delegated powers from the bank's Board of Trustees, and approval from the Financial Supervisory Authority of Norway. Purchases of own equity certificates shall be done in compliance with applicable rules and regulations for transactions in the capital markets.

The bank's administration has the authority to choose the book runner(s) for the repurchases of own equity certificates.

This delegated power is in effect until a new, superseding decision is made and in effect.

"I henhold til finansforetaksloven § 10-5, jf. allmennaksjeloven § 9-4 gir forstanderskapet styret fullmakt til å erverve og ta pant i bankens egne egenkapitalbevis, på følgende vilkår:

The board recommends to the Board of Trustees that the following decision is made:

"In accordance with the Financial Institutions Act (Lov om finansforetak og finanskonsern (finansforetaksloven)) §10-5, and the Norwegian public limited liability companies act (Lov om allmennaksjeselskap (Allmennaksjeloven)) §9, the Board of Trustees gives the board delegated powers to purchase and take as collateral, the bank's own equity certificates, given the following provisions:

1. The bank may, on one or more occasions, purchase and/or take as collateral equity certificates with a total nominal amount of up to and including NOK 15 million.

2. The amount paid for each individual equity certificate shall be minimum NOK 75, and maximum NOK 170.

3. The delegated powers shall not be used if this will have a material impact on the bank's core tier 1 capital, and internal requirements and/or requlatory requirements for minimum amounts of capital.

4. Purchases of equity certificates is to happen by purchases through the capital markets through Oslo Stock Exchange, and the sales are to happen through the same market, or through a sale to the bank's employees, subject to the applicable laws, rules and requlations

5. The delegated powers may be used from the time it is approved by the Financial Supervisory Authority of Norway, and registered in the Register of Business Enterprises (Foretaksregisteret).

6. The delegated power may be delegated further.

The delegated power is in effect until the next regularly scheduled meeting of the Board of Trustees, or to 31 March 2022.

Kristiansand, 24.02.2021

Geir Bergskaug Marianne Lofthus CEO Director, Capital Markets

Board of Trustees meeting 25 March 2021

14 2021 Delegation of powers to issue senior non-preferred debt

The bank's board has – in accordance with the bank's bylaws – delegated powers to the administration to issue senior non-preferred debt for amounts up to and including NOK 8 billion. This decision, made 14 September 2020 (139/20), is to be seen in connection with the requlatory requirements that the bank – as a part of its recovery and resolution planning – shall have a satisfactory minimum level of own funds and eligible liabilities (MREL).

The MREL-requirement consists of a loss-absorbing amount and a recapitalisation amount, and is for Sparebanken Sør a total of 32% of adjusted risk-weighted amount of commitment, looking ahead to 1 January 2024. The MREL-requirement needs to be met with subordinated debt and senior nonpreferred debt, issued to external investors. Senior debt can, however, be included as eligible debt during a transitional period, but non-preferred debt is to be increasingly, and linearly, replace this as an eligible liability, with the full effect of this transition coming into effect on 1 January 2024.

As at 23 February 2021, Sparebanken Sør has a total outstanding amount of NOK 3 billion of seniornon-preferred debt, held by external investors. The bank has established a financing plan in order to secure the phasing in of new debt in the requirement, taking account for both the maturity profile of outstanding senior debt and the requlatory authorities' requirements regarding the pace of the phase-in.

During the spring of 2019, several changes were made to the EU's capital requirement (CRR/CRDIV) and bank recovery and resolution directive (BRRD2), commonly referred to as "the banking package". The changes in the EU rules and regulations is to be implemented in Norwegian law during 2021.

One of the new requirements could result in decisions regarding issuance of senior non-preferred debt having to be made by the bank's Board of Trustees. According to the bank's current financing plan, the bank is to issue such debt during this calendar year. Against this background, it is recommended that the resulting necessary decisions by the Board of Trustees is made in its meeting on 25 March 2021, in order to secure that the bank has the necessary powers to issue senior nonpreferred debt in case this is required by the new rules and regulations.

The bank's Board recommends that the Board of Trustees makes the following decision:

"In order to secure compliance with the authorities' requirements regarding minimum amounts of own funds and eligible liabilities (MREL), Sparebanken Sør may issue Senior Non-Preferred debt to external investors in the Norwegian and international capital markets for amounts up to and including an amount equivalent to NOK 8,000 million (NOK 8 billion), with a time to maturity at issuance of up to and including 10 years, and paying either a fixed or floating interest rate. This delegated power holds for both public issuance and private placements.

This delegated power is in effect until the Board of Trustees makes a new, superseding decision."