Domainz Task Force - Domainz Sale Roles and Responsibilities

Status: Approved at Council Meeting 030404

1. There are four groups involved in the sale of Domainz. They are
   1. Council of InternetNZ (Council)
   2. Board of Domainz (Board)
   3. Independent Committee of the Board of Domainz (Committee)

2. This paper proposes clarification of the exact roles and responsibilities of each group, as we enter the formal sale process.
   
3. Role of the Council
   1. The Council has a crucial role in the sale, regardless of whether the sale is of shares or of some or all of the assets.
   2. Any sale of the shares needs to be approved by Council as the governing body of InternetNZ.
   3. Any sale of the assets is primarily a decision for Domainz but it is almost inevitable that this would constitute a major transaction under Section 129 of the Companies Act 1993 and hence need to be approved by the Council acting on behalf of InternetNZ as sole shareholder.
   4. Council as a large governance body is not well positioned to handle the detailed negotiations around any sale, so it is considered advisable that it delegates the authority to engage sale advisors and negotiate terms and conditions with potential purchasers.
   5. Council should though approve the nature of the sale process, identity of the purchaser, the acceptable price range and ultimately approve the final contract of sale.

4. Role of the Taskforce
   1. The Taskforce, with representatives of both InternetNZ and Domainz on it is the group with primary responsibility for managing and co-ordinating the sale process, and making recommendations to both InternetNZ and Domainz.
   2. It has delegated authority to appoint sale advisors, manage the sale process, short-list for negotiation interested purchasers and negotiate with interested parties.
   3. It shall recommend to Council a sale process, and then working through that process recommend to Council and/or the Committee approval to negotiate a sale contract with a particular potential purchaser for an agreed price range.
   4. It shall also have authority to negotiate a final sale contract with the preferred purchaser and submit this to Council or the Committee for approval, depending on whether shares or assets are sold.
   5. The Taskforce should manage all external communications relating to the Sale.
   6. The task force should provide the Committee with all information required to communicate appropriately with staff.
      
5. Role of the Board
   1. The major role of the Board is to continue to govern Domainz in a manner that enhances value and is in the best interest of the shareholder ? InternetNZ.
   2. The Board has prepared and can implement the business plan of Domainz, which focuses on actions to add value to Domainz.
   3. The Board has delegated to the (Independent) Committee full decision-making authority in relation to the sale process.
      
6. Role of the Committee
   1. The Committee acts on behalf of the Board in relation to any matter relating to the sale.
   2. The Chief Executive will report only to the Committee, rather than the Board, on any matters that may relate to the sale.
   3. The Committee is responsible for ensuring through the Chief Executive that Domainz staff are kept informed of the sale process in such a way it meets Domainz's legal obligations as an employer and ensures that staff are dealt with fairly and appropriately.
   4. In the case of a sale of the assets of Domainz, as opposed to shares in the company, the Committee will consider any recommendation from the Taskforce and approve any such sale of assets. This will be subject to final approval by the Council as a major transaction.
      
7. It is recommended that Council
   1. Approve the roles of the Council and Taskforce as outlined in this paper
   2. Delegate to the Taskforce authority to appoint sale advisors, manage the sale process, short-list for negotiation interested purchasers and negotiate with interested parties

Keith Davidson
Chair
Domainz Future Taskforce