MENU COVERING THE WORLD. UNCOVERING POSSIBILITIES NORBIT is a global provider of tailored technology to carefully selected niches ESG CORPORATE GOVERNANCE ARTICLES OF ASSOCIATION CODE OF CONDUCT Corporate Governance in NORBIT As of 24 March 2021 CORPORATE GOVERNANCE NORBIT aims to maintain a high standard of corporate governance. Good corporate governance strengthens the confidence in the group and contributes to long-term value creation by regulating the division of roles and responsibilities between shareholders, the board of directors and executive management. Corporate governance at NORBIT ASA (the “company”) shall be based on the following main principles: All shareholders shall be treated equally NORBIT shall maintain open, relevant and reliable communication with its stakeholders, including its shareholders, governmental bodies and the public about its activities NORBIT’s board of directors shall be autonomous and independent of the executive management The majority of the directors shall be independent of major shareholders There shall be clear division of roles and responsibilities between shareholders, the board and management NORBIT’s corporate governance principles are in accordance with the Norwegian Accounting Act §3-3b and based on the current Norwegian Code of Practice (the Code) for Corporate Governance, most recently issued on 17 October 2018. The Code is available at www.nues.no. A review and presentation of NORBIT’s compliance with the Code’s recommendations follows herein. NORBIT’s principles are consistent with the recommendations. IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE NORBIT’s corporate governance principles are determined by the board of directors (the “board”), which has the overall responsibility for ensuring that the group has a high standard of corporate governance. The board has prepared a corporate governance policy document addressing the framework of guidelines and principles regulating the interaction between the shareholders, the board and the Chief Executive Officer (the CEO). The purpose of the corporate governance policy is to ensure appropriate separation of roles and responsibilities between shareholders, the board and executive management, as well as to ensure satisfactory controls of the group’s business activities. The board and executive management perform an annual assessment of its principles for corporate governance. Deviations from the Code: None BUSINESS ACTIVITY NORBIT is a global provider of tailored technology solutions to carefully selected niches. The business purpose is set out in the company’s Articles of Association as: “The company is the parent company of an internationally focused technology group which provides custom-made high-technology products in selected niche markets. This is done through acquisition, management and trading in shares, partnership interests and other securities.” The board has defined clear objectives for the group, to ensure value creation for the shareholders. NORBIT will provide its shareholders and the broader capital market with an updated view on its ambitions and targets during 2021. Deviations from the Code: None EQUITY AND DIVIDENDS The board is committed to maintain a satisfactory capital structure for the group according to the group’s goals, strategy and risk profile, thereby ensuring that there is an appropriate balance between equity and other sources of financing. The board will continuously assess the capital requirements related to the group’s strategy and risk profile. Equity At 31 December 2020, the group’s equity totalled NOK 436.8 million, which corresponds to an equity ratio of 65.0 per cent. The board considers NORBIT’s financial position to be solid with the necessary capacity to support the its objectives, strategy and risk profile. Dividends The board has established a dividend policy. Long term, the policy is to pay out between 30 and 50 per cent of the group’s ordinary net profit after tax as dividends. When deciding on the annual dividend, the board considers the group’s financial position, investment plans as well as the needed financial flexibility for strategic growth. Based on the financial results for 2020, the board proposes a dividend of NOK 0.30 per share, in line with the group’s dividend policy. Board authorisations In the event that a board authorisation is proposed for a capital increase, acquisition of treasury shares or similar, or for multiple purposes, each authorisation should be treated as a separate issue and subject to vote by the general meeting. Board authorisations are valid for such periods as the shareholders’ meeting decides. Authorisations to the board to increase the share capital or to buy own shares will normally not be given for periods longer than until the next annual general meeting (AGM). It follows from the purpose of the authorisations that the board may need to waive existing shareholders’ preference rights, which is permitted under the terms of the authorisations concerned. At the annual general meeting 2020, the board was granted the following authorisations: Increase in the company’s share capital by up to an aggregate nominal value of 30 per cent of the total share capital in connection with investments and transactions Increase in the company’s share capital by up to 5.28 per cent of the share capital in connection with incentive programs to the group’s employees Acquisition of treasury shares by up 10 per cent of the share capital on behalf of the company Resolve additional distributions of dividends up to NOK 0.30 per share based on the annual accounts for the financial year 2019 Only the authorisation to resolve additional dividend of NOK 0.30 per share was exercised in 2020. Deviations from the Code: None EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES NORBIT has a single class of shares, and all shares carry the same rights in the company. Equal treatment of shareholders is essential. In the event of capital increases based on authorisations issued by the general meeting, where the existing shareholders’ pre-emptive rights are waived upon, the board will justify the reason for such waiver through a public announcement in connection with the capital increase. Any transactions, agreements or arrangements between the company or group entities and its shareholders, members of the board, members of the executive management team or close associates of any such parties may only be entered into as part of the ordinary course of business and on arm’s length market terms. All such transactions shall comply with the procedures set out in the Norwegian Public Limited Liability Companies Act. The board shall arrange for a valuation to be obtained from an independent third party unless the transaction, agreement or arrangement in question is considered to be immaterial. Directors and members of the executive management team shall immediately notify the board if they have any material direct or indirect interest in any transaction entered into by the company. Additional information on transactions with related parties can be found in Note 25 to the 2020 financial statements. Deviations from the Code: None SHARES AND NEGOTIABILITY NORBIT’s shares are freely tradeable and there are no restrictions on owning or voting for shares. Deviations from the Code: None ANNUAL SHAREHOLDERS’ GENERAL MEETING Meeting notification, registration and participation NORBIT’s highest decision-making body is the general meeting of shareholders. All shareholders have the right to participate in the general meetings of the company and NORBIT encourages all of its shareholders to participate. The annual general meeting for 2021 will take place on 4 May 2021. Pursuant to article 8 of the company’s articles of associations, shareholders who wish to participate in a general meeting, shall notify the company of this within a deadline which is set out in the notice of the general meeting, and which cannot expire earlier than five days prior to the meeting. The cut-off for confirmation of attendance shall be set as short as practically possible. Shareholders who are unable to attend a general meeting may use electronic voting to vote directly on individual agenda items during the pre-meeting registration period. Shareholders unable to attend may also vote by proxy. The procedures for electronic voting and proxy voting instructions are described in the meeting notification and published on the company website. Shareholders may also send notification of their attendance, using the form provided, by post or email to the company’s account manager DNB, or via the company’s website, www.norbit.com. The full notice for general meetings shall be sent to the shareholders no later than 21 days prior to the meeting. The board will ensure that the notice includes information about resolutions and that supporting information is sufficiently detailed to allow shareholders to form a view on all matters to be considered at the meeting. Notices shall provide information on procedures that shareholders shall observe in order to participate in and vote at the general meeting. The notice should also set out: (i) the procedure for representation at the meeting through a proxy, including a form to appoint a proxy, and (ii) the right for shareholders to propose resolutions in respect of matters to be dealt with by the general meeting. The form for the appointment of a proxy should also be designed to make voting on each individual matter possible. In accordance with article 8 of the company’s articles of association, documents relating to matters to be addressed at a general meeting of shareholders may be made available on NORBIT’s website. The same applies to documents which by law must be included in or attached to the invitation to attend the general meeting. If the documents are made available in this way, the statutory requirement with respect to distribution to shareholders is not applicable. A shareholder may nevertheless ask to be sent documents relating to matters to be discussed at a general meeting by post. Meeting chair and voting The general meeting elects the person to chair the meeting. The board, the chair of the nomination committee and the company’s auditor are expected to be present at general meetings. The general meeting elects the members of the nomination committee and shareholder elected directors. Minutes of the general meeting will be published as soon as practical via the Oslo Stock Exchange’s messaging service www.newsweb.no (ticker: NORBT) and on the company’s website www.norbit.com. Deviations from the Code: None NOMINATION COMMITTEE NORBIT has a nomination committee as required by Article 7 of the company’s articles of association. At 31 December 2020, the nomination committee comprised the following: Reidar Stokke, chair Berit Rian Janniche Fusdahl The nomination committee should comprise at least three members, and each member is elected for a period of two years. The members of the nomination committee should be selected to consider the interests of shareholders in general. The majority of the nomination committee must be independent of the board and the executive management team. Members of the executive management team shall not be members of the nomination committee. The members and chair of the nomination committee are elected by the general meeting. The primary responsibilities of the nomination committee are to recommend and propose to the general meeting candidates and remuneration for the company’s directors and nomination committee, and remuneration to the members of the audit committee. The recommendation will include a proposal for appointment of chair. The nomination committee must make a written recommendation, which is published and presented to the general meeting. The deadline for proposing board candidates for the upcoming term is 31 October. The nomination committee normally begins its work for the upcoming general meeting on this date. Deviations from the Code: None BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE Composition NORBIT does not have a corporate assembly. According to article 5 of the NORBIT’s articles of associations, the board shall consist of a minimum of three and a maximum of seven directors elected by the general meeting. The general meeting elects the Chair of the board and the Deputy Chair of the board. Directors are elected for a period of two years. At 31 December 2020, NORBIT’s board comprise five members, of which all were elected for a period of two years at the company’s extraordinary general meeting on 3 May 2019. The current composition of the board is presented in the annual report, and an overview of the directors competence and background is available from the company’s website www.norbit.com. In appointing members to the board, it is emphasised that the board shall have the required competency to independently evaluate the cases presented by the executive management team as well as the company’s operation. It is also considered important that the board can function well as a body of colleagues. Directors are encouraged to own shares in the company. At 31 December 2020, all the directors held shares in NORBIT, further disclosed in Note 26 to the financial statements. Independence of the board NORBIT’s board is composed such that it is able to act independently of any special interests. All the directors of NORBIT are deemed to be independent of senior executives, material business associates and the company’s largest shareholders, although, Prétor Advokat, a Norwegian law firm, in which the director Tom Solberg is a partner, renders legal services to the group. The services provided are mainly undertaken by Tom Solberg. The service fee to Prétor is disclosed in Note 25 to the financial statements. Deviations from the Code: None THE WORK OF THE BOARD OF DIRECTORS The board shall ensure that the group has proper management with clear internal distribution of responsibilities and duties. A clear division of work has been established between the board and the executive management team. The CEO is responsible for the executive management of the group. The board has the overall responsibility for the management of the group and the supervision of its day-to-day management and business activities. The board shall prepare an annual plan for its work with special emphasis on goals, strategy and implementation. The board’s primary responsibility shall be (i) participating in the development and approval of the group’s strategy, (ii) performing necessary monitoring functions and (iii) acting as an advisory body for the executive management team. The board is also responsible for ensuring that the operation of the group is compliant with the group’s values and ethical guidelines. The Chair of the board is responsible for ensuring that the board’s work is performed in an effective and correct manner. All members of the board shall regularly receive information about the group’s operational and financial development. The group’s strategies shall regularly be subject to review and evaluation by the board. The regulations governing the board’s working practices includes guidelines for how individual directors and the CEO should conduct themselves with respect to matters in which they may have a personal interest. Among them is the stipulation that each director must make a conscious assessment of his/her own impartiality and inform the board of any possible conflict of interest. The board evaluates its own performance and expertise once a year. The board held a total of 14 meetings in 2020 and the attendance rate was 97.1 per cent. Sub-committees of the board Audit committee Pursuant to the Norwegian Public Limited Liability Companies Act and the listing rules of the Oslo Stock Exchange, the company shall have an audit committee. The audit committee is appointed by the board. The committee’s main tasks are to prepare the board’s follow-up of the financial reporting process, monitor the performance of the group’s internal control and risk management systems, and maintain an ongoing dialogue with the auditor. The audit committee held 6 meetings in 2020. The attendance rate was 100 per cent. At 31 December 2020, the audit committee comprised the following: Trond Tuvstein, Chair Bente Avnung Landsnes Remuneration committee NORBIT has a remuneration committee appointed by the board. The remuneration committee shall evaluate and propose the compensation of NORBIT’s CEO and other members of the executive management team and provide general compensation related advice to the board. At 31 December 2020, the remuneration committee comprised the following: Finn Haugan, Chair Tom Solberg Marit Collin Deviations from the Code: None RISK MANAGEMENT AND INTERNAL CONTROL The board shall ensure that NORBIT has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the group’s activities. The internal control and the systems shall also encompass the group’s corporate values and ethical guidelines. The objective of the risk management and internal control is to be to manage exposure to risks in order to ensure successful conduct of the group’s business and to support the quality of its financial reporting. The board shall carry out an annual review of the group’s most important areas of exposure to risk and its internal control arrangements. The board shall provide an account in the annual report of the main features of the group’s internal control and risk management systems as they relate to the group’s financial reporting. Internal control of financial reporting is achieved through day-to-day follow-up by management, and supervision by the audit committee. Deviations from the Code: None REMUNERATION OF THE BOARD Remuneration of directors shall be reasonable and reflect the board’s responsibilities, expertise, time invested and the complexity of the business. The remuneration to the directors is not performance-related nor include share option elements. The annual general meeting shall determine the board’s remuneration after considering recommendations by the company’s nomination committee. Additional information on remuneration paid to individual directors for 2020 is presented in Note 26 to the financial statements. The board shall be informed if individual directors perform tasks for the company or any group entities other than exercising their role as directors. Fee for any such services shall be approved by the board. Work in sub-committees may be compensated in addition to the remuneration received for board membership. Director Tom Solberg performs legal services for the company. Further details are provided in Note 25 to the financial statements. Deviations from the Code: None REMUNERATION OF EXECUTIVE MANAGEMENT Pursuant to Section 6-16a of the Public Limited Companies Act, the board has adopted separate guidelines on the remuneration of executive management. The company’s guidelines for renumeration to executive management are described in Note 26 to the financial statements and will also be presented to the shareholders at the annual general meeting in the form of a separate document. The board determines the remuneration paid to the CEO. The CEO determines the remuneration payable to the key executives in accordance after consultation with members of the remuneration committee. There were no incentive programs in effect and no variable remuneration was paid to executive management in 2020, with the exception of a discretionary bonus paid to the Business Unit Leader of Oceans. Further information is provided under Note 26. Deviations from the Code: None INFORMATION AND COMMUNICATION Investor relations The company’s reporting of financial and other information is based on transparency and equal treatment of shareholders, the financial community and other interested parties. The objective of the company’s investor relation activities is to ensure that the financial markets and shareholders receive accurate and timely information that can affect the company’s share price. All market participants shall have access to the same information, and all information is published in English. All notices sent to the stock exchange are made available on the company’s website and at www.newsweb.no. NORBIT’s ambition is to comply with the Oslo Stock Exchange’s Code of Practice for IR (“the IR Code”). The company has, in line with the IR Code, also adopted an IR Policy. The CEO and CFO are responsible for communications with shareholders in the period between general meetings. Financial information The company holds investor presentations in association with the publication of its quarterly results. These presentations are open to all and provide an overview of the group’s operational and financial performance in the previous quarter, as well as an overview of the general market outlook and group’s future prospects. These presentations are also made available on the company’s website. Quiet period NORBIT will minimise its contacts with analysts, investors and journalists in the 30 days period prior to publication of its results. During this period, the company will minimise meetings with investors, analysts, media or other parties about the group’s results and future outlook. This is to ensure that all interested parties in the market are treated equally. Deviations from the Code: None TAKEOVERS In a takeover process, should it occur, the board and the executive management team each have an individual responsibility to ensure that the company’s shareholders are treated equally and that there are no unnecessary interruptions to the group’s business activities. The board has a particular responsibility in ensuring that the shareholders have sufficient information and time to assess the offer. In the event of a takeover process, the board shall ensure that: the board will not seek to hinder or obstruct any takeover bid for the company’s operations or shares unless there are particular reasons for doing so; the board shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the company; the board shall not institute measures with the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and the board shall be aware of the particular duty it has for ensuring that the values and interests of the shareholders are protected. In the event of a takeover bid, the board will, in addition to complying with relevant legislation and regulations, seek to comply with the recommendations in the Code. This could include obtaining a valuation and fairness opinion from an independent expert. On this basis, the board shall draw up a statement containing a well-grounded evaluation of the bid and make a recommendation as to whether or not the shareholders should accept the bid. The evaluation shall specify how, for example, a takeover would affect long-term value creation of NORBIT. Deviations from the Code: None AUDITOR The auditor is appointed by the general meeting. The auditor makes an annual presentation of the auditing plan to the audit committee. Further, the auditor provides the board with written confirmation that the requirement of independence has been met. The auditor participates in all meetings of the audit committee and in the board meeting that deals with the annual accounts. The auditor reports to the audit committee and board on his assessment of the internal control on the financial reporting process. The auditor reviews, with the board and audit committee, any material changes in the company’s accounting principles and assessments of material accounting estimates. There have been no disagreements between the auditor and management on any material issues. The outcome of this review is presented to the board. The board and the audit committee have met with the auditor without representatives of executive management being present regarding the preparation of the annual accounts for 2020. At the annual general meeting the board shall present a review of the auditor’s compensation as paid for auditory work required by law and remuneration associated with other specific assignments. Compensation paid is presented in Note 8 to the financial statements. The board shall arrange for the auditor to attend all general meetings. Deviations from the Code: None Victory awaits him who has everything in order — luck, people call it. Roald Amundsen, The South Pole, 1912. 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