PURPOSE

The goal is to have systems for communication, monitoring and incentives that enhance and maximize corporate profit and shareholders’ return through the efficient use of the company’s resources. Improvement in the Company’s corporate governance is a continuous process, and is a field that has gained increased focus from the board and the management. The board endeavours to ensure that the Company practices sound corporate governance in accordance with the Code.

The recommendations and rules that are followed are publicly available at www.nues.no

DESCRIPTION

Bergen Group ASA’s principles of corporate governance contain i.a. the following elements:

Bergen Group ASA shall ensure transparent, reliable and relevant communication concerning the Company’s activities and conditions relating to corporate governance.

• Equal treatment. All shareholders shall be treated equally.
• Control and management. Importance will be attached to avoiding conflicts of interest between the Company, shareholders, the board of directors and the administration. Where conflicts of interest do arise, routines shall be established to deal with these in a professional manner. Bergen Group ASA shall have a clear division of responsibility between the board and the administration.
• Independence and obligations towards society. The board of directors shall be self-contained and independent of the management team. The Company’s responsibility to society shall be an integral part of the Company’s value base and ethical guidelines.

SHAREHOLDER POLICY

Bergen Group ASA aims to give its shareholders a high and stable return. Return is defined as the sum of the share performance and dividends paid. The company attaches importance to providing the stock market and other interested parties with relevant and up-to-date information in order to help give a true picture of the Company’s activities and performance and give the investors an adequate basis for decision-making in relation to the acquisition and disposal of shares in the Company.

BERGEN GROUP AND CORPORATE RESPONSIBILITY

Bergen Group ASA has a goal of ensuring that Corporate Responsibility (“CR”) is an integral part of the management system and business culture in all operating companies within the group. The overall principles for the Company’s CR-policy are based on a sustainable development, both economically, environmentally and socially.

 

Bergen Group ASA has established a slogan "Local know-how - global value” which indicates our goal to further develop the local expertise as a platform for the value-generating business activities.

A value-based and ethical approach to business is required from each and everyone in Bergen Group ASA and its subsidiaries (the “Group”). The shareholders, top executives and employees’ have a responsibility in ensuring that the Company meets its goals in relation to CR. Human values such as empathy, honesty, fairness and respect underlie an active approach to CR, together with a continuous focus on ethics and responsibility.

 

Bergen Group ASA will in 2012 have continued focus on further developing a value-based management.

THE COMPANY’S BUSINESS

The Group is an innovative supplier of products, services and solutions to the offshore and maritime industry. The Group has 1,600 skilled and motivated employees, working in well-established companies strategically located along the coast of Norway.

The Company’s Articles of Association Section 3 reads:

”The scope of the company’s business is to own and operate industry- and other related business, management of capital and other functions for the group, hereunder to participate in or acquire other companies or business.”

The object clause states the business of the Company and ensures the essential predictability regarding the Company’s business.

The Company’s aims and strategies for business are presented in the annual report.

EQUITY AND DIVIDENDS

The Group had a book equity of NOK 1 516 million as of 31 December 2011 which corresponds to an equity ratio of 39,7 %. The Company regards the Group’s current capital structure as appropriate in relation to its goals, strategy and risk profile.

 

There are no outstanding subscription rights as of 31 December 2011.
 
Mandates granted to the board of directors

According to the Norwegian Code of Practice for Corporate Governance mandates granted to the board of directors to increase the Company’s share capital should be restricted to defined purposes. The mandates granted to the board should also be limited in time to no later than the date of the next annual general meeting.

 

At the ordinary general meeting in the Company held 29 June 2011, the Board was  granted a power of attorney to increase the share capital by up to NOK 20 000 000 by issuance of new shares. The power of attorney is not defined to certain defined purposes and which was due to the company’s financial situation at the time of adopting the resolution. The power of attorney is valid until the ordinary general meeting to be held in 2012.

 

At the ordinary general meeting in the Company held on 29 June 2011, the general meeting resolved to grant the board of directors a power of attorney to acquire own shares up to an aggregate par value of 10% of the existing share capital of the Company at the time of the decision (NOK 60 622 009). The purchase and sale of the shares may take place at the Board of Directors’ discretion. The highest price to be paid for the shares is NOK 100 and the minimum price is set to NOK 1 per share. The power of attorney is valid until the ordinary general meeting to be held in 2012, but not longer than until 30 June 2012.

 

There is no share option scheme in the Company.

 

The Company has not declared or paid any dividends since its incorporation. The Company will strive to follow a dividend policy favorable to shareholders. This will be achieved by sound business development and continuous growth. The Company aims to give shareholders a competitive return on capital relative to the underlying risk. The Board will consider the amount of dividend (if any), on an annual basis, based upon the earnings of the Company and the financial situation of the Company, taking into account any developments since the latest annual accounts. The payment of any dividends will depend on a number of factors, including the Company’s future earnings, capital requirements, financial position and future prospects, restrictions on the payment of dividends under Norwegian law and on any debt covenants, along with other factors the Board may consider relevant. The Company has not paid any dividends in the past.

EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE
ASSOCIATES

Each share in the Company carries one vote, and all shares carry equal rights, including the right to participate in general meetings. The Company emphasizes that the interests of the shareholders is advanced and that all shareholders, in accordance with the requirements of the Norwegian Securities Trading Act, is treated on an equal basis, unless there is a factual and legal basis for discrimination. Should it be necessary to waive the pre-emption rights of existing shareholders when increasing the share capital, such waiver must be justified by the common interest of the company and the shareholders and explained by the board in a separate stock exchange notice.

 

Any transactions carried out by the Company with its own shares will be conducted through the Oslo Stock Exchange.

 

Any transaction which is not immaterial between the company and any shareholder, board member, leading employees or any closely related party of such persons should be examined by an external third party before they are entered into. This does not apply for any agreement approved by the general meeting according to the Norwegian Public Limited Companies Act. Independent valuations should also be arranged in respect of transactions between companies in the same group where any of the companies involved have minority shareholders.

 

The board of directors and executive personnel shall notify the board if they have any material direct or indirect interest in any transaction entered into by the company.

FREELY NEGOTIABLE SHARES

The shares are listed on the Oslo Stock Exchange and are freely tradable. There is no form of restriction on negotiability included in the Company’s articles of association. The Board is not aware of any agreements which may secure any shareholder beneficial rights to own or trade shares at the expense of other shareholders. The shares are registered in the Norwegian Central Securities Depository (VPS).

THE GENERAL MEETING

The general meeting is the highest authority of a Norwegian Public Limited Company. The Company encourages its shareholders to exercise their rights by participating in general meetings of the Company. The Company arranges for the annual general meeting to be held within six months of the end of each financial year. Extraordinary general meetings shall be called if the Board resolves to do so or the auditor or shareholders representing 5% of the shares and votes requires it.

 

The Company seeks to convene the general meetings as early as possible. The Company’s principles of corporate governance stipulate that the notice calling the meeting and other documents regarding the general meeting shall be available on the Company's website no later than the 21st day before the date of the general meeting and up to and including the day the meeting is held. The Company will also send a written notice to all shareholders with known address. The board of Directors, nomination committee and the auditor will participate at the general meeting. In addition the company will ensure an independent chairman of the general meeting.

 

The notice calling the meeting shall specify the matters to be considered by the meeting, and any proposed amendments to the articles of association shall be stated. Supporting information sufficiently detailed and comprehensive to allow shareholders to form a view on all matters to be considered at the meeting are distributed together with the notice.

The company will also make the recommendations of the election committee available in the same way with the same 21 day deadline.

 

The deadline for shareholders to give notice of their intention to attend the general meeting is set as close to the meeting as possible and the board ensures that shareholders who cannot participate in person can vote by proxy. A form for appointing a proxy is distributed together with the notice.

NOMINATION COMMITTEE

The Company has in accordance with section 9 of the Articles of Association a nomination committee consisting of three members who are elected by the general meeting of shareholders. The majority of the nomination committee is independent of the board and the executive management. The nomination committee was elected at the general meeting 29 June 2011 and consists of Andreas Iversen as chairman and Jarle Sjo, Tore Dalseide and Rune Skarveland as members. The next election of members to the nomination committee will be at the ordinary general meeting in 2012. The committee prepares a proposal for the election of the board members and also gives a recommendation to the remuneration to the board members to the general meeting.

 

The management of the Company pertains to the Board, which oversees the proper organization of the business. The Board supervises the administration of the Company; hereunder supervises the Chief Executive Officer (the “CEO”). Pursuant to Section 5 of the Articles of Association, the Board of Directors of the Company consists of 5 to 9 members as decided by the general meeting. The Chairman and members of the Board of Directors is to be elected by the General Meeting.

 

The general meeting also resolves the annual remuneration of the members of the Board of Directors following a proposal of the Nomination Committee; see section 9 of the Articles of Association.

The Company does not have a corporate assembly. However, the Company practices a group solution which allows the employees of the operational subsidiaries to elect employee representatives to the board of directors of Bergen Group ASA. Currently the board has 3 employee representatives elected by and amongst the employees of the group.

 

The Company’s Board of Directors has a total of 8 members elected by the shareholders, in addition to the 3 members elected by the employees. All members elected by the shareholders are independent of the Company’s management and main business associates. The following 5 board members are independent of the main shareholders: Linn Cecilie Moholt, Eva von Hirsch, Denis Riordan, Rune Skarveland, Oddvar Stangeland. The Company considers that the composition of the Board ensures that the common interests of all shareholders will be attended to, and that the Board possesses the expertise, capacity and diversity required. The Company believes that the Board will be well positioned to act independently of the executive management of the Company and exercise proper supervision of the management of the Company and the Company’s operations. The annual report contains a presentation of the Board of Directors and details of the shareholdings of all directors. Members of the Board of Directors are encouraged to own shares in the company. The Board members are elected for a period of two years, and none of the existing Board members are out for a new election at the 2012 Annual General meeting. Board members shall not be elected for more than two years at a time.

The female representation of the Board is within the legislated target.

THE WORK OF THE BOARD OF DIR ECTORS

The Board endeavors to schedule in advance a number of regular physical meetings to be held during the calendar year, normally six to eight meetings per year, depending on the level of activity of the Company. Interim meetings may be convened if a director, or the administration, so requires. The Board meetings are chaired by the Chairman unless otherwise agreed by a majority of the directors attending. If the Chairman is not present or cannot lead the meeting, the meeting will be chaired by a board member elected by and among the directors present. 

 

The work of the Board includes, without limitation:

The board of directors has issued instructions for its own work as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties. The instructions are evaluated annually in connection with the annual evaluation of the board’s performance and expertise.

In 2011 a total of 12 meetings of the Board of Directors were held. The attendance percentage for the Board of Directors meetings in 2011 was 83 %.

 

A separate Audit committee consisting of 3 Board members was established in 2009. The committee consists of 3 members, all independent of the daily management of the Company. A separate policy is established for the committee, and depending on the activity in the Company meetings should be held minimum 4 times each year.

INTERNAL CONTROL AND RISK MANAGEMENT

The Board has established routines for sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the Company’s activities. A review of the Company’s most important risk areas and its internal control function is conducted by the Board annually.

The Company is strongly focused on frequent and relevant management reporting of both operational and financial matters, both in order to ensure adequate information for decision-making and to respond quickly to changing conditions.

 

The Board receives monthly reports on the company’s financial performance and status reports on the Group’s most important individual projects. The group also regularly conducts internal audits of individual units’ adherence to systems and procedures. Financial performance is also reported on a quarterly basis to the Board and the Oslo Stock Exchange. The Group’s value-based management is an integrated part of the internal control and risk management system in the group.

REMUNERATION OF THE BOARD OF DIR ECTORS

The remuneration of the Board is decided by the annual general meeting upon the proposal of the Nomination Committee; see section 9 of the Articles of Association. The level of compensation reflects the responsibility of the Board, the expertise required and the level of activity in the Board. Remuneration is not linked to the Company’s performance and the Company has not issued any share options to the directors. The remuneration of directors is disclosed in the notes to the annual accounts in note 23. If directors receive other compensation from the Company on an exceptional basis, detailed information will be provided in the financial statement.

 

Pursuant to Section 6-16 a) of the Norwegian Public Limited Companies Act, the Board of Directors has issued a statement regarding the stipulation of salaries and other remuneration to the management. The statement can be summarized as follows: The main principles for Bergen Group ASA’s salary policy for managers is that senior employees shall be offered conditions that are competitive when salary, payment in kind, bonuses and pension plans are all taken into account. As a guideline, cash remuneration can be given to senior employees in addition to their basic salary (bonus), but the bonuses are limited max 30% of yearly basic salaries and linked to achieving specific targets. Guidelines for awarding bonuses shall be devised by the board. Bonuses to the managing director are determined by the board upon recommendation by the board’s Compensation Committee.

 

On 30 June 2009, the general meeting resolved to approve the following guideline for the Company’s new/amended option scheme:

“As a guideline for a new/amended option scheme options can be distributed to managers in Bergen Group ASA and its subsidiaries for purchase of shares in Bergen Group ASA. The board of directors stipulates the option rate. The option scheme shall in principle apply for three years, and up to 1/3 of the options can be exercised per year during the period. The option scheme shall not exceed 6 % of the existing share capital.”

 

The remuneration of the executive management is disclosed in the annual accounts note 5.

INFORMATION AND COMMUNICATION

Through its Corporate Governance Policy, the Board has implemented guidelines for disclosure of Company information. The reporting of financial and other information will be based on openness and equal treatment of all participants. The Company provides shareholders and the market as a whole with information about the Company. Such information takes the form of annual reports, quarterly reports, stock exchange bulletins, press releases and investor presentations when appropriate. The company seeks to treat all shareholders equally in line with applicable regulations. Information distributed through the Oslo Stock Exchange, or otherwise in press releases, is published on the Company’s web site www.bergengroup.no at the same time. The company aims to have regular presentations. The financial calendar is available through stock exchange announcements and on the Company’s website. All information sent to shareholders is simultaneously posted on the Company’s website. Two weeks prior to the publication of the quarterly results, Bergen Group ASA has a self-imposed “quiet period”, when contact with external analysts, investors and journalists is kept to a minimum.

 

The board shall ensure that the quarterly and annual accounts from the Company provides a correct and complete picture of the group’s financial and business position, including to what extent operational goals and strategically goals are achieved.

 

The board of Directors should establish guidelines for the Company’s contact with shareholders other than through general meetings.

TAKEOVERS

The Corporate Governance Policy provides that the Board shall not seek to prevent or obstruct takeover bids for the Company’s activities or shares, unless there are particular reasons for such actions. In the event of a takeover bid for the shares in the Company, the Board shall not exercise mandates or pass any resolutions with the intention of obstructing the takeover bid unless this is approved by the general meeting following announcement of the bid. In particular, the Board shall not without the prior approval of the general meeting (i) issue shares or any other equity instruments in the Company, (ii) resolve to merge the Company with any other entity, (iii) resolve on any transaction that has a material effect on the Company’s activities, or (iv) purchase or sell any shares in the Company.

 

During the course of a takeover process, the Board will use their best efforts to ensure that all the shareholders of the Company are treated equally. The Board shall also use its best efforts to ensure that sufficient information to assess the takeover bid is provided to the shareholders.

 

Pursuant to the Norwegian Securities Trading Act, any person who through acquisition becomes the holder of shares representing more than one-third of the voting rights in the capital of the Company is obliged to make an unconditional offer at a fair price for the purchase of the balance of the issued shares in the capital of the Company. The mandatory offer must be made within four weeks after the threshold was passed. If an offer is made for the shares in the Company, the Board shall issue a statement evaluating the offer and make a recommendation as to whether the shareholders should accept the offer. If the Board finds itself unable to provide such a recommendation, it shall explain the background. The Board’s statement on a bid shall make clear whether the views expressed are unanimous, and if this is not the case, it shall explain the basis on which members of the Board have excluded themselves from the Board’s statement. The Board shall consider whether to arrange a valuation from an independent expert. If any member of the Board or the management, or close associates of such persons, or anyone who has recently held such a position, is either the bidder or has a similar particular interest in the bid, the Board shall in any case arrange an independent valuation. This shall also apply if the bidder is a major shareholder in the Company. Any such valuation should be either attached to the Board’s statement, be reproduced in the statement or be referred to in the statement.

AUDITOR

The Company emphasizes on keeping a close and open relationship with the Company’s auditor. The auditor participates in Board meetings for approval of the annual accounts. The Company’s auditor shall present an annual plan for its audit work to the audit committee. In addition the auditor shall present a review of the company’s internal control procedures, with identification of weaknesses and proposals for improvement. The Board shall at least yearly have a meeting with the auditor without the management’s presence. Compensation of the auditor for auditing and other services is presented to the annual general meeting and is included in the notes to the annual accounts note 5. The board continuously evaluates the need for written guidelines concerning the executive management use of the auditor for other services than the audit. The board finds that the auditor’s independence of the Company’s executive management is ensured. The Auditor shall give a yearly written confirmation stating the Auditor’s independence.

 

The Board of Directors shall establish guidelines in respect of the use of the auditor by the Company’s Executive Management for services other than the audit.