Board Statement on Corporate Governance

Nordic Nanovector ASA (the ‟company”) considers good corporate governance to be a prerequisite for value creation and trustworthiness and for access to capital. In order to secure strong and sustainable corporate governance, it is important that the company ensures good and healthy business practices, reliable financial reporting and an environment of compliance with legislation and regulations. Nordic Nanovector’s Board of Directors actively adheres to good corporate governance standards and will at all times ensure that Nordic Nanovector complies with ‟The Norwegian Code of Practice for Corporate Governance” (the ‟Code”) most recently revised 30 October 2014 issued by the Norwegian Corporate Governance Policy Board (NCGB), or explain possible deviations from the Code. The Code can be found at www.nues.no. Nordic Nanovector has governance documents setting out principles for how business should be conducted, and these also apply to Nordic Nanovector’s subsidiaries. The Code covers 15 topics, and this statement covers each of these topics and states Nordic Nanovector’s adherence to the Code. Information concerning corporate governance pursuant to section 3-3 b of the Norwegian Accounting Standard Act is included in section below.

1. Implementation and reporting on corporate governance
A Corporate Governance Policy was adopted by the board of directors on January 27th, 2015 for and on behalf of the company and is, in all material respects based on the Code, to which the board has resolved that the company shall adhere.

The board of directors of the company has adopted several corporate governance guidelines, including rules of procedure for the board of directors, instructions for the audit committee, instructions for the remuneration committee, instructions for the nomination committee, instruction for handling inside information, insider policy for primary insiders and employees that are not primary insiders, an anti-corruption manual and a corporate social responsibility policy.

The board of directors will ensure that the company at all times has sound corporate governance. An overall review of the company's corporate governance is included in the company's annual report to the shareholders and on the company's web page. 
Deviations from the Code: None


2. Business
Nordic Nanovector ASA's business purpose is defined in the company's articles of association as follows: “The objective of the company is to develop, market and sell medical products and equipment and to run business related thereto or associated therewith.” The strategies and primary objectives are included in the annual report.
Deviations from the Code: None


3. Equity and dividends
The company shall have an equity capital that is suitable for its objectives, strategy and risk profile.

In December 2016, the company raised NOK 498 663 816 in new equity through a private placement of 4 374 244 new shares, completed at a subscription price of NOK 114 per share. The price was determined through an accelerated book-building process. The net proceeds of the new equity will be used to fund new studies, to accelerate the pipeline of pre-clinical assets to clinical trials, to prepare for commercial launch of Betalutin®, and general corporate purposes. Total issued share capital at December 31st, 2016 amounted to NOK 9 794 924, divided into 48 974 618 shares, each with a par value of NOK 0.20.

The equity ratio at December 31st, 2016 was 91.6 per cent and is considered suitable by the board.

The board has a clear and predictable dividend policy, which is also disclosed in the company's annual report: The financial resources of Nordic Nanovector are directed to wards the clinical development of Betalutin® and further investigations in the company's product pipeline. The company does not anticipate paying any cash dividend until sustainable profitability is achieved.

The mandates to the board to increase Nordic Nanovector's share capital is tied to defined purposes, and limited in time no later than the date of the next annual general meeting.

The annual general meeting held May 19th, 2016 granted an authorisation to increase the share capital limited to 10 per cent of the share capital, to be used in connection with the share based incentive programmes for the group’s employees. The authorisation is valid until the next annual general meeting, but no longer than June 30th, 2017. Of the 4 897 461 authorised options, 2 846 701 had been issued end of 2016.

The annual general meeting held May 19th, 2016 granted an authorisation to increase the share capital limited to 10 per cent of the share capital, to be used for general corporate purposes, including but not limited to financing and acquisitions of other companies, including issuance of consideration shares in connection with the above mentioned transactions. Of the authorised 4 897 461 shares, 4 374 244 have been used. The authorisation is valid until the next annual general meeting, but no longer than June 30th, 2017.

The annual general meeting held May 19th, 2016 granted an authorisation to increase the share capital limited to NOK 20 000 at par value. The authorisation may only be used to issue shares to members of the company’s board of di­rectors against contributions in NOK. Of the authorised 100 000 shares, 44 328 restricted stock units are outstand­ ing. The authorisation is valid until May 19th, 2018. The authorisation has not been used.
Deviations from the Code: None


4. Equal treatment of shareholders and transaction with close associates
It is the company’s policy to treat all shareholders equally. Nordic Nanovector ASA has only one class of shares. Each share in the company carries one vote, and all shares carry equal rights, including the right to participate in general meetings. The nominal value of each share is NOK 0.2.

If the board resolves to carry out a share issue without pre-emption rights for existing shareholders, then the justification shall be publicly disclosed in a stock exchange an­nouncement issued in connection with the share issue.

New share capital was raised in December 2016 through a private placement. The board considered the equal treatment requirements together with pros and cons related to carrying out the transaction as a private placement. The board considered that the waiver of the preferential rights inherent in a private placement was necessary, taking into consideration the time aspect and successful completion in the common interest of the company and its shareholders.

In the event of a material transaction between the com­pany and its shareholders, a shareholder's parent company, board director, executive management or closely-related parties of any such parties, the board will arrange for a val­uation to be obtained from an independent third party.

Board directors and executive management are obliged to notify the board if they have a significant, direct or indirect, interest in any transaction carried out by the company other than by virtue of their position within the company. The board of directors will report any transactions with related parties in the annual report.
Deviations from the Code: None


5. Freely negotiable shares
All shares are freely negotiable with no form of restriction on negotiability.
Deviations from the Code: None


6. General Meetings
The board gives weight to ensuring that as many shareholders as possible can exercise their voting rights in the company's general meetings, and that the general meetings are an effective forum for the views of shareholders and the board. The chair of the board of directors, the CEO and CFO are present at the annual general meetings, along with the nomination committee and the company auditor.

The 2017 annual general meeting will be held on May 24th, 2017. Shareholders who are unable to participate themselves may vote by proxy, and a person can also be appointed to vote for the shareholders as a proxy. The notice of the meeting and relevant documents, including the proposal of the nomination committee, are made available on the company website three weeks in advance of the general meeting.

The notice of the general meeting is sent to all shareholders individually, or to their depository banks, three weeks in advance of the general meeting. The notice of the general meeting includes information regarding shareholders' rights, guidelines for registering and voting at the general meeting. The company provides information on the procedure for representation at the general meeting through proxy, nominates a person to vote on behalf of the shareholders, and to the extent possible prepare a form, which allows separate voting instructions for each matter.
Deviations from the Code: Not all board directors are participating in the AGM. Four out of six board directors are located outside of Norway, so it is difficult for all to participate both from a practical and a cost perspective.


7. Nomination committee
The nomination committee shall consist of three members. The general meeting elects the members of the nomination committee, its chair and determines the committee's remuneration. The majority of the members shall be independent of the board of directors and the management, and at least one member shall not be a member of the committee of representatives or the board. No more than one member of the committee shall be a board director, and any such member shall not offer himself for re-election to the board. The nomination committee shall not include the chief executive or any other executive personnel.

The annual general meeting, May 19th, 2016, elected Johan Christenson (chair), Ole Peter Nordby and Olav Steinnes as members of the nomination committee. The nomination committee's duties, if appointed, include proposing candidates for election to the board and the nomination committee and proposing fees to be paid to such members.
Deviations from the Code: None


8. Composition and independence of the board
The composition of the board shall ensure that it can act independently of any special interests. The board was elected at the annual general meetings May 19th, 2016 and October 12th, 2016 and consists of; Ludvik Sandnes (chair), Jean-Pierre Bizzari, Joanna Horobin, Per Samuelsson, Gisela M. Schwab, and Hilde H Steineger

Ludvik Sandnes (chair), Jean-Pierre Bizzari, Joanna Horobin, Gisela M. Schwab and Hilde H. Steineger are independent of the company's executive personnel, material business and the company's major shareholder(s).

Ludvik Sandnes spends less than five per cent of his time looking for new potential investments for HealthCap in Norway.

Ludvik Sandnes, Per Samuelsson, Gisela M. Schwab, and Hilde H. Steineger were elected for the period until the annual general meeting in 2017. Jean-Pierre Bizzari and Joanna Horobin were elected for the period until the annual general meeting in 2018. The biographies of the board directors are presented on the company's website and the board directors' shareholding is disclosed in note 12 to the annual accounts. An overview of the board directors’ meetings attendance is included in the biographies.
Deviations from the Code: None


9. The work of the Board of Directors
The board prepares an annual plan for its work, with particular emphasis on objectives, strategy and implementation. The board evaluates annually its performance and expertise based on work performed and experiences gained in the previous year.

The board of directors has established an audit committee consisting of Hilde H. Steineger (chair), Ludvik Sandnes and Per Samuelsson for the thorough and independent handling of questions concerning accounting, audit and finance. The audit committee is also advisory and preparatory for the full board. The board of directors has established a remuneration committee consisting of Per Samuelsson (chair), Joanna Horobin, Ludvik Sandnes and Hilde H. Steineger which is a preparatory and advisory committee for the board in questions relating to the company's remuneration of the executive management. The board has also established instructions for the committees and the CEO.
Deviations from the Code: None


10. Risk management and internal control
It is the responsibility of the board to ensure that the company has sound internal controls in place and systems for risk management that are appropriate in relation to the extent and nature of the company's activities. The board conducts an annual review of the company's most important areas of exposure to risk, such as internal control arrangements. Board meetings are held frequently, and management reports, including financial performance, are distributed to the board on a monthly basis.
Deviations from the Code: None

 

11. Remuneration of the Board of Directors
The remuneration of the board is proposed by the nomination committee and decided by the shareholders at the annual general meeting of the company. The level of remuneration of the board reflects the responsibility of the board, its expertise and the level of activity in both the board and any board committees.

The company has not granted share options to board directors. The company has, however, granted restricted stock units to board directors that have elected to receive all or part of their remuneration determined by the annual general meeting (the "AGM") in advance in the form of restricted stock units. The number of restricted stock units allocated to the board directors, is determined on the basis of the volume weighted share price 10 trading days prior to the AGM. The remuneration of the board is thus not linked to the company's performance. If board directors, or companies associated with board directors, take on specific assignments for the company in addition to their appointments as board directors this will be reported to the board and the board will approve the remuneration for such additional duties.
Deviations from the Code: None


12. Remuneration of executive personnel
The board has established guidelines for the remuneration of the executive personnel. These guidelines are communicated to the annual general meeting and included in the annual report. The performance-related remuneration of the executive personnel, such as share option grants and bonus programmes, are linked to value creation for shareholders. 
Deviations from the Code: None


13. Information and communications
Nordic Nanovector ASA is committed to treat all shareholders equally and will provide timely and precise information about the company and its operations to its shareholders, the Oslo Stock Exchange and the financial markets in general (through the Oslo Stock Exchange's information system). Such information will be given in the form of annual reports, quarterly reports, press releases, notices to the stock exchange and investor presentations. The company has published an annual, electronic finance calendar with an overview of the dates for important events, such as the annual general meetings and publishing of interim reports.
Deviations from the Code: None


14. Company take-overs
The board of directors has established guiding principles for how it will act in the event of a take-over offer. The board of directors will not attempt to influence, hinder or complicate the submission of bids for the acquisition of the company's operations or shares, or prevent the execution thereof. The board of directors will help ensure that shareholders are treated equally. If a take-over offer is made, the board of directors will obtain a valuation from an independent expert and issue a recommendation as to whether shareholders should accept the offer.
Deviations from the Code: None


15. Auditor
On an annual basis, the auditor presents to the audit committee the main features of the plan for the performance of the audit work. The auditor also participates in meetings of the board of directors that deal with the annual financial statements and, at least once a year, carries out a review of the company's procedures for internal control in collaboration with the audit committee. In addition, the external auditor meets with the board of directors, without management being present, at least once per year.
Deviations from the Code: None

Approved by the Board of Directors, 23 March 2017.