Corporate governance guidelines for Apply

as resolved by the Board of Directors on 28 april 2011

1. INTRODUCTION TO THE CORPORATE GOVERNANCE GUIDELINES
The Board of Directors of Apply ASA (the “Company”) intends to conduct its business in accordance with the Norwewgian Code of Practice for Corporate Governance (the "Code of Practice") as adopted by the Norwegian Corporate Governance Board, and has prepared this corporate governance guidelines document (the “Policy”) to give a summary of the principles to be applied by the Company.

This Policy addresses the framework of guidelines and principles regulating the interaction between the Company’s shareholders, the Board of Directors (the “Board”), the Chief Executive Officer (the “CEO”) and the Company’s executive management team (the “Executive Management Team”).

2. BUSINESS, VALUES AND OBJECTIVES
The Company’s business, values and objectives are set out in the Management System, ref Appendix 1 hereto, while the Company's ethical guidelines are detailed in Appendix 2 hereto and the guidelines on corporate social responsibility are set out in Appendix 3 hereto.

3. COMPANY CAPITAL AND DIVIDEND
The Board aims to maintain a satisfactory equity ratio in the Company in light of the Company's goals, strategy and risk profile, thereby ensuring that there is an appropriate balance between equity and other sources of financing. The Board shall continuously assess the Company’s capital requirements in light of the Company’s strategy and risk profile.

The Board's authorities to increase the share capital and to buy own shares shall be granted for periods no longer than until the next Annual General Meeting of the Company.

It is an objective for the Company to generate return to the shareholders in the form of dividends and capital appreciation, at a level which is at least equal to other investment possibilities with comparable risk.

4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH RELATED PARTIES
The Company aims to treat all shareholders equally. Deviations from the shareholders' preferential rights to subscribe for new shares will only be made when this is considered to be in the best interest of the Company taking into account all relevant factors. Purchase of treasury shares will normally only be made over the exchange at the quoted price.

Any transactions, agreements or arrangements between the Company and its shareholders, members of the Board, members of the Executive Management Team or close associates of any such parties shall only be entered into as part of the ordinary course of business and on arms 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 must be considered to be immaterial.

No person or company mentioned in the above paragraph shall vote or otherwise participate in any decision by the Company regarding a transaction, agreement or arrangment with such person or company as a counterparty.

Board Members 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.

5. THE GENERAL MEETING
All shareholders have the right to participate in the General Meetings of the Company, which exercise the highest authority of the Company. The Company shall summon the shareholders to any General Meeting as soon as possible. The Annual General Meeting shall normally be held before 30 April every year. The person chairing a General Meeting should be independent of the Company and the Board.

The full notice for General Meetings shall be sent to the shareholders no later than 21 days prior to the meeting. The notices for such meetings shall include or refer to documents providing the shareholders with sufficient detail in order for the shareholders to make an assessment of all the cases to be considered as well as all relevant information regarding procedures of attendance and voting. The Board and the Company’s auditor shall be present at General Meetings.

Notices for General Meeting shall provide information on the procedures shareholders must 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 cut-off for confirmation of attendance shall be set as short as practically possible and the Board will arrange matters so that the shareholders, who are unable to attend in person, will be able to vote by proxy. The form of proxy will be distributed with the notice.

6. NOMINATION COMMITTEE
The Company shall have a nomination committee elected by the general meeting in accordance with the Company's articles of association. The general meeting shall also issue instructions for the nomination committee in accordance with the Code of Practice.

7. THE BOARD - COMPOSITION
In appointing members to the Board, it is emphasised that the Board shall have the requisite 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. Board Members shall be elected for periods not exceeding two years at a time, with the possibility of re-election. Board Members shall be encouraged to own shares in the Company. Elections of board members shall also take into account the independence requirements of the Code of Practice.

The Company does not have a general assembly.

8. RESPONSIBILITY OF THE BOARD OF DIRECTORS
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 Company’s strategy, (ii) performing necessary monitoring functions and (iii) acting as an advisory body for the Executive Management Team. Its duties are not static, and the focus will depend on the Company’s ongoing needs. The Board is also responsible for ensuring that the operation of the Company is in compliance with the Company’s values and ethical guidelines. The Chairman of the Board shall be responsible for ensuring that the Board’s work is performed in an effective and correct manner.

The Board shall ensure that the Company has a good 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 Company.

All members of the Board shall regularly receive information about the Company’s operational and financial development. The Company’s strategies shall regularly be subject to review and evaluation by the Board.

The Board shall prepare an annual evaluation of its work.

9. SUB-COMMITTEES OF THE BOARD
The Company shall have a Remuneration Committee appointed by the Board, consisting of three members. The remuneration committee shall administer the Company’s bonus incentive program and provide general compensation related advise to the Board.

The Company shall have an Audit Committee as set out in the Norwegian Public Limited Liability Companies Act.

10. RISK MANAGEMENT AND INTERNAL CONTROL
The Board shall ensure that the Company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the Company’s activities. The internal control and the systems shall also encompass the Company’s corporate values and ethical guidelines. The objective of the risk management and internal control shall be to manage exposure to risks in order to ensure successful conduct of the Company’s business and to support the quality of its financial reporting.

The Board shall carry out an annual review of the Company’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 Company’s internal control and risk management systems as they relate to the Company’s financial reporting.

11. BOARD COMPENSATION
The General Meeting shall annually determine the Board’s remuneration. Remuneration of Board Members shall be reasonable and based on the Board's responsibilities, work, time invested and the complexity of the enterprise. The compensation shall be a fixed annual amount. The Chairman of the Board may receive a higher compensation than the other Board Members. The Board shall be informed if individual Board Members perform other tasks for the Company than exercising their role as Board Members. Work in sub-committees may be compensated in addition to the remuneration received for Board membership.

The Company’s financial statements shall provide further information about the Board’s compensation.

12. COMPENSATION TO EMPLOYED MANAGEMENT
The Board decides the salary and other compensation to the CEO. The CEO’s salary and bonus shall be determined on the basis of an evaluation with emphasis on the following factors: financial results, business development, employee and customer satisfaction. Any fringe benefits shall be in line with market practice, and should not be substantial in relation to the CEO’s basic salary. The Board shall annually carry out an assessment of the salary and other remuneration to the CEO.

The Company’s financial statements shall provide further information about salary and other compensation to the CEO and the Executive Management Team.

The CEO determines the remuneration of executive employees. The Board shall (through the Remuneration Committee) issue guidelines for the remuneration of the Executive Management Team. The guidelines shall lay down the main principles for the Company’s management remuneration policy. The salary level should not be of a size that could harm the Company’s reputation, or above the norm in comparable companies. The salary level should, however, ensure that the Company can attract and retain executive employees with the desired expertise and experience.

13. INFORMATION AND COMMUNICATION
The Board and the Executive Management Team assign considerable importance to giving the shareholders quick, relevant and current information about the Company and its activity areas. Emphasis is placed on ensuring that the shareholders receive identical and simultaneous information.

Sensitive information will be handled internally in a manner that minimises the risk of leaks. All contracts to which the Company becomes a party, shall contain confidentiality clauses.

The Company shall have clear routines for who is allowed to speak on behalf of the Company on different subjects, and who shall be responsible for submitting information to the market and investor community. The CEO and the CFO shall be the main contact persons of the Company in such respects.

The Board must be aware of matters of special importance to the shareholders. The Board must therefore ensure that the shareholders are given the opportunity to make known their points of view at and outside the General Meeting.

The Company shall ensure that any inside information is treated in accordance with applicable legislation and subject to further guidelines determined by the Company.

14. TAKE-OVERS
The Board shall in a take-over situation ensure that the Company observes the rules of the Norwegian Securities Trading Act and the principles of the Code of Conduct.

The Board should normally arrange a reasoned valuation from an independent expert to be obtained and be made public no later than at the time of the public disclosure of the Board’s statement pursuant to the Norwegian Securities Trading Act.

15. AUDITOR
Each year the auditor shall present to the Board a plan for the implementation of the audit work and a written confirmation that the auditor satisfies established requirements as to independence and objectivity.

The auditor shall be present at Board meetings where the annual accounts are on the agenda. Whenever necessary, the Board shall meet with the auditor to review the auditor’s view on the Company's accounting principles, risk areas, internal control routines etc.

The auditor may only be used as a financial advisor to the Company provided that such use of the auditor does not have the ability to affect or question the auditors’ independence and objectiveness as auditor for the Company. Only the Company’s CEO and/or CFO shall have the authority to enter into agreements in respect of such counselling assignments.

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 concrete assignments.

In connection with the auditor's presentation to the Board of the annual work plan, the Board should specifically consider if the auditor to a satisfactory degree also carries out a control function.
The Board shall arrange for the auditor to attend all General Meetings.