NORBIT : The board of directors report on salary and other remuneration for leading personnel for 2021

THE BOARD OF DIRECTORS' REPORT

ON SALARY AND OTHER REMUNERATION FOR

LEADING PERSONNEL FOR 2021

THE BOARD OF DIRECTORS' REPORT ON SALARY AND OTHER REMUNERATION FOR LEADING PERSONNEL FOR 2021S

1.

INTRODUCTION

1.1 Background

This remuneration report (the "Report") is prepared by the board of directors of NORBIT ASA (the "Company" or together with its subsidiaries the "Group") in accordance with the Norwegian Public Limited Liability Companies Act (the "Companies Act")

Section 6-16 b with regulations. The Report contains information regarding remuneration to previous, present and future leading personnel of the Company ("Directors") for the financial year of 2021 in line with the applicable requirements.

The report is based on the board of directors' guidelines for salary and other remuneration to the senior executives in NORBIT ASA approved by the general meeting on 4 May 2021 (the "Guidelines").

1.2 Overview of the year

In 2021, NORBIT ASA reported good progress towards its ambition level with all-time high revenues, despite challenges relating to the pandemic and shortage in supply of raw material components:

• ■ Revenues came in at NOK 787.8 million, representing an increase of 27 per cent from 2020.

• ■ Profitability improved driven by the higher revenue base and operational leverage. The EBITDA margin was 18 per cent in 2021, up from 15 per cent in 2020.

• ■ Net profit increased to NOK 47.9 million compared to NOK 27.3 million in 2020.

• ■ Shareholders were rewarded with a total return of 75.6 per cent, including NOK 0.30 per share dividend paid

Segments Oceans and PIR were the main contributors to the revenue growth in 2021, delivering 42 per cent and 30 per cent growth, respectively. Growth within Oceans was mainly drivenby higher sonar sales, where revenues increased across all geographies compared to 2020. Within PIR, revenues increased as a result of higher sales of contract manufacturing and R&D services. Due to the increase in revenues, both segments capitalised on operational leverage and as a result improved the margins. Segment Connectivity experienced a weak first half of 2021, where the pandemic and the exposure to the European automotive industry resulted in lower volumes sold.

In the second half of the year, revenue increased, but the margin remained unsatisfactory.

In August, NORBIT completed the acquisition of iData Kft, a technology company specialised in vehicle tracking and fleet management related services with a subscription-based business model. The acquisition is part of broadening the platform for growth in segment Connectivity. With its iTrack GPS tracking system iData's solutions are used by more than 4 800 companies in around 40 000 vehicles. iData also offers e-toll payment solutions that are used in more than 10 000 vehicles.

In 2021, NORBIT provided an update on its ambitions and long- term financial targets. The group's ambition is to deliver organic revenues in excess of NOK 1.5 billion and an EBITDA margin above 25 per cent in 2024. In addition, NORBIT is continuing to pursue value-accretive acquisitions to accelerate growth further.

2.

REMUNERATION TO THE BOARD OF DIRECTORS

2.1 Board composition

In 2021, the board consisted of Finn Haugan (chair), Bente Avnung Landsnes (deputy chair), Trond Tuvstein, Marit Collin and Tom Solberg. The board of directors was elected at the Company's general meeting on 4 May 2021, and there were no changes to the board of directors in 2021.

NORBIT ASA

2.2 Remuneration composition and framework

The board's remuneration is determined by the general meeting after receiving proposal from the nomination committee. The remuneration comprises of fixed payment for board membership and work in sub-committees. In addition, the board members are reimbursed for travel expenses. The Company is responsible for payment of social security taxes, as well as costs for directors' and officer's liability insurance.

In 2021, the remuneration to the board members was not performance-related nor included share option elements. The board did not participate in incentive programs available to employees in the Group or any other share-based incentive schemes during 2021.

Table 1:

Actual board fees paid to the board of directors in 2021 and 2020

Amounts in NOK thousand	Board	Audit committee
Finn Haugan	2021	500	-
Chairman	2020	500	-
Bente Avnung Landsnes	2021	300	25
Deputy chair	2020	300	25
Tom Solberg	2021	150	-
Director	2020	150	-
Trond Tuvstein	2021	150	50
Director	2020	150	50
Marit Collin	2021	150	-
Director	2020	150	-
1) Remuneration as expensed
2.3 Shareholding

The following number of shares is owned by the board members (and their related parties) as of 31 December 2021.

Table 2:

Shareholding by the board of directors

Shares subject

to lock-up

Board of Directors Finn Haugan

Bente Avnung Landsnes

Tom Solberg (through Mariteam AS) Trond Tuvstein (through TTU Invest AS) Marit Collin (through Collin AS)

Total shares held by the board of directors

- 325

Remuneration committee

Total remuneration

15 515

20 520

- 325

15 165

20 170

- 200

- 200

15 165

20 170

Shares not subject to lock-upTotal shares at year-end

- - - - - -

81 078

60 473

65 789

32 894

41 447

81 078 0.14%

60 473 0.10%

65 789 0.11%

32 894 0.06%

41 447 0.07%

281 681

Percentage of total shares

281 681

0.48%

3.

REMUNERATION TO THE DIRECTORS

3.1 Director composition

The Company considers the CEO, CFO and other members of the corporate management team to be covered by the term Director under the Companies Act. As of the date of this Report, the following persons are considered Directors:

• ■ Per Jørgen Weisethaunet, Group CEO

• ■ Per Kristian Reppe, Group CFO

• ■ Arild Søraunet, Group CTO

• ■ Stein Martin Beyer, Group COO and business unit director PIR

• ■ Peter Koldgaard Eriksen, business unit director Oceans

• ■ Peter Tschulik, business unit director Connectivity

3.2 Remuneration composition and framework

The remuneration principles and compensation elements are described in the Guidelines. They consist of a (i) fixed base salary, (ii) non-financial benefits ("fringe benefits"), (iii) pension benefits, (iv) participation in share purchase programs open to all employees, (v) variable cash salary, and (vi) a long-term incentive program (referred to as a synthetic option program in the Guidelines)

Directors do not receive remuneration for directorships in group companies.

Table 3 below contains an overview of the total remuneration which the Directors have received (fixed remuneration paid and variable remuneration accrued) from the Company and other companies within the Group in 2021 and 2020.

Table 3:

Remuneration of directors for the reported financial year from the group

Fixed remunerationVariable remuneration

Extra-	Proportion of
Base	Fringe	One-year	Multi-year	ordinary	Pension	Total remu­	fixed remu-
Amounts in NOK million	salary 1)	Fees	benefits	variable 2)	variable 3)	items	expense	neration	neration
Per Jørgen Weisethaunet	2021	3.0	-	0.0	0.5	-	-	0.1	3.6	86%
(Group CEO)	2020	2.7	-	0.0	-	-	-	0.1	2.8	100%
Per Kristian Reppe	2021	2.0	-	0.1	0.5	-	-	0.1	2.7	79%
(Group CFO) 3)	2020	0.9	-	0.1	-	-	-	0.0	1.0	100%
Stian Lønvik	2021	-	-	-	-	-	-	0.0	­	-
(Group CFO) 4)	2020	1.1	-	0.0	-	-	-	0.1	1.2	100%
Arild Søraunet	2021	1.7	-	0.0	0.3	-	-	0.1	2.1	86%
(Group CTO)	2020	1.3	-	0.0	-	-	-	0.1	1.4	100%
Peter Koldgaard Eriksen	2021	3.1	-	0.1	1.1	-	-	0.1	4.4	74%
(Business unit director Oceans) 5)	2020	2.8	-	0.1	1.5	-	-	0.1	4.4	67%
Peter Tschulik	2021	1.8	-	-	0.3	-	-	0.0	2.1	86%
(Business unit director Connectivity)6)	2020	1.8	-	-	-	-	-	0.0	1.8	100%
Stein Martin Beyer	2021	2.0	-	0.0	0.4	-	-	0.1	2.5	86%
(Business unit director PIR and group COO)	2020	1.9	-	0.0	-	-	-	0.1	2.1	100%
1) Salaries as expensed, excluding social security taxes
2) See comment below
3) 2020 remuneration from 20.7 to 31.12
4) 2020 remuneration from 1.1 to 31.7
NORBIT ASA

• 5) Remuneration in USD, translated to NOK using the average exchange rate for the year

• 6) Remuneration in EUR, translated to NOK using the average exchange rate for the year

The one-year variable remuneration is based on compensation accrued from performance related variable pay and is paid the year following the accruing year. See section 4 for further information. In addition to the performance-based bonus, CFO Per Kristian Reppe and business unit director Oceans, Peter Koldgaard Eriksen, were paid discretionary bonuses of NOK 0.2 million and NOK 0.6 million. See section 4.3 for further information.

3.3 Share-based remuneration

There was no share-based remuneration to the Directors in 2021 or 2020.

At the general meeting held 4 May 2021, the board of directors was granted an authorisation to increase NORBIT ASA's share capital by up to 2.0 per cent of the share capital to be used to issue shares to the Group's employees in connection with incentive programs. The authorisation is valid until the annual general meeting in 2021 to be held 4 May 2022. In July 2021, the board of directors approved and implemented an incentive share purchase programs for all eligible employees in NORBIT for the fiscal year 2021, which also included the Directors. Three out of six Directors participated in the incentive programs on the same terms as other employees.

4.

COMPLIANCE WITH THE GUIDELINES

4.1 Criteria framework

In August, NORBIT updated its ambitions and long-term financial targets. The ambition is to deliver organic revenues of NOK 1.5 billion and an EBITDA margin above 25 percent in 2024. The revenue ambition implies an annual compounded growth rate of 25 per cent from 2020. In connection with the announced targets, the board of directors determined specific performance criteria for the variable cash salary and the long-term incentive program, reflecting the following financial ambitions:

2. The Group delivering annual organic reported EBITDA1 margin between 20 and 25 per cent. This criterion is weighted 25 per cent.

- A margin above 25 per cent implies full payout under the criteria, while a margin below 20 per cent would imply no payout. Linear adjustment is made between 20 and 25 per cent.

-

Direct transaction expenses for completedacquisitions, mergers or divestments are to be adjusted for on yearly basis.

• 3. The Company delivering a total shareholder return (share price return plus dividend paid) of more than 25 per cent in a calendar year. This criterion is weighted 25 per cent.

• 4. For variable cash salary: Determined at the board of directors' discretion based on individual performance.

  For the long-term incentive program: Determined at the discretion of the board of directors based on the board's overall assessment of the Group's and management's performance.

  This criterion is weighted 25 per cent.

The four criteria are equal for all Directors, except for the discretionary award under the variable cash salary program. Under criterion 4, the targets for discretionary award for the CEO are set by the board of directors. The targets for the other executive personnel are set by the CEO.

No compensation is payable under any criteria if NORBIT ASA's total shareholder return is less than 15 per cent in the calendar year.

1. The Group delivering annual organic revenue growth between 15 and 25 per cent. This criterion is weighted 25 per cent.

- Growth above 25 per cent implies full payout under the criteria, while growth below 15 per cent implies no payout. Linear adjustment is made between 15 and 25 per cent growth.

-

Acquisitions, mergers or divestments are adjusted foron yearly basis

4.2 Information on how the remuneration complies with the Guidelines

Variable cash salary

In relation to the variable cash salary, the actual performance for the year, as well as the resulting score is presented in the table below.

1

Short for earnings before interest, tax, depreciation and amortisation. EBITDA corresponds to operating profit before depreciation and amortisation expenses, as reported in the consolidated statement of profit and loss.