NORWAY UNITED STATES. Overview of requirements for listing shares on Oslo Børs vs NYSE Euronext / NASDAQ. April 2014

Transcription

1 NORWAY UNITED STATES Overview of requirements for listing shares on Oslo Børs vs NYSE Euronext / NASDAQ April 2014

2 Overview This presentation has been prepared with respect to listing of shares on the regulated markets operated by the Oslo Stock Exchange and NYSE Euronext and NASDAQ In Norway: Oslo Børs and Oslo Axess In the United States (US): New York Stock Exchange Euronext (NYSE) and NASDAQ Stock Market (NASDAQ) This presentation has been prepared by Advokatfirmaet Selmer DA for matters pertaining to Norwegian law and by Akin Gump Straus Hauer & Feld LLP for matters pertaining to US law, based on their experience for Norway and US transactions respectively, to provide an overview with respect to certain listing requirements and obligations in relation to listing on Oslo Børs / Oslo Axess vs NYSE / Nasdaq This presentation comprises only general information on certain Norwegian and US regulations related to listing, and registration of securities, and the continuing obligations of companies listed on Oslo Børs / Oslo Axess and NYSE / Nasdaq, and is not a complete nor exhaustive description of such obligations or other matters that could impact the regulations or application of such regulations. This presentation is prepared for information purposes only as of the date hereof, and shall not be considered nor construed as legal advice in any respect. No liability or responsibility are accepted as a result of this presentation 2

3 Main features for listing in Norway and the US 03 Listing in Norway 05 Listing in the US 10 Listing comparisons - fees and continuing obligations 16 Prospectus and registration requirements 20 American Depository Receipts, FPIs and EGCs 24 Contact persons 31

4 Main features for listing in Norway vs US Norway United States Time listing process Formal listing process takes minimum 8 weeks (fast track possible) Varies. Typical Securities and Exchange Commission registration / initial listing process at least weeks Market places Oslo Børs (main list) and Oslo Axess (pre-commercial) NYSE: NYSE, NYSE Arca, NYSE Euronext, NYSE Alternext, NYSE MKT Ownership spread / Minimum no. of holders Minimum 500 for Oslo Børs (200 in VPS for secondary listed) and 100 for Oslo Axess of defined shareholders. 25% free float Nasdaq: NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global Select Market NYSE: 5,000 worldwide (or 400 US) round lot holders (a round lot is 100 shares). No free float requirement Nasdaq: 300 round lot holders. No free float requirement Market value MNOK 300 for Oslo Børs and MNOK 8 for Oslo Axess NYSE: $40M or $100M (publicly held shares) Nasdaq: $5M or $15M (publicly held shares) Liquidity forecast 12 months (principle rule) N/A Issuer categories International issuers Global Industry Classification Standard (GICS). Specific disclosure requirements for specialist issuers within inter alia mineral/mining, oil and gas No unique material requirements. Securities need to be recorded in the VPS. Currently US incorporated companies are restricted for listing in Oslo, unless being reporting issuer in the US Industry Classification Benchmark (ICB) used at NYSE/Nasdaq. Specific disclosure requirements for oil/gas and mineral/mining companies Non-U.S. companies may use NYSE alternate quantitative listing standards. Foreign private issuers receive significant relief from disclosure, reporting and corporate governance obligations 4

5 Main features for listing in Norway and the US 03 Listing in Norway 05 Listing in the US 10 Listing comparisons - fees and continuing obligations 16 Prospectus and registration requirements 20 American Depository Receipts, FPIs and EGCs 24 Contact persons 31

6 Norway Main listing requirements Oslo Børs Oslo Axess Market value Minimum NOK 300 million Minimum NOK 8 million Existence and operational history Historical financial information Liquidity Three years existence and operational history and the main part of the company s activities must not be in a pre-commercial phase (exemption may be applied for) The company must have published annual reports for the last three years (exemption may be applied for) and interim report for last quarter Sufficient liquidity to continue business activities in accordance with planned scale of operation for at least 12 months (18 months if the company is in a pre-commercial phase) No explicit requirements The company must have prepared at least one audited annual or interim report Sufficient liquidity to continue business activities in accordance with planned scale of operation for at least 12 months Defined number of shareholders Minimum 500 Minimum 100 Share price Minimum NOK 10 Minimum NOK 1 6

7 Norway Main listing requirements, cont. Oslo Børs Oslo Axess Free float 25% 25% Board composition Organization At least two board members independent from management, material business relations and large shareholders. Management in principle not to be part of the board Adherence to Norwegian corporate governance (non-norwegian companies may use local code) code and sufficient resources and competence to comply with reporting requirements. Required auditing committee At least two board members independent from management, material business relations and large shareholders. Management in principle not to be part of the board Adherence to Norwegian corporate governance code (non-norwegian companies may use local code) and sufficient resources and competence to comply with reporting requirements. Required auditing committee Tradability Freely transferable shares Freely transferable shares Specialist issuer Due diligence Independent reserve report requirements for specialist issuers within inter alia mineral/mining, oil and gas Industry standard for managers and Oslo Børs specific requirements Independent reserve report requirements for specialist issuers within inter alia mineral/mining, oil and gas Industry standard for managers and Oslo Børs specific requirements Prospectus Prospectus required Prospectus required 7

8 Norway Three alternative formal listing processes 1. Normal; minimum of 8 weeks Pre-listing report Pre-listing meeting Listing application ** Board meeting Oslo Børs *** min 5 days* min 15 days* min 20 days* within 45 calendar days Listing Initial contact Introduction meeting DD meeting Prospectus * Business days ** Public disclosure that applied for listing *** For Fast-track and flexible, the fixing of the OSE board meeting is flexible All deadlines are calculated on the basis of this date 2. Flexible; the process includes all steps as in a normal process and requires a minimum of 8 weeks, but the fixing of OSE board meeting is flexible 3. Fast-track; companies that are prepared for listing may agree on a significantly reduced time period for the listing process (minimum 4 weeks) and the fixing of OSE board meeting is flexible 8

9 Norway Main exemptions for secondary listings Exemptions for Oslo Børs and Oslo Axess Audited interim report A limited scope audit of the most recent interim report will only be required if requested by Oslo Børs/Oslo Axess Defined number of shareholders The requirement of number of shareholders apply; however only a minimum of 200 (Oslo Børs) or 100 (Oslo Axess) shareholders must have their shares registered with the VPS Share price The requirement of minimum NOK 10 (Oslo Børs) or NOK 1 (Oslo Axess) per share does not apply Take-over regulations The company can apply for exemption from the Norwegian takeover rules Corporate governance code The company s local corporate governance code can be adhered to instead of the Norwegian code of practice for corporate governance Due diligence Oslo Børs / Oslo Axess may exempt from their due diligence requirements 9

10 Main features for listing in Norway and the US 03 Listing in Norway 05 Listing in the US 10 Listing comparisons - fees and continuing obligations 16 Prospectus and registration requirements 20 American Depository Receipts, FPIs and EGCs 24 Contact persons 31

11 US Main requirements for US Listings * Requirement General requirements for all US listed securities The class of securities to be listed must be registered with the US Securities and Exchange Commission (SEC) pursuant to the Securities Exchange Act of 1934, as amended (Exchange Act) The class of securities must be accepted for listing on an exchange The security must be freely tradable; typically sold in a transaction registered under the Securities Act of 1933, as amended (Securities Act) Initial filing documents for public offering of securities Periodic reporting and other ongoing obligations FPI must file with the SEC a registration statement on Form F-1 and deliver to investors a prospectus (which forms part of the registration statement) Registration statement must be declared effective by SEC prior to sale of any securities After a FPI registers a class of securities pursuant to the Exchange Act or sells securities pursuant to the Securities Act, it is required to file an annual report (meeting specified SEC disclosure requirements) and other reports with the SEC on an ongoing basis Once a FPI files a Securities Act Registration Statement or it becomes an SEC reporting company, it is subject to certain other US federal laws (including, the Sarbanes-Oxley corporate governance regime, books and records maintenance obligations and the Foreign Corrupt Practices Act) A FPI must comply with the corporate governance and other ongoing eligibility requirements of the exchange it is listed on A FPI and an emerging growth company (EGC)** receive material relief from certain of the above obligations *For purposes of the US listing and regulatory requirements, this presentation assumes the issuer would be a foreign private issuer (FPI see slide 26 for definition) **See slide 28 for definition of an EGC 11

12 US Main NYSE listing requirements * Quantitative Listing Standards for US Companies and FPIs Less stringent financial criteria, but the share distributions are based on US shareholdings only Alternate Listing Standards for FPIs only More stringent criteria, but take into account worldwide share distribution (i) Distribution Requirements: (i) Distribution Requirements: a. Minimum of 400 US shareholders must each hold at least 100 shares and at least 1.1 million shares must be publicly held in the US a. Minimum of 5,000 shareholders worldwide must each hold at least 100 shares and at least 2.5 million shares must be publicly held worldwide b. Price at the time of initial listing minimum $4 per share b. Price at the time of initial listing minimum $4 per share c. No free float requirements c. No free float requirements (ii) Market Value: Publicly held shares in the US must have a market value of $40 million at the time of the IPO (ii) Market Value: Publicly held shares worldwide must have a market value of $100 million (iii) Financial Standards Tests: See slide 13 (iii) Financial Standards Tests: See slide 13 * References in this presentation to NYSE refers to the NYSE s alternate quantitative listing standards for FPIs, unless stated otherwise. FPIs may elect to qualify for listing under either standard 12

13 US Main NYSE financial standards tests An issuer (including a FPI) must meet one of the three financial standards tests set out below: Financials Amount Required by Each Standard Applicable Financial Standards Test Quantitative Listing Standard Alternate Listing Standard 1) Earnings Test: Aggregate pre-tax income for last 3 years $10 million ($2 million in each of 2 most recent fiscal years and positive amounts in all 3 years); OR 2) Valuation/Revenue Test: MAY SATISFY EITHER A OR B A. Valuation with Cash Flow Test $12 million (with $5 million in most recent fiscal year and $2 million in next most recent fiscal year) If EGC, may meet test if $10 million for last 2 years with $2 million in both years $100 million ($25 million in each of the two most recent fiscal years) If EGC, may meet test if $100 million for last 2 years with $25 million in each of most recent 2 years Global Market Capitalization $500 million $500 million Revenues (most recent 12-month period) $100 million $100 million Aggregate Cash Flow for last 3 years B. Pure Valuation Test Global Market Capitalization Revenues (most recent fiscal year) 3) Assets/Equity Test: Global Market Capitalization Total Assets $25 million (positive cash flow in all 3 years) If EGC, $25 million for last 2 years (positive cash flow) $150 million $75 million ($50 million in stockholders equity) $750 million $75 million $100 million (2 most recent years, $25 million) If EGC, $100 million for last 2 years (2 most recent years, $25 million) N/A 13

14 US Main Nasdaq listing requirements * An issuer (including a FPI) must meet one of the standards set out below: Requirements Equity Standard Market Value of Listed Securities Standard Net Income Standard Stockholder s Equity $5 million $4 million $4 million Market Value of Publicly Held Shares $15 million $15 million $5 million Operating History 2 years N/A N/A Market Value of Listed Securities N/A $50 million N/A Net Income from Continuing Operations (in latest fiscal year or in 2 of last 3 fiscal years) N/A N/A $750,000 Publicly Held Shares 1 million 1 million 1 million Shareholders (round lot holders) Market Makers Bid Price or Closing Price $4 $3 $4 $2 $4 $3 Free Float N/A N/A N/A * References in this presentation to Nasdaq refer to Nasdaq s Capital Market, which is Nasdaq s equity market for companies that have relatively small levels of market capitalization 14

15 US Illustrative registration / listing timeline (non- EGCs) Pre-Filing Period Waiting Period Post-Effective Period 30 days 4 to 6 weeks 1 to 3 weeks T + 3 days Preparation of Form F-1 registration statement Due diligence Analyze accounting issues Prepare and file stock exchange application Initial SEC comment period Respond to SEC comments File amended registration statements, as appropriate Incorporate all SEC comments Typically obtain stock exchange approval prior to commencement of road shows Finalize prospectus Prepare and file acceleration request Conduct road shows Registration statement declared effective by SEC Print and distribute final prospectus Sign underwriting agreement * At the time the issuer engages its underwriters (pre-filing), the issuer is subject to publicity and other restrictions 15

16 Main features for listing in Norway and the US 03 Listing in Norway 05 Listing in the US 10 Listing comparisons - fees and continuing obligations 16 Prospectus and registration requirements 20 American Depository Receipts, FPIs and EGCs 24 Contact persons 31

17 Comparison Main continuing obligations Financial reporting Accounting standard Board and management certifications Disclosure of material news Norway 1 Annual reports within 4 months of fiscal year end and interim reports within 2 months after end of period. Required disclosure of financial calendar IFRS (certain limited exemptions). US GAAP accepted Certification of annual and quarterly reports by board members and management efficiently in charge Immediate disclosure of inside information (may be delayed) and certain defined corporate actions. Not immaterial agreements with close associates shall also be disclosed (exemption for secondary listed companies) United States Annual reports within 4 months of fiscal year end; no requirement to file quarterly reports (however, market practice is to release a quarterly earnings report and file it with the SEC) IASB IFRS (no US GAAP reconciliation required) / US GAAP CEO and CFO certification of annual and periodic reports (since a FPI is not required to file quarterly reports, this obligation only applies to an FPI s annual report) Requirement to publicly disclose material events. Public disclosure is required for material information that the FPI (i) makes or is required to make public pursuant to the law of its domicile, incorporation, or organization (ii) files or is required to file with a stock exchange on which its securities are traded and which was made public by that exchange, or (iii) distributes or is required to distribute to its security holders Material transactions Extended disclosure requirements for acquisition/divesture exceeding a 5% change, and required information document approved by Oslo Børs for acquisition/divesture exceeding a 25% (100% Oslo Axess) change, based on certain criteria (certain exemptions for secondary listed companies) See above 1) Different rules apply if Norway is host member state within the EEA 17

18 Comparison Main continuing obligations, cont. Take over bids Norway 1 Mandatory offer obligation when passing an ownership to shares representing 1/3 of the votes and repeated obligation when passing 40% and 50%. Extensive regulations for both bidder and target company, also for voluntary offers. Certain secondary listed companies may granted exemption United States There is no obligation for a shareholder to make a mandatory offer. FPIs may take advantage of certain exemptions from certain of the more onerous provisions of the US tender offer rules depending on the level of US ownership, with 10% and 40% being the important thresholds. Offers may be subject to best price rules and all offers subject to antifraud provisions. Going private transactions by affiliates are subject to additional disclosure requirements Disclosure of large shareholdings Immediate disclosure by investor including volume, but not price, when reaching, passing or falling below the following shares/rights thresholds: 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 and 90% Beneficial owners of over 5% of a class of equity securities registered with the SEC must publicly disclose their ownership in a filing with the SEC and the exchange on which the issuer is listed. The disclosure includes the level of ownership and whether the beneficial owner intends to be a passive investor or to influence the management and policies of the issuer. The filing must be updated for material changes Primary insider reporting/ Restrictions on share dealing Disclosure of all trades with volume and price before next trading day. Includes treasury shares, board members and key executives, as well as large shareholders represented on the board of listed issuer. Norwegian law prohibits insider dealing and market abuse 1) Different rules apply if Norway is host member state within the EEA No applicable listing rules, but US securities law prohibits insider dealing and market abuse. FPIs are exempt from the primary insider reporting and short swing profit disgorgement rules 18

19 Comparison Main continuing obligations, cont. Corporate governance Communications with shareholders Minimum share price requirement Specialist issuers Norway 1 Both Oslo Børs and Oslo Axess have ongoing corporate governance requirements (including equal treatment, regulations on communication regarding shareholder meetings, facilitating proxy voting), as well as adherence to the Norwegian Code for Corporate Governance (local code allowed for non-norwegian companies). Required disclosure in annual accounts of corporate governance compliance All communication with shareholders shall be disclosed simultaneously United States Both NYSE and Nasdaq have material ongoing corporate governance requirements related to board and board committee composition (including the independence of the members of various board committees) and process. Both exchanges provide exemptions from many aspects of these rules, which allow a FPI to follow its home-country practice if the issuer, among other things, makes appropriate disclosure Communications with shareholders and analysts must be immediately publicly disclosed and filed with the SEC. FPIs are exempt from this regulation but typically have procedures in place to achieve material compliance. Also see disclosure of material news above Share price shall exceed NOK 1 on an ongoing basis NASDAQ: Minimum closing bid price of $1 per share (for 30 consecutive days) NYSE: Minimum average closing price of $1 per share (over 30 consecutive trading days) Oil and gas companies are required to file annual reserve report Specific disclosure requirements for oil/gas and mineral/mining companies Language Norwegian. International issuers in practice granted exemptions for English language All filings with the SEC must be in English 1) Different rules apply if Norway is host member state within the EEA 19

20 Main features for listing in Norway and the US 03 Listing in Norway 05 Listing in the US 10 Listing comparisons - fees and continuing obligations 16 Prospectus and registration requirements 20 American Depository Receipts, FPIs and EGCs 24 Contact persons 31

21 Main prospectus and registration requirements Norway United States Prospectus / Registration requirements Sub-categories of prospectuses / Registration statements Practical exemptions Offering prospectus required for public offering of securities, and listing prospectus required for listing of securities on regulated markets Shorter information documents if certain exemptions are available Practical exemptions for offering prospectus if offer is directed towards less than 150 persons, professional investors or with a minimum allocation and subscription of EURO 100,00 per investor Practical exemption from listing prospectus if number of shares to be listed represents less than 10% of the already listed shares of 12 months period Securities Act Registration Statement on Form F-1 required in connection with public offering of shares in IPO by FPI. Exchange Act Registration Statement must be filed to register the class being listed. The disclosure in both documents overlaps significantly Shorter form Securities Act Registration Statement on Form F-3 available once a FPI has been subject to the US reporting requirements for at least 12 calendar months Exemptions from Securities Act registration requirements are available for the sale of shares in certain circumstances, including in private placements to sophisticated investors and non-u.s. persons in offshore transactions 21

22 Norway Main requirements and practical exemptions Main regulation Offering prospectus requirement Offering prospectus practical exemptions Listing prospectus requirement Listing prospectus practical exemptions Sub-categories to prospectuses Light touch regime Approval Approval process EEA passporting Offer to subscribe for or to purchase transferable securities directed towards 150 or more persons in the Norwegian securities market, which involves an amount of at least EUR 1,000,000 over a period of 12 months Minimum subscription and allocation amount exceeding EUR 100,000 per investor and employee issues Listing of transferable securities on a Norwegian regulated market, including any increases of share capital Share capital increases of less than 10% of already listed/issued share capital over a period of 12 months (regardless in which markets the shares are marketed/listed) and employee issues Shorter information documents if certain exemptions are available (including with respect to employee issues) Less extensive prospectus content requirements for rights issues and small cap companies The prospectus shall be approved by the relevant authority in the company s EEA home jurisdiction (for non EEA incorporated companies, this is normally the Norwegian FSA) Normally 3 4 weeks. The prospectus shall be close-to-finalized when submitted for approval A prospectus approved by the Norwegian FSA can be passported and used throughout the EEA 22

23 US Short form registration and practical exemptions Main regulation Short form registration Once a FPI has been subject to the US reporting requirements for at least 12 calendar months, and it meets the other Form F-3 requirements, the issuer may take advantage of the Form F-3 short form Registration Statement. The Form F-3 allows an issuer to file a shelf registration statement (automatically updated through incorporation by reference of subsequently filed annual reports and other disclosures filed on Form 6-K). Allows expedited access to the US public capital markets. Shelf offerings can be consummated in a week or two if an effective shelf registration statement is on file with the SEC Subsequent issuances An issuer may sell additional securities without registration if it complies with an available exemption from the US federal securities laws both in the US or to US persons (e.g., to sophisticated investors) and outside the US (in an offshore transaction) Securities (with limited exceptions including certain securities sold by a FPI in accordance with Regulation S) that are not sold in a transaction registered in accordance with the Securities Act will be considered restricted securities in the US and may not be freely transferable absent an exemption (such as Rule 144 or resales to QIBs under Rule 144A) or the filing of a resale registration statement Additional considerations Anti-fraud provisions of US federal securities laws (e.g., SEC Rule 10b-5) apply regardless of whether the offering is exempt from registration 23

24 Main features for listing in Norway and the US 03 Listing in Norway 05 Listing in the US 10 Listing comparisons - fees and continuing obligations 16 Prospectus and registration requirements 20 American Depository Receipts, FPIs and EGCs 24 Contact persons 31

25 American Depositary Receipts (ADRs) An ADR is a negotiable receipt issued by a bank, trust company or other similar financial institution (the Depositary), which represents the beneficial ownership of equity securities in a FPI An ADR program creates a new security, the ADR, which trades in US dollars consistent with US market practice. Holders of ADRs receive dividends in US dollars. Retail investors are eligible to purchase ADRs in unrestricted ADR programs. A sponsored ADR program is established through a depositary agreement among the issuer, the Depositary and the holders of the ADRs. An unsponsored ADR program is established without the participation of the issuer There are three categories of ADR programs: ADR Program Level 1 Level 2 Level 3 Description ADRs trade in the US only in the over-the-counter market (pink sheets) and not on an exchange. To qualify for a level 1 program: (i) the issuer s securities must be traded on a foreign exchange; (ii) the Depositary must file a short form Securities Act Registration Statement consisting primarily of the depositary agreement with the SEC and (iii) the issuer must comply with the Rule 12g3-2(b) exemption from Exchange Act registration. No US prospectus is required and the issuer will not become subject to ongoing US periodic reporting requirements, stock exchange requirements, Sarbanes-Oxley, Foreign Corrupt Practices Act or other US regulations applicable to companies listed in the US ADRs are listed on an exchange (no additional capital can be raised). A Level 2 program requires the filing of a short form Securities Act Registration Statement and a more extensive Exchange Act Registration Statement (to register the class being listed) on SEC Form 20-F. This program provides more liquidity than a Level 1 program. However, this option significantly increases US regulation of the issuer (compliance with SOX and FCPA) and other ongoing reporting and corporate governance requirements US public offering of ADRs and listing on a US exchange. In addition to filing the short form Securities Act Registration statement for the ADRs, an issuer must also file a Securities Act Registration Statement on Form F-1 and register the class of securities under the Exchange Act. Level 3 programs provides maximum liquidity and access to the US capital markets. However, this option, like Level 2, significantly increases US regulation of the issuer (compliance with SOX and FCPA) and other ongoing reporting and corporate governance requirements 25

26 Foreign Private Issuer (FPI) definition A foreign private issuer (FPI) is a company, other than a foreign government, organized outside the United States which satisfies the following criteria. A foreign company will not be considered a FPI if: more than 50% of the issuer s outstanding voting securities are held directly or indirectly of record by US residents; and any of the following applies: o the majority of the issuer s executive officers and directors are US citizens or residents; o more than 50% of the issuer s assets are located in the United States; or o the issuer s business is administered principally in the United States Based on the above test, if more than 50% of the issuer s outstanding voting securities are held of record by non-us residents, the issuer qualifies as an FPI and there is no need to address the second prong of the test The vast majority of the non-us companies listed on a securities exchange in the US qualify as a FPI 26

27 US regulatory benefits for FPIs Regulatory Benefit Annual Report Filings Quarterly Financial Reports Longer period for filing annual report. A FPI has four months after its fiscal year end to file its Annual Report on Form 20-F, whereas a US issuer has between 60 and 90 days after its fiscal year end A FPI is not required under US federal securities laws or the rules of the US national securities exchanges to file or make public quarterly financial information (subject to certain exceptions, such as issuers contractually obligated to make sure filings). In contrast, US issuers are required to file unaudited financial information quarterly, on Form 10-Q, and such reports are certified by the CEO/CFO Proxy Solicitations Regulation Fair Disclosure Executive Compensation IFRS -- No US GAAP Reconciliation Short Swing Profits A FPI is not required to comply with the US proxy rules FPIs are exempt from Regulation FD, which requires the immediate disclosure of any material non-public information a FPI shares with analysts or selected shareholders. Most FPIs, however, adopt procedures to comply with this rule in principle A FPI is exempt from certain material aspects of executive compensation disclosures, including the obligation to prepare Compensation, Disclosure and Analysis A FPI may prepare its financial statements in accordance with IASB IFRS without reconciliation to US GAAP FPIs not subject to primary insider (executive officers, directors or greater than 10% shareholders) reporting and short swing profit recapture rules, which require an insider to disgorge profits on purchases and sales of issuer securities within a six-month period, regardless of intention or possession of material non-public information 27

28 Emerging Growth Companies (EGCs) An emerging growth company (EGC) is a category of issuer established by the US JOBS Act An EGC is an issuer (including a FPI) with total annual gross revenues of less than $1 billion (subject to inflationary adjustment every 5 years) during its mostly recently completed fiscal year Status as an EGC is maintained until the earliest of: the last day of any fiscal year in which the issuer s total annual gross revenues are $1 billion or more; the last day of the issuer s fiscal year following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act (for a debt-only issuer that never sells common equity pursuant to a registration statement, this five-year period will not run); any date on which the issuer has, during the prior three-year period, issued more than $1 billion in non-convertible debt securities; or the date on which it is deemed to be a large accelerated filer (a company that has been public for at least twelve months, has filed a Form 20-F, and has a public float of at least $700 million) 28

29 Benefits of being an EGC Benefits during IPO Testing the waters. Before or after filing a registration statement, EGCs and their authorized persons (including underwriters) may meet with QIBs and other institutional investors to gauge their interest in a contemplated offering. These presentations may be oral or the issuer may use written materials Confidential SEC review. EGCs may initiate the SEC review process confidentially by submitting a draft registration statement for nonpublic review by the SEC Staff Scaled financial disclosures. EGC may conduct an offering with 2 years (and not 3 years) of audited financial statements and as few as 2 years (rather than 5 years) of selected financial data Continuing benefits (so called IPO on-ramp ) Sarbanes Oxley. EGCs are exempt from the requirement that its independent auditor attest to management's assessment of internal controls over financing reporting required by SOX Section 404(b) Extended US GAAP phase-in. EGCs are not required to comply with new or revised financial accounting standards under US GAAP until those standards also apply to private companies PCAOB rules. EGCs are exempt from any PCAOB rules that, if adopted, would mandate audit firm rotation and an expanded narrative, called auditor discussion and analysis, that would appear as part of any financial statement audit 29

30 US Illustrative registration / listing timeline (EGCs) Pre-Filing Period Waiting Period Post-Effective Period 30 days 4 weeks 21 days 1 to 3 weeks T + 3 days Preparation of Form F-1 registration statement Due diligence Analyze accounting issues Prepare and file stock exchange application Prepare Test the- Water materials Commence Test-the- Water meetings SEC initial review of registration statement Test-the-Water meetings continue Ongoing due diligence Respond to SEC comments Make at least one additional confidential submission of Form F-1 Incorporate all SEC comments Ongoing due diligence Statutory waiting period Publicly file Form F-1 with SEC Respond to any additional SEC comments Typically obtain stock exchange approval prior to commencement of road shows Finalize prospectus Prepare and file acceleration request Conduct road shows Registration statement declared effective by SEC Print and distribute final prospectus Sign underwriting agreement * At the time the issuer engages its underwriters (pre-submission), the issuer is subject to publicity and other restrictions 30

31 Main features for listing in Norway and the US 03 Listing in Norway 05 Listing in the US 10 Listing comparisons - fees and continuing obligations 16 Prospectus and registration requirements 20 American Depository Receipts, FPIs and EGCs 24 Contact persons 31

32 Contact persons Lars Knem Christie Anthony J. Renzi Jr. Partner, Lawyer Lars K Christie is heading Selmer s capital markets division of our Corporate department, and is ranked as "Leading lawyer" by International Financial Law Review in the category "Capital Markets". Christie specializes in securities law, company law and corporate governance, and is regularly appointed with respect to IPOs, offerings and M&A. As a former lawyer at Oslo Børs, Christie also has experience with approvals of listing applications, prospectuses and offer documents, in addition to preparing and implementing new securities laws. Christie is appointed external examiner on company and securities law at the Universities of Oslo and Bergen, and is member of The Norwegian Bar Association s legislative committee for stock exchange and securities law. Partner, Lawyer trenzi@akingump.com (Washington, DC) (London) Tony concentrates on international and domestic transactions, including equity and high-yield debt financings, mergers and acquisitions, corporate restructurings and private equity investments. He has represented a broad range of international clients, with a focus on European (particularly Scandinavian) issuers and investment banks, developing strategies for raising (public and private) capital, acquiring assets or companies, and making private equity investments in cross-border transactions. Tony is the author or co-author of articles addressing U.S. securities law issues, including his recent article All Abroad, (International Financial Law Review, September 2012). He is Chambers ranked in USA Capital Markets (debt and equity) and Norway Capital Markets (expert based abroad). 32