Employee Share Plans in Europe and the USA - Sorainen

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Employee Share Plans in Europe and the USADenmarkDenmark1. Securities law1.1 Offer of securities: The Danish prospectus regime consists of three tiers. 11The Danish prospectus regime consists of “three tiers”, of which only Tier 1 is a direct implementationof the Prospectus Directive. The layout below illustrates the three tiers of the Danish prospectusregime:OFFERINGLEGISLATIONTier 1Offerings of securities with anaggregate value above €2,500,000and of securities which are listed oradmitted to trading on a regulatedmarket• Prospectus Directive• Prospectus Regulation• CESR’s recommendations• The Danish Securities TradingAct, Chapter 6• Executive Order no. 223/2010• Guidelines No. 9318/2005Tier 2Offerings of unlisted securities withan aggregate value between€100,000 and €2,500,000• The Danish Securities TradingAct, Chapter 12• Executive Order no. 222/2010• Guidelines No. 9320/2005Tier 3Offerings of unlisted securities withan aggregate value below€100,000• Not covered by prospectusrules. The Danish MarketingAct and other acts may beapplicableThe EU Prospectus PassportIn the context of the Danish legislation regarding the EU Prospectus Passport, the distinction betweenthe three tiers described above is essential. This is because the regulations implementing theProspectus Directive only cover offerings of (a) securities with an aggregate value above € 2,500,000and (b) securities which are listed or admitted to trading on a regulated market within EU/EEA(collectively, “Tier 1 Offerings”).UK/1729295/03 27 September 2010
Employee Share Plans in Europe and the USADenmark• Tier 1 applies to offers of securities with an aggregate value above€2,500,000 and to securities which are listed or admitted to trading on aregulated market.• Tier 2 applies to offers of unlisted securities with an aggregate value ofbetween €100,000 and €2,500,000.• Tier 3 applies to offers of unlisted securities with an aggregate value below€100,000.Under the Danish prospectus regime, the main rule is that any offer of securitiesto the public 2 with an aggregate value above €100,000 (i.e. an offer within Tier 1or Tier 2) results in the obligation to issue a prospectus.There are, however, a number of exemptions in place, which may apply to shareplans. The exemptions can be divided into three categories namely:• those applying to the offer of securities which are not listed or admitted totrading on a regulated market ("Unlisted Securities");• those applying to the listing of securities, which are to be listed oradmitted to trading on a regulated market ("Listed Securities"); and• those applying to the offer of securities which are to be listed or admittedto trading on a regulated market.For Tier 1 Offerings the EU Prospectus Passport requires the EU/EEA member states to mutuallyrecognise prospectuses approved by the competent authority in any other member state and thusenable the cross border passporting of prospectuses within the EU/EEA.2In accordance with Section 2b of the Danish Securities Trading Act an offer of securities to the publicis:“a communication to natural or legal persons in any form and by any means, presenting sufficientinformation on the terms of the offer and the securities to be offered, so as to enable an investor todecide to purchase or subscribe to these securities”.It follows from the definition that a share plan under which securities of an aggregate value above€100,000 are offered will, in principle, be an offer of securities to the public and result in an obligationto publish a prospectus.Non-transferable securitiesTo the extent that options offered under a share plan are non-transferable securities, the offering willnot be covered by Danish prospectus rules.In addition, at the time of exercise of the non-transferable securities under a share plan, there is nopublic offer within the meaning of Article 2.1 (d) of the EU Prospectus Directive as interpreted by theDanish FSA.UK/1729295/03 28 September 2010
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