Norway-Stock Option Development

1. LEGISLATION TAXES STOCK OPTIONS BOTH AT GRANT AND EXERCISE DATE

Norway has become the first major country to enact legislation with respect to the taxation of stock options that will result in income tax consequences both at date of grant and at date of exercise. This new legislation is retroactively effective to January 1, 1996. However, the new rules will not affect the taxation of restricted stock or stock appreciation rights.

Under previously-existing law, stock options were taxed at date of exercise on the excess of the market value of the stock at date of exercise over its exercise price. However, there may now be two taxable events for individuals subject to tax in Norway. The new rules operate as indicated below: