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«for the demerger of Norsk Hydro ASA business register no. 914 778 271 as a part of the merger of Norsk Hydro ASA’s petroleum activities with ...»

-- [ Page 1 ] --

PLAN

for

the demerger of

Norsk Hydro ASA

business register no. 914 778 271

as a part of the merger of

Norsk Hydro ASA’s petroleum activities with

Statoil ASA

business register no.: 923 609 016

entered into by the boards of directors of Norsk Hydro ASA and Statoil ASA on 12 and 13 March

2007 respectively for subsequent approval by the companies’ respective general meetings

This is a translation of the original official Norwegian document.

CONTENTS:

MAIN ELEMENTS OF THE MERGER ************************************************ 1. 3

2. ASSETS, RIGHTS AND OBLIGATIONS TO BE TRANSFERRED TO THE MERGED

COMPANY *********************************************************************** 5

ADJUSTMENT OF THE DEMERGER BALANCE AFTER THE EFFECTIVE DATE ETC. *****

3. 9 DEMERGER CONSIDERATION ***************************************************** 4. 11 CHANGES IN CAPITAL STRUCTURE BEFORE THE IMPLEMENTATION **************** 5. 12 CHANGES IN CAPITAL STRUCTURE AS A RESULT OF THE MERGER ***************** 6. 12 FOUNDERS AND SUBSCRIPTION CERTIFICATES ************************************ 7. 13 FURTHER ON THE MERGED COMPANY ******************************************** 8. 14

9. ACCOUNTING ISSUES************************************************************* 15 FISCAL ISSUES ******************************************************************* 10. 15 CONDITIONS FOR THE COMPLETION OF THE MERGER ***************************** 11. 15 COMPLETION OF THE MERGER *************************************************** 12. 16 PLANNING OF THE INTEGRATION ******************************************

–  –  –

(2) STATOIL ASA, business register no. 923 609 016, Forusbeen 50, 4035 Stavanger, (‘‘Statoil’’) (hereinafter jointly referred to as the ‘‘Parties’’ and individually as a ‘‘Party’’), regarding the merger of Hydro’s Petroleum Activities (as defined in clause 2.1. below) with Statoil (the ‘‘Merger’’).

1. MAIN ELEMENTS OF THE MERGER

–  –  –

On 18 December 2006, Hydro and Statoil entered into an Integration Agreement regarding a merger of Hydro’s Petroleum Activities with Statoil into one group (the ‘‘Merged Company’’), based on the principle of a merger of equals.

The Merged Company will be a competitive global participant in the petroleum industry, and the world’s largest operator for offshore projects in water depths of more than 100 meters. The Merged Company will have greater ability than each of the Parties separately to secure further growth in an environment with increasing competition for new resources and increasing technical complexity in available projects.

The purpose of the Integration Agreement was to form the basis for the development of this Merger Plan, which shall be based on and supplement the provisions in the Integration Agreement. The Integration Agreement shall be terminated and shall be replaced by the Merger Plan at the time when the Merger Plan is approved by the boards of directors of Statoil and Hydro.

1.2 The main feature of the Merger and general principles for completion

The activities in Hydro and its subsidiaries (the ‘‘Hydro Group’’) currently include the two core business areas Aluminium and Oil & Energy, together with Hydro Other Businesses and Hydro’s ‘‘captive’’ insurance company Industriforsikring AS (‘‘Industriforsikring’’). Hydro Other Businesses comprises the activities of Hydro Polymers, Hydro IS Partner (‘‘HISP’’), Hydro Production Partner, Industry- and Business Parks and Shared Services.

The Parties agree on a merger of Hydro’s Petroleum Activities with Statoil into one group, based on the principle of a merger between equals. Hydro’s Petroleum Activities are mainly organised under the business area Oil & Energy, however certain related activities which shall be included in the Merger, are organised in other business areas.

The Merger presupposes a demerger of the parent company Hydro. As a part of the Merger, a transfer of the ownership interests in a number of companies to be included in the Merged Company’s corporate structure will also take place, as well as a transfer of the ownership interests in certain other partly owned companies (‘‘the Petroleum Companies’’ or ‘‘Petroleum Companies’’). An overview of the Petroleum Companies is included in Annex 1.

The remaining part of the parent company Hydro and the ownership interests in the companies not included in the Merger (jointly ‘‘the Hydro Companies’’ or ‘‘Hydro Companies’’), will be part of the Hydro Group’s remaining activities (‘‘Hydro’s Remaining Activities’’).

1.3 Technical implementation

The Merger will be implemented by way of a demerger of Hydro’s Petroleum Activities with Statoil as the assignee company pursuant to the rules set out in the act dated 13 June 1997 no. 45 regarding public limited companies (the ‘‘Public Limited Companies Act’’) chapter 14, whereupon Hydro’s shareholders will receive 3 consideration in the form of shares in the Merged Company. In this respect, this Merger Plan constitutes a demerger plan pursuant to the Public Limited Companies Act section 14-4.





Hydro’s Petroleum Activities are mainly operated through subsidiaries. The most important of these subsidiaries, Norsk Hydro Produksjon AS, also conducts other activities of importance, while the rest of the subsidiaries included in Hydro’s Petroleum Activities do not conduct other activities of importance.

As a part of the Merger, the following Related Transactions (‘‘Related Transactions’’) shall be carried out prior to the time when the Merger is implemented by registration in the Register of Business Enterprises (‘‘Implementation’’):

(i) A demerger of Norsk Hydro Produksjon AS whereby assets, rights and obligations related to the Petroleum Activities are transferred to a newly established limited company wholly owned by Hydro (Norsk Hydro Petroleum AS).

(ii) Intra-group transfers of assets (including shares), rights and obligations to the extent necessary in order for Hydro’s Petroleum Activities and Hydro’s Remaining Activities respectively to be organised in companies which (a) only have assets, rights and obligations belonging either to the Petroleum Activities or Hydro’s Remaining Activities, and (b) are included in uninterrupted chains of ownership consisting solely of companies included either in Hydro’s Petroleum Activities or Hydro’s Remaining Activities.

In cases where it is not possible to carry out one or more Related Transactions prior to the Implementation, Statoil’s consent in writing is required for the completion of the Merger.. Such consent may not be unreasonably withheld. Statoil must also give written consent in case of significant changes in the informed transaction models and principles for the completion of Related Transactions.

Upon the completion of the Merger, all assets, rights and obligations included in Hydro’s Petroleum Activities will be transferred to Statoil. This transfer takes place through a reduction of the share capital of Hydro by NOK 3,197,265,703.30 from NOK 4,567,522,433.30 to NOK 1,370,256,730 by reducing the par value of each share from NOK 3.66 to NOK 1.098, and by simultaneously increasing the share capital of Statoil by NOK 2,606,655,590 to NOK 7,971,617,757.50 by issuing 1,042,662,236 new shares, each with a par value of NOK 2.50, as consideration to Hydro’s shareholders, resulting in that such shareholders receive 0.8622 shares in the Merged Company for each share owned in Hydro. Consideration in the form of shares shall not be issued for Hydro’s treasury shares.

The relation between Hydro’s nominal and paid-in share capital before and after the demerger corresponds to, in accordance with the provisions of the Norwegian Taxation Act regarding tax exempted demergers, the relation between the remaining net values in Hydro after the demerger and the net values to be transferred to the Merged Company in connection with the Merger (the ‘‘Proportion of Division’’).

1.4 Financial effective date The financial effective date of the Merger shall be 1 January 2007 (the ‘‘Effective Date’’).

This principle implies that all assets, rights and obligations related to Hydro’s Petroleum Activities which existed at the Effective Date, or which materialise later and have not ceased to exist at the Implementation, shall be allocated to the Petroleum Activities with effect for the Merger.

As a consequence, Hydro shall, as from 1 January 2007, continuously identify all rights and obligations which materialise or cease to exist for Hydro, and which are related to Hydro’s Petroleum Activities. In this respect, as well as in the Merger Plan in general, rights and obligations imply rights and obligations towards other legal entities, as well as rights and obligations between the remaining part of Hydro or Norsk Hydro Produksjon AS on the one hand, and the part of Hydro or Norsk Hydro Produksjon AS that shall be transferred to the Merged Company on the other hand, based on intra-group transactions as if they were separate companies from the Effective Date.

4

1.5 Time schedule The Merger Plan shall be submitted for approval to the general meetings of Statoil and Hydro as soon as possible, and no later than four months from the date hereof.

The completion of the Merger by registration in the Register of Business Enterprises shall take place on the first business day of the subsequent month after the expiry of the period for creditor’s objections and all other necessary conditions for the Implementation in accordance with the Merger Plan have been fulfilled.

2. ASSETS, RIGHTS AND OBLIGATIONS TO BE TRANSFERRED TO THE MERGED

COMPANY

2.1 Main principle The merger involves a merger of Hydro’s Petroleum Activities with Statoil into one group.

Hydro’s Petroleum Activities (‘‘Hydro’s Petroleum Activities’’ or the ‘‘Petroleum Activities’’) comprise all assets, rights and obligations which completely or primarily relate to the Hydro Group’s activities in the areas of exploration, production, transport, processing, marketing and sale of, as well as research and development related to, oil and gas, including all shares and assets which Hydro owns in companies with such activities. Further, Hydro’s activities within wind power and Hydro’s interests in Naturkraft AS and HISP together with Hydro’s ownership interests in Norsk Hydro Canada Inc. shall be included. On the other hand, the Hydro Group’s activities within hydroelectric power and associated trading activities, solar energy, CO2 quotas and Industriforsikring are not included.

If the transfer of assets, rights and obligations triggers a pre-emptive right or similar rights for third parties, any consideration which Hydro thereby may receive shall be included in the Petroleum Activities.

Except as otherwise stated in the Merger Plan, the Merger involves a transfer of all assets, rights and obligations included in the Petroleum Activities regardless of their nature, including assets, rights and obligations related to licenses, approvals, employment, claims, operating related debt, bond loans, intellectual property rights, disputes, sureties, guarantees, taxation, environmental matters, derivative contracts and other agreements, regardless of whether they are known or unknown, conditional or unconditional.

All cash and bank deposits which are not part of the Petroleum Companies, and syndicated credit facilities, shall be allocated to Hydro’s Remaining Activities. On the other hand, all bond loans shall be allocated to the Petroleum Activities.

Up to the Implementation, Hydro shall provide Statoil with such continuous information as is necessary to enable Statoil to verify whether the distribution of assets, rights and obligations and Related Transactions are implemented in accordance with the provisions of the Merger Plan and as the Parties otherwise have agreed.

2.2 Further specification of the assets, rights and obligations to be transferred 2.2.1 Introduction An overview of the most important assets, rights and obligations which will be transferred from Hydro to the Merged Company in connection with the Merger is included below.

–  –  –

2.2.3 Bond loans

The Merger involves a transfer of the following bond loans from Hydro to the Merged Company:

(i) All bond loans outstanding under ‘‘Indenture’’ of 15 April 1992 with Norsk Hydro a.s. (now Norsk Hydro ASA) as issuer (‘‘Issuer’’) and The Chase Manhattan Bank N.A. as trustee (‘‘Trustee’’) (now The Bank of New York), including subsequent supplements and amendments, with a total principal sum as of the Effective Date of NOK 16,319,498,691 based on an exchange rate of NOK/USD 6.2726.

(ii) All bond loans outstanding under ‘‘Trust Deed’’ of 22 January 1999 with Norsk Hydro ASA as issuer (‘‘Issuer’’) and The Chase Manhattan Bank N.A. as trustee (‘‘Trustee’’) (now The Bank of New York) with subsequent supplements and amendments, with a total principal sum as of the Effective Date of NOK 2,491,394,874 based on an exchange rate of NOK/GBP 12.3087 and NOK/EUR 8.2628.

2.2.4 Guarantee liability

The Merger involves a transfer of a guarantee portfolio related to the Petroleum Activities consisting of parent company guarantees and rights and obligations related to bank guarantees granted to the benefit of the Petroleum Activities. At the Effective Date, this guarantee portfolio includes a guarantee liability of approximately NOK 20 billion. Within the limits of ordinary course of business, the guarantee portfolio will be subject to changes in the period from the Effective Date and up until Implementation both with regard to guarantee liability and premium liability.

2.3 Further on employment issues



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