EGC Corporate Governance Practices (May 2018)

A Survey and Related Resources PAGE D-3 * Under certain circumstances, a company may qualify with $10 million in aggregate for two years and nine months. **A company that qualifies as an EGC and avails itself of the provisions of the Securities Act and the Exchange Act permitting EGCs to report only two years of audited financial statements can qualify under the Earnings Test by meeting the following requirements: adjusted pre-tax earnings from continuing operations must total at least $10 million in the aggregate for the last two fiscal years together with a minimum of $2 million in both years. The company must also meet the following requirements:* • 400 round lot holders for U.S. companies and 5,000 round lot holders for non-U.S. companies; • Minimum number of publicly held shares of 1,100,000 for U.S. companies and 2,500,000 for non-U.S. companies; • Minimum aggregate market value of publicly held shares of $40 million for U.S. companies and $100 million for non-U.S. companies ($60 million if the non-U.S. company has a parent or affiliate that is a listed company and retains control of the company or is under common control with the company); and • Minimum price per share at least $4.00 at initial listing. *An FPI may also avail itself of the requirement applicable to U.S. companies. The number of shareholders includes shareholders of record and beneficial holders of shares held in street name. Shares held by directors, officers, or immediate families and other concentrated holdings of 10% or more are excluded. When considering a listing application from a company organized under the laws of Canada, Mexico, or the United States (“North America”), the NYSE will include all North American holders in applying the minimum shareholder requirement. When listing a company from outside North America, the NYSE may, in its discretion, include holders in the company’s home country or primary trading market outside the United States in applying the minimum shareholder requirement, provided that such market is a regulated stock exchange. In exercising this discretion, the NYSE will consider all relevant factors including: (i) whether the information is derived from a reliable source, preferably either a government-regulated securities market or a transfer agent that is subject to governmental regulation; (ii) whether there exist efficient mechanisms for the transfer of securities between the company’s non-U.S. trading market and the United States; and (iii) the number of shareholders and the extent of trading in the company’s securities in the United States prior to the listing.