Andritz AG

EANS-News: ANDRITZ AG
Report by the Executive Board and the Supervisory Board on the granting of share options to executive staff and members of the Executive Board

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Company Information

Graz (euro adhoc) - The company intends to implement the 2014 Share Option
Program decided 
in the 107th Annual General Meeting on March 21, 2014. The Executive Board 
and the Supervisory Board submit the following report on this topic 
according to § 95, para. 6, of the Austrian Stock Corporation Act: 

1. Goals and principles of the program
   It is the goal of the program to link the amount of the variable parts 
   of total remuneration directly to the development of earnings and of 
   the share price of the company. This is also in keeping with the 
   recommendation suggested in the Austrian Corporate Governance Code (ACGC) 
   that 'if a stock option scheme is proposed, the parameters of comparison 
   to be applied shall be defined in advance and may include, for example, 
   the performance of stock indices, share price targets, or other suitable
   benchmarks' (Rule 28). The goal also is to focus ANDRITZ's management 
   even more on the aims of the corporate shareholders and to ensure 
   participation in the success achieved. In compliance with the EU 
   remuneration recommendation and the ACGC, share options shall not be 
   exercisable for at least three years after they have been granted. 
   In addition, participants in the share option program must also hold 
   investments in ANDRITZ shares from their own resources for the full 
   duration of the program. 

   In determining the total number of options allocated to each business 
   area, this program takes account of profitability and sales for the first 
   time, each with a 50% weighting. As a result, the number of options per 
   business area is geared even more to the respective business area's 
   contribution towards sales and earnings.

   As a result of the poor earnings development in 2013, the benchmark 
   chosen to meet the "increase in earnings per share" vesting condition is 
   not the low earnings per share in 2013, but the earnings per share in 
   2012, which was the highest level so far in the company's history. 
   In addition, the percentage of increase in earnings per share needed to
   meet the "increase in earnings per share" vesting condition was increased
   from the 15% and 20% levels, respectively, in the previous option 
   programs to levels of 20% and 25%, respectively, now. The management 
   has thus oriented the targets for exercise of the options even more to 
   the expectations and interests of the shareholders in terms of future 
   earnings performance and value creation. The current targets required 
   for the management to exercise the options can thus be considered very 
   demanding compared to the option programs of other companies. In addition,
   the total number of options granted has been halved compared to the 
   previous option programs.

2. Number and distribution of the share options to be granted, validity of 
   program
   Approximately 100 to 120 executives of the ANDRITZ GROUP as well as the 
   members of the Executive Board shall have the opportunity to participate 
   in the share option program. The number of shares allocated per eligible 
   manager will be, depending on the area of responsibility, up to 20,000 
   for executives, for each Executive Board member 37,500.  These options 
   are to be drawn from the pool of shares under the corporate buy-back 
   program. The maximum number of share options that can be issued is 
   1,300,000. Of these options, 187,500 options are assigned to the five 
   members of the Executive Board, and the remainder to executive staff.

   Exercise of the share option program shall commence on May 1, 2017 and 
   be terminated on April 30, 2019. 

3. Terms and conditions of exercise
  3.1. One share option provides eligibility for subscribing to one share. 


  3.2. In order to exercise a share option, eligible persons must be in 
       active employment of the company or one of its affiliates as from 
       May 1, 2014 and until the date of exercise (and the exercise 
       conditions under 3.4. must be fulfilled); this requirement may, 
       in certain special cases, be waived for important reasons. Another 
       requirement is that managers must have invested at least 
       EUR 20,000.-, and the members of the Executive Board at least 
       EUR 40,000.-, in ANDRITZ shares from their own resources. This 
       investment must have been paid up latest by the time of allocation 
       of the options, i.e. June 1, 2014. 
        
       Participants in the 2014 Share Option Program must maintain this 
       investment continuously until exercise of the options and must 
       furnish proof thereof upon exercise.

       Eligible persons who have previously invested money in the company 
       from their own resources under the current share option program may 
       use this investment for the new share option program. Shares that 
       were endowed to foundations of which eligible persons are founders 
       and beneficiaries can also be used in terms of these own resources. 
       Any persons who have so far not participated in a share option 
       program must prove their investment from their own resources by 
       June 1, 2014.

  3.3. The exercise price of the share options (in the following referred 
       to as 'the exercise price') is the unweighted average of the closing 
       prices of the ANDRITZ share during the four calendar weeks following 
       the 107th Annual General Meeting of Shareholders on March 21, 2014.

  3.4. The total number of shares that can be purchased must not exceed the 
       number of options issued.

       Options can be exercised between May 1, 2017 and April 30, 2019 
       (= period of exercise), subject to:
       - the average unweighted closing price of ANDRITZ shares during 20 
         successive trading days in the period May 1, 2016 to April 30, 2017 
         being at least 15% above the exercise price calculated as per 3.3., 
         and 
       - the earnings per share (related to the overall number of listed 
         shares) for the business year 2015 or the earnings per share 
         (related to the overall number of listed shares) for the business 
         year 2016 being at least 20% above the earnings per share (related 
         to the overall number of listed shares) for the business year 2012,

         or

       - the average unweighted closing price of ANDRITZ shares during 20 
         successive trading days in the period May 1, 2017 to April 30, 2018 
         being at least 20% above the exercise price calculated as per 3.3., 
         and
       - the earnings per share (related to the overall number of listed 
         shares) for the business year 2016 or the earnings per share 
         (related to the overall number of listed shares) for the business 
         year 2017 being at least 25% above the earnings per share (related 
         to the overall number of listed shares) for the business year 2012. 

       Provided that the terms and conditions of exercise are fulfilled, 50%
       of the options can be exercised immediately upon commencement of the
       exercise period (see information under 2.), and 25% of the options 
       can be exercised after three months, with the remaining 25% being 
       exercisable after a further three months.


  3.5. Share options can only be exercised by way of a written notification 
       to the corporation.

4. Number and apportioning of the options already granted to wage- 
   earners, managerial staff, and to the individual board members, stating 
   the number of subscribable shares in each case
   At present, 2,187,000 share options have been issued for 79 executive 
   staff out of current option programs. A total of 420,000 share options 
   thereof are allocated to the five members of the Executive Board 
   (100,000 share options for the CEO, 80,000 share options each for the 
   other members of the Executive Board), and the remainder to executive 
   staff. Depending on the responsibilities of the manager in question, 
   up to 20,000 share options are granted to each of the managerial staff 
   entitled to them. 
   Each share option entitles the holder to the purchase of one share.

5. General remarks
  5.1. The share options are not transferable. 

  5.2. The shares purchased under the share option program are not subject 
       to a ban on sales over a certain period. 


Graz, April 2014


                   The Executive Board     The Supervisory Board


Further inquiry note:
Dr. Michael Buchbauer
Head of Group Treasury
Tel.: +43 316 6902 2979
Fax: +43 316 6902 465
mailto:michael.buchbauer@andritz.com

end of announcement                               euro adhoc 
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company:     Andritz AG
             Stattegger Straße 18
             A-8045 Graz
phone:       +43 (0)316 6902-0
FAX:         +43 (0)316 6902-415
mail:     welcome@andritz.com
WWW:      www.andritz.com
sector:      Machine Manufacturing
ISIN:        AT0000730007
indexes:     WBI, ATX Prime, ATX, ATX five
stockmarkets: official market: Wien 
language:   English
 



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