Andritz AG

EANS-News: ANDRITZ: Report by the Executive Board and the Supervisory Board on the Stock Option Program for 2016

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Annual & Special Corporate Meetings

By resolution of the Annual General Meeting of ANDRITZ AG on March 30, 2016, 
the company's Executive Board was authorized to purchase treasury shares in 
accordance with the provisions of the Austrian Stock Corporation Act (AktG) 
and to possibly cancel these company shares with approval from the Supervisory 
Board without having to submit the matter to the Annual General Meeting of 
Shareholders again. The proportion of shares to be purchased or which have 
already been purchased under previous authorizations must not exceed 10 
percent of the company's total shares. The lowest price per no-par value 
share must not be less than the respective amount represented by each share 
in the capital stock. The highest price paid per share upon buy-back must not 
exceed the average, unweighted closing price on the Vienna Stock Exchange 
over the 10 trading days preceding exercise of this authorization by more 
than 10 percent. This authorization to purchase treasury shares is currently 
limited to 30 months as from the resolution by the Annual General Meeting 
on March 30, 2016. On the basis of this and previous authorizations, the 
company currently holds 1,924,699 treasury shares.

The Executive Board and the Supervisory Board of ANDRITZ AG now intend 
to make use of the authorization to buy back shares and to pass a resolution to
assign treasury shares of the company to senior executives of the ANDRITZ GROUP 
and members of the Executive Board under the stock option program for 2016. 
The share numbers stated in the document are maximum figures in each case. 
The actual number of treasury shares to be transferred depends on achievement 
of the actual goals of the program mentioned. It may be much smaller, and it 
still depends very much on a resolution of the ANDRITZ AG Executive and 
Supervisory Boards to be published separately. 

The Executive and Supervisory Boards of ANDRITZ AG submit the following report, 
pursuant to § 95 (6) in conjunction with § 159 (2), line 3 AktG, on the 
intended granting of stock options to senior executives of the ANDRITZ GROUP 
and members of the Executive Board:

1. Goals and principles of the program
   It is the goal of the program to link the amounts of variable salary 
   parts directly to the development of the financial results and 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 increasingly focus ANDRITZ's management 
   orientation 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, stock options shall not be 
   exercisable for at least three years after they have been granted. In 
   addition, participants in the stock option program must also hold 
   investments in ANDRITZ shares from their own resources for the full 
   duration of the program. 

   Employee stock option programs of this kind are common and widespread 
   among listed companies. For this purpose the company must be able to offer
   the management the opportunity to acquire ANDRITZ AG shares. Thus, the 
   option program is also an essential means of strengthening employee loyalty
   and helps to make the company more attractive as an employer. The stock 
   option program is intended to create an additional incentive for the 
   company management to contribute their services towards the success of 
   ANDRITZ AG and of the ANDRITZ GROUP by having a share in this success as 
   (future) shareholders and co-owners.

2. Number and distribution of the stock options to be granted, validity of 
   program
   Approximately 100 to 120 senior executives of the ANDRITZ GROUP as well as 
   the members of the Executive Board shall have the opportunity to benefit 
   from the stock option program. The number of shares allocated per eligible 
   senior executive will be up to 20,000, depending on the area of 
   responsibility, and 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 stock options that can be issued is
   1,300,000. The four members of the Executive Board are assigned 150,000 of 
   these options and the remainder to senior executives.

   Exercise of the stock option program shall commence on May 1, 2019 and be 
   terminated on April 30, 2021. 

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


 3.2. In order to exercise a stock option, eligible persons must be in active 
      employment of the company or one of its affiliates as from May 1, 2016 
      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 senior 
      executives 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, which investment must have been paid up not later 
      than by the time of allocation of the options, i.e. June 1, 2016. 
      Participants in the stock option program for 2016 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 stock option program may use this 
      investment for the new stock option program. Shares that were endowed to 
      foundations of which eligible persons are founders and beneficiaries 
      can also be considered as own resources. Any persons who have not 
      participated in a stock option program so far must provide proof of their 
      investment from their own resources by June 1, 2016.

 3.3. The exercise price of the stock options (in the following referred to 
      as "the exercise price") is the unweighted average of the closing price 
      of the ANDRITZ share during the four calendar weeks following the 109th 
      Annual General Meeting of Shareholders on March 30, 2016.

 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, 2019 and April 30, 2021 
      (= period of exercise), subject to:
       - the average unweighted closing price of ANDRITZ shares during 20 
         successive trading days in the period May 1, 2018 - April 30, 2019 
         being at least 15 percent above the exercise price calculated as per 
         3.3., and 
       - the profit per share (related to the overall number of listed shares) 
         for the 2017 business year or the profit per share (related to the 
         overall number of listed shares) for the 2018 business year being at 
         least 15 percent above the profit per share (related to the overall 
         number of listed shares) for the 2015 business year,

         or

       - the average unweighted closing price of ANDRITZ shares during 20 
         successive trading days in the period May 1, 2019 - April 30, 2020 
         being at least 20 percent above the exercise price calculated as per 
         3.3., and
       - the profit per share (related to the overall number of listed shares) 
         for the 2018 business year or the profit per share (related to the 
         overall number of listed shares) for the 2019 business year being at 
         least 20 percent above the profit per share (related to the overall 
         number of listed shares) for the 2015 business year. In order to 
         determine the earnings per share, the consolidated financial 
         statements of the applicable year and with an unqualified auditor's 
         report are relevant. In case of any doubt, the Audit Committee of the 
         Supervisory Board shall decide.   
       

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

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

4. Number of the options already granted and distribution over employees, 
   senior executives, and the individual company boards, stating the 
   respective number of shares available for subscription in each case
   At the moment, 982,500 stock options from current option programs have been 
   issued for 78 executives. The members of the Executive Board hold a total 
   of 150,000 of these stock options, 75,000 stock options in total are held 
   by former members of the Executive Board, and the remainder is held by
   senior executives. The number of stock options granted per senior executive 
   eligible is up to 20,000 depending on the area of responsibility. Each 
   stock option entitles the holder to the purchase of one share.               

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

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


5.3. If the earnings-related requirement pursuant to 3.4 is not achieved or 
     is not expected to be achieved and therefore a gain resulting from 
     recognition of the options in the balance sheet in the respective current 
     period is realized, such a gain will not be taken into account in 
     calculating the earnings per share for the purposes of this option 
     program.


                                   Graz, March, 2016



                      The Executive Board        The Supervisory Board

Further inquiry note:
Dr. Michael Buchbauer
Head of Group Finance, Corporate Communications & Investor Relations
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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