OUTOKUMPU OYJ STOCK EXCHANGE RELEASE December 17, 2015 at 4.00 pm EET
As part of the long-term incentive programs for key employees in Outokumpu, the Board of Directors has approved the commencement of the fifth plan, plan 2016–2018, of the Performance Share Plan 2012 and the Restricted Share Pool 2012. Furthermore, the Board approved the details of a Matching Share Plan of the incoming CEO Roeland Baan who takes the Outokumpu CEO position on January 1, 2016.
Matching Share Plan of the CEO
The Board of Directors has approved a Matching Share Plan for the CEO, according to which Roeland Baan is entitled to receive in total 1,157,156 gross shares including taxes on the condition that he personally invests EUR 1 million into Outokumpu shares by February 20, 2016. The matching shares will then be delivered in four equal installments in the end of 2016, 2017, 2018 and 2019, respectively. The CEO is required to keep at least all the shares he acquires and the first vesting portion, i.e. 25% of the net amount of the received matching shares throughout his service with Outokumpu. If the CEO’s service contract is terminated without any fault or negligence attributable to him, all unvested matching shares (ie. shares not yet delivered) will vest at the expiry of the CEO agreement, provided that the ownership requirement for the CEO is fulfilled. The CEO is not entitled to a specific severance payment, and the notice period is three months for both parties.
In the consideration of the CEO compensation, the Board wanted to emphasize shareholder value creation, commit the CEO through a substantial personal investment in the company and thereby connect him closely to the development of the company value.
Furthermore, the CEO is part of Outokumpu’s short-term incentive plan with a 95% maximum payout of the annual base salary in 2016. The annual base salary of Roeland Baan is EUR 950,000. He will be also included in the plan 2016-2018 of the Performance Share Plan with a maximum reward of 220,000 gross shares including taxes.
Performance Share Plan 2012, plan period 2016-2018
The Board of Directors approved in 2012 the Performance Share Plan 2012, which is part of the remuneration and commitment program for the key management of Outokumpu. Performance Share Plan 2012 offers a possibility to receive Outokumpu shares as a long-term incentive provided that the criteria set by the Board for each earning period are met. Performance Share Plan 2012 consists of annually commencing individual plans. Each plan contains a three-year earning period after which, if the earnings criteria are met, share rewards will be delivered to the participants.
The Board of Directors has now approved the commencement of the fifth plan 2016-2018 of the Performance Share Plan 2012. Plan period 2016-2018 commences at the beginning of 2016 with the share rewards distributed in spring 2019. The earning criteria applied for the plan will be approved by the Board in February 2016.
The Board of Directors has approved that at the maximum 150 key employees may participate in the plan 2016–2018. The maximum number of gross shares (taxes included) that can be allocated is 2,900,000 from which applicable taxes will be deducted. The remaining net value will be delivered to the participants in Outokumpu shares, if the performance criteria set by the Board are met.
Restricted Share Pool 2012, plan period 2016-2018
The Restricted Share Pool program 2012 that the Board of Directors of Outokumpu approved in 2012 enables long-term rewarding of selected employees of the Outokumpu Group. It consists of annually commencing individual plans, each with a three-year vesting period after which the allocated share rewards will be delivered to the participants provided that their employment with Outokumpu continues uninterrupted throughout the duration of the plan until the shares are delivered.
The Board of Directors has now approved the commencement of the fifth plan 2016-2018 of the Restricted Share Pool. Plan period 2016–2018 commences at the beginning of 2016 with the share rewards distributed in spring 2019. Restricted share grants are approved annually by the CEO with the exception of allocations to any Leadership Team members, which require Board approval. The maximum number of shares that may be allocated within the fifth plan 2016–2018 is 330,000 gross shares from which applicable taxes will be deducted, and the remaining net value will be delivered to the participants in Outokumpu shares.
Other terms
The aggregate reward for each participant, excluding the CEO Baan, under the above programs and together with other short-term and long-term incentives of the participant, may not exceed 200% of the participant’s annual base salary.
According to the share ownership requirement applied in Outokumpu, the members of the Outokumpu Leadership Team are required to own Outokumpu shares received under incentive programs corresponding to the value of their annual gross base salary. Half of the net shares received from these programs must be used to fulfil this requirement. The CEO is required to keep at least all the shares he invests and the first vesting portion, i.e. 25% of the net amount of the received matching shares throughout his service with Outokumpu.
For more information:
Investors: Johanna Henttonen, tel. +358 9 421 3804, mobile +358 40 530 0778
Media: Saara Tahvanainen, tel. +358 40 589 0223 Outokumpu Group Outokumpu i s a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable – thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs more than 12 000 professionals in more than 30 countries, with headquarters in Espoo, Finland and shares listed in Nasdaq Helsinki. www.outokumpu.com
