Outokumpu - New share-based incentive programmes

STOCK EXCHANGE ANNOUNCEMENT
1 February 2012 at 2.00 pm EET
 
The Board has approved a new share-based incentive plan (Performance Share Plan 2012), to be offered to the key management, and a Restricted Share Pool programme which enables the long-term rewarding of selected individual employees of Outokumpu Group. The purpose of these programmes is to retain, motivate and reward the management for good performance that supports the implementation of Outokumpu's strategy as well as to direct their attention to increasing profitability and shareholder value.

The Performance Share Plan 2012

The Performance Share Plan consists of annually commencing performance share plans with three-year earnings periods. The first plan commences at the beginning of 2012 and the potential share rewards will be delivered in the spring 2015 if targets set by the Board of Directors are achieved. The earnings criteria applied in the first plan 2012-2014 are EBIT and relative Total Shareholder Return (TSR).

The Board has approved 98 employees to be in the scope of the programme for the 2012-2014-plan. If the performance targets for the first plan are attained in full, the maximum number of shares to be delivered is no more than 1 300 000 gross shares from which applicable taxes will be deducted and the remaining net-value will be delivered to the participants as Outokumpu shares.

The Restricted Share Pool

The Restricted Share Pool consists of annually commencing share plans with three-year vesting periods 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 first plan commences at the beginning of 2012 and any potential share rewards will be delivered in the spring 2015.

Restricted share grants are approved annually by the CEO on the basis of the authorisation granted by the Board of Directors, with the exception of possible allocations to Group Executive Committee members, which will be approved by the Board of Directors. The maximum number of shares that may be allocated within the first 2012-2014 plan is 200 000 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 of an individual participant under the above programmes, together with other short term and long-term incentives of the participant, may not exceed 200% of the participant's annual base salary.

No new shares will be issued in connection with the above share-based incentive programmes and therefore the programmes will have no diluting effect.

According to the share ownership plan applied, the members of the Group Executive Committee are obliged to own Outokumpu shares received under incentive programmes corresponding to the value of their annual gross base salary. 50% of net shares received from these new programmes must be used to fulfil the above ownership requirement.

Current share-based incentive scheme 2009-2013, earnings period 2009-2011 and harmonization of the earnings criteria with the new Performance Share Plan 2012

The Board of Directors of Outokumpu has confirmed that the targets set for the earnings period 2009-2011 were not met. No reward will therefore be paid to participants for this earnings period.

In line with the above earnings criteria applied in the first plan 2012-2014 of the Performance Share Plan 2012, the EPS criterion previously applied in the current share-based incentive scheme 2009-2013 is for the year 2012 replaced with the EBIT criterion in its on-going earnings periods 2010-2012 and 2011-2013.  

OUTOKUMPU OYJ

Outokumpu is a global leader in stainless steel with the vision to be the undisputed number one. Customers in a wide range of industries use our stainless steel and services worldwide. Being fully recyclable, maintenance-free, as well as very strong and durable material, stainless steel is one of the key building blocks for sustainable future. Outokumpu employs some 8 000 people in more than 30 countries. The Group's head office is located in Espoo, Finland. Outokumpu is listed on the NASDAQ OMX Helsinki.www.outokumpu.com

ENG Share-based incentive programmes 1.2.2012

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Source: Outokumpu Oyj via Thomson Reuters ONE

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