41 Stock option plan1) (page 1/2)
The Annual General Meeting of September 29, 1999 approved a contingent increase of capital stock of up to € 10,996,288.00 through the issue of up to 4,295,425 shares (Contingent Capital I). The sole purpose of the contingent capital increase is to grant subscription rights to members of the Company’s Management Board, to members of the Management Board of subsidiaries in Germany and abroad and to other senior executives within the Heidelberg Group.
- The comments on the stock option plan are also part of the Corporate Governance Report
Authorization of the Management Board and the Supervisory Board
The Management Board has been authorized to grant subscription rights to eligible persons within a period of five years from the time the contingent capital goes into effect. The subscription rights are to be issued to those entitled by way of entry in the commercial register in tranches of not more than 30 percent of the total volume per financial year. The Supervisory Board has the sole responsibility for granting subscription rights to members of the Management Board.
The subscription rights can only be exercised after the end of the vesting period. The vesting period commences when the subscription rights are issued and ends three years after the issue date. The term of the subscription rights commences when the subscription rights are issued and ends six years after the date of issue. Subscription rights that have not been exercised or cannot be exercised by the end of the term expire without compensation.
Exercise period and exercise blocking periods
Subscription rights can be exercised at any time after the end of the blocking period during the respective term. However, the subscription rights cannot be exercised during blocking periods that have been established by the Management Board and Supervisory Board – for example, periods of at least ten trading days before dates on which reports on the Company’s business development are published. The entire period or parts of the period between the end of a financial year and the end of the respective ordinary Annual General Meeting may also be designated as blocking periods.
Investment on own account
When granting subscription rights, the precondition may be imposed that the eligible persons must acquire shares of Heidelberger Druckmaschinen Aktiengesellschaft on their own account and that they retain the shares for the appropriate vesting period.
Condition for exercising subscription rights
Subscription rights can only be exercised if the market price of the Company’s shares (as calculated on the basis of the total shareholder return method) between the issue and the exercising of the subscription rights outperforms the value of the Dow Jones EURO STOXX Index (hereinafter referred to as the ‘Index’) as calculated on the basis of the total shareholder return method. The target shall be deemed to have been reached if the performance calculated thus exceeds that of the Index. If subscription rights are not exercised despite the target having been reached they cannot be exercised again until the target hasonce more been reached.
The exercise price is defined as the average closing price of the Company’s shares on the last ten consecutive trading days in Frankfurt am Main before the relevant subscription period for the respective subscription rights (the exercise price). If the closing price of the shares in the electronic trading system of Deutsche Börse Aktiengesellschaft (which is used to determine the target price) is more than 175 percent of the exercise price determined in accordance with the above section (the threshold amount) on the last day of trading before the subscription rights are exercised (the relevant market price), the exercise price shall be increased by the amount by which the relevant market price exceeds the threshold amount. This does not affect the provisions of Article 9 (1) of the German Stock Corporation Act (AktG).
Non-transferability/dividend rights of new shares
The subscription rights are not legally transferable. The new shares are entitled to a share in the profit from the beginning of the financial year in which the issue occurs.