Report of the Management Board to the Annual Shareholders´ Meeting 1. pursuant to Section 98 (3) and Section 159 (2) (3) Stock Corporation Act (Stock Options to Members of the Supervisory Board) and 2. pursuant to Section 159 (3) Stock Corporation ...
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1. General 1.1 The shareholders´ meeting to be held on 13 June 2008 shall resolve on the grant of stock options to members of the supervisory board. The shares underlying the options shall be own shares held by the Company. Therefore the management board submits the following report pursuant to Section 98 (3) and Section 159 (2) (3) Stock Corporation Act.
1.2 The shareholders´ meeting to be held on 13 June 2008 shall resolve on the amendment of the existing stock option plans by including an authorisation of the management board to determine an additional execution window per year within the options can be executed.
1.3 In addition, the management board shall be authorised pursuant to section 159 para 3 Stock Corporation Act to resolve on a conditional capital increase, with the consent of the supervisory board, up to a amount of EUR 3,000,000.00 until 13 June 2013, in one or several tranches, for the purpose of granting share options to employees, executives and members of the management board of the Company or of an undertaking affiliated with it. (authorised conditional capital 2008).
2. Principles and incentives underlying the options for the supervisory board and the options for employees, directors and members of the management board of the company or an undertaking affiliated with it
2.1 The underlying principle for the grant of the stock options is that employees, directors and the members of the management board of the Company or an undertaking affiliated with it as well as members of the supervisory board substantially contribute to the increase in the value of the Company and should therefore also receive stock options. For employees, directors and members of the management board the granting of stock options constitutes an incentive scheme that contributes to the increase in the value of the Company. The granting of stock options to employees is international common standard for young biotech companies and is according to the opinion of the management board a necessary instrument for employees´ retention and increases the attractiveness of the Company as employer.
2.2 Hence, the management board shall be authorised pursuant to section 159 para 3 Stock Corporation Act to resolve on a conditional capital increase, with the consent of the supervisory board, up to a amount of EUR 3,000,000.00 until 13 June 2013, in one or several tranches, for the purpose of granting share options to employees, executives and members of the management board of the Company or of an undertaking affiliated with it (authorised conditional capital 2008). The resolution of the management board on the contingent capital increase is subject to the approval of the supervisory board. The management board has to publish a report according to section 159 para 3 in connection with para 2 number 3 Stock Corporation Act two weeks prior of the approval by the supervisory board.
2.3 When resolving on the contingent capital increase the management board and the supervisory board have to apply the following principles (essential provisions of the ESOP 2008):
(i) Each beneficiary is entitled, subject to the detailed provisions of a stock options agreement, which includes the provisions of the ESOP 2008, and subject to the payment of the strike price to convert one option into one share. The strike price, i.e. the price which the beneficiaries have to pay to the Company in order to exercise their options, shall correspond to the last closing price of the Intercell share prior to the resolution on the grant of options or prior to the disclosure, if applicable, that is has to be published before such resolution can be adopted.
(ii) The exercise of the options is subject to the achievement of an exercise hurdle. The exercise hurdle is achieved if the closing price of the Intercell share on the day prior to the start of an execution window is at least 15 percent above the strike price.
(iii) The term of the options is limited with the expiry of the execution window in the fifth year following the calendar year in which the options were granted. 25% of the options granted to the beneficiaries become exercisable in each of the second, the third, the fourth and the fifth year following the year in which the options were granted.
(iv) For options that are granted as special incentive, in particular in connection with the engagement of new executive members the first exercise can be determined deviant. In case of a change of control through taking over of more than 50% of the proportion of the voting rights of the Company all outstanding options are exercisable with the effectiveness of the take over. In any other case the options are only exercisable during an execution window.
(v) The execution windows are periods of up to four weeks each, determined by the management board of the Company. An annual execution window starts the day after every annual ordinary shareholder´s meeting during the term of the options, in which the options may be exercised. The management board may - also for the existing options according to the ESOP 2001 and the ESOP 2006 - determine an additional execution window per year. The first exercise of the options will not be affected by this. The determination of an additional execution window serves a higher flexibility because of an increased number of employees and because of the internationalisation of the Company; but does not lead to an early possibility to execute the options.
(vi) For options that replace existing stock options programs of acquired enterprises, different terms can be agreed and resolved upon; such terms have to be based on the terms of the replaced options.
(vii) The options are not transferable except for a transfer by death.
(viii) No lock-up period exists with respect to the shares received from exercising the options.
3. Granting of options to members of the Supervisory Board
3.1 In general: The shareholders´ meeting to be held on 13 June 2008 shall resolve on the grant of stock options to members of the supervisory board. The shares underlying the options shall be own shares held by the Company. Therefore the management board submits the following report pursuant to Section 98 (3) and Section 159 (2) (3) Stock Corporation Act.
3.2 Principles and Incentive: Outstanding experts from the vaccine and finance industry could be gained as members of the supervisory board. In order to tie these persons to the Company, it is necessary to provide an incentive system, which is linked to the performance of the Company. A stock option agreement shall be concluded between the Company and the members of the supervisory board, the provisions of which shall be correspondent to those of the ESOP 2008 (see above).
3.3 Number and allocation of options: Until now, the following numbers of stock options have been granted to members of the supervisory board, members of the management board, executive employees and other employees (excluding options that have been cancelled):
Beneficiaries Number of options Members of the Supervisory Board Michel Gréco 27,500 Ernst Afting 27,500 David Ebsworth 25,000 James R. Sulat 27,500 Hans Wigzell 20,000 Mustapha Leavenworth Bakali 20,000
Members of the Management Board Gerd Zettlmeissl 315,750 Alexander von Gabain 296,000 Werner Lanthaler 312,000 Thomas Lingelbach 170,000
Executive employees 692,700 Other employees 233,125 Employees of subsidiaries 174,200
Total 2,341,275
Now, to each member of the supervisory board 10,000 (ten-thousand) stock options shall be granted.
The strike price, i.e. the price which the members of the supervisory board have to pay to the Company in order to exercise their options, shall be EUR 31.35, which is the closing share price at 19 May 2008, the day prior to the publication of this report.
Vienna, May 2008 The Management Board
end of announcement euro adhoc
Further inquiry note:
Intercell AG
Lucia Malfent
Head of Communications
Tel. +43 1 20620-303
lmalfent@intercell.com
Branche: Biotechnology
ISIN: AT0000612601
WKN: A0D8HW
Index: ATX Prime, ATX
Börsen: Wiener Börse AG / official market