Outokumpu Oyj - Company Announcement

Outokumpu – Launch of plan 2016–2018 of the share-based incentive programs and new share-based incentive program of the CEO

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 is 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

Attachments:

PSP_RSP_17122015_EN.pdf