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Henkel Unveils New Stock Incentive Plan
Düsseldorf (ots-PRNewswire) -
-- Worldwide 900 managers eligible to participate
-- Linked to the absolute and relative performance of the Henkel
-- To be financed by share buy-back program
Stock Incentive Plan Proposal
The Management Board, the Shareholders' Committee and the Supervisory Board of Henkel KGaA will propose a new Stock Incentive Plan at the AGM on May 8, 2000. Their objective is to let the Company's 900 top executives worldwide participate in the price appreciation of the Henkel stock, and thus in the value increase of the Company. Annually revolving options with a five year term on Henkel preferred shares will be granted to the participating managers.
The purchase price for the first tranche of the stock options, which will be issued in 2000, will be equivalent to the average closing price of the Henkel preferred share over the first 60 days of XETRA trading following the AGM.
Each participant will be able to purchase up to 8 shares per stock option, depending on the degree of attainment of two performance goals. Attainment of the goals will be measured over a three-year period. The performance goals are set in terms of the absolute appreciation of the Henkel preferred share on the stock market, and of the preferred share's relative performance as compared with the Dow Jones Stoxx Index.
Depending on the absolute price appreciation of the Henkel preferred share, participating managers will be able to purchase the following number of preferred shares per stock option:
One preferred share if the share price rises by more than 10% Two preferred shares if the share price rises by more than 15% Three preferred shares if the share price rises by more than 20% Four preferred shares if the share price rises by more than 25% Five preferred shares if the share price rises by more than 30%
In addition, up to three preferred shares per stock option can be purchased if the Henkel preferred share achieves the following performance relative to the Dow Jones Stoxx Index:
One preferred share if the Dow Jones is outperformed by more than 1% Two preferred shares if the Dow Jones is outperformed by more than 4% Three preferred shares if the Dow Jones is outperformed by more than 7%
Blocking and Exercise Periods
The stock options will be blocked for an initial period of three years. Thereafter they can be exercised, insofar as the performance goals have been achieved up to the end of the five-year period, within a time frame of 28 days after the scheduled regular public reporting dates.
Number of Stock Options Granted
The number of stock options granted differs according to management levels.
The 42 members of the two top management levels of the Henkel Group must make a personal investment in Henkel preferred shares in order to become entitled to participate in the Stock Incentive Plan. This personal investment amounts to one Henkel preferred share per stock option. The preferred shares purchased as part of this personal investment will be blocked for a period of three years.
Volume of the Stock Incentive Plan
The first tranche of the Stock Incentive Plan will comprise approximately 125,000 stock options, giving managers the right to acquire up to one million Henkel preferred shares. The subsequent tranches will have a similar volume. The total volume of the Stock Incentive Plan will comprise a maximum of one million stock options, giving participants the right to acquire up to eight million Henkel preferred shares.
Share Buy-Back Proposal
In addition, the Boards of Henkel KGaA will propose to the AGM a share buy-back program for up to 14.6 million ordinary and preferred shares. This is equivalent to the maximum legal limit of 10 % of the Company's subscribed capital. Stocks will be acquired on the stock exchange or by means of a bid made to all shareholders.
Purpose for Share Buy-Back Program
The Henkel shares acquired through the buy-back program can be used for:
Stock Incentive Plan
Sale of preferred shares to participating managers as part of the new Stock Incentive Plan. Henkel intends to use the AGM's authorisation for the buy-back program to acquire stock for the Stock Incentive Plan in order to avoid equity dilution.
Acquisition of Companies
Sale of shares to third parties for the purpose of acquiring companies or of carrying out mergers. At the moment there are no definite plans to utilize Henkel stock for this purpose.
Redemption of Henkel Shares
Redemption of Henkel shares without the need for further resolutions by the AGM. At the moment Henkel has no definite plans to redeem shares for this purpose.
The Management Board, the Shareholders' Committee and the Supervisory Board are convinced that the proposed Stock Incentive Plan provides a strong performance incentive for the executives of the Henkel Group. In addition, it will also lead to a significant value increase and to long-term commitment of the executives to the Company which is in the interest of Henkel and its shareholders.
Henkel is a worldwide operating specialist in adhesives, brand-name products and in systems businesses with affiliates in over 70 countries. Henkel is the number one producer of Adhesives, Surface Technologies and Industrial and Institutional Hygiene (jointly with Ecolab Inc.) on a worldwide scale. In Detergents it ranks second on Continental Europe and in Cosmetics Henkel holds the number three position in Europe. Cognis, the recently carved out chemicals business is the world's leading producer of Oleochemicals.
ots Original Text Service: Henkel Group Internet: http://recherche.newsaktuell.de
Contact: Magdalena Moll, +49-2-11-7-97-16-31, or Waltraud Mueller, +49-2-11-7-97-72-78, both of Henkel, Investor Relations, fax, +49-211-798-28-63Original-Content von: Henkel AG & Co. KGaA, übermittelt durch news aktuell