Employee Share Plans in Europe and the USA - Sorainen

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Employee Share Plans in Europe and the USAAustriaAustria1. Securities law1.1 Offer of securities 1 : The offer of securities to the public generally requires thepublication of a prospectus. However, there is an exemption from thatrequirement where securities are only offered to existing or former directors oremployees:• by their employer (which has securities already admitted to trading on an EUregulated market); or• by an affiliated undertaking.To rely on this exemption, a document 2 must be made available containinginformation on the number and the nature of the securities and the reasons for,and details of, the offer.12The Prospectus Directive was implemented into Austrian law in August 2005.The Austrian Financial Market Authority (Finanzmarktaufsicht) (FMA) has issued a regulation whichsets out the minimum content of any such document as follows:• company name and seat of the issuer;• details on where to find additional information about the issuer, particularly the last published yearlyfinancial statement and other publications that have been disclosed within the last twelve months infulfilment of disclosure obligations;• a declaration on the reasons for the public offering or admission of the securities to trading on aregulated market;• details on the legal provision on the basis of which the document is produced (in this case, thiswould be § 3 subsection 1 nr. 12 Austrian Capital Market Act (Kapitalmarktgesetz) (KMG); and• details of the offer, such as: circle of offerees, timeframe for the offer, minimum and maximumamount for each acquirer and the issue price, details on the type of security and the rightsassociated therewith, the risks as well as details of any additional obligations attached to thedistribution or admission of the securities. Further, where the issue price has not been determinedat the point of the document's publication, then the criteria by which the price shall be ascertainedmust be given as well as the place where it may be inspected at a later point.Pursuant to the KMG the document can be published in the following ways:• in the Austrian official gazette to the "Wiener Zeitung" or otherwise in at least one newspaper withnationwide circulation; or• in a printed form to be made available, free of charge, to the public at the offices of the market onwhich the securities are being admitted to trading, or at the registered office of the issuer and at theoffices of the financial intermediaries placing or selling the securities, including paying agents; or• in an electronic form on the issuer's website and, if applicable, on the website of the financialintermediaries placing or selling the securities, including paying agents; orUK/1729295/03 7 September 2010
Employee Share Plans in Europe and the USAAustriaThere is also an exemption for offers made to fewer than 100 natural or legalpersons per EEA member state (other than qualified investors).1.2 Regulatory issues: There are no other regulatory issues which affect theoffering of securities to employees.1.3 Disclosure: 3 An Austrian joint stock company (AG) must report the grant ofstock options under employee share plans to shareholders and stock optionsgranted to employees or directors must not exceed 20% of the company's issuedshare capital. The annual financial statements of all Austrian companies mustinclude a summary of the company's employee share plans and of rights grantedunder them. Companies listed on the Vienna stock exchange have additionalreporting obligations.2. Exchange controlsThere are no applicable exchange controls.3. Financial assistance3.1 Austrian company: An AG and a limited liability company (GmbH) aregenerally prohibited from acquiring their own shares or shares in their parent,although an AG can acquire up to 10% of its own shares for an employee shareplan. 4 In addition, an AG is prohibited from providing financial assistance toacquire its own shares or shares in its parent company. There is no suchprohibition on a GmbH, although loans made by a GmbH to acquire its ownshares or shares in its parent company could be subject to rules which prohibit areduction of capital. 53.2 Austrian subsidiary of non-Austrian company: The application of therestrictions on financial assistance to an Austrian subsidiary of a non-Austrian• in an electronic form on the website of the regulated market where the admission to trading issought; or• in electronic form on the website of the FMA or on the website of an organisation charged with thistask for an adequate fee if the FMA has decided to offer this service.345Certain additional factors will apply if the employee share plan is operated by an Austrian company, butwill not apply if the plan is operated by a non-Austrian company, regardless of whether Austrianemployees participate in that plan.An AG may acquire up to 10% of its own shares, or increase its authorised or unissued share capital,to provide shares under an employee share plan.However, as the issue or transfer of shares in a GmbH (as well as the granting of an option for theissue or transfer of shares in a GmbH) requires a notarial deed in Austria, employee share plans usingGmbH shares are in practice of no significance in Austria.UK/1729295/03 8 September 2010
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Employee Share Plans in Europe and the USA - Sorainen

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