AUSTRIA Law and Practice Contributed by: Clemens Hasenauer and Albert Birkner, CERHA HEMPEL
and instruments afforded under statutory corporate law. Typically, governance documents include a sharehold - ers’ agreement, the articles of association and bylaws for the management board (and the supervisory board and/or advisory board, if any). In general, governance documents frequently contain: • rights to appoint and dismiss members of the supervisory and/or management board (and/or advisory board, if any); • a catalogue of reserved matters with veto rights or qualified majorities; • restrictions on dealings with shares (typically rights of first refusal, tag-along/drag-along rights and/or a lock-up); • profit distribution, anti-dilution, escalation/deadlock clauses and exit/termination rights (including put and/or call option rights); • reporting and access to information rights; or • any combination of the above. In addition, financing commitments to provide the company with further equity and/or shareholder loans are sometimes agreed on. 6.9 Voting by Proxy In Austria, shareholders may vote by proxy. However, certain formal requirements apply. Proxies should be issued in writing. A power of attorney in simple written form typically suffices for stock corporations. Proxies relating to limited liability companies will, in certain cases, require notarised signatures and, if applicable, an apostille (or even super-legalisation). Depending on the subject of the vote/resolution, a general voting proxy may not always be sufficient. 6.10 Squeeze-Out Mechanisms The Austrian Minority Shareholders Squeeze-Out Act allows a majority shareholder holding, directly or indirectly, at least 90% of the shares to squeeze out the remaining minority shareholders. The consent of minority shareholders is not required and therefore, the respective shareholders may not block the pro - cedure. However, they are entitled to adequate cash
compensation, which, on request, is subject to a judi - cial review mechanism to determine the adequate amount. Moreover, the articles of association may state an exclusion of the squeeze-out right (opting out) or introduce a higher threshold. A special regime applies to squeeze-outs effected within three months of completing a successful man - datory or voluntary takeover offer aimed at obtaining control (see Section 7 of the Squeeze-Out Act). 6.11 Irrevocable Commitments The shareholder structure of an Austrian listed com - pany is typically composed of one or a few core share - holders holding large blocks of shares, whereas the percentage of free float shares is sometimes rather small. Therefore, it is not uncommon to approach a core shareholder first – if it makes sense strategically – and to privately negotiate and seek an irrevocable commitment by the shareholder to sell these shares before launching a public offer. There are good argu - ments supporting the validity of such commitments even within the context of a public tender process and arguably (while some grey areas exist), such an irrevocable commitment, if already made prior to the launch of a public tender offer, should also remain binding in the case of a competing offer. Contractual provisions providing a way out for the principal shareholder before a tender process are rather unusual, although such a clause would appear to be legally permissible. Within a tender process, the Takeover Act gives shareholders who have already accepted a public tender offer the mandatory right to withdraw their acceptance in the event that a compet - ing tender offer is launched (but a contractual right of exit will make sense for those commitments, which – as outlined above – would otherwise arguably remain binding in a subsequent tender process).
7. Disclosure 7.1 Making a Bid Public
The bidder must disclose without undue delay its plan or intention to make an offer and it must inform the administrative bodies of the target company via press agencies and international news services:
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