AUSTRIA Law and Practice Contributed by: Clemens Hasenauer and Albert Birkner, CERHA HEMPEL
• 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 share - holder 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 remaining minority sharehold - ers. The consent of minority shareholders is not required, and therefore, the respective share - holders may not block the procedure. However, they are entitled to adequate cash compen - sation that is, on request, subject to a judicial review mechanism as to 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 effect - ed within three months of completing a suc - cessful mandatory 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 company is typically composed of one or a few core shareholders 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 com - mitment by the shareholder to sell these shares before launching a public offer. There are good arguments supporting the validity of such com - mitments 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 pro - cess are rather unusual, although such a clause would appear to be legally permissible. Within a tender process, the Takeover Act gives share - holders who have already accepted a public ten - der offer the mandatory right to withdraw their acceptance in the event that a competing 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).
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