EANS-News: OMV Aktiengesellschaft Report pursuant to section 65 para 1b in
conjunction with sections 171 para 1 and 153 para 4 Stock Corporation Act
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Capital measures/OMV/Austria/Oil/Gas
OMV Aktiengesellschaft
Corporate register number: 93363z
ISIN: AT 0000743059
Please note:
This report is legally required in order to be able to transfer shares under the
long-term, performance based incentive and compensation programs to employees
and managers within OMV Group. Please be aware that the numbers of shares in
this document are maximum amounts. The actual number of shares to be transferred
depends on the achievement of different criteria, may be significantly smaller
and in particular is subject to a separate resolution by the Supervisory Board
of OMV Aktiengesellschaft.
_____________________________________________________
Report pursuant to section 65 para 1b in conjunction with sections 171 para 1
and 153 para 4 Stock Corporation Act
The Executive Board of OMV Aktiengesellschaft ("OMV" or "Company") has been
authorized by resolution of the Annual General Meeting of the Company held on
May 18, 2016, for period of 5 years from the adoption of the resolution, subject
to the approval of the Supervisory Board, to dispose of or utilize stock
repurchased or already held by the Company to grant treasury shares to
employees, senior employees and/or members of the Executive Board/management
boards of the Company or one of its affiliates including for purposes of share
transfer programs, in particular long term incentive plans including matching
share plans or other stock ownership plans, under exclusion of the general
purchasing possibility of shareholders (exclusion of subscription rights). The
authorization can be exercised as a whole or in parts or even in several
tranches by the Company, by a subsidiary (Section 189a Number 7 Commercial Code)
or by third parties for the account of the Company.
The Executive Board and the Supervisory Board of OMV intend to make use of such
authorization and to resolve upon an allocation of up to a maximum of 101.111
(for members of the Executive Board), a maximum of 476.297 (for other senior
executives) and a maximum of 19.950 (for Potentials) treasury shares in the
Company under the Long Term Incentive Plan 2014 (LTIP 2014), which was approved
by the Annual General Meeting of the Company on May 14, 2014, and under the
Matching Share Plan 2016 (MSP 2016), which was approved by the Annual General
Meeting of the Company on May 18, 2016, to members of the Executive Board and
senior executives and potentials of the OMV Group. The actual number of shares
to be transferred is subject to performance, depends on the resolution of the
Supervisory Board of OMV Aktiengesellschaft and will be published separately.
The Executive Board and the Supervisory Board of OMV Aktiengesellschaft,
represented by the Remuneration Committee, therefore report as follows.
R E P O R T:
1. Long Term Incentive Plan 2014
Plan purpose and objectives
The Long Term Incentive Plan (LTIP) 2014 is a performance based and long-term
compensation instrument for the Executive Board, selected senior managers and
other employees of OMV Group that promotes mid- and long-term value creation at
OMV and aligns the interests of management and shareholders by providing
management with the possibility to receive shares in the Company subject to
performance (measured against key indicators linked to the medium-term strategy
and shareholder return). The plan also seeks to prevent unnecessary risk-taking.
The defined performance criteria must not be amended during the performance
period of the LTIP 2014.
Eligibility
Executive Board members are obliged to participate. Selected senior managers of
OMV Group may participate in the LTIP 2014. Other employees of OMV Group that
have been nominated via the Career & Succession Planning process ("Potentials")
may also participate in the LTIP 2014.
The nomination of senior managers to the LTIP by the Executive Board of OMV
Aktiengesellschaft is taking place annually and potential share transfers are
based on the performance level of the respective senior manager in the
respective year and may be granted pro rata..
Personal share ownership rules
There is no requirement for an upfront investment in OMV shares to participate
in the LTIP 2014. However, Executive Board members and senior managers are
required to build up an appropriate volume of shares in the Company and to hold
these shares until retirement or leaving the Company. The shareholding
requirement is defined as a percentage of the annual gross base salary (14 times
(i) the January gross base salary or (ii) the gross base salary for the first
month as participant in the LTIP 2014):
* CEO: 200%
* Deputy CEO: 175%
* Other Executive Board members: 150%
* Senior managers: 75%
Executive Board members must achieve the required shareholding within 5 years
after the start of their respective current contract as Executive Board member.
Basis for the calculation of the respective number of required shares is the
average share price over the 3-month period 1 January 2014 - 31 March 2014 (=
average of closing prices at Vienna Stock Exchange). Once the above percentage
has been reached, subsequent changes in the share price do not influence the
number of shares required. In case and to the extent of a salary increase of
Executive Board members the number of required shares has to be adapted.
Shares granted to Executive Board members under the Matching Share Plan (MSP)
2016 or to be vested to Executive Board members under the LTIP 2014 as well as
investments made for previous LTIPs count towards this shareholding requirement.
Dividends for the required shares held, if any, are paid out in cash. Senior
managers are not obliged to hold shares if the holding of the Company's shares
is prohibited by law in the countries where the respective senior managers work.
Grant levels
The maximum number of shares granted under the LTIP 2014 is expressed as a
percentage of the annual gross base salary:
* 175% for the CEO
* 150% for the Deputy CEO
* 125% for other Executive Board members
* 112.5% for senior managers
In case the respective Executive Board member is appointed later than 1 January
2014, the grant for 2014 is calculated on a pro rata basis. The same applies for
an exit during 2014. The allocation is made by the Supervisory Board or the
Remuneration Committee of the Supervisory Board.
Plan mechanisms
The maximum number of shares to be granted to the participant at the Vesting
Date shall be calculated as follows: The relevant percentage for each
participant (as mentioned above) divided by OMV's average share price (= closing
price at the Vienna Stock Exchange) over the 3-month period 1 January 2014 to 31
March 2014. The number of shares will be rounded down. Before the Vesting Date
the potential shares are "virtual", i.e. the participants do not hold these
shares and have no voting or dividend rights. On the Vesting Date, the definite
number of shares shall be determined based on the achievement of the performance
criteria and then transferred to the participant.
The final number of shares is calculated by multiplying the maximum grant of
shares with the overall percentage of performance achievement.
Effective_dates_and_term
o Plan commencement: January 1, 2014, subject to AGM approval
o Performance period: 3 years (January 1, 2014 to December 31, 2016)
o Vesting date: March 31, 2017
Performance criteria and weightings
The performance criteria focus on sustained value creation across three areas of
performance:
* 50%: Total Shareholder Return relative to a group of peer companies
* 40%: Absolute reported Return on Average Capital Employed, adjusted for
acquisitions averaged over the three year performance period
* 10%: Sustainability element: Absolute "Safety Performance"
The value of the performance is based on the Action Item Response Rate and
contractor management.
In 2014, the specific performance targets were set for the performance period
(January 1, 2014 until December 31, 2016) and communicated to plan participants.
It is not allowed to modify the performance criteria thereafter.
Share transfer/pay-out
To the extent that the shareholding requirement is not fulfilled, the payment
will be automatically made in the form of shares until the requirement is
reached. Otherwise the Executive Board members and senior managers could opt
between (i) single payment in shares, (ii) single payment cash or (iii) cash
payment in instalments. Participants had to make this decision at the latest by
the third quarter of the year the plan started. If such a decision could not be
made due to compliance relevant information, the payment will automatically be
made in cash (single payment). The transfer of shares or cash payment to the
participants is generally made net after deduction of taxes (in Austria payroll
tax deduction).
If the approval of the share transfer has been given by the Supervisory Board on
the Vesting Date or earlier, transfer of the shares to be transferred under the
LTIP 2014 will be executed on the business day following the Vesting Date,
otherwise the transfer takes place with the beginning of the month following the
approval, in each case subject to legal restrictions, if any. The Company does
not cover any share price risk caused by the delay or by the transfer.
If a payment is made in cash, the amount will be calculated by using OMV's
closing price at the Vienna Stock Exchange on the Vesting Date, if this day is
not a business day, then the respective day before.
In case any payment in cash or transfer of shares is based on incorrect data,
the amounts will be corrected accordingly.
Rules for leaving participants
· Bad leavers: Unvested awards are forfeited
· Good leavers: Unvested awards continue
· Retirement, permanent disability: Unvested awards continue
· Death: Unvested awards are valued as per date of death and settled in
cash
_
Change of control in the ownership structure
In case of early termination of the appointment as an Executive Board member
and/or the related employment contract declared by the company following a
change of control in OMV, the full amount of the granted award is paid out in
cash immediately subject to the projected target achievement at that time.
All other early terminations following a change of control in OMV result in the
application of the leaver concept.
LTIP for Potentials
For the LTIP for Potentials certain deviations from the LTIP as described above
apply. In particular there is no requirement for an own shareholding. The
maximum award for each participating person amounts to EUR 35,000.--. Payment is
generally made in the form of shares.
2. Matching Share Plan 2016
Plan purpose and objectives
The Matching Share Plan (MSP) 2016, as integral part of the annual bonus
agreement is a long-term incentive and compensation vehicle for the members of
the Executive Board that promotes the attachment to the Company and the
alignment with shareholder interests via a long-term investment in restricted
shares of OMV. The plan also seeks to prevent inadequate risk-taking. The MSP
provides for a transfer of shares which are counted towards the shareholding
requirements under existing and future Long Term Incentive plans until the
requirements are reached (see Vesting/Payout below). All shares to be granted
under the MSP 2016 will be used to fulfill such personal investment and
shareholding requirements under the LTIPs, will be transferred to a trustee
deposit account of the Company and will be subject to a holding period.
Based on the resolution of the Annual General Meeting of the Company held on May
18, 2016, an award of shares will be made to Executive Board members to match
100% of their gross annual cash bonus. The maximum gross annual cash bonus can
amount to 100% of the annual gross base salary and is based on the following
performance criteria: 60% financial targets, 20% efficiency targets and 20%
project management.
The shares granted have to be reduced or have to be returned in the case of a
clawback event. Furthermore, if the shares were based on incorrect calculations
of the bonus, the Executive Board members are obligated to return or pay back
benefits obtained due to such wrong figures.
The performance criteria defined for the annual bonus must not be amended during
the term of the MSP. However, significant changes in tax, legal and royalty
issues might require target adjustments. A cap of 100% of the base salary is
applicable.
Plan mechanisms
After determination of the annual cash bonus by the Remuneration Committee of
the Supervisory Board, an equivalent matching bonus grant will be made net
(after deduction of taxes) in Company shares which shall be transferred to a
trustee deposit, managed by the Company, to be held for three years. Dividends,
if any, earned from the vested shares are paid out to the Executive Board
members in cash.
Determination of number of shares
After determination of the gross annual cash bonus an award of 100% of the gross
annual cash bonus earned in the previous year is made in Company shares. The
number of shares awarded is calculated as follows:
Gross annual cash bonus amount divided by the average closing price for OMV
shares at the Vienna Stock Exchange over the 3-month period November 1, 2016 -
January 31, 2017. The resulting number of shares will be rounded down.
Effective dates and term
· Plan start: January 1, 2016 as an integral part of the annual
bonus agreement
· Vesting Date: March 31, 2017, subject to Supervisory Board
approval
· Holding period: 3 years from vesting
Share transfer/Pay-out
If the approval of the share transfer has been given by the Supervisory Board on
Vesting Date or earlier, transfer of bonus shares will be executed on the
business day following the Vesting Date, otherwise the transfer takes place with
the beginning of the next month following the authorization. The Company does
not cover any share price risk caused by the delay or by transfer.
The delivery of shares to the participants is made net after deduction of taxes
(payroll tax deduction), in each case subject to legal restrictions, if any.
.
Leaving Executive Board members
The rules outlined above for the LTIP 2014 apply, provided, however, that for
good leavers and in the case of retirement and permanent disability the vesting
of unvested awards remains subject to a decision to be made by the Supervisory
Board in its discretion.
Clawback
Under the following circumstances, the Supervisory Board may reduce the number
of shares vesting under the MSP or may request from the Executive Board members
a retransfer of shares which have been granted or made under the MPS:
· Adaptions of located financial statements due to miscalculation
· Material failure of risk management which leads to significant
damages (like Deep Water Horizon accident, Texas City Refinery accident)
· Serious misconduct of individual Executive Board member which
violates Austrian law
3. Number of awardable shares
According to the above mentioned criteria of the LTIP 2014 and the MSP 2016 and
the achievements of the performance criteria the maximum number of bonus shares
awardable to the current and former members of the Executive Board (EB member)
and other senior executives are as below. The actual number of shares to be
transferred is subject to a resolution by the Supervisory Board of OMV and will
be published separately.
(i) Current and former members of the Executive Board:
CEO:
28.177
Deputy CEO:
18.722
EB member, responsible for Finance: 9.392
EB member, responsible for Upstream: 22.904
EB member, responsible for Downstream: 21.916
(ii) Other senior executives and Potentials:
Other senior executives:
476.297
Potentials:
19.950
The numbers of shares mentioned above are gross numbers at maximum performance
achievement level. The actual number of shares to be transferred after
assessment of the actual performance achievement will be a net amount after
deduction of taxes and duties and will be published after the transfer on the
website of OMV under http://www.omv.com/portal/01/com/omv/OMVgroup/
Investor_Relations/OMV_Share/Share_Buybacks_Sales/2017.
4. Exclusion of shareholders' general possibility to purchase treasury shares
As outlined above, OMV treasury shares shall be granted to the members of the
Executive Board, other senior executives and potentials of OMV Group under the
Long Term Incentive Plan 2014 and to Executive Board members under the Matching
Share Plan 2016. OMV thereby intends to increase the focus of the participating
persons on the long-term Company value and their identification with the
Company. The LTIP 2014 and the MSP 2016 are performance-based and long-term
compensation and incentive instruments which shall promote the mid- and long-
term value creation at OMV, align the interests of the management and
shareholders through long-term investment in shares and minimize risks. For such
purpose it is necessary to exclude, in respect of the treasury shares used for
the LTIP 2014 and the MSP 2016, the shareholders' possibility to purchase OMV
treasury shares.
The LTIP 2013 was approved by the Annual General Meeting of the Company on May
14, 2014. The MSP 2016 was approved by the Annual General Meeting of the Company
on May 18, 2016.
The interest of the Company prevails over the shareholders' interest in having a
possibility to utilize or purchase OMV treasury shares. Taking into account all
circumstances the exclusion of the shareholders' possibility to purchase
treasury shares is necessary, reasonable, appropriate, in the best interest of
the Company and therefore objectively justified.
Vienna, February 2017 The Executive Board and the
Supervisory Board
Further inquiry note:
OOMV
Magdalena Moll, Investor Relations
Tel.: +43 (1) 40 440- 21600; e-mail: investor.relations@omv.com
Robert Lechner, Public Relations
Tel.: +43 (1) 40 440-21472; e-mail: public.relations@omv.com
end of announcement euro adhoc
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company: OMV Aktiengesellschaft
Trabrennstraße 6-8
A-1020 Wien
phone: +43 1 40440/21600
FAX: +43 1 40440/621600
mail: investor.relations@omv.com
WWW: http://www.omv.com
sector: Oil & Gas - Downstream activities
ISIN: AT0000743059
indexes: ATX Prime, ATX
stockmarkets: official market: Wien
language: English