2014 Performance Share Plan and Bonus / Matching Plan Factsheet

Transcription

1 2014 Performance Share Plan and Bonus / Matching Plan

2 2014 Performance Share Plan Rules Purpose of the PSP Plan Share-based compensation aligns the interests of the Executive Directors with shareholders and also serves to retain the Executive Directors in their positions. It incentivises the creation of shareholder value in excess of that achieved by comparator organisations which ensures executive and shareholder interests are aligned. Award size Awards will be made annually. The number of performance shares will be calculated based on the face value method which calculates the number of shares granted based on the share price at date of grant and a fixed percentage of base salary. The maximum award size at grant is 100% of total salary. Dividend equivalents will also accrue. Performance targets Performance will be measured using relative total shareholder return (TSR) against a peer group. TSR calculations will be externally verified. The Remuneration Committee will regularly review the peer group to assess appropriateness. The peer group may also be updated or adjusted following mergers or other corporate activities. TSR peer group Agrium Air Products Akzo Nobel Balfour Beatty Boskalis Westminster Celenese CF Industries Chicago Bridge & Iron Colas DSM Koninklijke Fluor Lanxess Leighton Holdings Methanex Petrofac Solvay Westlake Chemicals Yara International 2

3 2014 Performance Share Plan Rules Vesting Awards vest after three years. The level of vesting is subject to performance against specific targets (shown in graph, right). No pay-out will be made for below-threshold performance. Vesting shares for Executive Directors (net of tax and other applicable deductions) will then be held for a further 2 years after vesting in line with the Dutch Corporate Governance Code. The outcome may be adjusted upwards or downwards if the Remuneration Committee concludes that the outcome would otherwise be contrary to the interests of the Company. Claw back A claw-back clause is included in the service agreements of the Executive Directors, applicable in the situation that the financial or other information on which the pay-out of variable remuneration was based is determined to be incorrect. This will be applied if needed at the discretion of the Remuneration Committee. 3

4 2014 Performance Share Plan Rules Treatment of Leavers Treatment of leavers during the vesting period will depend on whether the leaver is classified as a good leaver or bad leaver. Bad leavers are defined as those employees who leave in circumstances justifying the dismissal of the employee or who resign voluntarily. In this case the award will be cancelled at the time of termination of employment. Good leavers are defined as those employees who leave for reasons of disability, death, retirement with agreement of the Remuneration Committee, redundancy or no fault termination (as determined by the Remuneration Committee). In this case a 1/36 share will be maintained for each full calendar month that the employment has lasted from the date of award, and remain subject to the normal terms of vesting unless the Remuneration Committee determines otherwise. Vesting will normally be accelerated in the case of disability or death. Change in Control The default condition for a change-in-control of the company prior to vesting would involve vesting pro-rata based on the number of months from the date of award and an assessment of performance based on the period to change in control. The outcome may be adjusted upwards or downwards if the Remuneration Committee concludes that the outcome would otherwise be contrary to the interests of the Company. At the discretion of the Remuneration Committee the pro-rating of awards may be waived and the awards instead rolled over into executive compensation arrangements at the new company. Where vesting has already occurred (i.e. during the holding period) the shares would be released to the participant. The Remuneration Committee has flexibility to settle PSP awards in cash rather than shares on change in control where it judges this to be appropriate. Awards will be subject to the new Dutch legal requirement to adjust the value of shares under the PSP in certain circumstances pertaining to corporate transactions. 4

5 2014 Performance Share Plan Rules Adjustments Awards can be adjusted to maintain the equivalent economic value in the event of a stock split redemption of shares, issue of shares, equity offerings, merger / demerger without change of control etc. Eligibility The CEO, CFO and any other future Executive Directors will participate in the plan. In addition, other senior executives may also participate as determined by the Remuneration Committee. Grant date The 2014 grants will be made as soon as practicable after the AGM. Future plan changes The Remuneration Committee reserves the right to make changes the terms of the plan if it considers them necessary. There will be no fundamental changes to the plan or increases to maximum award sizes without approval of the AGM. 5

6 2014 Bonus / Matching Plan Rules Purpose of the Bonus / Matching Plan The Bonus / Matching Plan encourages the Executive Directors and senior management to focus on the sustained delivery of high performance results over the longer term by incentivising them to invest a portion of their after-tax annual bonus in OCI shares. Bonus Deferral Executive Directors are strongly encouraged to invest up to 50% of the value of their after-tax annual bonus in OCI shares. Other members of senior management will voluntarily be able to invest up to 50% of their aftertax annual bonus in OCI shares. The shares are held in the individual s name. Matching Shares Any deferral of annual bonus into shares will be matched by the company on a 1:1 basis to incentivise the Executive Directors and senior management to increase their long-term interest in the company. Matching shares will be in the form of Restricted Stock Units (RSUs) based on the pre-tax value of the amount elected for deferral such that the matching shares are, after tax, equivalent to the number of deferred shares. Pay-out of the matching share awards at the end of a three year holding period will be conditional upon the participant still being employed by OCI (subject to the comments on leavers below). After vesting, matching shares (net of tax) granted to the Executive Directors will be held for a further two years in line with the Dutch Corporate Governance Code during which period dividends will accrue. 6

7 2014 Bonus / Matching Plan Rules Treatment of Leavers Shares that participants elect to defer are not subject to forfeiture since these are purchased from bonus payments on which tax will already have been paid. Treatment of matching shares for leavers during the vesting period will depend on whether the leaver is classified as a good leaver or bad leaver. Bad leavers are defined as those employees who leave in circumstances justifying the dismissal of the employee or who resign voluntarily. In this case matching awards will be cancelled at the time of termination of employment. For good leavers 1/12 th of the matching shares will vest on exit for each full quarter that the employment has lasted from the date of award although the Remuneration Committee has overriding discretion to vary these terms. Change in Control In the event of change in control then matching shares will be cancelled and settled in full as a cash equivalent. 7

8 2014 Bonus / Matching Plan Rules Adjustments Awards can be adjusted to maintain the equivalent economic value in the event of a stock split redemption of shares, issue of shares, equity offerings, merger / demerger without change of control etc. Eligibility The CEO, CFO and any other future Executive Directors will participate in the plan. In addition, members of the senior management will also participate as determined by the Remuneration Committee. Awards Bonus shares will be made available to eligible participants for purchase as soon as practicable after the AGM based on annual bonuses paid during Future plan changes The Remuneration Committee reserves the right to make changes the terms of the plan if it considers them necessary. There will be no material changes to the plan for Executive Directors without approval of the AGM. 8

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