-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HbCVdJJs5vi8PWb5+QN1EDNwkC4aT/iIyORA6S1VElrkezc6utaYiM8nZ/yIwAJC iz9GSQSim2ek9qd8zb8/Cg== 0000950127-06-000378.txt : 20060608 0000950127-06-000378.hdr.sgml : 20060608 20060608091356 ACCESSION NUMBER: 0000950127-06-000378 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20060605 FILED AS OF DATE: 20060608 DATE AS OF CHANGE: 20060608 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CEZ AS CENTRAL INDEX KEY: 0001041841 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-07172-01 FILM NUMBER: 06892871 BUSINESS ADDRESS: STREET 1: C/O DUHOVA 2/1444 STREET 2: 140 53 PRAGUE 4 CITY: CZECH REPUBLIC STATE: 2N MAIL ADDRESS: STREET 1: CT CORPORATION SYSTEM STREET 2: 1633 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10019 6-K 1 a6-k.txt OPTIONS AND OPTION PLAN ================================================================================ FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of June 2006 Commission File Number 333-7182-01 CEZ, a. s. ----------------------------------------------- (Translation of registrant's name into English) c/o Duhova 2/1444 140 53 Prague 4 Czech Republic ---------------------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F. [X] Form 40-F. [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ] Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________ ================================================================================ The following information was filed by CEZ, a. s. in Czech language with the Prague Stock Exchange as required by its rules and regulations: CEZ DISCLOSES TERMS AND CONDITIONS OF ITS OPTION PLAN On Friday June 2, CEZ announced that, according to the CNB's latest EU-conforming interpretation, the disclosure requirement applies not only to stock transactions, but also to executed option agreements. Accordingly, the company's Board of Directors promptly decided to disclose information on option agreements made by 15 members of CEZ's management to the CNB Capital Markets Supervision. List of Current Option Agreements
Potential Net Proceeds of Sale as of This Date (Current Share Price less Acquisition Price and Position Name Number of Shares Acquisition Price* Personal Income Tax) - ---------- ----------------- ------------------ ------------------- ------------------------- Directors Roman Martin 750000 shares 139.2 CZK/share 282 CZK mil. Borovec Jiri 300000 shares 206.6 CZK/share 99 CZK mil. Benes Daniel 300000 shares 506.6 CZK/share 38 CZK mil. Pleskac Tomas 300000 shares 549.8 CZK/share 29 CZK mil. Svoboda Alan** 300000 shares 160.87 CZK/share 109 CZK mil. Pasak Zdenek*** 300000 shares 829.03 CZK/share loss - 28 CZK mil. Executive Feist Jiri 75000 shares 243.53 CZK/share 23 CZK mil. Committee Krizek Karel 75000 shares 274 CZK/share 21 CZK mil. Members Mazac Bohumil 75000 shares 243.53 CZK/share 23 CZK mil. Sedlak Josef 75000 shares 243.53 CZK/share 23 CZK mil. Schmalz Vladimir 75000 shares 243.53 CZK/share 23 CZK mil. Skalka Michal 75000 shares 651.73 CZK/share 2 CZK mil. Suk Jaroslav 75000 shares 243.53 CZK/share 23 CZK mil. Smucr Igor 75000 shares 274 CZK/share 21 CZK mil. Stepan Lubomir 75000 shares 773,7 CZK/share loss -4 CZK mil.
* Until April 20, 2006, the 6-month average price before the appointment date; after April 20, 2006, the one-month average price before the appointment date. ** Alan Svoboda served as Director of CEZ until April 21, 2006, and has not yet exercised his option rights. *** Zdenek Pasak, who has served as Director since April 22, 2006, has not yet signed his option agreement. However, the share acquisition price has already been fixed, and governs the potential gain/loss. He will sign his option agreement under the new rules, according to which he will be entitled to exercise one-third of his options no earlier than one year after the execution of the option agreement, and the remaining two-thirds after subsequent years in office. The option plan was introduced in CEZ in 2001, when none of the current Directors were serving in the company. The option is a standard financial instrument affording the holder the right to purchase shares in the future for a pre-determined price. Any investor may purchase such option. Under the option agreement, CEZ's Directors acquire the right to purchase shares for a price equal to the average share price before the appointment date. The aim of this incentive plan is to hold the management's interest in the appreciation of the value of the company for the shareholders. In the case of CEZ, the Czech Republic, as the principal shareholder, will earn CZK 290 per each crown of gain for the company's management (Board of Directors and Executive Committee Members). BACKGROUND ON CEZ'S OPTION PLAN - The option plan is a standard management incentive tool that integrates management interests with those of the shareholders. For each crown earned on the option plan by the entire management of the 2 CEZ Group and the participants in the plan, the Czech Republic as the majority owner will earn more than CZK 290 (net of tax revenues). - CEZ's option plan was authorized by the General Meeting of CEZ in 2001. None of the current Directors was involved in the plan at that time. - Information on the option plan was made public at the time of its approval in 2001. - Until the beginning of 2004, the price of CEZ's shares had stagnated and the option plan had not brought any significant benefits to is beneficiaries. - Since spring 2004, after the introduction of the new management of CEZ, the price of CEZ's shares has been growing consistently, resulting in an increase, not only in the shareholders' profits, but also in potential gains from the management option plan. OPTION PLAN MECHANISM: Parties involved: Board of Directors Members of CEZ's Executive Committee (eligibility for signing an option agreement arises 3 months after the appointment date). What is involved: The option to purchase the company's shares for a price prevailing before the appointment date (The option of a standard financial product - the advantage of the participants in the plan is that they are not required to pay for the option and may choose the time for its exercise). Rules: - Participation in the option plan is a one-time step (the value of the potential gain may not be added to the annual salary). - The value of the option depends on the value of the shares (it fluctuates over time) - accordingly, the gain cannot be determined exactly until the time of exercise of the option and the sale of the shares. - The participant in the plan must buy the shares using their own funds, and the difference between the acquisition value and the current value is subject to income tax - the net gain is therefore substantially lower. OPTION PLAN RESULTS: The option plan of CEZ surely has been conducive to an appreciation of the state interest in the company by more than 200 billion crowns over the last two years, and hence to building a reserve for the future pension reform. Thanks to efficient management, cost cutting, and prudent investments abroad, the value of CEZ has been increasing substantially more rapidly than that of the other power utilities, despite the fact that electricity prices in the Czech Republic have been increasing more slowly than those in all of the neighboring countries. Electricity price growth CEZ or EON share price growth in the 2004-2006 period in the 2004-2006 period -------------------------- ------------------------------- CZK % CZK, or EUR % - --------------- ------------ ----------- ------------ ---------------- Czech Republic 228 28.0% 308 301% Germany 390 47.9% 36.2 69% * using the exchange rate of 28.30 Kc/EUR In the case of Germany, the table above refers to the price at the beginning of September 2005 (the time when a CEZ auction was held). Since September 2005, however, the German prices (annual forward) have increased by a further 25% (or, as the case may be, by 37% when compared with the 2004 base). 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CEZ, a. s. ------------ (Registrant) Date: June 5, 2006 By: /s/ Libuse Latalova ------------------------------ Libuse Latalova Head of Finance Administration -----END PRIVACY-ENHANCED MESSAGE-----