To stimulate the realization of long-term Company goals and objectives, Arcadis NV uses Long-Term Incentive Plans (LTIPs).
Since 2014, securities under the LTIPs are solely granted in the form of Restricted Share Units (RSUs) and represent an equal number of ordinary shares, subject to meeting the applicable vesting conditions. The RSUs will be converted into ordinary shares on the vesting date, and are delivered as soon as practical thereafter.
RSUs are granted conditionally and depend on achieving/meeting certain conditions during the vesting period.
To prevent dilution, (a portion of) the shares required to meet the obligations from exercising LTIPs can be purchased by the Company (instead of issuing new shares), with due consideration to the Company’s balance sheet, in particular available freely distributable reserves and available cash. Alternatively, shares may be issued, whereby it is intended to limit this to 1% of the number of issued shares.
Arcadis 2010 Long-Term Incentive Plan
Options and RSUs annually granted to members of the Executive Board and selected senior executives were conditional and had a vesting period of three years. Vesting was dependent on performance criteria set forth in advance. The granting of such options and RSUs took place each year on or about the second day after the Annual General Meeting, whereby the exercise price for the options matched the closing price of Arcadis NV shares on the day of the grant.
In 2013, the last awards, which will expire in 2023, were granted.
Arcadis NV 2014 Long-Term Incentive Plan
In 2014, the Supervisory Board approved the continuation of the Arcadis NV 2010 Long-Term Incentive Plan in the form of the Arcadis NV 2014 Long-Term Incentive Plan (“2014 LTIP”). The revised Plan was approved by the General Meeting in May 2014.
Shares granted were conditional in nature and depended, amongst others, on attaining a performance measure after three years. The performance measure is Total Shareholder Return (TSR), defined as stock price appreciation plus dividend yield.
Arcadis NV 2019 Long-Term Incentive Plan
In April 2019, the Arcadis NV 2019 Long-Term Incentive Plan was approved by the Annual General Meeting. Based on this plan the Company can grant equity-settled and cash-settled awards to eligible employees. Conditional performance shares granted to Executive Board members must be held for two more years after vesting.
In summary the following applies to these grants:
- Annual grant to Executive Board (EB) and Executive Leadership Team (ELT) members: subject to continued employment during the vesting period of three years, and achieving performance conditions (1/3 Total Shareholder Return, 1/3 Earnings per share and 1/3 sustainability)
- Annual grant to other employees: subject to continued employment during the vesting period of three years; no performance conditions