To stimulate the realization of long-term company objectives and goals, Arcadis NV has put in place a Long-Term Incentive Plan, and Stichting Lovinklaan, together with Arcadis NV, has put in place a Share Purchase Plan.
At the time of the merger with Geraghty & Miller in 1993, Arcadis NV adopted and later expanded in 1994 and 1996 the existing stock option plans. These employee stock option plans were dedicated to employees of the American subsidiaries and ended in 2003 and 2005, respectively. Since that time no new options can be granted under these plans. The options granted under these plans are valid for a ten-year period and generally vest after a three-year period.
In the General Meeting of May 2001 the Arcadis NV 2001 Long Term Incentive Share Option Plan was introduced. Under this plan, during a five year period, a maximum of 2,500,000 (rights to acquire) Arcadis NV shares could be granted to key personnel in Arcadis NV and its subsidiaries. The number of options per year was determined by a number of pre-set performance criteria as formulated by the Supervisory Board. The criteria were related to the increase in earnings per share in the preceding book year. The options were provisional in nature and vested after a period of three years provided the participant were still employed by Arcadis NV or one of its subsidiaries. Options issued under this plan are valid for a period of ten years, beginning on the date of issuance. Options were usually granted on the second working day after the annual shareholders meeting; the exercise price will match the closing price of Arcadis NV shares on the Euronext Amsterdam stock exchange on the day on which the options were granted. In May 2005 the General Meeting agreed to a number of changes to the 2001 plan. These changes resulted from the implementation of the Dutch Corporate Governance Code as well as the expiration of the Arcadis 1996 Incentive Plan. The primary changes that were introduced:
Under the Arcadis 2005 Long-Term Incentive Plan there was no longer room for allocating options and shares. Therefore a revised Plan was approved by the General Meeting in May 2010.
The Arcadis NV 2010 Long-Term Incentive Plan (the “2010 LTIP”) provides for the periodic allocation of (conditional) options and (conditional) shares to the members of the Executive Board and key employees. The objective of the 2010 LTIP is to strengthen the personal ties of the participants with the Company and to let them benefit from the increase of the Arcadis stock price so that their interest is in line with the interest of the shareholders of the Company.
The Plan provides for a maximum of 10,000,000 shares or options to be allocated during a five year period, all of which may be granted as ‘qualified’ options in accordance with Section 422 of the United States Internal Revenue Code 1986. Such ‘qualified’ options may be granted only to employees of Arcadis. The options and shares annually granted to members of the Executive Board and selected key employees are conditional and such options and shares have a vesting period of three years. Vesting is dependent on performance criteria set forth in advance. The granting of such options and shares will generally take place each year on the second day after the annual shareholders meeting, whereby the exercise price will match the closing price of Arcadis NV shares on the day of grant.
The Plan provides for the possibility to grant options to employees under different conditions such as remarkable performance, for reasons of retention or in light of acquisitions. These options can be granted under conditions to be determined by the Supervisory Board.
To prevent dilution the required shares, or a portion thereof, can be purchased by the Company with due consideration to the Company’s financial position, in particular the cash available within the Company. Alternatively, in support of the Plan shares can be issued with the intention to limit this to a maximum of 1% of the number of outstanding shares.
Arcadis NV 2014 Long-Term Incentive Plan
Under the Arcadis 2010 Long-Term Incentive Plan there was no longer room for allocating options and shares. Therefore a revised Plan was approved by the General Meeting in May 2014.
Arcadis NV 2010 Employee Share Purchase Plan
In 2002, following the shareholders meeting, the Executive Board together with the Lovinklaan Foundation, established an Employee Share Purchase Plan that allows employees to periodically purchase shares in the Company at a previously set discount. This plan has since been implemented in a number of countries in which Arcadis is located.
A new Employee Share Purchase Plan (the “2010 ESPP”) was approved by the General Meeting in May 2010 with the intention of applying it to all Arcadis employees. The Company may from time to time designate the subsidiaries of Arcadis that are eligible to participate in the 2010 ESPP. The 2010 ESPP will respect any existing rights under the current share plan. Where necessary sub-plans of the 2010 ESPP will be established to comply with local (fiscal) regulations. The 2010 ESPP will allow employees to periodically purchase Arcadis shares at a previously set discount.
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