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Exhibit 4.1
PERFORMANCE SHARE
PLAN
Executives
Article 1:
Definitions
As used
herein, capitalized terms shall have the meaning stated opposite
them below:
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Agreement |
: |
any agreement concluded in any
year between Akzo Nobel and the relevant Executive
pursuant to which a conditional award of Shares is
granted under the Plan. |
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AGM |
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the
general meeting of shareholders of Akzo Nobel. |
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Akzo
Nobel |
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Akzo
Nobel N.V. |
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Akzo
Nobel Group |
: |
Akzo
Nobel and any Akzo Nobel subsidiary, of which the financial results are
consolidated within the financial statements of Akzo
Nobel. |
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Board
of Management |
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the
Board of Management of Akzo Nobel. |
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Executive |
: |
an
employee of a company (or companies) within the Akzo Nobel Group with a
remuneration grade SE or TE and who has been declared
eligible for grants under the Plan by the Board of
Management. |
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Performance
Period |
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a period
of three consecutive financial years of Akzo Nobel, starting on January
1 of the year of conditional grant of the relevant Shares and
ending on December 31 of the third
year. |
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Plan |
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this
Performance Share Plan. |
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Retirement |
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the
earlier of the termination of the employment agreement of an Executive
with Akzo Nobel by reaching the mandatory age for
retirement, the entering into a transitional arrangement
covering the period until the Executive’s retirement, or
other cessation of employment due to retirement
under local country plans and procedures. |
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Share(s) |
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common
share(s) in the capital of Akzo Nobel. |
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Takeover |
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means a
situation in which any one person, or more than one person acting as a
group acquires ownership of stock of Akzo Nobel that
constitutes more than 50 percent of the total fair market
value or total voting power of the stock of Akzo
Nobel. |
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TSR |
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total
shareholder return, representing the share price performance plus paid
dividends in any Performance Period. |
1
Exhibit 4.1
Article 2: The
Plan
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2.1
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Subject
to approval of the Plan by the AGM, the Plan will take effect as
per January 1, 2005.
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| 2.2 |
The Plan
may be terminated at any time by the Board of Management after
which termination no new grants will be made under the Plan. In any
event, no grants will be made after the tenth anniversary of the
approval of the Plan by the AGM.
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| 2.3 |
Any
proposed change to the provisions of the Plan which would be to the
advantage of the Executives requires the prior approval of the AGM.
No such approval is required for other changes, including changes
intended to facilitate the administration of the Plan, or to comply
with or take account of existing or proposed
legislation. |
Article 3: The Granting of
Shares; Performance Targets
| 3.1 |
Akzo
Nobel will conditionally grant to the relevant Executive in any
year the number of Shares as specified in the Agreement with such
Executive. The Agreement will only be valid if duly signed by both
parties within the time period specified by Akzo Nobel and failing
such signed Agreement within the specified time no rights can be
claimed in respect of the Plan.
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| 3.2 |
Grants
under the Plan in any year will normally be made as soon as
practicable after the AGM of such year.
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| 3.3 |
The
receipt of the Shares granted under the Plan will be conditional on
achievement of performance targets, expressed as TSR of Akzo Nobel
relative to the TSR of a group of comparator companies during the
relevant Performance Period. For 2005 the comparator group will
consist of the following companies:
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BAYER
AG |
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IMPERIAL
CHEMICAL INDUSTRIES |
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CIBA
SPECIALTY CHEMICALS |
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PLC
(ICI) |
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HOLDING
INC |
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MERCK
KGAA |
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CLARIANT
INTERNATIONAL LIMITED |
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NOVO
NORDISK A/S |
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DEGUSSA
AG |
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PPG
INDUSTRIES INC |
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THE DOW
CHEMICAL |
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SCHERING
AG |
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COMPANY |
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SERONO
SA |
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KONINKLIJKE DSM NV |
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SOLVAY
SA |
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E.I.
DUPONT DE NEMOURS & |
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UCB
SA |
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CO. |
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THE
VALSPAR CORPORATION |
| 3.4 |
The
grant of Shares will become unconditional on the basis of an
incentive zone, for 2005 set as follows. No grant of Shares will
become unconditional at the end of the Performance Period if, on
relative TSR, Akzo Nobel ranks below tenth position within the peer
group. If Akzo Nobel ranks tenth, 25% of the conditionally granted
Shares will become unconditional. For fifth position, all Shares
conditionally granted will become unconditional. Between the tenth
and fifth position, there will be linear vesting with 40% for the
ninth, 55% for the eighth, 70% for the seventh and 85% for the
sixth position.
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Only for
the first position at the end of the performance period, the
maximum number of Shares will vest. The maximum number of Shares
that may vest is 150% of the conditionally granted number of
performance Shares. Between the fifth and first position there will
be linear vesting with 112.5% for the fourth, 125% for the third
and 137.5% for the second position. |
2
Exhibit 4.1
| 3.5 |
The
comparator group and the performance targets (including the
incentive zone) for any year after 2005 will be determined by the
Board of Management. The targets will be the same for all
Executives.
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| 3.6 |
The
performance targets may be amended in circumstances which
reasonably cause the Board of Management to consider that changed
performance targets would be a fairer measure of performance, and
would not be more easy or difficult to be satisfied.
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| 3.7 |
At the
end of the each Performance Period, the Board of Management will
determine the extent to which the performance targets have been
satisfied and will calculate the number of Shares (if any) that
will vest for the relevant period. |
Article 4: Satisfaction of
Aw
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