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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
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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
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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
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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.
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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
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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
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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.
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Article
3: The Granting of Shares; Performance Targets
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3.1
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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
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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
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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
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3.4
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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.
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2
Exhibit
4.1
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3.5
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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
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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
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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.
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Article
4: Satisfaction of Awards
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4.1
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Awards will be satisfied
b
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