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DSM Engineering Materials: Exercise options and surrender options to be exercised

February 10 2023

Repeatedly and most recently, on Tuesday January 31, I asked DSM about exercising the existing series of options that may still be held by colleagues who are coming along to Advent/Lanxess. DSM gave a very brief answer / explanation. They did not want to extend the period within which the exercise must be exercised. Employees who leave of their own accord are also not stretched. As far as we are concerned, however, there is a difference here: All employees of Engineering Materials do not really leave of their own accord.

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DSM: The outstanding DSM options must be exercised by DEM employees before closing, otherwise they expire. An earlier request, whether DSM wants to facilitate that the options can be exercised even longer after closing, has been submitted internally. DSM maintains its previously adopted position (CEOD) of Tuesday, November 29, 2022.

DSM is not prepared to do so, because this has also not taken place in all previous most recent transfers (Protective Materials and Resins). DSM wants to continue to treat current and former employees equally in this regard. The transition from DSM to DSM-Firmenich is also now playing a role, after which no materials business unit will be present in DSM anymore. The (financial) bond in the form of DSM options of DEM employees is no longer logical, taking into account that both DEM transforms after closing into a JV of DEM-HPM and DSM also transforms from DSM to DSM-Firmenich.

No exercise but surrender

If the exercise period cannot be extended, is DSM prepared to buy off the options that are still held? The intention is that DSM buys off those options.

DSM: DSM will not buy off the options.

Advent provides a financial compensation for the loss of the option scheme. This has been discussed with the employer and Montelena project/final responsible for (Global) Finance.

This is where the peek-a-boo begins

Advent/Lanxess obviously has nothing to do with the options that DSM has already given the staff. This is about an appreciation for results already achieved. That is why it is up to DSM to buy it off. This also makes it a discussion that should be completely outside the transfer collective bargaining. If it is the intention that Advent/Lanxess also buys off the existing rights, then we should also discuss this with Advent/Lanxess. Then the current offer is far from sufficient.

With Advent/Lanxess we are talking about the future. The acquiring party wants to buy off the option plan with a one-off amount instead of offering an alternative structural arrangement / plan as a translation / replacement of the DSM option plan.

At some point DSM will no longer be able to continue playing peek-a-boo. And once again maintains her previously chosen attitude. The option scheme will be terminated on the closing date. The employment with DSM will then be terminated and part of the plan is that the option rights will lapse (see also plan book, appendix 3). Any options must be exercised prior to closing. DSM has never bought off, compensated or otherwise any outstanding options. DSM does offer (telephone) consultation, but that will yield little in view of the position taken.

Ultimate attempt

With regard to financial products, the comment is often made that results achieved in the past are no guarantee for the future. That also applies here a bit. The fact that a settlement has been found in previous sales of DSM business units does not mean that it has to apply one-to-one to DEM. The world has moved on, the circumstances are different, advancing insight and the members at DEM have a different view. So once again we urged consultation on:

  1. buying off the current options
  2. a “drop-off” premium

There is a clear motivation for both and we would have liked to explain that.

DSM has taken the position that it has no further role in the transition to the collective labor agreement. And in fact refers back to the regular (CEOD) in which we had already raised it in November. DSM also kicks in the open door that the employer is responsible for the DSM collective labor agreement.

Fog, a smoke screen, road transparency, dodge and deceive

DSM does not answer the repeated question of who within DSM is responsible for approving or disapproving such agreements. In this way, the person responsible remains out of harm's way.

From Rijlandsmodel to Anglo-Saxon model

In the Rhineland model, an employer recognizes the mutual interest in the employer/employee relationship. This is often illustrated by comments such as:

  • That's where we come from;
  • We solve that;
  • That's not how you treat each other.

In the Anglo-Saxon model, the shareholder comes first and the role of employee organizations is systematically undermined. We are not used to that from DSM, but it seems that the pendulum has now swung completely the other way.

Under the circumstances, membership of an employee organization is greater than ever.

If the above is reason to respond, comments are more than welcome. If you have any questions, you can also contact the representative John Kapteijn via john.kapteijn@unie.nl

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