Frequently Asked Questions

What is a DRIP?

A Dividend Rei nvestment Plan (DRIP) allows shareholders to use their net cash dividends to buy shares in the company in a convenient way.

What are the benefits?

DRIPs benefit both the company and the shareholders.

- Shareholder benefits

• Opportunity to add to their existing holding at competitive cost.
• Easy to understand and easy to join.
• Share purchase at low cost and conditions normally only accessible for professional trades (VWAP, excl. auctions and off exchange trades).

- Company benefits

• A DRIP can be seen as a supplementary service to long-term shareholders, enabling them to buy existing shares at low rates. It is a shareholder service provided at no cost to the company.
• A DRIP does not create the equity dilution associated with Stock/Scrip dividends.

How can I participate in the DRIP?

• Shareholders who hold their DSM shares in a regular securities account should note the following:
  - If you have a securities account in which the default option is to reinvest your net dividend, you need to take no action. Nevertheless, we advise you to contact your bank or broker, who can give you further details on the program.
  - If you have a securities account in which the default option is to receive your net dividend in cash, you need to contact your bank or broker. They can give you further details on how to participate in the DRIP.

• Shareholders whose shares have been registered will directly be informed by ANT on how to participate in the DRIP

What do I need to do if I do not want to take part in the DRIP?

• Shareholders who hold their DSM shares in a regular securities account should note the following:
  - If you have a securities account in which the default option is to reinvest your net dividend, you need to inform your bank or broker.
  - If you have a securities account in which the default option is to receive your net dividend in cash, you need not take any action if you do not want to participate. If you want to participate, you will need to instruct your bank or broker accordingly.
• Shareholders whose shares have been registered will directly be informed by ANT on how to act if they do not wish to participate.

What are the features of a DRIP?

A DRIP enables participating shareholders to use their net cash dividends to buy shares in the market:

• Shareholders will receive details about the DRIP and instructions from their bank/broker or either ANT and through an advertisement that ABN AMRO will publish in certain newspapers.
• Participants' net cash dividend will be paid by DSM to an ABN AMRO account. ABN AMRO will subsequently buy shares and deliver them to the participants’ bank or broker on the dividend payment date.
• Shareholders will receive an overview of the shares bought for their account and a tax voucher from either ANT or their bank/broker.
• ABN AMRO will withhold a low dealing charge (approx. 0.50%). Because banks and brokers usually charge minimum tariffs for share acquisitions, the costs associated with such transactions are generally higher than under the DRIP.

How is a DRIP executed in the Dutch Market?

In the Dutch Market a DRIP is executed as an optional dividend payment, which is a well-known way of paying a combined dividend in this market. Shareholders, ANT, banks and brokers are familiar with this structure.

The main difference compared with a stock dividend is that investors participating in the DRIP have to pay 15% dividend withholding tax on the dividend they receive, so in practice 85% of the cash dividend will be reinvested. As in the case of an optional dividend, investors are offered the opportunity to opt for existing shares in DSM by submitting their dividend rights to ABN AMRO for a certain period through their bank or broker.

All dividend rights that investors submit to ABN AMRO for the DRIP will be aggregated and will eventually be reinvested in existing shares of DSM. To this end ABN AMRO will make purchases through the Euronext Amsterdam stock exchange. After the purchase period, ABN AMRO will fix the exchange ratio based on the daily Volume Weighted Average Price (excluding auction and off exchange trades) as calculated in Bloomberg for a certain period (“VWAP”). The number of dividend rights needed to receive one share can be calculated as follows:

(VWAP excluding auction and off exchange trades) / ( net cash dividend per share minus approx. 0.5% costs of the net dividend).

Example:

* Assumption made for the purpose of this example: the company will pay a final dividend of EUR 0.67/share, equal to 2005.

** Depending on the settlement of fractions (see below).

Formula = EUR 34.00 / ( EUR 0.5695 (=value of one dividend right on one (1)  old share) – (0.5% x EUR 0.5695) ) = 60. This means that 60 dividend rights are required to reinvest/purchase one (1) share.

Example:

For the settlement of remaining fractions (0.17) see the answer to the question “How are fractions settled?”.

What are the costs?

• The costs are approx. 0.5% of the net dividend reinvested.
  This amount is used to cover the costs. For example: a shareholder who receives a net dividend amount of EUR 100 pays approx. EUR 0.50 in costs.
• Some banks may charge additional costs for settlement and rounding of fractions, see the answer to the question “How are fractions settled?”
• There are no costs involved in joining or leaving the program.

What is included in the approx 0.50% costs?

• Purchase and settlement costs.
• Guaranteeing “VWAP excluding auction and off exchange trades” to investors. Purchases are made during the period used to calculate VWAP. VWAP may deviate from the actual purchase prices at which ABN AMRO purchases the shares in that same period.
• Financing costs as purchases are made before the actual payment of the dividend by DSM.
• Payment of commission to banks/brokers and ANT. In principle no commissions will be charged by your bank or broker for the exchange of dividend rights, but as set out below some banks may charge costs for settlement and rounding of fractions. See the answer to the question “How are fractions settled?”

How are fractions settled?

• If the number of the dividend rights is not exactly divisible into whole new shares, fractions will arise.
• The settlement of fractions differs per bank. In general, remaining dividend rights or fractions of shares will be settled for cash.However, some banks may apply a rounding feature, whereby an entitlement to 0.5 share or more will be rounded upwards, while an entitlement to less than 0.5 share will be rounded downwards.
• It is possible that your bank or broker charges a fee in connection with this rounding mechanism. We advise you to contact your bank or broker about this.

Is this a stock dividend?

• No, this is not a stock dividend. DSM only pays a cash dividend. In the case of a stock dividend you would receive new shares from the company (out of the premium reserve) based on the gross dividend amount.
• Through the DRIP you are offered the opportunity to reinvest your net dividend in shares.
• The DRIP is a facility offered to you by ABN AMRO.

How can I withdraw from the DRIP and are there any costs involved?

• If you hold your shares in a regular securities account, you need to inform the bank that administers your shares.
• If you are a holder of registered shares, you need to inform ANT that you no longer desire to participate in the DRIP.

There are no costs involved in withdrawing from the DRIP.

Do I have the option to take part in the reinvestment plan for only part of my dividend?

No, if you want to take part you have to reinvest the total net dividend you receive on your DSM shares of that account.

What happens if I sell all or part of my shares during my participation in the DRIP?

If you sell your shares or a part of your shares, nothing will change. You will receive your dividend based on your position on the dividend record date.

What are the tax consequences of taking part in the DRIP?

• You are only entitled to reinvest the net dividend. For the dividend withholding tax withheld, you will receive a dividend note from either ANT or your bank.
• The tax consequences depend on your own tax position. To analyze this you may need to contact your own tax adviser.
• In general the tax consequences are the same as when you receive a cash dividend from a Dutch company and buy shares in a Dutch company out of your own resources.

Restrictions

In your jurisdiction, participation in the Plan may be restricted by law. You should seek information about any such restrictions and comply with these. Any failure to comply with such restrictions may constitute a violation of the securities laws of your jurisdiction and ABN AMRO and DSM do not assume any responsibility or liability for any such violation by anyone whomsoever. Shareholders must seek immediate and independent advice on their position.

The value of investments can fluctuate. Results achieved in the past are no guarantee of future results. We advise you to seek independent advice from your financial adviser about participation in the DRIP.