The Selection and Remuneration Committee of the ARCADIS NV Supervisory Board prepared this remuneration report. For more information on the membership of this committee and activities performed in 2006, please refer to the Report by the Supervisory Board.

In light of the demands imposed by the Dutch Corporate Governance Code, the remuneration policy for the Executive Board was revised in 2005. In the General Meeting of Shareholders on May 11, 2005, the Executive Board's remuneration policy was accepted.

Remuneration Executive Board
The Supervisory Board determines compensation for members of the Executive Board based on recommendations by the Selection and Remuneration Committee, and within the boundaries of the remuneration policy as accepted by the General Meeting of Shareholders.

Starting points for the remuneration policy
The policy aims at providing a compensation package to attract, motivate and retain qualified management. In addition, there has to be a direct correlation between remuneration and value creation for all of those involved, whereby the policy supports short-term operational achievements, as well as the long-term goals of the Company.The starting points for the remuneration package are:

• A total compensation package generally commensurate with the average remuneration packages of a selected labor market reference group.
• Variable remuneration is an important component of the total package. Performance criteria are aimed at increasing shareholder value in the short and long term; a direct correlation exists between creating value and remuneration.
• When evaluating individual remuneration packages for Executive Board members, due consideration is given to the differing responsibilities of the various positions.
• In the case of a foreign board member, the remuneration package is also commensurate with the package offered in the member's native country.

The labor market reference group consists of a number of Dutch companies that are comparable in complexity and size and a number of foreign companies active in the same sector as ARCADIS. These companies are: Ballast Nedam (NL), Ten Cate (NL), Boskalis (NL), Draka Holding (NL), Fugro (NL), Grontmij (NL), PinkRoccade (NL), Jaakko Pöyry Group (Fin), Alten (Fr), Tetra Tech (U.S.), Sweco (S) and WSP (U.K.). The remuneration policy is set up in such a way that when all goals are achieved, the flexible remuneration, on average, is expected to make up 50% of total remuneration (excluding pensions and fringe benefits). As the number of performance-related shares that are part of the remuneration package are fixed at three years, the actual percentage of the flexible remuneration can considerably deviate from the above-mentioned percentage.
The Selection and Remuneration Committee will periodically review the remuneration package to verify its market comparability with the labor market reference group. Material policy changes will be presented to the General Meeting of Shareholders.

Fixed annual salary
To reach a level consistent with the current average salary of the reference group, the 2004 salary will be increased with 5% in two increments (on July 1, 2005 and on July 1, 2006). This includes the annual adjustment based on general trends in wage costs, taking into account Company-specific factors and developments in society.

Short-term flexible remuneration: bonus
The bonus can vary from 0% to 60% of the fixed annual salary, with 40% (the target bonus) indicating that goals were met. Financial goals determine 75% of the bonus; non-financial goals, the remaining 25%. The goals are annually preset by the Supervisory Board.

The financial goals and achievements for 2005 and 2006 are:
– Net income from operations per share (earnings per share - EPS) excluding currency effects, comprising 60%.
The EPS goals are related to the budget for the given year. With an achieved EPS growth of 40% in 2005 and 50% in 2006, the maximum bonus percentage of 30% for this criterion was reached in both years.
– Return on capital invested (ROCI), comprising 40%. The goal in principle is 15% but is annually weighted against the budget. With an ROCI of 20.6% in 2005 and 20.3% in 2006, the maximum bonus percentage of 20% was reached in both years for this criterion.

Non-financial goals are benchmarked against the specific responsibility of the individual board member. Non-financial goals cannot be exceeded; however, partial achievement is possible. The bonus percentage for this portion of the remuneration package in 2005 varied from 7% to 10% and in 2006 from 6% to 10%. This resulted in bonus awards in 2005 varying between 57% and 60% and in 2006 from 56% to 60% of the fixed annual salary.

Long-term flexible remuneration: ARCADIS shares and options
In light of the need for long-term value creation, the remuneration package provides for long-term variable remuneration, consisting of performance-related (rights to the acquisition of) ARCADIS shares. This concerns 25,000 options and 10,000 shares per year for the Chairman of the Executive Board and 15,000 options and 7,000 shares for each member. These numbers are valid for three years (2005, 2006 and 2007).
Options and shares granted are conditional in nature and depend on attaining a performance measure after three years. The performance measure is Total Shareholder Return (TSR), defined as share price increase plus dividend. This measure stimulates the creation of shareholder value in the longer term.

Each year, a three-year cycle begins, whereby achievements are measured at the end of the period against a peer group of companies of comparable size and breadth. ARCADIS' position in the peer group (10 companies including ARCADIS) determines whether the (conditional) options and shares granted earlier become unconditional. The following table indicates the number of options and shares that can become unconditional at the end of each three-year period depending on ARCADIS' relative position in comparison to the peer group.

Position against peer group	Number of conditional options and shares that become unconditional
1st	150%
4th	100%
7th	50%
Below 7th	0%
Between 1st and 7th	Determined by interpolation

The maximum number of options and shares per year for which Executive Board members are eligible are 37,500 options and 15,000 shares for the Chairman and 22,500 options and 10,500 shares for each member. This concerns 150% of the referenced conditional numbers of options and shares granted. The General Meeting of Shareholders approved this policy on May 11, 2005 for the years 2005, 2006 and 2007.

The exercise price of options granted is the closing price of the ARCADIS share on the Euronext exchange on the first day of trading after the General Meeting of Shareholders in which Company shares are traded ex-dividend. Options are valid for a 10-year period. Unconditional shares that are received by Executive Board members must be retained for a period of at least two years.

The peer group consists of the following companies: URS Corporation (U.S.), WSP (U.K.), WS Atkins (U.K.), Alten (Fr), Tetra Tech (U.S.), TRC Companies (U.S.), Grontmij (NL), Sweco (S) and Jaako Pöyry Group (Fin).

Members of the Executive Board can participate in the ARCADIS NV 2002 Employee Share Purchase Plan, under which a maximum of € 400 per month of shares in ARCADIS NV can be bought from the Lovinklaan Foundation at a discount.

Compensation and other fringe benefits
Members of the Executive Board receive reimbursement for expenses, as well as other customary fringe benefits such as a company car. The Company has not pledged any loans, guarantees or other benefits to members of the Executive Board. In 2005, at the proposal of the Supervisory Board, indemnification was granted to Executive Board members for costs related to their positions.

Pensions and early retirement
The current members of the Executive Board participate in the pension plan of the Dutch ARCADIS Pension Fund. On January 1, 2004, this plan was changed to a defined contribution plan. The premium is based on the goal of having a pension that, under selective criteria, is comparable to average pay. The recommended retirement age is 63 years. Contribution by the employee in this plan is 6% of the salary at which the pension is calculated.
Mr Schneider gets compensation for the limited fiscal deductibility due to the fact that he lives in Germany.

Employment contracts and severance pay
Mr. Noy and Mr. Jaski have been appointed for an indefinite period. Their contracts do not contain details regarding fixed severance pay. For new members of the Executive Board, a four-year term limit will be applied, while a maximum will be established for severance pay.

There are no agreements in place between management and ARCADIS NV determining severance payments at the termination of a labor contract resulting from a public bid on the firm.

Click on the links below to view their contracts:
- employment contract Mr Noy (in Dutch)
- employment contract Mr Jaski (in Dutch)
- employment contract Mr Van der Klift
- employment contract Mr Schneider

Remuneration of Executive Board
In 2005, an amount of € 1,167,000 (2004: € 1,298,000) was charged to the Company for remuneration of Executive Board members including pension charges. As flexible remuneration, 17,000 performance shares and 40,000 performance options were granted. In the schedule below, the different components of the remuneration for each present Executive Board member are provided (amounts in thousands of euros).

	Year	Salary1)	Bonus2)	Pension	Performance shares		Performance options
					Number	Amount3)	Number	Amount3)
Harrie Noy	2006	356	219	76	10,000	233	25,000	216
	2005	339	209	79	10,000	113	25,000	93
Michiel Jaski	2006	266	159	42	7,000	163	15,000	129
	2005	254	148	30	7,000	79	15,000	56
Ben van der Klift 4)	2006	168	153	17	5,000	117	12,500	108
Friedrich Schneider 4)	2006	137	145	22	5,000	117	12,500	108

1) On July 1, 2006 the salaries of the members of the Executive Board were raised by 5% (2005: 5%).
2) The bonus is based on the results achieved in 2006 respectively 2005. This bonus is paid in 2007 respectively 2006.
3) This amount will be charged over a 3-year period to the Company's profit and loss account.
4) The salaries mentioned are the amounts as of the date of appointment as members of the Executive Board (May 17, 2006).

Shares and options held by members of the Executive Board
The interests held in the share capital of ARCADIS NV by those who during 2006 were members of the Executive Board are noted in the table below:

Shares ARCADIS NV	31 December 2005	31 December 2006
Harrie Noy	34,122	37,305
Michiel Jaski	1,719	1,870
Ben van der Klift*	-	699
Friedrich Schneider*	-	-
Conditional shares ARCADIS NV**
Harrie Noy	10,000*	12,000*
Michiel Jaski	7,000*	14,000*
Ben van der Klift	-	5,000
Friedrich Schneider	-	5,000

* Ben A. van der Klift and Friedrich M.T. Schneider were appointed members of the Executive Board on May 17, 2006.
** Amounts based on granting of 100% of the reference numbers, with maximal extension to 150%.

Overview of options outstanding to the members of the Executive Board at December 31, 2006

	Option plan from year	Granted  in year	Granted	Exerciseprice	Exercised	Outstanding	Expiration date
Harrie Noy	2001	2001	30,000	€ 9.20	30,000	0	05-22-2011
		2002	15,000	€ 10.79	–	15,000	05-15-2012
		2003	17,500	€ 8.93	–	17,500	05-13-2013
	2005	2005	25,000*	€ 17.94	–	25,000	05-10-2015
		2006	25,000*	€ 37.13	-	25,000	05-18-2016
Michiel Jaski