Explanatory notes
2 Heineken N.V. Agenda
3 Heineken N.V. Agenda
4 Heineken N.V. Agenda
to the agenda for the Annual General Meeting of Shareholders of Heineken N.V.,
to be held on Wednesday, 20 April 2005
Item 3: Reserve and dividend policy
Heineken N.V. has maintained a consistent reserve and dividend policy, intended to achieve
a pay-out ratio of 20-25% of the net profit, excluding exceptional items. Every three years, the situation
is reviewed to establish whether there is scope for increasing the dividend paid to shareholders by
paying the same dividend per share but increasing the number of shares in issue, in principle by 25%.
The number of shares in issue can be increased either by an issue of recapitalisation shares from the
free reserves or a share split, giving additional shares to existing shareholders.
Through its reserve and dividend policy, Heineken pursues several aims: to expand its existing market
positions, to play an active part in the expected ongoing concentration of the global beer market,
to maintain a healthy capital structure and to preserve its independence. Achieving these objectives
requires the reservation of a considerable part of the profit.
Item 7: Amendments to the Articles of Association
The proposal to amend the Articles of Association of Heineken N.V. relates to the Dutch Corporate
Governance Code of 9 December 2003 and the law of 9 July 2004 concerning the large company
regime (structuurregeling), which amended Book 2 of the Dutch Civil Code and came into effect on
1 October 2004. The proposal makes provision for an indemnification for the members of the Executive
Board and the Supervisory Board and includes amendments with respect to textual clarifications,
improvements in the layout and modernisation of the current Articles of Association. The full text with
the proposed amendments to the Articles of Association and explanatory notes may be inspected
at the company's offices in Amsterdam, where copies can be obtained. The text is also posted on the
corporate website (www.heinekeninternational.com). The proposal also includes an authorisation
to execute the notarial deed of amendment. The amendment of the Articles of Association will come
into force upon execution of the notarial deed.
Item 8: Adoption of the remuneration policy for the Executive Board
The Annual General Meeting of Shareholders will be invited to adopt the remuneration policy
referred to in the 2004 annual report and described in the remuneration report posted on the website.
The remuneration policy and structure reflect the company's strategic ambitions, take into account
internal and external circumstances and preserve the highest standards of good corporate citizenship.
The policy seeks to maintain a tight focus on the company's strategic short-term and long-term results.
The remuneration structure provides for short-term and long-term incentives in addition to the base
salary, the long-term incentive including an allotment of shares.
Item 9: Approval of the Long-Term Incentive Plan for the Executive Board
One of the company's key objectives is sustained, long-term value creation for shareholders. To foster
achievement of that objective, the Supervisory Board proposes to grant shares to the Executive Board
and a group of senior managers. Under this Long-Term Incentive Plan, 'performance shares' will be
allotted on condition that predefined, explicit and objective performance criteria are met. More infor
mation on the Long-Term Incentive Plan for the Executive Board is given in the remuneration report
of the Supervisory Board (see our website and our 2004 annual report).
We intend to introduce a similar Long-Term Incentive Plan for a group of senior management with
effect from 1 January 2006.
Item 10: Authorisation of the Executive Board to repurchase own shares
It is proposed that the Executive Board be authorised by the General Meeting of Shareholders,
for the statutory maximum period of 18 months from the date on which the amendment of the Articles
of Association referred to in item 7 becomes effective to repurchase shares subject to the following
conditions and with due observance of the law and the Articles of Association:
a the maximum number of shares which may be repurchased is the statutory maximum of 10%
of the issued share capital of the company;
b repurchase transactions must be executed at a price between the nominal value of the shares
and 110% of the opening price quoted for the shares in the Official Price List (Officiële Prijscourant)
of Euronext Amsterdam on the date of the repurchase transaction or, in the absence of such
a price, the latest price quoted therein;
c repurchase transactions may be executed on the stock exchange or otherwise.
The authorisation to repurchase shares may be used mainly in the connection with the Long-Term
Incentive Plan for the members of the Executive Board (see item 9) and the Long-Term Incentive Plan
for the group senior management, but may also serve other purposes, such as, for example in
connection with acquisitions.
Item 12: Appointment of two members of the Supervisory Board
Binding nomination drawn up by the Supervisory Board, in accordance with article 7,
paragraph 2, of the Articles of Association of Heineken N.V., for the appointment
of a Supervisory Board member.
1 M. Das
2 R. Overgaauw
Particulars of candidates
Maarten M.) Das
Age 56
Shares held in the company none
Profession lawyer, partner of Loyens Loeff N.V.
Supervisory directorships in
Dutch listed stock companies none
Other companies Greenfee B.V. (Chairman)
Management positions Heineken Holding N.V. (Chairman)
Stichting Administratiekantoor Priores
LAC B.V.
Reasons Mr. Das has been a member of the Supervisory Board
since 1994 and has been delegated member since 1995.
He fits the profile drawn up by the Supervisory Board.
The Supervisory Board proposes to reappoint Mr. Das
as member and delegated member of the Supervisory Board,
in view of his extensive legal expertise and his valuable
input to the Supervisory Board.
Item 11: Authorisation of the Executive Board to issue (rights to) shares and to restrict
or exclude shareholders' pre-emption rights
It is proposed that the Executive Board be authorised by the General Meeting of Shareholders, for
a period of 18 months from the date on which the amendment of the Articles of Association referred
to in item 7 becomes effective, as the body authorised to resolve to issue shares or grant rights to
subscribe for shares and to restrict or exclude shareholders' pre-emptive rights, with due observance
of the law and the Articles of Association. The authorisation will be limited to 10% of the company's
issued share capital, as per the date of issue.
The authorisation may be used in connection with the Long-Term Incentive Plan for the members of
the Executive Board (see item 9) and the Long-Term Incentive Plan for the group senior management,
but may also serve other purposes, such as, for example, in connection with acquisitions.
Ruud (R.) Overgaauw
Age
Shares held in the company
Profession
Supervisory directorships
64
none
former General Manager of Vrumona B.V.
none
