Explanatory notes
to the agenda for the Annual General Meeting of Shareholders
of Heineken N.V., to be held on Thursday 20 April 2006.
Item lb: Explanation of the reserve and dividend policy.
Heineken 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 2: Authorisation of the Executive Board to
repurchase own shares.
An authorisation was last given by the General Meeting
of Shareholders held on 20 April 2005.
The General Meeting of Shareholders is requested to
renew the authorisation of the Executive Board.
It is proposed that the Executive Board be authorised
by the General Meeting of Shareholders, for the statutory
maximum period of 18 months, starting 20 April 2006,
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;
The authorisation to repurchase shares may be used
in connection with the Long-Term Incentive Plan for the
members of the Executive Board and the Long-Term
Incentive Plan for Senior Management, but may also
serve other purposes, such as, for example, in connection
with acquisitions.
Item 3: Authorisation of the Executive Board to issue
(rights to) shares and to restrict or exclude shareholders'
pre-emption rights.
An authorisation was last given by the General Meeting
of Shareholders held on 20 April 2005.
The General Meeting of Shareholders is requested to
renew the authorisation of the Executive Board.
It is proposed that the Executive Board be authorised
by the General Meeting of Shareholders, for a period of
18 months, starting 20 April 2006 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 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 and the Long-Term Incentive Plan for
Senior Management, but may also serve other purposes,
such as, for example, in connection with acquisitions.
Item 4: Composition of the Supervisory Board.
a The Supervisory Board has made a non-binding
nomination of Mr. C.J.A. van Lede for his re-appointment
as member of the company's Supervisory Board.
Mr. Van Lede fits the profile drawn up by the
Supervisory Board, as set out on our website.
Cees van Lede was born in 1942. He has been
a member of the Supervisory Board since 2002
and Chairman since 2004.
Mr. Van Lede is a former CEO of Akzo Nobel N.V.
At present he is member of the Supervisory Board
of Akzo Nobel N.V., Royal Philips Electronics N.V., Reed
Elsevier Group, Sara Lee Corporation, Air Liquide S.A.
and Air France/KLM.
c
repurchase transactions may be executed
on the stock exchange or otherwise.
