Explanatory Notes
to the agenda for the Annual General Meeting
of Shareholders of Heineken N.V., to be held
on Thursday 19 April 2007.
Agenda items la, lb, lc, Id and le, 2, 3a and 3b, 4, 5 and 6 are
subject to approval of the General Meeting of Shareholders.
Item lb: Proposal for a new reserve
and dividend policy
A new dividend policy is proposed. Under the
existing policy Heineken reviewed every 3 years if
there would be scope to increase the dividend via a
share-split, thereby increasing the number of shares,
whilst maintaining the annual dividend per share at
the same level. This resulted in an intended dividend
payout ratio of 20-25 per cent of net profit before
exceptional items and amortisation of brands (net
profit beia).
in the new policy it is proposed to increase the
annual dividend payout to 30-35 per cent (net profit
beia). The new policy reinforces the relationship
between dividend payments and the annual
development of net profit beia and keeps supporting
the intention of Heineken N.V. to preserve its
independence, to maintain a healthy financial
structure and to retain sufficient earnings in order
to grow the business both organically and through
acquisitions. Under the new policy Heineken will
only consider share splits if and when the share
price has reached a level where the liquidity of the
stock becomes adversely affected.
Heineken will continue to pay the annual dividend in
the form of an interim dividend and a final dividend.
The interim dividend will be fixed at 40 per cent of
the total dividend of the previous year.
The new policy will first be applied over the financial
year 2006.
Item 2: Amendments to the Articles of Association
The proposal to amend the Articles of Association
of Heineken N.V. mainly relates to the recently
adopted law on the use of electronic communication
devices at decision-making within companies
(Wijziging van Boek 2 van het Burgerlijk Wetboek
ter bevordering van het gebruik van elektronische
communicatiemiddelen bij de besluitvorming
in rechtspersonen), which came into force on
1 January 2007.
This law facilitates the electronic convocation of
the General Meeting of Shareholders, the electronic
participation to the General Meeting of Shareholders
(e.g. through webcam) and electronic voting prior
to the General Meeting of Shareholders. The law
provides for the possibility to have a record date
up to 30 days before the General Meeting of
Shareholders (as compared to the current 7 days).
The record date is the date on which shareholders
must have registered their shares in order to be able
to participate in and exercise their voting rights at
the General Meeting of Shareholders.
Furthermore, a small amendment is proposed to
the authority of the members of the Executive Board
to represent the company (joint representation
together with a proxy holder will permitted).
Finally, in line with the Transparency Directive,
the term within which the annual accounts need
to be submitted to the Supervisory Board will be
shortened to four months.
The full text with the proposed amendments
may be inspected at the company's offices in
Amsterdam, where copies can be obtained.
The text is also posted on the company's website
(www.heinekeninternational.com). The proposal also
includes an authorisation to execute the notarial
deed of amendment. The amendment to the Articles
of Association will come into force upon execution
of the notarial deed.
Item 3a: Amendment to the remuneration
policy for the Executive Board
The General Meeting of Shareholders will be invited
to adopt the amended remuneration policy as
referred to in the 2006 annual report and described
in the remuneration report posted on the website.
The amended remuneration policy and structure
reflects the organisational structure and the
strategic ambitions. The major change in the
remuneration policy relates to the pay-level for
the CEO. It is now proposed to pay at market
