63
implemented for senior management in 2006.
Each year a number of performance shares are
conditionally awarded, the vesting of which is
subject to meeting a stretching performance
target after three years. The value of the
performance shares at target level for 2007 for
the CEO is €750,000 and for the CFO €412,500.
7 ie performance condition is total shareholder
r turn, measured over a three-year period,
relative to a performance peer group. The
performance peer group is different from the
I bour market peer group and includes companies
w ith which Heineken competes for shareholder
preference. It is composed of other brewers,
but also includes European companies operating
i the branded consumer products market.
ie performance peer group consists of the
f llowing companies:
nheuser-Busch Inc.,
irlsberg A/S,
I iBevS.A.,
t \BMiller pic,
ottish Newcastle pic,
f enkel KGaA,
I Oréal S.A.,
L 'MH S.A.,
oninklijke Numico N.V.*,
I estléS.A.,
I lilever N.V.
ollowing its take-over, Koninklijke Numico N.V. has been
eplaced in the performance peer group by Diageo Pic. This
eplacement shall have effect as of the plan period 2005-
2007.
over a three-year period, Heineken performs
ïtter than the median of the peer group
proportion of the performance shares will vest,
flow median, no performance shares will vest,
sixth position, 25 per cent of the target amount
ill vest. A linear vesting schedule applies, with
7 per cent of the target number vesting at fifth
Tsition and 75 per cent at fourth position. At third
osition, the target number will vest. If Heineken is
inked first, the maximum number of performance
shares will vest. This is 1.5 times the target
amount of shares. The vested shares are subject
to a holding restriction of two years.
For the LTIP performance period, Heineken was
ranked at the end of 2007 as follows:
Period 2007-2009: 5th
Period 2006-2008: 3rd
Period 2005-2007: 3rd
Heineken is acquiring the shares that will be
required for vesting.
The Executive Board performance share allocation
at target level is as follows:
For the year starting 1 January 2005, based on
the share price of €24.53 at 31 December 2004,
17,224 performance shares for the CEO and
13,250 performance shares for the CFO. On
the basis of the fulfilment of the performance
condition (total shareholder return ranking
for the LTIP performance period 2005-2007
at third position), the performance shares will
vest within 5 business days after the publication
of the 2007 annual results as determined by the
Supervisory Board in such a way that Mr Van
Boxmeer is entitled to a gross amount (pro
rated to the time of appointment as CEO) of
14,244 (100 per cent of target) Heineken N.V.
shares and Mr Hooft Graafland is entitled to
a gross amount of 13,250 (100 per cent of
target) Heineken N.V. shares. As Heineken N.V.
will fulfill the tax payment obligations related
to vesting, the amount of Heineken N.V. shares
to be received by the CEO and CFO will be a net
amount in shares.
For the year starting 1 January 2006, based on
the share price of €26.78 at 31 December 2005,
15,777 performance shares for the CEO and
12,136 performance shares for the CFO. These
will vest, subject to the fulfilment of the
performance condition, in 2009.
Heineken N.V. Annual Report 2007