The following best practice provisions are not (fully)
applied or applied with an explanation:
11.1.1: appointment period Executive Board members;
II.2.8: severance payment Executive Board members;
III.2.1, III.2.2 a, c and e and III.2.3: independence of
Supervisory Board members;
III.3.5: appointment period Supervisory Board members;
III.4.1 (g): contact with Central Works Council;
III.5.H: chairman Remuneration Committee;
111.6.6: delegated Supervisory Board member.
Other best practice provisions, which are not applied,
relate to the fact that these principles and/or best practice
provisions are not applicable to Heineken N.V.:
II.2.4,11.2.6 and II.2.7: Heineken does not grant options
on shares;
III.8: Heineken does not have a one-tier management
structure;
IV.1.2 Heineken has no financing preference shares;
IV.2: Heineken has no depositary receipts of shares,
nor a trust office;
IV.3.11: Heineken has no anti-takeover measures;
IV.4: The principle and best practice provisions relate
to shareholders;
V.3.3: Heineken has an internal audit function.
The Annual General Meeting of Shareholders of 22 April
2010 will have the opportunity to discuss the way Heineken
deals with the Code.
Item 5a: Adjustments to the Remuneration policy for the
Executive Board.
The Annual General Meeting of Shareholders is invited
to adopt the adjustments to the remuneration policy
for the Executive Board as per 1 January 2010. The core
remuneration principles of supporting the business
strategy, paying for performance and paying competitively
and fairly remain unchanged. The proposed adjustments
are to further strengthen the link between pay and
performance and more effectively drive Heineken's long
term success.
The adjustments relate to the Short Term Incentive (a.o.
allowing to set specific financial and operational measures
on an annual basis) and to the Long Term Incentive
(a.o. replacing Total Shareholder Return (TSR) with key
fundamental financial performance measures. The present
policy and the adjustments to the policy are stated in the
remuneration report in the annual report (pages 65 to 70)
and are posted on the website.
Item 5b: Related amendment to the Long Term Incentive
Plan for the Executive Board.
In order to align the long term incentive for the Executive
Board to the principles of the current remuneration policy
(remuneration at the median of the labour market peer
group) the Supervisory Board determined that the value at
target level of the shares that will be conditionally awarded
(starting with award of 2010) will be 125% of base salary for
the CEO and 100% of base salary for the CFO. As part of the
proposed adjustment to the remuneration policy for the
Executive Board (also starting with the award of 2010) TSR
will be replaced as performance measure by the following
financial performance measures: Organic Gross Profit beia
Growth, Organic EBIT beia Growth, Earnings per Share (EPS)
beia Growth and Free Operating Cash Flow, each having
equal weight. At threshold performance 50% of the
performance shares will vest (which is 25% under the
current TSR measure), at target performance 100% of the
performance shares will vest and at maximum performance
150% of the performance shares will vest.
The Annual General Meeting of Shareholders is invited to
approve the amended level of the shares that will be
conditionally awarded under the current remuneration
policy and the adjustments to the Long Term Incentive plan.
Item 6a: Appointment of Mr. J.A. Fernandez Carbajal.
In accordance with the Articles of Association of the
Company, the Supervisory Board has made a non-binding
nomination for the appointment, subject to the completion
of the acquisition of the beer operations of FEMSA, of
Mr. Fernandez Carbajal as member of the Supervisory
Board, for the maximum period of four years (i.e. until the
end of the Annual General Meeting of Shareholders to be
held in 2014).
The Supervisory Board proposes to appoint Mr. Fernandez
Carbajal in view of his broad strategic and operational
experience in the beer business in Latin America and
specifically in Mexico.
José Antonio Fernandez Carbajal joined FEMSA in 1987.
He was named Chief Executive Officer of FEMSA in January
1995 and has served as Chairman of the Board of FEMSA
since 2001. Before becoming CEO of FEMSA, Mr. Fernandez
Carbajal served as the Chief Executive Officer of OXXO,
the largest convenience store chain of Latin America.
He also held positions in FEMSA's corporate area, as well
as in the commercial department of the Cuauhtémoc
Moctezuma Brewery. Mr. Fernandez Carbajal is also
Chairman of the Board of Coca-Cola FEMSA, Vice Chairman
of the Board of Monterrey Tecnológico, and participates on
Boards of important national and international companies,
such as Grupo Financiero BBVA Bancomer, Grupo Industrial
Bimbo, Televisa.
