112
Financial statements Notes to the consolidated financial statements
29. Share-based payments - Long-Term Incentive Plan
As from 1 January 2005 Heineken established a performance-based share plan (Long-Term Incentive Plan; LTIP) for the Executive
Board. As from 1 January 2006 a similar LTIP was established for senior management.
The LTIP 2008 - 2010 and 2009 - 2011 for the Executive Board includes share rights, which are conditionally awarded to the
Executive Board each year and are subject to Heineken's Relative Total Shareholder Return (RTSR) performance in comparison
with the TSR performance of a selected peer group.
The LTIP share rights conditionally awarded to senior management each year in the 2008 - 2010 plan and the 2009 - 2011 plan ar
for 25 per cent subject to Heineken's RTSR performance and for 75 per cent subject to internal performance conditions.
The LTIP share rights conditioning awarded to senior management and the Executive Board for the 2010 - 2012 plan are fully
subject to internal performance conditions.
These performance conditionally are Organic Gross Profit beia growth, Organic EBIT beia growth, Earnings Per Share (EPS) beia
growth and Free Operating Cash Flow.
At target performance, 100 per cent of the shares will vest. At maximum performance 150 per cent of the shares will vest.
The performance period for share rights granted in 2008 is from 1 January 2008 to 31 December 2010. The performance period
for share rights granted in 2009 was from 1 January 2009 to 31 December 2011. The performance period for share rights granted
in 2010 is from 1 January 2010 to 31 December 2012.
The vesting date for the Executive Board is within five business days, and for senior management the latest of 1 April and 20 busines
days, after the publication of the annual results of 2009, 2010, 2011 and 2012 respectively.
As Heineken will withhold the tax related to vesting on behalf of the individual employees, the number of Heineken N.V. shares
to be received by the Executive Board and senior management will be a net number.
The terms and conditions of the share rights granted are as follows:
Based on
share price
Vesting conditions
Contractual
Share rights granted to Executive Board
in 2008
26,288
44.22
Continued service and RTSR performance
3 years
Share rights granted to senior
Continued service, 75% internal performance
management in 2008
Share rights granted to Executive Board
263,958
44.22
conditions and 25% RTSR performance
3 year
in2009
53,083
21.90
Continued service and RTSR performance
3 years
Share rights granted to senior
Continued service, 75% internal performance
management in 2009
562,862
21.90
conditions and 25% RTSR performance
3 years
Share rights granted to Executive Board
Continued service, 100% internal performance
in 2010
55,229
33.27
conditions
3 year
Share rights granted to senior
Continued service, 100% internal performance
management in 2010
516,765
33.27
conditions
3 years
1,478,185
The number of shares is based on target performance.
Based on RTSR and internal performance, it is expected that approximately 218,903 shares will vest in 2011 for senior management.
No vesting occurred for the Executive Board. The expenses relating to these expected additional grants are recognised in profit or
loss during the performance period.