Report of the Executive Board Corporate Governance Statement
FEMSA, CB Equity and any member of the FEMSA group may
not sell any shares in Heineken N.V. (and in Heineken Holding
N.V.) for a five-year period, subject to certain exceptions,
including amongst others, (i) beginning in year three, the
right to sell up to 1 per cent of all outstanding shares of
each of Heineken N.V. and Heineken Holding N.V. in any
calendar quarter, (ii) beginning in year three, the right to sell
any Heineken N.V. shares and/or any Heineken Holding N.V.
shares in any private block sale outside the facilities of a
stock exchange so long as Heineken Holding N.V. (as to
Heineken N.V. shares) respectively L'Arche Green N.V. (as to
Heineken Holding N.V. shares) is given first the opportunity
to acquire such shares at the market price thereof.
Unless FEMSA's economic interest in the Heineken Group
were to fall below 14 per cent, the current FEMSA control
structure were to change or FEMSA were to be subject to
a change of control, FEMSA is entitled to have two
representatives on the Heineken N.V. Supervisory Board,
one of whom will be Vice-Chairman, who also serves as the
FEMSA representative on the Board of Directors of Heineken
There are share-based Long-Term Incentive Plans for both the
Executive Board members and senior management. Eligibility
for participation is based on objective criteria.
Each year, performance shares are awarded to the participants.
Depending on the fulfilment of certain predetermined
performance conditions during a three-year performance
period, the performance shares will vest and the participants
will receive real Heineken N.V. shares.
Shares received by Executive Board members upon vesting
under the Long-Term Incentive Plan are subject to a holding
period of five years as from the date of award of the respective
performance shares, which is approximately two years from
the vesting date.
Under the Short-Term Incentive Plan for the Executive Board,
the Executive Board members are entitled to receive a cash
bonus subject to the fulfilment of predetermined performance
conditions. Under the amended remuneration policy that
will be submitted for approval to the General Meeting of
Shareholders of 21 April 2011, the Executive Board members
shall be obliged to invest at least 25 per cent of their STI pay-out
in Heineken N.V. shares (investment shares) to be delivered by
Heineken N.V.; the maximum they can invest in Heineken N.V.
shares is 50 per cent of their STI pay-out (at their discretion).
The investment shares are subject to a holding period of five
years as from 1 January of the year in which the investment
shares are acquired.
Executive Board members are entitled to receive one additiona
Heineken N.V. share (a matching share) for each investment
share held by them at the end of the respective holding period.
The entitlement to receive matching shares shall lapse upon the
termination by the Company of the employment agreement for
an urgent reason ('dringende reden') within the meaning of the
law or in case of dismissal for cause ('ontslag met gegronde
redenen') whereby the cause for dismissal concerns
unsatisfactory functioning of the Executive Board member.
In exceptional non-recurring situations, extraordinary
share entitlements may be awarded by the Executive
Board to employees. These share entitlements are usually
non-performance related and the employees involved are
usually entitled to receive real Heineken N.V. shares after
the expiry of a period of time.
The shares required for the share-based Long-Term Incentive
Plans, the Short-Term Incentive Plan and the extraordinary shari
entitlements will be acquired by Heineken N.V. The transfer
of shares to the participants in the share-based Long-Term
Incentive Plans, to the Executive Board members under the
Short-Term Incentive Plan and the recipients of extraordinary
share entitlements requires the approval of the Supervisory
Board of Heineken N.V.
Change of control
There are no important agreements to which Heineken N.V. is
a party and that will automatically come into force, be amended
or be terminated under the condition of a change of control
over Heineken N.V. as a result of a public offer.
However, for the situation of a change of control over Heineken
N.V. (as defined in the respective agreement), the contractual
conditions of most of Heineken N.V.'s important financing
agreements and the terms and conditions of Heineken N.V.'s
bond issues after 2003 entitle the banks and bondholders
respectively to claim early repayment of the amounts borrowec
by Heineken N.V.
Also some of Heineken's important joint venture agreements
provide that in case of a change of control over Heineken (as
defined in the respective agreement), the other party to such
agreement may exercise its right to purchase Heineken's shares
in the joint venture, as a result of which the respective joint
venture agreement will terminate.