Financial statements I Notes to the consolidated financial statements continued
29. Share-based payments - Long-Term Variable Award
As from 1 January 2005 HEINEKEN established a performance-based share plan (Long-Term Variable award; LTV) for the Executive Board. As from
1 January 2006 a similar plan was established for senior management. Under this LTV share rights are awarded to incumbents on an annual basis.
The vesting of these rights is subject to the performance of Heineken N.V. on specific performance conditions over a three year period.
The LTV 2009 - 2011 performance condition for the Executive Board is Relative Total Shareholder Return (RTSR) or TSR performance in comparison
with the TSR performance of a selected peer group. The LTV 2009-2011 performance conditions for senior management are RTSR (25 percent) and
internal financial measures (75 percent).
The performance conditions for LTV 2010-2012 and LTV 2011 -2013 are the same for the Executive Board and senior management and comprise
solely of internal financial measures, being 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 awarded shares vest. At threshold performance. 50 per cent of the awarded shares vest. At maximum
performance 200 per cent of the awarded shares vest for the Executive Board as well as senior managers contracted by the US and 175 per cent
vest for all other senior managers.
The performance period for share rights granted in 2009 was from 1 January 2009 to 31 December 2011The performance period for share rights
granted in 2010 is from 1 January 2010 to 31 December 2012. The performance period for the share rights granted in 2011 isfroml January 2011
to 31 December 2013. The vesting date for the Executive Board is within five business days, and for senior management the latest of 1 April and
20 business days, after the publication of the annual results of 2011,2012 and 2013 respectively.
As H EINEKEN 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:
Grant date/employees entitled
Based on
Contractual
life of rights
Share rights granted to Executive Board in 2009
53,083
21.90
Continued service and RTSR performance
3 years
Share rights granted to senior management in 2009
562,862
21.90
Continued service, 75% internal performance
conditions and 25% RTSR performance
3 years
Share rights granted to Executive Board in 2010
55,229
33.27
Continued service, 100% internal
performance conditions
3 years
Share rights granted to senior management in 2010
516,765
33.27
Continued service, 100% internal
performance conditions
3 years
Share rights granted to Executive Board in 2011
65,072
36.69
Continued service, 100% internal
performance conditions
3 years
Share rights granted to senior management in 2011
730,090
36.69
Continued service, 100% internal
performance conditions
3 years
The number of shares is based on target performance.
Based on RTSR and internal performance, it is expected that approximately 593,428 shares will vest in 2012 for senior management.
122
Heineken N.V. Annual Report 2011