Notes to the consolidated financial statements continued
28. Employee benefits continued
Historical information
2012
Present value of the defined benefit obligation
7,901
6,900
6,643
5,936
4,963
Fair value of defined benefit plan assets
(6,401)
(5,860)
(5,646)
(4,858)
(4,231)
Deficit in the plan
1,500
1,040
997
1,078
732
Experience adjustments arising on plan liabilities, losses/(gains)
(170)
(30)
(24)
(116)
71
Experience adjustments arising on defined benefit plan assets, (losses)/gains
291
(15)
320
313
(817)
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 performance conditions for LTV 2010-2012, LTV 2011-2013 and LTV 2012-2014 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 share rights vest. At threshold performance, 50 per cent of the awarded share rights vest. As from
LTV 2011 -2013 at maximum performance 200 per cent of the awarded share rights vest for the Executive Board as well as senior managers contracted
by the US, Mexico and Brazil, and 175 per cent vest for all other senior managers. For LTV 2010-2012 the maximum vesting is 150 per cent of target
vesting for all participants.
The performance period for share rights granted in 2010 was from 1 January 2010 to 31 December 2012. The performance period for share rights
granted in 2011 is from 1 January 2011 to 31 December 2013. The performance period for the share rights granted in 2012 is from 1 January 2012
to 31 December 2014 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 2012,2013 and 2014 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
Contractual
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
Share rights granted to Executive Board in 2012
66,746
35.77
Continued service, 100% internal
performance conditions
3 years
Share rights granted to senior management in 2012
703,382
35.77
Continued service, 100% internal
performance conditions
3 years
The number of shares is based on target performance.
122 Heineken N.V. Annual Report 2012