Corporate Governance Statement continued
Share plans
There is a share-based Long-Term Variable Award ('LTV') 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 Eleineken N.V. shares.
Shares received by Executive Board members upon vesting under the
Long-Term Variable Award 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 Variable Pay ('STV') for the Executive Board, the
Executive Board members are entitled to receive a cash bonus subject to
the fulfilment of predetermined performance conditions. The Executive
Board members are obliged to invest at least 25 per cent of their STV
payout 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 STV payout (at their discretion).
The investment shares (which are acguired by the Executive Board members
in the year after the year over which the STV payout is calculated) are
subject to a holding period of five years as from 1 January of the year
in which the investment shares are acguired.
Executive Board members are entitled to receive one additional 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 Heineken N.V. shares after the
expiry of a period of time.
The shares reguired for the LTV. the STV and the extraordinary share
entitlements will be acguired by Heineken N.V. The transfer of shares to
the participants under the LTV. to the Executive Board members under
the STV and the recipients of extraordinary share entitlements reguires
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, in the situation of a change 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
borrowed 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.
Compensation rights on termination of employment agreements
There are no agreements of Heineken N.V. with Executive Board members
or other employees that specifically entitle them to any compensation
rights upon termination of their employment after completion of a public
offer on Heineken N.V. shares.
If Heineken N.V. gives notice of termination of the employment agreement
for a reason which is not an urgent reason ('dringende reden') within the
meaning of the law. Heineken N.V. shall pay severance compensation
to the Executive Board member on expiry of the employment agreement.
This severance compensation shall be set on the basis of the notion of
reasonableness taking into account all the circumstances of the matter,
including whether the Executive Board member shall be bound by
a non-competition obligation and whether any allowance is paid by
Heineken N.V. in relation to this non-competition obligation. In case of
dismissal for cause ('ontslag met gegronde reden') whereby the cause
for dismissal concerns unsatisfactory functioning of the Executive Board
member, the severance compensation cannot exceed one year's base
salary, including holiday allowance.
Appointment and dismissal of Supervisory and Executive
Board members
Members of the Supervisory Board and the Executive Board are appointed
by the General Meeting of Shareholders on the basis of a non-binding
nomination by the Supervisory Board.
The General Meeting of Shareholders can dismiss members of the
Supervisory Board and the Executive Board by a majority of the votes cast,
if the subject majority at least represents one-third of the issued capital.
54
Heineken N.V. Annual Report 2012
