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Corporate Governance Statement (continued)
Restrictions related to shares held by FEMSA
Share plans
Change of control
Heineken NV.
Report of the
Report of the
Financial
Sustainability
Other
Annual Report 2016
Introduction
Executive Board
Supervisory Board
Statements
Review
Information
Upon completion (on 30 April 2010) of the acquisition of the beer operations of Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA), CB Equity
LLP (belonging to the FEMSA group) received Heineken N.V. shares (and Heineken Holding N.V. shares). Pursuant to the Corporate Governance
Agreement of 30 April 2010 concluded between the Company, Heineken Holding N.V., L'Arche Green N.V., FEMSA and CB Equity LLP the
following applies:
- Subject to certain exceptions, FEMSA, CB Equity LLP, and any member of the FEMSA group shall not increase its shareholding in Heineken Holding
N.V. above 20% and shall not increase its holding in the Heineken Group above a maximum of 20% economic interest (such capped percentages
referred to as the 'Voting Ownership Cap').
- Subject to certain exceptions, FEMSA, CB Equity LLP and any member of the FEMSA group may not exercise any voting rights in respect
of any shares beneficially owned by it, if and to the extent that such shares are in excess of the applicable Voting Ownership Cap.
- Unless FEMSA's economic interest in the Heineken Group were to fall below 14%, 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 Company's Supervisory Board, one of whom will be
Vice-Chairman, who also serves as the FEMSA representative on the Board of Directors of Heineken Holding N.V.
There is a share-based Long-Term Variable Award ('LTV') for both the Executive Board members and senior management. Eligibility for participation
in the LTV by senior management 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 Heineken N.V. shares.
Shares received by Executive Board members upon vesting under the LTV 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% of their STV payout in
Heineken N.V. shares (investment shares) to be delivered by the Company; the maximum they can invest in Heineken N.V. shares is 50% of their STV
payout (at their discretion).
The investment shares (which are acquired 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 acquired. 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
(in respect of Mr. Van Boxmeer), or service agreement (in respect of Mrs. Debroux), as the case may be, 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 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 required for the LTV, the STV and the extraordinary share entitlements will be acquired by the Company on the basis of an authorisation
granted by the AGM and subject to approval of the Supervisory Board of the Company.
There are no important agreements to which the Company is a party and that will automatically come into force, be amended or be terminated
under the condition of a change of control over the Company as a result of a public offer.
However, the contractual conditions of most of the Company's important financing agreements and notes issued (potentially) entitle the banks
and noteholders respectively to claim early repayment of the amounts borrowed by the Company in the situation of a change of control over
the Company (as defined in the respective agreement).
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.