0
46
Corporate Governance statement
Substantial shareholdings
Restrictions related to shares
held by FEMSA
Share plans
Change of control
Heineken N.V.
Annual Report 2020
Introduction
Report of the
Executive Board
Report of the
Supervisory Board
Financial
Statements
Sustainability
Review
Other
Information
Pursuant to the Financial Supervision Act (Wet
op het financieel toezicht) and the Decree on
Disclosure of Major Holdings and Capital Interests
in Issuing Institutions (Besluit melding zeggenschap
en kapitaalbelang in uitgevende instellingen), the
Netherlands Authority for the Financial Markets
has been notified about the following substantial
shareholdings regarding the Company:
- Mrs. C.L. de Carvalho-Heineken (indirectly
50.005%; the direct 50.005% shareholder is
Heineken Holding N.V.).
- Voting Trust (FEMSA) (indirectly 8.63%).
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 Incentive Plan
('LTIP') for both the Executive Board members and
senior management. Eligibility for participation
in the LTIP 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 LTIP 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 (STIP)
for the Executive Board, Executive Board
members are entitled to receive a cash bonus
subject to the fulfilment of predetermined
performance conditions.
Executive Board members are obliged to invest
at least 25% of their STIP 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 STIP payout (at
their discretion).
The investment shares (which are acquired by the
Executive Board members in the year after the
year over which the STIP 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 Mr. Van den Brink and 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.
Due to impact of the COVID-19 pandemic on
HEINEKEN's business, and as announced on 22 April
2020, there will be no STIP pay-outs (including the
part related to achievement of individual objectives)
for 2020 for Executive Board members and senior
management, no LTI vesting for Executive Board
members and, as a message of solidarity with the
Company and its employees who are affected by
this crisis, the Executive Board and Executive Team
have collectively agreed to a 20% reduction in base
salaries from May 2020 to December 2020.
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 LTIP, the STIP 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.