Van de Velde NV — Remuneration Information 2012

Mar 23, 2012

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Remuneration report

1. Introduction

The remuneration report provides transparent information on Van de Velde's remuneration policy for its directors and members of the Management Committee, in accordance with the Belgian Corporate Governance Act of 6 April 2010 and the Belgian Corporate Governance Code. The underlying remuneration report will be submitted for approval to the General Meeting of 25 April 2012 and presented to the worker's council, in accordance with the provisions of the Act.

The company's remuneration policy is focused on attracting and retaining profiles with the experience needed to ensure the continuity and growth of the company. The aim of the reward policy is to ensure employees are properly compensated, based on the performance of the employee and the company. The evolution of the total reward is linked to the results of the company and individual performance.

2. Remuneration of the directors

The Nomination and Remuneration Committee makes recommendations to the Board of Directors with regard to the compensation for directors, including the chairman of the Board of Directors. These recommendations are subject to the approval of the Board of Directors.

The compensation for the non-executive directors is proposed to the General Meeting. They receive only fixed remuneration for their membership of the Board of Directors and the advisory committees on which they have a seat. The amount of the remuneration will only take into account their role in the Board of Directors and various committees, the ensuing responsibilities and time spent.

The non-executive directors receive no performance-related remuneration such as bonuses, long-term payments, non-cash benefits or pension plans. Non-executive directors are not granted any options or warrants.

For his chairmanship, his membership of the Nomination and Remuneration Committee, the Audit Committee and the Strategic Committee, the chairman of the Board of Directors receives gross remuneration of 60,000 euro. The other non-executive members receive annual remuneration of 12,000 euro for their membership in the Board of Directors and 2,500 euro for their membership in the Audit and/or Nomination and Remuneration Committee respectively.

The members of the Board of Directors who are also members of the Management Committee receive no remuneration for their membership of the Board of Directors.

A directorship may be terminated at any time without any form of compensation. There are no employment contracts or service contracts that provide for notice periods or severance payments between the company and the members of the Board of Directors that are not members of the Management Committee.

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3. The remuneration of the members of the Management Committee

The level and structure of the remuneration for the members of the Management Committee must be such that qualified and expert professionals can be attracted, retained and motivated, bearing in mind the nature and scope of their individual responsibilities. To this end, an international HR consultant is used to propose the job weighting and the corresponding customary salary package in the relevant market. The compensation is regularly benchmarked on the basis of a relevant sample of listed companies.

The managing directors make proposals to the Nomination and Remuneration Committee with regard to members' remuneration on an individual basis.

Other principles on which the remuneration policy is based:

• A member of the Management Committee who is also a member of the Board of Directors shall receive no remuneration for being a member of the Board of Directors.
• A member of the Management Committee who is also a managing director shall receive no remuneration for being a managing director.
• An appropriate part of the remuneration package of the members of the Management Committee must be linked to the performance of the company and individual performance, to the extent that the interests of the Management Committee are aligned with the interests of the company and its shareholders.
• If members of the Management Committee are eligible for a bonus based on the performances of the company or its subsidiaries or personal performance, the remuneration report will state the criteria applied to evaluate the performance against the targets as well as the evaluation period. These details shall be published in such a way that no confidential information is disclosed with regard to the company's strategy.
• In principle, granted shares or other forms of deferred remuneration are not deemed to be acquired and options may not be exercised within three years from their grant date.
• Obligations of the company in the framework of premature exit arrangements will be closely investigated to ensure poor performance is not rewarded.

A variable annual remuneration ("Group bonus") is granted to the CEO and the members of the Management Committee, with the exception of Herman Van de Velde NV. This is based on the attainment of annual targets relating to the fiscal year for which the variable remuneration is payable, as set by the Nomination and Remuneration Committee. These targets are based on objective parameters and are closely linked to the results of the Group. Every year, the Nomination and Remuneration Committee evaluates the degree to which the targets¹ have been met and submits this report to the Board of Directors for approval. The maximum amount of this Group bonus, not including the CEO, is 37,500 euro per member. There is also an individual bonus scheme for some members of the Management Committee, based on the attainment of individual targets relating to the fiscal year for which the variable remuneration is payable, as set down every year in writing by the Nomination and Remuneration Committee. These targets are based on objective parameters and are closely dependent on the responsibilities of the member in question. The Nomination and Remuneration Committee evaluates the degree to which these individual targets have been attained and submits this report to the Board of Directors for approval.

The maximum amount of the individual variable remuneration, not including the two members who are entitled to claim a loyalty bonus (see below), is 27% of the gross basic remuneration Two members of the Management Committee (including the CEO) are entitled to a loyalty bonus, which entails the individual bonus being established annually based on the targets attained in the year in question, although the actual payment only occurs if they still work for the company on a date established in advance. In additional to the variable

¹ The audited figures are used as a basis for determining whether the targets with regard to the Group result have been met.

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remuneration system, the Board of Directors retains the discretionary power to grant an additional bonus to the CEO and one or more members of the Management Committee to reward a specific performance or merit, on the proposal of the Nomination and Remuneration Committee.

There are no special agreements or systems that entitle the company to claim back variable remuneration that has been paid out if it has been granted erroneously on the basis of data that subsequently proves to be incorrect. In such cases, the company will invoke the possibilities found in common law.

With regard to the relative importance of the variable remunerations, see below.

Plans in which members of the Management Committee are compensated in shares, share options or any other rights to acquire shares are subject to prior shareholder approval at the annual general meeting. The approval relates to the plan itself and not to the individual grant of share-based benefits under the plan. In principle, shares are not permanently acquired and options are not exercisable within less than three years.

The total gross remuneration (including remunerations received from other companies that form part of the Group and remunerations received for other tasks and/or tenures) awarded in 2011 to the members of the Management Committee (including Herman Van de Velde NV) and the CEO amounts to:

	Management Committee2	CEO
Basic remuneration	1,126	453
Variable remuneration	317	143
Pensions	23	0
Other benefits	13	0

The variable remuneration is the bonus acquired during the reported year. There are various types of grant, including cash, deferred payment and deposit into a supplementary pension plan. The members of the Management Committee who are also employees are also entitled to a company car with fuel card as per the company car policy, meal vouchers, a group insurance (pension plan) and hospitalisation insurance.

Currently, all members of the Management Committee, with the exception of the managing directors, are employed on the basis of an employment contract, which can be terminated, subject to the notice term calculated in accordance with the applicable labour laws. This notice term can be replaced by a corresponding notice compensation as the company sees fit. No other notice compensation is provided for. The members of the Management Committee who work through a management company – the managing directors – are employed on an independent basis and are subject to a notice term of six months. In 2011 no members of the Management Committee received severance pay.

² Excluding the CEO. The total gross remuneration of Antony Verbaeys will be included in the total gross remuneration of the Management Committee pro rata 4 months.

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4. Remuneration policy for coming years

No extraordinary changes are expected to be made to the remuneration policy for coming years and the above-mentioned provisions will remain in force.

5. Share-based payments

The General Meeting of 28 April 2010 approved the 2010 option plan giving the Nomination and Remuneration Committee the power to grant options on the company's shares to the members of the Management Committee for a term of five years. These options are granted at no charge. The exercise price per share of the options is equal to (i) the average closing price of the share in the course of the thirty calendar days prior to the date of the offer or (ii) the closing price of the final trading day preceding the date of the offer, whichever is lowest. An option remains valid for ten years. The company and the option holder may decide by mutual agreement to reduce the terms of validity of the option below ten years but never below five years. The options cannot be exercised before the end of the third calendar year after the year in which they are offered.

In 2011 Hedwig Schockaert was granted 5,000 options. No unexercised options expired.

	Options		Granted and accepted			Options
	end	in 2011		Exercised in 2011		end
	2010	Number	Exercise price	Number	Exercise price	2011
4F EBVBA	15,000	0		5,000	34	10,000
Herman Van de Velde NV	30,000	0		10,000	34 en 28.33	20,000
Dirk De Vos	10,000	0		0		10,000
Hedwig Schockaert	15,000	5,000	34	5,000	28.33	15,000
Stefaan Vandamme	10,000	0		0		10,000
Karlien Vanommeslaeghe	5,000	0		0		5,000
Philippe Vertriest	7,500	0		5,000	28.33	2,500
	92,500	5,000		2,500		72,500