Food Lion 2010 Annual Report Download - page 69

Delhaize Group - Annual Report 2010 65
DELHAIZE GROUP
AT A GLANCE OUR STRATEGY OUR ACTIVITIES IN 2010
CORPORATE
GOVERNANCE STATEMENT
RISK
FACTORS FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
Party Transaction Questionnaire in 2010
for internal control purposes. Further
Information on Related Party Transactions,
as defined under International Financial
Reporting Standards, can be found in
Note 32 to the Financial Statements.
Insider Trading and
Market Manipulation Policy
The Company has a Policy Governing
Securities Trading and Prohibiting Market
Manipulation (“Trading Policy”) which reflects
the Belgian and U.S. rules of market abuse
(consisting of insider trading and market
manipulation). The Company’s Trading
Policy contains, among other things, strict
trading restrictions that apply to persons
who regularly have access to material non-
public information. More details concerning
the Company’s Trading Policy can be found
in the Company’s Corporate Governance
Charter. The Company maintains a list of
persons having regular access to material
non-public information and periodically
informed these persons in 2010 about
the rules of the Trading Policy and about
upcoming restriction periods for trading in
Company securities.
Disclosure Policy
As recommended by the Belgian Code on
Corporate Governance, the Company has
adopted a Disclosure Policy that sets out
the framework and the guiding principles
that the Company applies when disclosing
information. This policy is available at
www.delhaizegroup.com.
Compliance with the Belgian Code
on Corporate Governance
In line with the “comply-or-explain”
principle of the Belgian Code on Corporate
Governance, the Company concluded that
the best interests of the Company and its
shareholders are served by variance from
the Code in a limited number of specific
cases. These variances are explained below:
• Provision 4.5 of the Belgian Code on
Corporate Governance states, among
other things, that directors should
not consider taking more than five
directorships in listed companies. In the
opinion of the Board of Delhaize Group,
the mere fact that a person is a director of
more than five listed companies should
not automatically disqualify this person
as board member of Delhaize Group.
Rather, this situation should be reviewed
on a case-by-case basis to determine
if it is likely to affect the performance of
the services of this person as director
of Delhaize Group. For this reason, the
Board of Delhaize Group reserves the
right to grant a waiver to this rule upon
request of a non-executive director.
When making its decision, the Board
will consider, among other factors, the
amount of time the non-executive director
will likely have to devote to the Company.
The Board of Directors granted such
a waiver to Baron Vansteenkiste and
Count Goblet d’Alviella, who both serve
on the Boards of more than five listed
companies.
• Provision 8.8 of the Belgian Code on
Corporate Governance prescribes that the
level of shareholding for the submission
of proposals by a shareholder to the
General Meeting of Shareholders should
not exceed 5% of the share capital. Even
though the Company’s management
or the Board of Directors will always
consider any proposal submitted by
shareholders in the best interest of the
Company, the Board is of the opinion
that the threshold of 5% of the share
capital is currently too low to oblige the
Company to put a proposal of any nature
on the agenda of the General Meeting
of Shareholders. The Board of Directors
therefore retains the principles in this
context as prescribed by Article 30 of the
Company’s Articles of Association which
foresees the right of shareholders holding
more than 20% of the share capital to ask
the Board to convene a General Meeting
of Shareholders.
• Provision 5.4./1 of Appendix E to the
Belgian Code on Corporate Governance
states, among other things, that a majority
of the members of the Remuneration
and Nomination Committee should be
independent. All of the members of this
Committee were independent pursuant to
the Belgian Company Code, the Belgian
Code on Corporate Governance and the
NYSE rules until May 27, 2010. As of that
date, half of them were independent
since Count Goblet d’Alviella and Mr.
Robert J. Murray lost their independence
under the criteria of the Belgian Company
Code because they have served on the
Board of Directors as non-executive
director for more than three consecutive
terms. The Board believed that the
experience gained by Messrs. Goblet and
Murray on the complex and important
matters related to compensation through
their prior service on the Remuneration
and Nomination Committee provided
substantial benefit for the Board as a
whole, and outweighed concerns related
to their independence qualifications.
Effective January 1, 2011, a majority of
the members of the Remuneration and
Nomination Committee are independent
pursuant to the Belgian Company
Code, the Belgian Code on Corporate
Governance and the NYSE rules
because Mr. Robert J. Murray resigned
as member of the Remuneration and
Nomination Committee as of that date.
The composition of the Remuneration and
Nomination Committee can be found in
the table on page 53.
Undertakings Upon Change of
Control over the Company as of
December 31, 2010
Management associates of non-U.S.
operating companies received stock
options issued by the Board of Directors
under the Stock Option Plans 2001 to 2007,
granting to the beneficiaries the right to
acquire ordinary shares of the Company.
Management associates of U.S. operating
companies received options, which qualify
as warrants under Belgian law, issued by
the Board of Directors under the Delhaize
Group 2002 Stock Incentive Plan, as
amended, granting to the beneficiaries
the right to subscribe to new American
Depositary Receipts of the Company. The
General Meeting of Shareholders approved
a provision of these plans that provide
that in the event of a change of control
over the Company the beneficiaries will
have the right to exercise their options and
warrants, regardless of their vesting period.
The number of options and warrants
outstanding under those plans as of
December 31, 2010 can be found under
Note 21.3 to the Financial Statements.