Investor Relations

Annual Reports

• Board of Directors
• Secretary
• Executive committee and day-to-day management
• Conflicts of interest and related party transactions
• External control
• Protocol concerning transactions in the Ter Beke share
• Remuneration report

1. Board of Directors

1.1. Composition

The composition of the board as per 31 December 2010, as well as the meetings and those present in 2010 are summarised in the table below:

x = present

° Subject to reappointment by the shareholders’ meeting

As permanent representative of:
(1) NV Holbigenetics
(2) BVBA Louis Verbeke
(3) LMCL CVA
(4) Compagnie du Bois Sauvage SA
(5) BVBA Delvaux Transfer
(6) Sparaxis SA
(7) BVBA Lemon

* AC = Audit Comittee - RNC = Remuneration and Nomination Comittee

1.2. Operation

The operation of the Board of Directors is described in detail in the internal Regulations of the Board of Directors, which form an integral part of the group’s Corporate Governance Charter.

1.3. Assessment

The Board of Directors continuously evaluates its own composition and functioning as well as the composition and functioning of the committees. a formal evaluation is organised regularly, led by the chairman of the Board of Directors. in November 2010, a comprehensive evaluation took place and the findings of this evaluation were implemented. This evaluation addressed the following questions:

• Overall structure of the group;
• Selection and appointment of directors;
• Composition of the board;
• Operation of the board;
• Information to the board;
• Tasks of the board;
• Operation of the board committees;
• Remuneration of the board;
• Follow up by the board of its decisions;
• Relationship between the board and the executive management.

1.4. Appointments / reappointments:

The Board of Directors will propose to the shareholders’ meeting of 26 may 2011 the reappointment for a period of three years, starting from the end of the shareholders’ meeting of 26 may 2011 and expiring at the shareholders’ meeting of 2014, of Luc De Bruyckere, NV Holbigenetics, represented by Frank Coopman, and Dominique Coopman. These reappointments are proposed pursuant to an assessment by and an advice from the Remuneration and Nomination Committee.

The Board of Directors will propose to the shareholders’ meeting of 26 may 2011 the reappointment as independent director within the meaning of articles 524 and 526ter of the Belgian Company Code for a period of three years, starting from the end of the shareholders’ meeting of 26 may 2011 and expiring at the shareholders’ meeting of 2014, of BVBA Willy Delvaux, represented by Willy Delvaux, and BVBA Lemon, represented by Jules Noten. These reappointments are proposed pursuant to an assessment by and an advice from the Remuneration and Nomination Committee.

Compagnie du Bois Sauvage, represented by Vincent Doumier, resigned as board member per 25 february 2011.

At the advice of the Remuneration and Nomination Committee and according to the procedure for the appointment of new directors provided in the group’s Corporate Governance Charter, the Board of Directors will propose to the shareholders’ meeting of 26 may 2011 the appointment as independent director within the meaning of articles 524 and 526ter of the Belgian Company Code for a period of three years, starting from the end of the shareholders’ meeting of 26 may 2011 and expiring at the shareholders’ meeting of 2014, of BVBA Dirk Goeminne, represented by Dirk Goeminne. In accordance with the applicable legal provisions, this appointment will be submitted to the group’s works council.

Dirk Goeminne is 56 years old, married and father of three. He studied applied Economic science and Commercial Engineering at Antwerp and commenced his career as an auditor at Price Waterhouse. From 1979 onwards he has held the position of managing director at various companies in different sectors. Between 1997 and 2003 he was CEO and then Chairman of the Dutch retail chain Hema. until 2007 he was Chairman of Vroom&Dreesmann, the largest retail chain in the Netherlands and of La Place, the largest restaurant chain in the Netherlands. Today he holds directorships at uitgeverij Lannoo, Van de Velde Groep, Stern Group, Beter Bed Holding and several former subsidiaries of Mitiska. His proven entrepreneurship, combined with his financial experience, experience in the retail sector and his international experience mean that he more than fulfills the profile requirements of new director prepared by the Board of Directors.

1.5. Committees within the Board of directors

Two committees were active within the Board of Directors in 2010: the audit Committee and the Remuneration and Nomination Committee. The composition of the committees is in accordance with the legislation and adheres to the regulations of the Corporate Governance Code. The committees work within the mandate given by the Board of Directors as described in the comprehensive regulations in the annexes to the Corporate Governance Charter.

1.5.1. Audit Comittee

The composition of the Audit Committee as per 31 December 2010, as well as the meetings and those present in 2010 are summarised in the table below:

x = present
* Member Audit Committee until 27 May 2010
** Chairman until 27 May 2010
*** Chairman as of 28 May 2010

In order to respect the composition requirements of the Corporate Governance Code 2009, the composition of the committee was adjusted following the 2010 shareholders’ meeting so that a majority of independent directors is maintained.
All members of the audit Committee have expert knowledge of financial management. If necessary, the committee met together with the statutory auditor. The audit Committee advised the Board of Directors on the annual results of 2009 and the semi-annual results of 2010, and with respect to the group’s internal control and risk management. It supervises the internal audit function.

1.5.2. Remuneration and Nomination Committee

The composition of the Remuneration and Nomination Committee as per 31 December 2010, as well as the meetings and those present in 2010 are summarised in the table below:

x = present

The Remuneration and Nomination Committee advises the Board of Directors on the remuneration of group executives, the Chairman and the director’s remunerations. The committee also advises on the general remuneration policy for directors and the executive management as well as on the principles of the variable remuneration system. Furthermore the committee advises the Board of Directors on the appointment and reappointment of directors, the composition of the committees within the Board of Directors, the members and the chairman of the Executive Committee and the Managing Director.

2. Secretary

Dirk De Backer is appointed as secretary of the Board of Directors and as secretary of the committees within the board

3. Executive committee and day-to-day management

3.1. Composition

The composition of the Executive Committee in 2010 was as follows:

• Marc Hofman, Chairman / Managing Director
• Wim De Cock, Operations Director Processed Meats
• Marc Lambert, Operations Director Ready Meals
• Annie Vanhoutte, Director Human Resources
• René Stevens, Group CFO
• Gunter Lemmens, representing Asadelta Consulting CV, Commercial Director (as of 1 april 2010)

3.2. Operation

In 2010, the Executive Committee met every two weeks and whenever the operational situation so required, and was responsible for reporting to the Board of Directors. The operation of the Executive Committee is described in detail in the internal Regulations of the Executive Committee, which forms an integral part of the group’s Corporate Governance Charter.

3.3. Assessment

The Board of Directors assesses the performance of the CEO once a year outside the presence of the CEO and also assesses once a year with the CEO the performance of the other members of the Executive Committee. In 2010, this assessment took place. The board uses both qualitative and quantitative criteria in this respect.

4. Conflicts of interest and related party transactions

Board of Directors: in 2010, the Board of Directors applied the procedure of article 523 of the Belgian Company Code pursuant to the reporting by the managing Director of a conflicting interest relating to the board’s decision on the remuneration of the managing Director. The minutes of the 6 may 2010 meeting of the Board of directors are entirely published in the annual report of Ter Beke SA.
The decision of the board reads as follows (free translation):
“…
Following deliberations the Board of Directors unanimously took the following decision:
The remuneration of the managing Director (excluding the remuneration for the mandate of director of Ter Beke NV) for the 2010 financial year will be determined as follows (amounts stated below represent the total cost to the group):
Fixed remuneration: 354,000 EUR
Basis for variable remuneration: 100,000 EUR
The allocation of the variable remuneration will be 50% according to the group’s variable remuneration policy and 50% based on a qualitative assessment conducted by the Remuneration and Nomination Committee.
The other remunerations and benefits for the CEO remain unchanged.
…”
In 2010 there were no other conflicts of interest in the sense of article 523 of the Belgian Company Code within the Board of Directors, neither were any conflicts reported in accordance with annex 2 of the group’s Corporate Governance Charter with respect to transactions with related parties.

Executive Committee: In 2010 there were no conflicts of interest in the sense of article 523 of the Belgian Company Code within the Executive Committee, neither were any conflicts reported in accordance with annex 2 of the group’s Corporate Governance Charter with respect to transactions with related parties.

6. External control

Deloitte Bedrijfsrevisoren BV o.v.v.e. CVBA, represented by Dirk Van Vlaenderen and Kurt Dehoorne, was appointed by the General meeting of 27 May 2010 as statutory auditor for a period of three years. We consult regularly with the statutory auditor and prior to the semi-annual and annual reporting he is invited to attend the meeting of the Audit Committee. The statutory auditor has no relationships with Ter Beke that might influence his judgment and he confirmed his independence towards the group. The remuneration that was paid in 2010 for audit services to Deloitte Bedrijfsrevisoren BV o.v.v.e. CVBA and to the persons affiliated to Deloitte Bedrijfsrevisoren BV o.v.v.e. CVBA was 207 thousand EUR. The remuneration paid for non-audit services amounted to 78 thousand EUR.

7. Protocol concerning transactions in the Ter Beke share

Ter Beke employs a protocol applicable to the rules concerning transactions in Ter Beke securities. This protocol is enclosed as annex 3 to the Corporate Governance Charter of the group. The protocol provides that information that may have an impact on the stock price must be communicated immediately. Directors, executives and insiders are required to submit intended share transactions to the Compliance officer for approval. If the approval is refused, the party involved must renounce the transaction or submit the intended transaction to the Board of Directors. The protocol also includes guidelines designed to protect the confidential nature of privileged information and provides for closed periods within which transactions in Ter Beke securities are not allowed for the directors and relevant persons. The protocol is submitted for signature to all new members of the Board of Directors, the Executive Committee and other persons who have access to privileged information on a regular basis.

The company also maintains a list of the persons who have access to privileged information on a regular basis.

8. Remuneration report

8.1. 2010 procedure to develop the remuneration policy and to determine the level of remuneration and the applied remuneration policy

Remuneration procedure: Remuneration policy for the members of the Board of Directors, the CEO and the members of the Executive Committee was prepared by the Remuneration and Nomination Committee and was approved by the Board of Directors.
Remuneration policy for the members of the Board of Directors, the CEO and the members of the Executive Committee is an integral part of the Corporate Governance Charter and is an annex to the Remuneration and Nomination Committee’s internal regulations.
The Remuneration and Nomination Committee monitors the application of this policy and advises the Board of Directors in these matters.
The level of remuneration for members of the Board of Directors in the 2010 financial year was presented to the General meeting of shareholders for approval by the Board of Directors.
The level of remuneration for the CEO and the members of the Executive Committee in the 2010 financial year were determined by the Board of Directors based on recommendations from the Remuneration and Nomination Committee.

Remuneration policy: All members of the Board of Directors are entitled to an annual fixed remuneration. For 2010 this remuneration amounted to EuR 13,500. The members of the committees within the Board of Directors are also entitled to an additional annual fixed remuneration for their membership of one or more committees. For example, a member of a committee receives an annual remuneration of EUR 3,000 and the chair of a committee receives an annual remuneration of EUR 5,000.
For the mere performance of their mandate of director, directors are not entitled to any variable, performance-related or equity-related remuneration, or any other remuneration.
in principle, the remuneration of the CEO and members of the executive management consists of a fixed remuneration, an annual variable remuneration, a company car and fuel card and possible other remuneration components, such as pensions and insurance, all in line with current company guidelines.
The CEO and members of the executive management receive an annual variable remuneration allocated according to the achievement of targets set each year related to the financial year over which the variable remuneration is due.
These targets are based on objective parameters and are closely related to the group’s results and the role that the CEO and/or members of the executive management play in achieving these results.
The main parameters applied are volume, turnover, EBIT and EAT.
Which of these parameters are used in any given year and what the targets are relating to these parameters is evaluated annually by the Remuneration and Nomination Committee and presented to the Board of Directors for approval.
The basis of the variable remuneration is not greater than 25% of the annual gross fixed remuneration (fixed+variable).
In a given year, as soon as less than 75% of a target is achieved, the right to the variable remuneration linked to that target lapses. on the other hand, if the target is exceeded, up to 150% of the variable remuneration linked to that target can be earned.
The CEO’s variable remuneration for the 2010 financial year is 50% dependant on a qualitative assessment conducted by the Remuneration and Nomination Committee.
In addition to the system of variable remunerations the Board of Directors retains the discretionary power, following a proposal from the Remuneration and Nomination Committee, to allocate an (additional) bonus for specific performance or merit to the CEO and/or to the members of the executive management or a number of their staff.
There are no specific agreements or systems that give the company the right to recover the variable remuneration paid if this was allocated based on information that subsequently transpires to be incorrect. If necessary the company will rely on the facilities provided in common law.
The group’s remuneration policy will not be subject to substantial changes in 2011 or in the subsequent two financial years. The Board of Directors will put forward a motion to the General meeting of shareholders to increase the remuneration paid to the Board of Directors by a small percentage in 2011 as this is unchanged since 2005. Further the ROCE (return on capital employed) will be introduced as parameter in 2011, in addition to other parameters, for calculating the variable remuneration of the members of the Executive Committee.

8.2 Remuneration of the non-executive members of the Board of directors and of the executive memBers of the Board of directors as memBer of the Board

The remuneration of the members of the Board of Directors (both of the executive directors, the non-executive directors and of the independent directors) for the performance of their director mandate in 2010 can be summarized as follows:

(1) Only first semester member of the AC
(2) First semester: member of the committee: 1,500 EUR + second semester: Chairman of the committee: 2,500 EUR
(3) First semester: Chairman of the committee: 2,500 EUR + second semester: member of the committee: 1,500 EUR

BVBA Delvaux Transfer received in 2010 a one time additional remuneration of 5,395.25 EuR for specific consultancy services that were rendered at the explicit request of the Board of Directors.
Apart from the above remuneration, the non-executive directors did not receive any other fixed fees, nor any variable fees, nor any remuneration that is directly or indirectly linked to the evolution of the stock price of the Ter Beke share.

8.3. Remuneration of the CEO

The individual remuneration of the managing Director/Chairman of the Executive Committee (Marc Hofman) in 2010 amounted to (total cost for the group excluding the remuneration for the mandate of director of Ter Beke NV):

* The pension arrangement is a defined contribution arrangement

8.4. Remuneration of the other members of the executive management

The combined remuneration of the other members of the Executive Committee and the executive directors (Annie Vanhoutte, René Stevens, Wim De Cock, Marc Lambert, Asadelta Consulting CV, Luc De Bruyckere and Eddy Van der Pluym) in 2010 amounted to (total cost for the group excluding the remuneration for the mandate of director of Ter Beke NV):

* The pension arrangement is a defined contribution arrangement

8.5. Share related remuneration

The members neither of the Board of Directors, nor of the Executive Committee possess stock options or warrants or other rights to acquire shares.
In 2010, none of the members of the Board of Directors or of the Executive Committee were granted shares, stock options or any other rights to acquire shares.

8.6. Contractual arrangements on hiring and termination fees

In 2010 no appointment or departure arrangements were made with members of the Executive Committee, nor with the executive directors, which would give right to a departure fee of more than 12 months pay or that would otherwise be in conflict with the statutory provisions, the provisions of the Corporate Governance Code 2009 or common practice in the market. The contractual notice period for Marc Hofman, Luc De Bruyckere, Eddy Van der Pluym, Wim De Cock and Asadelta Consulting CV is in principle maximum 12 months, whereas the notice period for Annie Vanhoutte, Marc Lambert and René Stevens is in principle calculated on the basis of the legal provisions that apply to their employment contract.