GOVERNANCE
Additional Governance
Matters
Related Party Transactions Policy
The Company's monitoring proce
dures consist of a combination of
management oversight activities
and independent objective assess
ments of those activities by internal
audit or other third-parties.
Management's monitoring of inter
nal control is performed on a con
tinuous basis. Operating company
performance is measured and
compared to budgets and long
term plans and key performance
indicators that may identify anoma
lies indicative of a control failure. In
addition, the Company has imple
mented a group-wide performance
management system to monitor
and measure performance consist
ently across the organization.
The Company has a professional
and independent internal audit
team led by the Chief Audit Officer
who reports functionally to the Audit
Committee. The Audit Committee
reviews Internal Audit's risk assess
ment and audit plan, and regularly
receives internal audit reports for
review and discussion.
Internal control deficiencies identi
fied by internal audit are commu
nicated timely to management and
periodic follow up is performed to
ensure the corrective action has
been taken.
The Company's Board of Directors
has the ultimate responsibility for
monitoring the performance of the
company and its internal control.
As such, the separate commit
tees, described herein, have been
formed to monitor various aspects
of the Company's performance;
and the Terms of Reference for each
Committee are available on the
Company website.
The Company determined that,
as of December 31, 2012, effective
internal controls were maintained.
In line with the recommendations
of the Belgian Code on Corporate
Governance, the Company adopted
a Related Party Transactions Policy
containing requirements applica
ble to the members of the Board
and the Executive Management
in addition to the requirements of
the conflicts of interest policy in
the Company's Guide for Ethical
Business Conduct, which is avail
able at www.delhaizegroup.com.
The Company's Related Party Trans
actions Policy is attached as Exhibit
F to the Company's Corporate Gov
ernance Charter. The members of
senior management and the direc
tors of the Company and of its sub
sidiaries completed a Related Party
Transaction Questionnaire in 2012
for internal control purposes. Further
Information on Related Party Trans
actions, as defined under Interna
tional Financial Reporting Stand
ards, can be found in Note 32 to the
Financial Statements.
Insider Trading and Market
Manipulation Policy
The Company has a Policy Govern
ing Securities Trading and Prohibit
ing Market Manipulation ("Trading
Policy") which reflects the Belgian
and U.S. rules of market abuse (con
sisting of insider trading and market
manipulation). The Company's Trad
ing Policy contains, among other
things, strict trading restrictions
that apply to persons who regularly
have access to material non-public
information. More details concern
ing 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 peri
odically informed these persons in
2012 about the rules of the Trading
Policy and about upcoming restric
tion 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 2012, the Company was fully
compliant with the provisions of the
Belgian Code on Corporate Govern
ance.
Undertakings upon Change
of Control over the Company as
of December 31, 2012
Management associates of non-
U.S. operating companies received
stock options issued by the Board
of Directors under the Stock Option
Plan 2006 and under the umbrella
stock option plan 2007, grant
ing to the beneficiaries the right
to acquire ordinary shares of the
Company. Management associ
ates 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 Incen
tive Plan, as amended, and under
the Delhaize Group U.S. 2012 Stock
Incentive Plan, granting to the bene
ficiaries the right to subscribe to new
American Depositary Receipts of
the Company. The General Meeting
of Shareholders approved a provi
sion 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, 2012 can be found under Note
21.3 to the Financial Statements.
Management associates of U.S. oper
ating companies received restricted
stock units under the Delhaize
America, LLC 2002 and 2012 Res-
triced Stock Unit Plans, granting
to beneficiaries the right to receive
existing shares of the Company
upon vesting. The Shareholders'
Meeting approved a provision of
these plans that provide that in the
event of a change in control over the
Company the beneficiary will receive
existing shares regardless of the
vesting period.
In 2003, the Company adopted a
global long-term incentive program
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