Note 10
Financial statements - Notes to the consolidated financial statements
Restricted shares retention agreements for key management
10 OTHER FINANCIAL INCOME (EXPENSE)
2005 1
of the peer group is defined as the average share price for the last six months of 2003. The ending value is defined as the
average share price for the last six months of 2006, with dividends added.
At the end of the three-year period, Ahold will be ranked within the peer group on the basis of its TSR results and the number
of shares to be granted will depend on Ahold's ranking within the peer group. No shares will be granted should Ahold attain a
position lower than sixth of the ten companies in the peer group. Pursuant to the plan, approximately 735 participants are to
be granted a total of approximately 5.7 million of Ahold's common shares should Ahold achieve the third position in the
ranking. The maximum number of common shares that can be granted is approximately 8.6 million, if Ahold attains the
number one position. The number of shares in the table below are to be adjusted for forfeitures over the three-year period.
Number of shares if Ahold achieves position:
10, 9, 8 or
7 in ranking
6 in ranking
5 in ranking
4 in ranking
3 in ranking
2 in ranking
1 in ranking
A.C. Moberg
P.N. Wakkie
M.P.M de Raad
Total PSG
50,000
37,500
50,000
1,436,800
100,000
75,000
100,000
2,873,600
150,000
112,500
150,000
4,310,400
200,000
150,000
200,000
5,747,200
250,000
187,500
250,000
7,184,000
300,000
225,000
300,000
8,620,800
Valuation model and input variables
The fair value of the 2004-2006 Performance Share Grant has been calculated using a Monte Carlo simulation model.
The most important inputs are the historical volatilities in the share price of each of the shares of the peer group companies
between January 1, 2001 and December 31, 2003. The fair value resulting from the Monte Carlo simulation, adjusted for
assumed forfeitures, amounts to EUR 21 and is accounted for ratably over the three-year period of the plan.
In 2003 Ahold granted restricted shares to certain key officers under individual key management retention agreements. The
size of the grant was adjusted in 2004 due to the dilutive effect of the rights issue in December 2003. Vesting of 868,750
shares and 765,000 shares occurred in July 2004 and December 2004, respectively. Total compensation expense has been
recognized ratably over the vesting period of these grants.
2004
ICA put option
Other
(56)
379
1
Other financial income (expense)
(56)
380
Other financial expense primarily consists of a one-time loss of EUR 53 incurred on the buyback of EUR 1,000 equivalent in
principal amount of certain of the notes issued by the Company. For more information, see Note 26.
In connection with the acquisition of its 50% interest in ICA in 2000, Ahold granted a put option to its joint venture partners
Canica and HIAB, which was recognized as a separate liability at fair value. Until November 2004 the fair value of the ICA put
option was remeasured. In November 2004 the put option was settled (pursuant to which a 20% interest in ICA was obtained
from Canica) and waived (with respect to HIAB). Subsequently, Ahold sold a 10% interest in ICA to HIAB. Included in other
financial income in 2004 is EUR 379 resulting from the fair value remeasurement, the settlement of the Canica part of the
ICA put option and the waiver of the HIAB part of the ICA put option, as well as the related divestment result on the sale of
the 10% interest in ICA to HIAB.
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