Note 9
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Financial statements - Notes to the consolidated financial statements
Conditional share option plans
Main characteristics
In 2005 Ahold had one global share option plan with a
uniform set of rules and conditions (the "2005 Plan") for all
participants, except members of the Corporate Executive
Board. The term of the 2005 share options is eight years and
the exercise of these options is conditional upon continued
employment during a three-year vesting period. Upon
termination of employment, share options that have vested
can be exercised during four weeks after termination and
are forfeited thereafter, while share options that have not
vested will be forfeited immediately. In 2005, share options
were granted on the first Monday in April and the exercise
price of each share option equaled the closing market price
of Ahold's common shares on the last trading day prior to the
grant date. A separate plan applies to members of the
Corporate Executive Board. The share option grant made in
2005 to members of the Corporate Executive Board is
subject to a performance criterion at vesting, being the
average economic value-added improvement versus
targeted improvement over the three financial years prior
to vesting. The vested number of options will range from
80 percent to 120 percent of the targeted number of options
depending on performance against the vesting criteria.
When performance against the vesting criteria is below
80 percent of target, zero options will vest. Other
characteristics of the plan are the same as for the 2005 Plan
described above.
Until January 2, 2005 Ahold had three share option plans
(the Dutch, U.S. and International Share Option Plans
(collectively the "Plans")). Under these Plans, participants
were granted share options with either a five- or 10-year
term, generally exercisable after three years. Share options
were granted on the first business day of each year and the
exercise price of each share option equaled the closing
market price of Ahold's common shares on the last trading
day prior to the grant date. Upon termination of employment,
all share options granted under the Dutch Plan can be
exercised within four weeks after termination and are
forfeited thereafter. Share options granted under the
U.S. and International Plan can, upon termination of
employment, be exercised within four weeks after
termination provided they have vested and are forfeited
thereafter, while share options that have not vested will be
forfeited immediately.
Under all option plans, upon termination of employment
due to retirement, disability or death all share options are
exercisable during their relevant exercise periods.
The following table summarizes the status of the share
option plans during 2006. After the introduction of GRO,
options were discontinued as a remuneration component.
Outstanding
Granted
Exercised
Forfeited
Expired
Outstanding
at beginning
during
during
during
during
at the end
Exercise
Expiration
Description of grant
of 2006
2006
2006
2006
2006
of year
price
date
A.C. Moberg:
Five-year 2003 grant
500,000
500,000
5.20
05/04/2008
Five-year 2004 grant
50,625
50,625
5.83
12/28/2008
Five-year 2005 grant2
60,750
60,750
6.36
04/03/2010
10-year 2003 grant1
500,000
500,000
5.20
05/04/2013
10-year 2004 grant
50,625
50,625
5.83
12/28/2013
10-year 2005 grant2
60,750
60,750
6.36
04/03/2015
P.N. Wakkie:
Five-year 2005 grant2
45,000
45,000
6.36
04/03/2010
10-year 2005 grant2
45,000
45,000
6.36
04/03/2015
Subtotal Corporate Executive
Board members
1,312,750
1,312,750
Weighted average exercise price
5.44
5.44
Other employees
Five-year
11,384,435
67,500
108,284
760,272
3,848,413
6,734,966
8.64
Eight-year
9,394,967
195,715
606,177
8,593,075
6.36
10-year
10,097,546
67,500
56,098
508,098
366,749
9,234,101
18.22
Subtotal other employees
30,876,948
135,000
360,097
1,874,547
4,215,162
24,562,142
11.44
Total options3
32,189,698
135,000
360,097
1,874,547
4,215,162
25,874,892
11.14
Weighted average exercise price
6.46
6.12
14.83
31.07
11.14
Weighted average share price
at date of exercise
7.30
1 Special grant effective May 5, 2003.
2 This represents the maximum (120 percent-level) number of options.
3 The number of outstanding options at the beginning of 2006 has been adjusted by 1,487,950 options. These options were erroneously reported as forfeited in prior years, as a result
of clerical errors.
78 Ahold Annual Report 2006
