o www.ahold.com/reports2009
Notes to the consolidated financial statements
32 Share-based compensation - continued
Financials
Valuation model and input variables
The weighted average fair value of the conditional shares granted in 2009 amounted to €8.07 and €7.83 per share for the three-year
and five-year components, respectively (2008: €9.00 and €8.93, respectively). The fair value of the three-year component is based on
the share price on the grant date, reduced by the present value of dividends expected to be paid during the vesting period. The fair value
of the five-year component is determined using a Monte Carlo simulation model. The most important assumptions used in the valuations
of the three- and five-year components were as follows (expressed as weighted averages):
Percent 2009 2008
Risk-free interest rate 2.1 4.1
Volatility 34.1 30.7
Assumed dividend yield 2.7 2.1
Expected volatility has been determined as the average of the implied volatility and the historical volatility.
Other conditional shares
In addition to the shares granted under the GRO program, Ahold granted an at-target number of 950,000 conditional shares in 2007.
The fair value per share, determined in the same manner as the three-year GRO shares, was €9.44. The shares vested at the end of 2008,
after two years of continued employment. Half of these shares were subject to a performance condition. In 2009, based on the average
annual incentive multiplier for 2007 and 2008, Ahold determined the number of performance shares to be 599,625.
Share option plans
In 2005, Ahold had one global share option plan with a uniform set of rules and conditions for all participants, except members of the
Corporate Executive Board. The term of the 2005 share options is eight years. Share options that have vested can be exercised during
four weeks after termination and are forfeited thereafter. A separate plan applied to members of the Corporate Executive Board. The share
option grant made in 2005 to members of the Corporate Executive Board had a five- and ten-year term and was 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. In 2008, the final vesting percentage was determined at 96 percent. 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 ten-year term. In addition, a limited number of share options were granted in 2006 under the 2005
global share option plan rules with a five- and ten-year term. After the introduction of GRO, options were discontinued as a remuneration
component. All options have vested by the end of 2009.
Ahold Annual Report 2009 106
