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32 Share-based compensation (continued)
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Ahold Annual Report 2012
Notes to the consolidated
financial statements
Ahold at a glance
Our strategy
Our performance
Governance
Investors
Outstanding at the
beginning
of 2012
Granted1
Vested2
Forfeited
Outstanding
at the end
of 2012
Other employees
2007 grant
1,447,223
370,615
1,806,060
11,778
2008 grant
1,834,339
13,824
44,827
1,775,688
2009 grant
4,965,558
2,479,338
102,753
2,383,467
2010 grant
2,786,839
14,377
103,672
2,668,790
2011 grant
5,292,671
12,780
158,957
5,120,934
2012 grant
5,972,913
1,452
127,499
5,843,962
Subtotal CEB members
731,441
413,861
98,462
1,046,840
Total number of shares
17,058,071
6,757,389
4,426,293
549,486
18,839,681
1 Represents the number of shares originally granted for the 2012 grant. For the five-year 2007 grant the number of shares granted in 2012 represents the additional number of shares granted based on the final TSR ranking and the matching shares
related to the 2007 grant.
2 The vesting date of the iive-year 2007 grant, the matching shares related to the 2007 grant and the three-year 2009 grant was March 2, 2012. The Euronext closing share price was €10.07 as of March 2, 2012.
Valuation model and input variables
The weighted average fair value of the conditional shares granted in 2012, for all eligible participants including Corporate Executive Board members, amounted to €9.19 and €8.84 per share
for the three-year and five-year components, respectively (201 1€8.60 and €7.06, 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
2012
2011
Risk-free interest rate
1.0
2.4
Volatility
23.1
27.6
Assumed dividend yield
4.6
4.2
Expected volatility has been determined based on historical volatilities.
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, to whom a separate plan
applied. The term of the 2005 share options for all participants except Corporate Executive Board members 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 the four weeks following termination and are forfeited
thereafter. The share option grant made in 2005 to members of the Corporate Executive Board had a five- and a 1 0-year term and was subject to a performance criterion at vesting: the
average economic value-added improvement versus targeted improvement over the three financial years prior to vesting. In 2008, the final vesting percentage was set at 96%.
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 1 0-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- or 10-year term.
After the introduction of GRO, options were discontinued as a remuneration component. All options vested by the end of 2009.
