GOVERNANCE
8
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Long-Term Incentives
The long-term incentive plan is
designed to retain the Executive
Management team and reward
long-term success of the Group. Del-
haize Group's long-term incentive
plan consists of three components:
Stock options and warrants;
Restricted stock unit awards
(mostly applicable in the U.S.); and
Performance cash grants.
These components typically consti
tuted approximately 25%, 25% and
50% of the total value of long-term
incentives, respectively.
To support the Company strategy and
to recognize at the same time the
need for a continuous effort to maxi
mize the alignment with the share
holders' interest the following changes
will be made to the grants under the
U.S. Long-term Incentive plans:
As from the year 2013 the grant
of Restricted Stock Units will be
turned into a grant of Peformance
Shares by submitting the vesting
of the shares to the achievement
of a financial performance condi
tion (ROIC targets over a cumula
tive 3-years period).
As from the same time the vesting
scheme of the Performance Shares
will be changed into a cliff vesting
after 3 years (instead of the cur
rent vesting scheme that foresees a
vesting in equal instalments of one
fourth starting at the end of the sec
ond year following the grant date)
Finally, for the Vice President Level
and above in the US, the 2013
grant will consist solely of Perfor
mance Shares and Stock Options
(evenly split in expected value).
Stock Options Warrants
Pursuant to Article 520 ter of the Bel
gian Companies Code on reinforce
ment of corporate governance, the
Ordinary Shareholders' Meeting of
May 2012 approved the adoption of
the new Delhaize Group 2012 U.S.
Stock Incentive Plan and authorized
the Board of Directors to continue
grants of options with a vesting in
equal installments of one third over
a three-year period following the
grant date in order to maintain a
competitive recruitment and reten
tion framework in the U.S.
In 2012, 527,737 stock options were
granted to the Executive Manage
ment of Delhaize Group. The exer
cise price per share for the stock
options granted in 2012 amounted
to €30.99 for options on ordinary
shares traded on Euronext Brus
sels and $38.86/39.62 for options
related to the Company's American
Depositary Shares traded on the
New York Stock Exchange.
Following U.S. market practice, the
options granted in June 2012 under
the Delhaize Group 2012 U.S. Stock
Incentive Plan for executives of the
Group's U.S. operating companies
vest in equal annual installments of
one third over a three-year period
following the grant date. Following
European market practice, options
granted in June 2012 under the non-
U.S. 2007 Stock Option Plan for other
executives vest at the end of a three-
and-a-half-year period following the
grant date ("cliff vesting").
For more details on the share-based
incentive plans see Note 21.3 in the
financial statements.
The value of the stock option grant
determines the number of options
awarded. The value is determined
each year at the time of the grant using
the Black-Scholes-Merton formula.
The value of the stock option may vary
from year to year. As a result, the total
number of options granted can also
be different from year to year.
The following table shows the num
ber of stock options granted to the
CEO and the different members of
the Executive Management team
during the period 2010-2012.
NUMBER OF STOCK OPTIONS AWARDED
2010 2011 2012
Pierre-Olivier
Beckers
31 850
32 000
32 000
Pierre Bouchut
0
0
38 072
Stéfan
Descheemaeker
17 591
20 487
35 576
Michel Eeckhout
14 827
23 176
23 176
Ron Hodge
20 567
45 381111
25 381
Nicolas
Hollanders
8 765
14 238
14 238
Kostas
Macheras
12 741
20 306
41 299
Roland Smith
0
0
O j
O j
O
CO i
Michael Waller
0
17 995
17 995
Total
106 341
173 583
527 737
(1) Special grant upon appointment as CEO of Delhaize
America
(2) Including the following components; (1) special
grant upon appointment as CEO of Delhaize
America (2) long-term Incentive grant 2013
During 2012, no stock options were
exercised by the members of Execu
tive Management 20 875 stock options
lapsed.
STOCK OPTIONS
Exercised Lapsed Year(s)
in 2012 in 2012 granted
Pierre-Olivier
Beckers
0
10 089
2002,
2005
Stéfan
Descheemaeker
0
Michel Eeckhout
0
5 824
2002,
2005
Ron Hodge
0
2 008
2002
Nicolas
Hollanders
0
Kostas
Macheras
0
2 954
2005
Roland Smith
0
Michael Waller
0
Total
0
20 875
Restricted Stock Unit Awards
Pursuant to Article 520 ter of the Bel
gian Companies Code on reinforce
ment of corporate governance, the
Ordinary Shareholders' Meeting of
May 24 2012 approved the adop
tion of the new Delhaize America
2012 Restricted Stock Unit Plan and
authorized Delhaize America to
continue grants of restricted stock
units with a vesting in equal install
ments of one fourth over a five-year
period starting at the end of the sec
ond year following the grant date
in order to maintain a competitive
recruitment and retention frame
work within the U.S. market.
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