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32 Share-based compensation (continued)
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Our strategy Our performance Governance
Financials
Investors
Ahold Annuc
rl Report 2013
Outstanding at the
beginning
of 2013
Granted1,3
Vested2
Forfeited
Outstanding
at the end
of 2013
Other employees
2008 grant
1,775,688
446,075
2,195,297
26,466
2009 grant
2,383,467
75,618
84,810
2,223,039
2010 grant
2,668,790
1,343,430
91,446
1,233,914
2011 grant
5,120,934
120,591
320,042
4,680,301
2012 grant
5,843,962
77,193
359,330
5,407,439
2013 grant4
4,580,358
53,124
187,804
4,339,430
Subtotal Management Board members
1,046,840
391,895
122,084
1,316,651
Total number of shares
18,839,681
5,418,328
3,987,337
1,069,898
19,200,774
1 Represents the number of shares originally granted for the 2013 grant. For the five-year 2008 grant, the number of shares allocated in 2013 represents the additional number of shares allocated based on the final TSR ranking and the actual number of
matching shares related to the 2008 grant.
2 The vesting date of the five-year 2008 grant, the matching shares related to the 2008 grant and the three-year 2010 grant was March 1, 2013. The Euronext closing share price was €10.92 as of March 1, 2013.
3 The grant date fair value of the matching shares is expensed over the five-year vesting period. In this table the matching shares are presented as awarded in the year of vesting. The total number of matching shares granted up to and outstanding at the
end of the 2013 is 192,034 (2012: 304,985).
4 The 2013 grant includes the new program as described above. Under this new program 123,000 shares were granted in 2013, of which 41,000 vested in the same year. At the end of 2013, 82,000 shares under this program were outstanding, of
which 41,000 will vest in 2014 and 41,000 in 2015.
Valuation model and input variables
The weighted average fair value of the conditional shares granted in 201 3, for all eligible participants including Management Board members, amounted to €10.66, €8.72 and €10.64 per
share for the conditional shares, TSR performance shares and RoC performance shares, respectively (2012: €9.19 and €8.84 for three-year and five-year component, respectively). The fair
values of the conditional shares and the RoC performance shares are based on the Black-Scholes model. The fair values of the TSR performance shares are determined using a Monte Carlo
simulation model. The most important assumptions used in the valuations of the fair values were as follows (expressed as weighted averages for 2012):
Percent
2013
2012
Risk-free interest rate
0.3
1.0
Volatility
17.6
23.1
Assumed dividend yield
4.2
4.6
Expected volatility has been determined based on historical volatilities for a period of three years (2013 grant).
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 Management Board, to whom a separate plan applied.
The term of the 2005 share options for all participants except Management 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 Management Board had a five- and a 10-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 1 0-year term. After
the introduction of GRO, options were discontinued as a remuneration component. All options vested by the end of 2009.
