33. Commitments
34. Contingencies and Financial Guarantees
Delhaize Group Annual Report 2014 151
Amounts are gross before deduction of withholding taxes and social security contributions due by the employees and include
social security contributions due by the Company. They do not include the compensation of the former CEO as director of the
Company that is separately disclosed above.
In 2014, the aggregate compensation includes the pro-rata share of compensation and termination benefits for two members of
the Executive Committee who left the Company in 2014, and the pro-rata share of compensation for two new Executive
Committee members who joined the Executive Committee in 2014 and one member subsequently left the company also in 2014.
In 2013, the aggregate compensation includes termination benefits for the former CEO who left the company at the end of 2013,
the pro-rata share of compensation and termination benefits for three other members of the Executive Committee who left the
Company in 2013, and the pro-rata share of compensation of the new CEO and one new Executive Committee member, who
joined the Company in 2013.
In 2012, the aggregate compensation includes the pro-rata share of compensation of two members of the Executive Committee
who joined the company in 2012, and the pro-rata share of compensation of one member of the Executive Committee who left
the company, as well as his termination benefits.
(in millions of
2014
2013
2012
Short-term benefits (1)
8
9
8
Retirement and post-employment benefits'2'
1
1
1
Other long-term benefits (3)
1
1
Termination benefits
4
17
1
Share-based compensation
2
3
3
Total compensation expense recognized in the income statement
15
31
14
(1) Short-term benefits include base salary and other short-term benefits, the annual bonus payable during the subsequent year for performance achieved during the
respective years and the portion recognized in 2013 and 2014 of retention bonuses granted in 2013 and paid in 2014 to certain members of the Executive
Committee.
(2) The members of the Executive Committee benefit from corporate pension plans, which vary regionally (see Note 21.1). Amounts represent the employer
contributions for defined contribution plans and the employer service cost for defined benefit plans.
(3) Other long-term benefits include the performance cash component of the Long-Term Incentive Plan that was established in 2003. The grants of the performance
cash component provide for cash payments to the grant recipients at the end of a three-year performance period based upon achievement of clearly defined
targets. Amounts represent the expense recognized by the Group during the respective years, as estimated based on realized and projected performance.
Estimates are adjusted every year and when payment occurs.
Upon his resignation in 2013, Roland Smith, who was a member of the Executive Committee until September 4, 2013, exercised
300 000 warrants and the vesting of his restricted stock units (40 000) was accelerated. He subsequently sold 320 360 shares to
Delhaize Group.
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Group
and that specify all significant terms including: fixed or minimum quantities to be purchased; fixed, minimum or variable price
provisions; and the approximate timing of the transaction. Agreements that can be cancelled within 30 days of the reporting date
without penalty are excluded.
As of December 31, 2014, purchase obligations were €156 million (2013: €155 million and 2012: €164 million), of which
€38 million related to the acquisition of predominantly property, plant and equipment and for an insignificant amount intangible
assets.
Commitments related to lease obligations are disclosed in Note 18.3.
Delhaize Group is from time to time involved in legal actions in the ordinary course of its business. Delhaize Group is not aware
of any pending or threatened litigation, arbitration or administrative proceedings (individually or in the aggregate) that is likely to
have a material adverse effect on its business or consolidated financial statements. Any litigation, however, involves risk and
potentially significant litigation costs and therefore Delhaize Group cannot give any assurance that any currently pending
litigation or litigation which may arise in the future will not have a material adverse effect on our business or consolidated
financial statements.
The Group continues to be subject to tax audits in jurisdictions where we conduct business. Although some audits have been
completed during 2014, 2013 and 2012, Delhaize Group expects continued audit activity in 2015. While the ultimate outcome of
tax audits is not certain, the Group has considered the merits of its filing positions in its overall evaluation of potential tax
liabilities and believes it has adequate liabilities recorded in its consolidated financial statements for exposures on these matters.
Based on its evaluation of the potential tax liabilities and the merits of our filing positions, it is unlikely that potential tax exposures
