Notes to the
consolidated
financial statements
continued
32 Share-based compensation continued
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
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Remaining unvested shares granted under the 2006-2012 and the 2013-2015 GRO program will vest on the day after the publication of Ahold
Delhaize’s full-year results in the third year (three-year programs) or fifth year (five-year programs) after the grant, subject to performance
conditions and provided the participant is still employed by Ahold Delhaize. Remaining unvested shares granted to Management Board members
will vest on the day after the annual General Meeting of Shareholders in the third year (mid-term component) or fifth year (long-term component)
after the grant, subject to performance conditions and continued employment.
Other awards
A limited number of shares were granted to other ExCo members and other employees in 2014 and 2015 under a special purpose plan.
This program consists of unconditional and conditional shares. The unconditional shares vest immediately on the award date. The conditional
shares vest in two tranches. Half of the conditional shares vest on the day after the publication of Ahold Delhaize’s full-year results in the first year
and half in the second year after the grant.
Also, a number of shares were granted to a select group of senior management (excluding the Management Board and ExCo members) in
2016 under a one-time retention incentive award. The vesting of these individual share awards is contingent upon the realization of the merger
implementation. These performance shares will vest in two installments of 50% each of the granted shares. The first installment will vest 12 months
after the date of grant. The second installment will vest 24 months after the date of grant. To underline the retention function of this award, an
additional holding period of 12 months applies from the date of vesting.
At the end of each reporting period, Ahold Delhaize revises its estimates of the number of shares that are expected to vest based on the non
market vesting conditions (RoC and sustainable retailing performance). Ahold Delhaize recognizes the impact of the revision to original estimates,
if any, in the income statement, with a corresponding adjustment to equity. The final vesting percentage for the portion of the 2014 shares
dependent on Ahold Delhaize’s RoC performance is 117%.
Shares vesting in 2017
In 2017, the 2012 five-year GRO and the 2014 GRO grant will vest. The GRO shares vesting will comprise both conditional shares as well as
performance shares based on the Company’s TSR and RoC performance. Part of the TSR and RoC performance share grants were already
converted into restricted shares in 2016 (see Shares granted in 2012 converted in 2016 and Shares granted in 2014 and 2015 converted in
2016 above) and are not subject to additional performance criteria. For the remaining portion of the performance shares, 2016 TSR and RoC
performance was assessed. As of the end of 2016, Ahold Delhaize ranked second in the TSR peer group with respect to the 2012 five-year share
grant and first with respect to the 2014 grant. Based on these TSR rankings and applying the 2016 GRO vesting table, the vesting percentage for the
2012 grant was 150% and for the 2014 grant 175%.
On March 2, 2017, a maximum of 3.3 million shares granted in 2014 to Ahold Delhaize associates under the Ahold GRO plan, 2.7 million performance
shares granted in 2012 to Ahold Delhaize associates under the five-year component of the Ahold GRO plan and 0.1 million matching shares
granted in 2012 to Ahold Delhaize associates under the three-year component of the Ahold GRO plan are expected to vest. Vesting is subject to
the participant being employed by the Company on the applicable vesting date. As of vesting date, participants are allowed to sell all or part of
the shares vested, subject to insider trading restrictions as applicable from time to time.
On April 13, 2017, a maximum of 0.3 million shares granted in 2014 to members of the Management Board under the Ahold GRO plan and
0.2 million performance shares granted in 2012 to members of the Management Board under the five-year component of the Ahold GRO plan are
expected to vest. On May 26, 2017, a maximum of 0.2 million shares granted in 2014 to members of the Management Board under the Delhaize
European long-term incentive plan are expected to vest. Except to finance taxes and social security charges due on the vesting date, members
of the Management Board cannot sell shares for a period of at least five years following the grant date, or until the date of resignation from the
Management Board, if this period is shorter.
