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Chapter
34/
Share-Based Payments (IFRS 2)
393
plan ("PSG") . Due to contractual obligations, a very limited number of employees were granted op–
tions under the 2005 option plan rules. Furthermore, restricted shares are incidentally granted to em–
ployees as part of their remun eration. In principle, plan rules will not be altered during the term of the
plans. Total share-based compensation expenses, which are fully recog nized in the Group Supp ort Of–
fice segment, were as follows:
2006
2005
2004
GROprogram
9
Share option plans
8
17
I I
2004-2006
Performance Share Grant
3
7
7
Granted shares
-l
-l
--.5.
Total share -based compensation expenses
;U
25.
U
Total compensation cost related to non-vested options and conditional shares not yet recognized at
December 31, 2006 is EUR52 , which is expected to be recognized over a weighted-average period of
2.89 years.
The company does not hold any of its own shares to cover the share-based compensation pro–
grams, as it is the Comp any's current policy to issue new shares for these programs.
Co nditiona l sha re grant program (Global Reward Opportunity, GRO)
Main Characteristics
Under the GRO program, introd uced in 2006, Ahold shares are granted through a midterm (three–
year) and long-term (five-year) program. The number of conditional shares to be granted depends on
the at-target value, the annual incen tive multiplier of the precedi ng year and the average share price
for six month s precedi ng the date of the grant. The conditi ona l shares granted under the midte rm
component vest after three years continued employment. The Corporate Executi ve Board members
are not allowed to sell these shares within a period of five years from the grant date. However, the
Corporate Executive Board members are allowed to sell part of the shares to finan ce tax due at the
date of vesting . The conditional shares gra nted through the long-term component will vest after a
performance period of five years. During this five-year period, perfo rma nce will be measured using
the Total Shareholder Return ("TSR," share price growth and dividends) of the peer group (refer to
"Remuneration" sect ion of this Annu al Report for the composition of the peer gro up). The table
below indicates the percentage of conditional shares that could vest based on the rankin g of the
Company within the peer group:
Rank
Corporate Executive Board
Other participants
1
2.
1
1-
150% 130% 110% 90%
150% 135% 120% 105%
.2
Ii
70% 50%
90% 75%
Z
25%
60%
Ii
0%
45%
2
0%
30%
10
11
0% 0%
15% 7.5%
12
0%
0%
For partic ipants in the program other than the Corporate Executiv e Board members, the mid- term
component of the program contains a matching feature . For every five shares a participant holds for
an additional two years after the vesting date, the participant will receive one additional share.
Upon termination of employment due to retirement, disabilit y, or death, participants are allowed
to stay in the plan but will not receive any new gra nts. Upon term ination of employment without
cause (e.g., reorga nization or divestiture), a pro rata part of the granted shares will vest on the date of
termination of employment.
The following table summarizes the status of the GRO program during 2006:
Non-vested at
beeinnin? 0( 2006
Gramed Foifei ted
A.C. Moberg
Three-year component
32,5 16
Five-year component
32,5 16
J.
Rishton
Three-year component
34,924
Five-year component
34,924
P.N. Wakkie
Three-year component
29,987
Five-year component
29,987
Other participants
Three-year component
5,035,393 180,834
Five-year component
5035 393
lliMl
Total number of shares
10,265,640 370,677
10,975
1966
12,944
Non-ves ted at
the end 0(2006
32,5 16
32,5 16
34,924
34,924
29,987
29,987
4,843,584
4 843584
9,882,022