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Wiley l FRS: Practical Implem entation Guide and Workbook
2004-2006 Performan ce Sha re Gra nt
Main characteristics
Effective January 2004, Ahold launched a one-off share bonu s plan for a limited number of em–
ployees, the 2004-2005 Ahold Performance Share Grant Plan (the "PSG" Plan). This is a
performance-related share grant plan based on the development of Ahold' s Total Shareholder Return
("TSR") benchmarked against the TSR development of a selected group of 10 companies (including
Ahold) with the same core activities as Ahold. The peer group consists of the following companies :
Sysco Corporation, Wal-Mart Stores, Inc., Safeway Inc., Delhaize Group, The Kroger Co., Casino
SA., Metro A.G., Carrefour S.A., and Tesco PLC. TSR development is measured over the 2004-2006
period. The starting value of each of the share prices of the peer group is defined as the average share
price for the last six months of 2003 . The ending value is defined as the average share price for the
last six months of 2006, with dividends added. The PSG plan ended on December 31, 2006, and
based on the relative TSR performance, Ahold ranked seventh in the peer group. As a consequence no
shares have vested under this plan.
Valuation model and input variables
The fair value of the 2004-2006 Performance Share Grant has been calculated using a Monte
Carlo simulation model. The most important inputs are the historical volatilitie s in the share price of
each of the shares of the peer group companies between January 1, 200 1 and December 31,2003 . The
fair value resulting from the Monte Carlo simulation, adj usted for forfeitures, has been recognized
ratably over the three-year period of the plan.
Restricted shares retention agreements for key management
In 2003, Ahold granted restricted shares to certai n key officers under individual key management
retention agreements. The size of the grant was adjusted in 2004 due to the dilutive effect of the rights
issue in December 2003. Vesting of 868,750 shares and 765,000 shares occurred in July 2004 and
December 2004, respectively. Total compensation expense has been recognized ratably over the
vesting period of these grants.
10.2 ADIDAS GROUP, Annual Report 2006
Notes
33. Equity Compensation Benefits
Management Share Option Plan (MSOP) ofadidas AG
Under the Management Share Option Plan (MSOP) adopted by the shareholders of adidas AG on
May 20, 1999, and amended by resolution of the Annual General Meeting on May 8, 2002, and on
May 13, 2004 the executive board was authorized to issue nontransferable stock options for up to
1,373,350 no-par value bearer shares to members of the executive board of adidas AG as well as to
managing directors/senior vice presidents of its related companies and to other executives of adidas
AG and its related companies until August 27, 2004. The granting of stock options was able to take
place in tranches not exceeding 25% of the total volume for each fiscal year.
There is two-year vesting period for the stock options and a term of approximately seven years
upon their respective issue.