Food Lion 2006 Annual Report Download - page 95

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Restricted stock unit awards granted to associates of U.S. operating companies
under the Delhaize America 2002 Restricted Stock Unit Plan are as follows:
Effective Number of Number of Number of
Date of Grants Shares Underlying Shares Underlying Beneficiaries
Award Issued Awards Outstanding (at the moment
at December 31, 2006 of issuance)
May 2006 155,305 152,108 217
May 2005 145,868 132,524 204
May 2004 179,567 112,910 193
May 2003 249,247 98,501 185
May 2002 120,906 17,598 140
Activity related to the restricted stock plans is as follows:
Shares
2004
Outstanding at beginning of year 388,562
Granted 179,567
Released from restriction (63,230)
Forfeited/expired (3,827)
Outstanding at end of year 501,072
2005
Outstanding at beginning of year 501,072
Granted 145,868
Released from restriction (137,570)
Forfeited/expired (13,478)
Outstanding at end of year 495,892
2006
Outstanding at beginning of year 495,892
Granted 155,305
Released from restriction (126,004)
Forfeited/expired (9,872)
Outstanding at end of year 515,321
The weighted average fair value at date of grant for restricted stock unit awards
granted during 2006, 2005 and 2004 was USD 63.04, USD 60.76 and USD 46.40
based on the share price at the grant date, respectively.
The weighted average share price at the date of exercise was USD 73.78,
USD 64.26 and USD 55.99 at 2006, 2005 and 2004, respectively. The total intrin-
sic value of option exercices during the years ended 2006, 2005 and 2004, was
USD 60.0 million, USD 29.5 million and USD 30.5 million, respectively.
The weighted average fair value of options granted was USD 14.36, USD 18.28
and USD 15.33 per option for 2006, 2005 and 2004, respectively. The fair value
of options at date of grant was estimated using the Black-Scholes-Merton model
with the following weighted average assumptions:
2006 2005 2004
Expected dividend yield (%) 2.5 2.3 2.6
Expected volatility (%) 27.2 39.7 41.0
Risk-free interest rate (%) 5.0 3.7 3.9
Expected term (years) 4.0 4.1 4.7
Expected volatility was determined by calculating the historical volatility of the
Group’s share price over the expected option term. Expected volatility in 2006
excludes a period of abnormal volatility that is not representative of future
expected stock price behaviour and is not expected to recur during the expected
contractual term of the options. The expected term of options is based on histori-
cal ten-year option activity.
The following table summarizes options outstanding and options exercisable as
of December 31, 2006, and the related weighted average remaining contractual
life (years) and weighted average exercise price under the Delhaize America stock
option plans:
Range of Number Weighted Weighted
Exercise Prices Outstanding Average Average
Remaining Exercise Price
Contractual (in USD)
Life (in years)
USD 16.80 - USD 46.40 1,493,473 6.44 38.76
USD 46.56 - USD 60.76 1,497,798 6.83 56.21
USD 63.04 - USD 83.12 1,322,277 9.12 63.61
USD 16.80 - USD 83.12 4,313,548 7.40 52.43
A summary of the status of Delhaize Group’s nonvested options for U.S. 2002
Stock Incentive Plan as of December 31, 2006, and changes during the year ended
December 31, 2006, is presented below.
Shares Weighted
Average
Grant-Date
Fair Value
Nonvested at January 1, 2006 2,815,587 15.80
Granted 1,324,338 14.36
Vested (1,247,461) 13.10
Forfeited (295,163) 13.05
Nonvested at December 31, 2006 2,597,301 16.67
As of December 31, 2006, there was EUR 11.8 million of unrecognized compensa-
tion cost related to nonvested options that is expected to be recognized over a
weighted average period of 1.2 years.
/ ANNUAL REPORT 2006 93