Food Lion 2005 Annual Report Download - page 72

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Delhaize Group stock options and warrants granted to associates of non-U.S.
operating companies are as follows:
Plan Effective Number of Number of Exercise Number of Exercise
Date of Grants Shares Underlying Shares Underlying Price Beneficiaries Period
Award Issued Awards Outstanding (at the moment
at December 31, 2005 of issuance)
2005 Stock option plan June 2005 181,226 181,226 EUR 48.11 568 Jan. 1, 2009 -
June 14, 2012
2004 Stock option plan June 2004 237,906 237,305 EUR 38.74 561 Jan. 1, 2008 -
June 20, 2011
2003 Stock option plan June 2003 378,700 375,700 EUR 25.81 514 Jan. 1, 2007 -
June 24, 2010
2002 Stock option plan June 2002 158,300 154,300 EUR 54.30 425 Jan. 1, 2006 -
June 5, 2012
(1)
2001 Stock option plan June 2001 134,900 126,900 EUR 64.16 491 Jan. 1, 2005 -
June 4, 2011
(1)
2000 Warrant plan May 2000 115,000 106,600 EUR 63.10 461 June 2004 -
Dec. 2009
(1)
(1) In accordance with Belgian law, most of the beneficiaries of the stock option and/ or warrant plans agreed to extend the exercise period of their stock options and/or w arrants for a term of three years. The very few of the beneficiar-
ies who did not agree to extend the exercise period of their stock options and/or w arants are still bound by the initial expiry dates of the exercise periods of the plans, i.e. June 5, 2009 (under the 2002 stock option plan), June 4,
2008 (under the 2001 stock option plan) and December 2006 (under the 2000 Warrant Plan) respectively.
The exercise price associated with stock options is dependent on the rules
applicable to the relevant stock option plan. The exercise price is either the share
price on the date of the grant, the share price on the working day preceding the
offering of the option or the average price of the Delhaize Group share price for
the 30 days prior to the offering of the option.
The fair value of options and warrants is calculated using the Black-Scholes
valuation model. The fair value of share-based awards is expensed over the appli-
cable vesting period. Compensation expense is adjusted to reflect expected and
actual levels of vesting. Share-based compensation expense for 2005, 2004 and
2003 was EUR 27.6 million, EUR 24.3 million and EUR 24.3 million respectively.
Shares Weighted
Average Exercice
Price (in EUR)
2005
Outstanding at beginning of year 1,003,493 47.16
Grant ed 181,226 48.1 1
Exercised - -
Forfeited 2,688 49.29
Expired -
Outstanding at end of year 1,182,031 43.02
Options exercisable at end of year 233,500 63.68
The weighted average fair value of options granted is EUR 16.52, EUR 14.33 and
EUR 7.61 per option for 2005, 2004 and 2003 respectively. The fair value of each
option was estimated on the date of grant using a Black-Scholes pricing model
with the following assumptions:
2005 2004 2003
Expected dividend yield (% ) 2.3 2.6 3.6
Expected volatility (%) 39.7 41.0 41.3
Risk-free interest rate (% ) 2.9 3.7 3.4
Expected term (years) 5.3 5.3 5.3
Activity associated with non-U.S. stock option and warrant plans is as follows:
Shares Weighted
Average Exercice
Price (in EUR)
2003
Outstanding at beginning of year 400,000 59.99
Grant ed 378,700 25.8 1
Exercised - -
Forfeited (6,575) 58.75
Expired -
Outstanding at end of year 772,125 43.24
Options exercisable at end of year - -
2004
Outstanding at beginning of year 772,125 43.24
Grant ed 237,906 38.7 4
Exercised - -
Forfeited (6,538) 50.67
Expired -
Outstanding at end of year 1,003,493 47.16
Options exercisable at end of year 107,200 63.10
DELHAIZE GROUP / ANNUAL REPORT 200 5
70