Shares and shareholders' rights

For details on the number of outstanding shares, see Note 23 to the consolidated financial statements included in this Annual Report. For details on listings, share performance, and dividend policy with respect to Ahold's common shares, see the "Investor relations" section.

Issue of additional shares and pre-emptive rights

Shares may be issued pursuant to a resolution of the General Meeting of Shareholders upon a proposal of the Corporate Executive Board with the approval of the Supervisory Board. The General Meeting of Shareholders may resolve to delegate this authority to the Corporate Executive Board for a period not exceeding five years. A resolution of the General Meeting of Shareholders to issue shares or to authorize the Corporate Executive Board to do so is subject also to the approval of each class of shares whose rights would be adversely affected by the proposed issuance or delegation. The General Meeting of Shareholders has delegated this authority to the Corporate Executive Board, subject to the approval of the Supervisory Board until and including November 18, 2007 with respect to the issuance and/or granting of rights to acquire common shares up to a maximum of 10 percent of the outstanding common shares.

Holders of common shares have a pre-emptive right to purchase common shares upon the issue of new common shares in proportion to the aggregate amount of their existing holdings of Ahold's common shares. According to the Company's Articles of Association, this pre-emptive right does not apply in respect of any issuance of shares to employees of Ahold. The General Meeting of Shareholders may resolve to restrict or exclude pre-emptive rights. The General Meeting of Shareholders may also designate by resolution the Corporate Executive Board for a period not exceeding five years as the corporate body authorized to restrict or exclude pre-emptive rights. An absolute majority of votes cast in the General Meeting of Shareholders is required to adopt a resolution to restrict or exclude rights or to delegate this authority to the Corporate Executive Board, provided that at least one-half of the issued and outstanding share capital is represented at such meeting. A majority of at least two-thirds of the votes cast is required if less than one-half of the issued and outstanding share capital is represented. The General Meeting of Shareholders has delegated the authority to restrict or exclude the pre-emptive rights of holders of common shares upon the issuance of common shares and/or upon the granting of rights to subscribe for common shares to the Corporate Executive Board until and including November 18, 2007.

General Meeting of Shareholders

Ahold shareholders exercise their rights through annual and extraordinary General Meetings of Shareholders. These meetings must be held in the Netherlands, and specifically in the municipalities of Zaanstad, Amsterdam, the Hague, Rotterdam, Utrecht, Amersfoort or Haarlemmermeer. Each year, no later than June, Ahold is required to convene an annual General Meeting of Shareholders. Additional extraordinary General Meetings of Shareholders may be convened at any time by the Supervisory Board, the Corporate Executive Board or by one or more shareholders representing at least 10 percent of the issued share capital. The agenda for the annual General Meeting of Shareholders must contain certain matters as specified in Ahold's Articles of Association and under Dutch law. This includes, among other things, the adoption of Ahold's annual financial statements. Shareholders are entitled to propose items to be put on the agenda of the General Meeting of Shareholders provided they hold at least 1 percent of the issued share capital or the shares held by them represent a market value of at least EUR 50 million. Adoption of such a proposal requires a majority of votes cast at the General Meeting of Shareholders representing at least one-third of the issued shares. If this qualified majority is not achieved but a majority of the votes exercised was in favor of the proposal, then a second meeting may be held. In the second meeting, only a majority of votes exercised, regardless of the number of shares represented at the meeting (unless the law provides otherwise), is required to adopt the decision. Proposals for matters to be included in the agenda for the General Meeting of Shareholders must be submitted at least 60 days before the day of the meeting. Ahold may, however, refrain from including a matter on the agenda if this would prejudice its vital interests. The General Meeting of Shareholders is also entitled to approve important decisions regarding the identity or the character of Ahold including major acquisitions and divestments.

The Corporate Executive Board may set a record date to determine that a person may attend and exercise the rights relating to a General Meeting of Shareholders. Shareholders registered at that date are entitled to attend and to exercise the rights of shareholders in respect of such General Meeting of Shareholders, regardless of a sale of shares after the record date. Shareholders may be represented by written proxy.

Ahold is one of the companies participating in the Shareholder Communication Channel ("Stichting Communicatiekanaal Aandeelhouders"). The Company has used the Shareholder Communication Channel to distribute the agenda for the annual General Meeting of Shareholders and a voting instruction form that allows shareholders to grant power to an independent proxy holder, either by mail or via the internet.

Holders of ADRs will receive notice from The Bank of New York, the Depositary for Ahold's ADR facility, whenever it receives notice of a General Meeting of Shareholders or solicitation of consents or proxies of holders of common shares. The Depositary will provide a statement that the owners of ADRs on the record date will be entitled to instruct the Depositary as to the exercise of any voting rights represented by the common shares underlying their ADRs. If the Depositary does not receive instructions from any owner, the Depositary will deem the owner to have instructed the Depositary to give a discretionary proxy to a person designated by Ahold for these common shares.

Voting rights

Each common share gives the right to cast one vote. Subject to certain exceptions provided by Dutch law or Ahold's Articles of Association, resolutions are passed by a majority of the votes cast. A resolution to amend the Articles of Association that would change the rights vested in the holders of a particular class of shares requires the prior approval of a meeting of that particular class. A resolution to dissolve the Company may be adopted by the General Meeting of Shareholders following a proposal of the Corporate Executive Board made with the approval of the Supervisory Board. Any proposed resolution to wind up the Company must be disclosed in the notice calling the General Meeting of Shareholders at which that proposal is to be considered.

No votes may be cast at a General Meeting of Shareholders in respect of shares that are held by Ahold or any of its subsidiaries. These shares are not taken into account for the purpose of determining how many shareholders are voting and are represented, or how much of the share capital is represented at a General Meeting of Shareholders. There are no limitations, either under Dutch law or in Ahold's Articles of Association, on the right of non-residents of the Netherlands or foreign owners to hold or vote common shares.

Holders of depositary receipts with respect to cumulative preferred financing shares may attend the General Meeting of Shareholders. The voting rights on the underlying shares may be exercised by Stichting Administratiekantoor Preferente Financierings Aandelen Ahold ( "SAPFAA"), a foundation organized under the laws of the Netherlands in the manner described in Note 27 to the consolidated financial statements in this Annual Report.

Cumulative preferred financing shares

All outstanding cumulative preferred financing shares have been issued to SAPFAA. The purpose of SAPFAA is, among other things, to acquire and hold cumulative preferred financing shares against the issue of depositary receipts, as well as to exercise all voting rights attached to these shares. Holders of depositary receipts can obtain proxies from SAPFAA. Pursuant to its Articles of Association, the board of SAPFAA consists of three members: one A member, one B member and one C member.

The A member is appointed by the general meeting of depositary receipt holders, the B member is appointed by the Company and the C member is appointed by a joint resolution of the A member and the B member. As of March 21, 2007, the members of the board of SAPFAA were:

   
Member A: J.H. Ubas, Chairman
Member B: W.A. Koudijs
Member C: C.W.H. Brüggemann
 
 

Ahold pays a mandatory annual dividend on cumulative preferred financing shares, which is calculated in accordance with the provisions of article 39.4 of the Company's Articles of Association. On January 2, 2007, 100,802,061 cumulative preferred financing shares were converted into 22,419,051 common shares, which conversion was effected by (i) conversion of 22,419,051 cumulative preferred financing shares into 22,419,051 common shares; and (ii) the acquisition for no consideration of 78,383,010 cumulative preferred financing shares by Ahold. For further details on cumulative preferred financing shares and the voting rights attached thereto, see Note 27 to the consolidated financial statements in this Annual Report.

Cumulative preferred shares

No cumulative preferred shares are currently outstanding. Ahold entered into an option agreement with Stichting Ahold Continuïteit ("SAC") designed to exercise influence with respect to a potential change in control over the Company. SAC is a Dutch foundation whose statutory purpose is to safeguard the interests of the Company and all stakeholders in the Company and to resist to the best of its ability influences which might conflict with those interests by affecting the Company's continuity, independence or identity. As of March 21, 2007, the members of the board of SAC were:

Name Principal or former occupation
N.J. Westdijk, Chairman Former CEO of Royal Pakhoed N.V.
M. Arentsen Former CFO of CSM N.V.
G.H.N.L. van Woerkom President & CEO of ANWB
W.G. van Hassel Former lawyer/former chairman,
Dutch Bar Association
 
 

The members of the Corporate Executive Board and the members of the board of SAC declare that they are jointly of the opinion that SAC is independent of the Company as required by the General Rules for the Euronext Amsterdam Stock Market. For details on Ahold's cumulative preferred shares, see Note 23 to the consolidated financial statements in this Annual Report.

Repurchase by Ahold of its own shares

Ahold may acquire fully paid shares of any class in its capital for no consideration at any time or, subject to certain provisions of Dutch law and the Company's Articles of Association, if:

  1. Shareholders' equity, less the payment required to make the acquisition, does not fall below the sum of paid-in and called-up capital and any reserves required by Dutch law or Ahold's Articles of Association; and
  2. Ahold and its subsidiaries would thereafter not hold shares with an aggregate nominal value exceeding 10 percent of the issued share capital.

No votes may be exercised on any shares held by Ahold or its subsidiaries in its capital. An acquisition for consideration by the Company of shares in its capital of any class must be approved by resolution of the Corporate Executive Board, subject to the approval of the Supervisory Board. Shares in the Company's own capital may only be acquired if the General Meeting of Shareholders has authorized the Corporate Executive Board to do so. Such authority may apply for a maximum period of 18 months and must specify the number of shares that may be acquired, the manner in which shares may be acquired and the price limits within which shares may be acquired. Ahold may acquire shares in its capital for no consideration or for the purpose of transferring these shares to employees pursuant to share plans or option plans, without such authorization. The Corporate Executive Board has been authorized to acquire shares until and including November 18, 2007, subject to the approval of the Supervisory Board. As of the date of this Annual Report, Ahold has not acquired any shares under this authorization.

Major shareholders

Ahold is not directly or indirectly owned or controlled by another corporation or by any government. Except as described under "Cumulative preferred shares" above, the Company does not know of any arrangements that may, at a subsequent date, result in a change of control.

Significant ownership of voting shares

Pursuant to the Dutch Financial Markets Supervision Act, any person or legal entity who, directly or indirectly, acquires or disposes of an interest in Ahold's capital or voting rights must immediately give written notice to the Netherlands Authority for the Financial Markets ("Autoriteit Financiële Markten") (the "AFM"), if, as a result of that acquisition or disposal, the percentage of capital interest or voting rights held by that person or legal entity reaches, exceeds or falls below a certain threshold. There is no obligation to notify a change if the interest remains between the same thresholds.

The threshold percentages are: 5 percent, 10 percent, 15 percent, 20 percent, 25 percent, 30 percent, 35 percent, 40 percent, 50 percent, 60 percent, 75 percent and 95 percent.

In addition local rules may apply to investors.

Anyone whose capital or voting interest reaches or crosses the thresholds as a result of a change in the outstanding capital or voting rights of Ahold must notify the AFM within four trading days of the publication by the AFM of that change. Once every calendar year, holders of a 5 percent or larger interest in capital or voting rights whose interest as a result of certain acts has changed since their most recent notification, must notify the AFM thereof within four weeks after the calendar year.

As of March 21, 2007, except as set forth below, Ahold does not know of any record-owners of more than 5 percent of any class of capital interest and/or the related voting rights.

Ahold has reviewed the public notifications on record with the AFM. The following companies are registered to have notified the AFM of the following capital interests and interests in voting rights:

Capital interest Interest in voting rights
Stichting Administratiekantoor Preferente
Financieringsaandelen Ahold1 December 20, 2006 14.0% 4.4%
DeltaFort Beleggingen B.V. November 1, 2006 9.2% 3.3%
Capital Research & Management Company November 1, 2006 7.6% 8.9%
ING Groep N.V. November 1, 2006 6.1% 3.7%
 
 

1 All of the outstanding cumulative preferred financing shares are held by SAPFAA, for which SAPFAA issued corresponding depositary receipts to three investors.


In addition, Ahold has reviewed the public filings with the SEC. The following filings were made with the SEC:

  • Brandes Investment Partners, L.P. filed a Schedule 13G with the SEC, dated February 14, 2007, showing that it owned 210.7 million or 13.4 percent of Ahold's common shares as of December 31, 2006.
  • Capital Research & Management Company filed a Schedule 13G with the SEC, dated February 12, 2007, showing that it owned 137.3 million or 8.8 percent of Ahold's common shares as of December 29, 2006.

Articles of Association

Ahold's Articles of Association set forth certain aspects governing organization and corporate governance. The current text of Ahold's Articles of Association is available at the Trade Register of the Chamber of Commerce and Industry for Amsterdam and at www.ahold.com.

Set out below are two further provisions of Articles of Association with respect to the objectives of Ahold and provisions on the dissolution and liquidation of Ahold.

Description of the objectives of Ahold

Pursuant to article 2 of the Company's Articles of Association, Ahold's objectives are "to promote or join others in promoting companies and enterprises, to participate in companies and enterprises, to finance – including the giving of guarantees and acting as surety for the benefit of third parties as security for liabilities of companies and enterprises with which the Company is joined in a group or in which the Company owns an interest or with which the Company collaborates in any other way, - to conduct the management of and to operate companies engaged in the wholesale and retail trade in consumer and utility products and companies that produce such products, to operate restaurants and companies engaged in rendering public services, including all acts and things which relate or may be conducive thereto in the broadest sense, as well as to promote, to participate in, to conduct the management of and, as the case may be, to operate businesses of any other kind."

Liquidation

In the event of Ahold's dissolution and liquidation, the surplus assets remaining after satisfaction of all debts will be distributed in accordance with the provisions of Dutch law and the Company's Articles of Association in the following order:

  1. to the holders of cumulative preferred shares, the nominal amount or the amount paid thereon, if lower, as well as any dividends in arrears and dividends over the current dividend period until the date of payment of liquidation proceeds;
  2. to the holders of cumulative preferred financing shares, the nominal amount and share premium paid on these shares, as well as any dividends in arrears and dividends over the current dividend period until the date of payment of liquidation proceeds;
  3. to the holders of common shares, the nominal amount of these shares, as well as their proportional share in the common shares share premium account; and
  4. to the holders of the 120 outstanding founders' certificates, 10 percent of the balance remaining after the distributions mentioned above have been made and after the amounts of the general reserves and profit reserves created since December 31, 1961 have been deducted in accordance with Ahold's Articles of Association. The balance remaining after all of the above distributions shall be for the benefit of the holders of Ahold's common shares in proportion to the aggregate nominal value of common shares held by each of them.

Auditor

The General Meeting of Shareholders appoints the external auditor. The Audit Committee makes a recommendation to the Supervisory Board with respect to the external auditor to be proposed for (re-) appointment by the General Meeting of Shareholders. In addition, the Audit Committee evaluates and, where appropriate, recommends the replacement of the external auditors. The Audit Committee also pre-approves the fees for audit and permitted non-audit services to be performed by the external auditors as negotiated by the Corporate Executive Board. The Audit Committee shall not approve the engagement of the external auditors to render non-audit services prohibited by applicable laws and regulations or that would compromise their independence.

On May 18, 2006, the General Meeting of Shareholders re-appointed Deloitte Accountants B.V. as external auditor for the Company for the fiscal year 2006.

Decree Article 10 EU Takeover Directive

The information required by the Decree Article 10 EU Takeover Directive is included in this "Corporate governance" section and the "Investor relations" section, and the notes referred to therein, or included in the description of any relevant contract.