Cumulative Preferred Shares
Movements in issued and additional paid-in capital during the years were as follows:
Shares Issued and paid-in share capital
(x 1,000)
(x 1,000 EUR)
Cumulative
Cumulative
preferred
preferred
Total
Common
financing
Common
financing
issued and
shares
shares
shares
shares
paid-in
Balance as of January 2, 2000
646,484
144,000
146,681
32,672
179,353
Share issue
149,101
115,317
34,682
28,829
63,511
Shares issued as optional dividends
18,167
4,122
4,122
Exercise of stock options
3,097
747
747
Converted subordinated notes
Adjustment nominal value
17,981
3,328
21,309
Balance as of December 31, 2000
816,849
259,317
204,213
64,829
269,042
Share issue
80,500
20,125
20,125
Shares issued as optional dividends
20,462
5,115
5,115
Exercise of stock options
3,160
790
790
Converted subordinated notes
8
2
2
Balance as of December 30, 2001
920,979
259,317
230,245
64,829
295,074
Share issue
Shares issued as optional dividends
9,733
2,433
2,433
Exercise of stock options
392
98
98
Converted subordinated notes
3
1
1
Balance as of December 29, 2002
931,107
259,317
232,777
64,829
297,606
In March 1989, the Company entered into an agreement (the "Option Agreement") with Stichting Ahold Continuïteit
("SAC" or "Ahold Continuity Foundation"). SAC has no members or shareholders. Under the laws of The Netherlands, the
SAC is an independent legal entity governed by its board of directors. The board of directors of SAC is independent and its
composition is mandated by the listing rules of Euronext Amsterdam. In case of liquidation, the SAC board of directors
must distribute any remaining residual assets to charities. The statutory objective is to enhance Ahold's continuity,
independence and identity in case of a hostile takeover attempt. The Option Agreement was amended and restated in April
1994, March 1997 and December 2001. Pursuant to the Option Agreement, SAC was granted an option (the "SAC
Option") to acquire from the Company, from time to time until December 2016, cumulative preferred shares up to a total
par value that is equal to the total par value of all issued and outstanding shares of Ahold's capital stock, excluding
cumulative preferred shares, at the time of exercise of the SAC Option. The SAC Option, which was granted for no
consideration, entitles SAC, upon exercise (only in the event of a hostile takeover attempt), to receive cumulative preferred
shares. At the time of exercise, the Company may stipulate that only 25% of the par value would be paid in return for
such shares, until payment in full of the par value is later called by the Company. SAC would then only be entitled to a
market based interest return on its investment. If the SAC Options were to be exercised, the holders of the cumulative
preferred shares would be entitled to 2,000 votes per share and a cumulative dividend expressed as a percentage of the
amount called-up and paid-in on the cumulative preferred shares. The percentage applied is the sum of (i) the average
basic refinancing transaction interest rate as set by the European Central Bank plus 210 basis points, and (ii) the average
interest margin as set by the largest credit institution in The Netherlands based on balance sheet total at the end of the
fiscal year. The minimum percentage applied is 5.75%. Subject to limited exceptions, each transfer of cumulative
preferred shares require the approval of the Corporate Executive Board. SAC would not be able to initiate a vote under the
terms of the cumulative preferred shares, but would rather only be able to participate in votes initiated by the Company's
other shareholders. Therefore, SAC would not be in a position to change its level of profit participation upon exercise of
the options. Cumulative preferred shares can only be issued in registered form. No share certificates are issued for
cumulative preferred shares.
The option agreement and the cumulative preferred shares have certain anti-takeover effects. The issuance of all
authorized cumulative preferred shares will cause substantial dilution of the effective voting power of any shareholder,
including a shareholder that attempts to acquire the Company, and could have the effect of delaying, deferring and
preventing a change in the Company's control.
148
