Legal proceedings
U.S. Securities and ERISA Civil Litigation and GovernmentalRegulatory Investigations
On February 24, 2003, Ahold announced that it would be restating its earnings for fiscal 2000 and 2001 because of,
among other things, certain accounting irregularities at USF and because certain joint ventures had been improperly
consolidated. Ahold further announced forensic investigations into accounting irregularities at USF and the legality and
accounting treatment of certain questionable transactions at Disco, its Argentine subsidiary. Ahold also announced that
its Chief Executive Officer and Chief Financial Officer would resign. Following these announcements, civil and criminal
investigations were initiated by both U.S. and non-U.S. governmental and regulatory authorities and numerous civil
lawsuits were filed.
In the U.S., the foregoing has resulted in civil lawsuits claiming violations of the U.S. federal securities laws. Numerous
putative class actions claming violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated
there under and Section 20(a) of the Securities Exchange Act (the "Securities Action") were filed on behalf of Ahold's
shareholders. Among the named defendants are Ahold and certain of its current and former directors, officers and
employees. Additionally, two putative class actions were filed on behalf of participants in the Ahold USA 401(k) Savings
Plan Master Trust against the Company and certain of its current and former officers, directors and employees and one on
behalf of the participants in the USF 401(k) Retirement Savings Plan against USF and certain of its current and former
officers, directors and employees alleging violations of the Employee Retirement Income Security Act of 1974 ("ERISA")
(the "ERISA Actions"). The primary factual allegations alleged in the Securities Actions and the ERISA Actions are largely
the same. The plaintiffs in the Securities Actions seek compensatory damages in amounts to be proven at trial, together
with prejudgment interest, and the costs and expenses incurred in bringing the actions, including attorneys' fees, expert
fees and other disbursements. In the ERISA Actions, the plaintiffs seek an order compelling the defendants to make the
relevant plan whole for losses incurred as a result of the defendants' alleged ERISA violations, injunctive relief enjoining
the defendants from continuing the alleged breach of their fiduciary duties under ERISA and the plan documents, other
injunctive and equitable relief as appropriate to remedy the alleged breaches, reasonable attorneys' fees and costs and
interest on all judgment amounts as provided by law.
In addition to the Securities Actions and the ERISA Actions, the events leading to the announcement on February 24,
2003 (and other prior and subsequent events) have prompted certain governmental and regulatory entities to initiate
criminal and civil investigations of Ahold and certain of its subsidiaries. A criminal investigation is being conducted by the
U.S. Department of Justice. The U.S. Department of Justice investigation is being conducted by the U.S. Attorney's Office
for the Southern District of New York (the "U.S. Attorney"), which is conducting a grand jury investigation into possible
criminal wrongdoing by Ahold and certain of Ahold's current and former officers, directors and employees in connection
with the events leading to the announcement on February 24, 2003, and other prior and subsequent events. In the course
of that investigation, grand jury subpoenas were issued to Ahold by a federal grand jury in the U.S. District Court for the
Southern District of New York. The Federal Bureau of Investigation and criminal investigators from the U.S. Department of
Labor are also working with the U.S. Attorney on the grand jury investigation, and the investigation is also examining
whether criminal violations of ERISA occurred at Ahold's ERISA plans in the U.S. The SEC is conducting a civil
investigation to determine whether Ahold and certain of its current and former officers, directors and employees violated
U.S. federal securities laws and regulations. The Benefits Security Administration of the U.S. Department of Labor
commenced a civil investigation relating to the Ahold USA 401(k) Savings Plan Master Trust to determine whether any
violations under Title I of ERISA have occurred, including breaches of fiduciary duty. Both the NYSE and NASD have
initiated inquiries. The NYSE requested that Ahold provide certain information regarding its employees and advisors, who
were aware of the events giving rise to the announcement on February 24, 2003. The NASD requested that Ahold provide
certain information regarding certain employees and advisors identified in our response to the NYSE. Outside the U.S., the
Dutch Public Prosecutor, Euronext Amsterdam and the Netherlands Authority for the Financial Markets are conducting
similar investigations involving Ahold.
In addition to the investigations described above, there are also other criminal tax, administrative and/or regulatory
proceedings and investigations, primarily involving Disco, being conducted by various governmental and regulatory
authorities.
The Company cannot predict when these investigations will be completed or the likely outcome of any of the investigations
and proceedings. It is possible that these investigations and proceedings could lead to criminal charges, civil enforcement
proceedings, additional civil lawsuits, settlements, judgments and/or consent decrees against the Company (and/or its
subsidiaries) and that, as a result of these investigations, the Company will be required to pay fines, consent to injunctions
on future conduct, lose the ability to conduct business with government instrumentalities or suffer other penalties and
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