9. Website
Ahold Annual Report 2003 09
Corporate Governance
4. The Corporate Executive Board
New Corporate Executive Board members will be
appointed for a period of four years, with the possibility
of reappointment. The present Corporate Executive
Board members will relinquish their positions during
a staggered period as a means of maintaining an
appropriate degree of management continuity. A rotation
scheme for this purpose has been determined, which
we announced on February 27, 2004.
The rules for the Corporate Executive Board, which
were adopted on January 26, 2004, can be found on
our website.
5. Remuneration policy
Our remuneration policy with respect to Corporate
Executive Board members was adopted by the General
Meeting of Shareholders on March 3, 2004. Details on
this policy can be found in the section "Remuneration"
of this Annual Report.
6. Compliance with Tabaksblat Code
The changes to the Articles of Association, the rules
for the Supervisory Board and its committees (Audit
Committee, Remuneration Committee and Selection
and Appointment Committee) and the rules for the
Corporate Executive Board, as well as the adopted
general remuneration policy, satisfy or will satisfy all
of the requirements of the Tabaksblat Code, except
as set forth below:
We do not comply with the recommendation
on the maximum number of supervisory boards
on which the members of the Supervisory Board
are permitted to serve. The present chairman
of the Supervisory Board currently holds more
than five supervisory board memberships, but
has indicated to review this matter.
We are requiring that Corporate Executive
Board members keep shares obtained under
a long-term incentive plan for three years after
vesting, instead of the five years recommended
by the Tabaksblat Code.
In addition, we intend to comply with the Code's
recommendations concerning compensation and related
benefit matters applicable to executive officers entering
into new employment agreements. As permitted by the
Code, we will honor existing employment agreements in
accordance with their original terms.
7. Cumulative preferred shares
Our Articles of Association continue to provide for the
possible issuance of cumulative preferred shares. No
cumulative preferred shares, which are a different class
of shares than the preferred financing shares referred
to above, are currently outstanding. We believe that
our ability to issue cumulative preferred shares could
prevent, or at least delay, an attempt by a significant
shareholder from making an unfriendly takeover bid or
from successfully removing a majority of the members
of our Supervisory Board and Corporate Executive
Board. Under Dutch law a person can acquire a
controlling stake in a company without having the
obligation to make a tender offer for all outstanding
shares. As a result, a shareholder of Ahold holding
a substantial participation could acquire control over
Ahold without paying full value for the Company.
The cumulative preferred shares can prevent such
an acquisition or at least delay such an attempt.
The cumulative preferred shares also may protect the
interests of other stakeholders of Ahold, such as those
of the employees, in the event their interests are
seriously affected by a shareholder seeking control
of Ahold. For example, the cumulative preferred shares
could allow us to avoid a takeover by a party who
sought massive layoffs or liquidation.
8. Whistleblower procedure
Ahold is in the process of setting up and implementing
a single and uniform whistleblower procedure that
will apply to both its U.S. and European operations.
We plan to have in place a strong, effective and
uniform procedure that meets the requirements of
both U.S. and European rules and regulations, in
particular for the U.S. Sarbanes-Oxley Act of 2002
(the "Sarbanes-Oxley Act") and for The Netherlands,
the recommendations of the Tabaksblat Code.
The procedure helps us to further establish and sustain
an ethical workplace environment by describing the
types of behaviors that are encouraged as well as those
that should be reported.
At present, a number of whistleblower procedures
are in place at different operating companies of the
Ahold group. They will be integrated into one procedure
(the "Whistleblower Procedure") integration of which is
to be completed in the course of 2004.
The Whistleblower Procedure will consist of a
hotline program that provides for a centralized database
for documenting the steps taken by us, or, depending
on the nature of the complaint, the Audit Committee
to investigate allegations reported via the hotline. This
means 24-hour, around the year access to a skilled
interviewer. Any caller can remain anonymous. All
workplace issues that have been reported, including
but not limited to any issues regarding accounting
or audit irregularities, will be brought to the attention
of our Audit Committee or an appropriate department.
Reporting employees also will be protected from
retaliation. The hotline will provide us with fast, efficient
and effective means to launch the Whistleblower
Procedure. Additional value will be gained through the
standardized collection, measurement and reporting
of other regulatory or business process concerns.
We have added a special section to our website
(www.ahold.com) on corporate governance. All relevant
documents that we believe relate to our corporate
governance are posted on our website, which will be
updated if material changes to our corporate governance
are implemented.
