Note 23
Shares and share capital
Cumulative preferred shares
Common shares
Authorized share capital is comprised of the following classes of shares:
January 1,
2006
Cumulative preferred shares (1,250,000 of EUR 500 par value each)
Common shares (2,000,000,000 of EUR 0.25 par value each)
625
500
Total
1,125
In addition, Ahold has cumulative preferred financing shares ("preferred financing shares") outstanding. These preferred
financing shares are considered debt under IFRS. For disclosures regarding Ahold's preferred financing shares see Note 28.
The Company's Articles of Association provide for the possible issuance of cumulative preferred shares. No cumulative
preferred shares, were outstanding as of January 1, 2006 or during 2005 and 2004. Under Dutch law, a person or legal entity
may acquire a controlling stake in a company without being obliged to tender for all outstanding shares. As a result, a major
Ahold shareholder could acquire control without paying full value for the Company. The Company believes that its ability to
issue this class of shares could prevent, or at least delay, an attempt by a significant shareholder from making a hostile
takeover bid. This class of shares may also act to protect the interests of other Ahold stakeholders, such as employees, in the
event their interests are seriously affected by a shareholder seeking control of Ahold.
In March 1989, the Company entered into an agreement with Stichting Ahold Continuïteit ("SAC") as amended and restated in
April 1994, March 1997, December 2001 and December 2003 (the "Option Agreement"). Pursuant to the Option Agreement,
SAC was granted an option, without payment, 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 share capital, excluding cumulative preferred shares, at the time of exercising the option. The Option Agreement
provides for an increase of the total par value of cumulative preferred shares under option, taking into account the new,
increased authorized share capital. The holders of the cumulative preferred shares are entitled to 2,000 votes per share and
a cumulative dividend expressed as a percentage of the amount called-up and paid-in to purchase the cumulative preferred
shares. The percentage to be applied is the sum of (1) the average basic refinancing transaction interest rate as set by the
European Central Bank plus 2.1%, and (2) the average rate of interest that would be charged by the largest credit institution
in the Netherlands on the balance sheet total at the end of the most recent year. The minimum percentage to be applied is
5.75%. Subject to limited exceptions, any potential transfer of cumulative preferred shares requires the approval of the
Corporate Executive Board. Cumulative preferred shares can only be issued in registered form. No share certificates are issued
for cumulative preferred shares. The Company may stipulate that only 25% of the par value will be paid upon subscription for
cumulative preferred shares until payment in full is later required by the Company. SAC would then only be entitled to a
market-based interest return on its investment.
SAC is a foundation organized under the laws of the Netherlands. Its statutory purpose is to enhance Ahold's continuity,
independence and identity in case of a hostile take-over attempt. In the case of liquidation, the SAC board of directors will
decide on the use of any remaining residual assets. The SAC board of directors has four members. The members are appointed
by the board of SAC itself.
Ahold common shares are listed on Euronext Amsterdam. Ahold has a secondary listing on the Zurich Stock Exchange.
Additionally, Ahold's common shares are listed on the NYSE in the U.S. in the form of American Depositary Shares ("ADSs"),
evidenced by American Depositary Receipts ("ADRs"). The depositary for the ADSs is The Bank of New York. Each ADS
evidences the right to receive one common share.
No shares were issued to members of the Corporate Executive Board or Supervisory Board as part of their remuneration in
2005 (2004: 130,000).
AHOLD ANNUAL REPORT 2005 143
