o www.ahold.com/reports2009
Notes to the consolidated financial statements
22 Other non-current financial liabilities - continued
23 Pensions and other post-employment benefits
Financials
The cumulative preferred financing shares were issued in four tranches. Dividends are paid on each preferred financing share at a
percentage ("Financing Dividend Percentage") that differs per tranche. For the shares issued in October 2000, the percentage is based
on the average effective yield on Dutch government loans with a remaining duration of 9 to 10 years and set at the time that the shares
were issued. When a period of 10 years has lapsed after the issue date of a tranche, and every 10 years thereafter ("Reset date"), the
Financing Dividend Percentage is reset. For the shares issued in June 1996, August 1998 and December 2003, the percentage is based
on the 10-year euro swap rate. The current Financing Dividend Percentage is 5.93 percent per year for the shares issued in June 1996,
6.08 percent per year for the shares issued in August 1998, 6.27 percent per year for the shares issued in October 2000 and 7.33
percent per year for the shares issued in December 2003. The nominal value plus additional paid-in capital per tranche is €71 million
(June 1996 tranche), €46 million (August 1998 tranche), €320 million (October 2000 tranche) and €60 million (December 2003
tranche), in the aggregate €497 million.
The total number of votes that can be exercised by the cumulative preferred financing shares is approximately 74 million. This represents
approximately 6 percent of the total number of votes that can be cast (this total being calculated as the sum of the outstanding cumulative
preferred financing shares and the outstanding common shares).
The cumulative preferred financing shares are convertible into common shares. The conversion conditions have been set so as to avoid
any transfer of value from the common shares to the cumulative preferred financing shares. The maximum number of common shares to
be received upon conversion of all outstanding cumulative preferred financing shares is approximately 90 million. The conversion features
are similar for all tranches. Conversion is allowed for all shares in one tranche held by one investor but not for fractions of tranches held
by one investor. Upon conversion, the holders of (depositary receipts of) cumulative preferred financing shares will receive a number
of common shares that is calculated by dividing the value of the cumulative preferred financing shares on the day before the conversion
date by the average share price of Ahold common shares on the five trading days preceding the notification date, the notification date
and the four trading days following the notification date. The value of the cumulative preferred financing shares will be considered, for this
purpose, to be equal to the lower of the nominal value plus the additional paid-in capital of the cumulative preferred financing shares
("Par Value") or to the present value of the remaining preferred dividends until the first Reset date plus the present value of the Par Value
at the first Reset date.
Subject to the approval of the General Meeting of Shareholders, the Company can redeem the cumulative preferred financing shares
of a certain tranche, but not fractions of a tranche. Redemption of a tranche is subject to the approval of the holders of depositary receipts
of that tranche, unless all (remaining) cumulative preferred financing shares are redeemed. Redemption takes place at the higher of the
Par Value or the present value of the remaining preferred dividends plus the present value of the Par Value at the Reset date.
Defined benefit plans
Ahold has a number of defined benefit pension plans covering a substantial number of employees, former employees and retirees in
the Netherlands and the United States. Generally, the plans are career average or final average plans. In 2008, the Company decided
to transition its defined benefit pension plan for active salaried, non-union and certain union employees in the United States to a defined
contribution pension plan, as further described below. In addition, Ahold provides life insurance and medical care benefits for certain
retired employees meeting age and service requirements at its U.S. subsidiaries, which the Company funds as claims are incurred.
Net assets relating to one plan are not offset against net liabilities of another plan, resulting in the following presentation of the pension
and other post-employment benefits on the consolidated balance sheet:
January 3,
December 28,
million
2010
2008
Defined benefit liabilities
(96)
(113)
Defined benefit assets
278
112
Total defined benefit plans
182
(1)
The defined benefit assets are part of the other non-current financial assets; for more information, see Note 15.
Ahold Annual Report 2009 88
