Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-3*AND FORM S-3*
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
* This Registration Statement constitutes a filing on Form F-3 with respect
to securities of Koninklijke Ahold N.V. and a filing on Form S-3 with
respect to securities of Ahold Finance U.S.A., Inc.
<TABLE>
<S> <C>
KONINKLIJKE AHOLD N.V. AHOLD FINANCE U.S.A., INC.
(Incorporated in the Netherlands as a public company with (Exact name of Registrant as specified in its charter)
limited liability)
(Exact name of Registrant as specified in its charter)
ROYAL AHOLD
(Translation of Registrant's name into English)
THE NETHERLANDS DELAWARE
(State or other jurisdiction of incorporation (State or other jurisdiction of incorporation
or organization) or organization)
NOT APPLICABLE 58-2434256
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
ALBERT HEIJNWEG 1
1507 EH ZAANDAM, 913 NORTH MARKET STREET
THE NETHERLANDS WILMINGTON, DELAWARE 19801-3052
011-31-75-6599111 (302) 552-3100
(Address and telephone number of Registrant's principal (Address and telephone number of Registrant's principal
executive offices) executive offices)
</TABLE>
MR. ERNIE J. SMITH, AHOLD FINANCE U.S.A., INC.
ONE ATLANTA PLAZA
950 EAST PACES FERRY ROAD, SUITE 2575
ATLANTA, GEORGIA 30326
(404) 262-6050
(Name, address and telephone number of agent for service)
Copy of communications to:
MAUREEN BRUNDAGE, ESQ., WHITE & CASE LLP
1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 819-8314
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================== ======================= ================ ====================== ================
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED <F1> PER UNIT <F1> PRICE <F1> FEE
- ------------------------------------------ ----------------------- ---------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
Senior debt securities <F2>..............
Subordinated debt securities <F3>........
Guaranteed senior debt securities <F4>...
Guaranteed subordinated debt
securities <F5>........................
Guarantees of guaranteed senior debt
securities <F4>........................
Guarantees of guaranteed subordinated
debt securities <F5>...................
Warrants for debt securities <F6>........
Financing preferred shares, NLG 0.50
par value <F7> .......................
Convertible preferred shares, NLG 0.50
par value <F8>.........................
Common shares, NLG 0.50 par value <F9>...
Total.............................. U.S.$ 1,000,000,000<F10> 100% U.S.$1,000,000,000<F10> U.S.$278,000
========================================== ======================= ================ ====================== ===============
<F1> Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933, as amended.
<F2> Subject to note (10) below, there is being registered hereunder an
indeterminate principal amount of senior debt securities of Koninklijke
Ahold N.V. as may be issued from time to time at indeterminate prices. Such
senior debt securities may be convertible into common shares of Koninklijke
Ahold N.V or American depositary shares evidenced by American depositary
receipts issuable upon the deposit of the common shares.
<F3> Subject to note (10) below, there is being registered hereunder an
indeterminate principal amount of subordinated debt securities of
Koninklijke Ahold N.V. as may be issued from time to time at indeterminate
prices. Such subordinated debt securities may be convertible into common
shares of Koninklijke Ahold N.V or American depositary shares evidenced by
American depositary receipts issuable upon the deposit of the common
shares.
<F4> Subject to note (10) below, there is being registered hereunder an
indeterminate principal amount of guaranteed senior debt securities of
Ahold Finance U.S.A., Inc. and related guarantees thereof of Koninklijke
Ahold N.V. as may be issued from time to time at indeterminate prices. Such
guaranteed senior debt securities may be convertible into common shares of
Koninklijke Ahold N.V. or American depositary shares evidenced by American
depositary receipts issuable upon the deposit of the common shares.
<F5> Subject to note (10) below, there is being registered hereunder an
indeterminate principal amount of guaranteed subordinated debt securities
of Ahold Finance U.S.A., Inc. and related guarantees thereof of Koninklijke
Ahold N.V. as may be issued from time to time at indeterminate prices. Such
guaranteed subordinated debt securities may be convertible into common
shares of Koninklijke Ahold N.V or American depositary shares evidenced by
American depositary receipts issuable upon the deposit of the common
shares.
<F6> Subject to note (10) below, there is being registered hereunder an
indeterminate number of (i) warrants of Koninklijke Ahold N.V. entitling
the holder to purchase senior debt securities and/or subordinated debt
securities of Koninklijke Ahold N.V. and (ii) warrants of Ahold Finance
U.S.A., Inc. entitling the holder to purchase guaranteed senior debt
securities and/or guaranteed subordinated debt securities of Ahold Finance
U.S.A., Inc.
<F7> Subject to note (10) below, there is being registered hereunder an
indeterminate number of financing preferred shares of Koninklijke Ahold
N.V. as may be issued from time to time at indeterminate prices.
<F8> Subject to note (10) below, there is being registered hereunder an
indeterminate number of convertible preferred shares of Koninklijke Ahold
N.V. as may be issued from time to time at indeterminate prices. Such
convertible preferred shares will be convertible into common shares of
Koninklijke Ahold N.V or American depositary shares evidenced by American
depositary receipts issuable upon the deposit of the common shares.
<F9> Subject to note (10) below, there is being registered hereunder an
indeterminate number of common shares of Koninklijke Ahold N.V as may be
issued from time to time at indeterminate prices, including common shares
issuable upon conversion of (i) debt securities that are convertible into
common shares or (ii) convertible preferred shares. A separate Registration
Statement for the registration of American depositary shares evidenced by
American depositary receipts issuable upon the deposit of the common shares
registered hereby has been declared effective.
<F10>In no event will the aggregate offering price of all securities issued from
time to time under this Registration Statement and the Registration
Statement of Koninklijke Ahold N.V. and Ahold Finance U.S.A., Inc. on Form
F-3 and Form S-3 (Nos. 333-71383 and 333-71383-01) exceed U.S.$
3,000,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units or composite currencies.
</TABLE>
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Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
included in this Registration Statement also relates to the U.S.$ 2,000,000,000
maximum aggregate offering price of unsold securities previously registered
under the Registration Statement of Koninklijke Ahold N.V. and Ahold Finance
U.S.A., Inc. on Form F-3 and Form S-3 (Nos. 333-71383 and 333-71383-01). This
Registration Statement constitutes Post-Effective Amendment No. 1 to such
Registration Statement.
-------------
The Registrants hereby amend this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
KONINKLIJKE AHOLD N.V.
(a Netherlands public company with limited liability)
(ROYAL AHOLD)
AND
AHOLD FINANCE U.S.A., INC.
Royal Ahold may offer the following securities for sale through this prospectus:
Senior Debt Securities;
Subordinated Debt Securities;
Warrants to purchase Debt Securities;
Financing Preferred Shares;
Convertible Preferred Shares; and
Common Shares.
Ahold Finance U.S.A., Inc. may offer the following securities for sale through
this prospectus:
Senior Debt Securities of Ahold Finance U.S.A., Inc. guaranteed by Royal
Ahold;
Subordinated Debt Securities of Ahold Finance U.S.A., Inc. guaranteed by
Royal Ahold; and
Warrants to Purchase Debt Securities of Ahold Finance U.S.A., Inc.
We will provide the specific terms of the securities that we are offering in
supplements to this prospectus. You should read this prospectus and any
prospectus supplement carefully before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is June 8, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
About this Prospectus....................................................... 3
Where You Can Find More Information......................................... 3
Limitations on Enforcement of U.S. Laws Against Royal Ahold, its
Management, and Others.................................................... 5
Royal Ahold................................................................. 5
Ahold Finance U.S.A......................................................... 5
Use of Proceeds............................................................. 6
Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined
Fixed Charges and Preferred Share Dividends............................... 6
Description of Debt Securities of Royal Ahold............................... 7
Description of Guaranteed Debt Securities of Ahold Finance and
Guarantees of Royal Ahold................................................. 22
Description of Warrants to Subscribe to Debt Securities of Royal Ahold
and Ahold Finance U.S.A., Inc............................................. 39
Description of Share Capital of Royal Ahold................................. 41
Description of American Depositary Receipts Relating to Shares of
Royal Ahold............................................................... 51
Plan of Distribution........................................................ 60
Validity of Securities...................................................... 61
Experts..................................................................... 61
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission utilizing the "shelf" registration
process. Under the shelf registration process, we may sell the securities
described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
the securities. The prospectus supplement may also add to or update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional information described
under the heading "Where You Can Find More Information."
As used in this prospectus, "NLG" refers to the currency of the
Netherlands.
WHERE YOU CAN FIND MORE INFORMATION
ROYAL AHOLD
Koninklijke Ahold N.V. ("Royal Ahold") files annual reports and special
reports, proxy statements and other information with the Securities and Exchange
Commission (the "SEC"). You may read and copy any document Royal Ahold files at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at (800) SEC-0330 for further information on the
public reference room.
The SEC allows Royal Ahold to "incorporate by reference" in this
prospectus the information in the documents that Royal Ahold files with it,
which means that Royal Ahold can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this prospectus. Royal Ahold incorporates by
reference in this prospectus the documents listed below:
- Annual Report on Form 20-F for the fiscal year ended January 3,
1999;
- Report on Form 6-K dated May 4, 1999;
- Report on Form 6-K dated May 10, 1999;
- Report on Form 6-K dated May 12, 1999;
- Report on Form 6-K dated May 20, 1999; and
- any future Reports on Form 6-K that indicate they are incorporated
into this registration statement and any future Annual Reports on
Form 20-F that Royal Ahold may file with the SEC under the
Securities Exchange Act of 1934 (the "Exchange Act") until Royal
Ahold and Ahold Finance U.S.A., Inc. ("Ahold Finance") sell all of
the securities that may be offered through this prospectus.
You may request a copy of these documents at no cost to you, by writing
or telephoning us at either of the following addresses:
Director of Investor Relations
Royal Ahold
P.O. Box 33
1500 EA Zaandam
The Netherlands
Tel: 011 (31-75) 659-5648
Fax: 011 (31-75) 659-8359
Corporate Secretary
Ahold Finance U.S.A., Inc.
913 North Market Street
Wilmington, Delaware 19801-3052
Tel: (302) 552-3100
Fax: (302) 552-3128
Royal Ahold will provide its annual report in English to any holder of
these securities at the holder's request, for so long as the securities remain
outstanding. Royal Ahold will also provide unaudited interim financial
information to any holder upon request. In addition, Royal Ahold will supply
copies of its summary annual report in English to the depositary issuing
American depositary shares, and the depositary will distribute the summary
annual reports to holders of American depositary shares. Finally, Royal Ahold
will supply English translations of all notices of shareholders' meetings and
other communications that are sent to its shareholders to the depositary issuing
American depositary receipts, which will deliver them to holders of American
depositary receipts.
The summary annual reports prepared in English by Royal Ahold will
include audited consolidated financial statements of Royal Ahold prepared under
Dutch generally accepted accounting principles, as well as a reconciliation of
certain amounts to U.S. generally accepted accounting principles.
For a discussion of the principal differences between Dutch GAAP and
U.S. GAAP relevant to Royal Ahold, see Note 23 to Royal Ahold's audited
consolidated financial statements included in Royal Ahold's Annual Report on
Form 20-F for the fiscal year ended January 3, 1999, which is incorporated by
reference in this prospectus.
AHOLD FINANCE U.S.A., INC.
Ahold Finance is a consolidated subsidiary of Royal Ahold. Ahold
Finance does not, and will not, file separate reports with the SEC.
RELIANCE ON INFORMATION
You should rely only on the information incorporated by reference or
provided in this prospectus or in any prospectus supplement. We have not
authorized anyone to provide you with different information. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
LIMITATIONS ON ENFORCEMENT OF U.S. LAWS AGAINST
ROYAL AHOLD, ITS MANAGEMENT, AND OTHERS
Royal Ahold is a foreign corporation, and most of the members of its
management, as well as some of the experts referred to in this prospectus, are
residents of the Netherlands or other countries outside the United States. In
addition, the underwriters that are named in a prospectus supplement may be
residents of countries outside the United States. As a result, you should note
that it may be difficult or impossible to serve legal process on Royal Ahold,
members of its management, or experts or underwriters, and to force them to
appear in a U.S. court. It may also be difficult or impossible to enforce a
judgment of a U.S. court against any of these parties, or to enforce a judgment
of a foreign court against any of these parties in the United States. Finally, a
Netherlands court may refuse to allow an original action based on U.S.
securities laws.
Royal Ahold's legal counsel in the Netherlands, De Brauw Blackstone
Westbroek N.V., has advised Royal Ahold that the United States and the
Netherlands do not currently have a treaty providing for reciprocal recognition
and enforcement of judgments (other than arbitration awards) in civil and
commercial matters. As a result, a civil judgment by a U.S. court would not
necessarily be enforceable in the Netherlands.
ROYAL AHOLD
Royal Ahold is incorporated in the Netherlands as a public company with
limited liability.
Royal Ahold's principal business is food retailing. It also engages in
wholesale institutional food supply and certain specialty retailing activities
in the Netherlands.
Royal Ahold is the largest food retailer in the Netherlands and one of
the largest food retailers in the United States. It is also one of the largest
and among the most internationally diverse food retailing groups worldwide.
Royal Ahold's stores are primarily supermarkets, but it also operates through
specialty stores, "hypermarkets," discount stores and convenience stores.
Royal Ahold's operations are located primarily in the Netherlands and
the United States. It also has activities in Portugal, Spain, the Czech
Republic, Poland, several countries in the Asia Pacific region and in Latin
America.
Royal Ahold's principal executive offices are located at Albert
Heijnweg 1, 1507 EH Zaandam, the Netherlands, and the telephone number of these
offices is 011 (31-75) 659-9111. Royal Ahold is registered with the trade
register of the Chamber of Commerce of Amsterdam, under number 35000363.
AHOLD FINANCE U.S.A., INC.
Ahold Finance is an indirect wholly owned subsidiary of Royal Ahold.
Ahold Finance was incorporated in Delaware in December 1998. Its sole purpose is
to provide financing services to Royal Ahold and its U.S. subsidiaries.
The corporate offices of Ahold Finance are located at 913 North Market
Street, Wilmington, Delaware 19801-3052, and the telephone number of these
offices is (302) 552-3100.
USE OF PROCEEDS
Unless Royal Ahold or Ahold Finance state otherwise in a prospectus
supplement, the net proceeds from the sale of securities offered through this
prospectus will be used for general corporate purposes.
RATIOS OF EARNINGS TO FIXED CHARGES AND
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED SHARE DIVIDENDS
RATIOS OF EARNINGS TO FIXED CHARGES
The following table shows the ratios of earnings to fixed charges for
Royal Ahold, computed in accordance with Dutch GAAP and U.S. GAAP, for the first
thirteen weeks of 1999 and for fiscal years 1998, 1997, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C>
Dutch GAAP................................. 3.12x 3.01x 3.27x 3.11x 2.96x
U.S. GAAP.................................. 2.62x 2.65x 2.96x 3.01x 2.95x
</TABLE>
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDENDS
The following table shows the ratios of earnings to combined fixed
charges and preferred share dividends for Royal Ahold, computed in accordance
with Dutch GAAP and U.S. GAAP, for the first thirteen weeks of 1999 and for
fiscal years 1998, 1997, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Dutch GAAP................................. 3.03x 2.92x 3.19x 3.11x 2.96x
U.S. GAAP.................................. 2.55x 2.58x 2.88x 3.01x 2.95x
</TABLE>
CALCULATION OF RATIOS
The ratios of earnings to fixed charges and ratios of earnings to
combined fixed charges and preferred share dividends were calculated based on
information from Royal Ahold's records.
For purposes of these tables, "earnings" is calculated by adding:
(1) pre-tax income from continuing operations before adjustment for
minority interests in consolidated subsidiaries or income or loss
from equity investees;
(2) fixed charges;
(3) amortization of capitalized interest;
(4) distributed income of equity investees; and
(5) Royal Ahold's share of pre-tax losses of equity investees for
which charges arising from guarantees are included in fixed
charges;
and then subtracting:
(1) capitalized interest;
(2) preferred share dividend requirements of consolidated
subsidiaries; and
(3) minority interests in pre-tax income of subsidiaries that have
not incurred fixed charges.
"Fixed charges" is calculated by adding:
(1) interest expensed and capitalized;
(2) amortized premiums, discounts and capitalized expenses related to
indebtedness;
(3) an estimate of the interest within rental expense; and
(4) preferred share dividend requirements of consolidated
subsidiaries.
The term "equity investees" means investments that Royal Ahold accounts
for using the equity method of accounting.
The term "preferred share dividend" means the amount of pre-tax
earnings that is required to pay the dividends on outstanding preferred shares.
DESCRIPTION OF DEBT SECURITIES OF ROYAL AHOLD
The following is a summary of certain provisions of the debt securities
of Royal Ahold that may be issued under an indenture between Royal Ahold and The
Chase Manhattan Bank, as trustee, and an indenture between Royal Ahold and The
Bank of New York, as trustee. This summary does not purport to be complete and
is subject to and qualified in its entirety by reference to the detailed
provisions of the Trust Indenture Act of 1939 and the indentures. Royal Ahold
and Ahold Finance have filed forms of the indentures as exhibits to the
registration statement of which this prospectus is a part. References made
herein to provisions of or terms defined in the indentures are incorporated
hereby into this discussion.
GENERAL
Royal Ahold may offer the following debt securities through this
prospectus: senior debt securities and subordinated debt securities.
Any senior debt securities of Royal Ahold will be issued under an
indenture between Royal Ahold and The Chase Manhattan Bank, as trustee. Any
subordinated debt securities of Royal Ahold will be issued under an indenture
between Royal Ahold and The Bank of New York, as trustee. All references in this
summary to debt securities, senior debt securities or subordinated debt
securities are references to debt securities, senior debt securities or
subordinated debt securities of Royal Ahold.
The total principal amount of debt securities that can be issued under
the indentures is unlimited. Except as otherwise provided in the prospectus
supplement relating to a particular series of debt securities, the indentures do
not limit the amount of other debt, secured or unsecured, that may be issued by
Royal Ahold. Royal Ahold may issue the debt securities in one or more series.
The indentures provide for the debt securities to be issued in
registered form. However, Royal Ahold and the trustees may enter into
supplemental indentures for the purpose of providing for the issuance of debt
securities in bearer form.
Please refer to the prospectus supplement relating to the particular
series of debt securities offered through this prospectus for the following
terms, where applicable, of the debt securities:
- the designation, aggregate principal amount and authorized
denominations of the debt securities;
- the percentage of principal amount at which the debt securities
will be issued;
- the currency or currencies, composite currency or currency units
in which the principal of and any interest on the debt securities
will be payable;
- the date or dates on which the debt securities will mature;
- the rate or rates at which the debt securities will bear any
interest or the method by which such rate will be determined;
- the dates on which and places at which any interest will be
payable;
- whether the debt securities are senior debt securities or
subordinated debt securities;
- the terms of any mandatory or optional repayment or redemption;
- if the debt securities are convertible into common shares of
Royal Ahold, the terms and conditions upon which conversion will
be effected, including the conversion price, the conversion
period and whether conversion is mandatory, at the option of the
holder or at the option of Royal Ahold;
- any index used to determine the amount of payments of principal
or any interest on such debt securities;
- whether any debt securities will be issued as discounted debt
securities;
- whether the debt securities may be issued in the form of American
depositary debt securities evidenced by American depositary
receipts; and
- any other terms of the debt securities.
Each of the indentures provides that debt securities of a single series
may be issued at various times, with different maturity dates and redemption and
repayment provisions, if any, and may bear interest at different rates. If
interest is payable on the debt securities, the persons to which and the manner
in which it will be paid will be set forth in the prospectus supplement relating
to the debt securities. Unless otherwise indicated in the applicable prospectus
supplement, the debt securities will not be listed on any securities exchange.
The senior debt securities will be unsecured, unsubordinated
indebtedness of Royal Ahold and will rank equally with all other unsecured and
unsubordinated indebtedness of Royal Ahold. The senior debt securities will rank
equally without any preference among themselves and with all other present and
future unsecured, unsubordinated obligations of Royal Ahold, except as required
by law. The subordinated debt securities will be unsecured indebtedness of Royal
Ahold and, as set forth below under "--Subordination of Subordinated Debt
Securities," will be subordinated in right of payment to all senior indebtedness
(as defined below) of Royal Ahold. The subordinated debt securities will rank
equally without any preference among themselves and with all other present and
future unsecured and equally subordinated obligations of Royal Ahold, except as
required by law.
Some of the debt securities may be sold at a substantial discount below
their stated principal amount. These debt securities will either bear no
interest or will bear interest at a rate which at the time of issuance is below
market rates. The U.S. federal income tax consequences and other special
considerations applicable to the discounted debt securities will be described in
the prospectus supplement relating to these debt securities.
Unless the prospectus supplement for a particular series of debt
securities provides that the debt securities of that series may be redeemed at
the option of the holder, the indentures and the debt securities would not
provide for redemption at the option of a holder nor necessarily afford holders
protection in the event of a highly leveraged or other transaction that may
adversely affect holders.
GOVERNING LAW
The senior debt securities and the indenture under which they will be
issued are governed by the laws of the State of New York. The subordinated debt
securities and the indenture under which they will be issued are governed by the
laws of the State of New York, except for the provisions relating to the
subordination of the subordinated debt securities, which are governed by the
laws of the Netherlands.
There are no limitations under the laws of the Netherlands or the
Articles of Association of Royal Ahold on the right of non-residents of the
Netherlands to hold the debt securities issued by Royal Ahold.
GLOBAL SECURITIES
The debt securities of a series may be issued in the form of one or
more global certificates that will be deposited with a depositary identified in
a prospectus supplement. Unless a global certificate is exchanged in whole or in
part for debt securities in definitive form, a global certificate may generally
be transferred only as a whole and only to the depositary or to a nominee of the
depositary or to a successor depositary or its nominee.
Unless otherwise indicated in any prospectus supplement, The Depositary
Trust Company ("DTC") will act as depositary. Beneficial interests in global
certificates will be shown on records maintained by DTC and its participants,
and transfers of global certificates will be effected only through these
records.
DTC has provided us the following information, and we take no
responsibility for its accuracy. DTC is a limited purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the United States Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under Section 17A of
the Exchange Act. DTC holds securities that its participants deposit with DTC.
DTC also facilitates the clearance and recording of the settlement among its
participants of securities transactions, such as transfers and pledges, in
deposited securities through computerized records for participant's accounts.
This eliminates the need for physical exchange of certificates. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Other organizations such
as securities brokers and dealers, banks and trust companies that work through a
participant, either directly or indirectly use DTC's book-entry system. The
rules that apply to DTC and its participants are on file with the SEC.
DTC management is aware that some computer applications and systems for
processing data that are dependent upon calendar dates, including dates before,
on or after January 1, 2000, may encounter "Year 2000 problems." DTC has
informed its participants and other members of the financial community that it
has developed and is implementing a program so that its computer applications
and systems, as they relate to the timely payment of principal, interest and
other distributions to security holders, book-entry deliveries and settlement of
trades within DTC, continue to function appropriately. This program includes a
technical assessment and remediation plan, both of which are complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform its services properly is also
dependent upon other parties, including but not limited to: (1) issuers and
their agents, (2) third-party vendors from whom DTC licenses software and
hardware, and (3) third-party vendors on whom DTC relies for information or the
provision of services, including telecommunication and electric utility service
providers. DTC has informed its participants and other members of the financial
community that it is contacting third-party vendors from whom DTC acquires
services to: (1) impress upon them the importance of such services being Year
2000 compliant and (2) determine the extent of their efforts for Year 2000
remediation and, as appropriate, testing of their services. In addition, DTC is
in the process of developing contingency plans that it deems appropriate.
Pursuant to DTC's procedures, upon the sale of debt securities
represented by a global certificate to underwriters, DTC will credit the
accounts of the participants designated by the underwriters with the principal
amount of the debt securities purchased by the underwriters. Ownership of
beneficial interests in a global certificate will be shown on DTC's records
(with respect to participants), by the participants (with respect to indirect
participants and certain beneficial owners) and by the indirect participants
(with respect to all other beneficial owners). The laws of some states require
that certain persons take physical delivery in definitive form of the securities
that they own. Consequently, the ability to transfer beneficial interests in a
global certificate may be limited.
Royal Ahold will wire to DTC's nominee principal and interest payments
with respect to global certificates. Royal Ahold and the trustees under the
indentures will treat DTC's nominee as the owner of the global certificates for
all purposes. Accordingly, Royal Ahold, the trustees and the paying agents will
have no direct responsibility or liability to pay amounts due on the global
certificates to owners of beneficial interests in the global certificates.
It is DTC's current practice, upon receipt of any payment of principal
or interest, to credit participants' accounts on the payment date according to
their beneficial interests in the global certificates as shown on DTC's records.
Payments by participants to owners of beneficial interests in the global
certificates will be governed by standing instructions and customary practices
between the participants and the owners of beneficial interests in the global
certificates, as is the case with securities held for the account of customers
registered in "street name." However, payments will be the responsibility of the
participants and not of DTC, the trustees or Royal Ahold.
Debt securities of any series represented by a global certificate will
be exchangeable for debt securities in definitive form with the same terms in
authorized denominations only if:
- DTC notifies Royal Ahold that it is unwilling or unable to
continue as depositary, or DTC is no longer eligible to act as
depositary, and Royal Ahold does not appoint a successor
depositary within 90 days; or
- Royal Ahold determines not to have the debt securities of the
series represented by global certificates and notifies the
applicable trustee of its decision.
TAX REDEMPTION
In addition to any redemption provisions that may be specified in a
prospectus supplement, Royal Ahold may redeem a series of debt securities before
their maturity, in whole but not in part, if, at any time after the date of
issuance of a series of securities, as a result of any:
- amendment to, or change in, the laws of the Netherlands or any
political subdivision; or
- change in the application or official interpretation of such laws
or regulations,
where such amendment or change becomes effective after the date of the issuance
of the series of debt securities (a "tax event"), Royal Ahold becomes, or will
become, obligated to pay any additional amounts as provided below under
"--Payments of Additional Amounts" and cannot reasonably avoid such obligation.
Before Royal Ahold may redeem debt securities of a particular series,
it must deliver to the trustee at least 45 days prior to the date fixed for
redemption:
- a written notice stating that the debt securities of a particular
series are to be redeemed, specifying the redemption date and
other pertinent information; and
- an opinion of independent legal counsel to the effect that, as a
result of the circumstances described above, Royal Ahold has or
will become obligated to pay any additional amounts.
Royal Ahold will give you at least 30 days', but not more than 60
days', notice before any redemption of a series of securities. On the redemption
date, Royal Ahold will pay you the principal amount of your debt security, plus
any accrued interest (including any additional amounts) to the redemption date.
No notice of redemption may be given earlier than 90 days prior to the earliest
date on which Royal Ahold would be obligated to pay additional amounts were a
payment on the debt securities of the series then due.
PAYMENTS OF ADDITIONAL AMOUNTS
Royal Ahold will make all payments on the debt securities of any series
without withholding or deduction for any taxes, or other governmental charges in
effect on the date of issuance of the debt securities of such series or imposed
in the future by or on behalf of the Netherlands or any authority in the
Netherlands. In the event any Dutch taxes or other charges are imposed on
payments on any debt security held by you, Royal Ahold will pay to you such
additional amounts as may be necessary so that the net amounts receivable by you
after any payment, withholding or deduction of tax or charge will equal the
amounts of principal, any interest and any premium which would have been
receivable on the debt security if there were no such payment, withholding or
deduction. No additional amounts, however, will be paid to you, or to a third
party on your behalf, for any such taxes or charges that have been imposed by
reason of:
- you being a resident of the Netherlands or having some connection
with the Netherlands other than the mere holding of the debt
security or the receipt of principal, any interest, or any
premium on the debt security;
- your presentation of the debt security for payment more than 30
days after the later of (1) the due date for such payment or (2)
the date Royal Ahold provides funds to make such payment to the
trustee;
- any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax or governmental charge;
- any tax or other governmental charge that is payable other than
by withholding from payments on the debt security; or
- any combination of the foregoing events or circumstances.
Furthermore, no additional amounts will be paid with respect to any
payment to you if you are a fiduciary or partnership or other than the sole
beneficial owner of the payment if a beneficiary or settlor with respect to such
fiduciary or a member of such partnership or beneficial owner would not have
been entitled to receive the additional amounts had such beneficiary, settlor,
member or beneficial owner been the holder. Any reference in this summary or in
the indentures or the debt securities to principal or interest will be deemed
also to refer to any additional amounts that may be payable as described in this
paragraph.
CERTAIN COVENANTS APPLICABLE TO SENIOR DEBT SECURITIES
Certain Definitions Applicable to Covenants
The term "attributable debt" means the total net amount of rent
required to be paid by Royal Ahold or a subsidiary under any lease during the
remaining term of the lease, discounted from the due dates of the rent to the
date of determination at the rate of interest per annum implicit in the terms of
the lease (as determined by Royal Ahold or such subsidiary) compounded
semiannually. The net amount of rent required to be paid under any lease for any
period is the amount of the rent payable by the lessee with respect to such
period, after deducting amounts required to be paid for maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges. In the case of
any lease which the lessee has the right to terminate upon paying a penalty, the
net amount of rent will also include the amount of the penalty, but no rent will
be considered as required to be paid under the lease subsequent to the first
date that it may be terminated by the lessee.
The term "consolidated net tangible assets" means the total amount of
assets of Royal Ahold and its subsidiaries after deducting: (1) applicable
reserves and other properly deductible items, (2) all current liabilities
(excluding (a) any liabilities that the obligor has the right to extend or renew
to a time more than 12 months after the date on which the amount of consolidated
net tangible assets is being computed and (b) current maturities of long-term
indebtedness and capital lease obligations) and (3) all goodwill, all as shown
in the most recent consolidated balance sheet of Royal Ahold and its
subsidiaries, each computed in accordance with Dutch GAAP.
The term "funded debt" means all indebtedness for money borrowed with a
maturity of more than 12 months from the date the amount of funded debt is to be
determined or having a maturity of less than 12 months but which the borrower
has the right to renew or extend beyond 12 months from such date.
The term "subsidiary" means any entity of which Royal Ahold or one or
more other subsidiaries of Royal Ahold directly or indirectly owns or controls
at least a majority of the outstanding stock or other ownership interests that
ordinarily carry the power to vote in the election of directors, managers or
trustees of such entity or other persons performing similar functions (whether
or not stock or other ownership interests of any other class of such entity has
or might have voting power as a result of the happening of any contingency).
Limitation on Liens
Royal Ahold will not, and will not permit any subsidiary to, incur,
issue, assume or guarantee any indebtedness for money borrowed or any other
indebtedness evidenced by notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed (referred to in this summary as "debt") if such
debt is secured by pledge of, or mortgage, deed of trust or other lien on any
part of its or any such subsidiary's undertakings, assets or revenues (such
pledges, mortgages, deeds of trust and other liens being referred to in this
summary as "mortgages") without effectively providing that the senior debt
securities of all series issued under the indenture (and, if Royal Ahold so
determines, any other debt of Royal Ahold or such subsidiary then existing or
thereafter created which is not subordinated to the senior debt securities) will
be secured equally and ratably with (or prior to) such secured debt so long as
such secured debt shall be so secured. This restriction, however, will not apply
if the aggregate principal amount of all such secured debt which would otherwise
be prohibited, plus all attributable debt of Royal Ahold and its subsidiaries in
respect of "sale and leaseback transactions" (as defined below) which would
otherwise be prohibited by the covenant limiting sale and leaseback transactions
described below, would not exceed the greater of (1) U.S.$ 750,000,000 and (2)
15% of consolidated net tangible assets. This restriction also will not apply
to, and there will be excluded from secured debt in any computation under this
restriction, debt secured by:
(1) mortgages on property of any corporation existing at the time it
becomes a subsidiary;
(2) mortgages to secure indebtedness of any subsidiary to Royal Ahold
or to another subsidiary;
(3) mortgages for taxes, assessments or governmental charges (a) not
then delinquent or (b) the validity of which is being contested
in good faith by appropriate proceedings;
(4) materialmen's, mechanics', carriers', workmen's, repairmen's,
landlord's or other similar mortgages, or deposits to obtain the
release of such mortgages;
(5) mortgages arising under an order of attachment or distraint or
similar legal process so long as the execution or enforcement
thereof is effectively stayed and the claims secured thereby are
being contested in good faith;
(6) mortgages to secure public or statutory obligations or to secure
payment of workmen's compensation or to secure performance in
connection with tenders, leases of real property, bids or
contracts or to secure (or in lieu of) surety or appeal bonds and
mortgages made in the ordinary course of business for similar
purposes;
(7) mortgages on property existing at the time of acquisition of the
property by Royal Ahold or the subsidiary or to secure the
payment of any part of the purchase price or construction or
improvement cost of the property or to secure any debt incurred
before, at the time of, or within one year after, the acquisition
of the property or the completion of any construction or the
commencement of commercial operation of the property, whichever
is later, for the purpose of financing any part of the purchase
price or construction cost of the property;
(8) mortgages to secure guarantees arising in connection with the
sale, discount, guarantee or pledge of notes, chattel mortgages,
leases, accounts receivable, trade acceptances and other paper
arising in the ordinary course of business out of installment or
conditional sales to or by, or transactions involving title
retention with, distributors, dealers or other customers, or
merchandise, equipment or services;
(9) mortgages existing at the date of the senior debt indenture; and
(10) any extension, renewal or replacement of any mortgage referred to
in the foregoing clauses (1) to (9), so long as (a) the
extension, renewal or replacement mortgage is limited to the part
of the same property that secured the mortgage extended, renewed
or replaced (plus improvements on such property) and (b) the debt
secured by the mortgage at the time is not increased.
Limitation on Sales and Leasebacks
Royal Ahold will not, and will not permit any subsidiary to, enter into
any arrangement with any lender or investor (not including Royal Ahold or any
subsidiary), or to which any such lender or investor is a party, that provides
for Royal Ahold or any subsidiary to lease for a period, including renewals, in
excess of three years, any property if Royal Ahold or any such subsidiary has
sold or will sell or transfer the property more than 270 days after the
acquisition of the property or after the completion of construction and
commencement of full operation of the property to such lender or investor or to
any person to whom funds have been or are to be advanced by such lender or
investor on the security of such property (herein referred to as a "sale and
leaseback transaction") unless either:
(1) Royal Ahold or such subsidiary could create debt secured by a
mortgage on the property in an amount equal to the attributable
debt with respect to the sale and leaseback transaction without
equally and ratably securing the senior debt securities of all
series pursuant to the provisions of the covenant limiting liens
described above; or
(2) Royal Ahold, within 180 days after it or such subsidiary sells or
transfers the property, applies an amount equal to the greater of
(a) the net proceeds of the sale of the property; and (b) the
fair market value of the property at the time of entering into
such arrangement (as determined by Royal Ahold) to: (x) the
purchase of property, facilities or equipment (other than the
property, facilities or equipment involved in the sale) having a
value at least equal to the net proceeds of the sale; or (y) the
retirement of funded debt of Royal Ahold or any subsidiary (other
than as a result of payment at maturity or pursuant to any
mandatory sinking fund payment or any mandatory prepayment
provision).
The amount required to be applied to the retirement of funded
debt of Royal Ahold or any subsidiary pursuant to clause (y)
above will be reduced by:
(a) the principal amount of any senior debt securities of any
series (or, if the senior debt securities of any series
are original issue discount securities or provide that an
amount other than the face amount thereof will or may be
payable upon the maturity thereof or a declaration of
acceleration of the maturity thereof, such portion of the
principal amount or other amount as may be due and
payable thereon pursuant to a declaration in accordance
with Section 4.1 of the indenture) delivered within 180
days after such sale or transfer to the trustee for
retirement and cancellation; and
(b) the principal amount of funded debt, other than the debt
securities of any series, voluntarily retired by Royal
Ahold or any subsidiary within 180 days after such sale
or transfer.
CERTAIN COVENANTS APPLICABLE TO SUBORDINATED DEBT SECURITIES
Certain Definitions Applicable to Covenants
The term "public debt" means any loan, debt, guarantee or other
obligation of Royal Ahold represented by or securing bonds, notes, debentures or
other publicly issued debt securities which are, or are capable of being, traded
or listed on any stock exchange or other organized financial market.
The term "private debt" means loans, debts, guarantees and/or other
obligations of Royal Ahold in excess of 30% of the total consolidated fixed
assets of Royal Ahold and its subsidiaries, that are not public debt.
Limitation on Liens
Neither Royal Ahold nor any of its subsidiaries may secure any public
debt or private debt, then or thereafter existing, by any lien, pledge or other
charge upon any of its present or future assets or revenues. The above
restriction will not apply to:
(1) any security arising solely by mandatory operation of law;
(2) any security over assets existing at the time of acquisition
thereof;
(3) any security included within the assets of any company merged
with Royal Ahold where such security is created prior to the date
of such merger;
(4) any security over assets pursuant to the general terms and
conditions of a bank (for example, in the form prepared by the
Dutch Bankers Association (Algemene Bankvoorwaarden)), if and
insofar as applicable;
(5) any guarantee issued by Royal Ahold or any of its subsidiaries in
the ordinary course of its business; and
(6) any security upon any "margin stock," as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve
System of the United States (or any successor) as in effect from
time to time.
Any guarantee issued by Royal Ahold or any of its subsidiaries other
than in the ordinary course of its business will only be secured after the
trustee for the subordinated debt securities has given its written consent to
the guarantee.
EVENTS OF DEFAULT, WAIVER AND NOTICE UNDER THE SENIOR DEBT SECURITIES
An event of default with respect to any series of senior debt
securities means any of the following:
(1) default in the payment of any installment of interest or any
additional amounts on the senior debt securities of such series
and the continuance of such default for 30 days;
(2) default in the payment of the principal of or any premium on any
of the senior debt securities of such series when due, whether at
maturity, upon redemption, by declaration or otherwise;
(3) default in the payment of any sinking fund installment on the
senior debt securities of such series;
(4) default by Royal Ahold in the performance of any other covenant
or agreement contained in the indenture for the benefit of such
series and the continuance of such default for 90 days after
Royal Ahold is given a written notice as provided in the
indenture;
(5) Royal Ahold or any subsidiary of Royal Ahold shall:
(a) default in the payment of the principal or any interest on
any note, bond, coupon or other instrument evidencing
indebtedness for money borrowed in a total principal amount
of U.S.$50,000,000 or more, other than the senior debt
securities of such series, issued, assumed or guaranteed by
it, when and as the same shall become due and payable, if
such default shall continue for more than any period of
grace originally applicable thereto and the time for
payment of such amount has not been effectively extended,
or
(b) default in the observance of any other terms and conditions
relating to any such indebtedness for money borrowed, if
the effect of such default is to cause such indebtedness to
become due prior to its stated maturity; or
(6) certain events of bankruptcy, liquidation, insolvency or
moratorium of payments relating to Royal Ahold.
The trustee must, within 90 days after the occurrence of a default,
give all holders of senior debt securities of the relevant series then
outstanding notice of all uncured defaults known to it. The trustee may withhold
notice of any default (except in the case of a default in the payment of
principal or any premium or interest on any senior debt security of any series,
or in the payment of any sinking fund installment with respect to senior debt
securities of any series) if it in good faith determines that the withholding of
the notice is in the interest of the holders of outstanding senior debt
securities of such series.
If an event of default with respect to senior debt securities of any
series at the time outstanding shall occur and be continuing, either the trustee
or the holders of at least 25% in aggregate principal amount (calculated as
provided in the indenture) of the senior debt securities of such series then
outstanding may declare the principal (or, in the case of original issue
discount senior debt securities, the portion thereof as may be specified in the
prospectus supplement relating to such series) of the senior debt securities of
such series and any interest accrued thereon to be due and payable immediately.
If this happens, subject to the requirement that Royal Ahold take certain
actions to cure the default, the holders of a majority in aggregate principal
amount of the outstanding senior debt securities of such series may annul such
declaration.
Prior to the declaration referred to in the preceding paragraph, the
holders of a majority in aggregate principal amount of the senior debt
securities may waive certain defaults.
The Trust Indenture Act requires that Royal Ahold file with the trustee
annually a written statement as to the presence or absence of certain defaults
under the terms of the indenture.
If a default or an event of default occurs and is continuing with
respect to any series of senior debt securities, the holders of not less than a
majority in aggregate principal amount (calculated as provided in the indenture)
of the senior debt securities of such affected series then outstanding (with
each such series voting separately as a class) may direct the time, method and
place of conducting any proceeding or remedy available to the trustee, or
exercising any trust or power conferred on the trustee by the indenture with
respect to senior debt securities of the series.
The trustee will be under no obligation to exercise any of its rights
or powers under the indenture at the direction of the holders of senior debt
securities issued thereunder unless the holders offer to the trustee reasonable
security or indemnity against expenses and liabilities.
EVENTS OF DEFAULT, WAIVER AND NOTICE UNDER THE SUBORDINATED DEBT SECURITIES
An event of default with respect to any series of subordinated debt
securities means any of the following:
(1) default in the payment of any installment of interest or any
additional amounts on the subordinated debt securities of such
series and the continuance of such default for 14 days;
(2) default in the payment of the principal of (and any premium on)
any of the subordinated debt securities of such series when due,
whether at maturity, upon redemption, by declaration or otherwise
and the continuance of such default for 14 days;
(3) default in the payment of any sinking fund installment on the
subordinated debt securities of such series and the continuance
of such default for 14 days;
(4) default by Royal Ahold in the performance of any other covenant
or agreement contained in the indenture for the benefit of such
series and, if such default is capable of being remedied, the
continuance of such default for 30 days after written notice as
provided in the indenture;
(5) (a) Royal Ahold or any of its major subsidiaries (as defined
below) defaults in the payment of the principal of, or
interest on, any other obligation in respect of borrowed
moneys (as defined below) of, assumed or guaranteed by
Royal Ahold or any of its major subsidiaries when and as
the same shall become due and payable, if such default
continues for more than any applicable period of grace, and
the time for payment of such principal or interest has not
been effectively extended; or
(b) any obligation in respect of borrowed moneys of, assumed or
guaranteed by Royal Ahold or any of its major subsidiaries
shall have become repayable before the due date thereof as
a result of acceleration of maturity by reason of the
occurrence of any event of default thereunder.
However, if such obligation in respect of borrowed moneys is held
by any holder of subordinated debt securities (or any affiliate
thereof) and was declared to be due and payable, or became
capable of being declared due and payable prior to its stated
date of payment in circumstances which would not have occurred
but for a default by Royal Ahold or any of its subsidiaries in
complying with a restriction contained in the documentation
governing such obligation in respect of borrowed moneys on the
ability of Royal Ahold or such subsidiary to sell, pledge or
otherwise dispose of margin stock, then neither such declaration
(or any failure to pay based on any such declaration) or such
becoming capable of being declared due and payable shall
constitute an event of default; or
(6) certain events of bankruptcy, liquidation, insolvency or
moratorium of payments relating to Royal Ahold.
The term "major subsidiaries" means any entity that Royal Ahold
directly or indirectly controls and that has total assets in excess of 10% of
Royal Ahold's consolidated assets.
The term "borrowed moneys" means any indebtedness for borrowed money
with an original maturity of 12 months or more, the aggregate principal amount
of which is greater than NLG 10,000,000 or the equivalent thereof in any other
currency or currencies.
The trustee must, within 90 days after the occurrence of a default,
give all holders of subordinated debt securities of the relevant series then
outstanding notice of all uncured defaults known to it. The trustee may withhold
notice of any default (except in the case of a default in the payment of
principal and any premium or any interest on any subordinated debt security of
any series, or in the payment of any sinking fund installment with respect to
subordinated debt securities of any series) if it in good faith determines that
the withholding of the notice is in the interest of the holders of outstanding
subordinated debt securities of the series.
If an event of default with respect to subordinated debt securities of
any series issued thereunder at the time outstanding occurs and is continuing,
either the trustee or the holders of at least 25% in aggregate principal amount
(calculated as provided in the indenture) of the subordinated debt securities of
such series then outstanding may declare the principal (or, in the case of
original issue discount debt securities, the portion thereof as may be specified
in the prospectus supplement relating to such series) of the subordinated debt
securities of such series and any interest accrued thereon to be due and payable
immediately. If this happens, subject to the requirement that Royal Ahold take
certain action to cure the default, the holders of at least a majority in
aggregate principal amount of the subordinated debt securities of such series
then outstanding may annul such declaration.
Prior to the declaration referred to in the preceding paragraph, the
holders of a majority in aggregate principal amount of the subordinated debt
securities may waive certain defaults.
The Trust Indenture Act requires that Royal Ahold file with the trustee
annually a written statement as to the presence or absence of certain defaults
under the terms of the indenture.
If a default or an event of default occurs and is continuing with
respect to any series of subordinated debt securities, the holders of at least a
majority in aggregate principal amount (calculated as provided in the indenture)
of the subordinated debt securities of the affected series then outstanding
(with each such series voting separately as a class) may direct the time, method
and place of conducting any proceeding or remedy available to the trustee, or
exercising any trust or power conferred on the trustee by the indenture with
respect to subordinated debt securities of the series.
The trustee will be under no obligation to exercise any of its rights
or powers under the indenture at the direction of the holders of subordinated
debt securities issued thereunder unless the holders offer to the trustee
reasonable security or indemnity against expenses and liabilities.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The indebtedness represented by the subordinated debt securities will
be unsecured and subordinated in right of payment to the prior payment in full
of all senior indebtedness of Royal Ahold.
The term "senior indebtedness" means the principal of and any premium
and interest on any indebtedness of Royal Ahold currently outstanding or to be
issued by Royal Ahold after the date of the indenture unless by the terms of the
instrument creating or evidencing such indebtedness it is not senior in right of
payment to the subordinated debt securities. However, "senior indebtedness"
shall not include:
(1) Royal Ahold's outstanding 75/8% Subordinated Bonds 1993 due 2000;
(2) Royal Ahold's outstanding 5.875% Subordinated Bonds 1997 due
December 19, 2005;
(3) Royal Ahold's outstanding 63/4% Subordinated Bonds due August 24,
2003;
(4) Royal Ahold's outstanding 3% Convertible Subordinated Notes due
September 30, 2003; and
(5) any subordinated loans of Royal Ahold issued after the date of
the subordinated debt indenture.
The term "indebtedness" means all indebtedness for money that is
created, assumed, incurred or guaranteed in any manner by Royal Ahold or for
which Royal Ahold is otherwise responsible or liable.
In the event that Royal Ahold pays or distributes assets of Royal Ahold
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution and liquidation (ontbinding en vereffening) of Royal Ahold,
whether voluntary or involuntary, or in any bankruptcy proceedings
(faillissement), moratorium of payments (surseance van betaling) or in other
similar proceedings affecting Royal Ahold, then Royal Ahold will pay in full all
amounts due or to become due upon all senior indebtedness or will provide for
the payment thereof to the satisfaction of the holders of the senior
indebtedness, before it makes any payment or distribution on account of the
redemption price or principal of, any premium, any additional amounts or any
interest on the subordinated debt securities.
As a result of this subordination, in the event of the dissolution,
liquidation (ontbinding en vereffening) or bankruptcy (faillissement) of Royal
Ahold or moratorium of payments (surseance van betaling) by Royal Ahold or any
similar event, creditors of Royal Ahold who are holders of senior indebtedness
may recover more, ratably, than the holders of the subordinated debt securities.
DEFEASANCE
Defeasance and Discharge
Each of the indentures provides that Royal Ahold may be discharged from
any obligations in respect of the debt securities of any series (except for
certain obligations to register the transfer or exchange of debt securities of
such series, to replace stolen, lost or mutilated debt securities of such
series, to maintain paying agencies and to hold monies for payment in trust).
Royal Ahold will be so discharged upon the deposit with the applicable trustee,
in trust, of money and/or U.S. government obligations (as defined in the
applicable indenture) which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of and each installment of interest on the debt
securities of such series on the stated maturity of such payments in accordance
with the terms of such indenture and the debt securities of such series. This
trust may only be established if, among other things, Royal Ahold delivers to
the trustee an opinion of counsel (who may be counsel to Royal Ahold) stating
that either (1) Royal Ahold has received from, or there has been published by,
the U.S. Internal Revenue Service a ruling or (2) since the date of the
applicable indenture there has been a change in the applicable U.S. federal
income tax law, in either case to the effect that holders of the debt securities
of such series will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such defeasance and will be subject to U.S. federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such defeasance had not occurred.
Defeasance of Certain Covenants and Certain Events of Default
Each of the indentures provides that Royal Ahold may omit to comply
with (1) the covenants regarding limitations on sale and leaseback transactions
and limitations on liens described above and (2) the other covenants referred to
in Section 4.1(d) of such indenture (described in clause (4) under the captions
"--Events of Default, Waiver and Notice under the Senior Debt Securities" and
"--Events of Default, Waiver and Notice under the Subordinated Debt Securities"
above). Any omission to comply with those covenants will not constitute an event
of default under an indenture and the debt securities of a series issued
thereunder if certain conditions are met and Royal Ahold, among other things:
- deposits with the applicable trustee, in trust, money and/or U.S.
government obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of and
each installment of interest on the debt securities of such
series on the stated maturity of such payments in accordance with
the terms of such indenture and the debt securities of such
series; and
- delivers to the trustee an opinion of counsel stating that the
holders of the debt securities of such series will not recognize
income, gain or loss for U.S. federal income tax purposes as a
result of such defeasance of certain covenants and events of
default and will be subject to U.S. federal income tax on the
same amounts and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred.
Notwithstanding compliance with the foregoing requirements, the
obligations of Royal Ahold under such indenture and the parent debt securities
of such series, other than with respect to the covenants referred to above, and
the events of default, other than the events of default relating to these
covenants, will remain in full force and effect.
In the event Royal Ahold exercises its option to omit compliance with
certain covenants of one of the indentures with respect to the debt securities
of a series issued thereunder as described in the preceding paragraph and the
debt securities of such series are declared due and payable because of the
occurrence of any event of default other than an event of default described in
clause (4) under the captions "--Events of Default, Waiver and Notice under the
Senior Debt Securities" or "--Events of Default, Waiver and Notice under the
Subordinated Debt Securities" above, as the case may be, the amount of money and
U.S. government obligations on deposit with the trustee will be sufficient to
pay amounts due on the debt securities of such series at the time of their
stated maturity but may not be sufficient to pay amounts due on the debt
securities of such series at the time of the acceleration resulting from such
event of default.
MODIFICATION OF THE INDENTURES
Each indenture contains provisions permitting Royal Ahold and the
trustee thereunder, with the consent of the holders of at least a majority in
total principal amount (calculated as provided in the indentures) of the
outstanding debt securities of all series issued thereunder affected by such
modification (all such series voting as a single class), to modify such
indenture or any supplemental indenture or the rights of the holders of the debt
securities issued thereunder. However, Royal Ahold and the trustee cannot,
without the consent of the holder of each debt security so affected:
(1) extend the fixed maturity of the debt security;
(2) reduce the principal or premium amount thereof or reduce the rate
or extend the time of any payment of interest thereon or reduce
any additional amount payable thereon;
(3) make the principal amount thereof or any interest or premium
thereon payable in any coin or currency other than that provided
in such debt security;
(4) reduce the portion of the principal amount of an original issue
discount debt security (or a debt security that provides that an
amount other than the face amount thereof will or may be payable
upon a declaration of acceleration of the maturity thereof) due
and payable upon acceleration of the maturity thereof or the
portion of the principal amount thereof provable in any action or
proceeding pursuant to Section 4.2 of such indenture;
(5) reduce any amount payable upon redemption of such debt security;
(6) reduce the overdue rate thereof;
(7) impair, if such debt security provides therefor, any right of
repayment at the option of the holder of such debt security;
(8) alter adversely or eliminate any right of conversion of such debt
security; or
(9) reduce the percentage of the debt securities the consent of the
holders of which is required for any such modification.
The indenture relating to subordinated debt securities also provides
that Royal Ahold and the applicable trustee cannot enter into any supplemental
indenture if it would modify the terms providing for subordination of the
subordinated debt securities.
Each of the indentures also permits Royal Ahold and the trustee to
amend such indenture in certain circumstances without the consent of the holders
of any debt securities issued thereunder to evidence the merger of Royal Ahold
or the replacement of the trustee and for certain other purposes.
CONSOLIDATION, MERGER OR DISPOSITION OF ASSETS OF ROYAL AHOLD
Each of the indentures provides that Royal Ahold may consolidate or
merge with any other entity or sell, convey or lease all or substantially all of
its property if, upon any such consolidation or merger:
(1) the entity (if other than Royal Ahold) formed by such
consolidation or merger expressly assumes, by supplemental
indenture satisfactory in form to the trustee under the
applicable indenture, the due and punctual payment of principal
of and any interest on the debt securities issued pursuant to
such indenture, and the due and punctual observance of all of the
covenants and conditions of such indenture to be performed by
Royal Ahold; and
(2) Royal Ahold and any successor entity resulting from such
consolidation or merger, immediately after such consolidation or
merger, or sale, conveyance or lease, is not in default in the
performance of any covenant or condition of such indenture.
CONCERNING THE TRUSTEES
Except during the continuance of an event of default, each of the
trustees will perform only those duties that are specifically set forth in the
relevant indenture. During the continuance of any event of default under an
indenture, the trustee thereunder will exercise its rights and powers under the
indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use his rights under the circumstances in the
conduct of his own affairs.
Each of the trustees may acquire and hold debt securities and, subject
to certain conditions, otherwise deal with Royal Ahold as if it were not a
trustee under an indenture.
Royal Ahold and certain of its subsidiaries currently conduct banking
transactions with the trustees in the ordinary course of Royal Ahold's and such
subsidiaries' business.
DESCRIPTION OF GUARANTEED DEBT SECURITIES OF AHOLD FINANCE
AND GUARANTEES OF ROYAL AHOLD
The following is a summary of certain provisions of the debt securities
of Ahold Finance that will be issued under an indenture between Ahold Finance
and The Chase Manhattan Bank, as trustee, and an indenture between Ahold Finance
and The Bank of New York, as trustee. This summary does not purport to be
complete and is subject to and qualified in its entirety by reference to the
detailed provisions of the Trust Indenture Act of 1939 and the indentures. Royal
Ahold and Ahold Finance have filed forms of the indentures as exhibits to the
registration statement of which this prospectus is a part. References made
herein to provisions of, or terms defined in the indentures are incorporated
hereby into this discussion.
GENERAL
Ahold Finance may offer the following debt securities through this
prospectus:
- senior debt securities guaranteed by Royal Ahold (the "guaranteed
senior debt securities"); and
- subordinated debt securities guaranteed by Royal Ahold (the
"guaranteed subordinated debt securities").
Any guaranteed senior debt securities of Ahold Finance will be issued
under an indenture among Ahold Finance, Royal Ahold and The Chase Manhattan
Bank, as trustee. Any guaranteed subordinated debt securities of Ahold Finance
will be issued under an indenture among Ahold Finance, Royal Ahold and The Bank
of New York, as trustee. All references in this summary to guaranteed debt
securities are references to the guaranteed senior debt securities and
guaranteed subordinated debt securities of Ahold Finance.
The total principal amount of guaranteed debt securities that can be
issued under the indentures is unlimited. Except as otherwise provided in the
prospectus supplement relating to a particular series of guaranteed debt
securities, the indentures do not limit the amount of other debt, secured or
unsecured, that may be issued by Ahold Finance. Ahold Finance may issue the
guaranteed debt securities in one or more series.
The indentures provide for the guaranteed debt securities to be issued
in registered form. However, Ahold Finance, Royal Ahold and the trustees may
enter into supplemental indentures for the purpose of providing for the issuance
of guaranteed debt securities in bearer form.
Please refer to the prospectus supplement relating to the particular
series of guaranteed debt securities offered through this prospectus for the
following terms, where applicable, of the guaranteed debt securities:
- the designation, aggregate principal amount and authorized
denominations of the guaranteed debt securities;
- the percentage of principal amount at which the guaranteed debt
securities will be issued;
- the currency or currencies, composite currency or currency units
in which the principal of and any interest on the guaranteed debt
securities will be payable;
- the date or dates on which the guaranteed debt securities will
mature;
- the rate or rates at which the guaranteed debt securities will
bear any interest or the method by which such rate will be
determined;
- the dates on which and places at which any interest will be
payable;
- whether the guaranteed debt securities are guaranteed senior debt
securities or guaranteed subordinated debt securities;
- the terms of any mandatory or optional repayment or redemption;
- if the guaranteed debt securities are convertible into common
shares of Royal Ahold, the terms and conditions upon which
conversion will be effected, including the conversion price, the
conversion period and whether conversion is mandatory, at the
option of the holder or at the option of Ahold Finance;
- any index used to determine the amount of payments of principal
or any interest on such guaranteed debt securities;
- whether any guaranteed debt securities will be issued as
discounted guaranteed debt securities; and
- any other terms of the guaranteed debt securities.
Each of the indentures provides that guaranteed debt securities of a
single series may be issued at various times, with different maturity dates and
redemption and repayment provisions, if any, and may bear interest at different
rates. If interest is payable on the guaranteed debt securities, the persons to
which and the manner in which it will be paid will be set forth in the
prospectus supplement relating to the guaranteed debt securities. Unless
otherwise indicated in the applicable prospectus supplement, the guaranteed debt
securities will not be listed on any securities exchange.
The guaranteed senior debt securities will be unsecured, unsubordinated
indebtedness of Ahold Finance and will rank equally with all other unsecured and
unsubordinated indebtedness of Ahold Finance. The guaranteed senior debt
securities will rank equally without any preference among themselves and with
all other present and future unsecured, unsubordinated obligations of Ahold
Finance, except as required by law. The guaranteed subordinated debt securities
will be unsecured indebtedness of Ahold Finance and, as set forth below under
"--Subordination of Guaranteed Subordinated Debt Securities and Related
Guarantees," will be subordinated in right of payment to all senior indebtedness
(as defined below) of Ahold Finance. The guaranteed subordinated debt securities
will rank equally without any preference among themselves and with all other
present and future unsecured and equally subordinated obligations of Ahold
Finance, except as required by law.
The guarantee of the guaranteed senior debt securities will constitute
an unsecured, unsubordinated obligation of Royal Ahold and will rank equally
with all other unsecured and unsubordinated obligations of Royal Ahold. The
guarantee of the guaranteed subordinated debt securities will constitute an
unsecured obligation of Royal Ahold and, as set forth below under
"--Subordination of Guaranteed Subordinated Debt Securities and Related
Guarantees," will be subordinated in right of payment to all senior indebtedness
of Royal Ahold.
Some of the guaranteed debt securities may be sold at a substantial
discount below their stated principal amount. These debt securities will either
bear no interest or will bear interest at a rate which at the time of issuance
is below market rates. U.S. federal income tax consequences and other special
considerations applicable to the discounted guaranteed debt securities will be
described in the prospectus supplement relating to these guaranteed debt
securities.
Unless the prospectus supplement for a particular series of guaranteed
debt securities provides that the debt securities of that series may be redeemed
at the option of the holder, the indentures and the guaranteed debt securities
would not provide for redemption at the option of a holder nor necessarily
afford holders protection in the event of a highly leveraged or other
transaction that may adversely affect holders.
GOVERNING LAW
The guaranteed senior debt securities, the guarantees relating thereto
and the indenture under which they will be issued are governed by the laws of
the State of New York. The guaranteed subordinated debt securities, the
guarantees relating thereto and the indenture under which they will be issued
are governed by the laws of the State of New York, except for the provisions
relating to the subordination of the guarantees of the guaranteed subordinated
debt securities, which are governed by the laws of the Netherlands. The laws of
the State of New York would not require the trustee to pursue or exhaust its
legal and equitable remedies against Ahold Finance prior to exercising its
rights under the guarantee relating to the guaranteed debt securities. We cannot
assure you that a Dutch court would give effect to this provision. However,
Royal Ahold has waived any right to require a proceeding against Ahold Finance
before its obligations under the guarantees shall become effective.
GUARANTEES OF ROYAL AHOLD
Royal Ahold will unconditionally guarantee on an unsubordinated basis
(1) the due and punctual payment of the principal of, any premium and any
interest on the guaranteed senior debt securities, when and as these payments
become due and payable, whether at maturity, upon redemption or declaration of
acceleration, or otherwise, and (2) the conversion of the guaranteed senior debt
securities that are convertible into shares of Royal Ahold, in accordance with
the terms of the indenture relating to such securities. The guarantees of the
guaranteed senior debt securities will rank equally in rights of payment with
all other unsecured and unsubordinated indebtedness of Royal Ahold.
Royal Ahold will unconditionally guarantee on a subordinated basis (1)
the due and punctual payment of the principal of, any premium and any interest
on the guaranteed subordinated debt securities, when and as these payments
become due and payable, whether at maturity, upon redemption or declaration of
acceleration, or otherwise, and (2) the conversion of guaranteed subordinated
debt securities that are convertible into shares of Royal Ahold, in accordance
with the terms of the indenture relating to such securities. The guarantees of
the guaranteed subordinated debt securities will be subordinated as described
below under "--Subordination of Guaranteed Subordinated Debt Securities and
Related Guarantees."
Royal Ahold has (1) agreed that its obligations under the guarantees of
the guaranteed debt securities will be as principal obligor and not merely as
surety, and will be enforceable irrespective of any invalidity, irregularity or
unenforceability of the guaranteed debt securities or the indenture and (2)
waived any right to require a proceeding against Ahold Finance before its
obligations under the guarantees shall become effective.
Royal Ahold may, subject to certain conditions, assume payment of the
principal of, any premium and any interest on the guaranteed debt securities and
the performance of Ahold Finance under every covenant of the indentures and the
guaranteed debt securities without the consent of the holders of the guaranteed
debt securities.
GLOBAL SECURITIES
The guaranteed debt securities of a series may be issued in the form of
one or more global certificates that will be deposited with a depositary
identified in a prospectus supplement. Unless a global certificate is exchanged
in whole or in part for debt securities in definitive form, a global certificate
may generally be transferred only as a whole and only to the depositary or to a
nominee of the depositary or to a successor depositary or its nominee.
Unless otherwise indicated in any prospectus supplement, DTC will act
as depositary. Beneficial interests in global certificates will be shown on
records maintained by DTC and its participants, and transfers of global
certificates will be effected only through these records.
DTC has provided us the following information, and we take no
responsibility for its accuracy. DTC is a limited purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the United States Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under Section 17A of
the Exchange Act. DTC holds securities that its participants deposit with DTC.
DTC also facilitates the clearance and recording of the settlement among its
participants of securities transactions, such as transfers and pledges, in
deposited securities through computerized records for participant's accounts.
This eliminates the need for physical exchange of certificates. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Other organizations such
as securities brokers and dealers, banks and trust companies that work through a
participant, either directly or indirectly use DTC's book-entry system. The
rules that apply to DTC and its participants are on file with the SEC.
DTC management is aware that some computer applications and systems for
processing data that are dependent upon calendar dates, including dates before,
on or after January 1, 2000, may encounter "Year 2000 problems." DTC has
informed its participants and other members of the financial community that it
has developed and is implementing a program so that its computer applications
and systems, as they relate to the timely payment of principal, interest and
other distributions to security holders, book-entry deliveries and settlement of
trades within DTC, continue to function appropriately. This program includes a
technical assessment and remediation plan, both of which are complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform its services properly is also
dependent upon other parties, including but not limited to: (1) issuers and
their agents, (2) third-party vendors from whom DTC licenses software and
hardware, and (3) third-party vendors on whom DTC relies for information or the
provision of services, including telecommunication and electric utility service
providers. DTC has informed its participants and other members of the financial
community that it is contacting third-party vendors from whom DTC acquires
services to: (1) impress upon them the importance of such services being Year
2000 compliant and (2) determine the extent of their efforts for Year 2000
remediation and, as appropriate, testing of their services. In addition, DTC is
in the process of developing contingency plans that it deems appropriate.
Pursuant to DTC's procedures, upon the sale of guaranteed debt
securities represented by a global certificate to underwriters, DTC will credit
the accounts of the participants designated by the underwriters with the
principal amount of the guaranteed debt securities purchased by the
underwriters. Ownership of beneficial interests in a global certificate will be
shown on DTC's records (with respect to participants), by the participants (with
respect to indirect participants and certain beneficial owners) and by the
indirect participants (with respect to all other beneficial owners). The laws of
some states require that certain persons take physical delivery in definitive
form of the securities that they own. Consequently, the ability to transfer
beneficial interests in a global certificate may be limited.
Ahold Finance will wire to DTC's nominee principal and interest
payments with respect to global certificates. Ahold Finance and the trustees
under the indentures will treat DTC's nominee as the owner of the global
certificates for all purposes. Accordingly, Ahold Finance, the trustees and the
paying agents will have no direct responsibility or liability to pay amounts due
on the global certificates to owners of beneficial interests in the global
certificates.
It is DTC's current practice, upon receipt of any payment of principal
or interest, to credit participants' accounts on the payment date according to
their beneficial interests in the global certificates as shown on DTC's records.
Payments by participants to owners of beneficial interests in the global
certificates will be governed by standing instructions and customary practices
between the participants and the owners of beneficial interests in the global
certificates, as is the case with securities held for the account of customers
registered in "street name." However, payments will be the responsibility of the
participants and not of DTC, the trustees, Ahold Finance or Royal Ahold.
Guaranteed debt securities of any series represented by a global
certificate will be exchangeable for guaranteed debt securities in definitive
form with the same terms in authorized denominations only if:
- DTC notifies Ahold Finance that it is unwilling or unable to
continue as depositary, or DTC is no longer eligible to act as
depositary, and Ahold Finance does not appoint a successor
depositary within 90 days; or
- Ahold Finance determines not to have the guaranteed debt
securities of the series represented by global certificates and
notifies the applicable trustee of its decision.
TAX REDEMPTION
In addition to any redemption provisions that may be specified in a
prospectus supplement, Ahold Finance may redeem a series of guaranteed debt
securities before their maturity, in whole but not in part, if, at any time
after the date of issuance of a series of guaranteed debt securities, as a
result of any:
- amendment to, or change in, the laws of the Netherlands or any
political subdivision, or
- change in the application or official interpretation of such laws
or regulations,
where such amendment or change becomes effective after the date of the issuance
of the series of guaranteed debt securities (a "tax event"), Royal Ahold
becomes, or will become, obligated to pay any additional amounts as provided
below under "--Payments of Additional Amounts" and Royal Ahold or Ahold Finance
cannot reasonably avoid such obligation.
Before Ahold Finance may redeem guaranteed debt securities of a
particular series, Ahold Finance and Royal Ahold must deliver to the trustee at
least 45 days prior to the date fixed for redemption:
- a written notice stating that the guaranteed debt securities of a
particular series are to be redeemed, specifying the redemption
date and other pertinent information; and
- an opinion of independent legal counsel to the effect that, as a
result of the circumstances described above, Royal Ahold has or
will become obligated to pay any additional amounts.
Ahold Finance will give you at least 30 days', but not more than 60
days', notice before any redemption of a series of guaranteed debt securities.
On the redemption date, Ahold Finance will pay you the principal amount of your
guaranteed debt security, plus any accrued interest (including any additional
amounts) to the redemption date. No notice of redemption may be given earlier
than 90 days prior to the earliest date on which Royal Ahold would be obligated
to pay additional amounts were a payment on the guaranteed debt securities of
the series then due.
PAYMENTS OF ADDITIONAL AMOUNTS
Royal Ahold will make all payments pursuant to the guarantee of Royal
Ahold relating to the guaranteed debt securities without withholding or
deduction for any taxes or other governmental charges in effect on the date of
issuance of the guaranteed debt securities of such series or imposed in the
future by or on behalf of the Netherlands or any authority in the Netherlands.
In the event any Dutch taxes or other charges are imposed on payments pursuant
to this guarantee relating to any series of the guaranteed debt securities,
Royal Ahold will pay to you such additional amounts as may be necessary so that
the net amounts receivable by you after any payment, withholding or deduction of
tax or charge will equal the amounts of principal, any interest and any premium
which would have been receivable on the guaranteed debt securities if there were
no such payment, withholding or deduction. No additional amounts, however, will
be paid to you, or to a third party on your behalf, for any such taxes or
charges that have been imposed by reason of:
- you being a resident of the Netherlands or having some connection
with the Netherlands other than the mere holding of the
guaranteed debt security or the receipt of principal, any
interest or any premium on the guaranteed debt security;
- your presentation of the guaranteed debt security for payment
more than 30 days after the later of (1) the due date for such
payment or (2) the date Royal Ahold provides funds to make such
payment to the trustee;
- any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax or governmental charge;
- any tax or other governmental charge that is payable other than
by withholding from payments on the guaranteed debt security; or
- any combination of the foregoing events or circumstances.
Furthermore, no additional amounts will be paid with respect to any
payment made pursuant to the guarantee of Royal Ahold relating to a guaranteed
debt security to you if you are a fiduciary or partnership or other than the
sole beneficial owner of the payment if a beneficiary or settlor with respect to
such fiduciary or a member of such partnership or beneficial owner would not
have been entitled to receive the additional amounts had such beneficiary,
settlor, member or beneficial owner been the holder. Any reference herein or in
the indentures or the guaranteed debt securities to principal or interest will
be deemed also to refer to any additional amounts that may be payable as
described in this paragraph.
CERTAIN COVENANTS APPLICABLE TO GUARANTEED SENIOR DEBT SECURITIES
Certain Definitions Applicable to Covenants
The term "attributable debt" means the total net amount of rent
required to be paid by Royal Ahold or a subsidiary under any lease during the
remaining term of the lease, discounted from the due dates of the rent to the
date of determination at the rate of interest per annum implicit in the terms of
the lease (as determined by Royal Ahold or such subsidiary) compounded
semiannually. The net amount of rent required to be paid under any lease for any
period is the amount of the rent payable by the lessee with respect to such
period, after deducting amounts required to be paid for maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges. In the case of
any lease which the lessee has the right to terminate upon paying a penalty, the
net amount of rent will also include the amount of the penalty, but no rent will
be considered as required to be paid under the lease subsequent to the first
date that it may be terminated by the lessee.
The term "consolidated net tangible assets" means the total amount of
assets of Royal Ahold and its subsidiaries after deducting: (1) applicable
reserves and other properly deductible items, (2) all current liabilities
(excluding (a) any liabilities that the obligor has the right to extend or renew
to a time more than 12 months after the date on which the amount of consolidated
net tangible assets is being computed and (b) current maturities of long-term
indebtedness and capital lease obligations) and (3) all goodwill, all as shown
in the most recent consolidated balance sheet of Royal Ahold and its
subsidiaries, each computed in accordance with Dutch GAAP.
The term "funded debt" means all indebtedness for money borrowed with a
maturity of more than 12 months from the date the amount of funded debt is to be
determined or having a maturity of less than 12 months but which the borrower
has the right to renew or extend beyond 12 months from such date.
The term "subsidiary" means any entity that Royal Ahold or one or more
other subsidiaries of Royal Ahold (including Ahold Finance) directly or
indirectly owns or controls at least a majority of the outstanding stock or
other ownership interests that ordinarily carry the power to vote in the
election of directors, managers or trustees of such entity or other persons
performing similar functions (whether or not stock or other ownership interests
of any other class of such entity has or might have voting power as a result of
the happening of any contingency).
Limitation on Liens
Royal Ahold will not, and will not permit any subsidiary to, incur,
issue, assume or guarantee any indebtedness for money borrowed or any other
indebtedness evidenced by notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed (referred to in this summary as "debt") if such
debt is secured by pledge of, or mortgage, deed of trust or other lien on any
part of its or any such subsidiary's undertakings, assets or revenues (such
pledges, mortgages, deeds of trust and other liens being referred to in this
summary as "mortgages") without effectively providing that the guaranteed senior
debt securities of all series issued under the indenture (and if Royal Ahold so
determines, any other debt of Royal Ahold or such subsidiary then existing or
thereafter created which is not subordinated to the guaranteed senior debt
securities) will be secured equally and ratably with (or prior to) such secured
debt so long as such secured debt shall be so secured. This restriction,
however, will not apply if the aggregate principal amount of all such secured
debt which would otherwise be prohibited, plus all attributable debt of Royal
Ahold and its subsidiaries in respect of "sale and leaseback transactions" (as
defined below) which would otherwise be prohibited by the covenant limiting sale
and leaseback transactions described below, would not exceed the greater of (1)
U.S.$750,000,000 and (2) 15% of consolidated net tangible assets. This
restriction also will not apply to, and there will be excluded from secured debt
in any computation under this restriction, debt secured by:
(1) mortgages on property of any corporation existing at the time it
becomes a subsidiary;
(2) mortgages to secure indebtedness of any subsidiary to Royal Ahold
or to another subsidiary;
(3) mortgages for taxes, assessments or governmental charges (a) not
then delinquent or (b) the validity of which is being contested
in good faith by appropriate proceedings;
(4) materialmen's, mechanics', carriers', workmen's, repairmen's,
landlord's or other similar mortgages, or deposits to obtain the
release of such mortgages;
(5) mortgages arising under an order of attachment or distraint or
similar legal process so long as the execution or enforcement
thereof is effectively stayed and the claims secured thereby are
being contested in good faith;
(6) mortgages to secure public or statutory obligations or to secure
payment of workmen's compensation or to secure performance in
connection with tenders, leases of real property, bids or
contracts or to secure (or in lieu of) surety or appeal bonds and
mortgages made in the ordinary course of business for similar
purposes;
(7) mortgages on property existing at the time of acquisition of the
property by Royal Ahold or the subsidiary or to secure the
payment of any part of the purchase price or construction or
improvement cost of the property or to secure any debt incurred
before, at the time of, or within one year after, the acquisition
of the property or the completion of any construction or the
commencement of commercial operation of the property, whichever
is later, for the purpose of financing any part of the purchase
price or construction cost of the property;
(8) mortgages to secure guarantees arising in connection with the
sale, discount, guarantee or pledge of notes, chattel mortgages,
leases, accounts receivable, trade acceptances and other paper
arising, in the ordinary course of business, out of installment
or conditional sales to or by, or transactions involving title
retention with, distributors, dealers or other customers, or
merchandise, equipment or services;
(9) mortgages existing at the date of the guaranteed senior debt
indenture; and
(10) any extension, renewal or replacement of any mortgage referred to
in the foregoing clauses (1) to (9), so long as (a) the
extension, renewal or replacement mortgage is limited to the part
of the same property that secured the mortgage extended, renewed
or replaced (plus improvements on such property) and (b) the debt
secured by the mortgage at the time is not increased.
Limitation on Sales and Leasebacks
Royal Ahold will not, and will not permit any subsidiary to, enter into
any arrangement with any lender or investor (not including Royal Ahold or any
subsidiary), or to which any such lender or investor is a party, that provides
for Royal Ahold or any subsidiary to lease for a period, including renewals, in
excess of three years, any property if Royal Ahold or any such subsidiary has
sold or will sell or transfer the property more than 270 days after the
acquisition of the property or after the completion of construction and
commencement of full operation of the property to such lender or investor or to
any person to whom funds have been or are to be advanced by such lender or
investor on the security of such property (herein referred to as a "sale and
leaseback transaction") unless either:
(1) Royal Ahold or such subsidiary could create debt secured by a
mortgage on the property in an amount equal to the attributable
debt with respect to the sale and leaseback transaction without
equally and ratably securing the guaranteed senior debt
securities of all series pursuant to the provisions of the
covenant limiting liens described above; or
(2) Royal Ahold, within 180 days after it or such subsidiary sells or
transfers the property, applies an amount equal to the greater of
(a) the net proceeds of the sale of the property; and (b) the
fair market value of the property at the time of entering into
such arrangement (as determined by Royal Ahold) to (x) the
purchase of property, facilities or equipment (other than the
property, facilities or equipment involved in the sale) having a
value at least equal to the net proceeds of the sale; or (y) the
retirement of funded debt of Royal Ahold or any subsidiary (other
than as a result of payment at maturity or pursuant to any
mandatory sinking fund payment or any mandatory prepayment
provision).
The amount required to be applied to the retirement of funded
debt of Royal Ahold or any subsidiary pursuant to clause (y)
above will be reduced by:
(a) the principal amount of any guaranteed senior debt
securities of any series (or, if the guaranteed senior
debt securities of any series are original issue discount
securities or provide that an amount other than the face
amount thereof will or may be payable upon the maturity
thereof or a declaration of acceleration of the maturity
thereof, such portion of the principal amount or other
amount as may be due and payable thereon pursuant to a
declaration in accordance with Section 4.1 of the
indenture) delivered within 180 days after such sale or
transfer to the trustee for retirement and cancellation;
and
(b) the principal amount of funded debt, other than the
guaranteed debt securities of any series, voluntarily
retired by Royal Ahold or any subsidiary within 180 days
after such sale or transfer.
CERTAIN COVENANTS APPLICABLE TO GUARANTEED SUBORDINATED DEBT SECURITIES
Certain Definitions Applicable to Covenants
The term "public debt" means any loan, debt, guarantee or other
obligation of Royal Ahold represented by or securing bonds, notes, debentures or
other publicly issued debt securities which are, or are capable of being, traded
or listed on any stock exchange or other organized financial market.
The term "private debt" means loans, debts, guarantees and/or other
obligations of Royal Ahold in excess of 30% of the total consolidated fixed
assets of Royal Ahold and its subsidiaries, that are not public debt.
Limitation on Liens
Neither Royal Ahold nor any of its subsidiaries may secure any public
debt or private debt, then or thereafter existing, by any lien, pledge or other
charge upon any of its present or future assets or revenues. The above
restriction will not apply to:
(1) any security arising solely by mandatory operation of law;
(2) any security over assets existing at the time of acquisition
thereof;
(3) any security included within the assets of any company merged
with Royal Ahold where such security is created prior to the date
of such merger;
(4) any security over assets pursuant to the general terms and
conditions of a bank (for example, in the form prepared by the
Dutch Bankers Association (Algemene Bankvoorwaarden)), if and
insofar as applicable;
(5) any guarantee issued by Royal Ahold or any of its subsidiaries in
the ordinary course of its business; and
(6) any security upon any "margin stock," as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve
System of the United States (or any successor) as in effect from
time to time.
Any guarantee issued by Royal Ahold or any of its subsidiaries other
than in the ordinary course of its business will only be secured after the
trustee for the guaranteed subordinated debt securities has given its written
consent to the guarantee.
EVENTS OF DEFAULT, WAIVER AND NOTICE UNDER THE GUARANTEED SENIOR DEBT SECURITIES
An event of default with respect to any series of guaranteed senior
debt securities means any of the following:
(1) default in the payment of any installment of interest or any
additional amounts on the guaranteed senior debt securities of
such series and the continuance of such default for 30 days;
(2) default in the payment of the principal of or any premium on any
of the guaranteed senior debt securities of such series when due,
whether at maturity, upon redemption, by declaration or
otherwise;
(3) default in the payment of any sinking fund installment on the
guaranteed senior debt securities of such series;
(4) default by Ahold Finance or Royal Ahold in the performance of any
other covenant or agreement contained in the indenture for the
benefit of such series and the continuance of such default for 90
days after Ahold Finance and Royal Ahold are given a written
notice as provided in the indenture;
(5) Royal Ahold or Ahold Finance or any other subsidiary of Royal
Ahold shall:
(a) default in the payment of the principal or any interest on
any note, bond, coupon or other instrument evidencing
indebtedness for money borrowed in a total principal
amount of U.S.$50,000,000 or more, other than the
guaranteed senior debt securities of such series, issued,
assumed or guaranteed by it, when and as the same shall
become due and payable, if such default shall continue for
more than any period of grace originally applicable
thereto and the time for payment of such amount has not
been effectively extended, or
(b) default in the observance of any other terms and
conditions relating to any such indebtedness for money
borrowed, if the effect of such default is to cause such
indebtedness to become due prior to its stated maturity;
or
(6) certain events of bankruptcy, liquidation, or insolvency relating
to Ahold Finance;
(7) certain events of bankruptcy, liquidation, insolvency or
moratorium of payments relating to Royal Ahold; or
(8) the guarantee ceases to be in full force or effect (except as
contemplated by the terms thereof), or Royal Ahold denies or
disaffirms its obligations under the guarantee.
The trustee must, within 90 days after the occurrence of a default,
give all holders of guaranteed senior debt securities of the relevant series
then outstanding notice of all uncured defaults known to it. The trustee may
withhold notice of any default (except in the case of a default in the payment
of principal or any premium or interest on any guaranteed senior debt security
of any series, or in the payment of any sinking fund installment with respect to
guaranteed senior debt securities of any series), if it in good faith determines
that the withholding of the notice is in the interest of the holders of
outstanding guaranteed senior debt securities of such series.
If an event of default with respect to guaranteed senior debt
securities of any series at the time outstanding shall occur and be continuing,
either the trustee or the holders of at least 25% in aggregate principal amount
of the guaranteed senior debt securities of such series then outstanding may
declare the principal (or, in the case of original issue discount guaranteed
senior debt securities, the portion thereof as may be specified in the
prospectus supplement relating to such series) of the guaranteed senior debt
securities of such series and any interest accrued thereon to be due and payable
immediately. If this happens, subject to the requirement that Ahold Finance or
Royal Ahold take certain actions to cure the default, the holders of a majority
in aggregate principal amount of the outstanding guaranteed senior debt
securities of such series may annul the declaration with respect to the
particular series.
Prior to the declaration referred to in the preceding paragraph, the
holders of at least a majority in aggregate principal amount of the guaranteed
senior debt securities of such series may waive certain defaults.
The Trust Indenture Act requires that each of Ahold Finance and Royal
Ahold file with the trustee annually a written statement as to the presence or
absence of certain defaults under the terms of the indenture.
If a default or an event of default occurs and is continuing with
respect to any series of guaranteed senior debt securities, the holders of not
less than a majority in aggregate principal amount (calculated as provided in
the indenture) of the guaranteed senior debt securities of such affected series
then outstanding (with each such series voting separately as a class) may direct
the time, method and place of conducting any proceeding or remedy available to
the trustee, or exercising any trust or power conferred on the trustee by the
indenture with respect to guaranteed senior debt securities of the series.
The trustee will be under no obligation to exercise any of its rights
or powers under the indenture at the direction of the holders of guaranteed
senior debt securities issued thereunder unless the holders offer to the trustee
reasonable security or indemnity against expenses and liabilities.
EVENTS OF DEFAULT, WAIVER AND NOTICE UNDER THE GUARANTEED SUBORDINATED DEBT
SECURITIES
An event of default with respect to any series of guaranteed
subordinated debt securities means any of the following:
(1) default in the payment of any installment of interest or any
additional amounts on the guaranteed subordinated debt securities
of such series and the continuance of such default for 30 days;
(2) default in the payment of the principal of (and any premium on)
any of the guaranteed subordinated debt securities of such series
when due, whether at maturity, upon redemption, by declaration or
otherwise and the continuance of such default for 30 days;
(3) default in the payment of any sinking fund installment on the
guaranteed subordinated debt securities of such series and the
continuance of such default for 30 days;
(4) default by Ahold Finance or Royal Ahold in the performance of any
other covenant or agreement contained in the indenture for the
benefit of such series and, if such default is capable of being
remedied, the continuance of such default for 30 days after
written notice as provided in the indenture;
(5) (a) Ahold Finance or Royal Ahold or any of their major
subsidiaries (as defined below) defaults in the payment of
the principal of, or interest on, any other obligation in
respect of borrowed moneys (as defined below) of, assumed
or guaranteed by, Ahold Finance or Royal Ahold or one of
their major subsidiaries, as the case may be, when and as
the same shall become due and payable, if such default
continues for more than any applicable period of grace and
the time for payment of such principal or interest has not
been effectively extended; or
(b) any obligation in respect of borrowed moneys of, assumed
or guaranteed by Ahold Finance or Royal Ahold or any of
their major subsidiaries shall have become repayable
before the due date thereof as a result of acceleration of
maturity by reason of the occurrence of any event of
default thereunder.
However, if such obligation in respect of borrowed moneys is held
by any holder of guaranteed subordinated debt securities (or any
affiliate thereof) and was declared to be due and payable, or
became capable of being declared due and payable prior to its
stated date of payment in circumstances which would not have
occurred but for a default by Ahold Finance or Royal Ahold or any
of their subsidiaries in complying with a restriction contained
in the documentation governing such obligation in respect of
borrowed moneys on the ability of Ahold Finance or Royal Ahold or
such subsidiary to sell, pledge or otherwise dispose of margin
stock, then neither such declaration (or any failure to pay based
on any such declaration) or such becoming capable of being
declared due and payable shall constitute an event of default; or
(6) certain events of bankruptcy or insolvency relating to Ahold
Finance;
(7) certain events of bankruptcy, liquidation, insolvency or
moratorium of payments relating to Royal Ahold; or
(8) the guarantee ceases to be in full force or effect (except as
contemplated by the terms thereof), or Royal Ahold denies or
disaffirms its obligations under the guarantee.
The term "major subsidiaries" means any entity that Ahold Finance or
Royal Ahold, as applicable, directly or indirectly controls and that has total
assets in excess of 10% of the consolidated assets of Ahold Finance or Royal
Ahold, as applicable.
The term "borrowed moneys" means any indebtedness for borrowed money
with an original maturity of 12 months or more, the aggregate principal amount
of which is greater than U.S.$100,000,000 or the equivalent thereof in any other
currency or currencies.
The trustee must, within 90 days after the occurrence of a default,
give all holders of guaranteed subordinated debt securities of the relevant
series then outstanding notice of all uncured defaults known to it. The trustee
may withhold notice of any default (except in the case of a default in the
payment of principal and any premium or any interest on any guaranteed
subordinated debt security of any series, or in the payment of any sinking fund
installment with respect to guaranteed subordinated debt securities of any
series), if it in good faith determines that the withholding of the notice is in
the interest of the holders of outstanding guaranteed subordinated debt
securities of the series.
If an event of default with respect to guaranteed subordinated debt
securities of any series issued thereunder at the time outstanding occurs and is
continuing, either the trustee or the holders of at least 25% in aggregate
principal amount (calculated as provided in the indenture) of the guaranteed
subordinated debt securities of such series then outstanding may declare the
principal (or, in the case of original issue discount guaranteed debt
securities, the portion thereof as may be specified in the prospectus supplement
relating to such series) of the guaranteed subordinated debt securities of such
series and any interest accrued thereon to be due and payable immediately. If
this happens, subject to the requirement that Ahold Finance or Royal Ahold take
certain actions to cure the default, the holders of a majority in aggregate
principal amount of the outstanding guaranteed subordinated debt securities of
such series may annul the declaration with respect to the particular series.
Prior to the declaration referred to in the preceding paragraph, the
holders of at least a majority in aggregate principal amount of the guaranteed
subordinated debt securities of such series may waive certain defaults.
The Trust Indenture Act requires that Ahold Finance and Royal Ahold
file with the trustee annually a written statement as to the presence or absence
of certain defaults under the terms of the indenture.
If a default or an event of default occurs and is continuing with
respect to any series of guaranteed subordinated debt securities, the holders of
at least a majority in aggregate principal amount (calculated as provided in the
indenture) of the guaranteed subordinated debt securities of the affected series
then outstanding (with each such series voting separately as a class) may direct
the time, method and place of conducting any proceeding or remedy available to
the trustee, or exercising any trust or power conferred on the trustee by the
indenture with respect to guaranteed subordinated debt securities of the series.
The trustee will be under no obligation to exercise any of its rights
or powers under the indenture at the direction of the holders of guaranteed
subordinated debt securities issued thereunder unless the holders offer to the
trustee reasonable security or indemnity against expenses and liabilities.
SUBORDINATION OF GUARANTEED SUBORDINATED DEBT SECURITIES AND RELATED GUARANTEES
The indebtedness represented by the guaranteed subordinated debt
securities will be unsecured and subordinated in right of payment to the prior
payment in full of all senior indebtedness of Ahold Finance. The guarantee of
the subordinated debt securities will be unsecured and subordinated in right of
payment to the prior payment in full of all senior indebtedness of Royal Ahold.
The term "senior indebtedness" means, with respect to Ahold Finance,
the principal of and any premium and interest on any indebtedness of Ahold
Finance currently outstanding or to be issued by Ahold Finance after the date of
the indenture unless by the terms of the instrument creating or evidencing such
indebtedness it is not senior in right of payment to the guaranteed subordinated
debt securities. However, "senior indebtedness" shall not include any
indebtedness of Ahold Finance that is subordinated in right of payment to any
other indebtedness of Ahold Finance.
The term "senior indebtedness" means, with respect to Royal Ahold, the
principal of and any premium and interest on any indebtedness of Royal Ahold
currently outstanding or to be issued by Royal Ahold after the date of the
indenture unless by the terms of the instrument creating or evidencing such
indebtedness it is not senior in right of payment to the guarantee. However,
"senior indebtedness" shall not include:
(1) Royal Ahold's outstanding 75/8% Subordinated Bonds 1993 due 2000;
(2) Royal Ahold's outstanding 5.875% Subordinated Bonds 1997 due
December 19, 2005;
(3) Royal Ahold's outstanding 63/4% Subordinated Bonds due August 24,
2003;
(4) Royal Ahold's outstanding 3% Convertible Subordinated Notes due
September 30, 2003; and
(5) any subordinated loans of Royal Ahold issued after the date of
the guaranteed subordinated debt indenture.
The term "indebtedness" means all indebtedness for money that is
created, assumed, incurred or guaranteed in any manner by Ahold Finance or Royal
Ahold or for which Ahold Finance or Royal Ahold, as the case may be, is
otherwise responsible or liable.
In the event of any dissolution and liquidation of Ahold Finance,
whether voluntary or involuntary, or in any bankruptcy proceedings or in other
similar proceedings affecting Ahold Finance, Ahold Finance will pay in full all
amounts due or to become due upon all senior indebtedness of Ahold Finance, or
payment thereof provided for to the satisfaction of the holders of the senior
indebtedness, before it makes any payment or distribution on account of the
redemption price or principal of, or premium, if any, or interest, if any, on
the guaranteed debt securities.
In the event Royal Ahold pays or distributes assets of Royal Ahold of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution and liquidation (ontbinding en vereffening) of Royal Ahold,
whether voluntary or involuntary, or in any bankruptcy proceedings
(faillissement), moratorium of payments (surseance van betaling) or in other
similar proceedings affecting Royal Ahold, then Royal Ahold will pay in full all
amounts due or to become due upon all senior indebtedness or will provide for
the payment thereof to the satisfaction of the holders of the senior
indebtedness, before it makes any payment or distribution, including payment of
any additional amounts, with respect to the guarantee of guaranteed subordinated
debt securities.
As a result of this subordination, in the event of (1) any dissolution
and liquidation of Ahold Finance, whether voluntary or involuntary, or any
bankruptcy proceedings or in other similar proceedings affecting Ahold Finance,
or (2) the dissolution, liquidation (ontbinding en vereffening) or bankruptcy
(faillissement) of Royal Ahold or moratorium of payments (surseance van
betaling) by Royal Ahold or any similar event, creditors of Ahold Finance or
Royal Ahold, as the case may be, who are holders of senior indebtedness of such
entity may recover more, ratably, than the holders of the guaranteed
subordinated debt securities.
DEFEASANCE
Defeasance and Discharge
Each of the indentures provides that Ahold Finance may be discharged
from any obligations in respect of the guaranteed debt securities of any series
(except for certain obligations to register the transfer or exchange of
guaranteed debt securities of such series, to replace stolen, lost or mutilated
guaranteed debt securities of such series, to maintain paying agencies and to
hold monies for payment in trust) and Royal Ahold may be discharged from any and
all obligations in respect of the guarantees related thereto. Ahold Finance and
Royal Ahold will be so discharged upon the deposit with the applicable trustee,
in trust, of money and/or U.S. government obligations (as defined in the
applicable indenture) which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of and each installment of interest on the
guaranteed debt securities of such series on the stated maturity of such
payments in accordance with the terms of such indenture and the guaranteed debt
securities of such series. This trust may only be established if, among other
things, Ahold Finance or Royal Ahold delivers to the trustee an opinion of
counsel (who may be counsel to Ahold Finance or Royal Ahold) stating that either
(1) Ahold Finance or Royal Ahold has received from, or there has been published
by, the U.S. Internal Revenue Service a ruling or (2) since the date of the
applicable indenture there has been a change in the applicable U.S. federal
income tax law, in either case to the effect that holders of the guaranteed debt
securities of such series will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such defeasance and will be subject
to U.S. federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such defeasance had not occurred.
Defeasance of Certain Covenants and Certain Events of Default
Each of the indentures provides that Ahold Finance and Royal Ahold may
omit to comply with (1) the covenants regarding limitations on sale and
leaseback transactions and limitations on liens described above and (2) Section
4.1(d) of such indenture (described in clause (4) under the captions "--Events
of Default, Waiver and Notice under the Guaranteed Senior Debt Securities" and
"--Events of Default, Waiver and Notice under the Guaranteed Subordinated Debt
Securities" above). Any omission to comply with those covenants will not
constitute an event of default under an indenture and the guaranteed debt
securities of a series issued thereunder if certain conditions are met and Ahold
Finance or Royal Ahold, among other things:
- deposits with the applicable trustee, in trust, money and/or U.S.
government obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of and
each installment of interest on the guaranteed debt securities of
such series on the stated maturity of such payments in accordance
with the terms of such indenture and the guaranteed debt
securities of such series; and
- delivers to the trustee an opinion of counsel stating that the
holders of the guaranteed debt securities of such series will not
recognize income, gain or loss for U.S. federal income tax
purposes as a result of such defeasance of certain covenants and
events of default and will be subject to U.S. federal income tax
on the same amounts and in the same manner and at the same times
as would have been the case if such deposit and defeasance had
not occurred.
Notwithstanding compliance with the foregoing requirements, the
obligations of Ahold Finance and Royal Ahold under such indenture and of Ahold
Finance under the guaranteed debt securities of such series and of Royal Ahold
under the guarantee thereof, other than with respect to the covenants referred
to above, and the events of default, other than the events of default relating
to these covenants, will remain in full force and effect.
In the event Ahold Finance or Royal Ahold exercises this option to omit
compliance with certain covenants of one of the indentures with respect to the
guaranteed debt securities of a series issued thereunder as described in the
preceding paragraph and the guaranteed debt securities of such series are
declared due and payable because of the occurrence of any event of default other
than an event of default described in clause (4) under the captions "--Events of
Default, Waiver and Notice under the Guaranteed Senior Debt Securities" or
"--Events of Default, Waiver and Notice under the Guaranteed Subordinated Debt
Securities" above, as the case may be, the amount of money and U.S. government
obligations on deposit with the trustee will be sufficient to pay amounts due on
the guaranteed debt securities of such series at the time of their stated
maturity but may not be sufficient to pay amounts due on the guaranteed debt
securities of such series at the time of the acceleration resulting from such
event of default.
MODIFICATION OF THE INDENTURES
Each indenture contains provisions permitting Ahold Finance, Royal
Ahold and the trustee thereunder, with the consent of the holders of at least a
majority in total principal amount (calculated as provided in the indentures) of
the outstanding guaranteed debt securities of all series issued thereunder
affected by such modification (all such series voting as a single class), to
modify such indenture or any supplemental indenture or the rights of the holders
of the guaranteed debt securities and guarantees issued thereunder. However,
Ahold Finance, Royal Ahold and the trustee cannot, without the consent of the
holder of each guaranteed debt security so affected:
(1) extend the fixed maturity of the guaranteed debt security;
(2) reduce the principal or premium amount thereof or reduce the rate
or extend the time of any payment of interest thereon or reduce
any additional amount payable thereon;
(3) make the principal amount thereof or any interest or premium
thereon payable in any coin or currency other than that provided
in such guaranteed debt security;
(4) reduce the portion of the principal amount of an original issue
discount guaranteed debt security (or a guaranteed debt security
that provides that an amount other than the face amount thereof
will or may be payable upon a declaration of acceleration of the
maturity thereof) due and payable upon acceleration of the
maturity thereof or the portion of the principal amount thereof
provable in any action or proceeding pursuant to Section 4.2 of
such indenture;
(5) reduce any amount payable upon redemption of such guaranteed debt
security;
(6) reduce the overdue rate thereof;
(7) impair, if such guaranteed debt security provides therefor, any
right of repayment at the option of the holder of such guaranteed
debt security;
(8) alter adversely or eliminate any right of conversion of such
guaranteed debt security; or
(9) reduce the percentage of the guaranteed debt securities the
consent of the holders of which is required for any such
modification.
Each of the indentures further provides that Ahold Finance, Royal Ahold
and the applicable trustee cannot enter into any supplemental indenture if it
would modify the terms of the guarantee of Royal Ahold relating to the
applicable guaranteed debt securities in any manner adverse to the holders of
such guaranteed debt securities. The indenture relating to guaranteed
subordinated debt securities also provides that Ahold Finance, Royal Ahold and
the applicable trustee cannot enter into any supplemental indenture if it would
modify the terms providing for subordination of the guaranteed subordinated debt
securities or the guarantee of Royal Ahold relating thereto.
Each of the indentures also permits Ahold Finance, Royal Ahold and the
trustee to amend such indenture in certain circumstances without the consent of
the holders of any debt securities issued thereunder to evidence the merger of
Royal Ahold or Ahold Finance or the replacement of the trustee and for certain
other purposes.
CONSOLIDATION, MERGER OR DISPOSITION OF ASSETS OF AHOLD FINANCE OR ROYAL AHOLD
Each of the indentures provides that Ahold Finance and Royal Ahold may
consolidate or merge with any other entity, or sell, convey or lease all or
substantially all of the property of either of them if, upon any such
consolidation or merger:
(1) the entity (if other than Ahold Finance or Royal Ahold,
respectively) formed by such consolidation or merger expressly
assumes, by supplemental indenture satisfactory in form to the
trustee under the applicable indenture, the due and punctual
payment of principal of and any interest on the guaranteed debt
securities issued pursuant to such indenture, and the due and
punctual observance of all of the covenants and conditions of
such indenture to be performed by Ahold Finance or Royal Ahold,
as applicable; and
(2) Ahold Finance or Royal Ahold, as applicable, and any successor
entity resulting from such consolidation or merger immediately
after such consolidation or merger, or sale, conveyance or lease,
is not in default in the performance of any covenant or condition
of such indenture.
CONCERNING THE TRUSTEES
Except during the continuance of an event of default, each of the
trustees will perform only those duties that are specifically set forth in the
relevant indenture. During the continuance of any event of default under an
indenture, the trustee thereunder will exercise its rights and powers under the
indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use his rights under the circumstances in the
conduct of his own affairs.
Each of the trustees may acquire and hold guaranteed debt securities
and, subject to certain conditions, otherwise deal with Ahold Finance or Royal
Ahold as if it were not a trustee under an indenture.
Royal Ahold and certain subsidiaries of Royal Ahold currently conduct
banking transactions with the trustees in the ordinary course of business.
DESCRIPTION OF WARRANTS TO SUBSCRIBE TO DEBT SECURITIES
OF ROYAL AHOLD AND AHOLD FINANCE U.S.A., INC.
The following is a summary of certain provisions of the warrants that
may be issued by Royal Ahold or Ahold Finance pursuant to one or more separate
warrant agreements, either independently or together with debt securities. This
summary does not purport to be complete and is subject to and qualified in its
entirety by reference to the forms of warrant agreements filed with the
registration statement of which this prospectus is a part. Provisions of the
forms of warrant agreements or terms defined in the forms of warrant agreements
and referred to herein are incorporated into this discussion by reference.
GENERAL
Royal Ahold may offer the following warrants pursuant to this
prospectus:
(1) warrants to subscribe for senior debt securities of Royal Ahold;
and
(2) warrants to subscribe for subordinated debt securities of Royal
Ahold.
Ahold Finance may offer the following warrants pursuant to this
prospectus:
(1) warrants to subscribe for guaranteed senior debt securities; and
(2) warrants to subscribe for guaranteed subordinated debt
securities.
See "Description of Debt Securities of Royal Ahold" and "Description of
Guaranteed Debt Securities of Ahold Finance and Guarantees of Royal Ahold."
The warrants may be issued in one or more series. Please refer to the
prospectus supplement relating to particular series of warrants for specific
terms of the warrants, including the following terms:
- the type and number of warrants;
- the debt securities for which the warrants may be exercised;
- the expiration date of the warrants;
- the period during which warrants may be exercised;
- the exercise price of the warrants;
- any mandatory or optional call provisions;
- the identity of the warrant agent;
- whether the warrants will be issued in registered form or in
bearer form; and
- any other terms of the warrants offered thereunder.
The warrants will be represented by warrant certificates. Royal Ahold
or Ahold Finance, as the case may be, will pay all stamp taxes and any other
duties to which the original issuance of the warrant certificates may be
subject.
TRANSFER AND EXCHANGE
Warrants may be transferred or exchanged pursuant to procedures
outlined in the applicable warrant agreement. No service charge will be made for
registration of transfer or exchange upon surrender of any warrant certificate
at the office of the applicable warrant agent maintained for that purpose. Royal
Ahold or Ahold Finance, as the case may be, may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of warrant
certificates.
No warrant or warrant certificate will entitle the holder thereof to
any of the rights of a holder of debt securities of Royal Ahold or Ahold
Finance, including the right to receive payments of principal or interest on
debt securities or to enforce any of the covenants in any indenture relating to
debt securities.
EXERCISE OF WARRANTS
In order to exercise warrants, the holder of the warrants will be
required to surrender to the warrant agent the related warrant certificate and
pay in full the exercise price for the debt securities to be subscribed for upon
such exercise. The exercise price must be paid in cash or by certified or
official bank check or by wire transfer to an account designated by Royal Ahold
or Ahold Finance, as applicable, for such purpose. The warrant agent then will
deliver the applicable debt securities to the holder, and will issue a new
warrant certificate for any warrants not exercised.
AMENDMENT OF WARRANT AGREEMENT
From time to time, Royal Ahold or Ahold Finance, as the case may be,
and the warrant agent under the relevant warrant agreement, may amend or
supplement such warrant agreement for certain purposes without the consent of
the holders of the warrants issued thereunder, including to cure defects or
inconsistencies or make any change that does not materially and adversely affect
the rights of any holder. Any amendment or supplement to a warrant agreement
that has a material adverse effect on the interests of the holders of the
warrants issued thereunder will require the written consent of the holders of a
majority of the outstanding warrants issued thereunder.
The written consent of each holder of the warrants affected shall be
required for any amendment that:
- increases the exercise price;
- shortens the period during which warrants may be exercised;
- if the warrants may be redeemed at the option of Royal Ahold or
Ahold Finance, reduces the price at which the warrants may be
redeemed; or
- materially and adversely affects the exercise rights of holders.
DESCRIPTION OF SHARE CAPITAL OF ROYAL AHOLD
Set forth below is a summary of material information relating to Royal
Ahold's share capital, including summaries of certain provisions of the Articles
of Association of Royal Ahold and applicable Dutch law in effect at the date
hereof. This summary does not purport to be complete and is qualified in its
entirety by reference to the full Articles of Association of Royal Ahold, an
unofficial English translation of which has been included as an exhibit to the
Registration Statement. The full text of the Articles of Association is
available, in Dutch and English, at the principal executive offices of Royal
Ahold.
SHARE CAPITAL
Under the Articles of Association of Royal Ahold, the authorized share
capital of Royal Ahold currently amounts to NLG 1,300,000,000 par value. It
consists of:
(1) 1,045,000,000 common shares, each with a par value of NLG 0.50;
(2) 650,000 cumulative preferred shares (the "preferred shares "),
each with a par value of NLG 1,000;
(3) 195,000,000 cumulative preferred financing shares (the "financing
preferred shares"), each with a par value of NLG 0.50, divided
into sixteen series, numbered FPl to FP16 inclusive, each series
consisting of 12,187,500 financing preferred shares; and
(4) 60,000,000 convertible cumulative preferred financing shares (the
"convertible preferred shares"), each with a par value of NLG
0.50, divided into six series, numbered CPD1 and CPD2 and further
numbered CPF1 to CPF4 inclusive, each series consisting of
10,000,000 convertible preferred shares.
After conversion of convertible preferred shares (see "--Convertible
Preferred Shares" below), the number of convertible preferred shares will
decrease and the number of common shares will increase by the number of
converted convertible preferred shares.
COMMON SHARES
The common shares are issued in bearer or registered form, at the
option of the shareholder. Common shares in bearer form may be exchanged for
common shares in registered form, or vice versa, at any time, upon written
request to the corporate executive board of Royal Ahold.
For each common share in bearer form a share certificate is issued.
Such numbers of common shares in bearer form as the corporate executive board
will determine may be represented by one certificate. For registered common
shares, share certificates may also be issued, and such numbers of common shares
in registered form may be represented by one certificate as the holder of such
common shares shall request the Royal Ahold corporate executive board in
writing. Share certificates which are issued for bearer shares have a dividend
sheet without dividend coupons or vouchers. The bearer CF ("Centrum voor
Fondsenadministratie") certificates for common shares are in practice held by an
approved custodian in order to allow them to be traded on the AEX-Stock
Exchange. The dividend sheets of the bearer CF certificates are required to be
held by an approved custodian. The common shares in bearer form are transferable
with the dividend sheet through the book-entry transfer system maintained by
Nederlands Centraal Instituut voor Giraal Effectenverkeer.
The names and addresses of holders of registered shares are entered in
the shareholders' registers for each class of shares which are maintained by
Royal Ahold. Such registers also include the number of shares held by each
shareholder, the class and number of their shares, the amount paid up on each
share, and whether any share certificate has been issued. The registers also
include the names and addresses of persons who possess certain ownership rights
or a pledge in respect of such shares. On request of the shareholder, pledgee or
a holder of certain ownership rights, and without charge, Royal Ahold is
required to provide an extract from the register of shareholders in respect of
its right to any registered share. Registers are available at the office of
Royal Ahold for inspection by stockholders, as well as pledgees and holders of
certain ownership rights, insofar as the voting right attached to the shares
rests in them. Any part of a register kept outside the Netherlands in compliance
with laws or stock exchange regulations in the foreign jurisdictions concerned,
however, is not available for such inspection.
Transfer of a registered share in the capital of Royal Ahold requires
an instrument of transfer and, if Royal Ahold is not a party to the transfer, a
written acknowledgment by Royal Ahold of the transfer. The acknowledgment must
be made in the instrument of transfer, or by a dated statement on the instrument
of transfer, or on a copy or extract thereof certified by a civil law notary or
the transferor to be a true copy or extract of the instrument of transfer.
Official service by an authorized Dutch person of the instrument of transfer or
of such copy or extract on Royal Ahold is considered to have the same effect as
an acknowledgment by Royal Ahold of the transfer. In addition, if a share
certificate has been issued for a registered share, the share certificate must
be surrendered to Royal Ahold. The transfer may then be acknowledged by Royal
Ahold by way of endorsement to that effect written on the share certificate or
by replacing the share certificate by a new share certificate issued in the name
of the transferee.
The holders of the common shares are entitled to one vote per share.
There are no limitations, either by the laws of the Netherlands or in the
Articles of Association, on the right of non-residents of the Netherlands or
foreign owners to hold or vote Royal Ahold's common shares. See "--General
Meetings and Voting Rights" below. The holders of common shares are entitled to
dividends in such amounts and at such times as may be declared by Royal Ahold
out of funds legally available therefor, as described under "--Dividends" below.
Cash dividends payable in Dutch guilders on common shares of Royal Ahold may be
officially transferred from the Netherlands and converted into any other
convertible currency.
Common shares may be issued pursuant to a resolution of the Royal Ahold
corporate executive board, subject to the prior approval of the supervisory
board of Royal Ahold and within the current authorized maximum of 1,045,000,000
common shares, of which 629,199,442 shares were issued and outstanding as of May
15, 1999. The current authority of the corporate executive board to resolve to
issue common shares will terminate on May 6, 2002, unless extended by the
general meeting of shareholders of Royal Ahold in accordance with the Articles
of Association, in each instance for a period not exceeding five years. If no
such extension is given, the issue of common shares will require a resolution of
the general meeting of shareholders, upon a proposal of the corporate executive
board which is subject to the prior approval of the supervisory board. For these
purposes, issues of shares include the granting of rights to subscribe for
shares (including convertible debt), such as options and warrants, but not the
issue of shares upon exercise of such rights. The common shares are subject to
certain pre-emptive rights. See "--Shareholders' Pre-emptive Rights" below.
Common shares must be fully paid on issue. All of Royal Ahold's
presently outstanding common shares are fully paid.
The principal paying agent in the Netherlands for the common shares is
ABN AMRO Bank N.V.
PREFERRED SHARES
The purpose of the preferred shares is to provide a preventive measure
against unfriendly takeover bids. On March 7, 1989, Royal Ahold and Stichting
Ahold Continuiteit ("Stichting" or, in English, "Ahold Continuity Foundation")
entered into an option agreement, which was amended and restated in April 1994
and March 1997, pursuant to which Stichting was granted an option to acquire
from Royal Ahold, from time to time in the 15 years following the date of the
original option agreement, preferred shares up to a total par value that is
equal to the total par value of all issued and outstanding shares of capital
stock of Royal Ahold. During this period Royal Ahold has the right pursuant to
the option agreement to place preferred shares with Stichting up to a total par
value that is equal to the total par value of all issued and outstanding shares
of capital stock of Royal Ahold.
The holders of the preferred shares are entitled to 2,000 votes per
share. See "--General Meetings and Voting Rights" below. Subject to limited
exceptions, each transfer of preferred shares requires the approval of the Royal
Ahold corporate executive board. Preferred shares can only be issued in
registered form. No share certificates will be issued for the preferred shares.
The preferred shares have certain anti-takeover effects. The issuance
of all authorized preferred shares will cause substantial dilution of the
effective voting power of any shareholder, including a shareholder that attempts
to acquire Royal Ahold, and could have the effect of delaying, deferring or
preventing a change in control of Royal Ahold.
Stichting is a non-membership organization with a self-appointing
managing board, organized under the law of the Netherlands. Its statutory
objectives are to enhance the continuity and the identity of Royal Ahold in case
of an unwanted take-over attempt. As of May 15, 1999, the members of the
managing board of Stichting were:
NAME PRINCIPAL OCCUPATION OR RELATION TO ROYAL AHOLD
Voting members
J.J. Slechte Former President of Shell Nederland B.V.
(Chairman)
A.M. Knulst Former Managing Director of bv Trustkantoor Gestor
P.J. van Dun Former Executive Vice President of Royal Ahold
Non-voting members
H. de Ruiter Chairman of the Supervisory Board of Royal Ahold
C.H. van der Hoeven President of the Corporate Executive Board of
Royal Ahold
Preferred shares may be issued, and rights to subscribe for preferred
shares may be granted, pursuant to a resolution of the Royal Ahold corporate
executive board, subject to the prior approval of the supervisory board. The
corporate executive board has this authority for the same period as its
authority to issue common shares and it may be extended in the same manner. If
no such extension is given, the issue of preferred shares, or the granting of
rights to subscribe for preferred shares, will require a resolution of the
general meeting of shareholders, upon a proposal of the corporate executive
board which is subject to the prior approval of the supervisory board. The
corporate executive board must, upon the issue of preferred shares (including
the granting of rights to subscribe for preferred shares) other than an issue of
preferred shares to a person or persons exercising a previously acquired right
to subscribe for such preferred shares, within four weeks after such issue call
a general meeting of shareholders of Royal Ahold to explain the reasons for the
issue, unless such explanation has previously been given at a general meeting.
The prior approval of the general meeting of shareholders of Royal
Ahold for a specific issue of preferred shares is required if, as a result of
such issue and/or as a result of previous issues of preferred shares by the
corporate executive board without the approval or other cooperation of the
general meeting of shareholders, the number of preferred shares that may be
subscribed for and/or that has been issued will result in the total nominal
value of preferred shares (issued by the corporate executive board without the
approval or other cooperation of the general meeting) exceeding 100% of the
total nominal value of the other shares outstanding before such issue. If
preferred shares have been issued pursuant to a resolution of the corporate
executive board to issue the shares, or pursuant to a resolution of the
corporate executive board to grant a right to subscribe for the shares, in each
case passed without the prior approval or other cooperation of the general
meeting, the corporate executive board is obliged to call a general meeting of
shareholders within two years after such issue and make a proposal regarding
repurchase or redemption of the issued preferred shares. If at that general
meeting no resolution regarding repurchase or redemption is passed, the
corporate executive board must, within two years after the proposal was made,
and every two years thereafter, call a general meeting of shareholders and again
make such proposal for repurchase or redemption. This obligation ceases to exist
if the preferred shares are no longer outstanding or are no longer held by a
person other than Royal Ahold.
Without prejudice to any applicable statutory provisions, the
provisions of the Articles of Association regarding the calling of, and in
certain cases the required prior approval by, a general meeting of shareholders
of Royal Ahold with respect to an issue of preferred shares will cease to apply
as soon as Royal Ahold is no longer bound by the relevant obligations under the
Listing Rules of the Amsterdam Exchanges N.V.
The holders of preferred shares are entitled to a preferred dividend.
See "--Dividends" below.
It may be stipulated that only 25% of the nominal value of the
preferred shares is required to be paid upon subscription for preferred shares
until payment in full of the par value is called by Royal Ahold. No preferred
shares are currently issued and outstanding.
Preferred shares have preferences upon the dissolution and liquidation
of Royal Ahold over the financing preferred shares, the convertible preferred
shares and the common shares as to payment of dividends, as described under
"--Dividends" and "--Liquidation Rights" below.
FINANCING PREFERRED SHARES
Financing preferred shares may be issued, and rights to subscribe for
financing preferred shares may be granted, pursuant to a resolution of the
corporate executive board, subject to the prior approval of the supervisory
board and up to a total nominal amount which, at the time of such issue or the
granting of such rights, equals 25% of the outstanding shares in the capital of
Royal Ahold, excluding preferred shares. The corporate executive board has this
authority for the same period as its authority to issue common shares and it may
be extended in the same manner. If no such extension is given, the issue of
financing preferred shares, or the granting of rights to subscribe for financing
preferred shares, will require a resolution of the general meeting of
shareholders, upon a proposal of the corporate executive board, which is subject
to the prior approval of the supervisory board. Financing preferred shares must
be fully paid up upon issue. They can only be issued in registered form. No
share certificates are issued for financing preferred shares. Subject to limited
exceptions, each transfer of financing preferred shares requires the approval of
the corporate executive board. Financing preferred shares may only be
transferred to natural persons.
As of May 15, 1999, a total of 144 million of the financing preferred
shares were issued and outstanding.
Financing preferred shares have preferences as to payment of dividends
and upon the dissolution and liquidation of Royal Ahold over the convertible
preferred shares and the common shares, as described under "--Dividends" and
"--Liquidation Rights" below. In 1997 and 1998 Royal Ahold paid NLG 18,348,000
and NLG 26,835,400, respectively, as dividends on the financing preferred
shares. Holders of financing preferred shares do not have pre-emptive rights.
Holders of financing preferred shares have voting rights as described under
"--General Meetings and Voting Rights" below.
CONVERTIBLE PREFERRED SHARES
Convertible preferred shares may be issued, and rights to subscribe for
convertible preferred shares may be granted, pursuant to a resolution of the
corporate executive board, subject to the prior approval of the supervisory
board. The corporate executive board has this authority for the same period as
its authority to issue common shares and it may be extended in the same manner.
If no such extension is given, the issue of convertible preferred shares, or the
granting of rights to subscribe for convertible preferred shares, will require a
resolution of the general meeting of shareholders, upon a proposal of the
corporate executive board, which is subject to the prior approval of the
supervisory board.
Convertible preferred shares may be issued in bearer or registered
form, at the option of the holder. For each convertible preferred share in
bearer form, a share certificate will be issued. Convertible preferred shares
must be fully paid upon issue. As of the date hereof, no convertible preferred
shares are issued and outstanding.
Conversion of convertible preferred shares into common shares may take
place:
(1) pursuant to a resolution of the corporate executive board; or
(2) at the request of a holder of convertible preferred shares, which
request must be made to the corporate executive board after which
the corporate executive board must resolve to convert.
Conversion in the two cases mentioned above can only take place if:
(1) in the case of convertible preferred shares of series CPF1, CPF2,
CPF3 or CPF4, during 20 business days in a period of 30
consecutive business days the closing price of the common shares
on the AEX-Stock Exchange is at least 25% higher than the issue
price of the first convertible preferred share of the relevant
series; or
(2) in the case of convertible preferred shares of series CPD1 or
CPD2, during 20 business days in a period of 30 consecutive
business days the closing price of the American depositary shares
on the New York Stock Exchange is at least 25% higher than the
issue price of the first convertible preferred share of the
relevant series.
If a convertible preferred share has been converted into a common
share, the holder thereof is entitled to dividends and other distributions like
any holder of common shares as of the start of the fiscal year in which the
conversion has taken place. However, if in respect of the current fiscal year
dividends have already been made payable prior to the day of conversion, only
dividends which have been made payable in cash will be paid. The holder of a
convertible preferred share which has been converted into a common share remains
entitled to the preferred dividend in respect of the fiscal year preceding the
fiscal year in which the conversion has taken place.
Convertible preferred shares have preferences as to payment of
dividends and upon the dissolution and liquidation of Royal Ahold over the
common shares as described under "--Dividends" and "--Liquidation Rights" below.
Holders of convertible preferred shares have pre-emptive rights as described
under "--Shareholders' Pre-emptive Rights" below. Holders of convertible
preferred shares have voting rights as described under "--General Meetings and
Voting Rights" below.
SHAREHOLDERS' PRE-EMPTIVE RIGHTS
Holders of preferred shares and holders of financing preferred shares
do not have pre-emptive rights with respect to issues of common shares or
convertible preferred shares.
Holders of common shares and convertible preferred shares have pro rata
pre-emptive rights to subscribe for new issues of common shares and convertible
preferred shares in proportion to their holdings, except for:
(1) issues of shares to employees of Royal Ahold or employees of
group companies; and
(2) issues of shares in return for non-cash consideration.
For these purposes, issues of shares include the granting of rights to
subscribe for shares, such as options and warrants, but not the issue of shares
upon exercise of such rights.
Pre-emptive rights with respect to the common shares and convertible
preferred shares may be restricted or excluded by a resolution of the corporate
executive board subject to the approval of the supervisory board. The corporate
executive board has been delegated this authority with respect to the common
shares by the general meeting of shareholders, and with respect to the
convertible preferred shares in the Articles of Association, for the same
periods as its authority to issue such shares, and this authority may be
extended in the same manner. If no such extension is given, the restriction or
exclusion of pre-emptive rights will require a resolution of the general meeting
of shareholders upon a proposal by the corporate executive board, which is
subject to the approval of the supervisory board. The adoption by the general
meeting of shareholders of a resolution restricting or excluding pre-emptive
rights with respect to common shares and convertible preferred shares will
require a vote of (1) a majority of the votes cast if half or more of the issued
and outstanding share capital is present or represented at the meeting or (2) at
least two-thirds of the votes cast if less than half of the issued and
outstanding capital is present or represented at the meeting.
ACQUISITION BY ROYAL AHOLD OF ITS OWN SHARES
Royal Ahold may acquire any class of its shares in its capital, subject
to certain provisions of Dutch law and the Articles of Association, if:
(1) shareholders' equity less the payment required to make the
acquisition does not fall below the sum of paid-up capital and
any reserves required by Dutch law or the Articles of
Association; and
(2) Royal Ahold and its subsidiaries would thereafter not hold shares
with an aggregate nominal value exceeding one-tenth of Royal
Ahold's issued share capital.
Any shares held by Royal Ahold in its own capital may not be voted.
An acquisition by Royal Ahold of any class of shares in its capital
must be approved by resolution of the corporate executive board, subject to the
approval of the supervisory board. Acquisitions by Royal Ahold of shares in its
own capital may only take place if the general meeting of shareholders of Royal
Ahold has granted to the corporate executive board the authority to effect such
acquisitions. Such authority may apply for a maximum period of 18 months and
must specify the number of shares that may be acquired, the manner in which
shares may be acquired and the price limits within which shares may be acquired.
This authority was renewed by the annual general meetings of shareholders held
in May 1997 and May 1998. In May 1999, the annual general meeting of
shareholders voted to extend the authority to acquire shares through November
10, 2000, subject to the approval of the supervisory board. As of the date of
this prospectus, Royal Ahold has not acquired any shares under this
authorization. Under this authorization, the maximum number of shares that can
be acquired cannot exceed the maximum amount authorized by law (currently 10%)
of the issued share capital at the time of acquisition. No such authority is
required for the acquisition by Royal Ahold of shares in its own capital for the
purpose of transferring such shares to employees of Royal Ahold or employees of
a group company pursuant to an employee stock option plan and as long as such
shares are quoted on the official price list of a stock exchange.
CAPITAL REDUCTION
Upon a proposal of the corporate executive board, subject to approval
of the supervisory board, the general meeting of shareholders of Royal Ahold may
resolve to reduce the issued and outstanding share capital by canceling:
(1) shares which Royal Ahold holds in its own capital or shares the
depositary receipts for which are held by Royal Ahold;
(2) all the issued preferred shares against repayment of the amount
paid on such shares and upon waiver of the obligation to make
payment on such shares to the extent they have not been fully
paid up; and
(3) all the issued shares of one or more series of financing
preferred shares against repayment of the amount paid up on such
shares.
The resolution of the general meeting of shareholders will require the
vote of (1) a majority of the votes cast if half or more of the issued and
outstanding share capital is present or represented at the meeting or (2) at
least two-thirds of the votes cast if less than half of the issued and
outstanding share capital is present or represented at the meeting.
The issued share capital may also be reduced, in the manner provided
above, by reduction of the nominal value of any class of shares of Royal Ahold.
If reduction in the issued and outstanding capital entails repayment in
part, the resolution for that purpose may provide that such repayment will be
made in cash or in the form of rights as against Royal Ahold or participations
in any division of Royal Ahold.
DIVIDENDS
Subject to certain exceptions, dividends may only be paid out of
profits as shown in the annual financial statements of Royal Ahold as prepared
by the corporate executive board, adopted by the supervisory board and approved
by the general meeting of shareholders. Distributions may not be made if the
distribution would reduce shareholders' equity below the sum of the paid-up part
of the capital and reserves which must be maintained by Dutch law. No dividends
may be paid to Royal Ahold on shares which Royal Ahold holds in its own capital
or of which the depositary receipts are held by Royal Ahold, unless such shares
or depositary receipts are encumbered with certain rights of ownership in other
parties or a pledge.
Out of profits, dividends must first be paid on the preferred shares at
a percentage of the amount called-up and paid-up on such shares which is based
on the promissory note discount rate (voorschotrente) established by the
Netherlands Central Bank for the relevant financial year. The minimum preferred
share dividend percentage at any time is 5.75%. To the extent that profits are
not sufficient to pay the preferred share dividend in full, the deficit shall be
paid out of the reserves, subject to the general restrictions on distributions
set out above. To the extent that the preferred share dividend cannot be paid
out of the reserves, the profits earned in subsequent years shall be applied
first to making to the holders of preferred shares such payment as will fully
eliminate the deficit before distributions to holders of other classes of shares
are made. If the profit earned in any fiscal year has been determined and in
that fiscal year preferred shares have been cancelled against repayment, the
persons who were the holders of such preferred shares shall have the right to
the payment of a dividend equal to the amount of the dividend that such persons
would otherwise have been entitled to if, on the date of the determination of
the profit, such persons had still been the holders of such preferred shares,
calculated on the basis of the period during which in the fiscal year such
persons were holders of said preferred shares.
After payment of the preferred share dividend, if possible, dividends
must then be paid on each financing preferred share at a percentage of the
amount paid-in on such share plus the premium paid on the first financing
preferred share which was issued of the series to which the particular share
belongs. The financing preferred share dividend percentage is based on the
average effective yield on the Dutch state loans with a (remaining) life of nine
to ten years. To the extent that profits are not sufficient to pay in full the
financing preferred share dividend, the deficit shall be paid out of the
reserves and thereafter out of the profits earned in subsequent years, as
described above for the preferred share dividend, before further distributions
are made. If the profit earned in any fiscal year has been determined and in
that fiscal year financing preferred shares have been cancelled against
repayment, the persons who were the holders of such financing preferred shares
shall have the right to the payment of a dividend equal to the amount of the
dividend that such persons would otherwise have been entitled to if, on the date
of the determination of the profit, such persons had still been the holders of
such financing preferred shares, calculated on the basis of the period during
which in the fiscal year such persons were holders of said financing preferred
shares.
After payment of the financing preferred share dividend, if possible,
dividends must then be paid on each convertible preferred share at a percentage
of the amount paid-up on such share plus the premium paid on the first
convertible preferred share that was issued of the series to which the
particular share belongs. Where any payment of such shares has been made in a
foreign currency, the percentage shall be calculated on the amount in such
foreign currency. The convertible preferred share dividend with respect to the
series CPF1 to CPF4 inclusive is calculated according to the same formula as
applies to the calculation of the financing preferred share dividend percentage.
The convertible preferred share dividend percentage in respect of the series
CPD1 and CPD2 is based on the average effective yield on the most recently
issued U.S. federal government bond issuance in U.S. dollars with a maturity of
30 years. To the extent that profits are not sufficient to pay in full the
convertible preferred share dividend, the deficit shall be paid out of the
reserves and thereafter out of the profits earned in subsequent years as
described above for the preferred share dividend, before further distributions
are made.
Out of the profits remaining after the payment of the convertible
preferred share dividend such amounts shall be reserved as the supervisory
board, in consultation with the corporate executive board, may deem necessary.
The profit then remaining is at the disposal of the general meeting of
shareholders, which may resolve to transfer it to reserves or to distribute it
among the holders of common shares. On a proposal of the corporate executive
board made with the approval of the supervisory board, the general meeting may
(1) resolve to distribute to the holders of common shares a dividend in the form
of common shares or (2) resolve to make distributions to the holders of common
shares out of one or more reserves that Royal Ahold is not prohibited from
distributing by law.
Subject to the prior approval of the supervisory board, the corporate
executive board may resolve to make interim distributions to shareholders or to
holders of shares of a particular class or series if an interim statement of
assets and liabilities shows that such distribution is permitted.
Dividends are payable no later than 14 days after the date declared,
unless the body declaring the dividend shall determine a different date.
Dividends that have not been claimed within five years and one month after the
date when they became payable will be forfeited to Royal Ahold and will be added
to the general reserve.
GENERAL MEETINGS AND VOTING RIGHTS
A general meeting of shareholders must be held once a year, no later
than June, to approve the annual accounts and attend to other matters. General
meetings of shareholders may be convened by the corporate executive board, the
supervisory board and, in certain circumstances, the holders of at least 10% of
the total outstanding share capital of Royal Ahold. Notice of the general
meeting will be given by the corporate executive board, the supervisory board or
the holders of at least 10% of the total outstanding share capital of Royal
Ahold, as the case may be, at least 15 days prior to the meeting and will be
published in at least one nationally distributed daily newspaper and the
Official Price List (Officiele Prijscourant) of the Amsterdam Exchanges. Holders
of registered shares will also be notified by mail. There are no quorum
requirements applicable to general meetings.
Shareholders (and holders of non-voting depositary receipts that may be
issued for shares in the Netherlands) are only entitled to attend meetings of
shareholders and take part in the deliberations, and those who have voting
rights may only vote at meetings of shareholders, if they have signed the
attendance list in advance and, in addition, insofar as their rights relate to
shares in bearer form or depositary receipts in bearer form, if they have
deposited their share certificates or depositary receipt certificates at the
office of Royal Ahold prior to the meeting. Shareholders (and holders of
depositary receipts) may be represented by written proxy. If the proxy relates
to share certificates or depositary receipts issued in bearer form, the proxy
must be deposited at the office of Royal Ahold prior to the meeting
simultaneously with the deposit of the share certificates or depositary receipts
to which the proxy relates. Furthermore, if the proxy relates to registered
certificates or depositary receipts, the proxy must be deposited at the office
of Royal Ahold prior to the meeting.
Each share in the capital of Royal Ahold is entitled to one vote for
each NLG 0.50 par value represented thereby. Subject to certain exceptions
provided for by law or the Articles of Association, resolutions are passed by an
absolute majority of the votes cast. A proposal to alter the Articles of
Association whereby any change would be made in the rights that vest in the
holders of shares of a particular class requires the prior approval of a meeting
of holders of shares of that particular class. Among other types of resolutions,
a resolution of the general meeting of shareholders to amend the Articles of
Association or to wind up Royal Ahold may only be adopted upon a proposal of the
corporate executive board that has been approved by the supervisory board.
Meetings of holders of shares of a particular class shall be held
whenever such a meeting is required by law or any provision of the Articles of
Association. These meetings may be called by the corporate executive board, the
supervisory board or one or more shareholders or holders of depositary receipts
who jointly represent at least one-tenth of the issued and outstanding shares of
the class concerned. The provisions of the Articles of Association relating to
the convening of meetings apply mutatis mutandis to meetings of holders of
preferred shares, convertible preferred shares and financing preferred shares,
except that meetings of holders of preferred shares or financing preferred
shares are only convened by sending letters, whether or not registered, to the
holders of such shares.
No votes may be cast in respect of shares held by Royal Ahold or any of
its subsidiaries nor in respect of shares the depositary receipts for which are
held by Royal Ahold or by any of its subsidiaries. However, holders of certain
ownership rights and pledgees of shares which belong to Royal Ahold or its
subsidiaries will not be excluded from the right to vote if such grant of
certain ownership rights or pledge was created before the shares concerned were
held by Royal Ahold or a subsidiary of Royal Ahold.
LIQUIDATION RIGHTS
In the event of the dissolution and liquidation of Royal Ahold, the
assets remaining after payment of all debts will be distributed in the following
order:
(1) to the holders of preferred shares;
(2) to the holders of financing preferred shares; and
(3) to the holders of convertible preferred shares.
If any assets remain, the holders of common shares shall be paid, if
possible, the par value amount of their common shares plus the pro rata part of
the share premium reserve to which the holders of common shares are entitled.
DESCRIPTION OF AMERICAN DEPOSITARY RECEIPTS
RELATING TO SHARES OF ROYAL AHOLD
The following is a summary of certain provisions of the share deposit
agreement, dated as of September 30, 1998, entered into by Royal Ahold, The Bank
of New York, as depositary (the "share depositary"), and the registered holders
of American depositary receipts (the "owners") and the owners of beneficial
interests in American depositary receipts (the "beneficial owners"), pursuant to
which the American depositary receipts (the "ADRs") are to be issued.
This summary does not purport to be complete and is subject to and
qualified in its entirety by reference to the share deposit agreement, including
the form of ADRs.
Terms used herein and not otherwise defined have the meanings set forth
in the share deposit agreement. Copies of the share deposit agreement and the
Articles of Association of Royal Ahold will be available for inspection at (1)
the corporate trust office of the share depositary, currently located at 101
Barclay Street, New York, New York 10286 (the "corporate trust office"), and (2)
the Amsterdam office of Mees Pierson N.V., as custodian, currently located at
Herengracht 214, P.O. Box 243, 1000 AE Amsterdam, the Netherlands. The share
depositary's principal executive office is located at One Wall Street, New York,
New York 10286.
AMERICAN DEPOSITARY RECEIPTS
The share depositary may issue ADRs evidencing American depositary
shares ("ADSs") pursuant to the share deposit agreement. Each ADS will represent
one common share ("deposited securities"). The share depositary and Royal Ahold
will treat only persons in whose names ADRs are registered on the books of the
share depositary as owners of the ADRs.
DEPOSIT, TRANSFER AND WITHDRAWAL
Upon delivery to the custodian of common shares (or evidence of rights
to receive common shares), and the payment of the fees, charges and taxes
provided in the share deposit agreement, the share depositary will execute and
deliver an ADR at its corporate trust office to the person entitled thereto.
Each ADR will be registered in the name of the person entitled thereto and will
evidence any authorized number of ADSs requested by such person.
The owner of an ADR will be entitled to delivery of the underlying
deposited securities. Prior to the delivery of the underlying deposited
securities, the owner of the ADR must, subject to the terms and conditions of
the share deposit agreement:
- surrender the ADR at the corporate trust office of the share
depositary; and
- pay the fees of the share depositary for the surrender of
receipts, governmental charges and taxes provided in the share
deposit agreement.
The forwarding of share certificates, other securities, property, cash
and other documents of title will be at the risk and expense of the owner.
Subject to the terms and conditions of the share deposit agreement and
any limitations established by the share depositary, the share depositary may
deliver ADRs prior to the receipt of shares or deliver shares prior to receipt
of ADRs (a "pre-release") and deliver shares upon the receipt and cancellation
of ADRs which have been pre-released, whether or not such cancellation is prior
to the termination of such pre-release or the share depositary knows that such
ADR has been pre-released. The share depositary may receive ADRs instead of
shares in satisfaction of a pre-release. Each pre-release must be:
(1) preceded or accompanied by a written representation from the
person to whom the ADRs or shares are to be delivered that such
person or its customer:
(a) owns the shares or ADRs to be remitted;
(b) assigns all beneficial right, title and interest in such
shares or ADRs, as the case may be, to the share
depositary and for the benefit of the owners; and
(c) will not take any action with respect to such shares or
ADRs, as the case may be, that is inconsistent with the
transfer of beneficial ownership;
(2) at all times fully collateralized with cash or such other
collateral as the share depositary deems appropriate;
(3) terminable by the share depositary on not more than five business
days' notice; and
(4) subject to further indemnities and credit regulations as the
share depositary deems appropriate.
The ADRs are transferable on the books of the share depositary.
However, the share depositary may close the transfer books at any time it
considers such closing as useful to the performance of its duties or at the
written request of Royal Ahold.
DIVIDENDS, OTHER DISTRIBUTIONS AND RIGHTS
Subject to any restrictions imposed by Dutch law, regulations or
applicable permits, the share depositary will convert all cash dividends and
other cash distributions denominated in a currency other than dollars (a
"foreign currency") that it receives in respect of the deposited securities into
U.S. dollars, to the extent that in its judgment it can do so on a reasonable
basis and can transfer the resulting U.S. dollars to the United States. The
share depositary will distribute, as promptly as practicable, the resulting
dollar amount (net of expenses incurred by the share depositary in converting
such foreign currency) to the owners entitled to the distribution. The
distribution may be made upon an averaged or other practicable basis without
regard to any distinctions among owners on account of exchange restrictions or
the date of delivery of any ADR or otherwise. The amount distributed to the
owners of ADRs will be reduced by any amount of taxes to be withheld by Royal
Ahold or the share depositary. See "--Liability of Owner for Taxes" below.
If any of the following events occur, the share depositary may either
distribute the foreign currency received by the share depositary or the
custodian to the owners entitled to receive the distribution, or in its
discretion may hold such foreign currency uninvested and without liability for
interest thereon for the respective accounts of the owners entitled to receive
the distribution:
(1) the share depositary determines that in its judgment any foreign
currency received by it or the custodian cannot be converted on a
reasonable basis into dollars transferable to the United States;
(2) any approval or license of any government or agency thereof that
is required for such conversion is denied or in the opinion of
the share depositary is not obtainable; or
(3) any such approval or license is not obtained within a reasonable
period as determined by the share depositary,
If any conversion of foreign currency cannot be effected for
distribution to some of the owners entitled to receive the distribution, the
share depositary may in its discretion make the conversion and distribution in
U.S. dollars to the extent permissible to the owners entitled to receive the
distribution. The share depositary may distribute the balance of the foreign
currency received by the share depositary to the owners entitled to receive the
distribution, or hold such balance uninvested and without liability for interest
thereon for the respective accounts of the owners entitled thereto.
If Royal Ahold declares a dividend in common shares, or a free
distribution of common shares, the share depositary may, and will if Royal Ahold
so requests, distribute to the owners of outstanding ADRs entitled thereto
additional ADRs evidencing an aggregate number of ADSs representing the amount
of common shares received as such dividend or free distribution. The
distribution of ADRs will be subject to the terms and conditions of the share
deposit agreement with respect to the deposit of common shares and the issuance
of ADSs including the withholding of any tax or other governmental charge and
the payment of fees of the share depositary.
The share depositary may withhold any distribution of ADRs if it has
not received satisfactory assurances from Royal Ahold that such distribution
does not require registration under the Securities Act of 1933 (the "Securities
Act"), or is exempt from registration under the provisions of the Securities
Act.
Instead of delivering ADRs for fractional ADSs in the event of any such
dividend or free distribution, the share depositary will sell the amount of
common shares represented by the aggregate of the fractions and distribute the
net proceeds in accordance with the share deposit agreement. If the share
depositary does not distribute additional ADRs, each ADS will also represent the
additional common shares distributed by Royal Ahold.
If Royal Ahold offers to the holders of any deposited securities any
rights to subscribe for additional common shares or any other rights, the share
depositary will determine the procedure to be followed in making such rights
available to any owners of ADRs or in disposing of such rights for the benefit
of any owners and making the net proceeds available in dollars to such owners.
If by the terms of the rights offering or for any other reason the share
depositary may not either make such rights available to any owners or dispose of
such rights and make the net proceeds available to such owners, then the share
depositary will allow the rights to lapse.
If the share depositary determines that it is lawful and feasible to
make such rights available to all owners or to certain owners but not to other
owners, the share depositary may distribute the rights to those owners to whom
it determines it is lawful and feasible to do so, in such form as it deems
appropriate. If the share depositary determines that it is not lawful and
feasible to make such rights available to certain owners, it may sell the rights
at a public or private sale, and allocate the net proceeds of the sale for the
account of such owners otherwise entitled to such rights. This allocation may be
made upon an averaged or other practical basis without regard to any
distinctions among such owners because of exchange restrictions or the date of
delivery of any ADRs or otherwise.
In circumstances in which rights would not otherwise be distributed, if
an owner of ADRs requests the distribution of warrants or other instruments in
order to exercise the rights allocable to such owner's ADSs, the share
depositary will make such rights available to the owner upon written notice from
Royal Ahold to the share depositary that:
(1) Royal Ahold has elected in its sole discretion to permit such
rights to be exercised; and
(2) the owner has executed such documents as Royal Ahold has
determined in its sole discretion are reasonably required under
applicable law.
The share depositary will, on behalf of any owner, exercise such rights and
purchase common shares, and Royal Ahold will cause the common shares so
purchased to be delivered to the share depositary on behalf of such owner, if:
- the owner gives instructions pursuant to such warrants or other
instruments to the share depositary to exercise such rights;
- the owner pays to the share depositary the purchase price of the
common shares to be received upon exercise of the rights; and
- the owner pays the fees of the share depositary as set forth in
such warrants or other instruments.
As agent for such owner, the share depositary will cause the common
shares so purchased to be deposited and will execute and deliver ADRs to such
owner pursuant to the share deposit agreement.
The share depositary will not offer rights to owners unless both the
rights and the securities to which such rights relate are either exempt from
registration under the Securities Act with respect to a distribution to all
owners or are registered under the provisions of the Securities Act. However,
Royal Ahold is not obligated to file a registration statement with respect to
such rights or underlying securities or to make efforts to have such a
registration statement declared effective. If an owner of ADRs requests the
distribution of warrants or other instruments, even though distribution has not
been registered under the Securities Act, the share depositary will not make
such distribution unless it has received an opinion from recognized counsel in
the United States for Royal Ahold stating that such distribution to such owner
is exempt from registration.
Neither Royal Ahold nor the share depositary will be responsible for
any failure to determine that it may be lawful or feasible to make any rights
available to owners in general or any owner in particular.
Whenever the share depositary receives any distribution other than
cash, common shares or rights in respect of the deposited securities, the share
depositary will distribute the securities or properties it receives to the
owners entitled to the distribution, after deduction or upon payment of any fees
and expenses of the share depositary or any taxes or other governmental charges.
If, however, (1) in the opinion of the share depositary the distribution cannot
be made proportionately among the owners entitled to the distribution, or (2)
for any other reason the share depositary determines that the distribution is
not feasible, the share depositary may adopt such method as it may deem
equitable and practicable for making such distribution, including the public or
private sale of any of the securities or property received, and distribution by
the share depositary of the proceeds of any such sale (net of the fees and
expenses of the share depositary) to the owners entitled to the distribution as
in the case of a distribution received in cash.
If the share depositary determines that any distribution of property is
subject to any taxes or other governmental charges which the share depositary or
the custodian is obligated to withhold, the share depositary may, by public or
private sale, dispose of all or a portion of the property in such amounts and in
such manner as the share depositary deems necessary and practicable to pay such
taxes or charges. The share depositary will distribute the proceeds of any such
sale after deduction of such taxes or charges to the owners entitled thereto.
Where, by the terms of a distribution or offering in accordance with
the share deposit agreement, or for any other reason, such distribution or
offering may not be made available to owners, and the share depositary may not
dispose of such distribution or offering on behalf of such owners and make the
net proceeds available to such owners, then the share depositary will not make
such distribution or offering, and will allow the rights, if applicable, to
lapse.
Upon any change in nominal or par value, split-up, consolidation or any
other reclassification of deposited securities, or upon any recapitalization,
reorganization, merger or consolidation or sale of assets affecting Royal Ahold
or to which it is a party, any securities that are received by the share
depositary or custodian in exchange for, in conversion of, or in respect of
deposited securities will be treated as new deposited securities under the share
deposit agreement and the ADSs will thereafter represent, in addition to the
existing deposited securities, the right to receive the new deposited securities
so received in exchange or conversion, or the share depositary may, with the
approval of Royal Ahold, execute and deliver additional ADRs as in the case of a
distribution in common shares, or call for the surrender of outstanding ADRs to
be exchanged for new ADRs specifically describing such new deposited securities.
RECORD DATES
Whenever (1) any cash dividend or other cash distribution becomes
payable, (2) any distribution other than cash is made, (3) rights are issued
with respect to the deposited securities, (4) for any reason the share
depositary causes a change in the number of common shares that are represented
by each ADS, (5) the share depositary receives notice of any meeting of holders
of common shares or other deposited securities, or (6) the share depositary
finds it necessary or convenient, the share depositary will fix a record date
(as close as practicable to the record date, if any, fixed by Royal Ahold in
respect of such matter):
(1) for the determination of the owners who will be:
(a) entitled to receive such dividend, distribution or rights,
or the net proceeds of the sale thereof;
(b) entitled to give instructions for the exercise of voting
rights at any such meeting; or
(c) obligated to pay any charges as described in clause (8)
under "Charges of Share Depositary" below; or
(2) on or after which each ADS will represent the changed number of
common shares.
VOTING OF DEPOSITED SECURITIES
Upon receipt of notice of any meeting or solicitation of consents or
proxies of holders of common shares or other deposited securities, if requested
in writing by Royal Ahold, the share depositary will, as soon as practicable
thereafter, mail to all owners a notice containing:
(1) the information included in the notice the share depositary
received from Royal Ahold;
(2) a statement that the owners as of the close of business on a
specified record date will be entitled to instruct the share
depositary as to the exercise of any voting rights represented by
their ADSs; and
(3) a statement as to the manner in which such instructions may be
given.
Upon the written request of an owner, the share depositary will
endeavor, insofar as practicable, to vote or cause to be voted the amount of
common shares or other deposited securities represented by the ADRs in
accordance with the instructions set forth in the request. The share depositary
will not vote shares or other deposited securities other than in accordance with
such instructions. If the share depositary does not receive instructions from
any owner on or before the date established by the share depositary for such
purpose, the share depositary will deem the owner to have instructed the share
depositary to give a discretionary proxy to a person designated by Royal Ahold
for such deposited securities. The share depositary will then give a
discretionary proxy to a person designated by Royal Ahold to vote such deposited
securities. No such instruction, however, will be deemed given and no such
discretionary proxy will be given with respect to any matter as to which Royal
Ahold informs the share depositary that (1) Royal Ahold does not wish such proxy
given, (2) substantial opposition exists or (3) such matter materially and
adversely affects the rights of holders of common shares. There can be no
assurance that the owners will receive the notice described in this paragraph
sufficiently prior to the date established by the share depositary for the
receipt of instructions to ensure that the share depositary will in fact receive
such instructions on or before such date.
REPORTS AND OTHER COMMUNICATIONS
The share depositary will make available for inspection by owners at
its corporate trust office any reports and communications, including any proxy
soliciting material, received from Royal Ahold, that are (1) received by the
share depositary or the custodian or the nominee of either as the holder of the
deposited securities and (2) made generally available to the holders of such
deposited securities by Royal Ahold. The share depositary will also send to the
owners copies of these reports when furnished by Royal Ahold pursuant to the
share deposit agreement. Any such reports and communications furnished to the
share depositary by Royal Ahold will be furnished in English if required by the
SEC.
AMENDMENT AND TERMINATION OF THE SHARE DEPOSIT AGREEMENT
Royal Ahold and the share depositary may amend the form of ADRs and the
share deposit agreement in any respect without the consent of the owners or
beneficial owners of ADRs. However, any amendment that imposes or increases any
fees or charges (other than taxes and other governmental charges, registration
fees, cable, telex or facsimile transmission costs, delivery costs or other such
expenses), or which otherwise prejudices any substantial existing right of
owners, will not take effect with respect to outstanding ADRs until the
expiration of 30 calendar days after notice of the amendment has been given to
the owners of outstanding ADRs. Every owner at the time any amendment becomes
effective will be considered, by continuing to hold such ADR, to consent and
agree to such amendment and to be bound by the share deposit agreement as
amended. No amendment may impair the right of the owner of any ADR to surrender
such ADR and receive the deposited securities, except to comply with applicable
law.
The share depositary may at any time at the direction of Royal Ahold
terminate the share deposit agreement by mailing notice of termination to the
owners of all outstanding ADRs at least 30 calendar days prior to the date fixed
in such notice for termination. The share depositary also may terminate the
share deposit agreement by mailing notice of termination to Royal Ahold and the
owners of all ADRs then outstanding if the share depositary has delivered to
Royal Ahold a written notice of its election to resign and a successor
depositary has not been appointed and accepted its appointment in accordance
with the terms of the share deposit agreement within 90 days after delivery of
the notice.
If any ADRs remain outstanding after the date of termination of the
share deposit agreement, the share depositary:
(1) will discontinue the registration of transfers of ADRs;
(2) will suspend the distribution of dividends to the owners thereof;
and
(3) will not give any further notices or perform any further acts
under the share deposit agreement, except for the collection of
dividends and other distributions pertaining to the deposited
securities, the sale of rights and other property as provided in
the share deposit agreement and the delivery of deposited
securities, together with any dividends or other distributions
received with respect thereto and the net proceeds of the sale of
any rights or other property, in exchange for ADRs surrendered to
the share depositary (after deducting the fees of the share
depositary for the surrender of an ADR and other expenses set
forth in the share deposit agreement and any applicable taxes or
governmental charges).
At any time after one year from the date of termination, the share
depositary may sell any remaining deposited securities. The share depositary may
hold the net proceeds of such sale, together with any other cash, unsegregated
and without liability for interest, for the pro rata benefit of the owners that
have not surrendered their ADRs. Any such owners will become general creditors
of the share depositary with respect to such net proceeds. After making such
sale, the share depositary will be discharged from all obligations under the
share deposit agreement, except to account for net proceeds and other cash
(after deducting, in each case, the fee of the share depositary for the
surrender of ADRs and other expenses set forth in the share deposit agreement
and any applicable taxes or other governmental charges).
Upon the termination of the share deposit agreement, Royal Ahold will
be discharged from all obligations under the share deposit agreement except for
certain obligations to the share depositary, as set forth in the share deposit
agreement.
CHARGES OF SHARE DEPOSITARY
The share depositary will charge any party depositing or withdrawing
common shares or any party surrendering ADRs or to whom ADRs are issued, where
applicable:
(1) stock transfer or other taxes and other governmental charges;
(2) any transfer or registration fees as may from time to time be in
effect for the registration of transfers of common shares and
applicable to deposits or withdrawals;
(3) any cable, telex and facsimile transmission expenses as are
provided in the share deposit agreement to be at the expense of
persons depositing common shares or owners;
(4) any expenses incurred by the share depositary in the conversion
of foreign currency pursuant to the share deposit agreement;
(5) a fee not in excess of $5.00 per 100 ADS (or portion thereof) for
the issuance and surrender of ADRs pursuant to the share deposit
agreement (subject to the rules of any stock exchange on which
the ADSs may be listed for trading);
(6) a fee not in excess of $.02 per ADS (or portion thereof) for any
cash distribution made pursuant to the share deposit agreement;
(7) a fee for the distribution of securities pursuant to the share
deposit agreement; and
(8) any other charge payable by the share depositary, any of the
share depositary's agents, including the custodian, in connection
with the servicing of common shares or other deposited
securities.
The share depositary, pursuant to the share deposit agreement, may own
and deal in any class of securities of Royal Ahold and its affiliates and in
ADRs.
LIABILITY OF OWNER FOR TAXES
If any tax or other governmental charge becomes payable by the
custodian or the share depositary with respect to any ADR or any deposited
securities, the tax or other governmental charge will be payable by the owner or
beneficial owner of the ADR to the share depositary. The share depositary may
refuse to make any transfer of the ADR or any withdrawal of the deposited
securities underlying the ADR until payment is made, and may withhold any
dividends or other distributions, or may sell any part of the deposited
securities underlying the ADR and may apply the dividends or other distributions
or the proceeds of the sale to pay the tax or other governmental charge. The
owner or beneficial owner of the ADR will remain liable for any deficiency.
CERTAIN OTHER PROVISIONS
Neither the share depositary nor Royal Ahold nor any of their
respective directors, employees, agents or affiliates will be liable to any
owner or beneficial owner of any ADR if the share depositary or Royal Ahold or
any of their respective directors, employees, agents, or affiliates shall be
prevented, delayed or forbidden from, or be subject to any civil or criminal
penalty on account of, doing or performing any act or thing which by the terms
of the share deposit agreement or the deposited securities it is provided will
be done or performed by reason of:
(1) any provision of any present or future law or regulation of the
United States, or any other country, or of any other governmental
or regulatory authority or stock exchange or inter-dealer
quotation system;
(2) any present or future provision of the Articles of Association of
Royal Ahold;
(3) any provision of any securities issued or distributed by Royal
Ahold or any offering or distribution thereof; or
(4) any act of God or war or other circumstances beyond its control.
Neither the share depositary nor Royal Ahold nor any of their
respective directors, officers, employees or agents or affiliates will incur any
liability to any owner or beneficial owner of any ADR by reason of any exercise
of, or failure to exercise, any discretion provided for under the share deposit
agreement.
Royal Ahold and the share depositary and their agents assume no
obligation and will not be subject to any liability under the share deposit
agreement to owners or beneficial owners of ADRs, except that they agree to
perform their respective obligations specifically set forth under the share
deposit agreement without negligence or bad faith.
Neither the share depositary nor Royal Ahold nor any of their agents
will be under any obligation to appear in, prosecute or defend any action, suit
or other proceeding in respect of any deposited securities or in respect of the
ADRs, which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense and liability will be furnished
as often as may be required. The custodian is responsible solely to the share
depositary, and it will not be under any obligation with respect to these
proceedings.
The share depositary, Royal Ahold and their agents will not be liable
for any action or nonaction by any of them in reliance upon the advice of or
information from legal counsel, accountants, any person presenting common shares
for deposit, any owner or any other person believed by any of them in good faith
to be competent to give such advice or information. Each of the share
depositary, Royal Ahold and their agents may rely and will be protected in
acting upon any written notice, request, direction or other document believed by
it to be genuine and to have been signed or presented by the proper party or
parties.
The share depositary will not be liable for any acts or omissions made
by a successor depositary.
The share depositary will not be responsible for any failure to carry
out any instructions to vote any of the deposited securities, or for the manner
in which any such vote is cast or the effect of any such vote, provided that any
such action or nonaction is in good faith.
No disclaimer of liability under the Securities Act is intended by any
provision of the share deposit agreement.
The share depositary may refuse to deliver ADRs, to register the
transfer of any ADR or to make any distribution on, or related to, common shares
until it has received such proof of citizenship or residence, exchange control
approval or other information as it may consider necessary or proper.
The delivery of ADRs against deposit of common shares may be suspended,
or the transfer of ADRs may be refused, or the registration of transfer of
outstanding ADRs may be suspended, during any period when the transfer books of
the share depositary are closed. Such delivery or transfer may also be refused,
or such registration or transfer may also be suspended, if any such action is
considered necessary or advisable by the share depositary or Royal Ahold because
of any requirement of law or of any government or governmental body or
commission, or under any provision of the share deposit agreement, or for any
other reason, subject to the following sentence. Notwithstanding anything to the
contrary in the share deposit agreement, the surrender of outstanding ADRs and
withdrawal of deposited securities may not be suspended, subject only to:
(1) temporary delays caused by closing the transfer books of the
share depositary or Royal Ahold or the deposit of common shares
in connection with voting at a shareholders' meeting or the
payment of dividends;
(2) the payment of fees, taxes and similar charges; and
(3) compliance with any U.S. or foreign laws or governmental
regulations relating to the ADRs or to the withdrawal of the
deposited securities.
The share depositary will not knowingly accept for deposit under the
share deposit agreement any common shares required to be registered under the
provisions of the Securities Act unless a registration statement for such common
shares is in effect.
The share depositary will keep books at its corporate trust office for
the registration and transfer of ADRs, which at all reasonable times will be
open for inspection by the owners. Such inspection, however, cannot be for the
purpose of communicating with owners in the interest of a business or object
other than the business of Royal Ahold or a matter related to the share deposit
agreement or the ADRs.
The share depositary may appoint one or more co-transfer agents for the
purpose of effecting transfers, combinations and split-ups of ADRs at designated
transfer offices on behalf of the share depositary. In carrying out its
functions, a co-transfer agent may require evidence of authority and compliance
with applicable laws and other requirements by owners or persons entitled to
ADRs, and will be entitled to protection and indemnity to the same extent as the
share depositary.
GOVERNING LAW
The share deposit agreement and the ADRs will be governed by the laws
of the State of New York, except that Royal Ahold's authorization and execution
of the share deposit agreement will be governed by the laws of the Netherlands.
PLAN OF DISTRIBUTION
Royal Ahold and Ahold Finance may sell the securities through this
prospectus to or through underwriters or dealers or directly to other purchasers
or through agents.
The distribution of the securities may be carried out from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of securities, underwriters may receive
compensation from Royal Ahold or Ahold Finance, as the case may be, or from
purchasers of securities for whom they may act as agents in the form of
discounts, concessions or commissions. Underwriters may sell securities to or
through dealers and such dealers may receive compensation in the form of
discounts, concessions and commissions from the underwriters and commissions
from the purchasers for whom they may act as agents. Underwriters, dealers and
agents that participate in the distribution of securities may be deemed to be
underwriters, and any discounts or commissions received by them from Royal Ahold
or Ahold Finance, as the case may be, and any profit on the resale of securities
by them may be deemed to be underwriting discounts and commissions under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from Royal Ahold or Ahold Finance, as the case may be,
will be described in the applicable prospectus supplement.
Under agreements that may be entered into by Royal Ahold and, in the
case of securities to be issued by Ahold Finance, Ahold Finance, the
underwriters, dealers and agents who participate in the distribution of the
securities offered through this prospectus may be entitled to indemnification by
Royal Ahold and, in the case of securities to be issued by Ahold Finance, Ahold
Finance, against certain liabilities, including liabilities under the Securities
Act.
The securities offered through this prospectus (other than common
shares and ADSs) will be new issues of securities with no established trading
market. Underwriters and agents to whom such securities are sold by Royal Ahold
or Ahold Finance, as the case may be, for public offering and sale may make a
market in such securities, but such underwriters and agents will not be
obligated to do so and may discontinue any market-making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
such securities.
Royal Ahold and Ahold Finance may authorize agents, underwriters or
dealers to solicit offers by certain institutional investors to purchase offered
securities which will be paid for and delivered on a future date specified in a
prospectus supplement. The obligations of any purchasers under this delayed
delivery and payment arrangements will not be subject to any conditions except
that the purchase at delivery must not be prohibited under the laws of any
jurisdiction in the United States to which the institution is subject.
VALIDITY OF SECURITIES
Certain matters of United States law relating to the securities offered
through this prospectus will be passed upon for Royal Ahold and Ahold Finance by
White & Case LLP, New York, New York. Certain Dutch legal matters relating to
the securities will be passed upon for Royal Ahold by De Brauw Blackstone
Westbroek N.V., Amsterdam, the Netherlands.
EXPERTS
Royal Ahold's consolidated financial statements as of January 3, 1999
and December 28, 1997 and for each of the fiscal years in the three-year period
ended January 3, 1999 incorporated by reference from Royal Ahold's annual report
on Form 20-F for the fiscal year ended January 3, 1999 have been audited by
Deloitte & Touche, Registeraccountants, independent auditors, as stated in their
report, which is incorporated herein by reference and have been so incorporated
in reliance upon the report of such firm given upon the authority of the firm as
experts in auditing and accounting.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses payable in connection with the issuance and distribution
of the securities being registered (other than underwriting discount)* are as
follows:
- -------------------
* Each of the expenses listed above is estimated except for the SEC
registration fee.
SEC registration fee....................................$ 278,000.00
AEX-Stock Exchange filing fees.......................... 5,500.00
NYSE listing fees....................................... 150,000.00
Printing and engraving expenses......................... 315,000.00
Accounting fees and expenses............................ 300,000.00
Legal fees and expenses................................. 995,000.00
Rating agency fees...................................... 75,000.00
Trustees' and agents' fees and expenses................. 37,500.00
Blue Sky fees and expenses.............................. 10,000.00
Netherlands capital tax................................. 10,000,000.00
Miscellaneous expenses.................................. 14,000.00
Total...............................$ 12,180,000.00
=============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Royal Ahold maintains insurance with respect to losses of any of its
directors or officers arising from any claim or claims by third parties against
such directors or officers for any wrongful act in their respective capacities.
Section 145 of the Delaware General Corporation Law authorizes and
empowers Ahold Finance to indemnify its directors, officers, employees and
agents against liabilities incurred in connection with, and related expenses
resulting from, any claim, action or suit brought against any such person as a
result of his/her relationship with Ahold Finance, when such person acted in
good faith and in a manner the person reasonably believed to be in, and not
opposed to, the best interests of Ahold Finance in connection with the acts or
events on which such claim, action or suit is based. The finding of either civil
or criminal liability on the part of such persons in connection with such acts
or events is not necessarily determinative of the question of whether such
persons have met the required standard of conduct and are, accordingly, entitled
to be indemnified. The foregoing statements are subject to the detailed
provisions of Section 145 of the Delaware General Corporation Law.
The By-laws of Ahold Finance provide that it shall indemnify and
reimburse all persons whom it may indemnify and reimburse pursuant to Section
145 of the Delaware General Corporation Law, to the fullest extent permitted.
The indemnification provided for therein is not exclusive of any other rights to
which those entitled to receive indemnification or reimbursement hereunder may
be entitled under any statute, the Certificate of Incorporation or any By-law of
Ahold Finance or under any agreement, vote of shareholders or disinterested
directors or otherwise.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
NUMBER DESCRIPTION
1.1 Form of Underwriting Agreement with respect to common shares
of Royal Ahold (incorporated herein by reference to Exhibit
1.1 to Royal Ahold's Report on Form 6-K dated May 4, 1999).
1.2 Form of Underwriting Agreement with respect to debt
securities of Royal Ahold (incorporated herein by reference
to Exhibit 1.2 to Royal Ahold's Report on Form 6-K dated May
4, 1999).
1.3 Form of Underwriting Agreement with respect to debt
securities of Ahold Finance (incorporated herein by reference
to Exhibit 1.3 to Royal Ahold's Report on Form 6-K dated May
4, 1999).
4.1 Articles of Association of Royal Ahold (incorporated herein
by reference to Exhibit 1 to Royal Ahold's Report on Form 6-K
dated June 23, 1998).
4.2 Indenture for the issuance of senior debt securities of Royal
Ahold, to be dated on or about the date of the issuance of
the first series of senior debt securities thereunder,
between Royal Ahold and The Chase Manhattan Bank (including
the form of senior debt securities) (incorporated herein by
reference to Exhibit 4.2 to Royal Ahold's Report on Form 6-K
dated May 4, 1999).
4.3 Indenture for the issuance of subordinated debt securities of
Royal Ahold, to be dated on or about the date of the issuance
of the first series of subordinated debt securities
thereunder, between Royal Ahold and The Bank of New York
(including the form of subordinated debt securities)
(incorporated herein by reference to Exhibit 4.4 to Royal
Ahold's Registration Statement on Form F-3 (No. 333-9376)).
4.4 Indenture for the issuance of guaranteed senior debt
securities of Ahold Finance, to be dated on or about the date
of the issuance of the first series of guaranteed senior debt
securities thereunder, among Ahold Finance, Royal Ahold, as
guarantor, and The Chase Manhattan Bank (including the form
of guaranteed senior debt securities) (incorporated herein by
reference to Exhibit 4.4 to Royal Ahold's Report on Form 6-K
dated May 4, 1999).
4.5 Indenture for the issuance of guaranteed subordinated debt
securities of Ahold Finance, to be dated on or about the date
of issuance of the first series of guaranteed subordinated
debt securities thereunder, among Ahold Finance, Royal Ahold,
as guarantor, and The Bank of New York (including the form of
guaranteed subordinated debt securities) (incorporated herein
by reference to Exhibit 4.5 to Royal Ahold's Report on Form
6-K dated May 4, 1999).
4.6 Deposit Agreement among Royal Ahold, The Bank of New York, as
depositary, and holders and beneficial owners from time to
time of American depositary receipts issued thereunder,
including the form of American depositary receipt, relating
to Royal Ahold's common shares (incorporated herein by
reference to Exhibit 4.1 to Royal Ahold's Report on Form 6-K
dated March 31, 1998).
4.7 Form of Warrant Agreement between Royal Ahold and a warrant
agent to be named, relating to warrants to subscribe for debt
securities of Royal Ahold (incorporated by reference to
Exhibit 4.7 to the Registration Statement of Royal Ahold and
Ahold Finance on Form F-3 and Form S-3 (Nos. 333-71383 and
333-71383-01)).
4.8 Form of Warrant Agreement between Ahold Finance and a warrant
agent to be named, relating to warrants to subscribe for debt
securities of Ahold Finance (incorporated herein by reference
to Exhibit 4.8 to the Registration Statement of Royal Ahold
and Ahold Finance on Form F-3 and Form S-3 (Nos. 333-71383
and 333-71383-01)).
5.1 Opinion of De Brauw Blackstone Westbroek N.V., Dutch counsel
to Royal Ahold, as to certain Dutch legal matters relating to
the common shares, the financing preferred shares and the
convertible preferred shares issuable by Royal Ahold.
5.2 Opinion of De Brauw Blackstone Westbroek N.V., Dutch counsel
to Royal Ahold, as to certain Dutch legal matters relating to
the debt securities issuable by Royal Ahold and the warrants
to subscribe to such debt securities.
5.3 Opinion of White & Case LLP, U.S. counsel to Royal Ahold and
Ahold Finance, as to: the validity of the debt securities
issuable by Royal Ahold, the warrants to subscribe to such
debt securities and the guarantees by Royal Ahold of the debt
securities issuable by Ahold Finance; and the validity of the
debt securities issuable by Ahold Finance and the warrants to
subscribe to such debt securities.
5.4 Opinion of De Brauw Blackstone Westbroek N.V., Dutch counsel
to Royal Ahold, as to certain Dutch legal matters relating to
the guarantee by Royal Ahold of the debt securities issuable
by Ahold Finance.
12.1 Computation of ratio of earnings to fixed charges of Royal
Ahold.
12.2 Computation of ratio of earnings to combined fixed charges
and preferred share dividends of Royal Ahold.
23.1 Consent of De Brauw Blackstone Westbroek N.V. (included in
Exhibits 5.1, 5.2 and 5.4).
23.2 Consent of White & Case LLP (included in Exhibit 5.3).
23.3 Consent of Deloitte & Touche, Registeraccountants,
independent auditors to Royal Ahold.
24 Powers of Attorney of Royal Ahold and Ahold Finance (included
on Pages II-7 and II-9 of this Registration Statement).
25.1 Form of T-1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Chase Manhattan
Bank, as senior debt trustee under the indenture relating to
senior debt securities issuable by Royal Ahold.
25.2 Form of T-1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as subordinated debt trustee under the indenture relating to
subordinated debt securities issuable by Royal Ahold.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Chase Manhattan Bank, as
senior debt trustee under the indenture relating to
guaranteed senior debt securities issuable by Ahold Finance.
25.4 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
subordinated debt trustee under the indenture relating to
guaranteed subordinated debt securities issuable by Ahold
Finance.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities
Act if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrants pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by reference
in the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering;
(4) to file a post-effective amendment to the registration
statement to include any financial statements required by Rule 3-19 of
Regulation S-X at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Securities Act need not be
furnished, provided that the Registrants include in the prospectus, by
means of a post-effective amendment, financial statements required
pursuant to this paragraph (4) and other information necessary to
ensure that all other information in the prospectus is at least as
current as the date of those financial statements. Notwithstanding the
foregoing, a post-effective amendment need not be filed to include
financial statements and information required by Section 10(a)(3) of
the Securities Act or Rule 3-19 of Regulation S-X if such financial
statements and information are contained in periodic reports filed with
or furnished to the Commission by the Registrants pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this registration statement; and
(5) that, for purposes of determining any liability under the
Securities Act, each filing of Royal Ahold's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated
by reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Royal Ahold
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Zaandam, the Netherlands, on this 8th day of
June, 1999.
KONINKLIJKE AHOLD N.V.
By:/s/ Jeanette J. Bos
---------------------------
Name: Jeanette J. Bos
Title: Vice President
Legal Affairs
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul P.J. Butzelaar and Jeanette J. Bos,
and each of them severally, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all the said
attorneys-in-fact and agents or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons (who comprise a
majority of the Corporate Executive Board) in the capacities indicated, on
June 8, 1999.
SIGNATURE TITLE
/s/ C.H. van der Hoeven
- --------------------------- President of the Corporate Executive
C.H. van der Hoeven Board and Chief Executive Officer
/s/ J.G. Andreae
- --------------------------- Member of the Corporate Executive
J.G. Andreae Board and Executive Vice-President
/s/ A.M. Meurs
- --------------------------- Member of the Corporate Executive
A.M. Meurs Board and Chief Financial Officer
/s/ A. Noddle
- --------------------------- Member of the Corporate Executive
A. Noddle Board and Executive Vice-President
/s/ R. Tobin
- --------------------------- Member of the Corporate Executive
R. Tobin Board and Executive Vice-President
/s/ R. Zwartendijk
- --------------------------- Member of the Corporate Executive
R. Zwartendijk Board and Executive Vice-President
/s/ L.A.P.A. Verhelst
- --------------------------- Senior Vice-President of
L.A.P.A. Verhelst Administration
/s/ E.J. Smith
- -------------------------- Authorized Representative in the
E.J. Smith United States
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Ahold
Finance U.S.A., Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, Georgia, on this 8th day of
June, 1999.
AHOLD FINANCE U.S.A., INC.
By:/s/ Ernie J. Smith
---------------------------
Name: Ernie J. Smith
Title: Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ernie J. Smith and Gary Preston his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all the said attorneys-in-fact and agents or either of them, or his
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons (who include a
majority of the Board of Directors) in the capacities indicated, on
June 4, 1999.
SIGNATURE TITLE
/s/ Robert G. Tobin
- --------------------------- Chairman
Robert G. Tobin
/s/ Ernie J. Smith
- --------------------------- Secretary
Ernie J. Smith
/s/ Brian Fields
- --------------------------- Member
Brian Fields
/s/ Mildred F. Smith
- --------------------------- President and Treasurer (Principal
Mildred F. Smith Executive Officer, Principal
Financial Officer and Principal
Accounting Officer)
Albert Heijnweg 1
1057 EH ZAANDAM
The Netherlands
F.M. Schlingmann - advocaat
Telephone: (020) 577 1452
Facsimile: (020) 577 1775
E-mail: [email protected]
Amsterdam, 8 June 1999 Your ref.:
Our ref.: i:\main_lib\newyork\1101615\0035\9$hk01!.doc\mb
Ladies and Gentlemen,
Koninklijke Ahold N.V.
Registration under the United States Securities Act of 1933,
as amended, of common shares, financing preferred shares
and convertible preferred shares
in the share capital of Koninklijke Ahold N.V.,
par value NLG 0.50 per common share,
financing preferred share and
convertible preferred share,
as described in the Registration Statement (as defined below)
I have acted in the name of De Brauw Blackstone Westbroek N.V. as legal counsel
in respect of the law of the Netherlands to Koninklijke Ahold N.V., a company
incorporated under the law of the Netherlands, with its corporate seat in
Zaandam (municipality Zaanstad), the Netherlands (the "Company"), in connection
with the registration under the United States Securities Act of 1933, as amended
(the "Securities Act"), by the Company of common shares, financing preferred
shares and convertible preferred shares (collectively the "Shares"), each with a
par value of NLG 0.50, in the share capital of the Company pursuant to the
Registration Statement (as defined below). The Shares are being registered for
offering and sale from time to time pursuant to Rule 415 under the Securities
Act. The aggregate public offering price of the Shares and certain debt
securities and warrants of the Company and of Ahold Finance U.S.A., Inc.
(collectively the "Securities") that are also being registered pursuant to the
Registration Statement and securities that have been registered pursuant to
certain other registration statements of the Company will not exceed USD
3,000,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units or composite currencies.
In connection herewith I have examined the following documents:
(a) a photocopy of a copy of the deed of incorporation of the Company and the
text of the articles of association of the Company, as most recently
amended, according to the Extract (as defined below), by deed of
amendment executed on June 22, 1998 (the "Articles of Association"), both
as filed with the Chamber of Commerce and Industry for "de Zaanstreek"
(the "Chamber of Commerce");
(b) an extract from the trade register regarding the Company, dated June 7,
1999 (the "Extract"), provided by the Chamber of Commerce and confirmed
to me to be unchanged in all respects material for rendering this opinion
by telephone by the Chamber of Commerce on the date hereof;
(c) a telecopy of an extract from the minutes of the general meeting of
shareholders of the Company, held on May 6, 1997, referring to the
resolution to designate the corporate executive board ("raad van
bestuur") of the Company as the corporate body authorized to resolve,
subject to the approval of the supervisory board ("raad van
commissarissen") of the Company, to, inter alia, issue Shares and to
limit or exclude pre-emptive rights;
(d) a telecopy of an excerpt from the minutes of the meeting of the corporate
executive board ("raad van bestuur") of the Company, held on October 26,
1998, relating to the resolution of the corporate executive board of the
Company to file a shelf registration statement with the United States
Securities and Exchange Commission at a maximum total amount of USD
3,000,000,000 and a telecopy of an excerpt from the minutes of the
meeting of the corporate executive board ("raad van bestuur") of the
Company, held on May 17, 1999, relating to the resolution of the
corporate executive board of the Company to file a shelf registration
statement with the United States Securities and Exchange Commission at a
maximum total amount of USD 3,500,000,000;
(e) telecopies of a resolution of the supervisory board ("raad van
commissarissen") of the Company, signed in counterparts and dated January
15, 1999, to approve the proposal of filing a shelf registration that
offers the possibility to issue equity, senior debt, convertible debt,
preferred financing shares, convertible financing shares and warrants in
the amount of up to USD 3,000,000,000 and telecopies of a resolution of
the supervisory board ("raad van commissarissen") of the Company, signed
in counterparts and dated May 20, 1999, to approve the proposal of filing
a shelf registration that offers the possibility to issue equity, senior
debt, convertible debt, preferred financing shares, convertible financing
shares and warrants in the amount of up to USD 3,500,000,000;
(f) a copy of a registration statement on Form F-3 and on Form S-3 (Nos.
333-71383 and 333-71383-01) (the "Registration Statement"), including a
prospectus (together the "Prospectus"), relating to the Shares and the
Securities;
and such other documents as I have deemed necessary to enable me to render this
opinion.
My examination referred to above has been limited to the text of the documents.
For the purpose of this opinion I have made the following assumptions:
(i) all signatures on original documents are the genuine signatures of the
persons purported to have executed the same and all copies (in whatever
form) conform to the originals;
(ii) the Shares, at the time of issuance thereof, will have been duly
authorized in accordance with the articles of association of the Company
in effect at the time of authorization (and under the Articles of
Association due authorization requires that Shares are issued pursuant to
a resolution adopted by the general meeting of shareholders ("algemene
vergadering van aandeelhouders") of the Company on a proposal of the
corporate executive board ("raad van bestuur") of the Company, or
pursuant to a resolution of the corporate executive board of the Company
if the corporate executive board of the Company has been duly authorized
to issue Shares in accordance with the Articles of Association, subject
to the approval of the supervisory board ("raad van commissarissen") of
the Company, and the validity of the resolution of the general meeting of
shareholders of the Company to issue Shares or rights to acquire Shares
or to designate another corporate body of the Company requires the prior
or simultaneous approval of each group of holders of shares of the same
class whose rights are prejudiced by the issue);
(iii) the nominal amount of the Shares and any share premium agreed upon at any
time will have been duly paid up;
(iv) the amount of the authorized share capital ("maatschappelijk kapitaal")
of the Company at the time of issuance is sufficient to allow for the
issuance of the Shares;
(v) the Shares will have been issued in the form and in the manner prescribed
by the articles of association of the Company in effect at the time of
issuance (and under the Articles of Association issuance as contemplated
under the Registration Statement and the Prospectus meets that
requirement) with due observance or valid exclusion of any pre-emptive
rights; and
(vi) the Shares will otherwise have been issued and accepted by the
subscribers therefor in accordance with all applicable law (including,
for the avoidance of doubt, the law of the Netherlands).
I have not investigated the law of any jurisdiction other than the Netherlands
and I do not express an opinion on the law of any jurisdiction other than the
Netherlands. I only express an opinion on matters of the law of the Netherlands
as it stands and has been published as at the date of this opinion. I do not
express any opinion on taxation laws.
Terms and expressions of law and of legal concepts as used in this opinion have
the meaning attributed to them under the law of the Netherlands and this opinion
should be read and understood accordingly.
Based upon the foregoing (including the documents listed above and the
assumptions set out above) and subject to any facts, circumstances, events or
documents not disclosed to me in the course of my examination referred to above,
I am, at the date hereof, of the following opinion:
1. The Company has been duly incorporated and is validly existing as a legal
entity in the form of a public company with limited liability ("naamloze
vennootschap") under the law of the Netherlands.
2. The Shares, when issued as set out in the assumptions above, will be duly
authorized and will be validly issued by the Company in accordance with
the law of the Netherlands and will be fully paid and non-assessable.
Without my prior written consent, this opinion letter may not be transmitted to
or filed with any person, firm, company or institution, except to your United
States counsel, White & Case LLP.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to De Brauw Blackstone Westbroek N.V. in the
Prospectus under the headings "Limitations on Enforcement of U.S. Laws against
Royal Ahold, its Management, and Others" and "Validity of Securities". In giving
such consent, I do not thereby admit that I am in the category of persons whose
consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Francine M. Schlingmann
- ------------------------------
Francine M. Schlingmann
for De Brauw Blackstone Westbroek N.V.
Koninklijke Ahold N.V.
Albert Heijnweg 1
1507 EH ZAANDAM
The Netherlands
F.M. Schlingmann - advocaat
Telephone: (020) 577 1452
Facsimile: (020) 577 1775
E-mail: [email protected]
Amsterdam, 8 June 1999 Your ref.:
Our ref.: f:\229\20138776\b001opic-229.doc\mb
Ladies and Gentlemen,
Koninklijke Ahold N.V.
Registration under the United States Securities Act of 1933
as amended, of senior and subordinated debt securities and warrants
as described in the Registration Statement (as defined below)
I have acted in the name of De Brauw Blackstone Westbroek N.V. as legal counsel
in respect of the law of the Netherlands to Koninklijke Ahold N.V., a company
incorporated under the law of the Netherlands, with its corporate seat in
Zaandam (municipality Zaanstad), the Netherlands (the "Company"), in connection
with the registration under the United States Securities Act of 1933, as amended
(the "Securities Act"), by the Company of (i) senior and subordinated debt
securities (the "Senior Debt Securities" and the "Subordinated Debt Securities",
respectively and collectively the "Debt Securities"), which Debt Securities may
be convertible into common shares, each with a par value of NLG 0.50, to be
issued in the share capital of the Company (the "Common Shares"), and of (ii)
warrants (the "Warrants") entitling the holders thereof to purchase Senior
and/or Subordinated Debt Securities, pursuant to the Registration Statement (as
defined below). The Debt Securities and the Warrants are further collectively
referred to as the "Securities". The Debt Securities will be issued under the
Indentures (as defined below). The Warrants will be issued under the Warrant
Agreements (as defined below). The Securities are being registered for offering
and sale from time to time pursuant to Rule 415 under the Securities Act. The
aggregate public offering price of the Debt Securities, the Common Shares, the
Warrants, the financing preferred shares and the convertible preferred shares in
the share capital of the Company (collectively the "Shares") and of certain debt
securities and warrants of Ahold Finance U.S.A., Inc., that are also registered
pursuant to the Registration Statement and that have been registered under
certain other registration statements of the Company will not exceed USD
3,000,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units or composite currencies.
In connection herewith I have examined the following documents:
(a) a photocopy of a copy of the deed of incorporation of the Company and the
text of the articles of association of the Company, as most recently
amended, according to the Extract (as defined below), by deed of
amendment executed on June 22, 1998, (the "Articles of Association"),
both as filed with the Chamber of Commerce and Industry for "de
Zaanstreek" (the "Chamber of Commerce");
(b) an extract from the trade register regarding the Company, dated June 7,
1999 (the "Extract"), provided by the Chamber of Commerce and confirmed
to me to be unchanged in all respects material for rendering this opinion
by telephone by the Chamber of Commerce on the date hereof;
(c) a telecopy of an excerpt from the minutes of the meeting of the corporate
executive board ("raad van bestuur") of the Company, held on October 26,
1998, relating to the resolution of the corporate executive board of the
Company to file a shelf registration with the United States Securities
and Exchange Commission at a maximum total amount of USD 3,000,000,000
and a telecopy of an excerpt from the minutes of the meeting of the
corporate executive board ("raad van bestuur") of the Company, held on
May 17, 1999, relating to the resolution of the corporate executive board
of the Company to file a shelf registration with the United States
Securities and Exchange Commission at a maximum total amount of USD
3,500,000,000;
(d) telecopies of a resolution of the supervisory board ("raad van
commissarissen") of the Company, signed in counterparts and dated January
15, 1999, to approve the proposal of filing a shelf registration that
offers the possibility to issue equity, senior debt, convertible debt,
preferred financing shares, convertible financing shares and warrants in
the amount of up to USD 3,000,000,000 and telecopies of a resolution of
the supervisory board ("raad van commissarissen") of the Company, signed
in counterparts and dated May 20, 1999, to approve the proposal of filing
a shelf registration that offers the possibility to issue equity, senior
debt, convertible debt, preferred financing shares, convertible financing
shares and warrants in the amount of up to USD 3,500,000,000;
(e) a telecopy of an extract from the minutes of the general meeting of
shareholders of the Company, held on May 6, 1997, referring to the
resolution to designate the corporate executive board ("raad van
bestuur") of the Company as the corporate body authorized to resolve,
subject to the approval of the supervisory board ("raad van
commissarissen") of the Company, to, inter alia, issue Common Shares and
rights to acquire Common Shares, and to limit or exclude preemptive
rights;
(f) a draft, dated January 25, 1999, of a form of senior debt indenture (the
"Senior Indenture") between the Company and The Chase Manhattan Bank,
including the forms of the Senior Debt Securities and filed as Exhibit
4.2 to the Registration Statement and a telecopy, received by me on June
3, 1999, of certain amended pages of the Senior Indenture;
(g) a faxed copy of an undated form of subordinated debt indenture, faxed to
me on September 22, 1998, (the "Subordinated Indenture" and, together
with the Senior Indenture, the "Indentures") between the Company and The
Bank of New York, including the forms of the Subordinated Debt Securities
and filed as Exhibit 4.3 to the Registration Statement;
(h) a draft (marked newyork 364246 v4 [7T1YRED]) of a form of warrant
agreement (the "Warrant Agreement") between the Company and the Warrant
Agent named therein, including the form of the warrant certificate
evidencing one or more Warrants and filed as Exhibit 4.7 to the
Registration Statement;
(i) a copy of a registration statement on Form F-3 and on Form S-3 (Nos.
333-71383 and 333-71383-01) (the "Registration Statement"), each
including a prospectus (together the "Prospectus"), relating to the
Shares and the Securities;
and such other documents as I have deemed necessary to enable me to render this
opinion.
My examination referred to above has been limited to the text of the documents.
For the purpose of this opinion I have made the following assumptions:
(i) all signatures on original documents are the genuine signatures of the
persons purported to have executed the same and all copies (in whatever
form) conform to the originals;
(ii) the Indentures, the Warrant Agreement, the Debt Securities and the
Warrants will have been executed substantially in the form of the drafts
and forms referred to above in (f), (g) and (h) (in the case of the Debt
Securities and the Warrants with such changes or additions thereto as
contemplated or otherwise permitted under the Indentures and the Warrant
Agreement);
(iii) all the parties to the Indentures and the Warrant Agreement other than
the Company have the required capacity, power and authority to execute
and deliver the Indentures and the Warrant Agreement and to perform their
respective obligations thereunder and the Indentures, the Warrant
Agreement, the Debt Securities and the Warrants will have been duly
authorized, executed and delivered by all the parties thereto;
(iv) the Indentures and the Warrant Agreement will have been executed and
delivered in the name of the Company by any individual member of the
corporate executive board ("lid van de raad van bestuur") of the Company,
as referred to in the Extract or by any other person duly authorized by
the Company to so execute and deliver the Indentures and the Warrant
Agreement in the name of the Company;
(v) the Debt Securities and the Warrants will have been executed and
delivered in the name of the Company by the manual or facsimile signature
of any individual member of the corporate executive board ("lid van de
raad van bestuur") of the Company (with, in the case of a facsimile
signature, approval of such signing member of the corporate executive
board of the Company of the use of his facsimile signature) and will have
been duly authenticated and delivered in accordance with the provisions
of the Indentures and the Warrant Agreement;
(vi) the Indentures, the Warrant Agreement, the Debt Securities and the
Warrants, when duly executed and delivered by the Company and when duly
authorized, executed and delivered by all parties thereto, will
constitute valid, binding and enforceable obligations of all the parties
thereto under the law of the State of New York to which they are
expressed to be subject, except for the subordination provisions of the
Subordinated Indenture and of the Subordinated Debt Securities which are
expressed to be governed by the law of the Netherlands;
(vii) the Debt Securities and the Warrants will
(A) only be issued if an exception to or general exemption from the
prohibition set forth in paragraph 1 of article 3 of the Dutch
1995 Act on the Supervision of the Securities Trade ("Wet toezicht
effectenverkeer 1995") (the "Prohibition") applies and the
requirements to which such exception or general exemption,
respectively, is subject, are fully complied with; or
(B) only be issued if the Securities Board of the Netherlands
("Stichting Toezicht Effectenverkeer") has, upon request, granted
an individual dispensation from the Prohibition and the conditions
attached to such dispensation are fully complied with;
(viii) the Debt Securities and the Warrants, at the time of the issuance
thereof, will be duly issued, authenticated, offered, sold, delivered and
paid for (a) as contemplated in and in accordance with the Indentures,
the Warrant Agreement, the Registration Statement and the Prospectus, (b)
in accordance with any applicable law and (c) with such terms so as not
to violate any applicable law (including, for the avoidance of doubt, any
law in effect at the time of such issuance, authentication, offer, sale
and delivery);
(ix) the Company has at the time of the entering into of the Indentures, the
Warrant Agreement and the issuance of any Debt Securities or Warrants
complied with all requirements of article 25 of the Works Council Act
("Wet op de ondernemingsraden") in connection with the entering into of
the Indentures, the Warrant Agreement and the issuance of the Debt
Securities or Warrants;
(x) (i) the Debt Securities, (ii) if the Debt Securities are convertible into
Common Shares, the Common Shares issuable upon conversion, and (iii) the
Warrants, if the Warrants are convertible into Debt Securities which are
convertible into Common Shares, at the time of issuance thereof, will
have been duly authorized in accordance with the articles of association
of the Company in effect at the time of authorization (and under the
Articles of Association due authorization requires that Common Shares and
rights to acquire Common Shares are issued pursuant to a resolution
adopted by the general meeting of shareholders ("algemene vergadering van
aandeelhouders") of the Company on a proposal of the corporate executive
board ("raad van bestuur") of the Company, or pursuant to a resolution of
the corporate executive board of the Company if the corporate executive
board of the Company has been duly authorized to issue shares in the
share capital of the Company and rights to acquire shares in the share
capital of the Company in accordance with the Articles of Association,
subject to the approval of the supervisory board ("raad van
commissarissen") of the Company, and the validity of the resolution of
the general meeting of shareholders of the Company to issue Common Shares
or rights to acquire Common Shares or to designate another corporate body
of the Company requires the prior or simultaneous approval of each group
of holders of shares of the same class whose rights are prejudiced by the
issue);
(xi) if the Debt Securities are convertible into Common Shares the nominal
amount of the Common Shares and any share premium agreed upon at any time
have or will have been duly paid up;
(xii) if the Debt Securities are convertible into Common Shares the amount of
the authorized share capital ("maatschappelijk kapitaal") of the Company
at the time of issuance is sufficient to allow for the issuance of the
Common Shares upon conversion of the Debt Securities;
(xiii) if the Debt Securities are convertible into Common Shares, the Common
Shares issued upon conversion will have been issued in the form and in
the manner prescribed by the articles of association of the Company in
effect at the time of issuance (and under the Articles of Association
issuance as contemplated under the Registration Statement and the
Prospectus meets that requirement);
(xiv) if the Debt Securities are convertible into Common Shares, the Common
Shares issued upon conversion will otherwise have been issued and
accepted by the subscribers therefor in accordance with all applicable
law (including, for the avoidance of doubt, the law of the Netherlands);
and
(xv) if the Debt Securities are convertible into Common Shares the resolutions
of the corporate executive board of the Company to issue Common Shares or
rights to acquire Common Shares or to limit or exclude pre-emptive rights
are not contrary to reasonableness and fairness which persons connected
with a Dutch company need to observe vis-a-vis each other.
I have not investigated the law of any jurisdiction other than the Netherlands
and I do not express an opinion on the law of any jurisdiction other than the
Netherlands. I only express an opinion on matters of the law of the Netherlands
as it stands and has been published as at the date of this opinion. I do not
express any opinion on taxation laws.
Terms and expressions of law and of legal concepts as used in this opinion have
the meaning attributed to them under the law of the Netherlands and this opinion
should be read and understood accordingly.
Based upon the foregoing (including the documents listed above and the
assumptions set out above) and subject to any facts, circumstances, events or
documents not disclosed to me in the course of my examination referred to above,
I am, at the date hereof, of the following opinion:
1. The Company has been duly incorporated and is validly existing as a legal
entity in the form of a public company with limited liability ("naamloze
vennootschap") under the law of the Netherlands.
2. The Debt Securities and the Warrants, when issued as set out in the
assumptions above, will, according to the courts of the Netherlands duly
applying the law of the State of New York as the law expressed to be
governing the contractual provisions of the Debt Securities (except for
the subordination provisions of the Subordinated Debt Securities which
are expressed to be governed by the law of the Netherlands) and the
Warrants, constitute valid and binding contractual obligations of the
Company, enforceable against the Company in accordance with their terms.
3. The Common Shares, when issued upon conversion of the Debt Securities
that are convertible into Common Shares and subject to the assumptions
above, will be duly authorized and will be validly issued by the Company
in accordance with the law of the Netherlands and will be fully paid and
non-assessable.
The opinions expressed above are subject to the following qualifications:
(aa) the opinions expressed herein are limited by any applicable bankruptcy,
moratorium and other laws affecting creditors' rights (including
statutory preferences) generally;
(bb) when applying the law of the State of New York as the law expressed to be
governing the Indentures, the Warrant Agreement, the contractual
provisions of the Debt Securities and the Warrants (except for the
subordination provisions of the Subordinated Indenture and of the
Subordinated Debt Securities which are expressed to be governed by the
law of the Netherlands), the competent courts of the Netherlands, if any,
- may give effect to the mandatory rules of the law of another
country with which the situation has a close connection, if and in
so far as under the law of the latter country, those rules must be
applied whatever the law applicable to the Indentures, the Warrant
Agreement and the contractual provisions of the Debt Securities
and the Warrants;
- will apply the law of the Netherlands in a situation where it is
mandatory irrespective of the law otherwise applicable to the
Indentures, the Warrant Agreement and the contractual provisions
of the Debt Securities and the Warrants;
- may refuse to apply the law of the State of New York if such
application is manifestly incompatible with the public policy of
the Netherlands; and
- shall have regard to the law of the country in which performance
takes place in relation to the manner of performance and the steps
to be taken in the event of defective performance; any corporate
law aspects of the Debt Securities and the Warrants will be
subject to the law of the Netherlands;
(cc) when applying the law of the Netherlands as the law governing the
subordination provisions of the Subordinated Indenture and of the
Subordinated Debt Securities, the competent courts of the Netherlands, if
any:
- may give effect to the mandatory rules of the law of another
country with which the situation has a close connection, if and
insofar as, under the law of the latter country, those rules must
be applied whatever the law applicable to the subordination
provisions of the Subordinated Indenture and of the Subordinated
Debt Securities;
- shall have regard to the law of the country in which performance
takes place in relation to the manner of performance and the steps
to be taken in the event of defective performance;
(dd) a final judgement in respect of the Indentures, the Warrant Agreement,
the Debt Securities or the Warrants, rendered by a court of another
country in favour of a party to the Indentures, the Warrant Agreement, or
any holder of a Debt Security or a Warrant against the Company, will be
recognized and enforced by the courts of the Netherlands subject to the
conditions and limitations of a convention or treaty on the recognition
and enforcement of judgements in civil and commercial matters between
such country and the Netherlands and subject to the rules and regulations
promulgated pursuant thereto;
(ee) in the absence of an applicable convention between the United States of
America and the Netherlands providing for reciprocal recognition and
enforcement of judgements in civil and commercial matters, a judgement
rendered by a U.S. court in favour of a party to the Indentures, the
Warrant Agreement, or any holder of a Debt Security or a Warrant against
the Company will not be recognized and enforced by the courts of the
Netherlands; in order to obtain a judgement which is enforceable against
the Company in the Netherlands, such party will have to file its claim
against the Company with the competent Netherlands court and may submit
in the course of the proceedings the final judgement which has been
rendered in the United States; if the Netherlands court finds that the
jurisdiction of the court in the United States has been based on grounds
which are internationally acceptable and that proper legal procedures
have been observed, the Netherlands court would, in principle, give
binding effect to the final judgement which has been rendered in the
United States, unless such judgement contravened Netherlands principles
of public policy;
(ff) the recognition of the submission by the Company to the jurisdiction of
any state or federal court in the State and County of New York, the
Borough of Manhattan, United States of America, will be subject to
similar conditions and limitations as those set forth in the EC
Convention on jurisdiction and the enforcement of judgements in civil and
commercial matters of September 27, 1968, as amended, and the rules and
regulations promulgated pursuant thereto, such as the limitation that
application for provisional, including protective, measures which are
available under the law of another state than the State of New York may
be made to the courts of that state;
(gg) the enforcement in the Netherlands of the Indentures, the Warrant
Agreement, the Debt Securities and the Warrants and of foreign judgements
will be subject to the rules of civil procedure as applied by the courts
of the Netherlands;
(hh) a power of attorney, instruction, designation or appointment may under
the law of the Netherlands not be deemed to be irrevocable, to the extent
that such power of attorney, instruction, designation or appointment has
not been granted for the performance of a legal act in the interest of
the receiver thereof or of a third party, and to the extent that the law
of the Netherlands would apply, such power of attorney, instruction,
designation or appointment would terminate upon the bankruptcy of the
grantor, instructor, designator or appointor thereof;
(ii) to the extent that the law of the Netherlands is applicable, title to a
Debt Security or a Warrant may not pass if the Debt Security or the
Warrant is not delivered ("geleverd") in accordance with the law of the
Netherlands, the transferor does not have the power to pass on title
("beschikkingsbevoegdheid") to the Debt Security or the Warrant or the
transfer of title is not made pursuant to a valid title of transfer
("geldige titel");
(jj) to the extent that the law of the Netherlands is applicable, the
provisions set out in the Indentures to the effect that the Issuer (as
therein defined), the Trustee (as therein defined) and any agent of the
Issuer or the Trustee may deem and treat the Person (as therein defined)
in whose name any Security (as therein defined) shall be registered in
the Register (as therein defined) for such series as the absolute owner
of such Security (whether or not such Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for
the purpose of receiving payment of or on account of the principal of
and, subject to the provisions of the Indentures, interest, if any, on
such Security and for all other purposes and that neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be affected
by any notice to the contrary, may not be enforceable under all
circumstances;
(kk) to the extent that the law of the Netherlands is applicable, the
provision set out in the Warrant Agreement to the effect that prior to
due presentment of a Warrant Certificate (as therein defined) for
registration of a transfer, the Issuer (as therein defined), the Warrant
Agent (as therein defined) and all other persons may treat the Holder (as
therein defined) as the owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding, may not be
enforceable under all circumstances;
(ll) the recognition of a trust as such is subject to the conditions and
limitations of the Convention on the law applicable to trusts and on
their recognition of July 1, 1985, and the rules and regulations
promulgated pursuant thereto;
(mm) to the extent that the Indentures, the Warrant Agreement and the terms
and conditions of the Debt Securities and the Warrants are considered
general conditions ("algemene voorwaarden") within the meaning of article
6:231 of the Netherlands Ci-vil Code ("Burgerlijk Wetboek"), a provision
therein may be annullable ("vernietigbaar") if
(A) the provision, taking into account the nature and the further
contents of the agreement, the way in which the general conditions
have been agreed upon, the mutually apparent interests of the
parties and the other circumstances of the matter, is unreasonably
onerous for the party against which the general conditions are
used;
or
(B) the user of the general conditions has not offered that party
against which they are used a reasonable opportunity to take
cognizance thereof;
it should be noted that (i) part 3, chapter 5 of Book 6 of the
Netherlands Civil Code dealing with general conditions does not apply if
the holder of a Debt Security or a Warrant acts in the conduct of a
profession or trade and is not established ("gevestigd") in the
Netherlands and that (ii) a holder of a Debt Security or a Warrant cannot
bring about the annulment of a provision of the Indentures, the Warrant
Agreement and/or the terms and conditions of the Debt Securities or the
Warrants if such holder of a Debt Security or a Warrant is a legal entity
which meets any of the conditions set out in article 6:235 of the
Netherlands Civil Code, one of which conditions is that such legal entity
is an N.V., a B.V., a co-operative ("cooperatie") or a mutual insurance
society ("onderlinge waarborgmaatschappij"), which - at the time the
agreement was entered into - has lastly published its annual accounts or
in respect of which at that time article 2:403, paragraph 1 of the
Netherlands Civil Code has lastly been applied;
(nn) to the extent that the law of the Netherlands is applicable to the
succession or substitution of the Company by any successor corporation or
person as set forth in Sections 8.1 and 8.2 of the Indentures and in
Sections 6.01 and 6.02 of the Warrant Agreement, it should be noted that
the transfer of a debt from a debtor to a third party only takes effect
against the creditor if and when the latter has given his consent
("toestemming") within the meaning of article 155 of Book 6 of the
Netherlands Civil Code, after the parties (being the original debtor and
the third party transferee) have notified him of the transfer, and that
the substitution of a party to a contract by a third party only takes
effect against another party to such contract if and when the latter has
cooperated with such substitution ("medewerking") within the meaning of
paragraph 1 of article 159 of Book 6 of the Netherlands Civil Code, after
the parties (being the original party to the contract and the third party
by whom such original party will be substituted) have made a deed for the
purpose of such substitution; when the creditor has consented in advance
to the transfer of the debt and the substitution of the respective party,
respectively, the transfer and the substitution, respectively, take
effect as soon as the debtor and the third party have reached an
agreement and made a deed for the purpose of the substitution,
respectively, and they have together informed the creditor in writing of
the transfer and the substitution, respectively;
(oo) if any of the Debt Securities or the Warrants were executed in the name
of the Company by bearing the manual or facsimile signature of any person
who at the date of the signing is a duly authorized representative of the
Company but before authentication and delivery of such Debt Securities or
Warrants ceases to hold such offices for whatever reason or did not hold
such offices at the date of execution and delivery of such Debt
Securities or Warrants, it may be necessary for the enforcement of the
Debt Securities or Warrants that the holder of one or more Debt
Securities or Warrants shall present not only such Debt Securities or
Warrants but a copy of the relevant Indenture or the Warrant Agreement as
well;
(pp) to the extent that the law of the Netherlands is applicable, the
provisions in each of the Indentures to the effect that no recourse for
the payment of the principal of or interest, if any, on the Securities
(as therein defined), or for any claim based thereon or otherwise in
respect thereof, and that no recourse under or upon any obligation,
covenant or agreement of the Issuer (as therein defined) in the Indenture
or any indenture supplemental thereto or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, official, member or deputy member
of the executive board or member of the supervisory board, as such, past,
present or future, of the Company or of any successor entity, either
directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement
of any assessment or penalty or otherwise, may not be enforceable under
all circumstances;
(qq) to the extent that the law of the Netherlands is applicable, the
provisions in each of the Indentures to the effect that in any
proceedings brought by the Trustee (and also any proceedings in which a
declaratory judgement of a court may be sought as to the interpretation
or construction of any provision of the Indenture to which the Trustee
shall be a party), the Trustee shall be held to represent all the Holders
(as therein defined) of the Securities (as therein defined) to which such
proceedings relate, and that it shall not be necessary to make any
Holders of such Securities parties to any such proceedings, may not be
enforceable;
(rr) to the extent that the law of the Netherlands is applicable, the
provisions in each of the Indentures to the effect that no Holder (as
therein defined) of any Security (as therein defined) of any series shall
have any right by virtue or by availing of any provision of the Indenture
to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to the Indenture,
or for the appointment of an administrator, bewindvoerder, receiver,
liquidator, curator, sequestrator, trustee or other similar officer or
for any other remedy under the Indenture, unless such Holder previously
shall have given to the Trustee written notice as further provided in the
Indenture, may not be enforceable under all circumstances;
(ss) no opinion is expressed on the validity of any conveyance, transfer,
assignment, mortgage or pledge to the Trustee as security for the
Securities of one or more series of any property or assets under any
supplemental indenture as contemplated by Section 7.1 of each of the
Indentures and no opinion is expressed on any supplemental indenture for
whatever purpose contemplated by the said section of the Indentures;
(tt) to the extent that Debt Securities qualify as savings certificates as
defined in the Act on savings certificates ("Wet inzake spaarbewijzen",
the "Savings Certificates Act") any transfer or acceptance of such Debt
Securities must be made through the mediation of either the Company or an
admitted institution of the Amsterdam Stock Exchange with due observance
of the Savings Certificates Act and its implementing regulations
(including registration requirements), provided that no such mediation is
required (i) if such Debt Securities are physically issued outside the
Netherlands and are not immediately thereafter distributed in the
Netherlands or to residents of the Netherlands in the course of primary
trading or immediately thereafter, (ii) in respect of the initial issue
of such Debt Securities to the first holders thereof, and (iii) in
respect of a transfer and delivery by individuals who do not act in the
conduct of a profession or trade; and
(uu) no opinion is rendered with respect to section 12.4 of the Subordinated
Indenture.
Without my prior written consent, this opinion letter may not be transmitted to
or filed with any person, firm, company or institution except to your United
States counsel, White & Case LLP.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to De Brauw Blackstone Westbroek N.V. in the
Prospectus under the headings "Limitations on Enforcement of U.S. Laws against
Royal Ahold, its Management, and Others" and "Validity of Securities".
In giving such consent, I do not thereby admit that I am in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Francine M. Schlingmann
- ------------------------------
Francine M. Schlingmann
for
De Brauw Blackstone Westbroek N.V.
June 8, 1999
Koninklijke Ahold N.V.
Albert Heijnweg 1
1507 EH Zaandam
The Netherlands
Ahold Finance U.S.A., Inc.
913 North Market Street
Wilmington, Delaware 19801-3052
Ladies and Gentlemen:
We have acted as special United States counsel for Koninklijke Ahold N.V.,
a company incorporated under the law of the Netherlands ("Royal Ahold") and
Ahold Finance U.S.A., Inc., a company incorporated under the laws of Delaware
("Ahold Finance"), in connection with the preparation of:
(1) The Registration Statement on Form F-3 and Form S-3 filed with the
Securities and Exchange Commission (the "Commission") on the date hereof (the
"Registration Statement"), pursuant to which:
(a) Royal Ahold proposes to issue and sell from time to time (i)
common shares, NLG 0.50 par value per share, which may be in the form of
American depositary shares (the "Common Shares"), (ii) convertible
preferred shares, NLG 0.50 par value per share (the "Convertible Preferred
Shares"), (iii) financing preferred shares, NLG 0.50 par value per share
(the "Financing Preferred Shares"), (iv) debt securities consisting of
debentures, notes or other evidences of indebtedness representing
unsecured, unsubordinated obligations of Royal Ahold (the "Senior Debt
Securities"), which may be in the form of American depository notes, (v)
debt securities consisting of debentures, notes or other evidences of
indebtedness representing unsecured, subordinated obligations of Royal
Ahold (the "Subordinated Debt Securities"), which may be in the form of
American depository notes, (vi) warrants to subscribe for Senior Debt
Securities and Subordinated Debt Securities (the "Royal Ahold Warrants"),
(vii) guarantees of guaranteed senior debt securities of Ahold Finance (the
"Guarantees of Guaranteed Senior Debt"), and (viii) guarantees of
guaranteed subordinated debt securities of Ahold Finance (the "Guarantees
of Guaranteed Subordinated Debt"); and
(b) Ahold Finance proposes to issue and sell from time to time (i)
debt securities consisting of debentures, notes or other evidences of
indebtedness representing unsecured, unsubordinated obligations of Ahold
Finance guaranteed by Royal Ahold (the "Guaranteed Senior Debt
Securities"), (ii) debt securities consisting of debentures, notes or other
evidences of indebtedness representing unsecured, subordinated obligations
of Ahold Finance guaranteed by Royal Ahold (the "Guaranteed Subordinated
Debt Securities"), and (iii) warrants to subscribe for Guaranteed Senior
Debt Securities and Guaranteed Subordinated Debt Securities (the "Ahold
Finance Warrants");
(2) The Indenture (the "Senior Debt Indenture"), to be dated on or about
the date of the first issuance of Senior Debt Securities thereunder, between
Royal Ahold and The Chase Manhattan Bank, as trustee (the "Senior Debt
Trustee"), filed as Exhibit 4.2 to the Registration Statement;
(3) The Indenture (the "Subordinated Debt Indenture"), to be dated on or
about the date of the first issuance of Subordinated Debt Securities thereunder,
between Royal Ahold and The Bank of New York, as trustee (the "Subordinated Debt
Trustee"), filed as Exhibit 4.3 to the Registration Statement;
(4) The Indenture (the "Guaranteed Senior Debt Indenture"), to be dated on
or about the date of the first issuance of Guaranteed Senior Debt Securities
thereunder, among Ahold Finance, Royal Ahold, as guarantor, and The Chase
Manhattan Bank, as trustee (the "Guaranteed Senior Debt Trustee"), filed as
Exhibit 4.4 to the Registration Statement;
(5) The Indenture (the "Guaranteed Subordinated Debt Indenture"), to be
dated on or about the date of the first issuance of Guaranteed Subordinated Debt
Securities thereunder, among Ahold Finance, Royal Ahold, as guarantor, and The
Bank of New York, as trustee (the "Guaranteed Subordinated Debt Trustee"), filed
as Exhibit 4.5 to the Registration Statement;
(6) The form of Warrant Agreement (the "Royal Ahold Warrant Agreement")
between Royal Ahold and a warrant agent to be named, relating to the Royal Ahold
Warrants, filed as Exhibit 4.7 to the Registration Statement;
(7) The form of Warrant Agreement (the "Ahold Finance Warrant Agreement")
between Ahold Finance and a warrant agent to be named, relating to the Warrants,
filed as Exhibit 4.8 to the Registration Statement;
(8) The form of Underwriting Agreement and related Terms Agreement attached
thereto (collectively, an "Underwriting Agreement"), to be entered into in
connection with offering from time to time of the Common Shares, filed as
Exhibit 1.1 to the Registration Statement;
(9) The form of Underwriting Agreement and related Terms Agreement attached
thereto (collectively, an "Underwriting Agreement"), to be entered into in
connection with offering from time to time of Senior Debt Securities and
Subordinated Debt Securities, filed as Exhibit 1.2 to the Registration
Statement; and
(10) The form of Underwriting Agreement and related Terms Agreement
attached thereto (collectively, an "Underwriting Agreement"), to be entered into
in connection with offering from time to time of Guaranteed Senior Debt
Securities and Guaranteed Subordinated Debt Securities, filed as Exhibit 1.3 to
the Registration Statement.
Based upon our examination of such documents, certificates, records,
authorizations and proceedings as we have deemed relevant, it is our opinion
that:
(a) When (i) the execution of the Senior Debt Indenture has been duly
authorized by Royal Ahold by appropriate corporate action, (ii) the Senior
Debt Indenture, in the form filed as an exhibit to the Registration
Statement, has been duly executed and delivered by Royal Ahold and the
Senior Debt Trustee, (iii) the issuance of the Senior Debt Securities and
approval of the final terms thereof have been duly authorized by Royal
Ahold by appropriate corporate action, and (iv) the Senior Debt Securities,
in the form included in the Senior Debt Indenture filed as an exhibit to
the Registration Statement (with such changes or additions as permitted in
the Senior Debt Indenture), have been duly executed and delivered by Royal
Ahold and authenticated by the Senior Debt Trustee pursuant to the Senior
Debt Indenture and delivered and paid for as contemplated by the applicable
Underwriting Agreement and the Registration Statement, the Senior Debt
Securities will constitute valid and legally binding obligations of Royal
Ahold under the laws of the State of New York, enforceable in accordance
with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether the issue of enforceability is considered
in a proceeding in equity or at law);
(b) When (i) the execution of the Subordinated Debt Indenture has been
duly authorized by Royal Ahold by appropriate corporate action, (ii) the
Subordinated Debt Indenture, in the form filed as an exhibit to the
Registration Statement, has been duly executed and delivered by Royal Ahold
and the Subordinated Debt Trustee, (iii) the issuance of the Subordinated
Debt Securities and approval of the final terms thereof have been duly
authorized by Royal Ahold by appropriate corporate action, and (iv) the
Subordinated Debt Securities, in the form included in the Subordinated Debt
Indenture filed as an exhibit to the Registration Statement (with such
changes or additions as permitted in the Subordinated Debt Indenture), have
been duly executed and delivered by Royal Ahold and authenticated by the
Subordinated Debt Trustee pursuant to the Subordinated Debt Indenture and
delivered and paid for as contemplated by the applicable Underwriting
Agreement and the Registration Statement, the Subordinated Debt Securities
will constitute valid and legally binding obligations of Royal Ahold under
the laws of the State of New York, enforceable in accordance with their
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law);
(c) When (i) the execution of the Royal Ahold Warrant Agreement has
been duly authorized by Royal Ahold by appropriate corporate action, (ii)
the Royal Ahold Warrant Agreement, in the form filed as an exhibit to the
Registration Statement, has been duly executed and delivered by Royal Ahold
and the warrant agent thereunder, (iii) the issuance of the Royal Ahold
Warrants and approval of the final terms thereof have been duly authorized
by Royal Ahold by appropriate corporate action, and (iv) the Royal Ahold
Warrants, in the form included in the Royal Ahold Warrant Agreement filed
as an exhibit to the Registration Statement (with such changes or additions
as permitted in the Royal Ahold Warrant Agreement), have been duly executed
and delivered by Royal Ahold and countersigned by the warrant agent
thereunder pursuant to the Royal Ahold Warrant Agreement and delivered and
paid for as contemplated by the applicable Underwriting Agreement and the
Registration Statement, the Royal Ahold Warrants will constitute valid and
legally binding obligations of Royal Ahold under the laws of the State of
New York, enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless
of whether the issue of enforceability is considered in a proceeding in
equity or at law);
(d) When (i) the execution of the Guaranteed Senior Debt Indenture has
been duly authorized by Ahold Finance and Royal Ahold by appropriate
corporate action, (ii) the Guaranteed Senior Debt Indenture, in the form
filed as an exhibit to the Registration Statement, has been duly executed
and delivered by Ahold Finance, Royal Ahold and the Guaranteed Senior Debt
Trustee, (iii) the issuance of the Guaranteed Senior Debt Securities and
approval of the final terms thereof have been duly authorized by Ahold
Finance by appropriate corporate action, (iv) the Guaranteed Senior Debt
Securities, in the form included in the Guaranteed Senior Debt Indenture
filed as an exhibit to the Registration Statement (with such changes or
additions as permitted in the Guaranteed Senior Debt Indenture), have been
duly authorized, executed and delivered by Ahold Finance and Royal Ahold
and authenticated by the Guaranteed Senior Debt Trustee pursuant to the
Guaranteed Senior Debt Indenture and delivered and paid for as contemplated
by the applicable Underwriting Agreement and the Registration Statement,
and (v) the guarantees of the Guaranteed Senior Debt Securities by Royal
Ahold, in the form included in the Guaranteed Senior Debt Indenture filed
as an exhibit to the Registration Statement, have been duly executed and
delivered by Royal Ahold, the Guarantees of Guaranteed Senior Debt will
constitute valid and legally binding obligations of Royal Ahold under the
laws of the State of New York, enforceable in accordance with their terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law);
(e) When (i) the execution of the Guaranteed Subordinated Debt
Indenture has been duly authorized by Ahold Finance and Royal Ahold by
appropriate corporate action, (ii) the Guaranteed Subordinated Debt
Indenture, in the form filed as an exhibit to the Registration Statement,
has been duly executed and delivered by Ahold Finance, Royal Ahold and the
Guaranteed Subordinated Debt Trustee, (iii) the issuance of the Guaranteed
Subordinated Debt Securities and approval of the final terms thereof have
been duly authorized by Ahold Finance by appropriate corporate action, (iv)
the Guaranteed Subordinated Debt Securities, in the form included in the
Guaranteed Subordinated Debt Indenture filed as an exhibit to the
Registration Statement (with such changes or additions as permitted in the
Guaranteed Subordinated Debt Indenture), have been duly executed and
delivered by Ahold Finance and Royal Ahold and authenticated by the
Guaranteed Subordinated Debt Trustee pursuant to the Guaranteed
Subordinated Debt Indenture and delivered and paid for as contemplated by
the applicable Underwriting Agreement and the Registration Statement, and
(v) the guarantees of the Guaranteed Subordinated Debt Securities by Royal
Ahold, in the form included in the Guaranteed Subordinated Debt Indenture
filed as an exhibit to the Registration Statement have been duly
authorized, executed and delivered by Royal Ahold, the Guarantees of
Guaranteed Subordinated Debt will constitute valid and legally binding
obligations of Royal Ahold under the laws of the State of New York,
enforceable in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law);
(f) When (i) the execution of the Guaranteed Senior Debt Indenture has
been duly authorized by Ahold Finance and Royal Ahold by appropriate
corporate action, (ii) the Guaranteed Senior Debt Indenture, in the form
filed as an exhibit to the Registration Statement, has been duly executed
and delivered by Ahold Finance, Royal Ahold and the Guaranteed Senior Debt
Trustee, (iii) the issuance of the Guaranteed Senior Debt Securities and
approval of the final terms thereof have been duly authorized by Ahold
Finance by appropriate corporate action, and (iv) the Guaranteed Senior
Debt Securities, in the form included in the Guaranteed Senior Debt
Indenture filed as an exhibit to the Registration Statement (with such
changes or additions as permitted in the Guaranteed Senior Debt Indenture),
have been duly executed and delivered by Ahold Finance and authenticated by
the Guaranteed Senior Debt Trustee pursuant to the Guaranteed Senior Debt
Indenture and delivered and paid for as contemplated by the applicable
Underwriting Agreement and the Registration Statement, the Guaranteed
Senior Debt Securities will constitute valid and legally binding
obligations of Ahold Finance under the laws of the State of New York,
enforceable in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law);
(g) When (i) the execution of the Guaranteed Subordinated Debt
Indenture has been duly authorized by Ahold Finance and Royal Ahold by
appropriate corporate action, (ii) the Guaranteed Subordinated Debt
Indenture, in the form filed as an exhibit to the Registration Statement,
has been duly executed and delivered by Ahold Finance, Royal Ahold and the
Guaranteed Subordinated Debt Trustee, (iii) the issuance of the Guaranteed
Subordinated Debt Securities and approval of the final terms thereof have
been duly authorized by Ahold Finance by appropriate corporate action, and
(iv) the Guaranteed Subordinated Debt Securities, in the form included in
the Guaranteed Subordinated Debt Indenture filed as an exhibit to the
Registration Statement (with such changes or additions as permitted in the
Guaranteed Subordinated Debt Indenture), have been duly executed and
delivered by Ahold Finance and Royal Ahold and authenticated by the
Guaranteed Subordinated Debt Trustee pursuant to the Guaranteed
Subordinated Debt Indenture and delivered and paid for as contemplated by
the applicable Underwriting Agreement and the Registration Statement, the
Guaranteed Subordinated Debt Securities will constitute valid and legally
binding obligations of Ahold Finance under the laws of the State of New
York, enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless
of whether the issue of enforceability is considered in a proceeding in
equity or at law); and
(h) When (i) the execution of the Ahold Finance Warrant Agreement has
been duly authorized by Ahold Finance by appropriate corporate action, (ii)
the Ahold Finance Warrant Agreement, in the form filed as an exhibit to the
Registration Statement, has been duly executed and delivered by Ahold
Finance and the warrant agent thereunder, (iii) the issuance of the Ahold
Finance Warrants and approval of the final terms thereof have been duly
authorized by Ahold Finance by appropriate corporate action, and (iv) the
Ahold Finance Warrants, in the form included in the Ahold Finance Warrant
Agreement filed as an exhibit to the Registration Statement (with such
changes or additions as permitted in the Ahold Finance Warrant Agreement),
have been duly executed and delivered by Ahold Finance and countersigned by
the warrant agent thereunder pursuant to the Ahold Finance Warrant
Agreement and delivered and paid for as contemplated by the applicable
Underwriting Agreement and the Registration Statement, the Ahold Finance
Warrants will constitute valid and legally binding obligations of Ahold
Finance under the laws of the State of New York, enforceable in accordance
with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether the issue of enforceability is considered
in a proceeding in equity or at law).
Insofar as the opinion set forth herein relates to matters of the law of
The Netherlands, we have relied upon the opinions of De Brauw Blackstone
Westbroek N.V., Dutch counsel to Royal Ahold, dated of even date herewith and
filed as Exhibits 5.1, 5.2 and 5.4 to the Registration Statement, and our
opinion herein is subject to any and all exceptions and reservations set forth
therein.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm appearing and under the caption
"Validity of Securities" in the Prospectus that is part of the Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder.
Very truly yours,
/s/ White & Case LLP
--------------------
WHITE & CASE LLP
MB:DBH:UB:dem
Koninklijke Ahold
Albert Heijnweg 1
1507 EH ZAANDAM
The Netherlands
F.M. Schlingmann - advocaat
Telephone: (020) 577 1452
Facsimile: (020) 577 1775
E-mail: [email protected]
Amsterdam, 8 June 1999 Your ref.:
Our ref.: f:\229\20138776\b001opia-229.doc\mb
Ladies and Gentlemen,
Koninklijke Ahold N.V. - Ahold Finance U.S.A., Inc.
Registration under the United States Securities Act of 1933
as amended, of senior and subordinated debt securities issuable by
Ahold Finance U.S.A., Inc. and of guarantees of such debt securities by
Koninklijke Ahold N.V. as described in the Registration Statement
(as defined below)
I have acted in the name of De Brauw Blackstone Westbroek N.V. as legal counsel
in respect of the law of the Netherlands to Koninklijke Ahold N.V., a company
incorporated under the law of the Netherlands, with its corporate seat in
Zaandam (municipality Zaanstad), the Netherlands (the "Company"), in connection
with the registration under the United States Securities Act of 1933, as amended
(the "Securities Act"), by Ahold Finance U.S.A., Inc. of senior and subordinated
debt securities issuable by Ahold Finance U.S.A., Inc. (the "Finance Senior Debt
Securities" and the "Finance Subordinated Debt Securities", respectively, and
collectively the "Finance Debt Securities"), which Finance Debt Securities may
be convertible into common shares, each with a par value of NLG 0.50, to be
issued in the share capital of the Company (the "Common Shares"), and which
Finance Debt Securities are stated to be unconditionally guaranteed by the
Company, and the registration under the Securities Act of the guarantees by the
Company. The Finance Debt Securities will be issued under the Indentures (as
defined below). The Finance Debt Securities are being registered for offering
and sale from time to time pursuant to Rule 415 under the Securities Act. The
aggregate public offering price of the Finance Debt Securities, the Common
Shares, the financing preferred shares and the convertible preferred shares in
the share capital of the Company (collectively the "Shares") and of certain debt
securities and warrants of the Company and of certain warrants of Ahold Finance
U.S.A., Inc., that are also registered pursuant to the Registration Statement
and that have been registered under certain other registration statements of the
Company will not exceed USD 3,000,000,000 or the equivalent thereof in one or
more foreign currencies, foreign currency units or composite currencies.
In connection herewith I have examined the following documents:
(a) a photocopy of a copy of the deed of incorporation of the Company and the
text of the articles of association of the Company, as most recently
amended, according to the Extract (as defined below), by deed of
amendment executed on June 22, 1998 (the "Articles of Association"), both
as filed with the Chamber of Commerce and Industry for "de Zaanstreek"
(the "Chamber of Commerce");
(b) an extract from the trade register regarding the Company, dated June 7,
1999 (the "Extract"), provided by the Chamber of Commerce and confirmed
to me to be unchanged in all respects material for rendering this opinion
by telephone by the Chamber of Commerce on the date hereof;
(c) a telecopy of an excerpt from the minutes of the meeting of the corporate
executive board ("raad van bestuur") of the Company, held on October 26,
1998, relating to the resolution of the corporate executive board of the
Company to file a shelf registration with the United States Securities
and Exchange Commission at a maximum total amount of USD 3,000,000,000
and a telecopy of an excerpt from the minutes of the meeting of the
corporate executive board ("raad van bestuur") of the Company, held on
May 17, 1999, relating to the resolution of the corporate executive board
of the Company to file a shelf registration with the United States
Securities and Exchange Commission at a maximum total amount of USD
3,500,000,000;
(d) telecopies of a resolution of the supervisory board ("raad van
commissarissen") of the Company, signed in counterparts and dated January
15, 1999, to approve the proposal of filing a shelf registration that
offers the possibility to issue equity, senior debt, convertible debt,
preferred financing shares, convertible financing shares and warrants in
the amount of up to USD 3,000,000,000 and telecopies of a resolution of
the supervisory board ("raad van commissarissen") of the Company, signed
in counterparts and dated May 20, 1999, to approve the proposal of filing
a shelf registration that offers the possibility to issue equity, senior
debt, convertible debt, preferred financing shares, convertible financing
shares and warrants in the amount of up to USD 3,500,000,000;
(e) a telecopy of an extract from the minutes of the general meeting of
shareholders of the Company, held on May 6, 1997, referring to the
resolution to designate the corporate executive board ("raad van
bestuur") of the Company as the corporate body authorized to resolve,
subject to the approval of the supervisory board ("raad van
commissarissen") of the Company, to, inter alia, issue Common Shares and
rights to acquire Common Shares, and to limit or exclude preemptive
rights;
(f) a telecopy of a form of senior debt indenture (the "Senior Indenture")
dated as of April 29, 1999 between Ahold Finance U.S.A., Inc. as Issuer,
the Company as Guarantor and The Chase Manhattan Bank, including the
forms of the Finance Senior Debt Securities and filed as Exhibit 4.4 to
the Registration Statement;
(g) a draft, dated January 25, 1999, of a form of subordinated debt indenture
(the "Subordinated Indenture" and, together with the Senior Indenture,
the "Indentures") between Ahold Finance U.S.A., Inc. as Issuer, the
Company as Guarantor and The Bank of New York, including the forms of the
Finance Subordinated Debt Securities and filed as Exhibit 4.5 to the
Registration Statement and a telecopy, received by me on June 3, 1999, of
an amended page 2 of the Subordinated Indenture;
(h) the form of guaranty (the "Guaranty") to be endorsed on the Finance Debt
Securities, as set out in the Indentures;
(i) a copy of a registration statement on Form F-3 and on Form S-3 (Nos.
333-71383 and 333-71383-01) (together the "Registration Statement"),
including a prospectus (the "Prospectus"), relating to the Shares and the
Securities;
and such other documents as I have deemed necessary to enable me to render this
opinion.
My examination referred to above has been limited to the text of the documents.
For the purpose of this opinion I have made the following assumptions:
(i) all signatures on original documents are the genuine signatures of the
persons purported to have executed the same and all copies (in whatever
form) conform to the originals;
(ii) the Indentures (including the Guaranties) and the Finance Debt Securities
will have been executed substantially in the form of the drafts and forms
referred to above in (f), (g) and (h);
(iii) all the parties to the Indentures other than the Company have the
required capacity, power and authority to execute and deliver the
Indentures and to perform their respective obligations thereunder and the
Indentures and the Finance Debt Securities will have been duly
authorized, executed and delivered by all the parties thereto;
(iv) the Indentures will have been executed and delivered in the name of the
Company by any individual member of the corporate executive board ("lid
van de raad van bestuur") of the Company, as referred to in the Extract
or by any other person duly authorized by the Company to so execute and
deliver the Indentures in the name of the Company;
(v) the Guaranty to be endorsed on the Finance Debt Securities will have been
executed and delivered in the name of the Company by the manual or
facsimile signature of any individual member of the corporate executive
board ("lid van de raad van bestuur") of the Company (with, in the case
of a facsimile signature, approval of such signing member of the
corporate executive board of the Company of the use of his facsimile
signature) and the Finance Debt Securities on which the Guaranty is
endorsed will have been duly authenticated and delivered in accordance
with the provisions of the Indentures;
(vi) the Indentures, the Finance Debt Securities and the Guaranties, when duly
executed and delivered by the Company and when duly authorized, executed
and delivered by all parties thereto, will constitute valid, binding and
enforceable obligations of all the parties thereto under the law of the
State of New York to which they are expressed to be subject, except for
the subordination provisions of (i) the Subordinated Indenture, (ii) the
Finance Subordinated Debt Securities and (iii) the Guaranty endorsed on
such Finance Subordinated Debt Securities, which subordination provisions
are expressed to be governed by the law of the Netherlands;
(vii) the Finance Debt Securities will be offered in accordance with the
provisions of or pursuant to the 1995 Act on the supervision of the
securities trade ("Wet toezicht effectenverkeer 1995").
(viii) the Finance Debt Securities, at the time of the issuance thereof, will be
duly issued, authenticated, offered, sold, delivered and paid for (a) as
contemplated in and in accordance with the Indentures, the Registration
Statement and the Prospectus, (b) in accordance with any applicable law
and (c) with such terms so as not to violate any applicable law
(including, for the avoidance of doubt, any law in effect at the time of
such issuance, authentication, offer, sale and delivery);
(ix) the Company has at the time of the entering into of the Indentures and
the issuance of the Guaranty complied with all requirements of article 25
of the Works Council Act ("Wet op de ondernemingsraden") in connection
with the entering into of the Indentures and the issuance of the
Guaranty;
(x) the Guaranty and the Common Shares, if the Finance Debt Securities are
convertible into Common Shares, will have been duly authorized in
accordance with the articles of association of the Company in effect at
the time of authorization (and under the Articles of Association due
authorization requires that Common Shares and rights to acquire Common
Shares are issued pursuant to a resolution adopted by the general meeting
of shareholders ("algemene vergadering van aandeelhouders") of the
Company on a proposal of the corporate executive board ("raad van
bestuur") of the Company, or pursuant to a resolution of the corporate
executive board of the Company if the corporate executive board of the
Company has been duly authorized to issue shares in the share capital of
the Company and rights to acquire shares in the share capital of the
Company in accordance with the Articles of Association, subject to the
approval of the supervisory board ("raad van commissarissen") of the
Company, and the validity of the resolution of the general meeting of
shareholders of the Company to issue Common Shares or rights to acquire
Common Shares or to designate another corporate body of the Company
requires the prior or simultaneous approval of each group of holders of
shares of the same class whose rights are prejudiced by the issue);
(xi) if the Finance Debt Securities are convertible into Common Shares, the
nominal amount of the Common Shares and any share premium agreed upon at
any time have or will have been duly paid up;
(xii) if the Finance Debt Securities are convertible into Common Shares, the
amount of the authorized share capital ("maatschappelijk kapitaal") of
the Company at the time of issuance is sufficient to allow for the
issuance of the Common Shares upon conversion of the Finance Debt
Securities;
(xiii) if the Finance Debt Securities are convertible into Common Shares, the
Common Shares issued upon conversion of any Finance Debt Securities will
have been issued in the form and in the manner prescribed by the articles
of association of the Company in effect at the time of issuance (and
under the Articles of Association issuance as contemplated under the
Registration Statement and the Prospectus meets that requirement);
(xiv) if the Finance Debt Securities are convertible into Common Shares, the
Common Shares issued upon conversion of any Finance Debt Securities will
otherwise have been issued and accepted by the subscribers therefor in
accordance with all applicable law (including, for the avoidance of
doubt, the law of the Netherlands); and
(xv) if the Finance Debt Securities are convertible into Common Shares, the
resolutions of the corporate executive board of the Company to issue
Common Shares or rights to acquire Common Shares or to limit or exclude
pre-emptive rights are not contrary to reasonableness and fairness which
persons connected with a Dutch company need to observe vis-a-vis each
other.
I have not investigated the law of any jurisdiction other than the Netherlands
and I do not express an opinion on the law of any jurisdiction other than the
Netherlands. I only express an opinion on matters of the law of the Netherlands
as it stands and has been published as at the date of this opinion. I do not
express any opinion on taxation laws.
Terms and expressions of law and of legal concepts as used in this opinion have
the meaning attributed to them under the law of the Netherlands and this opinion
should be read and understood accordingly.
Based upon the foregoing (including the documents listed above and the
assumptions set out above) and subject to any facts, circumstances, events or
documents not disclosed to me in the course of my examination referred to above,
I am, at the date hereof, of the following opinion:
1. The Company has been duly incorporated and is validly existing as a legal
entity in the form of a public company with limited liability ("naamloze
vennootschap") under the law of the Netherlands.
2. The Guaranties, when issued as set out in the assumptions above, will,
according to the courts of the Netherlands duly applying the law of the
State of New York (except with respect to the subordination provisions of
the Guaranty endorsed on any Subordinated Finance Debt Securities, which
are expressed to be governed by the law of the Netherlands) as the law
expressed to be governing the Guaranties constitute a valid and binding
contractual obligation of the Company, enforceable against the Company in
accordance with its terms.
The opinions expressed above are subject to the following qualifications:
(aa) the opinions expressed herein are limited by any applicable bankruptcy,
moratorium and other laws affecting creditors' rights (including
statutory preferences) generally;
(bb) when applying the law of the State of New York as the law expressed to be
governing the Indentures, the contractual provisions of the Finance Debt
Securities and the Guaranties (except for the subordination provisions of
the Subordinated Indenture, the Subordinated Finance Debt Securities and
of the Guaranty endorsed on such Subordinated Finance Debt Securities
which are expressed to be governed by the law of the Netherlands), the
competent courts of the Netherlands, if any,
- may give effect to the mandatory rules of the law of another
country with which the situation has a close connection, if and in
so far as under the law of the latter country, those rules must be
applied whatever the law applicable to the Indentures, the
contractual provisions of the Finance Debt Securities and the
Guaranties;
- will apply the law of the Netherlands in a situation where it is
mandatory irrespective of the law otherwise applicable to the
Indentures, the contractual provisions of the Finance Debt
Securities and the Guaranties;
- may refuse to apply the law of the State of New York if such
application is manifestly incompatible with the public policy of
the Netherlands; and
- shall have regard to the law of the country in which performance
takes place in relation to the manner of performance and the steps
to be taken in the event of defective performance; any aspects of
the law of companies of the Finance Debt Securities which are
convertible into Common Shares and of the Guaranty endorsed
thereon will be subject to the law of the Netherlands;
(cc) when applying the law of the Netherlands as the law governing the
subordination provisions of the Subordinated Indenture, the Subordinated
Finance Debt Securities and the Guaranty endorsed on such Subordinated
Finance Debt Securities, the competent courts of the Netherlands, if any:
- may give effect to the mandatory rules of the law of another
country which the situation has a close connection, if and insofar
as, under the law of the latter country, those rules must be
applied whatever the law applicable to the subordination
provisions of the Subordinated Indenture, the Subordinated Finance
Debt Securities and the Guaranty endorsed on such Subordinated
Finance Debt Securities;
- shall have regard to the law of the country in which performance
takes place in relation to the manner of performance and the steps
to be taken in the event of defective performance;
(dd) a final judgement in respect of the Indentures, the Finance Debt
Securities or the Guaranties, rendered by a court of another country in
favour of a party to the Indentures, or any holder of a Finance Debt
Security against the Company, will be recognized and enforced by the
courts of the Netherlands subject to the conditions and limitations of a
convention or treaty on the recognition and enforcement of judgements in
civil and commercial matters between such country and the Netherlands and
subject to the rules and regulations promulgated pursuant thereto;
(ee) in the absence of an applicable convention between the United States of
America and the Netherlands providing for reciprocal recognition and
enforcement of judgements in civil and commercial matters, a judgement
rendered by a U.S. court in favour of a party to the Indentures or any
holder of a Finance Debt Security against the Company will not be
recognized and enforced by the courts of the Netherlands; in order to
obtain a judgement which is enforceable against the Company in the
Netherlands, such party will have to file its claim against the Company
with the competent Netherlands court and may submit in the course of the
proceedings the final judgement which has been rendered in the United
States; if the Netherlands court finds that the jurisdiction of the court
in the United States has been based on grounds which are internationally
acceptable and that proper legal procedures have been observed, the
Netherlands court would, in principle, give binding effect to the final
judgement which has been rendered in the United States, unless such
judgement contravened Netherlands principles of public policy;
(ff) the recognition of the submission by the Company to the jurisdiction of
any state or federal court in the State and County of New York, the
Borough of Manhattan, United States of America, will be subject to
similar conditions and limitations as those set forth in the EC
Convention on jurisdiction and the enforcement of judgements in civil and
commercial matters of September 27, 1968, as amended, and the rules and
regulations promulgated pursuant thereto, such as the limitation that
application for provisional, including protective, measures which are
available under the law of another state than the State of New York may
be made to the courts of that state;
(gg) the enforcement in the Netherlands of the Indentures, the Finance Debt
Securities and the Guaranties and of foreign judgements will be subject
to the rules of civil procedure as applied by the courts of the
Netherlands;
(hh) a power of attorney, instruction, designation or appointment may under
the law of the Netherlands not be deemed to be irrevocable, to the extent
that such power of attorney, instruction, designation or appointment has
not been granted for the performance of a legal act in the interest of
the receiver thereof or of a third party, and to the extent that the law
of the Netherlands would apply, such power of attorney, instruction,
designation or appointment would terminate upon the bankruptcy of the
grantor, instructor, designator or appointor thereof;
(ii) to the extent that the law of the Netherlands is applicable, the
provisions set out in the Indentures to the effect that the Issuer (as
therein defined), the Guarantor (as therein defined), the Trustee and any
agent of the Issuer, the Guarantor or the Trustee may deem and treat the
Person (as therein defined) in whose name any Security (as therein
defined) shall be registered in the Register (as therein defined) for
such series as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership
or other writing thereon) for the purpose of receiving payment of or on
account of the principal of and, subject to the provisions of the
Indentures, interest, if any, on such Security and for all other purposes
and that neither the Issuer nor the Guarantor, nor the Trustee nor any
agent of the Issuer, the Guarantor or the Trustee shall be affected by
any notice to the contrary, may not be enforceable under all
circumstances;
(jj) the recognition of a trust as such is subject to the conditions and
limitations of the Convention on the law applicable to trusts and on
their recognition of July 1, 1985, and the rules and regulations
promulgated pursuant thereto;
(kk) to the extent that the law of the Netherlands is applicable to the
succession or substitution of the Company by any successor corporation or
person as set forth in Sections 8.1 and 8.2 of the Indentures, it should
be noted that the transfer of a debt from a debtor to a third party only
takes effect against the creditor if and when the latter has given his
consent ("toestemming") within the meaning of article 155 of Book 6 of
the Netherlands Civil Code, after the parties (being the original debtor
and the third party transferee) have notified him of the transfer, and
that the substitution of a party to a contract by a third party only
takes effect against another party to such contract if and when the
latter has cooperated with such substitution ("medewerking") within the
meaning of paragraph 1 of article 159 of Book 6 of the Netherlands Civil
Code, after the parties (being the original party to the contract and the
third party by whom such original party will be substituted) have made a
deed for the purpose of such substitution; when the creditor has
consented in advance to the transfer of the debt and the substitution of
the respective party, respectively, the transfer and the substitution,
respectively, take effect as soon as the debtor and the third party have
reached an agreement and made a deed for the purpose of the substitution,
respectively, and they have together informed the creditor in writing of
the transfer and the substitution, respectively;
(ll) if the Guaranty was executed in the name of the Company by bearing the
manual or facsimile signature of any person who at the date of the
signing of the relevant Indenture or the Guaranty endorsed on the
relevant Finance Debt Securities was a duly authorized representative of
the Company but before authentication and delivery of the Security (as
defined in the Indenture) on which the Guaranty is endorsed ceases to
hold such offices for whatever reasons or did not hold such offices at
the date of execution and delivery of the Indenture, it may be necessary
for the enforcement of the Guaranty that the holder of one or more Debt
Securities shall present a copy of the Indenture;
(mm) to the extent that the law of the Netherlands is applicable, the
provisions in the Indenture to the effect that no recourse for the
payment of the principal of or interest, if any, on the Securities (as
therein defined) or for payment pursuant to the Guaranty, or for any
claim based thereon or otherwise in respect thereof, and that no recourse
under or upon any obligation, covenant or agreement of the Guarantor (as
therein defined) in the Indenture or any indenture supplemental thereto
or in any Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
official, member or deputy member of the executive board or member of the
supervisory board, as such, past, present or future, of the Guarantor or
of any successor entity, either directly or through the Guarantor or any
successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or
otherwise, may not be enforceable under all circumstances;
(nn) to the extent that the law of the Netherlands is applicable, the
provisions in each of the Indentures to the effect that in any
proceedings brought by the Trustee (and also any proceedings in which a
declaratory judgement of a court may be sought as to the interpretation
or construction of any provision of the Indenture to which the Trustee
shall be a party), the Trustee shall be held to represent all the Holders
(as therein defined) of the Securities (as therein defined) to which such
proceedings relate, and that it shall not be necessary to make any
Holders of such Securities parties to any such proceedings, may not be
enforceable;
(oo) to the extent that the law of the Netherlands is applicable, the
provisions in each of the Indentures to the effect that no Holder (as
therein defined) of any Security (as therein defined) of any series shall
have any right by virtue or by availing of any provision of the Indenture
to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to the Indenture,
or for the appointment of an administrator, bewindvoerder, receiver,
liquidator, curator, sequestrator, trustee or other similar officer or
for any other remedy under the Indenture, unless such Holder previously
shall have given to the Trustee written notice as further provided in the
Indenture, may not be enforceable under all circumstances; and
(pp) no opinion is expressed on the validity of any conveyance, transfer,
assignment, mortgage or pledge to the Trustee as security for the
Securities of one or more series of any property or assets under any
supplemental indenture as contemplated by Section 7.1 of each of the
Indentures and no opinion is expressed on any supplemental indenture for
whatever purpose contemplated by the said section of the Indentures.
Without my prior written consent, this opinion letter may not be transmitted to
or filed with any person, firm, company or institution except to your United
States counsel, White & Case LLP.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to De Brauw Blackstone Westbroek N.V. in the
prospectus under the headings "Limitations on Enforcement of U.S. Laws against
Royal Ahold, its Management, and Others" and "Validity of Securities".
In giving such consent, I do not thereby admit that I am in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Francine M. Schlingmann
- ------------------------------
Francine M. Schlingmann
for De Brauw Blackstone Westbroek N.V.
<TABLE>
<CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES
Dutch GAAP
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
earnings before 1,726,326 1,362,972 924,380 671,551 587,597
income tax and
minority interest
minority interest (86,163) (46,755) (43,115) (35,753) (22,714)
adjustments
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest (36,512) (24,950) (7,441) (4,408) (2,472)
"earnings" (Dutch 2,307,692 1,896,280 1,247,661 924,046 845,302
GAAP)
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest 36,512 24,950 7,441 4,408 2,472
fixed charges 740,553 629,963 381,278 297,064 285,363
Ratio of earnings 3.12 3.01 3.27 3.11 2.96
to fixed charges
according to Dutch
GAAP
US GAAP
1998 1997 1996 1995 1994
earnings before 1,331,311 1,129,778 798,374 634,320 579,553
income tax and
minority interest
minority interest (57,309) (38,441) (37,498) (29,865) (17,225)
adjustments
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest (36,512) (24,950) (7,441) (4,408) (2,472)
"earnings" (US GAAP) 1,941,531 1,671,400 1,127,272 892,703 842,747
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest 36,512 24,950 7,441 4,408 2,472
fixed charges 740,553 629,963 381,278 297,064 285,563
Ratio of earnings 2.62 2.65 2.96 3.01 2.95
to fixed charges
according to US GAAP
</TABLE>
<TABLE>
<CAPTION>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED SHARE DIVIDENDS
Dutch GAAP
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
earnings before 1,726,326 1,362,972 924,380 671,551 587,597
income tax and
minority interest
minority interest (86,163) (46,755) (43,115) (35,753) (22,714)
adjustments
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest (36,512) (24,950) (7,441) (4,408) (2,472)
"earnings" (Dutch 2,307,692 1,896,280 1,247,661 924,046 845,302
GAAP)
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest 36,512 24,950 7,441 4,408 2,472
preferred share 21,871 18,348 9,476
dividends
fixed charges incl. 762,424 648,311 390,754 297,064 285,363
fixed charge dividends
Ratio of earnings to 3.03 2.92 3.19 3.11 2.96
combined fixed
charges and preferred
share dividends
according to Dutch
GAAP
US GAAP
1998 1997 1996 1995 1994
earnings before 1,331,311 1,129,778 798,374 634,320 579,553
income tax and
minority interest
minority interest (57,309) (38,441) (37,498) (29,865) (17,225)
adjustments
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest (36,512) (24,950) (7,441) (4,408) (2,472)
"earnings" (US GAAP) 1,941,531 1,671,400 1,127,272 892,703 842,747
interest expenses 704,041 605,013 373,837 292,656 282,891
capitalized interest 36,512 24,950 7,441 4,408 2,472
preferred share 21,871 18,348 9,476
dividends
fixed charges incl. 762,424 648,311 390,754 297,064 385,363
Fixed charge dividends
Ratio of earnings to 2.55 2.58 2.88 3.01 2.95
combined fixed
charges and preferred
share dividends
according to US GAAP
</TABLE>
Date
June 8, 1999
Reference
K.J.N. Bakkes
We consent to the incorporation by reference in this Registration Statement of
Koninklijke Ahold N.V. on Form F-3 and Form S-3 of our report dated March 9,1999
appearing in the annual report on Form 20-F of Koninklijke Ahold N.V. for the
year ended January 3, 1999 and to the reference to us under the heading
"Experts" in such Registration Statement.
/s/ Deloitte & Touche registeraccountants
Securities Act of 1933 File No.
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
- --------------------------------------------------------------------------------
------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
THE CHASE MANHATTAN BANK
(Exact name of Trustee as specified in its charter)
13-4994650
(I.R.S. Employer Identification Number)
270 Park Avenue, New York, New York
(Address of Principal Executive Offices)
10017
(Zip Code)
------------
<TABLE>
<CAPTION>
<S> <C>
KONINKLIJKE AHOLD N.V. AHOLD FINANCE U.S.A., INC.
(Incorporated in The Netherlands as a public company with (Exact name of Registrant as specified in its charter)
with limited liability)
(Exact name of Registrant as Specified in its Charter)
ROYAL AHOLD
(Translation of Registrant's Name into English)
The Netherlands Delaware
(State or other jurisdiction of (State of other jurisdrction of incorporation
incorporation or organization) of organization)
N/A 58-2434256
(I.R.S. Employer Identification No.) (I.R.S. Employer Indentification No.)
Albert Heijnweg 1 913 North Market Street
1507 EH Zaandam, Wilmington, Delaware 19801-3052
The Netherlands (302) 552-3100
011-31-75-6599111 (Address and telephone number of Registrant's
(Address and telephone number of Principal executives offices)
Registrant's principal executive offices)
Senior Debt Securities
(Title of the Indenture Securities)
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 8th day of June, 1999.
THE CHASE MANHATTAN BANK
By /s/ Janet Robinson
-------------------
Janet Robinson
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1998, in
accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the
Federal Reserve Act.
<TABLE>
DOLLAR AMOUNTS
<CAPTION>
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................... $ 12,546
Interest-bearing balances ............................................ 6,610
Securities: ..............................................................
Held to maturity securities................................................ 2,014
Available for sale securities.............................................. 46,342
Federal funds sold and securities purchased under
agreements to resell ................................................ 27,489
Loans and lease financing receivables:
Loans and leases, net of unearned income $129,281
Less: Allowance for loan and lease losses 2,796
Less: Allocated transfer risk reserve ......... 0
--------------
Loans and leases, net of unearned income,
allowance, and reserve ............................................. 126,485
Trading Assets .......................................................... 58,015
Premises and fixed assets (including capitalized
leases)............................................................ 3,001
Other real estate owned
........................................................ 260
Investments in unconsolidated subsidiaries and
associated companies............................................... 255
Customers' liability to this bank on acceptances
outstanding ....................................................... 1,245
Intangible assets ...................................................... 1,492
Other assets ........................................................... 16,408
-------------
TOTAL ASSETS ........................................................... $302,162
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .............................................. $99,347
Noninterest-bearing .................................$41,566
Interest-bearing .....................................57,781
--------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's .......................................... 80,602 Noninterest-bearing
.........................................$ 4,109
Interest-bearing ................................... 76,493
Federal funds purchased and securities sold under agree-
ments to repurchase .................................................. 37,760
Demand notes issued to the U.S. Treasury ............................. 1,000
Trading liabilities .................................................. 42,941
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ................... 4,162 With a remaining
maturity of more than one year
through three years....................................... 213
With a remaining maturity of more than three years.............. 106
Bank's liability on acceptances executed and outstanding 1,245
Subordinated notes and debentures ..................................... 5,408
Other liabilities ..................................................... 11,796
TOTAL LIABILITIES ..................................................... 284,580
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock .......................................................... 1,211
Surplus (exclude all surplus related to preferred stock).............. 10,441
Undivided profits and capital reserves ................................ 5,916
Net unrealized holding gains (losses)
on available-for-sale securities ...................................... (2)
Cumulative foreign currency translation adjustments ................... 16
TOTAL EQUITY CAPITAL .................................................. 17,582
----------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................. $302,162
==========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) /_/
-------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
KONINKLIJKE AHOLD N.V.
(Exact name of obligor as specified in its charter)
ROYAL AHOLD
(Translation of Registrant's name into English)
The Netherlands Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Albert Heijnweg 1
1507 EH Zaandam,
The Netherlands
(Address of principal executive offices) (Zip code)
AHOLD FINANCE U.S.A., INC.
(Exact name of obligor as specified in its charter)
Delaware 58-2434256
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
913 North Market Street
Wilmington, Delaware 19801-3052
(Address of principal executive offices) (Zip code)
-------------
Subordinated debt securities
(Title of the indenture securities)
========================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 7th day of June, 1999.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
----------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
ASSETS Dollar Amounts
In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency $4,508,742
and coin................................
Interest-bearing balances................. 4,425,071
Securities:
Held-to-maturity securities............... 836,304
Available-for-sale securities............. 4,047,851
Federal funds sold and Securities purchased 1,743,269
under agreements to resell................
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............39,349,679
LESS: Allowance for loan and
lease losses............603,025
LESS: Allocated transfer risk
reserve........................15,906
Loans and leases, net of unearned income, 38,730,748
allowance, and reserve..................
Trading Assets.............................. 1,571,372
Premises and fixed assets (including 685,674
capitalized leases).......................
Other real estate owned..................... 10,331
Investments in unconsolidated subsidiaries 182,449
and associated companies..................
Customers' liability to this bank on 1,184,822
acceptances outstanding...................
Intangible assets........................... 1,129,636
Other assets................................ 2,632,309
-----------
Total assets................................ $61,688,578
===========
LIABILITIES
Deposits:
In domestic offices....................... $25,731,036
Noninterest-bearing.............10,252,589
Interest-bearing................15,478,447
In foreign offices, Edge and Agreement 18,756,302
subsidiaries, and IBFs..................
Noninterest-bearing................111,386
Interest-bearing................18,644,916
Federal funds purchased and Securities sold 3,276,362
under agreements to repurchase............
Demand notes issued to the U.S.Treasury..... 230,671
Trading liabilities......................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less.... 1,154,502
With remaining maturity of more than one 465
year through three years................
With remaining maturity of more than 31,080
three years.............................
Bank's liability on acceptances executed 1,185,364
and outstanding...........................
Subordinated notes and debentures........... 1,308,000
Other liabilities........................... 2,743,590
----------
Total liabilities........................... 55,971,865
==========
EQUITY CAPITAL
Common stock................................ 1,135,284
Surplus..................................... 764,443
Undivided profits and capital reserves...... 3,807,697
Net unrealized holding gains (losses) on 44,106
available-for-sale securities.............
Cumulative foreign currency translation
adjustments............................... (34,817)
Total equity capital........................ 5,716,713
-----------
Total liabilities and equity capital........ $61,688,578
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni Directors
Alan R. Griffith
Gerald L. Hassell
- --------------------------------------------------------------------------------
***
Exhibit 25.3
Securities Act of 1933 File No.
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
- --------------------------------------------------------------------------------
------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
THE CHASE MANHATTAN BANK
(Exact name of Trustee as specified in its charter)
13-4994650
(I.R.S. Employer Identification Number)
270 Park Avenue, New York, New York
(Address of Principal Executive Offices)
10017
(Zip Code)
----------------
<TABLE>
<CAPTION>
<S> <C>
KONINKLIJKE AHOLD N.V. AHOLD FINANCE U.S.A., INC.
Incorporated in The Netherlands as a public company (Exact name of Registrant as specified in its charter)
with limited liability)
(Exact name of Registrant as Specified in its Charter)
ROYAL AHOLD
(Translation of Registrant's Name into English)
The Netherlands Delaware
(State or other jurisdiction of (State of other jurisdrction of incorporation
incorporation or organization) of organization)
N/A 58-2434256
(I.R.S. Employer Identification No.) (I.R.S. Employer Indentification No.)
Albert Heijnweg 1 913 North Market Street
1507 Eh Zaandam, Wilmington, Delaware 19801-3052
The Netherlands (302) 552-3100
011-31-75-6599111 (Address and telephone number of Registrant's
(Address and telephone number of Principal executives offices)
Registrant's principal executive offices)
Guaranteed Senior Debt Securities
(Title of the Indenture Securities)
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 8th day of June, 1999.
THE CHASE MANHATTAN BANK
By /s/ Janet Robinson
---------------------------------
Janet Robinson
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1998, in
accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the
Federal Reserve Act.
<TABLE>
DOLLAR AMOUNTS
<CAPTION>
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................... $ 12,546
Interest-bearing balances ............................................ 6,610
Securities: ..............................................................
Held to maturity securities................................................ 2,014
Available for sale securities.............................................. 46,342
Federal funds sold and securities purchased under
agreements to resell ................................................ 27,489
Loans and lease financing receivables:
Loans and leases, net of unearned income $129,281
Less: Allowance for loan and lease losses 2,796
Less: Allocated transfer risk reserve ......... 0
--------------
Loans and leases, net of unearned income,
allowance, and reserve ............................................. 126,485
Trading Assets .......................................................... 58,015
Premises and fixed assets (including capitalized
leases)............................................................ 3,001
Other real estate owned
........................................................ 260
Investments in unconsolidated subsidiaries and
associated companies............................................... 255
Customers' liability to this bank on acceptances
outstanding ....................................................... 1,245
Intangible assets ...................................................... 1,492
Other assets ........................................................... 16,408
-------------
TOTAL ASSETS ........................................................... $302,162
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .............................................. $99,347
Noninterest-bearing .................................$41,566
Interest-bearing .....................................57,781
--------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's .......................................... 80,602 Noninterest-bearing
.........................................$ 4,109
Interest-bearing ................................... 76,493
Federal funds purchased and securities sold under agree-
ments to repurchase .................................................. 37,760
Demand notes issued to the U.S. Treasury ............................. 1,000
Trading liabilities .................................................. 42,941
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ................... 4,162 With a remaining
maturity of more than one year
through three years....................................... 213
With a remaining maturity of more than three years.............. 106
Bank's liability on acceptances executed and outstanding 1,245
Subordinated notes and debentures ..................................... 5,408
Other liabilities ..................................................... 11,796
TOTAL LIABILITIES ..................................................... 284,580
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock .......................................................... 1,211
Surplus (exclude all surplus related to preferred stock).............. 10,441
Undivided profits and capital reserves ................................ 5,916
Net unrealized holding gains (losses)
on available-for-sale securities ...................................... (2)
Cumulative foreign currency translation adjustments ................... 16
TOTAL EQUITY CAPITAL .................................................. 17,582
----------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................. $302,162
==========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) /_/
_____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_____________
KONINKLIJKE AHOLD N.V.
(Exact name of obligor as specified in its charter)
ROYAL AHOLD
(Translation of Registrant's name into English)
The Netherlands Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Albert Heijnweg 1
1507 EH Zaandam,
The Netherlands
(Address of principal executive offices) (Zip code)
AHOLD FINANCE U.S.A., INC.
(Exact name of obligor as specified in its charter)
Delaware 58-2434256
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
913 North Market Street
Wilmington, Delaware 19801-3052
(Address of principal executive offices) (Zip code)
_____________
Guaranteed subordinated debt securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of 2 Rector Street, New York,
the State of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank 33 Liberty Plaza, New York,
of New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 7th day of June, 1999.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
----------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
ASSETS Dollar Amounts
In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency $4,508,742
and coin................................
Interest-bearing balances................. 4,425,071
Securities:
Held-to-maturity securities............... 836,304
Available-for-sale securities............. 4,047,851
Federal funds sold and Securities purchased 1,743,269
under agreements to resell................
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............39,349,679
LESS: Allowance for loan and
lease losses............603,025
LESS: Allocated transfer risk
reserve........................15,906
Loans and leases, net of unearned income, 38,730,748
allowance, and reserve..................
Trading Assets.............................. 1,571,372
Premises and fixed assets (including 685,674
capitalized leases).......................
Other real estate owned..................... 10,331
Investments in unconsolidated subsidiaries 182,449
and associated companies..................
Customers' liability to this bank on 1,184,822
acceptances outstanding...................
Intangible assets........................... 1,129,636
Other assets................................ 2,632,309
-----------
Total assets................................ $61,688,578
===========
LIABILITIES
Deposits:
In domestic offices....................... $25,731,036
Noninterest-bearing.............10,252,589
Interest-bearing................15,478,447
In foreign offices, Edge and Agreement 18,756,302
subsidiaries, and IBFs..................
Noninterest-bearing................111,386
Interest-bearing................18,644,916
Federal funds purchased and Securities sold 3,276,362
under agreements to repurchase............
Demand notes issued to the U.S.Treasury..... 230,671
Trading liabilities......................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less.... 1,154,502
With remaining maturity of more than one 465
year through three years................
With remaining maturity of more than 31,080
three years.............................
Bank's liability on acceptances executed 1,185,364
and outstanding...........................
Subordinated notes and debentures........... 1,308,000
Other liabilities........................... 2,743,590
----------
Total liabilities........................... 55,971,865
==========
EQUITY CAPITAL
Common stock................................ 1,135,284
Surplus..................................... 764,443
Undivided profits and capital reserves...... 3,807,697
Net unrealized holding gains (losses) on 44,106
available-for-sale securities.............
Cumulative foreign currency translation
adjustments............................... (34,817)
Total equity capital........................ 5,716,713
-----------
Total liabilities and equity capital........ $61,688,578
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni Directors
Alan R. Griffith
Gerald L. Hassell
- --------------------------------------------------------------------------------
