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‘Structure Regime’
AEGON N.V. is applying the large company corporate provisions (also referred to as ‘Structure Regime’), as provided for under Dutch Corporate law. The proposals made to the Dutch Parliament in January 2002 to amend the Structure Regime are still pending, but no decisions have been made so far. This development as well as the ongoing international corporate governance discussions have given the Executive Board and the Supervisory Board cause to review and evaluate the position of AEGON N.V. as a company governed by the Structure Regime and to consider proposing and implementing changes to the corporate governance structure of AEGON N.V. In addition, the recapitalisation agreement entered into between AEGON and Vereniging AEGON in September 2002 gave rise to a reassessment of the company’s relationship with its largest shareholder. The Executive Board expects to be in a position to make its proposals for changes to the corporate governance structure of AEGON N.V. to the Annual General Meeting of shareholders in April 2003.
Currently AEGON N.V. is governed by the provisions of the Structure Regime, which has the following features:
Supervisory Board
In the performance of their duties, the members of the Supervisory Board shall follow the interests of the Company and its business. The Supervisory Board currently consists of ten members and acts as a body with collective responsibility and accountability. The members of the Board are (re)appointed by the Board itself, each time for a term of office of four years. They must retire at the latest at the conclusion of the Annual General Meeting of Shareholders (AGM) in the year in which they reach the age of 70 years. Shareholders, the Central Works Council in the Netherlands (CWC) and the Executive Board have the legal right to recommend candidates for the Supervisory Board. Moreover, shareholders and the CWC have the legal right to object to any candidate. The requirements, which the composition of the Board and the individual members have to meet, are outlined in the Profile. This Profile is available for shareholders at the secretariat of the Executive Board. According to the Profile, a total of ten Supervisory Board members is considered to be a suitable number, considering that the Executive Board is composed of four to five members, only one of the Supervisory Board members may be a former member of the Executive Board and Supervisory Board members may not be dependent on any interests associated with the Company and must fulfill their duties without mandate. (Re)Appointments have to be prepared and advised on by the Nominating Committee. Supervisory Board members are entitled to a fixed fee and an expense allowance. According to Dutch corporate law and the Articles of Incorporation, the Supervisory Board is the body that is authorized to appoint or discharge members of the Executive Board and to adopt the annual accounts. Moreover, certain important Executive Board resolutions, among which those concerning securities issues, are subject to the approval of the Supervisory Board. Rules and Regulations have been adopted, for internal use, in which procedures and the Board’s duties, activities and allocation of tasks are laid down.
Executive Board
The Executive Board, as a body, is charged with the management of the Company, whereby each individual member has specific areas of interest, within an allocation of duties as approved by the Supervisory Board. In principle, Executive Board members will be appointed for an indefinite period of time and shareholders have to be informed of an intended appointment. They can retire at the age of 60 and have to retire at the age of 62. The Supervisory Board determines the conditions of employment.
Shareholders
The Executive Board is accountable to investors for a clear and transparent justification of its management. Every shareholder has the right to speak and to vote without limitation in any of AEGON’s meetings of shareholders. Each outstanding share entitles the holder to one vote. AEGON was one of those actively involved in the establishment of the Dutch ‘Stichting Communicatiekanaal Aandeelhouders’ (Shareholders’ Communication Channel Foundation), established in April 1998 for better and direct communication with shareholders. Shareholders with a securities account in the Netherlands and participating in this Communication Channel can use the possibility offered by the Foundation to receive the annual report and the agenda for the AGM. Also a system is introduced which will offer shareholders the possibility of voting without attending a meeting in person. Furthermore, for both management and (groups of) shareholders the Communication Channel may serve to solicit proxies.
According to Dutch corporate law and AEGON N.V.’s Articles of Incorporation, shareholders in a meeting are authorized as follows:
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To approve the annual accounts, including profit appropriation and dividend. Furthermore, to release the Executive Board from liability with respect to its management and the Supervisory Board with respect to the supervision thereof, insofar as such management appears from the annual accounts. |
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To appoint the external auditor. |
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To decide on share issues or on the granting of rights to take shares (stock options) or to designate the Executive Board to resolve on such issues or grants, up to a certain maximum percentage and for a period not exceeding five years, and, possibly, to exclude shareholders’ pre-emptive rights. |
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To amend the Articles of Incorporation as proposed by the Executive Board and previously approved by the Supervisory Board. |
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To authorize the Executive Board to repurchase AEGON’s own shares. |
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To determine the Supervisory Board members’ fees. |
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