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Since AEGON was formed through the merger between AGO Holding N.V. and Ennia N.V. in 1983, it has voluntarily applied the 'large company regime' of the Dutch corporate code. However, on May 9, 2003, AEGON's shareholders approved certain changes to AEGON's corporate governance structure and AEGON's relationship with its major shareholder, Vereniging AEGON (Association AEGON), in an extraordinary General Meeting of Shareholders. AEGON's Articles of Incorporation were subsequently amended on May 26, 2003. The changes have increased the authority of AEGON's common shareholders and leaves behind a corporate governance structure that dates back to a time when AEGON was mainly active in the Netherlands. AEGON believes that this change is consistent with emerging global best practices in corporate governance.
As a public company under Dutch law, AEGON N.V. is governed by three corporate bodies: the General Meeting of Shareholders, the Executive Board and the Supervisory Board.
GENERAL MEETING OF SHAREHOLDERS
A General Meeting of Shareholders is held at least once a year to discuss and resolve on subjects including the adoption of the annual accounts, the approval of dividends and any appointments to the Executive Board and the Supervisory Board. Meetings are convened by public notice.
Extraordinary General Meetings of Shareholders may be convened by the Supervisory Board or the Executive Board whenever deemed necessary. In addition, shareholders representing at least 10% of the outstanding share capital may request the Supervisory Board and the Executive Board to convene an extraordinary General Meeting of Shareholders, specifying the business to be discussed.
In accordance with the Articles of Incorporation, requests to add
subjects to the agenda of a General Meeting of Shareholders made by
shareholders representing at least 0.1% of the issued common shares
will generally be honored.
Every shareholder is entitled to attend the General Meeting of Shareholders and to speak and vote in the meeting, either in person or by proxy granted in writing, provided that is complied with the applicable statutory provisions for providing of evidence of shareholders' status or notification of the intention to attend the meeting. When convening General Meeting of Shareholders, the Executive Board can set a record date for determining the entitlement of shareholders to attend and vote at the General Meeting.
As a participant of 'Stichting Communicatiekanaal Aandeelhouders' (a Dutch foundation with the purpose of enhancing communication with and participation of shareholders at General Meetings) AEGON welcomes the possibility of voting by proxy. Moreover, proxies are solicited from New York registered shareholders in accordance with US practice.
At the General Meeting of Shareholders each share is entitled to one
vote; however, the holder of preferred shares, Vereniging AEGON, is
entitled to cast 2.08 votes per preferred share in the event of a
'special cause' and limited to a period of six months per 'special
cause'. In this respect reference is made to the section on Vereniging
AEGON in this annual report's Financial Statements. At the General Meeting
of Shareholders all resolutions are adopted by an absolute majority
of the valid votes, unless a greater majority is required by law or
by the Articles of Incorporation.
EXECUTIVE BOARD
The Executive Board, as a body, is charged with the management of the
company, each member having specific areas of interest within an allocation
of duties. The number of the Executive Board members and the terms
of employment of these members are determined by the Supervisory Board.
Members of the Executive Board can retire at the age of 60 and must
retire at the age of 62. The Articles of Incorporation require the
Executive Board to obtain the prior approval of the Supervisory Board
for a number of resolutions. The Supervisory Board may subject further
resolutions of the Executive Board to its prior approval.
SUPERVISORY BOARD
The supervision of the management of the Executive Board and the general
course of affairs of the company and the business connected with it
is entrusted to the Supervisory Board, acting as a body with collective
responsibility and accountability. The Supervisory Board also assists
the Executive Board by giving advice. In performing their duties the
Supervisory Board members shall act in accordance with the interests
of the company and its business.
The Supervisory Board currently consists of nine non-executive members,
one of whom is a former member of the Executive Board. Specific issues
are dealt with and prepared in committees from among the members of
the Supervisory Board. With a view to a balanced composition of the
Supervisory Board a profile has been drawn up, outlining the required
qualifications of its members. Upon reaching the age of 70, a member
of the Supervisory Board is no longer eligible for reappointment.
The remuneration of the members of the Supervisory Board is fixed
by the General Meeting of Shareholders.
DUTCH CORPORATE GOVERNANCE
In December 2003, the final version
of a new Dutch Corporate Governance Code was adopted. The code is
titled: The Dutch Corporate Governance Code. Principles of good corporate
governance and best practice provisions. The Dutch Corporate Governance
Code was prepared by a committee instituted for this purpose by the
Minister of Finance and the Minister of Economic
Affairs whose members represented a number of leading organizations
from the Dutch business community. The committee was chaired by Mr. Morris
Tabaksblat, who is also the chairman of AEGON's Supervisory
Board.
The purpose of the code is to reflect the
latest generally held views on good corporate governance in the Netherlands.
These views have been expressed in principles of good corporate
governance as well as more concrete best practice provisions through
which the principles are applied. The code thus purports to provide
Dutch listed companies a guide to improving their corporate governance.
The code came into effect on January 1, 2004. In accordance with its
terms, the code requires a Dutch listed company to formally report
on its application of the code in its annual report over the financial
year 2004. The report should also serve as the basis for a discussion
on this subject in the General Meeting of Shareholders to be held
in 2005.
AEGON AND CORPORATE GOVERNANCE
AEGON has welcomed the institution of the
Corporate Governance Committee and has actively participated in the
discussions within the Dutch business community that have accompanied
the preparation and publication of the code.
AEGON endorses the code and the principles of good corporate governance
included therein. AEGON intends to use the code and the principles
contained therein to continue and intensify its ongoing discussions
with its stakeholders on corporate governance with the view to bringing
its corporate governance standards in compliance with the code.
Immediately subsequent to the publication of the definitive Dutch
Corporate Governance Code AEGON has initiated a review process aimed
at implementing the code in the company's corporate governance. In
line with the recommendations of the code, the current chapter gives
an overview specifically indicating where its corporate governance
is already compliant with the code. To the extent that AEGON does
not fully comply with best practice provisions of the Dutch Corporate
Governance Code, the reasons therefore are explained and the actions
the Supervisory Board and the Executive Board contemplate taking are
set out.
This chapter will be discussed as a separate item during the annual
General Meeting of Shareholders to be held on April 22, 2004.
Whilst not all principles and best practice provisions of the Dutch
Corporate Governance code are cited, the discussion set forth below
closely follows the structure of the Dutch Corporate Governance Code.
Where appropriate the headings of the chapters and paragraphs of the
Dutch Corporate Governance Code have been included for easy reference
in addition to references to the individual clauses.
IMPLEMENTING THE CORPORATE GOVERNANCE CODE
COMPLIANCE WITH AND ENFORCEMENT OF THE CODE
The Executive Board and the Supervisory Board will continue to take
responsibility for the corporate governance structure of AEGON. The
paragraphs in the annual report dealing with corporate governance
already customarily included are expanded. Starting with the 2004
annual report, the annual reports will include a separate chapter
describing AEGON's application of the principles and best practice
provisions of the corporate governance code. [I. Principle; I.1] Each
time a substantial change in the corporate governance structure of
the company is contemplated, the compliance of AEGON with the code
shall be submitted to the General Meeting of Shareholders for discussion
under a separate agenda item. [I.2]
EXECUTIVE BOARD
The current members of the Executive Board are appointed for an indefinite
term. Giving due regard to the existing employment positions of the
individual members, the Supervisory Board intends to investigate whether
these employment positions can be reconciled with the best practice
provision to limit the term in office of members of the Executive
Board to (consecutive) four year periods. The Supervisory Board intends
to limit the term in office of members of the Executive Board to (consecutive)
four year periods.
In accordance with past practice within AEGON, the Executive Board
will submit to the Supervisory Board for its consideration and approval
the operational and financial objectives of AEGON, the strategy to
be used to achieve these objectives, as well as the parameters that
are applied in relation to the strategy (including the financial ratios
and capital adequacy levels). A summary hereof will continue to form
part of AEGON's annual reports. [II.1.2]
In 2003, AEGON set up the Group Risk and Capital Committee at group
level. This is in addition to the pre-existing risk management systems
set up at country unit level. The objectives of the Group Risk and
Capital Committee include monitoring AEGON's overall risk exposures,
making recommendations and overseeing remedial action where exposures
are deemed excessive. Moreover, this committee is tasked with ensuring
that risks are well measured and managed within the country units.
The Group Risk and Capital Committee regularly reports to the Executive
Board and the Supervisory Board. In the annual report, the Executive
Board shall comment on the adequacy and effectiveness of its internal
risk management and control systems also describing any significant
changes and improvements that are contemplated. [II.1.3; II.1.4]
In 2002, AEGON has adopted a Code of Conduct at group level. The Code
of Conduct is monitored and implemented by a taskforce reporting directly
to the Executive Board. This is in addition to the pre-existing Codes
of Conduct adopted earlier by the majority of AEGON's country units.
The Code of Conduct includes appropriate whistleblower provisions,
which give employees the ability to report on suspected irregularities
without jeopardizing their positions. More detailed rules and regulations
regarding the reporting of irregularities are being developed. Serious
violations of the Code of Conduct, as well as any alleged irregularities
concerning the functioning of Executive Board members are reported
directly to the chairman of the Supervisory Board. The Code of Conduct
of AEGON N.V. is posted on this site.
[II.1.3; II.1.6]
AEGON's annual report includes information about the most important
external factors and variables influencing the results of the company.
These sensitivity analyses customarily reported on in AEGON's annual
report include the sensitivity to interest rates, equity and real
estate markets, long-term assumptions of AEGON and currency markets.
The Executive Board and Supervisory Board will continue to consider
the publication of additional sensitivity analyses if and when appropriate.
[II.1.5]
None of the members of the Executive Board are a member of the Supervisory
Board of more than one Dutch listed company nor are any of them chairman
of the Supervisory Board of a listed company. Any appointment of members
of the Executive Board as a supervisory or non-executive director
of another listed company are subject to the prior approval of the
Supervisory Board. The Executive Board and the Supervisory Board have
agreed that members of the Executive Board intending to accept any
other important position will notify the Supervisory Board prior to
acceptance of such position. [II.1.7]
REMUNERATION
In 2003, the Supervisory Board has on the advice of the Compensation
Committee made amendments to the Remuneration Policy, which amendments
came into effect on January 1, 2004. This revised Remuneration Policy
will be submitted to the General Meeting of Shareholders on April
22, 2004 and, if adopted, be in place for a period of three years.
AEGON places a high importance on attracting and retaining qualified
directors and personnel, whilst safeguarding and promoting AEGON's
medium- and long-term interests. The Remuneration Policy for members
of the Executive Board is reflective thereof. It is designed to support
AEGON's strategy for value creation and shareholder alignment, as
well as the focus on performance and business results. In addition,
it offers an incentive for board members through performance-linked
pay, reflecting both their individual role as well as the collective
responsibilities of the Executive Board as a whole. The Remuneration
Policy also takes into consideration compensation levels in relevant
reference markets and segments and corporate governance guidelines.
[II.2]
The Remuneration Policy for the members of the Executive Board includes
fixed and variable components. For the variable components, the Supervisory
Board has set clear and measurable criteria including performance
of the AEGON share price and the development of AEGON's earnings per
share. For an overview of the Remuneration Policy for the Executive
Board, please refer to The Remuneration Policy.
The Remuneration Policy also includes a plan for members of the Executive
Board to be remunerated partly in stock options or stock appreciation
rights. If members of the Executive Board are entitled to stock options
and stock appreciation rights, these options and rights are granted
solely by reference to the AEGON share price on Euronext Amsterdam
at the close of trading on the date of granting thereof. The terms
under which stock options and stock appreciation rights are issued
shall not be altered during the term thereof except for technical
alterations in accordance with market practice in events such as a
stock split, mergers and acquisitions, share issuances and (super) dividends. [II.2.4; II.2.5]
The Supervisory Board will implement further changes to the Remuneration
Policy with regard to severance payments payable to new members of
the Executive Board. These changes will include a maximum severance
payment in the event of dismissal of the fixed component of the relevant
member's salary of one year, or two years in cases where a maximum
of one year’s salary would be manifestly unreasonable for a member
of the Executive Board who is dismissed in his first term of office.
In addition, whilst giving due regard to the existing employment agreements
with the current members of the Executive Board and the fact that
employment conditions in the United States are different, the Supervisory
Board intends to investigate whether the existing arrangements with
regard to severance payments with current members of the Executive
Board can be reconciled with the Dutch Corporate Governance Code provision
purporting to limit the severance payment in the event of dismissal
to the maximum indicated by the code. [II.2.7]
As consistently disclosed in AEGON’s annual reports and in the normal
course of the business, members of the Executive Board of AEGON are
entitled to mortgage loans under the terms applicable to personnel
as a whole, subject to the prior approval of the Supervisory Board. [II.2.8]
DETERMINATION AND DISCLOSURE OF REMUNERATION
The Remuneration Policy will be submitted to the General Meeting of
Shareholders to be held on April 22, 2004 for adoption. Any future
material changes to the Remuneration Policy regarding members of the
Executive Board will also be submitted to the General Meeting of Shareholders
for adoption. [Principle above II.2.9; III.5.10]
In its remuneration report, the Supervisory Board will account for
the manner in which the Remuneration Policy regarding members of the
Executive Board has been applied on the basis of the report of the
Compensation Committee of the Supervisory Board. Any special remuneration
as well as any severance payments shall be included and explained
in the remuneration report. In addition, each year the annual report
provides an overview of the then current Remuneration Policy for the
near future. The remuneration report will be posted on AEGON’s website
www.aegon.com. [II.2.9; II.2.10; II.2.13]
In accordance with existing practice, the remuneration of the individual
members of the Executive Board will be determined by the Supervisory
Board within the scope of the adopted Remuneration Policy. Upon conclusion
of a contract with a new member of the Executive Board, the main elements
of the employment contract with this member shall be made public. [Principle above II.2.9; II.2.11; II.2.12]
In AEGON’s annual accounts the value of options and stock appreciation
rights, if any, granted to the Executive Board and personnel are being
recognized with an indication as to how this value is determined. [II.2.14]
CONFLICTS OF INTEREST
Compiled in 2002, after a company-wide collaborative effort, AEGON’s
Code of Conduct is a code of ethics that addresses conflicts of interest
that may occur between AEGON and its employees including the members
of the Executive Board. The Code of Conduct is available on AEGON’s
website.
More detailed regulations regarding conflicts of interest between
members of the Executive Board and AEGON are included in the Rules
and Regulations of the Executive Board. Subject to making some technical
refinements thereto the Rules and Regulations of the Executive Board
are compliant with the Dutch Corporate Governance Code. [II.3; II.3.1; II.3.2; II.3.3; II.3.4]
However, under the provisions of the Dutch Corporate Governance Code,
the membership of Messrs. Shepard and Streppel of the executive committee
of Vereniging AEGON may give rise to deemed conflicts of interest.
The Supervisory Board and the Executive Board will consider how any
such deemed conflicts of interest should be addressed.
COMPLIANCE
AEGON has detailed regulations applicable to members of the Executive
Board and the Supervisory Board concerning the ownership of and transactions
in securities, other than AEGON stock. These regulations are in conformity
with the regulations prescribed by the Dutch regulators and shall
be further refined so as to comply with the more detailed best practice
provisions of the Dutch Corporate Governance Code. Compliance with
these regulations is supervised by the Group Compliance Officer, who
acts alongside compliance officers appointed by country units and
the business units. [II.2.6; III.7.2; III.7.3]
SUPERVISORY BOARD
ROLE AND PROCEDURE
The duties of the Supervisory Board are the supervision of the management
by the Executive Board and the general course of affairs of AEGON
and the business connected with it. In particular, this includes supervision
of the achievement of AEGON’s stated objectives,corporate strategy,
risk management, the financial reporting process (also in light of
the United States’ Sarbanes-Oxley legislation) and general compliance
with legislation and regulations. The Supervisory Board is also responsible
for deciding on how to resolve conflicts of interest between members
of the Executive Board, members of the Supervisory Board, major shareholders
and the independent auditor on the one hand, and AEGON on the other
hand. The Supervisory Board assists the Executive Board by giving
advice. In performing their duties, the members of the Supervisory
Board are required to act in accordance with the interests of AEGON
and its affiliated enterprises. Pursuant to AEGON's Articles of Incorporation
and the Rules and Regulations of the Supervisory Board, the Supervisory
Board is empowered to obtain all information they deem necessary for
the performance of their duties, which includes the right to obtain
information from officers and external experts of the company. [III.1; III.1.6; III.1.8; III.1.9; III.6]
The Rules and Regulations of the Supervisory Board contain provisions
regarding the division of duties within the Supervisory Board and
its internal procedures and contacts with the Executive Board, as
well as with the General Meeting of Shareholders. Subject to further
refinements in the context of implementing the Dutch Corporate Governance
Code being made, these regulations shall be posted on AEGON’s website. [III.1.1]
The Supervisory Board shall continue its existing practice to include
a detailed report of its activities in the relevant financial year
in each annual report. In its report it will include the information
prescribed in the Dutch Corporate Governance Code. The report will
include appropriate reference to the subjects discussed within the
Supervisory Board during the relevant year. [III.1.2; III.1.3; III.1.5; III.1.7; III.1.8]
INDEPENDENCE
The current composition of the Supervisory Board is in compliance
with the best practice provisions of the Dutch Corporate Governance
Code as well as the provisions of the United States’ Sarbanes-Oxley
Act 2002 regarding the independence of supervisory directors. The
sole member that does not qualify as ‘independent ’ within the meaning
of these provisions is Mr. K.J. Storm who was, immediately prior to
his appointment as a member of the Supervisory Board in 2002, chairman
of the Executive Board. [III.2; III.2.1; III.2.2]
EXPERTISE AND COMPOSITION
Since the most recent amendment of AEGON’s Articles of Incorporation
in May 2003, members of the Supervisory Board are appointed by the
General Meeting of Shareholders. For the purpose of making nominations
for the Supervisory Board, including any nominations for reappointment,
the Supervisory Board has drawn up a profile that specifies the desired
composition and competences of the Supervisory Board as a whole as
well as those of the individual members. This profile also reflects
the detailed composition requirements of the Dutch Corporate Governance
Code. [III.3; III.3.1; III.3.2 ]
Under the composition profile, it is expected that each member of
the Supervisory Board shall be capable of assessing the broad outline
of the overall policy, in addition to the specific expertise required
for the role designated to the individual member. The profile also
takes into account the nature of the insurance business of AEGON,
the activities of the Supervisory Board and the background of the
Supervisory Board members and is designed to ensure that the Supervisory
Board as a whole is capable of the proper performance of its duties.
The composition profile will be made available on AEGON’s website
where shareholders and investors can also find the prescribed information
about each member of the Supervisory Board as well as the retirement
schedule. [III.1.3; III.1.7; III.3.1; III.3.6]
AEGON offers its newly appointed members of the Supervisory Board
an introduction program covering the general financial affairs of
AEGON, general aspects of the insurance industry as well as aspects
unique to AEGON in addition to general legal affairs of the group.
The Supervisory Board regularly discusses whether there are any areas
where its members require further training. [III.3.3]
Several members of the Supervisory Board also serve as a member of
Supervisory Boards of other Dutch listed companies. The Supervisory
Board has concluded that none of these memberships unduly or negatively
influences the proper performance of the relevant members of their
duties as member of the Supervisory Board. Mr. Tabaksblat, the chairman
of the Supervisory Board, as well as Mr. Storm currently hold more
than the maximum number of Supervisory Board positions with Dutch
listed companies (including chairmanships) set forth in the Dutch
Corporate Governance Code. Mr. Storm has advised the Supervisory Board
that he expects to be compliant with the relevant best practice provision
before the end of 2004. Mr. Tabaksblat has indicated he will not be
available for reappointment upon the end of his current term in 2005. [III.3.4]
The Supervisory Board intends to make proposals to provide that no
member can serve on AEGON’s Supervisory Board for more than three
four-year terms. [III.3.5]
Pursuant to the Rules and Regulations of the Supervisory Board a member
of the Supervisory Board shall resign if the Supervisory Board has
resolved that such a member is not longer fit to function due to inadequate
performance, fundamental differences of opinion or other important
circumstances. [III.1.4]
ROLE OF THE CHAIRMAN OF THE SUPERVISORY BOARD AND THE COMPANY SECRETARY
The chairman of the Supervisory Board of AEGON is Mr. Tabaksblat.
Mr. De Ruiter is vice-chairman. In accordance with the Rules and Regulations
of the Supervisory Board, the chairman is responsible for overseeing
the functioning of the Supervisory Board as a whole and its committees,
for keeping close track of the flow of information to the Supervisory
Board and for the consultation and decision-making processes within
the Supervisory Board. The chairman is also responsible for initiating
the assessment of the individual members of the Supervisory Board
and the Executive Board and for maintaining appropriate contact with
the Executive Board and the Dutch Central Works Council. [III.4; III.4.1; III.4.2]
The duties of the company secretary include assisting the Supervisory
Board. In particular, the company secretary is responsible for the
correct application of the statutory obligations under the Articles
of Incorporation and the Rules and Regulations of the Supervisory
Board.The appointment of the company secretary is subject to the approval
of the Supervisory Board. [III.4.3]
COMPOSITION AND ROLE OF THE KEY COMMITTEES OF THE SUPERVISORY BOARD
In compliance with the applicable provisions of the United States'
Sarbanes-Oxley Act 2002 and the Dutch Corporate Governance Code, the
Supervisory Board has in place four standing committees from among
its members. These committees are: the Audit Committee, the Compensation
Committee, the Nominating Committee and the Strategy Committee. Each
committee reports its findings to the Supervisory Board and these
findings are discussed in the plenary meetings of the Supervisory
Board. [III.5; III.5.3]
Each of the committees of the Supervisory Board has a charter in which
the duties of the committee, the composition and its internal procedures
are laid down. Upon certain technical changes triggered by the Dutch
Corporate Governance Code being implemented, the committee charters
shall be published on AEGON’s website. [III.5.1]
Annually, the report of the Supervisory Board (which is part of the
annual report) includes information on the activities of each of the
committees. Such reports also list the members of each committee. [III.5.2]
AUDIT COMMITTEE
The Audit Committee, established in 1983, is appointed by the Supervisory
Board to assist the Supervisory Board in monitoring (1) the integrity
of the financial statements of AEGON, (2) the independent auditor’s
qualifications and independence, (3) the performance of AEGON’s internal
audit function and the independent auditor, and (4) the compliance
by AEGON with legal and regulatory requirements, as well as advising
on and monitoring the financing of AEGON and its finance related strategies.
The Audit Committee is chaired by Mr. Eustace. Meetings of the Audit
Committee are customarily attended by the Executive Board members,
the director of the Group Finance Department and the independent auditor.
In addition, at least once per year (and more often as necessary)
the Audit Committee meets with the independent auditor without members
of the Executive Board being present. [III.5.4; III.5.5; III.5.6; III.5.7; III.5.8; III.5.9]
COMPENSATION COMMITTEE
The purpose of the Compensation Committee, established in 1989, is
to design, develop, implement and review the compensation and terms
of employment of members of the Executive Board and of the fees of
the members of the Supervisory Board to be adopted by the General
Meeting of Shareholders. The Compensation Committee makes its recommendations
to the Supervisory Board. The Compensation Committee is chaired by
Mr. De Wit. Mr. Van Wijk is the sole member of the Compensation Committee
who is also a member of the management board of another Dutch listed
company. [III.5.10; III.5.11; III.5.12]
NOMINATING COMMITTEE
The purpose of the Nominating Committee, established in 1993, is to
advise the Supervisory Board on candidates for the Supervisory Board
for a first appointment to fill a vacancy as well as on members for
the Supervisory Board for possible reappointment after each four-year
term. Any such proposals are based on the profile for the Supervisory
Board drawn up for this purpose. In addition, the Nominating Committee
advises on and proposes to the Supervisory Board candidates to be
nominated for appointment to the Executive Board as a member or as
the chairman. On a regular basis the Nominating Committee reviews
the functioning of the individual members of the Executive Board and
the Supervisory Board as well as the selection criteria for senior
management within the AEGON Group. The Nominating Committee is chaired
by Mr. Tabaksblat. [III.5.13]
STRATEGY COMMITTEE
The Strategy Committee, established by the Supervisory Board in 2002,
has the task of reviewing the major features of the strategy proposed
by the Executive Board and preparing the presentation of the strategy
to the Supervisory Board. The Strategy Committee also considers options
and alternative avenues with regard to the strategy in addition to
considering the material aspects relating to the implementation of
the agreed strategy. Finally, it is acting as a consultative body
for the Executive Board with regard to its strategy. The Strategy
Committee is chaired by Mr. Tabaksblat.
CONFLICTS OF INTEREST
Rules regarding conflicts of interest applicable to members of the
Supervisory Board are included in the Rules and Regulations of the
Supervisory Board. These rules are compliant with the relevant provisions
of the Dutch Corporate Governance Code and will be posted on AEGON’s
website [III.6; III.6.1; III.6.2; III.6.3; III.6.4; III.6.5]
REMUNERATION OF THE MEMBERS OF THE SUPERVISORY BOARD
The remuneration of the members of the Supervisory Board is determined
by the General Meeting of Shareholders and is not dependent on the
profit of AEGON. The members of the Supervisory Board do not receive
any shares or rights to shares by way of remuneration. Members of
the Supervisory Board are not eligible to receive any personal loans,
guarantees or similar benefits. [III.7; III.7.1; III.7.4]
THE SHAREHOLDERS AND GENERAL MEETING OF SHAREHOLDERS
POWERS
AEGON places a high level of importance on dialogue with its shareholders.
For this purpose, AEGON has an active department on group level called
Group Corporate Affairs and Investor Relations. One of the key stages
for the dialogue with its shareholders is the General Meeting of Shareholders.
AEGON has traditionally made an effort to maximize shareholder participation
by allowing proxy voting, both in the United States (where AEGON has
a significant shareholder base) and in the Netherlands through Stichting
Communicatiekanaal Aandeelhouders. [IV.1]
The Supervisory Board and Executive Boards welcome increased shareholder
participation. They intend to make proposals to the General Meeting
of Shareholders in 2005 to make further amendments to the Articles
of Incorporation with a view to subjecting major changes in the identity
of character of AEGON or its business to the approval of the General
Meeting of Shareholders. [IV.1]
The Articles of Incorporation of AEGON currently provide that the
General Meeting of Shareholders may cancel the binding character of
binding nominations for the appointment of new members to the Supervisory
Board and the Executive Board with a majority of two-thirds of the
votes cast representing at least one half of the issued capital. In
addition, members of the Executive Board and members of the Supervisory
Board can only be dismissed by the General Meeting of Shareholders
with the same qualified majority (except if proposed by the Supervisory
Board). These provisions were included at the time of the overall
review of AEGON’s corporate governance and were adopted at the extraordinary
General Meeting of Shareholders in May, 2003.
This qualified majority requirement was included in order to give
AEGON protection against unfriendly actions by, for example, a hostile
bidder. The effects of this qualified majority are mitigated by the
fact that in practice nominations will in most cases not be binding,
thus allowing the shareholders to decide on the nomination with a
simple majority. The Supervisory Board and the Executive Board intend
to evaluate the provisions in AEGON's Articles of Incorporation containing
the qualified majority requirements in light of the provisions of
the Dutch Corporate Governance Code. [IV.1.1; IV.3.9]
AEGON has preferred shares class A and preferred shares class B, all
of which are held by Vereniging AEGON. The preferred shares class
A have been restructured in September 2002 and May 2003 with the effect
that the capital contribution made on these shares is reflective of
the market value of AEGON’s common shares at that time. [IV.1.2]
Currently, Vereniging AEGON holds 11,100,000 preferred shares class
B, representing approximately 0.6% of voting shares under usual circumstances.
The 1983 Merger Agreement (as amended) provides that additional preferred
shares class B are to be issued by AEGON to Vereniging AEGON at the
option of Vereniging AEGON in order to prevent Vereniging AEGON’s
voting power from being diluted as a result of new issuances of common
shares. In addition, AEGON and Vereniging AEGON have entered into
a preferred shares voting rights agreement. Pursuant to this agreement,
voting power attached to the preferred shares classes A and B is under
normal circumstances limited to one vote per share. The preferred
shares voting rights agreement allows Vereniging AEGON to exercise
the full voting power on its preferred shares (approximately 2.09
votes per preferred share) in the event of a ‘special cause ’ (as
defined in the preferred shares voting rights agreement) for up to
six months. [IV.1.2]
As a result of the foregoing and certain qualified majorities specified
in AEGON’s Articles of Incorporation, in the event of a ‘special cause’ (as referred to above), for a period of six months Vereniging AEGON
can effectively be in a position to temporarily block any unfriendly
actions by a hostile bidder or others. The Supervisory Board and the
Executive Board take the view that this arrangement is in accordance
with the principles that the Dutch Corporate Governance Committee
has recommended to the legislator to be taken into consideration when
drafting a law on anti-takeover measures. [IV.1.1; IV.1.2; IV.3.9; Account
of the Committee’s work]
The Executive Board intends to make amendments to the Rules and Regulations
of the Executive Board to the effect that in the event of a serious
private bid for a business unit or a participating interest in excess
of the threshold expected to be set in the Dutch Civil Code the Executive
Board will make public its position on the bid and its reasons for
its position. [IV.1.3]
At the annual General Meeting of Shareholders in 2005, AEGON’s policy
on profit appropriation (additions to reserves and on dividends) shall
be dealt with and explained as a separate item on the agenda of the
annual General Meeting of Shareholders. Also, a resolution to pay
a final dividend shall be dealt with as a separate item. [IV.1.4; IV.1.5]
Release from liability of the members of the Executive Board for their
management and of the members of the Supervisory Board for their supervision
will be separately voted upon in the annual General Meeting of Shareholders. [IV.1.6]
AEGON intends to continue its current practice providing for the determination
of a registration date for the exercise of the voting rights and the
rights relating to General Meetings of Shareholders. [IV.1.7]
PROVISION OF INFORMATION TO AND LOGISTICS OF THE GENERAL MEETING OF SHAREHOLDERS
AEGON attaches high importance to fair disclosure of information to
its stakeholders and the financial markets in all relevant jurisdictions.
The company applies the rules and regulations dealing with disclosure
set by the various regulators and the stock exchanges on which we
are listed. Meetings with shareholders, analysts and investors and
press conferences are webcast on AEGON’s website in real time so as
to safeguard equal and timely access to information. Meetings will
be announced by way of press releases.All presentations made on these
occasions are posted on its website. In accordance with market practice,
the company uses various press information services to distribute
its press releases. [IV.3; IV.3.1]
All communications and filings are supervised by the Disclosure Committee
instituted by AEGON in compliance with the United States’ Sarbanes-Oxley
legislation. These communications will be made available on a separate
part of AEGON’s website [IV.3; IV.3.6]
AEGON refrains from any actions that may jeopardize the independence
of analysts in relation to the company. Other than factually, analysts’
reports and valuations (including earnings estimates) are not assessed,
commented upon or corrected by AEGON in advance of their publication
and AEGON pays no remuneration of whatever kind to any such analysts
in the context of preparing such reports or the publication thereof. [IV.3.2;IV.3.3]
The Executive Board and the Supervisory Board will provide the General
Meeting of Shareholders with all requested information, unless overriding
interests of AEGON are better served by not providing the requested
information. If such overriding interests are invoked, that will be
substantiated. [IV.3.5]
AEGON uses shareholders’ circulars to inform the shareholders about
the facts and circumstances relevant to upcoming proposals.Shareholders’
circulars may take the form of an appropriate written explanation
to the agenda of the General Meeting of Shareholders. Shareholders’
circulars are in any event published in those instances where shareholders’
approval is prescribed (including delegations or authorizations requested
from the General Meeting of Shareholders). [IV.3.7]
As a general rule, the report of the General Meeting of Shareholders
shall be made available,on request, to the shareholders not later
than three months after the meeting. Shareholders will be given three
months to react to the report prior to its adoption in accordance
with the Articles of Incorporation by the chairman of the General
Meeting of Shareholders and the secretary appointed by the chairman
for that purpose. The report will be posted on AEGON ’s website. [IV.3.8]
RESPONSIBILITY OF INSTITUTIONAL INVESTORS
In addition to AEGON’s responsibility to its shareholders and other
stakeholders, the company also is an institutional investor. As such,
in deciding whether to exercise its rights as a shareholder of other
listed companies AEGON acts primarily in the interest of its policyholders
and other ultimate beneficiaries of its products whilst giving due
regard to the responsibility to the ultimate beneficiaries and investors
in the companies in which it has invested.[IV.4]
In compliance with local Codes of Conduct applicable to institutional
investors, AEGON’s country units in the United States and the United
Kingdom have detailed policies in place in relation to their exercise
of the voting rights attaching to the shares held by them. It is the
intention of AEGON Nederland N.V. to publish on its Dutch website,
www.aegon.nl, its existing policies regarding the exercise of the
voting rights attaching to the shares held by AEGON Nederland N.V.
in Dutch listed companies. In addition, starting in 2005 it is intended
that a report on how this policy was implemented in any given financial
year is published on the website of AEGON Nederland N.V. A record of
whether, and if so, how AEGON Nederland N.V. has voted as shareholder
in General Meetings of Shareholders of Dutch listed companies shall
be published on its website. This record shall be updated at least
on a quarterly basis. [IV.4.1; IV.4.2; IV.4.3]
AUDIT OF THE FINANCIAL REPORTING AND THE POSITION OF THE INTERNAL AUDITOR FUNCTION AND THE INDEPENDENT AUDITOR
FINANCIAL REPORTING
Following the adoption of the Sarbanes-Oxley Act by the United States
Congress, AEGON undertook in 2002 and 2003 a thorough review of its
internal procedures relating to the composition, preparation and publication
of its financial reporting. The Executive Board is confident that
the internal procedures set up for this purpose allow major financial
information to be delivered to the Executive Board in an orderly and
timely fashion. The Executive Board is receiving the financial information
from the country units directly. The Supervisory Board, acting primarily
through the Audit Committee, is supervising the compliance with these
internal procedures and the external information.Specific regulations
dealing with the internal control function have been documented in
the charter of the Audit Committee and the attachments thereto. [V.1; V.1.1; V.1.2; V.1.3]
ROLE, APPOINTMENT, REMUNERATION AND ASSESSMENT OF THE FUNCTIONING OF THE INDEPENDENT AUDITOR
Based on its charter, the Audit Committee of the Supervisory Board
has determined the extent of the involvement of the independent auditor
in the preparation and publication of financial reports (other than
the annual accounts) in addition to setting up a pre-approval procedure
for any additional (non- audit) services that may be rendered by the
independent auditor to the company. [V.2]
The independent auditor is yearly appointed by the shareholders at
the annual General Meeting of Shareholders. The shareholders will
be given the possibility to question the independent auditor at the
General Meeting of Shareholders in relation to his statement on the
fairness of the annual accounts. [V.2; V.2.1]
The Executive Board and the Audit Committee report annually to the
Supervisory Board on their dealings with the independent auditor,
particularly assessing its independence. At least every four years
the Audit Committee and the Supervisory Board conduct a thorough assessment
of the functioning of the independent auditor. The findings of this
assessment will be shared with the General Meeting of Shareholders
for the purposes of its deliberations on the annual appointment of
the independent auditor. [V.2.2; V.2.3]
INTERNAL AUDITOR FUNCTION
In 2003, AEGON has appointed an internal auditor on group level reporting
directly to the Executive Board. This is in addition to the internal
auditors that have been appointed on the level of AEGON’s country
units. The work schedule for the Group Internal Auditor was drawn
up with involvement of the Audit Committee and the independent auditor.
The findings of the internal auditor are made available to the Executive
Board, the Audit Committee as well as the independent auditor. [V.3; V.3.1]
RELATIONSHIP AND COMMUNICATION OF THE EXTERNAL AUDITOR WITH THE SUPERVISORY BOARD AND THE EXECUTIVE BOARD
The Supervisory Board meets with the independent auditor at least
once a year on the occasion of the discussion of the annual accounts
that are to be submitted for adoption to the General Meeting of Shareholders.A
s part of standing procedures, the independent auditor receives the
information underlying the annual accounts and the quarterly figures
and is given ample opportunity to respond to all information. [V.4; V.4.1]
Reports by the independent auditor of his findings in relation to the audit of the annual accounts are made to the Supervisory Board and the Executive Board simultaneously. [V.4]
The independent auditor may request the chairman of the Audit Committee to call a meeting of the Audit Committee. The independent auditor customarily attends the meetings of the Audit Committee. In accordance with applicable laws, the independent auditor reports on its activities to the Executive Board and the Supervisory Board, raising issues in relation to his audit that require the attention of management. Pursuant to the charter of the Audit Committee such issues include significant financial reporting issues and judgements made in connection with the preparation of the financial statements, including the quality of earnings, significant deviations between planned and actual performance, the selection or application of accounting principles (including any significant changes with respect thereto), any major issues as to the adequacy of its internal controls and any special steps adopted in light of material control deficiencies. [V.4.2; V.4.3]
COMPENSATION COMMITTEE
The Terms of Reference for the Compensation Committee are outlined in the Supervisory Board Rules and Regulations. The Compensation Committee is responsible for the design, development, implementation and review of the Remuneration Policy that outlines the terms and conditions of employment of the CEO and the other members of the Executive Board and of the fees of the members of the Supervisory Board. The Committee makes its recommendations to the Supervisory Board. The Remuneration Policy as currently in place will be submitted to the General Meeting of Shareholders to be held on April 22, 2004 for adoption. Any subsequent material changes in the Remuneration Policy will be submitted to the annual General Meeting of Shareholders for adoption.
The Supervisory Board appoints at least three of its members to the committee, for a period of four years. The committee currently consists of Messrs. F. J. de Wit (chairman), H. de Ruiter (vice-chairman), W.F.C. Stevens and L.M. van Wijk. The secretary to the Supervisory Board also acts as the secretary to the committee, whilst the Group Human Resources manager assists the committee as an internal advisor. The committee may also consult outside advisors for select expert subjects, such as market benchmark information and system validation.
The committee will meet at least once a year. It will report its findings and conclusions to the Supervisory Board and these are discussed in the plenary meetings of the Supervisory Board.
REMUNERATION POLICY
The Remuneration Policy aims to create
a reward structure that will allow the company to attract, retain
and reward executives who will lead the continued growth, development
and financial success of the company, as well as at providing those
executives with a well-balanced and incentive compensation. This reward
structure covers five elements: base salary, short-term incentive,
long-term incentive, pension and other arrangements.
In December 2002, the Compensation Committee decided to review the
total direct elements (base salary plus STI and LTI) of the Executive
Board members’ income, included in the Remuneration Policy, in order
to strengthen the interdependence between their income and the results
of the activities under their responsibility. This review took place
during five meetings of the committee in 2003, having as main objective
to revise the Remuneration Policy so as to better support AEGON’s
strategy for value creation and shareholder alignment by focusing
on performance and business results. At the same time, the Remuneration
Policy should continue to offer an incentive through performance-linked
pay, reflecting both the members’ individual role as well as their
collective responsibilities. In reviewing the Remuneration Policy,
the committee also considered recent trends and developments in reference
markets. The revisions in the Remuneration Policy took effect on January
1, 2004. In view of the provisions of the Dutch Corporate Governance
Code, the Supervisory Board has subsequently decided to submit the
Remuneration Policy, as revised, to the General Meeting of Shareholders
for adoption. Upon adoption, the Remuneration Policy will be in effect
for a three-year period, starting January 1, 2004. The amendments
to the Remuneration Policy have not lead to a higher total direct
compensation ‘at target’ performance as compared to the old structure.
Even a performance ‘over target’ will not deliver a compensation to
the level of the past.
In implementing the Dutch Corporate Governance Code, due regard will
be given to existing employment agreements with individual members
of the Executive Board.
BASE SALARY
POLICY
Base salary levels are based on the requirements,
responsibilities and risks of a position as member of the Executive
Board. The committee will ensure that base salary levels are realistic
and competitive.
In setting the appropriate levels, the committee has taken into account
individual roles and responsibilities of the Executive Board members.
As a consequence, it will distinguish between the base salary levels
for respectively the CEO, CFO and the other members.
Annually the committee will review the levels, considering circumstances
that would justify adjustment, such as fundamental changes in the
business environment or in the individual responsibilities.
The committee will also consider benchmark information provided by
(outside) advisors. In that regard, the European Insurance Market
will serve as the reference for European Executive Board members.
For US Board members, the US Insurance Market is used as the appropriate
reference. For all, base salary is reflected against the median market
level. The individual salaries of the Dutch Executive Board members
do follow the standard Dutch Collective Labor Agreement.
2003
Mr. Shepard’s annual base salary (USD 1,000,000) was not increased when he was appointed chairman of the Executive Board in April 2002, and did not change in 2003 either. The annual base salaries for 2003 of Messrs. Streppel and Van der Werf were increased as per January 1, 2003, from EUR 495,000 to EUR 650,000 and from EUR 495,000 to EUR 550,000 respectively whilst Mr. Wynaendts’ base salary was set at EUR 550,000 per annum as per his appointment to the Executive Board on April 17, 2003.
2004
The base salaries of the Executive Board members were not changed on January 1, 2004.
SHORT-TERM INCENTIVE (STI)
POLICY
Short-term incentive (STI) bonuses aim to reward Executive Board members for achieving pre-set targets. Those targets will reflect their responsibilities and will be set annually to ensure that business priorities are followed and the targets remain ambitious, dynamic and realistic.
2002, PAYABLE IN 2003
Under the 2002 STI Plan, all Executive Board members were eligible to a bonus for 2002 up to a maximum of 150% of their base salary in that year, to be paid in 2003.
Through this plan Mr. Shepard could earn USD 50,000 per percent point increase in 2002’s earnings per share. The other members could earn EUR 31,765 per percent point increase in the preceding year earnings per share over the rate of euro inflation. At the choice of the Executive Board members concerned, half of the bonus may be paid in AEGON shares with a three-years holding period. After this three-year period the Executive Board members will be entitled to bonus shares, provided that they are still employed by AEGON. The number of bonus shares to which the members are entitled at that time will be based on performance, on the basis of EPS growth above inflation in the preceding three years, according to the following table.
|
|
|
3-year average EPS growth
(over inflation) |
Share matching % |
| < |
5% |
0 |
|
5 – 10% |
25% |
|
10 – 12% |
50% |
|
12 – 14% |
75% |
| > |
14% |
100% |
However, since the earnings per share in the financial year 2002 did not increase, no bonuses over 2002 were paid in 2003 under this STI Plan.
2003, TO BE GRANTED IN 2004
The 2003 STI Plan was the same as that
in 2002. Through this plan Mr. Shepard could earn USD 50,000 per percent
point increase in the preceding year earnings per share and the other
members EUR 32,432 per percent point increase in the preceding year
earnings per share over the rate of euro inflation. The amounts for
STI 2003 will be determined after the annual General Meeting of Shareholders
has adopted the annual accounts 2003. All the members of the Executive
Board have opted for payment of half of the STI bonus amount in AEGON
shares.
2004, TO BE GRANTED IN 2005
The STI Plan, comprised in the Remuneration
Policy, determines that a short-term bonus will be paid only if value
is created for shareholders, i.e. only after a positive value of new
business (VNB), as defined in AEGON's Embedded Value Report, is realized.
For Messrs. Shepard and Streppel group VNB will apply; for Messrs.
Van der Werf and Wynaendts, the VNB for their specific business area
will be taken into account. Provided the relevant VNB is positive,
then the actual level of income before tax adjusted for capital gains
and losses on equities and real estate will determine the level of
the bonus payout. The income before tax adjusted for capital gains
and losses on equities and real estate target will be calculated based
on a rolling, three-year average, increased by 2.5% to reflect an
estimated rate of inflation. Bonus payout for Messrs. Shepard and
Streppel solely depend on AEGON’s income before tax adjusted for capital
gains and losses on equities and real estate. For Messrs. Van der
Werf and Wynaendts the bonus is based on the income before tax adjusted
for capital gains and losses on equities and real estate of the country
unit(s) under their responsibility (60%), and on AEGON’s income before
tax adjusted for capital gains and losses on equities and real estate
(40%).
TARGET STI BONUS LEVELS AS FROM JANUARY 1,
2004
|
|
|
| |
Target
(last 3-years’ average)
(% of base salary) |
Maximum
(% of base salary) |
| Shepard |
118% |
189% |
| Streppel |
50% |
80% |
| Van der Werf |
80% |
125% |
| Wynaendts |
80% |
125% |
The target levels vary due to differences
in responsibilities and base salary. Whilst Mr. Streppel’s base salary
is higher than Messrs. Van der Werf’s and Wynaendts’, their achievable
bonuses are higher, reflecting their role value drivers for AEGON.
Annually the Committee will review the agreed parameters to ensure
that they continue to provide the best reference. External experts
will sign off all relevant VNB and income before tax adjusted for
capital gains and losses on equities and real estate.
LONG-TERM INCENTIVE (LTI)
The long-term incentive (LTI) Plan focuses
on the company performance against a select peer group. The peer group
comprises companies that are comparable in type of business, size
and geographical presence. Additionally, those companies should be
recognized as the most appropriate reference group by AEGON, as well
as by analysts, shareholders and other stakeholders.
2002, GRANTED IN 2003
Under the 2002 LTI Plan the Executive Board
members were eligible to receive a pre-determined number of stock
options or stock appreciation rights (SARs), subject to three criteria:
| 1. |
Comparison of the AEGON share price with
the share prices of a peer group of nine financial companies
(ABN AMRO, AIG, Allianz, AXA, Fortis, Generali, ING, Prudential
PLC and Zurich). The comparison is based on the share price
performance over the preceding three years. |
| 2. |
Should the AEGON share price performance
achieve a top three position, each Executive Board member will
receive 200,000 options. Should this share price performance
finish in the middle group (of four companies) each Executive
Board member will earn 100,000 options. Should the share price
performance rank in the bottom group (three companies) 50,000
options will be granted. |
| 3. |
In case earnings per share did not increase,
no options will be granted. |
Since earnings per share in the financial
year 2002 did not increase, Executive Board members did not receive
any stock options or SARs in 2003.
2003, TO BE GRANTED IN 2004
The 2003 LTI Plan was the same as that
in 2002. The average AEGON share price performance compared with those
of the peer group (based on the share price performance over 2001,
2002 and 2003) ranked in the bottom group as a result of which each
Executive Board member will receive 50,000 SARs in March 2004, provided
shareholders adopt the annual accounts for 2003, showing an increase
of the earnings per share.
2004, TO BE GRANTED IN 2005
Reflecting recent trends and developments
in reference markets and the desire to more distinctly link performance
and compensation, the Remuneration Policy was revised to provide that
as from January 2004, the total LTI value is a combination of performance
options and performance shares, with a 50-50 split. Vesting of these
rights will be based on the performance of AEGON, relative to a group
of peer companies.
This peer group consists of, reflective of the criteria of comparability,
Allianz, Aviva, AXA, Fortis, Generali, ING, Jefferson-Pilot, John
Hancock Life Insurance, Lincoln National, Nationwide FS Inc. and Prudential
PLC.
The LTI plan also defines a revised target performance zone. Performance
relative to that zone will subsequently determine the LTI bonus for
Executive Board members. The performance incentive zone starts at
position eight. Once AEGON achieves this position, 50% of the grant
will vest. At position six, 100% will vest. Should AEGON rank number
one, 200% of the grant will vest.
TARGET LTI AWARD LEVELS AS FROM JANUARY 1,
2004
|
|
| |
Target
(LTI value – 100% basis)
(% of base salary) |
| Shepard |
95% |
| Streppel |
60% |
| Van der Werf |
60% |
| Wynaendts |
60% |
The Committee will monitor the peer group
composition and the performance incentive zone to ensure that they
continue to provide an appropriate reference. The first review will
take place in 2006. Would those parameters no longer provide the appropriate
reference, the Committee may decide to amend them. External experts
will sign off all data used in the comparisons.
PENSION AND OTHER ARRANGEMENTS
Other elements of the reward structure of Executive Board members
have not been revised in the Remuneration Policy.
The pension arrangements aim at creating a reliable retirement provision
for Executive Board members that conform to market practice. The plan
for the Dutch Executive Board members, based on the attained age system,
sets the pension age at 62, with the possibility of an earlier retirement
under specified terms, and a benefit of maximum 70% of the calculated
pension base, depending on the years of service. Mr. Shepard has continued
his participation in the AEGON USA pension provisions.
Mr. Shepard is entitled to a variable allowance in addition to the
STI. Until his appointment as Chairman of the Executive Board this
allowance related to the earnings' increase of AEGON USA. Effective
from his appointment as Chairman per April 18, 2002, the Committee
advised, and the Supervisory Board resolved to do this, to entitle
Mr. Shepard to an annual allowance equal to 0.1% of the net income
of AEGON N.V., as a compensation for the fact that the variable allowance
related to the AEGON USA earnings increase was stopped as per the
same date and his base salary was not increased at that time. The
total of these pro rata allowances over 2002, paid in April 2003 to
Mr. Shepard, amounted to EUR 1.207 million.
In the individual employment contracts, specific arrangements regulate
the Executive Board members’ entitlements in case of termination by
AEGON of the Executive Board membership or employment with AEGON.
Mr. Shepard would, under such termination other than for ‘cause, death,
disability, retirement or voluntary resignation’, be entitled to three
years’ fixed salary plus an amount equal to the average of the STI
bonuses he has received in three previous years. As for the other
members no specific financial arrangement was agreed, as a consequence
of which relevant procedures in the Netherlands will apply.
The individual employment contracts also determine the provisions
in case of termination of Executive Board membership or employment
with AEGON, in connection with a merger, takeover or fundamental changes.
In that case Mr. Shepard is entitled to compensation in line with
CEOs in the US insurance industry, but not less than three years’
fixed salary, in addition to vested benefits, plus an amount equal
to the average of the STI bonuses he has received in three previous
years.
Mr. Streppel would be entitled to compensation using the Dutch ‘Zwartkruis
formula’ by which the amount will be calculated on the basis of and
depending on age, years of service, functional level and the probability
of finding another equivalent position. For Messrs. Van der Werf and
Wynaendts relevant procedures in the Netherlands will be followed.
|
