Aegon proposes changes to its corporate governance to increase authority of shareholders; Dutch large company regime abolished; voting power Vereniging Aegon (the 'Association') reduced.
Aegon N.V. intends to revise its corporate governance and will propose to its shareholders to abolish the Dutch large company regime (currently applied on a voluntary basis), to increase the authority of Aegon N.V.’s shareholders.
With the proposed changes Aegon N.V. leaves behind a corporate governance regime that dates back to the time the company was mainly active in the Netherlands. Aegon N.V. believes this change is consistent with emerging global best practices in corporate governance. The proposal to amend the Articles of Association of Aegon N.V., necessary to accomplish the intended changes in corporate governance, was sent to shareholders today.
As announced at the time of publication of the full year results 2002 on March 6, 2003, the Annual General Meeting of Shareholders will take a decision regarding the proposed amendments on April 17, 2003.
The proposed changes include the following:
- Aegon N.V. will end its voluntary application of the Dutch large company regime.
- The General Meeting of Shareholders will have the authority to appoint or remove members of both the Supervisory Board and of the Executive Board, which if this takes place other than at the nomination from the Supervisory Board will require a 2/3rd majority vote in a general shareholders’ meeting representing more than half of Aegon N.V.’s issued share capital.
- The annual accounts will be adopted by the General Meeting of Shareholders.
- Since the recapitalization of September 2002 the voting power of the Association in Aegon N.V. has been 33 percent. In line with what was announced in September 2002 and subject to the proposed changes to Aegon N.V.’s corporate governance the Association has agreed to reduce its voting rights under normal circumstances, based on the general principle of one vote per common share and one vote per preferred share.
- The voting rights under normal circumstances will be calculated by dividing the number of preferred shares and common shares held by the Association by the total number of voting shares of Aegon N.V. Based on current numbers, this would amount to 23.6 percent.
- However, in the event of a special cause, such as a hostile takeover bid, the Association will be entitled to exercise its full voting rights of 33 percent, based on one vote per common share and 2.08 votes per preferred share. The full voting rights per preferred share are the result of the increase of the nominal value per preferred share from 12 eurocent to 25 eurocent and the corresponding reduction of the number of outstanding preferred shares from 440.000.000 to 211.680.000. As a result, the economic value and the voting rights of the common shares and the preferred shares (based on the share price of a common share in September 2002) will be the same.
- The Association shall determine itself whether a special cause, such as a hostile takeover bid, exists. The Association will have the right to exercise the full voting power on its preferred shares for up to six months per special cause.
- The Association’s agreement to limit its voting power with respect to each preferred share to one vote per share under normal circumstances will be incorporated in the Preferred Shares Voting Rights Agreement to be entered into by the Association and Aegon N.V. Through the agreement the Association will comply with its obligation to disclose how it will use its full voting power.
- The option currently exercisable by the Association to purchase additional preferred shares in order to protect it against dilution of its voting power in Aegon N.V. as a result of a new share issuance will be adjusted to the new situation through an amendment of the 1983 Merger Agreement.
- The representation of Aegon N.V. in the board of the Association will be reduced. The board of the Association will have seven members, two of whom are appointed by Aegon N.V.
- The changes in Aegon N.V.’s corporate governance will be submitted to the General Meeting of Shareholders for approval as an integrated proposal, comprising the amendment to the Articles of Association of Aegon N.V., the Preferred Shares Voting Rights Agreement and the Amendment of the 1983 Merger Agreement.
For a further explanation of this press release we would refer to the explanatory notes (see related documents on the right). The legal documents – the Articles of Incorporation of Aegon N.V., the Preferred Shares Voting Rights Agreement and the Amendment of the 1983 Merger Agreement – relevant to this press release are also published as 'related document'.