As filed with the Securities and Exchange Commission on October 11, 2001
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
FORM F-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________________
AEGON N.V. AEGON FUNDING CORP. AEGON FUNDING CORP. II
(Exact name of Registrant as (Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its charter) specified in its charter)
Not Applicable Delaware Delaware
(Translation of Registrant's name (State or other jurisdiction of (State or other jurisdiction of
into English) incorporation or organization) incorporation or organization)
The Netherlands 42-1489646 42-1510367
(State or other jurisdiction of (I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
incorporation or organization) Corporation Trust Center Corporation Trust Center
Not Applicable 1209 Orange Street 1209 Orange Street
(I.R.S. Employer Identification No.) Wilmington, DE 19801 Wilmington, DE 19801
Mariahoeveplein 50 (Address and telephone number of (Address and telephone number of
2591 TV The Hague Registrant's principal executive Registrant's principal executive
The Netherlands offices) offices)
011-31-70-344-3210
(Address and telephone number of
Registrant's principal executive
offices)
Craig D. Vermie, Esq.
AEGON USA, INC.
4333 Edgewood Road NE
Cedar Rapids, IA 52499
(319) 398-8814
(Name, address and telephone number of agent for service)
Copy of communications to:
A. Peter Harwich, Esq.
Allen & Overy
10 East 50th Street
New York, New York, 10022
(212) 610-6471
_______________________
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:[_]
Calculation of Registration Fee
====================================================================================================================================
Proposed maximum Proposed maximum Amount of
Amount to be offering price per unit aggregate offering registration
Title of each class of securities to be registered registered (1)(2) (1)(2) price (1)(2) fee (2)
---------------------------------------------------- ----------------- ----------------------- ------------------ --------------
Common shares, euro 0.12 par value (4)..............
Debt securities.....................................
Guarantees with respect to debt securities (5)......
------------------------------------------------------------------------------------------------------------------------------------
Total............................................. $4,000,000,000 N/A $4,000,000,000 $1,000,000(3)
------------------------------------------------------------------------------------------------------------------------------------
(1) There are being registered under this registration statement such
indeterminate number of common shares of AEGON N.V. and such indeterminate
principal amount of debt securities of AEGON N.V., AEGON Funding Corp. and
AEGON Funding Corp. II as shall have an aggregate offering price not to
exceed $4,000,000,000. If any debt securities are issued at original issue
discount, such greater principal amount as shall result in net proceeds of
$4,000,000,000 or the equivalent in foreign currency is being registered
under this registration statement. Any securities registered under this
registration statement may be sold separately or as units with other
securities registered under this registration statement. The proposed
maximum offering price per unit will be determined, from time to time, by
the registrant in connection with the issuance of the securities under this
registration statement.
(2) Pursuant to General Instruction II.C of Form F-3, not specified with
respect to each class of securities to be registered.
(3) Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
(4) Including such indeterminate number of common shares of AEGON N.V. as may
be issued from time to time upon conversion or exchange of debt securities
that are convertible or exchangeable into common shares, to the extent any
of such debt securities are, by their terms, convertible or exchangeable
for common shares. No separate consideration will be received for common
shares issuable upon conversion of or in exchange for any securities
registered hereunder that provide for conversion or exchange into such
securities.
(5) Debt securities issued by AEGON Funding Corp. or AEGON Funding Corp. II
will be fully and unconditionally guaranteed by AEGON N.V. No separate
consideration will be received from investors for such guarantees.
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.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED OCTOBER 11, 2001
PROSPECTUS
AEGON N.V.
(a Netherlands public company with limited liability)
and
AEGON Funding Corp.
(a Delaware corporation)
and
AEGON Funding Corp. II
(a Delaware corporation)
U.S. $4,000,000,000
_____________________
AEGON N.V. may offer its common shares and senior or subordinated debt
securities, including debt securities convertible or exchangeable into its
common shares, for sale through this prospectus.
AEGON Funding Corp. and AEGON Funding Corp. II may offer senior or
subordinated debt securities guaranteed by AEGON N.V. for sale through this
prospectus.
We may offer these securities from time to time in one or more offerings
with a total initial offering price of up to U.S. $4,000,000,000. We may also
offer any combination of these securities.
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 _______, 2001.
CONTENTS
Page
FORWARD-LOOKING STATEMENTS................................................ 3
ABOUT THIS PROSPECTUS..................................................... 3
AEGON N.V................................................................. 4
AEGON FUNDING CORP........................................................ 4
AEGON FUNDING CORP. II.................................................... 4
WHERE YOU CAN FIND MORE INFORMATION ABOUT US.............................. 4
FINANCIAL AND EXCHANGE RATE INFORMATION................................... 5
ENFORCEMENT OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS.................. 6
USE OF PROCEEDS........................................................... 6
RATIOS OF EARNINGS TO FIXED CHARGES....................................... 6
DESCRIPTION OF SHARE CAPITAL OF AEGON N.V................................. 7
DESCRIPTION OF DEBT SECURITIES............................................ 10
TAXATION.................................................................. 18
PLAN OF DISTRIBUTION...................................................... 33
VALIDITY OF SECURITIES.................................................... 35
EXPERTS................................................................... 35
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FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference forward-looking
statements that are based on current expectations, estimates, forecasts and
projections about the industries in which we operate, management's beliefs and
assumptions made by management. Such statements include, in particular,
statements about our plans, strategies and prospects. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," variations
of such words and similar expressions are intended to identify such forward-
looking statements. These statements are not guarantees of future performance
and involve risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in these forward-looking statements. Except as required
under the Federal securities laws and the rules and regulations of the
Securities and Exchange Commission, we do not have any intention or obligation
to update publicly any forward-looking statements after they are made, whether
as a result of new information, future events or otherwise.
Some of the important factors that could cause actual outcomes and results
to differ materially from forward-looking statements we make may include factors
described under "Risk Factors" in any related prospectus supplement, factors
described in our other filings with the SEC and the following factors:
. changes in general economic conditions, particularly in the U.S., The
Netherlands and the United Kingdom;
. changes in performance of financial markets, including emerging
markets;
. the frequency and severity of insured loss events;
. changes affecting mortality and morbidity levels and trends;
. changes affecting interest rate levels;
. changes affecting currency exchange rates, including the euro/U.S.
dollar and euro/pound sterling exchange rates;
. increasing levels of competition in the U.S., The Netherlands, the
United Kingdom and emerging markets;
. changes in laws and regulations;
. regulatory changes relating to insurance industries;
. acts of God, acts of terrorism and acts of war;
. changes in policies of central banks and/or foreign governments; and
. general competitive factors, in each case on a global, regional and/or
national basis.
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."
3
AEGON N.V.
AEGON N.V. (AEGON), through its member companies we collectively refer to
as the AEGON Group, is a leading international insurance group with its
headquarters in The Hague, The Netherlands. Its shares are quoted on the stock
exchanges of Amsterdam, Frankfurt, New York, London, Zurich and Tokyo. Ranked
by market capitalization, total assets and profits, the AEGON Group is one of
the world's ten largest listed insurance groups. The AEGON Group has major
operations in the U.S., The Netherlands, the United Kingdom, Canada and Mexico.
The AEGON Group is also present in Hungary, Spain, Belgium, Germany, Hong Kong,
Italy, Luxembourg, the Philippines and Taiwan, and has representative offices in
China and India. With roots dating back 150 years, the AEGON Group has
extensive experience in the insurance industry. Crucial differences exist in
local markets and for this reason the AEGON Group emphasizes a decentralized
organization structure. Our operating companies, with knowledgeable and
experienced local management and employees, market their own, unique products
using tailored distribution channels.
Close to 90% of the AEGON Group's core business is life insurance and
pension, related savings and investment products. The AEGON Group is also
active in accident and health insurance, property and casualty insurance and
limited banking activities. Consistent with a policy of spreading risks to
achieve reliable performance, the AEGON Group seeks to maintain a good balance
of business within the AEGON Group, both geographically and among product
groups. AEGON's headquarters are located at Mariahoeveplein 50, P.O. Box 202,
2501 CE The Hague, The Netherlands (telephone 011-31-70-344-3210; internet:
www.aegon.com).
AEGON FUNDING CORP.
AEGON Funding Corp. (AFC) was incorporated on May 21, 1999 under the laws
of the State of Delaware. AFC is an indirect wholly owned subsidiary of AEGON
and has no subsidiaries of its own.
AFC was established as a financing vehicle to be used to raise funds for
the U.S. subsidiaries of AEGON. AFC's registered office is at Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware, 19801, and the telephone
number of this office is 1-302-658-7581.
AEGON FUNDING CORP. II
AEGON Funding Corp. II (AFC II) was incorporated on September 19, 2000
under the laws of the State of Delaware. AFC II is an indirect wholly owned
subsidiary of AEGON and has no subsidiaries of its own.
AFC II was established as a financing vehicle to be used to raise funds for
the U.S. subsidiaries of AEGON. AFC II's registered office is at Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, and the telephone
number of this office is 1-302-658-7581.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
AEGON files annual reports with and furnishes other information to the
Securities and Exchange Commission. You may read and copy any document filed
with or furnished to the SEC by AEGON at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. AEGON's SEC filings are also
available to the public through the SEC's web site at www.sec.gov. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference room
in Washington D.C. and in other locations.
As allowed by the SEC, this prospectus does not contain all the information
you can find in our registration statement or the exhibits to the registration
statement. The SEC allows AEGON to "incorporate by reference" information into
this prospectus, which means that:
. incorporated documents are considered part of this prospectus;
. AEGON can disclose important information to you by referring you to
those documents;
. information that AEGON files with the SEC after the date of this
prospectus that is incorporated by reference in this prospectus
automatically updates and supersedes this prospectus; and
4
. information that is more recent than is included in this prospectus
automatically updates and supersedes information in documents
incorporated by reference with a date earlier than this prospectus.
. This prospectus incorporates by reference the documents of AEGON
listed below:
. Annual Report on Form 20-F for the fiscal year ended December 31,
2000;
. Report on Form 6-K dated April 6, 2001;
. Report on Form 6-K dated May 3, 2001;
. Report on Form 6-K dated May 4, 2001;
. Report on Form 6-K dated May 21, 2001;
. Report on Form 6-K dated May 30, 2001;
. Report on Form 6-K dated May 31, 2001;
. Report on Form 6-K dated June 19, 2001;
. Report on Form 6-K dated July 3, 2001;
. Report on Form 6 K dated August 10, 2001;
. Report on Form 6-K dated September 25, 2001;
. Report on Form 6-K dated October 4, 2001;
. Report on Form 6-K/A dated October 11, 2001; and
. each of the following documents that AEGON files with or furnishes to
the SEC after the date of this prospectus from now until we terminate
the offering of securities under this registration statement:
-reports filed under Section 13(a), 13(c) or 15(d) of the Exchange
Act, and
-reports filed on Form 6-K that indicate that they are incorporated
by reference in this prospectus.
These documents contain important information about the AEGON Group and our
financial condition. You may obtain copies of these documents in the manner
described above. You may also request a copy of these filings (excluding
exhibits) at no cost by contacting us as follows:
Investor Relations Investor Relations
AEGON N.V. AEGON USA, Inc.
P.O. Box 202 1111 North Charles Street
2501 CE The Hague Baltimore, MD 21201
The Netherlands USA
Tel: 011-31-70-344-8305 Tel: 1-410-576-4577
Fax: 011-31-70-383-2773 Fax: 1-410-347-8685
E-mail: groupir@aegon.nl E-mail: ir@aegonusa.com
No person is authorized to give any information or represent anything not
contained in this prospectus and the accompanying prospectus supplement. We are
only offering the securities in places where sales of those securities are
permitted. The information contained in this prospectus and any accompanying
prospectus supplement, as well as information incorporated by reference, is
current only as of the date of that information. The AEGON Group's business,
financial condition, results of operations and prospects may have changed since
that date.
AFC and AFC II do not, and will not, file separate reports with the SEC.
FINANCIAL AND EXCHANGE RATE INFORMATION
Except as otherwise noted, we present the financial statement amounts in
this prospectus and in the documents incorporated by reference in this
prospectus in accordance with generally accepted accounting principles
5
in The Netherlands (Dutch GAAP), which differ in significant respects from
generally accepted accounting principles in the U.S. (U.S. GAAP). For a
discussion of the principal differences between Dutch GAAP and U.S. GAAP
relevant to AEGON, see Note 5 to AEGON's audited consolidated financial
statements included in AEGON's Annual Report on Form 20-F for the fiscal year
ended December 31, 2000, and Note 3 to AEGON's unaudited financial statements
contained in AEGON's report on Form 6-K/A dated October 11, 2001, which are
incorporated by reference in this prospectus.
We have derived the financial data in this prospectus presenting year-end
figures from audited financial statements of AEGON. We have derived all
financial data in this prospectus presenting interim figures from unaudited
financial statements.
As used in this prospectus, "NLG" and "guilder" refer to the Dutch guilder,
"dollar" and "$" refer to the U.S. dollar and "euro" refer to the unified
currency that was introduced in connection with the European Economic and
Monetary Union in The Netherlands and the other participating member states of
the European Union on January 1, 1999. AEGON adopted the euro as its reporting
currency beginning January 1, 1999. Effective January 1, 1999, the official
euro / guilder exchange rate was fixed at a rate of euro 1.00 = NLG 2.20371.
AEGON's financial statements for fiscal years prior to fiscal 1999 and certain
other data included in this prospectus were originally stated in guilders, but
have been translated to euros using this fixed exchange rate.
ENFORCEMENT OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
AEGON is a Netherlands corporation. A substantial number of the directors
and management of AEGON, AFC and AFC II and certain of the experts named in this
prospectus are residents of The Netherlands or other countries outside the
United States. As a result, it may not be possible for investors to effect
service of process within the United States upon AEGON or such persons with
respect to matters arising under U.S. Federal securities laws or to enforce
against them judgments of courts of the United States predicated upon civil
liability under the Federal securities laws. Because of the absence of a
convention between the United States and The Netherlands providing for the
reciprocal recognition and enforcement of judgments in civil and commercial
matters, it is uncertain whether a court in The Netherlands, in original actions
or in actions for enforcement of judgments of United States courts, will find
liability or enforce judgments predicated solely upon the Federal securities
laws. Judgments of United States courts may be enforced by courts in The
Netherlands only if such courts independently determine that fairness and good
faith require such enforcement and that such enforcement does not contravene
principles of pubic policy of The Netherlands. AEGON has consented to service
of process in New York City for claims based upon the indenture, the debt
securities and the guarantees described under "Description of Debt Securities."
USE OF PROCEEDS
Unless otherwise set forth in the applicable prospectus supplement, we
intend to use the proceeds from the sale of securities offered through this
prospectus for the AEGON Group's general corporate purposes, which include
financing our operations, debt repayment and refinancing, capital expenditures
and acquisitions. The specific purpose of any individual issuance of securities
will be described in the applicable prospectus supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table shows AEGON's historical ratios of earnings to fixed
charges for the periods indicated, computed in accordance with Dutch GAAP and
U.S. GAAP.
Six months ended
June 30, 2001 Year ended December 31,
(unaudited) (audited)
---------------- ----------------------------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
Dutch GAAP.......... 4.8 4.6 3.9 3.2 2.7 2.5
U.S. GAAP........... 4.1 5.1 3.6 3.6 3.5 2.3
6
Calculation of Ratios
The data used to prepare the ratios have been derived from our consolidated
financial statements.
For purposes of these tables, "earnings" means income before tax plus fixed
charges.
"Fixed charges" are calculated by adding:
(1) interest expensed and capitalized; and
(2) amortized premiums, discounts and capitalized expenses related to
indebtedness.
DESCRIPTION OF SHARE CAPITAL OF AEGON N.V.
The following is a summary of the terms of AEGON's share capital, including
brief descriptions of provisions contained in AEGON's articles of incorporation,
as last amended on May 30, 2000. These summaries and descriptions do not purport
to be complete statements of these provisions.
Share Capital
As of June 30, 2001, the total authorized capital stock of AEGON consisted
of 2,600,000,000 common shares and 1,400,000,000 preferred shares, each par
value euro 0.12 per share. At the same date, there were 1,417,027,697 common
shares and 440,000,000 preferred shares issued, of which 31,178,080 common
shares were held by AEGON as treasury shares.
All of AEGON's issued common shares are fully paid and not subject to calls
for additional payments of any kind. AEGON's common shares are held by
shareholders worldwide in bearer and registered form. Holders of shares of New
York registry hold their common shares in registered form (New York Shares).
As of June 30, 2001, 549,684,370 common shares were registered in AEGON's
registry in The Netherlands, of which 517,271,586 common shares were held by
Vereniging AEGON, AEGON's controlling shareholder. As of that date 132,286,231
shares were held as New York Shares. The balance of the issued common shares
was held in bearer form.
Dividends
Under Dutch law and AEGON's articles of incorporation, the holders of AEGON
common shares are entitled to payment of dividends out of the profits remaining
after the creation of a reserve account, if any. The Executive Board of AEGON
may determine the dividend payment date for the common shares and preferred
shares, which may vary for registered and bearer shares, the record date for
payment applicable to holders of registered common shares and, with the approval
of the AEGON's Supervisory Board, the currency or currencies in which dividends
will be paid. For dividends on New York Shares, AEGON may make payment in U.S.
dollars. With respect to common shares, AEGON typically declares both an
interim dividend during the fiscal year and a final dividend after the
shareholders have approved AEGON's annual accounts. These dividends typically
may be paid in cash or common shares at the option of the shareholder.
Preferred dividends are payable on the capital actually paid in on the
preferred shares, and each such dividend, on an annual basis, is equal to the
European Central Bank's fixed interest percentage for basic refinancing
transactions, increased by 1.75%, as determined on the first Euronext Amsterdam
working day of the financial year to which the dividend relates.
Voting Rights
All holders of AEGON common shares and preferred shares are entitled to
attend personally or by proxy any general meeting of shareholders upon
compliance with the procedures described below. Each holder of common shares or
preferred shares is entitled to one vote for each share held by him and
represented at the meeting.
A general meeting of shareholders is required to be held not later than
June 30 in each year. General meetings of shareholders are called by AEGON's
Supervisory Board or AEGON's Executive Board and are required to be held in The
Hague, The Netherlands or certain other cities in The Netherlands. In order to
attend a general meeting of shareholders, holders of bearer shares must produce
evidence that such shares were held on a date specified in the notice of the
meeting. Holders of registered shares must be listed on a date specified in the
notice of
7
the meeting as being the holders of shares in a register, irrespective of
whether or not they are the owners of such shares on the date of the meeting.
Action is taken at general meetings by an absolute majority of the votes
cast unless a larger majority is explicitly provided by law or by the articles
of incorporation.
AEGON may not vote shares held by it as treasury shares.
Control of AEGON N.V.
Vereniging AEGON. As of June 30, 2001, Vereniging AEGON held 100% of the
outstanding preferred shares and 37.3% of the outstanding common shares
(excluding shares held by AEGON as treasury shares). These holdings give
Vereniging AEGON 52.4% of AEGON's voting shares and thus voting control of
AEGON. Vereniging AEGON is a membership association under Dutch law. One of the
principal characteristics of a membership association is that it has no share
capital. The major objective of Vereniging AEGON is to promote the direct and
indirect interests of AEGON Group companies, as well as insured parties,
employees, shareholders and other relations of those companies. Vereniging AEGON
expects to achieve its objective by, among other things, maintaining and
executing voting control of AEGON. The table below shows the ownership
percentage of Vereniging AEGON as of June 30, 2001.
Title of Class Number Owned Percent of Class
Outstanding
Common Shares..................................................... 517,271,586 37.3%
Preferred Shares.................................................. 440,000,000 100%
Vereniging AEGON has two administrative bodies: the general membership and
executive committee. The general membership currently consists of 20
individuals who were elected as members of Vereniging AEGON. Of these 20
individuals, 16 represent a broad cross-section of Dutch society, and are called
elected members. Of the other four members of the general membership, two are
elected from the AEGON Supervisory Board and two are elected from the AEGON
Executive Board. No employee (or former employee) of AEGON or its subsidiaries
may be elected to the general membership.
Appointment of the AEGON Supervisory Board and Executive Board. AEGON has
a two-tier management system consisting of an executive board and a supervisory
board. Members of the Supervisory Board and the Executive Board are appointed
by the Supervisory Board. The number of members of the Supervisory Board is
determined from time to time by the Supervisory Board but may not consist of
less than seven members. Reference is made to "Item 6. Directors, Senior
Management and Employees" in AEGON's Annual Report on Form 20-F for the year
ended December 31, 2000.
Shareholder Proposals. Proposals by shareholders are required to be placed
on the agenda of a general meeting of shareholders, but only if such proposals
have been signed by the holder or holders of at least 0.1% of the total capital
issued and are submitted in writing to AEGON at least two months and not more
than three months prior to the meeting, unless in the opinion of the Supervisory
Board and the Executive Board there are important company interests that should
prevent this from happening.
Amendment of Articles. AEGON's articles of incorporation may be amended at
any general meeting of shareholders where at least 50% of the issued capital is
represented, by an absolute majority of the votes cast. If the required quorum
is not represented at the shareholder meeting, the amendment may be approved at
a subsequent meeting to be called and held within four weeks with the same
required vote, but without such quorum requirement. Any amendment of the
articles of incorporation must have been proposed by the Executive Board and
approved by the Supervisory Board.
Annual Accounts. The Supervisory Board adopts annually AEGON's annual
accounts with respect to the previous calendar year, accompanied by a
certificate of an independent accountant certifying such annual accounts. The
annual accounts are submitted for approval to the annual general meeting of
shareholders by the Executive Board, and the Executive Board is also required to
present to the annual general meeting of shareholders a report of management
with respect to the previous calendar year.
8
Liquidation Rights
In the event of the liquidation of AEGON, the general meeting of
shareholders determines the remuneration of the liquidators and of the members
of the Supervisory Board. The assets remaining after payment of all debts,
liquidation expenses and taxes are to be distributed first to the holders of
preferred shares in the amount of their paid-in capital. The amount left after
such payment will be distributed to the holders of common shares.
Preemptive Rights
Except in certain instances prescribed by law, the holders of common shares
have preemptive rights on a pro rata basis to purchase any common shares to be
issued. Holders of preferred shares, as such, have no preemptive rights in
respect of any common shares.
Preemptive rights in respect of common shares may be limited or precluded
by a resolution approved by the general meeting of shareholders. See "Issuance
of Additional Shares" below. In the notice of the meeting, the reasons for the
proposal to limit or preclude the preemptive rights in respect of common shares
and the intended issue price must be explained in writing. Preemptive rights
may also be limited or precluded by the Executive Board if a resolution is
approved by a general meeting of shareholders that confers this power on the
Executive Board for a maximum of five years. This power may from time to time
be extended, but never for a period longer than five years. A resolution
approved at the general meeting of shareholders or taken by the Executive Board
to limit or preclude the preemptive rights in respect of common shares requires
the approval of the Supervisory Board. If AEGON makes a rights offering to the
holders of common shares, the rights of holders of New York Shares to exercise
the rights offered may be subject to a restriction that permits AEGON to sell
those rights in a manner to be determined by the Executive Board and to remit
the cash proceeds of that sale to the holders of New York Shares if the
additional common shares are not registered under the Securities Act of 1933.
Issuance of Additional Shares
Shares of AEGON's authorized but unissued capital stock may be issued at
such times and on such conditions as may be determined at a general meeting of
shareholders or by the Executive Board if authorized by the shareholders. At
the general meeting of shareholders held on May 3, 2001, the shareholders
authorized the Executive Board for a period of three years effective January 1,
2002 subject to the approval of the Supervisory Board:
(a) to issue shares and grant rights to acquire shares up to the amount of
AEGON's authorized capital; and
(b) to limit or exclude shareholders' preemption rights with regard to the
issuance of shares and rights to acquire shares.
The Supervisory Board subsequently approved this authorization. At the same
general meeting, the shareholders revoked a similar authorization to the
Executive Board granted at the general meeting of shareholders held May 4, 2000.
In respect of the issuance of common shares and the granting of rights to
acquire shares without preemption rights, the authority given under clause (a)
is limited to common shares with an aggregate par value of:
. 1% of the capital, if the issuance is to employees or management of
any AEGON Group company pursuant to an option plan that has been
instituted for the entire AEGON Group;
. 10% of the capital; and
. 20% of the capital, if the issuance occurs in connection with the
acquisition of an enterprise or a corporation.
For the purposes of this paragraph, the term "capital" means the par value
amount of the common share capital issued at the moment this authority is used
for the first time in a certain year. The authorizations described above may
only be withdrawn by a resolution of the general meeting of shareholders
following a proposal by the Executive Board that has been approved by the
Supervisory Board.
Repurchase by AEGON of its Shares
Subject to certain restrictions contained in the laws of The Netherlands
and AEGON's articles of incorporation, the Executive Board may cause AEGON to
purchase its own shares, provided that the total number of shares so repurchased
may not exceed, in the aggregate, 10% of the issued capital. These purchases may
be made
9
only upon authorization by the general meeting of shareholders, which
authorization is valid for a maximum of 18 months and must include the number of
shares to be acquired, the way in which they may be acquired and the minimum and
maximum purchase price. At the general meeting of shareholders held May 3, 2001,
the shareholders authorized the Executive Board for a period of 18 months to
acquire shares up to the maximum number allowed by law and AEGON's articles of
incorporation, for a consideration not to exceed 10% of the quoted local market
price.
Certificates for Common Shares and their Transfer
Certificates evidencing common shares are issuable, subject to the
restrictions described below, in bearer or registered form, as the holder may
elect. Certificates issued by the New York registrar are in registered form and
are printed in the English language. Bearer shares are evidenced by
certificates printed only in the Dutch language. Common shares in bearer form
and New York Shares may be held by residents as well as non-residents of The
Netherlands. Only common shares in bearer form may be traded on Euronext
Amsterdam and the London, Frankfurt, Tokyo and Zurich stock exchanges. Only New
York Shares may be traded on the New York Stock Exchange.
Upon presentation of a bearer certificate to AEGON's Dutch transfer agent,
accompanied by a request that the shares evidenced by that certificate be
transferred to New York Shares, the Dutch transfer agent will cancel the bearer
shares and will instruct AEGON's New York transfer agent to issue a New York
Share certificate evidencing those shares. Similarly, upon presentation to the
New York transfer agent of New York Shares accompanied by an appropriate
request, the New York transfer agent will cancel those New York Shares and will
instruct the Dutch transfer agent to issue a bearer share certificate evidencing
those shares.
Transfers of common shares in bearer form are accomplished by delivery of
the share certificates. New York Shares may be transferred on the books of
AEGON at the office of the New York transfer agent by surrendering the New York
Shares with the deed of transfer on the New York Shares or in a separate
instrument completed in full and signed by the transferor. Upon surrender,
AEGON, acting through its New York transfer agent, will either note the transfer
on the surrendered New York Shares or issue replacement New York Shares
registered in the name of the new owner. In addition, a shareholder is
entitled, upon written request to AEGON and the surrender for cancellation of
any share certificate previously issued, to have his name entered in the
register of shareholders with respect to the shares owned by him and to receive,
in lieu of a certificate, a non-negotiable declaration of registration of those
shares.
DESCRIPTION OF DEBT SECURITIES
The following is a summary of the general terms of the debt securities.
Each time that we issue debt securities pursuant to this prospectus we will file
a prospectus supplement with the Securities Exchange Commission that you should
read carefully. The prospectus supplement may contain additional terms of those
debt securities. The terms presented here, together with the terms contained in
the prospectus supplement, will be a description of the material terms of the
debt securities, but if there is any inconsistency between the terms presented
here and those in the prospectus supplement, those in the prospectus supplement
will apply and will replace those presented here. You should also read the
indenture under which we will issue the debt securities, which we have filed
with the SEC as an exhibit to the registration statement of which this
prospectus is a part. The terms of the debt securities include those stated in
the indenture and those made part of the indenture by reference to the Trust
Indenture Act of 1939.
General
The debt securities will be issued by AEGON, AFC or AFC II, as the case may
be, under an indenture with Citibank, N.A., unless specified otherwise in a
prospectus supplement.
Any debt securities issued by AFC or AFC II will be guaranteed by AEGON.
The total principal amount of debt securities that can be issued under the
indenture is unlimited. Except as otherwise provided in the prospectus
supplement relating to a particular series of debt securities, the indenture
does not limit the amount of other debt, secured or unsecured, that we may
issue. We may issue the debt securities in one or more series.
The prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
10
. the issuer of the debt securities, AEGON, AFC or AFC II;
. the price of the debt securities offered;
. the title of the debt securities;
. the total principal amount of the debt securities;
. the date or dates, if any, on which the principal of and any premium
on the debt securities will be payable;
. any interest rate, the date from which interest will accrue, interest
payment dates and record dates for interest payments;
. whether the debt securities are senior or subordinated debt
securities;
. the places at which payments of principal and interest are payable;
. the terms of any optional or mandatory redemption, including the price
for the redemption;
. any sinking fund provisions;
. whether payments on the debt securities will be payable in foreign
currency or currency units or another form and whether payments will
be payable by reference to any index or formula;
. any changes or additions to the events of default or covenants
described in this prospectus;
. whether debt securities will be issued as discount securities and the
amount of any discount;
. whether the debt securities will be represented by one or more global
securities;
. whether the debt securities will be issued in registered or bearer
form, and any restrictions that may apply;
. any terms for the conversion or exchange of the debt securities for
other securities of AEGON Group companies or any other entity
(including any related cash-out option); and
. any other terms of the debt securities.
We have the ability under the indenture to "reopen" a previously issued
series of debt securities and issue additional debt securities of that series or
establish additional terms of the series. We are also permitted to issue debt
securities with the same terms as previously issued 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
and will rank equally with all other unsecured and unsubordinated debt of their
issuer. The subordinated debt securities will be unsecured indebtedness and
will be subordinated in right of payment to some existing and future debt of
their issuer. See "Subordination" below.
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. U.S. Federal income tax consequences and other special
considerations applicable to discounted debt securities are discussed below
under "Taxation in the United States" and may be discussed further in the
prospectus supplement relating to these debt securities.
Guarantees
If AFC or AFC II issues the debt securities, AEGON will fully and
unconditionally guarantee the due and punctual payment of the principal of, any
premium and any interest on those debt securities, when and as these payments
become due and payable, whether at maturity, upon redemption or declaration of
acceleration, or otherwise. The guarantees of senior debt securities will
constitute an unsecured, unsubordinated obligation of AEGON and will rank
equally with all other unsecured and unsubordinated obligations of AEGON. The
guarantees
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of subordinated debt securities will constitute an unsecured obligation of AEGON
and will be subordinated in right of payment to all senior indebtedness of
AEGON.
AEGON will (1) agree that its obligations under the guarantees 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) waive any right to require a proceeding
against AFC or AFC II, as the case may be, before its obligations under the
guarantees shall become effective. See "Enforcement of Civil Liabilities
Against Foreign Persons."
Governing Law
The debt securities, the indenture and the guarantees will be governed by
and construed in accordance with the laws of the State of New York. The laws of
the State of New York would not require the trustee to pursue or exhaust its
legal and equitable remedies against AFC or AFC II, as the case may be, 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, AEGON will waive any right to require a proceeding against
AFC or AFC II before its obligations under the guarantees shall become
effective. There are no limitations under the laws of The Netherlands or the
articles of incorporation of AEGON on the right of non-residents of The
Netherlands to hold the debt securities issued by AEGON.
Form, Exchange and Transfer
Unless otherwise specified in the related prospectus supplement, the debt
securities of each series will be issuable in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
Unless otherwise specified in the related prospectus supplement, any
payments of principal, interest and premium on registered debt securities will
be payable and, subject to the terms of the indenture and the limitations
applicable to global securities, debt securities may be transferred or
exchanged, at any office or agency we maintain for such purpose, without the
payment of any service charge except for any applicable tax or governmental
charge.
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.
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
12
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.
We will wire to DTC's nominee principal and interest payments with respect
to global certificates. We and the trustees under the indenture will treat
DTC's nominee as the owner of the global certificates for all purposes.
Accordingly, we, the trustee and the paying agent 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 trustee or us.
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 us that it is unwilling or unable to continue as
depositary, or DTC is no longer eligible to act as depositary, and we
do not appoint a successor depositary within 90 days; or
. we determine not to have the debt securities of a series represented
by global certificates and notify the trustee of our decision.
Payments of Additional Amounts
If the prospectus supplement for a particular series of debt securities so
provides, the issuer or guarantor will make all payments on the debt securities
of that series without withholding or deduction for any taxes, or other
governmental charges in effect on the date of issuance of the debt securities of
that series or imposed in the future by or on behalf of The Netherlands, in the
case of AEGON, or the United States, in the case of AFC or AFC II, or any
authority in The Netherlands or the United States, as applicable. In the event
any Dutch, in the case of payments by AEGON, or United States, in the case of
payments by AFC or AFC II, taxes or other charges are imposed on payments on any
debt security of that series held by you, the issuer or guarantor 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; provided, however, that (a) in the case of payments by
AEGON, the amounts with respect to any Dutch taxes shall be payable only to
holders that are not residents in The Netherlands for purposes of its tax laws;
and (b) in the case of payments by AFC or AFC II, the amounts with respect to
any United States taxes shall be payable only to holders that are non-U.S.
persons not resident in the United States, foreign corporations or certain
trusts or estates not subject to taxes, for United States tax purposes, and
provided further, that the issuer or guarantor shall not be required to make any
payment of any additional amounts on account of:
. in the case of payments by AEGON, your being a resident of The
Netherlands or having some connection with The Netherlands or United
States (in the case of Dutch taxes) other than the mere holding of the
debt security or the receipt of principal, any interest, or any
premium on the debt security;
. in the case of payments by AFC or AFC II, your being a resident of the
United States or having some connection with the United States (in the
case of United States taxes) other than the mere holding of the debt
security or the receipt of principal, and 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
we provide funds to make such payment to the trustee;
. any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or other governmental charge;
13
. any tax, assessment or other governmental charge payable other than by
withholding from payments on the debt security;
. in the case of payments by AFC or AFC II, with respect to United
States taxes, any tax imposed by reason of the holder's past or
present status as a tax-exempt organization with respect to the United
States or as a corporation which accumulates earnings to avoid United
States Federal income tax;
. any tax, assessment or other governmental charge which would not have
been imposed or withheld if the holder had declared his or her non-
residence in The Netherlands, in the case of payments by AEGON, or the
United States, in the case of payments by AFC or AFC II, or made a
similar claim for exemption so that, upon making the declaration or
the claim, the holder would either have been able to avoid the tax,
assessment or charge or to obtain a refund of the tax, assessment or
charge;
. any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of,
premium, if any, or any interest on, any debt security, if such
payment can be made without such withholding by any other paying
agent; or
. any combination of items above,
nor shall additional amounts be paid with respect to any payment of the
principal of, premium, if any, or any interest on any debt security to any
holder who is a fiduciary, a partnership or a beneficial owner and who is other
than the sole beneficial owner of the payment to the extent the fiduciary or a
member of the partnership or a beneficial owner would not have been entitled to
any additional amount had it been the holder of the debt security.
Tax Redemption
If the prospectus supplement for a particular series of debt securities so
provides, the issuer or guarantor may redeem that series of debt securities
before its maturity, in whole but not in part, if, at any time after the date of
issuance of that series of securities, as a result of any:
. amendment to, or change in, the laws of The Netherlands, in the case
of payments by AEGON, or the United States, in the case of payments by
AFC or AFC II, or any political subdivision thereof; or
. change in the application or official interpretation of such laws or
regulations,
where the amendment or change becomes effective after the date of the issuance
of the series of debt securities, the issuer or guarantor become, or will
become, obligated to pay any additional amounts as provided above under
"Payments of Additional Amounts" and cannot reasonably avoid such obligation.
Before the issuer or guarantor may redeem debt securities of a particular
series as provided above, the issuer or guarantor must deliver to the trustee at
least 30 days, but not more than 60 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 selected by us to the effect
that, as a result of the circumstances described above, we have or
will become obligated to pay any additional amounts.
The issuer or guarantor will give you at least 30 days', but not more than
60 days', notice before any tax redemption of a series of securities. On the
redemption date, the issuer or guarantor will pay you the principal amount of
your debt security, plus any accrued interest (including any additional amounts)
to the redemption date.
Conversion or Exchange
The terms, if any, upon which debt securities of any series are convertible
into or exchangeable for other securities will be set forth in the related
prospectus supplement. These terms may include the conversion price, the
conversion period, provisions as to whether conversion or exchange will be at
the option of the holders of that series
14
of debt securities or at our option, any events requiring an adjustment of the
conversion price, provisions affecting conversion in the event of the redemption
of such series of debt securities and other relevant provisions relating to
those securities.
Events of Default
The following are defined as events of default with respect to securities
of any series outstanding under the indenture, unless otherwise stated in the
related prospectus supplement:
(a) failure to pay principal or premium, if any, on any debt security of
that series when due, and continuance of such a default beyond any
applicable grace period;
(b) failure to pay any interest on any debt security of that series when
due, and continuance of such a default for a period of 30 days beyond
any applicable grace period;
(c) failure to deposit any sinking fund payment, when due and continuance
of such a default beyond any applicable grace period, on any debt
security of that series;
(d) failure to perform any of our other covenants or the breach of any of
the warranties in the indenture after being given written notice and
continuance of such a default for a period of 90 days beyond any
applicable grace period; and
(e) certain events in bankruptcy, insolvency or reorganization of AEGON,
AFC or AFC II.
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of that series may accelerate the
maturity of the debt securities of that series (or, such portion of the
principal amount of such debt securities as may be specified in a prospectus
supplement). If an acceleration occurs, subject to specified conditions, the
holders of a majority of the aggregate principal amount of the outstanding debt
securities of that series may rescind and annul such acceleration. Because each
series of debt securities will be independent of each other series, a default in
respect of one series will not necessarily in itself result in a default or
acceleration of the maturity of a different series of debt securities.
Other than its duties in case of an event of default, the trustee is not
obligated to exercise any of its rights or powers under the indenture at the
request or direction of any of the holders, unless the holders offer the trustee
reasonable indemnity. Subject to the indemnification of the trustee, the
holders of a majority in aggregate principal amount of the outstanding debt
securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee with respect to the debt securities of that
series.
A holder of debt securities of any series will not have any right to
institute any proceeding with respect to the indenture unless:
. the holder previously gave written notice to the trustee of an event
of default;
. the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made written request,
and have offered reasonable indemnity to the trustee to institute such
proceeding as trustee; and
. the trustee fails to institute such proceeding, and has not received
from the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series a direction inconsistent
with such request, within 60 days after such notice, request and
offer.
The limitations described above do not apply to a suit instituted by a
holder of a debt security for the enforcement of payment of the principal,
interest or premium on that debt security on or after the applicable due date
specified in that debt security.
We will be required to furnish to each trustee annually a statement by our
officers as to whether or not we are in default in the performance of any of the
terms of the indenture.
15
Subordination
The indebtedness evidenced by the subordinated debt securities will, to the
extent set forth in the indenture with respect to each series of subordinated
debt securities, be subordinate in right of payment to the prior payment in full
of all of our senior debt, as defined, including any senior debt securities.
The prospectus supplement relating to any subordinated debt securities will
summarize the subordination provisions of the indenture applicable to that
series including:
. the applicability and effect of such provisions upon any payment or
distribution of our assets to creditors upon any liquidation,
bankruptcy, insolvency or similar proceedings;
. the applicability and effect of such provisions in the event of
specified defaults with respect to senior debt, including the
circumstances under which and the periods in which we will be
prohibited from making payments on the subordinated debt securities;
and
. the definition of senior debt applicable to the subordinated debt
securities of that series.
In the event and during the continuation of any default in the payment of
any senior debt continuing beyond any applicable grace period specified in the
instrument evidencing that senior debt (unless and until the default shall have
been cured or waived or shall have ceased to exist), no payments on account of
principal, premium, if any, or interest, if any, on the subordinated debt
securities or sums payable with respect to the conversion or exchange, if
applicable, of the subordinated debt securities may be made pursuant to the
subordinated debt securities.
Upon payment or distribution of our assets to creditors upon dissolution or
winding-up or total or partial liquidation or reorganization, whether voluntary
or involuntary in bankruptcy, insolvency, receivership or other proceedings, the
holders of our senior debt will be entitled to receive payment in full of all
amounts due on the senior debt before any payment is made by us on account of
principal, premium, if any, or interest, if any, on the subordinated debt
securities.
By reason of this subordination, in the event of our insolvency, holders of
subordinated debt securities may recover less, ratably, and holders of senior
debt may recover more, ratably, than our other creditors. The indenture does
not limit the amount of senior debt that we may issue.
Limitation on Liens
If so specified in a prospectus supplement relating to a series of debt
securities, so long as any of the debt securities of that series remain
outstanding, the issuer and its subsidiaries may not secure any indebtedness in
respect of borrowed moneys having an original maturity of more than two years by
granting security upon any of their present or future assets or revenues unless
they effectively provide that the same or equal and ratable security (or other
security acceptable to the trustee) is accorded to all debt securities of that
series for so long as the secured indebtedness is so secured. This limitation
does not apply to:
. security created over any shares in, assets of or securities owned by
any subsidiaries that are not principally engaged in the business of
life insurance and that do not contribute more than 10% of AEGON's
total aggregate consolidated gross premium income as reflected in its
most recent annual audited financial statements;
. security created in the normal course of the insurance business
carried on in a manner consistent with generally accepted insurance
practice for that insurance business;
. security or preference arising by operation of any law;
. security over real property to secure borrowings to finance the
purchase or improvement of that real property;
. security over assets existing at the time of the acquisition of those
assets; and
16
. security not otherwise permitted by the above that secures borrowed
money in an aggregate principal amount not exceeding 50% of AEGON's
total aggregate consolidated indebtedness with an original maturity of
more than two years.
Defeasance
Unless otherwise indicated in the related prospectus supplement, we may
elect, at our option at any time, to have the provisions of the indenture
relating (a) to defeasance and discharge of indebtedness or (b) to defeasance of
certain restrictive covenants apply to the debt securities of any series, or to
any specified part of a series.
In order to exercise either option, we must irrevocably deposit, in trust
for the benefit of the holders of those debt securities, money or U.S.
government securities, or both, which, through the payment of principal and
interest in accordance with their terms, will provide amounts sufficient to pay
the principal of and any premium and interest on those debt securities on the
respective stated maturities in accordance with the terms of the indenture and
those debt securities. Any additional conditions to exercising these options
with respect to a series of debt securities will be described in an applicable
prospectus supplement.
If we meet all the conditions to clause (a) above and elect to do so, we
will be discharged from all our obligations with respect to the applicable debt
securities and if those debt securities are subordinated debt securities, the
provisions relating to subordination will cease to be effective (other than
obligations to register transfer of debt securities, to replace lost, stolen or
mutilated certificates and to maintain paying agencies). We shall be deemed to
have paid and discharged the entire indebtedness represented by the applicable
debt securities and to have satisfied all of our obligations under the debt
securities and the indenture relating to those debt securities.
If we meet all the conditions to clause (b) above and elect to do so, we
may omit to comply with and shall have no liability in respect of certain
restrictive covenants as described in the related prospectus supplement and, if
those debt securities are subordinated debt securities, the provisions of the
indenture relating to subordination will cease to be effective, in each case
with respect to those debt securities.
Modification of the Indenture
Under the indenture, our rights and obligations and the rights of holders
may be modified with the consent of the holders holding not less than a majority
of the aggregate principal amount of the outstanding debt securities of each
series affected by the modification. No modification of the principal or
interest payment terms, and no modification reducing the percentage required for
modifications or altering the provisions relating to the waiver of any past
default, is effective against any holder without its consent. We and the
trustee may also amend the indenture or any supplement to the indenture without
the consent of the holders of any debt securities to evidence the succession or
addition of another corporation to AEGON, AFC or AFC II, as the case may be, to
evidence the replacement of the trustee with respect to one or more series of
debt securities and for certain other purposes.
Consolidation, Merger or Disposition of Assets of AEGON, AFC or AFC II
We may not consolidate with or merge into, or sell or lease substantially
all of our assets to any person unless:
. the successor person expressly assumes our obligations on the debt
securities and under the indenture;
. immediately after giving effect to the transaction, no event of
default, and no event which, after notice or lapse of time or both,
would become an event of default, shall have occurred and be
continuing; and
. any other conditions specified in the related prospectus supplement
are met.
Concerning the Trustee
We and certain of our affiliates and subsidiaries may maintain deposit
account and lines of credit and have other customary banking relationship with
the trustee and its affiliates in the ordinary course of our and their
respective businesses.
Pursuant to the Trust Indenture Act, should a default occur with respect to
the debt securities constituting our senior debt securities or subordinated debt
securities, the trustee would be required to resign as trustee with
17
respect to the debt securities constituting either the senior debt securities or
the subordinated debt securities under the indenture within 90 days of the
default unless the default were cured, duly waived or otherwise eliminated or
unless only senior debt securities or subordinated debt securities are
outstanding under the indenture at the time of the default.
TAXATION
Taxation in The Netherlands
General. The following describes the principal Dutch tax consequences of
the acquisition, holding and disposal of common shares in AEGON or an interest
in the debt securities. This summary does not purport to be a comprehensive
description of all Dutch tax considerations that may be relevant to a decision
to acquire, hold, convert or dispose of the common shares or the debt
securities. Each prospective investor should consult a professional tax adviser
with respect to the tax consequences of an investment in the common shares or
the debt securities. The discussion of certain Dutch taxes below is included for
general information only.
This summary is based on tax legislation, published case law, treaties,
rules, regulations and similar documentation in force as of the date of this
prospectus.
For the purposes of this discussion we have assumed that:
. AFC and AFC II are not resident, nor deemed to be resident, of The
Netherlands for Dutch tax purposes;
. a corporate holder does not hold, directly or indirectly, an interest
of 5% or more of the total issued capital of AEGON, and
. an individual holder, alone, or together with his or her partner
(statutory defined term) or certain other related persons does not
hold, directly or indirectly, (a) an interest of 5% or more of the
total issued capital of AEGON or 5% or more of a certain class of
AEGON's shares, (b) rights to acquire, directly or indirectly, such
interest or (c) certain profit sharing rights in AEGON.
A holder that acquires an interest in excess of the thresholds mentioned
above is strongly recommended to consult a professional tax adviser with respect
to the Dutch tax consequences of an investment in the common shares.
Common Shares of AEGON.
Dividend Withholding Tax
Dividends and other revenue from the common shares will be generally
subject to Dutch dividend withholding tax at a rate of 25%. Dividends include:
. distributions in cash or in kind including deemed and constructive
distributions;
. liquidation proceeds, proceeds on redemption of the common shares and,
as a rule, the consideration for the repurchase of common shares by
AEGON in excess of the average paid-in capital recognized for Dutch
dividend withholding tax purposes, unless the repurchase is exempt on
the basis of Article 4c of the Dividend Tax Act 1965;
. the par value of shares issued to a holder of common shares or an
increase of the par value of common shares, except when the increase
is funded out of AEGON's paid-in capital as recognized for Dutch
dividend withholding tax purposes; and
18
. partial repayments of paid-in capital, if and to the extent there are
net profits, unless the general meeting of the shareholders of AEGON
has resolved in advance to make such repayment and provided that the
nominal value of the common shares concerned has been reduced by an
equal amount by way of an amendment of the articles of incorporation
and the paid-in capital is recognized as capital for Dutch dividend
withholding tax purposes.
. In general, AEGON is required to remit all amounts withheld as Dutch
dividend withholding tax to the Dutch tax authorities.
Residents of The Netherlands
In general, the Dutch dividend withholding tax withheld with respect to
dividend distributions will be creditable for Dutch income tax purposes for the
beneficial owner thereof, or, subject to certain conditions, may be recoverable
in whole or in part by the Dutch resident beneficial owner of such dividend.
AEGON can refrain from withholding dividend withholding tax on the portion
of the proceeds from the common shares in respect of which the temporary special
distribution tax (as discussed below) is applicable, if the recipient of
proceeds from the common shares is a resident of The Netherlands.
On request and if certain conditions are met, a refund of the Dutch
dividend withholding tax applies to Dutch qualifying pension funds, certain
exempt entities and Dutch investment institutions as defined in Article 28 of
the Corporate Income Tax Act 1969.
Non-residents of The Netherlands
If a holder is resident in a country other than The Netherlands and if a
treaty for the avoidance of double taxation with respect to taxes on income is
in effect between The Netherlands and such country, and the holder is the
beneficial owner of the dividends and a qualifying resident for purposes of the
treaty, the holder will, depending on the terms of the particular treaty,
qualify for full or partial relief at source or for a refund (in whole or in
part) of the Dutch dividend withholding tax.
Residents of the United States that qualify for, and comply with the
procedures for claiming benefits under the income tax convention between The
Netherlands and the United States (NL/US income tax treaty), generally are
eligible for a reduction of up to 15% of the Dutch withholding tax on dividend
income. The NL/US income tax treaty provides a complete exemption for dividends
received by exempt pension trusts and exempt organizations, as defined therein.
A holder of the common shares will qualify for benefits under the NL/US income
tax treaty (subject to compliance with the procedures for claiming benefits) if
the holder:
. is the beneficial owner of the common shares and the dividends paid on
those common shares;
. is resident in the United States;
. is not also resident in another jurisdiction;
. does not hold the common shares in connection with the conduct of
business in The Netherlands; and
. is an individual, an exempt pension trust or exempt organization (as
defined in the NL/US income tax treaty), an estate or trust whose
income is subject to U.S. taxation as the income of a resident, either
in its hands or in the hands of its beneficiaries, or a corporation
that is not subject to the treaty's limitation of benefits provision.
AEGON can refrain from withholding Dutch dividend withholding tax on the
part of the dividend distribution in respect of which the distribution tax
discussed below is applicable, if the recipient of the dividend distribution is
a resident of The Netherlands, The Netherlands Antilles or Aruba, a member state
of the European Union or a country with which The Netherlands has concluded a
treaty for the avoidance of double taxation.
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Proposed Legislation
Recently, a proposal for legislation was announced that may affect the
eligibility for an exemption, reduction or refund of the Dutch dividend
withholding tax. The proposed legislation would have retroactive effect as of
April 27, 2001. A recipient of a dividend on the common shares will not be
entitled to an exemption, reduction or partial refund of Dutch dividend
withholding tax if the recipient is not considered the beneficial owner of such
dividend. This is the case if:
. the recipient of the dividend, in connection with the receipt of the
dividend has incurred an obligation, as part of one or more related
transactions, as a result of which the dividend in whole or in part
has accrued or will accrue to the benefit of a person that is to a
lesser extent entitled to an exemption, reduction or refund than the
recipient of the dividend; and
. such person, other than the recipient of the dividend, retains or
acquires, directly or indirectly, a comparable interest in the common
shares on which the dividends are paid, as such person had before the
related transactions were entered into.
Distribution Tax
AEGON is subject to a temporary special distribution tax at a rate of 20%
to the extent that any "excessive" dividends are distributed on the common
shares in the period from January 1, 2001 up to and including December 31, 2005.
This distribution tax is a corporate income tax, not a creditable or refundable
withholding tax. For purposes of this distribution tax, dividends are considered
to be "excessive" when during a particular calendar year, the total amount of
dividends distributed exceeds the highest of the following three amounts:
. 4% of the market capitalization of AEGON at the beginning of the
relevant calendar year;
. twice the amount of the average annual dividends (exclusive of
extraordinary dividends) by reference to the three calendar years
immediately preceding January 1, 2001; or
. the adjusted statutory income of AEGON for the preceding book year.
The temporary special distribution tax is not levied insofar as the
aggregate amount of dividend distributions during the period January 1, 2001
through December 31, 2005 is in excess of the balance of the fair market value
of the net assets at the end of the fiscal year that ended prior to January 1,
2001 reduced by the paid-in capital recognized for Dutch tax purposes.
The distribution tax due is reduced pro rata for common shares that were
held, at the time of the dividend distribution, for an uninterrupted period of
three years, or as of September 14, 1999, by individuals or entities (other than
investment institutions as defined in the Corporate Income Tax Act 1969) holding
at least 5% of AEGON's nominal capital.
Corporate Income Tax and Individual Income Tax
Residents of The Netherlands
If a corporate holder is subject to Dutch corporate income tax, and the
common shares are attributable to its business assets or deemed business assets,
payments on the common shares and the gains realized upon the disposal of the
common shares are taxable.
If an individual holder is resident or deemed to be a resident in The
Netherlands for Dutch tax purposes (including an individual who has opted to be
taxed as a resident of The Netherlands), payments on the common shares and gains
realized upon the disposal of the common shares are taxable at the progressive
rates of the Income Tax Act 2001, if:
(1) the holder of the common shares has an enterprise or an interest in an
enterprise to which the common shares are attributable; or
20
(2) the payments and gains qualify as income from miscellaneous activities
in The Netherlands within the meaning of Section 3.4 of the Income Tax
Act 2001, which include the performance of activities with respect to
the common shares that exceed "regular, active portfolio management"
(normaal, actief vermogensbeheer).
If neither condition (1) nor (2) applies to an individual holder of common
shares, the common shares will be included in the individual's yield basis.
Consequently, actual payments on the common shares and the actual gains realized
upon the disposal of the common shares will not be taxable. Instead, the holder
of the common shares will be taxed at a flat rate of 30% on deemed income from
"savings and investments" (sparen en beleggen) within the meaning of Section 5.1
of the Income Tax Act 2001. This deemed income amounts to 4% of the average of
the individual's "yield basis" (rendementsgrondslag) within the meaning of
Article 5.3 of the Income Tax Act 2001 at the beginning of the calendar year,
and the individual's yield basis at the end of the calendar year, insofar as the
average exceeds a certain threshold.
Non-residents of The Netherlands
Dividend distributions on the common shares and capital gains realized upon
the disposal of the common shares for a holder that is not resident nor deemed
to be resident in The Netherlands for Dutch tax purposes (and, in the case of an
individual holder, has not opted to be taxed as a resident of The Netherlands)
are not taxable in The Netherlands, provided that:
. the holder does not have an enterprise or an interest in an enterprise
that is carried on through a permanent establishment or a permanent
representative in The Netherlands to which the common shares are
attributable;
. the holder is not entitled to a share in the profits of an enterprise
that is effectively managed in The Netherlands, other than by way of
securities or through an employment contract, and to which enterprise
the common shares are attributable; and
. with respect to an individual holder, the dividend distributions or
capital gains do not qualify as income from miscellaneous activities
in The Netherlands within the meaning of Section 3.4 of the Income Tax
Act 2001, which include the performance of activities in The
Netherlands with respect to the common shares that exceed "regular,
active portfolio management" (normaal, actief vermogensbeheer).
Gift and Inheritance Taxes
Residents of The Netherlands
Generally, gift and inheritance taxes will be due in The Netherlands in
respect of an acquisition of the common shares by way of a gift by, or on the
death of, an individual holder who, for the purposes of the Dutch gift and
inheritance tax, is resident or deemed to be resident in The Netherlands at the
time of the gift or his or her death.
An individual of Dutch nationality is deemed to be a resident of The
Netherlands for the purposes of the Dutch gift and inheritance tax if he or she
has been resident in The Netherlands during the 10 years preceding the gift or
his or her death. An individual of any other nationality is deemed to be a
resident of The Netherlands for the purposes of the Dutch gift and inheritance
tax only if he or she has been residing in The Netherlands at any time during
the 12 months preceding the time of the gift.
Non-residents of The Netherlands
No gift or inheritance taxes will arise in The Netherlands in respect of an
acquisition of the common shares
21
by way of gift by, or as a result of the death of, an individual holder who is
neither resident nor deemed to be a resident of The Netherlands, unless:
. the individual holder at the time of the gift has, or at the time of
his or her death had, an interest in a Dutch enterprise to which the
common shares are or were attributable;
. the common shares are or were attributable to the assets of an
enterprise that is effectively managed in The Netherlands and the
donor is, or the deceased was, entitled, other than by way of
securities or through an employment contract, to a share in the
profits of that enterprise at the time of the gift or, as applicable,
at the time of his or her death; or
. in the case of a gift of the common shares by an individual who at the
date of the gift was neither resident nor deemed to be resident in The
Netherlands, such individual dies within 180 days after the date of
the gift, if at the time of his or her death such individual was a
resident or deemed to be a resident of The Netherlands.
Value Added Tax (VAT)
In general, no Dutch VAT will arise with respect to the issuance of the
common shares and with respect to dividend distributions, partial or complete
repayment of paid-in capital or other payments and distributions on common
shares.
Capital Tax
Dutch capital tax will, in principle, be due by AEGON at the rate of 0.55%
of the fair market value of any contribution to the capital of AEGON upon the
issuance of the common shares.
Other Taxes and Duties
No net wealth tax, registration tax, customs duty, transfer tax, stamp duty
or any other similar documentary tax or duty will be payable in The Netherlands
by a holder in respect of or in connection with the subscription, issue,
placement, allotment or delivery of the common shares.
Debt Securities of AEGON, AFC and AFC II.
Withholding Tax
No Dutch withholding tax is due upon payments on the debt securities
provided that, in the case of debt securities issued by AEGON, the payments do
not depend, nor are deemed to depend, on profits or distributions of profits by
AEGON.
Corporate Income Tax and Individual Income Tax
Residents of The Netherlands
If a holder of the debt securities is subject to Dutch corporate income tax
and the debt securities are attributable to its business assets or its deemed
business assets, payments on the debt securities and the gains realized upon the
disposal of the debt securities will be taxable.
If a holder of the debt securities is an individual resident or deemed to
be resident in The Netherlands for Dutch tax purposes (including an individual
who has opted to be taxed as a resident of The Netherlands), payments
22
on the debt securities and the gains realized upon the disposal of the debt
securities will be taxable at the progressive rates of the Income Tax Act 2001,
if:
(1) the holder of the debt securities has an enterprise or an interest in
an enterprise, to which enterprise the debt securities are
attributable; or
(2) such payments and gains qualify as income from miscellaneous
activities in The Netherlands within the meaning of Section 3.4 of the
Income Tax Act 2001, which include the performance of activities with
respect to the debt securities that exceed "regular, active portfolio
management" (normaal, actief vermogensbeheer).
If neither condition (1) nor (2) applies to an individual holder of the
debt securities, the debt securities will be included in the individual's yield
basis. Consequently, actual payments on the debt securities and the actual gains
realized upon the disposal of the debt securities will not be taxable. Instead,
the holder of the debt securities will be taxed at a flat rate of 30% on deemed
income from "savings and investments" (sparen en beleggen) within the meaning of
Section 5.1 of the Income Tax Act 2001. This deemed income amounts to 4% of the
average of the individual's "yield basis" (rendementsgrondslag) within the
meaning of Article 5.3 of the Income Tax Act 2001 at the beginning of the
calendar year and the individual's yield basis at the end of the calendar year,
insofar as the average exceeds a certain threshold.
Non-residents of The Netherlands
A corporate holder and individual holder of the debt securities that is not
resident nor deemed to be resident in The Netherlands for Dutch tax purposes
(nor, in the case of an individual holder, has opted to be taxed as a resident
of The Netherlands) is not taxable in respect of a payment on the debt
securities or the gains realized upon the disposal of the debt securities,
provided that:
. the corporate holder or individual holder of the debt securities does
not have an interest in a Dutch enterprise to which Dutch enterprise
the debt securities are attributable;
. the corporate holder or the individual holder of the debt securities
is not entitled to a share in the profits of an enterprise that is
effectively managed in The Netherlands, other than by way of
securities or through an employment contract, and to which enterprise
the debt securities are attributable; or
. in respect of an individual holder such payments and gains do not
qualify as income from miscellaneous activities in The Netherlands
within the meaning of Section 3.4 of the Income Tax Act 2001, which
include the performance of activities in The Netherlands with respect
to the debt securities that exceed "regular, active portfolio
management" (normaal, actief vermogensbeheer).
Gift and Inheritance Taxes
Residents of The Netherlands
Generally, gift and inheritance taxes will be due in The Netherlands in
respect of an acquisition of the debt securities by way of a gift by, or on the
death of, an individual holder who for the purposes of the Dutch gift and
inheritance tax is resident or deemed to be resident in The Netherlands at the
time of the gift or his or her death.
An individual of Dutch nationality is deemed to be resident in The
Netherlands for the purposes of the Dutch gift and inheritance tax, if he or she
has been resident in The Netherlands during the 10 years preceding the gift or
his or her death. An individual of any other nationality is deemed to be
resident in The Netherlands for the purposes of the Dutch gift and inheritance
tax only if he or she has been residing in The Netherlands at any time during
the 12 months preceding the time of the gift.
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Non-residents of The Netherlands
No gift or inheritance taxes will arise in The Netherlands in respect of an
acquisition of the debt securities by way of gift by, or as a result of the
death of, an individual holder who is neither resident nor deemed to be resident
in The Netherlands, unless:
. such individual holder at the time of the gift has or at the time of
his or her death had, an interest in a Dutch enterprise to which Dutch
enterprise the debt securities are or were attributable;
. the debt securities are or were attributable to the assets of an
enterprise that is effectively managed in The Netherlands and the
donor is or the deceased was entitled to a share in the profits of
that enterprise, at the time of the gift or at the time of his or her
death, other than by way of securities or through an employment
contract; or
. in the case of a gift of the debt securities by an individual who at
the date of the gift was neither a resident nor deemed to be a
resident of The Netherlands, such individual dies within 180 days
after the date of the gift, if at the time of his or her death such
individual was a resident or deemed to be a resident of The
Netherlands.
Other Taxes and Duties
No capital duty, registration tax, customs duty, transfer tax, stamp duty
or any other similar documentary tax or duty, will be payable in The Netherlands
by the corporate holder or the individual holder in respect of or in connection
with the subscription, issue, placement, allotment or delivery of the debt
securities.
Proposed EU Savings Directive
On July 18, 2001 the EU Commission published a proposal for a new directive
regarding the taxation of savings income. It is proposed that, subject to a
number of important conditions being met, member states will be required to
provide to the tax authorities of another member state details of payments of
interest or other similar income paid by a person within its jurisdiction to an
individual resident in that other member state, subject to the right of certain
member states to opt instead for a withholding system for a transitional period
in relation to such payments. The proposed directive is not yet final, and may
be subject to further amendment and clarification.
Taxation in the United States
General. This section summarizes the material U.S. tax consequences to
beneficial holders of the common shares and the debt securities. This summary
addresses only the U.S. Federal income tax considerations for holders that
acquire the securities at their original issuance and hold the securities as
capital assets. This summary does not address all U.S. Federal income tax
matters that may be relevant to a particular prospective holder. Each
prospective investor should consult a professional tax advisor with respect to
the tax consequences of an investment in the common shares or the debt
securities. This summary does not address tax considerations applicable to a
holder of security that may be subject to special tax rules including, without
limitation, the following:
. financial institutions;
. insurance companies;
. dealers or traders in securities or currencies;
. tax-exempt entities;
24
. persons that will hold the securities as part of a "hedging" or
"conversion" transaction or as a position in a "straddle" for U.S.
Federal income tax purposes;
. holders that own (or are deemed to own) 10% or more of the voting
shares of the relevant issuer or guarantor; and
. holders that have a "functional currency" other than the U.S. dollar.
Further, this summary does not address alternative minimum tax consequences
or the indirect effects on the holders of equity interests in a holder of
security.
This discussion does not cover every type of security that may be issued
under this prospectus. If we intend to issue a security of a type not described
in this summary, additional tax information will be provided in the prospectus
supplement for the applicable security.
This summary is based on the U.S. Internal Revenue Code of 1986, as
amended, U.S. Treasury regulations and judicial and administrative
interpretations, in each case as in effect and available on the date of this
prospectus. All of the foregoing are subject to change, which change could
apply retroactively and could affect the tax consequences described below.
Each prospective investor should consult its own tax advisor with respect
to the U.S. Federal, state, local and foreign tax consequences of acquiring,
owning or disposing of the securities.
For the purposes of this summary, a "U.S. holder" is a beneficial owner of
securities that is, for U.S. Federal income tax purposes:
. a citizen or resident of the United States;
. a corporation, or other entity that is treated as a corporation for
U.S. Federal income tax purposes, created or organized in or under the
laws of the United States or any state of the United States (including
the District of Columbia);
. an estate the income of which is subject to U.S. Federal income
taxation regardless of its source; or
. a trust, if a court within the United States is able to exercise
primary supervision over its administration and one or more U.S.
persons have the authority to control all of the substantial decisions
of such trust.
If a partnership holds securities, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. Partners of partnerships holding securities should consult their
tax advisor. A non-U.S. holder is a beneficial owner of securities that is not
a U.S. holder.
Tax Consequences to U.S. Holders.
Common Shares of AEGON
Distributions
The gross amount of any distribution (including any amounts withheld in
respect of Dutch withholding tax) actually or constructively received by a U.S.
holder with respect to common shares will be taxable to the U.S. holder as a
dividend to the extent of AEGON's current and accumulated earnings and profits
as determined under U.S. Federal income tax principles. The U.S. holder will
not be eligible for any dividends received deduction in respect of the dividend
otherwise allowable to corporations. Distributions in excess of earnings and
profits will be non-
25
taxable to the U.S. holder to the extent of, and will be applied against and
reduce, the U.S. holder's adjusted tax basis in the common shares. Distributions
in excess of earnings and profits and such adjusted tax basis will generally be
taxable to the U.S. holder as capital gain from the sale or exchange of
property. AEGON does not maintain calculations of its earnings and profits under
U.S. Federal income tax principles. If AEGON does not report to a U.S. holder
the portion of a distribution that exceeds earnings and profits, the
distribution will generally be taxable as a dividend even if that distribution
would otherwise be treated as a non-taxable return of capital or as capital gain
under the rules described above. The amount of any distribution of property
other than cash will be the fair market value of that property on the date of
distribution.
The amount of any distribution paid in currency other than U.S. dollars (a
"foreign currency") including the amount of any withholding tax thereon, will be
included in the gross income of a U.S. holder in an amount equal to the U.S.
dollar value of the foreign currencies calculated by reference to the exchange
rate in effect on the date of receipt, regardless of whether the foreign
currencies are converted into U.S. dollars. If the foreign currencies are
converted into U.S. dollars on the date of receipt, a U.S. holder generally
should not be required to recognize foreign currency gain or loss in respect of
the dividend. If the foreign currencies received in the distribution are not
converted into U.S. dollars on the date of receipt, a U.S. holder will have a
basis in the foreign currencies equal to its U.S. dollar value on the date of
receipt. Any gain or loss on a subsequent conversion or other disposition of
the foreign currencies will be treated as ordinary income or loss.
Dividends received by a U.S. holder with respect to common shares will be
treated as foreign source income for the purposes of calculating that holder's
foreign tax credit limitation. Subject to certain conditions and limitations,
and subject to the discussion in the next paragraph, any Dutch income tax
withheld on dividends may be deducted from taxable income or credited against a
U.S. holder's Federal income tax liability. The limitation on foreign taxes
eligible for the U.S. foreign tax credit is calculated separately with respect
to specific classes of income. For this purpose, dividends distributed by AEGON
generally will constitute "passive income," or, in the case of some U.S.
holders, "financial services income." In certain circumstances, a U.S. holder
may be unable to claim foreign tax credits for foreign taxes imposed on a
dividend if the U.S. holder (1) has not held the common shares for at least 16
days in the 30-day period beginning 15 days before the ex-dividend date, during
which it is not protected from risk of loss; (2) is obligated to make payments
related to the dividends; or (3) holds the common shares in arrangements in
which the U.S. holder's expected profit, after non-U.S. taxes, is insubstantial.
In general, upon making a distribution to shareholders, AEGON is required
to remit all amounts withheld as Dutch dividend withholding tax to the Dutch tax
authorities and, in such circumstances, the full amount of the taxes so withheld
would generally (subject to certain limitations and conditions) be eligible for
the U.S. holder's foreign tax deduction or credit as described above. Investors
are urged to consult their tax advisers regarding the general creditability or
deductibility of Dutch withholding taxes.
A distribution of additional common shares to U.S. holders with respect to
their common shares that is made as part of a pro rata distribution to all
shareholders generally will not be subject to U.S. Federal income tax unless
U.S. holders can elect that the distribution be payable in either additional
common shares or cash. AEGON expects that U.S. holders would have this option
upon each distribution. Accordingly, a distribution of additional common shares
to U.S. holders with respect to their common shares where U.S. holders may elect
that distribution be payable in additional common shares or cash will be taxable
under the rules described above.
Sale or Other Disposition of Shares
A U.S. holder will generally recognize gain or loss for U.S. Federal income
tax purposes upon the sale or exchange of common shares in an amount equal to
the difference between the U.S. dollar value of the amount realized from such
sale or exchange and the U.S. holder's tax basis for those common shares. This
gain or loss will be a capital gain or loss and will generally be treated as
from sources within the United States, except that losses will be treated as
foreign source to the extent the U.S. holder received dividends that were
includible in the financial services income basket during the 24-month period
prior to the sale. Prospective investors should consult their own tax advisors
with respect to the treatment of capital gains (which may be taxed at lower
rates than
26
ordinary income for taxpayers who are individuals, trusts or estates that have
held the common shares for more than one year) and capital losses (the
deductibility of which is subject to limitations).
If a U.S. holder receives foreign currency upon a sale or exchange of
common shares, gain or loss, if any, recognized on the subsequent sale,
conversion or disposition of such foreign currency will be ordinary income or
loss, and will generally be income or loss from sources within the United States
for foreign tax credit limitation purposes. However, if such foreign currency
is converted into U.S. dollars on the date received by the U.S. holder, the U.S.
holder generally should not be required to recognize any gain or loss on such
conversion.
Redemption of Common Shares
The redemption of common shares by AEGON will be treated as a sale of the
redeemed shares by the U.S. holder (which is taxable as described above under
"Sale or Other Disposition of the Common Shares") or, in certain circumstances,
as a distribution to the U.S. holder (which is taxable as described above under
"Distributions").
Passive Foreign Investment Company Considerations
A corporation organized outside the United States generally will be
classified as a passive foreign investment company (PFIC) for U.S. Federal
income tax purposes in any taxable year in which, after applying certain look-
through rules, either: (1) at least 75% of its gross income is passive income,
or (2) on average at least 50% of the gross value of its assets is attributable
to assets that produce passive income or are held for the production of passive
income. In arriving at this calculation, AEGON must also include a pro rata
portion of the income and assets of each corporation in which it owns, directly
or indirectly, at least a 25% interest. Passive income for this purpose
generally includes dividends, interest, royalties, rents and gains from
commodities and securities transactions, but excludes any income derived in the
active conduct of an insurance business by a corporation which is predominantly
engaged in an insurance business. Based on AEGON's estimated gross income, the
average value of AEGON's gross assets and the nature of AEGON's active insurance
business, AEGON does not believe that it will be classified as a PFIC in the
current taxable year. AEGON's status in any taxable year will depend on its
assets and activities in each year and no assurances can be provided in that
regard.If AEGON were treated as a PFIC in any year during which a U.S. holder
owns common shares, certain adverse tax consequences could apply. Investors
should consult their own tax advisors with respect to any PFIC considerations.
Debt Securities of AEGON, AFC and AFC II.
Interest
Interest paid on the debt securities, other than interest on a discount
note that is not qualified stated interest (each as defined below under
"Original Issue Discount - General"), will be taxable to a U.S. holder as
ordinary interest income at the time it is received or accrued, depending on the
U.S. holder's method of accounting for U.S. Federal income tax purposes.
A U.S. holder utilizing the cash method of accounting for U.S. Federal
income tax purposes that receives an interest payment denominated in a foreign
currency will be required to include in income the U.S. dollar value of that
interest payment, based on the exchange rate in effect on the date of receipt,
regardless of whether the payment is in fact converted into U.S. dollars.
If interest on a debt security is payable in a foreign currency, an accrual
basis U.S. holder is required to include in income the U.S. dollar value of the
amount of interest income accrued on a debt security during the accrual period.
An accrual basis U.S. holder may determine the amount of the interest income to
be recognized in accordance with either of two methods. Under the first accrual
method, the amount of income accrued will be based on the average exchange rate
in effect during the interest accrual period or, with respect to an accrual
period that spans two taxable years, the part of the period within the taxable
year. Under the second accrual method, the U.S. holder may elect to determine
the amount of income accrued on the basis of the exchange rate in effect on the
last
27
day of the accrual period or, in the case of an accrual period that spans two
taxable years, the exchange rate in effect on the last day of the part of the
period within the taxable year. If the last day of the accrual period is within
five business days of the date the interest payment is actually received, an
electing accrual basis U.S. holder may instead translate that interest expense
at the exchange rate in effect on the day of actual receipt. Any election to use
the second accrual method will apply to all debt instruments held by the U.S.
holder at the beginning of the first taxable year to which the election applies
or thereafter acquired by the U.S. holder and will be irrevocable without the
consent of the U.S. Internal Revenue Service.
A U.S. holder utilizing either of the foregoing two accrual methods will
recognize ordinary income or loss with respect to accrued interest income on the
date of receipt of the interest payment (including a payment attributable to
accrued but unpaid interest upon the sale or retirement of a debt security).
The amount of ordinary income or loss will equal the difference between the U.S.
dollar value of the interest payment received (determined on the date the
payment is received) in respect of the accrual period and the U.S. dollar value
of interest income that has accrued during that accrual period (as determined
under the accrual method utilized by the U.S. holder).
Foreign currency received as interest on the debt securities will have a
tax basis equal to its U.S. dollar value at the time the interest payment is
received. Gain or loss, if any, realized by a U.S. holder on a sale or other
disposition of that foreign currency will be ordinary income or loss and will
generally be income from sources within the United States for foreign tax credit
limitation purposes.
Interest on the debt securities received by a U.S. holder will be treated
as foreign source income for the purposes of calculating that holder's foreign
tax credit limitation. The limitation on foreign taxes eligible for the U.S.
foreign tax credit is calculated separately with respect to specific classes of
income. For this purpose, the interest on the debt securities should generally
constitute "passive income," or in the case of certain U.S. holders, "financial
services income."
Original Issue Discount
General
A debt security, other than a debt security with a term of one year or less
(a short-term note), will be treated as issued at an original issue discount
(OID, and a debt security issued with OID, a Discount Note ) for U.S. Federal
income tax purposes if the excess of the sum of all payments provided under the
debt security, other than "qualified stated interest payments" (as defined
below), over the issue price of the debt security is more than a "de minimis
amount" (as defined below). "Qualified stated interest" is generally interest
paid on a debt security that is unconditionally payable at least annually at a
single fixed rate. The issue price of the debt securities will be the first
price at which a substantial amount of the debt securities are sold to persons
other than bond houses, brokers, or similar persons or organizations acting in
the capacity of underwriters, placement agents, or wholesalers.
In general, if the excess of the sum of all payments provided under the
debt security other than qualified stated interest payments over its issue price
is less than 0.25% of the debt security's stated redemption price at maturity
multiplied by the number of complete years to its maturity (the "de minimis
amount"), then such excess, if any, constitutes "de minimis OID" and the debt
security is not a Discount Note. Unless the election described below under
"Election to Treat All Interest as OID" is made, a U.S. holder of a debt
security with de minimis OID must include such de minimis OID in income as
stated principal payments on the debt security are made. The includible amount
with respect to each such payment will equal the product of the total amount of
the debt security's de minimis OID and a fraction, the numerator of which is the
amount of the principal payment made and the denominator of which is the stated
principal amount of the debt security.
A U.S. holder will be required to include OID on a discount debt security
in income for U.S. Federal income tax purposes as it accrues calculated on a
constant-yield method (described below) before the actual receipt of cash
attributable to that income, regardless of the U.S. holder's method of
accounting for U.S. Federal income tax purposes. Under this method, U.S.
holders generally will be required to include in income increasingly greater
28
amounts of OID over the life of Discount Notes. Investors should consult their
own tax advisors to determine the U.S. Federal income tax implications of the
constant-yield method and regarding the accrual of OID generally.
OID for any accrual period on a debt security that is denominated in, or
determined by reference to, a foreign currency will be determined in that
foreign currency and then translated into U.S. dollars in the same manner as
interest payments accrued by an accrual basis U.S. holder, as described under
"Payments of Interest" above. Upon receipt of an amount attributable to OID in
these circumstances, a U.S. holder may recognize ordinary income or loss.
OID on a Discount Note will be treated as foreign source income for the
purposes of calculating a U.S. holder's foreign tax credit limitation. The
limitation on foreign taxes eligible for the U.S. foreign tax credit is
calculated separately with respect to specific classes of income. For this
purpose, OID on a Discount Note should generally constitute "passive income" or,
in the case of certain U.S. holders, "financial services income."
Acquisition Premium
A U.S. holder that purchases a debt security for an amount less than or
equal to the sum of all amounts payable on the debt security after the purchase
date other than payments of qualified stated interest but in excess of its
adjusted issue price and that does not make the election described below under
"Election to Treat All Interest as OID" will have acquisition premium.
Investors should consult their own tax advisors regarding the U.S. Federal
income tax implications of acquisition premium.
Market Discount
A debt security, other than a short-term note, will be treated as purchased
at a market discount (a market discount note) if the debt security's stated
redemption price at maturity or, in the case of a Discount Note, the debt
security's "revised issue price," exceeds the amount for which the U.S. holder
purchased the debt security by at least 0.25% of the debt security's stated
redemption price at maturity or revised issue price, respectively, multiplied by
the number of complete years to the debt security's maturity. If such excess is
not sufficient to cause the debt security to be a market discount note, then
such excess constitutes "de minimis market discount" and the debt security is
not subject to the rules discussed in the following paragraphs. For these
purposes, the "revised issue price" of a debt security generally equals its
issue price, increased by the amount of any OID that has accrued on the debt
security.
Any gain recognized on the maturity or disposition of a market discount
note will be treated as ordinary income to the extent that such gain does not
exceed the accrued market discount on that debt security. Alternatively, a U.S.
holder of a market discount note may elect to include market discount in income
currently over the life of the debt security. Such an election shall apply to
all debt instruments with market discount acquired by the electing U.S. holder
on or after the first day of the first taxable year to which the election
applies. This election may not be revoked without the consent of the IRS.
Market discount on a market discount note will accrue on a straight-line
basis unless the U.S. holder elects to accrue such market discount on a
constant-yield method. Such an election shall apply only to the debt security
with respect to which it is made and may not be revoked. A U.S. holder of a
market discount note that does not elect to include market discount in income
currently generally will be required to defer deductions for interest on
borrowings allocable to that debt security in an amount not exceeding the
accrued market discount on that debt security until the maturity or disposition
of that debt security.
Election to Treat All Interest as OID
A U.S. holder may elect to include in gross income all interest that
accrues on a debt security using the constant-yield method described above under
the heading "Original Issue Discount - General," with the modifications
described below. For the purposes of this election, interest includes stated
interest, OID, de minimis
29
OID, market discount, de minimis market discount and unstated interest, as
adjusted by any amortizable bond premium or acquisition premium.
In applying the constant-yield method to a debt security with respect to
which this election has been made, the issue price of the debt security will
equal its cost to the electing U.S. holder, the issue date of the debt security
will be the date of its acquisition by the electing U.S. holder, and no payments
on the debt security will be treated as payments of qualified stated interest.
This election will generally apply only to the debt security with respect to
which it is made and may not be revoked without the consent of the IRS. If this
election is made with respect to a debt security with amortizable bond premium,
then the electing U.S. holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on which
is excludible from gross income) held by the electing U.S. holder as of the
beginning of the taxable year in which the debt security with respect to which
the election is made is acquired or thereafter acquired. The deemed election
with respect to amortizable bond premium may not be revoked without the consent
of the IRS.
If the election to apply the constant-yield method to all interest on a
debt security is made with respect to a market discount note, the electing U.S.
holder will be treated as having made the election discussed above under
"Original Issue Discount - Market Discount" to include market discount in income
currently over the life of all debt instruments held or thereafter acquired by
such U.S. holder.
Debt Securities Purchased at a Premium
A U.S. holder that purchases a debt security for an amount in excess of its
principal amount may elect to treat such excess as amortizable bond premium. If
this election is made, the amount required to be included in the U.S. holder's
income each year with respect to interest on the debt security will be reduced
by the amount of amortizable bond premium allocable (based on the debt
security's yield to maturity) to such year. In the case of a debt security that
is denominated in, or determined by reference to, a foreign currency,
amortizable bond premium will be computed in units of foreign currency, and
amortizable bond premium will reduce interest income in units of foreign
currency. At the time amortizable bond premium offsets interest income, a U.S.
holder realizes exchange gain or loss (taxable as ordinary income or loss) equal
to the difference between exchange rates at that time and at the time of the
acquisition of the debt securities. Any election to amortize bond premium shall
apply to all bonds (other than bonds the interest on which is excludible from
gross income) held by the U.S. holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by the U.S. holder and is
irrevocable without the consent of the IRS.
Sale, Exchange or Retirement of the Debt Securities
A U.S. holder's tax basis in a debt security will generally equal its "U.S.
dollar cost," increased by the amount of any OID or market discount included in
the U.S. holder's income with respect to the debt security and the amount, if
any, of income attributable to de minimis OID and de minimis market discount
included in the U.S. holder's income with respect to the debt security (each as
determined above), and reduced by the amount of any payments with respect to the
debt security that are not qualified stated interest payments and the amount of
any amortizable bond premium applied to reduce interest on the debt security.
The "U.S. dollar cost" of a debt security purchased with a foreign currency will
generally be the U.S. dollar value of the purchase price on (1) the date of
purchase or (2) in the case of a debt security traded on an established
securities market (as defined in the applicable U.S. Treasury regulations), that
are purchased by a cash basis U.S. holder (or an accrual basis U.S. holder that
so elects), on the settlement date for the purchase.
A U.S. holder will generally recognize gain or loss on the sale, exchange
or retirement of a debt security equal to the difference between the amount
realized on the sale, exchange or retirement and the tax basis of the debt
security. The amount realized on the sale, exchange or retirement of a debt
security for an amount in foreign currency will be the U.S. dollar value of that
amount on the date of disposition, except in the case of debt securities traded
on an established securities market (as defined in the applicable U.S. Treasury
regulations) that are sold by an accrual basis U.S. holder that elects to
utilize the U.S. dollar value on the settlement date for the sale.
30
Gain or loss recognized by a U.S. holder on the sale, exchange or
retirement of a debt security that is attributable to changes in currency
exchange rates will be ordinary income or loss and will consist of OID exchange
gain or loss and principal exchange gain or loss. OID exchange gain or loss will
equal the difference between the U.S. dollar value of the amount received on the
sale, exchange or retirement of a debt security that is attributable to accrued
but unpaid OID as determined by using the exchange rate on the date of the sale,
exchange or retirement and the U.S. dollar value of accrued but unpaid OID as
determined by the U.S. holder under the rules described above under "Original
Issue Discount - General". Principal exchange gain or loss will equal the
difference between the U.S. dollar value of the U.S. holder's purchase price of
the debt security in foreign currency determined on the date of the sale,
exchange or retirement, and the U.S. dollar value of the U.S. holder's purchase
price of the debt security in foreign currency determined on the date the U.S.
holder acquired the debt security. The foregoing foreign currency gain or loss
will be recognized only to the extent of the total gain or loss realized by the
U.S. holder on the sale, exchange or retirement of the debt security, and will
generally be treated as from sources within the United States for U.S. foreign
tax credit limitation purposes.
Any gain or loss recognized by a U.S. holder in excess of foreign currency
gain recognized on the sale, exchange or retirement of a debt security would
generally be U.S. source capital gain or loss (except to the extent such amounts
are attributable to market discount, accrued but unpaid interest, or subject to
the general rules governing contingent payment obligations). Prospective
investors should consult their own tax advisors with respect to the treatment of
capital gains (which may be taxed at lower rates than ordinary income for
taxpayers who are individuals, trusts or estates that held the debt securities
for more than one year) and capital losses (the deductibility of which is
subject to limitations).
A U.S. holder will have a tax basis in any foreign currency received on the
sale, exchange or retirement of a debt security equal to the U.S. dollar value
of the foreign currency at the time of the sale, exchange or retirement. Gain
or loss, if any, realized by a U.S. holder on a sale or other disposition of
that foreign currency will be ordinary income or loss and will generally be
income from sources within the United States for foreign tax credit limitation
purposes.
Payments by Guarantor
A payment on guaranteed debt securities made by AEGON will be treated in
the same manner as if made directly by the issuer.
Special Categories of Debt Securities of AEGON, AFC and AFC II
Additional tax rules may apply to other categories of debt securities of
AEGON, AFC and AFC II. The prospectus supplement for these debt securities may
describe these rules. In addition, you should consult your tax advisor in these
situations. These categories of debt securities include:
. debt securities that are convertible into common shares of AEGON;
. debt securities that are issued in bearer form;
. debt securities with contingent payments;
. debt securities with variable rate payments;
. indexed debt securities where payments will be payable by reference to
any index or formula;
. debt securities that are perpetual in maturity;
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. debt securities that are callable by the issuer before their maturity,
other than typical calls at a premium; and
. debt securities that are extendable at the option of the issuer or the
holder.
Information Reporting and Backup Withholding
If you hold your securities through a broker or other securities
intermediary, the intermediary is required to provide information to the IRS
concerning interest, OID or dividend, as the case may be, and retirement
proceeds on your securities, unless an exemption applies. In addition, you must
provide the intermediary with your taxpayer identification number for its use in
reporting information to the IRS and comply with other IRS requirements
concerning information reporting. If you are subject to these requirements but
do not comply, the intermediary is required to backup withhold in respect of
amounts payable to you on the securities. If the intermediary backup withholds
payments, you may use the withheld amount as a credit against your Federal
income tax liability. Some U.S. holders, including corporations and tax-exempt
organizations, are exempt from these requirements. U.S. holders should consult
their tax advisors as to their qualification for exemption from backup
withholding and the procedure for obtaining an exemption.
Tax Consequences to Non-U.S. Holders.
Withholding Taxes
Generally, payments of principal and interest, including OID, on the
guaranteed debt securities will not be subject to U.S. withholding taxes. The
same rules will apply to payments of additional amounts and payments made by a
guarantor on a guaranteed debt security. However, if you hold guaranteed debt
securities issued by AFC or AFC II, for the exemption from U.S. withholding
taxes to apply to you, you must meet one of the following requirements:
. You provide your name, address, and a signed statement that you are
the beneficial owner of the guaranteed debt security and are not a
U.S. holder. This statement is generally made on U.S. IRS Form W-8BEN;
. You or your agent claim an exemption from withholding tax under an
applicable tax treaty. This claim is generally made on U.S. IRS Form
W-8BEN; or
. You or your agent claim an exemption from withholding tax on the
ground that the income is effectively connected with the conduct of a
trade or business in the U.S. This claim is generally made on U.S. IRS
Form W-8ECI.
You should consult your tax advisor about the specific methods for
satisfying these requirements. A claim for exemption will not be valid if the
person receiving the application form has actual knowledge that the statements
on the form are false.
Even if you comply with these conditions, U.S. withholding tax might arise
on guaranteed debt securities issued by AFC and AFC II if the amount of interest
is based on the earnings or other attributes of AFC and AFC II, as the case may
be, or a related party. If this exception applies, additional information will
be provided in the prospectus supplement.
Information Reporting and Backup Withholding
If you provide the tax certifications needed to avoid withholding tax on
interests, as described above, principal and interest payments received by you
will automatically be exempt from U.S. information reporting
32
requirements and backup withholding. Interest payments made to you by AFC and
AFC II will be reported to the IRS. Sales proceeds you receive on a sale of your
guaranteed debt through a broker may be subject to information reporting and
backup withholding if you are not eligible for an exemption. In particular,
information reporting and backup withholding may apply if you use the U.S.
office of a broker, and information reporting (but not backup withholding) may
apply if you use the foreign office of a broker that has certain connections to
the U.S. You should consult your tax advisor concerning information reporting
and backup withholding on a sale.
Sale, Exchange or Retirement of Securities
If you sell, exchange or redeem common shares or debt securities, you will
not be subject to U.S. Federal income tax on any gain unless one of the
following applies:
. the gain is connected with a trade or business that you conduct in the
U.S.;
. you are an individual, you are present in the U.S. for at least 183
days during the year in which you dispose of the guaranteed debt
security, and certain other conditions are satisfied; or
. the gain represents accrued interest or OID, in which case the rules
for interest would apply.
U.S. Trade or Business
If you hold your securities in connection with a trade or business that you
are conducting in the U.S., any interest or dividend on the security and any
gain from disposing the security generally will be subject to income tax as if
you were a U.S. holder, and if you are a corporation, you may be subject to the
"branch profits tax" on your earnings that are connected with your U.S. trade or
business. This tax is 30%, but may be reduced or eliminated by an applicable
income tax treaty.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus in and outside the
United States in one or more of the following ways:
. through underwriters;
. through dealers;
. through agents; or
. directly to purchasers.
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. Underwriters, dealers and
agents may be customers of, engage in transactions with or perform services for
the AEGON Group in the ordinary course of business.
The prospectus supplement relating to any offering will include the
following information:
. the terms of the offering;
. the names of any underwriters, dealers or agents;
. the purchase price of the securities;
. the net proceeds to us from the sale of the securities;
. any delayed delivery arrangements;
. any underwriting discounts or other underwriters' compensation; and
33
. any discounts or concessions allowed or reallowed or paid to dealers.
Sales through Underwriters or Dealers
If we use underwriters in an offering using this prospectus, we will
execute an underwriting agreement with one or more underwriters. The
underwriting agreement will provide that the obligations of the underwriters
with respect to a sale of the offered securities are subject to specified
conditions precedent and that the underwriters will be obligated to purchase all
of the offered securities if they purchase any. Underwriters may sell those
securities through dealers. The underwriters may change the initial offering
price and any discounts or concessions allowed or re-allowed or paid to dealers.
If we use underwriters in an offering of securities using this prospectus, the
applicable prospectus supplement will contain a statement regarding the
intention, if any, of the underwriters to make a market in the offered
securities.
We may grant to the underwriters an option to purchase additional offered
securities, to cover over-allotments, if any, at the public offering price (with
additional underwriting discounts or commissions), as may be set forth in the
related prospectus supplement. If we grant any over-allotment option, the terms
of the over-allotment option will be set forth in the prospectus supplement
relating to such offered securities.
If we use a dealer in an offering of securities using this prospectus, we
will sell the offered securities to the dealer as principal. The dealer may then
resell those securities to the public or other dealers at a fixed price or
varying prices to be determined at the time of resale.
Direct Sales and Sales through Agents
We may also use this prospectus to directly solicit offers to purchase
securities. In this case, no underwriters or agents would be involved. Except as
set forth in the applicable prospectus supplement, none of our directors,
officers or employees will solicit or receive a commission in connection with
those direct sales. Those persons may respond to inquiries by potential
purchasers and perform ministerial and clerical work in connection with direct
sales.
We may also sell the offered securities through agents we designate from
time to time. In the prospectus supplement, we will describe any commission
payable by us to the agent. Unless we inform you otherwise in the prospectus
supplement, any agent will agree to use its reasonable best efforts to solicit
purchases for the period of its appointment.
Delayed Delivery Contracts
We may authorize underwriters and agents to solicit offers by certain
institutions to purchase securities pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in the prospectus
supplement. Institutions with which delayed delivery contracts may be made
include commercial and savings banks, insurance companies, educational and
charitable institutions and other institutions we may approve. The obligations
of any purchaser under any delayed delivery contract will not be subject to any
conditions except that any related sale of offered securities to underwriters
shall have occurred and the purchase by an institution of the securities covered
by its delayed delivery contract shall not at the time of delivery be prohibited
under the laws of any jurisdiction in the United States to which that
institution is subject. Any commission paid to agents and underwriters
soliciting purchases of securities pursuant to delayed delivery contracts
accepted by us will be detailed in the prospectus supplement.
Indemnification
Underwriters, dealers or agents participating in a distribution of
securities using this prospectus may be deemed to be underwriters under the
Securities Act. Pursuant to agreements that we may enter into, underwriters,
dealers or agents who participate in the distribution of securities by use of
this prospectus may be entitled to indemnification by us against certain
liabilities, including liabilities under the Securities Act, or contribution
with respect to payments that those underwriters, dealers or agents may be
required to make in respect of those liabilities.
34
VALIDITY OF SECURITIES
Certain matters of United States law relating to the securities offered
through this prospectus will be passed upon for AEGON, AFC and AFC II by Allen &
Overy, New York, New York. Certain Dutch legal matters relating to the
securities will be passed upon for AEGON by Allen & Overy, Amsterdam, The
Netherlands.
EXPERTS
Ernst & Young Accountants, independent auditors, have audited the
consolidated financial statements and schedules included in AEGON's annual
report on Form 20-F for the year ended December 31, 2000, as set forth in their
report, which is incorporated by reference in this prospectus. AEGON's financial
statements and schedules are incorporated by reference in reliance on Ernst &
Young Accountant's report, given on their authority as experts in accounting and
auditing.
35
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
AEGON maintains insurance to indemnify members of the AEGON Executive and
Supervisory Boards and officers of AEGON. The certificate of incorporation of
each of AFC and AFC II provides for indemnification of present and former
officers and directors and their legal representatives for actions taken at the
request of AFC or AFC II, as the case may be. Indemnification is to be made to
the fullest extent legally permissible under the General Corporation Law of the
State of Delaware for all expenses, liabilities and losses reasonably incurred
by such persons in connection with those actions. The by-laws of each of AFC and
AFC II permit insurance to be maintained for such indemnification.
Any underwriter will agree, severally, to indemnify the directors of AEGON,
AFC and AFC II and the officers of such corporations who sign the registration
statement from and against certain civil liabilities, including liabilities
under the Securities Act or to contribute with respect to payments which such
persons may be required to make in respect thereof, based on information
supplied by such underwriter for use herein and in any prospectus supplement.
Item 9. Exhibits
Exhibit
Number Description
-------- --------------------------------------------------------------------------------------------------
*1.1 Form of Underwriting Agreement with respect to common shares
*1.2 Form of Underwriting Agreement with respect to debt securities
4.1 Articles of Incorporation of AEGON N.V.
4.2 Specimen Share Certificate
4.3 Indenture between AEGON N.V., AEGON Funding Corp., AEGON Funding Corp. II and Citibank, N.A., as Trustee
5.1 Opinion of Allen & Overy, New York, New York
5.2 Opinion of Allen & Overy, Amsterdam, The Netherlands
23.1 Consent of Allen & Overy, New York, New York (included in Exhibit 5.1)
23.2 Consent of Allen & Overy, Amsterdam, The Netherlands (included in Exhibit 5.2)
23.3 Consent of Ernst & Young Accountants
24.1 Powers of Attorney (included on signature pages)
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 on Form T-1
Item 10. Undertakings
A. Undertaking pursuant to Rule 415
Each of the undersigned registrants hereby undertakes:
(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 of 1933;
-------------------------------
* To be filed by amendment or by a report on Form 6-K pursuant to Item 601 of
Regulation S-K.
36
(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) 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;
(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 registration statement is on Form S-3, Form S-8 or Form F-3, and 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 registrant pursuant to Section 13 and Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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) If the registrant is a foreign private issuer, to file a post-
effective amendment to the registration statement to include any financial
statements required by Item 8.A. of Form 20-F 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 Act need not be
furnished, provided that the registrant includes in the prospectus, by
means of a post-effective amendment, financial statements required
pursuant to this subparagraph (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,
with respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act if such financial
statements and information are contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in Form F-3.
B. Undertaking regarding request for acceleration of effective date:
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
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 registrant 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 Act and will be governed by the final adjudication of
such issue.
C. Undertaking regarding filings incorporating subsequent Exchange Act
documents by reference:
Each of the undersigned registrants undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
37
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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.
38
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
AEGON N.V., 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 Hague, The Netherlands, on this 11th day of October,
2001.
AEGON N.V.
By: /s/ K.J. STORM
----------------------------------
Name: K.J. Storm
Title: Chairman of the Executive Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints E. Lagendijk and C.M. van Katwijk, 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 reports on
Form 6-K relating thereto and any registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, 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 and on the dates
indicated.
Signature Title Date
/s/ K.J. STORM Chief Executive Officer and Chairman of October 11 , 2001
-------------------------------------
K.J. STORM the Executive Board (Principal Executive
Officer)
/s/ D.J. SHEPARD Executive Board Member October 11, 2001
-------------------------------------
D.J. SHEPARD
/s/ P. VAN DE GEIJN Executive Board Member October 11 , 2001
-------------------------------------
P. VAN DE GEIJN
/s/ J.B.M. STREPPEL Executive Board Member October 11 , 2001
-------------------------------------
J.B.M. STREPPEL (Principal Financial and Principal
Accounting Officer)
39
/s/ M. TABAKSBLAT Chairman of the Supervisory October 11, 2001
-------------------------------------
M. TABAKSBLAT Board
/s/ H. DE RUITER Vice Chairman of the Supervisory Board October 11, 2001
-------------------------------------
H. DE RUITER
/s/ D.G. EUSTACE Supervisory Board Member October 11, 2001
-------------------------------------
D.G. EUSTACE
/s/ SIR M. JENKINS, K.C.M.G. Supervisory Board Member October 11, 2001
-------------------------------------
SIR M. JENKINS, K.C.M.G.
/s/ O.J. OLCAY Supervisory Board Member October 11, 2001
-------------------------------------
O.J. OLCAY
/s/ K.M.H. PEIJS Supervisory Board Member October 11, 2001
-------------------------------------
K.M.H. PEIJS
/s/ G.A. POSTHUMUS Supervisory Board Member October 11, 2001
-------------------------------------
G.A. POSTHUMUS
/s/ T. REMBE Supervisory Board Member October 11, 2001
-------------------------------------
T. REMBE
/s/ W.F.C. STEVENS Supervisory Board Member October 11, 2001
-------------------------------------
W.F.C. STEVENS
/s/ F.J. DE WIT Supervisory Board Member October 11, 2001
-------------------------------------
F.J. DE WIT
/s/ C.D. VERMIE Authorized U.S. Representative October 11, 2001
-------------------------------------
C.D. VERMIE
Pursuant to the requirements of the Securities Act of 1933, the registrant,
AEGON Funding Corp., certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form F-3 and has duly
40
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wilmington, Delaware, on
this 11th day of October, 2001.
AEGON Funding Corp.
By: /s/ R.J. MCGRAW
---------------
Name: R.J. MCGRAW
Title: President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints E. Lagendijk and C.M. van Katwijk, 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 any registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, 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 comprise a
majority of the Board of Directors) in the capacities and on the dates
indicated.
Signature Title Date
/s/ R.J. MCGRAW President October 11, 2001
--------------------------------
R.J. MCGRAW (Principal Executive Officer)
/s/ C.M. VAN KATWIJK Treasurer October 11, 2001
--------------------------------
C.M. VAN KATWIJK (Principal Financial Officer
and Principal Accounting Officer)
/s/ C.D. VERMIE Secretary October 11, 2001
--------------------------------
C.D. VERMIE
Pursuant to the requirements of the Securities Act of 1933, the registrant,
AEGON Funding Corp. II, 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 Wilmington, Delaware, on this 11th day of
October, 2001.
AEGON Funding Corp. II
By: /s/ R.J. MCGRAW
---------------
Name: R.J. McGraw
Title: President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints E. Lagendijk and C.M. van Katwijk, and each of
them severally, his true and lawful attorneys-in-fact
41
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 any registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, 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 comprise a
majority of the Board of Directors) in the capacities and on the dates
indicated.
Signature Title Date
/s/ R.J. MCGRAW President October 11, 2001
---------------------------------
R.J. MCGRAW (Principal Executive Officer)
/s/ C.M. VAN KATWIJK Treasurer October 11, 2001
---------------------------------
C.M. VAN KATWIJK (Principal Financial Officer
and Principal Accounting Officer)
/s/ C.D. VERMIE Secretary October 11, 2001
---------------------------------
C.D. VERMIE
42
EXHIBIT INDEX
Exhibit
Number Description
------- ---------------------------------------------------------------------------------------------------
*1.1 Form of Underwriting Agreement with respect to common shares
*1.2 Form of Underwriting Agreement with respect to debt securities
4.1 Articles of Incorporation of AEGON N.V.
4.2 Specimen Share Certificate
4.3 Indenture between AEGON N.V., AEGON Funding Corp., AEGON Funding Corp. II and Citibank, N.A., as Trustee
5.1 Opinion of Allen & Overy, New York, New York
5.2 Opinion of Allen & Overy, Amsterdam, The Netherlands
23.1 Consent of Allen & Overy, New York, New York (included in Exhibit 5.1)
23.2 Consent of Allen & Overy, Amsterdam, The Netherlands (included in Exhibit 5.2)
23.3 Consent of Ernst & Young Accountants
24.1 Powers of Attorney (included on signature pages)
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 on Form T-1
--------------------
* To be filed by amendment or by a report on Form 6-K pursuant to Item 601 of
Regulation S-K.
43