NOTES TO THE BALANCE SHEETS OF AEGON N.V. Amounts in EUR millions to Vereniging AEGON on a quarterly basis over the (remaining) amount outstanding under the TRSs. The interest rate is equal to the 3 month EURIBOR plus a spread.  The 2001 TRS ends on March 12, 2006, and the 2002 TRS matures on March 11, 2009, but both swaps may be terminated earlier, either partly or entirely, at the option of AEGON N.V. The TRSs are carried at market value with changes in market value reported in equity. In 2002 Vereniging AEGON and AEGON N.V. agreed to mark to market the existing TRS agreements that hedge the 2001 and 2002 stock option and stock appreciation rights (SARs) plans based on the EUR 10.04 closing price of AEGON N.V. shares on Euronext Amsterdam at September 17, 2002. This resulted in a payment to Vereniging AEGON of EUR 378.3 million.  The weighted average number of EUR 0.12 common shares over 2003 was 1,476,499,310 (2002: 1,457,614,959). The shares repurchased by AEGON, although included in the issued and outstanding number of shares, are excluded from the calculation of the weighted average number of shares (see page 140). The number has been adjusted for stock dividend. Senior executives of AEGON companies as well as other AEGON employees have been offered AEGON SARs in 2003 and 2002 which do not entitle the holder to buy AEGON shares but provide the same financial benefits. Stock options have been offered in 2001 and previous years. Rights and options have been granted at an exercise price equal to the market price of the shares at the date of the grant. The rights granted in 2003 and 2002 vest after two years and can only be exercised during the five years after the vesting date. The plans for 1997 up to and including 2001 can be exercised three years after being granted and then during a period of two years. Plans for SARs and, in the past, stock option plans can only be established after the prior consent of the annual General Meeting of Shareholders. If, subsequently, the Executive Board decides to implement such plans, that decision has to be approved by the Supervisory Board. Options granted pursuant to the purchase agreement with Providian have various expiration dates. The options granted in 1997 to senior executives of former Providian business units fully vest in three years and the exercise period is up to ten years, with the latest period ending in August 2008. In compliance with regulations, SARs and options cannot be exercised in black-out periods.  The following tables set forth the changes in the years 2001, 2002 and 2003 as well as the breakdown of SARs and options outstanding. $^{1 }$Adjusted for the stock splits in 1998 and 2000 as appropiate. AEGON GROUP ANNUAL REPORT 2003 138 Weighted average exercise Number of price 1 options/SARs in EUR Balance at January 1, 2001 41,926,284 30.22 Issued 11,288,800 34.84 Exercised (3,920,532) 12.46 Lapsed (25,374) 49.54 Balance at December 31, 2001 49,269,178 32.69 Issued 11,555,700 26.70 Exercised (883,376) 16.36 Lapsed (5,004,000) 17.31 Balance at December 31, 2002 54,937,502 34.98 Issued 11,447,300 6.30 Exercised (26,840) 10.14 Lapsed (10,690,852) 28.55 BALANCE AT DECEMBER 31, 2003 55,667,110 37.38 2003 2002 NUMBER OF COMMON SHARES Balance at January 1 1,444,579,122 1,422,253,234 Issuance of shares — — Stock dividend 69,798,678 22,325,888 Exercise of options — — BALANCE AT DECEMBER 31 1,514,377,800 1,444,579,122 STOCK APPRECIATION RIGHTS AND STOCK OPTIONS 