Subject to Completion, dated November 28, 2000
PRICING SUPPLEMENT Pricing Supplement No. 1 to
(TO PROSPECTUS DATED NOVEMBER 22, 2000 Registration Statement No. 333-49198
AND PROSPECTUS SUPPLEMENT Dated , 2000
DATED NOVEMBER 27, 2000) Rule 424(b)(3)
$50,000,000
ABN AMRO Bank N.V.
MEDIUM-TERM NOTES, SERIES A
Senior Fixed Rate Notes
-----------------------
[SHIELDS(sm) LOGO] due December 27, 2007
Based on the
Nasdaq-100 Index(R)
Structured HybrId Equity LinkeD Securities
("SHIELDS(sm)")
The SHIELDS(sm) will pay the principal amount of $1,000 at maturity. The
SHIELDS(sm) will also pay an amount based on the percentage increase in value,
if any, over the life of these SHIELDS(sm) of the Nasdaq-100 Index(R), which we
refer to as the Nasdaq-100.
o The principal amount and issue price of each SHIELDS(sm) is $1,000.
o We will not pay interest on the SHIELDS(sm).
o At maturity, you will be entitled to receive from us, the principal amount
of $1,000 per SHIELDS(sm) plus a supplemental redemption amount. This
amount is based on the percentage increase in value, if any, of the
Nasdaq-100 over the life of the SHIELDS(sm). If the value of the
Nasdaq-100 immediately prior to the maturity of the SHIELDS(sm) is higher
than which is the value of the Nasdaq-100 on December 21, 2000, the
date we offer the SHIELDS(sm) for initial sale to the public, then you will
receive a supplemental redemption amount per SHIELDS(sm) equal to the
percentage increase in the value of the Nasdaq-100, up to a maximum of
110%, multiplied by $1,000.
o Investing in the SHIELDS(sm) is not equivalent to investing in the stocks
included in the Nasdaq-100.
o The SHIELDS(sm) have been approved for listing on the American Stock
Exchange Inc., subject to official notice of issuance. The American Stock
Exchange Inc. symbol for the SHIELDS(sm) is "SNQ.A".
You should read the more detailed description of the SHIELDS(sm) in this
pricing supplement. In particular, you should review and understand the
descriptions in "Summary of Pricing Supplement", "Description of
SHIELDS(sm)" and "Taxation."
The SHIELDS(sm) involve risks not associated with an investment in conventional
debt securities. See "Risk Factors" beginning on PS-5.
PRICE $1,000 PER SHIELDS(sm)
Agent's Proceeds to
Price to Public Commissions Company
--------------- ------------ ------------
Per SHIELDS(sm)............ $1,000 $35 $965
Total...................... $50,000,000 $1,750,000 $48,250,000
ABN AMRO INCORPORATED
, 2000
<PAGE>
The SHIELDS(sm) may not be offered, transferred or sold as part of their
initial distribution, or at any time thereafter, to or for the benefit of any
person (including legal entities) established, domiciled, incorporated or
resident in The Netherlands.
The SHIELDS(sm) are securities (effecten) within the meaning of article 1
of The Netherlands' Securities Market Supervision Act 1995 (Wet toezicht
effectenverkeer 1995). The SHIELDS(sm) may be offered in certain countries
excluding The Netherlands. Any offer of these SHIELDS(sm), any announcements
thereof and all offer notices, publications, advertisements and other documents
in which an offer of the SHIELDS(sm) is made, or a forthcoming offer is
announced, will comply with all applicable laws and regulations of the
jurisdiction in which such an offer is made from time to time. A statement to
the effect that the offering of the SHIELDS(sm) will comply with all applicable
rules in the countries in which such offering takes place will be submitted to
the Securities Board of The Netherlands (Stichting Toezicht Effectenverkeer)
pursuant to article 3, paragraph 2 of the Exemption Regulation pursuant to The
Netherlands' Securities Market Supervision Act, before any SHIELDS(sm) are
offered.
These restrictions shall cease to apply from the date on which the
Securities Board of The Netherlands (Stichting Toezicht Effectenverkeer) shall
have granted a dispensation on the offering of the SHIELDS(sm) pursuant to this
pricing supplement and the accompanying prospectus supplement and the
prospectus.
In this pricing supplement, the "Bank," "we," "us" and "our" refer to ABN
AMRO Bank N.V.
PS-2
<PAGE>
SUMMARY OF PRICING SUPPLEMENT
The following summary describes the SHIELDS(sm) we are offering to you in
general terms only. You should read the summary together with the more detailed
information that is contained in the rest of this pricing supplement and in the
accompanying prospectus and prospectus supplement. You should carefully
consider, among other things, the matters set forth in "Risk Factors."
The SHIELDS(sm) offered are medium-term debt securities of ABN AMRO Bank
N.V. The return on the SHIELDS(sm) is linked to the performance of the
Nasdaq-100 Index(R), which we refer to as the Nasdaq-100. These SHIELDS(sm)
combine features of debt and equity by offering at maturity 100% protection of
the issue price with the opportunity to participate in the upside potential of
the underlying Nasdaq-100.
Each SHIELDS(sm) costs $1,000 We, ABN AMRO Bank N.V., are offering you
SHIELDS(sm) due December 27, 2007 based
on the Nasdaq-100. The principal amount
and issue price of each SHIELDS(sm) is
$1,000.
Payment at Maturity Unlike ordinary debt securities, the
SHIELDS(sm) do not pay interest. Instead
you will receive the principal amount of
$1,000 per SHIELDS(sm) plus a
supplemental redemption amount if the
value of the Nasdaq-100 increases over
the life of the SHIELDS(sm).
100% Principal Protection We will pay you at least $1,000 per
SHIELDS(sm).
The Supplemental Redemption The supplemental redemption amount will
Amount be equal to the percentage increase in the
Nasdaq-100, up to a maximum of 110%,
multiplied by $1,000. The supplemental
redemption amount will be calculated as
follows:
<TABLE>
<S> <C>
Final Index Value - Initial Index Value
$1,000 x ---------------------------------------
Initial Index Value
; provided that the supplemental redemption amount per
SHIELDS(sm) shall not exceed $1,100;
where,
Initial Index Value = , the closing value of the Nasdaq-
100 Index on December 21, 2000, the date
we offer the SHIELDS(sm) for initial sale to
the public
Final Index Value = the closing value of the Nasdaq-100 Index on
December 21, 2007
</TABLE>
However, if this amount is zero or less,
we will not pay you a supplemental
redemption amount. In other words, if the
Nasdaq-100 does not go up over the life
of the SHIELDS(sm), you will not receive
any supplemental redemption amount.
PS-3
<PAGE>
The Nasdaq-100 The last reported closing value of the
is currently at 2769.32 Nasdaq-100 as published by The Nasdaq
Stock Market, Inc., which we refer to as
"Nasdaq", on November 27, 2000 was
2769.32. You can review the
publicly-reported closing values of
Nasdaq-100 since 1995 in the "Description
of SHIELDS(sm)- Historical Information"
section of this pricing supplement. The
payment of dividends on the stocks which
compose, or underlie, the Nasdaq-100 is
not reflected in the level of the
Nasdaq-100 and, therefore, has no effect
on our calculation of the percentage
increase in the Nasdaq-100.
The Calculation Agent We have appointed ABN AMRO Incorporated,
which we refer to as AAI, to act as
calculation agent for The Chase Manhattan
Bank, the trustee for the SHIELDS(sm). As
calculation agent, AAI will determine the
percentage change in the Nasdaq-100, the
final index value and the supplemental
redemption amount.
No affiliation with The Nasdaq The Nasdaq Stock Market, Inc. is not an
Stock Market, Inc. affiliate of ours and is not involved with
this offering in any way. The obligations
represented by the SHIELDS(sm) are
obligations of the Bank and not of The
Nasdaq Stock Market, Inc.
More Information on the The SHIELDS(sm) are senior notes issued as
SHIELDS(sm) part of our Series A medium-term note
program. You can find a general
description of our Series A medium-term
note program in the accompanying
prospectus supplement dated November 27,
2000. We describe the basic features of
this type of note in the sections called
"Description of Notes" and " -- Notes
Linked to Commodity Prices, Single
Securities, Baskets of Securities or
Indices."
Because this is a summary, it does not
contain all of the information that may
be important to you. You should read the
"Description of SHIELDS(sm)" section in
this pricing supplement for a detailed
description of the terms of the
SHIELDS(sm). You should also read about
some of the risks involved in investing
in SHIELDS(sm) in the section called
"Risk Factors." We urge you to consult
with your investment, legal, accounting
and other advisors with regard to any
investment in the SHIELDS(sm).
How to Reach Us You may contact our principal executive
offices at Gustav Mahlerlaan 10, 1082 PP
Amsterdam, The Netherlands (telephone
number (31-20) 628 9393).
PS-4
<PAGE>
INCORPORATION OF DOCUMENTS BY REFERENCE
The Securities and Exchange Commission ("SEC") allows us to incorporate by
reference much of the information we or ABN AMRO Holding N.V., our parent, file
with them, which means that we can disclose important information to you by
referring you to those publicly available documents. The information that we
incorporate by reference in this pricing supplement is considered to be part of
this pricing supplement. Because we are incorporating by reference future
filings with the SEC, this pricing supplement is continually updated and those
future filings may modify or supersede some of the information included or
incorporated in this pricing supplement. This means that you must look at all
of the SEC filings that we incorporate by reference to determine if any of the
statements in this pricing supplement or in any document previously
incorporated by reference have been modified or superseded. This pricing
supplement incorporates by reference the documents listed below and any future
filings we or ABN AMRO Holding N.V. make with the SEC (including any Form 6-K's
we or ABN AMRO Holding N.V. subsequently file with the SEC and specifically
incorporate by reference into this pricing supplement) under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we complete our
offering of the securities to be issued hereunder or, if later, the date on
which any of our affiliates cease offering and selling these securities:
(a) the Annual Report on Form 20-F of ABN AMRO Holding N.V. and ABN AMRO
Bank N.V. for the year ended December 31, 1999; and
(b) the Reports on Form 6-K dated (A) March 15, 2000 (press release of
ABN AMRO Holding N.V. announcing (1) the approval of a proposal
empowering the Executive Committee of Stichting Administratiekantoor
ABN AMRO Holding N.V. to authorize holders of depository receipts for
preference shares to vote at the Annual Shareholders' Meeting of ABN
AMRO Holding N.V. and (2) the annual figures of ABN AMRO Holding N.V.
for 1999), (B) May 31, 2000 (press release of ABN AMRO Bank N.V.
announcing the restructuring of its business into three business
units consisting of Wholesale Clients, Retail Clients and Private
Clients & Asset Management); (C) August 17, 2000 (press release of
ABN AMRO Holding N.V. announcing its 2000 interim results); (D)
November 17, 2000 (press release containing U.S. GAAP reconciliation);
(E) November 22, 2000 (press release of ABN AMRO Bank N.V. announcing
the acquisition of Michigan National Corporation) and (F) November
28, 2000 (press release of ABN AMRO Bank N.V. announcing the
acquisition of Allegheny Asset Management).
You may request, at no cost to you, a copy of these documents (other than
exhibits not specifically incorporated by reference) by writing or telephoning
us at: ABN AMRO Bank N.V., ABN AMRO Investor Relations Department,
Hoogoorddreef 66-68, P.O. Box 283, 1101 BE Amsterdam, The Netherlands
(Telephone: (31-20) 628 3842).
PS-5
<PAGE>
RISK FACTORS
The SHIELDS(sm) are not secured debt and, unlike ordinary debt securities,
the SHIELDS(sm) do not pay interest. This section describes the most
significant risks relating to the SHIELDS(sm). You should carefully consider
whether the SHIELDS(sm) are suited to your particular circumstances before you
decide to purchase them.
SHIELDS(sm) Are Not Ordinary Senior Notes
The terms of the SHIELDS(sm) differ from those of ordinary debt securities
in that we will not pay interest on the SHIELDS(sm). Because the supplemental
redemption amount due at maturity may be equal to zero, the return on your
investment (the effective yield to maturity) in the SHIELDS(sm) may be less
than the amount which would be paid on an ordinary debt security. The return of
only the principal amount of each SHIELDS(sm) at maturity will not compensate
you for any loss in value due to inflation and other factors relating to the
value of money over time.
SHIELDS(sm) May Not Pay More than Par at Maturity
If the percentage change in the Nasdaq-100 is equal to or less than zero,
you will receive only the par amount of $1,000 for each SHIELDS(sm) you hold at
maturity.
Secondary Trading May Be Limited
There may be little or no secondary market for the SHIELDS(sm). Although
the SHIELDS(sm) have been approved for listing on the American Stock Exchange
Inc., it is not possible to predict whether the SHIELDS(sm) will trade in the
secondary markets. Even if there is a secondary market, it may not provide
enough liquidity to allow you to trade or sell the SHIELDS(sm) easily.
Market Price of the SHIELDS(sm) Influenced by Many Unpredictable Factors
Several factors, many of which are beyond our control, will influence the
value of the SHIELDS(sm), including:
o the value of the Nasdaq-100
o interest and yield rates in the market
o the volatility (frequency and magnitude of changes in price) of the
Nasdaq-100
o economic, financial, political and regulatory or judicial events that
affect the securities underlying the Nasdaq-100 or stock markets
generally and which may affect the final index value
o the time remaining to the maturity of the SHIELDS(sm)
o the dividend rate on the stocks underlying the Nasdaq-100
o our creditworthiness
Some or all of these factors will influence the price that you will
receive if you sell your SHIELDS(sm) prior to maturity. For example, you may
have to sell your SHIELDS(sm) at a substantial discount from the principal
amount if at the time of sale the Nasdaq-100 is at, below, or not sufficiently
above the initial index value or if market interest rates rise.
You cannot predict the future performance of the Nasdaq-100 based on its
historical performance. We cannot guarantee that the value of the Nasdaq-100
will increase so that you will receive at maturity an amount in excess of the
principal amount of the SHIELDS(sm).
PS-6
<PAGE>
Adjustments to the Nasdaq-100 Could Adversely Affect the SHIELDS(sm)
Nasdaq is responsible for calculating and maintaining the Nasdaq-100.
Nasdaq can add, delete or substitute the stocks underlying the Nasdaq-100 or
make other methodological changes that could change the value of the
Nasdaq-100. Nasdaq may discontinue or suspend calculation or dissemination of
the Nasdaq-100. Any of these actions could adversely affect the value of the
SHIELDS(sm).
Potential Conflicts of Interest
As calculation agent, AAI calculates the amount paid to you at maturity of
the SHIELDS(sm). AAI and other affiliates may carry out activities that
minimize our risks related to the SHIELDS(sm), including trading in the
individual stocks included in the Nasdaq-100 as well as in other instruments
related to the Nasdaq-100. In particular, on the date of this pricing
supplement, we, through our subsidiaries or others, hedged our anticipated
exposure in connection with the SHIELDS(sm) by the purchase and sale of
exchange traded and over-the-counter options on the Nasdaq-100, individual
stocks included in the Nasdaq-100, futures contracts on the Nasdaq-100 and
options on such futures contracts or by taking positions in any other
instruments that we wished to use in connection with such hedging. Through our
subsidiaries, we are likely to modify our hedge position throughout the life of
the SHIELDS(sm), including on the date that the Final Index Value is to be
determined, by purchasing and selling the securities and instruments listed
above and any other available securities and instruments that we may wish to
use in connection with our hedging activity. Although we have no reason to
believe that our hedging activity had or will have a material impact on the
price of such options, stocks, futures contracts, and options on futures
contracts or on the value of the Nasdaq-100, we cannot give any assurance that
we did not, or in the future will not, affect such prices as a result of our
hedging activities. AAI and some of our other subsidiaries also trade the
individual stocks included in the Nasdaq-100 and other financial instruments
related to the Nasdaq-100 on a regular basis as part of their general
broker-dealer businesses. Any of these activities could influence AAI's
determination of calculations made with respect to the SHIELDS(sm) and,
accordingly, could affect your payout on the SHIELDS(sm).
It is also possible that any advisory services that our affiliates provide
in the course of any business with the issuers of the component stocks could
lead to actions on the part of such underlying issuers which might adversely
affect the level of the Nasdaq-100.
Investment in the SHIELDS(sm) Not the Same as an Investment in the Nasdaq-100
Stocks
The supplemental redemption amount, if any, per $1,000 SHIELDS(sm) will
not exceed $1,100. In addition, the payment of dividends on the stocks which
compose, or underlie, the Nasdaq-100 has no effect on the calculation of the
percentage increase in the Nasdaq-100. Therefore, the return on your investment
based on the percentage change in the Nasdaq-100 is not the same as the total
return based on the purchase of those underlying stocks held for a similar
period.
Tax Treatment
You should also consider the tax consequences of investing in the
SHIELDS(sm). The SHIELDS(sm) are best suited for accounts (including non-U.S.
accounts) not subject to U.S. federal income taxes. U.S. taxable investors will
be subject to annual income tax based on the comparable yield, as defined in
the accompanying prospectus supplement, of the SHIELDS(sm) even though they
will not receive any payments thereon prior to maturity and at maturity may
only receive the return of the par amount of the SHIELDS(sm). In addition, any
gain recognized by U.S. taxable investors on the sale, exchange or retirement
of the SHIELDS(sm) will generally be treated as ordinary income. Please read
carefully the section "Taxation" in this pricing supplement.
PS-7
<PAGE>
DESCRIPTION OF SHIELDS(sm)
Capitalized terms not defined herein have the meanings given to such terms
in the accompanying prospectus supplement. The term "SHIELDS(sm)" refers to
each $1,000 principal amount of our SHIELDS(sm) due December 27, 2007 based on
the Nasdaq-100.
Principal Amount...................... $50,000,000
Original Issue Date (Settlement Date). December , 2000
Maturity Date......................... December 27, 2007
Specified Currency.................... U.S. Dollars
CUSIP................................. 00372C AA1
Minimum Denominations................. $1,000
Issue Price........................... $1,000
Interest Rate......................... None
Maturity Redemption Amount............ At maturity (including as a result of
result of acceleration under the terms
of the Indenture), you will receive
$1,000, the par amount of the
SHIELDS(sm), plus the supplemental
redemption amount, if any.
Supplemental Redemption Amount........ We will pay you a supplemental
redemption amount per SHIELDS(sm) at
maturity equal to the greater of (a)
zero and (b) the Nasdaq-100 Percent
Change multiplied by $1,000; provided
that the supplemental redemption amount
per $1,000 SHIELDS(sm) shall not exceed
$1,100. The Calculation Agent will
calculate the supplemental redemption
amount on the date the Final Index Value
is determined.
The Calculation Agent will provide
written notice to the Trustee at its New
York office, on which notice the Trustee
may conclusively rely, of the
supplemental redemption amount, on or
prior to 11:00 a.m. on the Business Day
preceding the Maturity Date. See
"Discontinuance of the Nasdaq-100;
Alteration of Method of Calculation"
below.
The Calculation Agent will round all
percentages resulting from any
calculation with respect to the
SHIELDS(sm) to the nearest one
hundred-thousandth of a percentage
point, with five one-millionths of a
percentage point rounded upwards (e.g.,
9.876545% (or .09876545) would be
rounded to 9.87655% (or .0987655)). All
dollar amounts resulting from such
calculation will be rounded to the
nearest cent with one-half cent being
rounded upwards.
PS-8
<PAGE>
Nasdaq-100 Percent Change............. The Nasdaq-100 Percent Change is a
fraction, the numerator of which will be
the Final Index Value less the Initial
Index Value and the denominator of which
will be the Initial Index Value. The
Nasdaq-100 Percent Change is described
by the following formula:
(Final Index Value - Initial Index Value)
-----------------------------------------
Initial Index Value
Initial Index Value................... , the Index
Closing Value of the Nasdaq-100 on
December 21, 2000, the date we offer the
SHIELDS(sm) for initial sale to the
public.
Final Index Value..................... The Final Index Value will be the
Index Closing Value of the Nasdaq-100 on
December 21, 2007.
If a Market Disruption Event occurs on
December 21, 2007, the Maturity Date,
the Final Index Value will be determined
on December 24, 2007; provided that if
such date is not a Trading Day, or if
there is a Market Disruption Event on
such date, the Calculation Agent will
determine the value of the Nasdaq-100
on such date in accordance with the
formula for and method of calculating
the Nasdaq-100 last in effect prior to
the commencement of the Market
Disruption Event (or prior to the
non-Trading Day), using the closing
price (or, if trading in the relevant
securities has been materially suspended
or materially limited, its good faith
estimate of the closing price that would
have prevailed but for such suspension
or limitation or non-Trading Day) on
such date of each security most recently
constituting the Nasdaq-100.
Index Closing Value................... The Index Closing Value will equal the
closing value of the Nasdaq-100 or any
Successor Index at the regular official
weekday close of trading on a specified
date. See "--Discontinuance of the
Nasdaq-100; Alteration of Method of
Calculation."
In this "Description of SHIELDS(sm),"
references to the Nasdaq-100 will
include any Successor Index, unless the
context requires otherwise.
Trading Day........................... A day, as determined by the Calcultion
Agent, on which trading is generally
conducted on the New York Stock
Exchange, the American Stock Exchange
Inc., the Nasdaq National Market, the
Chicago Mercantile Exchange, and the
Chicago Board of Options Exchange and in
the over-the-counter market for equity
securities in the United States.
Book Entry Note or Certificated Note.. Book Entry
Trustee............................... The Chase Manhattan Bank
PS-9
<PAGE>
Agent................................. ABN AMRO Incorporated
Market Disruption Event............... "Market Disruption Event" means with
respect to the Nasdaq-100, the
occurrence or existence of either of the
following events as determined by the
Calculation Agent:
(i) a suspension, material
limitation or absence of trading of
stocks then constituting 20% or
more, by weight, of the Nasdaq-100
(or the relevant Successor Index) on
the Nasdaq for more than two hours
of trading or during the one-half
hour period preceding the close of
trading or a breakdown or failure in
the price and trading systems of
Nasdaq as a result of which the
reported trading prices for stocks
then constituting 20% or more, by
weight, of the Nasdaq-100 (or the
relevant Successor Index) during the
last one-half hour preceding the
closing of trading on Nasdaq are
materially inaccurate; or the
suspension, material limitation or
absence of trading on any major U.S.
securities market of trading in
futures or options contracts related
to the Nasdaq-100 (or the relevant
Successor Index) for more than two
hours of trading or during the
one-half hour period preceding the
close of trading on such market; and
(ii) a determination by the
Calculation Agent in its sole
discretion that the event described
in clause (i) above materially
interfered with our ability or the
ability of any of our affiliates to
unwind all or a material portion of
the hedge with respect to the
SHIELDS(sm).
For the purpose of determining whether a
Market Disruption Event exists at any
time, if trading in a security included
in the Nasdaq-100 is materially
suspended or materially limited at that
time, then the relevant percentage
contribution of that security to the
level of the Nasdaq-100 shall be based
on a comparison of (x) the portion of
the level of the Nasdaq-100 attributable
to that security relative to (y) the
overall level of the Nasdaq-100, in each
case immediately before that suspension
or limitation.
For purposes of determining whether a
Market Disruption Event has occurred:
(1) a limitation on the hours or number
of days of trading will not constitute a
Market Disruption Event if it results
from an announced change in the regular
business hours of the relevant exchange
or market, (2) a decision to permanently
discontinue trading in the relevant
futures or options contract will not
constitute a Market Disruption Event,
(3) limitations pursuant to the rules of
Nasdaq (or any applicable rule or
regulation enacted or promulgated by any
other self-regulatory organization or
any government agency of similar scope
as determined by the Calculation Agent)
on trading during significant market
fluctuations will constitute a
suspension, absence or material
limitation of trading, (4) a suspension
of trading in a futures or options
contract on the Nasdaq-100 by the
primary securities market related to
such contract by reason of (a) a price
change exceeding limits set by such
exchange or market, (b) an imbalance of
orders relating to such contracts or (c)
a disparity in bid and ask quotes
relating to such contracts will
constitute a suspension
PS-10
<PAGE>
or material limitation of trading in
futures or options contracts related to
the Nasdaq-100 and (5) a "suspension,
absence or material limitation of
trading" on Nasdaq or on the primary
market on which futures or options
contracts related to the Nasdaq-100 are
traded will not include any time when
such market is itself closed for trading
under ordinary circumstances.
Alternative Calculation of the
Final Index Value in case of
an Event of Default .................. If an Event of Default with respect to
any SHIELDS(sm) shall have occurred and
be continuing, the Calculation Agent
will determine the amount declared due
and payable upon any acceleration of the
SHIELDS(sm), which will be equal to
$1,000 plus the supplemental redemption
amount, if any, determined as though the
date on which the Final Index Value is
scheduled to be determined were the date
of acceleration.
Calculation Agent..................... AAI and its successors.
All determinations made by the
Calculation Agent will be at the sole
discretion of the Calculation Agent and
will, in the absence of manifest error,
be conclusive for all purposes and
binding on you and on us.
Because the Calculation Agent is our
affiliate, potential conflicts of
interest may exist between the
Calculation Agent, and you as the holder
of the SHIELDS(sm), including with
respect to certain determinations and
judgments that the Calculation Agent
must make in determining the Final Index
Value, the supplemental redemption
amount or whether a Market Disruption
Event has occurred. See "Discontinuance
of the Nasdaq-100; Alteration of Method
of Calculation" below and "Market
Disruption Event" above. AAI, as a
registered broker-dealer, is required to
maintain policies and procedures
regarding the handling and use of
confidential proprietary information,
and such policies and procedures will be
in effect throughout the term of the
SHIELDS(sm) to restrict the use of
information relating to the calculation
of the Final Index Value and the
supplemental redemption amount prior to
the dissemination of such information.
AAI is obligated to carry out its duties
and functions as Calculation Agent in
good faith and using its reasonable
judgment.
Nasdaq-100............................ We have derived all information
contained in this pricing supplement
regarding the Nasdaq-100, including,
without limitation, its make-up, method
of calculation and changes in its
components, from publicly available
information. Such information reflects
the policies of, and is subject to
change by, Nasdaq. The Nasdaq-100 was
developed by Nasdaq, and is calculated
and maintained by Nasdaq and was first
published in January 1985. Nasdaq has no
obligation to continue to calculate and
publish, and may discontinue calculation
and publication of, the Nasdaq-100.
The Nasdaq-100 is a modified
capitalization-weighted index of 100 of
the largest and most active
non-financial domestic and
PS-11
<PAGE>
international companies listed on
Nasdaq. The Nasdaq-100 constitutes a
broadly diversified segment of the
largest and most actively traded
securities listed on Nasdaq, and includes
companies across a variety of major
industry groups. At any moment in time,
the value of the Nasdaq-100 equals the
aggregate value of the then-current
Nasdaq-100 share weights of each of the
100 Nasdaq-100 component securities,
which are based on the total shares
outstanding of each of such Nasdaq-100
component security, multiplied by each
such security's respective last sale
price on the Nasdaq, and divided by a
scaling factor (the "divisor"), which
becomes the basis for the reported
Nasdaq-100 value. The divisor serves the
purpose of scaling such aggregate value
(otherwise in the trillions) to a lower
order of magnitude which is more
desirable for Nasdaq-100 reporting
purposes.
To be eligible for inclusion in the
Nasdaq-100, a security must be traded on
Nasdaq and meet the other eligibility
criteria, including the following: the
security must be of a non-financial
company; only one class of security per
issuer is allowed; the security may not
be issued by an issuer currently in
bankruptcy proceedings; the security
must have average daily trading volume
of at least 100,000 shares per day; the
security must have been listed on a
market for at least two years (in the
case of a spin-off, the operating
history of the spin-off will be
considered), or a one-year period if a
security would otherwise qualify to be
in the top 25% of the issuers included
in the Nasdaq-100 by market
capitalization; if the security is of a
foreign issuer, the company must have a
worldwide market value of at least $10
billion, a U.S. market value of at least
$4 billion, and average trading volume
on Nasdaq of at least 200,000 shares per
day; in addition, foreign securities
must be eligible for listed options
trading; and the issuer of the security
may not have entered into a definitive
agreement or other arrangement which
would result in the security no longer
being listed on Nasdaq within the
succeeding six months. These Nasdaq-100
eligibility criteria may be revised from
time to time by The National Association
of Securities Dealers, Inc. without
regard to the SHIELDS(sm).
Periodically (typically, several times
per quarter), Nasdaq may determine that
total shares outstanding have changed in
one or more Nasdaq-100 component
securities due to secondary offerings,
repurchases, conversions, or other
corporate actions. Under such
circumstances, in accordance with Nasdaq
policies and procedures for making
adjustments to the Nasdaq-100, the
Nasdaq-100 share weights would be
adjusted by the same percentage amounts
by which the total shares outstanding
have changed in such Nasdaq-100
securities. Additionally, Nasdaq may
periodically (ordinarily, several times
per quarter) replace one or more
component securities in the Nasdaq-100
due to mergers, acquisitions,
bankruptcies, or other market
conditions, or due to delistings if an
issuer chooses to list its securities on
another marketplace, or if the issuers
of such component securities fail to
meet the criteria for continued
inclusion in the Nasdaq-100.
The Nasdaq-100 share weights, which are
based upon the total shares
PS-12
<PAGE>
outstanding in each of the 100
Nasdaq-100 component securities, are
additionally subject, in certain cases,
to a rebalancing (see "Calculation and
Rebalancing of the Nasdaq-100" below).
Ordinarily, whenever there is a change
in the Nasdaq-100 share weights or a
change in a component security included
in the Nasdaq-100, Nasdaq adjusts the
divisor to assure that there is no
discontinuity in the value of the
Nasdaq-100 which might otherwise be
caused by any such change.
A current list of the issuers of the
component stocks of the Nasdaq-100 and
the weighting of each component stock,
as a percentage of the total index
capitalization, is published and
disseminated daily by Nasdaq, as well as
numerous market information services.
The table under "Historical Information"
below shows the actual performance of
the Nasdaq-100 for the period between
January 1, 1995 and November 27, 2000.
Stock prices fluctuated widely during
this period and were higher at the end
than at the beginning. The results shown
should not be considered as a
representation of the income yield or
capital gain or loss that may be
generated by the Nasdaq-100 in the
future. In addition, after the close of
trading on December 18, 1998, the
Nasdaq-100 share weights of the
Nasdaq-100 component securities were
rebalanced in accordance with the
"modified capitalization weighted"
methodology implemented on such date
(see "Calculation and Rebalancing of the
Nasdaq-100" below). As a result, the
performance of the Nasdaq-100 after
December 18, 1998 reflects the
performance of the Nasdaq-100 component
securities as calculated in accordance
with the revised Nasdaq-100 methodology.
Ranking Review. The Nasdaq-100 component
securities are evaluated annually, as
described below, except under
extraordinary circumstances which may
result in an interim evaluation.
Securities listed on Nasdaq which meet
the eligibility criteria described above
are ranked by market value. Nasdaq-100
eligible securities which are already in
the Nasdaq-100 and which are in the top
150 eligible securities (based on market
value) are retained in the Nasdaq-100
provided that such security was ranked
in the top 100 eligible securities as of
the previous ranking review. Securities
not meeting such criteria are replaced.
The replacement securities chosen are
the largest market capitalization
Nasdaq-100 eligible securities not
currently in the Nasdaq-100. Generally,
the list of annual additions and
deletions is publicly announced via a
press release in the early part of
December. Replacements are made
effective after the close of trading on
the third Friday in December. Moreover,
if at any time during the year a
Nasdaq-100 component security is no
longer traded on Nasdaq, or is otherwise
determined by Nasdaq to become
ineligible for continued inclusion in
the Nasdaq-100, the security will be
replaced with the largest market
capitalization security not currently in
the Nasdaq-100 and meeting the
Nasdaq-100 eligibility criteria listed
above.
In addition to the annual ranking
review, the securities in the Nasdaq-
100 are monitored every day by Nasdaq
with respect to changes in
PS-13
<PAGE>
total shares outstanding arising from
secondary offerings, stock repurchases,
conversions, or other corporate actions.
The following quarterly scheduled weight
adjustment procedures have been adopted
with respect to such changes. If the
change in total shares outstanding
arising from such corporate action is
greater than or equal to 5.0%, such
change is made to the Nasdaq-100 on the
evening prior to the effective date of
such corporate action or as soon
thereafter as practicable. Otherwise, if
the change in total shares outstanding
is less than 5.0%, then all such changes
are accumulated and made effective at
one time on a quarterly basis after the
close of trading on the third Friday in
each of March, June, September, and
December. In either case, the Nasdaq-100
share weights for such Nasdaq-100
component securities are adjusted by the
same percentage amount by which the
total shares outstanding have changed in
such Nasdaq-100 component securities.
Ordinarily, whenever there is a change
in Nasdaq-100 share weights or a change
in a component security included in the
Nasdaq-100, Nasdaq adjusts the divisor
to assure that there is no discontinuity
in the value of the Nasdaq-100 which
might otherwise be caused by any such
change.
Calculation and Rebalancing of the
Nasdaq-100. Effective after the close of
trading on December 18, 1998, the
Nasdaq-100 has been calculated under a
"modified capitalization- weighted"
methodology, which is a hybrid between
equal weighting and conventional
capitalization weighting. This
methodology is expected to: (1) retain
in general the economic attributes of
capitalization weighting; (2) promote
portfolio weight diversification
(thereby limiting domination of the
Nasdaq-100 by a few large stocks); (3)
reduce Nasdaq-100 performance distortion
by preserving the capitalization ranking
of companies; and (4) reduce market
impact on the smallest Nasdaq-100
component securities from necessary
weight rebalancings.
Under the methodology employed, on a
quarterly basis coinciding with Nasdaq's
quarterly scheduled weight adjustment
procedures described above, the
Nasdaq-100 component securities are
categorized as either "Large Stocks" or
"Small Stocks" depending on whether
their current percentage weights (after
taking into account such scheduled
weight adjustments due to stock
repurchases, secondary offerings, or
other corporate actions) are greater
than, or less than or equal to, the
average percentage weight in the Nasdaq-
100 (i.e., as a 100-stock index, the
average percentage weight in the
Nasdaq-100 is 1.0%).
Such quarterly examination will result
in a Nasdaq-100 rebalancing if either
one or both of the following two weight
distribution requirements are not met:
(1) the current weight of the single
largest market capitalization Nasdaq-100
component security must be less than or
equal to 24.0% and (2) the "collective
weight" of those Nasdaq-100 component
securities whose individual current
weights are in excess of 4.5%, when
added together, must be less than or
equal to 48.0%. In addition, Nasdaq may
conduct a special rebalancing if it is
determined necessary to maintain the
integrity of the Nasdaq-100.
PS-14
<PAGE>
If either one or both of these weight
distribution requirements are not met
upon quarterly review or Nasdaq
determines that a special rebalancing is
required, a weight rebalancing will be
performed in accordance with the
following plan. First, relating to
weight distribution requirement (1)
above, if the current weight of the
single largest Nasdaq-100 Component
Security exceeds 24.0%, then the weights
of all Large Stocks will be scaled down
proportionately towards 1.0% by enough
for the adjusted weight of the single
largest Nasdaq-100 security to be set to
20.0%. Second, relating to weight
distribution requirement (2) above, for
those Nasdaq-100 component securities
whose individual current weights or
adjusted weights in accordance with the
preceding step are in excess of 4.5%, if
their "collective weight" exceeds 48.0%,
then the weights of all Large Stocks
will be scaled down proportionately
towards 1.0% by just enough for the
"collective weight," so adjusted, to be
set to 40.0%.
The aggregate weight reduction among the
Large Stocks resulting from either or
both of the above rescalings will then
be redistributed to the Small Stocks in
the following iterative manner. In the
first iteration, the weight of the
largest Small Stock will be scaled
upwards by a factor which sets it equal
to the average Nasdaq-100 weight of
1.0%. The weights of each of the smaller
remaining Small Stocks will be scaled up
by the same factor reduced in relation
to each stock's relative ranking among
the Small Stocks so that the smaller the
Nasdaq-100 component security in the
ranking, the less the scale-up of its
weight. This is intended to reduce the
market impact of the weight rebalancing
on the smallest component securities in
the Nasdaq-100.
In the second iteration, the weight of
the second largest Small Stock, already
adjusted in the first iteration, will be
scaled upwards by a factor which sets it
equal to the average index weight of
1.0%. The weights of each of the smaller
remaining Small Stocks will be scaled up
by this same factor reduced in relation
to each stock's relative ranking among
the Small Stocks such that, once again,
the smaller the stock in the ranking,
the less the scale-up of its weight.
Additional iterations will be performed
until the accumulated increase in weight
among the Small Stocks exactly equals
the aggregate weight reduction among the
Large Stocks from rebalancing in
accordance with weight distribution
requirement (1) and/or weight
distribution requirement (2).
Then, to complete the rebalancing
procedure, once the final percent
weights of each Nasdaq-100 security are
set, the Nasdaq-100 share weights will
be determined anew based upon the last
sale prices and aggregate capitalization
of the Nasdaq-100 at the close of
trading on the Thursday in the week
immediately preceding the week of the
third Friday in March, June, September,
and December. Changes to the Nasdaq-100
share weights will be made effective
after the close of trading on the third
Friday in March, June, September, and
December and an adjustment to the
Nasdaq-100 divisor will be made to
ensure continuity of the Nasdaq-100.
PS-15
<PAGE>
Ordinarily, new rebalanced weights will
be determined by applying the above
procedures to the current Nasdaq-100
share weights. However, Nasdaq may from
time to time determine rebalanced
weights, if necessary, by instead
applying the above procedure to the
actual current market capitalization of
the Index components. In such instances,
Nasdaq would announce the different
basis for rebalancing prior to its
implementation.
In this pricing supplement, unless the
context requires otherwise, references
to the Nasdaq-100 will include any
Successor Index and references to Nasdaq
will include any successor to Nasdaq.
We or our affiliates may presently or
from time to time engage in business
with one or more of the issuers of the
component stocks of the Nasdaq-100,
including selling products and/or
services to, purchasing products and/or
services from, extending loans to or
making equity investments in any of such
issuers or providing advisory services
to such issuers, including merger and
acquisition advisory services. In the
course of such business, we, or our
affiliates, may acquire non-public
information with respect to such
companies and, in addition, one or more
of our affiliates may publish research
reports with respect to such issuers.
The statements in the preceding sentence
are not intended to affect the right of
holders of the SHIELDS(sm) under the
securities laws. You should undertake an
independent investigation of the issuers
of the component stocks of the
Nasdaq-100 and of the Nasdaq-100 to the
extent required, in your judgment, to
allow you to make an informed decision
with respect to an investment in the
SHIELDS(sm).
Discontinuance of the Nasdaq-100;
Alteration of Method of Calculation. If Nasdaq discontinues publication of
the Nasdaq 100 and Nasdaq or another
entity publishes a successor or
substitute index that AAI as the
Calculation Agent determines, in its
sole discretion, to be comparable to the
discontinued Nasdaq-100 (such index
being referred to herein as a "Successor
Index"), then any subsequent Index
Closing Value will be determined by
reference to the value of such Successor
Index at the close of trading on the
relevant exchange or market for the
Successor Index on the date that the
Final Index Value is to be determined.
Upon any selection by the Calculation
Agent of a Successor Index, the
Calculation Agent will cause written
notice thereof to be furnished to the
Trustee, to us and to the holders of the
SHIELDS(sm) within three Trading Days of
such selection.
If Nasdaq discontinues publication of
the Nasdaq-100 prior to, and such
discontinuance is continuing on, the
date that the Final Index Value is to be
determined and AAI as the Calculation
Agent determines that no Successor Index
is available at such time, then on such
date, the Calculation Agent will
determine the Index Closing Value that
would be used in computing the
supplemental redemption amount on such
date. The Index Closing Value will be
computed by the Calculation Agent in
accordance with the formula for and
method of calculating the Nasdaq-100
last in effect prior to such
PS-16
<PAGE>
discontinuance, using the closing price
(or, if trading in the relevant
securities has been materially suspended
or materially limited, its good faith
estimate of the closing price that would
have prevailed but for such suspension
or limitation) on such date of each
security most recently comprising the
Nasdaq-100. Notwithstanding these
alternative arrangements, discontinuance
of the publication of the Nasdaq-100 may
adversely affect the value of the
SHIELDS(sm).
If at any time the method of calculating
the Nasdaq-100 or a Successor Index, or
the value thereof, is changed in a
material respect, or if the Nasdaq-100
or a Successor Index is in any other way
modified so that such index does not, in
the opinion of AAI, as the Calculation
Agent, fairly represent the value of the
Nasdaq-100 or such Successor Index had
such changes or modifications not been
made, then, from and after such time,
the Calculation Agent will, at the close
of business in New York City on the date
that the Final Index Value is to be
determined make such calculations and
adjustments as, in the good faith
judgment of the Calculation Agent, may
be necessary in order to arrive at a
value of a stock index comparable to the
Nasdaq-100 or such Successor Index, as
the case may be, as if such changes or
modifications had not been made, and
calculate the supplemental redemption
amount with reference to the Nasdaq-100
or such Successor Index, as adjusted.
Accordingly, if the method of
calculating the Nasdaq-100 or a
Successor Index is modified so that the
value of such index is a fraction of
what it would have been if it had not
been modified (e.g., due to a split in
the index), then the Calculation Agent
will adjust such index in order to
arrive at a value of the Nasdaq-100 or
such Successor Index as if it had not
been modified (e.g., as if such split
had not occurred).
Historical Information................ The following table sets forth the high
and low daily closing values, as well as
end-of-quarter closing values, of the
Nasdaq-100 for each quarter in the
period from January 1, 1995 through
November 27, 2000. The Index Closing
Values listed below were obtained from
Bloomberg Financial Markets. We believe
all such information to be accurate. The
results shown should not be considered
as a representation of the income, yield
or capital gain or loss that may be
generated by the Nasdaq-100 in the
future. In addition, after the close of
trading on December 18, 1998, the
Nasdaq-100 share weights of the
Nasdaq-100 Component Securities were
rebalanced in accordance with the
"modified capitalization weighted"
methodology implemented on such date
(see "Calculation and Rebalancing of the
Nasdaq-100" above). As a result, the
performance of the Nasdaq-100 after
December 18, 1998 reflects the
performance of the Nasdaq-100 Component
Securities as calculated in accordance
with the revised Nasdaq-100 methodology.
PS-17
<PAGE>
Daily Index Closing Values
High Low Period-end
-------- -------- ----------
1995
First Quarter....... 460.54 398.00 447.15
Second Quarter...... 546.06 439.92 538.03
Third Quarter....... 609.75 538.97 585.08
Fourth Quarter...... 621.71 546.93 576.23
1996
First Quarter....... 643.41 534.42 609.69
Second Quarter...... 699.35 604.07 677.30
Third Quarter....... 745.73 598.34 737.58
Fourth Quarter...... 856.64 731.21 821.36
1997
First Quarter....... 925.52 797.06 797.06
Second Quarter...... 989.37 783.92 957.30
Third Quarter....... 1,145.07 953.44 1,097.17
Fourth Quarter...... 1,148.21 938.99 990.80
1998
First Quarter....... 1,220.66 956.19 1,220.66
Second Quarter...... 1,339.71 1,163.98 1,337.34
Third Quarter....... 1,465.89 1,140.34 1,345.48
Fourth Quarter...... 1,836.01 1,128.88 1,836.01
1999
First Quarter....... 2,144.66 1,854.39 2,106.39
Second Quarter...... 2,296.77 1,967.84 2,296.77
Third Quarter....... 2,545.41 2,163.77 2,407.90
Fourth Quarter...... 3,707.83 2,362.11 3,707.83
2000
First Quarter....... 4,704.73 3,340.81 4,250.19
Second Quarter...... 4,291.53 3,023.42 3,763.79
Third Quarter....... 4,099.30 3,477.31 3,570.61
Fourth Quarter...... 3,457.97 2,668.25 2,769.32
(through November
27, 2000)
Source: Bloomberg Financial Markets
License Agreement between
Nasdaq and the Bank................... Nasdaq and the Bank have entered into a
non-exclusive license agreement
providing for the license to the Bank,
and certain of its affiliated or
subsidiary companies, in exchange for a
fee, of the right to use the Nasdaq-100,
which is owned and published by Nasdaq,
in connection with certain securities,
including the SHIELDS(sm).
The license agreement between Nasdaq and
the Bank provides that the following
language must be set forth in this
pricing supplement:
The SHIELDS(sm) are not sponsored,
endorsed, sold or promoted by Nasdaq
(including its affiliates) (Nasdaq, with
its affiliates, are referred to as the
"Corporations"). The Corporations have
not passed on the legality or
suitability of, or the accuracy or
adequacy of descriptions and disclosures
relating to, the SHIELDS(sm). The
PS-18
<PAGE>
Corporations make no representations or
warranty, express or implied, to the
owners of the SHIELDS(sm) or any member
of the public regarding the advisability
of investing in securities generally or
in the SHIELDS(sm) particularly, or the
ability of the Nasdaq-100 to track
general stock market performance. The
Corporations' only relationship to us
(the "Licensee") is in the licensing of
the Nasdaq-100, Nasdaq-100 Index(R),
and Nasdaq(R) trademarks or service
marks and certain trade names of the
Corporations and the use of the
Nasdaq-100 which is determined, composed
and calculated by Nasdaq without regard
to us or the SHIELDS(sm). Nasdaq has no
obligation to take our needs or the
needs of the owners of the SHIELDS(sm)
into consideration in determining,
composing or calculating the Nasdaq-100.
The Corporations are not responsible for
and have not participated in the
determination of the timing, prices or
quantities of the SHIELDS(sm) to be
issued or in the determination or
calculation of the equation by which the
SHIELDS(sm) are to be converted into
cash. The Corporations have no liability
in connection with the administration,
marketing or trading of the SHIELDS(sm).
THE CORPORATIONS DO NOT GUARANTEE THE
ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ-100 OR ANY
DATA INCLUDED THEREIN. THE CORPORATIONS
MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS
TO RESULTS TO BE OBTAINED BY THE
LICENSEE, OWNERS OF THE SHIELDS(sm), OR
ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE NASDAQ-100 OR ANY DATA INCLUDED
THEREIN. THE CORPORATIONS MAKE NO
EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIM ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE, WITH RESPECT
TO THE NASDAQ-100 OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL THE
CORPORATIONS HAVE ANY LIABILITY FOR ANY
LOST PROFITS OR SPECIAL, INCIDENTAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
PS-19
<PAGE>
Additional Amounts.................... The Issuer will, subject to certain
exceptions and limitations set forth
below, pay such additional amounts (the
"Additional Amounts") to holders of the
SHIELDS(sm) as may be necessary in order
that the net payment of the principal
of, and any supplemental redemption
amount on, the SHIELDS(sm) and any other
amounts payable on the SHIELDS(sm),
after withholding for or on account of
any present or future tax, assessment or
governmental charge imposed upon or as a
result of such payment by The
Netherlands (or any political
subdivision or taxing authority thereof
or therein) or the jurisdiction of
residence or incorporation of any
successor corporation or any
jurisdiction from or through which any
amount is paid by the Issuer or a
successor corporation, will not be less
than the amount provided for in the
SHIELDS(sm) to be then due and payable.
The Issuer will not, however, be
required to make any payment of
Additional Amounts to any such holder
for or on account of:
(a) any such tax, assessment or
other governmental charge that would
not have been so imposed but for (i)
the existence of any present or
former connection between such
holder (or between a fiduciary,
settlor, beneficiary, member or
shareholder of such holder, if such
holder is an estate, a trust, a
partnership or a corporation) and
The Netherlands and its possessions,
including, without limitation, such
holder (or such fiduciary, settlor,
beneficiary, member or shareholder)
being or having been a citizen or
resident thereof or being or having
been engaged in a trade or business
or present therein or having, or
having had, a permanent establishment
therein or (ii) the presentation,
where presentation is required, by
the holder of a SHIELDS(sm) for
payment on a date more than 30 days
after the date on which such payment
became due and payable or the date
on which payment thereof is duly
provided for, whichever occurs
later;
(b) any estate, inheritance, gift,
sales, transfer or personal property
tax or any similar tax, assessment
or governmental charge;
(c) any tax, assessment or other
governmental charge that is payable
otherwise than by withholding from
payments on or in respect of the
SHIELDS(sm);
PS-20
<PAGE>
(d) any tax, assessment or other
governmental charge required to be
withheld by any paying agent from
any payment of principal of, or
supplemental redemption amount on,
the SHIELDS(sm), if such payment can
be made without such withholding by
presentation of the SHIELDS(sm) to
any other paying agent;
(e) any tax, assessment or other
governmental charge that would not
have been imposed but for a holder's
failure to comply with a request
addressed to the holder or, if
different, the beneficiary of the
payment, to comply with
certification, information or other
reporting requirements concerning
the nationality, residence or
identity of the holder or beneficial
owner of a SHIELDS(sm), if such
compliance is required by statute or
by regulation of The Netherlands (or
other relevant jurisdiction), or of
any political subdivision or taxing
authority thereof or therein, as a
precondition to relief or exemption
from such tax, assessment or other
governmental charge;
(f) any combination of items (a),
(b), (c), (d) or (e);
nor shall Additional Amounts be paid
with respect to any payment on the
SHIELDS(sm) to a holder who is a
fiduciary or partnership or other than
the sole beneficial owner of such
payment to the extent such payment would
be required by the laws of The
Netherlands (or other relevant
jurisdiction), or any political
subdivision thereof, to be included in
the income, for tax purposes, of a
beneficiary or settlor with respect to
such fiduciary or a member of such
partnership or a beneficial owner who
would not have been entitled to the
Additional Amounts had such beneficiary,
settlor, member or beneficial owner been
the holder of the Notes.
PS-21
<PAGE>
USE OF PROCEEDS
The net proceeds we receive from the sale of the SHIELDS(sm) will be used
for general corporate purposes and, in part, by us or one or more of our
affiliates in connection with hedging our obligations under the SHIELDS(sm),
including hedging market risks associated with the supplemental redemption
amount. See also "Risk Factors--Potential Conflicts of Interest" in this pricing
supplement and "Use of Proceeds" in the accompanying prospectus.
PS-22
<PAGE>
PLAN OF DISTRIBUTION
In order to facilitate the offering of the SHIELDS(sm), the Agent may
engage in transactions that stabilize, maintain or otherwise affect the price
of the SHIELDS(sm) or the stocks underlying the Nasdaq-100. Specifically, the
Agent may overallot in connection with the offering, creating a short position
in the SHIELDS(sm) for its own account. In addition, to cover allotments or to
stabilize the price of the SHIELDS(sm), the Agent may bid for, and purchase,
the SHIELDS(sm) or the stocks underlying the Nasdaq-100 in the open market. See
"Use of Proceeds" and "Risk Factors--Potential Conflicts of Interest".
PS-23
<PAGE>
ERISA MATTERS
We and certain of our affiliates, including AAI, may each be considered a
"party in interest" within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a "disqualified person" within
the meaning of the Internal Revenue Code of 1986, as amended (the "Code") with
respect to many employee benefit plans. Prohibited transactions within the
meaning of ERISA or the Code may arise, for example, if the SHIELDS(sm) are
acquired by or with the assets of a pension or other employee benefit plan with
respect to which AAI or any of its affiliates is a service provider, unless the
SHIELDS(sm) are acquired pursuant to an exemption from the prohibited
transaction rules.
The acquisition of the SHIELDS(sm) may be eligible for one of the
exemptions noted below if such acquisition:
(a) (i) is made solely with the assets of a bank collective investment
fund and (ii) satisfies the requirements and conditions of Prohibited
Transaction Class Exemption ("PTCE") 91-38 issued by the Department of Labor
("DOL");
(b) (i) is made solely with assets of an insurance company pooled separate
account and (ii) satisfies the requirements and conditions of PTCE 90-1 issued
by the DOL;
(c) (i) is made solely with assets managed by a qualified professional
asset manager and (ii) satisfies the requirements and conditions of PTCE 84-14
issued by the DOL;
(d) is made solely with assets of a governmental plan (as defined in
Section 3(32) of ERISA) which is not subject to the provisions of Section 401
of the Code;
(e) (i) is made solely with assets of an insurance company general account
and (ii) satisfies the requirements and conditions of PTCE 95-60 issued by the
DOL; or
(f) (i) is made solely with assets managed by an in-house asset manager
and (ii) satisfies the requirements and conditions of PTCE 96-23 issued by the
DOL.
Under ERISA, the assets of a pension or other employee benefit plan may
include assets held in the general account of an insurance company which has
issued an insurance policy to such plan or assets of an entity in which the
plan has invested. If you are a pension or other employee benefit plan, you
should consult your legal advisor regarding the application of ERISA and the
Code.
PS-24
<PAGE>
TAXATION
United States Tax Consequences
United States holders should refer generally to the summary under "United
States Federal Taxation" in the accompanying prospectus supplement, and such
holders should read carefully the discussion under "United States Federal
Taxation -- Notes -- Optionally Exchangeable Notes" which summarizes the
principal United States federal income tax consequences to a United States
holder of the ownership and disposition of contingent payment debt instruments
such as the SHIELDS(sm). In connection with the discussion thereunder, we have
determined that the "comparable yield" is an annual rate of 6.35%, compounded
annually. Based on our determination of the comparable yield, the "projected
payment schedule" for a SHIELDS(sm) (assuming a par amount of $1,000 or with
respect to each integral multiple thereof) consists of a projected amount due
at maturity, equal to $1,540.31.
The following table states the amount of interest that will be deemed to
have accrued with respect to a SHIELDS(sm) during each accrual period, based
upon our determination of the comparable yield and the projected payment
schedule:
<TABLE>
TOTAL INTEREST
DEEMED TO HAVE
INTEREST ACCRUED FROM
DEEMED TO ACCRUE ORIGINAL ISSUE DATE
DURING ACCRUAL PERIOD PER NOTE AS OF END OF
ACCRUAL PERIOD (PER NOTE) ACCRUAL PERIOD
-------------- --------------------- ---------------------
<S> <C> <C>
Original Issue Date through December 31, 2000..... $ 1.54 $ 1.54
January 1, 2001 through December 31, 2001......... $63.60 $ 65.14
January 1, 2002 through December 31, 2002......... $67.64 $132.77
January 1, 2003 through December 31, 2003......... $71.93 $204.71
January 1, 2004 through December 31, 2004......... $76.50 $281.20
January 1, 2005 through December 31, 2005......... $81.36 $362.56
January 1, 2006 through December 31, 2006......... $86.52 $449.08
January 1, 2007 through December 27, 2007......... $91.23 $540.31
</TABLE>
The comparable yield and the projected payment schedule are not provid
for any purpose other than the determination of United States Holders' interest
accruals and adjustments thereof in respect of the SHIELDS(sm) for federal
income tax purposes and do not constitute a representation regarding the actual
amounts of the payments on the SHIELDS(sm).
Dutch Tax Consequences
The following is a summary of certain Dutch tax consequences regarding
your investment in the SHIELDS(sm) if you are not resident in The Netherlands
for Dutch tax purposes. The summary does not purport to be a comprehensive
description of all of the tax considerations that may be relevant to any
particular investor, including tax considerations that arise from rules of
general application or that are generally assumed to be known to investors.
This summary is based on Dutch law as it stands on the date of this pricing
supplement and may be subject to change. You should consult your own adviser
regarding the tax consequences of the purchase, ownership and disposition of
the SHIELDS(sm) in light of your particular circumstances, including the effect
of any state, local or other Dutch tax laws.
Withholding Tax
All payments by us under the SHIELDS(sm) may be made free of withholding
or deduction for or on account of any taxes of whatsoever nature imposed,
levied, withheld or assessed by The Netherlands or any political subdivision or
taxing authority thereof or therein.
PS-25
<PAGE>
Taxes on Income and Capital Gains
If you derive income from a SHIELDS(sm) or you realize a gain on the
disposal or retirement of a SHIELDS(sm), you will not be subject to Dutch
taxation on income or capital gains values:
o such income or gain is attributable to an enterprise or part thereof
which is carried on through a permanent establishment or a permanent
representative in The Netherlands;
o you have, directly or indirectly, a substantial interest or a deemed
substantial interest in us, and such interest or the SHIELDS(sm) do
not form part of the assets of an enterprise; or
o you are an individual and you do not have a substantial interest or a
deemed substantial interest in us and any of certain persons
connected to you has a substantial interest or a deemed substantial
interest in us and each such interest or the SHIELDS(sm) do not form
part of the assets of an enterprise.
o in addition, as of January 1, 2001, you perform activities in The
Netherlands to which the SHIELDS(sm) are attributable and such
activities exceed "normal investment activities".
Gift and Estate Taxes
Dutch gift, estate or inheritance taxes will not be levied on the occasion
of the transfer of a SHIELDS(sm) by way of gift by, or on the death of, a
holder unless:
o the transfer is construed as an inheritance or as a gift made by or
on behalf of a person who, at the time of the gift or death, is, or
is deemed to be, resident in The Netherlands; or
o such SHIELDS(sm) is attributable to an enterprise or part thereof
which is carried on through a permanent establishment or a permanent
representative in The Netherlands.
Other Taxes and Duties
No Dutch registration tax, custom duty, stamp duty, capital tax or any
other similar tax or duty, other than court fees in The Netherlands, is payable
by you in respect of, or in connection with, the execution, delivery and
enforcement by legal proceedings (including the enforcement of any foreign
judgment in the Courts of The Netherlands) of the Indenture or the performance
of our obligations under the SHIELDS(sm).
Proposed European Union Withholding Tax Directive
In May 1998, the European Commission presented to the Council of Ministers
of the European Union a proposal for a directive on the taxation of savings
which would oblige EU member states to either (1) require a "paying agent"
established in the EU member state to withhold tax on the payment of interest,
discount or premium to an individual beneficial owner who is a tax resident in
another EU member state, unless the recipient establishes that it has reported
the payment in its state of residence (a "withholding tax system") or (2)
require a paying agent established in the EU member state to supply information
concerning the payment to the EU member state where such recipient is a tax
resident (an "information reporting system"). For these purposes, the term
"paying agent" is widely defined to include an agent who collects interest,
discounts or premiums on behalf of an individual who is entitled to them.
In June 2000 the Council of Ministers of Finance and Economics (ECOFIN)
agreed that the proposal for the directive should be amended on a number of
points, including the requirement that discussions be held with non-EU member
states to promote the adoption of an equivalent savings withholding tax in
their countries. Subject to these discussions being successful, ECOFIN will
decide whether or not to implement the directive no later than December 31,
2002. Pending agreement on the scope and precise text of the directive, it is
not possible to say what effect, if any, the adoption of the proposed directive
would have on the SHIELDS(sm) or payments in respect thereof.
PS-26
<PAGE>
<TABLE>
<S> <C>
========================================================== ==========================================================
You should rely only on the information contained or ABN AMRO BANK N.V.
incorporated by reference in this pricing supplement,
the prospectus supplement and the prospectus. We $50,000,000
have not authorized anyone else to provide you with
different or additional information. We are offering to SHIELDS(sm) due
sell these securities and seeking offers to buy these December 27, 2007
securities only in jurisdictions where offers and sales Based on the
are permitted. Neither the delivery of this pricing Nasdaq-100 Index(R)
supplement or the accompanying prospectus
supplement and prospectus, nor any sale made Structured HybrId Equity LinkeD
hereunder and thereunder shall, under any Securities
circumstances, create any implication that there has ("SHIELDS(sm)")
been no change in the affairs of ABN AMRO Bank N.V.
since the date hereof or that the information contained or
incorporated by reference herein is correct as of any time
subsequent to the date of such information.
Until 25 days following the bona fide offering of any
securities offered by this pricing supplement to the
public, all dealers that effect transactions in these
securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in
addition to the dealers' obligation to deliver a prospectus
when acting as underwriters and with respect to their
unsold allotments or subscriptions.
----------------------------------------------------------
TABLE OF CONTENTS
PRICING SUPPLEMENT
Page
----
Summary of Pricing Supplement......................PS-3
Incorporation of Documents by Reference............PS-5
Risk Factors.......................................PS-6
Description of SHIELDS(sm).........................PS-8
Use of Proceeds...................................PS-22
Plan of Distribution..............................PS-23
ERISA Matters.....................................PS-24
Taxation..........................................PS-25
PROSPECTUS SUPPLEMENT
Page
----
About This Prospectus...............................S-2 PRICING SUPPLEMENT
Foreign Currency Risks..............................S-3 (TO PROSPECTUS DATED
Description of Notes................................S-5 NOVEMBER 22, 2000 AND
The Depositary.....................................S-23 PROSPECTUS SUPPLEMENT
Series A Notes Offered on a Global Basis...........S-24 DATED NOVEMBER 27, 2000)
United States Federal Taxation.....................S-27
Plan of Distribution...............................S-36
Legal Matters......................................S-37
PROSPECTUS ABN AMRO Incorporated
Page
----
About This Prospectus.................................1
Where You Can Find Additional Information.............2
Consolidated Ratio of Earnings to Fixed Charges.......3
ABN AMRO Bank N.V.....................................4
Use of Proceeds.......................................5
Description of Debt Securities........................6
Form of Securities...................................12
Plan of Distribution.................................15
Legal Matters........................................17
Experts..............................................17
ERISA Matters for Pension Plans and
Insurance Companies..............................17 , 2000
========================================================== ==========================================================
</TABLE>
