ING Direct 2008 Annual Report Download - page 127

LIABILITIES
13 PREFERENCE SHARES
Preference shares
The authorised preference share capital of ING Groep N.V. was divided into two categories preference A shares and preference B shares.
The share capital consisted of 100 million preference A shares with a par value of EUR 1.20 of which as at 31 December 2007 16,012,839
were issued and 1,000 million preference B shares with a par value of EUR 0.24 of which none were issued as at 31 December 2007.
As at 31 December 2008 no preference A shares or preference B shares were in issue. The movement in outstanding preference shares
is explained under Cancellation of preference shares.
The dividend on the preference A shares was equal to a percentage of the amount (including share premium) for which the preference
A shares were originally issued. This percentage was calculated by taking the arithmetic mean of the average effective yield on the five
longest-dated Dutch government loans, as determined by a Calculating Agent to be designated by the Executive Board for the last
20 stock exchange days preceding the day on which the first preference A shares are issued, or, as the case may be, preceding the day
on which the dividend percentage is adjusted. The percentage thus established could be increased or decreased by not more than
0.5 percentage points, depending on the market conditions then prevailing, as the Executive Board could decide with the approval of the
Supervisory Board. The dividend on the preference A shares for the financial years 2004-2013 was set at EUR 0.1582 per share per year.
Cancellation of preference shares
During 2008, ING Group repurchased 5,296,015 (depositary receipts for) preference A shares (2007: 57,016,572) at an average price of
EUR 3.60 per share or EUR 19.1 million in total (2007: EUR 3.64 per share or EUR 207.5 million). The preference A shares (for which the
depositary receipts were) thus repurchased and 10 million preference A shares for which the depositary receipts were acquired from
ABN AMRO in 2007, were cancelled in two blocks on 29 February 2008 and 4 September 2008 respectively.
The remaining 716,824 preference A shares were redeemed and cancelled in accordance with ING Groep N.V.’s Articles of Association
against payment of EUR 3.40 plus accrued dividend, effective 4 September 2008. From that date, there were no preference shares of ING
Groep N.V. outstanding anymore.
Pursuant to an amendment of ING Groep N.V.’s Articles of Association, effected on 8 October 2008, the authorised share capital of
ING Groep N.V. was adjusted in such a way that it no longer provided for preference A shares and/or preference B shares, so that such
shares may no longer be issued by ING Groep N.V.
Cumulative preference shares
Pursuant to the Articles of Association of ING Groep N.V. as amended on 8 October 2008, the authorised cumulative preference share
capital consists of 4.5 billion cumulative preference shares, of which none have been issued. The par value of these cumulative preference
shares is EUR 0.24.
The cumulative preference shares rank before the preference shares and the ordinary shares in entitlement to dividend and to
distributions upon liquidation of ING Groep N.V.
The dividend on the cumulative preference shares will be equal to a percentage, calculated on the amount compulsorily paid up or yet
to be paid up. This percentage shall be equal to the average of the Euro OverNight Index Average (EONIA) as calculated by the European
Central Bank. During the financial year for which the distribution is made, this percentage is weighted on the basis of the number of days
for which it applies, increased by 2.5 percentage points.
If and to the extent that the profit available for distribution is not sufficient to pay the dividend referred to above in full, the shortfall will
be made up from the reserves insofar as possible. If, and to the extent that, the dividend distribution cannot be made from the reserves,
the profits earned in subsequent years shall first be used to make up the shortfall before any distribution may be made on shares of any
other category.
ING Groep N.V.’s Articles of Association make provision for the cancellation of cumulative preference shares. Upon cancellation of
cumulative preference shares and upon liquidation of ING Groep N.V., the amount paid up on the cumulative preference shares will
be repaid together with the dividend shortfall in preceding years, insofar as this shortfall has not yet been made up.
Restrictions with respect to dividend and repayment of capital
ING Groep N.V. is subject to legal restrictions regarding the amount of dividends it can pay to the holders of its cumulative preference
shares, when issued. Pursuant to the Dutch Civil Code, dividends can only be paid up to an amount equal to the excess of the company’s
own funds over the sum of the paid-up capital, and reserves required by law.
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ING Group Annual Report 2008