ING Direct 2011 Annual Report Download - page 65

1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
The holder of a depositary receipt is entitled to receive from ING
Trust Office payment of dividends and other distributions
corresponding to the dividends and other distributions received
byING Trust Office on an ordinary share.
The Board of ING Trust Office currently comprises five members
who are independent from ING Group. No Executive Board
members or former Executive Board members, Supervisory Board
members or former Supervisory Board members, ING Group
employees or former ING Group employees or permanent advisors
or former permanent advisors are on the Board of ING Trust Office.
The Board of ING Trust Office appoints its own members, without
any requirement for approval by ING Group.
The Board of ING Trust Office reports on its activities through an
annual report, which has been included on pages 73–75.
ISSUANCE OF SHARES
ING Group’s authorised capital is the maximum amount of capital
allowed to be issued under the terms of the Articles of Association.
New shares in excess of this amount can only be issued if the
Articles of Association are amended. For reasons of flexibility, ING
Group seeks to set the authorised capital in the Articles of
Association at the highest level permitted by law.
Share issues are to be decided by the General Meeting, which may
also delegate its authority. Each year, the General Meeting is asked
to delegate authority to the Executive Board to issue new ordinary
shares or to grant rights to subscribe for new ordinary shares, both
with and without pre-emptive rights for existing shareholders. The
powers delegated to the Executive Board are limited:
• in time: powers are delegated for a period of 18 months;
• by number: insofar as sufficient unissued ordinary shares are
available in the authorised capital, ordinary shares may be issued
up to a maximum of 10% of the issued share capital, or, in the
event of a merger or takeover or to safeguard or conserve the
capital position of the Company, up to a maximum of 20% of
the issued capital; and
• in terms of control: resolutions by the Executive Board to issue
shares require the approval of the Supervisory Board.
Approval by the General Meeting would be required for any share
issues exceeding these limits.
The purpose of this delegation of authority is to allow the Company
to respond promptly to developments in the financial markets.
Without such delegation, if the Company wished to issue new
shares, there would be an increased risk that conditions in the
financial markets may have changed during the time needed for
convening a general meeting, especially as the statutory
convocation period was extended to 42 days. In view of the
importance of flexibility with respect to the issue of shares, the
Executive Board and the Supervisory Board will periodically evaluate
the delegation of authority to issue shares and, if necessary, make
adjusted proposals to the General Meeting.
TRANSFER OF SHARES AND DEPOSITARY RECEIPTS AND
TRANSFER RESTRICTIONS
Shares are transferred by means of a deed of transfer between the
transferor and the transferee. To become effective, ING Group has
to acknowledge the transfer, unless ING Group itself is a party to
the transfer. The Articles of Association do not restrict the transfer
of ordinary shares, whereas the transfer of cumulative preference
Meeting, the company is deemed to be in full compliance with
the Corporate Governance Code.
• Dutch law requires that the company’s external auditors be
appointed at the general meeting and not by the Audit
Committee.
• The articles of association of ING Group (‘Articles of
Association’) provide that there are no quorum requirements to
hold a general meeting, although certain shareholder actions
and certain resolutions may require a quorum.
• The shareholder approval requirements for equity compensation
plans under Dutch law and the Corporate Governance Code
differ from those applicable to US companies which are subject
to the NYSE’s listing rules. Under Dutch company law and the
Corporate Governance Code, shareholder approval is only
required for equity compensation plans (or changes thereto) for
members of the Executive Board and Supervisory Board, and not
for equity compensation plans for other groups of employees.
CAPITAL AND SHARES
CAPITAL STRUCTURE, SHARES
The authorised capital of ING Group consists of ordinary shares and
cumulative preference shares. Currently, only ordinary shares are
issued, while a call option to acquire cumulative preference shares
has been granted to ING Continuity Foundation (Stichting
Continuïteit ING). The acquisition of cumulative preference shares
pursuant to the call option is subject to the restriction that,
immediately after the issue of cumulative preference shares, the
total amount of cumulative preference shares outstanding may not
exceed one-third of the total issued share capital of ING Group (see
page 10). The purpose of the call option is to protect the
independence, the continuity and the identity of ING Group against
influences which are contrary to the interests of ING Group, its
enterprise and the enterprises of its subsidiaries and all stakeholders
(including, but not limited to, hostile takeovers). The ordinary shares
are not used for protective purposes. The ordinary shares, which
are all registered shares, are not listed on a stock exchange.
The Board of ING Continuity Foundation currently comprises four
members who are independent of ING Group. No Executive Board
members or former Executive Board members, Supervisory Board
members or former Supervisory Board members, ING Group
employees or former ING Group employees or permanent advisors
or former permanent advisors are on the Board of ING Continuity
Foundation. The Board of ING Continuity Foundation appoints its
own members, after consultation with the Supervisory Board of ING
Group, but without any requirement for approval by ING Group.
For more information on ING Continuity Foundation, see page 76.
DEPOSITARY RECEIPTS
More than 99.9% of the issued ordinary shares are held by ING
Trust Office. In exchange for these shares, ING Trust Office has
issued depositary receipts in bearer form for these shares. The
depositary receipts are listed on various stock exchanges (see page
10 for an overview of the listings). Depositary receipts can be
exchanged upon request of the holders of depositary receipts for
non-listed ordinary shares, without any restriction, other than
payment of an administrative fee of one eurocent (EUR 0.01)
per depositary receipt with a minimum of twenty-five euros
(EUR 25.00) per exchange transaction.
63ING Group Annual Report 2011
Corporate governance continued