RBS 2012 Annual Report Download - page 350

Corporate governance
The company is committed to high standards of corporate governance.
Details are given in the Corporate governance report on pages 294 to
342. The Corporate governance report and compliance report (pages 343
and 344) form part of this Report of the directors.
Share capital
Details of the ordinary and preference share capital at 31 December 2012
and movements during the year are shown in Note 26 on the
consolidated accounts.
Following approval at the Group’s Annual General Meeting on 30 May
2012, the sub-division and consolidation of the Group’s ordinary shares
on a one-for-ten basis took effect on 6 June 2012. The nominal value of
the ordinary shares was amended to £1. The sub-division and
consolidation of the Group’s ordinary shares resulted in the creation of
59,554,319,127 deferred shares of 15p each, which were cancelled on 6
June 2012.
In 2012, the company issued 326 million ordinary shares of 25p each
prior to the sub-division and consolidation and 62 million ordinary shares
of £1 each following the sub-division and consolidation, in connection
with employee share schemes.
On 10 September 2012, the Company announced the allotment and
issue of 52,661,227 new ordinary shares of £1 each with an aggregate
nominal value of £52,661,227 for the purpose of ensuring 2012 coupon
payments on discretionary hybrid capital securities were neutralised from
a Core Tier 1 capital perspective. The shares were allotted to UBS AG at
a subscription price of 227.87 pence per share determined by reference
to the average market price during the period in which the shares were
sold in the market following the Company’s interim results on 3 August
2012. The gross proceeds of the issue were £120 million. The share price
at close of business on 10 September 2012 was 253 pence per share.
Additional information
Where not provided elsewhere in the Report of the directors, the following
additional information is required to be disclosed by Part 6 of Schedule 7
to the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008.
The rights and obligations attaching to the company’s ordinary shares
and preference shares are set out in the company’s Articles of
Association, copies of which can be obtained from Companies House in
the UK or can be found on the Group’s website www.rbs.com
On a show of hands at a general meeting of the company every holder of
ordinary shares and cumulative preference shares present in person or
by proxy and entitled to vote shall have one vote. On a poll, every holder
of ordinary shares or cumulative preference shares present in person or
by proxy and entitled to vote shall have four votes for every share held.
The notices of Annual General Meetings and General Meetings specify
the deadlines for exercising voting rights and appointing a proxy or
proxies to vote in relation to resolutions to be passed at the meeting.
The cumulative preference shares represent less than 0.015% and the
non-cumulative preference shares represent less than 0.675% of the total
voting rights of the company respectively, the remainder being
represented by the ordinary shares.
There are no restrictions on the transfer of ordinary shares in the
company other than certain restrictions which may from time to time be
imposed by laws and regulations (for example, insider trading laws).
Pursuant to the Listing Rules of the FSA, certain employees of the
company require the approval of the company to deal in the company’s
shares.
The rules governing the powers of directors, including in relation to
issuing or buying back shares and their appointment are set out in the
company’s Articles of Association. It will be proposed at the 2013 Annual
General Meeting that the directors be granted authorities to allot shares
under the Companies Act 2006. The company’s Articles of Association
may only be amended by a special resolution at a general meeting of
shareholders.
A number of the company’s share plans include restrictions on transfers
of shares while shares are subject to the plans or the terms under which
the shares were awarded.
The rights and obligations of holders of non-cumulative preference
shares are set out in Note 26 on the consolidated accounts.
Except in relation to the Dividend Access Share, the company is not
aware of any agreements between shareholders that may result in
restrictions on the transfer of securities and/or voting rights. There are no
persons holding securities carrying special rights with regard to control of
the company.
Under the rules of certain employee share plans, eligible employees are
entitled to acquire shares in the company, and shares are held in trust for
participants by The Royal Bank and Ulster Bank Dublin Trust Company
as Trustees. Voting rights are exercised by the Trustees on receipt of
participants’ instructions. If a participant does not submit an instruction to
the Trustee no vote is registered.
The Royal Bank of Scotland plc 1992 Employee Share Trust, The Royal
Bank of Scotland Group plc 2001 Employee Share Trust and The Royal
Bank of Scotland Group plc 2007 US Employee Share Trust hold shares
on behalf of the Group’s employee share plans. The voting rights are
exercisable by the Trustees, however, in accordance with investor
protection guidelines, the Trustees abstain from voting. The Trustees
would take independent advice before accepting any offer in respect of
their shareholdings for the company in a takeover bid situation.
Awards granted under the company’s employee share plans may be met
through a combination of newly issued shares and shares acquired in the
market by the company’s employee benefit trusts.
A change of control of the company following a takeover bid may cause a
number of agreements to which the company is party to take effect, alter
or terminate. All of the company’s employee share plans contain
provisions relating to a change of control. Outstanding awards and
options may vest and become exercisable on change of control, subject
where appropriate to the satisfaction of any performance conditions at
that time and pro-rating of awards. In the context of the company as a
whole, these agreements are not considered to be significant.
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Report of the directors continued