AGM additional document
Banco Santander S.A.
09 May 2008
Explanatory report pursuant to Article 116 bis Spanish Securities Market Law
CORPORATE GOVERNANCE
PROPOSED DISTRIBUTION OF PROFIT
A total gross dividend of EUR 0.6508 per share to be paid out of 2007 profit
will be proposed for approval by the shareholders at the Annual General Meeting,
the detail being as follows: three interim dividends of EUR 0.122940 per share
and one of EUR 0.281961 per share. The first three were distributed in August
and November 2007 and in February 2008, and the fourth will be paid in May 2008.
With this fourth dividend, which, if the proposed distribution of profit to be
submitted to the Annual General Meeting is approved, will be the final dividend
paid out of 2007 profit, the total dividend will have increased by 25% with
respect to that paid out of 2006 profit.
In the first three interim dividends out of 2007 profit, a total of EUR 2,307
million were distributed, leaving EUR 1,763 million to be paid on or after the
aforementioned date.
SHARE CAPITAL AND TREASURY SHARES
Structure of the share capital and agreements in force relating to the possible
issuance of new shares or of debentures convertible into shares
At 31 December 2007, and at the date of preparation of this directors' report,
the share capital of Banco Santander, S.A. amounted to EUR 3,127.1 million,
represented by 6,254,296,579 fully subscribed and paid shares of EUR 0.50 par
value each, all of the same class and of a single series. All these book-entry
shares carry the same voting and dividend rights.
Also, securities issued during the year with a total nominal value of EUR 7,000
million, mandatorily convertible into newly-issued ordinary shares of the Bank,
were outstanding at 31 December 2007. These securities can be voluntarily
exchanged for shares of the Bank on 4 October 2008, 2009, 2010 and 2011, and
must be mandatorily exchanged on 4 October 2012. The reference price of the
Bank's share for conversion purposes was set at EUR 16.04 per share, and the
conversion ratio of the debentures is 311.76 shares for each debenture.
As approved by the shareholders at the Extraordinary General Meeting held on 27
July 2007, the authorised additional share capital amounts to EUR
1,563,574,144.5. The Bank's directors have until 27 July 2010 to carry out
increases under this authorisation. The limit available at any given time of the
aforementioned maximum amount shall be deemed to include the amount of any
capital increases that may be made to cater for the conversion of debentures
under Resolution Ten of the Annual General Meeting of 21 June 2003. This
resolution empowers the Board to fully or partially disapply the pre-emption
right in accordance with the terms of Article 159.2 of the Spanish Companies
Law.
In addition, Resolution Eight of the Bank's Annual General Meeting of 23 June
2007 authorised a capital increase of EUR 375 million and granted the Board the
broadest powers to set the date and establish the terms and conditions of this
capital increase, within one year from the date of the aforementioned Annual
General Meeting. If the Board does not exercise the powers delegated to it
within the aforementioned period, these powers will be rendered null and void.
Treasury shares policy and transactions involving treasury shares
The Annual General Meeting held on 23 June 2007 expressly authorised the Bank
and the Group subsidiaries to acquire shares representing the Bank's capital for
any consideration permitted by law, observing the legally-stipulated limits and
requirements, until they reach a maximum -including the shares already held by
them- of 312,714,828 shares or, as the case may be, a number of shares
equivalent to 5 per cent of the existing share capital at any give time, fully
paid, at a minimum price per share of the par value and a maximum price of up to
3% higher than the quoted price on the Continuous Market of the Spanish stock
exchanges (including the block market) at the acquisition date. This
authorisation, which can only be exercised within 18 months from the date of the
Annual General Meeting, includes the acquisition of the shares, if any, that
must be delivered to Company employees and directors either directly or as a
result of the exercise of options held by them.
At its meeting on 23 June 2007, the Board of Directors adopted the current
resolution on treasury share policy (which can be consulted on the Group's
website: www.santander.com). This resolution regulates the main aspects of
treasury share transactions, such as their purpose, the persons authorised to
conduct them, general guidelines, prices, time limits and reporting obligations.
This policy prohibits the use of treasury shares for golden parachute purposes.
At 31 December 2007, the Bank shares owned by the consolidated companies
accounted for less than 0.01% of the Bank's capital at that date. At 31 December
2006 and 2005, they represented 0.12% (0.15% including derivatives on own equity
instruments) and 0.08%, respectively.
The transactions with treasury shares performed in the Group's interest by the
consolidated companies in 2007 can be summarised as the acquisition of
611,138,902 shares, equivalent to a par value of EUR 305.6 million (cash amount
of EUR 8,473.0 million) and the sale of 618,404,917 shares, with a par value of
EUR 309.2 million (cash amount of EUR 8,570.5 million).
The average purchase price of the Bank's shares in 2007 was EUR 13.86 per share
and the average selling price was EUR 13.86 per share. The net gain in 2007 on
transactions involving treasury shares, amounting to EUR 5 million, was
recognised in the Group's equity under 'Shareholders' equity-Reserves'.
Restrictions on the free transferability of the shares
There are no legal or bylaw-stipulated restrictions on the transfer of shares
other than those set forth below.
As is the case with all other Spanish credit institutions, there are legal
restrictions on the transfer of shares, since Articles 57 and 58 of Law 26/1988,
of 29 July, on Discipline and Intervention of Credit Institutions apply to the
Bank. These articles provide that any acquisition of a significant ownership
interest in a credit institution must previously be notified to the Bank of
Spain, which in certain circumstances has a right to object to the acquisition.
Notwithstanding the foregoing, a description is provided below of a shareholder
agreement notified to the Bank which affects the free transfer of certain shares
of the Bank.
Restrictions on voting rights
There are no legal or bylaw-stipulated restrictions on voting rights.
In this respect, Article 15.1 of the bylaws stipulates that 'the holders of any
number of shares registered in their name in the corresponding accounting record
five days prior to the date on which the General Meeting is to be held and who
are current in their capital payments shall be entitled to attend the General
Meeting'.
Shareholder agreements
In February 2006 three directors, together with other shareholders of the Bank,
entered into a shareholder agreement that was notified to the Bank and to the
Spanish National Securities Market Commission (CNMV), and the document
witnessing the aforementioned agreement was filed at both the CNMV Registry and
the Cantabria Mercantile Registry.
The agreement, which was signed by Mr. Emilio Botin-Sanz de Sautuola y Garcia de
los Rios, Ms. Ana Patricia Botin-Sanz de Sautuola y O'Shea, Mr. Emilio
Botin-Sanz de Sautuola y O'Shea, Mr. Francisco Javier Botin-Sanz de Sautuola y
O'Shea, Simancas, S.A., Puente San Miguel, S.A., Puentepumar, S.L., Latimer
Inversiones, S.L. and Cronje, S.L. (Sole-Shareholder Company), provides for the
syndication of the Bank shares held by the signatories to the agreement or whose
voting rights have been granted to them.
The aim pursued by virtue of the syndication agreement, the restrictions
established on the free transferability of the shares and the regulated exercise
of the voting rights inherent thereto is to ensure, at all times, the concerted
representation and actions of the Syndicate members as shareholders of the Bank,
for the purpose of developing a lasting, stable common policy and an effective,
unitary presence and representation in the Bank's corporate bodies.
At the date of execution of the agreement, the Syndicate comprised a total of
44,396,513 shares of the Bank (0.710% of its capital). In addition, as
established in Clause One of the agreement, the syndication will be extended,
solely with respect to the exercise of the voting rights, to other Bank shares
held either directly or indirectly by the signatories, or whose voting rights
are assigned to them, in the future. Accordingly, at 31 December 2007, a further
19,875,320 shares (0.318% of the Bank's share capital) were included in the
Syndicate.
At any given time, the Chairman of the Syndicate is the person then presiding
over the Marcelino Botin Foundation, currently Mr. Emilio Botin Sanz de Sautuola
y Garcia de los Rios.
The members of the Syndicate undertake to syndicate and pool the voting rights
of all kinds inherent to the syndicated shares, so that these rights may be
exercised and, in general, the Syndicate members heading the Bank may act in a
concerted manner, in accordance with the instructions and indications and with
the voting criteria and orientation, necessarily unitary, issued by the
Syndicate, and, for this purpose, the representation of these shares is
attributed to the Chairman of the Syndicate as the common representative of its
members.
Except for transfers made in favour of other members of the Syndicate or the
Marcelino Botin Foundation, prior authorisation must be obtained from the
Syndicate Assembly, which may freely approve or refuse permission for the
planned transfer.
Significant direct and indirect ownership interests
At 31 December 2007, the share capital of the Bank was distributed among
2,278,321 shareholders.
The Bank's Shareholder Register showed the following shareholders with an
ownership interest of more than 3% in the share capital at 31 December 2007(*):
Chase Nominees Limited (10.80%), State Street Bank & Trust (8.13%) and EC
Nominees Ltd (5.85%). The Bank understands that the aforementioned entities hold
these interests in their capacity as international custodian/depository banks
acting for the account of third parties, and has no record of any individual
holding of more than 3% in the Bank's share capital or voting rights.
(*)Threshold stipulated, for the purposes of the Annual Corporate Governance
Report, in Royal Decree 1362/2007, of 19 October.
The table below includes the direct and indirect holdings of the members of the
Bank's Board of Directors and the ownership interests represented by them at 31
December 2007, per the Bank's Official Shareholder Register:
Number of Number of Number of Total shares Total as %
shares held shares held shares of share
directly indirectly represented capital
Directors
Mr. Emilio Botin-Sanz de Sautuola y 1,638,812 27,042,993 107,949,897 136,631,702 2.506
Garcia de los Rios (1)
Mr. Fernando de Asua Alvarez 25,616 40,000 --- 65,616 0.001
Mr. Alfredo Saenz Abad 365,163 1,243,532 --- 1,608,695 0.026
Mr. Matias Rodriguez Inciarte (3) 555,617 65,300 61,444 682,361 0.011
Mr. Manuel Soto Serrano --- 250,000 --- 250,000 0.004
Assicurazioni Generali S.p.A 13,885,264 67,847,477 --- 81,732,741 1.307
Mr. Antonio Basagoiti Garcia-Tunon 530,000 --- --- 530,000 0.008
Ms. Ana Patricia Botin-Sanz de Sautuola y 4,977,423 4,024,306 --- 9,001,729 0.000
O'Shea (1)
Mr. Javier Botin-Sanz de Sautuola y 4,793,481 6,300,000 --- 11,093,481 0.000
O'Shea (1) (2)
Lord Burns (Terence) 100 27,001 --- 27,101 0.000
Mr. Guillermo de la Dehesa Romero 100 --- --- 100 0.000
Mr. Rodrigo Echenique Gordillo 651,598 7,344 --- 658,942 0.011
Mr. Antonio Escamez Torres 559,508 --- --- 559,508 0.009
Mr. Francisco Luzon Lopez 44,195 1,298,544 --- 1,342,739 0.021
Mr. Abel Matutes Juan 99,809 86,150 --- 185,959 0.002
Mr. Luis Angel Rojo Duque 1 --- --- 1 0.000
Mr. Luis Alberto Salazar-Simpson Bos 131,312 19,464 --- 150,776 0.002
Ms. Isabel Tocino 1,545 --- --- 1,545 0.000
28,259,544 108,252,111 108,011,341 244,522,996 3.910
(1) Mr. Emilio Botin-Sanz de Sautuola y Garcia de los Rios has been
attributed the voting rights of 90,715,628 shares owned by the Marcelino Botin
Foundation (1.45% of the share capital), 8,096,742 shares held by Mr. Jaime
Botin-Sanz de Sautuola y Garcia de los Rios, 96,047 shares held by Ms. Paloma
O'Shea Artinano, 9,041,480 shares held by Mr. Emilio Botin-Sanz de Sautuola y
O'Shea, 9,001,559 shares held by Ms. Ana Patricia Botin-Sanz de Sautuola y
O'Shea and 11,093,481 shares held by Mr. Javier Botin-Sanz de Sautuola y O'Shea.
Therefore, although the table above shows the direct and indirect ownership
interests of each of the two last-mentioned directors of the Entity, these
holdings, in the column relating to the total percentage of share capital held,
are included together with those belonging to or also represented by Mr. Emilio
Botin-Sanz de Sautuola y Garcia de los Rios.
(2) Mr. Javier Botin-Sanz de Sautuola y O'Shea has the status of a nominee
director, since he represents on the Board the 2.506% of the share capital
relating to the holdings of the Marcelino Botin Foundation, Mr. Emilio
Botin-Sanz de Sautuola y Garcia de los Rios, Ms. Ana Patricia Botin-Sanz de
Sautuola y O'Shea, Mr. Emilio Botin-Sanz de Sautuola y O'Shea, Mr. Jaime
Botin-Sanz de Sautuola y Garcia de los Rios, Ms. Paloma O'Shea Artinano and his
own holding.
(3) Mr. Matias Rodriguez Inciarte has been attributed the voting rights of
61,444 shares owned by his children.
Additionally, at its meeting on 28 January 2008, the Board of Directors of Banco
Santander, S.A. resolved to appoint Mr. Juan Rodriguez Inciarte as a director of
the Bank to fill, by co-optation, the vacancy that resulted from the decision of
Mutua Madrilena Automovilista to stand down from the Board. This appointment
will be submitted for ratification by the shareholders at the Annual General
Meeting scheduled to take place at first and second call on 20 and 21 June,
respectively. At 31 December 2007, Mr. Juan Rodriguez Inciarte held 577,740
shares of the Bank (direct ownership interest).
BOARD OF DIRECTORS
Rules governing the appointment and replacement of members of the Board of
Directors and the amendment of the Bylaws
The most significant regulations governing the procedures, criteria and
competent bodies for the appointment, re-election and renewal of directors are
contained in various provisions of the Spanish Companies Law, the Regulations of
the Mercantile Registry, the Bank's bylaws (Articles 28.II, 30 and 31) and the
Regulations of the Board of Directors (Articles 16 and 20 to 24).
Also of relevance in this connection is the legislation governing the creation
of credit institutions.
Following is a description of the most relevant features of the framework
resulting from all the aforementioned provisions:
- Number of directors and term of office:
The bylaws (Article 30) provide for a maximum of 22 directors and a minimum of
14 directors. The Bank's Board is currently composed of 19 directors.
The term of office of a director is five years, although directors can be
re-elected. Directors designated by co-optation and ratified at the earliest
subsequent General Meeting shall cease to hold office on the same date as that
on which their predecessors would have done so.
- Competence and procedure for appointment:
Responsibility for the appointment and re-election of directors lies with the
General Meeting. Nevertheless, in the event that directors vacate their office
during the term for which they were appointed, the Board of Directors may
provisionally designate another director until the shareholders, at the earliest
subsequent General Meeting, either confirm or revoke this appointment.
Proposals for the appointment, re-election and ratification of directors
submitted by the Board of Directors to the General Meeting and decisions adopted
by the Board itself by virtue of its co-optation powers must be preceded by the
related proposal from the Appointments and Remuneration Committee. If the Board
objects to the Committee's proposal, it must give the reasons for its decision
and place these reasons on record.
The directors whose appointment, re-election, ratification or removal has been
proposed shall refrain from participating in the deliberations and ballots of
the Board and of the Committee.
The rules applicable for the amendment of the bylaws do not establish more
exacting conditions than those stipulated by law and, accordingly, the
requisites established in the Spanish Companies Law shall apply.
- Appointment requisites and restrictions:
It is not necessary to be a shareholder in order to be appointed a director,
except when this is legally required in the case of provisional appointment by
the Board (co-optation) referred to above. The following persons may not hold
the office of director: undischarged bankrupt traders and non-traders, minors
and the incapacitated, persons sentenced to penalties disqualifying them from
holding public office, those sentenced for gross breach of the law or of social
provisions, persons barred from trading and government employees who discharge
functions related to the Bank's specific activities. Directors must be persons
of renowned commercial and public integrity, competence and solvency. There is
no age limit for directors.
Candidates to be proposed for the position of director will be selected on the
basis of whether they are persons of renowned solvency, competence and
experience, and, furthermore, particular importance will be attached, where
appropriate, to the size of their shareholdings in the Bank's capital.
Individuals representing legal-entity directors are subject to the same
requirements as individual directors.
On taking office, the designated directors must formally agree to fulfil all the
obligations and perform all the duties inherent to the position.
- Proportional system:
Shares pooled to form an amount of share capital equal to or greater than that
which results from dividing the total share capital by the number of board
members will carry entitlement to designate, on the legally-stipulated terms, a
proportionate number of directors, disregarding fractions.
- Vacation of office or removal:
Directors shall cease to hold office when the term for which they were appointed
elapses, unless they are re-elected, when the General Meeting so resolves, or
when they resign or place their office at the disposal of the Board.
Directors must place their office at the disposal of the Board and tender the
related notice of resignation if the Board, after receiving the report of the
Appointments and Remuneration Committee, should deem this appropriate, in those
cases in which the directors might have an adverse effect on the functioning of
the Board or on the Bank's credibility and reputation and, in particular, when
they are subject to any incompatibility or prohibition provided for by law that
would bar them from holding office.
Furthermore, the directors must, at their earliest convenience, notify the Board
of any circumstances which might jeopardise the Bank's credibility and
reputation and, in particular, of any lawsuits in which they are involved as
accused parties.
Lastly, the Board Regulations (Article 22.2) specifically provide that
non-executive nominee directors must tender their resignations, in the
appropriate number, when the shareholder they represent disposes of, or
significantly reduces, its ownership interest.
Powers of the General Meeting and of the Board of Directors
The powers of the General Meeting and of the Board of Directors of the Bank are
governed by current legislation and the Bank's bylaws, the Regulations of the
General Meeting and those of the Board, which can be consulted on the Group's
website at www.santander.com.
Following is a summary of the most noteworthy features:
- Powers of the General Meeting
As provided for in Article 28 of the bylaws, the General Meeting is authorised
to adopt all manner of resolutions concerning the Bank, and is reserved, in
particular, the following powers:
I. To approve a set of regulations for the General Meeting which, subject to the
provisions of the law and the Bank's bylaws, governs the procedures for calling,
preparing and informing a General Meeting, the attendance and conduct thereof,
and the exercise of voting rights when a General Meeting is called and held.
II. To appoint and remove the members of the Board of Directors, and to ratify
or revoke the provisional appointments of directors made by the Board itself,
and to scrutinize and approve the conduct of the directors' activities.
III. To appoint the auditors.
IV. To approve, if appropriate, the financial statements; to decide on the
distribution of profit; and to approve, if appropriate, the consolidated
financial statements.
V. To resolve to issue debentures, increase or reduce capital, transform, merge,
spin off or dissolve the Bank and, in general, make any amendment to the bylaws.
VI. To authorise the Board of Directors to increase share capital, as provided
for in Article 153.1.b of the Spanish Companies Law.
VII. To grant the Board of Directors such powers as it might deem advisable in
the event of unforeseen circumstances.
VIII. To decide on any matters submitted to it by resolution of the Board of
Directors.
IX. To decide on the application of share or share-option based remuneration
systems and of any other remuneration system linked to the value of the Bank's
share, irrespective of the eventual beneficiaries of such remuneration systems.
X. To resolve to subsidiarise or contribute to subsidiaries the Bank's operating
assets, thus converting the Bank into a mere holding company.
XI. To approve, as appropriate, the acquisition or disposal of assets when, in
view of their quality and volume, they entail an effective change in the company
objects.
XII. To resolve to conduct transactions whose effect is equivalent to the
liquidation of the Bank.
- Powers of the Board of Directors
As established in Article 29 of the bylaws, the Board of Directors is
responsible for managing, administering and representing the Bank in all the
activities included in its company objects, using the powers attributed to it by
law and the Bank's bylaws. With the exception of the powers conferred by the
bylaws upon the General Meeting, and as provided for in Article 37 of the
bylaws, the Board of Directors has the broadest powers to manage, administer and
represent the Bank. Consequently, it may adopt all manner of resolutions and
take such action and enter into such agreements as it may deem appropriate in
order to attain the corporate goals, at all times in observance of prevailing
legislation.
The Board Regulations (Article 3) establish that, except with respect to matters
for which the General Meeting has sole responsibility, the Board of Directors is
the Bank's senior decision-making body.
Without prejudice to the foregoing, the Board delegates the conduct of the
Bank's ordinary operations to the executive bodies (mainly the Executive
Committee) and to the management team, and itself focuses on the general
supervisory function, directly assuming and exercising, on a non-delegation
basis, the responsibilities that this function entails, including most notably
the following:
a) Approval of the Bank's general policies and strategies, in particular:
(i) Strategic plans, management targets and annual budget;
(ii) Dividend and treasury share policy;
(iii) General risk policy;
(iv) Corporate governance policy;
(v) Corporate social responsibility policy;
b) Approval of shareholder, market and public reporting and communication
policies. The Board is responsible for furnishing the markets with swift,
accurate and reliable information, above all that relating to the shareholder
structure, to substantial changes in governance rules, to particularly
significant related party transactions or to treasury shares.
c) Approval of the financial information that the Bank must periodically
publish.
d) Approval of transactions involving the acquisition and disposal of
substantial Bank assets and major corporate transactions, unless such approval
is to be given by the General Meeting, in conformity with Article 28 of the
bylaws.
e) Approval, within the framework of Article 38 of the Bank's bylaws, of the
remuneration for each director.
f) Approval of the agreements regulating the performance by the directors of
duties other than those of a director and the remuneration corresponding to them
for discharging executive functions.
g) Appointment, remuneration and, where appropriate, removal of the other senior
executives and definition of the basic terms and conditions of their contracts.
h) Control of management activity and evaluation of executives. i) Authorisation
to create or acquire holdings in special purpose vehicles or entities domiciled
in countries or territories deemed to be tax havens.
j) The responsibilities specifically provided for in the Board Regulations.
The powers detailed in sections (c), (d), (e), (f), (g), and (i) may be
exercised, when advisable for reasons of urgency, by the Executive Committee,
provided the Board is subsequently informed at the earliest meeting held.
- Board of Directors Committees
The Board has set up, as decision-making committees, an Executive Committee, to
which general decision-making powers have been delegated, and a Risk Standing
Committee, to which specific risk-related powers have been delegated.
Also, the Board has a series of other committees with supervisory, reporting,
advisory and proposal powers, namely the Audit and Compliance Committee, the
Appointments and Remuneration Committee, the International and Technology
Committee and the Productivity and Quality Committee.
Following is a summary of the rules governing the organisation and operation of
the Executive Committee and the Risk Standing Committee.
Executive Committee
The Executive Committee, regulated in Article 39 of the bylaws and Article 13 of
the Board Regulations, has been delegated all the powers of the Board of
Directors, except for those not delegable by law and those listed below.
a) Approval of the Company's general policies and strategies, in particular:
(i) Strategic plans, management targets and annual budget;
(ii) Dividend and treasury share policy;
(iii) General risk policy;
(iv) Corporate governance policy;
(v) Corporate social responsibility policy.
b) Approval of shareholder, market and public reporting and communication
policies. The Board is responsible for furnishing the markets with swift,
accurate and reliable information, above all that relating to the shareholder
structure, to substantial changes in governance rules, to particularly
significant related party transactions or to treasury shares.
c) Control of management activity and evaluation of executives.
d) Together with the powers pertaining to the Board in relation to its
composition and modus operandi, the remuneration and duties of directors, the
hiring of technical assistance for directors, and the Board's relations with
shareholders, the markets and the auditor.
As indicated in the 'Powers of the Board of Directors' section, when reasons of
urgency so advise, certain of these powers may be exercised by the Executive
Committee, provided the Board is subsequently informed at the earliest meeting
held.
The Executive Committee shall comprise a maximum of twelve directors. The
Chairman of the Board of Directors will at all times be one of the members of
the Executive Committee, which he will preside. This Committee proposes to the
Board the decisions for which it has sole responsibility. Furthermore, the
issues addressed and the resolutions adopted by the Executive Committee are
placed on record and at each Board meeting the minutes of the Executive
Committee meetings held since the Board last convened are furnished to the
directors for their perusal.
Risk Standing Committee
The Risk Standing Committee is regulated in Article 14 of the Board Regulations.
It shall comprise a minimum of four and a maximum of six directors and shall be
presided over by a deputy chairman with executive functions.
This Committee has been permanently delegated the following powers of the Board
of Directors:
a) To decide on the granting of loans, the opening of credit accounts and risk
transactions in general, as well as on their modification, assignment and
cancellation, and on global risk management -country risk, interest rate risk,
credit risk, market risk, operational risk, treasury risk, derivatives risk-,
and to determine and approve the general and specific conditions of discounting
facilities, loans, deposits, guarantees and banking transactions of all kinds.
b) To arrange, modify, subrogate to and terminate finance lease agreements for
all manner of movable property and real estate, on the terms and conditions
freely determined by it, and to acquire the assets leased under such agreements,
with no limitation as to their amount or quantity.
c) As security for the obligations of third parties, and on their behalf,
whether they be individuals or legal entities, with no limitation as to the
amount, vis-a-vis all manner of individuals and legal entities, public or
private agencies or bodies, specifically for the purposes of the Public
Authority Contracts Law and supplementary provisions thereto, and with such
conditions and clauses as it may deem appropriate, the Committee may arrange,
modify, withdraw or cancel guarantees of any kind or any other type of security,
by making, as appropriate, any cash or securities deposits that may be required
of it, with or without security, and may bind the Company, even jointly and
severally with the principal debtor, thereby waiving the benefits of order,
discussion and division.
Per Article 14.3 of the Board Regulations, its functions are as follows:
a) To propose to the Board the risk policy for the Group, which will include in
particular:
(i) The various types of risk (operational, technological, financial, legal and
reputational, inter alia) facing the Group, including contingent liabilities and
other off-balance-sheet items in the financial or economic risks;
(ii) The information and internal control systems to be used to control and
manage the aforementioned risks;
(iii) The level of risk deemed acceptable by the Group;
(iv) The measures envisaged to mitigate the impact of the identified risks in
the event that they materialise;
b) To conduct systematic reviews of the Group's exposure to its main customers,
economic activity sectors, geographical areas and types of risk.
c) To ascertain and authorise, where appropriate, the management tools,
improvement initiatives, project development and any other significant risk
control actions, specifically including the characteristics and behaviour of the
internal risk models and the result of their internal valuation.
d) To assess and implement the indications issued by the supervisory authorities
in the performance of its functions.
e) To ensure that the Group's actions are consistent with the previously
established level of risk tolerance and to empower lower-ranking committees or
executives to assume risks.
f) To decide on transactions outside the powers delegated to lower-ranking
bodies and on the overall limits for pre-classified risk categories in favour of
economic groups or in relation to exposure by type of risk.
SIGNIFICANT AGREEMENTS ENTERED INTO BY THE COMPANY WHICH WILL COME INTO FORCE,
BE MODIFIED OR TERMINATE IN THE EVENT OF A CHANGE IN CONTROL OF THE COMPANY
RESULTING FROM A TAKEOVER BID
No such agreements exist.
AGREEMENTS BETWEEN THE COMPANY AND ITS DIRECTORS, MANAGEMENT PERSONNEL OR
EMPLOYEES WHICH PROVIDE FOR TERMINATION BENEFITS WHEN THE LATTER RESIGN OR ARE
DISMISSED WITHOUT JUSTIFICATION OR IF THE EMPLOYMENT RELATIONSHIP ENDS AS A
RESULT OF A TAKEOVER BID
In addition to those described in Note 5 for executive directors, the Bank has
established certain termination benefit clauses in favour of its non-director
senior executives. Had the aforementioned circumstance arisen on 31 December
2007, it would have given rise to termination benefits totalling EUR 79.6
million for these executives.
24 March 2008.
This information is provided by RNS
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