Chapter III. Administration of the company.
Article 13. The company is governed and administered by a Board of Directors consisting of a minimum of eleven members and a maximum of twenty one, shareholders or otherwise, appointed and ratified by the General Shareholders’ Meeting, and who will be subjected to the legally established duties and, in particular, to those referring to the diligent administration, loyalty, fidelity and secrecy in the terms regulated by the current legislation at each moment.
Article 14. The current Spanish legal provisions shall be observed in electing Board Members.
Board Members shall occupy their positions during the period for which they were appointed of six years. They may be re-elected one or more times for periods of the same maximum length.
Should a vacancy arise for any reason, the Board may provisionally fill it from among the shareholders until the next General Shareholders’ Meeting, where a definitive appointment shall take place.
The appointment of the Board Members shall expire when the term has ended and the subsequent General Meeting has been held, or following the legal period within which the Meeting is to be held to resolve on whether to approve the financial statements for the previous year.
Article 15. The Board shall appoint, from among its members, a Chairman, and may also appoint one or two Vice-Chairmen, who shall maintain such functions until their termination, dismissal or resignation as Board Members, and they may always be re-elected.
A Secretary shall also be designated from among its members or from outside. If not a Board member, such Secretary would have the right to address the Board, but not to vote.
The Board, with the objective to guarantee the best management of the company will approve a set of Bylaws that will reflect the internal rules of the Board as well as its administration, in accordance with the law and the Bylaws. The General Shareholders´ Meeting will be notified of the existence of aforementioned Bylaws.
Article 16. The Board of Directors shall meet whenever the interests of the company so require, and will be convened by the Chairman or by a Deputy Chairman, either on his own initiative or on the request of two or more Directors. Its meetings shall be held in the company’s registered offices or in any other place designated in the notice of the meeting. For the Board Meeting to be valid, it must be attended, amongst those present and represented, by the majority of its members. Directors who are absent or unable to personally attend a meeting may cause themselves to be represented there and cast their vote by special delegation to another Director.
Director attendance of the meetings of the Board of Directors using distance means of communication will likewise be valid, provided that they allow all of the Directors attending to reciprocally recognise and identify each other, to be in permanent communication and to be able to intervene and cast their vote in real time. The Board of Directors meetings attended by Directors via distance means of communication in conformity with the provisions in this article will be deemed to be the same meeting, held at the place where the Chairman of the Board or the person acting as such attends the meeting. On the minutes of the meeting and on the certifications of the resolutions, the manner in which they are adopted must be stated.
Directors representing at least one third of the members of the Board may call a meeting, stating the Agenda and that it is to be held in the town where the registered address is located if, after requesting that the Chairman call the meeting, with no reason justifying his decision he has not called it within a term of one month.
In the event that, due to insufficient number of Directors present or represented, the Board were unable to meet validly, a new meeting would be convened and in the event that such meeting could not be validly held, the General Shareholders’ Meeting shall be convened by the Chairman or a Vice-Chairman in order to adopt the pertinent agreements, having been informed of the situation.
In order to be deemed valid, decisions require the agreement of the absolute majority of Directors attending the meeting, present or represented.
Article 17. The Board’s decisions shall be recorded in minutes which shall be written up in a special book. These shall be signed by the Chairman or whoever substitutes him and by the Secretary. The statements, copies and certifications of the Board’s Minutes shall bear witness and shall be deemed authentic, being authorised by the Secretary with the approval of the Chairman or of another Director executing his functions.
Article 18. The Board of Directors is granted the most extensive powers for representing the Company and administering its business, and for carrying out any operations comprised within its corporate object or relating thereto. Particularly, and without the list below limiting such extension of powers, it may execute the following actions:
a) Create, organize and direct the Company’s establishments and activities.
b) Issue and approve the system of internal rules and regulations, and appoint, suspend and dismiss the Directors, employees, agents and any personnel providing services to the Company, stipulate their functions and duties, and establish their salaries, wages and remunerations.
c) Claim and receive all and any cash sums, chattels, securities and any other payment in kind that must be handed over to the Company, regardless of whoever may be the persons and entities obliged to pay, including the State, provinces and districts, the nature and amount, denomination and origin of the obligations, liquidate accounts; establish and settle balances and formalize receipts and releases.
d) Appear and perform judicial acts before the Government and the Public Administration, before Authorities of all orders and categories, presenting all kinds of legitimate claims, following all the steps in such proceedings and events until a decision is obtained, in addition to any lawful legal remedy relating thereto, and cease and desist from claims and actions at any stage in the proceedings.
e) Represent the Company before Courts of all orders, classes and degrees, both actively and passively and to desist from actions in course.
f) Subscribe, with the Public Administration and with any public and private persons, any kind of contract relating to works, services and supplies, under any condition and form, therefore including those by competition and tender.
g) Approve and carry out purchases, sales, swaps, assignments, leases, subleases and any other acquisition and sale of real or personal property, credits, real and personal rights; to lay down, exercise and waiver preferential right to purchase and to redemption and any conditions relating to suspension, resolution and termination. Settle and compromise in arbitration and conciliation.
h) Accept, qualify, postpone and subrogate, divide, increase, reduce, constitute and cancel, wholly or partially, mortgages, leaseholds, easements, deposits, seizures, provisional notations and other liens, obligations and real or other rights and waiver any kind of action or privilege by means of payment or without such payment.
i) Contract loans or advances with or without interest, security, mortgage and other guarantees and under any kind of condition and to provide any kind of guarantee or counter-guarantee in favour of third parties. Nevertheless, loans by means of bond issues must be authorized by the General Shareholders' Meeting.
j) Constitute and withdraw deposits and guarantees, consignments, open, close and liquidate current and credit accounts in Banks or otherwise with or without guarantee under any kind of condition.
k) Issue, accept, endorse, discount, guarantee, collect and negotiate bills of exchange, promissory notes, mail transfers, cheques, invoices and other draft or trade documents.
l) Involve and interest the Company in the incorporation and operations of other Companies and enterprises, and represent it therein.
m) Determine the investment of available funds and the utilisation of reserves.
n) Determine overheads for Company Administration and the amount for ordinary and extraordinary amortizations; prepare the accounts, inventories, balance sheets and budgets, and draw up the reports to be submitted to the General Shareholders' Meeting at the end of each accounting period.
o) Propose the amount for dividends and agree upon the distribution of any amount by way of advance and credited against such dividends.
p) Convening the General Shareholders' Meeting and execute its decisions, except in the event of special delegation to one of the Directors or other any person.
q) And, in short, enact all matters relating to the interests of the Company and those concerning its disposition and administration .
Article 19. - The Board may institute an Executive Committee with the composition, organization and powers that it deems appropriate. It may also delegate its powers, wholly or partially, to one or more of its members, who shall assume the title of Managing Director.
It may also grant general and special powers to any person, for whatever matter it deems appropriate, relating to the administration and business that the Company carries out, of any nature.
In all cases included under this Article, the Board may also grant powers of substitution, either definitively or with limitations. Matters that cannot be delegated shall be the rendering of accounts and the presentation of the balance sheet to the General Shareholder's Meeting, nor the powers granted by such Meeting to the Board, unless specifically authorized by such Meeting.
Article 20. - The permanent delegation of some of the Board's powers to the Executive Committee or to the Managing Directors, and the appointment of such positions, in order to be valid, shall require the favourable vote of two thirds of the Board members, and shall not be deemed valid until registered at the Mercantile Registry.
Article 20 Bis. - An Audit Committee shall be constituted, whose composition, operation and functions shall be those described below.
Composition and operation
1.- It shall be made up by a minimum of three and a maximum of five members to be appointed and discharged by the Company’s Board of Directors from among its members. Under no circumstances may such appointment correspond to any person who is carrying out at that moment, or has carried out in the three immediately previous years, functions as executives or employees of the Company. At least one of the members of the Audit Committee shall be independent and shall be appointed on the basis of his or her knowledge and experience in accounting or auditing or both. The Chairman’s appointment, also to be carried out by the Board of Directors, shall necessarily correspond to one of the Company’s non-executive Directors, who may not remain in such position for a period in excess of four years, although he may, nevertheless, be re-elected after the term of one year has elapsed from the moment of termination.
2. - The Secretary to the Company Board of Directors shall attend its meetings, with a right to address the Committee but not to vote, and act as its Secretary.
3. - It shall only be deemed as constituted when attended by a majority of its members and it shall adopt its agreements by majority vote, the Chairman having the casting vote in the event of equalty.
4. - It shall meet when convened by the Chairman and, at least, twice a year coinciding with the initial and final stages of the audit of the Company's financial statements and of the consolidated accounts of its Business Group and always prior to issuing the corresponding audit reports. Meetings may be attended, when specially summoned, by the Auditor of the Company for the purposes of explaining the most significant aspects in the audits carried out.
1. - Report to the General Shareholders’ Meeting on the questions presented therein on matters of their authority.
2.- Monitor the effectiveness of the company’s internal control, internal audit., and if applicable, risk management systems, and discuss any significant weaknesses in the internal control system identified during the performance of the audit with the auditors or audit firms.
3.- Oversee the preparation and presentation of the regulated financial information.
4.- Propose to the Company’s Board of Directors, for submission to the General Shareholders’ Meeting, the appointment of auditors or audit firms in accordance with applicable law.
5 .-Establish the appropriate relationships with auditors or audit firms for the purpose of receiving information on any matter which may compromise their independence and any other matter relating to the process of auditing the accounts, in addition to any other communication laid down in Spanish legislation regarding auditing accounts and technical auditing standards. In any case, auditors and audit firms shall annually furnish the committee with written confirmation of their independence from the company or directly and indirectly related companies in addition to reporting any additional services of any type presented to these companies by the aforementioned auditors or firms, or related individuals or companies, in accordance with the provisions of current Spanish legislation.
6.- Annually and prior to the issuance of the auditors’ report, issue a report expressing an opinion on the independence of the auditors or audit firms. In any case, this report shall give an opinion on any of the above referred to additional services provided.
7.- Review and inform on the estimates made by Company management and of those companies comprised within its Group of Companies with respect to possible significant tax and legal contingencies
8.- Have knowledge of the results of inspections conducted by official entities.
9.- Any other matter which may be especially entrusted to it by the Board of Directors.
Article 21. - The Directors, provided that they comply with the commission received and the stipulations contained herein, undertake no personal obligation nor responsibility for the progress and outcome of business operations, except for those specifically provided for by the legislation in force.