Chapter IV. General shareholders' meeting.
Article 22. - The General Shareholders' Meeting is the principal governing body of the Company and its decisions, adopted in accordance with the provisions herein, are deemed obligatory for all shareholders, including those absent, dissenting and abstaining.
Meetings shall take place on the day and in the place stipulated in the notification, in the town where the company has its registered address. However, the General Meeting may be held at any other place in the Spanish territory or abroad if the Board of Directors so establishes it when calling the meeting.
The General Shareholders’ Meeting may be attended either at the venue where the meeting is going to be held or, as the case may be, at other places provided by the company, stating them in the notice, which are connected with the first venue by means of any valid systems allowing the recognition and identification of the attendants, the permanent communication between those present regardless of where they are located, as well as the intervention and casting of votes, all in real time. The main venue must be located within the municipal district stated in the notice as the place where the Meeting will be held, but this is not necessary for the ancillary venues. The attendants at any of the places will be considered, for all purposes in respect of the General Shareholders’ Meeting, as attendants of one same meeting. The meeting will be deemed to have been held at the place where the main venue is located.
The General Shareholders’ Meeting will approve its own Regulations of Operation.
Article 23. - The General Shareholders' Meeting shall be made up of all holders of at least a hundred shares, either present or represented. The owners or holders of less than a hundred shares may group together to complete this number, and cause themselves to be represented either by one of such group, or by another shareholder that owns by himself the necessary number of shares to participate in the general Meeting.
Article 24. - The Annual General Shareholders’ Meeting, previously called for this purpose, shall meet once a year, within the first calendar semester, to audit the company’s management, approve the accounts of the foregoing period and to decide upon the distribution of profit.
The Annual General Shareholders’ Meeting shall be valid even if called or held out of term.
It shall also meet extraordinarily whenever agreed by the Board of Directors, on its own initiative or at the request of one or more shareholders who represent at least five percent of the paid-up capital, such request stipulating the matters to be discussed in the Meeting. In this case, the Meeting shall be convened to be held within the two months subsequent to the date on which the directors were required by notary for such purpose, and the agenda shall necessarily include the matters which gave rise to the request. Should the General Shareholders’ Meeting fail to be convened within the period established by law or the Company’s Bylaws, a, the meeting may be called upon the request of any shareholder, by the corresponding Commerc2ial Court Judge for the area in which the company has its registered office after a hearing of the directors. Should the directors fail to attend to the request by the minority to convene a General Shareholders’ Meeting in a timely manner, a meeting may be called by the Commercial Court Judge for the area in which the company has its registered office after a hearing of the directors.
In the event of the request for a court ordered meeting, judges shall hand down a judgment within one month from the date of the request and if agreed, freely appoint the chairman and secretary of the meeting. A judge’s decision to order a meeting to be called may not be appealed. The costs relating to the court ordered calling of the meeting shall be borne by the company. In the event of the death or resignation of the majority of the members of the Board of Directors, if there are no substitutes, any shareholder may request the Commercial Court Judge for the area in which the company has its registered office to call a General Shareholders’ Meeting for the purpose of appointing directors. In addition, any of the members still in office may call a General Shareholders’ Meeting for this sole purpose.
Article 25. -Annual or Extraordinary General Shareholders’ Meetings shall be convened, following a resolution of the Board of Directors, by the Chairman of the Board of Directors or in his absence by a Deputy Chairman, or by the Secretary, by means of notice published in the Official Gazette of the Mercantile Registry or in one of the most widely circulated daily newspapers in Spain, on the website of the Spanish National Securities Market Commission and on the Company’s website, at least one month before the date stipulated for it to be held, or in any other manner and time period laid down under current Spanish legislation. An Extraordinary General Meeting may be called with just fifteen days’ notice in the cases and with the requirements provided by law.
The announcement shall stipulate the date of the meeting date at first call and all matters to be discussed, in addition to the indications required by law. Furthermore, it may specify the date on which, when relevant, the Meeting shall be held at second call. A period of at least twenty-four hours must elapse between the first and the second meeting.
Shareholders with shares representing at least five percent of the share capital may request that a supplement to the call notice of the Annual General Shareholders’ Meeting be published including one or more items to be put on the Agenda. This right is required to be exercised by authenticated means and is required to be received at the registered office within five days following publication of the notice of the meeting. Supplements to the notice should be published at least fifteen days prior to the date set for the meeting.
Also, shareholders representing at least five percent of the share capital, within the same term stated in the preceding paragraph, may submit grounded resolution proposals on matters already included or to be included on the Agenda of the Meeting that has been called. The company will ensure the dissemination of these resolution proposals and of the documentation which, as the case may be, is attached on its website, from the moment they are received and without interruption.
In the case of attendance at the Meeting via telematic means duly guaranteeing the identity of the subject, the notice of the meeting shall state the deadlines, manners, and methods for exercising the shareholders' rights stipulated by the Board of Directors to enable the Meeting to progress in an organized manner. Specifically, the Board of Directors may determine that the opinions and proposed resolutions that, according to the law, the shareholders attending the meeting via telematic means plan to make should be sent to the company prior to the time at which the Meeting is held. Replies to any of the above shareholders who exercise their right to information during the meeting, shall be provided in writing within seven days following the date of the meeting.
Notwithstanding the above, the Meeting shall be validly constituted to discuss any matter provided that representation of the entire share capital is in attendance, and unanimously agrees to hold such Meeting.
Article 26. - General Shareholders' Meetings shall be chaired by the Chairman, or in his absence by a Vice-Chairman, and the Secretary to the Board of Directors shall act as its Secretary. The Shareholders’ Meeting may agree that the chairman and secretary of each Meeting be freely appointed at each Meeting. Agreements shall be adopted by majority vote of shareholders, whether present or represented, except in cases where the legislation in force requires a qualified majority. Each shareholder shall be entitled to as many votes as shares he owns or represents, which can be entrusted through postal correspondence or telegraph or any other remote means of communication, as long as the identity of the party bestowing the shares can be guaranteed through these procedures. Shareholders with a right of attendance may cause themselves to be represented in the Meeting by any person. Representation conferred by shareholders only entitled to vote by grouping together may correspond to any person among them.
Any shareholder that is entitled to attend may cause themselves to be represented at the Meeting by means of another person. Representation must be especially conferred in writing or by electronic means. The company will establish the system for the electronic notification of the appointment, with the necessary and proportionate formal requirements to guarantee the identification of the shareholder and the proxy or proxies appointed by the former. Proxies are to be appointed specifically for each Shareholders Meeting, in accordance with the conditions and scope laid down by the Spanish Limited Liability Companies Law, except in the case of a spouse, an ascendant or descendant relative of the represented shareholder or an attorney with general powers, registered with official notary, to administer the entire assets that the represented shareholder owns within national territory.
Proxies shall always be revocable, and the revocation must be documented and communicated to the company by the means described in the preceding paragraph.
If instructions have been given by the shareholder who is represented, the proxy will vote in accordance with same and will under the obligation of conserving those instructions during one year following the relevant General Meeting.
The proxy may represent more than one shareholder, with no limitations regarding the number of shareholders represented. When a proxy represents several shareholders, different votes may be cast according to the instructions given by each shareholder.
In any event, the number of shares that are represented will be counted in order to determine that there is a quorum for the Meeting.
Prior to the appointment, the proxy must provide the shareholder with detailed information regarding whether there is a situation of conflict of interest. If the conflict arises after the appointment and the represented shareholder was not warned of the possible existence thereof, the shareholder must be informed immediately. In either case, if precise new instructions are not given for each one of the matters on which the proxy must vote on behalf of the shareholder, the proxy must refrain from voting. In particular, there may be a conflict of interest when the proxy is in any of these situations:
a) He/she is a controlling shareholder of the company or an entity controlled by it.
b) He/she is a member of the board of directors, the management board or the supervisory board of the company or of the controlling company or of an entity controlled by it.
c) He/she is an employee or an auditor of the company, of the controlling company or of an entity controlled by it.
d) He/she is a natural person related to the foregoing. Related natural persons are deemed to be: the spouse or the person’s spouse in the two prior years, or persons cohabiting with a similar relationship of affection or persons who cohabited regularly during the two prior years, as well as the ascendants, descendants, siblings and their respective spouses.
Personal attendance by the represented shareholder at the Meeting shall be equivalent to such revocation.
Article 27. - In order to exercise right of attendance at the General Shareholders' Meeting, ownership of the shares must be registered in the corresponding book entries at least 5 days of advance of the date on which the Meeting is to take place.
Article 28. - Shareholders may request, in writing up to the seventh day before the date of the General Shareholders’ Meeting, or verbally during such Meeting, such reports or explanations as they deem necessary relating to the matters included on the agenda. Equally, the shareholders can request information or clarifications or formulate questions in writing regarding publicly accessible information which has been presented by the company to the Spanish National Securities Market Commission (CNMV) as of the last General Shareholders Meeting and regarding the audit report. Directors shall be obliged to provide the aforementioned information in the format, time period and any other established legal conditions, with the exception of the situation where the Chairman, in his judgement: (i) considers the publication of the requested information to conflict with company interests; or it must be done pursuant to legal or regulatory provisions. Such exception shall not apply when the request is backed by shareholders who represent, at least, a quarter of the capital.
Directors will not be under the obligation of replying to specific questions of the shareholders when, prior to those questions being asked, the requested information is clearly and directly available for all shareholders on the company website in a Q&A format.
Article 29. - An Ordinary or Extraordinary General Shareholders' Meeting shall be validly constituted, at first call, when the shareholders present or represented own at least twenty-five percent of the subscribed share capital with a right to vote; at second call, the constitution of the Meeting shall be valid regardless of the capital concurrent at such Meeting.
Notwithstanding the above, in order for Ordinary and Extraordinary General Shareholders’ Meetings to be able to validly agree upon capital increases or reductions or any other amendment of the Company Bylaws; the elimination or limitation of the right of first refusal of new shares; the transformation, merger or division of the Company; the assignment en bloc of assets and liabilities or the transfer of the registered office to a foreign country, shareholders representing at
least fifty percent of subscribed share capital with a right to vote must be present or represented at first call. At second call, twenty-five percent of such capital shall be sufficient.
When shareholders representing at least fifty percent of the subscribed share capital with a right to vote are in attendance, the agreements described in the paragraph above may only be validly adopted with the favourable vote of two-thirds of the capital present or represented at the Meeting.
Article 30. - Ordinary General Meetings shall have exclusive authority to audit the Company's administration and to approve, where appropriate, the accounts of the foregoing period and to decide upon the application of results.
Article 31. - Any other matters - which are not those covered in the preceding Article - reserved by law or bylaw under the authority of the General Shareholders' Meeting, may be decided by such Meeting ordinarily or extraordinarily, pursuant to the applicable legal requirements.
Article 32. - The decisions of the Meetings, with a summary of matters discussed and of such interventions for which a written record has been requested, shall be registered in Minutes, in accordance with the legal requirements, which shall be signed by the Chairman and the Secretary or whosoever may have substituted them. The Minutes of Meetings may be approved by the Meeting itself subsequent to being held or, in the absence of such approval, within a period of fifteen days, by the Chairman and two controllers, one representing the majority and another the minority.
Minutes approved in any of these two ways shall be effective as of the date of their approval.
Certifications of the Minutes and the agreements of General Shareholders’ Meetings shall be issued by the Secretary to the Board of Directors, and in his absence, by the persons empowered to do so hereby and by the Regulations of the Mercantile Registry, and with the approval of the Chairman or, where appropriate, of the Vice-Chairman of the Board itself.
Article 33. - The financial year shall coincide with the calendar year.
The Board of Directors is required to prepare the financial statements, directors’ report and proposed distribution of profit within three months following the end of the financial year. The financial statements shall comprise the balance sheet, income statement, statement of changes in equity, statement of cash flows and the notes to the financial statements. These documents, which are to constitute a unit, shall be drawn up clearly and shall present fairly the Company’s equity and financial position and the results of its operations, in accordance with Spanish law and the Commercial Code and shall be signed by all directors.
Article 34. - Ordinary General Shareholders' Meetings shall decide upon the application of the period's results, in accordance with the approved Balance Sheet. From the profits earned in each period, once the allowance for legal reserve and other considerations laid down by law, and the amount corresponding to the payment of the minimum dividend of one percent to those, where appropriate, non-voting shares, have been covered in accordance with the provisions of the Article 6 herein, the Meeting may apply whatever it deems appropriate for voluntary reserve and any other consideration permitted by law.
The remainder, where relevant, shall be distributed as dividends among ordinary shareholders, in the quantity agreed by the General Shareholders' Meeting, and in proportion to the capital paid up for each share and to payment of the statutory remuneration of the Board laid down in the following paragraph, in compliance with the legal requirements.
The Board of Directors shall be jointly entitled to a remuneration, in addition to the fees and allowances agreed by the General Shareholders' Meeting, for statutory participation, not in excess of ten percent of net profit, which may only be subtracted from such profit having covered considerations for the reserve stipulated by law and, where relevant, by the bylaws, and having disbursed to shareholders a dividend of at least four percent of the paid-up capital for each share.
It is expressly authorized that compensation for any or all of the members of the Board of Directors, and the management personnel both of the Company and of the companies belonging to the same Group, may consist of the issue of shares in the Company or of stock options in such Company or of stock which may be pegged to the value of such shares, in accordance with the terms and conditions as laid down by the General Shareholders' Meeting by means of appropriate agreement and pursuant to the legally established requirements.
The Board of Directors shall decide upon the manner of distributing amongst its members, including a modified amount, the remuneration that jointly corresponds to them under the provisions of this Article.
Article 35. - In the event that the General Shareholders' Meeting agrees on the payment of dividends, the Directors shall specify the place, term and method of payment. The Board of Directors may agree upon the distribution of amounts disbursed as dividends, in accordance with the provisions laid down by the legislation in force.
The General Meeting may resolve that the dividend be fully or partially paid in kind, provided that the goods or securities to be distributed are homogeneous, they are listed on an organised market at the time when the resolution becomes effective or the company duly guarantees that liquidity will be obtained within a maximum term of one year.
Article 36. - Dividends not claimed within a five-year term as of the date on which they fell due shall prescribe in the Company's favour.