General meeting of shareholders: exercise of the right to information

COMMUNICATION CHANNELS

REGULATION OF THE RIGHT TO INFORMATION

Section 197 (Right to information in public limited companies) of the Corporate Enterprises Act:

"1. Up to the seventh day prior to the general meeting, shareholders may seek from the directors such information or explanations as they may consider necessary on the items included on the agenda, or submit such written questions as they may deem fit.
The directors will be obliged to provide the information in writing up to the date of the general meeting.

2. During the general meeting, shareholders may orally request such information or explanations as they may deem fit on the business included on the agenda. If it is not possible to answer at that time, the directors will be obliged to provide the requested information in writing within seven days after the end of the general meeting.

3. The directors will be obliged to provide the information requested in accordance with the preceding two paragraphs unless that information is unnecessary to protect the shareholders’ rights or there are objective reasons to consider that it could be used for non-corporate purposes or making it public could be detrimental to the company or its related companies.

4. The information requested may not be denied when the request is backed by shareholders representing at least twenty-five per cent of the capital. A smaller percentage may be established in the articles of association, provided it is no less than five per cent of the capital.

5. Breach of the right to information contemplated in paragraph 2 above will entitle the shareholder to demand fulfilment of the obligation to provide information and claim for any damages sustained as a result of the breach, but will not be grounds for challenging the general meeting.

6. In the event of abusive or detrimental use of the information requested, the shareholder will be liable for any damages caused.”

Section 272 (Approval of the accounts), paragraph 2, of the Corporate Enterprises Act:

“2. Once the general meeting has been called, any shareholder may obtain from the company, immediately and free of charge, copies of the documents to be submitted for approval, as well as the management report and auditors’ report, if any.

This right shall be mentioned in the notice of call.”

Section 518 (General information prior to general meeting) of the Corporate Enterprises Act:

From the date of publication of the notice of call up to the date of holding the general meeting, the company shall publish permanently on its website at least the following information:

a) The notice of call.

b) The total number of shares and voting rights on the date of the notice of call, broken down by types of shares, if any. If the articles of association contemplate a double vote for loyalty and the special register contemplated in section 527 septies has been created, the information on the number of voting rights shall be updated promptly after the deadline for proof of rights prior to the general meeting.

c) The documents to be laid before the general meeting, particularly any reports by directors, auditors and independent experts.

d) The full texts of the resolutions proposed on each and all of the items on the agenda or, in connection with any purely informative items, a report by the competent bodies commenting on each such item. Any resolutions proposed by shareholders shall also be included as and when they are received.

e) In the event of appointment, ratification or re-election of board members, the identity, curriculum and category of each one and the proposal and reports contemplated in section 529 decies.

f) The forms to be used for proxy and distance voting, unless they are sent directly by the company to each shareholder. If it is not possible to publish these forms on the website for technical reasons, the company shall indicate on its website how to obtain the forms on paper and those forms shall be sent to all shareholders who so request.

Section 520 (Exercise of the shareholders’ right to information) of the Corporate Enterprises Act:

“1. Exercise of the shareholders’ right to information is regulated in section 197, although requests for information or explanations or the submission of written questions may be made up to the fifth day prior to the general meeting. Moreover, shareholders may request the directors, in writing within the same time or orally during the general meeting, to provide such clarifications as they may consider necessary regarding the information accessible to the public that the company has delivered to the National Securities Market Commission (CNMV) since the date of the previous general meeting, and regarding the auditors’ report.

2. All valid requests for information, explanations or written questions and the written answers provided by the directors shall be posted on the company’s website.

3. If, prior to submission of a specific question, the information requested is available clearly, expressly and directly for all shareholders on the company’s website in a question and answer format, the directors’ reply may merely refer to the information provided in that format.”

Section 520 bis (Remittance of information on the company to shareholders and beneficial owners) of the Corporate Enterprises Act:

1. Companies shall deliver the following information to their shareholders or the third party designated by each shareholder:

a) All information that may be required to enable them to exercise the rights deriving from their shares, sent to all shareholders holding shares in the relevant class, or

b) If the information contemplated in paragraph (a) is available for shareholders on the company’s website, a notice indicating where that information can be found.

The information shall be drafted in easily understandable language and style, i.e. it shall be worded clearly, concisely and comprehensibly and shall be accessible.

2. For the purposes contemplated above, companies may send the required information:

a) directly to all its shareholders, or

b) indirectly, in a standardised format and in due time, through the third parties they may have designated, the central securities depositary or the broker, in which case these parties will be obliged to forward the information without delay to the company’s shareholders.

3. If the entity legitimated as shareholder by virtue of the accounting record of the shares is a broker holding those shares on behalf of a beneficial owner, the broker shall promptly forward the information contemplated in paragraph 1 above to the beneficial owner(s).

Section 539 (Special reporting instruments) of the Corporate Enterprises Act:

1. Listed public limited companies shall comply with their information duties by any technical, computing or online means, notwithstanding shareholders’ right to request hard copies of the information.

2. Listed public limited companies shall have a website to provide any information requested by shareholders in exercise of their right and any relevant information required by securities market laws. Listed public limited companies shall also publish on that website the average payment period to suppliers and, if appropriate, the measures contemplated in the final paragraph of section 262.1.

An electronic shareholders’ forum shall be enabled on the company’s website, which individual shareholders and any voluntary associations that may be set up will be able to access with due guarantees to facilitate communication prior to general meetings. Any proposals intended to be submitted to supplement the agenda announced in the notice of call may be published in the forum, along with requests for accession to those proposals, initiatives for attaining a sufficient percentage to exercise a minority right contemplated in law and offers or requests for voluntary proxies.

3. The board of directors shall establish the contents of the information to be provided on the website in accordance with the indications of the Ministry of Economy and Finance or, subject to express authorisation, the National Securities Market Commission (CNMV).

4. The shareholders of each listed company may form specific, voluntary associations to exercise their representation at general meetings and other rights contemplated in this Act. For this purpose, the associations shall meet the following requirements:

a) They shall be set up for the sole purpose of defending the shareholders’ interests, avoiding any conflicts of interest that may be contrary to that purpose.

b) They shall be made up of at least one hundred persons, and shall not include any shareholders with interests of more than 0.5% of the voting capital.

c) They shall be set up in a public deed, which shall be entered in the Trade Register corresponding to the registered office of the listed company and, purely for purposes of publicity, in a special register enabled for this purpose at the National Securities Market Commission (CNMV). The rules on organisation and procedure of the association shall be set down in the deed of incorporation.

d) Their accounting shall be kept in accordance with the provisions established in the Commercial Code for corporate enterprises and their annual accounts shall be audited. Within one month after the annual accounts for the previous year are approved by the assembly of members of the association, the latter shall deliver a copy of those accounts to the Trade Registry, together with the corresponding auditors’ report and a descriptive report of its activities, sending a copy of these documents to the National Securities Market Commission. A list of members of the association on the last day of the previous year shall also be sent to the CNMV, annexed to the documents indicated above.

e) They shall keep a record of the proxies conferred upon them by shareholders for representation at any general meetings held, and of the proxies with which they have attended each general meeting, stating the identity of the represented shareholder and the number of shares with which they attended in that shareholder’s name. The register of proxies shall be kept at the disposal of the National Securities Market Commission and the issuer.
Shareholder associations may not receive, directly or indirectly, any amounts or financial benefits from the listed company.

The requirements for shareholder associations to exercise the rights vested in them by virtue of this Act shall be developed in the corresponding regulations. Those requirements shall include at least the requirements and limits for their creation, the bases of their organic structure, their rules for procedure and the rights and obligations corresponding to them, especially in relation to the listed company, as well as regulation of any conflicts of interest to guarantee adequate fulfilment of the purposes for which they are created.

5. Furthermore, the Government and, as appropriate, the Ministry of Economy and Finance and, subject to express authorisation, the National Securities Market Commission (CNMV), may develop such technical and legal specifications as may be necessary in respect of the contents of this section.

Article 17 of the Articles of Association

1. The directors attending the general meeting shall form the Presiding Board. After drawing up the attendance list and declaring the meeting open, the Secretary shall read out the items on the agenda, which shall be duly debated. The Chairman shall speak first, followed by such persons as he may authorise, including the Chairs of the Board Committees whenever necessary or convenient in respect of the business on the agenda. The Chairman shall then grant the floor to such shareholders as may so request, directing the debate and ensuring that it stays within the confines of the agenda.

From the date of publication of the notice of call to the general meeting up to five days, inclusive, before the date scheduled for the general meeting on first call, shareholders may request in writing such information or explanations as they may consider necessary, or submit such written questions as they may deem fit, on the items on the agenda. Shareholders may also request, in writing within the same time, such explanations from the directors as they may consider necessary on the information accessible to the public supplied by the company to the National Securities Market Commission (CNMV) since the last General Meeting and explanations regarding the auditors’ report. In these cases, the directors will be obliged to provide the information requested, in writing, up to the date of the General Meeting.

Valid requests for information, explanations or questions submitted in writing and the written answers given by the directors shall be published on the Company’s website.

Whenever the information contemplated in a specific question is already available to all shareholders clearly, expressly and directly on the company’s website in question-answer format, the directors may simply refer the shareholders to that information.

During the General Meeting, shareholders may orally request such information or explanations as they may deem fit on the items on the agenda or the publicly accessible information supplied by the company to the National Securities Market Commission since the date of the last general meeting and on the auditors’ report. If it is not possible to respond at that time, the directors shall provide the requested information in writing within seven days after the end of the General Meeting. Infringement of the right to information contemplated in this paragraph will not be considered a ground for challenging the validity of the general meeting, although shareholders will be entitled to demand fulfilment of the obligation to provide information and redress of any damages they may have suffered as a result of that infringement.

Directors will not be obliged to provide any information requested in the terms of the preceding paragraphs if that information is unnecessary to protect shareholders’ rights or if there are objective reasons to consider that it could be used for non-corporate purposes or that disclosure of the details requested could be detrimental to the interests of the company or any of its related companies. The information may not be denied if the request is backed by shareholders representing at least one-quarter of the capital.

The Chairman shall close the debate when he considers the business sufficiently debated and shall then put the proposed resolutions to a vote.
As a rule, resolutions shall be carried with the votes of a simple majority of the shareholders present and represented at the general meeting, considering a resolution passed when it obtains more votes for than against from the capital present and represented.

For a resolution on the increase or reduction of the capital or any other alteration of the Articles of Association, the issuance of debentures, suppression or restriction of the right of pre-emption over new shares, the conversion, merger or division of the company, the global transfer of assets and liabilities or moving the registered office to another country, if more than fifty per cent of the capital is present and represented at the general meeting the resolution will be passed by absolute majority. However, if the meeting is attended on second call by shareholders representing twenty-five per cent or more of the subscribed capital with voting rights but less than fifty per cent, the favourable vote of two thirds of the capital present or represented at the general meeting will be required.

Unless another system is established by the Presiding Board for any particular vote, all shareholders present or represented who do not expressly declare their abstention, vote against or blank vote will be deemed to vote for the resolutions, approval of which shall be evidenced by recording the votes against, blank votes and abstentions. However, when voting on business not included on the agenda, all shareholders present or represented who do not expressly declare their abstention, vote in favour or blank vote shall be deemed to vote against the resolution in question.

2. Voting and proxy by remote means of communication prior to the General Meeting

a) Shareholders entitled to attend and vote may vote on the resolutions proposed under the agenda by post or electronic means or any other form of remote communication, on the terms stipulated in the Regulations of the General Meeting and any provisions passed by the Board in development of or supplementing those Regulations.

The Board is authorised to develop and supplement the regulation set forth in the Regulations of the General Meeting taking account of the technical and legal bases that make it possible and duly guarantee the identity of the person exercising his voting right. In this case the Board shall decide when shareholders may start voting by remote communication, according to the state of and security offered by the available technical means.

The company shall publish on its web site all rules and regulations and any amendment thereof passed by the Board in development of and supplementing the Regulations of the General Meeting, pursuant to this provision, and the time specified by the Board as from which shareholders may vote by means of remote communication for General Meetings.

Shareholders entitled to attend General Meetings whovote by means of remote communication in pursuance of this article shall be counted as present for establishing the quorum of the relevant general meeting.

b) The provisions of (a) above will also be applicable to the granting of proxies for General Meetings by post, electronic means or any other form of remote communication.

c) Personal attendance of the General Meeting by a given shareholder will annul any vote cast by the same shareholder by postal or electronic correspondence. Similarly, personal attendance by the represented shareholder will also revoke a proxy granted by electronic correspondence or any other form of remote communication contemplated in the Regulations of the General Meeting.

Article 5 of the Regulations of the General Meeting:

1. The Company’s website shall include the notice of call, the agenda and documents at the disposal of shareholders. Mention shall also be made of the shareholders’ right to request the delivery and remittance of such documents, free of charge, providing information on the rules for attending the meeting and the procedures for obtaining an attendance card or certificate from one of the institutions authorised by law to issue them and for granting proxies. Shareholders shall also be informed of any other aspects of interest for the meeting, such as the provision or otherwise of simultaneous interpreting services or the foreseeable audio-visual broadcasting of the general meeting.

2. As from the date of publication of the notice of call to the general meeting, the Company shall publish on its website the text of all proposed resolutions that the Board has resolved to lay before the general meeting or that have been submitted by the shareholders who requested the general meeting, subject to the form and requisites stipulated in law.

3. The stipulations of the preceding two paragraphs are without prejudice to any other information that the company may be obliged to publish on its website under prevailing laws and regulations.

4. The Company shall send a notice to its shareholders, either directly or indirectly through the third parties designated by those shareholders, the central securities depository or the intermediary institution, indicating where they can find the necessary information to exercise the rights deriving from their shares, on the terms stipulated in the applicable legal provisions.

Article 6 of the Regulations of the General Meeting:

1. Once the Annual General Meeting has been called, any shareholder may obtain from the Company, immediately and free of charge, copies of all the documents that are to be laid before the general meeting for approval, together with the directors’ report and auditors’ report, if any. The Annual Corporate Governance Report and the Report on Directors’ Remuneration shall also be made available to shareholders for and at the Annual General Meeting, as well as any other documentation or information required by the laws and regulations in place or which the Board may consider appropriate.

2. Similarly, once an Annual or Extraordinary General Meeting has been called, shareholders may examine at the registered office the proposed resolutions, reports and such other documents as the Company may be obliged by law or the Articles of Association to make available, as well as the text of any other proposed resolutions that the Board may have approved by that date or, as the case may be, which have been submitted by the shareholders requesting the General Meeting, in the form and pursuant to the requisites stipulated in law. Shareholders may also, in the cases indicated in law, request the free delivery or remittance of the full text of all documents put at their disposal at the registered office.

3. Furthermore, as from the date of calling the Annual or Extraordinary General Meeting, shareholders shall have access through the company’s website to the proposed resolutions, reports and other documents to be made available on the website in pursuance of the law, the Articles of Association and these Regulations.

4. From the date of publication of the notice of call to the general meeting up to five days, inclusive, before the date on which the general meeting is to be held on first call, shareholders may request in writing such reports or explanations as they may deem necessary, or submit such written questions as they may deem fit, regarding the business included on the agenda. Within the same time and in the same form, shareholders may request reports or explanations or submit written questions on the publicly accessible information supplied by the company to the National Securities Market Commission (CNMV) since the last General Meeting and on the auditors’ report.

These requests for information may be delivered to the company’s registered office by hand or by post or, as the case may be, by any other means of communication specified for this purpose in the corresponding notice of call.

Regardless of the means used for submitting requests for information, shareholders’ requests shall include their names and surnames and proof of the shares held, so that these details can be checked against the list of shareholders and the number of shares recorded against their name supplied by the Management Company of the Securities Registration, Clearing and Settlement Services (Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.) for the relevant General Meeting. It will be up to the shareholders to prove that they have sent their request to the company in due time and form. The necessary explanations for shareholders to exercise their right to information shall be given on the company’s website, in pursuance of applicable laws and regulations.

During the General Meeting, any shareholders physically attending the General Meeting may orally request such information or explanations as they may deem fit on the items on the agenda, the publicly accessible information supplied by the Company to the National Securities Market Commission since the date of the last general meeting and the auditors’ report. Shareholders attending online may request such information or explanations as they may deem fit on these items, in the form indicated in the notice of call.

The directors shall provide the information requested in the form within the times stipulated in law, (i) unless the request for information or explanations does not refer to business contemplated on the agenda or publicly accessible information supplied by the company to the National Securities Market Commission (CNMV) since the last General Meeting, or to the auditors’ report; or (ii) unless, in the opinion of the Chairman, disclosure of the details requested could be detrimental to the company or its related companies, unnecessary for the protection of shareholders’ rights or if there are objective reasons to consider that it might be used for non-corporate purposes. The exception contemplated in (ii) will not be valid when the request is backed by shareholders representing at least one-quarter of the capital.

Valid requests for information, explanations or questions submitted in writing and the written answers given by the directors shall be published on the Company’s website.

Infringement of the right to information exercised orally during the General Meeting will not be considered a ground for challenging the validity of the General Meeting, without prejudice to the rights corresponding by law to any shareholders who have exercised that right.

In the event of abusive or detrimental use of the information requested, the shareholder responsible will be liable for any damage caused.