In complying with the provisions of the Corporate Bylaws, and having regard to the recommendations of the Special Commission to Encourage Transparency and Certainty in the Financial Markets and at Listed Companies, the Stockholders' Meeting of ENDESA adopts these Regulations. The objective of the Regulations is to promote the participation of the stockholders in the Stockholders' Meeting by suitably arranging for mechanisms to provide them with information and encourage them to contribute to decision-making in the Company by exercising their rights to participate in debates and to vote. For such purpose, the Regulations were drafted bearing in mind not only statutory and bylaw provisions but also the above-mentioned recommendations, the best practices of listed companies and ENDESA's own experience.
Article 1º. Purpose
In conformity with statutory provisions and the Corporate Bylaws, these Regulations govern the organization and functioning of the Stockholders' Meeting, including call notices, preparation and information for the Meeting, and attendance and proceedings thereat, with a view to making it easier for stockholders to exercise their rights.
Article 2º. Effectiveness and interpretation
These Regulations will be submitted for approval by the Stockholders' Meeting, at the proposal of the Board of Directors, and will become effective as soon as they are approved.
These Regulations will be interpreted pursuant to the provisions of the legislation in force and the Corporate Bylaws.
Article 3º. Publicity
In order to make it easy for stockholders to have access to these Regulations, the full wording of the Regulations will be posted on the Company's website.
Article 4º. Stockholders' Meeting
The Stockholders' Meeting is a meeting at which the stockholders, observing the statutorily established formalities and requirements, debate and decide by a majority on matters falling within their jurisdiction and to express the will of the Company in the form of resolutions.
All stockholders, including dissenters and those who have not participated in the Meeting, are subject to the resolutions of the Stockholders' Meeting.
Article 5º. Classes
1. Stockholders' Meetings may be Annual or Special. In both cases, Stockholders' Meetings will be governed by the provisions of the legislation in force, the Corporate Bylaws and these Regulations.
An Annual Stockholders' Meeting, previously called for such purpose, must be held within the first six months of each fiscal year to scrutinize the conduct of business, approve, as the case may be, the prior year's financial statements and resolve on the appropriation of income or allocation of loss. It will also debate and adopt resolutions on any other item on the agenda which falls within the specific jurisdiction of the Stockholders' Meeting.
2. Any Meeting other than as provided for in the preceding paragraph will be deemed to be a Special Stockholders' Meeting.
Article 6º. Powers
The Stockholders' Meeting is the competent body for resolving on all matters reserved for its decision by the Law or the Corporate Bylaws and, in general, for adopting all resolutions specific to it as the supreme body of the Company. In particular, the powers of the Stockholders' Meeting include, but are not limited to, the following:
a. To resolve on the approval of the individual and consolidated financial statements and on the appropriation of income or allocation of loss, and to scrutinize and, as the case may be, approve the conduct of the Company's business.
b. To appoint and, as the case may be, reappoint or ratify the appointments of the members of the Board of Directors, without prejudice to the power of co-optation specific to the Board, and to resolve their removal.
c. To appoint and, as the case may be, reappoint auditors, and to resolve to revoke their appointment in statutorily permitted cases.
d. To resolve capital increases or reductions, debenture issues, changes in the legal form, or the merger, spin-off or dissolution, of the Company and, in general, any amendment to the Corporate Bylaws.
e. To approve and amend the Regulations governing the Stockholders' Meeting.
f. To decide on matters submitted for its authorization by the Board of Directors and on any other decisions attributed to it by statute.
Article 7º. Power and obligation to call a Meeting
1. The Board of Directors will call an Annual Stockholders' Meeting to be held within the first six months of each year and a Special Stockholders' Meeting whenever it so deems appropriate for the interests of the Company.
The Board of Directors must also call a Stockholders' Meeting if stockholders holding at least 5 percent of the capital stock so request, stating in the request the business to be transacted at that Meeting. In such a case, the Stockholders' Meeting must be called to be held within thirty days following the date on which notice of the request to call it was served by a notary. The Board of Directors will draw up the agenda, which must include the business requested.
2. Without prejudice to the foregoing, if there is a situation which in the opinion of the Chairman of the Board of Directors or whoever substitutes for him is of singular importance to the Company and its stockholders, the Chairman, or his substitute, may call a Special Stockholders' Meeting to analyze the situation in question and, as the case may be, adopt the relevant resolutions.
Article 8º. Publication of call notice
1. The Stockholders' Meeting will be called by publishing a notice in the "Official Gazette of the Mercantile Registry" and in one of the largest circulation daily newspapers of the province at least fifteen days before the date set for holding the Meeting, except in the case of a merger or a spin-off, in which the call notice must be served one month in advance.
The Company will send the call notice to the National Securities Market Commission and to the other regulatory agencies in the markets on which it is listed, in accordance with the rules in force in the respective markets.
2. The call notice will state the date of the Meeting on first call and all the business to be transacted, indicating, where appropriate, the items on the agenda that have been included at the request of the entitled stockholders. It may also state, if appropriate, the date on which the Stockholders' Meeting is to be held on second call. There must be at least 24 hours between the first and second Meetings.
3. If a duly called Stockholders' Meeting is not held on first call, and the call notice does not include the date of the second call, notice of the second call must be served, subject to the same publicity requirements as in the case of the first call, within 15 days following the date of the Meeting not held and 8 days before the date on which the Meeting on second call is to be held.
4. The wording of the call notice will be posted on the Company's website, which will provide information on any other aspects of interest for following the Meeting, such as the existence of simultaneous interpreting services or audiovisual broadcasting of the Stockholders' Meeting.
Article 9º. Right to information
1. As soon as the call notice of the Ordinary Stockholders' Meeting is served, any stockholder may, immediately and at no charge, obtain from the Company at its registered office, the financial statements, the proposed appropriation of income or allocation of loss, the management report and the auditors' report.
This documentation will also be made available to the stockholders on the Company's website as from the date of the call notice.
2. From the date of the call notice for the Annual or Special Stockholders' Meeting, the stockholders may inspect at the registered office and on the company´s website the proposed resolutions, the reports and other documentation which is required to be made available pursuant to the Law and the Bylaws. In such cases as may be legally applicable, the stockholders may also request that the full wording of the documents made available to them be delivered or sent to them at no charge.
3. From the day of the publication of the summons to the General Stockholder´s Meeting up to and including the seventh day before the date on which the meeting is to be held at the first summons, the stockholders may request in writing the information or clarifications they deem necessary or ask the questions they deem appropriate in writing concerning the items on the Agenda. In addition, in the same manner and with the same notice, the stockholders may request information or clarifications, or ask questions in writing about the information accessible to the public that the company has provided the Spanish Securities and Exchange Commission with since the date on which the last General Stockholders' Meeting was held.
The Directors shall be obliged to provide the information requested in accordance with the two preceding paragraphs in the manner and terms set forth in law, except in cases in which, in the Chairman's opinion, publishing such information would not be in the company's interests. This exception will not apply when the request is supported by stockholders that represent at least one quarter of the capital.
Replies to the stockholders will be issued by the Board of Directors in a resolution or, as the case may be, by any of the Directors, by the Board Secretary, or by any person expressly authorized for such purpose.
4. Without prejudice to the right of stockholders to information concerning Stockholders' Meetings as referred to in Subarticle 3 above, once the Stockholders' Meeting has been called, stockholders may, after providing evidence of their identity as such, make comments or suggestions in writing on the items on the agenda through the Stockholder's Office or the Company's website. The Stockholders' Meeting will not be informed of these comments or suggestions, without prejudice to the Board of Directors being able to take them into account and to the right of stockholders to participate in the debates of the Stockholders' Meeting on its agenda.
Article 10º. Right to attend
1. Stockholders who, individually or grouped together with others, hold at least 50 shares, may attend Stockholders' Meetings provided that they have registered their shares in the appropriate book entry accounting record five days before the Meeting is held and they obtain the relevant attendance card. Attendance cards will be issued by the entities that keep the accounting records and will be used by the stockholders as a proxy document for the Stockholders' Meeting in question.
2. Before the Meeting starts, the attendees will be given the wording of the proposed resolutions to be submitted for the decision of the Stockholders' Meeting, without including documentary exhibits, if any, and, as the case may be, the wording of replies to the stockholders regarding any requests for information made by them in writing before the Stockholders' Meeting, if the Board of Directors deems that it is necessary or appropriate for the stockholders attending the Meeting to be apprised thereof.
3. Members of the Board of Directors must attend Stockholders' Meetings.
4. The Chairman may authorize the attendance of any person he deems appropriate, although the Stockholders' Meeting may revoke any such authorization.
Article 11º. Representation by proxy
1. Any stockholder who has the right to attend may be represented at a Stockholders' Meeting by another person. Proxies must be granted in writing and specially for each Stockholders' Meeting and are deemed to be without prejudice to the provisions of the Law on cases of family representation and the granting of general powers of attorney.
In any event, whether in the case of voluntary proxies or legal proxies, not more than one proxyholder can attend a Meeting.
2. A proxy can be revoked at any time. Personal attendance at the Stockholders' Meeting by the grantor of a proxy will be deemed to constitute a revocation of the proxy.
Article 12º. Public request for proxies
If the Directors of the Company, the depositories of the securities or the entities in charge of the book entry record request a proxy for themselves or for another and, in general, provided that the request is made publicly, the document in which the authority is recorded must contain or have attached to it the agenda, as well as the request for instructions to exercise the right to vote. Delegation may also include items that, although they are not included on the agenda in the summons, may be dealt with in the meeting, due to so being permitted by law.
Article 13º. Convening the Stockholders' Meeting
1. The Stockholders' Meeting will be validly convened on first call if the stockholders present in person or by proxy hold at least 25 percent of the subscribed voting capital stock. On second call, the Meeting will be validly convened regardless of the capital stock attending it.
2. Debenture issues, capital increases or reductions, changes in the legal form, or the merger or spin-off, of the Company and, in general, any amendment to the Corporate Bylaws, will require on first call the attendance in person or by proxy of stockholders holding at least 50 percent of the subscribed voting capital stock. On second call, the attendance of 25 percent of that capital stock will suffice.
3. The provisions of this Article will be deemed to be without prejudice to such qualified quorums for convening or voting at the Meeting as may be established in the Law or in the Bylaws.
Article 14º. Planning and media
1. Stockholders' Meetings may be held in various halls if the Presiding Panel considers that there is just cause for doing so. In this case, audiovisual media enabling intercommunication must be installed to ensure the simultaneity and unity of the proceedings at the Meeting.
2. If deemed necessary, the Meeting will be equipped with a simultaneous interpretation system.
3. To ensure orderly proceedings at the Meeting, systems for controlling access to the Meeting may be established and such security measures as may be deemed suitable will be adopted.
4. In order to promote the broadest dissemination of the proceedings and resolutions adopted at the Stockholders' Meeting, the media will be given access to the Meeting.
Article 15º. Chairman and Presiding Panel
1. Stockholders' Meetings will be chaired by the Chairman of the Board of Directors or, in his absence, by the relevant Deputy Chairman in conformity with the provisions of the Corporate Bylaws or, in the absence of both, by such Director as may be chosen by the Meeting.
The Chairman will be assisted by a Secretary, who will be the Secretary of the Board of Directors or, in his absence, by the Deputy Secretary, if any, or, otherwise, by such person as may be designated by the Meeting.
Once the Meeting has started, if the Chairman or the Secretary of the Stockholders' Meeting has to absent himself from it, his functions will be taken over by the relevant person in conformity with the provisions of the preceding paragraphs and the Meeting will continue.
2. The Presiding Panel will be composed of the Board of Directors.
Article 16º. Drawing up of the list of attendees
1. Attendance cards and proxies will be accepted up to the time set for the Stockholders' Meeting to start. Thereafter, stockholders or proxies who wish to attend the Meeting may do so in the same hall where the Meeting is being held or, if deemed appropriate by the Company, in an adjacent hall from which they can follow it, but they will not be deemed to be attendees of the Meeting for the purposes of drawing up the list of attendees.
2. Before transacting the business on the agenda, a list of attendees will be drawn up, stating the nature or representative capacity of each of them and the number of shares, held by them or third parties, with which they attend.
The list of attendees may be drawn up on a card filing system or be included on a computer medium. In these cases, the method used will be recorded in the Minutes themselves and the appropriate identification stamp, signed by the Secretary of the Stockholders' Meeting and countersigned by the Chairman, will be affixed to the sealed cover or the cover of the medium.
At the end of the list, the number of stockholders, present in person or by proxy, and the amount of capital stock held by them, specifying the amount corresponding to stockholders with voting rights, will be determined.
3. If the Chairman deems it necessary, he may designate two or more stockholder scrutineers to assist the Presiding Panel in drawing up the list of attendees and, as the case may be, counting the votes.
4. During the Stockholders' Meeting any stockholder with the right to attend may consult the list of attendees provided that it does not delay or postpone normal proceedings at the Meeting once the Meeting Chairman has declared the Meeting to be legally convened, and the Presiding Panel of the Meeting is not obliged to read or provide a copy of the list during proceedings at the Meeting.
Article 17º. Start of the Meeting
Once the list of attendees has been drawn up, the Chairman will declare the Meeting to be validly convened and then allow the Notary to take the floor so that he can ask the attendees if they have any reservations concerning or objections to the data disclosed or the valid convening of the Meeting, indicating that whoever wishes to express such reservations or raise such objections must do so by making a statement in the presence of the same Notary so that it can be duly noted in the Minutes of the Meeting.
Article 18º. Speeches
1. The Chairman will invite stockholders who wish to participate in the Meeting to request information or propose resolutions regarding the items on the agenda or to make any other statement so that, in the presence of the Notary, they can have their request, proposed resolutions or statement duly noted after indicating their personal particulars and the number of shares held by them or, as the case may be, represented by them.
2. The Chairman of the Meeting and such persons as he may designate for the purpose will address the attendees to present their respective reports. Then, the Chairman will invite stockholders who have so requested to take the floor, after determining the order in which they are to be called to do so.
3. Each stockholder will initially have five minutes on the floor, although the Chairman of the Meeting may extend the time allotted.
4. During the time allotted to them for speaking on the floor, the stockholders may request such information or clarifications as they deem necessary regarding the items on the agenda.
The Chairman is responsible, as provided in the Law, for furnishing the information requested, although he may, if he deems it appropriate due to its nature, entrust this function to the Managing Director, to any member of the Presiding Panel or to such expert as he may consider suitable.
If it is not possible to fulfill the stockholder's right during the Stockholders' Meeting, the directors shall be obliged to provide the stockholder in question with the information in writing within the seven days following the day on which the Stockholders' Meeting ends.
The directors shall be obliged to provide the information requested in accordance with the two preceding paragraphs in the manner and terms set forth in law, except in cases in which, in the Chairman's opinion, publishing such information would not be in the company's interests and the request is supported by stockholders that represent less than twenty-five percent of the capital.
5. Also, in light of the proposed resolutions delivered to them before the start of the Meeting, stockholders may, while speaking on the floor, submit alternative proposals on any item on the agenda, except in cases where by law they must be available to the stockholders at the registered office when the call notice is published.
In addition, while speaking on the floor they may propose the adoption of resolutions on business which does not have to be stated on the agenda of the Meeting in order to be debated and decided on by the Meeting.
6. Stockholders who wish to have the entirety of what they say on the floor noted in the Minutes must expressly make a request to this effect and deliver to the Notary, before taking the floor, the written transcript of their speech so that it can be verified and subsequently attached to the original Minutes.
Article 19º. Powers of the Chairman
1. The Chairman is responsible for moderating and keeping the debate within the confines of the agenda and for ending it when the matter has, in his view, been sufficiently debated.
2. In performing his functions of directing and organizing the Meeting, the Chairman will have, inter alia, the following powers:
a. To organize stockholders' speeches on the floor in the terms provided for in the preceding Article.
b. Where appropriate, to resolve to extend the time initially available to the stockholders for taking the floor.
c. To moderate speeches by stockholders on the floor, with power to urge them to keep to the agenda and observe the rules of etiquette when on the floor.
d. To call the stockholders to order when their speeches on the floor manifestly obstruct the Meeting or seek to disturb the normal conduct of the Meeting.
e. To ask stockholders to leave the floor when the time allotted to them has expired or when, despite the warnings made under letters c. and d. above, the stockholder persists with his conduct. In the exercise of this power, the Chairman may demand that a stockholder who has repeatedly ignored his requests leave the hall, as well as adopt the appropriate measures to ensure that the stockholder does so.
f. To announce the result of voting.
g. To resolve on matters that may arise in the course of the Stockholders' Meeting regarding the rules established in these Regulations.
Article 20º. Adoption of resolutions
1. Resolutions must be adopted by the affirmative vote of a majority of the voting capital stock attending the Meeting in person or by proxy, without prejudice to the qualified quorums for convening and voting at Meetings established in the Law and in the Corporate Bylaws.
2. If proposals have been submitted on business that does not have to be stated on the agenda for the Meeting to be able to resolve on them, the Chairman will decide on the order in which they are to be put to a vote. Otherwise, the resolutions will be adopted pursuant to the agenda set forth in the call notice.
3. After being read out by the Secretary, a step which can be dispensed with if no stockholder opposes doing so, the proposed resolutions which in each case have been submitted by the Board of Directors will first be put to a vote and, as the case may be, those submitted by other proposers will be voted on pursuant to an order of priority in time.
In any event, once a proposed resolution has been approved, all those relating to the same item of business which are incompatible with it will fail automatically and, therefore, will not be put to a vote.
4. To adopt resolutions, the following system for determining votes will be used:
a) In the case of resolutions on items on the agenda, the votes corresponding to all the shares attending the Meeting, whether in person or by proxy, less the votes corresponding to the shares the holders or proxyholders of which inform the Notary by written notice or a personal statement of their vote against, blank vote or abstention will be deemed to be votes for the proposal put to a vote.
b) In the case of resolutions on items not included on the agenda, the votes corresponding to all the shares attending the Meeting, whether in person or by proxy, less the votes corresponding to the shares the holders or proxyholders of which inform the Notary by written notice or a personal statement of their vote against, blank vote or abstention will be deemed to be votes against the proposal put to a vote.
c) For the purposes of the two preceding letters, shares which appear on the list of attendees less those the holders or proxyholders of which have absented themselves from the Meeting before the voting and have placed this circumstance on record in the presence of the Notary will be deemed to be shares attending the Meeting.
5. Notwithstanding the provisions of the preceding Subarticle, and having regard to the circumstances prevailing in each case, the Presiding Panel may resolve that in order to adopt resolutions any other system for determining votes that permits verification of the obtainment of the affirmative votes necessary for their approval and the recording of the result of the voting in the Minutes be used.
6. Whatever the system used to determine the voting, verification by the Presiding Panel of the Meeting that there is a sufficient number of affirmative votes to attain the necessary majority in each case will permit the Chairman to declare the proposed resolution in question approved.
Article 20º bis. Voting and representation by remote means of communication
a) The stockholders entitled to attend and vote may cast their votes on the proposals concerning the items on the agenda by post or through electronic communication, in accordance with that set forth in the By-laws, these Regulations and the rules that supplement and develop these Regulations, as stipulated by the Board of Directors.
Votes by post shall be cast by sending the company the attendance card issued by the company or the companies entrusted with keeping the book entry register, notwithstanding the other requirements and conditions that the Board of Directors may stipulate pursuant to that set forth in section b) of this article.
Votes by electronic communication shall be cast with a recognized electronic signature and any other kind of guarantee that the Board of Directors deems appropriate in order to ensure the authenticity and identity of the party exercising the right to vote, notwithstanding the other requirements and conditions that the Board of Directors may establish pursuant to that set forth in section b) of this article.
Votes cast by any of the means set forth in this section a), must be received by the company 24 hours before the date and time set for holding the General Stockholders' Meeting at the first summons. Otherwise, the vote shall be deemed not to have been cast.
The stockholders entitled to attend that cast their votes remotely pursuant to that set forth in this section a), shall be deemed present for the purposes of holding the General Stockholders' Meeting in question.
b) The Board of Directors is authorized to develop the provisions in the foregoing section a), stipulating the rules, means and procedures in line with the state of the art as well as the forms, conditions, restrictions and requirements that they deem appropriate in order to supplement the rules set forth in these regulations for exercising the right to vote through remote means of communication. In addition, the Board of Directors shall determine the time from which the stockholders may cast their vote through remote means of communication, depending on the stage of development and security provided by the technical means available.
The Board of Directors shall publish the regulations that develop and supplement the system established in the Regulations of the General Stockholders' Meeting and the time from which the stockholders may cast their vote in the General Stockholders' Meeting by remote means of communication on the company's website.
c) In particular, the Board of Directors may regulate the use of guarantees other than electronic signatures for the casting of electronic votes in order to preserve the authenticity and identity of the stockholder exercising the right to vote, and may also reduce the term of notice referred to in section a) above for the company to receive votes cast by electronic or postal correspondence.
In any case, the Board of Directors shall adopt the necessary measures to avoid possible duplicity and ensure that the party that cast the vote by postal or electronic correspondence is duly authorized to do so pursuant to that set forth in article 27 of the By-laws.
d) That set forth in sections a) and b) above shall also apply to a stockholder authorizing a proxy for the General Stockholders' Meeting by means of electronic communication or any other remote means of communication.
In accordance with that set forth in the By-laws, attendance in person by a stockholder at a General Stockholders' Meeting shall have the effect of revoking votes cast by post or electronically. In addition, attendance in person at a General Stockholders' Meeting by a stockholder represented by proxy shall have the effect of revoking the representation by proxy authorized through electronic correspondence or any other remote means of communication envisaged in the Regulations of the General Stockholders' Meeting.
Article 21º. Conclusion of the Meeting and the Minutes
1. Once voting on the proposed resolutions has finished, the Meeting will conclude and the Chairman will adjourn it.
2. The Minutes of the Meeting will be drawn up by a notary and need not be approved by the attendees. For such purpose, the Board of Directors will resolve to request a Notary of its choice to draw up the Minutes.
Article 22º. Extension
1. At the proposal of the Presiding Panel or at the request of the stockholders representing one-quarter of the capital present at the Stockholders' Meeting, the attendees may resolve to extend the sessions of Meeting for one or more consecutive days.
2. Once the Meeting has been extended, compliance with the requirements imposed by the Law or by the Corporate Bylaws for it to be validly convened need not be repeated at the successive sessions. If any stockholder included in the list of attendees drawn up at the start of the Meeting does not attend the successive sessions subsequently, the majorities necessary to adopt resolutions will continue to be determined at those sessions per the data from that list.
Article 23º. Temporary suspension
1. Exceptionally, if there are disturbances that substantially interrupt the proper order of the Meeting or there is any other extraordinary circumstance that temporarily hinders its normal conduct, the Presiding Panel may resolve to suspend the Meeting for an appropriate time, but at no time for longer than two hours, in order to have the conditions necessary for it to continue restored.
In this case, the Chairman may adopt such measures as he deems appropriate to ensure the safety of those present and avoid any repetition of circumstances that may further disrupt the proper order of the Meeting.
2. If, after the Meeting has resumed, the circumstances that gave rise to the temporary suspension persist, the Chairman may ask the Board of Directors, if an absolute majority of its members is sitting on the Presiding Panel of the Meeting, to propose to the attendees that the Meeting be extended on the following day. If the extension is not, or cannot, be approved, the Meeting will be adjourned immediately.
Article 24º. Publication
1. Regardless of the disclosure measures required by statute or regulations in each case, the stockholders may apprise themselves of the resolutions adopted by the Stockholders' Meeting on the Company's website, on which the full wording of such resolutions will be posted.
2. In addition, registrable resolutions will be filed for registration at the Mercantile Registry and for publication in the Official Gazette of the Mercantile Registry.
Article 25º. Notification
The Company will notify the National Securities Market Commission and the regulatory agencies of the markets on which it is listed of the wording of the resolutions adopted, in the form required in the rules regulating each market. The notice will be given as soon as possible and, in any event, within the period established for such purpose.
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