General Shareholders Meeting Reform For Listed Companies

9 March 2009

The Council of Ministers, based on a report from the Ministry of Justice, passed a bill of transposition of Directive 2007/37/CE into national law on February 6, 2009 which deals with the exercising of specific information and voting rights by the shareholders of listed companies.

This new legal reform aims to guarantee equal treatment of all shareholders in listed corporations and to safeguard the exercising of the information, participation and voting rights of the minority and scattered shareholders in same.

The key changes included in the text are the following:

1. Call to meetings and exercising of voting rights

     The General Shareholders Meetings must be called with sufficient prior notice and all documents must be effectively made available to the shareholders regardless of their place of residence. Thus the shareholders who do not reside in the Member State of the company seat can exercise their information, participation and voting rights (i.e. allowed to vote electronically) as easily as those who reside in the same Member State as the company seat.
     As regards long-distance participation, the by-laws must regulate this right as regards aspects such as: (i) broadcast of the General Meeting in real time; (ii) two-way communication, also in real time, so that the shareholders can address the General Meeting from a different location; and (iii) a mechanism which allows voting before or during the General Meeting without having to appoint a representative to attend in person.

2. Publishing the call to meeting

     The listed corporation will be obligated to announce the call to meeting, regardless of whether they are general, ordinary or extraordinary, by means of, at least (i) the Official Commercial Registry Gazette or one of the largest daily newspapers in Spain; (ii) the website of the Spanish Securities and Exchange Commission; and (iii) the website of the company convening the meeting.
     As regards point (iii), the listed corporation is also obligated to publish on their website, until the day the meeting is held, information such as: (i) the announcement of the call to meeting; (ii) the total number of shares and voting rights as of the date of the publication of the convening with a breakdown, as the case may be, of the share class; (iii) the documents which will be handed out in the General Meeting such as director, account audit and independent expert reports; (iv) the complete text of the motions to be voted on; (V) the required forms for vote by proxy and distance voting; (vi) long distance participation.

3. Other forms of participation

     Lastly, shareholders who represent at least 5 percent of the share capital can request the publication of a supplement to the call to meeting which includes one or more matters to be included in the order of business, as long as these are always accompanied by a justification or motion. This right cannot be exercised in the convening of an Extraordinary Shareholders Meeting

For further information, please contact Nathalie Kühlmann: