10.1. Shareholding structure of the company

Significant shareholdings

The share capital of Abengoa, S.A. is represented through account record books, the leasing for which corresponds to Iberclear (Management of Registry, Compensation and Stock Liquidation Company, S.A.) and is ninety million six hundred and forty one thousand one hundred and eight with fifty eight Euros (90,641,108.58) represented by hundred seven million six hundred twelve thousand five hundred thirty eight (107,612,538) shares fully subscribed and paid, belonging to two separate classes:

• Ninety million four hundred and sixty-nine thousand six hundred and eighty shares (90.469.680), belonging to Class A, shares with a par value of one (1 )Euro each all of the same class and series. Each Class A shares confers one hundred (100) voting rights,as ordinary shares ( "Class A shares").
• Seventeen million one hundred forty two thousand eight hundred fifty eight shares (17,142,858) belonging to Class B, shares with a par value of one euro cent (0.01) Euros each all of the same class and series. Each Class B shares confers one (1) voting right, all of these shares with economic privileged rights established in the article 8 of these bylaws (Class B shares and Class A shares herein after “shares with voting rights”)

The shares shall be represented by book entries and shall be governed by the Stock Market Act and other applicable provisions.

The Class A Shares are admitted for official trading on the Madrid and Barcelona Stock Exchanges, as well as the Spanish Stock Exchange Interconnection System (Continuous Market) since November 29, 1996.

In December 2007, Abengoa was selected by the “Comité Técnico Asesor” (technical advisory committee) of Ibex35 to enter and form part of this index as of January 2, 2008, a listing which has been maintained throughout 2009. The inclusion was the result of the periodic review of listed companies as undertaken by the Committee, in which, as well as the company’s capitalisation, the volume of business undertaken and the sector in which the business operates is also taken into consideration. The Ibex 35 is the leading index in Spain as followed by national and international investors. The index groups together the 35 companies with the greatest listed share capital and level of business.

The most recent change to the share capital of the company was agreed at the General Shareholder Meeting on April 10, 2011 and executed on November 4, 2011; it was in relation to the share capital increase through the issuance of 17,142,858 Class B shares.
 

 

As the company’s shares are listed, and holdings recorded with information on significant shareholder listings (the “X-25”) is provided by Iberclear, there is no other register of shareholders maintained by the company. Such information is provided by Iberclear for the Ordinary Shareholders meeting. Based upon the information received (the Iberclear list for April 10, 2011 and the notification of significant shareholders), the major shareholders at that time were:

 

The number of shareholders registered by the “Ordinary General Annual Shareholders Meeting” as at April 10, 2011 was 10,873.

Inversión Corporativa IC and Finarpisa, shareholders of Abengoa, signed an agreement of October 10, 2011, in the terms and conditions provided in the Investment Agreement between Abengoa and First Reserve Corporation fully enforceable from November 7, 2011, which regulates the exercise of his respective rights to vote in Abengoa's general meetings in relation with the proposal, appointment, ratification, reelection or substitution of a director in representation of First Reserve Corporation.

Inversión Corporativa I.C., S.A. and Finarpisa, S.A. jointly and severally undertake, subject to the terms and conditions stated in the Investment Agreement, as applicable, to:

(i) through their respective domanial directors ("consejeros dominicales") at the Board of Directors of Abengoa to vote in favor of:

(a) the appointment to such Board of the Investor's nominee for the Designated Investor Director pursuant to the cooptación procedure provided under the Spanish Capital Companies Act, and

(b) the proposal to recommend to Abengoa's stockholders the election of any replacement Designated Investor Director to the Board of Directors at Abengoa's next annual general meeting of shareholders;

(ii) to vote, at the corresponding annual general meeting of shareholders of Abengoa, in favor of the appointment of the Investor's nominee for the Designated Investor Director to be appointed to the Board of Directors; and

(iii) so long as the Investor or any of its Permitted Transferees owns any Class b Shares or any other security convertible into, or exchangeable for, Class B Shares issued pursuant to this Agreement or any other Transaction Document, not to propose, or request to the Board of Directors to recommend, to the shareholders any amendment to the Company's Organizational Documents that would adversely modify the equal rights of Class B Shares and Class A Shares in relation to dividends or other distributions as currently set forth in the Organizational Documents.

In accordance with that as set out in Article 19 and pursuant to the Articles of Association, there do not exist limits upon the voting rights of shareholders in relation to the number of shares which they hold. The right to attend the shareholders meeting is limited, however, to those shareholders with over 375 A class shares or 37,500 B class shares, without prejudice to the rights of representation and grouping of as held by all shareholders.

Constitutional Quorum: on first notice, 25% of the share capital. On second notice any percentage. These reflect the same percentages as per the Law for Anonymous Companies. In those cases stated in Article 103 of said Law, the quorum coincides entirely with the Law.

Quorum for the adoption of agreements: by a simple majority vote by those present or represented at the Meeting. In those cases stated in Article 103 of the Law for Anonymous Companies, the quorum coincides entirely with the Law.

Shareholder rights: Shareholders have the right to information, in accordance with the applicable standards in force; the right to free delivery of the documentation related to the Shareholder Meeting; the right to vote in proportion to their shareholding, with no maximum limit; right to attend shareholder meetings if holding a minimum of 1,500 shares; economic rights (to dividends, as and when paid, and their share of company reserves); right of representation and delegation, of grouping and the right to undertake legal actions which compete to shareholders.

Active encouragement of shareholders participation: making the documentation related to the Shareholder Meeting freely available by post to shareholders, as well as announcements made on the company’s website to give notice of the Shareholder Meeting. The option to grant a proxy vote, or to vote on an absentee basis may be undertaken via the appropriate completion of accredited attendance cards. In accordance with Article 528.2 of the Capital Company Act (Ley de Sociedades de Capital), Abengoa has approved the Regulation on the Shareholders’ Electronic Forum in order to facilitate communication between shareholders regarding the notice and holding of each General Shareholders’ Meeting. Prior to each general meeting, shareholders may send:
 

• Proposals that they intend to submit as supplementary points to the agenda published in the notice of the general meeting.
•  Requests to second these proposals.
• Initiatives to achieve the required percentage to exercise a minority right.
• Requests for voluntary representation.

The Articles of Association do not limit the maximum number of votes of an individual shareholder or include restrictions to make it more difficult to gain control of the company through the acquisition of shares.

The proposed agenda to be presented at the Shareholders Meeting is published along with notice of the meeting via the website and the CNMV.

The Shareholder Meeting matters are voted upon separately, and in accordance with the item on the agenda, when substantially distinct from one another, so that voters may exercise their views separately for distinct matters to be addressed. This is particularly of note when it concerns the appointment or ratification or an amendment to the Articles of Association.

The Company allows for the vote of shareholders’ appointed financial representatives to be split on the basis that they are acting on behalf of more than one shareholder, so that they may vote in accordance with the instructions of each individual shareholder whom they represent.

There are currently no agreements in effect between the company and its executive officers, managers or employees entitling the latter to severance pay or benefits if they resign or are wrongfully dismissed, or if the employment relationship comes to an end by reason of a public tender offer.

There is not any agreement between the company, the members of the board and employees regarding to severance pay or any other kind of compensation due to resignation or cease, or if the contractual relationship is ceased by a IPO.
 

Purchase of own shares

At the Ordinary Shareholder Meeting on April 10, 2011 it was agreed to authorise the Board of Directors to acquire on a secondary basis, via a contract, own shares, be it directly, or via subsidiaries or other companies in which they have a holding, up to the limit as stipulated in the agreements in force, at a price of between six cents of a Euro (0.06 Euros) and one hundred and sixty Euros and 20 cents (120.60 Euros) per share, being able to do so during a period of 18 months as of said date and in accordance with the fourth section of chapter 134 of the Amended Anonymous Company Law.

On November 19, 2007, the Company enteres into a contract with Santander Investment Bolsa, S.V. for the purposes of, without interfering with the normal development of the market and in strict adherence to the requirements of the stock exchange, improving liquidity of the shares, in a way to ensure the stability of the listing, avoiding any variations which do not reflect the trends of the market. Although this contract does not comply with the conditions as set out in the memo “Circular 3/2007” dated December 19 of the CNMV, Abengoa has voluntarily been in compliance with the requirements of “Circular 3/2007” in this regard. The operations undertaken under the scope of this Contract have been communicated on a quarterly basis to the “Stock Exchange Commission (CNMV)” and have been published on the company website.

On December 31, 2010 the treasury stock balance was 2,913,435 shares.

During the year, a total of 7,784,190 shares in the company were acquired, while 5,096,005 shares were sold, with a net result of €-2,144,373.
 

Details of the latest Shareholders Meeting

Abengoa’s Ordinary General Meeting of Shareholders was held on April 10, 2011 and in attendance was a total of 62,742,007 shares, about 69.35 % of the total equity, amounting to 476 shareholders (53 present and 423 represented) out of a total of 10,873 registered shareholders.

Proposals of Decisions submitted at the Ordinary General Assembly on 10.04.2011

First Decision:

To approve the following:

1º. The Annual Accounts (consisting of the Balance Sheet, Profit and Loss Account, Statement of Changes in the Net
Equity of the Financial Year, Statement of Cash Flow and Report) and the Management Report of Abengoa, S.A., for the 2010 financial year.

2º. The Annual Accounts of the Consolidated Group (consisting of the Balance Sheet, Profit and Loss Account,
Statement of Changes in the Consolidated Net Equity of the Financial Year, Statement of Consolidated Cash Flow and Consolidated Report) and the Consolidated Management Report of Abengoa, S.A., for the 2010 financial year.

3º. The Board of Directors management report for said financial year and the remuneration of its members, as stated in
the Annual Accounts.

Second Decision:

1º. The following 2010 financial year outcome distribution scheme are hereby approved, with the dividends to be
distributed from July 5, 2011 onwards:
 

 

Mr. Felipe Benjumea Llorente, Mr. José B. Terceiro, Mr. Manuel Sánchez Ortega and the Secretary of the Board of
Directors, Mr. Miguel Ángel Jiménez-Velasco Mazarío are hereby empowered such that either of them may register and deposit the Company’s and the Consolidated Group’s Annual Accounts and Management Report at the Company Registry under the terms and conditions envisaged by Law, marking them with signatures and indicating their destination.
 

Third Decision: Ratification, appointment and, as the case may be, re-selection of directors

On the proposal of the Appointments and Remunerations Committee, to agree on the re-selection of the following as Board Members, for another period of four years, since the mandate conferred upon them, by the 2007 General Assembly of Shareholders, has expired:

Fernando Solís Martínez-Campos, Proprietary
Ignacio Solís Guardiola, Proprietary.
María Teresa Benjumea Llorente, Proprietary
Carlos Sundheim Losada, Proprietary
Aplicaciones Digitales, S.L. (represented by José B. Terceiro Lomba), Executive

 To ratify the appointment of Manuel Sánchez Ortega as Executive Board Member, appointed through co-optation by the Board of Directors on October 25, 2010, for a four-year term.

Personal Data:

Fernando Solís Martínez-Campos is a Spanish citizen born on March 1, 1956 and holder of National ID 1579969-P. He is a Lawyer, married, with registered address as Pamplona, Avda. Carlos III, Nº 36-2ª izqda.

Ignacio Solís Guardiola is a Spanish citizen born on August 7, 1957 and holder of National ID 28560056-J. He is a bank executive, married, with registered address as Seville, Avda. de Manuel Siurot nº 10.

María Teresa Benjumea Llorente is an adult Spanish citizen, married, holder of National ID 28343491-Q, with registered address as Seville, Calle Infante Don Carlos número 13.

Carlos Sundheim Losada is a Spanish citizen born on March 30, 1951, holder of National ID 28302692-L, an Industrial Engineer, married, with registered address as Seville, Calle Conde de Gálvez, 4-B, casa 4.

Aplicaciones Digitales S.L., with registered address as Calle Circe 12, Majadahonda, Madrid and Tax ID B-81426066, represented by José B. Terceiro Lomba, adult, married, Economist, holder of National ID 35203147-Z, and registered address as C/ Circe 12 Majadahonda, Madrid.

Manuel Sánchez Ortega is a Spanish citizen born on June 3 1963, holder of National ID 2601273-L, married, Industrial Engineer, and registered address as 10415 Grey Fox Road, Potomac, MD 20854. If present, they would declare their specific acceptance and not under any legally envisaged incompatibility.

Fourth Decision:

Re-selection or appointment of the Company’s or Consolidated Group’s Accounts Auditor for the 2011 financial year.

To appoint Pricewaterhouse Coopers SL, holder of Tax ID B-79031290, domiciled in Madrid, at Paseo de la Castellana, 43, entered in the Company Registry of Madrid, Volume 9,267, on page 8,054, sheet number 87,250, and in the Official Registry Of Auditors with number 50-242, as Auditor of the Company and its group of companies for a one-year term, for the ongoing 2011 financial year, pursuant to Article 264 of the Corporations Act.

Fifth Decision:

To increase the share capital by increasing the nominal value of €0.25 to €1.00 per share charged against the unrestricted reserves

To increase the share capital, currently set at Twenty-two Million Six Hundred Seventeen Thousand Four Hundred Twenty Euros (€22,617,420) represented with Ninety Million Four Hundred Sixty-nine Thousand Six Hundred Eighty (90,469,680) shares at the nominal value of Twenty-five hundredth (€0.25) of One Euro each, all in a single class and series, in Sixty-seven Million Eight Hundred Fifty-two Thousand Two Hundred Sixty Euros (€67,852,260), by increasing the unit nominal value from Twenty-five hundredth (€0.25) of One Euro to One Euro (€1.00) per share, charged against unrestricted reserves, setting it at Ninety Million Four Hundred Sixty-nine Thousand Six Hundred Eighty Euros (€90,469,680) represented by Ninety Million Four Hundred Sixty-nine Thousand Six Hundred Eighty (90,469,680) shares completely subscribed and disbursed, of a single class and series, of at a unit nominal value of One Euro (€1.00), numbered correlatively from One (1) to Ninety Million Four Hundred Sixty-nine Thousand Six Hundred Eighty (90,469,680) inclusive, such that Article 6 of the Bylaws be changed to bear the draft in Decision Six below.

The balance supporting this proposal pursuant to Article 303 of the Corporations Act is the one approved by the Ordinary General Assembly of Shareholders convened for April 9 and 10, 2011, in first and second call respectively, in the first point on the Agenda and it refers to a date set within the six months immediately preceding this decision to increase the capital (December 31, 2010), verified by the accounts auditor from PriceWaterhouse Coopers, S.L.

To specifically empower Felipe Benjumea Llorente, José B. Terceiro, Manuel Sánchez Ortega and Miguel Ángel Jiménez-Velasco Mazarío, such either of them, and in their capacity as special representatives of this Assembly, may appear before Notary Public, notarize the due and necessary instruments, as deemed fit, for the entry of the decisions that may be legally required into the Company Registry, signing as many documents as may be necessary in the execution of said decisions and to particularly request the Securities Registration, Compensation and Liquidation Management Company (Iberclear) to obtain the book-entry registration of the shares and to apply to the CNMV and the Stock Exchange Companies for the processing of any documents whatsoever for the listing of the new securities.

Sixth Decision:

1º. To modify Articles 6, 8, 22 and 50 of the Bylaws to appropriately reflect the capital increase executed by virtue of the
Fifth Decision above, and to create various classes of shares, into Classes A, B and C, under the terms and conditions outlined hereunder, with Class A consisting of ninety million four hundred sixty-nine thousand six hundred eighty (90,469,680) shares but Classes B and C not consisting of any value whatsoever until the competent organ decides, as the case may be, on their issuance with the relevant legal and statutory prerequisites:

The Company’s shares in circulation, without any alteration of their rights, become Class A shares with a nominal value of One (1) Euro each, all belonging to the same class and series, each of them conferring one hundred (100) voting rights and constituting the class of ordinary shares, under the terms and conditions set forth in Article 8 of the Bylaws.
A Class B shares at a nominal value of one hundredth of a Euro (€0.01) each, all belonging to the same class and series, each of them conferring one (1) voting right and they entail the privileges established under Article 8 of the Bylaws.

A Class C shares at a nominal value of one hundredth of a Euro (€0.01) each, all belonging to the same class and series, without any voting rights, but with the preferences and privileges established under Article 8 of the Bylaws.

2º. To modify Articles 7, 15, 21, 31, 33, 34, 37, 38 and 53 for their adaptation to the new provisions of Royal Decree
Law 1/2010, of July 2, which approves the consolidated text of the Corporations Act and other Legal Provisions.

In accordance with the above,

Article 6 of the Bylaws is modified to reflect the various classes of shares into which the share capital is divided, and shall henceforth read as follows:

“Article 6. - Shares and Share Capital.

The capital of the Company is ninety million four hundred sixty-nine thousand six hundred and eighty (€90,469,680) Euros represented by ninety million four hundred sixty-nine thousand six hundred and eighty (90,469,680) shares fully subscribed and disbursed, belonging to Class A at the nominal value of One (1) Euro each, the same series, with each conferring one hundred (100) voting rights, and are the ordinary shares of the Company.

The shares shall be represented through book entries and governed by the provisions set forth in the Stock Exchange Laws and applicable legal provisions.

To modify Article 7 of the Bylaws in order to fit in the name of the company in charge of the book-entry registration of the shares, the Securities Registration, Compensation and Liquidation Management Company (Iberclear)], which shall henceforth read as follows:

“Article 7. - Book-entry Registration.

The company in charge of ensuring the book-entry registration of the shares of the Company is the Securities Registration, Compensation and Liquidation Management Company (Iberclear), under the terms and conditions established in the current regulations.”

To modify Article 8 of the Bylaws in order to fit in the existence of various classes of shares with the contents of rights and obligations indicated in the new version and which shall henceforth read as follows:

"Article 8. - Rights attributed to owners of shares

Class A Shares

At the nominal value of one Euro (1) each, and in the condition as ordinary shares, Class A Shares, ("Class A Shares") grant holders the rights established by Law and set forth in these Bylaws with the specifications outlined hereunder:

1. Voting Rights

Each Class A Share grants its holder one hundred (100) votes.

2. Pre-emptive and free allocation rights over new shares

Except in case of non-existence or exclusion of pre-emptive or free allocation rights or other analogous pre-emptive rights, when Class B and/or Class C shares are issued, the subsequent capital increase or subsequent issuance of convertible or exchangeable bonds, or bonds of any other securities or instrument that may originate the subscription, conversion, exchange, acquisition, or any other form of granting of the right to receive shares from the Company, shall be agreed upon by the Company either with the simultaneous issuance of Class A Shares, Class B Shares (if previously issued) and Class C Shares (if previously issued) in the same proportion in which the number of shares of each class is represented over the total number of shares already issued in which the capital of the Company is divided at the time of the increase or the issuance; be it through the issuance of whatever values or instruments that may occasion the subscription, conversion, exchange, acquisition or any other form of granting of the right to receive Class A Shares, Class B and Class C Shares in the proportion indicated.

With a full respect for the principle of proportionality described in the preceding paragraph, the pre-emptive right, that of free allocation and any other analogous pre-emptive right of the Class A shares shall only be purposefully for Class A shares (or convertible or exchangeable bonds, warrants or other securities and instruments that give right to its subscription or acquisition).

Capital increases using reserves or premiums obtained from the issuance of shares executed by increasing the nominal value of the shares issued as the case may be, class A shares as a whole shall be entitled to nominal value increase in a proportion similar to that represented by the total nominal value of the class A shares in circulation at the time of the execution of this agreement it represents with regards to the Company’s share capital represented by the class A shares and by the class B shares (if issued) and class C shares (if issued) and circulating at such time.

3. Other Rights

Notwithstanding the stipulations in section 2 above, each Class A Share grants all other rights, including economic rights, acknowledged by law and by these bylaws and rights entailed therein as holders of the condition of partner.

Class B Shares

Class B Shares, at a nominal value of one hundredth of a Euro (€0.01) each, (“Class B Shares" and, together with Class A Shares, “Shares with Voting Rights”), grant holders the rights established by Law and set forth in these Bylaws with the specifications outlined hereunder:

1. Voting Rights

Each Class B Share grants its holder one (1) vote.

2. Pre-emptive and free allocation rights over new Class B shares

With regards for the principle of proportionality between the number of shares representing class A shares, those of class B and those of class C (if already issued previously) over the total number of shares of the Company, previously enunciated in relation to class A shares, the pre-emptive and free allocation rights of class B shares shall solely be aimed at class B shares (or convertible or exchangeable bonds or debentures, warrants or other securities and instruments that may give rise to subscription or acquisition rights)

Capital increases using reserves or premiums obtained from the issuance of shares executed by increasing the nominal value of the shares issued as the case may be, class B shares as a whole shall be entitled to nominal value increase in a proportion similar to the total nominal value of the class B shares in circulation at the time of the execution of the agreement with regards to the Company’s share capital represented by the class A shares and by the class B shares circulating at such time.

3. Other Rights

Notwithstanding the stipulations of the preceding sections 1 and 2 and what is envisaged in the regulations in vigour, albeit its lower nominal value, each Class B Share confers the same rights, including economic rights, as a Class A Share, and the Company shall afford the same treatment to Class B Shares holders as it affords to Class A Shares holders, in the manner that such action does not invalidate the provisions of the valid regulations. Specifically, each Class B share awards its holder the entitlement to the same dividend, the same aggregate liquidation, the same restitution of funds in case of capital decrease, distribution of reserves of any nature (including, as the case may be, General Assembly attendance bonuses) or issuance bonuses and whatsoever other sharing and distributions as each Class A Share, all under the same terms and conditions as those of Class A.

In the event of capital decrease due to loss caused by the reduction in the nominal value of Class A shares and of Class B shares, the effect shall be proportional to their respective nominal value.

3. Separate voting in the event of modifications of bylaws or agreements and other operations that may negatively affect
class B shares

Bylaw or agreement modifications that may directly or indirectly damage or negatively affect the pre-emptive rights or privileges of class B shares (including any modification of the precautionary bylaws relating to class B shares or to any agreement that may damage or negatively affect class B shares in comparison with class A shares, or that may benefit or favourably affect class A shares in comparison with class B shares) shall require, in addition to it being approved pursuant to the stipulations of these bylaws, an approval by a majority of class B shares in circulation at the time. For explanatory but by no means limiting purposes, said precaution shall entail as follows: the elimination or modification of the precaution set forth herein on the principles of proportionality between the number of shares representing class A shares, those of class B and those of class C (if previously issued) over the total of the company’s shares in the issuance of new shares or securities or instruments that may give rise to conversion, exchange or acquisition, or in any other manner, that may suppose a right to receive the company’s shares; the partial or total exclusion, of a non-egalitarian nature for shares of class A, class B and class C (as the case may be), of the pre-emptive and other analogous rights that may be applicable by Law and by these bylaws; the repurchase or acquisition of the company’s own shares that may affect class A shares, class B shares and class C shares (as the case may be), in a non-identical manner, in their terms and conditions, price or in any other manner, and which may exceed that which is produced under the framework of ordinary operation of treasury stock or which may give rise to amortization of shares or to the reduction of capital in a non-identical manner for class A, class B or class C shares (as the case may be); the approval of the company’s structural modification that does not amount to treatment identity in all of its aspects for class A and class B shares; the exclusion of the shares of the company from trading on any secondary stock exchange or securities market except through the presentation of an offer of acquisitions for the exclusion from trading as envisaged in the considerations for the class A, class B and class C shares (as the case may be); the issuance of class C or of any other class of preferred or privileged shares that may be created in future.

For that purpose, separate voting rights of the various existing classes of shares will not be required for deciding on whether to totally or partially exclude, as the case may be, the pre-emptive and other analogous rights that may be applicable pursuant to the Law and these bylaws, simultaneously and identically for class A, class B, as the case may be, and class C shares

5. Rights of Redemption for class B Shares

In the cases in which offers are tendered and accepted for the acquisition of the entire Shares with voting rights of the company, following which the offeror, together with persons cooperating with it, (i) manages to directly or indirectly acquire voting rights in the company amounting or equal to 30 percent, except if another person, individually or jointly together with persons cooperating with it, already held a percentage of voting rights equal to or above that of the offeror after the offer, or otherwise (ii) having acquired shareholding below 30 percent, appoints a number of board members who, united, as the case may be, with those already appointed previously, may represent more than half of the members of the Company’s Administrative organ, each class B shares holder shall be entitled to a redemption by the company pursuant to Article 501 of the Corporations Act, except if the holders of the class B shares had already held the rights to participate in this offer and that their shares had been acquired in the same manner and under the same terms and conditions and, whatever the case may be, for the same consideration, as the holders of class A shares (each offer meeting the characteristics described above, a Supposition of Redemption.

Redemption Procedure

In the event of a Supposition of Redemption, for the purpose of information and within seven (7) calendar days from the date of either the liquidation of the offer, or offeror’s appointment of board members who, united, as the case may be, with those it may already have appointed, representing more than half of the Company’s administrative organ, the Company shall be obliged to publish an announcement informing class B shares holders of the process for the exercise of redemption rights in relation to such offer in the Company Registry’s Official Gazette, in Official Gazettes of Spanish Stock Exchange of Securities Markets, on the Webpage of the company and in a national Daily that is widely circulated.

Each class B holder may exercise its redemption rights within two months from the date of the last of the announcements mentioned in the paragraph above, by notifying the Company. The Company remains bound to ensure that said notice for the exercise of the redemption rights is issued through the systems established for that purpose by Iberclear SA, the Securities Registration, Compensation and Liquidation Management Company.
The redemption price that the Company shall immediately pay for each class B share redeemed shall be equal to the considerations paid in the offer to class A shares holders, increased by the legal interest rate on the aforementioned amount counting from the date of the issuance of notice of the exercise of the redemption rights until the date of the actual payment is made to the holder of the shares exercising the redemption rights. The Company administrators hereby remain empowered to undersign the agreements and take the actions that may be necessary or appropriate to ensure the complete and satisfactory execution of the redemption rights mentioned in this section.

The reference market value of any non-monetary considerations whatsoever met in the offer, on the date of the first liquidation of the offer, shall be considered as the Euro amounts. Said evaluation must be accompanied by a report issued by an independent expert appointed by the company, selected from audit firms of international repute.
Restrictions on dividends sharing until payment is made to holders of redeemed shares

From the moment the offer is tendered until the full payment of the redemption price including, as the case may be, the applicable interests of the class B shares with regards to those for which redemption rights is exercised, the Company may not pay, distribute or share any dividends whatsoever to its shareholders, regardless of whether such dividends, distribution or sharing are paid in money, securities of the Company or of any of its subsidiaries, or in any other securities, properties or rights.

Class C Shares

Class C Shares, at a nominal value of one hundredth of a Euro (€0.01) each, (“Class C Shares" and, together with Voting Rights Shares, “Shares”), grant holders the rights established by Law and set forth in these Bylaws with the specifications outlined hereunder:

1. Voting Rights

Class C shares do not confer voting rights.

2. Preference Dividend

2.1. Each Class C share shall afford its holder the right to receive a minimum annual dividend from the ordinary
distributable earnings of the financial year in question and which has ended during the existence of the Class, equal to one hundredth of a Euro (€0.01) per share of the Class C ("Preference Dividend").

2.2. The Company is bound to decide on dividing the Preference Dividend and on paying the holders of the Class C shares
before paying any dividend to the holders of Voting Rights Shares from the ordinary distributable earnings obtained by the Company during each financial year.

2.3. The Preference Dividend for Class C shares shall be paid within the nine (9) months following the close of the financial
year, as long as the aggregated amount of said Preference Dividend for the Class C shares does not exceed the amount of the distributable earnings obtained by the Company during such financial year.

In the event that the Company failed to obtain sufficient distributable earnings for the complete payment of the Preference Dividend during the financial year for all the Class C shares in existence at the end of said financial year, the part of the aggregated amount of said Preference Dividend from the distributable earnings obtained by the Company during the financial year of the relevant period of the calculation for such Class C shares shall not be payable nor shall such accumulate as dividend susceptible for future payment.

2.4. The Company’s failure to pay the partial or total Preference Dividend due to the company’s failure to obtain sufficient distributable earnings for the complete payment of the Preference Dividend for the financial year in question shall not originate the recovery of voting rights for the Class C shares.

3. Other dividends and distributions

In addition to the Preference Dividend, each Class C share entitles its holder to receive the same dividend, the same aggregated liquidation, the same restitution of contributions in the event of capital decrease, distribution of reserves of any nature or distribution of issuance bonuses and any other sharing and distributions as those of Voting Rights Shares, all under the same terms and conditions to which each Voting Rights Share may be entitle.

4. Preference Liquidation Rights

4.1. In the event of dissolution and liquidation of the Company, each Class C share shall entitle its holder to receive an
amount (the “Aggregated Preference Liquidation”) equivalent to the disbursed value of Class C shares.

4.2. The Company shall pay the Aggregated Preference Liquidation to the Class C shares holders before paying any amount in aggregated liquidation to holders of Voting Rights Shares. Regarding the rest of the aggregated liquidation quota that may correspond to them, they shall be entitled to the same rights as Voting Rights Shares.

5. Rights of Redemption for class C Shares

Each class C shares entitles its holder to redemption pursuant to the procedure established for the possible redemption of class B shares in the event that an offer of acquisition is tendered and (partly or wholly) liquidated (each offer meeting what follows, a “Supposition of Redemption”) for part or all of the shares of the Company except if the class C shares holders had already held the rights to participate in that offer and that their shares were acquired in this same manner and under the same terms and conditions and, whatever the case may be, for the same considerations, as the holders of class A Shares.

Notwithstanding the above, with regards to the total of the class C shares circulating at the time of the tendering of the acquisition offer that gives rise to the Supposition of Redemption in question, class C shares redeemed as consequence of a specific Supposition of Redemption may not represent a percentage above that representing the sum of class A shares and (as the case may be) class B shares (i) for which the offer giving rise to such Supposition of Redemption is tendered, (ii) of which the offeror of said offer is holder and (iii) of which the holders are persons cooperating with offeror or persons who signed agreements with offeror in relation to the offer, with regards to all of the class A shares and (as the case may be) class B shares circulating at the time of the tendering of the acquisition offer that gives rise to the Supposition of Redemption.

In the event that, as a result of applying the limitations set forth above, the redemption of all of class C shares, for which the rights of redemption have been exercised in this Supposition of Redemption, is deemed inadmissible, the class C shares to be redeemed from each class C shares holder shall be reduced, in proportion with the number of class C shares for which the rights of redemption have been exercised, making sure not to exceed the limit in question

6. Other Rights

6.1 Pre-emptive Rights

With regards for the principle of proportionality between the number of shares representing class A shares, those of class B (if already issued previously) and those of class C over the total number of shares of the company, previously enunciated in relation to class A shares, the pre-emptive and free assignment rights of class C shares shall solely be aimed at class C shares (or convertible or exchangeable bonds or debentures, warrants or other securities and instruments that may give rise to subscription or acquisition rights)

Capital increases using reserves or premiums obtained from the issuance of shares executed by increasing the nominal value of the shares issued as the case may be, class B shares as a whole shall be entitled to nominal value increase in a proportion similar to the total nominal value of the class B shares in circulation at the time of the execution of the agreement with regards to the Company’s share capital represented by the class A shares, by the class B shares (that may have been issued) and Class C shares circulating at such time.

6.2 Separate voting in the event of modifications of bylaws or agreements and other operations that may negatively affect
class C shares

Notwithstanding Article 103 of the Corporations Act, bylaw or agreement modifications that may directly or indirectly damage or negatively affect the pre-emptive rights or privileges of class C shares (including any modification of the precautionary bylaws relating to class C shares or to any agreement that may damage or negatively affect class C shares in comparison with class A and/or class B shares, or that may benefit or favourably affect class A and/or class B shares in comparison with class C shares) shall require, in addition to approval pursuant to the stipulations of these bylaws, approval by a majority of class C shares in circulation at the time. For explanatory but by no means limiting purposes, said precaution shall entail as follows: : the elimination or modification of the precaution set forth herein on the principles of proportionality between the number of shares representing class A shares, those of class B (if previously issued) and those of class C over the total of the company’s shares in the issuance of new shares or securities or instruments that may give rise to conversion, exchange or acquisition, or in any other manner, that may suppose a right to receive the company’s shares; the partial or total exclusion, of a non-egalitarian nature for shares of class A and/or class B and class C of pre-emptive and other analogous rights that may be applicable by Law and these bylaws; the repurchase or acquisition of the company’s own shares that may affect class A and/or class B shares with regards to class C shares, in a non-identical manner, in their terms and conditions, price or in any other manner, and which may exceed that which is produced under the framework of ordinary operation of treasury stock or which may give rise to amortization of shares or to reduction of capital in a non-identical manner for class A, class B (as the case may be) and class C shares; the approval of the company’s structural modification that does not amount to treatment identity in all of its aspects for class A, class B shares (as the case may be) with regards to class C; the exclusion of the shares of the company from trading on any secondary stock exchange or securities market except through the presentation of an offer of acquisitions for the exclusion from the trading as envisaged in the considerations for the class A, (class B as the case may be) and class C shares; the issuance of any other class of preferred or privileged shares that may be created in future.

Notwithstanding the provisions of Article 293 of the Corporations Act, whatever the case may be, the Company’s agreements on capital increase under whatsoever modality and under any formula that may give rise to the first issuance of class shares shall require, in addition to its approval in accordance with legal provisions and Article 30 of these Bylaws, the approval of the majority of class B shares then in circulation”

To modify Article 21 of these Bylaws in order to fit in the minimum number of shares necessary for admission to attend the Assembly, for new classes of shares, with reference to their nominal value, and which shall henceforth read as follows:

“Article 21. - Attendance.

Each three hundred seventy-five (375) class A shares or thirty-seven thousand five hundred (37,500) class B shares or a combination of both classes of shares with a nominal value equivalent to three hundred seventy-five Euros (€375) grants the holder the right to attend Shareholders’ Assemblies as long as holder provides proof of legitimacy before the time the Assembly is held, which shall be justified through the relevant attendance identity card bearing the number, class, series and ownership of shares, as well as the number of votes that bearer may cast. The card shall be issued by the Company in charge of Book-entry registration, to shareholders, justifying the entry of the shares into said Registry at least five days in advance of the day on which the Assembly is to be held on the first call.”

To modify Articles 15, 22, 24, 31, 33, 34, 37, 50 and 53 of these Bylaws in order to fit in the references to the valid Limited Liability Laws, to the Corporations Act and concurrent, which shall henceforth read as follows:

“Article 15. - Acquisition of Company’s own shares (Treasury stock buy-back).

The Company may buy-back its own shares under the conditions and with the limitations and requirements set forth in title IV, Chapter VI of the Corporations Act.”

“Article 22 - Representation

Any shareholder with the right to attend may be represented at the Assembly by another physical person who must also be shareholder with the right to attend.

Be what may, the representation must be conferred in writing and must be specific for each Assembly.

The legal persons, the under-aged and those under civil disqualification may attend through their legal representatives who shall be bound to justify their condition to the Chair of the Assembly and all that without damage to family representation and to the granting of general powers as regulated in Article 187 of the Consolidated Text of the Corporations Act.”

“Article 24. - Call

The Board of Directors call of both the Ordinary as well as the Extraordinary General Assemblies shall be made with announcements published on the Official Bulletin of the Company Registry and in one of the Dailies in the Province of Seville, at least one month in advance of the date the Assembly is due, or in any other media including publication on the Company’s Webpage with the requirements deemed applicable thereof, admitted in the valid laws.

The content of the call shall specify the conditions required by Law.

It may also show the date on which, if need be, the Assembly shall meet on the second call. There should be a time lapse of at least 24 hours between the first and second call.”

“Article 31. - Meeting Place and Extension.

The General Assemblies shall be held in Seville on the date stated in the call, but the sessions may be extended for one or more consecutive days.

The extension may be agreed upon by the Board of Directors or on the request of partners who, at least, represent twenty-five percent of the capital present or represented at the Assembly.

An attendance list shall be created for the constitution of the Assembly in accordance with the stipulations in Article 192 of the Corporations Act.”

“Article 33. - Right of Information.

The right of information entitled the partners as acknowledged in Article 197 of the Corporations Act may be definitely or temporarily suspended by the Chairperson of the Board if the request is submitted by shareholders representing less than twenty-five percent of the capital disbursed and if it deems that publishing the data may, in its opinion, negatively affect corporate interests.

If all the shares bear names, the directorship may, in cases permitted by Law, substitute the legally established publications for a written communication to each shareholder or interested party, complying, in any case, with the provisions of the Law.”

“Article 34. - Minutes Ledger.

Subjects discussed and decisions taken at the General Assemblies shall be entered in the Minutes Ledger, which may be displaceable sheets endorsed beforehand by the Company Registry, and which shall at least reflect the circumstances and prerequisites demanded both by the Corporations Act as well as by the Company Registry Regulations. The minutes, approved in accordance with Article 178 of the Corporations Act, shall be signed by those and as established in Articles 202 and 203 of the aforementioned Law.”

“Article 37. - Challenges.

Decisions taken by the General Assemblies and, where appropriate, by the Board of Directors, deemed to be in contravention of these Bylaws or deemed to be damaging to the Company interests, may be challenged in accordance with the provisions set forth in the Corporations Act.”

“Article 50. - Distribution of Surplus.

With full regards for the rights set forth in Article 8, after the deduction of the applicable general expenses and amortizations, the subtraction of the legal reserve as envisaged in Article 274 of the Corporations Act, and the subtraction of other compulsory Reserve Funds, the remainder of the cash profits shown on each balance sheet at the close of the financial year shall be distributed as follows by the decision of the General Assembly of Shareholders and on the proposal of the Board of Directors:

1º. An amount equal to four percent of the disbursed capital shall be taken out of the initial remainder and distributed among the partners, as minimum dividend of their respective shares.

2º. A minimum of five, and maximum of ten percent, shall then be taken out of the remainder and distributed among the members of the Board of Directors as agreed upon by the General Assembly, as remuneration for their respective services.

3º. The Board of Directors may propose to the Assembly that the remainder be either distributed as total or partial supplementary dividend or be made into special Reserves or Funds or, better still, be carried forward to the next financial year.”

“Article 53. - Liquidation.

Upon deciding to dissolve the Company, the General Assembly shall then name the receivers, compulsorily in odd numbers, with the faculties established by Law and other powers granted them by said General Assembly in agreeing on their appointment.

The Board Members may be appointed as receivers.

On the proposal of the Board, the Assembly may also designate amiable compositors to resolve the questions, issues or divergences that may occur in the receiver transactions.

The decision to dissolve shall be registered with the Company Registry and shall be published in accordance with the provisions of Article 369 of the Corporations Act.

During the liquidation period, the specific legal provisions and, especially, the stipulations of the Second Section of the Ninth Chapter of the Law shall be observed.”

Seventh Decision

Approval of the special report on the Remuneration Policy of Administrators and of the report in relation to article 116 bis of the Stock Exchange Laws.

Schedule 1 at the end of this document: Report on the Policy on Remuneration of Administrators

Schedule 2 at the end of this document: Report in relation to Article 116 bis of the Stock Exchange Laws

Eighth Decision: Authorizations granted the Board of Directors by the General assembly

In accordance with the provisions in Article 297.1.b) of the Corporations Act, to confer upon the Board of Directors the power to increase the share capital, on one or several occasions, within the legal timeframe of five years counting from the date of this General Assembly, by up to forty-five million two hundred thirty.-four eight hundred forty Euros (€45,234,840), equivalent to fifty percent (50%) of the share capital at the time this authorization is granted, by issuing shares of any of the classes envisaged in these Bylaws-with or without bonuses-, charged to the monetary contributions, with or without issuance bonuses, at the opportunity and in the amount that the Board may deem fit and without the need to have to first consult the General Assembly. With regards to each increase, it remains incumbent upon the Board of Directors to decide whether the new shares to be issued are ordinary, privileged, redeemable, without vote or of any other kind of those for which permission is granted, pursuant to the Laws and these Bylaws. In all the non-envisaged case scenarios, the Board of Directors may set forth the terms and conditions of the capital increase and the nature of the shares, and may freely offer the new shares not subscribed within the timeframe or timeframes for the exercise of pre-emptive rights.

Likewise, in accordance with Article 506 of the aforementioned Law, the Board of Directors are authorized to decide whether or not to exclude, as the case may be, pre-emptive subscription rights in relation to the increases that may be decided upon by virtue of this decision, in the event of concurrence of the circumstances envisaged in the aforementioned article, relating to equities, and as long as, in the event of exclusion, the nominal value of the shares to be issued plus, as the case may be, the amount of the issuance bonus is equal to the actual value of the company’s auditors’ report referred to in Article 506.3 of the Corporations Act, prepared for that purpose on the request of the Board of Directors. The Board of Directors are also authorized to re-draft article 6 of the Corporate Bylaws, relating to equity capital, upon the execution of the increase, on the basis of the actual amounts subscribed and disbursed in accordance with the stipulations of Article 311 of the Corporations Act.

In accordance with article 27 of the Official Stock Exchange Regulations, the declarations of the shareholders regarding this decision shall be entered in the minutes.

2. Apply for the listing of the shares that may be issued by virtue hereof on the National and International Stock
Exchange Markets on which the shares of the Bank are traded at the time each capital increase is executed, upon
compliance with whatsoever regulations that may be applicable thereof, for that purpose, empowering the Board of Directors with specific faculties to substitute any of its members and secretary to notarise whatsoever documents and do everything deemed necessary to that effect, including any taking actions, attesting or processing before the competent authorities of the United States of America in order to obtain the listing of the shares represented by ADR (American Depository Receipts) or before any other competent authority.

 

Ninth Decision

The General Assembly authorizing the Board of Directors on the issuance of fixed income or any other type of securities, convertible or not convertible

1º. Pursuant to article 511 of the Corporations Act, the Board of Directors are authorized for a period of five (5) years
counting from the date this decision is taken, to issue, on one or several occasions, any fixed income securities or debt securities of analogous nature (including, but not limited to, certificates, promissory notes or warrants), and fixed income or other types of securities (including warrants) convertible to the Company’s shares and/or exchangeable for the Company’s shares or for those of other companies within or outside the Company’s group, for up to Five Billion Euros (€5,000M). This authorization is specifically understood to entail the faculty to specify the criteria for determining the bases and modalities of the conversion, exchange or exercise of the faculty to increase the equity capital in the amount deemed necessary to meet the corresponding requests for conversion or exercise, and it is also specifically granted the faculty to exclude shareholders’ pre-emptive subscription rights, in accordance with Article 511 of the Corporations Act and all other applicable rules and regulations.

2º. The authorization conferred upon the Company’s Board of Directors in the immediately preceding number 1 remains
subject to the following terms and conditions:

1. Securities that may be issued. The securities referred to by this conferment may be debentures, bonds and other fixed-income securities or debt instruments of analogous nature in any of the forms admissible by Law, including, but not limited to, debenture bonds, promissory notes or warrants or other analogous securities that may grant direct or indirect rights to the subscription or acquisition of the Company’s shares, newly issued or already in circulation, that may be liquidated through physical delivery or by differences. This conferment also entails fixed-income securities and warrants convertible into the Company’s shares and/or exchangeable into the Company’s shares or into shares of other companies within or without the Company’s group.

2. Term. The securities may be issued on one or several occasions, at any time, within the maximum period of five
(5) years counting from the date this decision is taken.

3. Maximum amount authorized. The total maximum amount of the issuance or issuances of the securities agreed upon by virtue hereof shall be Five Billion Euros (€5,000) or its equivalence in another currency.

For the purpose of calculating the aforementioned limit, in the case of the warrants, the sum of bonuses and prices of the exercise of the warrants of each issuance approved pursuant to this conferment shall be taken into account. On the other hand, for fixed-income securities, the outstanding balance of the issued shall be considered for the purpose of the limit above.

This is to clarify that in conformity with Article 510 of the Corporations Act, on the issuance of debentures and other securities that acknowledge or create debts, the limitations envisaged in Article 405.1 of the Corporations Act shall not be applicable.

4. Scope of Conferment. The conferment this decision refers to shall extend, as widely as required by Law, to the
setting up of the various aspects and conditions of each issuance. In particular, and merely for explanatory but not limiting purposes, the Company’s Board of Directors shall determine the amount for each issuance, and always within the overall quantitative limits set forth; the place of the issuance (whether in or outside Spain) and the currency and, if outside Spain, its equivalence in Euro; the denomination, whether bonds or debentures or any other admitted by Law (even if subordinated); the date or dates of issuance; if the securities are not convertible, the possibility that they may be partially or totally exchangeable for the pre-existing shares of the Company or of other companies within or outside the Company’s group, and the necessary or voluntary circumstance of being convertible or exchangeable, and, in the latter, at the option of the securities holder or of the Company, or to incorporate a purchase or subscription option right over the shares referred to; the interest rate, dates and the coupon payment procedures; the perpetual or redeemable nature and, in the case of the latter, the period of amortization and the maturity date; the type of reimbursement, bonuses and batches, guarantees, even mortgage-types; the form of representation, by certificates or entries into accounts; the number of securities and their nominal value, which, in the case of convertible and/or exchangeable securities, shall not be less than the nominal value of the shares; pre-emptive rights, if appropriate, and the subscription system; the applicable laws, Spanish or foreign; to apply for, if appropriate, listing on official or non-official secondary markets, organized or not, Spanish or foreign, of the securities issued under the requirements set forth each time by the valid regulations; and, in general, any other condition of the issuance, including, as the case may be, to appoint the trustee of the relevant syndicate of the holders of the securities that may be issued and to approve the basic rules that shall govern the legal relationship between the Company and said syndicate which, if appropriate, may exist.

The conferment also includes the Board of Directors being attributed the power to decide on the conditions of amortization of the securities issued by virtue of this authorization, and for such purpose it may employ any of those envisaged in the Corporations Act in that regard. Likewise, the Board of Directors is hereby empowered to modify the terms and conditions of such securities if it deems convenient and if it obtains the official authorizations that may be necessary and, if appropriate, in conformity with the assemblies of the relevant syndicates of the holders of the pertinent securities that may be issued under this authorization.

5. Bases and modalities of the conversion. In the case of the issuance of fixed-income securities convertible into
shares (in the latter case, whether into shares of the Company or into shares of companies belonging or not to the group of the Company) and for the purpose of determining the bases and modalities of the conversion, the following criteria are hereby established:

The securities issued by virtue of this decision may be converted into newly issued shares of the Company or into shares of companies belonging or not to the group of the Company, based on fixed (specified or unspecified) or variable conversion, and the Board of Directors shall be empowered to decide whether they are convertible, and to determine whether they are necessarily or voluntarily convertible, and in the event of being voluntarily, on the option of their holders or the Company, with the frequency and within the period set forth in the issuance decision and which shall in no way whatsoever exceed fifteen (15) years counting from the corresponding date of issuance.

For the purpose of the conversion, the fixed-income securities shall be evaluated by the nominal amount and the shares at the exchange rate specified in the decision of the Board of Directors in which this conferment is utilized, or at the exchange rate that may be set on the date or dates indicated in the very decision of the Board of Directors, and based on the value of the shares of the Company trading on the Spanish Stock Exchange on the date/s or period/s taken as reference in the same decision, with or without discount.

They may also decide to issue fixed-income securities convertible with a variable conversion rate. In this case, the price of the shares for the purpose of conversion shall be the arithmetic mean of the closing prices of the Company’s shares on the Electronic Market during a period to be specified by the Board of Directors. The bonus or discount may be different for each date of conversion of each issuance (or, if appropriate, each tranche of issuance).

In the event that the securities of the corresponding issuance are convertible, the Board of Directors may establish that the Company reserves the right to opt at any time between conversion into newly issued shares of the Company, specifying the nature of the shares to hand over during the conversion or exchange, or even opting between handing over a combination of newly issued shares and pre-existing shares of the Company.

Where the conversion is appropriate, the fractions of the share that, if need be, may have to be handed over to the holder of the securities shall be rounded up by default to the whole number immediately below and each holder may receive cash, if so established by the Board of Directors, for the difference that such situation may cause.

In conformity with Article 59.2 of the Corporations Act, in no manner whatsoever shall the value of the shares be lower than the nominal value for the purpose of relating the conversion of the securities into shares. Likewise, pursuant to Article 415 of the Corporations Act, fixed-income convertible securities may not be issued for less than their nominal values and said securities may not be converted into shares if their nominal value is less than them.

When approving an issuance of securities pursuant to this authorization granted by the General Assembly, the Board of Directors shall issue a report based on the criteria described above explaining and specifying the bases and modalities of the conversion specifically applicable to the issuance indicated, which shall be accompanied by the corresponding report from the accounts auditors, both envisaged in Article 511 of the Corporations Act.

Once the Class B shares are issued, the issuance of convertible securities should be carried out with full regards for the principle of proportionality between the Class A and Class B shares as set forth in Article 8 of these Bylaws.

6. Rights s of Holders of Convertible and Exchange Securities. As long as it is possible to convert and/or exchange
the securities that may be issued into shares, their holders shall have all the rights granted them by the current
laws.

7. Capital increase, exclusion of the pre-emptive rights in convertible securities. For explanatory but not limiting purposes, the Board of Directors’ conferment envisaged herein also entails the following powers:

Pursuant to Article 511 of the Corporations Act, the Board of Directors is empowered to partially or totally exclude the pre-emptive rights of the shareholders, if it is a prerequisite for capturing financial resources on the international market, to use techniques of prospection of the demand or of any other manner justified by the interest of the Company. Whatever the case may be, should the Board of Directors decide to eliminate the pre-emptive rights over a specific issuance of convertible securities which it may eventually decide to issue pursuant to this authorization, upon approving the issuance, and in conformity with the stipulations of Article 511 of the Corporations Act, it shall issue a report giving the specific reasons of corporate interest justifying said measure, which shall be object of the correlative report from the Accounts Auditor referred to in the article cited above. Said reports shall be placed at the disposal of shareholders and it shall be mentioned and commented at the very next General Assembly held after the issuance in question, bearing in mind the provisions of aforementioned legal precept.

In accordance with Article 297.1.b) and 302 of the Corporations Act, the power to increase the share capital in the amount necessary to meet the request to convert the convertible securities issued pursuant to this conferment. Said power shall only be executed in the manner that the Board of Directors does not exceed with said increases, together with whatsoever other capital increases it may carry out by virtue of any other debentures to increase the capital that may be available, limited to half of the share capital stipulated in Article 297.1.b) of the Corporations Act and counted at the time of this authorization. This authorization to increase the share capital includes that of issuing and circulating the share capital that may be necessary, on one or several occasions, to ensure the conversion and, pursuant to Article 297.2 of the Corporations Act, that of modifying the article of the Corporate Bylaws relating to the amount of capital stock and, if need be, that of rendering void the part of said capital increase that may not be deemed necessary for the conversion into shares. Pursuant to Article 304.2 of the Corporations Act, the capital increase that the Board of Directors may execute to meet such conversion request shall not permit the exercise of pre-emptive rights by the Company’s shareholders.

The power to plan and specify the bases and modalities of the conversion and/or exchange, considering the criteria established in section 5 above and, in general and under its most extensive terms, the determination of whatsoever terms and conditions deemed necessary or convenient for the issuance. In the subsequent General Assemblies the Company may hold, the Board of Directors shall inform the shareholders on the use of the conferment to date, if need be, on the issuing of fixed-rate convertible and/or exchangeable securities.

8. Warrants: The regulations envisaged in sections 5 to 7 herein shall be applicable mutatis mutandis in the event of the issuance of warrants or other analogous securities that may directly or indirectly grant rights to the subscription of the Company’s newly issued shares or the Company’s shares already in circulation, with the conferment entailing the most extensive powers, with the same scope as previous sections, to decide on whatsoever it deems convenient in relation to said class of securities.

9. Listing or Admission to Trade. When appropriate, the Company shall apply for admission to trade or be listed on official or non-official secondary markets, organized or not, Spanish or foreign, of the securities issued by virtue of the conferment, empowering the Board of Directors to handle all processing and take all the actions necessary before the competent organs of the various Spanish and foreign stock markets in order to gain admission to trade or be listed.

10. Guarantees by the companies of the group for the fixed-income securities issuance. The Board of Directors of the Company is also hereby empowered to give guarantee in the name of the Company, within the limits pointed out above, for the newly issued securities (whether convertible or exchangeable) which the companies of the group may produce during the validity hereof.

11. Faculties of Conferment, Substitution and Empowerment. The Board of Directors is hereby authorized to confer the legally conferrable powers inherent hereof by virtue of this decision upon any of its members and/or on the Secretary of the Board of Directors so that either of them may grant the pertinent powers deemed necessary to the employees of the Company to act upon said conferred faculties.
3º To specifically revoke any conferment upon the Board of Directors for the same purpose, in any aspect that may not
have been executed, by virtue of the decision taken by the Ordinary General Assembly of Shareholders meeting held on April 11, 2010.
 

Tenth Decision:

Authorizations granted the Board of Directors by the General assembly

To authorize the Board of Directors to buy back the Company’s shares either directly or through its subsidiary or investee companies up to the maximum permitted by current laws at a rate set between one hundredth part of a Euro (€0.01) as a minimum and sixty Euros (€60) as maximum, with express power of substitution in any of its members. Said power shall remain in vigour for eighteen (18) months from this very date, subject to article 144 and following of the Corporations Act.

For that purpose, the authorization conferred upon the Board of Directors for the same purposes, by virtue of the decision taken at the Shareholders’ Ordinary General Assembly meeting held on April 11, 2010, is hereby specifically revoked.

Eleventh Decision:

Authorizations to the Board of Directors.

Felipe Benjumea Llorente, José B. Terceiro, Manuel Sánchez Ortega and Miguel Ángel Jiménez-Velasco Mazarío are hereby specifically authorized, such that any of them may, acting as special representative of this Assembly, appear before a Notary Public, to execute the necessary and due notarizations, as the case may be, to enter the decisions taken into the Company Registry as legally required, undersigning as many documents as may be necessary in the execution of said decisions.

The Board of Directors are also authorized, with the faculty of substitution, to freely interpret, apply, execute and develop the approved decisions, including rectification and fulfilment thereof, and to authorize any of its members to notarize any rectification or supplementaries deemed necessary to correct any error, defect or omission that could impede the entry of any decision whatsoever into the company registry, to the extent of complying with as many requirements as may be inevitable for the effectiveness of the decisions taken.

There are no directors that hold positions in other listed companies.

In accordance with the register of significant shareholdings that the Company maintains, pursuant to the internal code of conduct in relation to the stock market, the percentage shareholdings of the directors in the capital of the Company as at December 31, 2011 were as follows:
 

 

10.2. Company Management Structure

The Board of Directors

• Composition: number and identity

Following changes to Article 39 the Corporate Bylaws, as agreed by shareholders and the Ordinary Shareholders Meeting held April 15, 2007, the maximum number of members of the Board of Directors has been set at fifteen, with respect to the nine established until that time. This modification reinforced the structure of the administration body through a number of managers that allows, on one hand, a more diversified composition and, on the other, facilitates the delegation and adoption of agreements with minimal attendance thereby ensuring a multiple and plural presence in the Board of Directors.

 

In agreement with the recommendations established in the Unified Code of Good Government of Listed Companies, the composition of the Board bears the capital structure in mind; this enables the Board to represent in a stable fashion, the highest possible percentage of the capital and ensures protection of the general interests of the Company and its shareholders. The Board is provided, moreover, with a degree of independence in concert with the practices and professional needs of any company. Its current composition is the following:

 

The total number of directors is considered to be adapted to ensure the necessary representation and the effective functioning of the Board of Directors.

Without prejudice that the independence is a condition that must be common to any director, without distinction due to his or her origin or appointment, basing his condition on reliability, integrity and professionalism in his or her undertakings, in agreement with the guidelines included under Law 26/2003, in the O. M. 3722/2003 and in the Unified Code of Good Governance of Listed Companies, the classification of the current directors is as follows:

 

in the table above, the Board is made up of a majority of external, non-executive directors.

• Reglas de organización y funcionamiento

The Board of Directors is governed by the Board Regulations, by the Corporate Bylaws and by the Internal Securities Exchange Code of Conduct. The Board Regulations were initially approved by the Board at a meeting on January 18, 1998, clearly in anticipation of the current rules of good governance and internal efficient application. The most recent update of note took place on June 29, 2003, in order to incorporate matters relating to the Audit Committee as established under the Financial System Reform Act.

- -Structure:

The Board of Directors is currently made up of 15 members. The Board Regulations cover the composition of the Board, the functions and its internal organisation; additionally, there is the Internal Stock Exchange Code of Conduct, the scope of which covers the Board of Directors, senior management and all those employees who, due to their skills or roles, are also impacted by its content. The Shareholder Meeting rules cover the formal aspects and other aspects of the shareholder meetings. Finally, the Board is supported by the Audit Committee and the Remuneration Committee, which in turn are subject to their own respective Internal Governance Rules. All such rules, included within the revised Internal Corporate Governance Rules, are available on the Company website, www.abengoa.com.

Since its inception, the Remuneration Committee has been analysing the structure of the governing bodies of the Company and has worked to align such bodies with regulations in force regarding governance, focusing in particular on the historical and current configuration of such ruling bodies within Abengoa. Consequently, in February 2007 the committee recommended the creation of a Coordination Director, as well as the dissolution of the Advisory Committee to the Board of Directors. The first recommendation was to align the Company with the latest corporate governance recommendations in Spain in 2006; the second recommendation reflected that the advisory board had completed the role for which it was established in the first place, and that its coexistence with the remaining company bodies could create a potential conflict of roles. Both proposals were approved by the Board of Directors in February 2007 as well as by the shareholders at the ordinary general meeting on April 15 of the same year.

Finally, in October 2007 the Committee proposed to the Board the resignation of Mr. Javier Benjumea Llorente as Vice-president, along with the revoking of any powers which had been granted, and the naming of a new representative, being an Abengoa representative, being an Abengoa representative, or a Focus-Abengoa Foundation representative, for all those entities where he would have a responsible post.

On the basis of the foregoing, the committee decided that it would be opportune to repeat the study on numbers and conditions of the vice-president to the Board of Directors within the current structure of the company’s governing bodies.

As a result, the Committee considered it necessary that the vice-president of Abengoa hold the powers as per the Law for Anonymous Companies so that, on the one hand, he or she is granted full representation of the company and, on the other, the functions of the president of the board. On this basis it was considered that the Coordinating Director – in accordance with the responsibilities as assigned to the role by the Board of Directors (February 2007) and at the Shareholder Meeting (April 2007) – was ideal for the role, in addressing the corporate governance recommendations and the structure of the company, as well as the composition and diversity of the directors. The coordination director already has the duty to take into account the concerns and goals of the board members and, to achieve this, has the power to call Board meetings and to add items to the agenda. As this role was more in substance than in title, considered the interests of the directors, and reflected a certain representation of the Board, it was considered appropriate to recognise this institution and comprehensive representation.

For the reasons mentioned, the Committee deemed it appropriate to propose Aplicaciones Digitales, S.L. (Aplidig, represented by Mr. José B. Terceiro Lomba), the current Coordination Director, as the new Vice-President of the Board. Additionally, within the representative duties, it was proposed that the vice-president, in conjunction with the president, would represent Abengoa as president of Focus-Abengoa Foundation, as well as for other foundations and institutions in which the company is or should be represented.

In light of the above, on December 10, 2007 the Board of Directors approved the appointment of Aplicaciones Digitales, S. L. (represented by Mr. José B. Terceiro Lomba), the current Coordination Director, as the new Vice-President of the Board, with unanimous consent of the independent directors regarding the retention of his role as coordination director despite being promoted to an executive board member role. Additionally, within the representative duties on July 23, 2007, the Board approved that the vice-president, in conjunction with the president, would also represent Abengoa as Chairman of the Focus-Abengoa Foundation Board, as well as for other foundations and institutions in which the company is or should be represented.

The Chairman of the Board, as the leading executive of the Company is granted full powers excluding those which by law are not assignable to the Board of Directors regardless the Board-attributed faculties and competences. With regards to the vice-president, also an executive role, he or she holds at the same time power over the aforementioned faculties.

At the proposal of the meeting of the Appointments and Remuneration Committee of October 25, 2010, and due to the resignation as a director of Mr Miguel Martín Fernández due to other professional commitments, the Committee agreed to appoint Mr Manuel Sánchez Ortega as CEO for a period of four years, by co-optation. Mr Manuel Sánchez Ortega shares the executive functions of the Company with Mr Felipe Benjumea Llorente.
 

- Functions:

The role of the Board of Directors is to undertake the necessary actions so as to achieve the corporate objectives of the Company. It is empowered to determine the financial goals of the company, agree upon the strategies necessary as proposed by senior management so as to achieve such goals, assure the future viability of the company and its competitiveness, as well as adequate leadership and management, supervising the development of the Company’s business.

- Appointments:

Shareholder meetings, or when applicable the Board of Directors, within the established rules and regulations, are designated the authority to appoint members of the Board. The appointee will be required to demonstrate that they have the necessary legal requirements, that they are trustworthy and that they have the required knowledge, prestige and sufficient professional references so as to undertake the functions of director.

Directors are appointed for a maximum of 4 years, although may then be re-appointed.
 

- Cease of directors:

Directors will be removed from their position at the end of their tenure or under any other circumstances in accordance with the appropriate laws. Further, they should relinquish their role as Directors in the event of any incompatibility with, prevention of, a serious charge against, or non-compliance with their obligations as Directors.

- Meetings:

In accordance with Article 42 of the Company Bylaws, the Board of Directors will meet as deemed necessary given the demands of the Company or, as a minimum requirement, three times annually, with the first meeting during the first quarter of the year. During 2010, the Board met a total of 15 times, in addition to a meeting between the Board of Directors and senior management.

- Duties of the Directors:

The function of the director is to participate in the direction and control of management of the Company for the purposes of and with the aim of maximising its value for shareholders. Each director operates with the diligence and care of a loyal and dedicated professional, guided by the company’s interests, as a representative with complete independence to defend and protect the interests of the shareholders..

By virtue of their appointment, the directors are required to:

- Prepare and be sufficiently and properly informed for each meeting.
- Actively assist and participate in the meetings and decisions.
- Avoid conflicts of interest and, in the event that they arise, to communicate such conflicts to the Company through the Board of Directors’ Secretary.
- Not to undertake duties for competing entities.
- Not to use Company information for personal purposes.
- Not to use the Company’s business opportunities for their own interest.
- Maintain full confidentiality regarding information received within their role as Director of the Company.
- Abstain from voting on proposals that may have an effect on them.
 

- The Chairman:

The Chairman, in addition to the Company Bylaws and legal requirements, is the senior-most executive of the Company, and as such is effectively responsible for the management of the Company, in accordance always with the criteria and decisions of the Board of Directors and the Shareholder meetings. The Chairman is responsible for implementing the decisions made by the company’s management bodies, through application of the powers as permanently granted to him by the Board of Directors, which he represents in all aspects. The Chairman also casts the deciding vote on the Board of Directors.

The Chairman is also the Chief Executive Officer. The following measures are in place to prevent an accumulation of power.

Under Article 44 bis of the Company Bylaws, on December 2, 2002 and February 24, 2003 the Board of Directors agreed to appoint the Audit Committee and the Appointment and Remuneration Committee.

These committees have the powers, which may not be delegated, as per the Law, the Company Bylaw and internal regulations, acting as regulatory body and supervisory body associate with the matters over which they chair.

Both are chaired by a non-executive independent director and are comprised of a majority of non-executive directors.
 

-  The Secretary:

The Secretary to the Board of Directors undertakes those responsibilities as required by law. Currently the role of Secretary and that of Legal Counsel to the Board is undertaken by the same person, being responsible for the correct calling of meetings and that resolutions are properly implemented by the Board. In particular, he will advise the Board as to the legality of proposed deliberations and decisions and upon compliance with the Company’s internal corporate governance regulations, making him responsible as a guarantor of the legality, both in law and in substance, of the actions of the Board.

The Secretary, as a specialised role, guarantees the legality in law and in substance of the actions of the Board, with the full support of the board to perform their duties with independent judgement and substance. He or she is also responsible for safeguarding the internal rules of corporate governance.
 

-  Resolutions:

Decisions are made by a simple majority of those directors present at the meeting (present of represented) in each meeting, with the exception of legal matters as previously set out.
 

• Compensation and other benefits

- Salaries:

Directors are remunerated in accordance with Article 39 of the Company Bylaws. The director’s remuneration may consist of a fixed amount as agreed at the Shareholders Meeting, and need not be equal for all directors. Additionally they may receive a proportion of retained earnings of the Company, of between 5 and 10 percent, maximum, of earnings after dividends in the year to which the remuneration relates. Additionally, costs of relocations are recovered, if undertaken as part of their role as Director.

The total remuneration paid during 2011 to the whole of the Board of Directors was €13,237,000 for fixed and variable remuneration concepts (€8,912,000 in 2010) and €155,863 for other concepts (€138,000 in 2010).

Detail on individual salaries and benefits in 2011 paid to the Board of Directors is as follows (in thousands of Euros):

 

The increase in the number of Executive Board Members from two to three marks the conclusion of the increase of 48.3% in the total value of comparing the 2010 – 2011 salary scales for Board Members (€8.9 M in 2010 and €13.2 M in 2011).

Additionally, during 2011 the remuneration paid to the Company’s senior management team, as shown below (members of the senior management team that are not executive directors, indicating the total remuneration paid to them during the year) for all concepts (fixed and variable) totalled €7,822,000 (€7,216,000 in 2010).

For more information on the Corporate Governance Report, the appendix of this Management Report contains the complete version which has been subjected to independent verification by our auditors who have issued opinion of reasonable assurance based on the ISAE 3000 standard “Assurance Engagements other than Audits or Reviews of Historical Financial Information” issued by the International Auditing and Assurance Standard Board (IAASB) of the International Federation of Accountants (IFAC).