Company Bylaws Meliá Hotels International S.A. 1 Palma de Mallorca, April, 2016 1 The General Meeting of Shareholders of the Company held on June 4, 2015 resolved the modification of articles 6th, 7th, 8th, 9th, 19th, 20th, 21st, 22nd, 24th, 25th, 26th, 27th, 28th, 29th, 30th, 31st, 32nd, 33rd, 35th, 36th, 37th, 38th, BIS 39th, 42nd, 43rd, 45th, 46th, 47th, First Additional Provision, Additional Provision Two and the inclusion of a new Article 39 TER. Registered on the Mercantile Register on the 29 th July 2015; inscription 120. Article 5 of the Bylaws concerning the share capital of the company, has been modified under deed dated April 25, 2016, registered in the Mercantile Register of Mallorca on April 27, 2016, inscription 125.
Summary Chapter I. Legal regime, corporate name, objective, term and address Article 1.- Legal Regime and Corporate Name Article 2.- Corporate term Article 3.- Registered address Article 4.- Corporate objective Chapter II. Share capital, shares and bonds Article 5.- Share capital Article 6.- Account entries Article 7.- Accounting Register of Shares and Register of Shareholders Article 8.- Legitimation of Shareholders Article 9.- Membership status Article 10.- Passive dividends Article 11.- Co-ownership of shares Article 12.- Usufruct of shares Article 13.- Pledges on shares Article 14.- Embargo of shares Article 15.- Transfer of shares Article 16.- Theft, misappropriation, misplacement or destruction of certificates from the Register Article 17.- Non-voting shares Article 18.- Redeemable shares Article 19.- Preference shares Article 20.- Bonds Chapter III. Corporate bodies Article 21.- Corporate bodies Article 22.- The General Shareholders Meeting Article 23.- Types of General Shareholders Meetings Article 24.- Calling and preparation of the General Shareholders Meeting Article 25.- Representation to attend the General Shareholders Meeting Article 26.- Designation of positions at the General Shareholders Meeting Article 27.- Development of the General Shareholders Meeting Article 28.- Majorities for the approval of resolutions Article 29.- minutes of the General Shareholders Meeting Article 30.- Powers of the General Shareholders Meeting Article 31.- Structure and appointments to the Board of Directors Article 32.- Term of office and renewal Article 33.- Appointments to the Board of Directors Article 34.- Powers of the Board of Directors Article 35.- Operation of the Board of Directors Article 36.- Performance of duties Article 37.- Remuneration of Directors Article 38.- Delegation of powers Article 39.- Executive Committee Article 39 bis.- Auditing and Compliance Committee Article 39-ter. Appointments and Remuneration Committee Chapter IV. Financial Year and Annual Accounts Article 40.- Financial year Article 41.- Documentation of accounts Article 42.- Annual accounts Article 43.- Approval and deposit of Annual Accounts Article 44.- Application of annual results Article 45.- Censure and verification of Annual Accounts
Chapter V. Winding-up and liquidation Article 46.- Reasons for winding-up Article 47.- Liquidation of the Company Additional provisions Chapter I Legal regime, corporate name, objective, term and address ARTICLE 1.- Legal Regime and Corporate Name 1.1. Legal regime. The company shall be governed by these by-laws and, in matters not covered by these by-laws, by the provisions of Royal Decree Law 1/2010 of 2 July, which approves the revised text of the Companies Act, all applicable Stock Market Legislation and all other applicable legal or regulatory provisions. The company is also subject to the Internal Regulations approved by the Annual General Shareholders Meeting or the Board of Directors, except where such Regulations contravene the law or these by-laws.
1.2. Denomination. The company will be called MELIA HOTELS INTERNATIONAL, S.A. ARTICLE 2.- Corporate term 2.1 Corporate term and commencement of activities. The Company has been established for an unlimited period of time; its operations started as of the date of its incorporation deed and it will only be wound up if such is agreed by the General shareholder s meeting or for other reasons as determined by law. ARTICLE 3.- Registered address 3.1. Registered address. The registered address shall be at Palma de Mallorca, Calle Gremio Toneleros, number 24, Polígono Son Castelló, and the Board of Directors shall be entitled, to the extent allowed under the legal provisions in force, to change said address within the limits of the municipality of Palma de Mallorca. 3.2. Branches. The company may also resolve upon the opening, closing and transfer of branches, agencies or delegations both in Spain and abroad on agreement by the Board of Directors. 3.3.- Electronic head office and corporate website. The Company shall have a corporate website where the Shareholders may exercise their right to information and which shall provide relevant or significant information on the Company. Any change, transfer or removal of the Company s website shall be the responsibility of the Board of Directors. ARTICLE 4.- Corporate objective 4.1 Corporate object. The corporate object shall be as follows: (a) The acquisition, ownership, operation, promotion, commercialisation, development, administration and granting of rights over tourist and hotel facilities, and of any other facilities designed for activities related to tourism, leisure and recreation in any of the forms permitted by Law. (b) The acquisition, subscription, ownership and transmission of all types of securities, both public and private, both domestic and international, proxy of the share capital of companies whose corporate purpose is the operation and/or ownership of the activities indicated in the previous section a). (c) The acquisition, ownership, operation, management, commercialisation and granting of rights over all types of goods and services for tourist and hotel facilities, or any other facilities designed for activities related to tourism, leisure and recreation. (d) The acquisition, development, commercialisation and granting of rights over any know-how or technology related to tourism, hotels, leisure or recreation. (e) The promotion of all types of business related to tourism, hotels, leisure or recreation, as well as participation in the creation, development and operation of new businesses, establishments or entities involved in tourism, hotels, leisure or recreation. The activities forming part of the corporate objective may be carried out by the company totally or partially in an indirect manner, through holdings in other companies with a similar corporate objective. The objective specifically excludes any activities that the Law reserves for companies that comply with certain requirements with which the company is not in compliance. In particular, this specifically excludes all activities that the Law reserves for Collective Investment Institutions or Investment Services Companies.
Chapter II Share capital, shares and bonds ARTICLE 5.- Share capital 5.1 Stock capital. The capital stock is FORTY FIVE MILLION, NINE HUNDRED AND FORTY THOUSAND EUROS ( 45,940,000.-), represented by TWO HUNDRED AND TWENTY NINE MILLION, SEVEN HUNDRED THOUSAND (229,700,000) SHARES each of a nominal value of TWENTY EURO CENTIMES ( 0.20). 5.2 Shares. The shares are fully subscribed and paid up and constitute a unique single class and series. ARTICLE 6.- Account entries 6.1 Legal regime. The shares are represented by account entries and regulated by the legislation applicable at any. 6.2 Modification. Any change in the characteristics of the shares represented by means of account entries shall be announced, once formalised, in the Official Journal of the Commercial Registry as well as in one newspaper widely distributed in the province in which the Company has its headquarters. ARTICLE 7.- Accounting Register of Shares and Register of Shareholders 7.1 Accounting Register. The shares, and also their transfer and the constitution of limited real rights will be subject to registration in the corresponding Accounting
Register kept by the entity entrusted with this duty, in accordance with the Securities Market Act and concordant provisions. The entity entrusted with the registration in the corresponding Accounting Register of the shares represented by means of account entries will report to the Company all of the data required to identify Shareholders. 7.2 Company shareholder Register. Nevertheless, in accordance with the Law and to guarantee that the Shareholders may exercise their rights under these Bylaws, the Company may keep its own register of shareholders. The Company shareholder Register will be kept in the most appropriate format, which may be computer-based, and will include for each shareholder the number of shares they own, either directly or indirectly through controlled entities, in the sense of Article 4 of Stock Market Law, or through intermediary or fiduciary persons or entities or similar, that are also Shareholders in the Company, as well as through collective investment institutions or similar, that are also Shareholders in the Company, in such a way that the exercise of the right to vote related to such shares is determined directly or indirectly by the shareholder in question. 7.3 Information requirements. The Company, through its Chairman, and after prior agreement with the Board of Directors, may address any shareholder at any time to require that shareholder to communicate to the Chairman the number of shares owned directly and the number controlled indirectly through controlled or intermediary persons or entities mentioned in the previous paragraph, and which act on behalf of the said shareholder, although they do so in their own name. The Company, through its Chairman, and after prior agreement with the Board of Directors, may also address any person or entity that owns shares or, if appropriate, real rights over shares in the Company in order that that person or entity declares whether they are acting on behalf of another shareholder, or if their voting rights are determined by another shareholder. 7.4 Communications. Any shareholder may also address the Company through the Chairman of the Board of Directors to request information on the data on the said shareholder contained in the Company shareholder Register. ARTICLE 8.- Legitimation of Shareholders 8.1 Legitimation. The Company will only acknowledge as Shareholders or, if appropriate, as holders of real rights over a share or shares, those persons or entities correctly registered in Accounting Registers and, when appropriate, in the Company shareholder Register mentioned in the previous article. 8.2 Attendance card. To exercise their right to attend the General Shareholders Meeting, Shareholders, or the owner of real rights over a share or shares, must be in possession of the corresponding nominative attendance card, indicating the number, class and series of the shares they own or over which they have a right that allows them to attend the General Shareholders Meeting, as well as the number of votes which, if appropriate, they may issue. He may also have another means to provide evidence of the ownership of the shares which the Board of Directors may choose, pursuant to the Law, these Bylaws and the Regulations of the General Shareholders Meeting. 8.3 Issue of attendance cards. In order to allow Shareholders to take part in the General Shareholders Meeting and to ensure they may exercise their rights as foreseen in these Bylaws, the Company, in accordance with the Accounting Register and, when appropriate, with the Company shareholder Register, will issue, directly or through
the entity entrusted with keeping the Accounting Register, attendance cards to those Shareholders or, if appropriate, those owners of real rights over a share or shares, that exist at least FIVE (5) days before the General Shareholders Meeting is held in first calling. 8.4 Representation. The attendance card may be used by the Shareholders as a document to grant representation for the General Shareholders Meeting, notwithstanding the agreement of the Board of Directors to grant representation by any other means that may provide proof of identity of the represented shareholder and of the proxy appointed, pursuant to the Law, these Bylaws and the Regulations of the General Shareholders Meeting. ARTICLE 9.- Membership status 9.1 Every share shall confer upon its lawful holder Shareholder status and it entails that the Shareholder shall fully and totally comply with the provisions in these Bylaws and in the resolutions adopted by the governing bodies of the Company. Shareholders are entitled to exercise the right inherent to their status, according to these Bylaws and the Law. ARTICLE 10.- Passive dividends 10.1 Calls. If the Company has shares that have not been fully paid-up, the Board of Directors, if this has not already been done within the terms of the capital increase, will set the time limits, form and amount in which pending calls on shares, must be paid, announcing these decisions in the Official Journal of the Commercial Registry. 10.2 Default. Any shareholder who is in default in the payment of any call shall not exercise the right to vote. His shares shall be deducted from the share capital for the purposes of establishing a quorum and adoption of resolutions by the General Shareholders Meeting. Default in the payment of any call will be subject to the payment of the interest stipulated in Law to the company on the date when the call becomes payable and with no requirement for any claims to be made, without prejudice to the rights of the Company to claim, in addition, any damages caused by the default. Should the term established for payment elapse, without payment having been made, the Company may either demand compliance with the obligation, including payment of legal interest and the loss and damage caused by the delay, or dispose of the shares in default at the defaulting shareholders expense, with no further requirements nor formalities other than prior communication of the intention to sell to the entity in charge of the Accounting Register for shares, and without prejudice to the terms of these Company Bylaws in relation to the transfer of shares. The sales price will be applied, in the first place, to pay the Company for any payments made, default interest, expenses caused by the sale, and damages suffered by the Company. Any remaining amounts, if such exist, will be provided to the defaulting shareholder or their heirs, who will then become responsible to the Company for any deficit that may exist. If a sale cannot be effected, the share shall be redeemed and the share capital reduced accordingly, and all sums until then received by the Company in respect of the share shall stand to the credit of the Company.
10.3 Transfer. The purchaser of a share which is not fully paid up shall be jointly and severally liable, together with all previous transferors, and at the discretion of the Directors of the Company, for the payment of the unpaid portion. The responsibility of the transferors will endure for three years from the date of the transfer. 10.4 Legal recourse. The terms of this article will not impede the Company using any of the procedures defined in article 45 of Company Law in respect to defaulting Shareholders. ARTICLE 11.- Co-ownership of shares 11.1 Co-ownership. Shares are indivisible. Joint owners of a share are, therefore, to delegate upon a single person the power to exercise their corporate rights, and shall be jointly responsible towards the Company with respect to any and all liabilities stemming from their shareholding. 11.2 Joint ownership. This rule shall also apply to all other forms of joint ownership of rights on the shares. ARTICLE 12.- Usufruct of Shares 12.1 Ownership of shareholder Rights. In case any shares are subject to a right of usufruct, membership shall lie with the owner; however, the usufructuary shall be entitled, in any case, to collect any dividends that the Company may pay during the term of the usufruct. If the Company s shares are pledged, the owner of the shares shall hold the rights inherent to his/her condition as the owner and the pledgee is obliged to enable the owner to exercise such rights. 12.2 Relations between usufructuary and owner. The relations between usufructuary and owner will be governed by the deed that constitutes the usufruct agreement; or, in its absence, by the Law and Civil Law. ARTICLE 13.- Pledges on shares 13.1 Ownership of shareholder Rights. All rights attaching to any shares subject to a charge shall be exercisable by the holder of the shares. 13.2 Obligations of Security Holder. From the moment the pledge is made, the security holder shall allow the holder to exercise the rights derived from their condition as a Company shareholder, a circumstance which must also be reflected in the document which defines the pledge. 13.3 Payment of dividend calls. If the holder of any shares is in default in the payment of any calls thereon, the security holder may himself discharge the liability or execute the charge. ARTICLE 14.- Embargo of shares 14.1 Applicable regime. In the event of shares being subject to enforcement proceedings, the provisions in the previous Article shall apply to the extent that they are not incompatible with the terms of the enforcement proceedings.
ARTICLE 15.- Transfers of shares 15.1 Transfers. Transfers of shares in the Company, which shall be free, shall be performed by book transfers. The recording of the transfer in the Accounting Register in favour of the acquirer shall have the same effects as the transfer of share certificates. 15.2 Authorisation. Authorities for the transfer and for the exercise of the rights arising from the shares may be evidenced by showing the relevant Certificate issued by the entity responsible for the Accounting Register on which the shares are registered described in the previous article 7. 15.3 Issue of Certificates of ownership. Nevertheless, and in general, and in accordance with Stock Market regulations, if Certificates are issued for shares represented by annotation in accounts, such shares may not be disposed of until the mentioned Certificates have become invalid or have not been renewed, with the exception of transfers derived from the execution of judicial and administrative decisions. ARTICLE 16.- Theft, misappropriation, misplacement or destruction of certificates from the Register 16.1 Applicable regime. In the event of theft, misappropriation, misplacement or destruction of the certificates evidencing the status of shareholder, for the issuance of new Certificates to replace the original Certificates, the legislation applicable to the system of representation of securities by annotation in account shall apply. ARTICLE 17.- Non-voting shares 17.1 Issue of non-voting shares. The company may issue non-voting shares within the limits determined by law. Their holders will be entitled to receive a minimum annual dividend, fixed or variable, resolved by the General Shareholders Meeting and/or the Board of Directors at the time of deciding to issue the shares, but which must not be less than 0.5% of the capital paid-out for each non-voting share. Once the minimum dividend has been agreed, holders of non-voting shares will be entitled to the same dividend as corresponds to ordinary shares. Where there are distributable profits, the company is required to resolve the distribution of the minimum dividend mentioned above. If there should be no distributable profits or insufficient distributable profits, the part of the minimum dividend not paid will be accumulated on the terms resolved by the General Shareholders Meeting and/or the Board of Directors at the time the issue of the shares is decided. 17.2 Preferential subscription right and recovery of voting rights. Holders of nonvoting shares may exercise the preferential subscription right in the event that it should be resolved by the General Shareholders Meeting of Shareholders and/or the Board of Directors at the time of issuing shares or debentures convertible to shares, and it must be decided at the same time as the recovery of the voting right after non-payment of the minimum dividend. ARTICLE 18.- Redeemable shares 18.1 Issue of redeemable shares. The company may issue shares which are redeemable at the request of the Company, the holders of the said shares or both, for a nominal
amount not greater than one-quarter of the share capital. The said shares must be fully paid-up at the time of subscription. In the resolution of issue the conditions will be fixed for the exercise of the right of redemption. If the aforesaid right should be attributed exclusively to the Company, it may not be exercised until three years have passed since the issue. 18.2 Redemption. The redemption of the redeemable shares must be made charged to profits or free reserves or with the proceeds of a new issue of shares resolved by the General Shareholders Meeting or, where appropriate, the Board of Directors, for the purpose of financing the redemption operation. If these shares should be redeemed from profits or free reserves, the company must constitute a reserve for the amount of the par value of the redeemed shares. If the redemption is not made from profits or free reserves or with the issue of new shares, it may only be carried out with the requirements established for the reduction of share capital by the refund of contributions. ARTICLE 19.- Preference shares 19.1 Issue of preference shares. The Company may issue shares which grant a privilege over ordinary shares, provided these comply with the legislation applicable at any time in terms of privileges in the issue of shares and complying with the formalities provided for the modification of Bylaws. 19.2 Nature of preference shares. When the privilege consists of the right to obtain a preference dividend, the Company will be required to resolve to distribute the dividend if any distributable profits should exist. The General Shareholders Meeting and/or the Board of Directors, at the time of deciding the issue of the shares, will decide whether the holders of preference shares will be entitled to the same dividend as corresponds to the ordinary shares, once the preference dividend has been resolved. If there should be no distributable profits or if there should not be a sufficient amount of these, the part of the preference dividend not paid will or will not be accumulated on the terms resolved by the General Shareholders Meeting and/or the Board of Directors, if appropriate, at the time when the issue of shares is decided. Ordinary shares may in no case receive dividends charged to the profit of a financial year, until the preference dividend corresponding to the same financial year has been paid. ARTICLE 20.- Bonds 20.1 Issue of bonds. The Company may issue numbered series of bonds, debentures or other securities, that acknowledge or create a debt, in accordance with the indications on the issue of bonds in the Law and other applicable legislation, as well as any other relevant regulations at all times. Chapter III Corporate bodies ARTICLE 21.- Corporate bodies 21.1 Definition. The governing bodies of the company are: a) The General Shareholders Meeting b) The Board of Directors
ARTICLE 22.- The General Shareholders Meeting 22.1 General. The shareholders, duly and legally seated at the General Shareholders Meeting, shall decide, by a simple majority of votes of the shareholders attending in person or represented, upon such matters as pertain to the areas of competence of the Shareholders meeting, save when the Law or these Bylaws dictate otherwise. All shareholders, including the dissenting ones and those who have not taken part in the meeting, shall be bound by the resolutions adopted by the General Shareholders Meeting, without prejudice to the right to challenge as are provided under law. 22.2 Right to attend. Every shareholder shall be entitled to attend the General Shareholders Meeting who holds, at least, THREE HUNDRED (300) shares, entered in the shareholder's name in the pertaining registry of account entries no less than FIVE (5) days before the date on which the General Shareholders Meeting is to be held, and provided, also, that each shareholder is up to date with all passive dividend payments, and retains ownership of the mentioned shares until the celebration of the General Shareholders Meeting. 22.3 Grouping of shares. Notwithstanding the above, any shareholders who hold a lesser number of shares shall be allowed at any time to delegate the representation thereof upon a shareholder of the group of shareholders or another person, whether or not a shareholder, who may be granted it according to Law. 22.4 Other participants. The members of the Board of Directors are expected to attend General Shareholders Meetings. Their attendance, however, is not a requirement for the valid constitution of the General Shareholders Meeting. The Chairman of the General Meeting may also authorise managers and other persons to attend with a right to speak but not to vote, without prejudice to the right of the General Shareholders Meeting to revoke such authorisation. 22.5 Right to vote. Each share present or represented at the meeting shall be entitled to cast one vote - except for those shares with no voting rights adhered to them in accordance with these Bylaws. 22.6 Remote participation. The participation at the General Meeting and votes on proposals concerning matters included on the Agenda of any type of General Shareholders Meeting may be made or delegated by the shareholder by post, by electronic means or by any other instruments of long-distance communication in accordance with applicable legislation, in these Bylaws and in the Regulations of the General Shareholders Meeting, provided there are sufficient guarantees regarding authenticity, identity of the person who participates or votes and legal security of the communications. ARTICLE 23.- Types of General Shareholders Meetings 23.1 Types and location. The General Shareholders Meeting may be ordinary or extraordinary and will be held in the location in which the Company has its headquarters. 23.2 Ordinary General Shareholders Meeting. The Ordinary General Shareholders Meeting must meet within the first six (6) months of each financial year to examine the company management, to approve, if appropriate, the accounts of the previous financial year and to resolve on application of the results, as well as to approve, if appropriate, the consolidated accounts.
23.3 Extraordinary General Shareholders Meeting. All Meetings not foreseen in the preceding paragraph shall be considered extraordinary. ARTICLE 24.- Calling and preparation of the General Shareholders Meeting 24.1 Manner of the calling. General Shareholders Meeting must be called by the Board of Directors by means of an announcement made in: (i) the Official Gazette of the Company Registry or one of the newspapers with the widest circulation in Spain, (ii) the Company s website, and (iii) the Spanish Securities Market Commission s website, which shall state the Company s name, the date and time when the General Shareholders Meeting shall be held, the meeting s agenda indicating the matters to be discussed and the post of the person or persons who call/s the meeting, and the other matters required in accordance with prevailing laws and the Company s General Shareholders Meeting Regulations. 24.2 Publication of the calling. The publication must take place at least ONE (1) MONTH before the date the meeting has been convened, except in those cases where Company Law or these Bylaws require greater time. The announcement may also include the date on which, if appropriate, the second calling of the General Shareholders Meeting would occur. There must be a period of at least twenty-four hours between the first and second calling. If the duly convened the General Shareholders Meeting is not held on its first calling, and the announcement does not include a date for a second calling, the second calling must be duly announced, with the same Agenda, in line with the same publication requirements that apply to the first calling within FIFTEEN (15) days after the date of the General Shareholders Meeting that has not been held and at least, TEN (10) days before its celebration. 24.3 Quorum. The Ordinary or Extraordinary General Shareholders Meeting shall be constituted at first or second calling whenever the shareholders in attendance or represented meet the legal and statutory minimum quorums regarding percentage of capital for the different matters on the Agenda according to current legislation. 24.4 Special quorum. Notwithstanding the terms of the previous point, in order that the General Shareholders Meeting validly approve the replacement of the corporate objective, a request for delisting of Company shares, or the transformation or windingup of the Company, the first calling of the General Shareholders Meeting must be attended by FIFTY PERCENT (50%) of the share capital with voting rights. In a second calling, the attendance of TWENTY-FIVE PERCENT (25%) of share capital with voting rights will suffice. The merger, or demerger, either total or partial, segregation and global assignment of assets and liabilities of the Company will also require this mentioned special quorum, except when such operations involve companies that, either directly or indirectly, are majority-owned by the Company, in which case the quorum requirements stated in the previous paragraph shall apply. 24.5 The Universal General Shareholders Meeting. The General Shareholders Meeting will be understood to be validly convened to address any issue provided that one hundred percent of the share capital is present or represented at the meeting and the attendees unanimously agree to hold the meeting. ARTICLE 25.- Representation to attend the General Shareholders Meeting 25.1 Representation. All shareholders who are entitled to attend the General Shareholders Meeting may be represented at it by another person, whether or not a shareholder.
A shareholder may not be represented at the General Shareholders Meeting by more than one proxy, unless it involves an intermediary entity legitimated as a Shareholder according to the Accounting Register and, if appropriate, the Register of Shareholders, which may delegate the voting rights to each of the indirect owners or to third parties appointed by the latter, with no limitation on the number of delegations granted. The proxy may represent more than one Shareholder with no limitation on the number of Shareholders represented. When a proxy has representations granted by many Shareholders, he may cast votes differently from votes cast for other Shareholders, following the instructions given by each Shareholder. The Board of Directors may require in the announcement of the General Shareholders Meeting that the delegations of representation of Shareholders along with the name of the proxy are in the possession of the Company at least ONE (1) DAY before the General Shareholders Meeting in its first calling. The Chairman of the General Shareholders Meeting may reject any representation conferred by a fiduciary, intermediary or apparent shareholder, provided he provides justification therefor. 25.2 Form. This representation must be expressed in writing or in any electronic means of communication providing such means comply with the requisites of applicable legislation, these Bylaws and, in particular, in the Regulations of the General Shareholders Meeting. Representation must be conferred separately for each General Shareholders Meeting. The public request for representation must be made in the manner and within the scope required by the Law, the Bylaws and, in particular, the Regulations of the General Shareholders Meeting. 25.3 Representation by family members. The restrictions described in the previous sections of the current article will not be applicable whenever the proxy is a spouse, child or parent of the shareholder; and neither when the proxy possesses a power of attorney to administer all of the Shareholders assets in Spain. 25.4 Revocal. Representation may be revoked at any time. Personal attendance at a meeting by the appointee shall have the effect of revoking the appointment. ARTICLE 26.- Designation of positions at the General Shareholders Meeting 26.1 Chairman. The General Shareholders Meeting shall be chaired by the Chairman of the Board of Directors and, in his absence, impossibility or vacancy, by the Vice- Chairman, and in the event of absence of the Chairman and the Vice-Chairman, by the member of the Board of Directors designated by the shareholders at the General Shareholders Meeting. 26.2 Secretary. The acting Secretary shall be the Secretary to the Board of Directors and, in his absence, impossibility or vacancy, by the Vice-Secretary, and in the absence of the latter, by the person designated by the shareholders, attending in person or represented, at the General Shareholders Meeting. ARTICLE 27.- Development of the General Shareholders Meeting 27.1 Organisation and management. The Chairman will be given all of the necessary powers to ensure the efficient organisation and management of the General Shareholders Meeting in accordance with the Regulations of the General Shareholders Meeting.
27.2 Attendance roll. Once the sitting of the meeting is declared valid, and before commencing the debate on the items on the agenda, an attendance roll will be prepared to record the shareholders attending in person or represented at the General Meeting. 27.3 Regulations of the General Shareholders Meeting. Any matters not considered in this current article on the organisation and management of the General Shareholders Meeting must comply with the terms of the Regulations of the General Shareholders Meeting. ARTICLE 28.- Majorities for the approval of resolutions 28.1 Majority votes. Resolutions at the General Shareholders Meeting will be passed by a simple majority vote of the shareholders present or represented at the meeting, except in those cases where the Law or these Bylaws require a higher majority. 28.2 Extra majority. For the General Shareholders Meeting to validly approve the replacement of the corporate objective, a request for delisting of Company shares, or the transformation or winding-up of the Company, a favourable vote of SIXTY PERCENT (60%) of the share capital with voting rights present or represented at the General Shareholders Meeting will be required both at the first and second calling. Nevertheless, when a second calling is attended by Shareholders that represent less than FIFTY PERCENT (50%) of the share capital with voting rights, the resolutions mentioned in this section may only be passed with the favourable vote of TWO THIRDS (2/3) present or represented at the General Shareholders Meeting. The merger, or demerger, either total or partial, segregation and global assignment of the assets or liabilities of the Company will also require the favourable vote of this special majority, except when such a merger or demerger involves companies that, either directly or indirectly, are majority owned by the company, in which case the majority vote requirements stated in 28.1 will be applicable. 28.3 Changes to certain articles in the Bylaws. Notwithstanding the previous terms, resolutions to change articles 3, 7, 8, 24.3, 24.4, 28, 33 and 38 of these Company Bylaws will require a favourable vote of at least SIXTY PERCENT (60%) of the share capital with voting rights present or represented at the General Shareholders Meeting both at the first and second calling. ARTICLE 29.- minutes of the General Shareholders Meeting 29.1 Approval of the minutes. The minutes of the General Shareholders Meeting may be approved by the actual meeting after it is held and, failing that, within the term of FIFTEEN (15) days, by the Chairman of the meeting and two Examiners, one on behalf of the majority and the other for the minority. 29.2 Executive power. The minutes approved in either of these two ways will have executive force from the date they are approved. 29.3 Presence of a Notary. The Board of Directors may require the presence of a Notary Public of their choice to take the minutes of the meeting, and they shall be obliged to do so whenever requested by shareholders representing at least ONE PER CENT (1%) of the share capital FIVE (5) days before the meeting is held. In both cases the Notarial Certificate shall be considered the minutes of the meeting and as such will be subject to the indications of the Law and the Regulations of the Commercial Register.
29.4 Minutes Book. Once the minutes are approved, they shall be signed by the Secretary to the meeting with the approval of the Chairman and transcribed in the minutes Book. ARTICLE 30.- Powers of the General Shareholders Meeting 30.1 Powers. The General Shareholders Meeting has the power to adopt all types of resolutions with regard to the Company, as contemplated in the Law or in these Bylaws and, in particular, it shall have the following powers: (a) To appoint, reelect and remove members of the Board of Directors and, if appropriate, the liquidators, as well as to ratify or revoke the provisional appointments of such members made by the Board of Directors. (b) To appoint, reelect and remove the Auditors of Accounts. (c) To exercise the corporate liability action against any of the persons mentioned in the preceding paragraphs. (d) To approve, if appropriate, the consolidated and individual accounts of the previous financial year, on application of the results, as well as the company s management. (e) To increase or decrease share capital, suppressing or restricting the right of preferential subscription, delegating to the Board of Directors, if appropriate, the power to indicate, within a given maximum period as dictated by the Law, the date or dates of said increase or decrease. The Board may exercise said power in full or in part or even desist from exercising said power depending on market conditions, the condition of the Company or any other fact or event of social or economic significance that would advise such a decision, informing of said decision in the first General Shareholders Meeting that occurs after expiry of the maximum period allowed for the change in share capital. (f) Issue obligations, bonds or other analogous securities. These may be simple, mortgage-based, convertible or exchangeable, at fixed or variable interest rates, subscribable in cash or kind, or subject to any other condition regarding their return or bundling, modality or characteristic. It may also confer authority on the Board of Directors to make said issuances, with power to exclude the right of preferential subscription in case of issuance of convertible instruments. When convertible bonds are to be issued, the General Shareholders Meeting shall approve the bases and modalities of conversion and the increase of share capital to the amount required to effect such conversion, in accordance with the Law. (g) Transform, merge, split, segregate, globally assign assets and liabilities or wind up the Company, as well as approve any operation which may have an effect similar to that of a liquidation of the company, and transfer of the registered office abroad. (h) Approve the modification of the Bylaws (i) Confer authority upon the Board of Directors to increase share capital in accordance the Law. When the General Shareholders Meeting confers said authority, it may also empower the Board to exclude to suppress or restrict preferential subscription rights in share issues covered by the authority, under the terms and requirements established by Law. (j) Approve the acquisition, disposal or contribution to another company of essential assets and transfer to subsidiary companies of essential activities carried out until then
by the Company. Activities and assets are essential when the volume of the operation exceeds twenty-five per cent of the total assets in the balance sheet. (k) Approve the remuneration policy of the Board members in the terms set forth in the Law, in these Bylaws and in the Regulations of the Board of Directors. (l) Approve and modify, where appropriate, a Regulation of the General Shareholders Meeting in accordance with the Law and Company Bylaws. (m) Confer authority upon the Board of Directors to act with regard to unforeseen circumstances whenever such is considered appropriate. (n) Resolve on any matter submitted to it by the Board of Directors. (o) Pronounce on any other matter not specifically covered by these Bylaws. ARTICLE 31.- Structure and appointments to the Board of Directors 31.1 Board of Directors. The Company shall be administered, managed and represented with all of the powers permitted by Law, except those reserved for the General Shareholders Meeting by Law or by these Bylaws, by the Board of Directors. 31.2 Number and election of Directors. The Board of Directors shall be made up of a minimum of FIVE (5) members, and a maximum of FIFTEEN (15), elected by the General Shareholders Meeting, with the exception contained in article 32 of these Bylaws. The General Shareholders Meeting shall determine the specific number of Directorships, within the stipulated limits. 31.3 Requirements for Director status. To sit on the Board of Directors requires members not be encumbered by circumstances of incompatibility or prohibition as defined by law. 31.4 Regulations of the Board of Directors. The Board of Directors will approve Regulations which will comprise the basic rules by which it must operate, its structure, and the different types of Directors that must form part of the Board, as well as any corporate governance rules regarding conduct of members. The Board of Directors will report the content of the Regulations and any changes made to them to the General Shareholders Meeting that follows any session of the Board in which such resolutions are adopted. ARTICLE 32.- Term of office and renewal 32.1 Duration. Directors will be appointed for a period of FOUR (4) years. 32.2 Re-election and removal. Re-election will follow the turns determined by the length of service of members of the Board, according to the date and order of their appointment, without prejudice to the power of the General Shareholders Meeting to remove Directors at any time in accordance with the Law and these Bylaws. 32.3 Co-option. If during the term for which they were appointed, seats fall vacant, the Board of Directors may co-opt people to fill them. Their appointment shall be submitted to the first General Shareholders Meeting held after the co-option. ARTICLE 33.- Appointments to the Board of Directors
33.1 Positions. The Board of Directors shall designate from amongst its members, upon prior report of the Appointments and Remuneration Committee, a Chairman to chair the Board, and, if so agreed, one or several Deputy Chairs, to replace the Chairman in cases of vacancy, absence or illness. If there are several Deputy Chairs, such substitution will be by the most senior one. The Board of Directors shall designate a Secretary, upon prior report of the Appointments and Remuneration Committee, and, if agreed so, one or several Deputy Secretaries, the latter of which, if there are several, will be numbered successively and will replace the Secretary and Deputy of a superior rank in cases of vacancy, absence or illness. In the absence of Deputy Secretaries, the Board shall also designate, from amongst its members attending the respective meeting, the person that will perform the role of temporary Secretary at that time. The Board of Directors shall also appoint a Coordinating Director from amongst its Independent Directors, upon prior proposal of the Appointments and Remuneration Committee and, in any case, pursuant to the provisions in the Law, in these Bylaws and in the Regulations of the Board of Directors. 33.2 Requirements to be appointed Chairman or Vice-Chairman. Notwithstanding the provisions in the Law, for a Director to be to be appointed Chairman or Vice-Chairman of the Board of Directors, at least one of the following circumstances must occur: (i) To have formed part of the Board of Directors during at least the THREE (3) years prior to said designation; or, (ii) To have previously occupied the position of Chairman of the Board of Directors, regardless of the period of time spent as a Director. Neither of the previous conditions will be required to be met whenever the designated Director is supported by SEVENTY-FIVE PERCENT (75%) or more of the members of the Board of Directors. The re-election as a Director of members of the Board that are currently Chairman and Vice-Chairman and, if appropriate, Coordinating Director if he meets the legal requirements, will imply their automatic continuity in those positions. 33.3 The Chairman. The Chairman of the Board of Directors will be the highest proxy of the Company and, in the performance of his office, besides those he is entitled to by Law or by these Bylaws, he will have those assigned by the Regulations of the General Shareholders Meeting and the Board of Directors. The Chairman of the Board of Directors will also be entitled to execute the resolutions decided by the Board of Directors and the Executive Committee, to which effect he will have the widest powers of representation, without prejudice to the matters that the Board may delegate to other Directors.. 33.4 Requirements to be appointed Secretary or Deputy Secretary. The Secretary and, where appropriate, the Deputy Secretary or Deputy Secretaries, of the Board of Directors are not required to be members of the Board of Directors, in which case they have a right to take part in the meeting but not to vote at the same. All Directors will have access to the advice and services of the Secretary and, where appropriate, the Deputy Secretary. Directors therefore have a duty to appoint a Secretary and, where appropriate, a Deputy Secretary that are fully able to perform the duties associated to their position. 33.5 The Secretary. The Secretary of the Board of Directors will ensure compliance with the regulations of the Board of Directors.
He will also be in charge of (i) keeping the documentation of the Board of Directors, prepare and draft the minutes of its meetings and discussions and attest to their content and the resolutions passed; (ii) ensure that the proceedings of the Board of Directors comply with applicable legislation, these Bylaws and the Regulations of the Board of Directors; and (iii) assist the Chairman for the Directors to receive relevant information for the performance of their duties with enough time in advance in the appropriate format. 33.6 Requirements to be appointed as Coordinating Director. In order to a Director being appointed as Coordinating Director it will be necessary that he/she hold office as Independent Director. The Coordinating Director shall resign as Director, if he/she lose the Independent condition, or when the Board of Directors decides it. 33.7 Coordinating Director. The Coordinating Director shall be particularly empowered to (i) request the call of the Board of Directors or the inclusion of new items on the agenda of an already convened Board; (ii) coordinate and gather the External Directors; and (iii) if appropriate, direct the regular assessment of the Chairman of the Board of Directors. ARTICLE 34.- Powers of the Board of Directors 34.1 Powers. The Board of Directors is responsible for the representation, management and administration of the Company with respect to all of the acts that comprise the company objective defined in these Bylaws, as well as all other acts required by Law and by these Bylaws, and without prejudice to the acts reserved specifically for Directors at the General Shareholders Meeting. To this effect and within this scope, the Board of Directors is responsible for acts or business activities including, but not limited to, the following: (a) To represent the Company before all types of people, organisations, authorities, public administration, banks and other entities, both private and official, both judicial and extrajudicial, absolving positions, compromising and desisting from all types of actions and procedures, and even ratifying said acts before the courts. (b) To pay debts and receive payments due of all types, including those with origin in the national authority, regional authority, provincial authority or municipal authority. (c) To prepare and to grant all types of contracts, deeds and documents, public or private, of any type, in relation to capital assets, livestock, merchandise, insurance policies, transport and real estate, including the purchase, subscription, sale or exchange of all types of capital assets, both public and private, both Spanish and international. (d) To request, obtain, acquire, grant and exploit patents, brands, privileges, licences and administrative concessions, as well as performing any transactions in regard to industrial property. (e) To convene the General Shareholders Meeting and execute and ensure compliance with resolutions adopted by the meeting. (f) To intervene in tenders and auctions, both judicial and extrajudicial. (g) To establish, monitor, liquidate, settle, and cancel current accounts, savings accounts and credit accounts with the Bank of Spain, and with any other banking organisation, savings bank, companies or other entities both in Spain and abroad. (h) To draw, endorse, accept, take, discount, negotiate and protest bills of exchange, financial and credit bills, cheques, promissory notes and money orders. (i) To request and obtain from banking, credit and financial organisations all types of credits, including mortgages, subscribing the appropriate policies and documents and employing and repaying the funds obtained. (j) To grant guarantees and deposits by any means for the obligations of third parties.