BASE INFORMÁTICA DE MODELOS JURÍDICOS

REGULATIONS OF THE GENERAL SHAREHOLDERS’ MEETING OF
CEMEX LATAM HOLDINGS, S.A.
REGULATIONS OF THE GENERAL SHAREHOLDERS’ MEETING OF
CEMEX LATAM HOLDINGS, S.A.
PRELIMINARY TITLE
Article 1.-Purpose and interpretation
1.
The Regulations of the General Shareholders’ Meeting of Cemex Latam
Holdings, S.A. (the “Company”) are intended to develop the basic rules for the
call, preparation and holding of the Company’s General Shareholders’ Meeting in
accordance with applicable legal provisions, the By-Laws and the good
governance recommendations generally recognized in the international markets in
order to ensure the equal treatment of all shareholders under identical conditions
with respect to information, presentations and the exercise of voting rights at the
General Shareholders’ Meeting and to facilitate the effective participation by the
shareholders thereat, in order to contribute to the transparent and informed
articulation of corporate decisions, with particular attention to the exercise of the
rights to which they are entitled for such purpose, which in any case must be
exercised in good faith and transparently within the framework of the corporate
interest of the Company.
2.
These Regulations shall be construed in accordance with Law, the Company’s
Internal Regulation (as this term is defined in the By-Laws of the Company) and
good governance recommendations generally recognized in the international
markets, all within the framework of the corporate interest.
Any doubts which may arise in connection with the interpretation hereof shall be
settled by the Board of Directors, which shall propose such amendments, if any,
as it deems appropriate. Any doubts arising in connection with the application and
interpretation hereof during the General Shareholders’ Meeting shall be settled by
the Presiding Committee (Mesa) thereof.
Article 2.-Scope of application
These Regulations shall apply to all General Shareholders’ Meetings held by the
Company. They shall have indefinite duration and shall become effective upon the first
General Shareholders’ Meeting to be called after the Meeting at which it is resolved that
they be approved, without prejudice to the rights previously accorded to the
shareholders under legal and By-Laws provisions. The same rules shall apply to any
amendment of the Regulations approved by the shareholders at a General Shareholders’
Meeting.
Article 3.-Dissemination
These Regulations and any amendments hereto shall be communicated to the relevant
authorities and registered with the Commercial Registry (Registro Mercantil) pursuant
to applicable rules and regulations. The current text of these Regulations shall be made
available on the Company’s corporate website.
Article 4.-Amendments
These Regulations may be amended by the General Shareholders’ Meeting. Any
proposal to alter these Regulations passed by the Board of Directors shall be
accompanied by a report justifying the proposed alteration. The approval of any such
proposed alteration shall require a majority of votes pursuant to the ordinary quorums
provided by the By-Laws. Any amendments to these Regulations shall be subject to the
dissemination provisions set forth in Article 3 above.
TITLE I
DEFINITION, TYPES AND POWERS
Article 5.- The General Shareholders’ Meeting
1.
The group of all duly convened shareholders who are meeting at a General
Shareholders’ Meeting to debate and decide by the required majorities those
matters within their power, or to be informed of those other matters that the Board
of Directors deems appropriate, constitutes the sovereign decision-making body of
the Company.
2.
The decisions of the General Shareholders’ Meeting are binding upon all
shareholders, including those who are absent, dissent, abstain from voting and
lack the right to vote, without prejudice to the rights such shareholders may have
to challenge such decisions.
3.
The Company shall ensure the equal treatment of all shareholders under identical
conditions with respect to information, participation and the exercise of voting
rights at the General Shareholders’ Meeting.
Article 6.- Types of General Shareholders’ Meetings
1.
A General Shareholders’ Meeting may be ordinary or extraordinary.
2.
The Ordinary General Shareholders’ Meeting, previously called for such purpose,
must meet within the first six (6) months of each fiscal year in order to approve, if
appropriate, the individual annual accounts, decide on the allocation of income
and appraise corporate management of the Company. It may also adopt
resolutions on any other matter falling within the competencies of the General
Shareholders’ Meeting, provided that the matter is included on the agenda or is
legally required and that the capital attendance requirements established by the
Corporate By-Laws and applicable Law are met.
The Ordinary General Shareholders’ Meetings shall be valid even when convened
or held after the aforementioned deadline.
3.
Any General Shareholders’ Meeting not provided for in the foregoing section
shall be deemed to be an extraordinary General Shareholders’ Meeting.
Article 7.- Powers
1.
The shareholders at a General Shareholders’ Meeting shall decide the matters
assigned thereto by Law, the By-Laws and these Regulations, and particularly
regarding the following:
(a)
the approval of the annual financial statements, the allocation of profits and
the approval of corporate management;
(b)
the appointment, re-election and removal of directors, as well as the
ratification of directors designated by interim appointment to fill vacancies;
(c)
the appointment, re-election and removal of the auditors;
(d)
the amendment of the By-Laws;
(e)
an increase or reduction in share capital, as well as the delegation to the
Board of Directors of the power to increase share capital, in which case it
may also grant thereto the power to exclude or limit pre-emptive rights,
upon the terms established by Law;
(f)
the exclusion or limitation of pre-emptive rights;
(g)
the transformation, merger, split-off, or overall assignment of assets and
liabilities, and the transfer of the registered office abroad;
(h)
the dissolution of the Company;
(i)
the approval of the final liquidating balance sheet;
(j)
the approval of the establishment of systems for compensation of the
Company’s directors, consisting of the delivery of shares or of rights therein
or compensation that takes as its reference the value of the shares;
(k)
the issuance of debentures and other negotiable obligations and delegation
to the Board of Directors of the power to approve the issuance thereof;
(l)
the authorization for the derivative acquisition of the Company’s own
shares;
(m) the approval and amendment of the Regulations for the General
Shareholders’ Meeting;
(n)
the transformation of the Company into a holding company, through
“subsidiarization” or the assignment to dependent entities of core activities
of the Company, even though it retains full ownership thereof;
(o)
the approval of the acquisition or disposal of core operational assets which
exceed twenty five per cent (25%) of the Company’s income or
consolidated assets or the results of its operations, according to the last
annual audited financial statements at the moment in which the transaction
is specified, without prejudice to the powers corresponding to the Board of
Directors;
(p)
the approval of transactions whose effect is equivalent to liquidation of the
Company.
2.
The shareholders acting at a General Shareholders’ Meeting shall also decide any
other matter submitted to them by the Board of Directors or by the shareholders in
the instances provided by Law or that is within their power pursuant to Law or in
the Company’s Internal Regulation.
3.
The shareholders acting at a General Shareholders’ Meeting may also decide, by
way of a consultative vote, on any reports or proposals submitted by the Board of
Directors.
TITLE II
CALL TO THE GENERAL SHAREHOLDERS’ MEETING
Article 8.- Call to the General Shareholders’ Meeting
1.
Pursuant to the provisions of the By-Laws, the General Shareholders’ Meeting
must be formally convened by the Board of Directors through, at least: (i) an
announcement published in the Spanish Official Bulletin of the Commercial
Registry (Boletín Oficial del Registro Mercantil) or one of the more widely
circulated newspapers in Spain; (ii) the web page of the Colombian Financial
Superintendency (Superintendencia Financiera de Colombia) or the body which
may exercise its current functions in the future; and (iii) on the Company’s
corporate website with the advance period required by Law.
The notice published on the Company’s corporate website shall be accessible on
an uninterrupted basis until at least the holding of the General Shareholders’
Meeting.
2.
The Board of Directors must call a Shareholders’ Meeting in the following events:
(a)
in the event set forth in Article 6.2 above; and
(b)
if the meeting is requested, in the manner provided for by Law, by
shareholders who hold or represent at least five per cent (5%) of the share
capital, which request sets forth the matters to be addressed. In this event,
the Board of Directors shall call for the General Shareholders’ Meeting to be
held within the statutory prescribed deadline. The Board of Directors shall
prepare the agenda of the call, which must include the matters specified in
the request.
Article 9.- Announcement of the Call
1.
2.
The notice of the call must contain all of the mentions required by Law in each
case and shall state:
(a)
the day, place and time of the meeting upon first call and all matters to be
dealt with, as well as the name of the person or persons convening the
meeting. The announcement may also, if appropriate, set forth the date on
which the General Shareholders’ Meeting shall proceed upon second call;
(b)
a clear and specific description of the procedures that the shareholders must
follow in order to (i) request the publication of a supplement to the call to a
General Shareholders’ Meeting; (ii) submit proposed resolutions regarding
matters already included or that should be included in the agenda; and (iii)
exercise their rights to information and to vote, upon the terms provided by
Law;
(c)
the date on which the holders of the Company’s shares must have them
registered in their name in the relevant book-entry registry to be able to
attend and vote at the General Shareholders’ Meeting being called; and
(d)
where and how the complete text of the documents to be submitted at the
General Shareholders’ Meeting can be obtained, particularly including the
reports of the directors, auditors and independent experts to be submitted
and the complete text of the proposed resolutions that are expected to be
adopted.
Shareholders representing at least five per cent (5%) of the share capital may:
(a)
request the publication of a supplement to the call to the ordinary General
Shareholders’ Meeting including one or more items in the agenda of the call
to meeting, so long as new items are accompanied by a rationale or, if
applicable, by a duly sustained proposal for a resolution;
(b)
present well-founded proposed resolutions regarding matters already
included or that should be included in the agenda of the call to the General
Shareholders’ Meeting. The Company shall ensure the dissemination to the
other shareholders of such proposed resolutions and any documentation
attached thereto in accordance with the provisions of Law.
The shareholders’ rights mentioned in this Section above must be exercised by
duly authenticated notice sent to the Company’s registered office which must be
received within five (5) days following the publication of the call to meeting. The
supplement to the call to meeting mentioned in such paragraphs must be published
within the statutory prescribed deadline.
3.
The shareholders at the General Shareholders’ Meeting may not deliberate on or
decide matters that are not included in the agenda of the call to meeting unless
otherwise provided by Law.
4.
The Board of Directors may require that a notary public attend the General
Shareholders’ Meeting and prepare the minutes thereof. In any event, the Board
must require the presence thereof under the circumstances provided by Law.
Article 10.- Information available from the date of notice
1.
2.
In addition to what is required by provisions of Law or the By-Laws, beginning
on the date of the publication of the call to the General Shareholders’ Meeting, the
Company shall publish on its corporate website:
(a)
the call to the General Shareholders’ Meeting;
(b)
the total number of shares and voting rights in which the Company’s share
Capital is divided into on the day the meeting is convened;
(c)
any document to be submitted to the approval of the General Shareholders’
Meeting, including the reports of directors, auditors and independent
experts;
(d)
the text of all resolutions proposed by the Board of Directors with respect to
the agenda items. When there is a supplement to the call to the Meeting the
Company shall also publish on its corporate website the text of the
proposals to which such supplement refers and which have been provided to
the Company;
(e)
in the event that the shareholders acting at the General Shareholders’
Meeting must deliberate on the appointment, re-election or ratification of
directors, the corresponding proposed resolution shall be accompanied by
the following information: professional profile and biographical data of the
director; other Boards of Directors on which the director holds office, at
listed companies or otherwise; the type of director he or she is in each case,
with mention, in the case of proprietary directors, of the shareholder that
proposes or proposed his appointment or with which he has ties; date of his
first and subsequent appointments as director of the Company; and
(f)
the means and procedures for granting a proxy to attend the General
Shareholders’ Meeting and for casting votes from a distance, including the
form of attendance, proxy-granting and distance voting card, if any. If they
cannot be uploaded to the corporate website for technical reasons, the
company must specify on the corporate website how to obtain hard copy
forms, which must be sent to all shareholders requesting them.
Pursuant to the provisions of applicable legislation, an Electronic Shareholders’
Forum shall be enabled on the Company’s corporate website on occasion of the
call to the General Shareholders’ Meeting. Duly verified shareholders and
shareholder groups may access the Electronic Shareholders’ Forum, the use of
which shall conform to its legal purpose and to the assurances and rules of
operation established by the Company.
3.
When the shareholders are to deal with an amendment to the By-Laws, besides the
statements required in each case by Law, the notice of the call must make clear
the right of all shareholders to examine at the Company’s registered office the
complete text of the proposed amendment and the report thereon and to request
that such documents be delivered or sent to them without charge.
4.
In all cases in which the Law so requires, such information and supplemental
documentation as is mandatory shall be made available to the shareholders.
Article 11.- Right to receive information prior to the holding of the General
Shareholders’ Meeting
1.
The Company shall comply with the statutory prescribed obligations to provide
information to the shareholders through its corporate website, without prejudice to
its right to use any other means for such purpose or to the shareholders’ right to
request the information in written form pursuant to Law.
2.
From the first date of publication of the call to the General Shareholders’ Meeting
through and including the seventh day prior to the date provided for the first call
to meeting, the shareholders may request in writing the information or
clarifications that they deem are required, or ask written questions that they deem
pertinent, regarding the matters contained in the agenda of the call to meeting and
the auditor’s report.
In addition, upon the same prior notice and in the same manner, the shareholders
may request information or clarifications or ask written questions regarding
information accessible to the public which has been provided by the Company to
the Colombian Financial Superintendency (Superintendencia Financiera de
Colombia) since the holding of the last General Shareholders’ Meeting and the
auditor’s report.
3.
All such requests for information may be made by delivery of the request to the
Company’s registered office, or by delivery to the Company via mail or other
means of electronic or long-distance data communication sent to the address
specified in the notice of the meeting or, in the absence of such specification, to
the Shareholder’s Office (Oficina de Atención al Accionista). Requests in which
the document by virtue of which the information is requested includes a
recognized electronic signature used by the requesting party or other mechanisms
which, pursuant to a resolution previously adopted for such purpose, the Board of
Directors deems sufficient to ensure the authenticity and identity of the
shareholder exercising such right to receive information shall be allowed.
Whatever the means used to issue the requests for information are, the request of
the shareholder must include the shareholder’s first and last names, with evidence
of the shares owned. The shareholder shall be responsible for maintaining proof of
delivery of the request to the Company in form and time.
4.
Directors must provide shareholders with any information requested under section
above, unless:
(a)
in the sound judgment of the Chairman, disclosure of such requested
information would harm corporate interests. This exception shall not apply
when the request is supported by shareholders representing at least onefourth (1/4) of the share capital;
(b)
the request for information or clarification does refer to information
accessible to all shareholders on the corporate website of the Company,
under the question-answer format;
(c)
the request for information or clarification does not refer to matters included
in the agenda of the call to meeting or to information accessible to the public
which has been provided by the Company to the Colombian Financial
Superintendency (Superintendencia Financiera de Colombia) since the
holding of the last General Shareholders’ Meeting or the auditors’ report; or
(d)
legal or regulatory provisions provide otherwise.
TITLE III
RIGHT TO ATTEND AND PROXY REPRESENTATION
Article 12.- Right to attendance
All holders of voting shares may attend the General Shareholders’ Meeting, with the
right to be heard and to vote. In order to exercise the right to attend, shareholders must
cause the shares to be registered in their name, directly or through its direct depository,
at the Depósito Centralizado de Valores de Colombia Deceval, S.A. (“Deceval”) at least
five (5) days prior to the day on which the General Shareholders’ Meeting is held. This
circumstance must be evidenced by means of the appropriate attendance, proxy-granting
and distance voting card, deposit certificate issued by Deceval, or by any other valid
means of verification accepted by the Company.
Article 13.- Other attendees
1.
The members of the Board of Directors must attend the General Shareholders’
Meeting. The absence of any of them shall not affect the validity thereof.
2.
Managers, experts and other persons interested in the efficient running of
corporate affairs may be authorized to attend the General Shareholders’ Meeting
by the Chairman thereof. In addition, the Chairman of the General Shareholders’
Meeting may grant the press, financial analysts and any other person the
Chairman deems appropriate access to such General Shareholders’ Meeting,
although the shareholders acting thereat may revoke such authorization.
Article 14.- Right to proxy representation
1.
Shareholders may exercise the right to attend the General Shareholders’ Meeting
personally or through proxy representation by another person, whether or not such
person is a shareholder, if the requirements of Law and the Company’s Internal
Regulation are met.
2.
Without prejudice to the provisions of Law, proxy representation for the General
Shareholders’ Meeting must be granted in writing, by postal or electronic
correspondence, or by any other means of communication from a distance,
provided that the identity of the individual granting the proxy and the security of
electronic communications is duly assured, pursuant to the provisions of the
applicable Law. When granted by means of postal or electronic correspondence,
only those proxies which are granted in the following manner shall be deemed
valid:
(a)
by postal correspondence, delivering to the Company the attendance, proxygranting and distance voting card issued or any other means of verifying
representation that is accepted by the Company; or
(b)
by electronic correspondence, through notice to the Company setting forth
the details of the proxy being granted and the identity of the shareholder
being represented, issued under any type of guarantee that the Company
deems best ensures the authenticity and identification of the shareholder
granting the proxy.
3.
A proxy granted by either of the above-mentioned means of long-distance
communication must be received by the Company before midnight (00:00) on the
third day prior to the day set for the holding of the General Shareholders’ Meeting
upon first or second call, as the case may be.
4.
The Board of Directors has the power to further elaborate upon the foregoing
provisions by establishing rules, means and procedures adjusted to current
techniques in order to organize the grant of proxies by electronic means, in each
case in accordance with the rules and regulations issued for such purpose.
Specifically, the Board of Directors may establish rules for the use of guarantees
other than electronic signatures for the granting of proxies by electronic
correspondence, reduce the advance period established above for receipt by the
Company of proxies granted by postal or electronic correspondence, and allow
and authorize the Chairman of and Secretary for the General Shareholders’
Meeting and the persons delegated thereby to accept any distance votes received
after such period, to the extent allowed by the instruments available.
5.
The Chairman and Secretary of the Board of Directors or the Chairman of and
Secretary for the General Shareholders’ Meeting, from the formation thereof, and
the persons delegated thereby, shall have the broadest powers to verify the identity
of the shareholders and their representatives, check the ownership and legitimacy
of their rights, and accept the validity of the attendance, proxy-granting and
distance voting card or the document or instrument verifying the attendance or the
grant of a proxy .
6.
A proxy is always revocable. Attendance at the General Shareholders’ Meeting of
the shareholder granting the proxy, either personally or by having cast his vote
from a distance after the date of the proxy, shall have the effect of revoking the
proxy.
7.
A public solicitation for proxies by the Board of Directors or any of its members
shall be governed by the provisions of Law and, by the corresponding resolution
of the Board of Directors, if any.
8.
A proxy must include voting instructions, setting forth the direction of their vote,
their abstention or their blank vote.
9.
If the proxy has been validly granted pursuant to Law and these Regulations but
does not include voting instructions or questions arise as to the intended proxyholder or the scope of the representation, and unless otherwise indicated by the
shareholder, it shall be deemed that the proxy is granted in favor of the Chairman
of the Board of Directors; refers to all of the items included in the agenda of the
call to the General Shareholders’ Meeting; contains the instruction to vote
favorably on all proposals made by the Board of Directors with respect to the
items on the agenda of the call to meeting; and also extends to matters that,
although not provided for on the agenda of the call to meeting, may be dealt with
at the General Shareholders’ Meeting because it is so allowed by Law; in respect
of which the proxy-holder shall cast his vote in the direction he deems most
favorable to the interests of the shareholder granting the proxy, within the
framework of the corporate interest.
10.
Prior to their appointment, proxies must provide the shareholder with detailed
information on any conflicts of interest. If a conflict arises subsequent to the
appointment and the principals were not advised of that possibility, they must be
informed thereof immediately. In either case, if no specific instructions are
received for each of the matters on which a proxy is to vote for a shareholder, the
former must abstain from voting on behalf of the latter.
Unless otherwise expressly indicated by the shareholder granting the proxy, in the
event that the proxy-holder is subject to a conflict of interest, it shall be deemed
for such circumstance that the shareholder granting the proxy has appointed as
proxy-holders, jointly and severally and successively, in the order set forth below
in the event that any of them is in turn subject to a conflict of interest: the
Chairman of the General Shareholders’ Meeting, the Secretary for the General
Shareholders’ Meeting and the Vice-Secretary of the Board of Directors, if any. In
this latter event, if there are several Vice-Secretaries, the order to be used shall be
the order established at the time of their appointment (First Vice-Secretary,
Second Vice-Secretary, etc).
11.
Professional financial intermediaries providing investment services may vote in
the Company’s General Shareholders Meeting on behalf of their clients, when
appointed as proxies thereby. In such event, a financial intermediary may cast
non-concurrent votes pursuant to divergent voting instructions, as appropriate.
Intermediaries appointed as proxies must provide the Company with a list
showing client identity, number of shares for which the proxy is granted and any
voting instructions received, within the seven (7) days prior to the date of the
general meeting.
Financial intermediaries may delegate their proxy to a third party designated by
the client, subject to no limitation respecting the number of delegations, other than
as established in the By-Laws.
TITLE IV
ORGANISATION AND SESSIONS OF GENERAL SHAREHOLDERS’
MEETING
Article 15.- Place of the Meeting
1.
The General Shareholders’ Meeting shall be held at the place within the territory
of the Region of Madrid (Comunidad Autónoma de Madrid) which is indicated in
the call to meeting.
2.
The General Shareholders’ Meeting may be attended by going to the place where
the meeting is to be held or, if applicable, to any other place or places provided by
the Company and indicated in the call to meeting, and which are connected
therewith by any valid systems that allow for: (i) recognition and identification of
the parties attending; (ii) permanent communication among the attendees
regardless of their location; and (iii) participation and voting; all of it on a realtime basis. For all purposes relating to the General Shareholders’ Meeting,
attendees at any of the sites shall be deemed attendees at the same individual
meeting that shall be deemed to be held at the location indicated in the paragraph
above.
Article 16.- Infrastructure, means of communication and services available at the
premises
1.
The premises to be used to hold the General Shareholders’ Meeting shall have the
personnel, technical equipment and safety, assistance and emergency measures
commensurate with the nature and location of the property, as well as the
importance of the event. In addition, the premises for holding the General
Shareholders’ Meeting shall have the emergency and evacuation measures
required by Law, as well other measures deemed appropriate in light of the
circumstances.
2.
Appropriate safety controls and surveillance and protection measures, as well as
systems for controlling access to the meeting, shall be established in order to
ensure the safety of the attendees and the orderly conduct of the General
Shareholders’ Meeting.
3.
The proceedings of the General Shareholders’ Meeting may be the subject of
audiovisual recording, if so determined by the Chairman of the General
Shareholders’ Meeting. They may also be the subject of retransmission by any
means, including over the Internet, and broadcast on social networks.
4.
If deemed convenient, appropriate means may be provided to simultaneously
interpret into English.
Article 17. Shareholder’s Office
1.
From the publication o the announcement of the call to the General Shareholders’
Meeting, the Company will fit out a Shareholder’s Office in a physical and/or
online site, which shall constitute a communication channel between the Company
and its shareholders. The aforementioned functions may be delegated to a third
party if it is deemed appropriate.
2.
In a visible place of the venue where the General Shareholders’ Meeting is
convened and, if applicable, in the place indicated in the call to the meeting which
shall be communicated with such venue by means of any valid system which
allows the identification and recognition of the attendees, the Company will
install, from the moments preceding the beginning of the General Shareholders’
Meeting and while it is being held, a physical Shareholder’s Office with the
purposes of:
(a)
addressing the issues raised by the attendees to the meeting in connection
with the development of the event before the commencement of the session,
notwithstanding the shareholders’ rights to intervene in the meeting, to
include new points in the meeting’s agenda and to vote which are provided
for under the Law and the Company’s By-Laws;
(b)
helping and informing the attendees to the meeting who are willing to
intervene in the session, preparing a list of the shareholder who have
expressed their wish to be heard and compiling the text of such
shareholders’ interventions, provided that they were available in writing;
(c)
providing the attendees to the meeting that so request with the whole text of
the proposals for resolutions made by the Board of Directors or the
shareholders to be considered by the General Shareholders’ Meeting with
respect to the items on the agenda of the call to meeting. Proposals made
immediately before the holding of the General Shareholders’ Meeting, and
therefore not possibly available in writing in order to be delivered to the
attendees to the meeting, are excepted from the provision in this paragraph.
The Shareholder’s Office shall also provide the attendees to the meeting
with a copy of the reports of the Board of Directors and any other
documentation that, pursuant to the Law and the Company’s By-Laws, must
be made available to the shareholders in connection with the aforementioned
proposals for resolutions.
TITLE V
CONDUCT OF THE GENERAL SHAREHOLDERS’ MEETING
Article 18.-Opening of the premises and monitoring access thereto
1.
In the place and on the day provided, on first or second call, for the holding of the
General Shareholders’ Meeting, and beginning one (1) hour prior to the time
announced for the commencement of the meeting (unless otherwise specified in
the notice of the call), the shareholders or their valid representatives may present
their respective attendance, proxy-granting and distance voting cards or proxy
verification instruments or deposit certificates.
2.
Once the acceptance of attendance, proxy-granting and distance voting cards and
verification instruments has ended, the shareholders and proxy-representatives, if
any, arriving late to the place where the General Shareholders’ Meeting is held
may attend the meeting (in the room where the meeting is held, or, if so decided
by the Chairman of the General Shareholders’ Meeting, in an adjoining room from
where they can follow the meeting), but will not be included on the list of
attendees.
Article 19.-Presiding Committee
1.
The Presiding Committee (Mesa) of the General Shareholders’ Meeting shall be
formed at the time stated in the call to the General Shareholders’ Meeting. The
Presiding Committee shall be formed by the Chairman of and Secretary for the
General Shareholders’ Meeting, along with the other members of the Board of
Directors attending the meeting. Without prejudice to the powers assigned to it in
these Regulations, the Presiding Committee shall assist the Chairman of the
General Shareholders’ Meeting, at his request, in the performance of his duties.
2.
The Chairman of the Board of Directors, or, in the absence, the Vice-Chairman of
the Board of Directors, shall act as the Chairman of the General Shareholders’
Meeting; if there are several Vice-Chairmen of the Board of Directors, they shall
act in the order set forth in the By-Laws; and in the absence of the foregoing, the
appointed by the Presiding Committee shall serve.
3.
The Chairman of the General Shareholders’ Meeting shall be assisted by the
Secretary for the General Shareholders’ Meeting. The Secretary of the Board of
Directors and, in the absence thereof, the Vice-Secretary of the Board of
Directors, shall act as Secretary for the General Shareholders’ Meeting; if there
are several Vice-Secretaries, they shall serve in the order provided under the
Company’s By-Laws. In the absence of both, the person appointed by the
Presiding Committee shall serve.
In addition, the Chairman of the General Shareholders’ Meeting may, if so
desired, obtain the assistance of any person the Chairman deems appropriate.
Article 20.-Powers of the Chairman of the General Shareholders’ Meeting
1.
The Chairman of the General Shareholders’ Meeting, who is responsible for
presiding over the meeting, shall generally have the broadest powers needed for
the best progress thereof, including the following:
(a)
to open the meeting;
(b)
to verify that there is a valid quorum for the General Shareholders’ Meeting
and, if applicable, to declare it to be validly in session;
(c)
to take notice of the request, if any, made by the Board of Directors for the
presence of a notary public to take the minutes of the meeting;
(d)
to make decisions regarding questions, requests for clarification or claims
raised with respect to the list of attendees, the identity and the legitimacy of
the shareholders and proxy-representatives, the authenticity and integrity of
the attendance, proxy-granting and distance voting cards or relevant
verification instruments, as well as all matters relating to the possible
exclusion, suspension or limitation of voting and related rights and,
specifically, to the right to vote attaching to the shares pursuant to Law or
the Company’s Internal Regulation;
(e)
if he deems it appropriate, to address the General Shareholders’ Meeting to
give an account of the Company’s progress and to describe its results, goals
and plans;
(f)
to give the floor to the directors or senior managers that he deems
appropriate in order for them to address the shareholders at the General
Shareholders’ Meeting;
(g)
to order and direct presentations such that the debate adheres to the agenda;
(h)
to order and direct the deliberations by granting the floor to shareholders
who so request, and taking the floor away or refusing to grant it when the
Chairman deems that a matter has been sufficiently debated, is not on the
agenda or hinders the proper progress of the meeting;
(i)
to reject proposals made by shareholders when inappropriate or
extemporaneous;
(j)
to indicate the time for voting;
(k)
to establish voting systems and procedures, organize the voting, and
determine the system for counting and calculating the votes;
(l)
to announce the results of the voting;
(m) to temporarily suspend the General Shareholders’ Meeting;
2.
(n)
to adjourn the meeting; and
(o)
in general, to exercise all other powers, including those of order and
discipline, which are required to properly hold the General Shareholders’
Meeting.
The Chairman of the General Shareholders’ Meeting, even when present at the
meeting, may entrust management of debate to a director the Chairman deems
appropriate, or to the Secretary for the General Shareholders’ Meeting, who shall
carry out these duties on his behalf, and who may be removed at any time.
Article 21.-Duties of the Secretary for the General Shareholders’ Meeting
1.
The duties of the Secretary for the General Shareholders’ Meeting shall be the
following:
(a)
to declare the Presiding Committee to be formed;
(b)
to inform the shareholders at the General Shareholders’ Meeting, by
delegation from the Chairman thereof, of the provisional and final quorum
of shareholders in attendance, indicating the number of shareholders present
in person and by proxy, the number of shares they represent in person and
represented by proxy, and the percentage of share capital represented
thereby and the total number of shareholders and shares in attendance at the
meeting with an indication of the percentage of capital that such shares
represent;
(c)
to read, if applicable, or to make a summary report of the essential terms of
the call to meeting, the text of the proposed resolutions of the Board of
Directors and the other matters on which, the Board of Directors is required
to report to the shareholders at the General Shareholders’ Meeting pursuant
to Law or the Company’s Internal Regulation. A reading of the notice of the
call to meeting, the proposed resolutions or the other documents relating to
the General Shareholders’ Meeting shall not be required when such
documentation has been made available to the shareholders from the date of
publication of the notice of the call to meeting;
(d)
to assist the Chairman of the General Shareholders’ Meeting in the
resolution of questions, requests for clarification or claims raised with
respect to the list of attendees, proxies or distance votes;
(e)
to draft the minutes of the General Shareholders’ Meeting, if applicable; and
(f)
in general, to exercise at the direction of the Chairman of the General
Shareholders’ Meeting those powers as are necessary for order and
discipline and required for the appropriate conduct of the meeting and the
adoption and formalization of resolutions.
Article 22.-Establisment of a Quorum for the General Shareholders’ Meeting
1.
The General Shareholders’ Meeting shall be validly established with the minimum
quorum required by Law, taking into account the matters appearing on the agenda
of the call to meeting.
Notwithstanding the provisions of the foregoing paragraph, if the shareholders are
called upon to deliberate on amendments to the By-Laws, including the increase
and reduction of share capital, on the transformation, merger, split-off, the overall
assignment of assets and liabilities, the relocation of the registered office abroad,
on the issuance of debentures or on the exclusion or limitation of pre-emptive
rights, the required quorum on first call shall be met by the attendance of
shareholders representing at least fifty per cent (50%) of the subscribed share
capital with the right to vote. If a sufficient quorum is not available, the General
Shareholders’ Meeting shall be held upon second call.
2.
The absence of shareholders occurring once a quorum for the General
Shareholders’ Meeting has been established shall not affect the validity of the
meeting.
3.
If the attendance of shareholders representing a particular percentage of share
capital or the consent of specific interested shareholders is required pursuant to
Law or the By-Laws in order to validly adopt a resolution regarding one or more
items on the agenda of the call to meeting, and such percentage is not reached or
such shareholders are not present in person or by proxy, the shareholders at the
General Shareholders’ Meeting shall be limited to deliberation and decision
regarding those items on the agenda of the call to meeting which do not require
the attendance of such percentage of share capital or such shareholders.
Article 23.-List of attendees
1.
Once the Presiding Committee has been formed, and prior to beginning with the
agenda of the call to meeting, a list of attendees shall be prepared which sets forth
the nature or representation of each attendee and the number of their own or other
parties’ shares present. At the end of the list, there shall be a determination of the
number of shareholders present in person (including those who have cast their
votes from a distance) or by proxy, as well as the amount of capital they own,
with a specification as to which capital corresponds to shareholders with the right
to vote. The list of attendees shall include as present those shareholders who have
cast votes from a distance pursuant to the provisions of the Company’s Internal
Regulation.
2.
The list of attendees shall be contained in electronic media, the sealed cover of
which shall show the appropriate identification procedure signed by the Secretary
for the General Shareholders’ Meeting with the approval of the Chairman thereof.
3.
If the meeting takes place in different places pursuant to the provisions of these
Regulations, the list of attendees shall also include the share capital represented in
person or by proxy in each room. In such case, distance votes shall be included in
the room where the Presiding Committee is located.
4.
The Secretary for the General Shareholders’ Meeting has the power, exercised by
delegation from the Chairman thereof, to prepare the list of attendees. The
Secretary for the General Shareholders’ Meeting shall be provided with the means
and systems determined by the Chairman thereof for preparation of the list and, if
applicable, for calculation of the voting. The list of attendees shall be attached to
the minutes of the General Shareholders’ Meeting.
Article 24.-Commencement of the meeting
1.
Prior to the commencement of the General Shareholders’ Meeting, the Chairman
thereof or, by delegation therefrom, the Secretary therefor, shall announce the
provisional or final information relating to the number of shareholders present in
person and by proxy, the number of shares present in person and by proxy, an
indication of the percentage of share capital represented by both, and the total
number of shareholders and shares in attendance at the meeting with an indication
of the share capital represented by such shares.
If such information indicates compliance with the quorum needed to validly hold
the General Shareholders’ Meeting and the shareholders at the General
Shareholders’ Meeting can deliberate and adopt resolutions regarding at least one
of the items on the agenda of the call to meeting, the Chairman of the General
Shareholders’ Meeting shall declare a valid quorum to exist and shall call the
meeting to order. If such information is provisional, the shareholders at the
General Shareholders’ Meeting shall be given the final information prior to
deliberating on the items on the agenda.
2.
If appropriate, the Chairman of the General Shareholders’ Meeting shall announce
the presence of a notary public at the meeting, shall identify such notary public,
and shall disclose the request he has made of the notary public to prepare the
minutes of the meeting.
If a notary public has been required to prepare the minutes of the meeting, the
notary public shall ask the shareholders’ at the General Shareholders’ Meeting and
make clear in the minutes whether there are reservations or objections regarding
the statements made by the Chairman or by the Secretary for the General
Shareholders’ Meeting regarding the number of shareholders in attendance and
the share capital which is present.
Article 25.- Shareholder Requests. Identification
Shareholders desiring to address the meeting and, if applicable, to request information
or clarifications regarding the items on the agenda of the call to meeting or to make
proposals, must so request at the time indicated by the Chairman of the General
Shareholders’ Meeting and prior to commencement of the presentation period, to the
Office of the Shareholder or to whomever is indicated for such purposes, and state for
the record their first and last names and, if applicable, the corporate name of the
shareholder they represent, as well as the number of shares they own and/or represent.
Article 26.- Reports
1.
While the shareholders who desire to take the floor are identified and verified
pursuant to the provisions of the foregoing article, the Secretary for the General
Shareholders’ Meeting, at the direction of the Chairman thereof, shall provide a
report thereto regarding the publications of the notice of the call to meeting.
2.
Thereafter, the meeting shall continue with the presentation of any reports by the
Chairman of the General Shareholders’ Meeting and the members of the Board of
Directors or the persons designated for such purpose by the Chairman of the
General Shareholders’ Meeting.
3.
Thereafter, and in any event prior to voting, the Chairman of the General
Shareholders’ Meeting shall commence the period for presentations by the
shareholders.
Article 27.- Shareholders’ presentation period. Order of presentations and
proposals
1.
Presentations by duly verified shareholders shall occur in the order in which they
are called by the Secretary for the General Shareholders’ Meeting. No shareholder
may make a presentation dealing with business not included in the agenda of the
call to meeting, without prejudice to the proposed resolutions that might legally be
made outside of the agenda of the call to meeting, or without being granted the
floor.
2.
Shareholders must make reasonable use of their power with respect to both the
duration of their presentation, which must be brief and concise, as well as the
content thereof, which must conform to the provisions of the preceding paragraph
and to the respect deserved by the proceedings of the General Shareholders’
Meeting and the other attendees. Presenting parties shall have a maximum of five
(5) minutes for each presentation, without prejudice to the powers of the
Chairman of the General Shareholders’ Meeting to limit or extend such period.
Notwithstanding the foregoing, when the number of presentations requested or
other circumstances so require, the Chairman of the General Shareholders’
Meeting may set a maximum period less than that mentioned above, giving due
regard in each case to the equal treatment of presenting shareholders and the
principle of non-discrimination.
3.
The powers to make presentations and requests for information shall only be
exercised once, and the same shareholder cannot return to exercise such powers at
the end of their presentation period. During such period, the presenting
shareholder may make proposals regarding any item on the agenda of the call to
meeting, except in those cases in which they should have been available to the
shareholder at the registered office at the time of publication of the call to meeting
or the supplement to the call to meeting, if any, they are excluded by Law, or they
breach the rights of other shareholders. They may also propose the adoption of
resolutions regarding which, according to Law, the shareholders at the General
Shareholders’ Meeting may deliberate and decide upon without appearing in the
agenda of the call to meeting.
4.
5.
In the exercise of his powers to order the meeting, and without prejudice to other
action that may be taken, the Chairman of the General Shareholders’ Meeting
may:
(a)
extend the time initially allocated to each shareholder, when the Chairman
so deems it appropriate;
(b)
decide the order in which answers will be provided to the shareholders and
whether such answers will be given following each presentation period or
collectively in summarized form after the last presentation, without
prejudice to the legally provided possibility of sending the information in
writing within a period of seven (7) days following the holding of the
General Shareholders’ Meeting;
(c)
end the shareholder presentation period;
(d)
request the presenting parties to clarify issues that have not been understood
or which have not been sufficiently explained during the presentation;
(e)
call the presenting shareholders to order so that they limit their presentation
to business properly before the General Shareholders’ Meeting and refrain
from making improper statements or exercising their right of presentation in
an abusive or obstructionist manner;
(f)
announce to the presenting parties that the time for their presentations will
soon be ending so that they may adjust their discourse and, when the time
granted for their presentation has ended, or if they persist in the conduct
described in the preceding paragraph, may withdraw the floor from them,
and, if the Chairman believes that their presentation might alter the proper
order and normal conduct of the meeting, ask them to leave the premises
and the Chairman may adopt appropriate measures in order for this
provision to be complied with; and
(g)
deny the floor when the Chairman believes that a particular matter has been
sufficiently debated, is not included in the agenda, or hinders the progress of
the meeting, as well as reject the reply of the presenting shareholder.
The Chairman of the General Shareholders’ Meeting shall have the broadest
powers to allow and apply the legally appropriate procedures or to reject the
proposals made by the shareholders during their presentation on any matter
included in the agenda of the call to meeting or on those matters which may be
debated and decided at the General Shareholders’ Meeting without such matters
appearing on the agenda for the meeting, in light of compliance in each case with
the requirements of applicable Law and regulations. In voting on the proposals
allowed pursuant to this paragraph (both on items included in the agenda and on
items not appearing therein) the procedure established under these Regulations
shall apply, without prejudice to the Chairman’s ability to decide on the use of
other procedures or alterative voting systems.
Article 28.- Right to receive information during the General Shareholders’
Meeting
1.
During the presentation period, shareholders or their duly accredited proxyrepresentatives may verbally request information or clarifications that they deem
are necessary regarding the matters contained in the agenda of the call to meeting
or information accessible to the public that has been provided by the Company to
the Colombian Financial Superintendency (Superintendencia Financiera de
Colombia) since the holding of the last General Shareholders’ Meeting and the
auditors’ report. They must have previously identified themselves for this purpose
in accordance with the provisions set forth under these Regulations.
2.
Directors shall be required to provide the information requested pursuant to the
preceding paragraph in the form and within the periods provided by Law, except
in those cases in which:
(a)
in the sound judgment of the Chairman, disclosure of such requested
information would harm corporate interests. This exception will not apply
when the corresponding request is supported by shareholders representing at
least twenty five per cent (25%) of the share capital;
(b)
the request for information or clarification does refer to information
accessible to all shareholders on the corporate website of the Company,
under the question-answer format;
(c)
the request for information or clarification does not refer to matters included
in the agenda of the call to meeting, information accessible to the public that
has been provided by the Company to the Colombian Financial
Superintendency (Superintendencia Financiera de Colombia) since the
holding of the last General Shareholders’ Meeting or the auditors’ report;
and
(d)
legal or regulatory provisions provide otherwise.
3.
The requested information or clarification shall be provided by the Chairman of
the General Shareholders’ Meeting or, if applicable and if directed by such
Chairman of any of the Committees of the Board of Directors, by a director, or, if
appropriate, by any employee of the Company, the auditor, or any other person
designated by the Chairman of the General Shareholders’ Meeting.
4.
In the event that for any reason it is not possible to satisfy the shareholder’s right
to receive information during the proceedings of the General Shareholders’
Meeting, the directors shall provide the requested information in writing to the
interested shareholder within seven (7) days of the close of the General
Shareholders’ Meeting.
Article 29.- Establishment of a final quorum for the General Shareholders’
Meeting
1.
At the end of the presentations, if the information previously provided was
provisional, the list of attendees shall be closed and the Chairman of the General
Shareholders’ Meeting, or the Secretary by delegation thereof, shall read the final
information contained in the list of attendees, detailing the number of shareholders
present in person and by proxy, the number of shares represented in person and by
proxy, with an indication of the percentage of share capital that both represent,
and the total number of shareholders and shares in attendance at the meeting, with
an indication of the share capital that such shares represent.
2.
Once this information has been publicly announced, the Chairman of the General
Shareholders’ Meeting shall, if appropriate, declare the existence of a proper and
sufficient quorum on first or second call, as the case may be, and shall decide if
the shareholders can debate and adopt resolutions regarding all matters contained
in the agenda or if, on the contrary, debate must be limited to only some of them,
based on attendance at the General Shareholders’ Meeting in accordance with the
list of attendees.
3.
Once the establishment of a quorum for the General Shareholders’ Meeting has
been declared, and a notary public is in attendance in order to prepare the notarial
minutes of the meeting, the attending shareholders may state to the notary public
any reservation or objection they may have regarding the existence of a valid
quorum for the General Shareholders’ Meeting or regarding the information from
the list of attendees which was previously read aloud, in order to duly record such
reservation or objection in the minutes.
Article 30.- Temporary suspension
1.
In exceptional cases, when there are incidents which temporarily prevent the
normal progress of the meeting, the Chairman of the General Shareholders’
Meeting may resolve to suspend the session for the time the Chairman deems
appropriate in order to reestablish the conditions needed for the continuation
thereof. The Chairman of the General Shareholders’ Meeting may adopt such
additional measures as the Chairman deems appropriate to ensure the safety of
those present and to avoid the repetition of circumstances which might again
affect the proper conduct of the meeting.
2.
Once the meeting has resumed, if the situation which gave rise to the suspension
persists, the Chairman of the General Shareholders’ Meeting shall consult with the
Presiding Committee in order for the shareholders to agree to continue the
meeting on the next day. In the event the continuation is not approved for any
reason, the Chairman of the General Shareholders’ Meeting shall immediately
adjourn the meeting.
Article 31.- Continuation
1.
At the proposal of the Chairman of the General Shareholders’ Meeting, a majority
of the directors attending the Meeting or at the request of shareholders
representing at least one-fourth (1/4) of the share capital present at the General
Shareholders’ Meeting, the shareholders at the General Shareholders’ Meeting
may agree to a continuation of their sessions over one or more consecutive days,
provided that there are just grounds for doing so. Regardless of the number of
sessions, the General Shareholders’ Meeting shall be deemed to be a single
meeting, and a single set of minutes shall be prepared for all of the sessions.
2.
Once the session of the General Shareholders’ Meeting has been continued, it
shall not be necessary during the following sessions to repeat, should it be the
case, the fulfillment of the requirements provided by Law or by the Company’s
By-Laws for its valid constitution. If any shareholder included on the list of
attendees created at the beginning of the meeting does not attend the following
sessions of the meeting, the required majorities to adopt resolutions shall be
deemed to be the majorities determined in such list taking into account the
information contained in such list, without prejudice of the provisions of article
34.3.
TITLE VI
VOTING AND ADOPTION OF RESOLUTIONS
Article 32.- Casting of votes from distance
1.
Shareholders may cast their vote regarding proposals relating to the items
included on the agenda of the call to meeting by postal or electronic
correspondence or any other means of communication from a distance, provided
that the identity of the person and the security of electronic communications is
duly assured. In all cases, they shall be deemed to be present for purposes of
constituting a quorum for the General Shareholders’ Meeting.
2.
To cast their vote by postal correspondence, shareholders must send to the
Company the attendance, proxy-granting and distance voting card issued in their
favor by the corresponding entity and which sets forth the direction of their vote,
their abstention or their blank vote; or other written means that, in the judgment of
the Board of Directors recorded in a resolution adopted for such purpose, allows
for the due verification of the identity of the shareholder exercising his voting
rights.
3.
Votes may also be casted by means of electronic correspondence, which shall
enclose an electronic copy of the shareholder’s attendance and voting card,
including the shareholder’s electronic signature or other form of identification of
the shareholder that the Board of Directors, by virtue of a resolution adopted for
such purpose, deems to best ensure the authenticity and identification of the
shareholder exercising the right to vote.
4.
Votes cast by either of the means set forth in the preceding paragraphs must be
received by the Company before midnight (00:00) on the third day prior to the
date provided for the holding of the General Shareholders’ Meeting, upon first or
second call, as applicable. Otherwise, the vote shall be deemed not to have been
cast.
5.
The distance voting referred to in this Article shall be rendered void:
(a)
by subsequent express revocation made by the same means used to cast the
vote and within the period established for such voting;
(b)
by attendance at the meeting of the shareholder casting the vote; or
(c)
if the shareholder validly grants a proxy after the date of casting the distance
vote.
6.
If express instructions are not included in the casting of the distance vote, or are
only included with respect to some of the items on the agenda of the call to
meeting, and unless expressly indicated otherwise by the shareholder, it shall be
deemed that the distance vote refers to all of the items included on the agenda of
the call to the General Shareholders’ Meeting and that the vote is in favor of the
proposals made by the Board of Directors with respect to the items included on
the agenda of the call to meeting with respect to which express instructions are not
included.
7.
In connection with the proposed resolutions which have not been made by Board
of Directors or those related to items not included in the agenda of the meeting,
the shareholder who cast their votes from distance may delegate its representation
through any of the options provided in this regulations and, in that case, it will be
applied to such delegation the rules established for that purposes. Unless
otherwise indicated by the shareholder, it will be deemed that the proxy has been
granted to the Chairman of the Board of Directors.
8.
The Board of Directors is empowered to elaborate upon the appropriate rules,
means and procedures to organize the casting of votes and the grant of proxies by
electronic means.
9.
Specifically, the Board of Directors may: (i) establish rules for the use of
guarantees other than electronic signatures for casting electronic votes or by other
valid means of long-distance communication; (ii) reduce the advance period set
forth in paragraph 4 above for receipt by the Company of votes cast; and (iii)
accept and authorize the Chairman of and Secretary for the General Shareholders’
Meeting and the persons delegated thereby to accept, if appropriate, distance votes
received after such period, to the extent allowed by available instruments.
10.
The Chairman and Secretary of the Board of Directors or the Chairman of and
Secretary for the General Shareholders’ Meeting, as from the achievement of a
valid quorum therefore, and the persons delegated thereby, shall enjoy the
broadest powers to verify the identity of the shareholders and their
representatives, and check the legitimacy of the exercise of the rights of
attendance, proxy-granting information and voting by the shareholders and their
representatives; and check and accept the validity and effectiveness of the proxies
and distance voting, as well as the instructions received through brokers,
representatives or depositaries of shares, all in accordance with the provisions set
forth in the Company’s Internal Regulation and in the rules established by the
Board of Directors in elaboration thereof.
Article 33.- Voting on proposed resolutions
1.
Once the shareholder presentations have ended and responses have been made to
requests for information pursuant to the provisions of these Regulations, the
proposed resolutions regarding matters included in the agenda of the call to
meeting or which according to Law may be submitted for a vote even though not
appearing therein, including any proposals made by the shareholders during the
meeting that are appropriate under the Law and the Company’s Internal
Regulation.
The Board of Directors shall propose different resolutions in connection with
matters that are substantially independent of one another, so that the shareholders
may separately exercise their right to vote.
The adoption of resolutions shall proceed following the agenda set forth in the call
to meeting. Resolutions proposed by the Board of Directors shall be first
submitted to vote and then, if appropriate, resolutions proposed by other
proponents and those relating to matters that the shareholders at the General
Shareholders’ Meeting can decide upon without appearing in the agenda shall be
voted, with the Chairman of the General Shareholders’ Meeting deciding upon the
order in which they shall be submitted for a vote. In any event, once a proposed
resolution has been adopted, all others relating to the same matter and which are
incompatible therewith shall be withdrawn and therefore need not be voted upon.
It shall not be necessary for the Secretary for the General Shareholders’ Meeting
to previously read aloud the complete text of resolutions proposed by the Board of
Directors if such text has already been published on the Company’s corporate
website since the date of publication of the notice of the call to the General
Shareholders’ Meeting. In this case, the reading of a summary or excerpts may be
sufficient when it is deemed appropriate for some or all of the proposals by the
Chairman of the General Shareholders’ Meeting, or by the Secretary for the
General Shareholders’ Meeting by delegation thereof.
2.
As a general rule, and without prejudice to the powers of the Chairman of the
General Shareholders’ Meeting to use other procedures and alternative systems,
for purposes of voting on the proposed resolutions, the direction of the votes of
the shareholders shall be determined as follows:
(a)
in the case of proposed resolutions relating to matters included in the agenda
of the call to meeting, votes corresponding to all shares present in person
and by proxy, less the votes corresponding to: shares whose holders or
representatives state that they vote against, in blank, or abstain, by
communicating or expressing their vote or abstention to the notary public
(or, in the absence thereof, the Secretary for the General Shareholders’
Meeting) or the assistants thereto, for note thereof to be taken in the
minutes; shares whose holders have voted against, in blank, or have
expressly stated that they abstain through the means of communication
referred to in these Regulations; and shares whose holders or representatives
have left the meeting prior to the voting on the proposed resolution in
question and have had the notary public or assistant thereto (or, in the
absence thereof, the Secretary for the General Meeting) record their
withdrawal from the meeting, shall be deemed to be votes in favour; or
(b)
3.
in the case of proposed resolutions relating to matters not included in the
agenda of the call to meeting, votes corresponding to all shares present in
person and by proxy, less the votes corresponding to: shares whose holders
or representatives state that they vote in favor, in blank, or abstain, by
communicating or expressing their vote or abstention to the notary public
(or, in the absence thereof, the Secretary for the General Shareholders’
Meeting) or the assistants thereto, for note thereof to be taken in the
minutes; shares whose holders have voted in favor, in blank, or have
expressly stated that they abstain through the means of communication
referred to in these Regulations; and shares whose holders or representatives
have left the meeting prior to the voting on the proposed resolution in
question and have had the notary public or assistants thereto (or, in the
absence thereof, the Secretary for the General Shareholders’ Meeting)
record their withdrawal from the meeting, shall be deemed to be votes
against.
A proxy-representative may hold the proxy of more than one shareholder without
limitation as to the number of shareholders being represented. If a proxy-holder
represents several shareholders, the proxy-holder may casts votes in different
directions based on the instructions given by each shareholder. Furthermore, so
long as it is legally admissible and the required guarantees of transparency and
certainty are provided in the opinion of the Board of Directors, a vote may be
divided in order for financial intermediaries who are recorded as having
shareholder status but act for the account of different clients to be able to divide
their votes in accordance with the instructions given by such clients.
Article 34.- Adoption of resolutions and announcement of voting results
1.
The shareholders acting at a General Shareholders’ Meeting shall adopt
resolutions with the majorities of votes required by Law or the By-Laws. Each
voting share, whether represented in person or by proxy at the General
Shareholders’ Meeting, shall grant the holder the right to one (1) vote, without
prejudice to the limitations on the maximum number of votes that may be cast by
a shareholder and to the situations of conflict of interest set forth in article 24 of
the By-Laws, other instances in which the By-Laws provide for the suspension of
voting rights, and the restrictions established under Law.
2.
The approval of resolutions shall require the favorable vote of one-half plus one of
the voting shares cast in person or by proxy at the General Shareholders’ Meeting.
The foregoing does not affect situations in a greater majority is required by Law
or the By-Laws.
3.
For purposes of determining the number of shares upon which the majority
needed to adopt the various resolutions shall be calculated, all shares appearing on
the list of attendees shall be deemed to be in attendance, present and represented
at the meeting, less: shares whose owners or representatives have left the meeting
prior to the voting on the proposed resolution or resolutions in question and have
recorded their withdrawal with the notary public or assistants thereto (or, in the
absence thereof, with the Secretary for the General Shareholders’ Meeting); and
shares which, by application of the provisions of Law or the By-Laws are totally
or partially deprived of the right to vote in general or for the particular resolution
in question or for which exercise of the right to vote has been suspended for the
holders thereof.
4.
Once the Chairman of the General Shareholders’ Meeting, at the time of voting,
finds the existence of a sufficient number of votes in favor or against all or some
of the proposed resolutions, the Chairman may declare them to be approved or
rejected by the shareholders at the General Shareholders’ Meeting, without
prejudice to the statements that the shareholders may wish to make to Secretary
for the General Shareholders’ Meeting or to the notary public, if any, regarding
the direction of their vote for recording in the minutes of the meeting.
5.
Without prejudice to the provisions of the preceding paragraph, for each
resolution submitted to a vote at the General Shareholders’ Meeting, there must be
a determination of at least the number of shares for which valid votes have been
cast, the proportion of share capital represented by such votes, the total number of
valid votes, the number of votes in favor and against each resolution, and the
number of abstentions, if any.
TITLE VII
CLOSURE AND MINUTES OF THE MEETING
Article 35.- Closure
Once the voting on the proposed resolutions has been completed and the results
announced by the Chairman of the General Shareholders’ Meeting, the General
Shareholders’ Meeting shall end and the Chairman thereof shall bring the meeting to a
close, adjourning the session.
Article 36.- Minutes
1.
The minutes of the meeting may be approved by the shareholders of the General
Shareholders’ Meeting at the end thereof, and otherwise within a period of fifteen
(15) days by the Chairman of the General Shareholders’ Meeting and two (2)
inspectors, one on behalf of the majority and the other on behalf of the minority.
2.
Once the minutes are approved, they shall be signed by the Secretary for the
General Shareholders’ Meeting, with the approval of the person acting therein as
the Chairman. In the event the above-mentioned persons are unable to do so for
any reason, they shall be replaced by the persons established by Law or the ByLaws.
3.
In the event that a notary public takes part in the General Shareholders’ Meeting,
the notarial minutes shall be deemed the minutes of the General Shareholders’
Meeting, and shall not require approval.
TITLE VIII
SUBSEQUENT ACTS
Article 37.- Publication of Resolutions
1.
The text of the resolutions adopted by the shareholder at the General
Shareholders’ Meeting and the voting results shall be published in full on the
Company’s corporate website within five (5) days of the end of the General
Shareholders’ Meeting.
2.
Without prejudice to registration with the Commercial Registry of recordable
resolutions and applicable legal provisions regarding the publication of corporate
resolutions, the Company shall communicate to the Colombian Financial
Superintendency (Superintendencia Financiera de Colombia) the literal text or a
summary of the contents of the resolutions approved by the General Shareholders’
Meeting.
Furthermore, at the request of any shareholder or their representative at the General
Shareholders’ Meeting, the Secretary of the Board of Directors shall issue a certification
of the resolutions or of the minutes.
TITLE IX
TRANSITORY PROVISION
Sole transitory provision. Non application of provisions of the Regulations of
the General Shareholders’ Meeting prior to the listing of the shares on the
Colombian Stock Exchange
As long as the shares of the Company are not listed on the Colombian Stock
Exchange, the following provisions of the Regulations of the General Shareholders’
Meeting which, being acceptable under the Spanish Companies Law for the
companies whose shares are listed on a secondary official stock exchange, infringe
the mandatory rules for the remaining companies which are not in that case, shall
not be applicable:
(a)
The power to delegate to the Board of Directors the authority to exclude or
limit pre-emptive rights in connection with a share capital increase, as set
forth in article 7.1 (e) of these Regulations.
(b)
The obligations to publish the call to the General Shareholders’ Meetings in
the Spanish Official Bulletin of the Commercial Registry (Boletín Oficial
del Registro Mercantil) or one of the more widely circulated newspapers in
Spain, in the web page of the Colombian Financial Superintendency
(Superintendencia Financiera de Colombia) or the body which may
exercise its current functions in the future and on the Company’s corporate
website, and to keep it accessible on an uninterrupted basis until at least the
holding of the General Shareholders’ Meeting, both set forth in article 8.1 of
these Regulations. Instead, the call to the General Shareholders’ Meetings
shall be published in the Spanish Official Bulletin of the Commercial
Registry (Boletín Oficial del Registro Mercantil) or one of the more widely
circulated newspapers in Spain, or in the Company’s corporate website
provided that it has been created, registered with the Commercial Registry
of Madrid and published in the terms provided for under the applicable
legislation.
(c)
The shareholders’ inability to request the publication of a supplement to the
call to extraordinary General Shareholders’ Meetings established in article
9.2 (a) of the Regulations of the General Shareholders’ Meeting.
(d)
The shareholders right to request information or clarifications or ask written
questions regarding information accessible to the public which has been
publicly disclosed by the Company to the Colombian Financial
Superintendency (Superintendencia Financiera de Colombia) since the
holding of the last General Shareholders’ Meeting and the auditor’s report,
as set forth in the second paragraph of the article 11.2 of the Regulations of
the General Shareholders’ Meeting.
(e)
The obligation to make the communications described in article 37.2 of
these Regulations.
REGULATIONS OF THE BOARD OF DIRECTORS
CEMEX LATAM HOLDINGS, S.A.
REGULATIONS OF THE BOARD OF DIRECTORS OF CEMEX LATAM
HOLDINGS, S.A.
PRELIMINARY TITLE
Article 1.-Purpose and interpretation
1.
The Regulations of the Board of Directors (the “Regulations”) contain the
guidelines that are to govern all action taken by the Board of Directors of Cemex
Latam Holdings, S.A. (the “Company”), the basic rules for the organization and
operation thereof and the rules of conduct to be observed by its members, in order
to achieve the greatest degree of transparency, effectiveness, dynamism,
supervision and control in the performance of its management and supervision
duties and representation of the corporate interest.
2.
These Regulations shall be construed in accordance with Law, the Internal
Regulation (as this term is defined in the By-laws of the Company) and good
governance recommendations generally recognized in the international markets,
all within the framework of the corporate interest.
3.
The Regulations further develop and supplement applicable legal and By-Laws
provisions, which provisions shall prevail in the event of conflict with the
provisions set forth herein.
Article 2.-Scope of application
1.
The Regulations apply to the Board of Directors, the representative decisionmaking bodies thereof (whether collective or single-person) and its internal
committees, as well as to all of its members. The persons to whom these
Regulations apply shall have the duty to be apprised of them, to comply with them
and to enforce them, for which purpose the Secretary of the Board of Directors
shall provide them with a copy to be acknowledged by means of a signed receipt,
and publish it on the Company’s corporate website.
2.
The directors shall comply with and enforce the provisions of the Internal
Regulation and shall confirm such commitment in writing upon accepting their
appointment or re-election in such manner as is determined by the Secretary of the
Board of Directors.
Article 3.-Dissemination
These Regulations hereto shall be communicated to the relevant authorities in
accordance with the applicable legal provisions and registered with the Commercial
Registry (Registro Mercantil), pursuant to applicable rules and regulations. The current
text of these Regulations shall be made available on the Company’s corporate website.
Article 4.-Amendments
1.
The Board of Directors may, by resolution adopted by a two-thirds (2/3) majority
of the directors present in person or by proxy, amend these Regulations on its own
initiative, or on the initiative of its Chairman, of one-third (1/3) of the directors or
of the Corporate Governance Committee, with the proposed amendment to be
accompanied by a description of the reasons for and the scope of the amendment
sought. The Corporate Governance Committee shall prepare a report on the
proposed amendment and shall submit it to the Board of Directors, unless the
proposal is made on the initiative of the Board of Directors itself.
2.
Notice of the meeting of the Board of Directors called to decide upon the abovementioned proposal shall be given not less than seven days in advance of such
meeting, and shall be accompanied by the entire text of the proposed amendment,
the description of its reasons and, if applicable, the report of the Corporate
Governance Committee.
3.
Amendments to these Regulations shall also be subject to the dissemination
provisions set forth in Article 3 above.
4.
The Board of Directors shall inform the shareholders of any amendment to the
Regulations approved thereby at the next General Shareholders’ Meeting.
TITLE I
STRUCTURE AND POWERS
Article 5.- Structure
Management of the Company is vested in the Board of Directors, its Chairman and, if
so resolved by the Board of Directors, in an Executive Committee (Comisión Ejecutiva)
and/or one or several Chief Executive Officers (Consejero Delegado).
Article 6.- Powers of the Board of Directors
1.
The Board of Directors has the power to adopt resolutions regarding all matters
not assigned by Law or the By-Laws to the shareholders acting at a General
Shareholders’ Meeting.
2.
The Board of Directors has the widest powers and authority to manage and
represent the Company. Without prejudice to the foregoing, the Board of
Directors shall focus its activity on the definition, supervision and monitoring of
the strategies and general guidelines that must be followed by the Company, and
shall entrust to the representative management decision-making bodies and to the
senior managers the day-to-day management and direction.
3.
Those powers reserved by Law or the By-Laws for direct exercise by the Board of
Directors may not be delegated.
4.
The Board of Directors shall design, evaluate and continuously review the Internal
Regulation of the Company. The Board of Directors shall approve the corporate
polices, which shall further develop the principles set forth in the By-Laws and
other elements of the Internal Regulation and shall codify the guidelines for action
by the Company and its shareholders.
5.
Specifically, the Board of Directors shall, acting on its own initiative or at the
proposal of the appropriate internal decision-making body, deal with the matters
set forth below as an example only:
A.
B.
In connection with the General Shareholders’ Meeting:
(a)
call the General Shareholders’ Meeting;
(b)
propose the amendment of the By-Laws to the shareholders at a
General Shareholders’ Meeting;
(c)
propose the amendment of the Regulations for the General
Shareholders’ Meeting to the shareholders coming together thereat;
(d)
submit to a decision by the shareholders at a General Shareholders’
Meeting the transformation of the Company into a holding company,
through “subsidiarization” or the assignment to dependent entities of
core activities theretofore carried out by the Company, even though
the Company retains full control of such entities;
(e)
submit to a decision by the shareholders at a General Shareholders’
Meeting the approval or disposal of core operational assets which
exceed twenty five per cent (25%) of the Company’s income or
consolidated assets or the results of its operations, according to the last
annual audited financial statements at the moment in which the
transaction is specified;
(f)
propose to the shareholders at a General Shareholders’ Meeting the
approval of transactions the effect of which is equivalent to liquidating
the Company; and
(g)
carry out resolutions approved by the shareholders at a General
Shareholders’ Meeting and perform any duties that the shareholders
have entrusted thereto.
In connection with the organization of the Board of Directors and the
delegation of powers and the granting of powers of attorney:
(a)
approve and amend these Regulations; and
(b)
define the structure of the general powers of attorney to be granted by
the Board of Directors or by the representative management decisionmaking bodies.
C.
D.
In connection with the information to be provided by the Company:
(a)
manage the provision of information regarding the Company to the
shareholders and the markets in general in accordance with the
standards of equal treatment, transparency and truthfulness;
(b)
draw up the Company’s annual financial statements, management
report and proposal for the allocation of profits or losses, as well as
the consolidated annual financial statements and management report
and the financial information that the Company must periodically
make public due to its status as listed company, ensuring that such
documents provide a true and fair view of the assets and liabilities, the
financial condition and the operating income of the Company,
pursuant to applicable legal provisions; and
(c)
approve the Company’s Annual Corporate Governance Report and
Corporate Governance Survey (Código País – Colombia), should the
Company voluntarily decides to be subject to it, and any other report
that the Board of Directors deems advisable in order to better inform
shareholders and investors or that is required by legal provisions
applicable at any time.
In connection with the directors and senior managers:
(a)
designate directors to fill vacancies by interim appointment and
propose to the shareholders at a General Shareholders’ Meeting the
appointment, ratification, re-election or removal of directors;
(b)
designate and renew internal positions within the Board of Directors
and the members of and positions on the committees established
within the Board of Directors;
(c)
set, pursuant to the By-Laws and within the limits established therein,
the Director Compensation Policy and the compensation of directors.
In the case of executive directors, the Board of Directors shall
establish the additional compensation payable thereto for their
executive duties and other basic terms and conditions to which their
contracts must be subject;
(d)
approve, upon the proposal of the Chairman of the Board of Directors
or of the Chief Executive Officer, the determination and modification
of the Company’s organizational chart, the appointment and removal
of senior managers of the Company, as well as set the compensation
or indemnification, if any, payable to them in the event of removal.
As an exception to the foregoing, based on the proposal made for such
purpose by the Chairman of the Board of Directors, the Audit
Committee shall, if applicable, submit to the Board of Directors a
proposal supported by the corresponding report regarding the
selection, appointment or removal of the Director of the Internal Audit
Area.
For these purposes, senior managers shall be those managers who
report directly to the Board of Directors, to the Chairman thereof or to
the Chief Executive Officer of the Company and, in all cases, the
Director of the Internal Audit Area, as well as any other manager that
the Board of Directors regards as such;
E.
6.
(e)
approve the Senior Management Compensation Policy as well as the
basic terms and conditions of the contracts with senior managers,
based on the proposal made by the Chairman of the Board of Directors
or by the Chief Executive Officer to the Nominating and
Compensation Committee in order for the latter to prepare a report
thereon and submit it to the Board of Directors; and
(f)
make regulations, review and decide on possible conflicts of interest
and related-party transactions between the Company and its Directors
and senior managers as well as with persons related thereto.
Other powers:
(a)
prepare the Dividend Policy and submit to the shareholders at a
General Shareholders’ Meeting the corresponding proposed
resolutions regarding the allocation of profits or losses and other
methods of shareholder compensation, as well as decide upon the
payment, if any, of interim dividends;
(b)
pass upon all public tender offers for securities issued by the
Company;
(c)
decide upon proposals submitted thereto by the Executive Committee,
the Chairman of the Board of Directors, the Chief Executive Officer,
the independent director with special powers (Lead Independent
Director) or the committees of the Board of Directors; and
(d)
make decisions regarding any other matter within its authority which
the Board of Directors believes to be in the interests of the Company
or which the By-Laws or these Regulations reserve to the Board as a
whole.
The Board of Directors shall evaluate, on an annual basis and with the possibility
of using for such purpose the external and internal means it deems advisable in
each case:
(a)
its operation and the quality of its work;
(b)
the performance of their duties by the Chairman of the Board of
Directors and by the Chief Executive Officer of the Company, based
on the report submitted thereto by the Nominating and Compensation
Committee; and
(c)
the operation of its committees, in view of the report submitted thereto
by such committees. For such purpose, the Chairman of the Board of
Directors shall organize and coordinate the aforementioned evaluation
process with the Chairmen of the committees.
TITLE II
COMPOSITION
Article 7.- Number of directors
1.
The Board of Directors shall be composed of a minimum of three (3) and a
maximum of nine (9) directors, who shall be appointed or ratified at the General
Shareholders’ Meeting, subject to applicable legal and By-Law provisions. The
determination of the number of directors shall be the purview of the shareholders
acting at the General Shareholders’ Meeting, for which purpose the shareholders
may establish such number either by express resolution or through the filling or
non-filling of vacancies or the appointment of new directors within the minimum
and maximum numbers mentioned in the By-Laws.
2.
The Board of Directors shall submit a proposal to the shareholders at the General
Shareholders’ Meeting, setting forth the number of directors that, in view of the
circumstances affecting the Company and taking into account the aforementioned
maximum and minimum numbers, best suits good governance recommendations
enjoying widespread recognition, with a view to ensuring a proper degree of
representation and the effective operation of the Board and to reflecting an
appropriate balance of experience and expertise, such that decision-making is
enriched and multiple viewpoints are contributed to the discussion of the matters
dealt with by the Board of Directors.
3.
The foregoing shall be deemed to be without prejudice to the system of
proportional representation to which the shareholders are entitled under the
provisions of Law.
Article 8.- Types of Directors
1.
The following shall be deemed:
(a)
Executive directors: the directors who perform senior management duties or
are employees of the Company.
(b)
External proprietary directors: those directors who own a shareholding
interest that is equal to or greater than that legally regarded as significant at
any time, or who have been appointed owing to their status as shareholders,
although their shareholding interest does not reach such amount, or whose
appointment has been proposed to the Company by any of the
abovementioned shareholders.
For purposes of the definition above, it shall be deemed that a director has
been proposed to the Company by a shareholder when: he has been
appointed through the use of the proportional representation system; he is a
director, senior manager or employee of, or a nonsporadic provider of
services to such shareholder; the corporate documents show that the
shareholder accepts that the director has been appointed by it or represents
it; or he is the spouse of, a person related by a like relationship of affection
to, or a relative up to the second degree of kinship of, a significant
shareholder.
2.
(c)
External independent directors: those directors who, having been appointed
because of their personal and professional qualities, may carry out their
duties without being conditioned by relationships with the Company, its
significant shareholders or its managers.
(d)
Other external directors: those directors who are not executive directors and
also do not fit the description of a proprietary or independent director.
For the purposes of this section, and pursuant to the applicable Spanish and
Colombian corporate governance legal provisions, the following persons may not
be appointed as independent directors:
(a)
those who are employees or directors of the Company or any of its parent
companies or subsidiaries, unless three (3) and five (5) years, respectively,
have passed since the end of the relationship;
(b)
those shareholders who directly or under any shareholders agreement have
control over the majority of the Company’s voting rights or the power to
appoint the majority of the member of the Board of Directors of the
Company;
(c)
significant shareholders, directors, senior managers and employees of an
entity that receives, or has received during the last three (3) years,
significant donations from the Company. For the purposes herein, it shall be
deemed as significant donations those representing more than twenty per
cent (20%) of the donations received by the relevant institution. Those who
are mere trustees of a foundation receiving donations shall not be deemed
included in the provisions of this letter;
(d)
shareholders or employees of partnerships (asociaciones) or companies
providing advisory or consulting services to the Company or its group of
companies if the revenues obtained for such services represent for the latter,
at least, twenty per cent (20%) of their operational incomes, as well as those
who are, or have been during the last three (3) years, partners of the auditor
or responsible for the auditor’s report, in connection with the audit of the
Company or any of the companies of its group during such period;
(e)
management of an entity in which a director of the issuer serves as legal
representative;
(f)
those who are executive directors or senior managers of another company in
which an executive director or senior manager of the Company is an
external director;
(g)
those who hold, or have held during the last year, a significant business
relationship with the Company or the companies of its group, whether in
their own name or as a significant shareholder, director or senior manager of
an entity that holds or has held such relationship. The relationship entailed
by the provision of goods or services, including those of a financial nature,
and advisory or consultancy relationships shall be deemed to be business
relationships;
(h)
the spouse of, persons related by a like relationship of affection to, or
relatives up to the second degree of kinship of, an executive director or
senior manager of the Company;
(i)
those who have not been proposed, whether for appointment or re-election,
by the Nominating and Compensation Committee; and
(j)
those who receive from the Company or any of the companies of its group,
any amount or benefit other than as director compensation. For purposes of
this sub-section, the dividends or pension supplements received by the
director because of his prior professional or employment relationship shall
not be taken into account, so long as such supplements are unconditional in
nature and therefore the company paying them may not suspend, modify or
revoke the accrual thereof at its discretion other than on the grounds of
noncompliance with obligations.
(k)
those under the situations described in (a), (c), (g) or (h) regarding a
significant shareholder or a shareholder represented in the Board of
Directors. As for the relationship described in (h), the established limitation
shall not only apply regarding to the shareholder, but also regarding to
proprietary director of the Company.
3.
Proprietary directors who cease to have such status as a result of the shareholder
which proposed their appointment selling its interest may only be re-elected as
independent directors when such shareholder has sold all of its shares of the
Company and they meet the other requirements for classification as such.
4.
A director who has a shareholding interest in the Company may have the status of
independent director provided that he satisfies all of the conditions established in
this section and, in addition, his interest is not significant in accordance with
applicable legal provisions.
5.
The Board of Directors shall be composed such that external directors represent a
majority over executive directors.
6.
The Board of Directors shall endeavour to ensure that the number of executive
directors is the necessary minimum, taking into account the complexity of the
Company and the percentage interest held by executive directors in the share
capital of the Company, and that the number of independent directors accounts for
at least one-third (1/3) of the total number of directors.
7.
The status of each director shall be justified by the Board of Directors at the
General Shareholders’ Meeting at which the appointment thereof must be made or
ratified, and shall be maintained or, if applicable, modified annually in the Annual
Corporate Governance Report after verification by the Nominating and
Compensation Committee.
Article 9.- Selection of candidates
1.
The Board of Directors, and the Nominating and Compensation Committee within
its area of authority, shall endeavour to ensure that the candidates proposed to the
shareholders at a General Shareholders’ Meeting for appointment or re-election as
directors, as well as the directors appointed directly to fill vacancies in the
exercise of the power of the Board of Directors to make interim appointments, are
respectable and qualified persons, widely recognized for their expertise,
competence, experience, qualifications, educational background, availability and
commitment to their duties.
2.
In particular, the Board of Directors and the Nominating and Compensation
Committee shall consider the following principles:
3.
(a)
it shall be endeavour that all directors contribute to the Board of Director
with a professional speciality and that directors have previous experience in
the Company’s sector;
(b)
all directors shall have enough time to responsibly comply with the
performance of their duties; and
(c)
all directors shall have the basic skills to dully perform their duties.
In the case of a director that is a legal entity, the individual representing it in the
performance of the duties inherent in the position of director shall be subject to
the same requirements mentioned in the preceding paragraph and shall also be
personally subject to the incompatibilities and bound by the duties established for
the director in the Internal Regulation.
Article 10.- Appointment
1.
The directors shall be appointed by the shareholders acting at the General
Shareholders’ Meeting pursuant to the provisions of Law and the By-Laws.
2.
The proposals for appointment and re-election of directors that the Board of
Directors submits to a decision by the shareholders acting at a General
Shareholders’ Meeting, and the decisions made by the Board of Directors in the
exercise of the legally-assigned power to make interim appointments to fill
vacancies, shall be preceded by: (a) the corresponding proposal of the Nominating
and Compensation Committee, in the case of independent directors, or (b) the
report of the Nominating and Compensation Committee, in the case of the other
directors, which report must assign the new director to one of the categories
contemplated in these Regulations.
Article 11.- Term of office and re-election
1.
The directors shall serve in their positions for a term of three (3) years, so long as
the shareholders acting at a General Shareholders’ Meeting do not resolve to
remove them and they do not resign from their position.
2.
Directors may be re-elected for an unlimited number of terms of three (3) years.
3.
Vacancies which occur may, pursuant to Law, be filled by the Board of Directors
until the next General Shareholders’ Meeting, whereat the shareholders shall
confirm the appointments or elect the persons who should replace directors which
are not ratified, unless it decides to withdraw the vacant positions.
4.
The proposals for re-election of directors that the Board of Directors resolves to
submit to a decision of the shareholders at the General Shareholders’ Meeting
shall be subject to a process of preparation, which shall include a proposal (in the
case of independent directors) or a report (in the case of the other directors) issued
by the Nominating and Compensation Committee, containing an analysis of the
quality of the work performed and the dedication to the position shown by the
proposed directors during the preceding term of office as well as an express
evaluation of the respectability, capability, expertise, competence, availability and
commitment to their duties.
To this end, the directors sitting on the Nominating and Compensation Committee
shall be evaluated by the Committee itself, which shall use the internal and
external means it deems appropriate for such purpose, and each of them shall
leave the meeting during the debate and voting of resolutions that may affect
them.
5.
The Chairman, the Vice-Chairmen, the independent director with special powers
(Lead Independent Director), and, if they are directors, the Secretary and the ViceSecretaries of the Board of Directors, who are re-elected as members of the Board
of Directors by the shareholders acting at a General Shareholders’ Meeting, shall
continue to perform the duties they previously performed within the Board of
Directors without the need for a new appointment, all without prejudice to the
Board of Directors’ power of revocation with respect to such positions.
Article 12.- Incompatibilities
1.
It shall not be appointed as directors or, if applicable, as individual representative
of a director that is legal entity:
(a)
those natural persons or legal entities holding the position of director in
more than three (3) companies whose shares are submitted to trading in a
national or foreign stock exchange;
(b)
those persons who during the two (2) preceding years, have held high
positions in the public administration incompatible with the simultaneous
performance of the directors’ duties in a listed company pursuant to the
applicable Law, or positions of responsibility in the regulatory bodies of the
securities markets or other sectors in which the Company operates.
(c)
those natural persons or legal entities involved in any other incompatibility
or prohibition cases under general regulations, including those persons that
under any form have opposing interests to the Company.
2.
The Board of Directors shall not be composed of a majority of directors who are
engaged in a marital relation, or are relatives up to the third degree of kinship or
second of affinity. In that situation, the directors who prior to the concurrence of
such circumstance were members of the Board of Directors shall continue to hold
their positions and shall immediately call the Board of Directors to appoint a new
election. All resolutions passed by the Board of Directors with the vote of the
majority of directors contravening this section shall not be effective.
3.
In the absence of clarity on the applicability of any of the ineligibilities and
incompatibilities grounds to a specific case, the Board of Directors shall decide,
prior proposal of the Nominating and Compensation Committee, upon its
application to such event. The proposal of the Nominating and Compensation
Committee shall be in writing and shall be reflected in the minutes of the meeting
of the Nominating and Compensation Committee.
Article 13.- Resignation, removal and withdrawal
1.
The directors shall cease to hold office upon the expiration of the term of office
for which they have been appointed or when it is so resolved by the shareholders
at a General Shareholders’ Meeting in the exercise of the powers attributed
thereto.
2.
The directors shall tender their resignation to the Board of Directors and formally
resign from their position in the following cases:
(a)
when, due to supervening circumstances, they are involved in any
circumstance of incompatibility or prohibition governed by provisions of a
general nature, the By-Laws or these Regulations;
(b)
when, as a result of any acts or conduct attributable to the director, serious
damage is caused to the value or reputation of the Company or there is a risk
to the Company of criminal liability;
(c)
when they cease to deserve the respectability or to have the capability,
expertise, competence, availability or commitment to their duties required to
be a director of the Company;
(d)
when their continuance in office on the Board of Directors may, for any
reason, jeopardize directly, indirectly or through their related persons
(pursuant to the definition of this term set forth in these Regulations), the
faithful and diligent performance of their duties in furtherance of the
corporate interest;
(e)
when the reasons why the director was appointed cease to exist and, in
particular, in the case of proprietary directors, when the shareholder or
shareholders who proposed, requested or decided the appointment thereof
totally or partially sell or transfer their equity interest, with the result that
such equity interest ceases to be significant or sufficient to justify the
appointment;
(f)
when an independent director is affected, at any time following his
appointment as such, by any of the prohibitions against holding office
provided for in these Regulations; and
(g)
when the condition of the activities carried out by the director, or the
companies directly or indirectly controlled by the director, or the individuals
or legal entities that are shareholders or related to any of them, or the
individual representing a director that is a legal entity, may compromise the
director’s capacity to hold office as such.
3.
In any of the instances set forth in section 2 above, the Board of Directors shall
request the director to resign from his position and, if applicable, shall propose his
removal from office to the shareholders at the General Shareholders’ Meeting.
4.
In the event that an individual representing a legal entity acting as director falls
under any of the circumstances set forth in section 2 above, such individual shall
be disqualified from acting as a representative thereof.
5.
The Board of Directors may propose the removal of an independent director
before the passage of the period provided for in the By-Laws only upon sufficient
grounds, evaluated by the Board of Directors after a report of the Nominating and
Compensation Committee. For such purposes, it shall be deemed that there are
sufficient grounds in the event of noncompliance with the duties inherent in his
position or when such director has subsequently become subject to any of the
prohibitions set forth in section 2 of this article. Such removal may also be
proposed as a consequence of public tender offers, mergers or other similar
corporate transactions resulting in a significant change in the structure of the
Company’s share capital.
Article 14.- Duty to abstain
The directors affected by proposals for appointment, re-election to or removal from
office or admonishment shall leave the meeting during the debate and voting on the
respective resolutions.
TITLE III
POSITIONS AND COMMITTEES
CHAPTER I
POSITIONS
Article 15.- Chairman of the Board of Directors
1.
The Chairman of the Board of Directors shall be appointed from among the
directors after a report of the Nominating and Compensation Committee, and shall
have the status of Chairman of the Company, which he shall permanently
represent with the broadest powers, having a duty to carry out its resolutions and
the power, in urgent cases, to adopt such measures as the Chairman deems
advisable in furtherance of the corporate interest.
2.
The Chairman of the Board of Directors undertakes the senior management and
representation of the Company and leads the Board of Directors. He exercises the
following powers in addition to the powers conferred by Law and the Internal
Regulation:
(a)
to call and preside over meetings of the Board of Directors, setting the
agenda for the meetings and directing the discussion and debate;
(b)
to preside over the General Shareholders’ Meeting and direct the discussion
and debate therein; and
(c)
to bring to the Board of Directors those proposals which the Chairman
deems appropriate for the efficient running of the Company, particularly
those relating to the operation of the Board of Directors itself and other
corporate decision-making bodies, as well as to propose the persons, if any,
who shall hold office as Vice-Chairman or Vice-Chairmen, Chief Executive
Officer, and Secretary and, if applicable, Vice-Secretary or Vice-Secretaries
of the Board of Directors and on the committees of the Board of Directors.
Article 16. Vice-Chairman or Vice-chairmen of the Board of directors
1.
The Board of Directors, at the proposal of its Chairman and after a report of the
Nominating and Compensation Committee, may elect one or more Vice-Chairmen
from among its members who shall temporarily replace the Chairman of the
Board of Directors in the event of vacancy, absence, sickness or disability.
2.
If there is more than one Vice-Chairman of the Board of Directors, the order in
which they have been appointed shall be considered (first Vice-chairman, second
Vice-chairman, etc.); and if there is no Vice-Chairman, the Chairman will be
replaced by the longest-serving director and, in case of equal lengths of service,
the oldest.
Article 17. Chief executive officer
1.
The Board of Directors may, acting upon a proposal of the Chairman thereof and
following a report of the Nominating and Compensation Committee, and with the
favorable vote of two-thirds (2/3) of the directors, appoint one or more Chief
Executive Officers, with the powers it deems appropriate and which may be
delegated pursuant to the provisions of Law and the By-Laws, that may be
exercised jointly or severally, as determined by the Board of Directors.
2.
Apart from the Board of Directors, its Chairman and, if applicable, the Executive
Committee and the Chief Executive Officer shall exercise the power to represent
the Company.
3.
In the event of a vacancy in the office, absence, sickness or disability of the Chief
Executive Officer, the duties thereof shall be temporarily assumed by the
Chairman of the Board of Directors, who shall immediately call the Board of
Directors to hold a meeting in order to deliberate and resolve upon the
appointment, if appropriate, of a new Chief Executive Officer. In the event that
the same person holds office as Chairman of the Board of Directors and Chief
Executive Officer, the replacement provisions set forth in Article 16 above shall
apply.
Article 18. Independent director with special powers (Lead Independent Director)
1.
2.
In the event that the Chairman of the Board of Directors performs executive
duties, the Board of Directors shall, at the proposal of the Nominating and
Compensation Committee, authorize an independent director to:
(a)
request the Chairman of the Board of Directors to call a meeting of this
body when he deems it appropriate;
(b)
request the inclusion of matters on the agenda for the meetings of the Board
of Directors;
(c)
coordinate and express the opinions of the external directors; and
(d)
lead the evaluation of the Chairman of the Board of Directors.
The removal of the independent director with special powers (Lead Independent
Director) requires the prior report of the Nominating and Compensation
Committee.
Article 19. Secretary, Vice-secretary or Vice-secretaries and Counsel to the Board
of Directors
1.
At the proposal of the Chairman, and after a report of the Nominating and
Compensation Committee, the Board of Directors shall appoint a Secretary and, if
appropriate, one or more Vice-Secretaries, who need not be directors and who will
replace the Secretary in the event of vacancy, absence, sickness or disability. The
same procedure shall be used to decide the removal of the Secretary and, if
applicable, of each Vice-Secretary.
2.
In the event that there is more than one Vice-Secretary, the Secretary of the Board
of Directors will be replaced by the appropriate Vice-Secretary in accordance with
the order established at the time of appointment thereof.
3.
Secretary of the Board of Directors shall have the following duties:
(a)
keep custody of the corporate documents, duly record the proceedings of
meetings in the minute books and certify the resolutions adopted and
decisions made by the collective management decision-making bodies;
(b)
ensure the formal and substantive legality of all action taken by the
collective management decision-making bodies and the adherence thereof to
the Internal Regulation;
(c)
give advice to the Board of Directors on the assessment and continuous
update of the Internal Regulation and report on new initiatives in the area of
corporate governance at the domestic and international level;
(d)
generally act as a channel in relations between the Company and the
directors in connection with all matters relating to the operation of the
Board of Directors, in compliance with the instructions of the Chairman
thereof;
(e)
verify, under the guidance of the Chairman of the Board of Directors, that
the information provided by the Company for the adoption of resolutions by
the Board of Directors is previously made available to the directors;
(f)
channel all requests from the directors regarding the information on and
documentation of those matters that fall within the purview of the Board of
Directors;
(g)
decide the information that must be included in the Company’s corporate
website in compliance with the obligations imposed by applicable
regulations; and
(h)
act as Secretary of the Executive Committee and for the General
Shareholders’ Meeting.
4.
In addition, the Secretary, and the Vice-Secretary or Vice-Secretaries, if any, of
the Board of Directors shall have the duties entrusted to the directors in these
Regulations which, because of their nature, are applicable thereto.
5.
In order to perform his duties, the Secretary must have access to the minutes of
the meetings of the committees of the Board of Directors for which is not the
Secretary.
6.
The Board of Directors, prior report of the Nominating and Compensation
Committee, may appoint a Counsel to the Board of Directors, who shall have the
duties provided by applicable Law. The Secretary or one of the Vice-Secretaries,
if any, may perform the duties of Counsel to the Board of Directors if they are
attorneys-at-law and satisfy the other requirements established by applicable Law
and it is so determined by the Board of Directors. Specifically, the Counsel to the
Board of Directors must have access to the minutes of the meetings of the Board
of Directors and its committees in order to verify that they comply with applicable
regulations and with the Internal Regulation. The Counsel to the Board of
Directors must comply with the directors’ obligations established in these
Regulations, which are applicable because of their nature.
Article 20. Senior managers
1.
Senior managers shall be deemed to be the main executives of the Company,
directly reporting to the Board of Directors or to the Chief Executive Officer of
the Company, as well as any other manager to whom the Board of Director
recognizes such condition, whose main duty is to carry out the strategy designed
by the Board of Directors of the Company.
2.
The Board of Director, for the purposes of setting the compensation of senior
managers, shall consider their skills, expertise, responsibilities and duties.
3.
Basic information on the senior managers of the Company shall be available to the
public on the Company’s corporate website.
4.
The powers of senior managers and its authorization to represent the Company
shall be set by the Board of Director pursuant to the Company’s By-Laws and the
applicable Law.
5.
The Board of Directors shall create other management positions as it deems
appropriate.
Article 21. Compliance manager
1.
The Company shall have a compliance manager who shall be responsible for the
supervision, and enforceability of the good corporate governance policies.
2.
The compliance manager shall have, among others, the following duties:
(a)
answer the enquiries asked to him in relation with the offering or reception
of gifts and presents by the directors of the Company;
3.
(b)
hear, if appropriate, the claims of violations of the provisions of the good
corporate governance policies and notify them to the Corporate Governance
Committee;
(c)
give, if appropriate, his opinion in relation with potential violations of the
gift and invitation policy and the anti-corruption policy of the Company;
(d)
keep updated the released versions of the good corporate governance
policies on the Company’s corporate website; and
(e)
issue the reports on good corporate governance required by the relevant
authorities.
The compliance manager may request the directors of the Company information,
documents and explanations in connection with the compliance of the provisions
of the good corporate governance policies. In addition, the compliance manager
shall notify the Corporate Governance Committee and/or the other competent
committees of any irregularity that may arise.
Article 22. Auditor
1.
The shareholders at a General Shareholders’ Meeting, at the proposal of the Board
of Directors and upon the recommendation of the Audit Committee, shall appoint
an auditor that shall exercise its duties pursuant to the applicable Spanish
accounting rules and principles, and shall be obliged to report to the Audit
Committee any internal control problems which may identify.
2.
The Company shall not appoint as auditor of the Company any person or
company that may have received incomes from the Company and/or its economic
affiliates, representing at least the twenty five per cent (25%) of its last annual
incomes.
3.
For the purpose of informing the material findings that the auditor may carry out,
the auditor shall notify in writing to the Audit Committee or to whom it may
concern pursuant to the competences of the organ and the magnitude of the
finding at his judgement, of the irregularities in the running of the Company and
in the business development.
CHAPTER II
COMMITTEES
Article 23. Committees of the Board of Directors
1.
The Board of Directors must create an Audit Committee, a Nominating and
Compensation Committee and a Corporate Governance Committee and may
create an Executive Committee.
2.
The Board of Directors may also create other committees or commissions of
purely internal scope, with such powers as are determined by the Board of
Directors.
3.
The committees shall be governed by their own rules and regulations, if any,
which shall be approved by the Board of Directors, and in the alternative and to
the extent not inconsistent with their nature, by the provisions of these
Regulations and, in the alternative and to the extent not inconsistent with their
nature, by the provisions of these Regulations governing the operation of the
Board of Directors.
Article 24. Executive Committee
1.
The Board of directors, irrespective of the appointment of one or more Chief
Executive Officers, may create an Executive Committee. The Executive
Committee, if applicable, shall have all of the powers of the Board of Directors,
except for those powers that may not be delegated pursuant to legal or By-Law
restrictions.
2.
The Executive Committee shall be made up of three (3) directors, one (1) of
whom must be an independent director. The appointment of the members of the
Executive Committee and its internal positions, as well as the delegation of
powers in their favor shall be made, upon prior report by the Nominating and
Compensation Committee, by the Board of Directors with the favorable vote of
two-thirds (2/3) of the directors.
3.
The directors sitting on the Executive Committee shall continue to hold office for
so long as their appointment as directors remains, without prejudice to the Board
of Directors’ power of revocation. Should they be renewed as directors, their
renewal, if any, as members of the Executive Committee shall be subject to the
proceedings and requirements set forth in the preceding paragraph.
4.
The Executive Committee shall meet as many times as deemed appropriate by the
Chairman thereof and at least once (1) every two (2) months. It shall also meet
when so requested by a minimum of two (2) of the directors sitting on the
Committee. The Executive Committee may adopt resolutions on any matter
within the purview of the Board of Directors which, in the opinion of the
Executive Committee itself, should be resolved without delay, except only for
such matters as may not be delegated pursuant to Law or the By-Laws.
5.
Resolutions of the Executive Committee shall be adopted by a majority of its
members who are present at the meeting in person or by proxy. In the event of a
tie, the Chairman of the Executive Committee shall have the tie-breaking vote.
6.
The members of the Executive Committee may delegate their vote to other
members of the Committee. The resolutions adopted by the Executive Committee
shall be recorded in the minutes of the meeting, which must be signed by the
chairman and the secretary of the meeting and include the form of the call to the
meeting, the identity of the attendees and the votes cast for the approval of each of
the items in the agenda.
7.
The Chairman of the Executive Committee shall inform the Board of Directors, at
the next meeting thereof following the meetings of the Committee, of the matters
dealt with and the resolutions adopted by the Committee during its meetings.
Article 25. Audit Committee
1.
The Board of Directors shall create a permanent Audit Committee, an internal
informational and consultative body without executive powers, which shall have
information, advisory and proposal-making powers within its scope of action.
2.
The Audit Committee shall be made up of a minimum of three (3) and a
maximum of five (5) directors appointed by the Board of Directors, at the
proposal of the Nominating and Compensation Committee. All independent
directors shall be part of the Nominating and Compensation Committee.
3.
The Board of Directors shall appoint the Chairman of the Audit Committee from
among the independent directors sitting thereon, and the Secretary of the
Committee, who need not be a director and who, in any event, must comply with
the directors’ obligations established in these Regulations, which are applicable
because of their nature. The position of Chairman shall be served for a maximum
period of three (3) years, at the conclusion of which the Chairman shall not be reelected until it has been standing at least one (1) year from its removal, without
prejudice of its continuity or re-election as member of the Committee.
4.
Without prejudice to the provisions of sections above, the Board of Directors shall
endeavor to ensure that the members of the Audit Committee and, in particular,
the Chairman thereof, have such expertise, qualifications and experience in
accounting, audit or risk management matters as are required by the duties they
are called upon to perform.
5.
Members of the Audit Committee shall be appointed for a maximum term of three
(3) years and may be re-elected on one or more occasions for maximum terms of
the same duration.
6.
The Audit Committee shall have in any event the following duties and powers to:
(a)
report to the shareholders at the General Shareholders’ Meeting regarding
questions raised therein by shareholders on matters within its area of
authority;
(b)
supervise the effectiveness of the internal control of the Company and the
corporate risk management; attempting the procedures of internal control to
(i) be in line with the Company’s needs and strategies and (ii) ensure the
effectiveness and efficiency of the operations, as well as the accuracy and
reliability of the financial information;
(c)
approve the recruitment policy of the statutory auditor;
(d)
review periodically the Company’s risk management policy and to propose
amendments and updates which are deemed as appropriate by the Board of
Directors;
(e)
together with the auditors, analyze significant weaknesses in the internal
control system detected during the audit process;
(f)
supervise the process of preparing and presenting regulated financial
information and establish the policies and practices which shall be used by
the Company in the preparation, dissemination and disclosure of its
financial information;
(g)
propose the appointment, re-election or replacement of the auditors, in
accordance with applicable legal provisions, to the Board of Directors for
submission to the General Shareholders’ Meeting.
The Company shall not appoint individuals or companies that have received
revenues from the Company and/or from their economic affiliates, which
equal twenty five per cent (25%) or more of their total income for the
previous year as its auditor;
(h)
supervise the activities of the Internal Audit Area, which will be
functionally controlled by the Audit Committee, and the compliance with
the internal audit program, which shall take into account the corporate risks
and globally assess all the areas of the Company;
(i)
establish appropriate relations with the auditors to receive information
regarding matters that might risk the independence thereof, for examination
by the Audit Committee, and any other information related to the
development of the auditing procedure as well as such other
communications as are provided for in legislation regarding the auditing of
financial statements and in other legal provisions on auditing;
(j)
receive from the statutory auditors, annually, a confirmation regarding their
independence in relation with the Company, as well as the information
regarding the additional services of any nature provided by the statutory
auditors to the Company in accordance with the applicable law;
(k)
on an annual basis, prior to the auditor’s report, issue a report opining on the
independence of the auditor. This report must in any case pronounce on the
provision of additional services referred to in the preceding paragraph;
(l)
monitor whether the applicable legislation is being complied with;
(m) review the financial statements before submission for approval to the Board
of Director and the General Shareholders Meeting, ensuring that the interim
financial statements are drafted up in compliance with the same accounting
standards than the annual financial statements, and considering for this
purpose the possibility of auditing or subject to limited review such interim
financial statements;
(n)
define mechanisms to consolidate the information of the issuer’s control
bodies to be submitted to the Board of Directors;
(o)
report to the Board of Directors, prior to the adoption by it of the
corresponding decision, about the creation or acquisition of shares in entities
with special purposes or domiciled in countries or territories that are
considered as tax heavens, as well as other similar transactions or operations
of an analogous nature;
(p)
issue the reports and carry out the actions that, within its scope of
competence, are conferred to it, additionally, in accordance with the
Company’s Internal Regulation or when requested by the Board of Directors
or its Chairman; and
(q)
the remaining functions assigned by the Board of Directors.
7.
The Audit Committee shall meet as many times as the Chairman thereof deems is
necessary to perform the duties entrusted thereto and at least once (1) in each
period of three (3) months. It shall also meet when so requested by at least two (2)
of its members. The Chairman of the Board of Directors and the Chief Executive
Officer may request informational meetings of the Audit Committee on an
exceptional basis.
8.
A valid quorum for meetings of the Audit Committee shall be established with the
attendance, in person or by proxy, of a majority of its members, and its resolutions
shall be adopted upon simple majority vote. In the event of a tie, the Chairman of
the Audit Committee shall have the tie-breaking vote.
9.
The members of the Audit Committee may delegate their vote to other members
of the Committee. The resolutions adopted by the Audit Committee shall be
recorded in the minutes of the meeting, which must be signed by the chairman and
the secretary of the meeting and include the form of the call to the meeting, the
identity of the attendees and the votes cast for the approval of each of the items in
the agenda.
10.
At the request of the Chairman of the Audit Committee, addressed for such
purpose to the Chairman of the Board of Directors, any director may be asked to
attend the meetings thereof. The Chairman of the Committee may also request, the
attendance of any administrator, manager or employee of the Company as well as
of any member of the management decision-making bodies of the companies in
which the Company has an interest whose appointment has been proposed by the
Company, provided that there is no legal impediment thereto.
The auditors of the Company may also attend the meetings of the Audit
Committee with the right to speak but not to vote.
11.
The Chairman of the Audit Committee shall report to the Board of Directors on
the matters considered and the resolutions adopted at the meetings thereof at the
first meeting of the Board of Directors following those of the Committee. Within
three (3) months following the close of each fiscal year, the Audit Committee
shall also submit to the Board of Directors for approval a report detailing its work
for the prior fiscal year, which shall subsequently be made available to the
shareholders on occasion of the call to the Ordinary General Shareholders’
Meeting.
Article 26. Nominating and Compensation Committee
1.
The Board of Directors shall create a permanent Nominating and Compensation
Committee, which shall be an internal informational and consultative body
without executive powers, and which shall have information, advisory and
proposal-making powers within its scope of action.
2.
The Nominating and Compensation Committee shall be made up of a minimum of
three (3) and a maximum of five (5) directors appointed by the Board of Directors
from among external directors, and the majority of the members thereof must be
independent directors.
3.
The Board of Directors shall appoint the Chairman of the Nominating and
Compensation Committee from among the independent directors sitting thereon,
and the Secretary of the Committee, who need not be a director and who, in any
event, must comply with the directors’ obligations established in these
Regulations, which are applicable because of their nature.
4.
The Board of Directors shall endeavor to ensure that the members of the
Nominating and Compensation Committee have the expertise, qualifications and
experience required by the duties they are called upon to perform.
5.
Members of the Nominating and Compensation Committee shall be appointed for
a maximum term of three (3) years, and may be re-elected on one or more
occasions for terms of the same maximum duration.
6.
The Nominating and Compensation Committee shall have the following powers
to:
(a)
conduct a periodic review of the Director Compensation Policy and the
Senior Management Compensation Policy and propose the amendment and
update thereof to the Board of Directors;
(b)
report on and review the criteria that should be followed in composing the
Board of Directors and in selecting candidates, defining their duties and
necessary qualifications and assessing the time and dedication required for
the proper performance of their work.
(c)
supervise the procedure for selecting candidates to serve as members of the
Board of Directors and as senior managers of the Company;
(d)
assist the Board of Directors in the definition and implementation of
continuous programs of training and expansion of knowledge;
(e)
ensure that when new vacancies are filled or new directors are appointed,
the selection procedures are free from any implied bias that may entail any
kind of discrimination and, in particular, from any bias that may hinder the
selection of women directors;
(f)
bring proposals to the Board of Directors for the appointment of
independent directors (for interim appointment to fill a vacancy or for
submission of such proposals to a decision by the shareholders at the
General Shareholders’ Meeting), as well as proposals for the reelection or
removal of such directors by the shareholders at the General Shareholders’
Meeting and report on the proposals of removal of such directors issued by
the Board of Directors;
(g)
report on the proposals for appointment of the other directors (for the
interim appointment thereof to fill a vacancy or for the submission of such
proposals to a decision by the shareholders at the General Shareholders’
Meeting), as well as the proposals for re-election or removal of such
directors by the shareholders at the General Shareholders’ Meeting.
(h)
report on and make proposals of appointment to internal positions on the
Board of Directors and on proposals relating to the appointment of the
members that must make up each of the committees, verifying and
confirming compliance with the requirements of expertise and experience in
connection with the duties of the committee in question and, in particular,
those of the Audit Committee.
(i)
establish and supervise an annual program for continuous evaluation and
review of the qualifications, educational background and, if applicable,
independence, as well as of ongoing compliance with the requirements of
respectability, capability, expertise, competence, availability and
commitment to the position that must be satisfied in order to serve as
director and as a member of a committee, and propose to the Board of
Directors such measures as it deems advisable in this regard, while
collecting any information or documentation hat it deems necessary or
appropriate for such purposes;
(j)
examine or organize the succession of the Chairman of the Board of
Directors and of the Chief Executive Officer of the Company and, if
applicable, make proposals to the Board of Directors for such succession to
occur in an orderly and well-planned fashion;
(k)
propose to the Board of Directors the system and amount of annual director
compensation, as well as the individual compensation of executive directors
and other basic terms and conditions of their contracts, including any
severance payments or compensation that may be provided in the event of
removal, in any event pursuant to the provisions of the Internal Regulation;
(l)
report proposals of the Chairman of the Board of Directors or of the Chief
Executive Officer regarding the appointment or removal of the senior
managers;
(m) report on and submit to the Board of Directors the proposals made by the
Chairman of the Board of Directors or the Chief Executive Officer relating
to the structure of the compensation payable to senior managers and to the
basic terms and conditions of their contracts, including possible
compensation that may be provided in the event of removal;
(n)
report on incentive plans and pension supplements for the Company’s entire
payroll;
(o)
conduct a periodic review of the general compensation programs for the
Group’s payroll, evaluating the adequacy and results thereof;
(p)
ensure compliance with the compensation programs of the Company and
report on the documents to be approved by the Board of Directors in
connection with the foregoing and on the relevant sections of the Annual
Corporate Governance Report of the Company;
(q)
become familiar with and report, if applicable, to the Board of Directors on
the selection, appointment and compensation of directors and senior
managers of the main companies within the Group and affiliates thereof,
without prejudice to respect the independence and uniqueness (upon the
terms set forth in applicable legal provision) of those that have corporate
governance rules that assign such powers to their own Nominating and
Compensation Committee or equivalent body;
(r)
issue such other reports or carry out such other activities as may fall within
its purview pursuant to the Company’s Corporate Governance System or as
may be requested by the Board of Directors or the Chairman thereof; and
(s)
all other functions assigned by the Board of Directors.
7.
The Nominating and Compensation Committee shall meet as many times as the
Chairman thereof deems is necessary to perform the duties entrusted thereto and,
at least, once (1) a year. It shall also meet when so requested by, at least, two (2)
of its members. The Chairman of the Board of Directors and the Chief Executive
Officer may request informational meetings of the Nominating and Compensation
Committee on an exceptional basis.
8.
A valid quorum for meetings of the Nominating and Compensation Committee
shall be established with the attendance, in person or by proxy, of a majority of its
members, and resolutions shall be adopted upon simple majority vote. In the event
of a tie, the Chairman of the Nominating and Compensation Committee shall have
the tie-breaking vote.
9.
The members of the Nominating and Compensation Committee may delegate
their vote to other members of the Committee. The resolutions adopted by the
Nominating and Compensation Committee shall be recorded in the minutes of the
meeting, which shall be signed by the chairman and the secretary of the meeting
and include the form of the call to the meeting, the identity of the attendees and
the votes cast for the approval of each of the items in the agenda.
10.
At the request of the Chairman of the Nominating and Compensation Committee,
addressed for such purpose to the Chairman of the Board of Directors, any
director may be requested to attend the meetings thereof. The Chairman of the
Committee may also request, the attendance of any administrator, manager or
employee of the Company as well as of any member of the management decisionmaking bodies of the companies in which the Company has an interest whose
appointment has been proposed by the Company, provided that there is no legal
impediment thereto.
11.
The Chairman of the Nominating and Compensation Committee shall report to the
Board of Directors on the matters dealt with and the resolutions adopted at its
meetings at the next meeting held by the Board of Directors following the
Committee meetings. In addition, within three (3) months following the close of
each fiscal year, the Nominating and Compensation Committee shall submit to the
Board of Directors for approval a report detailing its work for the prior fiscal year.
Article 27. Corporate Governance Committee
1.
The Board of Directors shall establish a Corporate Governance Committee, a
permanent internal informational and consultative body without executive powers,
which shall have information, advisory and proposal-making powers within its
scope of action.
2.
The Corporate Governance Committee shall be made up of a minimum of three
(3) and a maximum of five (5) directors appointed by the Board of Directors, at
the proposal of the Nominating and Compensation Committee, from among
external directors, and the majority of the directors thereof shall be independent.
3.
The Board of Directors shall appoint a Chairman of the Corporate Governance
Committee from among the independent directors sitting thereon, and a Secretary,
who need not be a director and who, in any event, must comply with the directors’
obligations established in these Regulations, which are applicable because of their
nature.
4.
The Board of Directors shall endeavor to ensure that the directors sitting on the
Corporate Governance Committee have the expertise, skills and experience
required by the duties they are called upon to perform.
5.
The members of the Corporate Governance Committee shall be appointed for a
maximum term of three (3) years and may be re-elected on one or more occasions
for terms of the same maximum duration.
6.
The Corporate Governance Committee shall have the following powers:
(a)
periodically review the Company’s Internal Regulation, with special
emphasis on the Corporate Governance and Compliance Policies, and
propose to the Board of Directors, for approval or submission to the
shareholders at the General Shareholders’ Meeting, such amendments and
updates as contribute to its development and ongoing improvement;
(b)
report any amendment to the Company’s Internal Regulation provided that
such amendment has not stemmed from its own initiative;
(c)
promote the Company’s corporate governance strategy;
(d)
supervise compliance with statutory requirements and with the rules and
regulations of the Company’s Internal Regulation;
(e)
ensure the diligent compliance with the rules contained in the Company’s
Internal Regulation and propose to the Board of Directors the amendments
which are deemed necessary in order to adjust the corporate governance
standards to the best existing practices;
(f)
know, promote, guide and supervise the Company’s actions relating to
corporate governance and sustainability and report thereon to the Board of
Directors and to the Executive Committee, as the case may be;
(g)
know, promote guide and supervise the Company’s actions relating to
corporate reputation and report thereon to the Board of Directors and to the
Executive Committee, as appropriate;
(h)
report on the Company’s Annual Corporate Governance Report and the
Company’s Corporate Governance Survey (Código País – Colombia),
should the Board of Directors decide voluntarily to be subject to it, prior to
the approval thereof, collecting for such purpose the reports of the Audit
Committee and the Nominating and Compensation Committee with respect
to the sections of such report and survey that are within its powers, and the
annual report on sustainability;
(i)
assist the Board of Directors on the definition of the Company’s
communication schedule with shareholders, stakeholders and the market in
general, ensuring that they have complete, accurate and timely access to the
most relevant information on the Company;
(j)
monitor the negotiations carried out by members of the Board of Directors
of the Company with shares issued by the Company;
(k)
review and previously report on all transactions to be entered into between
its significant shareholders or directors, managers and other persons related
to them and the Company which approval shall be made by the Board of
Directors or the Executive Committee, when appropriate. The Corporate
Governance Committee shall verify that such transactions are carried out on
an arms’ length basis and that do not violate the equality of treatment
between shareholders.
The Corporate Governance Committee shall develop a policy regarding the
review of related-party transactions which are referred to in this paragraph
and shall implement the review procedures as a standard part of its
operational procedures.
Any member of the Corporate Governance Committee that is a part in a
related-party transaction shall abstain from taking part in the deliberations of
the Committee and in the voting of the proposal of approval or ratification
of said transaction. However, the attendance of such director to the meeting
of the Corporate Governance Committee shall be taken into consideration
for the purposes of establishing the necessary quorum for the valid
constitution of the committee's meeting.
During the revision and approval of the related-party transactions, the
Corporate Governance Committee shall take into consideration:
(i)
the nature of the parties' interests in the transaction;
(ii)
the essential terms of the transaction, including the amount and the
type of transaction;
(iii)
the importance of the transaction for the Company and the relatedparty;
(iv)
whether the transaction could affect the impartiality of any director
of the Company in connection with the corporate interest of the
Company and any of its shareholders;
(v)
equal treatment of the shareholders;
(vi)
any other circumstance as deemed convenient by the Corporate
Governance Committee.
In those related-party transactions involved in the day-to-day management
and with current o recurrent condition, such report shall be referred to the
generic authorization granted by the Board of Directors regarding the line of
operations and its execution conditions;
(l)
previously report on the Company’s renunciation of the exploitiation or of
any business opportunity referred in the framework agreement to be entered
into by the Company and the listed company dominant of the group in
which the Company is included in line with the second recommendation of
the Unified Spanish Corporate Governance Code of May 22, 2006 (the
“Framework Agreement”);
(m) report, on a regular basis, on the compliance of the Framework Agreement;
(n)
issue a report on any amendments to the Framework Agreement;
(o)
issue recommendations and proposals on any matter within the scope of its
competences;
(p)
issue the relevant reports and carry out the actions that fall within its scope
of action, in accordance with the Company’s Internal Regulation or as
requested by the Board of Directors or its Chairman.
(q)
report on any related party transactions carried out between the Company
and its affiliates;
(r)
all other functions assigned by the Board of Directors.
7.
The Corporate Governance Committee shall meet as many times as the Chairman
deems is necessary to fulfill the duties entrusted thereto. The Committee shall also
meet when so requested by at least two (2) of its members. The Chairman of the
Board of Directors and the Chief Executive Officer may request informational
meetings with the Corporate Governance Committee on an exceptional basis.
8.
A valid quorum for meetings of the Corporate Governance Committee shall be
established with the attendance, in person or by proxy, of a majority of its
members, and resolutions shall be adopted upon simple majority vote. In the event
of a tie, the Chairman of the Corporate Governance Committee shall have the tiebreaking vote.
9.
The members of the Corporate Committee may delegate their vote to other
members of the Committee. The resolutions adopted by the Corporate Governance
Committee shall be recorded in the minutes of the meeting, which shall be signed
by the chairman and the secretary of the meeting and include the form of the call
to the meeting, the identity of the attendees and the votes cast for the approval of
each of the items in the agenda.
10.
At the request of the Chairman of the Corporate Governance Committee
addressed for such purpose to the Chairman of the Board of Directors, any
director may be requested to attend the meetings thereof. The Chairman of the
Committee may also request, the attendance of any administrator, manager or
employee of the Company as well as of any member of the management decisionmaking bodies of the companies in which the Company has an interest whose
appointment has been proposed by the Company, provided that there is no legal
impediment thereto.
11.
The Chairman of the Corporate Governance Committee shall inform the Board of
Directors, at the next meeting thereof following the meetings of the Committee, of
the matters dealt with and the resolutions adopted at the Committee meetings. In
addition, within three (3) months following the end of each fiscal year, the
Corporate Governance Committee shall submit to the Board of Directors for
approval a report on its activities during the prior fiscal year.
TITLE IV
OPERATION
Article 28. Meetings
1.
The Board of Directors shall meet with the frequency that the Chairman thereof
deems appropriate as frequently as necessary to effectively execute its duties but
at least once (1) every two (2) months. One-third (1/3) of the directors may also
call a meeting to be held on the municipality of the Company’s registered address,
establishing the agenda thereof, if a prior petition has been submitted to the
Chairman of the Board of Directors and he has failed, without well-founded
reasons, to call the meeting within one (1) month.
2.
Prior to the commencement of each fiscal year, the Board of Directors shall set a
schedule for its ordinary meetings. Such schedule may be modified by a
resolution adopted by the Board of Directors or upon a decision made by the
Chairman, who shall report the modification to the directors not less than four (4)
days in advance of the date originally set for the meeting or of the new date set in
lieu thereof, if earlier.
3.
The Board of Directors shall also meet when its Chairman resolves to call an
extraordinary meeting thereof, when requested by one fourth (1/4) of directors. In
such case, the meeting shall take place within ten (10) days of receipt of the
request.
4.
The call to meeting of the Board of Directors shall be carried out by the Secretary
of the Board of Directors or whoever acts in his stead, with the authorization of
the Chairman of the Board of Directors. The call to meeting shall be made by any
means allowing for receipt thereof. Notice of the call shall be given as much in
advance as is necessary for the directors to have access thereto not later than the
third day prior to the date of the meeting, except in the case of urgent meetings.
Together with the call to meeting, which shall always, in the absence of wellfounded reasons, include the agenda for the meeting, any information that is
deemed necessary shall be sent or made available through any other means that
may reasonably make possible its reception. The meetings of the Board of
Directors may be cancelled, suspended or the date, agenda or place thereof
changed using the same procedure.
5.
Without prejudice to the foregoing, extraordinary and urgent meetings of the
Board of Directors may be called when the Chairman of the Board of Directors
deems it justified in the circumstances, by any means allowing for receipt of the
call to meeting, and the requirements and formalities for the call to meetings
mentioned in the preceding paragraphs of this article shall not apply in such case.
6.
The Chairman of the Board of Directors shall decide on the agenda for the
meeting. Any director may submit a request to the Chairman of the Board of
Directors for the inclusion of matters in the agenda and the latter shall be required
to include them when such request has been made not less than two (2) days in
advance of the date set for the meeting.
7.
Without prejudice to the foregoing, the Board of Directors shall be deemed to
have validly met without the need for a call if all of the directors are present and
unanimously agree to hold the meeting and to the items of the agenda to be dealt
with.
8.
Voting by the Board of Directors may occur in writing without a meeting
provided no director is opposed thereto. In this instance, the directors may deliver
to the Secretary of the Board of Directors, or to the person performing its duties,
who shall act on behalf of the Chairman, their votes and the considerations they
wish to appear in the minutes. Resolutions adopted by this procedure shall be
recorded in minutes prepared pursuant to the provisions of Law.
9.
Any director may request the services of external consultants, which approval
shall be subject to the affirmative vote of the majority of directors present at the
Board of Directors’ meeting.
Likewise, the supporting committees of the Board of Directors may also, at any
time, request the services of external consultants when deemed appropriate to
carry out his duties in a correct manner.
Article 29. Place of Meetings
1.
Meetings of the Board of Directors shall be held at such place as is designated in
the call to meeting.
2.
Meetings of the Board of Directors may be held in several places connected to
each other by a system which permits the recognition and identification of the
attendees, permanent communication among the attendees regardless of their
location, and participation in discussion and the casting of votes, all in real time
(including videoconference or remote attendance systems or any other similar
system).
The directors in attendance at any of such interconnected places shall be deemed
to have attended the same single meeting of the Board of Directors. The meeting
shall be deemed to be held at the place where the largest number of directors are
located and, if in equal numbers, where the Chairman of the Board of Directors or
whoever chairs the meeting in the absence thereof is located.
Article 30. Conduct of the Meetings
1.
In order for resolutions of the Board of Directors to be valid, at least a majority of
the directors must be present at the meetings at which they are adopted, in person
or by proxy, except in the case set forth in paragraph 6 of this article.
2.
The directors shall use their best efforts to attend the meetings of the Board of
Directors and, when unable to attend in person, they shall endeavor to give a
proxy to another director, to whom they shall give any appropriate instructions.
The proxy granted shall be a special proxy for the Board meeting in question and
may be communicated by any means that allow its reception.
They may not grant a proxy in connection with matters in respect of which they
are in a conflict of interest situation.
3.
The Chairman of the Board of Directors, as the person responsible for its effective
operation, shall stimulate and organize the debate and active participation by all
the directors during its meetings, safeguarding their freedom to make decisions
and express their opinion.
4.
In addition, the Chairman of the Board of Directors may, when so required by the
circumstances, adopt any measures necessary to ensure the confidentiality of the
deliberations and of the resolutions adopted during the meetings of the Board of
Directors.
5.
The Chairman may invite all those who can help improve the information
provided to the directors to attend the meetings of the Board of Directors.
6.
Resolutions shall be adopted by an absolute majority of votes cast in person or by
proxy, except when referred to any of the following (without prejudice to any
other exception contained in the applicable Law, the By-laws or these
Regulations) that shall require votes of two thirds (2/3) of the directors of the
Company:
(a)
grant to the Company of loans, credit lines or any other type of financing,
by virtue of which it incurs in an indebtedness for an aggregate amount per
fiscal year higher than one hundred and fifty million Euros (€150,000,000),
or its equivalent in other currencies, taking into account re-payments of that
debt;
(b)
make investments for an aggregate amount per fiscal year higher than one
hundred and fifty million Euros (€150,000,000) or its equivalent in other
currencies;
(c)
exercise of the authority delegated by the General Shareholders’ Meeting to
issue simple or convertible and/or exchangeable debentures;
(d)
carry out transactions to sell or acquire assets for an aggregate amount per
fiscal year higher than one hundred and fifty million Euros (€150,000,000)
or its equivalent in other currencies;
(e)
carry out any transaction of any type with persons or entities of countries
sanctioned by the United States of America or the European Union;
(f)
use of the cash for any purpose other than payment of debt (including debt
incurred by other companies of the Cemex Group, other than the Company
or its affiliates) for an aggregate amount per fiscal year higher than one
hundred and fifty million Euros (€150,000,000) or its equivalent in other
currencies; and
(g)
7.
grant of powers of attorney to carry out any of the foregoing transactions.
In the event of a tie, the Chairman of the Board of Directors shall have the tiebreaking vote.
TITLE V
DIRECTORS’ COMPENSATION
Article 31. Directors’ compensation
1.
The directors shall be entitled to the compensation provided for in the By-Laws.
2.
Compensation that is tied to the results of the Company shall take into account the
qualifications, if any, contained in the auditor’s report which reduce such results.
3.
The Board of Directors of the Company shall assign an item of the annual budget
to cover the expenses of the Board of Directors that include, among others, the
fees assigned to its members to participate in the meeting of the Board of
Directors, the travel expenses, the representation expenses of directors and the
expenses of the external consultancies deemed necessary in the exercise of their
duties.
TITLE VI
DUTIES OF DIRECTORS
Article 32. General duties
1.
In the performance of his duties, a director shall act in good faith and with the
diligence of a prudent businessman and a faithful representative, and shall comply
with the duties prescribed by Law and the Company’s Internal Regulation.
In exercise of their duties, directors should:
(a)
make the necessary efforts to in furtherance of the Company’s corporate
purpose;
(b)
ensure the strict compliance with the relevant provisions of Law and the
Company’s By-Laws;
(c)
keep and protect the commercial and industrial secrets of the Company;
(d)
abstain from making an inappropriate use of privileged information;
(e)
grant an equal treatment to all shareholders and respect their right of
information pursuant to the applicable Law;
(f)
abstain from participating personally or through an intermediate, for his own
interest or the interest of third parties, in competing activities of the
Company or in events which may result in a conflict of interests;
2.
3.
(g)
set an example of ethic conduct with their actions and promote policies that
encourage an ethic work environment; and
(h)
support the organization and promote policies and ethic behavior and
encourage collaborators to report the irregularities in such behaviors,
ensuring that no retaliations are taken against those collaborators reporting
the violation.
For the purposes of maintaining the greater objectivity, independency and
knowledge in the decision making process, members of the Board of Directors
shall be individually and collectively guided by the following principles:
(a)
once appointed, directors represent all shareholders and, therefore, shall not
act in the interest of certain shareholders or group of shareholders in
particular;
(b)
directors shall carry out their functions in compliance with their duties as
directors;
(c)
directors shall treat all shareholders equally and fairly in their decisions;
(d)
directors shall promote, in connection with their duties, compliance with all
applicable Law provisions and the Company’s By-Laws and Internal
Regulation;
(e)
directors shall carry out their position in a objective and independent
manner; and
(f)
directors shall avoid conflict of interests with the Company, and shall notify
its existence to the rest of the members of the Board of Directors and abstain
from voting on the matter.
Without prejudice to such other duties as may be set forth under these Regulations
of the Board of Directors, a director is specifically required to:
(a)
properly prepare the meetings of the Board of Directors and, if applicable,
the meetings of the committees of which the director is a member, for which
purposes the director must diligently inform himself of the running of the
Company and the matters to be discussed at such meetings;
(b)
attend the meetings of the decision-making bodies and committees of which
the director is a member and actively participate in the deliberations in order
that the director’s opinion may be an effective contribution to decisionmaking.
In the event that, due to well-founded reasons, the director is unable to
attend a meeting of which notice has been given, the director shall give
instructions to the director who is to represent him;
4.
(c)
fulfill any specific obligation which is entrusted to the director by the Board
of Directors, by the Chairman of the Board or by the Chief Executive
Officer, and which reasonably falls within the director’s scope of
dedication;
(d)
inquire into and give notice to the Board of Directors of any irregularities in
the management of the Company of which the director has had notice, and
monitor any situation of risk;
(e)
propose a call to an extraordinary meeting of the Board of Directors or the
inclusion of new matters in the agenda of the next meeting to be held, in
order that deliberations may be conducted on such issues as the director
deems advisable; and
(f)
oppose resolutions which are contrary to Law, the Company’s Internal
Regulation and request that such opposition be recorded in the minutes.
In the event that the director is a legal entity, the obligations provided in this
section shall be required to the individual person representing such director.
Article 33. Prohibitions
Directors shall abstain from:
(a)
participating in activities, businesses and transactions which contravene the
applicable Law or participating in activities which may harm the fulfillment of
their duties and responsibilities or affect the good name of the Company;
(b)
abusing of its position as director of the Company to obtain benefits for
themselves or third parties by offering contracts or activities with the Company, or
by using the services of the Company or its subsidiaries and obtain personal
benefits from suppliers, contractors, clients or users;
(c)
using the privileged information to which they have access to due to its position
for their our benefit, or the benefit of third parties other than the Company;
(d)
offering or accepting, directly or indirectly, gifts, favors, donations, invitations,
travels or payments from persons that directly or indirectly operates with the
Company, or which are interested in doing business with the Company or hiring
the Company’s or any of its subsidiaries’ services or products to promote private
agendas. Before performing any of such actions aimed at receiving or delivery any
of such gifts that may exceed the commercial custom, the director shall bring to
the compliance manager the proposal;
(e)
encouraging, promoting or suggesting shareholders to grant a proxy for attending
the General Shareholders’ Meeting of the relevant companies in which is not
clearly defined the name of the proxy holder;
(f)
recommending shareholders to vote for candidate persons for being appointed as
directors;
(g)
suggesting, coordinating or convening with any shareholder or proxy of
shareholders to bring proposals to the General Shareholders’ Meeting for its
consideration;
(h)
Suggesting, coordinating or convening with any shareholder or proxy of
shareholders to vote in favor or against any proposal brought to the General
Shareholders’ Meeting; and
(i)
suggesting or determining the name of the persons that may act as proxy holders
at the next General Shareholders’ Meeting.
Article 34. Duty of confidentiality
1.
The director shall keep confidential the deliberations and resolutions of the Board
of Directors, of the Executive Committee or of the committees of which the
director is a member and, in general, not disclose any information, data, reports or
background information to which the director may have had access while in
office, and not use any of the foregoing for the director’s own benefit, for the
benefit of the shareholder, if any, that has proposed or made his appointment or of
any other third party, without prejudice to the duties of transparency and
information imposed by applicable Law.
2.
The obligation governed in the preceding paragraph shall not prevent the director
from communicating confidential information to third parties in the performance
of his duties as a director or the exercise of powers expressly delegated to him by
the Board of Directors or by the relevant committee, provided the duty of
confidentiality of the recipient of the information is appropriately guaranteed,
under the responsibility of the director, on the terms set forth by Law. In
particular, it shall be deemed that directors act in exercise of its own powers when
they give information to:
(i)
managers and employees of the Company to duly perform their duties and
responsibilities;
(ii)
the management bodies of the parent company of the group to which the
Company is part, for the purpose, among others of facilitating compliance of
its legal obligations such as: (a) preparation of financial statements both
individual and consolidated; (b) compliance of its periodic report
obligations; and (c) performance of the analysis and monitoring of the tax
matters, for the purpose of tax consolidation, plan the group’s policy and the
exercise of its unitary management and fulfill any other purposes advisable
for the corporate interest of the Company and the parent company of the
group to which the Company is part such as, among others, the obtaining
and renewal of the credit ratings;
(iii) external consultants of the Company (auditors, lawyers, investment banks,
etc.) for the adequate performance of its mandate.
3.
The director’s duty of confidentiality shall survive even after the director no
longer holds such position.
Article 35. Duty not to compete
1.
A director may not be a director or manager of, or provide services to, another
company or entity whose corporate purpose is totally or partially analogous to the
corporate purpose of the Company or which is a competitor thereof.
2.
The obligation not to compete shall not apply neither to the administrative or
management positions nor to the provision of services by directors of subsidiaries
of the Company or of other companies belonging to the consolidated Group of
which the Company is part of.
Article 36. Conflicts of interest
1.
A conflict of interest shall be deemed to exist in those cases in which there is a
conflict, whether direct or indirect, between the interests of the Company and the
personal interest of the director. A personal interest of the director shall be
deemed to exist when a matter affects the director or a person related to him or, in
the case of a proprietary director, the shareholder or shareholders that proposed or
made his appointment or persons directly or indirectly related thereto.
2.
For purposes of these Regulations, the following shall be deemed related persons:
3.
(a)
the director’s spouse or person related to the director by a like relationship
of affection;
(b)
the ascendants, descendants and siblings of the director or of the director’s
spouse (or another person related to the director by a like relationship of
affection);
(c)
the spouses of the director’s ascendants, descendants and siblings; and
(d)
the companies in which the director or his/her respective related persons,
acting personally or through a third party, falls within any of the instances
of control established by Law and the companies or entities in which the
director or any of his related persons, acting personally or through a third
party, holds a management position or from which he receives
compensation for any reason, provided that the director also directly or
indirectly exercises a significant influence on the financial and operating
decisions of such companies or entities.
In the case of a legal entity acting as director, the following shall be deemed to be
related persons:
(a)
the shareholders who, in respect of the legal entity acting as director, fall
within any of the cases of control established by Law;
4.
(b)
the companies that form part of the same group, as such is defined in the
Law, and the shareholders thereof;
(c)
the individual acting as a representative, the directors, in fact or in Law, and
the liquidators of, and the representatives holding general powers of
attorney granted by, the legal entity acting as director; and
(d)
those persons who, in respect of the representative of the legal entity acting
as director, are deemed related persons pursuant to the provisions of the
preceding sub-section applicable to individuals acting as directors.
Conflicts of interest shall be governed by the following rules:
(a)
Communication: the director must give notice to the Board of Directors, in
the person of the Chairman or the Secretary of the Board of Directors, of
any conflict of interest in which the director is involved.
(b)
Abstention: the director shall leave the meeting during the deliberation and
voting on those matters in which the director is affected by a conflict of
interest, and shall not be counted in the number of members attending for
purposes of the calculation of a quorum and majorities, as well as suspend
any indirect action on the activities related to the conflict.
(c)
Transparency: in the Annual Corporate Governance Report, the Company
shall report any cases of conflict of interest in which the directors have been
involved during the fiscal year in question and of which the Company is
aware by reason of notice given thereto by the director affected by such
conflict or by any other means.
5.
Notwithstanding the foregoing, in those instances where the conflict of interest
situation is, or may reasonably be expected to be, of a nature that constitutes a
structural and permanent conflict between the director (or a person related to him
or, in the case of a proprietary director, the shareholder or shareholders that
proposed or made his appointment or persons directly or indirectly related thereto)
and the Company, it shall be deemed that the director lacks, or has ceased to
possess, the competence required to hold office for purposes of the provisions of
these Regulations.
6.
The provisions of this article may be further developed through the corresponding
rules that may be made by the Board of Directors.
Article 37. Use of corporate assets
1.
A director may not use the Company’s assets or profit from the director’s position
in the Company in order to obtain any financial benefit, unless adequate
consideration has been paid and it is a standardized service.
2.
On an exceptional basis, the director may be relieved from the obligation to
provide such consideration, but in any such case, the financial benefit shall be
deemed indirect compensation and shall be approved by the Board of Directors
following a report of the Nominating and Compensation Committee.
Article 38. Non-Public information
1.
Information granted to directors by virtue of its duties shall be deemed to be
privileged information. Any information which has not been released to the
market and that due to its nature may negatively influence in the development of
the activities of the Company shall not be disclosed. Privileged information may
be released to the relevant legal authorities if a valid request is granted.
2.
The director may use non-public information of the Company for private purposes
only if the following conditions are satisfied:
(a)
that such information is not applied with respect to transactions for the
purchase or sale of securities or financial instruments of the issuer to which
the information directly or indirectly refers;
(b)
that it does not place the director in a position of advantage vis-à-vis third
parties, including suppliers and clients;
(c)
that the use thereof does not cause any harm to the Company; and
(d)
that the Company does not own proprietary rights in, or have a similar legal
position with respect to, the information that the director wishes to use.
Article 39. Business opportunities
1.
A director may not take advantage of a business opportunity of the Company,
either for the director’s own benefit or for the benefit of related persons, unless the
investment or transaction has previously been offered to the Company, the
Company has chosen not to take advantage of it without any pressure from the
director, and the director has been authorized by the Board of Directors to profit
from the transaction, following a report of the Corporate Governance Committee.
2.
For purposes of the preceding paragraph, a business opportunity shall be deemed
to be any possibility of making an investment or a business transaction that has
arisen or has been discovered in connection with the director’s performance of
duties as such, or through the use of means and information belonging to the
Company, or in circumstances such that it is reasonable to believe that the third
party’s offer was in face addressed to the Company.
3.
Likewise, the director shall not use the Company’s name and shall not invoke his
position as director of the Company in order to carry out transactions for the
director’s own account or for the account of related persons.
Article 40. Transactions between the company and directors or significant
shareholders
1.
The execution by the Company or the companies of its Group of any transaction
with directors, shareholders who own an interest in the Company equal to or
greater than the interest that is legally considered as significant or that are
represented in the Board of Directors of the Company, or with related parties,
shall be subject to approval by the Board of Directors or if there is an urgent need,
by the Executive Committee, prior to the report of the Corporate Governance
Committee.
2.
The Board of Directors of the Company shall ensure that transactions entered into
between the Company and its subsidiaries with directors, shareholders described
under section above or the relevant related parties, are executed at arm’s length
and respecting the principle of equal treatment of all shareholders.
3.
In the case of transactions within the ordinary course of business which are
regular or recurrent, it shall be solely necessary the generic authorization of the
line of transactions and its execution conditions.
4.
However, the Board of Directors’ authorization shall not be deemed to be
necessary in connection with the transactions that simultaneously meet the
following three conditions: (i) that the transaction is executed by virtue of
agreements with standardized conditions massively applicable to many customers;
(ii) that the transactions are executed at prices or rates generally set by the
supplier of the relevant good or service, and (iii) that the amount of the transaction
does not exceed one per cent (1%) of the annual consolidated income of the
Company, pursuant to the audited accounts of the last year at the time the
transaction is executed.
5.
The Company shall inform of the transactions described in this article in the cases
and pursuant to applicable provisions of Law.
Article 41. Duties of information of directors
1.
A director shall disclose to the Company any interest (through agreements or
instruments of any kind, such as certificates of deposit, derivatives, etc.) that the
director may hold in the capital of any company pursuing a business that is the
same as or similar or complementary to the business which the Company’s
corporate purpose consists of, as well as any offices held or duties performed
therein and the conduct, for the director’s own account or for the account of
another, of any kind of business that is complementary to the business that the
corporate purpose of the Company consists of. Such information shall be included
in the notes to the annual financial statements and in the Annual Corporate
Governance Report, in compliance with legal requirements.
2.
A director shall also disclose to the Company:
(a)
All positions the director holds in and services the director provides to other
companies or entities, as well as his other professional commitments. In
particular, before accepting office as director or manager in another
company or entity (except for the positions that will perform in companies
belonging to the Group or in other companies in which the director shall act
representing the Group’s interest), the director shall give notice thereof to
the Nominating and Compensation Committee.
(b)
Any substantial change in the director’s professional status that may affect
the condition or capacity by virtue of which the director may have been
appointed as director.
(c)
Any judicial, administrative or other proceedings instituted against the
director which, because of their significance or characteristics, may
seriously reflect upon the reputation of the Company. In particular, in the
event that a director becomes subject to an order for further criminal
prosecution upon indictment (resultar procesado) or an order for the
commencement of an oral trial is issued against him for the commission of
any of the crimes contemplated in Section 213 of the Stock and Limited
Companies Law (Ley de Sociedades de Capital), such director shall give
notice thereof to the Company, in the person of its Chairman. In such
instance, the Board of Directors shall review the case as soon as practicable
and shall adopt the decisions it deems fit taking into account the interests of
the Company.
(d)
In general, any fact or event that may be relevant to the holding of office as
a director of the Company.
TITLE VII
INFORMATION
Article 42. Annual corporate governance Report
1.
The Board of Directors shall, on an annual basis and following a report by the
Corporate Governance Committee, approve a corporate governance report and the
corporate governance survey (Código país – Colombia), if it voluntarily decides
to do so, for the Company which shall include all specifications provided for by
Law and any others which the Board of Directors deems appropriate to include
therein.
2.
Approval of the annual corporate governance report and, if applicable, the
corporate governance survey (Código país – Colombia) of the Company shall also
be preceded by a report from the Audit Committee with respect to information on
the risk supervision systems and by a report from the Nominating and
Compensation Committee with respect to information on directors and senior
managers and their compensation.
3.
The annual corporate governance report of the Company shall be included in a
separate section of the Management Report and shall therefore be approved
together therewith and shall be made available to the shareholders together with
the other documentation for the ordinary General Shareholders’ Meeting.
4.
In addition, public notice shall be given of the annual corporate governance report
of the Company and, if applicable, of the corporate governance survey (Código
país – Colombia), as provided in the securities market rules and regulations.
Article 43. Corporate website
1.
The Company shall maintain a corporate website to allow shareholders to exercise
their right to receive information and to disseminate the relevant information
required by securities market laws, which shall include the minimum documents
and information provided for by applicable Law and the Company’s Internal
Regulation, including information and documentation regarding the call to
General Shareholders’ Meetings and any other documentation and information
that the Board of Directors, through its Secretary, deems appropriate to make
available to the shareholders by such means.
In particular, the Company shall include on its corporate website:
(a) the legal provisions applicable to ordinary shares, as well as the means for
the shareholders of the Company to defend their interests;
(b) the relevant transactions entered into with related-parties to the Company,
unless such transactions are executed at arm’s length or such transactions
are part of the ordinary course of the business of the Company; and
(c) the personal profile and personal data of the members of the Board of
Directors, the senior managers, the Company’s auditor and the internal
auditor.
2.
It falls upon the Secretary of the Board of Directors to decide the information that
is to be included on the Company’s corporate website to comply with the
obligations imposed by applicable Laws and regulations and the Company’s
Internal Regulation, and he shall be responsible for the update thereof on the
terms set forth in applicable Law. The Secretary of the Board of Directors shall
report on the exercise of such power to the Board of Directors.
TITLE VIII
TRANSITORY PROVISION
Sole transitory provision. Non application of provisions of the Regulations of
the Board of Directors prior to the listing of the shares on the Colombian
Stock Exchange
As long as the shares of the Company are not listed on the Colombian Stock
Exchange, the following provisions of the Regulations of the Board of Directors
which, being acceptable under the Spanish Companies Law for the companies
whose shares are listed on a secondary official stock exchange, infringe the
mandatory rules for the remaining companies which are not in that case, shall not
be applicable:
(a)
The authority of the Board of Directors to manage the provision of
information regarding the Company to the shareholders and the markets
in general in accordance with the standards of equal treatment,
transparency and truthfulness established in article 6.5.C.(a) of the
Regulations of the Board of Directors.
(b)
The obligation to approve an Annual Corporate Governance Report
described in article 42 of the Regulations of the Board of Directors and
the reference thereto made in articles 6.5.C.(c), 8.7, 26.6.(p), 27.5.(h),
36.4.(c) and 41 of the Regulations.
CEMEX
Code of
Ethics and
Business
Conduct
CONTENTS
MESSAGE FROM OUR CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER > 4
INTRODUCTION > 5
FUNDAMENTALS > 6
1. MISSION, VALUES, AND BELIEFS THAT DEFINE US
RELATIONS WITH STAKEHOLDERS > 8
2. OUR PEOPLE AND HUMAN RIGHTS
3. CUSTOMER RELATIONS AND FAIR DEALING
4. SUPPLIER RELATIONS AND FAIR DEALING
5. GOVERNMENT RELATIONS
6. COMMUNITY RELATIONS
OPERATIONS AND ACTIVITIES > 16ES > p.13
7. ANTITRUST COMPLIANCE
8. ANTI-BRIBERY
9. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
10. GIFTS, SERVICES AND OTHER COURTESIES
11. ENVIRONMENTAL RESPONSIBILITY
12. POLITICAL CONTRIBUTIONS AND ACTIVITIES
SAFETY & SECURITY > 27
13. SAFETY AND HEALTH IN THE WORKPLACE
14. CONFIDENTIAL INFORMATION
15. FINANCIAL CONTROLS AND RECORDS
16. PRESERVATION OF ASSETS
MANAGEMENT > 35
17. MANAGEMENT OF THE CEMEX CODE OF ETHICS AND BUSINESS CONDUCT
LETTER OF COMMITMENT, CEMEX CODE OF ETHICS AND BUSINESS CONDUCT > 38
MESSAGE FROM OUR
CHAIRMAN OF THE
BOARD AND CHIEF
EXECUTIVE OFFICER
Living the values and principles that comprise the CEMEX Code of Ethics and Business Conduct has been key to
our growth and success.
As our industry evolves, our values of Collaboration, Leadership and Integrity remain unchanged, and these
pillars will continue to serve as the basis for all our actions. In our constant quest to reinforce the confidence of
our employees, customers, investors, suppliers and communities, we must constantly update and strengthen
the activities that contribute to the transparency of our actions.
Each of us is responsible for observing the CEMEX Code of Ethics and Business Conduct, not only to guarantee
our compliance with applicable laws and regulations in every country where we are present, but also to ensure
our adherence to the highest principles and standards of corporate responsibility. We also encourage you to
come forward when you have questions or suspect that you have observed an act of misconduct. It is CEMEX’s
policy never to retaliate against anyone for making a report in good faith.
I count on your continued support, enthusiasm and commitment to build the future as one CEMEX, united by the
values that distinguish this great company.
Sincerely,
Lorenzo H. Zambrano
Chairman of the Board and Chief Executive Officer
INTRODUCTION
Since its beginning in 1906, our company has embraced values that have helped CEMEX grow into what it is
today. This document presents the foundations that have served as both our inspiration and our guidance.
Our company’s globalization process—characterized by rapid growth and geographical expansion—has
required the integration of many different cultures. To consolidate and strengthen our identity worldwide, we
must ensure that our company’s values and principles guide our activities in every country in which we operate.
With this goal in mind, in early 1999, representatives from all of our operational areas participated in the
development of this document, the CEMEX Code of Ethics and Business Conduct (“the Code”), which was
unveiled by Lorenzo H. Zambrano, Chairman of the Board and Chief Executive Officer, on April 13, 2000. Since
then, the Code has been a touchstone for our mission and the set of principles underlying our daily actions.
Our commitment, as a part of the CEMEX team, is to live this document through all of our actions, always in
compliance with the laws and regulations of the countries in which we operate. We are confident that a culture
based on these values will foster full development of our individual abilities and skills and steady growth in the
value of our company for all stakeholders—our customers, investors, employees, suppliers and communities.
While the Code covers a wide range of business practices and relationships, it cannot and does not address
every issue that may arise or every ethical decision that must be made. Rather, it establishes key guiding
principles for CEMEX employees. All of our officers, directors and employees must conduct themselves
according to the language and spirit of the Code and seek to avoid even the appearance of improper behavior.
Ethical behavior honors us as individuals and dignifies our way of doing business.
This copy of the CEMEX Code of Ethics and Business
Conduct is under the care and custody of:
Name: ________________________________
Signature: _____________________________
FUNDAMENTALS
1. MISSION, VALUES, AND BELIEFS THAT DEFINE US
Our Mission
CEMEX’s mission is to serve the global building needs of its customers and
build value for its stakeholders by becoming the world’s most efficient and
profitable building solutions company.
To achieve our mission, we work with our customers to build a better world,
supplying the highest-quality products and services and growing and
positioning ourselves as the best option for our stakeholders within the global
building materials industry.
Our Values
We strive for excellence in our performance, creating long-lasting relationships built on trust and our core values of
collaboration, integrity and leadership.
Collaboration: Work with others in a collective pursuit of excellence
Integrity: Act honestly, responsibly and respectfully toward others at all times
Leadership: Envision the future and focus our efforts on service, excellence and competitiveness
Beliefs that define our character
We are convinced that our business success stems from being the best option for our stakeholders, and therefore,
• We endeavor to develop and implement strategies that ensure that our leadership generates value for our customers, investors,
employees, suppliers and communities. We know that our continuous focus on effective service and competitiveness is
fundamental to achieving our mission
• We believe that, by acting with integrity, our employees give us a competitive advantage. We build lasting ties of trust and
mutual benefit in all our interactions by doing business honestly, responsibly and respectfully. We encourage clear and direct
communication because we recognize that diverse backgrounds and opinions are enriching
• We are convinced that collaboration optimizes our decision-making and helps us to achieve better results. We affirm our
professionalism by keeping ourselves up date, communicating effectively and working in teams to share our efforts and
knowledge. We proactively seek ways to satisfy the needs and expectations of our stakeholders by being innovative, striving
for continuous self-improvement, adjusting to change and doing our best
These principles are the driving force of CEMEX’s people.
CEMEX Code of Ethics and Business Conduct
7
RELATIONS WITH
STAKEHOLDERS
2. OUR PEOPLE AND HUMAN RIGHTS
At CEMEX, our people are a competitive advantage. Our Company fosters an
encouraging environment for individual growth. As an essential part of our
Company, we must strive to achieve our mission by acting in a manner that
consistently reflects the principles and values we all share.
Recruitment
We recruit employees based on their ability, career experience and personal
alignment with our corporate values. Our selection and hiring processes are carried
out respectfully, without creating false expectations, and in adherence to local laws
and practices.
CEMEX’s commitment to our people
Our Company seeks to provide a safe and productive work environment for each
of us, to maximize individual potential and creativity and to foster collaboration
and teamwork. We are each entitled to a workplace that observes and respects basic
human rights.
To this end, our Company assigns high priority to:
• Complying with labor laws and regulations
• Respecting individual differences and opinions and preventing all forms of
discrimination and harassment
• Safety equipment, systems and procedures that protect our people and facilities
• Preserving the environment and our occupational health
• Defining, communicating and ensuring compliance with our policies and internal
procedures
As employees, we must foster an environment of mutual respect, and comply with
the laws, rules and regulations of the countries were we operate.
Interpersonal relationships
We seek to ensure that our workplace interpersonal relationships encourage
collaboration and teamwork, which are essential factors to overcoming the
challenges that we continuously face.
To foster collaboration, we:
• Provide effective support to others and encourage teamwork and expert networks
in which everyone can share knowledge, experience and best efforts
• Place our Company’s global corporate performance above personal, unit, area or
business unit performance
• Never sacrifice our Company’s long-term advancement for short-term returns
• Recognize that healthy competition in the workplace stimulates personal and
career growth, provided that it does not diminish our collaboration, team spirit or
corporate performance as a whole
Q: Most of my coworkers are
local, while I have been brought
in from another country. For the
most part, my colleagues have
been very friendly and accepting,
and we all work well together.
However, one of them constantly
makes comments about how
people from my region of the
world are “not trustworthy.” He is
constantly over my shoulder and
tells others that my people have
a poor work ethic. I try to ignore
it, but I am very offended by his
behavior. How should I respond?
A: If you feel comfortable doing
so, tell your coworker that his
discriminatory remarks are hurtful,
distracting and need to stop. If you
do not feel comfortable, or if this
colleague does not stop harassing
you, contact ETHOSline, your local
Ethics Committee or your Human
Resources Department. Each of us
at CEMEX has a right to work in a
discrimination- and harassmentfree environment. You do not have
to tolerate harassment.
To encourage communication, we:
• Promote the values we share as a Company, and become positive role models of
the behaviors and practices established in our Code
• Express our ideas and concerns clearly and honestly in a timely and responsible
manner, and contribute constructive criticism in order to make our relations and
processes more efficient
• Show respect for the opinions of others
CEMEX Code of Ethics and Business Conduct
9
How do I know if I have
witnessed a human rights
violation?
Human rights violations occur in
many ways, and we are committed
to preventing all such misconduct.
There are many situations which
may interfere with fundamental
rights. Ask yourself the following
questions to decide whether an
action, event or condition you have
witnessed could be considered a
violation of human rights:
• Is the situation causing you
or your coworkers to work in
conditions that are unsafe or
unhealthy?
• Are you or your colleagues
expected to perform actions that
are uncomfortable, illegal or
morally objectionable?
• Have you been the victim of
retaliation, or witnessed someone
else being retaliated against?
• Did you receive punishment,
or witness a colleague receiving
punishment, for performing an
action you are legally permitted
to take?
• Could an action or situation
have an adverse effect on
the environment, surrounding
communities or our Company’s
reputation?
• In the case of a customer or
supplier, have you observed
actions or behaviors that do not
comply with our Code, human
rights or the law?
To ensure effective people management, we:
• Contribute to the creation and maintenance of a healthy, stimulating and
productive work environment in which all of us are treated fairly and respectfully
• Avoid unfounded judgment of others
• Set goals that challenge us, match our abilities and emphasize results
• Ask for and listen attentively to feedback
• Provide honest, constructive, objective, fact-based and timely feedback
• Delegate responsibilities to your collaborators and provide them with assignments
that are intellectually challenging
• Provide timely and widespread recognition for a job well done
Employees’ responsibilities
As employees, we are expected to:
• Become familiar with our Company’s mission and contribute to its achievement
by living our organizational values and observing our Code
• Read, understand and comply with CEMEX’s policies and internal procedures
• Dedicate our talents and full efforts to our jobs
• Share our knowledge and experience for the benefit of CEMEX and its
stakeholders
• Meet our commitments consistently, honestly and responsibly
• Share joint responsibility with our Company for our own individual growth and
development, and avail ourselves of the opportunities that CEMEX offers to keep
our expertise up-to-date
• Contribute to an environment of collaboration and teamwork
• Observe and enforce all health and safety standards
• Display at all times the best image of our Company by setting a good example
• Come forward when we have questions or suspect that we have observed an act of
misconduct
CEMEX’s commitment to human rights
Our Company is also committed to offering us continuous training, development,
individual recognition, promotion on the basis of merit, candid communication
and effective feedback. In addition, we must observe all applicable wage and hour
laws that govern our work, and never use or condone the use of child or forced
labor. As a company that believes in the power of acting with integrity, CEMEX
seeks to advance respect for human rights.
Therefore, our Company sets a positive global example by:
• Upholding the fundamental human rights of our people by complying with child
and forced labor prohibitions, and never discriminating against others based on
their legally-protected traits
• Making employment decisions based solely on merit, and not on any legallyprotected traits such as age, race, ethnicity, religion, disability, marital status or
sexual orientation, among other factors
• Recognizing the right to freedom of association
• Focusing on providing safe, healthy, productive work environments and humane
working conditions
• Improving our processes and procedures to minimize our impact on our
environment and the communities that support us
It is crucial to our Company’s goals and operations that we each respect and comply
with laws which govern basic human rights. In addition, it is the responsibility
of each of us to make a report if we suspect that a violation of human rights has
occurred. This includes any act of retaliation we may witness as the result of our
colleagues standing up for their rights or the rights of others. Do not hesitate to
reach out to your Human Resources Department, Business Unit Ethics Committee
or ETHOSline to report such a concern.
10
CEMEX Code of Ethics and Business Conduct
Identifying discrimination
Acts of discrimination are often blatantly offensive and, therefore, easy to detect. Other times, discriminatory remarks are
more subtle. So how do we know when we’ve witnessed an act of discrimination? Listen for the following types of comments:
• “Can you believe she was promoted? Everyone knows women don’t make good leaders.”
• “I don’t know why they keep him around. He’s far too old to do this type of work.”
• “She’s so young—she doesn’t belong here. We need to hire people with experience and know-how, not someone like her.”
• “He seems nice enough, but people from his part of the world aren’t really trustworthy. We’re better off not hiring him.”
• “Why would we hire a pregnant woman? She’s just going to leave after she has her baby, anyway.”
• “I can’t believe they would promote a disabled man before me! Look at him—he can barely get around.”
All of the comments have something in common: they are all discriminatory and, therefore, prohibited. If you witness another
CEMEX employee making similar statements, you should stop the conversation immediately and inform your colleague that
he or she is violating our Code, Company policy and the law. You are encouraged to report the behavior if it continues or
worsens.
Related Topics:
9. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
14. CONFIDENTIAL INFORMATION
CEMEX Code of Ethics and Business Conduct
11
3. CUSTOMER RELATIONS AND FAIR DEALING
CEMEX works to be its customers’ best option. All of our business dealings
are conducted fairly and professionally, and we supply top-quality services
and products at the stipulated time and place.
As a company and individually, we make every possible effort to act in an
innovative and proactive manner, exceeding our customers’ expectations
and anticipating their needs in order to ensure long and mutually beneficial
relationships.
Market selection
Globalization
Our global expansion has immersed
us in a great variety of cultures and
work environments. When working
in different environments, we carry
out our business with respect
for local customs and traditions.
However, you must consult
CEMEX’s Legal Department before
drafting and signing agreements
and contracts, or taking any
action that might infringe upon
laws or regulations governing
trade and competition. Further,
you are encouraged to report any
information on actual or intended
unfair trade practices.
If you are responsible for
facilities, vehicles or other
property related to CEMEX’s
operations, you must strictly
follow the Company’s practices
and procedures relating to the
prevention of drug trafficking,
smuggling and any other
inappropriate use of such
property.
We do not discriminate against customers or markets for any reason other than to
comply with legal provisions. Unlawful discrimination is a violation of our Code
and global competition laws, and will not be tolerated. If you witness or suspect
unlawful customer or market discrimination report the behavior immediately to
ETHOSline or the Legal Department.
Doing business with our customers
We encourage our customers to adhere to the standards of our Code. Therefore, we
strongly advise our customers not to perform or engage in any act prohibited by law
or by our Code. If a customer is found to have engaged in illegal or unethical acts,
it may result in the termination of this relationship.
Commitments and promises
Following our corporate values, we treat customers with integrity and
professionalism and avoid arrogance at all times. To build and maintain customer
relationships based on trust and credibility, we must only make commitments
that are commensurate with our abilities. If unforeseen circumstances make it
impossible to meet a commitment, the person involved must inform his/her
immediate supervisor, as well as the customer.
Promotions and sales pitches
Our sales pitches and promotions will be free of false representations regarding
product quality and/or availability, delivery dates and payment terms. We must
market our products and services honestly and accurately. Using deceitful or
dishonest practices is a violation of our Code and our corporate values, and will not
be tolerated.
Related Topic:
9. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
10. GIFTS, SERVICES AND OTHER COURTESIES
14. CONFIDENTIAL INFORMATION
12
CEMEX Code of Ethics and Business Conduct
4. SUPPLIER RELATIONS AND FAIR DEALING
CEMEX’s success depends on supplier relationships that are built on trust
and mutual benefit. We will always manage our supplier relationships with
honesty, respect and integrity, offering equal opportunities for all parties.
Equality and fairness in supplier relations
We will provide suppliers with equal opportunities to bid on and win contracts. In addition, we will always conduct our
procurement processes consistently, respectfully and confidentially. In all cases, we will base the evaluation of bids for the
selection of suppliers on established criteria.
Doing business with our suppliers
We encourage our suppliers to adhere to the standards of our Code and, therefore, strongly advise our suppliers not to perform
or engage in any act prohibited by law or by the Code. CEMEX will review reports of unlawful or unethical activity on a
case-by-case basis. If a supplier is found to have engaged in illegal or unethical acts, it may result in the termination of the
relationship.
Honoring contracts and proprietorship, obeying the law and complying with regulations
We honor all of our agreements and commitments, including copyrights, licenses and other proprietary claims. Consequently,
we will do business only with contractors or suppliers who are qualified to use, transfer or market products and/or services
subject to royalties or other obligations. Therefore, contractors and suppliers are required to prove the authenticity and
legitimacy of their products and services. CEMEX will not do business with contractors and suppliers that are unable to
provide such proof.
Related Topic:
9. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
10. GIFTS, SERVICES AND OTHER COURTESIES
14. CONFIDENTIAL INFORMATION
CEMEX Code of Ethics and Business Conduct
13
5. GOVERNMENT RELATIONS
CEMEX’s operations require a wide range of interactions with government
agencies in many countries. These agencies may act as regulators,
customers, suppliers, stockholders and/or promoters. We will always conduct
our interactions with these agencies consistent with our Company’s principles
and values, with particular emphasis on honesty and respect.
Government as regulator
We advocate a policy of awareness of, and compliance with, laws, regulations, standards and other legal provisions in every
country in which we operate. No officer, director, employee or intermediary of CEMEX may commit an illegal or unethical
act, or instruct others to do so, for any reason. If you believe any practice raises questions as to compliance with any applicable
law, rule or regulation, or if you have questions regarding any law, rule or regulation, contact your local legal department or
ethics committee for guidance.
Government as customer
When dealing with government customers, it is important that we know and comply with applicable laws and regulations. If
part of your job involves sales to government agencies, you are accountable for compliance with the legal requirements that
govern each particular transaction. This rule applies wherever the transaction may occur.
Government as supplier
In transactions in which a government or any of its agencies acts as a supplier of goods or services, we must abide by the
principles established in our Code under “Supplier Relations and Fair Dealings.”
Government as shareholders
Governments that are shareholders in any CEMEX company will always be treated in the same manner as all other
shareholders. No individual shareholder will be given preference over another.
Government as promoter
In any country in which we operate, and to the extent practicable, we will contribute to the government’s community
development efforts in accordance with the criteria established in the Code under “Community Relations.”
Relations with government officials
Before the first business contact with a government or any of its agencies, you must ensure that you are authorized to interact
with government officials on CEMEX’s behalf.
Technical collaboration with the government
We may provide technical support on a temporary basis for government projects designed to benefit the community at large.
However, such actions must first be approved by country manager.
Related Topics:
3. CUSTOMER RELATIONS AND FAIR DEALING
4. SUPPLIER RELATIONS AND FAIR DEALING
6. COMMUNITY RELATIONS
8. ANTI-BRIBERY
14
CEMEX Code of Ethics and Business Conduct
6. COMMUNITY RELATIONS
CEMEX is committed to promoting and contributing to the development of
its communities by preserving the environment, fostering mutually beneficial
relationships and maintaining open lines of communication.
CEMEX’s role in community-development programs
As a responsible member of the global community, we participate directly and through legitimate organizations in programs
and actions designed to promote integration, development and improved quality of life in the countries in which we operate.
Our participation may include counsel, management, sponsorships or any other support involving our products, assets and/or
services.
Our involvement in community-development projects must ensure that:
• Local laws do not prohibit such involvement
• The programs, actions or sponsorships are approved by local authorities
• CEMEX’s country or regional manager, or his or her assignee, approves the involvement
• The Company does not assume obligations and responsibilities that belong to government entities, other organizations or the
community itself
• We do not create or promote any dependency on CEMEX
• We focus on community development by promoting culture, health, education, sports, the environment or similar values
• All activities are recorded in accordance with CEMEX standards amd generally accepted accounting principles in the
particular country
• Beneficiaries acknowledge the support and state its value and/or nature, their names and the reasons for the contribution
As employees, we may not request or accept any personal benefits or assistance in holding public office in exchange for support
provided by CEMEX. As representatives of our Company, we will not compromise the future of CEMEX or the quality of its
relations with local communities by supporting partial or short-term solutions.
Role of CEMEX employees in community development
Our employees’ behavior in the community must always reflect the values of CEMEX. Our Company supports our
participation in actions, events and organizations that contribute to the development of our communities, provided that such
participation does not interfere with our job performance. When participating in such organizations on our own time or
during working time with the Company’s consent, we must never create false expectations of support or imply that CEMEX
will contribute to the event or organization in any way.
Local supplier development and employee recruitment
CEMEX believes in hiring local employees and fostering relationships with local suppliers as a way of contributing to regional
development. Employment decisions are made based on the candidates’ technical ability, performance, education, work
experience and alignment with our corporate values. Similarly, our criteria for supplier selection are competitive pricing,
quality, experience and service.
Related Topics:
2. OUR PEOPLE AND HUMAN RIGHTS
4. SUPPLIER RELATIONS AND FAIR DEALING
11. ENVIRONMENTAL RESPONSIBILITY
CEMEX Code of Ethics and Business Conduct
15
OPERATIONS
AND ACTIVITIES
7. ANTITRUST COMPLIANCE
CEMEX is dedicated to conducting all of its business activities with the highest ethical
standards. While we strive to be the best, our corporate values dictate that we can do
so only through hard work and outstanding service.
Compliance with all applicable laws is a fundamental part of our corporate values. This
is particularly true in the case of antitrust legislation. Although antitrust compliance is
a good business practice in and of itself, it is important to remember that a violation of
antitrust laws may result in severe consequences for our Company and its employees,
officers and directors.
CEMEX operates in many countries with different antitrust laws and regulations. We
must therefore ensure that all of our business activities conform to local laws and
regulations, and to our Company’s own policies. Country Managers are responsible for
ensuring its compliance.
Further, we are expected to report any actual or potential unfair trade practice through
ETHOSline or the Legal Department. We must also contact the Legal Department, if we
have questions regarding any particular practice or activity.
Dealing with customers and suppliers
We treat every customer and supplier fairly and appropriately under all applicable antitrust and competition laws. This means
that we must not take unfair advantage of our market position in any particular product or geographic area. There must be a
legitimate business reason, such as a cost difference or participation in a competitive bid, to sell the same product to similarly
situated customers at different prices.
Dealing with competitors
Competitive actions must always be justified by sound business considerations. Therefore, we will not make agreements with
competitors to unlawfully restrain trade. Examples of such illegal agreements include, but are not limited to, price fixing,
group boycotts and bid rigging. In virtually every country in which we operate, such arrangements result in serious legal
consequences, including jail sentences and very high fines.
We must consult the Legal Department before we draft and sign agreements and contracts or take actions that could infringe
upon the laws and regulations that govern trade and competition. While some contact with competitors is unavoidable and
Q: A friend of mine works for a competing company. When we get together for lunch, we usually talk about our personal
lives. However, today my friend is frustrated with the new pricing changes his company is rolling out. He tells me, in detail,
how his company plans to inflate the prices of certain products and services across the organization. I do not want to
betray my friend’s trust, but I feel like I should pass this information along to help CEMEX gain a competitive edge. What
should I do?
A: You must not use this information in any way—even to benefit CEMEX. End the conversation with your friend and tell him that he
should not be sharing confidential information about his company with you. Make it clear that you do not plan to do anything with the
information, but that you have a responsibility to inform of the conversation to your Legal Department. This conversation could create
the appearance of violating anti-competition laws, which could lead to substantial legal trouble for you and for CEMEX.
CEMEX Code of Ethics and Business Conduct
17
may be perfectly legitimate, we should, when in doubt, consult with a representative from the Legal Department BEFORE
making any such contact. For instance, when a competitor is also a customer or supplier, it is proper to conduct business
dealings as with any other customer or supplier. Discussions should be limited, however, to the terms of the transaction at
hand. Make sure that the individual calling on this customer is not the same person responsible for competing with this
customer.
The safest way to avoid unlawful agreements with competitors is to avoid meetings and other communications with
competitors, unless there is a clearly demonstrated lawful purpose for such communications.
Taking extra care when we may have a “dominant position”
If our Company has actual or potential power to dominate a particular geographic area or market, we should take extra care
to avoid tactics that could be viewed as designed to exclude or injure present or potential competitors. Competitive actions
must always be justified by sound business considerations. Targeting a particular company or taking steps to drive a particular
company out of business is inappropriate.
Most often, regulators use a company’s own documents (such as emails or handwritten notes) to prove any illegal conduct.
Therefore, to prevent any misinterpretation, you should avoid the use of sloppy or inappropriate language in your business
conversations.
A good rule to apply is: do not write or say anything that you would not like to hear or read about in a public forum.
Related Topics:
3. CUSTOMER RELATIONS AND FAIR DEALING
4. SUPPLIER RELATIONS AND FAIR DEALING
18
CEMEX Code of Ethics and Business Conduct
8. ANTI-BRIBERY
We reject all forms of corruption. Paying or receiving bribes is illegal and
highly unethical, and can lead to severe consequences for all parties involved,
including jail for individuals and harsh penalties for the Company. We are
committed to conducting our business with transparency and integrity, and
will therefore ensure that all transactions comply with anti-bribery laws,
including requirements to maintain complete and accurate books and
records.
General prohibition on corruption
All forms of bribery are unethical and illegal. We will investigate all allegations of
corruption and take disciplinary and –if appropriate- legal action against violators.
In accordance with international anti-bribery laws, we will never promise, offer,
commit, pay, lend, give or in any other way transfer anything of value to a
government official if such contribution is unlawful or intended for an illegal
purpose. This includes direct contributions, such as cash, as well as indirect
contributions, such as allowing an official to use our Company’s resources or office
space. Lawful contributions require due authorization by the relevant country
manager, and must be registered in applicable accounting records under a specific
label.
“Government official” includes:
• Any official or employee of any branch or level of government
• Political parties
• Candidates for public office
• Employees of government-owned or -controlled entities,
• Employees of international public organizations
Q: Part of my job involves
working with government
customers. Currently, I am
working with a foreign
government official in a country
where it is customary to give and
receive business gifts. However,
this official is demanding
expensive luxury items that I
am sure are against CEMEX’s
policy—and possibly the law.
What should I do?
A: Contact ETHOSline or the
Legal Department as soon as
possible. While some gifts to
government officials may be
permitted, committing to provide a
government customer with luxury
gifts constitutes a bribe. Make sure
you do not provide the official any
type of gift until you have confirmed
with the Legal Department that you
may do so.
Gifts, travel and entertainment expensses
Gifts, entertainment and other courtesies for the benefit of any government agency,
official or employee are allowed only for legitimate business reasons. In all cases,
such courtesies must be of nominal value and otherwise lawful, and require written
authorization from your country manager.
Travel expenses for any government official, if paid by us, must be reasonable and
for legitimate business reasons, such as visits to project sites to explain our business
propositions. In all cases, such travel expenses must be lawful and authorized in
writing by your country manager
All gifts, travel and entertainment expenses must be specifically recorded in exact
accordance with applicable laws and established company procedures.
CEMEX Code of Ethics and Business Conduct
19
Dealing with intermediaries
We may not do indirectly what we cannot do directly. Therefore, we will never use any third party as an intermediary to make a
corrupt payment.
Ignorance is not an excuse for violating anti-bribery laws. Before dealing with any third-party representative or intermediary,
we must ensure that it is reputable and agrees to comply with the provisions of this Code. The legal department will assist you
in conducting a thorough due diligence and in documenting the relationship with any prospective third-party representative or
intermediary.
Red flags for dealing with government officials
Dealing with government officials can be complex, and there are many laws and procedures of which we must be aware.
Below are several scenarios that are not appropriate, and may violate anti-corruption laws:
• A political candidate up for election asking for an illegal CEMEX contribution, either to the campaign, or to a program or
cause supported by the candidate
• A local official demanding a cash payment in order to secure contracts or work permits
• A government customer seeking reimbursement for personal expenses when visiting CEMEX facilities
• A third party working on CEMEX’s behalf offering a bribe to a government official on our Company’s behalf
• A foreign government official asking for a lavish gift in exchange for securing business with a local company
• A CEMEX employee treating a government official to an expensive meal, and paying for the expense out of pocket
These are just a few of many situations in which you and CEMEX could be in danger of violating—or appearing to violate—
global anti-corruption laws. You should seek immediate guidance from ETHOSline or your Legal Department before proceeding
if you encounter any of the above actions.
Related Topics:
5. GOVERNMENT RELATIONS
20
CEMEX Code of Ethics and Business Conduct
9. CONFLICTS OF INTEREST AND CORPORATE
OPPORTUNITIES
CEMEX employees, officers and directors have an obligation to conduct
themselves in an honest and ethical manner and to act in the best interests
of CEMEX. All employees, officers and directors should endeavor to avoid
situations that present a potential or actual conflict between their interests
and the interests of CEMEX.
Employees with outside interests or businesses
We are each expected to devote our talent and efforts to CEMEX, and to act with
loyalty to our Company. This means that we may not:
• Perform or enter into any trade or business in direct or indirect competition with
CEMEX
• Use our employment or position in CEMEX to derive improper personal benefits,
including benefits for family members or related third parties
• Derive revenues or benefits from suppliers, competitors or customers
Exceptions to this rule may include any benefits received from membership on a
corporate board of directors—if authorized by the head of our CEMEX business
area or unit—or work for a nonprofit organization.
Employees as CEMEX customers
As Company employees, we may purchase CEMEX products for our own use,
provided that we observe Company policy. Our Company reserves the right to
verify the final destination of any such goods. In addition, we may not own any
business engaged in marketing, distributing, transporting or processing CEMEX
products or services.
A “conflict of interest” occurs
when a person’s private interests
interfere in any way, or even appear
to interfere, with the interests of
CEMEX, its subsidiaries or affiliates.
A conflict of interest can arise when
an employee, officer or director
takes an action or has an interest
that may make it difficult for him
or her to perform his or her work
objectively and effectively. Conflicts
of interest may also arise when an
employee, officer or director (or his
or her family members) receives
improper personal benefits as
a result of his or her position at
CEMEX.
Employees as suppliers
To avoid a conflict of interest, we may not act as suppliers to our Company.
Likewise, outside businesses owned by CEMEX employees may not supply
products and/or services to CEMEX.
Employees’ relatives as customers or suppliers
We must not participate in or influence—directly or indirectly—any requirement,
negotiation or decision-making process related to customers and suppliers who
are members of our families. Members of our families include spouses, children,
stepchildren, parents, stepparents, siblings, in-laws and any other direct relatives or
members of our household.
Our Company expects our business to be conducted free from any actual or
potential conflict that may arise when our loyalty is split between our personal
interests and those of CEMEX. We must avoid situations that might create a
conflict between personal interests and those of our Company. Situations that could
create a conflict of interest should be promptly disclosed through ETHOSline or
the Business Unit Ethics Committee. In addition, you must advise your Business
Unit Ethics Committee or use ETHOSline if a business that is, or intends to be, a
CEMEX supplier or customer is owned by one of your close relatives.
CEMEX Code of Ethics and Business Conduct
21
How do I know when a potential
conflict of interest should be
addressed?
• Does the situation make it difficult
to do your work fairly, and without
personal bias?
• Are you in a position to share
information—even
inadvertently—with other CEMEX
employees, a CEMEX business
partner or a CEMEX competitor
that should not be shared?
• Are you tempted to act on
information you received through
your work for CEMEX in a way
that interferes with CEMEX’s best
interests?
• Does a situation or proposed
action make it difficult or
impossible for you to uphold our
Code, policies and the law?
• If anyone found out about the
situation, could it cause harm
or embarrassment to you or to
CEMEX?
If the answer to any of the above
questions is “yes,” you should
report the situation immediately.
Even the appearance of a conflict
of interest could prove damaging
for you and CEMEX.
Shareholders as customers or suppliers
At times, our shareholders may also serve as customers or suppliers of CEMEX.
We will treat shareholders who have or seek to have a business relationship with
CEMEX as we treat any other CEMEX supplier or customer. They will be subject
to the same procedures and terms as all other CEMEX suppliers or customers.
Shareholders and/or employees with family members in CEMEX
As CEMEX employees or shareholders, our family members may work for our
Company provided that they meet the corresponding job requirements. In all cases,
the hiring of relatives will follow the selection procedure established by CEMEX’s
local Human Resources Department. However, we may not directly or indirectly
supervise any member of our own family. Any employment decisions or personnel
changes are subject to the practices applicable to all other CEMEX employees.
Reporting conflicts of interest
Situations involving conflicts of interest are not always obvious or easy to resolve.
Therefore, we are each expected to report actual or potential conflicts of interest
to our Business Unit Ethics Committee or ETHOSline. Similarly, our Company’s
senior executive officers and directors must disclose to the ethics committee any
material transaction or relationship that could reasonably be expected to give rise
to conflict of interest, and the Ethics Committee will then notify the Board of
Directors (or a Committee of the Board) of any such disclosure.
Addressing a conflict of interest
In the event an actual or apparent conflict of interest arises between our personal
and professional relationships or activities, we are expected to handle such conflict
of interest in an ethical manner, and in accordance with the provisions of our Code.
Related Topics:
2. OUR PEOPLE AND HUMAN RIGHTS
3. CUSTOMER RELATIONS AND FAIR DEALING
4. SUPPLIER RELATIONS AND FAIR DEALING
8. ANTI-BRIBERY
10. GIFTS, SERVICES AND OTHER COURTESIES
14. CONFIDENTIAL INFORMATION
16. PRESERVATION OF ASSETS
22
CEMEX Code of Ethics and Business Conduct
10. GIFTS, SERVICES AND OTHER COURTESIES
We may not accept or give courtesies of any kind that may compromise, or
appear to compromise, decision-making on current or future negotiations. It
is forbidden to seek or condition a negotiation on any kind of gift, service or
courtesy.
Accepting gifts, services and other courtesies
Gifts, services and other courtesies from current or potential CEMEX customers,
suppliers, consultants or service providers are acceptable only if they are given for
legitimate business reasons.
You are not allowed to seek or structure a negotiation on the basis of any gift,
service or courtesy from a customer, supplier, consultant, service provider or
other third party. In addition, you are not permitted to receive gifts, services or
other courtesies from these parties, except for legitimate promotional materials,
services or other courtesies in line with standard business practices. If accepted,
such courtesy requires the written consent of your immediate supervisor and, most
importantly, must not compromise or appear to compromise your integrity or
objectivity, or create an expectation of personal obligation.
You may not request, negotiate or accept discounts or courtesies from suppliers,
consultants or service providers for your own or others’ benefit unless such action
is lawful, ethical and a generally accepted business practice between CEMEX and
these parties. In addition, you must secure the written approval for such courtesy
from the country manager/head of your area. Further, you must not request
or accept donations for charitable or other altruistic purposes from current or
potential customers, suppliers, consultants or service providers unless CEMEX, in
collaboration with other companies, decides to support campaigns dedicated to
specific causes.
Q: A CEMEX supplier recently
sent my team a holiday gift
basket. The gift basket is from a
popular retailer, and is valued at
around US $100. We have done
business with this supplier for
many years, and the gift is for
all of us to share. May we accept
the basket?
A: You may only accept the
gift with approval from your
immediate supervisor. This type of
gift may be in line with standard
business practices. However,
it is CEMEX’s policy to receive
approval prior to accepting
gifts from our suppliers or other
business partners. It is up to your
supervisor to determine whether
this gift would compromise, or
appear to compromise, any future
negotiations. You may also consult
with ETHOSline or your local Ethics
Committee.
Giving gifts, services and other courtesies
Gifts, services and other courtesies for the benefit of current and potential
customers, suppliers, consultants or service providers are allowed only for legitimate
business reasons. In all cases, such courtesies must be lawful and require written
authorization from your immediate supervisor. Any resulting expenses must be
specifically recorded in exact accordance with established company procedures. You
are not allowed to seek or structure negotiations on the basis of any gift, service or
other courtesy to a customer, supplier, consultant or service provider.
CEMEX Code of Ethics and Business Conduct
23
What constitutes an “acceptable”
gift?
The practice of offering and
accepting business gifts and
courtesies varies among many
jurisdictions. Gift-giving is also
an important component of many
cultural traditions around the globe.
Therefore, deciding which types
of gifts are acceptable to offer or
accept can sometimes be difficult.
When confronted with a gift-giving
scenario, ask yourself the following
questions:
• Is this a gift I would give to any
other CEMEX customer, supplier
or business partner?
• Would a CEMEX customer,
supplier or business partner offer
such a gift to others as well?
• Is this gift tasteful, workappropriate and inexpensive?
• Are these gifts given infrequently
at appropriate times—such as
promotions, anniversaries or
major holidays?
• Will offering or accepting this gift
appear to make me or my CEMEX
business partner biased?
• If I offer or accept this gift,
and the media finds out, could it
damage my reputation or that of
CEMEX?
Bribes and/or extortion
Bribes and extortion are improper and prohibited under all circumstances. If
you receive an offer or a request for a bribe, or are coerced or extorted in your
work relations, whether inside or outside the organization, report the situation
immediately. You must also report any extortion or bribery of fellow employees or
others to the Legal Department or through ETHOSline.
Examples of Acceptable and Unacceptable Gifts
It can be difficult to know whether a gift we are about to give or receive is appropriate,
especially when the rules governing such gifts can change from location to location.
Listed below are a few examples of both acceptable and unacceptable gifts. Keep in mind
that, while this is not a complete list of all types of gifts, it does offer practical guidance in
determining gifts that are reasonable—or unreasonable—in nature.
Acceptable gifts may include:
• Promotional items, such as pens, notepads, mugs or magnets
• Seasonal gift baskets or other commonplace items
• Greeting cards and notes of gratitude for service
• Small gifts of symbolic value for special occasions, such as birthdays, weddings or
graduations
Unacceptable gifts may include:
• Gifts of cash or cash equivalents, such as checks, gift cards or gift certificates
• Luxury items, such as expensive watches or pens, fine wine or expensive electronics
• Expensive tickets to an exclusive or sold-out event, such as a museum opening, a local
sporting event or a theater production not available to the public
Related Topics:
3. CUSTOMER RELATIONS AND FAIR DEALING
4. SUPPLIER RELATIONS AND FAIR DEALING
8. ANTI-BRIBERY
9. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
16. PRESERVATION OF ASSETS
24
CEMEX Code of Ethics and Business Conduct
11. ENVIRONMENTAL RESPONSIBILITY
At CEMEX managing our environmental footprint is an integral part of our
business philosophy. We are fully committed to carrying out our business
activities in an environmentally responsible and sustainable manner and to
minimize the environmental implications of our activities.
Our commitment to the environment
We are committed to mitigating the ecological impacts that our plants, quarries, and logistics operations have on their
surrounding communities. We do this by monitoring and controlling air emissions; managing land and conserving biodiversity
within and around our sites; minimizing disturbances such as noise, vibration, and traffic; optimizing water use; and reducing
and recycling waste. Our internal targets are continuously monitored and periodically reviewed and updated. We provide the
necessary resources for instruction, training and supervision to our employees to appropriately manage the environmental
aspects of our operations
Commitment of CEMEX employees
Everyone who works for CEMEX is responsible for demonstrating correct environmental behaviors and encouraged to report
potential environmental risks. Managers are held accountable for clearly defining environmental roles and responsibilities,
providing appropriate resources, and measuring, reviewing and continuously improving CEMEX’s environmental performance.
Our employees are encouraged to participate in environmental programs, as provided in Company guidelines.
Commitment to the community
CEMEX maintains its commitment to maximize the efficient use of natural resources, and to deliver products that respond
to our customers’ growing environmental expectations. We will continue working with governments and society to promote
effective mechanisms that support environmental improvement, and we will maintain open communications with our
employees, contractors, communities and stakeholders to disclose our progress. Our Company proactively participates in
public and private organizations engaged in the maintenance of ecological balance. We also collaborate with the design and
improvement of environmental regulations according to the company’s plans and programs.
Related Topics:
6. COMMUNITY RELATIONS
CEMEX Code of Ethics and Business Conduct
25
12. POLITICAL CONTRIBUTIONS AND ACTIVITIES
CEMEX acknowledges and respects the right of its employees to participate
in activities external to the company, such as politics, provided that they are
legal and do not interfere with the employees’ duties and responsibilities or in
any way involve the company.
Political contributions and activities
Political contributions are defined
as giving money, goods, services
or other assets to political parties,
politically-oriented organizations or
candidates for public office.
We have the right to make political contributions, either directly or through
committees or other entities in which CEMEX participates, provided that such
contributions are made in compliance with applicable law. We must make certain,
however, that any personal political contributions we make in which CEMEX does
not participate are not associated with our Company.
Political activities are defined as
any actions undertaken for political
purposes, including, but not limited
to, membership in political parties
or organizations, running for public
office, involvement in election
campaigns or holding a public
office or any position in a political
party.
Our Company respects our right to participate in political activities of our own
choosing, as long as our participation is on a strictly personal basis and does not
interfere with the performance of our duties for the company. If you are involved
in political activities, you must not associate them with CEMEX or use the
company’s name, symbols, logos or any other company identification during the
course of your involvement. In addition, you must not conduct political activities at
company facilities or use any company assets for this purpose.
Our Company will not be responsible, under any circumstances, for our actions in
the course of our outside political activities. Our involvement in politics will not
imply any political bias on the part of our Company.
Related Topics:
5. GOVERNMENT RELATIONS
8. ANTI-BRIBERY
9. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
26
CEMEX Code of Ethics and Business Conduct
SAFETY
& SECURITY
13. HEALTH AND SAFETY IN THE WORKPLACE
CEMEX gives highest priority to preventing incidents and safeguarding the
health and safety of our workforce. We are fully committed to carrying out
our business activities in a safe and efficient manner and to care for the
well-being of all those on our sites and those who may be impacted by our
activities.
Q: I noticed that my coworker
was not performing at her usual
standard. When I approached
her, she seemed weary and sick.
I asked her if she was feeling ill,
and she told me that she was
not sleeping much because our
supervisor was forcing her to
work long hours, threatening
the loss of her job if she did not
comply. I know that this violates
labor laws in our area. How can I
help her?
A: If you are concerned that
unlawful activity is occurring, you
should report it immediately. Not
only is this situation dangerous
for your coworker, it potentially
compromises the safety of those
around her. Since your coworker
has told you that your immediate
supervisor gave this direction, you
should consult through ETHOSline,
your local Ethics Committee or your
Human Resources Department.
CEMEX respects human rights,
and our Company will not tolerate
violations of labor laws.
Responsibility and accountability for Health and Safety
Everyone who works for CEMEX is responsible for demonstrating correct health
and safety behaviors and reporting potential risks to themselves and others. No
action or decision is so important that we must sacrifice our safety or the safety of
other employees, contractors or the community. Employees and contractors are
obliged to stop any work or any condition that is considered unsafe.
Managers will be held accountable for the health and safety of their operations
and are expected to visibly demonstrate leadership and commitment to ensure that
health and safety is given high priority.
We are committed to making CEMEX a safe workplace and supporting all aspects
of our employees’ health and well-being. We provide our employees with ongoing
training to identify risks in the workplace and we contribute to improving the
health of our communities through appropriate government agencies and nongovernmental organizations. CEMEX expect all employees and contractors,
to comply with all applicable health and safety laws and regulations and with
CEMEX’s policies, practices, systems and procedures.
Personal protection equipment
CEMEX provides employees with personal protective equipment needed to
perform our work, as well as the training necessary for its proper use. We have the
obligation to correctly use protective equipment assigned to us.
If you coordinate the services of contractors or external personnel, you must ensure
that they observe the same safety and health regulations and expectations applicable
to CEMEX’s own employees.
Q: I received a promotion recently, and my new position requires me to operate
equipment I have never used before. After several days of training, my supervisor told
me that I needed to start working with this equipment regularly to make up for lost
time. He said that I would learn as I went along. I am not comfortable operating this
equipment unsupervised. Can I request additional help?
A: Yes. You should tell your supervisor immediately that you are not ready to begin using this
equipment on your own. If he/she insists that you will learn on the job, contact ETHOSline,
your local Ethics Committee or your Human Resources Department for additional help. Only
those trained, authorized and competent should operate equipment. Doing otherwise can
compromise our safety and potentially put others around us at risk.
28
CEMEX Code of Ethics and Business Conduct
Safety and integrity of assets
We are responsible for keeping our work environment clean and orderly, and
thereby contributing to safe operational practices and the prevention of hazards.
We will collaborate proactively in the design and implementation of the safety
measures required to ensure the safety, reliability and integrity of CEMEX’s assets.
Each of us must understand the requirement to comply with safety rules and
procedures and must report any decision or activity that could pose a risk to the
safe operation of our plants and equipment and thereby present the potential risk of
harm to people.
Related Topics:
5. GOVERNMENT RELATIONS
6. COMMUNITY RELATIONS
16. PRESERVATION OF ASSETS
CEMEX Code of Ethics and Business Conduct
Q: An employee of mine recently
came to me to report a concern.
He told me that he felt one of
his coworkers—another of my
employees—may be working
under the influence of alcohol.
He was not completely sure,
but noticed his coworker was
slurring his speech and thought
he smelled alcohol on his
breath. How should I handle the
situation?
A: As a supervisor, you have an
important duty to foster a safe
environment for those who report
to you. You must address this issue
immediately, as it is a serious safety
concern. Take the employee off his
assignment and tell him you noticed
a change in his behavior and want
to see if he can safely perform his
duties. Document the issue and if
needed follow up with ETHOSline,
your local Ethics Committee or your
Human Resources Department.
If the employee is an immediate
danger to himself or others, contact
the local authorities.
29
14. CONFIDENTIAL INFORMATION
At CEMEX, we believe that our ability to obtain information and put it to good
use creates a competitive advantage. Accordingly, we must administer and
handle information in a responsible, safe, objective and legal manner.
Q: For my job, it is important
that I stay connected at all
times. I often do business on
my Company laptop and mobile
phone while commuting to work,
attending meals or spending
time out in public. I never leave
these items unattended. Is there
anything else I should be doing
to protect CEMEX’s assets and
information?
A: You are on the right path by
not leaving Company assets
unattended. However, you should
take special precautions when
conducting CEMEX business
outside of the workplace. Be careful
about working with confidential or
proprietary Company information
while you are in public places. You
never know when others may be
listening in or looking over your
shoulder. Also, make sure you are
using a secure connection, and
never save confidential information
to your personal devices. When you
are unsure, it is better to wait until
you are in a private, secure location
to conduct CEMEX business.
Confidential information is defined as any information pertaining to our Company
or its subsidiaries and affiliates, as well as our officers, directors, stockholders,
operations, activities, plans, investments or strategies that has not been made public
by lawful means. It includes, but is not limited to:
• Accounting information and financial projections
• Mergers, acquisitions, associations and expansion and business plans
• Securities transactions and financing
• Commercial or operating policies and practices
• Legal or administrative controversies
• Organizational changes
• Research and development of new products
• Personal employee information
• Intellectual property such as trade secrets, patents, trademarks and copyrights
• Customer and supplier lists, cost structures and pricing policies
Security and handling of confidential information
Each of us at CEMEX is responsible for the correct use of information. Supervisors
and managers are responsible for ensuring the proper use of information by
their teams. If you are a supervisor or manager, you must take the necessary
steps to ensure that all members of your team comply with company policy on
the protection of information. Unauthorized use or distribution of confidential
information violates our Code and could be illegal.
Use of confidential information
We must not divulge or communicate confidential information to third parties in
any way, except when required and authorized to do so for business reasons. In all
such cases, we must inform our immediate supervisor, the Legal Department or
the person responsible for the confidential information prior to any disclosure. If
you have any concern about the handling of such information, you should consult
your immediate supervisor, the Legal Department, the person responsible for the
information or use ETHOSline.
If you need to disclose or give confidential information to other CEMEX
employees, you must advise recipients of its confidential nature. All persons outside
of CEMEX who receive such information must sign a confidentiality agreement.
Our Company strictly prohibits the use of confidential information, whether
directly or through others, to obtain an inappropriate benefit or advantage. Such
an action could cause loss, damage or misfortune to the interests of CEMEX
or our stakeholders. The inappropriate use of confidential information may
result in disciplinary action, and may also have legal consequences. Similarly,
our shareholders, board members, members of company management, statutory
internal and external auditors, employees, contractors, suppliers and customers are
equally bound to keep such information confidential.
30
CEMEX Code of Ethics and Business Conduct
Trading on inside information
Using nonpublic information to trade in securities or giving such information to
any family member, friend or any other person (an action known as “tipping”) is
illegal. All nonpublic information should be considered inside information and
should never be used for personal gain. We are required to become familiar and
comply with CEMEX’s insider trading policy, copies of which are distributed to
all employees, officers and directors, and are made available through the ETHOS
Policy Center.
Information required by authorities and other parties
When governmental authorities require confidential information, we may provide
it only if the request is made in writing, meets applicable legal requirements and
is approved by our immediate supervisor, the Legal Department and any other
area concerned. It is essential to comply with the requirements established by the
different regulatory bodies that govern the actions of our Company.
Only CEMEX’s official spokespersons are authorized to provide corporate
information to the media, analysts or other outside parties.
Confidential information of third parties
We respect the property rights and proprietary information of other companies.
All CEMEX employees, officers and directors must respect such property and
information. This means that we do not infringe upon any patented or copyrighted
documents or materials. Further, we never reveal the confidential information of
our previous employers, or any information that is inadvertently revealed to us.
Q: One of my coworkers recently
mentioned that she planned to
start her own side business.
When she described to me what
she planned to do, it was clear
that she would not be competing
with CEMEX, nor would she run
her business on Company time or
with CEMEX resources. However,
I noticed her accessing customer
lists and printing them while at
work. I think she may be hoping
to use this information to help
start up her business. Should I
report what I witnessed?
A: Yes, you should report your
coworker’s activity immediately.
We have a responsibility to protect
the confidential information of our
customers and other business
partners, and may only use this
information for legitimate CEMEX
business. Additionally, we may not
use information obtained through
our position at CEMEX for personal
gain.
Never use, copy or disclose any confidential information without first seeking
guidance from ETHOSline or your Legal Department.
In addition, any invention, improvement, innovation or development we generate
as a direct or indirect result of our job responsibilities belongs to CEMEX, subject
to the legislation of the country where such development is generated. Finally, just
as we have an obligation to protect the confidential information of our previous
employers, we also have an obligation to protect CEMEX’s proprietary and
confidential information even after we leave CEMEX.
Related Topics:
9. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
15. FINANCIAL CONTROLS AND RECORDS
CEMEX Code of Ethics and Business Conduct
31
15. FINANCIAL CONTROLS AND RECORDS
CEMEX seeks to build credibility and trust with its stakeholders. Our
Company acknowledges its responsibility to communicate effectively with
our stakeholders so that they are provided with full and accurate information
about CEMEX’s financial condition and results of operations. Consequently,
we as employees must ensure, within the scope of our responsibilities and
duties, that our financial records are accurate and our financial controls
effective. We must also ensure that our reports and documents filed with or
submitted to securities regulators, as well as all other public communications,
include full, fair, accurate, timely and understandable disclosure.
Q: I am a supervisor, and one
of my employees is constantly
forgetting to clock in. I know
that she arrives to work on time,
and otherwise does a good job,
so I do not think it fair to punish
her for being forgetful. Each pay
period, I adjust her time to reflect
the actual number of hours I
believe she has worked. Is this
against our Code?
A: Yes—keeping false or
inaccurate records undermines
our commitment to financial
transparency. Talk to your employee
and let her know that, while you
appreciate her hard work, she
must remember to log in on time.
If your business unit is audited, her
improperly recorded time may raise
questions and concerns for CEMEX.
All CEMEX employees, officers and directors must avoid exaggeration, guesswork,
legal conclusions and derogatory remarks or characterizations of people and
companies. This applies to communications of all kinds, including email and
informal notes or memos. Records should always be handled according to
CEMEX’s record retention policies. If you are unsure whether a document should
be retained, you should consult the Legal Department before proceeding.
Financial records include financial statements, reports, tax returns, supporting
evidence and any other documents that reflect our Company’s operations.
Financial controls are the procedures related to safekeeping assets and ensuring
the reliability of financial records. They include the guidelines for the approval of
transactions.
Recording, safekeeping, and preparation of financial reports
The recording, safekeeping and preparation of financial reports for CEMEX’s
different stakeholders must strictly adhere to national, state and local laws/
regulations, generally accepted accounting principles and control guidelines issued
by our Company. In addition, all financial transactions must be prepared with
reasonable detail, supported by accurate evidence as required by applicable laws and
entered in the corresponding accounts at the time they are completed.
Disclosure of financial information
Financial information will be disclosed only as detailed above in the section on
“Confidential Information.” We must never alter or falsify documents, records
or reports, or conceal information that may alter the interpretation of financial
information.
Financial controls
Operations related to financial controls and records will be conducted pursuant to
the internal control procedures issued by the Comptroller’s Office. The Comptroller
is responsible for ensuring that internal control policies are disseminated and
implemented. The internal auditor is responsible for verifying, on a periodic basis,
that the company’s control procedures are being followed.
32
CEMEX Code of Ethics and Business Conduct
Any concerns relating to accounting, internal financial controls or auditing matters should be reported directly to the Audit
Committee of the Board of Directors, through ETHOSline.
Q: I need to meet my sales goals for the last quarter of the year. I know that this CEMEX customer will be
purchasing several tons within the next few days, but may not finalize the order until just after the quarter
ends. Since we are guaranteed this business, my supervisor suggests that we record the sale now to avoid
repercussions for failing to meet our goals. May I do this?
A: No. We must make sure that all of our records are complete, honest and accurate. This means we may never knowingly
record false information just to meet our goals. Doing so is a violation of our Code, CEMEX policies and the law, and will
not help our Company in any way. In addition, no one should ever pressure you to commit misconduct. If, after refusing to
make a false entry, your supervisor continues to pressure you, report the incident immediately to ETHOSline or your Ethics
Committee.
Related Topics:
14. CONFIDENTIAL INFORMATION
CEMEX Code of Ethics and Business Conduct
33
16. PRESERVATION OF ASSETS
The proper use and preservation of CEMEX’s assets are essential for the
fulfillment of our Company’s mission.
Assets are tangible and intangible property owned by CEMEX, including, but
not limited to, buildings, machinery, equipment, inventories, cash, receivables,
shares and securities. Assets also include our proprietary information,
inventions, business plans, patents, brands, trademarks and names,
corporate identity and information technology.
Custody and safekeeping of assets
Each of us is responsible for the custody and safekeeping of any assets under our direct control. We should never participate in,
influence or allow situations and/or actions that involve the unauthorized taking, mistreatment, abuse, lending, disposal or sale
of company assets.
Use of assets for personal benefit or purposes other than those provided in company policy
Assets owned by CEMEX and services our Company provides us are for the sole purpose of supporting us in performing
our duties, and for the ultimate benefit of our Company. If you need to use such assets and services for any other purpose,
you must obtain prior consent from your immediate supervisor. If such goods and/or services are intended for charitable or
altruistic purposes, prior written consent is required from your country manager/head of your area.
Use and maintenance of facilities, machinery, and equipment
Only those of us who are trained and authorized may operate CEMEX facilities, machinery and equipment. We are responsible
for safeguarding assets under our care, keeping them in good condition, following applicable maintenance procedures and
implementing all available risk-prevention programs to avoid accidents, support uninterrupted operation and extend the useful
life of such assets.
Related Topics:
9. CONFLICT OF INTERESTS AND CORPORATE OPPORTUNITIES
13. SAFETY AND HEALTH IN THE WORKPLACE
14. CONFIDENTIAL INFORMATION
15. FINANCIAL CONTROLS AND RECORDS
34
CEMEX Code of Ethics and Business Conduct
MANAGEMENT OF
THE CEMEX CODE
OF ETHICS
AND BUSINESS
CONDUCT
17. MANAGEMENT OF THE CEMEX CODE OF ETHICS
AND BUSINESS CONDUCT
This section specifies how the Code is managed to ensure that our values
remain alive and continue to thrive throughout our Company, as well as to
provide a structured approach for the resolution of ethical violations.
Procedures for inquiries, suggestions, and reports
CEMEX encourages all of us to report any suspected violation. Keep in mind that our Company will thoroughly investigate
all good faith reports of violations. Further, CEMEX will not tolerate any kind of retaliation for reports or complaints of
misconduct that are made in good faith. Open communication of issues and concerns by all employees, officers and directors
without fear of retaliation is vital to the successful implementation of our Code. Each of us is required to cooperate in internal
investigations of misconduct and unethical behavior. Any information supplied in regard to a particular case will receive
expeditious, professional and confidential treatment.
Our Code is applicable throughout our organization. Every employee, officer and director is required to follow and enforce the
guidelines established in our Code. To this end, our Company has established different communication channels for us to ask
questions, give suggestions and make note of cases in which CEMEX’s values have been actively promoted. These channels also
exist to report incidents and submit evidence of inappropriate conduct. Situations that may involve a violation of our Code are
not always obvious or easy to resolve. Therefore, you are expected to report any concerns about violations of our Code to one
of the following persons, departments or bodies:
• ETHOSline
• Your immediate supervisor
• Human Resources Department
• Legal Department
• Business Unit Ethics Committee
• CEMEX Ethics Committee
• Audit Committee of the Board of Directors
Any concern about violations of our Code by the Chief Executive Officer and members of the CEMEX Ethics Committee
should be reported promptly to the Audit Committee of the Board of Directors or through ETHOSline
Violations or suspected violations of accounting, internal financial controls or auditing matters should be reported directly to
the Audit Committee of the Board of Directors through ETHOSline.
Consequences
By putting our values into practice every day, we benefit ourselves and others. CEMEX encourages ethical behavior. Unethical
behavior will require our Company to enforce disciplinary measures, which may include termination of employment. There
may also be additional actions, obligations or sanctions resulting from the enforcement of applicable law.
Remember: CEMEX supervisors are responsible for exemplifying CEMEX’s values. They must recognize their colleagues when
appropriate, or take timely and appropriate disciplinary action in case of improper behavior.
Each of us should encourage our fellow employees to abide by the CEMEX values and guidelines of our Code. Our failure to
comply with our Code will be considered misconduct and may subject us to disciplinary action.
36
CEMEX Code of Ethics and Business Conduct
Code management structure
The parties responsible for the management of our Code are:
• Business Unit Ethics Committees
• CEMEX Ethics Committee
Business Unit Ethics Committees are responsible for ensuring awareness, observance and enforcement of the Code by:
• Encouraging the practice of its values and conduct
• Acting as advisory boards
• Referring cases to the appropriate parties
• Approving corrective measures to ensure global consistency
• Generating statistics and reports
• Addressing any requests for clarification
In addition to the above, the CEMEX Ethics Committee has the following responsibilities:
• Updating and modifying our Code
• Approving candidates’ membership on the Business Unit Ethics Committees
• Investigating and documenting selected cases
• Providing feedback to the Business Unit Ethics Committees
• Promoting global consistency in the interpretation and enforcement of our Code
To ensure its effectiveness, every ethics committee is comprised of five members from different CEMEX areas, each of
whom possesses an outstanding reputation and background, and is recognized for his or her honesty and comprehensive
understanding of the business.
The CEMEX steering committee designates the members of the CEMEX ethics committee. The members of Business Unit
Ethics Committees are appointed by the country manager and approved by the CEMEX ethics committee.
We all share in our Company’s values and assume our responsibility to actively practice and promote them. We expressly
acknowledge this responsibility by signing our letter of commitment after receiving a copy of our Code.
The guidelines contained in our Code are not all-inclusive, but are supplementary to Company policy.
Q: What should I expect when my report is investigated?
A: Reporting suspected misconduct is an important part of maintaining our commitments. However, coming forward with
a report can be difficult when we don’t know what to expect. After making a report, always keep the following in mind:
• Our Company will make every effort to protect our identities, consistent with local law.
• In locations where anonymous reporting is available, our Company will not attempt to identify us.
• If we do choose to make reports anonymously (where allowed by local law), it can be more difficult for our Company to
conduct a thorough investigation. It is therefore, it is recommended to provide some kind of contact information,
including for example an anonymous email address.
• Our Company investigates all reported misconduct—including all reports made anonymously.
• We will never tolerate retaliation for making a report in good faith. Making a report “in good faith” means that we
provide all the information we have, and we believe it to be true.
• All reports will be investigated by the appropriate authority, and will be escalated if needed.
• At times, we may be asked to participate in the investigation of a report. During such times, we have a responsibility to
assist in these investigations. We can do so knowing that our Company will take every reasonable measure to protect
our identities.
CEMEX Code of Ethics and Business Conduct
37
LETTER OF
COMMITMENT, CEMEX
CODE OF ETHICS AND
BUSINESS CONDUCT
I acknowledge that I have reviewed the CEMEX Code of Ethics and Business Conduct and fully understand
the mission, values and standards of behavior our organization exemplifies. I understand that compliance with
the CEMEX Code of Ethics and Business Conduct is mandatory for every employee of CEMEX. I also believe
that, by complying with the CEMEX Code of Ethics and Business Conduct, we all contribute to the creation of a
better working environment in which we can become better professionals and individuals. I confirm that I am
in compliance with these standards and that I have disclosed any actual or potential conflicts of interest. In
addition, I understand that the CEMEX Code of Ethics and Business Conduct is available at ETHOS and I need to
consult it whenever I have a question or concern.
Place and date: _______________________________________________
Signature: ___________________________________________________
Name: _____________________________________________________
Employee ID:
_______________________________________________
Department:
_______________________________________________
Immediate Supervisor: ___________________________________________
Review our Code of Ethics and
Business Conduct and other
policies in the Policy Center at
If in doubt, ask before you act.
Use
line
LIVING OUR VALUES
COLLABORATION
INTEGRITY
LEADERSHIP
BY-LAWS OF
CEMEX LATAM HOLDINGS, S.A.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
BY-LAWS OF CEMEX LATAM HOLDINGS, S.A.
TITLE I
THE COMPANY AND ITS SHARE CAPITAL
CHAPTER I
GENERAL PROVISIONS
Article 1.-Corporate name and applicable rules
1.
The name of the company is Cemex Latam Holdings, S.A. (the “Company”).
2.
The Company shall be governed by legal provisions relating to corporations
(sociedad anónima) and other applicable Laws and regulations, as well as by its
Internal Regulation.
3.
The Company’s internal regulation is made up of its By-Laws, the Regulations for
the General Shareholders’ Meeting, the Regulations for the Board of Directors
and the remaining Internal Corporate Governance Rules approved by the
competent decision-making bodies of the Company (the “Internal Regulation”).
4.
The Company shall pursue the corporate interest, which is understood as the
interest common to all shareholders of an independent corporation directed
towards the exploitation of its corporate purpose, in accordance with the
provisions of applicable Law and its Internal Regulation.
Article 2.-Corporate purpose
1.
The corporate purpose of the Company shall consist of:
(a)
the subscription, derivative acquisition, holding, use, management or
transfer of securities and shares of other companies, except from those
activities subject to special legislation;
(b)
the management and administration of securities representing the equity of
companies which are not resident in Spain by means of the pertinent
organization of material and personal resources, as provided for under
article 116 of Royal Legislative Decree 4/2004, of March 5, enacting the
Restated Text of the Corporate Income Tax Act (Ley del Impuesto sobre
Sociedades), as amended.
(c)
the manufacture, sale, importation and exportation of cement and other
construction materials and the exploration and exploitation of mines,
except from national strategic minerals;
(d)
the manufacture, production, marketing and distribution of any types of
sacks and containers or similar items made of paper or any other material,
which shall be used for cement and other construction materials packing;
(e)
the discretional public transport of goods by road, subject to the ground
transportation legislation in force. The transport agency, forwarded agent,
burden information and distribution centre, storage, goods’ distribution
and warehousing and lease of commercial vehicles activities, as well as all
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
other transport complementary activities referred to in article 1.2 of the
Ground Transport Act in force;
(f)
the manufacturing, production, marketing, pumping and sale of readymixed concrete, mortar, dry mortar, precast concrete products, limes,
gypsum, ashes and slags, as well as any other products directly or
indirectly related with construction materials and public projects;
(g)
the purchase, acquisition and transfer by any title of any kind of both urban
and rustic estates, including plots and buildings;
(h)
the active or passive lease and transferring of the use by any other title of
any kind of both urban and rustic estates, including plots and buildings;
(i)
the promotion and construction of all kinds of industrial, residential or
other type of buildings, directly or through contractors;
(j)
the development of agricultural, forestry or livestock activities, including
both the exploitation, commercialization and distribution of such activities;
(k)
the management of all types of byproducts and/or wastes, in its broadest
sense, including the collection, road transport, selection, assessment,
marketing, treatment, conversion to fuel or any other raw material and its
elimination;
(l)
the ownership, license, exploitation, management, development,
administration, maintenance and protection of industrial and intellectual
property rights and the assets which are underlying to these rights;
(m)
research and development activities in the field of building materials;
(n)
provision of technical assistance services and business management;
(o)
the structuring, issue, offering, either publicly or privately, and placement
of shares and fix or variable rate securities in capital markets in Spain or
abroad; and
(p)
the execution of transactions on financial derivative instruments relating to
exchange rates, interest rates, securities or any other underlying asset,
whether financial or not and the execution of financial transactions both
granting credit or assuming indebtedness with companies belonging to the
same group or third parties.
2.
The aforementioned activities may be carried out, in whole or in part, either
directly by the Company or through the ownership of shares or equity interests in
other companies whose purpose is identical or analogous to such activities,
subject to all applicable sectorial Law provisions.
3.
The Company may assume the management of a group of companies, even if their
Company’s corporate purpose is different from the Company’s corporate purpose,
including management and advice activities in all the companies’ areas, provided
by the corresponding professionals, in case such professional services are
required.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
4.
The activities that require any kind of administrative authorisation for its
performance shall be deemed as not comprised in the corporate purpose if such
authorisation has not been obtained by the Company.
Article 3.-Duration and commencement of operations
1.
The duration of the Company shall be indefinite.
2.
The Company shall commence its activities on the day on which the deed of
incorporation is granted.
Article 4.-Registered office and branches
1.
The Company has its registered in Madrid (Spain), at Calle Hernández de Tejada
number 1, and it may establish branches, agencies, local offices and delegations in
Spain and abroad pursuant to applicable legal provisions.
2.
Such registered office may be transferred to another location within the municipal
area of Madrid by resolution of the Board of Directors, which may also make
decisions regarding the creation, elimination or transfer of the branches, agencies,
local offices and delegations mentioned in the preceding paragraph anywhere in
Spain or abroad.
CHAPTER II
SHARE CAPITAL AND SHARES
Article 5.-Share capital
The share capital is five hundred seventy eight million two hundred and seventy eight
thousand three hundred and forty two Euros (578.278.342). It is represented by five
hundred seventy eight million two hundred and seventy eight thousand three hundred
and forty two (578.278.342) ordinary shares, with a face value of one Euro (1 Euro)
each, belonging to a same class and series, fully subscribed and paid up.
Article 6.-Representation of the shares
1.
The shares are registered and, once they have been deposited there, represented by
book entries in the book entries’ register of the Colombian Central Securities
Depository, Deceval, S.A. (Depósito Centralizado de Valores de Colombia)
(“Deceval”), in compliance with the requisite for the listing of the shares on the
Colombian Stock Exchange (Bolsa de Valores de Colombia). Therefore, the
transfer of the ownership will be made by means of entries and records in deposit
accounts or sub-accounts of Deceval’s holders.
2.
In order to be deposited all the outstanding Company’s shares in Deceval, the
Company will issue a document which will contain (i) the Company’s name and
its registered office, (ii) the total amount of the outstanding shares’ which are
deposited and (iii) the law applicable to the trading of the shares. All the shares
that the Company may issue in the future shall also be deposited in Deceval
following the same proceeding.
3.
The person whose name appears as the holder in the records of Deceval shall be
deemed the legitimate holder thereof. In the event of persons or entities formally
acting as shareholders under a fiduciary agreement, trust, or any other similar title,
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
the Company may require such persons to provide the particulars of the beneficial
owners of the shares, as well as information regarding all acts entailing the
transfer of such shares or the creation of liens thereon.
Article 7.- Unpaid subscriptions
1.
If shares have not been entirely paid up, this circumstance shall be reflected in the
corresponding book entry.
2.
Unpaid subscriptions must be paid at the time fixed by the Board of Directors,
within a period of five (5) years from the date of the resolution approving the
capital increase. The form and other circumstances of the payment shall be
governed by the provisions of the resolution approving the capital increase, which
may provide for cash as well as non-cash contributions.
3.
Without prejudice to the effects of default as set forth by Law, any late payment
of unpaid subscriptions shall bear, for the benefit of the Company, such interest as
is provided by Law in respect of late payments, starting from the day when
payment is due and without any judicial or extra-judicial demand being required.
Article 8.- Shareholder status
1.
Each share of the Company confers upon its legitimate holder the status of
shareholder, and vests such holder with the rights and obligation established under
Law and the Company’s Internal Regulation and in particular the following:
A.
B.
Shareholder’s rights:
(a)
the right to share in the distribution of the Company’s profits and in
the assets resulting from liquidation;
(b)
pre-emptive subscription rights in the issue of new shares or
convertible debentures;
(c)
to attend and vote in the General Meetings and to challenge the
corporate resolutions;
(d)
the information’s right pursuant to the provisions of applicable
legislation;
(e)
to request an authorization from the Board of Directors in order to
request to experts, at the cost and liability of the requesting
shareholders, specialized reports on matters others than related to the
audit of the financial statements referred in article 53 of the By-Laws
(“Specialized Audits”), provided that the conditions established in the
By-Laws are complied with;
(f)
to make recommendations to the Board of Directors or to the body
designated by it; and
(g)
to access to the Company’s public information in an integral and
appropriate way in the terms established in the Law and these ByLaws.
Shareholders’ obligations:
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(a)
to provide all the necessary information to comply with rules about
control of laundering and illegal activities;
(b)
register in Deceval their address or their legal representatives’ or
proxies’ address in order to send all the communications required to
the registered address as well as any other information so required by
Deceval; and
(c)
bear the cost of the Specialized Audits referred in article 53 of the ByLaws which has been requested by them.
2.
The shares are indivisible. Co-owners of one or more shares must designate a
single person for the exercise of shareholder rights, whose identity must be
notified to the Company, and shall be joint and severally liable to the Company
for all obligations arising from their status as shareholders.
3.
In the case of beneficially-owned shares (usufructo de acciones), the bare owner
(nudo propietario) shall be qualified as the designated shareholder, with the
beneficial owner (usufructuario) having the right in all cases to the dividends
issued by the Company during the period of beneficial ownership.
4.
In the event of a pledge of shares, the exercise of shareholder rights belongs to the
owner thereof.
5.
Ownership of shares entails compliance with the Company’s Internal Regulation
and submission to the lawfully-adopted decisions of the decision-making bodies
and management of the Company.
Article 9.- Shareholder’s agreements
Whereas the Company’s shares are admitted to trading on one or more Spanish or
foreign stock exchanges, the execution, extension or amendment of a shareholder’s
agreement which object is the exercise of voting rights in the General Shareholder’s
Meetings or that restricts or affects shareholders’ ability to freely transfer the shares or
convertible or exchangeable bonds shall be notified to the Company and disseminated
into the market through the relevant authorities in accordance with the applicable legal
provisions.
CHAPTER III
INCREASE AND REDUCTION IN SHARE CAPITAL
Article 10.- Increase in share capital
1.
The share capital may be increased by resolution of the shareholders acting at a
General Shareholders’ Meeting with the requirements established by Law and in
accordance with the various methods authorized thereby. The increase may be
effected by the issuance of new shares or by an increase in the nominal value of
existing shares. The par of exchange for the increase may consist of cash or noncash contributions to share capital, including the set-off of loans vis-à-vis the
Company or the conversion of reserves into share capital. The increase may be
effected in part with a charge against new contributions and in part with a charge
against reserves.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
2.
Unless expressly provided otherwise in the relevant corporate resolution, if the
increase in share capital is not fully subscribed within the period established for
such purpose, the share capital shall be increased by the amount of subscriptions
which have occurred.
3.
The price of the shares to be offered shall be freely determined as provided by the
General Shareholders’ Meeting, subject to applicable Law.
Article 11.- Authorized share capital
1.
The shareholders acting at a General Shareholders’ Meeting may, in accordance
with the requirements established for the amendment of the By-Laws and within
the limits and conditions fixed by Law, authorize the Board of Directors, with
powers of substitution, if any, to approve an increase in share capital on one or
more occasions.
2.
The shareholders at the General Shareholders’ Meeting may also delegate to the
Board of Directors the power to determine the date on which the adopted
resolution to increase the share capital is to be implemented and to set the terms
thereof regarding all matters not specified by the shareholders at the General
Shareholders’ Meeting.
Article 12.- Pre-emptive rights, and the exclusion thereof
1.
In increases of share capital with the issuance of new shares, whether ordinary or
preferred, and with a charge to cash contributions, when permitted by Law, and
within the period granted to them for this purpose by the Board of Directors,
which may not be less than fifteen (15) calendar days, the shareholders of the
Company may exercise the right to subscribe a number of shares proportional to
the nominal value of the shares they hold at that time.
2.
The shareholders acting at a General Shareholders’ Meeting or, if applicable, the
Board of Directors may, in furtherance of the corporate interests, exclude preemptive rights in whole or in part in such cases and under such conditions as are
provided by Law.
3.
Pre-emptive rights shall not apply when the share capital increase is made with a
charge to non-cash contributions or when it is due to the conversion of debentures
into shares or the exchange of shares as a result of the absorption of another
company or part of the spun-off assets of another company or of the takeover of
another company.
Article 13.- Reduction in share capital
In accordance with procedures provided for by Law, a reduction in share capital may be
carried out by means of a reduction in the nominal value of shares, a retirement or
pooling thereof in order to exchange them and, in all cases, the purpose thereof may be
to return contributions, cancel unpaid subscriptions, create or increase reserves, reestablish equilibrium between the share capital and the assets of the Company
diminished due to losses, or several of such purposes simultaneously.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
CHAPTER IV
ISSUANCE OF DEBENTURES AND OTHER SECURITIES
Article 14.- Issuance of debentures
1.
The shareholders acting at a General Shareholders’ Meeting may, as provided by
Law, delegate to the Board of Directors the power to issue simple or convertible
and/or exchangeable debentures. The Board of Directors may make use of such
delegation on one or more occasions for a maximum period of five (5) years.
2.
In addition, the shareholders acting at a General Shareholders’ Meeting may
authorize the Board of Directors to determine the time at which the approved
issuance should take place, as well as to set other conditions not provided for in
the shareholders’ resolution.
Article 15.- Convertible and/or exchangeable debenture
1.
Convertible and/or exchangeable debentures may be issued with a fixed
(determined or determinable) or variable exchange ratio.
2.
The pre-emptive rights of the shareholders in connection with the issuance of
convertible debentures may be excluded by shareholders acting at a General
Shareholders’ Meeting, or, if applicable, by the Board of Directors.
Article 16.- Other securities
1.
The Company may issue notes, warrants, preferred stock or other negotiable
securities other than those described in the preceding articles.
2.
The shareholders acting at a General Shareholders’ Meeting may delegate to the
Board of Directors the power to issue such securities up to the maximum amount
established by the General Shareholders’ Meeting. The Board of Directors may
make use of such delegation on one or more occasions for a maximum period of
five (5) years.
3.
In addition, the shareholders acting at a General Shareholders’ Meeting may
authorize the Board of Directors to determine the time at which the approved
issuance should take place, as well as to set other conditions not provided for in
the General Shareholders Meeting’s resolution.
4.
The Company may also guarantee the issue of securities by its affiliates.
TITLE II
GOVERNANCE OF THE COMPANY
CHAPTER I
THE GENERAL SHAREHOLDERS’ MEETING
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
Article 17.- The General Shareholders’ Meeting
1.
The shareholders, meeting at a duly called General Shareholders’ Meeting, shall
decide, by the majorities required in each case, on the matters within their
authority, in accordance with the Law and the Company’s Internal Regulation.
2.
Resolutions which are duly adopted at a General Shareholders’ Meeting shall bind
all shareholders, including shareholders who are absent, dissenting, abstain from
voting and who lack the right to vote, without prejudice to the rights they may
have to challenge such resolutions.
3.
The Company shall ensure in any event the equal treatment of all shareholders
under identical conditions with respect to information, participation and the
exercise of voting rights at the General Shareholders’ Meeting.
4.
The General Shareholders’ Meeting is governed by the provisions set forth under
the Law, these By-Laws, the Regulations for the General Shareholders’ Meeting
and other applicable provisions of the Internal Regulation.
Article 18.- Powers of the General Shareholders’ Meeting
1.
The shareholders acting at a General Shareholders’ Meeting shall decide on the
matters assigned thereto by Law or the Internal Regulation, and particularly
regarding the following:
(a)
the approval of the annual financial statements, the allocation of profits, and
the approval of corporate management;
(b)
the appointment, re-election and removal of directors, as well as the
ratification of directors designated by interim appointment to fill vacancies;
(c)
the appointment, re-election and removal of the auditor;
(d)
the amendment of the By-Laws;
(e)
an increase or reduction in share capital, as well as the delegation to the
Board of Directors of the power to increase share capital, in which case it
may also grant thereto the power to exclude or limit pre-emptive rights,
upon the terms established by Law;
(f)
the exclusion or limitation of pre-emptive rights;
(g)
the transformation, merger, split-off, or overall assignment of assets and
liabilities, and the transfer of the registered office abroad;
(h)
the dissolution of the Company;
(i)
the approval of the final liquidating balance sheet;
(j)
the approval of the establishment of systems for compensation of the
Company’s directors, consisting of the delivery of shares or rights therein,
or a compensation based upon the value of the shares;
(k)
issuance of debentures and other negotiable securities and delegation to the
Board of Directors of the power for the issuance thereof;
(l)
authorization for the derivative acquisition of the Company’s own shares;
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(m) the approval and amendment of the Rules for the General Shareholders’
Meeting;
(n)
the transformation of the Company into a holding company, through
“subsidiarization” or the assignment to dependent entities of core activities
of the Company, even though it retains full ownership thereof;
(o)
the approval of the acquisition or disposal of core operational assets which
exceed twenty five per cent (25%) of the Company’s income or
consolidated assets or the results of its operations, according to the last
annual audited financial statements at the moment in which the transaction
is specified, without prejudice to the faculties corresponding to the Board of
Directors; and
(p)
the approval of transactions whose effect is equivalent to the liquidation of
the Company.
2.
In addition, the shareholders acting at a General Shareholders’ Meeting shall
decide on any matter submitted to them by the Board of Directors or by the
shareholders in the cases provided by Law, or that are within their power under
Law or the Internal Regulation.
3.
The shareholders acting at a General Shareholders’ Meeting may also decide, by
way of a consultative vote, on any reports or proposals submitted by the Board of
Directors.
Article 19.- Types of General Shareholders’ Meetings
1.
General Shareholders’ Meetings may be ordinary or extraordinary.
2.
The Ordinary General Shareholders’ Meeting must be held within the first six
months of each fiscal year in order for the shareholders to approve the annual
financial statements from the prior fiscal year, if appropriate, resolve upon the
allocation of profits or losses from such fiscal year, and review corporate
management. It may also deliberate and resolve on any other matter falling within
their competencies, provided that such matter is included in the agenda or that it is
feasible under the Law, and that the quorum required by these By-Laws and the
applicable law is met. An Ordinary General Shareholders’ Meeting shall still be
valid even if called or held outside of the applicable time period.
3.
Any General Shareholders’ Meeting not provided for in the foregoing sub-section
shall be deemed an Extraordinary General Shareholders’ Meeting.
Article 20.- Call of a General Shareholders’ Meeting
1.
The General Shareholders’ Meeting must be formally called by the Board of
Directors through an announcement published as much in advance as required by
Law.
The announcement of the call to meeting shall be disseminated through the
following media, at a minimum:
(a)
the Official Bulletin of the Commercial Registry (Boletín Oficial del
Registro Mercantil) or one of the more widely circulated newspapers in
Spain;
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(b)
Colombia Financial Superitendency (Superitendencia Financiera de
Colombia) website or the body that may exercise its functions in the future;
and
(c)
the Company’s corporate website.
2.
The Board of Directors must call a General Shareholders’ Meeting (i) in the
events established by Law and (ii) if the meeting is requested, in the manner
provided for by Law, by shareholders who hold or represent at least five (5%) per
cent of the share capital, which request sets forth the matters to be dealt with.
3.
The announcement of the call to meeting must contain all statements required by
Law under such circumstance and must set forth:
(a)
the day, place, time of the General Shareholders’ Meeting upon first call and
all matters to be dealt with, as well as the name of the person or persons
convening the meeting. The announcement may also, if appropriate, set
forth the date and place on which the General Shareholders’ Meeting shall
proceed upon second call;
(b)
a clear and specific description of the procedures that the shareholders must
follow in order to (i) request the publication of a supplement to the call to an
ordinary General Shareholders’ Meeting, (ii) submit proposed resolutions on
items already included or that shall be included in the agenda and (iii)
exercise their rights to information and to vote, upon the terms provided by
Law.
(c)
the date on which the holders of the Company’s shares must have them
registered in their name in the relevant book-entry registry to be able to
attend and vote at the General Shareholders’ Meeting being called;
(d)
where and how the complete text of the documents to be submitted at the
General Shareholders’ Meeting can be obtained, particularly including the
reports of the directors, auditors and independent experts to be submitted
and the complete text of the proposed resolutions that are expected to be
adopted.
4.
The notice and all documents required by Law shall be published on the
Company’s website and shall be accessible on an uninterrupted basis until at least
the date on which the General Shareholders’ Meeting is to be held.
5.
Shareholders representing at least five (5%) per cent of the share capital may
request the publication of a supplement to the call of the Ordinary General
Shareholders’ Meeting including one or more items in the agenda of the call to the
Meeting, so long as new items are accompanied by a rationale or, if applicable, by
a duly sustained proposal for a resolution; and submit well-founded proposed
resolutions regarding matters already included or that should be included in the
agenda of the call to meeting of the General Shareholders’ Meeting being called.
The shareholder’s rights mentioned in the preceding paragraph must be exercised
by duly authenticated notice that must be sent to the company’s registered office
and which, must be received within five (5) days of the publication of the call to
meeting. The supplement to the call to meeting mentioned in such paragraphs
must be published within the statutorily prescribed deadline.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
6.
The shareholders at the General Shareholders’ Meeting may not deliberate on or
decide matters that are not included in the agenda of the call to meeting, unless
otherwise provided by Law.
7.
The Board of Directors may require that a notary public attend the General
Shareholders’ Meeting and prepare the minutes thereof. In any event, the Board
must require the presence thereof under the circumstances provided by Law.
Article 21.- Shareholders’ right to receive information
1.
From the date of publication of the call of the General Shareholders’ Meeting
through and including the seventh day prior to the date provided for the first call
to meeting, the shareholders may request in writing the information or
clarifications that they deem are required, or ask written questions that they deem
pertinent, regarding the matters contained in the agenda of the call to meeting and
the auditor’s report.
In addition, upon the same prior notice and in the same manner, the shareholders
may request information or clarifications or ask written questions regarding
information accessible to the public which has been provided by the Company to
the Colombian Financial Superintendency (Superintendencia Financiera de
Colombia) since the holding of the last General Shareholders’ Meeting and in
connection with the auditor’s report.
2.
During the holding of the General Shareholders’ Meeting, the shareholders may
verbally request the information or clarifications that they deem appropriate
regarding the matters contained in the agenda, the information available to the
public provided by the Company to the Colombian Financial Superintendency
(Superintendencia Financiera de Colombia) since the holding of the last General
Shareholder’s meeting and the auditor’s report.
3.
The Board of Directors shall be required to provide the information requested
pursuant to the two preceding paragraphs in the form and within the period
provided by Law and the Internal Regulation, except in cases in which it is
improper or untimely, including, specifically, those cases in which, in the opinion
of the Chairman, publication of the information might prejudice the corporate
interest. This last exception shall not apply when the request is supported by
shareholders representing at least one-fourth (1/4) of the share capital.
4.
When the shareholders are to deal with an amendment to the By-Laws, besides the
statements required in each case by Law, the notice of the call must make clear
the right of all shareholders to examine at the Company’s registered office the
complete text of the proposed amendment and the report thereon and to request
that such documents be delivered or sent to them without charge.
5.
In all cases in which the Law so requires, such information and supplemental
documentation as is mandatory shall be made available to the shareholders.
Article 22.- Establishment of a quorum for the General Shareholders’ Meeting
1.
The General Shareholders’ Meeting shall be validly established with the minimum
quorum required by Law, taking into account the matters appearing on the agenda
of the call to meeting.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
Notwithstanding the provisions of the foregoing paragraph, if the shareholders are
called upon to deliberate on amendments to the By-Laws, including the increase
and reduction of share capital, on the transformation, merger, split-off, the overall
assignment of assets and liabilities, the relocation of the registered office abroad,
on the issuance of debentures or on the exclusion or limitation of pre-emptive
rights, the required quorum on first call shall be met by the attendance of
shareholders representing at least fifty per cent (50%) of the subscribed share
capital with the right to vote. If a sufficient quorum is not available, the General
Shareholders’ Meeting shall be held upon second call.
2.
The absence of shareholders occurring once a quorum for the General
Shareholders’ Meeting has been established shall not affect the validity of the
meeting.
3.
If the attendance of shareholders representing a particular percentage of share
capital or the consent of specific interested shareholders is required pursuant to
applicable legal or By-Laws provisions in order to validly adopt a resolution
regarding one or more items on the agenda of the call to the General
Shareholders’ Meeting, and such percentage is not reached or such shareholders
are not present in person or by proxy, the shareholders shall be limited to
deliberation and decision regarding those items on the agenda which do not
require to be approved by such percentage of share capital or the presence of such
shareholders.
Article 23.- Right to attend
1.
The holders of voting shares may attend the General Shareholders’ Meeting and
take part in deliberations thereof, with the right to be heard and to vote.
2.
In order to exercise the right to attend, shareholders must cause the shares to be
registered in their name in Deceval, directly or through their direct depository, at
least five (5) days prior to the day on which the General Shareholders’ Meeting is
to be held. This circumstance must be evidenced with the appropriate attendance,
proxy-granting and distance voting card, validation certificate or other valid form
of verification accepted by the Company.
3.
The members of the Board of Directors must attend the General Shareholders’
Meeting. The absence of any of them shall not affect the validity of the General
Shareholders’ Meeting.
4.
The Chairman of the General Shareholders’ Meeting may authorize the attendance
thereat of the managers, technical personnel and other persons related to the
Company. Furthermore, he may also grant access thereto to any other person the
Chairman deems appropriate, although the shareholders acting thereat may revoke
such authorization.
Article 24.- Right be represented at the meeting
1.
All shareholders having the right to attend may be represented at the General
Shareholders’ Meeting by proxy through another person, whether or not such
person is a shareholder, by complying with the requirements of Law and the
Internal Regulation. The proxy shall be given for each General Shareholders’
Meeting in writing, by electronic means, or by any other means of communication
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
from a distance, provided that the identity of the individual granting the proxy and
the security of electronic communications are duly assured.
2.
The proxy's representational authority is understood as without prejudice to legal
provisions concerning cases of family representation and the granting of general
powers of attorney.
3.
The appointment of proxies may always be revoked, and personal attendance of
the party represented at the General Shareholders’ Meeting will count as
revocation.
4.
The Chairman and the Secretary of the Board of Directors or the Chairman and
the Secretary of the General Shareholders’ Meeting, from the constitution thereof,
and the persons delegated by any of them, shall have the widest powers to verify
the identity of the shareholders and their proxy-holders, verify the ownership and
status of their rights, and recognize the validity of the attendance, proxy-granting
and distance voting document or media evidencing attendance or representation
by proxy.
5.
Prior to their appointment, proxies must provide the shareholder with detailed
information on any conflicts of interest. If a conflict arises subsequent to the
appointment and the principals had not been notified of that possibility, they must
be informed thereof immediately. In either case, if no specific instructions are
received for each of the matters on which a proxy is to vote for a shareholder, the
former must abstain from voting on behalf of the latter.
6.
If the proxy has been validly granted pursuant to the Law, these By-Laws and the
Regulations of the General Shareholders’ Meeting but it does not include voting
instructions or in case questions arise as to the intended proxy-holder or the scope
of the representation, it shall be deemed, unless otherwise expressly stated by the
relevant shareholder, that the proxy is granted in favour of the Chairman of the
Board of Directors, refers to all of the items included in the agenda of the call to
the General Shareholders’ Meeting, contains the instruction to vote favourably on
all proposals submitted by the Board of Directors in connection with the items
included in the agenda of the call to meeting, and also extends to matters that,
although not provided for on the agenda of the call to meeting, may be dealt with
at the General Shareholders’ Meeting according to applicable Law, in respect of
which the proxy-holder shall cast his vote in the direction he deems most
favourable to the interests of the shareholder granting the proxy, within the
framework of the corporate interest.
7.
A public solicitation for proxies by the Board of Directors or any of its members
shall be governed by the provisions of Law and by the corresponding resolution of
the Board of Directors, if any.
Article 25.- Place and time of the meeting
1.
The General Shareholders’ Meeting shall be held at the place of the Autonomous
Region of Madrid indicated in the call to meeting.
2.
The General Shareholders’ Meeting may be attended by going to the place where
the meeting is to be held or, if applicable, to the other place or places provided by
the Company and indicated in the call to meeting, and which are connected
therewith by any systems that allow for: (i) recognition and identification of the
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
parties attending; (ii) permanent communication among the attendees regardless
of their location; and (iii) participation and voting; all of it on a real-time basis.
For all purposes relating to the General Shareholders’ Meeting, attendees at any of
the sites shall be deemed attendees at the same individual meeting.
3.
The General Shareholders Meeting may, upon just cause, agree to extend itself for
one or more consecutive days at the proposal of the Chairman of the General
Shareholders’ Meeting, a majority of the directors attending the Meeting or a
number of shareholders which represent at least one-fourth (1/4) of the share
capital. Regardless the number of sessions held during the Meeting, it shall be
considered as one meeting and shall be recorded in one set of minutes for all the
sessions.
Article 26.- Shareholder’s Office
1.
From the publication o the announcement of the call to the General Shareholders’
Meeting, the Company will fit out a Shareholder’s Office in a physical and/or
online site, which shall constitute a communication channel between the Company
and its shareholders. The aforementioned functions may be delegated to a third
party if it is deemed appropriate.
2.
In a visible place of the venue where the General Shareholders’ Meeting is
convened and, if applicable, in the place indicated in the call to the meeting which
shall be communicated with such venue by means of any valid system which
allows the identification and recognition of the attendees, the Company will
install, from the moments preceding the beginning of the General Shareholders’
Meeting and while it is being held, a physical Shareholder’s Office with the
purposes of:
a)
addressing the issues raised by the attendees to the meeting in connection
with the development of the event before the commencement of the session,
notwithstanding the shareholders’ rights to intervene in the meeting, to
include new points in the meeting’s agenda and to vote which are provided
for under the Law and these By-Laws;
b)
helping and informing the attendees to the meeting who are willing to
intervene in the session, preparing a list of the shareholder who have
expressed their wish to be heard and compiling the text of such
shareholders’ interventions, provided that they were available in writing;
c)
providing the attendees to the meeting that so request with the whole text of
the proposals for resolutions made by the Board of Directors or the
shareholders to be considered by the General Shareholders’ Meeting with
respect to the items on the agenda of the call to meeting. Proposals made
immediately before the holding of the General Shareholders’ Meeting, and
therefore not possibly available in writing in order to be delivered to the
attendees to the meeting, are excepted from the provision in this paragraph.
The Shareholder’s Office shall also provide the attendees to the meeting
with a copy of the reports of the Board of Directors and any other
documentation that, pursuant to the Law and these By-Laws, must be made
available to the shareholders in connection with the aforementioned
proposals for resolutions.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
Article 27.- Presiding Committee of the General Shareholders’ Meeting
1.
The Chairman of the Board of Directors or, in the absence thereof, the ViceChairman, shall act as the Chairman of the General Shareholders’ Meeting. If the
Board of Directors has appointed more than one Vice-Chairman, the order in
which they have been appointed shall be considered (first Vice-Chairman, second
Vice-Chairman, etc.). In the absence of all of the foregoing, the person appointed
by the Presiding Committee shall act as the Chairman of the General
Shareholders’ Meeting.
2.
The Secretary of the Board of Directors or, in his absence, the Vice-Secretary of
the Board of Directors, if applicable, shall act as the Secretary for the General
Shareholders’ Meeting. If more than one Vice-Secretary is appointed, it shall be
taken into account the order in which they have been appointed (first ViceSecretary, second Vice-Secretary, etc.) In the absence of all of the foregoing, the
person appointed by the Presiding Committee shall act as Secretary for the
General Shareholders’ Meeting.
3.
The Presiding Committee shall be made up of the Chairman and the Secretary for
the General Shareholders’ Meeting, and the other members of the Board of
Directors present at the meeting.
Article 28.-List of attendees
Once the Presiding Committee has been formed, and prior to beginning with the agenda
of the call to meeting, a list of attendees shall be prepared which sets forth the nature or
representation of each attendee and the number of their own or other parties’ shares
present. At the end of the list, there shall be a determination of the number of
shareholders present (including those voting from a distance) in person or by proxy at
the meeting, as well as the amount of share capital they own, with a specification as to
which capital corresponds to shareholders with the right to vote.
Article 29.- Deliberations and voting
1.
Once the list of attendees has been prepared, the Chairman shall, if appropriate,
declare the General Shareholders’ Meeting to be validly established and shall
determine whether the shareholders at the meeting may address all of the matters
included in the agenda or should instead limit themselves to addressing some of
them.
2.
The Chairman shall call the meeting to order, submit to a debate the matters
included in the agenda, and direct the debate in a manner such that the meeting
progresses in an orderly fashion, pursuant to the provisions of the Regulations of
the General Shareholders’ Meeting and other applicable regulations.
3.
Once a matter has been sufficiently debated, the Chairman shall submit it to a
vote. Each item on the agenda shall be separately submitted to a vote.
4.
The voting on the proposed resolutions shall be carried out in accordance with the
voting procedure contemplated in the Regulations of the General Shareholders’
Meeting and other applicable regulations.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
Article 30.- Distance voting
1.
Shareholders entitled to attend and to vote may cast their vote on proposals
relating to items on the agenda for any General Shareholders’ Meeting by the
following means:
a)
by hand-delivery or postal correspondence, sending the Company the duly
signed attendance and voting card, or other written means that, in the
judgment of the Board of Directors recorded in a resolution adopted for
such purpose, allows for the due verification of the identity of the
shareholder exercising his voting rights;
b)
by electronic correspondence or communication with the Company, which
shall enclose an electronic copy of the attendance and voting card including
the shareholder’s electronic signature or other form of identification of the
shareholder, in accordance with the conditions set by the Board of Directors
recorded in a resolution adopted for such purpose to ensure that this voting
system includes adequate assurances regarding authenticity and the identity
of the shareholder exercising his vote; or
c)
by any other means of communication from a distance, provided that the
identity of the individual granting the proxy and the security of electronic
communications is duly assured.
2.
In order to be valid, a vote cast by any of the aforementioned means must be
received by the Company before midnight (00:00) on the third day prior to the
date the Shareholders’ Meeting is to be held on first or second call, as applicable.
Otherwise, the vote shall be deemed not to have been cast.
3.
The Board of Directors may expand upon the foregoing provisions, establishing
such instructions, rules, means and procedures to document the casting of votes
and grant of proxies by remote means of communication as may be appropriate, in
accordance with the state of technology and conforming to any regulations issued
in this regard and to the provisions of these By-Laws.
4.
A distance vote shall be revoked either by physical attendance of the shareholder
at the General Shareholders’ Meeting or by express revocation thereof by the
same means used to cast such vote before the deadline set for that purpose, or if
the shareholder validly grants a proxy after the date of casting of the distance vote.
Article 31.-Approval of resolutions
1.
The majority required to approve a resolution shall be obtained with the
favourable vote of one-half plus one of the voting shares present or represented at
the General Shareholders’ Meeting. Excepted from the foregoing shall be those
instances in which the Law, these By-Laws or the Regulations of the General
Shareholders’ Meeting require a greater majority.
Notwithstanding the provisions of the above paragraph, where the Meeting has
been validly constituted on second call with less than fifty per cent (50%) of the
share capital with voting rights in attendance, any resolutions concerning
amendments to the By-Laws, including an increase or a reduction in share capital,
transformation, merger, demerger or complete assignment of the assets and
liabilities of the company or regarding the issue of debentures, shall require the
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
vote in favour of two-thirds (2/3) of the share capital in attendance at the
Shareholders General Meeting, either in person or by proxy, in order to be
approved.
As an exception to the above, amendments to article 39 of the By-Laws and the
approval of the authorisation to the Board of Directors to issue simple or
convertible and/or exchangeable bonds shall require the votes in favour of one
half plus one shares of the shares representing the share capital of the Company
2.
The attendees at the General Shareholders’ Meeting shall have one (1) vote for
each share which they hold or represent. Non-voting shares shall have the right to
vote in the specific cases laid down in the applicable Law.
Article 32.- Documentation of resolutions
1.
The documentation pertaining the shareholders’ resolutions, the conversion
thereof into a public instrument and the registration thereof with the Commercial
Registry shall be carried out pursuant to the provisions of Law.
2.
The total or partial certificates needed to evidence shareholder resolutions shall be
issued and signed by the Secretary of the Board of Directors, or by one of the
Vice-Secretaries, if any, with the approval of the Chairman of the Board of
Directors or, if applicable, of one of the Vice-Chairmen thereof.
CHAPTER II
MANAGEMENT OF THE COMPANY
Section I
The Board of Directors
Article 33.- Structure of the Company’s management
1.
The Company shall be managed by a Board of Directors.
2.
The Board of Directors shall be governed by the provisions set forth in the Law,
the By-Laws and the Regulations of the Board of Directors.
Article 34.- Powers of the Board of Directors
1.
The Board of Directors has the widest powers to manage the Company, and
except for those matters exclusively within the purview of the shareholders at a
General Shareholders' Meeting, is the highest decision-making body of the
Company.
2.
Notwithstanding the foregoing, the Board shall exercise, such powers as are
reserved for it by Law, as well as the following powers that are required for a
responsible execution of the general duty of supervision:
A.
In connection with the General Shareholders’ Meeting:
(a)
call the General Shareholders’ Meeting;
(b)
propose the amendment of the By-Laws to the shareholders at a
General Shareholders’ Meeting;
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
B.
C.
(c)
propose the amendment of the Regulations for the General
Shareholders’ Meeting to the shareholders coming together thereat;
(d)
submit to a decision by the shareholders at a General Shareholders’
Meeting the transformation of the Company into a holding company,
through “subsidiarization” or the assignment to dependent entities of
core activities theretofore carried out by the Company, even though
the Company retains full control of such entities;
(e)
submit to a decision by the shareholders at a General Shareholders’
Meeting the approval or disposal of core operational assets which
exceed twenty five per cent (25%) of the Company’s income or
consolidated assets or the results of its operations, according to the last
annual audited financial statements at the moment in which the
transaction is specified;
(f)
propose to the shareholders at a General Shareholders’ Meeting the
approval of transactions the effect of which is equivalent to liquidating
the Company; and
(g)
carry out resolutions approved by the shareholders at a General
Shareholders’ Meeting and perform any duties that the shareholders
have entrusted thereto.
In connection with the organization of the Board of Directors and the
delegation of powers and the granting of powers of attorney:
(a)
approve and amend the Regulations of the Board of Directors; and
(b)
define the structure of the general powers of attorney to be granted by
the Board of Directors or by the representative management decisionmaking bodies.
In connection with the information to be provided by the Company:
(a)
manage the provision of information regarding the Company to the
shareholders and the markets in general in accordance with the
standards of equal treatment, transparency and truthfulness;
(b)
draw up the Company’s annual financial statements, management
report and proposal for the allocation of profits or losses, as well as
the consolidated annual financial statements and management report
and the financial information that the Company must periodically
make public due to its status as listed company, ensuring that such
documents provide a true and fair view of the assets and liabilities, the
financial condition and the operating income of the Company,
pursuant to applicable legal provisions; and
(c)
approve the Company’s Annual Corporate Governance Report and
Corporate Governance Survey (Código País – Colombia), should the
Company voluntarily decides to be subject to it, and any other report
that the Board of Directors deems advisable in order to better inform
shareholders and investors or that is required by legal provisions
applicable at any time.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
D.
In connection with the directors and senior managers:
(a)
designate directors to fill vacancies by interim appointment and
propose to the shareholders at a General Shareholders’ Meeting the
appointment, ratification, re-election or removal of directors;
(b)
designate and renew internal positions within the Board of Directors
and the members of and positions on the committees established
within the Board of Directors;
(c)
set, pursuant to the By-Laws and within the limits established therein,
the Director Compensation Policy and the compensation of directors.
In the case of executive directors, the Board of Directors shall
establish the additional compensation payable thereto for their
executive duties and other basic terms and conditions to which their
contracts must be subject;
(d)
approve, upon the proposal of the Chairman of the Board of Directors
or of the Chief Executive Officer, the determination and modification
of the Company’s organizational chart, the appointment and removal
of senior managers of the Company, as well as set the compensation
or indemnification, if any, payable to them in the event of removal.
As an exception to the foregoing, based on the proposal made for such
purpose by the Chairman of the Board of Directors, the Audit
Committee shall, if applicable, submit to the Board of Directors a
proposal supported by the corresponding report regarding the
selection, appointment or removal of the Director of the Internal Audit
Area.
For these purposes, senior managers shall be those managers who
report directly to the Board of Directors, to the Chairman thereof or to
the Chief Executive Officer of the Company and, in all cases, the
Director of the Internal Audit Area, as well as any other manager that
the Board of Directors regards as such;
E.
(e)
approve the Senior Management Compensation Policy as well as the
basic terms and conditions of the contracts with senior managers,
based on the proposal made by the Chairman of the Board of Directors
or by the Chief Executive Officer to the Nominating and
Compensation Committee in order for the latter to prepare a report
thereon and submit it to the Board of Directors; and
(f)
make regulations, review and decide on possible conflicts of interest
and related-party transactions between the Company and its Directors
and senior managers as well as with persons related thereto.
Other powers:
(a)
prepare the Dividend Policy and submit to the shareholders at a
General Shareholders’ Meeting the corresponding proposed
resolutions regarding the allocation of profits or losses and other
methods of shareholder compensation, as well as decide upon the
payment, if any, of interim dividends;
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(b)
pass upon all public tender offers for securities issued by the
Company;
(c)
decide upon proposals submitted thereto by the Executive Committee,
the Chairman of the Board of Directors, the Chief Executive Officer,
the independent director with special powers (Lead Independent
Director) or the committees of the Board of Directors; and
(d)
make decisions regarding any other matter within its authority which
the Board of Directors believes to be in the interests of the Company
or which these By-Laws or the Regulations of the Board of Directors
reserve to the Board as a whole.
Likewise, the Board of Directors shall evaluate, on an annual basis and with the
possibility of using for such purpose the external and internal means it deems
advisable in each case:
(a)
its operation and the quality of its work;
(b)
the performance of their duties by the Chairman of the Board of
Directors and by the Chief Executive Officer of the Company, based
on the report submitted thereto by the Nominating and Compensation
Committee; and
(c)
the operation of its committees, in view of the report submitted thereto
by such committees. For such purpose, the Chairman of the Board of
Directors shall organize and coordinate the aforementioned evaluation
process with the Chairmen of the committees.
Article 35.- Representation of the Company
1.
The power to represent the Company, in court and out of court, is vested in the
Board of Directors acting collectively. The Chairman of the Board and, if
applicable, the Executive Committee and the Chief Executive Officer, also have
the power to represent the company.
2.
The Secretary of the Board and the Vice-Secretary, if any, have the necessary
representative powers to convert into public instruments the resolutions adopted
by the shareholders at a General Shareholders’ Meeting and the resolutions of the
Board and to apply for registration thereof.
3.
The provisions of this article are without prejudice to any other powers of
attorney, whether general or special, that may be granted.
Article 36.- Composition of the Board of Directors
1.
The Board of Directors shall be composed of a minimum of three (3) and a
maximum of nine (9) directors, who shall be appointed or ratified at the General
Shareholders’ Meeting, subject to Law and the requirements established by the
Company’s Internal Regulation.
2.
The determination of the number of directors shall be the purview of the
shareholders acting at the General Shareholders’ Meeting, for which purpose the
shareholders may establish such number either by express resolution or indirectly,
through the filling or non-filling of vacancies or the appointment or non-
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
appointment of new directors within the minimum and maximum numbers
established pursuant to the Company’s Internal Regulation.
The foregoing shall be deemed to be without prejudice to the systems of
proportionate representation to which the shareholders are entitled under the
provisions of Law.
3.
The Board of Directors shall be composed such that the external directors
represent a majority over the executive directors and, at least, one-third (1/3) of
the Board of Directors’ members are independent directors.
4.
For the purposes of the provisions set forth in these By-Laws, those directors
appointed for their personal or professional qualities who are in a position to
perform their duties without being influenced by any connection with the
Company, its significant shareholders or its management and that comply with the
requirements established in the Regulations of the Board of Directors, would be
deemed as independent directors. In order to define the category of independent
director, it would be taken into account, among other things, that the directors are
appointed upon the proposal of the Nominating and Compensation Committee.
The terms external director, proprietary director and executive director shall have
the meaning set forth the Regulations of the Board of Directors.
5.
The members of the Board of Directors’ shall be suitable professionals for the
performance of their duties and shall have broad experience in the economic
sector in which the Company carries out its activity.
Article 37.- Designation of positions
1.
The Board of Directors shall elect from among its members, after a report of the
Nominating and Compensation Committee, a Chairman of the Board of Directors
and, if it so decides, one or more vice-Chairmen of the Board of Directors,
directors, who shall replace, the Chairman, in the established sequential order, in
the event of absence, impossibility to act or illness.
2.
The Board of Directors, upon the proposal of its Chairman and report from the
Nominating and Compensation Committee, shall appoint a Secretary of the Board
of Directors and, if applicable, one or more vice-Secretaries, who need not to be
directors. In the absence of the Secretary and vice-Secretaries of the Board of
Directors, the director appointed by the Board of Directors from among those
attending the meeting in question shall act as such.
3.
The Board of Directors may, acting upon a proposal of the Chairman thereof and
following a report of the Nominating and Compensation Committee, and with the
favorable vote of two-thirds (2/3) of the directors, appoint one or more Chief
Executive Officers, that may act jointly or severally, with the powers it deems
appropriate and which may be delegated pursuant to the provisions of Law and the
By-Laws.
Article 38.- Meetings of the Board of Directors
1.
The Board of Directors shall meet with the frequency that the Chairman of the
Board of Directors deems appropriate and, in any event, at least once (1) in each
period of two (2) months. One-third (1/3) of the directors may also call a meeting,
establishing the agenda thereof, in order for the meeting to be held at the place
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
where the registered office is located, if a prior petition has been submitted to the
chairman of the Board of Directors and he has failed, without well-founded
reasons, to call the meeting within one (1) month.
The call to meeting of the Board of Directors shall be carried out by the Secretary
of the Board of Directors or the person acting in his stead, with the authorization
of the Chairman, by any means that allows for the receipt thereof. Notice of the
call shall be given as much in advance as is necessary for the directors to have
access thereto no later than the third day prior to such meeting, except in the case
of emergency meetings.
2.
Without prejudice to the foregoing, the Board of Directors shall be deemed to
have validly met without the need for a call if all of the Directors present in
person or by proxy unanimously agree to hold the meeting and to the items of the
agenda to be dealt with.
3.
Voting by the Board of Directors may occur in writing without a meeting
provided that no director objects thereto. In this instance, the directors may deliver
to the Secretary of the Board of Directors, or the person acting on his behalf, their
votes and the considerations they wish to appear in the minutes, by any means
allowing for the receipt thereof. Resolutions adopted by this procedure shall be
recorded in minutes prepared pursuant to the provisions of Law.
Article 39.- Quorum for the Meeting and majorities
1.
Meetings of the Board shall be validly held when more than one-half of its
members are present in person or by proxy. All of the directors may cast their vote
and give their proxy in favour of another director. The proxy granted shall be a
special proxy for the Board meeting in question, and may be communicated by
any means allowing for the receipt thereof.
2.
Resolutions shall be adopted by absolute majority of votes cast in person or by
proxy at the meeting, except in those cases in which a greater majority is
specifically required pursuant to a provision of the Law, the By-Laws or the
Regulations of the Board of Directors. In the event of a tie, the Chairman shall
have the tie-breaking vote.
3.
Without prejudice to what is established in the By-Laws, in the Regulations of the
Board of Directors or in applicable Law the following resolutions shall require
votes of two thirds (2/3) of the directors of the Company:
(a)
grant to the Company of loans, credit lines or any other type of financing,
by virtue of which it incurs in an indebtedness for an aggregate amount per
fiscal year higher than one hundred and fifty million Euros (€150,000,000),
or its equivalent in other currencies, taking into account re-payments of that
debt;
(b)
make investments for an aggregate amount per fiscal year higher than one
hundred and fifty million Euros (€150,000,000) or its equivalent in other
currencies;
(c)
exercise of the authority delegated by the General Shareholders’ Meeting to
issue simple or convertible and/or exchangeable debentures;
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(d)
carry out transactions to sell or acquire assets for an aggregate amount per
fiscal year higher than one hundred and fifty million Euros (€150,000,000)
or its equivalent in other currencies;
(e)
carry out any transaction of any type with persons or entities of countries
sanctioned by the United States of America or the European Union;
(f)
use of the cash for any purpose other than payment of debt (including debt
incurred by other companies of the Cemex Group, other than the Company
or its affiliates) for an aggregate amount per fiscal year higher than one
hundred and fifty million Euros (€150,000,000) or its equivalent in other
currencies; and
(g)
grant of powers of attorney to carry out any of the foregoing transactions
Article 40.- Formalization of resolutions
1.
Resolutions shall be recorded in minutes signed by the Chairman and the
Secretary, or by the person acting in their stead.
2.
Total or partial certifications, which are required to record the resolutions of the
Board of Directors, shall be issued and signed by the Secretary or, if applicable,
by one of the vice-Secretaries of the Board of Directors with the approval of the
Chairman or, if applicable, of one of the vice-Chairmen.
Section II
Committees and Positions within the Board of Directors
Article 41.- Committees of the Board of Directors
1.
The Board of Directors shall constitute an Audit Committee, a Nominating and
Compensation Committee and a Corporate Governance Committee, and may
create an Executive Committee too.
2.
In addition, the Board of Directors may create other internal committees or
commissions with the powers determined by the Board of Directors.
3.
To the extent not provided for in these By-Laws, the operation of the committees
of the Board shall be governed by the provisions of the Regulations of the Board
of Directors.
Article 42.- Executive Committee
1.
The Board of Directors, irrespective of the appointment of one or more Chief
Executive Officers, may create an Executive Committee with all of the powers
inherent to the Board of Directors except for those powers that may not be
delegated pursuant to legal or By-Laws restrictions.
2.
The Executive Committee shall be composed of three (3) directors, one (1) of
which shall be an independent director.
3.
The appointment of members of the Executive Committee, upon the report from
the Nominating and Compensation Committee, and the delegation of powers
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
thereto shall be carried out by the Board with the favorable vote of two-thirds
(2/3) of the directors.
Article 43.- Audit Committee
1.
The Board of Directors shall create, on a permanent basis, an Audit Committee,
an internal informational and consultative body, without executive duties, and
with informational, advisory, and proposal-making powers within its areas of
activity.
2.
The Audit Committee shall consist of a minimum of three (3) directors and a
maximum of five (5) directors, appointed by the Board of Directors, upon a
proposal of the Nominating and Compensation Committee. All the independent
directors shall be members of the Audit Committee.
3.
The Board of Directors shall appoint the Chairman of the Audit Committee from
among the independent directors forming a part thereof, as well as its Secretary,
who need not be a director. The position of Chairman of the Audit Committee
shall be held for a maximum period of three (3) years, after which period such
person may not be re-elected until the passage of at least one (1) year from
ceasing to act as such, without prejudice to his continuance or re-election as a
member of the Committee.
4.
The members of the Audit Committee shall have adequate experience in order to
duly perform the duties corresponding to such Committee.
5.
The Audit Committee shall have at least the following powers and duties:
(a)
report to the shareholders at the General Shareholders’ Meeting regarding
questions raised therein by shareholders on matters within its area of
authority;
(b)
supervise the effectiveness of the internal control of the Company and the
corporate risk management; attempting the procedures of internal control to
(i) be in line with the Company’s needs and strategies and (ii) ensure the
effectiveness and efficiency of the operations, as well as the accuracy and
reliability of the financial information;
(c)
approve the recruitment policy of the statutory auditor;
(d)
review periodically the Company’s risk management policy and to propose
amendments and updates which are deemed as appropriate by the Board of
Directors;
(e)
together with the auditors, analyze significant weaknesses in the internal
control system detected during the audit process;
(f)
supervise the process of preparing and presenting regulated financial
information and establish the policies and practices which shall be used by
the Company in the preparation, dissemination and disclosure of its
financial information;
(g)
propose the appointment, re-election or replacement of the auditors, in
accordance with applicable legal provisions, to the Board of Directors for
submission to the General Shareholders’ Meeting.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
The Company shall not appoint individuals or companies that have received
revenues from the Company and/or from their economic affiliates, which
equal twenty five per cent (25%) or more of their total income for the
previous year as its auditor.
(h)
supervise the activities of the Internal Audit Area, which will be
functionally controlled by the Audit Committee, and the compliance with
the internal audit program, which shall take into account the corporate risks
and globally assess all the areas of the Company;
(i)
establish appropriate relations with the auditors to receive information
regarding matters that might risk the independence thereof, for examination
by the Audit Committee, and any other information related to the
development of the auditing procedure as well as such other
communications as are provided for in legislation regarding the auditing of
financial statements and in other legal provisions on auditing;
(j)
receive from the statutory auditors, annually, a confirmation regarding their
independence in relation with the Company, as well as the information
regarding the additional services of any nature provided by the statutory
auditors to the Company in accordance with the applicable law;
(k)
on an annual basis, prior to the auditor’s report, issue a report opining on the
independence of the auditor. This report must in any case pronounce on the
provision of additional services referred to in the preceding paragraph;
(l)
monitor whether the applicable legislation is being complied with;
(m) review the financial statements before submission for approval to the Board
of Director and the General Shareholders Meeting, ensuring that the interim
financial statements are drafted up in compliance with the same accounting
standards than the annual financial statements, and considering for this
purpose the possibility of auditing or subject to limited review such interim
financial statements;
6.
(n)
define mechanisms to consolidate the information of the issuer’s control
bodies to be submitted to the Board of Directors;
(o)
report to the Board of Directors, prior to the adoption by it of the
corresponding decision, about the creation or acquisition of shares in entities
with special purposes or domiciled in countries or territories that are
considered as tax heavens, as well as other similar transactions or operations
of an analogous nature;
(p)
issue the reports and carry out the actions that, within its scope of
competence, are conferred to it, additionally, in accordance with the
Company’s Internal Regulations or when requested by the Board of
Directors or its Chairman; and
(q)
the remaining functions assigned by the Board of Directors and
corresponding to the Committee by applicable legislation.
For the compliance of its purposes, the Audit Committee shall engage
independent legal counsels when it is be deemed necessary in accordance with the
Company’s general recruitment policies.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
7.
The Audit Committee shall meet as many times as it is called to meeting upon
resolution made by the Committee itself or by the chairman thereof, and at least
once (1) in each period of three (3) months. The Company’s statutory auditors
may assist to the Audit Committee’s meetings with voice but without vote.
8.
Meetings of the Audit Committee shall be validly held when at least one half of
its members are present in person or by proxy. The Committee shall adopt its
resolutions upon a simple majority vote of those present in person or by proxy. In
the event of a tie, the chairman of the Committee shall have a tie-breaking vote.
9.
The Audit Committee’s meetings shall be governed by the provisions of the
Regulations of the Board of Directors and the applicable rules regarding the Board
of Directors.
Article 44.- Nominating and Compensation Committee
1.
The Board of Directors shall create, on a permanent basis. a Nominating and
Compensation Committee, which shall be an internal informational and
consultative body without executive powers, and which shall have the
information, advisory, and proposal-making powers within its scope of action.
2.
The Nominating and Compensation Committee shall be composed of a minimum
of three (3) directors and a maximum of five (5), all of whom shall be external
directors, with independent directors having majority representation.
3.
The Board of Directors shall appoint the chairman of the Nominating and
Compensation Committee from among the independent Directors forming a part
thereof, as well as its secretary, who need not be a director.
4.
The Nominating and Compensation Committee shall have the powers set forth in
the Regulations thereof, and in any event the following powers to:
(a)
conduct a periodic review of the Director Compensation Policy and the
Senior Management Compensation Policy and propose the amendment and
update thereof to the Board of Directors;
(b)
report on and review the criteria that should be followed in composing the
Board of Directors and in selecting candidates, defining their duties and
necessary qualifications and assessing the time and dedication required for
the proper performance of their work.
(c)
supervise the procedure for selecting candidates to serve as members of the
Board of Directors and as senior managers of the Company;
(d)
assist the Board of Directors in the definition and implementation of
continuous programs of training and expansion of knowledge;
(e)
ensure that when new vacancies are filled or new directors are appointed,
the selection procedures are free from any implied bias that may entail any
kind of discrimination and, in particular, from any bias that may hinder the
selection of women directors;
(f)
bring proposals to the Board of Directors for the appointment of
independent directors (for interim appointment to fill a vacancy or for
submission of such proposals to a decision by the shareholders at the
General Shareholders’ Meeting), as well as proposals for the reelection or
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
removal of such directors by the shareholders at the General Shareholders’
Meeting and report on the proposals of removal of such directors issued by
the Board of Directors;
(g)
report on the proposals for appointment of the other directors (for the
interim appointment thereof to fill a vacancy or for the submission of such
proposals to a decision by the shareholders at the General Shareholders’
Meeting), as well as the proposals for re-election or removal of such
directors by the shareholders at the General Shareholders’ Meeting.
(h)
report on and make proposals of appointment to internal positions on the
Board of Directors and on proposals relating to the appointment of the
members that must make up each of the committees, verifying and
confirming compliance with the requirements of expertise and experience in
connection with the duties of the committee in question and, in particular,
those of the Audit Committee.
(i)
establish and supervise an annual program for continuous evaluation and
review of the qualifications, educational background and, if applicable,
independence, as well as of ongoing compliance with the requirements of
respectability, capability, expertise, competence, availability and
commitment to the position that must be satisfied in order to serve as
director and as a member of a committee, and propose to the Board of
Directors such measures as it deems advisable in this regard, while
collecting any information or documentation hat it deems necessary or
appropriate for such purposes;
(j)
examine or organize the succession of the Chairman of the Board of
Directors and of the Chief Executive Officer of the Company and, if
applicable, make proposals to the Board of Directors for such succession to
occur in an orderly and well-planned fashion;
(k)
propose to the Board of Directors the system and amount of annual director
compensation, as well as the individual compensation of executive directors
and other basic terms and conditions of their contracts, including any
severance payments or compensation that may be provided in the event of
removal, in any event pursuant to the provisions of the Internal Regulations;
(l)
report proposals of the Chairman of the Board of Directors or of the Chief
Executive Officer regarding the appointment or removal of the senior
managers;
(m) report on and submit to the Board of Directors the proposals made by the
Chairman of the Board of Directors or the Chief Executive Officer relating
to the structure of the compensation payable to senior managers and to the
basic terms and conditions of their contracts, including possible
compensation that may be provided in the event of removal;
(n)
report on incentive plans and pension supplements for the Company’s entire
payroll;
(o)
conduct a periodic review of the general compensation programs for the
Group’s payroll, evaluating the adequacy and results thereof;
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(p)
ensure compliance with the compensation programs of the Company and
report on the documents to be approved by the Board of Directors in
connection with the foregoing and on the relevant sections of the Annual
Corporate Governance Report of the Company;
(q)
become familiar with and report, if applicable, to the Board of Directors on
the selection, appointment and compensation of directors and senior
managers of the main companies within the Group and affiliates thereof,
without prejudice to respect the independence and uniqueness (upon the
terms set forth in applicable legal provision) of those that have corporate
governance rules that assign such powers to their own Nominating and
Compensation Committee or equivalent body;
(r)
issue such other reports or carry out such other activities as may fall within
its purview pursuant to the Company’s Corporate Governance System or as
may be requested by the Board of Directors or the Chairman thereof; and
(s)
all other functions assigned by the Board of Directors.
5.
In order to perform its duties, the Nominating and Compensation Committee may
hire external consultants when deemed appropriate, in accordance with the general
hiring policies of the Company.
6.
The Nominating and Compensation Committee shall meet as many times as the
Chairman thereof deems necessary to perform the duties entrusted thereto and, at
least, once (1) a year.
7.
A valid quorum for meetings of the Nominating and Compensation Committee
shall be established with the attendance, in person or by proxy, of a majority of its
members. Its resolutions shall be adopted upon simple majority vote of its present
or represented members. In the event of a tie, the Chairman of the Nominating and
Compensation Committee shall have the tie-breaking vote.
8.
The meetings of the Nominating and Compensation Committee shall be governed
by the corresponding rules set forth in the Regulations of the Board of Directors,
as well as by the rules of the Board of Directors that may be applicable.
Article 45.- Corporate Governance Committee
1.
The Board of Directors shall create, on a permanent basis, a Corporate
Governance Committee, an internal informational and consultative body, without
executive duties, and with informational, advisory and proposal-making powers
within its scope of activity.
2.
The Corporate Governance Committee shall be made up of a minimum of three
(3) and a maximum of five (5) directors, appointed by the Board of Directors upon
a proposal of the Nominating and Compensation Committee, from among the
external directors, the majority of which must be classified as independent.
3.
The Board of Directors shall designate a chairman of the Corporate Governance
Committee from among the independent directors forming a part thereof, as well
as its secretary, who need not to be a director.
4.
The Corporate Governance Committee shall have the powers set forth in the
Regulations thereof, and in any event shall have the following powers:
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(a)
periodically review the Company’s Internal Regulations, with special
emphasis on the Corporate Governance and Compliance Policies, and
propose to the Board of Directors, for approval or submission to the
shareholders at the General Shareholders’ Meeting, such amendments and
updates as contribute to its development and ongoing improvement;
(b)
report any amendment to the Company’s the Internal Regulations provided
that such amendment has not stemmed from its own initiative;
(c)
promote the Company’s corporate governance strategy;
(d)
supervise compliance with statutory requirements and with the rules and
regulations of the Company’s Internal Regulations;
(e)
ensure the diligent compliance with the rules contained in the Company’s
Internal Regulations and propose to the Board of Directors the amendments
which are deemed necessary in order to adjust the corporate governance
standards to the best existing practices;
(f)
know, promote, guide and supervise the Company’s actions relating to
corporate governance and sustainability and report thereon to the Board of
Directors and to the Executive Committee, as the case may be;
(g)
know, promote guide and supervise the Company’s actions relating to
corporate reputation and report thereon to the Board of Directors and to the
Executive Committee, as appropriate;
(h)
report on the Company’s Annual Corporate Governance Report and the
Company’s Corporate Governance Survey (Código País – Colombia),
should the Board of Directors decide voluntarily to be subject to it, prior to
the approval thereof, collecting for such purpose the reports of the Audit
Committee and the Nominating and Compensation Committee with respect
to the sections of such report and survey that are within its powers, and the
annual report on sustainability;
(i)
monitor the negotiations carried out by members of the Board of Directors
of the Company with shares issued by the Company;
(j)
assist the Board of Directors on the definition of the Company’s
communication schedule with shareholders, stakeholders and the market in
general, ensuring that they have complete, accurate and timely access to the
most relevant information on the Company;
(k)
review and previously report on all transactions to be entered into between
its significant shareholders or directors, managers and other persons related
to them and the Company which approval shall be made by the Board of
Directors or the Executive Committee, when appropriate. The Corporate
Governance Committee shall verify that such transactions are carried out on
an arms’ length basis and that do not violate the equality of treatment
between shareholders.
The Corporate Governance Committee shall develop a policy regarding the
review of related-party transactions which are referred to in this paragraph
and shall implement the review procedures as a standard part of its
operational procedures.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
In those related-party transactions involved in the day-to-day management
and with current o recurrent condition, such report shall be referred to the
generic authorization granted by the Board of Directors regarding the line of
operations and its execution conditions;
(l)
previously report on the Company’s renunciation of the exploitation or of
any business opportunity referred in the framework agreement to be entered
into by the Company and the listed company dominant of the group in
which the Company is included in line with the second recommendation of
the Unified Spanish Corporate Governance Code of May 22, 2006 (the
“Framework Agreement”);
(m) report, on a regular basis, on the compliance of the Framework Agreement;
(n)
issue a report on any amendments to the Framework Agreement;
(o)
issue recommendations and proposals on any matter within the scope of its
competences;
(p)
issue the relevant reports and carry out the actions that fall within its scope
of action, in accordance with the Company’s Internal Regulations or as
requested by the Board of Directors or its Chairman;
(q)
report on any related party transactions carried out between the Company
and its affiliates; and
(r)
all other functions assigned by the Board of Directors.
5.
In order to perform its duties, the Corporate Governance Committee may hire
external consultants when deemed appropriate, in accordance with the general
hiring policies of the Company.
6.
The Corporate Governance Committee shall meet as many times as the Chairman
thereof deems necessary to perform the duties entrusted thereto.
7.
A valid quorum for meetings of the Corporate Governance Committee shall be
established with the attendance, in person or by proxy, of a majority of its
members. Its resolutions shall be adopted upon simple majority vote of its present
or represented members. In the event of a tie, the Chairman of the Corporate
Governance Committee shall have the tie-breaking vote.
8.
The meetings of the Corporate Governance Committee shall be governed by the
corresponding rules set forth in the Regulations of the Board of Directors, as well
as by the rules of the Board of Directors that may be applicable.
Section III
Rules applicable to directors
Article 46.- General Duties of directors
1.
In the performance of his duties, a director shall act in good faith and with the
diligence of a prudent businessman and a faithful representative, and shall comply
with the duties prescribed by law and the Company’s Internal Regulation, acting
in furtherance of the corporate interests.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
2.
The Regulations of the Board of Directors shall elaborate upon the specific
obligations of directors stemming from the duties of confidentiality, noncompetition and faithfulness, with special focus on conflict of interest situations
and the rights of the directors on such circumstances, including the duties of
information and abstention.
Article 47.- Terms of office and filling of vacancies
1.
The directors shall serve in their position for a term of three (3) years, so long as
the shareholders acting at the General Shareholders’ Meeting do not resolve to
remove them and they do not resign from their position. Directors may be reelected for successive periods of three (3) years.
2.
Vacancies which occur may, pursuant to Law, be filled by the Board of Directors
on an interim basis until the next General Shareholders’ Meeting, whereat the
shareholders shall confirm the appointments or elect the persons who should
replace directors which are not ratified, or it shall withdraw the vacant positions.
Article 48.- Directors’ compensation
1.
The directors shall be entitled to receive compensation for performing the duties
entrusted to them by reason of their appointment as mere members of the Board of
Directors.
2.
The directors, as member of the Board of Directors, shall be entitled to receive a
compensation composed by (i) a fixed amount; and (ii) attendance fees for the
meetings of the Board of Directors and the committees existing at each moment.
3.
The executive directors shall be entitled, furthermore, to receive a compensation
composed by (i) a fixed amount, and (ii) a variable amount, correlated with a
performance indicator of the director or the Company, (iii) benefits, which will
include the appropriate pension and insurance plans, and (iv) a compensation in
the event of separation or any termination of the legal relation entered into with
the Company not attributable to a director’s breach.
4.
The overall amount of the compensations which can be satisfied by the Company
to its directors resulting from the concepts foreseen in the preceding paragraphs,
shall not exceed the amount established, for that purpose, by the General
Shareholders’ Meeting, that may also lay the foundations for its periodic review
and updating. The aforesaid amount, so updated, if applicable, shall apply as long
as it is not amended by a new resolution of the General Shareholders’ Meeting.
The exact amount to be paid within the limit fixed by the General Shareholders’
Meeting, its distribution among directors and the criteria to be taken into account
for these purposes, the frequency of its receipt, as well as every point not provided
for by the General Shareholders’ Meeting, shall be within the competence of the
Board of Directors upon a proposal from the Nominating and Compensation
Committee.
Section IV
Annual Corporate Governance Report and Website
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
Article 49.- Annual Corporate Governance Report
1.
The Board of Directors shall, on an annual basis, annually approve a corporate
governance report and the Corporate Governance Survey (Código País –
Colombia), should it voluntarily decide to be subject to it, for the Company which
shall include all specifications provided for by Law and any other specifications
which the Board of Directors deems appropriate to include therein.
2.
The Annual Corporate Governance Report and, if applicable, the Corporate
Governance Survey shall be included in a separate section within the management
report, and shall therefore be approved simultaneously therewith and shall be
made available to the shareholders together with other documents relating to the
General Shareholders’ Meeting.
Article 50.- Corporate website
The Company shall maintain a corporate website to attend to the exercise by the
shareholders of the right to receive information, which shall include the documents and
information provided for by Law and the Company’s Internal Regulation and the other
information that it is deemed appropriate to make available to the shareholders and
investors through this medium.
TITLE III
ANNUAL FINANCIAL STATEMENTS, DISTRIBUTION OF PROFITS,
DISSOLUTION AND LIQUIDATION
CHAPTER I
FINANCIAL STATEMENTS
Article 51.- Fiscal year and drawing-up of financial statements
1.
The fiscal year shall commence on January 1 of each year and shall end on
December 31. The financial statements and the management report shall be
prepared in compliance with the structure and in accordance with the accounting
principles provided for under the current applicable provisions.
2.
Within the first three (3) months of the year, the Board of Directors shall draw up
the financial statements, the management report and the proposed allocation of
profits or losses and, if applicable, the consolidated financial statements and
management report. The financial statements and the management report must be
signed by all the directors. If the signature of any of them is missing, an indication
of such circumstance shall be inserted into each of the documents where it is so
missing, with express reference to the reason therefor.
The language of the financial statements and the management report shall be
Spanish. An English version of such documents shall be drafted for informative
purposes only. In the event of any inconsistency, the Spanish version shall prevail
over the English version.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
Article 52.- Auditors
1.
The financial statements and the management report of the Company, as well as
the consolidated financial statements and management report, must be reviewed
by external auditors.
2.
The auditors shall be appointed by the shareholders acting at a General
Shareholders’ Meeting prior to the end of the fiscal year to be audited, for a fixed
initial period that shall not be less than three (3) years nor greater than nine (9), to
be counted from the date of commencement of the first fiscal year to be audited;
the auditors may be re-elected by the General Shareholders’ Meeting upon the
terms provided for by Law, once the initial period has expired.
3.
The auditors’ remuneration shall be established in accordance with the provisions
of the Spanish auditing regulations.
Article 53.- Right to request a specialized audit
1.
Shareholders representing at least ten per cent (10%) of the Company’s share
capital, or their representatives, may request to experts, at their own expense and
liability, the implementation of specialized reports on concrete issues related to
the Company other than the audit of the financial statements, and called, for these
purposes, Specialized Audits.
The acquisition and sale’s market prices of the products marketed by the
Company, the remuneration of the Company’s directors, or any other type of
information deemed as privileged in accordance with the applicable legislation or
because of corporate interest demands, shall be automatically excluded from the
specialized audit’s objective scope.
2.
In order to exercise this right, the minority shareholders shall submit a motivated
request, in writing, addressed to the Company’s Board of Directors.
The request shall be reasoned on the grounds of anomalies or serious risks in
certain Company’s activities or the acting of one or more of its directors which
may endanger their investment and shall be addressed to the Board of Directors in
the next ordinary meeting.
3.
The Board of Directors shall evaluate the reasonability of the request and if it is
accepted, shall delegate to the Audit Committee the conformation of a committee
composed by experts with experience on the specific matter subject to review.
This Committee will elaborate an analysis of the situation for which this
Specialized Audit was requested and will issue a document indicating the
analyzed situation, the involved aspects, the risks and its likelihood of occurrence,
as accurate as possible, and the correction, reorganization and improvement’s
mechanisms which can be implemented.
4.
The Specialized Audit’s results shall be communicated to the Audit Committee
and forwarded to the Board of Directors, which will be able to request the
clarifications that it deems convenient. If a possible infringement of the
regulations in force is detected, the competent authorities shall be notified.
5.
The Specialized Audits shall not be able to replace or infringe the autonomy of
Company’s directors, neither affect their legal and statutory duties.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
6.
The cost associated to the engagement of the experts which conform the
committee, and the expenses related with the elaboration of the Specialized Audit,
shall be divided on a pro-rata basis between the shareholders who requested the
Specialized Audit. The Specialized Audit’s performance may be conditioned to
the payment or adequate underwriting of the cost associated to the aforesaid work.
7.
The number of Specialized Audits which may be carried out along a fiscal year
shall be limited to three (3).
8.
The experts who will carry out that Specialized Audit, shall conclude a
confidentiality agreement with the Company, whereby they recognize that the
information accessed by them cannot be disclosed to third parties for any reason
or use with speculative purposes. The working papers shall be maintained in
confidence.
9.
During the Specialized Audit, confidential or privileged information or
information regarding third parties shall not be disclosed and Company’s rights
and obligations shall not be violated and its information (including its contracts)
shall not be published when this can trigger a competitive disadvantage. These
restrictions include the ban on disclosing information about industrial sectors,
intellectual property and, in general, all those documents which are deemed
privileged or confidential or third parties’ property in accordance with the
applicable legislation.
Article 54.- Approval of financial statements and allocation of profits or losses
1.
The annual financial statements shall be submitted to the shareholders for
approval at the General Shareholders’ Meeting. Once the annual financial
statements have been approved, the shareholders at the General Shareholders’
Meeting shall resolve on the allocation of the results for the fiscal year.
2.
Once such payments as are provided for by these By-Laws or by Law have been
made, dividends may only be distributed with a charge against the profits for the
fiscal year or against unappropriated reserves, if the book value of net assets is not
less than the share capital, or does not become so as a result of the distribution.
3.
If the General Shareholders’ Meeting resolves to distribute dividends, they shall
establish the time and form of payment thereof. The establishment of these
standards and of any others that may be required or appropriate to carry out the
resolution may be delegated to the Board of Directors.
4.
The shareholders may resolve at the General Shareholders’ Meeting that the
dividend be paid totally or partially in kind, provided that the assets or securities
to be distributed are homogeneous, they are admitted to trading on an official
exchange at the time the resolution is made effective, or the Company duly
guarantees the liquidity thereof within a maximum period of one (1) year, and
they are not distributed for a lesser value than the value set forth for them in the
balance sheet of the Company.
Article 55.- Filing of the financial statements
The Board of Directors shall file the financial statements and the management report of
the Company, as well as the consolidated financial statements and management report,
together with the corresponding reports prepared by the auditors and all other
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
mandatory documents, in such manner and within such periods as are prescribed by
Law.
CHAPTER II
DISSOLUTION AND LIQUIDATION OF THE COMPANY
Article 56.- Grounds for dissolution
The Company shall be dissolved upon the occurrence of any of the events set forth in
the Law.
Article 57.- Liquidation of the Company
1.
From the moment the Company declares itself to be in liquidation, the Board of
Directors shall cease to hold office and the directors shall become liquidators of
the Company, except when the General Shareholder’s Meeting appoints other
liquidators different from the directors. They shall make up a collective body
which must be composed of an odd number of members. If necessary for such
purpose, the director having the least length of service since appointment shall
cease to hold office.
2.
If the Company is dissolved, each one of the liquidators shall joint and severally
represent the Company.
Article 58.- Supervening assets and liabilities
1.
If corporate property appears after the entries relating to the Company have been
cancelled, the liquidators shall assign to the former shareholders the additional
share to which they may be entitled, for which purpose such property shall be first
converted into cash where necessary.
After the passage of six (6) months from the date on which the liquidators were
required to comply with the provisions of the foregoing, without the former
shareholders having been assigned the additional share, or in the absence of
liquidators, any interested party may file a petition with the Court of First Instance
of the Company’s last registered office for the appointment of a person to replace
the liquidators in the performance of their duties.
2.
The former shareholders shall be joint and severally liable for all unpaid corporate
liabilities up to the amount of what they may have received as their share in
liquidation, without prejudice to the liability of the liquidators in the event of
fraud or gross negligence.
3.
In order to comply with formal requirements relating to legal acts performed prior
to the cancellation of the entries of the Company, or whenever necessary, the
former liquidators may formalize legal acts in the name of the defunct Company
following its cancellation in the registry. In the absence of liquidators, any
interested party may file a petition for formalization by the Court of First Instance
of the place where he last registered office of the Company was located.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
TITLE IV
FINAL PROVISIONS
Sole final provision. Jurisdiction for the resolution of disputes
In connection with all litigious disputes that may arise between the Company and the
shareholders, between the shareholders and the directors and between the directors and
the Company with regard to the corporate affairs, the Company, the shareholders and
the directors waive the right to resort to their own jurisdiction and expressly submit to
the jurisdiction of the courts of the place where the Company’s registered office is
located, except in those cases in which another jurisdiction is imposed by Law.
TITLE V
TRANSITORY PROVISION
Sole transitory provision. Non application of statutory provisions prior to the
listing of the shares on the Colombian Stock Exchange
As long as the shares of the Company are not listed on the Colombian Stock Exchange,
the following statutory provisions which, being acceptable under the Spanish
Companies Law for the companies whose shares are listed on a secondary official stock
exchange, infringe the mandatory rules for the remaining companies which are not in
that case, shall not be applicable:
(a)
The duty to disclose the shareholders’ agreements established in article 9 of
the By-Laws.
(b)
The minimum period of time to exercise the pre-emptive rights shall not be
of fifteen (15) days, as established in article 12.1 of the By-Laws, but of
thirty (30) days.
(c)
The authority of the General Shareholders’ Meeting to delegate on the
Board of Directors the exclusion of the pre-emptive rights on capital
increases and/or issue of convertible and/or exchangeable debentures as
established in articles 12.2, 15.2 and 18.1.(e) of the By-Laws.
(d)
The obligation to publish the call to the General Shareholders’ Meetings of
the Company in the Official Bulletin of the Commercial Registry or in one
of the more widely circulated newspapers in Spain, in the Colombia
Financial Superitendency website or the body that may exercise its
functions in the future and in the Company’s corporate website established
in article 20.1 of the By-Laws and the obligation to maintain it accessible on
an uninterrupted basis until at least the holding of the General Shareholders’
Meeting. Instead, the call for General Shareholders’ Meetings shall be
published in the Official Bulletin of the Commercial Registry and in one of
the more widely circulated newspapers in the province of Madrid or in the
Company’s corporate website if it has been created, registered with the
Madrid Commercial Registry and published as set forth in the applicable
legal provisions.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails
(e)
The impossibility for the shareholders to request a complement to the
General Shareholders’ Meetings established in article 20.5 of the By-Laws
for the Extraordinary General Shareholders’ Meetings,
(f)
The right of the shareholders to request information or clarifications or ask
written questions regarding information accessible to the public which
would have been provided by the Company to the Colombian Financial
Superintendency since the holding of the last General Shareholders’
Meeting and in connection with the auditor’s report set forth in article 21.1
of the By-Laws.
(g)
The obligation to approve an annual Corporate Governance Report referred
in article 49 of the By-Laws and the references thereto made in articles
34.2.C.(c), 44.4.(p) and 45.4.(h) of the By-Laws.
Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails