Shareholders rights

(Excerpt from the Electrica’s Articles of Association, approved by GMS on 21 October 2016)

 

Art. 8 Shares

 

(1) The rights and obligations deriving from the shares owned by the Romanian State are exercised by the entities nominated according to the legal provisions.

(2) The shares of the Company are nominative shares, issued in a dematerialized form, freely transferable and negotiable and fully paid.

(3) The shares may be converted according to the terms decided by the extraordinary general meeting of shareholders, in compliance with the legal provisions.

(4) The shares’ record shall be kept by Depozitarul Central S.A., or by any other competent entity according to the law which, upon the request of any shareholder, will issue a shareholder certificate.

(5) The Company’s shareholders may create mortgages over their shares and they may encumber them by usufruct rights according to the law.

(6) Romanian or foreign individuals or legal entities may hold shares issued by the Company, with the observance of the Romanian law.

(7) The shares issued in dematerialized form may be traded on a regulated market or on an alternative trading system, according to capital market legislation.

 

Art. 9 The depositary certificates

 

(1) Depositary certificates having as underlying shares the shares issued by the Company may be issued by other entity, different from the Company.

(2) Depositary certificates are securities which grant to the owner rights and obligations related to underlying shares based on which the depositary certificates were issued.

(3) The depositary certificates give the rights to obtain, by way of conversion, shares within the Company. The conversion shall be made in accordance with the provisions applicable to the matter.

(4) In addition and without prejudice to the above provisions, the right of the owners of the depositary certificates to own, in their name, shares of the Company is hereby recognised.

 

Art. 10 Bonds

 

(1) The Company may issue bonds according to the law.

(2) In case of bond issuances, the extraordinary general meeting of shareholders shall decide on the main terms and conditions of the bonds, including but not limited to: the maximum amount of the issuance, offer period, territoriality of the offer, type of issued bonds, the possibility of admission to trading on a regulated market or on an alternative trading system. The Board of Directors shall approve the terms and conditions of each issuance, such as: the nominal value, interest rate, maturity, terms of an early redemption or repayment of the bonds, other features of the bonds, as well as all documentation related to the bond placement.

 

Art. 11 Rights and obligations deriving from the shares

 

(1) Each share subscribed and fully paid in by the shareholders, in accordance with the law, grants the shareholders (i) the right to one vote in the general meeting of the shareholders, (ii) the right to elect the management bodies, (iii) the right to participate to the profit distribution, as well as (iv) other rights provided by these Articles of Association and by the legal provisions.

(2) The acquisition of the property right over a share by a person, directly or indirectly, has as effect the obtainment of the capacity of shareholder of the Company together with all rights and obligations deriving from this capacity, in accordance with the law and these Articles of Association.

(3) The rights and obligations deriving from the shares are transferred to the new acquirers together with the shares.

(4) When a nominative share is owned by several persons, the transfer shall be registered only if they appoint a sole representative for exercising the rights derived from the shares.

(5) The obligations of the Company are secured by its social patrimony, and the liability of the shareholders is limited to the subscribed share capital.

(6) The shareholder that has, in a certain operation, either personally or as representative of another person, an interest contrary to the interest of the Company, must refrain from deliberations regarding the respective operation.

 

Art. 12 The exercise of the rights by the holders of the depositary certificates

 

(1) The rights and obligations related to the underlying shares based on which the depositary certificates were issued are exercised by the holders of the depositary certificates, proportionally to their holdings of depositary certificates and taking into account the conversion rate between underlying shares and the depositary certificates.

(2) The issuer of the depositary certificates in the name of whom the underlying shares are registered, is the shareholder within the meaning and for the application of the Regulation no. 6/2009 regarding the exercise of certain rights of the shareholders in the general meetings of the companies. In this sense, the issuer of the depositary certificates is fully responsible for informing the holders of the depositary certificates in a correct, complete and timely manner, observing the provisions of the issuance documents of the depositary certificates, about the documents and the informative materials related to a general meeting of shareholders, as made available by the Company to the shareholders.

(3) In order to exercise its rights and obligations related to a general meeting of shareholders, a holder of depositary certificates will send to the entity where it has opened its account for depositary certificates the voting instructions for the topics on the agenda of the general meeting of the shareholders, so that the respective information is sent to the issuer of the depositary certificates.

(4) The issuer of the depositary certificates votes in the general meeting of the shareholders of the Company in accordance with and within the limits of the instructions of the holders of the depositary certificate which have this quality at the reference date.

(5) The issuer of the depositary certificates may cast different votes for certain underlying shares in the general meeting of the shareholders than those expressed for other underlying shares.

(6) The issuer of the depositary certificates is fully responsible for taking all necessary measures, so that the entity which keeps the records of the holders of the depositary certificates, the intermediaries involved in the custody services for holders of the depositary certificates on the market where the depositary certificates are traded and/or any other entities involved in recording the holders of the depositary certificates, to send the voting instructions of the holders of the depositary certificates related to the topics on the agenda of the general meeting of the shareholders.

(7) Any reference date for the identification of the shareholders which have the right to take part and to vote in the general meeting of the shareholders of the Company and any registration date for the identification of the shareholders which have rights deriving from its shares, as well as any other similar date set by the Company related to any corporate events of the Company will be established in accordance with the applicable legal provisions and with a prior notice sent with at least 15 free calendar days (in Romanian, zile calendaristice libere), to the issuer of the depositary certificates, in the name of which the underlying shares are registered based on which the depositary certificates mentioned above are issued. The reference date will be prior with at least 15 working days to the deadline for submitting the power of attorney related to the vote.

 

Art. 13 Transfer of shares

 

(1) The shares are indivisible. The Company shall recognize a sole owner per each share, subject to the provisions of article 11 paragraph (4) above.

(2) The partial or total transfer of shares between the shareholders or to third parties shall be carried out according to the terms and procedure provided by the applicable legal provisions, including the capital markets legislation.

 

 

CHAPTER 4 THE GENERAL MEETING OF THE SHAREHOLDERS

 

Art. 14 Duties of the general meeting of the shareholders

 

(1) The general meeting of the shareholders is the governing body of the Company.

(2) The general meetings of the shareholders are ordinary and extraordinary.

 

(3) The ordinary general meeting of the shareholders shall have the following main duties:

 

a. to appoint and revoke the members of the Board and establish the level of their remuneration and other rights according to the legal provisions;
b. to establish the income and expenses budget, to set out the activity schedule;
c. to establish the income and expenses budget consolidated at the group level;
d. to discuss, approve or amend the annual financial statements according to the reports submitted by the Board and the financial auditors;
e. to approve the profit distribution according to the law and to establish the dividend;
f. to decide on the management activity of the directors and on the discharge of liability, in accordance with the law;
g. to decide to file legal actions against the directors, managers as well as financial auditors for damages they caused to the Company by breaching their obligations towards the Company;
h. to decide on mortgaging or leasing or closing of one or more units of the company;
i. to appoint and revokes the financial auditor and to set the minimum term of the financial audit contract; and
j. to carry out any other duties set out by the law.

 

(4) The extraordinary general meeting of the shareholders shall decide on the following:

 

a. withdrawal of the preference right of shareholders upon subscription of new shares issued by the Company;
b. contracting any type of loans, debts or obligations representing a loan, as well as creating real or personal security related to these loans, in each case in accordance with the competence limits provided in Annex 1 to these Articles of Association;
c. operations regarding the acquisition, alienation, exchange or creation of encumbrances over fixed assets of the Company whose value exceeds, individually or cumulated, during any financial year, 20% of the total fixed assets, less receivables, and leases of tangible assets for periods longer than one year, whose individual or cumulated value towards the same co-contractor or involved persons or with whom it acts in concert exceeds 20% of the fixed assets value, less receivables at the time of entering in the relevant operation, as well as joint ventures in excess of the same value and with a duration of over one year;
d. approving investment projects in which the Company will be involved in accordance with the competence limits provided in Annex 1 to these Articles of Association, other than the ones provided in the annual investment plan of the Company;
e. approving the issuance and admission to trading on a regulated market or on an alternative trading system of shares, depositary certificates , allotment rights or other similar financial instruments; approving the competencies delegated to the Board;
f. changing the legal form;
g. relocation of the registered office;
h. changing the main or secondary business objects;
i. increasing the share capital, as well as decreasing or the replenishment of the share capital by issuing new shares, according to the law;
j. the merger and the spin-off;
k. the dissolution of the Company;
l. carrying out any bond issuance, as per the provisions of art. 10 of the Articles of Association, or conversion of a category of bonds in a different category or in shares;
m. approving the conversion of preferential and nominative shares from one category to another, according to the law;
n. any other amendment to the Articles of Association;
o. the establishment or dissolution of secondary offices: branches, agencies, representative offices, working points or other similar units without legal status, according to the legal provisions;
p. participation in the establishment of new legal persons;
q. approval of the eligibility and independence criteria with respect to the Board members;
r. approval of the corporate governance strategy of the Company, including the corporate governance action plan;
s. donations within the limits of the competence provided in Appendix 1 to these Articles of Association; and
t. approves granting of intragroup loans with a value of more than EUR 50 Million per operation;
u. any other decision that requires the approval of the extraordinary general meeting of the shareholders.

 

Art. 15 Convening the general meeting of the shareholders

 

(1) The general meeting of the shareholders is convened by the Board according to the legal provisions.

(2) The Board shall promptly convene the general meeting of the shareholders upon the request of shareholders representing, individually or cumulatively, at least 5% of the share capital. In this case, the general meeting of the shareholders shall be convened within no more than 30 days and shall gather within no more than 60 days from the date of receiving the request.

(3) In case the Board does not convene the general meeting of the shareholders according to paragraph (2) above, the shareholders that requested the convening may claim in court the authorisation to convene the general meeting of the shareholders, as well as (i) the approval of the agenda, (ii) the establishment of the reference date, of the date and place for the gathering of the general meeting of the shareholders and (iii) the appointment of the shareholder to preside the meeting.

(4) Shareholders individually or cumulatively representing at least 5% of the share capital are entitled to insert new topics on the agenda of the general meeting of the shareholders and to present draft decisions for the topics inserted or proposed to be inserted on the agenda of the general meeting of the shareholders. This right may be exercised only in writing (including by electronic means) and within a 15-day term since the publication of the convening notice.

(5) The ordinary general meetings of shareholders take place at least once a year, within maximum 4 (four) months from the end of the financial year, in order to analyse the balance sheet and profit and loss account for the previous year and to analyse the annual report of the Board;

(6) The extraordinary general meetings of shareholders shall be convened as many times as necessary, according to the legal provisions in force and to the provisions of these Articles of Association.

(7) The general meeting of the shareholders shall be convened at least 30 days before the scheduled date, by registered letter, by electronic means or other means provided by law. The 30-day term is not applicable to the second and third convening of the general meeting of the shareholders caused by insufficient quorum with the respect of the following conditions: (i) the provisions regarding convening were respected on the first convening, (ii) no new points were added on the agenda and (iii) at least 10 days must pass between the final convening and the date of the general meeting of the shareholders.

(8) The convening notice shall contain at least the name of the Company, the place, date and hour of the general meeting of the shareholders, the reference date and the agenda, which should explicitly mention all the matters to be debated and a clear and precise description of the procedures that the shareholders must meet in order to participate and vote within the general meeting of the shareholders, and all mandatory elements provided by the applicable law.

(9) When the agenda contains proposals for amending the Articles of Association, the convening notice must contain the full text of the proposed amendments.

(10) The general meeting of the shareholders gathers at the headquarters of the Company or in any other place indicated in the convening notice.

 

Art. 16 Organization of the general meeting of the shareholders

 

(1) For the validity of the deliberations of the ordinary general meeting of the shareholders gathered at the first call, shareholders representing at least one quarter (1/4) of the total number of voting rights must attend the meeting. The ordinary general meeting of the shareholders will adopt decisions with the majority of the votes casted by the shareholders present or validly represented in the meeting.

(2) In case the quorum provided in point (1) is not duly met, at the second call, the ordinary general meeting of the shareholders may decide on the items on the agenda of the first meeting irrespective of the quorum, taking decisions with the majority of the votes casted by the shareholders present or validly represented in the meeting.

(3) For the valid deliberations of the extraordinary general meeting of the shareholders, the following are necessary:

a. at the first convening, the presence of shareholders representing one quarter (1/4) of the total number of voting rights, and decisions must be taken with the majority of the votes held by the shareholders present or validly represented in the meeting, except for (A) the attributions provided in art. 14 (4), letters (d), (n), (q), (r) and (s), in which case the decisions will be taken with the favourable vote of at least 55% of the total number of voting rights, and (B) the attributions provided in art. 14 (4) (f) (h) in what concerns the main business object, (i), (j) and (k), in which case the decision will be adopted with a majority of at least two thirds (2/3) of the voting rights held by the shareholders present or validly represented in the meeting, but not less than 55% of the total voting rights. In case the quorum provided at this point (3) (a) of the current article is not duly met, the meeting shall be adjourned to another day at a time and place established in accordance with the legal provisions;

b. at the second and subsequent convening, the extraordinary general meeting of the shareholders can deliberate with respect to the items on the agenda of the first meeting in the presence of the shareholders holding one fifth (1/5) of the total number of voting rights and can adopt decisions with the majority of the votes held by the shareholders present or validly represented in the meeting, except for the (A) attributes provided in art. 14 (4) letters (d), (n), (q), (r) and (s), situation in which the decisions shall be taken with the favourable vote of at least 55% of the total number of voting rights and (B) attributes provided in art. 14 (4) points (f), (h) regarding the main business object, (i), (j) and (k), in which case the decision will be adopted with at least two thirds (2/3) of the voting rights held by shareholders present or validly represented in the meeting, but not less than 55% of the total voting rights.

(4) By way of exception from the provisions mentioned under paragraph (3) above, in case of any decisions regarding the withdrawal of the preference right of shareholders to subscribe for new shares in a share capital increase, the general meeting of the shareholders must vote with the observance of the relevant legal provisions regarding the quorum of the general meeting of the shareholders and the voting majority, as provided in the capital markets legislation.

(5) To calculate the quorum in the general meeting of the shareholders only the underlying shares for which the issuer of the depositary certificates votes in the general meeting of the shareholders, including the option for abstention vote, in accordance with the instructions received from the holders of the depositary certificates, will be taken into account. The issuer of the depositary certificates will communicate to the Company, at the moment at the calculation of the quorum in the general meeting of the shareholders, the percent of the voting rights related to the underlying shares for which it will express its vote in the general meeting of the shareholders.

(6) On the day and at the hour mentioned in the convening notice, the general meeting of the shareholders shall be opened by the Chairman or, in his/her absence, by a director empowered by the Chairman for this purpose. In case the minimum quorum for the first summoning is not met within 30 minutes after the time indicated in the published convening notice, the meeting will gather on the date of the second summoning at the hour, location and having the agenda indicated in the published convening notice.

(7) Out of the present shareholders, the general meeting of the shareholders shall elect a secretary who shall check the list of presence of the shareholders, indicating the share capital represented by each. The Chairman may appoint, among the Company’s employees, one or more technical secretaries to carry out the related duties according to the legal provisions. The minutes ascertaining the number of the shares submitted and the fulfilment of all formalities required by the law and by the Articles of Association to hold the general meeting of the shareholders will be drafted by the technical secretary.

(8) The minutes shall be signed by the secretary and by the Chairman and ascertains the fulfilment of the convening formalities, the formalities for applying the cumulative voting method (if the case), the date and place of the general meeting of the shareholders, the number of present shareholders, the number of shares, the number of votes that were expressed and their allocation, the summary of the debates, the decisions taken and, at the request of the shareholders, the statements they have made during the meeting.

(9) The minutes of the general meetings of shareholders shall be kept in a general meeting of shareholders register.

(10) The convening documents, the shareholder attendance list as well as, as the case may be, other documents provided by the law, must be attached to each minutes.

(11) The access of shareholders or their proxies entitled to participate at the general meeting of the shareholders shall be permitted by providing evidence of their identity, by the methods provided by law. The Board may refuse access to any meeting to any person who fails to provide such evidence of identity.

(12) The Chairman shall take such measures or give directions as it might be necessary to promote the orderly conduct of the meeting as laid down in the convening notice of the meeting, including adjourning the meeting at any time if it is necessary to secure the proper and orderly conduct of the meeting, provided that the present/represented shareholders confirm/approve this decision. The Chairman’s decision on matters of procedure or arising incidentally from the meeting shall be final as shall be his determination as to whether any matter is of such a nature, provided that the present/represented shareholders confirm/approve this decision.

(13) Shareholders’ participation to the general meeting of the shareholders is made in person or by representative according to the legal provisions. Shareholders may also be represented by other persons than shareholders. The special powers of attorney and the general power of attorney, upon its first use, will be submitted at the Company’s headquarters or will be transmitted to the Company to be registered at the Company’s registration office with at least 2 (two) working days prior to the date of the meeting at its first convening.

(14) Shareholders may appoint or revoke their representatives including by electronic means, according to the applicable legal provisions.

(15) In the situation in which the Company’s management has the obligation, in accordance with the law or these Articles of Association, to inform the shareholders about certain measures or actions undertaken, such information is included on the agenda of the general meeting of the shareholders and is not subject to the shareholders’ vote.

(16) Each shareholder may address questions in writing to the Board regarding the Company’s activity, before the date of the general meeting of the shareholders. The Board shall respond during the meeting. A response is considered to be given if the relevant information is available on Company’s website, under the “Frequent questions” section. The Company may formulate a general response to questions having the same content.

 

Art. 17 Exercising the voting right at the general meeting of the shareholders

 

(1) The decisions of the general meeting of the shareholders are taken by open vote.

(2) Decisions may be taken according to the terms and majority provided by law and these Articles of Association for ordinary or extraordinary general meetings of shareholders.

(3) Shareholders may vote by correspondence before the general meeting of the shareholders according to the procedure provided to the shareholders in the convening notice.

(4) The secret vote is mandatory when appointing or revoking the members of the Board, when appointing, revoking or dismissing the internal auditors and when making decisions regarding the liability of the members of the Company’s management and control bodies.

(5) In order to be enforceable against third parties, the decisions of the general meeting of the shareholders shall be submitted to the Trade Register within 15 days, in order to be mentioned in the excerpt in the register and published in the Romanian Official Gazette. The vote results shall be published on the Company’s webpage within maximum 15 days from the date of the general meeting. Upon the request of the general meeting of the shareholders, other documents may also be published on the webpage, according to the legal provisions.

(6) The conditions regarding the publicity of the general meeting of the shareholders apply correspondingly to the decisions of the Board in the matters delegated by the general meeting of the shareholders.

(7) The decisions taken by the general meetings of shareholders according to the law and these Articles of Association are mandatory even for the shareholders who were not present at the meeting or who voted against.

(8) The shareholders who do not agree with the decisions taken by the general meetings of shareholders regarding the change of the main business object, relocation of the registered office abroad, changing the Company’s legal form, the merger or spin-off of the Company, have the right to withdraw from the Company and to request the Company to purchase their shares, within 30 days from the publication of the decision of the general meeting of the shareholders in the Official Gazette, except for the decision related to merger and spin-off, in which case the term starts as of the date the decision was taken by the general meeting of the shareholders.