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Ticker Iberdrola

IBEX 35 | IBERDROLA
DATE:  07/07/2015 TIME |  17:38h 5,808€ /-1,16%
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IBERDROLA IR
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Notice of Call to the 2011 General Shareholders' Meeting

In compliance with the provisions of the Companies Law, the By-Laws and the Internal Regulations, the Board of Directors of Iberdrola, S.A. has resolved to call its shareholders to a

General Shareholders’ Meeting,

to be held

in Bilbao, at Palacio Euskalduna (Avenida Abandoibarra, número 4), on May 27, 2011, at 11:30 a.m., on first call

or, in the event that the required quorum is not met, the next day, May 28, 2011, at the same place and time, in order to deliberate and decide upon the matters included in the following:

AGENDA

ITEMS RELATING TO THE ANNUAL FINANCIAL STATEMENTS, THE MANAGEMENT OF THE COMPANY AND THE RE-ELECTION OF THE COMPANY’S AUDITOR:

One.- Approval of the individual [PDF] annual financial statements of the Company and of the annual financial statements consolidated [PDF] with those of its subsidiaries for the fiscal year ended on December 31, 2010. [See Proposal [PDF]]

Two.- Approval of the individual [PDF] management report of the Company and of the consolidated [PDF] management report of the Company and its subsidiaries for the fiscal year ended on December 31, 2010. [See Proposal [PDF]]

Three.- Approval of the management and activities of the Board of Directors during the fiscal year ended on December 31, 2010 and the strategic guidelines and foundations for the current fiscal year (2011). [See Proposal [PDF]]

Four.- Re-election of the auditor of the Company and of its consolidated group for fiscal year 2011. [See Proposal [PDF]]

ITEMS RELATING TO SHAREHOLDER COMPENSATION:

Five.- Approval of the proposal for the allocation of profits/losses and the distribution of dividends for the fiscal year ended on December 31, 2010. [See Proposal [PDF]]

Six.- Approval of an increase in share capital by means of a scrip issue at a maximum reference market value of one thousand nine hundred (1,909) million euros for the free-of-charge allocation of new shares to the shareholders of the Company. Offer to the shareholders for the acquisition of their free-of-charge allocation rights at a guaranteed price. Express provision for the possibility of an incomplete allocation. Application for admission of the shares issued to listing on the Bilbao, Madrid, Barcelona and Valencia Stock Exchanges, through the Automated Quotation System (Sistema de Interconexión Bursátil). Possible change in the maximum reference market value of the capital increase and of each installment thereof, all based on the capital increase subject to approval of the shareholders at this General Shareholders’ Meeting under item fifteen on the agenda thereof. Delegation of powers to the Board of Directors, with the express power of substitution, including the power to implement the capital increase by means of a scrip issue on one or, at most, two occasions (and the power to determine the maximum amount of the increase and each installment thereof based on such conditional capital increase and within the limits established in this resolution and the power to amend Article 5 of the By-Laws in each of the installments. [See Proposal [PDF]]

ITEMS RELATING TO THE COMPENSATION OF THE CHIEF EXECUTIVE OFFICER, SENIOR MANAGERS AND OTHER MANAGERS THROUGH THE DELIVERY OF SHARES OF THE COMPANY AND EXPRESS AUTHORIZATIONS AND DELEGATIONS REQUESTED FOR THE BOARD OF DIRECTORS:

Seven.- Approval of a Strategic Bonus intended for executive directors, senior managers and other management personnel tied to the achievement of strategic goals for the 2011-2013 period, and payment by means of the delivery of the Company's shares. Delegation to the Board of Directors of the power to implement, develop, formalize and execute such Strategic Bonus. [See Proposal [PDF]]

Eight.- Authorization to the Board of Directors, with the express power of substitution, for a term of five (5) years, to increase the share capital pursuant to the provisions of Section 297.1.b) of the Companies Law, by up to one-half of the share capital on the date of the authorization. Delegation of the power to exclude pre-emptive rights in connection with the capital increases that the Board may approve under this authorization, provided, however, that this power, together with the power contemplated in item nine, shall be limited to an aggregate maximum nominal amount equal to 20% of the share capital on the date of the authorization. [See Proposal [PDF]]

Nine.- Authorization to the Board of Directors, with the express power of substitution, for a term of five (5) years, of the power to issue debentures or bonds that are exchangeable for and/or convertible into shares of the Company or of other companies within or outside of its Group, and warrants on newly-issued or outstanding shares of the Company or of other companies within or outside of its Group, up to a maximum limit of five (5) billion euros. Establishment of the standards for determining the basis for and terms and conditions applicable to the conversion, exchange or exercise. Delegation to the Board of Directors, with the express power of substitution, of the powers required to establish the basis for and terms and conditions applicable to the conversion, exchange or exercise, as well as, in the case of convertible debentures and bonds and warrants on newly-issued shares, of the power to increase share capital to the extent required to accommodate requests for the conversion of debentures or for the exercise of warrants, with the power in the case of issues of convertible and/or exchangeable securities to exclude the pre-emptive rights of the Company’s shareholders, although this power, together with the power set forth in item eight, shall be limited to an aggregate maximum nominal amount equal to 20% of the share capital of the Company as of the date of authorization. Revocation of the authorization granted for such purposes by the shareholders at the General Shareholders’ Meeting held on March 20, 2009. [See Proposal [PDF]]

Ten.- Authorization to the Board of Directors, with the express power of substitution, for a term of five (5) years, to issue: a) bonds or simple debentures and other fixed-income securities of a like nature (other than notes), as well as preferred stock, up to a maximum amount of twenty (20) billion euros, and b) notes up to a maximum amount at any given time, independently of the foregoing, of six (6) billion euros. Authorization for the Company to guarantee, within the limits set forth above, new issuances of securities by subsidiaries. Revocation, to the extent of the unused amount, of the delegation granted by the shareholders for such purpose at the General Shareholders’ Meeting of March 26, 2010. [See Proposal [PDF]]

Eleven.- Authorization to the Board of Directors, with the express power of substitution, to apply for the listing on and delisting from Spanish or foreign, official or unofficial, organized or other secondary markets of the shares, debentures, bonds, notes, preferred stock or any other securities issued or to be issued, and to adopt such resolutions as may be necessary to ensure the continued listing of the shares, debentures or other securities of the Company that may then be outstanding, for which purpose the authorization granted for such purpose by the shareholders at the General Shareholders’ Meeting of March 26, 2010 is hereby deprived of effect. [See Proposal [PDF]]

Twelve.- Authorization to the Board of Directors, with the express power of substitution, to create and fund associations and foundations, pursuant to applicable legal provisions, for which purpose the authorization granted by the shareholders at the General Shareholders’ Meeting of March 26, 2010 is hereby deprived of effect to the extent of the unused amount. [See Proposal [PDF]]

ITEMS RELATING TO AMENDMENTS OF THE BY-LAWS AND REGULATIONS:

Thirteen.- Amendment of the By-Laws and Approval of a Restated Text [See Proposals [PDF]]:

13.1.- Amendment of Article 1 of the By-Laws to include concepts from the Corporate Governance System and in the corporate interest.

13.2.- Amendment of Articles 5 to 8, 9 to 15, 52 (which becomes Article 54), 53 (which becomes Article 55) and 57 to 62 (which become Articles 59 to 64) of the By-Laws to conform them to the latest statutory developments and to include technical and textual improvements.

13.3.- Amendment of Articles 16 to 20, 22 to 28 and 31 of the By-Laws, to improve the rules for validly holding the General Shareholders’ Meeting.

13.4.- Amendment of Article 21 of the By-Laws to include technical and textual improvements to the rules for validly holding the General Shareholders’ Meeting.

13.5.- Amendment of Articles 29, 30 and 54 to 56 (the latter becoming Articles 56 to 58) of the By-Laws to include technical and textual improvements and to round out the rules for exercising voting rights in the event of conflicts of interest.

13.6.- Amendment of Articles 32 to 51 (with Articles 46 and 47 becoming Articles 47 and 48, and Articles 48 to 51 becoming Articles 50 to 53) and inclusion of new Articles 46 and 49 of the By-Laws to improve the regulation of the Company’s Board of Directors and the Committees thereof and to include the latest statutory developments.

13.7.- Approval of a restated text of the By-Laws that includes the approved amendments and consecutively renumbers the titles, chapters, sections and articles into which the By-Laws are divided.

Fourteen.- Amendment of the Rules for the General Shareholders’ Meeting and Approval of a New Restated Text. [See Proposal [PDF]]

ITEM RELATING TO THE MERGER BY ABSORPTION OF IBERDROLA RENOVABLES, S.A.:

Fifteen.- Information regarding any significant changes in the assets or liabilities of the companies participating in the merger (i.e., Iberdrola, S.A. (as absorbing company) and Iberdrola Renovables, S.A. (as absorbed company)) between the date of the common terms of merger and the holding of the General Shareholders’ Meeting at which such merger is decided. Approval of the common terms of merger by absorption between Iberdrola, S.A. and Iberdrola Renovables, S.A. Approval as the merger balance sheet of the balance sheet of Iberdrola, S.A. as of December 31, 2010. Approval of the merger by absorption between Iberdrola, S.A. and Iberdrola Renovables, S.A. through the absorption of the latter by the former, causing the termination without liquidation of Iberdrola Renovables, S.A. and the transfer en bloc and as a whole of all of its assets to Iberdrola, S.A., with an express provision for the exchange to be covered by the delivery of treasury shares of Iberdrola, S.A. and, if required, by newly-issued shares of Iberdrola, S.A. pursuant to a capital increase subject to the above, all in accordance with the common terms of merger. Conditional increase in the share capital of Iberdrola, S.A. in the nominal amount of one hundred forty-eight million four hundred seventy thousand eleven and twenty-five one-hundredth (€148,470,011.25) euros, by means of the issuance of one hundred ninety-seven million nine hundred sixty thousand fifteen (197,960,015) shares with a par value of 0.75 euro each, of the same class and series as those currently outstanding, as a result of the merger by absorption of Iberdrola Renovables, S.A. by Iberdrola, S.A. and resulting amendment of Article 5 of the By-Laws. Express provision for incomplete subscription. Request for admission to trading of the shares issued on the Bilbao, Madrid, Barcelona and Valencia Stock Exchanges through the Automated Quotation System (Sistema de Interconexión Bursátil) (Electronic Market). Delegation of powers. Establishment of procedure to facilitate the merger exchange. Adherence of the transaction to the special tax rules provided for in Chapter VIII of Title VII of the restated text of the Corporate Income Tax Law. Delegation of powers. [See Proposal [PDF]]

ITEM RELATING TO GENERAL MATTERS:

Sixteen.- Delegation of powers to formalize and execute all resolutions adopted by the shareholders at the General Shareholders’ Meeting, for conversion thereof into a public instrument, and for the interpretation, correction and supplementation thereof or further elaboration thereon until the required registrations are made. [See Proposal [PDF]]

ITEMS RELATING TO RESOLUTIONS SUBMITTED FOR A CONSULTATIVE VOTE:

Seventeen.- Consultative vote regarding the Director compensation policy of the Company for the current fiscal year (2011) and the application of the current compensation policy during the preceding fiscal year (2010). [See Proposal [PDF]]

INFORMATION TO BE PROVIDED TO THE SHAREHOLDERS:

Information shall be provided to the shareholders at the General Shareholders’ Meeting regarding: (1) the implementation by the Board of Directors on June 30 and December 20, 2010 of an unrestricted capital increase for the free-of-charge allocation of ordinary shares issued to the shareholders of the Company, approved by the shareholders at the General Shareholders’ Meeting of March 26, 2010 under item six of the agenda, and the resulting amendment of the By-Laws; (2) the resolution approving a capital increase, adopted by the Board of Directors on March 11, 2011 pursuant to the resolution approved at the General Shareholders’ Meeting held on March 30, 2006, and the resulting amendment of the By-Laws; (3) the amendments of the Regulations of the Board of Directors approved on November 23, 2010; (3) the amendments of the Corporate Policies, the Regulations of Committees of the Board of Directors, and the other documents making up the Company’s Corporate Governance System since the last General Shareholders’ Meeting; and (5) the explanatory report regarding aspects of the equity structure and the governance and control system of the Company set forth in the former Section 116 bis of the Securities Market Law.

I.- Right to attend the Meeting, to proxy representation and to distance voting

All holders of voting shares may attend the General Shareholders’ Meeting and participate in its deliberations, with the right to be heard and to vote, so long as they have caused such shares to be registered in their name in the corresponding book-entry registry five (5) days prior to the day on which the General Shareholders' Meeting is to be held.

Every shareholder having the right to attend may be represented at the General Shareholders’ Meeting by another person (even though not a shareholder), by granting a proxy in writing or by postal or electronic correspondence that provides sufficient evidence of the identity of the proxy-holder and the shareholder granting the proxy. Shareholders having the right to attend may also cast their vote regarding proposals relating to the items included in the agenda by postal or electronic correspondence.

The rights to receive information, to attend the Meeting, to proxy representation and to distance voting shall be exercised pursuant to the provisions of Law, the Company’s Corporate Governance System and the Shareholder’s Guide available on the Company’s website (www.iberdrola.com) and at the Office of the Shareholder.

II.- Right to receive information

As from the date of publication of the notice of the call to meeting, the shareholders have the right to examine at the registered office of the Company and to request the delivery to them without charge (which documents may be sent by e-mail, with confirmation of receipt, if the shareholder accepts this form of delivery) of the individual and consolidated annual financial statements and management reports of the Company for fiscal year 2010 together with the auditor’s reports, the proposed By-Law amendments and mandatory directors’ reports, and the other documents that must be made available to the shareholders in connection with the holding of this General Shareholders’ Meeting.

III.- Right to request the publication of a supplement to the call to meeting

Shareholders representing at least five (5%) percent of the share capital may request the publication of a supplement to the call of the General Shareholders’ Meeting including one or more items on the agenda. The written notice exercising such right shall specify the name or corporate name of the requesting shareholder or shareholders, and there shall be attached thereto such documentation as evidences the shareholder’s status as a shareholder, in order to check such information against that provided by the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. (Iberclear), as well as the contents of the item or items proposed. The Board of Directors may require that the shareholder also attach the proposed resolution or resolutions and the report or reports providing a rationale therefor in the instances required by law. The exercise of this right must be exercised by duly authenticated notice sent to the Company’s registered office, which, must be received within five (5) days of the publication of the call to meeting.

IV.- Additional information and documentation available on the corporate website

Furthermore, the following documents are made available to the shareholders on the Company’s corporate website (www.iberdrola.com): (1) this call to meeting; (2) the individual [PDF] annual financial statements of the Company and of the consolidated [PDF] financial statements of the Company and its subsidiaries for the fiscal year ended on December 31, 2010, as well as the respective audit reports; (3) the Company’s individual [PDF] management report and the consolidated [PDF] management report of the Company and its subsidiaries for the fiscal year ended on December 31, 2010; (4) the Directors’ statement of responsibility [PDF] provided for in Section 35 of the Securities Market Law, which, together with the documents set forth in the two preceding items, constitutes the annul financial report of the Company for fiscal year 2010; (5) the full text of the proposed resolutions [PDF] corresponding to the items included on the agenda of the call to meeting and of the amendments to the By-Laws and Regulations proposed to the shareholders for approval at the General Shareholders’ Meeting, together with the mandatory reports [PDF] of the Board of Directors in connection with the proposed resolutions requiring them or otherwise deemed appropriate; (6) the current restated text of the By-Laws [PDF], the Rules for the General Shareholders’ Meeting [PDF], the Regulations of the Board of Directors [PDF] and the Regulations of the Committees of the Board of Directors; (7) the current texts of the Corporate Policies (in a full-text or summarized version) and of the other documents making up the Company’s Corporate Governance System; (8) the explanatory report [PDF] regarding aspects of the equity structure and the governance and control system of the Company set forth in the former Section 116 bis of the Securities Market Law; (9) the annual corporate governance report [PDF] for fiscal year 2010; (10) the annual report [PDF] regarding the compensation policy applicable to the Directors of Iberdrola, S.A. for the current fiscal year (2011) and the application of the current compensation policy for the preceding fiscal year (2010); (11) the annual activities report [PDF] of the Audit and Risk Supervision Committee for fiscal year 2010; (12) the sustainability report [PDF] (*) for fiscal year 2010; (13) the report [PDF] on strategic guidelines and foundations for activities of the Board of Directors for the current fiscal year (2011); (14) and the reports of the Board of Directors [PDF], and of an auditor [PDF] other than the Company’s auditor appointed for such purposes by the Commercial Registry, regarding the resolution to increase capital adopted by the Board of Directors on March 11, 2011, and (15) the Shareholder’s Guide [PDF] approved by the Board of Directors.

For further information regarding the General Shareholders’ Meeting, the shareholders may contact the Office of the Shareholder (Address: Cardenal Gardoqui, número 8, 48008 (Bilbao) or Tomás Redondo, número 1, 28033 (Madrid) / Telephone: (34) 900.10.00.19 (hours: Monday through Friday, from 9:00 a.m. to 7:00 p.m.) / E-mail: accionistas@iberdrola.com).

Furthermore, notice is hereby given that, pursuant to applicable legal provisions, an Electronic Shareholders’ Forum has been enabled on the corporate website (www.iberdrola.com) on this corporate website, the use of which shall conform to its legal purpose and to the assurances and rules of operation established by the Company, with duly verified shareholders and groups of shareholders having access thereto.

V.- Information regarding the merger by absorption of Iberdrola Renovables, S.A.

With respect to the merger by absorption of Iberdrola Renovables, S.A., it is hereby stated for the record that the shareholders, debtholders and employee representatives have the right to examine at the registered office or request the delivery or sending free of charge of the documents listed in Section 39.1 of Law 3/2009, of April 3, on structural modifications to corporations (“Structural Modifications Law”), which are the following: (1) the common terms of merger deposited with the Commercial Registries of Biscay and Valencia dated March 25 and 29, 2011, respectively; (2) the reports of the Boards of Directors of each of the merging companies regarding the common terms of merger; (3) the report issued by KPMG Auditores, S.L. in its capacity as sole independent expert appointed by the Commercial Registry of Biscay regarding the common terms of merger; (4) the individual and consolidated annual financial statements and management reports of Iberdrola, S.A. and Iberdrola Renovables, S.A. for the fiscal years ended on December 31, 2008, 2009 and 2010, together with their corresponding audit reports; (5) the merger balance sheets of the participating companies corresponding to the last individual annual audited balance sheets of each company ended on December 31, 2010, together with the relevant audit reports; (6) the current by-laws of the participating companies; (7) the full text of the By-Laws of the absorbing company that will apply after the merger (and which, given the date of the common terms of merger approved by the Board of Directors of Iberdrola, S.A. and Iberdrola Renovables, S.A. on March 22, 2011, does not include the by-law amendments that the Board of Directors of Iberdrola, S.A. submits to the shareholders at this General Shareholders’ Meeting, or the potential amendment of Article 5 of Iberdrola’s By-Laws to reflect the capital increase that Iberdrola might make in order to cover the exchange of shares arising from the merger); (8) the identity of the directors of the participating companies as well as the date from which they have held office.

Furthermore, by application of the provisions of Section 40.2 of the Structural Modification Law, stated for the record below are the minimum required legal statements regarding the common terms of merger being submitted for approval of the shareholders at the General Shareholders’ Meeting under item fifteen of the agenda:

1.- Absorbing company: Iberdrola, S.A. (“Iberdrola”), with a registered office at calle Cardenal Gardoqui número 8, Bilbao, registered with the Commercial Registry of Biscay at volume BI-233, folio 156, page number BI-167 and with Tax Identification Number A-48010615. Absorbed company: Iberdrola Renovables, S.A. (“Iberdrola Renovables”), with a registered office at calle Menorca número 19, planta 13ª, Valencia, registered with the Commercial Registry of Valencia at volume 8919, book 6205, folio 119, page number V-130102 and with Tax Identification Number A-83028035.

2.- Share exchange ratio: The shareholders of Iberdrola Renovables will receive 0.30275322 shares of Iberdrola, each having a par value of 0.75 euro, for each share of Iberdrola Renovables, each having a par value of 0.50 euro, as well as any cash compensation upon the terms provided by Section 25 of the Structural Modification Law in order to deal with any “odd-lots.” The exchange ratio, based on the actual value of the equity of Iberdrola and Iberdrola Renovables, has been determined taking into account (i) the capital increase and sale of treasury shares by Iberdrola on March 14, 2011, (ii) the treasury shares held by Iberdrola Renovables (representing approximately 0.386% of its share capital as of the date of approval of the common terms of merger), and (iii) the dividends that both companies plan to distribute as well as Iberdrola’s shareholder compensation system referred to in Section 8 of the common terms of merger and which are summarized below:

2.1.- Dividends to be distributed by the merging companies: (a) If the proposed allocation of profits formulated by the Board of Directors at its meeting of February 22, 2011 is approved by the shareholders at Iberdrola’s General Shareholders’ Meeting, upon effectiveness of the merger, Iberdrola will distribute a cash dividend against fiscal year 2010 results in the gross amount of three (€0.030) euro cents per share for each share with a right to receive it, the payment of which is planned to be made during the month of July 2011. The shareholders of Iberdrola Renovables who become shareholders of Iberdrola if the merger is approved will have the right to receive this dividend. (b) Iberdrola Renovables plans to make the following distributions: (i) If the shareholders at the General Shareholders’ Meeting of Iberdrola Renovables approve the resolution proposed by its Board of Directors at its meeting of February 21, 2011, Iberdrola Renovables will distribute a cash dividend with a charge to fiscal year 2010 results in the gross amount of two point five (€0.025) euro cents for each share entitled to receive it and (ii) if the proposed resolution formulated by the Board of Directors at its meeting of March 22, 2011 is approved by the shareholders at the General Shareholders’ Meeting of Iberdrola Renovables, Iberdrola Renovables will make a special cash dividend distribution (gross) of one point twenty (€1.20) euro for each share entitled to receive it. The proposed resolution referred to in this paragraph (ii) is also subject to the proposed merger being approved at the General Shareholders’ Meetings of both companies. 

2.2.- Other forms of shareholder compensation: At its meeting of February 22, 2011, Iberdrola’s Board of Directors resolved to formulate a proposed resolution which has been submitted for approval at the General Shareholders’ Meeting of Iberdrola covered by this call under item six on the agenda, consisting of an increase in unrestricted reserves for the free-of-charge allocation of new shares of Iberdrola within the framework of the shareholder compensation system referred to as the “Iberdrola Flexible Dividend,” which allows Iberdrola’s shareholders to receive either unrestricted shares of Iberdrola or an amount in cash (in this latter case, by means of the sale of the free-of-charge allocation rights to which they are entitled on the market or pursuant to a fixed-price purchase commitment that Iberdrola will assume in the event that the proposed resolution is ultimately approved at the General Shareholders’ Meeting). If the proposal regarding the “Iberdrola Flexible Dividend” is approved at Iberdrola’s General Shareholders’ Meeting, the delivery of the unrestricted shares or the receipt of cash amounts may occur in two implementations of the increase in unrestricted capital, which would take place on dates close to those on which the supplemental payment of the dividend for fiscal year 2010 and the payment of interim dividends for fiscal year 2011 would traditionally take place. The shareholders of Iberdrola Renovables becoming shareholders of Iberdrola if the merger is approved will have the right to participate in implementations of the “Iberdrola Flexible Dividend” system if approved at the General Shareholders’ Meeting.

3.- Exchange procedure: (1) Upon approval of the merger by the shareholders at the General Shareholders’ Meetings of the companies participating in the merger, the submission to the National Securities Market Commission of documentation equivalent to that referred to in Sections 26.1 d), 41.1 c) and similar provisions of Royal Decree 1310/2005, of November 4, and the registration of the relevant merger document and any increase in the capital of Iberdrola with the Commercial Registry of Biscay, there will be an exchange of Iberdrola Renovables shares for Iberdrola shares in accordance with the indicated exchange ratio. (2) The exchange will take place as from the date indicated in the notices to be published in a widely-circulated newspaper in the provinces of Biscay and Valencia, respectively, in the Official Gazettes (Boletines Oficiales) of the Spanish stock exchanges and in the Official Gazette of the Commercial Registry. A financial institution will be designated for such purpose to act as agent and which will be specified in such notices. (3) The exchange will take place through those entities participating in Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. (IBERCLEAR) that are depositaries of the shares of Iberdrola Renovables in accordance with the procedures established for the book-entry system, in accordance with the provisions of Royal Decree 116/1992, of February 14, and the Companies Law to the extent applicable. (4) Shareholder of Iberdrola Renovables holding shares that represent a fraction of the number set as the exchange ratio will be able to acquire or transfer shares in order to exchange them in accordance with such exchange ratio. Without prejudice to the foregoing, the companies participating in the merger may establish mechanisms, including the appointment of an “odd-lot agent,” to facilitate the merger for shareholders of Iberdrola Renovables holding a number of shares that does not allow them to receive a whole number of Iberdrola Shares pursuant to the exchange ratio. The shares of Iberdrola Renovables will be cancelled as a result of the merger. For informational purposes, it is stated for the record that as of the date of this call to meeting, Iberdrola is the holder of three billion three hundred seventy-nine million two hundred fifty-one thousand nine hundred twenty (3,379,251,920) shares of Iberdrola Renovables, representing 80% of its share capital, and that as of the date of the common terms of merger Iberdrola Renovables was the holder of sixteen million three hundred one thousand one hundred seventy-eight (16,301,178) treasury shares representing approximately 0.386% of its share capital. Pursuant to the provisions of Section 26 of the Structural Modifications Law and the rules and regulations regarding treasury stock, none of such interests will be exchanged for shares of Iberdrola.

4.- None of the shareholders of the companies participating in the merger is an industrial shareholder, and there is therefore no industry contribution to take place in the planned merger. The shares of the companies participating in the merger do not have any ancillary obligations.

5.- The companies participating in the merger do not have any special shares or owners of special rights other than the shares, and Iberdrola will not grant special shares or rights as a result of the merger.

6.- Iberdrola will not give any kind of advantage to either the independent expert participating in the merger process or the directors of the merging companies.

7.- From the date on which they are issued or delivered, as the case may be, any new shares issued by Iberdrola within the context of the above-referenced capital increase or delivered by Iberdrola to cover the exchange, all in accordance with Section 5 of the common terms of merger, will have the right to participate in the earnings of Iberdrola upon the same terms as the other outstanding shares of Iberdrola on such date. 

8.- For accounting purposes, the transactions of Iberdrola Renovables must be deemed to be carried out on behalf of as from January 1, 2011. It is hereby stated for the record, for all appropriate purposes, that such retroactive accounting treatment is in accordance with the Spanish National Chart of Accounts (Plan General de Contabilidad) approved by Royal Decree 1514/2007, of November 16.

9.- The By-Laws of the absorbing company, Iberdrola, will be those attached to the terms of merger as Annex 1 (although, given the date of the common terms of merger approved by the Boards of Directors of Iberdrola, S.A. and Iberdrola Renovables, S.A. dated March 22, 2011, they do not include the by-law amendments that the Board of Directors of Iberdrola, S.A. submits to the shareholders at this General Shareholders’ Meeting [or the possible amendment of Article 5 of the By-Laws of Iberdrola to reflect the capital increase that Iberdrola may undertake in order to cover the exchange of shares arising from the merger).

10.- Information regarding the valuation of the assets and liabilities of Iberdrola Renovables that will be transferred to Iberdrola as a result of the merger. Pursuant to the merger by absorption of Iberdrola Renovables by Iberdrola, such company will dissolve without liquidation and its assets and liabilities will be transferred en bloc to Iberdrola, which will acquire the rights and obligations thereof by universal succession. 
For purposes of the provisions of Section 31.9 of the Structural Modifications Law, it is stated for the record that, once the transaction is carried out, the assets and liabilities transferred by Iberdrola Renovables to Iberdrola will be recorded by Iberdrola in the amount corresponding thereto in the group’s consolidated annual financial statements as of the effective date of the merger for accounting purposes, i.e., January 1, 2011.
At January 1, 2011, the main categories of assets and liabilities of Iberdrola Renovables, as well as the value thereof pursuant to the standard set forth in the preceding paragraph, were the following:

(I) Assets to transfer (thousands of euros)

 

  NET BOOK VALUE
NON-CURRENT ASSETS 12,301,611
Intangible assets 9,162
Property, plant and equipment 81,758
Investments in group companies and associates 12,185,860
Non-current financial investments 9,517
Deferred tax assets 15,314
Long-term trade receivables -
CURRENT ASSETS 5,002,182
Inventories 574,796
Trade and other receivables 630,297
Investments in group companies and associates 3,745,698
Current financial investments 50,905
Accruals 486
Cash and cash equivalents -
TOTAL ASSETS TO TRANSFER 17,303,793

(II) Liabilities to assume (thousands of euros)

 

  NET BOOK VALUE
NON-CURRENT LIABILITIES 4.783.148
Provisions 10,845
Borrowings 1,947
Borrowings from group companies and associates 4,599,978
Deferred tax liabilities 170,378
CURRENT LIABILITIES 1,149,256
Borrowings 48,924
Payables to group companies and associates 658,889
Trade and other payables 440,572
Accruals 871
TOTAL LIABILITIES TO ASSUME 5,932,404

(III) Equity to transfer (thousands of euros)

 

  NET BOOK VALUE
TOTAL ASSETS AND LIABILITIES TO TRANSFER 11,371,389

11. The merger balance sheets of the companies participating in the merger shall be deemed to be the balance sheets ended on December 31, 2010, which form a part of their respective individual audited annual financial statements as of such date.

12.- Possible consequences of the merger on employment, as well as the possible impact thereof on gender within management bodies and the impact, if any, on the company’s social responsibility:

12.1.- Possible consequences of the merger with respect to employment: If the merger comes to fruition, Iberdrola, as absorbing company, will be responsible for all of Iberdrola Renovables’ current human and material resources as well as the policies and procedures that it has been observing regarding personnel management. Therefore, pursuant to the provisions of Article 44 of the Workers’ Statute (Estatuto de los Trabajadores), which governs business successions, Iberdrola will subrogate to the labor rights and obligations of Iberdrola Renovables. At the same time, it is stated for the record that the companies participating in the merger will comply with their obligations to provide information and, if applicable, to consult with the legal representatives of the workers of each of them in accordance with labor regulations. Furthermore, notice of the planned merger will be given to the public entities where appropriate and, in particular, to the General Social Security Revenue Office (Tesorería General de la Seguridad Social).

12.2.- Possible impact on gender within management bodies: It is not expected that the merger will produce especially significant changes in the structure of the absorbing company’s management bodies from the viewpoint of their distribution by gender. Likewise, the merger will not change the policy governing these issues at Iberdrola.

12.3.- Impact of the merger on the company’s social responsibility: Pursuant to Iberdrola’s Corporate Governance System (and particularly Iberdrola’s Regulations of the Board of Directors and Regulations of the Corporate Social Responsibility Committee), all those functions relating to Iberdrola’s Corporate Social Responsibility, and specifically those consisting of “[p]eriodically review[ing] the Social Responsibility System, focusing especially on Corporate Governance and Compliance Policies and propos[ing] to the Board of Directors, for approval or submission to the shareholders at a General Shareholders’ Meeting, such amendments and updates as contribute to its development and ongoing improvement” as well as “[s]upervis[ing] compliance with statutory requirements and with the regulations of the Company’s Corporate Governance System” correspond to the Corporate Social Responsibility Committee. In turn, it should be noted that Iberdrola Renovables’ status as a company in which Iberdrola holds an 80% interest implies that its internal regulations regarding corporate social responsibility contain principles similar in essence to those of Iberdrola. In view of the foregoing, it should not be expected that Iberdrola’s corporate social responsibility policies will be changed as a result of the merger.

VI.- Attendance bonus

The Company will pay an attendance bonus in the gross amount of 0.005 euro per share to the shares present or represented by proxy at the General Shareholders’ Meeting whose holders have provided due evidence of their attendance thereat in person or by proxy.

VII.- Participation of notary public

The Board of Directors has resolved to request the presence of a notary public to prepare the minutes of the General Shareholders’ Meeting.

VIII.- Personal data protection and broadcast of the proceedings

The personal data that the shareholders provide to the Company (in order to exercise or grant proxies to exercise their rights to information, to attend and to vote at the General Shareholders’ Meeting), or the personal data provided by the financial institutions and investment services companies that are depositaries or custodians of the shares held by such shareholders as well as by entities that pursuant to securities market regulations must maintain the registries of the securities represented by book entries, shall be handled by the Company in order to manage the development, compliance with and control of the existing shareholding relationship (especially but not limited to the call to and holding of the General Shareholders’ Meetings). For such purposes, the data shall be included in files for which the Company is responsible

In every case and when legally applicable, the owner of the data will be entitled to exercise the rights of access, rectification, opposition and deletion of the data collected by the Company. Such rights may be exercised, on such terms and in compliance with such requirements as are established by applicable law for such purpose, by addressing a letter to the Company at calle Cardenal Gardoqui, 8, 48008 Bilbao

If the shareholder includes personal data referring to other individuals in the attendance, proxy and distance voting card, the shareholder must inform them of the terms set forth in the preceding paragraphs and comply with any other requirements that may be applicable for the proper provision of the personal data to the Company, without the Company having to take any additional action.

All or part of the proceedings of the General Shareholders’ Meeting may be subject to audiovisual recording and broadcasting (through Internet video and availability to the public through the Company’s corporate website (www.iberdrola.com)) and disclosure through social networks. In particular, the Company intends to share the main headlines of the event on Twitter in real-time. Photographs of the live proceedings may also be uploaded to the Company’s channel on www.flickr.com and presentations can be shared on a website thereof at www.slideshare.net.

IX.- Simultaneous interpretation

The Company shall provide the equipment required for the simultaneous interpreting of the proceedings of the General Shareholders' Meeting into Euskera, English and Spanish sign language.

Although this notice contemplates two calls to Meeting, the Board of Directors informs the shareholders, in order to save them unnecessary inconvenience, that it is expected that the quorum required by Law, the By-Laws and the Rules for the General Shareholders’ Meeting will be met on first call and, therefore, it can be expected that the General Shareholders’ Meeting will be held on May 27, 2011, at 11:30 a.m., at Palacio Euskalduna (Avenida Abandoibarra, número 4, Bilbao).

Bilbao, April 12, 2011

The General Secretary & Secretary of the Board of Directors

 

 

(*) Spanish version.
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