Shareholder's Rights

The corporate governance framework should protect the rights of shareholders.

A. The basic rights of shareholders include the right to:
1. to have the methods of ownership registration stipulated and the share registry duly kept.
2. To transfer or carry over shares, as well as to receive in a timely manner the preferential subscription certificates and the shares subscribed in cases of capital increase.
3. To collect relevant information about the corporation in a timely manner.
4. To participate and vote in the General Shareholders’ Meetings.
5. To appoint the members of the Board of Directors.
6. To participate in the profits of the corporation and to set a dividend policy that expressly establishes the criteria for the distribution of profits.

B. Shareholders have the right to participate and to be sufficiently informed about decisions that bring about fundamental changes in the corporation, such as:
1. Amendments to the bylaws, articles of incorporation, or other governing documents of the corporation.
2. Authorization for the issuance of new shares.
3. Extraordinary transactions, such as corporate reorganizations and the sale of or contracts for substantial portions of the corporate assets, or any other transaction that results or may result in the sale of the company.

C. Shareholders should be able to effectively participate and vote at the General Shareholders’ Meetings, and should be informed about the regulations, including the voting process, governing the General Shareholders’ Meetings.
1. Shareholders should be provided with sufficient information in advance concerning the date, place and agenda of these General Shareholders’ Meetings, as well as detailed information on the matters to be discussed at such meetings. The agenda should not include generic matters, and the items to be discussed should be specified in such a way that each item is discussed separately, facilitating their analysis, and avoiding the joint resolution of issues on which there may be different opinions. The place where the General Meetings are to be held should be fixed in such a way as to facilitate the attendance of the shareholders.
2. Shareholders must have the opportunity to introduce items to be discussed, within a reasonable limit, on the agenda of the General Meetings. The items to be included in the agenda must be of corporate interest and within the legal or statutory competence of the Meeting. The Board of Directors must not deny this type of request without informing the shareholder of a reasonable reason.
3. Shareholders should have the opportunity to request, prior to the General Meeting or during the course of the same, the reports or clarifications they deem necessary regarding the items on the agenda.
4. Shareholders should be allowed to vote in person or by delegation, giving the same value and effect to the votes cast in one way or the other.
i) The bylaws should not impose limits on the ability of any shareholder entitled to participate in the General Meetings to be represented by the person he/she designates.
ii) Those requesting proxies for the General Shareholders’ Meeting must inform the shareholders of the matters in respect of which they will exercise the authority and the direction of the vote they will take, including all relevant information.

D. Capital structures or arrangements that allow certain shareholders to exercise disproportionate control as opposed to their shareholding should be disclosed.

E. Markets for corporate control should operate in an efficient and transparent manner.
1. Information regarding the acquisition of corporate control and extraordinary transactions should be communicated directly and clearly so that investors understand their rights. Transactions should be carried out with transparent prices and under fair and equitable conditions to protect the rights of all shareholders according to their category.
2. The “anti-absorption” mechanisms should not be used to exempt management from its responsibilities.
3. In the event of a takeover bid, the company’s shareholders should have the right to participate in the premium paid by a third party to acquire control of the company.
The management of the issuing company should be neutral and not take measures to protect against takeover bids unless expressly authorized by the General Shareholders’ Meeting. The transfer of control must include adequate disclosure of the valuation criteria underlying any offer. For this purpose, the management of the target company must establish the mechanisms that allow the holders of shares or other securities susceptible to subscribe or acquire, to become aware of the tender offer and the conditions proposed by the offeror and make an adequately reasoned decision.

F. Shareholders, including institutional investors, should take into account the costs and benefits derived from the exercise of their voting rights.

G. In the event of the delisting of a security from the Securities Market Public Registry, it should be ensured that those investors who consider themselves affected by such action may dispose of their securities and sell them on reasonable terms before the company is removed from the trading mechanism.

H. It should be encouraged that any discrepancies that may arise between the corporation and its shareholders be resolved by submitting such disputes to arbitration, and to this end, a mandatory arbitration agreement may be established in the corporation’s bylaws.