PROMIGAS S.A. E.S.P. REGULATIONS OF THE GENERAL SHAREHOLDERS' MEETING

Transcription

1 PROMIGAS S.A. E.S.P. REGULATIONS OF THE GENERAL SHAREHOLDERS' MEETING In order to ensure that the General Assembly of Shareholders achieves its objectives, the performance of its functions, facilitate discussion and decision making, within a framework of respect, participation and equitable treatment of shareholders, the following Internal Regulations and Rules of Procedure for the Assembly are established. ARTICLE ONE.- FUNCTIONS OF GENERAL SHAREHOLDERS' MEETING. The General Assembly of Shareholders shall exercise the following functions: a) Examine, approve or disapprove the financial statements that should be presented by the Board of Directors. b) Approve the balance sheet, decide on the destination for the profits presented in it, after deducting the sums which, according to the law, should be put in the legal reserve; c) Decree the creation of special reserves, out of distributable profits; d) Select for periods of two years, members of the Board of Directors and alternates. e) Appoint for periods of two years the statutory auditor and set the line item to pay the services of the Statutory Auditor's support staff; f) Delegate to the Board, the functions they deem convenient or that are not assigned by law to the assembly, and give them the necessary authorizations; g) Order the capitalization of profits and reserves that, in accordance to the law, can be capitalized; h) Authorize the sale or lease of the total assets of the Company; i) Decree the increase of capital of the Company, the extension or reduction of the term of duration, its merger with one or more companies, its transformation, its divestiture, its early dissolution, or any amendment to bylaws; j) In the case of dissolution of the company for any reason, appoint the liquidator and deputies, define their pay and remove them freely at any time;

2 k) Authorize the issuance of bonds and any other security allowed by law; l) Perform any other functions conferred to it by the By-laws and those which naturally correspond to it as the supreme Administrative body of the Company. m) Set the parameters under which the transactions are authorized with parties related to the administrators. Paragraph: When dealing with parties related to transactions with directors, the General Assembly of Shareholders periodically reviews the parameters and conditions under which these operations are possible, ensuring that they are of benefit to the company and under market conditions, in accordance with the Procedure for Transactions with Interested Parties to the Administrators, PPA-802 (internal document). n) Adopt its Regulations, as well as any additions and modifications. ARTICLE SECOND.- TYPES OF GENERAL ASSEMBLY MEETINGS The General Assembly of Shareholders may hold the following types of meetings: a) Ordinary Meetings: These are meetings at which the state of the Company is examined, members of the Board, the Statutory Auditor and administrators are appointed, and the financial statements of the company are submitted for consideration, among other things. b) Extraordinary Meetings: Extraordinary meetings are when urgent circumstances or unforeseen needs of society so dictate they are called. Nothing in this article is an impediment for so-called non-face-to-face (distance) meetings to be held in the terms established by law. ARTICLE THIRD.- VENUE: The meetings of the General Assembly of Shareholders will be held at the registered office of the Company, whether in the administrative offices or elsewhere expressly stated in the corresponding call. Exceptions to this rule are universal sessions and distance meetings. ARTICLE FOUR.- OPPORTUNITY a) Regular Meetings: The Assembly shall meet in ordinary session once a year during the first quarter of each year. The meetings shall be held on any business day in the Company registered office at the date and time indicated in the notice. If not called, the Assembly shall meet in their own right the first business day of April at 10:00 am at its registered office. c) Extraordinary Meetings: The Extraordinary Shareholders' Meeting will be held at any time.

3 ARTICLE FIVE.- NOTICE OF GENERAL SHAREHOLDERS' MEETINGS. The call to the various meetings of the General Assembly of Shareholders will be made as follows: a) Ordinary meetings: The Board will convene the shareholders to Ordinary meetings no less than fifteen (15) days in advance. The calls will be made by notice to be published in advance in the time indicated herein in a newspaper with national circulation. The notice shall state the date, time and place of the meeting. b) Extraordinary meetings: Shareholders will be notified at least five (5) business days in advance. The notice shall state the date, time and place of the meeting and agenda. The call may be made by the President, the Board, the Statutory Auditor or the competent authority when requested by a shareholder or group of shareholders representing ten (10%) or more of the subscribed shares. c) If at any ordinary of extraordinary meeting no quorum is achieved, a new meeting will be called that will meet with a plural number of partners, whatever the number of shares that are represented. The meeting shall be held no earlier than ten (10) business days before or thirty (30) working days after the date set for the first meeting. ARTICLE SIX.- RIGHT TO INSPECTION. In exercising the right of inspection, the shareholders within fifteen (15) days prior to the holding of the Ordinary Shareholders Meeting shall be entitled to examine for themselves or through an intermediary duly accredited in writing, at the its registered office offices, among others, the following documents: a) The copy of the notice convening the General Shareholders Assembly. b) The general purpose financial statements and notes to the individual and consolidated financial statements c) The opinion of the Statutory Auditor on the financial statements. d) The reports of the President of the Company, Board of Directors, and the Audit and Corporate Governance Committee.

4 e) The minutes books of the Board of Directors, subject to the prior signing of a confidentiality agreement of the Audit and Corporate Governance Committee and General Assembly of Shareholders. f) The projects to amend the By-laws if applicable. g) The project of proposed distribution of profits or loss absorption, as applicable. h) The report of the Statutory Auditor. i) The share register book. j) Other papers and documents permitted by law. Paragraph one: This right does not extend to documents that cover industrial secrets or information that if disclosed can be used to the detriment of the Company. Paragraph two: When a reform of By-laws is submitted for consideration by the General Assembly of Shareholders, consisting of transformation, merger, division, or segregation, the project should be made available to shareholders at the Company's registered office where the administrative office of the Company is, at least fifteen (15) business days in advance. ARTICLE SEVEN.- PARTICIPANTS. The General Assembly of Shareholders shall be chaired by the President of the Board or the person acting in their absence, and if they are not present by the shareholder appointed by the Assembly itself. The General Secretary of the Company will act as the Secretary of the Assembly and in their absence, the person appointed by the President of the Assembly. ARTICLE EIGHT.- OPENING OF THE GENERAL SHAREHOLDERS MEETING The Chairman of the Board will open and preside the General Assembly of Shareholders, or failing that another member of the Board, the President or Vice President of the company, and in their absence the person determined by the Assembly. ARTICLE NINE.- PRESIDING OFFICERS The Presiding Officers shall consist of the Chairman of the Board or any other member of the Board, the President and Secretary of the Company. Functions of the Presiding Officers: a) Determine the voting mechanism to be used, whether regular mail, roll call or ballot.

5 b) Request the removal of shareholders from the meeting when their behavior is not appropriate or impedes the normal development of the General Assembly of Shareholders. c) Ensure that the shareholders or their representatives in the General Assembly receive an equitable treatment regardless of the number of shares they own or represent. d) Ensure compliance with these Regulations e) To ensure the normal development of the General Assembly of Shareholders. ARTICLE TEN.- PRESIDENT OF GENERAL SHAREHOLDERS MEETING The Chairman of the Board will act as President of the General Assembly of Shareholders, in his/her absence another member of the Board, the President or a Vice President of the Company, or in the absence thereof, by the person determined by the Shareholders' Assembly. The President of the General Assembly of Shareholders will have the following functions: a) Chair the General Assembly of Shareholders and the Presiding Officers. b) Give the floor to shareholders in an orderly manner and other guests to the meeting, whenever requested. c) To extend the speaking time when so requested. d) Call each shareholder or their representative to proceed to vote according to the mechanism being used. e) Make the results of voting at the General Assembly of Shareholders either available directly or through the Secretary. f) Sign the minutes of the Assembly once it has been approved by the committee appointed to approve them. ARTICLE ELEVEN.- The General Secretary of Promigas S.A. E.S.P. will act as Secretary of the General Assembly of Shareholders and in their absence the person determined by the Assembly. The General Secretary Assembly of Shareholders will have the following functions: a) To verify shareholders. B) Verify the deliberative and decision-making quorum during the development of the General Assembly.

6 c) Receive the lists of candidates standing for election as Board members, who may only sign up before the item on the agenda begins. d) Check the content and validity of the submitted lists. e) Provide the legal support required during the development of the General Assembly of Shareholders. f) Receive the various proposals and recommendations made during the Shareholders Assembly. g) Prepare the minutes of the General Assembly of Shareholders and sign it once it has been approved by the committee appointed to approve the minutes. ARTICLE TWELVE.- RIGHTS OF SHAREHOLDERS IN THE GENERAL ASSEMBLY. The shareholders' rights are those set out hereunder: a) To submit for consideration of the shareholders the inclusion of new business on the agenda at meetings of the General Assembly of Shareholders. b) Submit for approval of shareholders the agenda for regular or special meetings of the General Assembly of Shareholders, which shall be broken down into the various matters to be addressed so as not to be confused with others, except for those items that must be discussed together due to connections to each other. c) Have timely and sufficient access to the documents with the right of inspection. d) To participate in the deliberations of the General Assembly of Shareholders and vote on them. e) To request special audits as described in the terms of the By-laws. f) Make public and resolve any differences arising between the shareholders or directors and the Company as well as those arising between shareholders or between shareholders and managers, on the occasion of the entering into, interpreting, conduct, termination or development of the Company by-laws during the liquidation of the Company, through the dispute resolution mechanisms provided for this end in the By-laws and in law. g) Make requests, complaints or suggestions to the Company, and get a timely response. h) Make recommendations to the Audit and Corporate Governance Committee for the betterment of the Good Governance of the Company or other operating aspects of the same, and enforce the Promigas S.A. E.S.P. Code of Good Governance.

7 i) Receive a proportionate share of the Company benefits as established by the year-end balances, subject to the provisions of the Law and the By-laws. j) To exercise the right of withdrawal in cases established by law. k) Count on an equitable treatment in the development of the General Assembly of Shareholders. l) Present proposals and recommendations to the Secretary during the General Assembly. m) Request the floor in an orderly and respectful manner to the President of the Assembly. Paragraph: Regarding the specialized audits established in the item e) above, in the event that a shareholder considers an audit necessary they must apply in writing to the Secretary General, Promigas Investor Relations Office (the unit responsible for meeting the needs of investors), no later than fifteen (15) working days before the meeting, indicating at least the following points: The name of the shareholder(s) requesting the audit. The name of the company that performed the audit, with a detailed statement showing it has a recognized reputation and track record. The detailed justification of the reasons for requesting the audit. In no event shall audits be about specific issues and may not be conducted about industrial secrets or matters protected by laws on intellectual property rights. The Board reserves the right to reject any application that does not meet the established requirements. n) Promote legal proceedings to enforce the protection of their rights, before the Superintendencia Financiera de Colombia (Financial Superintendence of Colombia). ARTICLE THIRTEEN.- RESTRICTION TO THE RIGHT OF THE SHAREHOLDER TO PARTICIPATE IN THE GENERAL ASSEMBLY a) When the shareholder is in default in the payment of the shares (art. 397 C.Co.), without prejudice they can participate and vote using the shares they have already paid for. b) When the quotas or shares have been given in usufruct, unless the exercise of political rights have been expressly reserved (Art. 412 C.Co.) c) The pledge does not confer the inherent rights as shareholders except by express stipulation or agreement. (art. 411 C.Co.). ARTICLE FOURTEEN.- DELIBERATIVE QUORUM

8 The decisions of the General Assembly of Shareholders, require that more than 50% of the subscribed shares of the company are properly represented, and must be adopted by the affirmative vote, in person or by proxy, of the shareholders representing at least half plus one of the shares represented at the relevant meeting. Any proposal that is not approved with the indicated votes shall be deemed denied. Exceptions are cases in which the law requires a special majority. FIRST PARAGRAPH : In all elections in which it two or more persons are to be voted on the electoral quotient system will apply, the total number of votes will be divided by the number of seats on the board up for election; the number of votes cast on each list is then divided by the quotient and seats are allocated due to the integer number. Remaining seats will be filled on the fractions in decreasing order; seats will be filled according to the fractions if there is a tie. SECOND PARAGRAPH: The representative or agent of a shareholder, whether a natural or legal person, individual or a community of any kind, may not split votes of their client or principal, which means that it is prohibited to vote with one or more shares of the principals in a certain way or for a certain person and with other shares in a different way or for other people. But this indivisibility of the vote does not stop the representative or agent of several natural or legal persons or various individuals or groups to vote in each case separately following the instructions of the person or entity represented or principal but not splitting it, in no case can the vote corresponding to the shares of a single shareholder be split. However, the attendance of a large number of individuals, regardless of the number of subscribed shares represented in the Meetings in its own right or the second call will suffice to make the deliberative quorum. The deliberations of the General Assembly of Shareholders may be suspended and resumed later however many times any plural number of attendees representing fifty-one (51%) of the shares represented at the meeting decide. But the discussion may not be extended for more than three (3) days. To resume the meeting a new call is not required and those who were not in the initial discussion can assist. ARTICLE FIFTEEN.- QUORUM AND MAJORITY DECISIONS The decisions of the General Assembly of Shareholders shall be adopted by a majority of the votes present, with the following exceptions: a) The distribution of profits will be approved by the Assembly with the affirmative vote of a plural number of shareholders who represent at least seventy-eight percent (78%) of the shares represented at the meeting. When no such majority is obtained at least fifty percent (50%) of the net profits must be distributed, or the balance thereof if losses from previous years need to be offset.

9 b) The payment of dividends for fully paid shares of the company, which is obligatory for all the shareholders, require the affirmative vote of no less than eighty percent (80%) of the shares represented at the meeting. In the absence of such a majority, dividends may only be given to shareholders who accept. c) The decision as to which issue of shares will be placed without being subject to the right of preference will require the favorable vote of no less than seventy percent (70%) of the shares present at the meeting. ARTICLE SIXTEEN.- INTERVENTIONS Shareholders may participate in the meetings of the General Assembly of Shareholders, when the President cedes them the floor. Shareholder interventions will be a maximum of five (5) minutes, however, this time may be extended at the consideration of the Board. No shareholder may speak more than twice on the same subject. Guests may intervene when directed by the President. ARTICLE SEVENTEEN.- BEHAVIOR AND PROHIBITIONS During the Assembly shareholders must at all times comply with this Regulation, behave properly and be respectful. Additionally, it is expressly forbidden for members of the Board, legal representatives, employees; whatever their employment relationship, as temporary or third party employees; liquidators and in general, any person who gives advice or provides services to the company, the behaviors listed below: Encourage, promote or suggest to the shareholders the granting of powers in where the name of the representative for the meetings is not clearly defined. Receive proxies for the meetings from the shareholders in which the name of the respective representative is not clearly defined. To accept as valid the powers conferred by the shareholders to participate in meetings, without complying with the requirements of Article 184 of the Commercial Code. Suggesting or determine for the shareholders the names of those to act as their representative in the meetings. Recommend shareholders the list they should vote for in the meetings.

10 Suggest, coordinate or agree with any shareholder or their representatives, proposals to be submitted for consideration by the Assembly. Suggest, coordinate or agree with any shareholder or their representatives, to vote for or against propositions that occur in the meeting. ARTICLE EIGHTEEN.- VOTING Each shareholder has the right to freely express their opinions, cast as many votes as the number of shares they own in the Company, without any limitation or restriction other than those expressly provided by Law and the By-laws. The shares are indivisible and as a result if for any legal or conventional cause a share belongs to several people, they should appoint a single representative to exercise the rights attached to the share. The votes of a single shareholder are indivisible, which means they are not allowed to divide their vote, except in cases where it is legally appropriate. Managers and employees of the Company may not vote on the financial statements and yearend accounts while in performance of their duties. ARTICLE N I N E T E E N.- ELECTIONS OF MEMBERS OF THE BOARD OF DIRECTORS The elections shall be held in accordance with the By-laws and the Code of Good Governance and shall be deemed to have been completed when the candidate(s) gets(get) the required number of votes as specified in the By-laws to take a seat on the Board. When two (2) or more persons are to be voted on to serve on the Board of Directors, the electoral quotient mechanism shall be used. ARTICLE T W E N T Y.- ELECTION OF THE STATUTORY ADVISOR The President and Board of Directors, will present for consideration by the General Assembly of Shareholders the necessary assessments so that it has enough evidence to judge the quality and service of the Statutory Auditor postulated. The selection of candidates will be based on the analysis of the criteria of experience, professionalism and recognition, as well as the ability to ensure compliance with company policies and other provisions of good governance. The post will be for periods of two (2) years, without prejudice to the right of the Assembly to proceed with their removal by any time.

11 ARTICLE TWENTY ONE.- COMMISSIONS The General Assembly of Shareholders shall have a Commission of Review and Approval of the Minutes, which will consist of two (2) persons elected by the General Assembly of Shareholders and who will be in charge of reviewing the contents of the minutes of the Meeting prepared by the General Secretary, approve and sign it if it is consistent with the truth and reality of the events. Additionally, if the case so warrants, a Commission on Elections and Votes can be established: It will consist of three (3) persons responsible for ensuring that voting is carried out in a transparent manner and in accordance with the By-laws, Code of Good Governance and these Regulations. If this is the case the votes will also be counted. This Committee shall report to the Board the results of each of the votes. ARTICLE TWENTY TWO.- AGREEMENT BETWEEN SHAREHOLDERS Two or more shareholders who are not administrators, may enter into agreements under which they commit to vote in the same or certain way at the meetings of the General Assembly of Shareholders. The agreement may include a stipulation that allows one or more of them or a third party to represent them in the meeting or at all Shareholders' meetings. This agreement must be in writing and delivered to the legal representative so it can be deposited at the company's administrative offices for the respective effects. In other cases neither the Company nor the other shareholders are liable for the breach of the terms of the agreement. ARTICLE TWENTY THREE.- MINUTES OF THE MEETINGS The meetings, deliberations, decisions, elections, and other work and activities of the General Assembly of Shareholders, shall be recorded in the respective minutes book. These will be authorized with the signatures of the Commissioners, the President and the Secretary of the Assembly, or in his absence, by the Statutory Auditor. The minutes will be headed by their number and contain at a minimum the following: the place, date and time of the meeting, the number of shares subscribed, how the convocation was realized and on what date before the meeting, the attendance list specifying the number of shares they own themselves or represent for others, the matters discussed, the decisions taken and the number of votes cast for, against or in blank, the written records submitted by participants during the meeting, the appointments made and the date and time of its closure. The minutes shall be approved by the General Assembly itself or the persons designated in the meeting for that purpose.

12 ARTICLE TWENTY FOUR.- INFORMATION AFTER THE ASSEMBLY Within the statutory period, the minutes of the Assembly approved by a committee appointed for that purpose and signed by its members and the President and the Secretary of the Assembly will be sent to the competent bodies.