Exhibit 1.1
EMPRESAS ICA SOCIEDAD CONTROLADORA, S.A. DE C.V.
BYLAWS
ARTICLE I
NAME, PURPOSE, DOMICILE AND DURATION
FIRST - The name of the company is EMPRESAS ICA SOCIEDAD CONTROLADORA and this
name will always be followed by the words SOCIEDAD ANONIMA DE CAPITAL VARIABLE
or the abbreviation "S.A. DE C.V."
SECOND - The purpose of the company is as follows:
1. - To promote, establish, organize, exploit, acquire and take part in the
capital stock or equity of all genres of business corporations or civil
partnerships or any other entity, both national and foreign, as well as to take
part in their administration or liquidation.
2. - To acquire, under any legal equity, shares, interests, certificates of
profit-sharing, bonds, debentures, partnership interests and all types of credit
instruments, of any type of business corporation, trust or joint venture, be it
forming part of their incorporation or by means of a post acquisition, as well
as selling, providing and negotiating such shares, certificates of
profit-sharing, equity interests, bonds, debentures, including any other credit
instruments.
3. - To act as an agent, representative or commission broker of individuals or
corporate entities, be they Mexican or foreign.
4. - To engage in all types of commercial or industrial activities allowed by
law.
5. - To obtain all types of loans or credit, issuing debts, bonds, commercial
paper and any other negotiable instrument or equivalent instrument, with or
without the granting of specific collateral by means of a pledge, mortgage,
trust or under any other legal security; to grant any other type of financing or
loan to business corporations or civil partnerships, businesses and institutions
with which the Company has business relations or an equity interest, receiving
or not specific collateral or personal guarantees.
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6. - To grant and receive all types of personal guarantees, collateral and debt
guarantees by endorsement or negotiable instrument drawn on corporations,
associations and institutions in which the Company has interest or shares, or
with which the Company has business relations or relations with any third party
being able to, in addition, be guarantor or in any other nature, including that
of joint or severally liable debtor, to guarantee debts and obligations of third
parties.
7. - To subscribe, issue, draw and guarantee by endorsement all types of
negotiable instruments, as well as to accept them and endorse them.
8. - To acquire, lease, use and enjoy, exploit, commercialize personal property
and real estate necessary for its establishment, as well as the buying and
selling of other property or real estate that is required for achieving its
objectives.
9. - To acquire, register, preserve, use, sell, transfer, lease, cede the use of
and, in general, dispose of all types of patents, brands, patent certificates,
commercial names, utility models, industrial designs, industrial secrets and any
other industrial property rights, as well as copyrights, options about them and
preferences, be it in Mexico or abroad.
10.- To sign, grant and execute all documents, of whatever legal nature, that
are considered necessary or convenient for the achievement of the above
objectives.
THIRD - The domicile of the company will be Mexico City, Federal District, but
it may establish agencies or branches within or outside of the Mexican Republic,
which will not be understood as a change of domicile.
FOURTH - The duration of the Company is ninety-nine years, starting on the day
of its incorporation.
FIFTH - No foreign person, whether an individual or a corporate entity, or
Mexican company that does not have the exclusion of foreigners clause in its
by-laws may have any direct or indirect participation or may own Company shares.
The Company will never acknowledge rights of shareholders to the above-mentioned
investors and companies. If for any reason any of said persons, investors or
companies acquire an equity interest or become the owner of one or more Company
shares, thereby contravening the
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above mentioned provision, it is agreed as of this time that said participation
will be null and void and consequently cancelled and the equity interest in
question will have no value nor will the certificates that represent it, and the
capital stock will be reduced by an amount equal to the value of the cancelled
participation.
ARTICLE II
ABOUT CAPITAL STOCK
CHAPTER I
ABOUT THE CAPITAL STOCK
SIXTH - The capital stock of the Company is variable. The minimum fixed capital
without right to withdrawal is $480,713,069.97 (four hundred eighty million
seven hundred thirteen thousand sixty-nine pesos and 97/100 National Currency)
represented by 434,971,287 registered common shares with no-par value, fully
subscribed and paid.
The variable portion of the capital stock may not be higher than ten times the
amount of the minimum fixed capital without right to withdrawal and will be
represented by registered common shares with no-par value.
There shall be only one class of shares, which will grant equal rights and
obligations to their holders. Each share issued due to an increase of the
capital stock or for any other reason will constitute the issuance of a new
series of shares which will be identified with a consecutive number followed by
the year, unless the shareholders' meeting resolves otherwise.
Companies in which this Company is the majority stockholder or holds a majority
equity interest may never invest, directly or indirectly, in shares of this
Company or in shares of any other company which is a majority shareholder of
this Company, or which without being so, said companies know that it is a
shareholder of this Company, except in the case that said companies acquire
shares of this Company to comply with sales options or plans granted or designed
or that may be granted or designed in favor of the employees of said companies.
SEVENTH - The capital stock may be increased or decreased by resolution of an
ordinary or extraordinary shareholders' meeting, as the case may be, in
accordance with the rules contained in this clause.
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Increases or decreases of the Company's fixed minimum portion of the capital
stock may only be decreed or the maximum limit of the variable portion may only
be modified by resolution of the Extraordinary Shareholders' Meeting to approve
its corresponding amendment to the Company's by-laws. The Company may increase
its capital and issue unsubscribed shares for placement among the general
public, pursuant to the provisions of Article 81 of the Stock Market Law.
Within the limits stipulated in the Sixth Clause of these by-laws, increases or
decreases of the variable portion of the capital stock may be effected by
resolution of the Ordinary Shareholders' Meeting and the respective minutes must
be notarized, without the need of registering the respective public deed in the
Public Registry of Commerce, except when the shareholders exercise their right
to withdrawal, under the terms of the Ninth Clause of the by-laws, or when
increases or decreases of the capital to which section I of article 14 Bis 3 of
the Stock Market Law makes reference, are concerned.
(Sole Circular Art. 8 sec.I subsection "a")
No increase in capital may be decreed until all the shares previously issued
have been fully paid. When adopting the capital increase resolutions, the
Shareholders' Meeting (the" Meeting"), that resolves upon the increase, or any
subsequent Shareholders' Meeting, will determine the terms and rules in
accordance with which said increase is to be carried out.
Shares issued as an increase of the variable portion of the capital stock and
through a resolution of the Meeting resolving that upon their issuance must be
deposited in the Company Treasury so that they could be surrendered as the
shares are subscribed, may be offered for subscription and payment by the Board
of Directors according to the powers granted to the Board by the Shareholders'
Meeting, however it must give Company shareholders the preference of
subscription referred to in this clause.
Capital stock increases may be effectuated by a capitalization from the reserve
of profits pending application or by surpluses or payment in cash or in kind.
For increases by capitalization of reserves of profits pending application or by
surpluses, all the holders that have subscribed shares, paid and outstanding at
the time of said increase will be entitled to the proportional part
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corresponding to the new shares, issued as a result of the capitalization.
In increases by payment in cash or in kind, shareholders of shares that are
subscribed, paid and outstanding at the time the increase is determined will
have a preference to subscribe the new shares issued or placed in circulation
throughout a period of fifteen days, starting from the date of publication of
the respective notice, in the official newspaper of the Company's place of
business, to which the shareholders give this publication the character of
"Official Gazette" of the place of business, or in the alternate, that date is
calculated as of the date the Meeting is held if all of the shares of the
capital stock are represented at the meeting.
If after the expiration of the term during which shareholders were entitled to
exercise their preferential right by this Clause, there remained unsubscribed
shares, then these are to be offered for subscription and payment under the
conditions and terms determined by the Meeting that resolved the capital stock
increase or by the terms determined by the Board of Directors, in such case, at
a price that may not be lower than the price at which they were offered to the
Company shareholders for subscription and payment.
The shareholders will not enjoy the preferential rights mentioned in the above
paragraphs when the following conditions exist: (i) the merger of the Company,
(ii) conversion of liabilities, (iii) public offering under the terms provided
by Article 81 of the Stock Market Law and the first paragraph of this clause,
(iv) the increase of capital stock by means of payment in kind for the shares
issued, or by canceling Company liabilities, and (v) placing shares acquired by
the Company in accordance to the Tenth Clause of these By-Laws.
Every capital stock increase must be registered in the specific books to be kept
by the Company for these purposes.
CHAPTER II
ABOUT DECREASES OF THE CAPITAL STOCK
EIGHTH - Decreases of the minimum fixed portion of the capital stock referred to
in the Seventh Clause of these By-laws, may be effectuated in order to absorb
losses, reimburse shareholders for their shares or release them of payments not
made and for cases
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where the shareholders exercise their withdrawal rights provided in the Ninth
Clause of these By-laws. The decreases in the minimum fixed portion of the
capital stock in order to absorb losses may be effectuated without the need to
extinguish shares, by virtue of the fact that they are no-par value shares.
NINTH - The reduction of the variable portion of the capital stock may be
effectuated by a partial or complete withdrawal of the shareholders'
contributions, following a previous written notice addressed to the President of
the Board of Directors, of their intentions to withdraw, which will be effective
at the end of the fiscal year in question if the notice is received prior to the
last quarter of the fiscal year, and at the end of the following year, if
received at a later time. However, shareholders may not exercise their right of
withdrawal if as a result of said withdrawal the fixed portion of the capital
stock not subject to withdrawal is affected.
In the event that the President of the Company's Board of Directors received
requests for withdrawals that would result in reducing the total amount of the
minimum fixed portion of the capital stock, the Company will be obligated to
satisfy only those requests whose reimbursement does not cause a reduction of
the minimum fixed portion of the capital stock, giving priority to the requests
it receives first in time.
In the event that the President of the Company's Board of Directors received
various simultaneous requests for withdrawals that would result in reducing the
total amount of the minimum fixed portion of the capital stock, the Company may
only decree the reimbursement of those shares whose withdrawal will not provoke
the reduction of the minimum fixed portion of the capital stock, and said
reimbursement will be effectuated in proportion to the number of shares of each
shareholders' simultaneous request.
The procedure for exercising the right of withdrawal foreseen in this clause, in
addition to complying with the provisions of Articles 220 and 221 of the General
Business Law, will be subject to the condition that the respective reimbursement
will be paid in accordance with the lower of the following two values: (1) 95%
of the quotation value on the Stock Exchange, obtained from the average weighted
price by volume of transactions effected during the last thirty days in which
the Company's shares were negotiated prior to the date on which the withdrawal
is to be effected, during a period not to exceed six months; or (2) the book
value of shares
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according to the balance sheet corresponding to the closing of the immediately
previous period in which the withdrawal is to become effective, previously
approved by an Ordinary Shareholders' Meeting. In case the number of days in
which the shares were negotiated during the period indicated in the preceding
paragraph is less than 30, then the days that would have been effectively
negotiated will be used. In the event that the shares are not negotiated in said
period, the book value of the shares will be taken. (Sole Circular Art.8, sec.I
subsection "c")
Payment of the reimbursement will be enforceable against the Company as of the
date following the Ordinary Shareholders' Meeting that approved the balance
sheet for the period in which the withdrawal is to be effective.
All decreases of the capital stock will be registered in the specific books to
be maintained by the Company for these matters.
TENTH - The Company may acquire shares of its own capital stock in accordance
with the following procedure: the acquisition will be realized through the Stock
Exchange, at the current market price, and the prohibition established in the
first paragraph of article one hundred thirty-four of the General Business Law
will not apply, provided that the purchase is made against the stockholders'
equity so long as said shares pertain to the company or, in such case, to the
capital stock; in the event that it is resolved to convert them into treasury
shares in which case a resolution of the Shareholders' Meeting will not be
required.
An Ordinary Shareholders' Meeting must expressly resolve, for each fiscal
period, the maximum amount of funds that may be used to purchase its own shares,
the only limitation being that the total amount of funds that may be used for
said purpose may never be greater than the total balance of net profits of the
Company, including withheld profits. On the other hand, the Board of Directors
will designate for such purpose the one or more persons responsible for
acquiring and placing the shares of the Company.
So long as the shares belong to the Company, they may not be represented at any
type of Shareholders' Meetings.
The shares that belong to the Company or in such case, the treasury shares, as
referred to in this first clause, without detriment to the provisions of the
General Business Law, may be placed among the public investors, and for this
latter case, the
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increase of the capital stock will not require a resolution of a Shareholders'
Meeting or a resolution of the Board of Directors for their placement.
Purchase and placement transactions may never exceed twenty five percent of the
capital stock, in the case of shares other than ordinary shares, or result in a
failure to comply with the requirement to maintain the registration on the list
of securities of the exchange in which they are quoted.
The purchase and placement of shares contemplated in this clause, their proper
reports which are to be presented to an Ordinary Shareholders' Meeting, the
rules for reflecting them in the financial information, as well as the form and
terms in which these transactions are announced to the National Banking and
Securities Commission, to the respective Stock Exchange and to the public
investor, will be subject to the general provisions issued by cited Commission.
ELEVENTH - The corresponding Shareholders' Meeting may resolve the issuance of
shares without voting rights, shares with limitations of other corporate rights
or shares of restricted vote other than those foreseen in article 113 of the
General Business Law, without adhering to what is established in article 198 of
the cited Law, provided that the Company has obtained the express authorization
of the National Banking and Securities Commission and the issuance conforms to
the following:
A) The issuance of shares other than common shares shall not exceed twenty-five
percent of the capital stock that is placed among the public investors, of the
total Company's shares that are also placed in the same market.
B) The issuance of shares other than common shares may be issued up to an
additional twenty-five percent, with prior authorization from the National
Banking and Securities Commission, provided that this last percentage be
represented by shares without the right to vote, with the limitation of other
corporate rights or by shares of restricted vote, which in all cases must be
convertible to common shares in a period no greater than five years, beginning
from the time of their placement.
C) In order to determine the percentages referred to above, neither the shares
nor the trust titles that represent them will be considered, and depending on
the nationality of the shareholder,
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limit the right to vote in compliance with the applicable legal provisions of
the foreign investment law.
D) No mechanisms may be negotiated or offered to the public investor, jointly,
common shares and restricted shares or with limited vote or without the right to
vote, except that the latter may be convertible into common shares in a maximum
period of five years, or that, depending on the nationality of the shareholder,
the shares or trust titles that represent them limit the right to vote in
compliance with the applicable legal provisions of the foreign investment law.
E) The shares without the right to vote will not be computed for purposes of
determining the quorum for a Shareholders Meeting. Moreover, the shares with
restricted or limited voting rights will only be computed to determine the
quorum, and for the resolutions of the Shareholders Meetings when the
shareholders must be called in order to exercise their right to vote.
(Stock Market Law Art. Bis 3, sec.II)
TWELFTH - In case of cancellation of the registration of the Company's shares in
the Securities Section of the National Registry of Securities and
Intermediaries, either upon the request of the Company or by resolution of the
National Banking and Securities Commission pursuant to the Law, the shareholders
that are titleholders of the majority of the common shares or who have the
possibility to impose their decisions in the ordinary shareholders' meetings or
of appointing the majority of the members of the Company's Board of Directors,
will be obligated to make a public share purchase bid prior to the cancellation.
The shareholders, referred to in the above paragraph, will have the obligation
to place in a trust, for a minimum period of six months, the resources necessary
for purchasing the investors' shares that did not exercised this right at the
same price as the bid; in the event that once the public bid is carried out and
prior to the cancellation of the registration in the Registry, the
aforementioned shareholders do not acquire 100% of the paid capital stock.
The public share purchase bid must be carried out at least at the higher price
between the market value in the Stock Exchange or the share's book value in
accordance with the last quarterly report presented to the Commission and the
Stock Exchange before the beginning of the public offer, except when said value
had been
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modified according to the criteria applicable to the determination of relevant
information in which case the most recent financial information that the Company
has must be considered. The market value will be the average weighted price by
volume of the transactions that were effected during the last 30 days in which
the Company's shares would have been negotiated prior to the date of the public
bid, during a period that may not exceed six months. In case the number of days
in which the shares were negotiated was less than 30, the days that effectively
would have been negotiated will be taken. In the event that the shares are not
negotiated in said period, the book value of the shares will be taken.
In case the public bid consists of more than one series of shares, the average
of the above paragraph must be taken from each one of the series that will be
cancelled, taking as the market value for the public offering of all the series,
the highest average.
Within the five working days prior to the date the offering begins, the
Company's Board of Directors must present their opinion with regards to their
justification of the price of the public bid, in which they will take into
account the minority shareholders' interests with the purpose of complying with
what is established in article 16, second paragraph of the Stock Market Law and
the opinion of the Audit Committee, which must be revealed in the event that it
is contrary. In case the Board of Directors is facing situations that could
generate a conflict of interest, the Board's opinion must be accompanied by
another opinion issued by an Independent Expert selected by their Audit
Committee, in which special emphasis is given to safeguarding the minority
shareholders' rights.
The shareholders referred to in the first paragraph of this clause will not be
obligated to carry out the public offering for the registry cancellation if the
consent of the shareholders that represent at least 95% of the Company's capital
stock is accredited by means of a resolution from a Meeting, and that the amount
offered for the shares placed between the Great Public Investor, according to
this clause, be less than 300,000 units of investment. The preceding can be done
with the understanding that in order to request and obtain the cancellation, the
Company must create a trust, as referred to in the second paragraph of this
clause, and notify the cancellation and creation of the trust through the SEDI.
What is agreed in this clause will also be applicable to the common certificates
of profit-sharing for shares, as well as the
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representative share certificates of two or more shares of one or more series of
shares of the Company.
The shareholders obligated to carry out the public offering may request the
Commission to authorize them, taking into consideration the Company's financial
situation and perspectives, to use a different basis for determining the price
referred to in the third paragraph of this clause, provided, however, that they
present the Board of Directors' resolution, with the prior favorable opinion of
the Audit Committee that includes its supporting reasons for justifying a
different price, and accompanied by a report from the Independent Expert that
gives special emphasis to the fact that the price is consistent with article 16
of the Stock Market Law.
(Sole Circular, Art.8, sec.III)
THIRTEENTH - Shares will be represented by certificates which must contain the
requirements of article 125 of the General Business Law; they may cover one or
more shares and will be consecutively numbered and signed by two members of the
Board with their handwritten or facsimile signature.
In the event of loss, destruction or theft of one or more share certificates,
the owner may request the issuance of new certificates, subject to the
provisions of the General Law of Credit Instruments and Transactions. Expenses
involved in the issue of the new certificates will be to the account of the
interested party.
The Company will maintain a share registry as required under Article 128 of the
General Business Law. The Company will recognize as the legitimate holder of the
shares the person who is registered in said Registry. At the request of any
interested party, following the necessary proof, the Company will register in
said book the share transfers and conversions that are effectuated. The Registry
Book will remain closed three days prior each Shareholders' Meeting until the
following day after the Meeting. During this time, no registration will be made
in said Book.
ARTICLE III
ABOUT COMPANY MANAGEMENT AND VIGILANCE
CHAPTER I
ABOUT THE ADMINISTRATIVE COUNCIL
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FOURTEENTH - Company management will be vested in the Board of Directors formed
by at least five and a maximum of twenty equity and independent standing members
as determined by the ordinary shareholders' meeting, of whom, at least
twenty-five percent must be independents members. The ordinary shareholders'
meeting will appoint for each standing member his or her alternate, at the
Board's proposal, with the purpose of achieving an effective participation. The
alternate member of an independent member must have the same status. (Stock
Market Law, Art.14-Bis-sec.IV).
The alternate will enter into office in the event of a resignation or temporary
absence of the standing member. The alternate will continue in office, according
to the situation, until the cause that gave rise to the absence of the standing
member disappears or until the Meeting makes a new appointment.
An equity member will be a person who has a shareholding in the Company for
which he or she works. An independent member will be a person who has been
invited to participate as a member of the Company's Board of Directors for his
or her professional experience, capacity and prestige, provided that in
addition, in no circumstance, he or she is:
A) An employee or executive of the Company or was either of these in the fiscal
year immediately prior to his or her appointment;
B) A shareholder that without having been an employee or executive of the
Company has the power of command over the executives of Company;
C) A member or employee of corporations or associations that render advisory or
consultative services to the Company, to the companies that belong to the same
economic group to which the Company forms a part of, whose incomes represent ten
percent or more of those companies' incomes;
D) Client, supplier, debtor, creditor, member or employee of a corporation that
is a client, supplier, debtor or creditor of the Company;
E) Employee of a foundation, association or civil partnership that receives
important donations from the Company;
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F) Chief Executive Officer or high-level executive of a corporation on whose
Board of Directors the Company's Chief Executive Officer or a high-level
executive participates; and
G) Spouse, concubine, blood relative or relative by marriage up to the first
degree, with regards to any of the people mentioned in subsections "c" through
"f" above, or up to the third degree, in relation to the persons indicated in
subsections "a" and "b" above.
The Board of Directors will appoint from among its members the person who is to
act as the Chairman of the Board and in the event of the latter's temporary
absence, the General Counsel of the Company will preside, and in the absence of
both, the independent member with the greatest seniority and who is an
attorney-at-law will preside.
In the event of a permanent absence of the Chairman, the Board of Directors will
be called whose meeting will be presided over by the General Counsel in order to
appoint the new Chairman from among the members of the Board already appointed.
The General Counsel may not be appointed as a candidate in the election process
for the new Chairman.
The Secretary and the Assistant Secretary (or "Pro-Secretary") of the Board of
Directors will be named by the Board. The appointment will be made independently
of the positions or status held by the person appointed within or outside of the
Company.
In addition to the Chairman of the Board, there may be a President and one or
more vice-presidents of the Company who will be named by the Board of Directors.
The President and the one or more Vice-presidents must be Mexican and may be
shareholders, members of the Board or persons unrelated to the Company; they
will represent the Company and will have the powers granted to them at the time
they are appointed.
One or more Directors, Managers and Assistant Managers may also exist; they will
be appointed by the Board of Directors and will have the powers granted to them
at the time of their appointment. The persons who hold these positions may be
shareholders, members of the Board, members of other administrative bodies or
persons unrelated to the Company.
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FIFTEENTH - The Chairman of the Board will have the following powers:
A) He or she will represent the Board before all types of persons and
authorities;
B) He or she will look to see that the resolutions of the shareholders' meetings
and the Board of Directors, and the opinions of the Audit Committee and the
Company's Examiners are fulfilled.
C) He or she will look to see that the legal provisions that regulate the
Company's activities and transactions, as well as the provisions of the
Company's By-laws, are fulfilled;
D) He or she will look to see that the Board meets at least once every three
months. He may call a Board meeting, in which he will have the casting vote.
E) He or she will have all other powers and responsibilities that are attributed
to him by the Company's laws and By-laws.
SIXTEENTH - The Ordinary Shareholders' Meeting will have the power to appoint
the number of standing members of the Board of Directors, as it deems
appropriate so that they may form part of the Executive Committee as temporary
and revocable agents.
The Ordinary Shareholders' Meeting may appoint, in addition, other standing or
alternate members of the Board of Directors so that, with the same status of
temporary and revocable agents, they may act as alternate members of the
Executive Committee and substitute for standing members during temporary or
definitive absences of the former; the General Regular Shareholders Meeting will
determine how said alternate members are to fulfill their duties.
The Executive Committee of the Company, as a collegiate body, will act and adopt
its resolutions by the majority vote of its members and will have the powers and
rights referred to in paragraphs a) through g) inclusive of the Seventeenth
Clause of these by-laws.
SEVENTEENTH - The Executive Committee must inform the Board of Directors of the
resolutions adopted when exercising the powers conferred upon it by this clause,
at least annually or when in the
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judgment of the Committee, facts or acts occur, which are significant for the
Company.
The Executive Committee will have the power to appoint from among its members,
the persons who will act as the Chairman and Secretary of the Company, as well
as the power to determine the dates for their meetings, with the understanding
that the Chairman of the Executive Committee must be a standing member of the
Board of Directors and the Secretary of the Executive Committee may either be a
standing member or an alternate member or the Secretary or Pro-secretary of the
Board of Directors. The Chairman will have a casting vote.
The Executive Committee may not delegate all of its powers to any one person,
but it may grant general and special powers when deemed appropriate and
determine the persons who are to carry out its resolutions. In the absence of
said appointment, both the Chairman and the Secretary will be authorized to
execute them.
The Company's Examiner shall meet with the Committee and for this purpose; he
must be duly called for a meeting. The Examiner will have the right to speak but
not to vote.
EIGHTEENTH - The Directors and, in such case, members of the Committees, may or
may not be Company shareholders; they will hold office for one year and may be
reelected and will continue in office until their successors are appointed and
take office.
NINETEENTH - All minority shareholders of common shares that represent at lease
ten percent of the capital stock, in one or more share series will be entitled
to name one Member and his respective alternate. The persons who exercise this
right may not participate in the appointment of the remaining members.
All minority shareholders of shares of restricted vote, other than those that
article 113 of the General Business Law foresees, or of shares of limited vote
that represent at least ten percent of the capital stock, will be entitled to
name one Member and his respective alternate. In default of this appointment by
the minority shareholders, the shareholders of said class of shares will enjoy
the right to name at least two members and their alternates. In this last case,
the appointments, as well as the substitutions and revocations of the members,
will be agreed upon in a special meeting. The persons who exercise this right
may not participate
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in the appointment of the remaining Members. (Stock Market Law, Art.14 Bis 3,
sec.III).
The appointment of the Member or Members appointed by the minorities may only be
revoked when the appointment of all the other Members is also revoked.
TWENTIETH - The Board of Directors will operate legally with the attendance of
the majority of its members and its resolutions will be adopted by a majority
vote.
In the event of a tie, the Chairman will have the casting vote.
TWENTY-FIRST - To attain the strategic vision of the Company, the Board of
Directors will be in charge of managing all its businesses. Also, it is vested
with the broadest powers to carry out all necessary or appropriate transactions
according to the nature and purpose of the Company, except for the acquisition
or sale of shares or those consisting of the exercise of the right of withdrawal
that corresponds to this Company, for its participation in variable capital
companies, in which case an authorization from the Ordinary Shareholders'
Meeting will be required, if within the then-current corporate period of the
Company, any of the following occurs either simultaneously or consecutively:
1) The purchase value of shares of another company is higher than 20% of the
shareholders' equity according to the last statement of the financial position
of this Company;
2) The sale value of shares of another company is higher than 20% of the
shareholders' equity according to the last statement of the financial position
of this Company;
3) The exercise of the withdrawal right in variable capital companies represents
the reimbursement of shares, the value of which is higher than 20% of the
shareholders' equity, according to the last financial position statement of the
financial positions of this Company.
The Board of Directors will have the following powers, which may not be
delegated:
Approve transactions that do not fall under the ordinary course of activity of
the business and that are intended to be carried out between the company and its
partners, with persons who form a
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part of management or with whom these persons maintain equity ties, or in such
case persons who are blood relatives or relatives by marriage up to the second
degree, the spouse or concubine; the purchase or sale of ten percent or more of
the assets; the posting of guarantees for an amount higher than thirty percent
of the assets, as well as transactions other than the foregoing that represent
more than one percent of the company assets. The members of the Board of
Directors will be responsible for the resolutions they adopt in connection with
these matters, except in the case where the member has declared his or her
disagreement at the time the act in question is discussed and resolved.
In addition, he or she will have the following powers, which he or she may
delegate:
A) Carry out all transactions inherent in the Company's purpose or that result
directly or indirectly from it and carry out acts of administration and strict
domain.
B) Represent the Company in judicial and administrative matters and before
persons and authorities of every kind, with a general power of attorney for
lawsuits and collections, with all the general powers including the special
powers that require a special power or clause by Law; initiate and abandon suits
of all kinds, including the Writ of Amparo; prepare and answer interrogatories;
arrive at transactions; submit to arbitration; file criminal complaints and
charges and become a coadjutant of the Public Prosecutor until obtaining the
remedy of damages caused by punishable acts.
C) Grant, subscription and endorsement of all types of credit instruments and
documents.
D) Grant all types of guarantees and bonds on behalf of the company when deemed
appropriate.
E) Delegate its powers to one or more Members for the performance of specific
acts, determining their powers and duties.
F) Grant general and special powers of attorney, whether delegating or
substituting their powers (but conserving them) and revoke them, including those
required to file criminal complaints and charges.
G) Create Special Committees or designate specific officers to ensure that the
shareholders and the market have access to the
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Company's public information; establish internal control mechanisms; ensure that
the Company has the necessary mechanisms to prove that it complies with the
various legal provisions applicable to it; and regularly evaluate the
performance of the Chairman and the top level officers of the Company,
indicating to them their attributes, with the understanding that said bodies or
officers who will constitute the presidency must be equity directors, and the
other members may be equity members, independent members or officers, acting as
an extension of the Board of Directors or the Executive Committee to provide
them with support in making decisions on various matters. These bodies or
officers do not constitute an executive body and do not assume functions that
correspond to the Board of Directors and to the Executive Committee in the
operating areas of the Company.
H) Name the one or more Directors, Managers and Assistant Managers necessary for
the functioning of the Company and grant them the powers deemed necessary, as
well as revoke their appointments.
I) Determine how the Company shares will be voted in Extraordinary and Ordinary
Shareholders' Meetings of companies in which the Company is the majority
shareholder, delegating as of this time said powers to the officer with powers
to attend the Meetings in question.
J) Call General and Special Shareholders Meetings and approve the financial
information of the Company that is to be presented to the Ordinary Shareholders'
Meeting.
K) All others granted by these By-laws, the Shareholders' Meeting or the law.
TWENTY-SECOND - The Board of Directors will meet every three months at least,
provided that the meeting is called by the Chairman, by twenty five percent of
the members or any of the company examiners. The Examiner is to be called to all
meetings of the Board and to all meetings of those intermediate consultation
bodies in which the Board of Directors has delegated powers, and the Examiner
will attend them with the right to speak but not to vote. Meetings will be held
in Mexico City or elsewhere in national territory as resolved by the Board.
Calls to said meetings are to be sent to those who are required to attend at
least five days in advance of the date of the event.
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The Agenda or a list of items to be addressed and resolved is to be sent with
the call.
TWENTY-THIRD - The following are the powers and obligations of the Secretary or
Assistant Secretary of the Board of Directors:
I.- To act as Secretary or Assistant Secretary in Meetings of the Board and in
Shareholders' Meetings.
II.- To keep the corporate books required by law and any others required under
the By-laws that are not specifically assigned to another Company officer or
employee.
III.- Have minutes of Shareholders' Meetings and Board Meetings notarized when
so resolved by these bodies of the Company and when appropriate according to
law; issue simple copies and certificates or excerpts of minutes of Board
Meetings and Shareholders' Meetings, as well as of entries that appear in his or
her books, authorizing them with his or her signature.
IV. - All other powers conferred by these By-laws and the Law.
TWENTY-FOURTH - The Chairman of the Board will preside over the meetings, and in
his absence, the Member elected by the persons in attendance will then preside.
In the absence of the Secretary of the Board, the person appointed by the member
presiding over the meeting will act as secretary.
TWENTY-FIFTH - Minutes will be drawn up of all Board Meetings by the Secretary,
recording the items addressed and the resolutions adopted. Said minutes will be
transcribed in the respective Book of Minutes and will be signed by the persons
who acted as Chairman and Secretary of the meeting, as well as by the one or
more examiners if they attend.
TWENTY-SIXTH - In order to perform their duties, members of the Board and of the
Committee created under the terms of the Thirteenth Clause hereof, the
President, Vice-Presidents, Directors, Managers and Assistant Managers of the
Company will post any of the following guarantees:
A) They will deliver to the company the sum of $1,000,000 (ONE MILLION PESOS,
MEXICAN CURRENCY), or
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B) They will post a bond in the amount mentioned above.
CHAPTER II
THE AUDIT COMMITTEE AND THE EXAMINER
TWENTY-SEVENTH - The General Regular Shareholders' Meeting will create an Audit
Committee, which will be comprised of directors, of whom the presiding director
and the majority of the directors must be independent; meetings must be attended
by the one or more Examiners who will attend as guests with the right to speak
but not to vote. The Audit Committee will have the following duties, among
others:
A) Prepare an annual report on its activities and present it to the Board of
Directors which in turn will present it to the Shareholders' Meeting.
B) Render to the General Regular Shareholders' Meeting the annual report on its
activities.
C) Issue an opinion with respect to transactions not related to the ordinary
course of the Corporation businesses, and intended by it to be entered into with
related parties or persons referred to in the Twenty First Clause hereof,
regarding powers of the Board of Directors that may not be delegated.
D) Propose, when deemed appropriate, that independent specialists be retained so
they give their opinion in respect to those transactions referred to in the
preceding sub-paragraph; as well as related to the following transactions: (i)
sale or purchase of ten percent (10%) or more of the assets; (ii) granting of
guarantees in excess of an amount of thirty percent (30%) of the assets; and
(iii) transactions other than the above-mentioned representing more than one per
cent (1%) of the Company assets.
E) Assess from time to time the internal control policies in order to verify
compliance with good corporate management practices and generally accepted
accounting principles applied to the Company.
F) Analyze the regular and extraordinary information that the Company should
submit to the National Bank and Securities Commission, the Stock Exchanges, the
investors, and the Stock Exchange Authorities of Mexico and other countries
where the Company has its securities quoted or publicly offered, in such a
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manner that this information is accurate, clear, and timely, to be in compliance
with the applicable legal framework, and so it reasonably shows its financial
status, the operating results, and cash-flows of the Company within the period
included in the applicable report;
G) Advise the Board of Directors about those candidates who may act as External
Auditors;
H) Establish policies for hiring employees or former employees of external
auditors of the Company;
I) Check the observation letters and Audit Reports from External Auditors,
J) Assist the Board of Directors reviewing the consolidated financial data.
K) Verify that the Company has policies that contribute to the adherence to
various legal provisions that are submitted;
L) Issue recommendations and opinions needed and related to its purposes and
duties, in respect of such rules issued by the National Bank and Securities
Commission or any competent stock security authority;
M) Be the Company's consulting body in order to assist its decision-making
bodies with judgment elements that contribute to the compliance of the
provisions ruling it and good corporate management;
N) Consider, when appropriate in order to have better assessment of securities
matters, the comments of financial analysts and risk qualifying agencies;
O) Assist the Chairman of the Board of Directors, the Executive Finance Vice
President and the Executive Management Vice President to comply with the duties
established for their positions in the applicable laws and, especially, to
comply with the requirements of certification and controls and procedures for
disclosing of information;
P) Know about relevant events that may affect the results or performance of the
Company, to suggest the acts or omissions deemed appropriate to prevent any
contingency;
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Q) Any other specific duties assigned to it by the Board of Directors.
TWENTY-EIGHTH - Company vigilance will be vested in one or more Examiners
designated by the General Regular Shareholders' Meeting and they may be
shareholders or persons unrelated to the Company. The Shareholders' Meeting may
designate at its discretion the alternate Examiners who will take office in the
order in which they were designated in the event of absence of the standing
Examiners, due to resignation or from impossibility declared by them to continue
performing their duties. They will remain in office until the impossibility to
perform disappears or the Shareholders makes a new designation.
TWENTY-NINTH - The one or more Examiners will hold office for one year and will
cease to perform their duties at the time their successors have been designated
and take office.
THIRTIETH - Examiners will have the powers granted to them by the General
Corporation Law.
THIRTY-FIRST - In order to perform their duties, Examiners will post either of
the guarantees mentioned in the Twenty Sixth Clause of these By-laws.
ARTICLE IV
THE FISCAL PERIOD AND THE BALANCE SHEET
THIRTY-SECOND - The fiscal period will run from January 1 to December 31 of each
year.
THIRTY-THIRD - Upon the conclusion of each fiscal period, the Board of Directors
will prepare a balance sheet in accordance with terms outlined in article 172 of
the General Corporation Law. This balance sheet is to be concluded and delivered
to the Examiner or Examiners no later than at the end of the third month
following the close of the period and to which the Examiner or Examiners will
render their opinion pursuant to the law.
In respect to said balance sheet, the provisions of Articles one hundred seventy
three to one hundred seventy seven of the cited Law will apply.
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ARTICLE V
SHAREHOLDERS MEETINGS
THIRTY-FOURTH - General Shareholders Meetings, Ordinary or Extraordinary, will
be held in accordance with the provisions of the General Corporation Law. Calls
to said meetings are to be published and will indicate the place, date and time
and the items to be discussed according to Agenda in one of the most widely
distributed newspapers in the Federal District, at least 15 calendar days in
advance of the date for the meeting. Meetings may be held without prior call if
holders of all the shares are present. From the time the call is published for
the Shareholders' Meeting, the information and the documents related to each one
of the points on the Agenda are to be immediately available to the shareholders
at no cost.
Shareholders entitled to vote, including a limited or restricted vote, who
represent at least ten per cent (10%) of the capital stock, may request that a
General Regular Shareholders meeting be called pursuant to article one hundred
eighty four of the General Corporation Law.
THIRTY-FIFTH - The Shareholders Meeting is the supreme authority of the Company
and all other bodies will be subject to its resolutions or accords. General
Regular Shareholders Meetings will be held on the day designated by the Board of
Directors, but in any case they will meet at least once a year within the four
months following the close of the fiscal period and they will address the items
indicated in article one hundred eighty one of the General Corporation Law, and
any matters other than those expressly reserved to the jurisdiction of the
Extraordinary or Special Shareholders' Meeting. Said meetings will also analyze
the report regarding the consolidated and unconsolidated financial statements of
the issuer referred to in the general points of article one hundred seventy two
of the General Corporation Law, corresponding to the immediately preceding
period of the Company, when the Company holds fifty percent or more of the
capital of other companies or when under any title it has the power to determine
their management, provided that said investment is at least twenty percent of
the shareholders' equity of the issuer or more. The issuer will be required to
publish both financial statements in the form and with the frequency established
by article one hundred seventy seven of the General Corporation Law.
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The General Extraordinary Meetings will be called to address any matters
outlined in article one hundred eighty two of the General Corporation Law and
any other matter required in accordance with these By-laws from a qualified
majority of shareholders.
Shareholders representing at least fifteen percent of the capital stock may
directly exercise civil liability actions against the administrators, provided
that they satisfy the requirements of article one hundred fifty three of the
General Corporation Law. Said action may also be exercised in respect to the
Examiners and members of the Auditing Committee, adjusting itself to cited legal
precept.
Shareholders with voting rights, including a limited or restricted right, who
constitute at least ten percent of the shares represented at a meeting may
request that voting be postponed on any item in respect to which they consider
that they are not sufficiently informed, adjusting to the terms and conditions
of article one hundred ninety nine of the General Corporation Law.
Shareholders with voting rights, including limited or restricted voting rights,
that represent at least twenty percent of the capital stock may object
judicially to resolutions of General Meetings in respect to which they are
entitled to vote, provided that they satisfy the requirement of article two
hundred one and adhere to provisions in article two hundred two of the General
Corporation Law.
THIRTY-SIXTH - In order for shareholders to be entitled to attend Meetings, they
will deposit their shares with a securities depository or will leave them in the
possession of the Secretary of the Board at the offices established at the
corporate domicile or with a credit institution in Mexico or abroad.
The deposits made to the Company are to be made at least two days prior to the
day indicated for the meeting. An admission card to the Meeting will be given
against the shares deposited, and it will show the number and class of shares it
covers, the name of the shareholder and the number of votes corresponding to it.
If the deposit is made with a credit institution, the respective proof of
deposit must also to be presented to the Company at least two days prior to the
date set for the meeting against which the admission card to the Meeting will be
delivered. The shares and the certificates exhibited will be returned after the
Meeting has been held in exchange for the voucher that was issued.
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Moreover, persons who attend Shareholders Meetings of the issuer as proxies have
the option to evidence their legal capacity by a power of attorney granted on
the format prepared by the issuer, which must satisfy the following
requirements:
1) Indicate clearly the name of the issuer as well as the agenda. The items
referred to in articles one hundred eighty one and one hundred eighty two of the
General Corporation Law may not be included under the items entitled
Miscellaneous; and
2) They will contain space for the instructions indicated by the grantor for the
exercise of the proxy.
The issuer will maintain at the disposal of brokers in the Securities Exchange
who evidence that they represent shareholders of the issuer, throughout the
period referred to in article one hundred seventy three of the General
Corporation Law, formats of the proxies so that they may timely deliver them to
their principals.
The Secretary of the Board of the issuer will be required to verify the
observance of all the provisions stated in the preceding paragraphs and inform
it to the Meeting, certifying the same in the corresponding Minutes.
THIRTY-SEVENTH - Meetings will be chaired by the Chairman of the Board of
Directors and in his absence by the person designated by the Meeting. The
Secretary of the Board will act as the Secretary of the Meeting and in his
absence by the Pro-Secretary of the Board and, in their absence, the person
designated by the Chairman or the Meeting.
The Chairman will name the inspector of quorum at his discretion to prepare the
respective attendance list and the calculations of shares.
Minutes will be drawn up of the Meetings and will be signed by the person who
presides over them, by the person who acts as Secretary, by the inspectors of
quorum and by the Examiner when he attends.
Copies, certificates or extracts of minutes of Meetings that are required to be
issued for any reason will be authorized by the Secretary of the Board.
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ARTICLE VI
THE RESULTS
THIRTY-EIGHTH - The net profits obtained during each fiscal year will be
distributed as follows:
1. - 5% (five percent) will be separated to constitute the legal reserve until
it amounts to one fifth of the capital stock, and if it diminishes, it will be
replenished in the same way, in the terms of article twenty of the General
Corporation Law.
2. - The amount as agreed by the General Shareholders Meeting to constitute one
or more welfare funds will be set aside.
3. - As for the balance, if any, it will be distributed as decided by the
Meeting.
ARTICLE VII
DISSOLUTION AND LIQUIDATION OF THE COMPANY
THIRTY-NINTH - The Company will be dissolved in those cases contemplated in the
General Corporation Law.
FORTIETH - Upon dissolution of the Company, it will be placed in liquidation
whereby one or more liquidators will be in charge of the Company. The
liquidators will be named at the Shareholders Meeting.
FORTY-FIRST - Except as resolved by the General Shareholders Meeting, the one or
more liquidators will have the powers conferred upon them by Article two hundred
forty two of the General Corporation Law, and they will distribute the balance
remaining among the shareholders, subject to the rules established in Article
one hundred thirteen, two hundred forty seven and two hundred forty eight of
cited Law and in these By-laws.
GENERAL PROVISIONS
For anything not stipulated herein, the provisions of the General Corporation
Law and the Special Provisions of the Stock Exchange Law will govern.
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