27th Jul 2007 15:25
Banco Santander Central Hispano SA27 July 2007 IGNACIO BENJUMEA CABEZA DE VACA, SECRETARY GENERAL AND SECRETARY OF THE BOARD OF"BANCO SANTANDER CENTRAL HISPANO, S.A.", CERTIFY: That, in accordance with the minutes of the meeting of the ordinaryGeneral Shareholders' Meeting of this entity, validly held on July 27, 2007, thefollowing resolutions were passed: ""ITEM ONE 1. Deprive of any and all effect resolution SEVEN.II) of the Ordinary GeneralShareholders' Meeting of 18 June 2005. 2. Re-authorise the Board of Directors, as broadly under the Law as may benecessary, so that in accordance with the provisions of Section 153.1.b) of theBusiness Corporations Law, it may increase share capital on one or moreoccasions and at any time, within a period of three years from the date of thisMeeting, in the maximum nominal amount of 1,563,574,144.5 euros, by means of theissuance of new shares - with or without a premium and with or without votingrights - with the consideration for such new shares consisting of cashcontributions, and with the power to set the terms and conditions of the capitalincrease and the characteristics of the shares, as well as to freely offer theunsubscribed new shares within the pre-emptive subscription period or periods,provide that, in the case of an incomplete subscription, the capital shall beincreased only by the amount of subscriptions made and amend the article of theBylaws regarding capital. The amount of capital increases, if any, to satisfythe conversion of debentures that is made under the provisions of resolution Tenof the Ordinary General Shareholders' Meeting of 21 June 2003 is deemed to beincluded within the limit of the aforementioned maximum amount available at anytime. Furthermore, the Board is authorised to totally or partially excludepre-emptive rights upon the terms of Section 159.2 of the Business CorporationsLaw. The delegation of powers includes the power to take all the steps requiredfor the new shares covered by the capital increase or increases to be admittedto trading on the domestic and foreign stock exchanges on which the Bank sharesare listed, in accordance with the procedures established by each of such stockexchanges. The Board of Directors is also authorised to delegate to theExecutive Committee the delegable powers granted by this resolution. ITEM TWO 1. Issuance of debentures mandatorily convertible into shares It is hereby resolved to issue debentures mandatorily convertible intonewly-issued ordinary shares of Banco Santander Central Hispano, S.A. (the"Company" or "Banco Santander") (the "Debentures" and each of them, a"Debenture") in accordance with the terms and conditions, and subject to thebasis for and terms of conversion described below, and to delegate to the Boardof Directors the powers required to implement the issuance (in theunderstanding, whenever powers are delegated to it hereunder, that they includethe express power to, in turn, delegate such authority to the ExecutiveCommittee or to one or more Directors). (a) Amount of the issuance The amount of the issuance shall be FIVE BILLION EUROS (€5,000,000,000). (b) Issue price and nominal value The issue price of the Debentures shall be the par value thereof, i.e., onehundred percent of their nominal value, which nominal value shall not be lessthan the nominal value of Banco Santander shares (i.e., half a euro (• 0.50) pershare) or less than the net equity value per share of existing Banco Santandershares, as disclosed in the consolidated financial statements of Banco Santanderas of 31 March 2007, prepared by the Board of Directors for such purpose on 22June 2007 and which have been passed upon by the Banco Santander auditor (i.e.,7.12 euros per share). (c) Interest Rate The interest rate shall be determined by the Board of Directors depending onmarket conditions, and may be fixed, variable, or a combination of both. TheBoard of Directors will likewise determine the intervals at which such interestis to accrue, as well as any conditions it may decide to establish for theaccrual and/or payment of interest. (d) Subscription and payment The Debentures shall be subscribed for and paid by one or more companies whollyowned, directly or indirectly, by Banco Santander. The proposed resolution expressly provides for the possibility of incompletesubscription of the issuance. Accordingly, the issuance will be limited to theamount equal to the nominal value of the Debentures actually subscribed and paidfor by the subsidiary or subsidiaries, which will, in turn, be limited to theamount subscribed and paid on the preferred interests mandatorily exchangeablefor the Debentures directly or indirectly issued by such company or companies,and will be deprived of effect with respect to the balance. (e) Maturity The Debentures shall mature not later than 5 years after the date on which theyare delivered to the subscribers thereof. The Board of Directors may establish ashorter maturity. Upon maturity, the Debentures shall be mandatorily converted into newly-issuedordinary shares of Banco Santander at the conversion rate specified insub-section 2 below. (f) Security The Board of Directors shall determine whether the Debentures, for which BancoSantander shall, in any event, have general personal liability, shall also bespecifically secured in any of the forms described in Section 284.1 of theBusiness Corporations Law. (g) Priority The Board of Directors shall determine whether or not the Debentures are to besubordinated and, if so, the order of priority within the subordinated creditorsof Banco Santander. (h) Series and tranches The Board of Directors may decide to create one or more series and/or tranchesof Debentures, and the Debentures of each series and/or tranche may havedifferent terms and conditions as to all aspects the determination of which isdelegated to the Board of Directors (including, without limitation, differentterms and conditions as to rank and/or security, interest rate, the accrual and/or payment thereof, maturity, events of conversion -in addition to thoseexpressly provided for in this Resolution-, and/or whether such events aremandatory and/or voluntary and, if voluntary, whether at the option of theholder or of Banco Santander). (i) Date or dates of execution of the resolution providing for the issuance This Resolution shall be executed on the date or dates the Board of Directorsmay determine, which shall not be later than one year following approval hereof. Upon expiration of the aforementioned period without the Resolution having beencarried out, it shall become null and void. 2. Basis for and terms of the conversion The Debentures shall be mandatorily convertible into newly-issued ordinaryshares of Banco Santander, with the Board of Directors being authorised todetermine other circumstances, aside from maturity, in which the Debentures areto or may be converted into shares and, if events of voluntary conversion areprovided for, whether such conversion will be made at the option of the holderand/or of Banco Santander, all at the intervals and during the periodestablished by the Board of Directors in the respective resolution, which shallnot extend beyond the due date of the Debentures determined by the Board ofDirectors as described under 1.e) above. For purposes of the conversion rate, the value of the Debentures and of theshares of Banco Santander shall be as follows: - the Debentures shall be valued at their nominal value; and - Banco Santander shares shall be valued (a) at the fixed exchange rate decidedupon by the Board of Directors in the respective resolution providing forimplementation of the issuance, or (b) at the exchange rate| that may bedetermined on the date or dates specified in the Board resolution providing forimplementation of the issuance (the "Exchange Price"). Nevertheless, theExchange Price (i.e. , the valuation of the shares) may not be lower than thegreatest of the following: (i) the arithmetic mean of the average weighted prices of Banco Santander Shareson the Spanish Electronic Market in the fifteen calendar days immediatelypreceding the date on which the Board of Directors of Banco Santander decides toexecute the resolution providing for the issuance; (ii) the closing price of Banco Santander shares on the Spanish ElectronicMarket on the trading day immediately preceding the date on which the Board ofDirectors of Banco Santander decides to execute the resolution providing for theissuance; and (iii) the net equity value per share of existing Banco Santander shares asdisclosed in the consolidated financial statements of Banco Santander as of 31March 2007 prepared by the Board of Directors for such purpose on 22 June 2007and which have been passed upon by the Banco Santander auditor (which is 7.12euros per share). The Exchange Price shall in any event be equal to or higher than the par valueof the Banco Santander shares (i.e., half a euro (• 0.50) per share). The number of shares each Debenture-holder will be entitled to receive uponconversion shall therefore be the quotient that results from dividing the valueattributed to such Debentures (i.e., their nominal value) by the Exchange Priceset by applying the guidelines and limits established in the precedingparagraph, adjusted as applicable in keeping with the provisions of sub-section3 below. Any fractional shares resulting from this transaction shall in all cases berounded off by default and shall be paid by Banco Santander to the holder of theDebentures in cash. 3. Rights of Debenture-holders The Debentures shall carry all the rights afforded them by current legislationand, particularly, pre-emptive subscription rights in the cases established bylaw, unless the General Shareholders' Meeting decides to exclude such rights inwhole or in part, pursuant to and in compliance with the requirements of Section159 of the current Business Corporations Law. The holders of the Debentures shall also enjoy anti-dilution protection in thecircumstances and on the terms set forth in Section 294.2 and, if applicable,Section 159.3 of the Business Corporations Law and in any other circumstancesthat may be determined by the Board of Directors in line with customary practicein this type of transaction in order to ensure that such circumstances affectBanco Santander and the Debenture-holders equally or, if appropriate, tocompensate the Debenture-holders for the loss of the expectation of conversionof the Debentures into shares owing to supervening circumstances that couldaffect Banco Santander. 4. Exclusion of pre-emptive subscription rights In furtherance of the best interests of the Company and for the reasonsdescribed by the Directors in the respective report, the pre-emptive rights ofBanco Santander shareholders are totally excluded. It is expressly stated forthe record that Banco Santander has no securities convertible into BancoSantander shares currently outstanding. 5. Capital increase Pursuant to the provisions of Section 292 of the Business Corporations Law, itis hereby resolved to increase the share capital in the maximum amount requiredto satisfy the conversion of the Debentures that may be issued, with expressprovision being made for the possibility of incomplete subscription. Suchcapital increase shall be made, in whole or in part, by the Board of Directorswhenever necessary to satisfy the conversion of Debentures, by means of theissuance of new ordinary shares with the same nominal value and carrying thesame rights as the ordinary shares outstanding on the date or dates on which therespective capital increase is made. Every time that, in the manner describedabove, the Board of Directors executes this Resolution, it shall amend thearticle of the Bylaws relating to capital accordingly. Pursuant to the provisions of Section 159.4 of the Business Corporations Law,pre-emptive subscription rights shall be excluded in the capital increase orincreases resulting from the conversion of Debentures. It is impossible at this time to determine the amount of capital that would berequired to satisfy the conversion given that, in accordance with the basis forand terms of the proposed conversion, the Exchange Price will be set by theBoard of Directors in the respective resolution providing for this issuance.However, since the Exchange Price may not be less than the net equity value pershare of the Banco Santander shares as disclosed in the consolidated financialstatements of Banco Santander as of 31 March 2007, prepared for such purpose bythe Board of Directors on 22 June 2007 and passed upon by the auditor of BancoSantander, which is 7.12 euros per share, the maximum amount of capital thatwould be required to satisfy the conversion of the Debentures would be351,123,595.5 euros in nominal value, equivalent to 702,247,191 shares. It is hereby resolved to seek admission to trading of the new shares on theMadrid, Barcelona, Bilbao and Valencia Stock Exchanges, through Spain'sElectronic Trading System (Sistema de Interconexion Bursatil) (ContinuousMarket). It is further resolved to conduct any and all requisite formalities andacts and file all required documents with the appropriate authorities of theforeign Stock Exchanges where the Banco Santander shares are listed on the dateor dates of execution of the resolution providing for the respective capitalincrease for admission to listing of the new shares issued as a result of thecapital increase approved hereby. The Board of Directors is hereby authorised,with the power to delegate such authority to the Executive Committee, so that,once this resolution has been implemented, it may make the correspondingapplications, prepare and file all appropriate documents on the terms it deemsfit and take all actions that may be required for such purpose. 6. Information made available to the shareholders This resolution has been adopted after making available to the shareholders theProposed Resolution and the supporting Report of the Board of Directors, incompliance with the provisions of the Business Corporations Law, as well as themandatory Reports of the Auditor appointed by the Commercial Registry and otherthan the auditor of Banco Santander for the purposes set forth in Sections 292.2and 159.1.b) and c) of the Business Corporations Law. 7. Delegation to the Board of Directors Without prejudice to the specific powers delegated in the previous sub-sections,it is hereby resolved to authorise the Board of Directors, as broadly under theLaw as is necessary and with express powers to delegate such authority to theExecutive Committee or to one or more Directors, to execute this Resolutionwithin one year from the date of the General Shareholders' Meeting. Uponexpiration of such period without this Resolution having been carried intoeffect, it shall become null and void. The Board of Directors is likewiseauthorised to complete the terms and conditions of the issuance in all mattersnot provided for herein and may, specifically, without limitation: (a) Determine the date or dates of issuance; the subscription procedure; theinterest rate; the dates, terms and procedure for the payment of the coupon;early repayment and the terms therefor; the form of representation; develop thebasis for and terms of the conversion and, in general, set any other conditionfor the issuance, determining all matters not contemplated herein as well as, ifappropriate, appoint the Representative of the debenture-holders' syndicate andapprove the basic rules that are to govern legal relations between the Companyand the Debenture-holders' Syndicate. (b) Publish the notices relating to the issuance, appear before a notary public,and execute the required notarial instrument evidencing the issuance of theDebentures that is the subject matter hereof, as well as the notarial record ofsubscription and closing of the issuance, if such issuance is documentedseparately, and seek registration of the aforementioned notarial instrument andof the notarial record, if any, with the Commercial Registry. (c) Increase the capital of Banco Santander through the issuance and flotation,on one or more occasions, of the shares representing such increase that may benecessary to satisfy the conversion of the Debentures and amend the article ofthe Bylaws relating to capital accordingly, depriving of effect the portion ofsuch capital increase that was not required for the conversion into shares, andseek admission to listing of the shares thus issued on the Madrid, Barcelona,Bilbao and Valencia Stock Exchanges through the Electronic Trading System(Continuous Market) and with the appropriate authorities of the foreign StockExchanges where the Banco Santander shares are listed on the date or dates ofexecution of the resolution providing for the capital increase. (d) Remedy, clarify, interpret, elaborate upon or supplement the resolutionsadopted at the General Shareholders' Meeting, any notarial instruments ordocuments executed to carry out such resolutions and, in particular, anysubstantive or formal defects, omissions or errors which could prevent access ofthe resolutions and the consequences thereof to the Commercial Registry, theOfficial Registers of the National Securities Market Commission or any otherregistries. (e) Execute, on behalf of Banco Santander, all public documents or documentsunder private signature that may be necessary or appropriate for the issuance ofthe Debentures that are the subject matter of this Resolution and, in general,conduct all requisite formalities for the execution hereof and the actualflotation of the Debentures." ITEM THREE Without prejudice to the delegations contained in the foregoing resolutions, itis hereby resolved: A) To authorize the Board of Directors to interpret, cure, supplement, carry outand develop the foregoing resolutions, including the adaptation thereof toverbal or written evaluations of the Commercial Registry or of any otherauthorities, officials or institutions which are competent to do so, as well asto comply with any requirements that may legally need to be satisfied for theeffectiveness thereof, and in particular, to delegate to the Executive Committeeall or any of the powers received from the shareholders at this GeneralShareholders' Meeting by virtue of the foregoing resolutions as well as thisresolution THREE. B) To authorize Mr. Emilio Botin-Sanz de Sautuola y Garcia de los Rios, Mr.Alfredo Saenz Abad, Mr. Matias Rodriguez Inciarte, Mr. Ignacio Benjumea Cabezade Vaca and Mr. Juan Guitard Marin so that any of them, acting severally, andwithout prejudice to any other existing power of attorney to record thecorporate resolutions in a public instrument, may appear before a Notary Publicand execute, on behalf of the Bank, any public instruments that may be requiredor appropriate in connection with the resolutions adopted by the shareholders atthis General Shareholders' Meeting."" CERTIFY also that, pursuant to the resolution of the Board of Directors torequest the presence of a Notary Public, Mr. Jose Maria de Prada Diez, Notarybelonging to the Ilustre Colegio of Burgos and with residence in the city ofSantander, attended the Shareholders' Meeting. The minutes of the meetingprepared by the Notary Public are the minutes of the Shareholders' Meeting. AND to leave record, I sign this certification with the approval of Mr. MatiasRodriguez Inciarte, Third Vice Chairman, in Santander on July 27, 2007. Reviewed The Third Vice Chairman This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Banco Santander