Additional content of the Management Report

Additional content of the Management Report pursuant to Article 116 bis of the Securities Market Law

The capital structure, including securities which are not traded on a regulated Community market, indicating, where appropriate, the different classes of shares, and, for each share class, the rights and obligations they carry and the percentage of capital which they represent.

The share capital of GRUPO FERROVIAL, S.A. amounts to 140,264,743 euro, divided up into 140,264,743 shares, each with a par value of (1) euro, pertaining to a single class and all to the same series. All the shares are fully subscribed and paid up. Each share affords its holder the right to cast one vote.

Any restriction on the transferability of securities

The Company's Articles of Association impose no restrictions of any kind on the exercising of voting rights nor on the acquisition or transfer of shares in capital, other than those established in general terms by mercantile legislation.

Significant direct or indirect interests in capital

At 31 December 2007, and according to the information available to the Company, the shareholders with significant ownership interests in Grupo Ferrovial, S.A. were the following:

According to the communication issued to the National Securities Market Commission and to the Company itself on 8 November 2007, the "concerted family group" made up of Mr. Rafael del Pino y Moreno and his children Ms. María, Mr. Rafael and Mr. Leopoldo del Pino y Calvo-Sotelo, controls indirectly, through Portman Baela S.L., 58.316% of the share capital of Grupo Ferrovial SA. 

 Significant direct or indirect interests in capital

Any restrictions on voting rights

There exist no legal restrictions or restrictions established in the Articles of Association on the exercising of voting rights except as stipulated by Article 44.1 of the Spanish Companies Law and Article 10.2 of the Articles of Association, which state that any shareholder who is in default of calls on share capital shall be unable to exercise its voting rights.

Agreements between shareholders

No agreement of this kind between Company shareholders has been communicated to the Company.

However, in accordance with the stipulations of Article 112.4 of the Securities Market Law, it is placed on record that on 5 October 2007 Portman Baela, S.L, majority shareholder of Grupo Ferrovial, S.A., informed the Company of the agreements reached between the shareholders of such company. According to the terms of such agreements, both the title to share capital and the voting rights of the shareholders of Portman Baela, S.L. which are legal entities are to be held at all times by Mr. Rafael del Pino y Moreno and/or his direct descendants. Moreover, the representatives of the aforementioned legal entity shareholders accept on their behalf  that title to capital and the voting rights of each of them are to be held by Mr. Rafael del Pino y Moreno and/or his direct descendants.

On the other hand, and as has been mentioned above, according to the communication presented to the National Securities Market Commission and to the Company itself on 8 November 2007, the "concerted family group" made up of Mr. Rafael del Pino y Moreno and his children Ms. María, Mr. Rafael and Mr. Leopoldo del Pino y Calvo-Sotelo controls indirectly, through Portman Baela S.L., 58.316% of the share capital of Grupo Ferrovial SA.   

Rules applicable in the appointment and replacement of members of the administrative body and for the amendment of the company's Articles of Association.

a) Appointment and replacement of members of the administrative body

The appointment and replacement of members of the Board of Directors are governed by the Articles of Association and by the Board Regulations, in accordance with the Spanish Companies Law.

  1. Composition in quantitative terms

    The Articles of Association require that the Board be made up of a minimum of five (5) and maximum of fifteen (15) members elected by the General Meeting, or by the Board of Directors itself, in accordance with the pertinent legal stipulations.

  2. Composition in qualitative terms

    The Articles of Association and the Regulations stipulate that the Board of Directors must aim for a composition with an ample majority of external or non-executive directors. Similarly, the Board is to aim for a composition of the majority group of external directors made up of Owner and Independent Directors, with the latter accounting for a significant proportion. In any event, and as was approved also in 2007,  Independent Directors are to make up at least one third of all Directors.

  3. Selection of Directors

    The Board of Directors Regulations establish a procedure for the appointment or prior selection for designation or re-election of Directors. Such procedure, when applied in the selection of new directors, has been overseen by external firms.

    The duties of the Appointments and Remuneration Committee include the drafting and review of the criteria to be applied with respect to the composition of the Board of Directors and selection of candidates, and ensuring that procedures for the selection of candidates are not implicitly biased in such a way as to hinder the selection of Directors on the basis of personal circumstances. Appointments (or re-elections) of Directors are required to be preceded by:

    • In the case of Independent Directors, a proposal from the Appointments and Remuneration Committee.

    • For all other Directors, a prior report.

    Every effort is required to be made to ensure that the persons elected are of known solvency, competence and experience, particular care being taken in relation to candidates for positions as Independent Directors, who are required to comply with the pertinent stipulations of the Regulations.

    The Board Regulations stipulate that Owner Directors may not maintain with Ferrovial personally, either directly or indirectly, significant and stable commercial, economic, employment or professional relations, apart from those of a professional nature inherent in the offices of Chairman and CEO of the Company.

    Those Directors who are the subject of proposals for appointment, reelection or dismissal shall be required to refrain from taking part in the related deliberations and voting. Voting, moreover, is to take place secretly.

  4. Term of office

    Directors shall hold their positions as such for three years and may be reelected one or more times for periods of the same duration.

    Independent Directors shall be required to place their office at the disposal of the Board and present their resignation, if this is what the Board considers appropriate, upon completing twelve (12) years of Board membership. They may nevertheless remain on the Board in a different capacity.

  5. Dismissal of Directors

    There is a regulated regime with respect to the dismissal of Directors, the Board Regulations envisaging a series of situations in which Directors shall be under the obligation to place their offices at the disposal of the company. Apart from dismissal upon completion of the term for which they were appointed, or when a decision to this effect has been reached by the General Meeting, the Regulations envisage - in addition to the restrictions relating to the office of Independent Director as mentioned above - the following grounds for dismissal:

    • In the case of Executive Directors, whenever the Board considers dismissal to be appropriate.
    • In the case of Owner Directors: upon transfer, in its entirety, of the holding in the Company which resulted in their appointment. The corresponding number of such Directors is also to be dismissed when such holding is reduced to a level which requires a reduction in the number of Owner Directors.

    • When a Director is affected by rules on incompatibility or banning from office established either by law or internally.

    • When a request to this effect is made by the Board owing to a breach by the Director of his/her obligations as such.

    • When the Director's continued Board membership could jeopardize the interests of Ferrovial.

    • Upon reaching 70 years of age. The Chairman, the Vice-chairmen when Executive, the CEO and the Secretary of the Board shall be dismissed at the age of 65, although they shall be able to continue as Directors and hold office as non-executive Chairman and Vice-chairmen.

    • In the event of significant changes in the Director's professional situation or in the conditions which led to his appointment to the Board..

    • When for reasons attributable to the Director, his/her continued Board membership is seriously damaging to the Company's assets or corporate reputation, in the Company's opinion. In particular, in the event of a procedure or commencement of an oral proceeding against the Director in any of the situations referred to in Article 124 of the Spanish Companies Law, the Board shall analyze at the earliest possible opportunity the circumstances of the case and the advisability of the Director's continuation, or otherwise, on the Board, recording the criterion adopted in such respect in the Annual Corporate Governance report.

    In the case of Independent Directors, the Board Regulations stipulate that the Board shall not propose their dismissal prior to completion of their term of office, except in cases of due cause recognized by the Board, following a report from the Appointments and Remuneration Committee. It shall be considered that there is due cause, in particular, when the Independent Director commits a breach of his/her duties, is affected by incompatibly rules, or is in any of the situations constituting grounds for dismissal as listed above.

    The dismissal of Independent Directors may also be proposed in the event of a change in the Company's capital structure owing to a public takeover bid, merger or similar operation, which makes it advisable to review the criteria with respect to proportionality established in good governance recommendations.

b) Amendment of the Company's Articles of Association

Amendments to the Articles of Association are required to comply with the stipulations of Articles 144 and 103 of the Spanish Companies Law.

Powers of members of the Board of Directors, and in particular, powers relating to the possibility of issuing or repurchasing shares

The Board of Directors is empowered to represent the Company, as a body and by majority decision. It is attributed the broadest of powers to enter into contracts in general, to perform all types of acts or transactions, involving obligations or disposal, ordinary or extraordinary administration and strict ownership, in respect of all kinds of assets, chattels, real property, monies, investment securities and commercial papers, the only exceptions being those matters for which competence corresponds to the General Meeting or which are not included in the corporate purpose.

The above notwithstanding, Mr. Rafael del Pino y Calvo-Sotelo, the Company's Chairman, and Mr. Joaquín Ayuso García, CEO, are permanently vested with all powers of the Board of Directors, to be exercised individually or severally, except for those which cannot, by law or pursuant to the Articles of Association, be delegated.

The Director Mr. José María Pérez Tremps is also vested with certain several powers and joint powers to be exercised in conjunction with certain persons pertaining to the Company. These joint powers include the purchase-sale of investment securities.

The Ordinary General Meeting of Shareholders of 26 March 2004 delegated to the Board of Directors power to issue fixed income securities, both simple and exchangeable and/or convertible, as well as warrants in respect of newly issued Company shares or Company shares in circulation.

Similarly, the Ordinary General Meeting of Shareholders of 31 March 2006 delegated to the Board of Directors, in accordance with the stipulations of Article 153.1.b) of the Spanish Companies Law, the power to increase share capital, in one or more operations and at any time, within a period of five years counted as from the date of approval by the General Meeting and by up to a maximum of seventy million (70,000,000) euro.

Lastly, the Company's Ordinary General Meeting of Shareholders of 30 March 2007 authorized the Board of Directors to execute a derivative acquisition of treasury stock of the company, either directly, or through companies controlled by it, subject to the limits and requirements established in the resolution of such General Meeting. This authorization is valid for a period of eighteen (18) months counted as from the date of the resolution. A resolution with similar terms is expected to be submitted to the General Meeting of Shareholders of 28 March 2008.

Significant agreements entered into by the company and which come into force, are amended or concluded in the event of a change in the control of the company resulting from a public takeover bid, and the effects of the above, except when disclosure would be seriously damaging to the company. This exception, however, does not apply when the company is under a legal obligation to make public this information.

There are two significant syndicated financing agreements which envisage, as possible grounds for early maturity, at the decision of the creditor companies, a decline in the Company's solvency owing to a change in its control. These agreements are: (1) one dated 23 June 2004 for a sum of three hundred million (300,000,000) euro, which has been drawn down in its entirety; and (ii) another dated 31 January 2006 for an amount, at the date of issue of this report, of five hundred and fifty-three million (553,000,000) euro, of which, at today's date, an amount of three hundred and ninety-eight million (398,000,000) euro has been drawn down.

On the other hand, it should be mentioned that there are certain financial agreements entered into by the Company and its group which require prior authorization by the credit institutions or grantors concerned for certain corporate operations such as mergers or demergers, or for a change in control.

Contracts between the company and the members of its management or directors or employees which establish their entitlement to severance upon wrongful dismissal or termination of the employment relationship owing to a public takeover bid. The contracts between the Company and members of its Senior Management, including two Executive Directors, envisage expressly their entitlement to receive the severance payments established in Article 56 of the Workers' Statute in the event of wrongful dismissal.

Similarly, eight members of Senior Management including two Executive Directors, with a view to fostering loyalty on their part and  permanent allegiance to the company, are recognized as being entitled to deferred extraordinary remuneration payable only in the event of any of the following:

  • Termination of the relationship by mutual agreement when the Senior Manager reaches a certain age;
  • Unfair dismissal or abandonment of the company at the company's initiative, without there being grounds for dismissal, prior to the date on which the senior manager reaches the agreed age, in the event that the sum in question is higher than that resulting from the application of Workers' Statute stipulations;
  • Death or invalidity of the Senior Manager.
  • In order to cover this incentive, the company makes annual contributions under a collective saving insurance plan, which names the Company as both policyholder and beneficiary. The contributions are calculated as a certain percentage of the total cash remuneration corresponding to each Senior Manager.
1000 Images, one word: Ferrovial

1000 Images, one word: Ferrovial

Ferrovial is one of the leading infrastructure groups in the world employing 100,000 people in 43 counties worldwide. The company’s investment strategy is focused on 4 main business areas: construction, airports, toll roads and car parking, and services.