Sacyr S A : 10 Report on the Amendment of the General Meeting Regulations

BOARD REPORT OF SACYR, S.A. EN

REPORT OF THE BOARD OF DIRECTORS OF SACYR, S.A. IN RELATION TO THE PROPOSED AMENDMENTS TO THE REGULATIONS OF THE GENERAL MEETING REFERRED TO IN ITEM ELEVEN ON THE AGENDA OF THE ANNUAL GENERAL MEETING CALLED FOR JUNE 28 AND APRIL 29, 2021, AT FIRST AND SECOND CALL, RESPECTIVELY

1. Introduction

The Board of Directors of Sacyr, S.A. (the "Company") issues this report, in accordance with sections 512 and 518 of the Spanish Corporate Enterprises Act (Ley de Sociedades de Capital), to justify the proposed amendments to the Company's Regulations of the General Meeting (the "Regulations") that are submitted at the General Meeting under item nine on the agenda. For all appropriate purposes, this report also includes the full wording of the proposed amendments.

To make it easier for shareholders to understand the changes that have given rise to these proposals, a statement of the purpose and justification of these amendments is provided, followed by the amendments to the Bylaws that are submitted for approval at the General Meeting.

2. General justification of the proposal

In line with the report drafted for the purpose of amending the Bylaws submitted at the Annual General Meeting, the proposed amendments to the Company's Regulations of the General Meeting are, in general, part of the ongoing process of review and updating carried out by the Company in relation to its internal corporate governance rules.

Specifically, the objectives of these amendments are:

1. Regulatory provision and development of the possibility for shareholders and their representatives to attend the General Meeting electronically, by remote connection and in real time under sections 182, 189 and 521.1 of the Corporate Enterprises Act, and, therefore, the necessary adaptation to ensure the correct exercise of shareholders' rights at the General Meetings.
2. Regulatory provision and development of the possibility, provided that the current legislation so permits, for the Board of Directors to call for a General Meeting to be held exclusively electronically, duly guaranteeing the identity of the subject, and clearly describing the periods, forms and means of exercising the rights of the shareholders envisaged by the directors to allow the proper conduct of the meeting.
3. Adaptation of the Regulation to the statutory provision that the Board of Directors will consist exclusively of natural persons.

3. Structure of the amendments and general justification

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The recommendation of the Code of Good Corporate Governance and section 197 bis of the Corporate Enterprises Act stipulate that votes must be cast separately for those matters that are substantially independent and, in particular, each article or group of articles that are autonomous.

However, since the proposed amendments have a single specific purpose (to update and review the content of the Regulations of the General Meeting to bring them into line with the amendments to the Bylaws) and, consequently, as there is no article or group of articles that are autonomous that makes a separate vote necessary or appropriate, the amendments are put forward as a single resolution.

Without prejudice to the fact that they are put forward as a single item for voting purposes, the specific reasons for the proposed amendments are explained and justified below, individually for each article.

3.1. Amendments relating to electronic attendance at meetings.

Amendment of sections 6 (Information available from the date of the call), 7 (Right to information before the General Meeting), 8 (Delegations), 9 (Attendance), 13 (List of attendees), 15 (Start of the General Meeting), 16 (Requests for intervention), 17 (Final constitution of the General Meeting), 18 (Interventions), 19 (Right to information during the holding of the General Meeting), 20 (Proposals), 21 (Extension and suspension of the General Meeting) and 22 (Voting through means of distance communication), of the Regulations of the General Meeting, to include telematics assistance to the General Meetings guaranteeing and ensuring the exercise of the rights of shareholders and their representatives.

3.2. Amendments relating to the electronic general meetings.

Amendment of sections 5 (Announcement of notice), 10 (Venue of the General Meeting), 11 (Organization and logistics), and 26 (Minutes of the General Meeting) of the Rules of Procedure of the General Meeting, introduction of sections 2 bis (Forms of celebration) and 11 bis (Organization and logistics of the General Telematics Meeting), all related to the holding of General Telematic Meetings, for the purpose of providing and regulatory development of the possibility of holding the General Meetings in full telematics ensuring and guaranteeing the rights of the shareholders and their representatives.

3.3. Amendment relating to the composition of the Board by natural persons.

Amendment of section 6 (Information available from the date of the call), section e) of the Rules of Procedure of the General Meeting to be in accordance with the Bylaws in relation to the composition of the Board by natural persons.

4. Specific justification for the amendments

4.1. Amendment of the Regulation providing for electronic attendance at general meetings guaranteeing and ensuring the exercise of the rights of shareholders and their representatives.

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It is considered necessary to include and develop, in the Rules of the General Meeting, electronic assistance to encourage the maximum participation of shareholders and their representatives in meetings, mechanisms that make it possible to attend and participate actively in the meeting also by electronic means when, for any reason, all or part of the shareholders are unable to attend the meetings on a current basis. In this regard, the content of Recommendation 6 of the Good Governance Code is included, which recommends that 'the company have mechanisms that allow..., in the case of highly capitalized companies and to the extent that it is proportionate, the attendance and active participation in the general meeting.'

Specifically, and in line with the amendment to the Bylaws, it is specified in the various provisions relating to the assistance that can be made both directly and electronically, and, on the other hand, pursuant to sections 182, 189 and 521.1 of the Corporate Enterprises Act, it is ensured, with the appropriate amendments, that the rights of the shareholders and their representatives are exercised in the Meetings when they attend the meetings electronically.

4.2. Amendment of the Regulation that envisages holding exclusively electronic meetings.

Likewise, the necessary amendments are introduced to the Regulation as a result of the proposed amendment to the Bylaws, which, subject to the necessary legal authorization, and, moving forward to the content of the next amendment to the Corporate Enterprises Act (Draft law on promoting long-termownership of shareholders), it is proposed to include the possibility for the Board of Directors to be able to call, in general and provided that the legislation in force so allows, the exclusively electronic boards.

To do so, all the rules necessary to ensure the correct exercise of the rights of shareholders and their representatives, as well as all the mandatory rules with regard to the electronic meetings that the legislator proposes to include in the next reform of the Corporate Enterprises Act, such as the need for the minutes of these types of meetings to be notarial and the need for, in any case, the identity and standing of the shareholders and their representatives to be duly guaranteed and that all attendees can effectively participate in the meeting through appropriate means of communication, such as audio or video, complemented by the possibility of written messages during the meeting, both to exercise the corresponding word, information, proposal and vote rights in real time, as well as to follow the interventions of the other attendees by the means indicated.

4.3. Amendment relating to the composition of the Board of Directors solely by natural persons.

Finally, the Board's Rules of Procedure are adapted to the proposed amendment to the Bylaws in which, moving forward to the proposed amendment of the Corporate Enterprises Act (Draft law on promoting the long-terminvolvement of shareholders), a change is proposed regarding the composition of the Board of Directors, demanding that it consist exclusively of natural persons to ensure better corporate governance and greater transparency.

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5. Amendments proposed at the General Shareholders Meeting

The full wording of the proposed amendments to the Bylaws is transcribed below:

Article 2 bis. Manner of holding the meeting

1. Provided that the legislation in force so permits, the General Meeting may be held in person or by telematic means.
2. The General Meeting held in person shall also admit attendance and representation by telematic means, as well as telematic voting.
3. It is guaranteed that all shareholders or their representatives may exercise their rights of attendance, information, intervention and voting at the General Meeting in a non in-person manner, by telematic means, in accordance with this Regulation and, if applicable, with the implementing rules approved by the Board of Directors, provided that the identity of the person participating or voting and the security of the electronic communications are duly guaranteed.
4. The Board of Directors shall determine the manner of holding the General Meeting.

Article 5. Notice of meeting advertisement

1. The General Meeting notice of meeting, for ordinary as well as extraordinary meetings, will be performed in a manner that it guarantees a quick access to the information and non-discriminatory among all shareholders. For said purpose, communications means that guarantee an efficient and public broadcast will be performed, as well as free access to said meeting by the shareholders of the entire European Union.
2. The General Meeting notice of meeting will be made, at least one month before the date established for the meeting to take place, except in those cases in which the applicable regulation establishes a different advancement. The dissemination of the advertisement of the notice of meeting will be made using, at least, the following means: (i) the Official Commercial Registry Gazette or one of the largest circulation newspapers in Spain; (ii) the Comisión Nacional del Mercado de Valores website and (iii) the Company website. The advertisement will be also sent to the Comisión Nacional del Mercado de Valores as a relevant fact. Likewise, the Board of directors can publish advertisements in other means if it considers its adequate to give the notice of meeting a greater publicity.
3. The notice of meeting advertisement will contain the mentions enforceable by the law and, among others, information regarding the following:
4. 1. Location, date and time of the meeting under first notice and, as the case may be, second notice, allowing a period of at least twenty four hours between the first and the second meeting.
   2. The General Meeting agenda, drafted clearly and concisely, will include all matters to be discussed in the meeting.
   3. The manner in which the General Meeting will be held, establishing whether it will be held in person or by telematic means.

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1. In the case of telematic attendance of the shareholders or their representatives at the General Meeting or if the General Meeting is held by telematic means, the details of the enabled telematic means that guarantee the identity of the shareholder or representative.
2. The requirements necessary to be able to attend, in person or by telematic means, the General Meeting and the means to be accredited before the Company, with specific mention of the date in which shareholders need to have shares recorded in their name in order to be able to participate and vote in the General Meeting.
3. If they were inadmissible, indication of the delegation and remote voting procedures by written or telematic means that may be used.
4. The location and manner in which the complete texts and agreement proposals may be obtained, and the address of the Company website in which the information will be available.
5. The formalities and procedures for the registration and formation of the list of attendees.

In addition, the advertisement must contain clear and concise information of the procedures shareholders must follow to participate and issue their vote in the General Meeting, including, in particular, the following:

1. The right to request information, to include matters in the agenda and to submit agreement proposals, as well as the business year period. When it is declared that detailed information regarding said rights can be found in the Company website, the advertisement can be limited to indicate the period of the business year.
2. The system for the casting of votes by representation, with special mention of the forms that are to be used for the delegation of votes and the means to be employed so the company can accept a notice by telematic means regarding the granted representations.
3. The procedures established for the issuing of remote votes, by mail or through telematic means.

4. Shareholders representing, at least, three per cent of the capital stock, when legally admissible:

1. Request the publication of a complement to the ordinary General Meeting notice of meeting including one or more new matters in the agenda, as long as all new matters are accompanied by a justification or, as the case may be, a justified agreement proposal. Under no circumstance can said right be exercised regarding the notice of meeting of extraordinary General Meetings. For the abovementioned purposes, the shareholder must indicate the number of shares of which he/she is bearer or represents. The exercise of this right must be made through irrefutable notice that must be received at the company registered address within the five following days to the notice of meeting publication.
   The complement must be published, as least, fifteen days before the date established for the General Meeting.

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