TREASURY STOCK POLICY
The Board of Directors of Gamesa Corporación Tecnológica, S.A. (the “Company”), according to the
articles 19 of the Bylaws and 5 of the Board of Directors Regulations, has the responsibility to formulate the
strategy and general politics lines of the Company, to prepare programs and to mark the targets to the
fulfilment of all the activities included in the corporate purpose and, in particular, it corresponds to the
Board of Directors to: (a) approve, among others, the treasury stocks policy and the risk control and
management policy, (b) identify the main risks of the Company, (c) organize the appropriate internal control
and information systems, and (d) to carry out the periodic monitoring of those systems.
In the frame set up by the general risk policy of the Gamesa Group, the treasury stock policy is sustained
on the following basis:
1.
OBJECT
The object of this document is to establish a frame for the control and management of the treasury stock
transactions and the related risk, to be developed by the Managing Unit of Risk Control, within the general
guidelines established in the control and management risks policy approved by the Board of Directors.
2.
SCOPE
This policy is to be applied on the fulfilment of transactions with the shares of Gamesa Corporación
Tecnológica, S.A. owned by the Company, in all the business that integrate the Gamesa Group, including
the investee companies in which the Company has an effective control.
Regarding the considered risks, the present policy is to be applied to the risks derived of the management
of the treasury stock that is carried out by the Managing Unit of Management Control of the Company.
3.
DEFINITIONS
On a general basis, “risk” is any threat that an event, action or omission, could prevent the Gamesa Group
to achieve its targets and execute its strategies with success. To the effects of this policy, the following
definitions have to be applied:
Treasury Stock Transactions: transactions made, directly or indirectly, by Gamesa Corporación
Tecnológica, S.A. or the entities integrated in its Group over:
marketable securities issued by Gamesa Corporación Tecnológica, S.A.;
financial instruments and agreements that confer the right to purchase the above mentioned
securities and financial instruments; or
agreements in which the underlying are the above mentioned securities, instruments or
agreements.
Generically, the transactions with the treasury stock include the sale of shares of Gamesa Corporación
Tecnológica, S.A. and the hiring of derivatives over treasury stock and cover derivatives.
Treasury Stock Position: number of shares in the treasury stock that are represented by shares of
Gamesa Corporación Tecnológica, S.A.
Treasury Stock Derivatives: are the financial instruments and agreements reached with third
parties that its underlying is the share of Gamesa Corporación Tecnológica, S.A.
Cover Derivatives: are the financial instruments and agreements reached with third parties that
its underlying is the share of Gamesa Corporación Tecnológica, S.A. or any other asset linked to the
mentioned share and whose hiring has cover purposes.
Treasury Stock Risk: is the exposure to adverse movements (drops) in the listing price of the
share of Gamesa Corporación Tecnológica, S.A. with the result of a lower market value of the
treasury stock position and of the any hired financial instrument that its underlying is the share of
Gamesa Corporación Tecnológica, S.A., having repercussions on a negative economic effect in the
balance sheet and/or results account.
Therefore, the risk or exposure level to share adverse movements will depend on the treasury stock
volume (share position), and on the hired treasury stock and cover derivatives, on the purchase
price, on the share volatility and on the temporary horizon for the fulfilment of each positions.
4.
POLICY AND BASIC PRINCIPLES
The transactions of buy and sell of treasury stock made by the Company and/or its dominated companies
will be made according to the current regulation and the related agreements approved by the Shareholders’
General Meeting, and are aimed to:
Encourage the market liquidity of the share or reduce the fluctuation, without interceding in the
free price formation process or encouraging certain shareholders of the Company.
Stabilize the share price after a public offering or stock subscription through a treasury stock loan
by the Company and the grant of a share call option to the insurance companies.
Permit the Company the access to the shares that shall make possible the fulfilment of the share
delivery duties committed according to securities issues or corporate transactions: remuneration or
loyalty plans for shareholders (for example, dividend investment plans), Directors, Managers or
employees.
Likewise, the treasury stock transactions will be made trying to optimize the financial result, cash flow and
the balance sheet of the Gamesa Group, maintaining the financial leverage ratio and the rating of the
Group, according to the set targets and mitigating the risk associated to those transactions.
The treasury stock transactions management will be developed regarding the guideline of the corporate
principles and will attend to the following basic principles of action:
Centralize in the Managing Unit of Management Control all transactions regarding the shares of
Gamesa Corporación Tecnológica, S.A.
Guarantee the correct use of the instruments for the treasury stock risks cover implementing the
appropriate procedures for the analysis and approval, and applying the financial prudence principles
in all the actions that may be carried out with them.
Register all the transactions according to the requirements established in the International Rules
of Financial Information.
Inform the supervisors and the market governing bodies with transparency of the treasury stock
transactions and the associated risks.
Act at any moment under the protection of the current law and the values included in the
“Principles of Corporate Social Responsibility and Code of Conduct of Gamesa Corporación
Tecnológica” and in the “Rules of Procedure in the Securities Market”, and specially, maintain the
confidentiality of the treasury stock transactions.
5.
GUIDELINES
5.1. Rules of action in the management of the treasury stock
In the management of the treasury stock of the Company the following rules of action will, anytime,
be observed:
Do not create a tendency in the price, or take part in the free formation of it.
Do not carry out any treasury stock transaction when the persons in charge of its execution have
privileged information.
Do not buy treasury stock during “closed periods” established by the current law.
Inform with transparency of the treasury stock transactions, according to the current rules and
law.
5.2. Guidelines for the risk control and management
To properly mitigate the risk related to treasury stock transactions the following guidelines and limits
are established:
The total volume of the treasury stock position plus the derivatives hired over the treasury stock
can not overcome the 5% of the total number of shares of Gamesa Corporación Tecnológica, S.A.
The hiring of derivatives will have the aim of the financial optimization of the treasury stock
position as well as the reduction of the treasury stock risk.
The derivatives will have as its underlying the share of Gamesa Corporación Tecnológica, S.A.
or, on specific occasions, indexes of relevant shares (IBEX 35, EURSTOXX 50, etc.) which
include in their weighting the share of Gamesa Corporación Tecnológica, S.A.
In the transactions with derivatives the guidelines established in the investment and financing
policy of the Gamesa Group will be observed.
The treasury stock management or from any other specific program, will be entrusted to the
Managing Unit of Management Control.
All the transactions will be daily registered including the position in treasury stock, derivatives
over treasury stock and cover, the transactions made, the result and the impact on the accounts
of the group and the measurement of the risk.
The Managing Unit of Management Control will carry out a monitoring of the risk position opened
and of the covers made, and will watch for the correct execution of the defined procedures for
the realization of treasury stock transactions.
The necessary information to verify the adaptation of the carried out transactions to the here
defined policy, will be periodically provided to the Board of Directors (and punctually, when
requested).
6.
RISK LIMITS
In order to adapt the impact of the risks to the fixed appetite, the Managing Unit of Management Control
will define and present to the President and Chief Executive Officer of the Company the specific numerical
values of the risks limits included in this policy and he will be able to decide the amendment of those values
and authorize that exceptionally those are exceeded, taking into account the proposals that the affected
units shall raise through the appropriate committee.
At the same time, the responsible of the affected units shall establish additional risk limits and indicators
which allow guaranteeing an appropriate control of this policy, as well as the necessary control and
information reporting systems.