investors > Shareholders Meetings > Annual General Meetings > 2005 > Proposal to the General Shareholders' Meeting

Proposal to the General Shareholders' Meeting

Item 3 of the Agenda - Allocation of Profits for the 2004 Financial Year

Pursuant to Article 27 of the Articles of Association of the Company, the Board of Directors hereby submits for approval that the net income of € 440,152,407.14 be allocated as follows:

Legal Reserve:                     € 22 007 620.36
Dividends*:                          € 338 000 000.00
Profit or loss forwarded :     € 80 144 786.78

* 0.09243 euros per share

Lisbon, the 1st of March 2005

THE BOARD OF DIRECTORS

Item 5 of the Agenda – Authorization for the Board of Directors to buy or to sell own shares

Whereas: 

a) The legal regulations applying to the acquisition and selling of own shares by public limited companies set forth in the Portuguese Commercial Companies Code;

b) The permission by the Articles of Association to acquire and hold own shares, in compliance with the law and within the limits fixed thereunder, as well as to carry out operations permitted by law involving own marketable securities;

c) The provisions laid down in Regulation (EC) 2273/2003 of the European Commission of December 22, 2003, that define special conditions contemplating, namely, requirements to exempt certain programs of reacquisition of own shares from the general conditions of market abuse, programs that should be taken into consideration even if they do not involve integrated acquisitions into the programs concerned;

d) The authorization conferred to the Board of Directors to buy and sell own shares by resolution of the General Meeting of Shareholders of March 31, 2004 which renewed previous identical resolutions of the General Meeting of Shareholders of May 11, 1999, May 12, 2000, May 10, 2001 and May 11, 2002 by virtue of which EDP carried out stock operations on own shares and presently holds 13.994.018 shares of the Company; 

e) The acquisition or selling of own shares cannot take place beyond eighteen months from the date of the respective resolution, consequently the authorization in force expires in November 2005; 

f) From the Company’s point of view it is deemed convenient for EDP and its subsidiaries to hold an authorization to buy or to sell own bonds, either for carrying out stock-options programs previously approved or for any actions deemed necessary or appropriate from the company’s point of view; 

The Board of Directors proposes that the General Meeting of Shareholders: 1) Approves the issue of a new authorization for the Board of Directors of EDP and for the management bodies of EDP’s subsidiaries buying or selling own shares;

2) Approves the acquisition by EDP, or by any of its current or future subsidiaries, of own shares, including rights to its acquisition or attribution, subject to a decision by the board of directors of the buying entity and under the following terms and conditions:  

a) Maximum number of shares to buy: up to a number not exceeding the corresponding to 10% of the share capital of EDP, deducing any selling that might have ocurred, regardless of the number of shares required in order that the buying entity fullfils the commitments imposed by the law or contract or by securities issuance or contractual binding regarding stock-options programs for the purchase of shares by Board members and other collaborators of EDP Group, subject to subsequent selling, if appropriate and under legal conditions, of the shares exceeding the limit above and regardless of the acquisition of own shares aiming at a share capital reduction, approved by resolution of a general meeting of shareholders, in which case specific limits referred to in the corresponding resolution shall apply. 

  b) Period during which shares can be acquired: eighteen months from the date of this resolution; 

  c) Forms of acquisition: acquisition of shares or rights of acquisition or attribution of shares, against payment, under the terms and limits peremptorily determined by law, either in regulated markets where EDP shares are listed or out of the Stock Exchange, respecting the principle of shareholders equity, namely the financial institution that will have entered into an equity swap agreement or similar with EDP, or any acquisition meant for the fulfillment of a legal or contractual commitment or convertion or exchange of convertible securities issued by the company or a subsidiary, under the terms of the respective issuance conditions or agreements executed for such convertion or exchange. 

  d) Minimum and maximum counterparts of the acquisition: the maximum and minimum buying price shall be, respectively, 115% and 85% of the weighted average of the closing price of EDP shares in the last 10 sessions of the Euronext Lisbon prior to the date of acquisition or to the date of constitution of the right of acquisition or attribution of shares or will correspond to the acquisition price resulting from contractual financial tools or conditions for issuance by the company or any subsidiary of securities convertible into or exchangeable by shares or any agreement executed with respect to such conversions or exchanges. 

  e) Opportunity for the acquisition: to be determined by the managing body of the buying entity, considering the situation of the bond market and the conveniences or commitements of the buying entity or any of its subsidiaries. Acquisitions may take place one or more times depending on what the Board deems more appropriate from the Company’s point of view. 

3)  Approves the selling of own shares that had been purchased before, subject to a decision by the board of directors of the selling entity and under the following terms and conditions: 

  a) Minimum number of shares to sell: the number of selling operations and the number of shares to sell shall be determined by the Board of Directors of EDP and/or by the managing bodies of EDP’s subsidiaries, whenever it is deemed necessary or convenient from the Company’s point of view. The selling includes the number of shares required to exercise the stock-options program;  

  b) Period during which shares can be sold: eighteen months from the date of this resolution; 

  c) Forms of selling: the shares should be sold, against payment, under the terms and limits peremptorily determined by law, namely by sale or exchange, either in regulated markets where EDP shares are listed or out of the Stock Exchange in the case of specific entities appointed by the managing body of the selling entity, respecting the legal principle of shareholders equity, namely financial institutions that take part in contracts of derivative instruments, or yet for the purpose of meeting any commitment required to exercise the stock-options programs expressly approved by the General Meeting of Shareholders; 

  d) Minimum price: The minimum selling price shall be either 90% of the weighted average of the closing price of EDP shares in the last 10 sessions of Euronext Lisbon prior to the selling date, except when such selling is meant to carry out the stock-options program for the purchase of shares expressly approved by the General Meeting of Shareholders or the price that was set or will result from the terms and conditions covering the issuance of other securities, namely convertible or exchangeable securities or from a contract executed for that issuance, convertion or exchange; 

  e) Opportunity for the selling: the managing body of the selling entity shall determine the timing of each operation in view of the market conditions and provided it is convenient to the selling entity or its subsidiary. Sellings may take place one or more times depending on what the Board deems more appropriate from the Company’s point of view. 

4)  Approves to inform the Board of Directors that, irrespective of its freedom to decide and to act as far as paragraphs 1 to 3 are concerned, under the terms and relevant circumstances (particularly in what concerns acquisitions integrated into rebuying programs meant for meeting the convertion rights of bonds or other securities, or stock-options programs for the purchase of shares or similar rights or other programs that may be the object of the Regulation mentioned in Paragraph E)), it should consider, not only the recommendations of the Securities Market Commission in force, but also the procedures hereinafter as regards the buying and selling of own shares in accordance with the authorizations granted as per the previous paragraphs: 

  a) To disclose to the public, before the buying and selling operations begin, the contents of the authorization, in particular, its objective, the maximum countervalue of the acquisition, the maximum number of shares to buy and the authorized timing for the stock operations to take place; 

  b) to record each stock operation carried out as per the preceeding authorizations; 

  c) the public disclosure of stock operations carried out until the end of the seventh day of the negotiation session subsequent to the date on which such operations took place;  

  d) to carry out stock operations in such a manner that no disturbances will affect the regular running of the market, trying to avoid sensitive moments of the negotiation, in particular the opening and closure of the session or when relevant facts are announced or results are being disclosed; 

  e) to buy at a price not higher than the highest price between the price of the latest independent operation and the price of the highest independent offer, at the time of the acquisition in the official stock market of Euronext Lisbon; 

  f) to restrict the acquisitions to 25% of the average daily amount of negotiation, or to 50% of that amount through communication to the proper entity and disclosure to the market; 

  g) to refrain from selling when rebuying stock operations are taking place as per the Regulation mentioned in Paragraph C).

Should acquisitions be integrated in rebuying programs, the Board of Directors may separate acquitisions and their conditions in accordance with the respective program and provide information of such separation in case public disclosure occurs.

Lisbon, the 1st of March 2005

THE BOARD OF DIRECTORS

 Item 6 of the Agenda – Authorization for the Board of Directors to buy or to sell own bonds

Whereas:
 
a) The legal regime applying to the acquisition and selling of own bonds by public limited companies set forth in the Portuguese Commercial Companies Code;

b) The Articles of Association contemplate the carrying out of operations permitted by law involving own marketable securities as well as to buy and hold own bonds and shares in compliance with the law and within the limits fixed thereunder ;

c) The authorization conferred to the Board of Directors to buy and sell own bonds by resolution of the General Meeting of Shareholders of March 31, 2004; 

d) The acquisition or selling of own bonds cannot take place beyond eighteen months from the date of the respective resolution, consequently the authorization in force expires in November 2005; 

e) From the Company’s point of view it is deemed convenient to hold an authorization to buy or to sell own bonds, 

The Board of Directors proposes that the General Meeting of Shareholders:
 
1)  Approves the issue of a new authorization for the Board of Directors of EDP and for the management bodies of EDP’s subsidiaries to buy or to sell own bonds;

2)  Approves the acquisition by EDP or any of its present or future subsidiaries of own bonds including the rights to its acquisition or attribution, subject to a decision by the Board of Directors and under the following terms and conditions:  

 a) Maximum number of bonds to buy: up to the limit of the total number of bonds of each issuance;  

 b) Period during which bonds can be acquired: eighteen months from the date of this resolution; 

 c) Forms of acquisition: acquisition under any business conditions, either out of the Stock Exchange or within national or international regulated markets, applying or not to a financial trustee, through direct transaction or by means of derivative instruments;  

 d) Minimum and maximum counterparts of the acquisition:  

  (i)  the maximum and minimum buying price shall be, respectively, 115% of the weighted average and 85% of the minimum value of the prices published in the last 10 days prior to the date of acquisition;
  (ii)  the maximum and minimum buying price regarding issuances not listed in the Euronext Lisbon, irrespective of being listed or not in other markets, is the value published by an entity internationally well known in the bond market;
  (iii)  for issuances not complying with the previous paragraph, the limit price is the value indicated by an independent and qualified consultant or by a financial trustee appointed by the Board of Directors; 
  (iv)  in the case where the operation results from or has to do with contractual conditions contemplated in another bond issuance, the price shall be the value that results from the said contractual conditions; 

 e) Opportunity for the acquisition: the Board of Directors shall determine the timing of each operation and acquisitions may take place one or more times depending on what the Board deems more appropriate from the Company’s point of view. 

3)  Approves the selling of own bonds by EDP or by any of its present or future subsidiaries, including rights to its acquisition or attribution, subject to a resolution by the Board of Directors and under the following terms and conditions: 

 a) Maximum number of bonds to sell: up to the limit of the total number of bonds hold, in view of the Company’s responsibilities and the market conditions;  

 b) Period during which bonds can be sold: eighteen months from tha date of this resolution; 

 c) Forms of selling: selling under any business conditions, either out of the Stock Exchange or within national or international regulated markets, applying or not to financial intermediaries, through direct transaction or by means of derivative instruments;  

 d) Minimum counterpart of the selling:  

  (i)  The minimum selling price shall be 85% of the weighted average of the prices published in the last 10 days prior to the date of selling;  
  (ii)  for issuances not listed in the Euronext Lisbon, irrespective of being listed or not in other markets, the limit price is the average buying and selling price published by an entity internationally well known in the bond market; 
  (iii)  for issuances not complying with the previous paragraph, the limit price is the value indicated by an independent and qualified consultant or by a financial trustee appointed by the Board of Directors;  
  (iv) in the case where the operation results from or has to do with contractual conditions contemplated in another bond issuance, the price shall be the value that results from the said contractual conditions; 

 e) Opportunity for the selling: the Board of Directors shall determine the timing of each operation and sellings may take place one or more times depending on what the Board deems more appropriate from the Company’s point of view. 

Lisbon, the 1st of March 2005

THE BOARD OF DIRECTORS