A General Meeting is a meeting of shareholders whose primary purpose is to make decisions on proposed agenda items that only the General Meeting can make. For the purpose of informed voting on individual agenda items, relevant information in the form of documents on individual items is available in advance. Shareholders can familiarize themselves with them prior to the General Meeting and if they have related additional questions they can submit a request for explanation.
In a company with such a large number of shareholders as ČEZ, it is necessary to set rules for the exercise of shareholder rights in such a way that shareholders are guaranteed equality in the exercise of their rights, but at the same time their right not to have the General Meeting last for an unreasonably long time is respected. In 2020, the General Meeting therefore approved the Rules of Procedure of the General Meeting (Article 13 of the Articles of Association).
How and where do I find out about the General Meeting?
Do I have the opportunity to prepare for the General Meeting in advance?
For the purpose of informed decision-making by the participants of the General Meeting, i.e. voting on individual agenda items, relevant information in the form of documents on individual items is available on the company’s website at least 30 days in advance. You have the opportunity to familiarize yourself with them before the General Meeting and, if you have additional questions, you can submit a request for explanation.
What is the purpose of publishing the documents for the General Meeting in advance?
The purpose of publishing documents for the General Meeting in advance is to provide shareholders with a primary source of information for deciding on agenda items. This allows shareholders to prepare for the General Meeting in advance, ensuring that they can exercise their shareholder rights to the fullest extent and most effectively.
Why should I prepare for the General Meeting in advance?
The purpose of the publication obligations associated with each General Meeting is to enable shareholders to make informed decisions on proposed agenda items. Draft resolutions on agenda items are always legally and factually justified in the Notice of the General Meeting. However, some of the draft resolutions are based on other documents published with the Notice. If shareholders wish to make an informed expression of their will with respect to the draft resolutions, it is therefore advisable that they become familiar with these documents in advance. As part of this preparation, shareholders also have sufficient time to formulate any requests for explanation and send them to the company in advance.
How can I proceed to make full use of my rights to an explanation?
In order for shareholders to exercise their rights under the Rules of Procedure to the maximum extent possible, the most appropriate course of action is the following:
- the shareholder reviews all documents in advance, i.e. in particular the published Notice of General Meeting, including supporting documents (e.g. the annual report);
- the shareholder will write up requests in preparation and send all such requests for explanation no later than 2 business days before the General Meeting;
- if the shareholder has additional questions at the start of the General Meeting, the shareholder may prepare an additional 10 written requests on each agenda item and submit them at the start of the General Meeting (within 1 hour) and also sign up for the first rounds of each agenda item (where they may additionally ask 5 oral requests and accompany them with a 10-minute presentation); and
- after the explanations or speeches by the members of the bodies at the General Meeting itself, the shareholder may continue to submit requests for explanation for each agenda item on the agenda in round 2, i.e. primarily to ask oral requests, for which he or she has a total of 10 minutes, and to a certain extent also to add written requests.
Where can I read the Rules of Procedure?
The Rules of Procedure of the General Meeting are set out in the Articles of Association, in particular in Articles 7 to 13. The Rules of Procedure themselves are contained in Rule 13. In essence, it is just a working designation of this part of the Articles of Association. In other words, the Rules of Procedure are part of the Articles of Association.
On what legal basis were the Rules of Procedure adopted?
The law expressly provides that the shareholders’ right to request an explanation may be regulated in terms of time and scope (Section 357(1) and (2) of the Business Corporations Act). It is also in line with the principle of proportionality to ensure that all shareholders exercise their rights at the General Meeting; a disproportionately long duration of the General Meeting materially impairs this right of (all) shareholders.
Why should I send my requests for explanations to the company in advance of the General Meeting?
Sending a request for explanation in advance has several advantages for you:
- the number of requests for explanation sent in advance is not limited by the Articles of Association;
- you are not pressed for time when preparing such requests, you are not disturbed by the course of the General Meeting and you have your own facilities at your disposal and therefore during the General Meeting itself you are able to concentrate solely on the proceedings.
- since the company prepares responses to requests for explanation sent in advance of the General Meeting, their preparation will not prolong the General Meeting (e.g. it will not be necessary to announce a technical break for their preparation), thus ensuring a more efficient and smoother course of the meeting.
How do I submit my request for an explanation in writing before the General Meeting?
Requests for explanation may be delivered in any of the following ways:
- to the company’s data box (yqkcds6),
- to the e-mail address email@example.com
- in person at the company’s registered office at Prague 4, Duhová 2/1444, ZIP code 140 53, or
- by post or other courier services to the same address.
In the case of extensive written submissions, such requests for explanation must be received by one of the above methods no later than 2 working days before the General Meeting.
What is an extensive written submission?
A shareholder’s submission that meets one of the following criteria:
- it contains more than 10 requests for explanation on a single item of the agenda, or
- it clearly exceeds 4 standard pages of text in total.
These limits will be applied separately to each item on the agenda. However, these limitations apply only to requests for explanation and not to shareholders’ proposals or counter-proposals or reasonable protests.
Can the scope of the published documents be extended before the General Meeting?
Yes, particularly if shareholders’ proposals or counter-proposals or requests of qualified shareholders to amend the agenda of the General Meeting have been submitted duly and within the deadline. The company may also publish additional information for shareholders. It is therefore in the interest of shareholders to regularly check the company website throughout the period from the publication of the Notice of General Meeting itself.
Why do the documents state that the data are up-to-date on various dates before their publication, and not on the date of publication of the documents?
The documents and information contained therein are always approved by internal departments and competent bodies of the company well in advance of the General Meeting and are always published in the approved version.
I have completed the registration and I have prepared some requests for explanation in advance, what should I do?
For shareholders who have not sent their requests for explanations in advance, an Information Center has been set up just for such cases, where they can submit their prepared requests for explanations from the moment the hall opens. In regards to the oral requests you shall be applied for discussion by the Information Center on the relevant agenda item.
Where should I submit a written request for an explanation at the General Meeting?
In the Information Center. You can do so from the moment the hall opens.
What is an Information Center and what is it for?
During the General Meeting, the Information Center is the main place to provide all information related to the General Meeting to shareholders and also serves as a contact point through which shareholders can exercise their shareholder rights, in particular to submit their written submissions and submit oral requests for explanation.
Do I only have to submit requests for explanations in writing?
Can I make requests for explanation in multiple separate written submissions?
Yes. Nowhere does it state that you can only make one written submission.
Will my requests for explanation submitted consecutively in multiple separate submissions be counted in aggregate?
There is no reason to do so for requests submitted in writing at least 2 working days in advance (in principle, the number of such requests is not limited by the Articles of Association). However, after this deadline, the company will aggregate these requests and if they exceed the set limit in aggregate, the company will notify you at the General Meeting and ask you to submit them properly (i.e. to comply with the relevant limits).
Will there be any space designated for preparation of written submissions on site at the General Meeting venue?
If you would like to use technical means to prepare written submissions, PC workstations are available for you. The station shall include, among other things, a printer, all documents for the agenda items of the General Meeting and all the forms for shareholder submissions.
How does the company pair the written request with the appropriate agenda item?
You must indicate for each request which agenda item you are submitting it for. In addition, you should group the requests for explanation together in a single submission on a point-by-point basis.
Do I have to choose whether to submit requests for explanation orally or in writing?
You may make oral or written requests depending on your preference. You can also submit part of your requests orally and part in writing.
Can I read my written question?
No, verbatim reading of written requests is not allowed. The whole point of the regulation is to get written requests submitted in advance. The written request will be read out by the person who will be giving the explanation on behalf of the company. This is to prevent duplication when reading requests for explanation.
Will I have room for a free discussion with the Board of Directors at the General Meeting?
The purpose of the General Meeting is not to have a free discussion between shareholders and the management of the company, but to enable the exercise of the rights of all shareholders and the adoption of relevant decisions.
The exercise of shareholders’ participation rights includes the possibility to ask for information that they need in order to make a decision on the agenda item under discussion. The option for shareholders to submit requests for explanations and receive answers to them has its own rules, which are enshrined in the law and specified in the Rules of Procedure. These rules include, in particular, acting responsibly and in a manner that respects space for other shareholders.
Can I ask questions orally at the General Meeting?
Can I come forward with an oral request at any time?
No. To be allowed to submit an oral request you must always apply for discussion at the Information Center and wait your turn.
Why do I have to apply for discussion?
For the purpose of organization of the discussion.
If I send (submit) a written request for explanation, am I automatically applied for discussion??
No. The submission of a request for explanation and the application for a discussion are thoroughly distinguished. If you wish to apply for discussion, you must do so via the Information Center.
Where do I apply for discussion at the General Meeting?
At the Information Center, bearing in mind that for the first rounds of discussion of the requests of explanation of agenda items you must apply for discussion no later than one hour after the General Meeting commences (but no later than the commencement of discussion of the first item of the agenda).
Can I use written notes when submitting an oral request?
Yes. There are no restrictions on the use of notes. However, if you read the entire request, you may be disqualified from the discussion by the Chairman of the General Meeting and directed to submit a written request for explanation.
Why is the process of requesting explanations split into two rounds?
Each round has a different function.
The first round is intended for responding to such requests for explanations that shareholders submit in writing prior to the General Meeting or alternatively that they prepare in advance and submit in writing or orally at the venue.
The second round, on the other hand, is intended more for answering additional questions following the information presented at the General Meeting, including, among other things, during the first round. The second round is therefore more reactive.
Why can I only apply for the first rounds of discussion of requests of explanation of agenda items within an hour of the commencement of the General Meeting?
Shareholders should apply for discussion in the first rounds at the commencement of the General Meeting, as the shareholders’ decision to participate in the first round should be based on their preparation prior to the General Meeting. The time limit of one hour from the commencement of the General Meeting is established to manage all applications for discussion in the first rounds and, if necessary, as an additional opportunity for shareholders to think about whether they want to speak in the first round with a verbal question.
The purpose of the actual time limit for application for discussion for any first round itself is to make it easier for the bodies of the company and the General Meeting to estimate time requirements for individual agenda items, and therefore to organize the General Meeting.
What if I arrive at the General Meeting late (e.g. more than an hour after the start of the meeting)?
As a shareholder, you bear the consequences of not being on time for the General Meeting. In principle, you cannot participate in any first round in such a case, not even by submitting written requests on the spot. However, there is no restriction on your participation in the second round (so you can submit a written request for the second round of each item on the agenda after you arrive). If you anticipate being late, you may also send your requests in advance.
The Rules of Procedure also allow for dealing with emergency situations, e.g. major traffic jam affecting a large number of shareholders, in an exceptional manner.
In any event, however, no shareholder may participate in the discussion of items that have already been concluded.
What do the individual limits relate to?
All limits on time and scope are set individually for each agenda item. However, they only apply to submissions containing requests for explanation. In other words, these restrictions do not apply to shareholders’ proposals, counter-proposals or reasonable protests.
How many requests for explanation can I submit for a General Meeting?
If you decide not to exercise your right to submit a request for explanation before the start of the General Meeting, you may submit up to 10 written requests for explanation regarding each agenda item during the first round of the meeting, followed by a further 5 requests for explanation (up to 15 in total) during an oral adress. Additionally, in the second round, you have an unlimited number of oral requests regarding each item on the agenda (within a 10-minute time limit for each item) and, in principle, an unlimited number of written request (within a scope of 4 standard pages of text).
I represent 10 other shareholders at the General Meeting. Does this mean that I have a separate limit for oral addresses for each shareholder represented?
All limits set out in the Rules of Procedure shall apply per participant. An exception occurs when the participant is a shareholder him/herself and is also acting as the representative of at least one other shareholder. In this case, in each first round, the shareholder has 10 minutes for him/herself and a total of 10 minutes for the represented shareholders (regardless of their number); the shareholder also has 5 oral requests for himself and a total of 5 for the represented shareholders (regardless of their number).
Could a situation arise where, as a result of the set procedural rules, I am no longer able to submit another request for explanation (e.g. the text does not fit into the specified number of standard pages of text)?
It may happen that if a shareholder has a large number of extensive questions that he or she does not submit in writing in advance, he or she will not have the opportunity to make all requests for explanation during the course of the General Meeting. It is unlikely, however, that such a large number of requests exceeding the limits set by Rules of Procedure would occur to shareholders during the discussion of a given item at a General Meeting. We therefore recommend that if shareholders have a broader interest in certain matters, they should take the opportunity to submit their requests in writing in advance.
Can I carry over unused minutes/requests for explanation to the next item/round? Alternatively, can I transfer unused minutes/ requests for explanation to another shareholder?
No. The system is established so that, for each agenda item and each round of the agenda, every shareholder is given certain space for their requests while also maintaining the time efficiency of the General Meeting.
Can my time limit for oral requests be reduced?
Time and scope limitations are regulated by the Rules of Procedure, which are part of the Articles of Association. The Rules of Procedure allow the Chairman of the General Meeting (with the approval of the Board of Directors) to reduce the time limit for the first round for all shareholders. However, the specified conditions must be met (more than 15 speakers registered for discussion under one item or more than 100 speakers in total under all items).
How do I know when I'm running out of time for my speech? How do I know how much time has passed?
There will always be a very visible board with a timer in the hall.
Can I respond immediately to the reply to my request for explanation?
In general, in order to be able to make an oral request for explanation (including reactive/additional questions), you must apply for discussion for this purpose at the Information Center so that the discussion can be organized.
Who determines the order of shareholders’ requests?
The order is based on the order in which the shareholder applies for discussion at the Information Center. This applies to both rounds.
When does registration for the second round close?
In general, no particular time limit is set; however, the opportunity to apply for discussion ends at the latest at the start of voting on an item. Taking into account the maximum duration of the General Meeting, the Chairman of the General Meeting may, at any time during the second round, set a time after which shareholders will no longer be able to make an oral address.
Why do written requests in the second round have to be submitted on the company’s form?
The submission of written requests in the second round on the company’s form is related to the requirement for shareholders to submit their written requests prepared in advance in the first round. The aim is to avoid unnecessary delays in the General Meeting. The management of requests submitted on the form is also much easier and more time efficient for the Information Center.
Can I make a request for explanation after the vote on an item?
No. The provision of explanation is primarily intended to serve as a basis for shareholders’ voting decisions. Therefore, after the vote, there will be no reason to provide such an explanation.
If I apply for discussion and then do not speak, are there any negative consequences for me?
No, you may change your mind at any time, for example if you wanted to ask a question similar to one that has already been asked. If you do not use your opportunity, this has no effect on the remaining length of your time limits.
If for example, as a shareholder who has applied for discussion, you miss your turn, you do not lose your opportunity for good. After all other shareholders who applied have made their addresses, the Chairman of the General Meeting shall ascertain, among other things, whether the shareholders who have applied for discussion but have not spoken actually wish to speak.
Will my request for explanation be answered at the General Meeting even if I do not attend the General Meeting?
The company is convinced that it is not obligated to answer such a request for explanation. However, as the company will have an explanation ready for such a request, the company will decide whether to provide an explanation anyway. In practice, this has usually been the case.
How do I register for the General Meeting?
Registration is a process that each participant of the General Meeting must go through, with the following steps:
- The first step is to identify each participant and the role in which they appear at the General Meeting (e.g. shareholder or a shareholder’s representative).
- This is followed by verification of whether the participant concerned is a shareholder on the record date, or verification of the authorization to represent a shareholder at the General Meeting.
- The participant will then receive a set of ballots and a shareholder’s card.
How long does it take to register for the General Meeting?
Registration usually opens at least one hour before the start of the General Meeting. Given the number of participants and the time consuming nature of the process, we recommend arriving as soon as possible after the registration opens, especially if the participant is acting in multiple roles (e.g. as a shareholder, as a representative of another shareholder and/or as a member of a statutory body of a shareholder that is a legal entity).
I was late to register, what are the implications of this?
Shareholder registration is available prior to and throughout the General Meeting. If a shareholder registers after the start of the General Meeting, they may lose certain procedural options associated with attendance, such as the capacity to vote or to submit requests for explanation on agenda items that have already been voted on.
I would like to attend the General Meeting, but I cannot come in person. Can I send a representative on my behalf?
The right to participate in the General Meeting shall be vested in the person registered as a shareholder in the statutory register of investment instruments (maintained by the Central Depository) on the record date. You can choose to attend in person or by proxy. However, with regard to a particular share, a shareholder and their representative cannot attend the General Meeting at the same time.
Can I be accompanied by another person?
The participation of a person designated by a shareholder pursuant to Section 399(2) of the Business Corporations Act (i.e. a shareholder’s escort) is not permitted, except for the participation of a person providing assistance to a shareholder with a disability.
What is a shareholder’s card?
A shareholder’s card is used to identify the participant upon entering the hall and during the General Meeting. It is therefore essential that participants carry it with them for the duration of the General Meeting.
Participants in the General Meeting use their shareholder’s card to communicate with the Information Center (after putting the card on a card reader).
In the case of oral requests for explanation, the participant shall place the shareholder’s card on the card reader near the microphone for the purpose of checking time limits (and shall leave it on the reader for the duration of the oral address for explanation).
However, the shareholder’s card is only required for submissions containing requests for explanation. In other words, it is not put on the reader (and therefore the count down does not start) when shareholder’s proposals and counter-proposals are made or when reasonable protests are raised.
Why is the exercise of the right to explanation restricted?
The Articles of Association themselves do not limit the scope of the right to explanation, but only regulate its exercise at the General Meeting. Within the scope of this regulation, the Articles of Association partially limit the right to explanation if it is exercised in a way that excessively prolongs the General Meeting and therefore significantly interferes with the right of other shareholders to participate in the General Meeting.
The Articles of Association (Rules of Procedure) assume that shareholders will prepare extensive questions in advance and it is therefore reasonable to require them to submit them to the company in advance. At the same time, however, the Rules of Procedure also allow enough room for questions that shareholders may wish to ask in response to what they learn directly at the General Meeting.
The whole arrangement is primarily intended for time management (for the company and for shareholders) and not to restrict shareholders’ rights and is based on the company’s experience with holding General Meetings in 2017 to 2019. It also respects the number of shareholders of the company.
How does the company protect shareholders from abusive or otherwise improper conduct by another shareholder?
Shareholder may not exercise their rights in an abusive manner, i.e. they are obliged to exercise these rights in accordance with their purpose and in a manner that does not harm other shareholders or the company or otherwise unreasonably interfere with their rights. They must act honestly, responsibly and in a manner that respects the purpose of the General Meeting (i.e. the discussion of the items on its agenda) and its orderly and peaceful course. Similarly, when asking verbal questions, the Rules of Procedure require their speech to be clear, concise and comprehensible.
These obligations are primarily intended to protect other shareholders. Therefore, if one shareholder has reason to believe that another shareholder is not complying with these obligations, the shareholder may propose to the Chairman of the General Meeting, for example, that the floor be taken away from the shareholder in question. The Chairman may, of course, also do so at the initiative of the company itself or if he personally finds a compelling reason to do so in order to preserve the orderly and dignified course of the meeting.
Why are the procedural rules for exercising the right to explanation universal and apply to all items on the agenda of the General Meeting, regardless of the objective problematic nature of the item under discussion?
The idea is to have the highest possible protection, i.e. the limits are set according to the usual course of the most time-consuming agenda items. It is not possible to automatically predict which agenda item will receive the largest number of requests for explanation at any given General Meeting. It cannot be ruled out in advance that there will be a range of explanations, for example, about a particular candidate proposed as a member of the body. This is always determined during the General Meeting.
I was at another company’s General Meeting and there they answered questions impromptu.
Different companies differ in many ways, including how they provide explanations to their shareholders. ČEZ cares about the accuracy of the answers provided and, given the size and scope of CEZ Group’s activities, has set up the process of preparing answers in a way that prioritizes such accuracy.
Why should a long General Meeting be a problem?
A disproportionately long General Meeting may limit the right of shareholders to participate in the General Meeting. Therefore, an attempt was made to find a proportional relation between the right to participate in the General Meeting, which applies equally to all shareholders present at the General Meeting, and the right to request and receive explanations, which is usually exercised only by some shareholders.
Where can I find more information related to stock ownership and dividend payments?
The purpose of this document is to provide shareholders with basic simplified information regarding shareholder participation in the General Meeting. The information contained in this document is for general information purposes only and does not replace or modify the rules of procedure of the General Meeting. The information contained in this document is not intended as a source of professional or legal advice and is in no way a substitute for professional legal services. The primary sources of precise and valid rules for the exercise of shareholders' rights are the Rules of Procedure, which are contained in Article 13 of the Articles of Association of ČEZ, a. s., and Act No. 90/2012 Coll., on Business Corporations and Cooperatives (the Business Corporations Act), as amended.