Annual Report - EDP

: corporate governance :of 55%-65% of the recurring net profit wasreinforced, with a minimum of the dividend pershare paid in 2011 (€0.185 per share).III.10. Stock option/stockpurchase option plansThe only plan to allocate shares or share optionscurrently in effect is described below.Stock option/stockpurchase option plansapplicable to themanagement bodyin 2003/2005As part of the variable remuneration of theChairman of the Board of Directors, the Chairmanof the Executive Committee and the members ofthe Executive Committee in the three-year periodfrom 2003 to 2005, the Remuneration Committeein office during that period provided for the stockoption plans in accordance with the qualitativeand quantitative assessment for each businessyear. In accordance with the plan,each stock purchase option can be exercised upto a maximum of 1/3 on each of the anniversariesfrom the date of allocation of the option planonwards. Options not exercised expire eightyears from the date of allocation.No options were exercised in 2012, as shown inthe table below, which also details all allocationsfrom 2003 to 2005. The option plan allocated inApril 2004 was terminated in April 2012 and allunexercised options expired.III.12. Business andoperations withowners of qualifyingholdingsIn its current activity, irrespective of theirrelevance, EDP does business and conductsoperations under normal market conditionsfor similar operations with different entities,particularly financial institutions, which includeowners of qualifying holdings in EDP and relatedcompanies. The operations performed in 2012 arenot considered relevant due to their nature or thefact that they are not significant in economic terms.In this context, in accordance with article 246(3) (c) of the Securities Code, in 2012 EDP didnot conduct any relevant transactions betweenrelated parties that materially affected its financialposition or performance.After a detailed analysis of this subject matterin 2008, the General and Supervisory Boardapproved a set of objective, transparent rulesfor the identification, prevention and resolutionof relevant corporate conflicts of interest, calledFramework for handling conflicts of interest.The framework was revised in late 2009.Following the decision by the General andSupervisory Board, on 17 May 2010 the ExecutiveBoard of Directors approved the rules onidentification, internal reporting and action incase of conflicts of interests applicable to allEDP Group employees who make decisions inDate ofoptionNº ofBenef.N.º ofOptionsOptionPriceDate ofCommencementDateof expiryNº of OptionsExercisedIN 2012 Total30/06/2005 6 932,328 2.21 30/06/2006 29/06/2013 0 740,07002/05/2006 6 1,461,497 2.21 02/05/2007 01/05/2014 0 1,086,554III.11. Business andoperations betweenthe company andmembers of themanagement andsupervisory bodiesor subsidiary orgroup companiesIn 11 May 2012, with the entry into force of thestrategic partnership agreement signed with theChina Three Gorges Corporation in December2011, this company (as well as three othercompanies in the Group) became members of theGeneral and Supervisory Board of EDP.Subsequently and in the scope of theimplementation of this partnership, an agreementwas concluded between EDP Renewables Europeand a CTG Group company (CWEI (Hong Kong)Co. Ltd (formerly China Three GorgesInternational (Hong Kong) Company Limited)in which the parties agree on the sale of a 49%stake in EDP Renewables Portugal, subject toobtaining prior obtaining regulatory approvals.In its normal activity, EDP conducts operationswith different entities, including EDP subsidiariesor group companies. These operations areconducted under normal market conditions forsimilar operations, irrespective of their relevance,and are part of EDP’s current activity.transactions with related parties. These rulesare also available on EDP’s website.In the context of the qualitative improvementof governance practices, on 29 July 2010 theGeneral and Supervisory Board approvedregulations on conflicts of interest and businessconflicts between EDP related parties, whichare available on the EDP website (www.edp.pt).These regulations replaced the Framework forhandling conflicts of interest. This set of ruleson the prevention, identification and resolutionof potential important conflicts of interest hasa wider scope of application than that set out inCMVM Regulation 1/2010.The Corporate Governance and SustainabilityCommittee is responsible for supervisingenforcement of the above rules and reports on itswork to the General and Supervisory Board.The General and Supervisory Board notedthat, with respect to the cases it analysed andinformation provided by the Executive Board ofDirectors regarding 2012, there was no evidencethat potential conflicts of interests in businessoperations had been resolved in a way that wascontrary to the company’s interests.For further information on this matter, please seepoint 3.5.1 of the Annual Report of the Generaland Supervisory Board.142A World Full Of Energy