Shares and Debt
Article 1 - SUL AMÉRICA S.A. is a Company governed by laws and uses of trade, by these bylaws and applicable legal provisions.
Sole Paragraph - The Company, its shareholders, Managers and members of the Fiscal Council, if instated, shall also be subject to the provisions of the Corporate Governance Level 2 Listing Rules of BM&FBOVESPA S.A. - Securities, Commodities and Futures Exchange (respectively “Level 2 Rules”, “Level 2”, and “BM&FBOVESPA").
Article 2 - The Company is headquartered in the city and state of Rio de Janeiro. The Company may open and close branches, offices, agencies, warehouses in any part of the Brazilian territory or abroad.
Article 3 - The Company’s purpose is the management of own assets and interest in other companies.
Article 4 - The Company’s duration is indeterminate.
Article 5 - The capital stock of the Company is R$1,319,882,346.85 (one billion, three hundred and nineteen million, eight hundred and eighty-two thousand, three hundred and forty-six. reais and eighty five cents), divided into 858,539,371 (eight hundred and fifty-eight million, five hundred and thirty-nine thousand, three hundred seventy-one) shares, being 474,206,251 (four hundred seventy-four million, two hundred and six thousand, two hundred and fifty-one) common shares and 384,333,120 (three hundred and eighty-four million, three hundred and thirty-three thousand, one hundred and twenty) preferred shares. All shares are registered shares with no par value.
Sole Paragraph - Each common share shall entitle to one vote at the Company’s General Meetings.
Article 6 - All the Company’s shares are book-entry and shall be kept in a trust account, on behalf of their holders, in an authorized financial institution, without issuing certificates.
Article 7 - The Company is authorized to create and issue preferred shares, all of them without voting rights, in one or more classes, even if they have more benefits than the shares already existing, up to the maximum limit of fifty percent (50%) of the total shares issued, thus establishing the respective preferences and advantages thereof and, within such limit, may increase the number of preferred shares of any class, without any ratio vis-à-vis other shares or common shares and, further, increase the number of common shares without any ratio vis-à-vis preferred shares.
Paragraph 1 - Unless as provided for in Paragraph 2 below, the preferred shares shall not entitle to vote and to minimum or fixed dividends, thus securing, however, (i) the priority as to the reimbursement of its book value in the event of winding-up of the Company, without any premium; (ii) right of being included in public offering in view of disposal of the Company’s share control, pursuant to Chapter VII hereof, so as to secure a treatment equal to that provided to the selling controlling shareholder; and (iii) dividends at least equal to those arising out of the common shares.
Paragraph 2 - The preferred shares shall entitle to vote in the following matters: (a) transformation, merger, amalgamation or spin-off of the Company; (b) approval of agreements between the Company and its controlling shareholder, whether directly or through third parties, as well as agreements involving other companies in which the controlling shareholder is interested, whenever pursuant to legal or statutory provision, the approval thereof is resolved at General Meeting; (c) appraisal of assets for payment of the Company’s capital increase; (d) selection of institution or specialized company for ascertainment of the economic value of the Company or its shares, for the purposes of the public offering dealt with in Chapter VII hereof; and (e) amendment and revocation of the provisions hereof that may alter or modify any of the requirements provided for in Section IV, item 4.1 of Level 2 Rules, unless, however, that the voting right established in this item (e)of the Agreement for Adoption of Best Practices for Corporate Governance - Level 2 shall prevail during the effectiveness thereof in relation to the Company, which new denomination is Contract of Level 2 Listing Rules.
Article 8 - Irrespectively of any capital increases to be resolved at General Meetings, the Company is authorized to increase its capital stock, without any statutory amendment, up to the limit of 450,000,000 (four hundred fifty million) of new common and/or preferred shares, with due regard for the legal limit established for each kind of share, by Board of Directors’ resolution, which shall establish the type and class of the shares to be issued, the issuance price thereof and the placement conditions.
Sole Paragraph - The Company may, by Board of Directors’ resolution, within the limit of authorized capital, and pursuant to the plan approved at General Meeting, grant call option to the managers or employees pertaining to the Company or companies under its control.
Article 9 - The Board of Directors may exclude the preemptive right over the issuance of shares, convertible debentures or subscription bonus, the placement of which is conducted through trade in stock exchange or public subscription, as provided for in Article 172 of the Brazilian Corporate Law.
Article 10 - If the right to withdraw is exercised, the total amount to be paid by the Company to the shareholders as reimbursement of said shares, in the cases provided for in Law 6,404/76, as amended by Law 10,303/01, shall be calculated according to the economic value of such shares to be ascertained in accordance with the appraisal procedure accepted by Law 9,457/97, whenever such amount is lower than the book value ascertained pursuant to Article 45 of Law 6,404/76.
Article 11 - The Company shall be managed by the Board of Directors and the Board of Executive Officers.
Paragraph 1 - The General Meeting shall establish the total compensation of the members of the Board of Directors and Board of Executive Officers.
Paragraph 2 - The provision for fees paid in twelfth, including any pro labore supplementary amounts, shall be jointly paid to Officers, Board of Directors’ resolution, and shall be drawn up in instrument filed in proper book.
Paragraph 3 - The members of the Board of Directors and the Board of Executive Officers are hereby discharged from posting bond for their management.
Paragraph 4 - The managers shall be invested in office upon execution of the Instrument of Managers Consent mentioned in the Level 2 Rules, and shall comply with applicable legal requirements. The managers shall further communicate the Company, upon their investiture in office, the number and the characteristics of the securities issued by the Company, directly or indirectly held by it, including its derivatives.
Article 12 - The Company’s Board of Directors shall be composed by nine (09) sitting members (up to the same number of alternate members may be elected at the General Meeting), of which one (1) shall be Chairman and another one (1) Vice-Chairman, all of them individuals, Company’s shareholders, whether residing or not in Brazil, elected at the General Meeting for an unified one (1) year term of office; reelection is allowed.
Paragraph 1 - Without prejudice to the provisions of Paragraph 4 of Article 11 above, the members of the Board of Directors shall be invested in office by instrument signed and drawn up in Book of Minutes of the Board of Directors’ Meetings and shall serve until such time as their successors are invested in office.
Paragraph 2 - At least twenty percent (20%) of the members of the Company’s Board of Directors shall be Independent Board members, as defined in the Level 2 Rules, and expressly declared independent board members in the minutes of the General Meeting electing them, and board members elected as per Paragraphs 4 and 5 of Article 141 of Law 6,404/76, as amended by Law 10,303/01 shall be also deemed as independent board members.
Paragraph 3 - If, as a result of observance of the percentage of twenty percent (20%) provided for in the previous Paragraph, the number of board members is a fraction, it shall be rounded to (i) the number subsequent to it, if the fraction is equal or higher than five tenth (0.5); or (ii) to the previous number, if the fraction is lower than five tenth (0.5).
Paragraph 4 - The positions of Chairman of the Board of Directors and Chief Executive Officer cannot be cumulated by same person.
Article 13 - The Board of Directors shall not elect members (i) acting as controlling shareholders in companies deemed as competitors in the market in which the Company is engaged; (ii) occupying positions that may be deemed as competitor in the market in which it is engaged, specially administrative or tax advisory councils; or (iii) have conflict of interest with the Company, unless as expressly approved at the General Meeting. Furthermore, the board member with any conflict of interest with the Company may not vote at the Board of Directors’ meetings.
Paragraph 1 - The statement relating to any impairment of board member that may have conflict of interest with the Company as to certain matter(s) to be resolved in meeting shall be submitted to vote of the members in said meeting and the impairment thereof shall be stated by a majority of votes.
Paragraph 2 - If certain Board Member is deemed impaired by the members attending the meeting, the Chairman of the Board of Directors shall not compute the vote to be cast by such Board Member regarding the matter in connection with which the latter has a conflict of interest.
Article 14 - The Board of Directors shall:
a) establish general guidelines for the Company’s business and approve the annual general budget, in addition to the business plan and targets and business strategy for the budget term;
b) elect and dismiss Company’s Officers;
c) inspect the Officers’ management, review, at any time, the Company’s books and documents, request information on the agreements executed or to be executed and any instrument that it may deem necessary;
d) call the General Meeting;
e) issue opinion on the management’s report or the Board of Executive Officers’ accounts;
f) appoint and dismiss independent auditors, as well as approve the contracting of any other services with the Company’s independent auditors, or said auditors same group companies, rather than the audit of the financial statements;
g) resolve on the acquisition of shares issued by the Company for cancellation or to be kept in the treasury;
h) resolve on the disposal or cancellation of shares issued by the Company which, by any reason, are kept in the treasury;
i) resolve on the acquisition, disposal or encumbrance of assets pertaining to the permanent assets, the value of which exceeds five percent (5%) of the Company’s shareholders equity ascertained in the last balance sheet audited, in a sole transaction or successive transactions in the same fiscal year;
j) resolve on the establishment of in rem guarantees and tendering of guarantees for own obligations, the amount of which exceeds five percent (5%) of the Company’s shareholders equity ascertained in the last balance sheet audited, in a sole transaction or successive transactions in the same fiscal year;
k) resolve on the issuance of promissory notes for public offering, pursuant to CVM Rule 134/90, as amended by CVM Rule 292/98 and CVM Rule 480/09;
l) resolve on the Company’s capital increase up to the limit of authorized capital, and can authorize the issuance of shares or subscription bonus;
m) propose the attribution of interest over the profits earned by the Company’s managers or employees and carry out the respective distribution thereof, with due regard for the limits established at the General Meeting;
n) attribute, in the event of approval of total amount of Board of Directors or Board of Executive Officers’ remuneration at the General Meeting, the monthly salary of each member of the Board of Directors or Board of Executive Officers;
o) review and, as applicable, propose the adoption of the General Plan for Call Option to the Company’s managers or employees or individuals rendering services to the Company or companies under its control;
p) establish the stock option conditions and rules, within limits and pursuant to the Stock Option Plan approved at the General Meeting, as well as for the management of said Plan, if committee is not created for this purpose; q) create permanent or temporary committees and commissions, as well as elect its members in order to support the Company’s Board of Directors;
q) establish the conditions and rules for granting of call option, with due regard for the limits and pursuant to the Stock Option General Plan approved at the General Meeting, as well as for management of said Plan, if the committee is not created for such purpose;
r) appoint Officer(s), as well as alternate members, and proxies that shall represent the Company at General Meetings of its direct subsidiaries, as well as establish vote guidelines for the Officers and proxies appointed;
s) resolve on any Company’s associations, as well as on the participation in any shareholders’ agreements;
t) resolve (i) on leasing, financings and loans exceeding ten percent (10%) of the Company’s shareholders equity ascertained in the last balance sheet audited, and/or (ii) on the issuance of simple debentures, not convertible into shares and without a collateral security , pursuant to Article 59, Paragraph 1 of Law 6,404/76;
u) authorize, when deemed necessary, the representation of the Company by a sole member of the Board of Executive Officers or by one attorney-in-fact;
v) open and close branches, offices, agencies in any part of the country or abroad;
w) agree or disagree with any tender offer for the acquisition of the Company shares by means of substantiated opinion, published within fifteen (15) days as of the publication of tender offer public notice, which shall comprise, at least (i) the convenience and the timing of the tender offer concerning the group of shareholders interest and in relation to the liquidity of their securities; (ii) the tender offer effects on the Company’s interests; (iii) strategic plans disclosed by the offeror in relation to the Company; (iv) other matters the Board of Directors may deem relevant, as well as the information required by Brazilian Securities and Exchange Commission’s applicable rules (“CVM”);
x) define and submit for the General Meeting’s decision, a three-name list of companies specialized in companies economic valuation to prepare an appraisal report on the Company’s shares, in cases of tender offer (OPA) for the company‘s deregistering as a publicly-held company or delisting from Level 2;
y) define the Company’s securities trading policy, policy for disclosure of material fact or act and related parties transactions; and
z) perform other legal attributions or to be attributed thereto at the General Meeting, as well as resolve on the cases not dealt with or provided for herein.
Paragraph 1 - The attributions dealt with in items “d”, “m”, “n”, “q”, “t”, and “u” may be delegated to the Board of Directors’ Chairman, by favorable vote cast by a majority of members of the Board of Directors.
Paragraph 2 - The transactions provided for in items “i”, “j” and “s”, involving an amount lower than that established in said items, shall be incumbent upon the Board of Executive Officers, as to the residual value thereof, pursuant these Bylaws.
Paragraph 3 - The Board of Directors shall meet, on an ordinary basis, once every three months and, on an extraordinary basis, whenever it is called by its Chairman or by two of its members. The call notices shall contain the agenda and delivered, in writing, within at least six (06) business days in advance or, in the event of meetings held by video conference or conference call, or another similar way that enables the remote participation therein, within four (04) business days in advance. The attendance of seven (7) board members is required for instatement of the Board of Directors’ Meeting, at the first call. If such quorum is not established, a second call notice shall be sent, in written, within two (2) business days in advance, or, in the event of meeting held by video conference or similar way, within one (1) business day in advance, which shall be deemed instated in the event of attendance of at least three (3) board members.
Paragraph 4 - With due regard for Paragraph 1 hereof, the Board of Directors’ resolutions shall be taken by a majority of votes cast by members present thereat and the Chairman shall issue the casting vote. The resolution taken thereat shall be drawn up in the Book of Minutes of the Board of Directors’ Meetings.
Paragraph 5 - The Board of Directors’ Chairman may stay any resolution on matters submitted for Board of Directors’ review, thus submitting them to the General Meeting immediately called, so as to resolve, on a definitive basis, the matter.
Article 15 - In the event of absences or temporary impairments of any board member, with due regard for Paragraph 1 hereof, such board member shall be replaced by alternate member or by Board Member appointed, in writing, which shall perform all duties and shall have all powers, duties and rights of the board member replaced, including the voting right. For evidencing said appointment, the Board Member replaced shall present a copy of the instrument of appointment to the other Board Members present at the meeting.
Paragraph 1 - In the event of absence of temporary impairment of the Board of Directors’ Chairman, the latter shall be replaced by its alternate or Board Member appointed, in writing, which shall perform his/her duties and shall have all powers, duties and rights of the board member replaced, including the voting right held thereby. A copy of the instrument of appointment shall be provided to all other Board Members present at the meeting in order to prove said appointment.
Paragraph 2 - In the event the position of board member is vacant, this member shall be replaced by his alternate, or, in the lack of alternate, a General Meeting shall be called to elect the alternate, who shall assume the position of board member for the remainder term of office of the replaced board member.
Article 16 - The Board of Directors shall be advised by technical and advisory committees referred to as: Investments Committee, Audit Committee, Compensation Committee, Governance and Disclosure Committee and Sustainability Committee.
Paragraph 1 - The Board of Directors, whenever it deems necessary, may also create other committees with technical or advisory roles, rather than those provided for permanent committees referred to in the caput of this Article.
Paragraph 2 - It shall be incumbent upon the Board of Directors to set the rules applicable to the committees, including rules on authority, composition, term of office, compensation, operation and scope. The Board of Directors may delegate to these Committees the authority to prepare a charter containing the aforementioned rules, which after the respective committee‘s approval, shall be ratified by the Board of Directors
Article 17 - The Company’s Board of Executive Officers shall be composed of three (3) to six (6) members, one (1) of which shall be Chief Executive Officer, all of them individuals, whether shareholders or not, residing in Brazil, elected and who may be dismissed at any time by the Board of Directors for one (1) year term of office; reelection is allowed.
Paragraph 1 - From among members of the Board of Executive Officers financial, oversight or corporate areas, the Board of Directors shall attribute the position of Vice C.E.O.
Paragraph 2 - Without prejudice to the execution of the instruments required for the Level 2 Rules, the Officer shall be invested in office by means of instrument signed and drawn up in the Book of Minutes of the Board of Executive Officers’ Meetings and shall serve until such time as new Executive Officers are invested in office.
Paragraph 3 - The positions of the Board of Executive Officers to be vacant during the term of office, the Board of Directors may elect a new Executive Officer for the remainder term, and shall always do it (i) referring to the position of Chief Executive Officer, and (ii) when necessary in order to re-establish the minimum number of Officers provided for herein
Paragraph 4 - In the event of impairments and absences of the Chief Executive Officer, the latter shall appoint an alternate Officer to replace him/her in the performance of his/her duties and shall have powers, duties and rights of the officer replaced, including the right to vote in the Board of Executive Officers’ meetings. The other Officers shall replace each other, as established by the Chief Executive Officer.
Article 18 - The Chief Executive Officer shall coordinate the Board of Executive Officers’ activities and supervise all the Company’s activities.
Sole Paragraph - Without prejudice to the attributions to be established by the Board of Directors to the other officers, the Chief Executive Officer may establish other attributions to such officers.
Article 19 - From among the Company’s officers, the Board of Directors shall appoint an officer to occupy the position of Investors Relations Officer that shall be incumbent upon the disclosure of material acts or facts in the Company’s business, to all markets participants and regulatory and inspecting entities.
Article 20 - Upon meeting of all members, the Board of Executive Officers shall have full powers to resolve on any matters or business of the Company’s interest, unless as provided by law or herein, within the private authority of the General Meeting or Board of Directors.
Sole Paragraph - The Board of Executive Directors shall be called, in writing, within three (3) days in advance, by its Chief Executive Officer or by two (2) officers acting jointly. A quorum of at least half of members is required to instate the Board of Executive Officers’ meetings and the resolutions shall be taken by a majority of votes cast by present thereat. The Board of Executive Officers’ resolutions shall be registered in proper book.
Article 21 - The Company shall be solely represented by its Chief Executive Officer; and jointly by any two (2) other members of the Board of Executive Officers or, even, by one Officer and by one attorney-in-fact legally appointed and with powers to that effect.
Paragraph 1 - The Company shall be represented, as plaintiff or defendant, vis-à-vis government agencies or federal, state and municipal authorities, as well as independent agencies, public companies, mixed capital companies and quasigovernmental entities, pursuant to the main section hereof and, further, an attorney-in-fact may be appointed with special powers for such purpose.
Paragraph 2 - The powers of attorney shall be granted on behalf of the Company by two (02) members of the Board of Executive Officers, acting jointly. Unless ad judicia powers of attorney and those intended for defense in administrative proceedings, all the other powers of attorney shall be granted for definite term that shall not exceed one year and specify the powers granted therein. The powers of attorney granted to the Company’s employees shall be cancelled and, consequently, automatically revoked upon termination of the employment contract of the grantee or if the latter no longer occupy the position.
Paragraph 3 - All members of the Board of Executive Directors and attorneys-in-fact shall not create any obligation for the Company, involving business not related to its corporate purpose, as well as perform forbearance acts on behalf of the Company.
Article 21 - The managers shall be liable for the acts performed during the carrying out of its duties vis-à-vis the Company and third parties, pursuant to the law and these Bylaws.
Article 22 - The managers shall be liable for the acts performed during the carrying out of its duties vis-à-vis the Company and third parties, pursuant to the law and these Bylaws.
Article 23 - The Company shall secure the legal technical defense of its Officers, members of the Board of Directors or the Fiscal Council, if any, in legal and administrative proceedings, the subjects matter of which are facts or acts occurred during the performance of their legal or corporate attributions in the ordinary course of business, and the Company may contract insurance policy to cover the legal expenses, attorneys’ fees and indemnifications arising out of said proceedings.
Paragraph 1 - The defense guarantee shall be secured even after the managers giving up their positions or end of their term of office, for any reason.
Paragraph 2 - The Company and the manager interested therein shall jointly appoint the person responsible for the defense of the interests of the latter and it may be represented by the Company’s attorneys, provided that there is no conflict of interest.
Paragraph 3 - In addition to the legal defense, the Company shall borne all court costs, fees of any nature, administrative expenses and bonds posted to secure instance.
Paragraph 4 - In the event of adverse judgment not favorable to the manager or if the latter is held liable by final and unappealable decision, he/she shall refund the amounts actually paid to the Company, except if it is evidenced that he/she acts in bona fine in the Company’s interests.
Article 24 - Related parties transactions shall comply with applicable legal rules, as well as those adopted in policy duly approved by the Board of Directors.
Article 25 - The Company’s Fiscal Council shall be instated on a temporary basis upon request of the shareholders, pursuant to law, and shall be composed of three (03) to five (05) sitting members and same number of alternate members, whether shareholders or not, elected at the General Meeting in which the instatement thereof was requested.
Paragraph 1 - The Fiscal Council’s members and the alternate members thereof shall serve until the first Ordinary General Meeting that shall elect them and may be reelected.
Paragraph 2 - The Fiscal Council’s authority shall be established by Law 6,404/76, as amended by Law 10,303/01 and the remuneration of its members shall observe the restrictions provided by law.
Paragraph 3 - The Fiscal Council’s members shall be invested in office upon execution of the Consent Instrument of Fiscal Council’s members mentioned in the Level 2 Rules, and compliance with applicable legal requirements. The Fiscal Council’s members shall further communicate the Company, upon investiture in office, the number and characteristics of the securities issued by the Company, directly or indirectly owned thereby, including its derivatives.
Article 26 - The General Meeting shall meet, on an ordinary basis, within four (4) months as of the end of the fiscal year and, on an extraordinary basis, whenever it is called by the Board of Directors, the Fiscal Council or its shareholders, pursuant to law.
Sole Paragraph - The General Meeting shall be chaired by the Chairman of the Company’s Board of Directors and, in the absence thereof, by the shareholders appointed at the General Meeting. The Chairman shall appoint one shareholder or attorney, from among those present thereat to act as secretary of the meeting.
Article 27 - The shareholders shall participate in the General Meeting if they evidence their shareholder’s status by presenting document proving the holding thereof.
Article 28 - The shareholders may be represented at the General Meetings by proxy appointed for less than 1 year, whether shareholder, the Company’s manager, attorney or financial institution.
Article 29 - The fiscal year shall be of twelve (12) months and shall end on December 31 each year when the financial statements provided by law shall be prepared.
Article 30 - After deducting all accrued losses, if any, and the income tax provision, the outstanding balance shall be used to satisfy the profit sharing of the Company’s managers, up to ten percent (10%) of the outstanding balance of the income ascertained and shall not exceed the annual total remuneration established for the managers at the General Meeting, with due regard for article 152, paragraph 2 of Law 6,404/76.
Article 31 - The outstanding balance of the income ascertained after the deduction of profit sharing mentioned above shall be the net income ascertained in the fiscal year and shall be used as follows:
a) five percent (5%) shall be used for creation of legal reserve, up to the amount of twenty percent (20%) of the capital stock. The creation of legal reserve may be waived if the outstanding balance plus the amount of the capital reserves exceeds thirty percent (30%) of the capital stock;
b) twenty-five percent (25%) of the net income adjusted pursuant to article 202 of Law 6,404/76 to be distributed among the shareholders as mandatory dividends; and
c) with due regard for the uses established in the items above, up to seventy-one point two five percent (71.25%) shall be intended for creation of statutory reserve for development of corporate business, which may not exceed the total amount of the capital stock, pursuant to article 199 of Law 6,404/76, the purpose of which is (i) to secure funds in permanent assets; (ii) injection of working capital to secure operating conditions adequate for performing the corporate purpose; and (iii) finance transactions of redemption, reimbursement or acquisition of shares issued by the Company. The creation of a statutory reserve may be waived by General Meeting’s resolution in the event of additional payment of mandatory minimal dividend. Once the limit provided for in article 199 of Law 6,404/76 is reached, the General Meeting, by proposal of the administrative bodies, shall resolve on the respective use thereof: (a) capitalization; or (b) distribution of dividends to shareholders.
Article 32 - The Company shall prepare annual or interim balance sheets and post, as per Board of Directors’ resolution, dividends in the income earned account of these balance sheets, in the total amount to be distributed at the end of the fiscal year, with due regard of the restrictions provided by law.
Paragraph 1 - Furthermore, as per Board of Directors’ resolution, interim dividends may be posted in the accrued profit or profit reserve account ascertained in the last annual or half-yearly balance sheet.
Paragraph 2 - Furthermore, as per Board of Directors’ resolution, the dividends, including interim and/or intermediary dividends may be paid as interest on capital stock.
Paragraph 3 - Interim and/or intermediary dividends shall be always credited and deemed as prepayment of mandatory dividend.
Paragraph 4 - The amount paid or credited as interest on capital stock, pursuant to article 9, paragraph 7 of Law 9,249/95 and applicable legislation and regulation, may be attributed to the mandatory dividend, thus including such amount in the dividends distributed by the Company, for all legal purposes.
Article 33 - The disposal of the Company’s share control by a sole transaction or by successive transactions shall be contracted under the suspensive or resolutory condition that the Buyer shall undertake to conduct a Tender Offer to other Company’s shareholders (including shareholders of preferred shares), so as to secure a treatment equal to that provided to the selling controlling shareholder (including the minimal price of one hundred percent (100%) of the price paid per each voting share held by the selling controlling shareholder), with due regard for the prevailing legislation and the Level 2 Rules.
Article 34 - The Tender Offer set forth in the previous Article shall be also carried out:
(a) In the events of onerous assignment of share subscription rights and other titles and rights relating to securities convertible into shares, which may entail the disposal of the Company’s Control; or
(b) In the event of disposal of Company’s Control by the company holding the Controlling Stake, and, in such event, the Selling Controlling Shareholder shall state the price established for the Company in such disposal to BM&FBOVESPA and attach documentation evidencing such transaction.
Article 35 - The party that acquires the Controlling Stake under the private share purchase agreement executed with the Controlling shareholder(s), involving any number of shares, shall:
(a) carry out the Tender Offer provided for in Article 33 hereof; and
(b) pay, as indicated hereinbelow, the amount corresponding to the difference between the tender offer price and the amount paid per share eventually bought at the stock exchange within six (6) months prior to the acquisition date of Power of Control, duly adjusted until date of payment. Said amount shall be distributed among all individuals who sold the Company’s shares at the trading sessions where the Buyer made the acquisitions, proportionally to the daily selling net balance of each share, and it shall be incumbent upon BM&FBOVESPA to carry out the distribution, pursuant to its rules.
Article 36 - The Company shall register any transfer of shares to the purchaser of the control power or to those that acquires the control power, only upon execution of the Consent Instrument of the Controlling Shareholders mentioned in the Level 2 Rules.
Article 37 - A tender offer shall be carried out:
(i) by the Company or the controlling shareholder for deregistering of the Company;
(ii) by the controlling shareholder in case the Company is delisted from the BM&FBovespa Level 2 best practices or due to corporate restructuring operations in which the resulting Company does not have its securities accepted for trading at Level 2 within 120 days of the General Meeting that approved the aforementioned operation; or
(iii) by the controlling shareholder in the event the authorization for trading securities issued by the Company in Level 2 is revoked, due to the eventual non-compliance with the provisions in the Level 2 Rules not remedied within the period determined by BM&FBOVESPA.
Paragraph 1 - The minimum price to be offered in cases mentioned in items (i) to (iii) in the caput of this Article shall be ascertained in appraisal report prepared as per Article 38with due regard, also, for other legal and regulatory rules applicable thereto.
Paragraph 2 - The controlling shareholder shall be discharged from carrying out the public offering provided for in the main section hereof, in case the Company is delisted from the BM&FBOVESPA Level 2 best practices, due to the signing of BM&FBOVESPA “Novo Mercado” listing agreement or if the company resulting from the corporate restructuring obtains authorization to trade securities at the "Novo Mercado" within one hundred and twenty (120) days as of the General Meeting that approved the aforementioned operation.
Paragraph 3 - In the event there is no controlling shareholder, the tender offer shall be conducted as specified hereinbelow:
(a) in case of item (ii) of caput of this Article, the General Meeting that approved the operation shall define that one (those) liable for conducting the tender offer under same conditions provided for above, who, in attendance of the Meeting, shall expressly assume the obligation to conduct the offer. If those persons responsible for conducting the tender offer are not defined, shareholders who voted favorably to the corporate restructuring shall conduct said tender offer.
(b) in case of item (iii) of caput of this Article, when delisting from Level 2 occurs due to non-compliance with the obligations provided for in Level 2 Rules (i) resulting from resolution at the General Meeting, shareholders who voted favorably to the resolution that implied the respective failure to comply shall conduct the tender offer provided for in the caput; or (ii) due to Management act of fact, the Company’s Management shall call for a Shareholders’ Meeting, whose Agenda shall resolve on how to remedy the failure to comply with obligations provided for in Level 2 Rules or, where applicable, to resolve on the Company’s delisting from Level 2, and in this case, said Meeting shall define that one(those) liable for conducting the tender offer provided for in the caput, who in attendance of the meeting shall expressly assume the responsibility for conducting the offer. In the case of a corporate reorganization in which the resulting Company is not listed in the the BM&FBovespa Level 2 best practices.
Article 38 - The appraisal report dealt with in the first Paragraph of the previous Article shall be prepared by institution or specialized company, with proved experience and independent as to the decision power of the Company, its managers and controlling shareholders, and the report shall meet the requirements set forth in Paragraph 1 of Article 8 of Law 6,404/76, as amended by Law 10,303/01 and mention the liability provided for in Paragraph 6 of said law.
Paragraph 1 - The General Meeting shall choose the institution or specialized company responsible for establishing the economic value of the Company as from the submission by the Board of Directors of a three-name list, and the respective resolution -not computing the blank votes and each share (irrespectively of the type and class) entitling to one vote - shall be taken by majority vote of shareholders representing the outstanding shares in attendance of that Meeting pursuant to the Level 2 Rules, if instated in first call, shall be attended by the shareholders representing at least twenty percent (20%) of the total outstanding shares or, if instated in second call, by any number of shareholders representing the outstanding shares.
Paragraph 2 - The costs for preparation of an appraisal report shall be fully borne by the parties responsible for the Tender Offer.
Article 39 - All Company’s shareholder or Group of shareholders shall disclose, by means of communication to the Company, the acquisition of shares that, added to those already existing, exceed 5% of the Company’s capital stock or multiple value of such percentage.
Paragraph 1 - The holders of debentures convertible in shares, call option and subscription bonus securing their holders the acquisition of shares in the number provided for herein shall have the same obligation.
Paragraph 2 - The penalties provided for in article 40 below shall be applied in the event of violation established herein.
Article 40 - The General Meeting may suspend the exercise of the rights, including the voting rights, of the shareholder that does not comply with the obligation provided by law, the regulation or these Bylaws, including to disclose the acquisition of share interest, as per article 39 hereof.
Paragraph 1 - The suspension of the exercise of rights may be resolved at any Ordinary or Extraordinary General Meeting in which such matter is included in the agenda.
Paragraph 2 - The shareholders representing at least five percent (5%) of the capital stock may call General Meeting, if the Board of Directors does not comply with the call notice, within eight (08) days, mentioning the non-compliance with such obligation and the name of the breaching shareholder.
Paragraph 3 - In addition to other aspects, the General Meeting that approves the suspension of political rights shall further establish the scope and term thereof, thus being prohibited the suspension of inspection and information rights provided by law.
Paragraph 4 - The suspension of rights shall cease after compliance with the obligation.
Article 41 - With due regard for paragraph 8 of this Article 41 hereof, any Acquiring Shareholder (as defined in paragraph 11 below), which acquired or became holder of shares issued by the Company in a number equal or higher than twenty-five percent (25%) of the total common shares issued by the Company undertakes to, within up to ninety (90) days as of the acquisition or event that triggered the holding thereof in a number equal or higher than twenty-five percent (25%) of the total common shares issued by the Company, carry out or request the registration, as applicable, public tender offer for acquisition of all shares issued by the Company ("OPA"), with due regard for the applicable regulation issued by the Securities and Exchange Commission (CVM), the Corporate Governance Code - Level 2 Rules, as well as the terms hereof.
Paragraph 1 - The OPA shall be (i) addressed, on an indistinct basis, to all Company’s shareholders, (ii) in auction carried out at BM&FBOVESPA, (iii) at the price established pursuant to Paragraph 2 below, and (iv) paid in cash, in Brazilian currency, for the acquisition of the shares issued by the Company under the OPA.
Paragraph 2 - The acquisition price under the OPA of each share issued by the Company shall be the highest amount established between: (i) the unit price of the shares issued by the Company ascertained in the appraisal report on the economic value ascertained within up to sixty (60) days as of the Extraordinary General Meeting in which the company responsible for the preparation of the appraisal report shall be appointed; and (ii) the average amount paid by the Acquiring Shareholder relating to the last five percent (5%) of the shares issued by the Company before the acquisition of twenty-five percent (25%) provided for in main section hereof, duly adjusted according to the Special System for Settlement and Custody (SELIC).
Paragraph 3 - The OPA mentioned in the main section hereof shall not exclude the possibility of another shareholder of the Company or, as applicable, the Company itself, carrying out a competing OPA, pursuant to applicable regulation.
Paragraph 4 - The Acquiring Shareholder undertakes to respond any requests or meet CVM requirements relating to the OPA, within the maximum terms provided for in the applicable regulation.
Paragraph 5 - If the Acquiring Shareholder does not comply with the obligations provided for herein, including as to the observance of the maximum terms (i) for carrying and application of OPA registration, or (ii) for responding any request or meeting any CVM requirements, the Company’s Board of Directors shall call Extraordinary General Meeting in which the Acquiring Shareholder shall not vote, to resolve on the suspension of voting rights of the Acquiring Shareholders not complying with the obligations provided for herein, as per article 120 of Law 6,404/76.
Paragraph 6 - Any Acquiring Shareholder (as defined in paragraph 11 below) that acquired or became holder of other rights, including right of enjoyment or trust, in connection with the common shares issued by the Company in a number equal or higher than twenty-five percent (25%) of the total common shares issued by the Company undertakes, within up to ninety (90) days as of the acquisition or event that triggered the holding of such rights, to carry out, as applicable, an OPA, under the terms provided for in article 41.
Paragraph 7 - The obligations set forth in article 254-A of Law 6,404/76 and articles 33, 34 and 35 hereof shall not excluded the compliance with the obligations provided for herein by the Acquiring Shareholder.
Paragraph 8 - The provisions dealt with in article 41 shall not be applied if an individual becomes holder of shares issued by the Company in a number equal of higher than twenty-five percent (25%) of the total common shares issued by it as a result (i) of merger of another company by the Company, (ii) the merger of shares of another Company by the Company, (iii) the subscription of the Company’s shares conducted in a sole issuance or more than one primary offering approved at the Company’s shareholders General Meeting and/or Board of Directors, and the proposal of which for capital increase established the issuance price of the shares based on the economic value ascertained in the appraisal report prepared by specialized institution or company, with proved experience in appraising publicly-held companies; (iv) succession in view of corporate restructuring or legal provision — including the succession resulting from inheritance — involving persons that are shareholders of the Company as of October 1, 2007 and (a) its respective direct or indirect controlled companies as of October 1, 2007, or (b) its respective direct or indirect controlling companies as of October 1, 2007. For the purposes hereof, control shall mean the holding of at least fifty percent (50%) plus one share of the voting capital of the controlled company and the exercise of rights provided for in items (a) and (b) of article 116 of the Brazilian Corporate Law.
Paragraph 9 - The provisions of Article 41 shall be also observed in the event of Acquiring Shareholder reaching twenty-five percent (25%) of the total common shares issued by the Company by means of mandatory tender offer, pursuant to CVM Rule 361/02 or any other prevailing rule. Any difference in the unit price between the OPA carried out pursuant to this Article and that under CVM Rule 361/02 mentioned above shall be paid to the shareholders accepting the OPA.
Paragraph 10 - For the purposes of calculating twenty-five percent (25%) of the common shares issued by the Company provided for herein, involuntary increases in the ownership interest arising from the cancellation of treasury shares and reduction of the Company’s capital stock upon cancellation of shares or reverse split of shares shall not be computed.
Paragraph 11 - For the purposes hereof, the capitalized term below shall have the following meaning:
"Acquiring Shareholder " shall mean, except for shareholders holding common shares as of the approval hereof, any person (including, but not limited to, any individual or legal entity, including any affiliated companies — that is, any persons (a) directly or indirectly controlled by the Acquiring Shareholder, or (b) controlling, whether directly or indirectly, the Acquiring Shareholder, or (c) directly or indirectly controlled by any person controlling, whether directly or indirectly, the Acquiring Shareholder, provided that at least fifty percent (50%) plus one share of the voting capital of such person is held by such Acquiring Shareholder or affiliate company —, investment fund, collective investment entities, securities portfolio, universality of rights, or any other type of organization, resident, domiciled or headquartered in Brazil or abroad), or group of persons bound by voting agreement and/or representing a single interest to subscribe and/or acquire the Company’s shares, or (d) spouse, companion, dependents included in the income tax return, ascendant or descendants and relatives up to the third degree of affinity of such persons. Among the examples of a person acting in the interest of the Acquiring Shareholders, we should mention any person (i) directly or indirectly controlled or managed by such Acquiring Shareholder, (ii) controlling or managing, under any system, the Acquiring Shareholder, (iii) directly or indirectly controlled or managed by any person controlling or managing, whether directly or indirectly, such Acquiring Shareholder, (iv) in which the controlling shareholder of such Acquiring Shareholder holds, directly or indirectly, an ownership interest equal or higher than thirty percent (30%) of the capital stock, (v) in which such Acquiring Shareholder holds direct or indirect ownership interest equal or higher than thirty (30%) of the capital stock, or (vi) holds direct or indirect ownership interest equal or higher than thirty (30%) of the capital stock of the Acquiring Shareholder.
Paragraph 12 - If the CVM rule applicable to the OPA provided for herein establishes the adoption of criterion for calculation of the acquisition price of each share of the Company under OPA, entailing an acquisition price higher than that calculated under Paragraph 2 above, the acquisition price calculated under the CVM rule shall prevail for application of the OPA.
Article 42 - Notwithstanding article 41 hereof, the provisions of the Corporate Governance Code - Level 2 Rules shall prevail in the event of prejudice to the rights of the addressees of the offerings mentioned in said article.
Article 43 - The provisions hereof, as applicable, shall be applicable to the Unit, in the event and upon issuance thereof, representing common and preferred shares of the Company.
Article 44 - The Company shall be wound up and liquidated in the cases provided by law or by General Meeting’s resolution that shall establish the conditions for the winding-up, pursuant to law, instate the Fiscal Council, for the winding-up term, thus electing its members and fixing the respective remunerations thereof.
Article 45- The shareholders’ agreements duly filed at the Company’s headquarters which, among other settlements, establish terms and conditions for disposal of shares issued by the Company, govern the preemptive right or the exercise of the voting right of the shareholders, shall be observed by the Company and its management.
Sole Paragraph. The obligations and liabilities arising out of such agreements shall be valid and enforceable vis-à-vis third parties upon registering thereof in the Company’s records and in the certificates, if issued. The Company’s managers shall ensure compliance with such agreements and the chairman of the General Meetings or of Board of Directors, as applicable, shall deemed invalid the vote cast by the shareholder or board member not complying with such agreements or even in the event of absence or non-attendance of shareholders or board members, the shareholders adversely affected or board members elected may vote with shares or votes pertaining to the shareholders and board members absent or that do not cast their votes, as applicable, pursuant to articles 118, paragraphs 8 and 9 of Law 6,404/76, as amended by Law 10,303/01.
Article 46 - The Company shall file any Shareholders’ Agreement provided for the exercise of control power at the Company’s headquarters only upon execution of the Consent Instrument of the Controlling Shareholders set forth in article 36.
Article 47 - The Company, its shareholders, managers and members of the Fiscal Council, undertake to resolve, by means of arbitration, before the Market Arbitration Panel, any and all dispute or controversy arising among them, related to or deriving from, especially, the application, validity, effectiveness, construal, infringement and its effects, of the provisions contained in Law 6,404/76, as amended by Law 10,303/01, the Company’s Bylaws, the rules issued by the Brazilian Monetary Council, the Brazilian Central Bank and CVM, as well as the other rules applicable to the operation of the capital markets in general, in addition to those included in the Level 2 Rules of the Agreement for Adoption of Best Practices of Corporate Governance Level 2, which new denomination is Contract of Level 2 Listing Rules.of the Regulation on the Application of Monetary Sanctions of the Corporate Governance Level 2 and the Arbitration Rule issued by the Market Arbitration Panel.
Article 48 - The Company may ensure the issuance of share deposit certificates (“Units”).
Paragraph 1 - Each Unit represent one (1) common share and two (02) preferred shares issued by the Company and shall be issued only upon request of the shareholders wishing to do so, with due regard for the rules established by the Board of Directors pursuant to this Chapter XII, article 24 of Law 6,404/76 and other legal provisions applicable thereto.
Paragraph 2 - Only shares free and clear of any burden and encumbrance shall be deposit for purposes of issuance of Units.
Article 49 - Except for cancellation of the Units, the holding of the shares represented by the Units shall be transferred only by means of transfer of the Units.
Paragraph 1 - The Units’ holder shall be entitle to request, at any time, the issuing and registering financial institution to cancel the Units and deliver the respective shares deposited, with due regard for the rules established by the Board of Directors, pursuant to these Bylaws.
Paragraph 2 - The Company’s Board of Directors may, at any time, suspend, for an indefinite term, the possibility of cancellation of Units provided for herein, upon primary and/or secondary public offering, in local and/or international market and, in such event, the suspension term shall not exceed thirty (30) days.
Paragraph 3 - The Units with any burden, encumbrances or lien shall not be canceled.
Article 50 - The Units shall entitle its holders the same rights, advantages and restrictions of the shares issued by the Company represented thereby.
Paragraph 1 - The Units’ holder shall be entitle to participate in the Company’s General Meetings and exercise the rights arising from the shares represented by the Units, by evidencing the holding thereof.
Paragraph 2 - The Units’ holders may be represented at the Company’s General Meetings by proxy appointed pursuant to article 126 of Law 6,404/76.
Paragraph 3 - In the event of division, reverse split, payment of dividends or issuance of new shares by capitalization of profits and reserves, the following rules shall be observed as to the Units:
(a) In the event of increase in the number of shares issued by the Company, issuing and registering financial institution shall register the deposit of the new shares and credit the new Units in the account of the respective holders so as to reflect the new number of shares held by the respective Units’ holders, at a ratio of one (1) for two (2) preferred shares issued by the Company for each Unit. The shares not triggering the issuance of Units shall be credited directly to its shareholders, without the issuance of Units; and
(b) In the event of reduction in the number of shares issued by the Company, the issuing and registering financial institution shall debit the deposit account of holders of reverse split shares, thus automatically canceling the Units in a number sufficient to reflect the new number of shares held by the Units’ holders, at a ratio of one (1) common share and two (2) preferred shares issued by the Company for each Unit and the other shares not triggering the issuance of Units shall be delivered directly to the shareholders, without issuance of Units.
Article 51 - The Company’s shareholders may convert their common shares into preferred shares issued by the Company, at a ratio of one (1) common share for one (1) preferred share up to the legal maximum limit of preferred shares.
Paragraph 1 - The Company’s Board of Directors shall establish conditions and terms for exercise of the conversion right provided for herein and may perform all acts required for the implementation thereof.
Paragraph 2 - If the exercise of the conversion of shares by the shareholders holding common shares, pursuant to main section hereof, results in a number of preferred shares higher than fifty (50%) percent of the total shares issued by the Company, said conversion shall be carried by apportionment among the shareholders interested therein, ratably to the interested held in the capital stock, until reaching said legal limit.
To view the Company‘s By-Laws in PDF format, click here.
1.1. This document establishes the bases of the disclosure policy of material act of fact and trading policy of securities adopted by Sul América S.A. (“Company”), and sets forth the procedures to be complied with in relation to the disclosure of material acts or facts and to the confidentiality before being disclosed to the market.Topo
2.1. For purposes of the policy herein, material act or fact (“Material Act or Fact”) is a controlling shareholder’s decision, a resolution of the general meeting or the Company’s management bodies, or any other politico-administrative, technical, trading or economic-financial act or fact occurred or related to the Company’s businesses which may substantially influence:
(i) the quotation of securities issued by the Company or referenced thereto;
(ii) investors’ decision to purchase, sell or maintain securities issued by the Company; or
(iii) investors’ decision to exercise any rights inherent to the condition of holder of securities issued by the Company or referenced thereto.
2.2. The events listed below, among others, may be considered Material Acts or Facts when they may substantially influence the quotation of securities issued by the Company or investors’ decision, as described in item 2.1 below:
(a) execution of transfer agreement or contract of the Company’s ownership control, still under suspensive or resolutory condition;
(b) change in the Company’s control, including by means of execution, amendment or termination of shareholders’ agreement; (c) execution, amendment or termination of shareholders’ agreement in which the Company is party or intervening party, or which has been recorded in the Company’s books;
(d) entrance or withdrawal of a partner who maintains operational, financial, technological or administrative agreement or placement with the Company;
(e) authorization to trade securities issued by the Company in any market, whether in Brazil or overseas;
(f) decision to promote the cancellation of the registration as a publicly-held company;
(g) incorporation, merger or spin-off involving the Company or related companies;
(h) change of corporate status or winding up of the Company;
(i) change in the equity composition of the Company;
(j) change in accounting criteria;
(k) debt renegotiation;
(l) approval of the stock option plan;
(m) modification in rights and advantages of securities issued by the Company;
(n) stock split or reverse split or bonus granting;
(o) acquisition or cancellation of shares issued by the Company to be held in treasury, as well as sale of shares acquired through this manner;
(p) Company’s profit or loss and allocation of cash earnings;
(q) execution or dissolution of agreement, or its unsuccessful outcome when the expectation of a success outcome is publicly known;
(r) approval, amendment or abandonment of project or delay in its implementation;
(s) the beginning, resuming or discontinuing of activities purpose of the Company;
(t) discover, change or development of Company’s technology or resources;
(u) modification of projects disclosed by the Company;
(v) judicial or out-of-court recovery, request or admission of bankruptcy, interference in the Company by supervisory agency or bringing of a suit which may affect the Company’s economic-financial condition; and
(w) decision to carry out a public offering.
3.1. In compliance with the provision herein, it is incumbent upon the Company’s Investor Relations Officer to disclose and inform the Brazilian Securities and Exchange Commission - CVM and the Stock Exchange in which the securities issued by the Company are traded any Material Act or Fact occurred or related to the Company’s businesses, as well as ensure the wide and immediate dissemination simultaneously in all markets trading the Company’s securities.
3.1.1. The Investor Relations Officer shall simultaneously disclose the Material Act or Fact to the market through any means of communication, including information to the press, or in meetings of entities of the same segment, investors, analysts or selected public, in Brazil or abroad.
3.1.2. The information shall be disclosed by means of widely-circulated newspapers commonly used by the Company, in the summary form, indicating the website on which the complete information shall be available to all investors, with at least identical content in relation to that submitted to the CVM and to the Stock Exchange in which the securities issued by the Company are traded.
3.1.3. The disclosure and communication of the Material Act or Fact, including the summarized information, shall be clearly and accurately, in a language accessible to investors.
3.1.4. The Material Act or fact shall be disclosed, whenever possible, before or after the trading session on Stock Exchanges and organized over-the-counter market entities in which the securities issued by the Company are traded.
3.1.5. In case the securities issued by the Company are accepted to be simultaneously traded in markets of several countries, the Material Act or Fact shall be disclosed, whenever possible, before or after the trading sessions of both countries. In the event of inconsistency, the business hours of the Brazilian market shall prevail.
3.1.6. In case the Material Act or Fact must be imperatively disclosed during the business hours, the Investor Relations Officer may request the suspension of trading of securities issued by the Company during the time necessary to properly disseminate the material information when disclosing the information to the Stock Exchange in which these securities are traded.
3.1.7. The trading suspension referred to in the item above shall not be effective in Brazil while the stock exchange of other country in which the Company’s shares are traded is operating, or in stock exchanges in which the trading involving the Company’s shares is not suspended.
3.2. Controlling shareholders, officers, members of the Board of Directors, Fiscal Council or any bodies with technical or advisory functions, created by statutory provision, shall inform any Material Act of Fact to the Investor Relations Officer who, pursuant to item 4 below, shall promote its disclosure.
3.3. People referred to in item 3.2 above who are personally aware of any Material Act of Fact and find omission by the Investor Relations Officer in complying with his duties of communication and disclosure, including whether information is out of control or uncommon fluctuation in quotation, price or number of the Company’s shares traded, shall only be exempted from liability if they immediately inform the Material Act or Fact.
3.4. In case the uncommon fluctuation in quotation of the Company’s shares referred to in item 3.3 above occurs before the Material Act or Fact is disclosed, the Investor Relations Officer shall inquire people who have access to this information, so as to verify whether they are aware of any inside information which should be disclosed to the market.Topo
4.1. Material Acts or Facts may exceptionally not be disclosed whether controlling shareholders or managers consider this action a risk to Company’s legitimate interest.
4.1.1. The Company’s controlling shareholders or managers may submit to the CVM the decision of maintaining confidentiality of Material Act or Fact through request forwarded to CVM’s President in a sealed envelope, containing the word “Confidential” in it.
4.2. In case the information is out of control or uncommon fluctuation in quotation, price or trading number of securities issued by he Company occurs, the controlling shareholders and managers shall, directly or through the Investor Relations Officer, promptly disclose the Material Act or Fact.
4.3. The controlling shareholders, officers, members of the Board of Directors, Fiscal Council or any bodies with technical or advisory functions, created by statutory provision, as well as the Company’s employees shall maintain confidentiality of information related to Material Act or Fact to which they have privileged access due to their position until its disclosure to the market, as well as ensure that their subordinates and trusted third parties do so, and shall be liable to these in case of non-compliance.
4.3.1. The Company’s employees who, due to their position, have privileged access to a Material Act or Fact shall sign the Declaration of Secrecy and Confidentiality to be defined by the Company, which sets forth the obligation of Material Act or Fact confidentiality to which they will have access until its disclosure to the market.Topo
5.1. Prior to the disclosure to the market of the Material Act or Fact occurred in the Company’s businesses, it is prohibited the trading with securities issued by:
(a) the Company;
(b) the Company’s direct or indirect controlling shareholders;
(c) the Company’s officers;
(d) the members of the Company’s Board of Directors;
(e) the members of the Company’s Fiscal Council;
(f) the members of any bodies with technical or advisory functions created by statutory provision of the Company;
(g) whoever is aware of information related to the Material Act or Fact due to his/her position in the Company, its parent company, subsidiaries or affiliated companies;
(h) whoever is aware of information related to the Material Act or Fact and knows this is information not disclosed to the market yet, specially those who have commercial, professional or trust relation with the Company, such as independent auditors, security analysts, advisors and institutions part of the distribution system; those are liable to verify the information disclosure before trading with the Company’s securities;
(i) the managers who leave the Company’s management before the public disclosure of business or fact which began during their management period and whose prohibition shall extend for six months after their withdrawal
5.2. The prohibition related to the item above shall also prevail:
(a) whether incorporation, total or partial spin-off, merger, change of corporate status or corporate restructuring of the Company are intended; and
(b) in relation to the direct and indirect controlling shareholders, officers and members of the Company’s Board of Directors whenever the acquisition or sale of securities issued by the Company, its subsidiaries, affiliated companies or other companies under common control is in progress, or whether the option or mandate is granted for such purposes.
5.3. People referred to in the item above are also prohibited to trade securities during fifteen (15) days prior to the disclosure of the Company’s Quarterly Information (ITR) and Annual Information (DFP - Standard Financial Statements).
5.4. Prohibitions set forth in paragraphs (a) to (i) of item 5.1 and paragraph (a) of item 5.2, shall not be effective right after the Company discloses the Material Act or Fact to the market, except whether the trading with securities may influence the conditions of these businesses, promoting loss for the Company or its shareholders.
5.5. In case any agreement or contract which aims at transferring the Company’s ownership control is entered into, or the option or mandate is granted for such purposes, as well as whether incorporation, total or partial spin-off, merger, change of corporate status or corporate restructuring of the Company are intended, and while the operation is not disclosed by means of publication of the Material Act or Fact, the Company’s Board of Directors shall not resolve on the acquisition or sale of shares issued by the Company.Topo
6.1. The provision in this Disclosure Policy of Material Act or Fact and Trading Policy of Securities includes persons mentioned herein, specially those listed in item 5.1, whose compliance with its terms shall be formalized by means of the Declaration of Compliance to be entered into in the format of Exhibit I, which shall be filled in the Company’s headquarters, while the person is bonded to it and during at least five years after his/her withdrawal.
6.2. The Company shall keep in its headquarters, available to the CVM, the list of persons mentioned in item 5.1, and their respective qualifications, as well as their positions held in the Company, address and Corporate Taxpayer’s ID or Individual Taxpayer’s Register numbers, and shall update this information whenever there is modification.
6.3. The officers, members of the Board of Directors, Fiscal Council or any bodies with technical or advisory functions of the Company, created by statutory provision, are liable to communicate to the Company, in the form of Exhibit II, the number, characteristics and manners to acquire the securities they hold issued by the Company, as well as subsidiaries or parent companies registered as publicly-held companies, or related to the securities, as well as alterations in their positions.
6.3.1. Persons mentioned above shall also inform the securities held by the spouse from whom they are not legally separated, the companion, any dependent included in their annual income tax return and companies directly or indirectly controlled by them.
6.3.2. The Company shall send information mentioned in this item to the CVM and stock exchanges or organized over-the-counter entities in which the securities issued by the Company are traded within ten (10) days after the end of the month in which alterations in positions held are verified, or the month in which the investiture in positions of managers or members of the fiscal council occurs.
6.4. The direct or indirect controlling shareholders and shareholders who elect the members of the Board of Directors or Fiscal Council, as well as any individual or corporate entity, or group of people, operating together or representing the same interest, who reach direct or indirect ownership of 5% (five per cent) or more of type or class of shares representing the Company’s capital stock, shall communicate to the Company in the form of Exhibit III.
6.5. The obligation set forth in item 6.4 above shall be complied with every time the ownership of a person or group of persons representing the same interest, who holds 5% (five per cent) or higher interest is increased at the same percentage of type or class of shares representing the Company’s capital stock.
6.5.1. The communications referred to in items 6.4 and 6.5 shall be carried out immediately after reaching the ownerships mentioned.
6.5.2. The communications referred to in items 6.4 and 6.5 shall inform the sale or extinguishment, or the rights related to them, of shares and other securities mentioned in this article every time the holder’s ownership in type or class of these securities reach the percentage of 5% (five per cent) of the total of this type or class and every time this ownership is decreased by 5% (five per cent) of the total of type or class.
6.5.3. Obligations set forth in item 6.4 shall also be complied with in the acquisition of any rights on shares and other securities referred to in the aforementioned item.
6.6. The Officer is responsible for the execution and follow-up of the disclosure policy, whose appointment shall be carried out by the Company’s Board of Directors, the operating management herein, as well as its amendments to be determined by the CVM or by the Company, supervising its compliance with the Investor Relations Officer.
6.7. The Disclosure Policy of the Material Act or Fact set forth herein was communicated to the CVM and to the stock exchange in which the securities issued by the Company are traded, within the term set forth in Article 24 of CVM Rule no. 358/02, as amended by CVM Rule no. 369/02, accompanied by a copy of the respective resolution of the Board of Directors and its full contents.Topo
7.1. Pursuant to CVM Rule no. 358/02, gross infringement is the breach of the provisions of this Disclosure Policy of Material Act or Fact and Trading Policy with Securities, for purposes set forth in Paragraph 3 of Article 11 of Law no. 6,385/76, and the defaulting party is subject to the pertinent penalties.
For the purposes of the Brazilian Corporation Law, the net income is the result for the fiscal year remaining after deducting (i) eventual accumulated losses, (ii) the provision for income tax (IRPJ) and (iii) any amount set aside to pay profit sharing for employees and Management pursuant to Bylaws, observing the limits set forth by applicable law.
The dividends correspond to the Company‘s net income amount distributed to its shareholders in proportion to each one’s share ownership.
The mandatory dividend, as provided for by Article 202 of the Brazilian Corporation Law, corresponds to the minimum amount of net income that the Company shall distribute to its shareholders.
According to the Company’s Bylaws, the amount referring to the mandatory dividend cannot be less than twenty-five percent (25%) of the adjusted net income pursuant to Article 202 of the Brazilian Corporation Law.
According to the Brazilian Corporation Law, exceptionally, the mandatory dividend may be waved in the year in which the Company’s Management bodies inform at the Annual Shareholders’ Meeting that such dividend is incompatible with the Company’s financial situation. The undistributed profits, in the aforementioned assumption, if not absorbed by losses in subsequent years, shall be paid as soon as the Company‘s financial situation allows so.
The Company’s fiscal year comprises twelve (12) months, ending on December 31 of every year.
Pursuant to the Company’s Bylaws, the net income for the year, calculated according to item 1 above, will be allocated as follows:
(A) 5% to the legal reserve up to an amount equal to 20% of the capital stock and its recording may be exempted in the year its balance, plus capital reserves amount exceeds 30% of the capital stock;
(B) 25% of the adjusted net income pursuant to Article 202 of the Brazilian Corporation Law to be distributed to shareholders as mandatory dividend; and
(C) once observed the allocations of previous items, up to 71.25% to the statutory reserve aiming the expansion of company business, which cannot exceed the capital stock amount, pursuant to Article 199 of the Brazilian Corporation Law, the purpose of which is (i) to ensure funds to be invested in permanent assets; (ii) to strengthen working capital so that to ensure proper operating conditions to the company’s purpose; and (iii) to finance redemption operations, reimbursement or acquisition of shares issued by the Company.
The recording of a statutory reserve may be exempted by resolution made at the Shareholders’ Meeting in the event of payment of additional dividends to the mandatory dividend. Once reached the limit provided for by Article 199 of the Brazilian Corporation Law, the Shareholders’ Meeting as proposed by the Management bodies, shall resolve on the respective allocation: (a) for capitalization; or (b) for distribution of dividends to shareholders.
The resolution on the allocation of the Company’s net income for the year, annually verified, based on the audited financial statements, shall be incumbent upon the Annual Shareholders’ Meeting to be held within the first four months following the end of the fiscal year, as proposed by the Company‘s Management.
The Company may also draw up balance sheets for shorter periods and declare, by resolution of the Board of Directors, dividends to the profit account verified in these balance sheets, in view of the total amount to be distributed at the end of the respective fiscal year, observing the limits provided for by laws.
Also by resolution of the Board of Directors, interim dividends can be declared to the retained earnings account or profit reserves existing in the last annual or semiannual balance sheet.
Also by decision of the Company’s Board of Directors, the dividends, including interim dividends may be paid as interest on equity.
Interim dividends shall always be credited and deemed as prepayment of mandatory dividend.
The dividends attributed to each preferred share shall be equal to those attributed to each common share and preferred shares are not entitled to minimum or fixed dividends.
Unless if otherwise resolved by the appropriate body to declare dividends, the Company shall pay dividend to the person who, on the date dividend is declared, is registered as the owner or beneficiary of the share, and the Company may establish that dividend shall become due on the date of effective payment to occur on a date subsequent to the resolution by the appropriate body.
The dividend shall be paid within sixty (60) days as of the date dividend was declared or another term set at the Shareholders’ Meeting, as long as in any case, within the same fiscal year.
The Company shares are book-entry which shall be registered at the custodian agent.
The shareholders users of fiduciary custodies shall have their dividends credited according to the procedures adopted by BM&FBovespa S.A. - Securities, Commodities and Futures Exchange and by Brazilian Clearing and Depository Corporation (CBLC).
By decision of the Board of Directors, interest on equity may be paid to shareholders, pursuant to applicable laws.
The amount paid or credited as interest on equity may be attributed to the mandatory dividend and composing this amount for all legal effects.
Contrary to dividends, the payment of interest on equity is not tax exempted, currently being subject to the withholding income tax as per effective tax rate(s), except for tax-exempted or immune shareholders.
The information contained herein related to the distribution of dividends shall apply, where applicable, to the payment of interest on equity.
In a meeting held on April 19, 2012, the Board of Directors approved that the Company will adopt, from 2013 onwards the minimum amount of 30% of the annual adjusted net income as its dividend distribution proposal for results verified in the financial statements for the 2012 onwards fiscal years - the 30% payout proposal includes the mandatory dividends of 25%. The distributions in each case, are subject to the respective proposals for the allocation of net income made by the Company’s Management and to the approval at the Annual General Meeting, and may be reviewed based on the Company’s plans and needs, considering upon that occasion, factors, such as relevant acquisitions and investments and the compliance with regulatory requirements. In any case, any distribution of interim dividends or interest on equity made in the year under consideration will be calculated in these percentages.
On May 5, 2011, the Board of Directors approved the quarterly distribution of interim dividends in the amount of R$0.012 per Company common or preferred share not represented by unit and R$0.036 per unit, by decision of the Board of Directors at the time of disclosure of the Company’s quarterly results, to the profit account verified in these statements and/or to the profit reserve included in the last annual balance sheet, observing the applicable legal and statutory provisions. The Board of Directors may revise this policy or make an exception in certain quarter, vis-à-vis the Company‘s plans and needs, taking into consideration at that occasion, factors such as, relevant acquisitions and investments and the compliance with regulatory requirements.
Conducting business according to the highest ethical standards is of great importance to SulAmérica, so that in each and every relationship, internal or external, people’s dignity, transparency and respect to the law is assured.
Everyone in the Company must contribute to reaching this objective and consequently ensure that its conduct, behavior and attitude comply with the company’s values.
Therefore it is everyone’s duty to know, understand, experience and adopt on a daily basis the recommendations stated in this Code of Ethical Conduct.
Objective and Coverage
The Code of Ethical Conduct is a guide for personal and professional conduct to all collaborators of the SulAmérica group, regarding internal and external relationships, and its compliance is mandatory.
“Ensuring financial protection and peace to our clients in a unique relationship of agility, trust and transparency.”
“By 2012, to become the company of preference of clients and brokers in the main markets and one of the most profitable ones.”
1. Always seek better results
2. Keep our promise
3. Be accessible and dynamic
4. Have the gift to serve
5. Value collaborators and team work
6. Commitment with sustainability
SulAmérica hopes that all collaborators act according to the highest personal and professional integrity standards when performing their activities. To do so it has established the following standards of ethical conduct.
Relationships at work should be based on courtesy, mutual respect, team spirit, loyalty, and trust. Regardless of the job or position, all tasks should be carried out efficiently, swiftly, and transparently, focusing on the best results, respecting the highest human and professional standards. SulAmérica values diversity (ILO Convention no. 111, which defines sources of discrimination) and is utterly intolerant of any conduct that may be characterized as sexual or moral harassment, discriminatory based upon color, national origin, ancestry, social class, sex, religion, sexual orientation, age, physical aspect, disability.
Using SulAmérica systems for personal purposes is prohibited, as well as sending or receiving text and image messages with improper or offensive material of sexual, racial or religious nature, for example.
Any political propaganda inside the Company or using its name, logo, commercial brand or assets for this purpose is prohibited. When participating in political party activities, the collaborators must act on their own, without giving the impression, no matter how subtle, that they are acting on behalf of the Company. SulAmérica does not finance or support the candidacy to public jobs and/or political parties during and outside time of election.
The collaborators may not trade any products, including handmade products, inside the Company’s facilities.
SulAmérica respects the free association to the Union and the right to collective association.
The collaborators, when performing their duties, must comply with the constitutional principles, norms and regulations, according to the law.
In the professional environment, choosing the right clothes and accessories is essential for contributing to a positive image of SulAmérica before our clients, and no collaborator or visitor wearing clothes considered inadequate to the work environment will be allowed in our facilities. When visiting a client, we recommend the same style adopted within our facilities.
Relationship with Shareholders
The relationship with shareholders must be based on an accurate, transparent, and timely communication of information that will allow them to follow the Company’s activities and performance.
Relationship with Brokers, Policy Holders and Clients in General
It is everyone’s duty to wait on brokers, policy holders, third parties, as well as Company’s clients with courtesy, promptness and efficiency, and when authorized, provide them with all proper information requested, whether or not its content is favorable to one of the parties, within the time expected. All questions regarding the convenience of answering to any requests must be immediately forwarded to a superior. No preferential treatment should be granted for personal reasons, and all procedures must be associated to the Company’s ethical and operational guidelines. It is SulAmérica’s policy to offer and provide service in a fair and transparent manner. In case SulAmérica fails to answer to a request from brokers, policy holders, third parties, as well as other clients, the petitioner must understand why and see the considerations as fair, honest and clear.
Relationship with Suppliers and Service Providers
The hiring process of suppliers and service providers must be based on the Company’s needs and performed according to a strict selection process ensuring the best selection when it comes to cost-benefit. The hiring process must follow legal, technical and professional criteria, and require an ethical profile for practicing management, social and environmental responsibility, rejecting dishonest competition, compulsory, forced and slave labor, particularly child labor, as well as any type of discrimination based upon color, national origin, ancestry, social class, sex, religion, sexual orientation, age, physical aspect, disability.
The purchase decisions must be based on the reliability and integrity of the supplier, in addition to the offer value, in view of the short and long term goals. The collaborators must avoid doing business with suppliers and service providers of dubious reputation. Suppliers and service providers must be parties not related (relatives and personal friends) to the collaborator in charge of approving transactions or hiring employees, to avoid conflict of interest.
Relationship with Government Agencies
The relationship with Government Agency representatives must be based on the highest standards of honesty and integrity in all contacts made.
The collaborator must avoid sharing his opinion about actions or behavior of a public server or making any comments of political nature.
No payment made in cash, gifts, services, entertainment or any other benefit may be offered, directly or indirectly, to any direct or indirect federal, state or local Public Administration or Foundation authority or server, with the exception of invitations to events, congresses, seminars, ceremonies sponsored by the Company or in which the Company may participate directly or indirectly.
Relationship with the Insurance Market
The relationship with other insurance market institutions must be based on strict loyalty and good faith, avoiding comments and insinuations that may tarnish the competition’s image before third parties. Providing commercial data and information regarding any of them which may attempt against their activities is prohibited.
Honest competition must be the core element of all operations and relations with the insurance market. SulAmérica’s competitiveness must be exercised under this principle. No comments that may affect the competition’s image or contribute to spreading rumors about such institutions or entities must be made.
SulAmérica’s collaborators must treat representatives of other institutions and entities with the same respect they expect to be treated with. The disclosure of the Company’s confidential information to competitors is prohibited.
Relationship with the Environment and Social-Environmental Issues
SulAmérica adopts and supports, within its area of action and influence, a set of values related to human rights protection, work conditions and environment that follows the 10 principles of the United Nations Global Compact:
When developing products and services, SulAmérica works the social-environmental responsibility with the purpose of minimizing any negative impacts, direct or indirect, on the quality of life of communities and environment. The collaborators must be committed to practicing, encouraging and valuing environmental protection, trying to merge the company’s goals with the wishes and interests of the community along with sustainable development.
Relationship with the Press
Our relationship with the means of communication must be based on transparency, credibility and reliability, and always taking ethical values into consideration. Our representatives, whenever authorized to speak on behalf of SulAmérica, must express their institutional point of view and never show their personal opinion.
Any contact with the press must be mediated by the Institutional Communication Department, which evaluates the company’s benefits and image risks and designate a spokesperson for each situation.
The collaborator must not provide confidential information on any of the Company’s Business Units and clients and partners referred to the press, unless explicitly authorized by the vice-president of the area and the Institutional Communication.
The same is valid for the publication of texts, speeches, interviews or public appearances associated with commercial interests. In case of publication, speech, interview or appearance of public interest that may affect the Company, the collaborator must notify in advance the Institutional Communication and the vice-president of the area, directly or through Compliance.
Only previously authorized collaborators can give interviews on behalf of SulAmérica.
Relationship with Class Association and Entities
We must recognize the important role of Class Associations and Entities legally constituted by their own efforts and practices, always willing to dialogue in any situation involving SulAmérica, with the objective of reaching a mutually satisfying solution.
The SulAmérica representatives of class associations and entities must be designated by the vice-president of the area.
Relationship with Legal and Regulatory Authorities
Any non-routine verbal or written contact with legal and regulatory authorities, in particular, any contact that may somehow criticize or suggest criticism or investigation regarding SulAmérica to a collaborator, to their business, should immediately be communicated to SulAmérica’s Compliance.
Collaborators and their spouse or second-degree relative (children, parents and siblings) may not participate, directly or indirectly, either as a stockholder, partner or shareholder, in a company providing goods or services to SulAmérica, unless previously and formally authorized by Compliance. Collaborators may not carry out any external activities paid or not paid that may compromise the proper exercise of their activities in the Company, except for occasional activities such as speeches and similar activities. The collaborators may not make personal investments in any business competing or interfering negatively with the Company or contrary to the Company’s interests.
The integration into the company’s staff of a spouse/partner or relatives - children, parents, sibling, in-laws, nephew/niece, uncle/aunt, cousins, stepson/stepdaughter, stepfather/stepmother, grandchildren - of a current collaborator and also of the spouse/partner, will only be possible after a formal consultation with Compliance and previous authorization of the vice-president of the Human Capital Board of Directors of the area in which the collaborator works; the Relationship and Management Vice-Presidency - VIREA, well as hiring professionals who may have relatives in any competing company, supplier, clients or other service providers in the insurance market. Direct or indirect relationship of subordination among relatives is not allowed, or the allocation of relatives to the same department. Designating a person to a position that will allow them to verify, process, review, audit or somehow affect the job of a family member is prohibited, as well as working together in processes that require the “done and verified” control. The designation of a person to a position that may influence the compensation process, promotion or terms and conditions for hiring a family member is also prohibited. Existing cases as of the date of release of this Code should be formally communicated to an immediate superior and to Compliance that will analyze the existence of conflict of interest.
Conflicts of Interest
Avoiding circumstances in which personal interest may conflict or may appear to conflict with the interests of SulAmérica or clients is essential. The interest may be characterized by any and all benefits favoring the person or third parties (relatives, friends, etc.) with which we have or had a personal, commercial or political relationship.
The collaborators are assured of their right to participate in any private or personal business other than that of the Company, as long as the businesses are legitimate and legal and do not interfere or conflict with the Company’s interests or result from confidential information obtained due to a job or position in the Company. In case of doubt, the collaborator must formally contact Compliance for guidance.
No administrator, no member of the Board of Directors, member of an audit committee, no other committees, no collaborators belonging to any governance body not part of the Sul America conglomerate, or part of any society maintained under common control, whether receiving compensation or not, may participate. Any occasional exception, including the participation in bodies belonging to non-profit, and non-governmental entities, will be previously evaluated by the Chairperson of the Board and by the Sul America Compensation Committee, of the Human Capital Board of Directors.
Using the position to its own convenience or someone else’s or to obtain any type of favor is prohibited.
The participation in business decision making with organizations in which the collaborator or any member of their family may have any interest or that may generate personal benefits to the collaborator is prohibited.
The Company’s physical and intellectual assets consist of real state, facilities, vehicles, equipment, warehouses, values, plans, products, technology, business and marketing strategies, information, research and data that must be protected by the managers and staff and cannot be used for personal benefit or offered to third parties. The Company’s equipment or any other resources may not be used for personal purposes, unless previously authorized by a superior.
SAS outside network connections will only be authorized by the Information Technology Security Area. The use of computers and personal emails is not recommended and its use is conditioned to the authorization of a hierarchical superior.
Any work created by the collaborators when performing their activities is property of the Company. Every collaborator must be responsible for preserving and safekeeping SulAmérica’s assets, under their responsibility. The improper appropriation of SulAmérica’s assets is considered breach of trust and confidence, and constitutes in a fraudulent act against the Company subject to work-related and legal sanctions.
It is strictly prohibited to copy, sell, or distribute information, software, or any other type of intellectual property that may violate the present agreement signed between the collaborators and SulAmérica.
Confidential information comprises data on products, clients, employees and other related parties, business and marketing strategies, annual budget, short and long term planning, volume of sales, research outcomes, financial data, procedure manuals, etc., as well as any other information or data linked or related to the competition in the insurance market. The disclosure to third parties or the internal disclosure to collaborators of the Company of information and data received or obtained under confidentiality is a serious violation. The confidential information and data can only be disclosed when published or upon the authorization of a duly representative.
Confidential information should not be unnecessarily kept in conference rooms or on the desk of a collaborator, especially during breaks and after working hours.
Confidential information should not be discussed in elevators, receptions, restaurants, restrooms and means of transportations.
Business topics involving confidential information should not be discussed on a cell phone or on the speaker phone in public places without privacy (halls, airports, elevators, etc.).
A collaborator must use his own name when registering in a social network and must refrain from mentioning any direct connection to the company in which he works.
No confidential company information will be published in any social network. Only publically classified corporate information and which may undoubtedly be published openly in the internet will be permitted.
The publication of opinions must be done in good faith, and in legal compliance only in the person`s own name, avoiding any connection of an opinion to the brand of the company where the person works.
Language and vocabulary must be adequate, to prevent any opinion from being considered ambiguous, subjective, aggressive, hostile, discriminatory, vexatious, ridiculing, or that in any way may harm the company image, and that of its` collaborators, partners, suppliers and clients.
It is expected that the collaborator will act in compliance with the Code of Ethical Conduct caring for the protection of his reputation and that of the company and that he inform the Compliance Committee any questionable situation which may be identified as being connected to the company.
Privileged information is any information accessed due to the job, occupation, or position in SulAmérica that has not been disclosed to the market, and the use of such information with the purpose of obtaining personal material benefit or for others is prohibited.
SulAmérica collaborators must strictly comply with SulAmérica’s Relevant Act or Fact Policy and Trading Securities approved by the Board of Directors.
Practice Against Corruption and Money Laundering Prevention
All Sul América collaborators are strictly prohibited from receiving commissions, discounts and/or personal favors using their position or occupation in the Company. The collaborators may not profit or grant any type of reciprocity, gains or personal benefits to financial institutions, brokers, policy holders or clients in general by using their professional relationship.
Any practice of corruption in any form through acts, omission, creation or support of favors is prohibited.
Money laundering is the process by which criminals turn resources obtained in illegal activities into resources apparently coming from a legal source. SulAmérica is aware of the risks related to using the insurance market to “conceal” resources coming from illegal activities, and is engaged in the Fight Against Money Laundering and Terrorist Financing, and in the compliance of the law and regulation requirements of the Inspecting Authorities.
The collaborators must be diligent in monitoring and detecting suspicious operations of money laundering and terrorist financing by informing Compliance.
Receiving and Offering Gifts and Favors
The collaborators, in view of their position or occupation in the Company, are prohibited from receiving, promising, or offering gifts or any valuables to individuals with whom SulAmérica does business. Such prohibition does not apply to receiving free gifts of no commercial value or gifts distributed as courtesy, advertisement or in events or commemorative days (Easter, Christmas, New Year’s) and do not exceed R$ 300.00 (three hundred reais), at the market’s value; this amount may be updated by Compliance. In exceptional situations, for reasons of protocol, courtesy or any other special occasion, free gifts exceeding the value above may be accepted, as long as the free gift is donated to a charity designated by the Sustainability Management.
Invitations to entertainment venues tend to have limited importance to the business and may look improper. Therefore, except for specific events held by SulAmérica, Compliance must approve the participation. The participation in entertainment events (shows, concerts, sports events) in which the guest has the authority to choose pending or foreseen decisions affecting SulAmérica’s interests is prohibited.
All transactions made by the company must be supported by its due documentation and must be recorded immediately in books and accounts according to the applicable laws. No payment or receipt can be made in disagreement with the purpose of its authorization.
The financial statements must be elaborated in accordance with the law and the basic accounting principles in order to represent SulAmérica’s financial situation accordingly.
Exclusive Channels for Questions and Reporting Violations of the Guidelines of the Code
It is the duty of every collaborator aware of or experiencing a situation that may characterize the violation of the present code or suspect or learn about facts that may harm SulAmérica to immediately inform Compliance using the communication channels. By doing that, you will be fulfilling your duty to safeguard the Company’s ethical principles.
Any suspicion/questions regarding the conduct standards and ethical principles must be reported to Compliance at: email@example.com, externally; and through the Employee Portal / Talk to Compliance, internally. The collaborator may choose to remain anonymous. Compliance will submit the reports to the Ethics Committee which will determine the course of verification, the references and any other resolution depending on the circumstances.
The content of the report must be as complete as possible in order to allow an investigation process to be started. The collaborator reporting a suspicious violation to the law, regulations and norms, and company’s procedures will not suffer retaliation or punishment as a result of their actions.
Disclosure and Solving Doubts
The managers and directors must disclose to their subordinates the norms within this Code as a way of disseminating it at their workplace. Specific questions related to concrete situations on the application or interpretation of the rules stated in this Code must be forwarded to the superior who, in turn, if necessary, will forward it to the top superior of the area and Compliance.
Code of Ethics Management
The management and updating of the Code of Ethical Conduct is responsibility of the Compliance area.
The present Code of Ethics will be effective as of its publishing date. All collaborators, as well as the individuals with which the company has a business relationship, must be familiar and comply with the Code of Ethical Conduct. The non-compliance may lead to the application of penalties enforced by the law.
The Corporate Governance Policy of Sul América S.A. ("Company") ("Policy") aims at establishing and consolidating the principles and practices of Corporate Governance adopted by the Company, aiming at aligning the interests of its shareholders and other stakeholders , besides adding value to the Company, in order to facilitate access to the capital and contribute to its continuity.
This policy is based on the Bylaws, the Code of Ethics, and other Policies and Internal Charters of the Company, in addition to the Shareholders‘ Agreement filed at its main offices.
The Company is a publicly held company and its Units (share deposit certificates , consisting of one common share and two preferred shares of the Company) are traded on the BM&FBovespa S.A. - Securities, Commodities and Futures Exchange ("BM&FBovespa"), being, therefore, subject to the rules and supervision of the Brazilian Securities Commission ("CVM"), the local authority that regulates the operation of the capital markets, and regulations issued by the BM&FBovespa.
The Company voluntarily adopted the BM&FBovespa’s Corporate Governance Level 2 Listing Rules ("Level 2 Listing Rules"), undertaking to adopt differentiated practices of corporate governance.
Additionally, certain subsidiaries of the Company are subject to regulatory bodies, such as the Superintendence of Private Insurance ("SUSEP"), the National Health Agency (ANS) and the Central Bank of Brazil (BCB), and, thus, they must comply with their respective rules on related party transactions where they are concerned.
The Company’s Corporate Governance System is based on the principles of transparency, fairness and accountability, and, within the management, its main decision making body is the Board of Directors and its advisory committees, composed of board members and external experts.
The main instances of the Company’s Corporate Governance system may be identified in the organizational chart provided below:
3.1. General Meeting
The Company‘s sovereign body is the General Meeting, which gathers its shareholders and convenes either ordinarily or extraordinarily, upon call, as provided in Law 6,404/76and the Company’s Bylaws.
The Annual General Meeting ("AGM") is held once a year to to verify the Company’s management’s accounts, and to examine, discuss and vote on the financial statements of the Company, approve the allocation of the net income, elect the members of the Board of Directors; and establish management compensation (Board of Directors and Executive Officers)
The Extraordinary General Meeting ("EGM") will be held whenever the interests of the Company so require to address any issues other than those under the competence of the AGM.
The Company, in order to encourage shareholders‘ participation in the General Meetings, makes available on its website and through the CVM IPE system, guides containing information on the shareholders participation in the General Assemblies, as presented in Item 4.1 of this Policy.
3.2. Board of Directors
The Board is a collegiate decision-making body responsible for setting the primary guidelines of the Company, as well as the corporate strategy and general business policy. Among other duties, it is also responsible for approving the annual budget, business plan and certain corporate transactions, besides electing and monitoring the activities of executive officers.
The Company‘s Board of Directors consists of nine sitting members and up to the same number of alternate members may be elected at the General Shareholders’ Meeting, all being shareholders of the Company, and with a unified term of office of one year, re-election allowed. The composition of the Board of Directors also complies with the requirements of the Level Listing Rules.
In addition to the duties established by the Corporations Law and the Bylaws, the mission and operation rules of the Company‘s Board of Directors are provided for in its internal charter. In accordance with such document, the mission of the Board is to contribute both to protect and to increase the value of the Company’s and the organizations’ under its control (“SulAmérica”) equity and to ensure the return on the shareholders investment based on a long-term perspective, sustainability and adoption of the best Corporate Governance practices in the definition of business.
The Board of Directors internal charter further defines the duties of the Chairman of the Board and of the Corporate Secretary. Also, in n accordance with the best practice corporate governance, the charter provides that, within the annual calendar of Board meetings, the Board shall meet with representatives of the independent audit, be presented with macroeconomic scenarios, ERM (Enterprise Risk Management) and Internal Controls.
Annually, the Board of Directors submits itself to a self-assessment process aiming at analyzing the qualification and performance of each of its members, of the Chairman of the Board and the performance of the advisory committees, in addition to the collegiate performance of the body. Additionally, the independent members of the Board have the opportunity to reassess their independence in to the Company and shareholders, by means of a questionnaire specially developed for this purpose.
3.3. Advisory Committees
The Board of Directors of the Company, upon performing its functions, counts on the support of the advisory committees composed of its own Directors and other professionals with renowned expertise in specific areas, allowing a detailed analysis of the matters within the jurisdiction of each committee.
The Company has the following committees:
3.3.1. Audit Committee
The roles of the Company‘s Audit Committee are to monitor and assess the activities of internal and external audit, risks and internal controls and adequacy, transparency and technical quality of the information included in the Company‘s financial reports. It shall further care for compliance with the Code of Ethics and advise the Board of Directors in the selection of independent auditors and the Chief of Internal Audit.
3.3.2. Investment Committee
The Investment Committee is responsible for evaluating and revising the guidelines of the investment policy of the Company and its subsidiaries. The Committee also monitors the results and evaluates the scenario and trends of the financial market as well as the adoption of best practices for risk control in investment management.
3.3.3. Compensation Committee
The Compensation Committee is responsible for assisting the Board of Directors in defining the compensation policy of the Company and its subsidiaries‘ management, keeping constantly updated as to compensation practices adopted by the market, besides reviewing and monitoring the performance evaluation of officers.
3.3.4. Governance and Disclosure Committee
The Disclosure and Governance Committee is primarily responsible for monitoring and supervising the determinations provided for in the Company’s Disclosure Policy, as well as the obligations set in the Level 2 Listing Rules.
3.3.5. Sustainability Committee
The Sustainability Committee is mainly responsible for designing and monitoring the execution of the Company’s Sustainability Policy and respective programs, and assisting and advising the Board of Directors and other stakeholders on issues related to corporate sustainability.
3.4. Board of Executive Officers
The Board of Executive Officers is comprised of three to six members who act as legal representatives of the Company and are responsible for the executive management of the business and the implementation of general policies and guidelines established by the Board of Directors.
To better perform its duties, the Board of Executive Officers of the SulAmérica group has the following internal deliberative bodies:
(i) Executive Committee (COMEX), which assesses and decides on corporate and strategic affairs;
(ii) Assets-Liabilities Management Committee ( ALCO), which monitors the risk exposure of the SulAmérica group and evaluates strategies to be adopted upon managing its assets in view of the characteristics of their liabilities and investment policies;
(iii) Committee for Evaluation of Action Plans (COPA), which evaluates and approves projects proposed by units of the Company requiring or entailing investment in expenditure exceeding the prescribed limits; and
(iv) Corporate Risk Committee, which evaluates and approves risk management policies and sets limits to be observed in the Company‘s operations, supporting the strategic management of risk;
3.5. Fiscal Council
The Fiscal Council is an independent body, not connected to the management, composed of three to five members elected by the General Meeting to oversee the activities of management and independent auditors, pursuant to powers and duties defined by Law 6,404/76.
According to the Bylaws of the Company, the Fiscal Council shall be instated on a temporary basis upon request of the shareholders in the General Meeting, as set forth in Law 6,404/76.
Among the corporate governance practices adopted by the Company, the following are outstanding:
4.1. Fostering participation in General Meetings
The Company adopts practices to encourage the participation of its shareholders at its General Meetings, providing information and documents related to the matters to be discussed at these events in advance and holding meetings at times and places that allow the presence of the greatest possible number of shareholders, in addition to allowing voting by proxy and providing such standard form. Additionally, the Company does not require the prior submission of the documentation necessary for shareholder participation at the meeting.
In addition, the Company develops guides providing guidelines for participation of its shareholders in its General Meetings, aiming at improving the transparency and quality of information provided to the shareholders and encouraging them to take part in the Company‘s decisions.
4.2. Policy of Disclosure of Relevant Facts or Act and Securities Trading
The Company has a Disclosure Policy, prepared in accordance with the terms of CVM Instruction No. 358/02 for which the Company maintains an extensive compliance program for its employees, managers and external consultants. This policy governs the procedures to be adopted upon the disclosure or maintenance of the confidentiality of material information, ensuring the disclosure of complete and timely information to the market, ensuring equality and transparency and curbing insider trading practices. The competence for monitoring the policy is of the Company‘s Governance and Disclosure Committee.
Additionally, the Company observes the quiet period of 15 days before the public disclosure of the financial statements, during which the controlling shareholders, Officers, members of the Board of Directors, Fiscal Council or members of any administrative bodies with technical or advisory functions, as well employees of the Company who have access to such information, must be silent on the financial statements in order to keep equality regarding their disclosure to the market. During this period, other information related to operating routines is ordinarily made available.
4.3. Dividend Policy
Under the Company’s bylaws, 25% of annual adjusted net income in the form of the Corporations Law is directed to the distribution of dividends to its shareholders. Particularly with regard to the results reported in the financial statements for fiscal years 2009, 2010 and 2011, the Company was willing to distribute dividends at 50% of the adjusted annual net income. The distributions in these cases are subject to the respective proposals for allocation of net income by Company‘s management and the approval in the Annual General Meeting, being able to be revised based on the Company‘s plans and needs, as considered at the time, such as but not limited to acquisitions and relevant investments and compliance with regulatory requirements. In any case, there shall be considered in such percentages those possible distributions of interim dividends or interests on net equity executed in the respective fiscal year.
4.4. Policy for transactions with related party and other cases involving conflicts of interest
The Company has a Policy of Transactions with Related Party, which establishes the procedures to be observed by employees, managers and controlling shareholders of the Company and its subsidiaries, both in operations to be performed among those parts, as in other situations where there is a potential conflict of interest, subject to the best corporate governance practices and primacy of the Company‘s interests.
4.5. Compensation Policy
The Company adopts a compensation policy that establishes guidelines to be complied with regarding the compensation of key personnel of its management, comprised of members of the Board of Directors, Board of Executive Officers, Fiscal Council and advisory committees to the Company’s Board of Directors.
The policy‘s main objective is to align the interests of key personnel of the Company‘s management, providing a total compensation consistent with best practices observed in the different market segments where it operates, contributing not only to attract, stimulate and retain qualified professionals to perform their functions, but also to generate value for shareholders.
4.6. Code of Ethical Conduct
The Company has a Code of Ethical Conduct that sets forth the standards that shall govern the conduct of its employees in internal and external relationship, The Company’s Code of Ethics is delivered to all employees at the time of their admission and it is available for consultation on the Portal do Funcionário (intranet) and on its corporate website.
4.7. Enterprise Risk Management
The Company adopts an ERM policy for adequately dealing with incertitude and optimizing its decision making process. For doing so, the Company counts on a Corporate Risk Committee that ensures integrated view of liabilities and with the support of the Board of Directors which, directly or by means of its advisory Committees, constantly encourages the adoption of the best practices of Corporate Governance.
4.8. Internal Controls Structure
The Company counts with an internal controls structure aiming at its compliance with the applicable laws, regulations and internal corporate policies, and at preserving Company’s reputation. For such purposes the Company counts with a Compliance area supported by four pillars: risk measurement, compliance with regulation, money laundering prevention and adoption of ethical practices and principles.
In order to ensure a freefloat of at least 25% of its capital stock, pursuant to what is provided for in the Level 2 Listing Rules, the Company monitors continuously its freefloat, currently counting with a freefloat of over 35% of its capital stock.
4.10. Qualified and Integrated Board of Directors
The members of the Company’s Board of Directors have outstanding professional experience and extensive knowledge of the markets in which the Company operates.
The Board of Directors and its advisory committees have a Corporate Governance Portal that allows them to keep a more agile and secure relationship with the Company, simplifying access to information required for the performance of their duties.
4.11. Communication Channel with the Board of Directors
The Company provides on its website the channel "Talk to the Board”, a tool that offers its shareholders the possibility of proposing to the Board of Directors themes to integrate the agenda of the Company‘s General Meetings or to send questions and suggestions.
The Company emphasizes the broad disclosure of relevant information, adopting the following practices:
4.13. 100% Tag-Along
The Company extends to all its preferred and ordinary shareholders the same conditions provided to controlling shareholders with regard to the sale of the Company‘s control. Such provision is at a level that exceeds the 80% tag-along required in the Level 2 Listing Rules. This practice includes the Company‘s shares on the Stocks with Differentiated Tag Along Index (ITAG) of BM&FBovespa.
4.14. Voting Rights of Preferred Shares
The Bylaws of the Company grants voting rights to preferred shareholders on certain matters, such transformation, merger, amalgamation or spin-off of the Company.
4.15. Adherence to the Arbitration Chamber
The Company adopted the Market Arbitration Chamber Regulation for resolution of corporate disputes and included in its bylaws an express provision on the subject. Such adherence has as main benefits a greater flexibility in resolving potential corporate questions, as well as the possibility of selection of arbitrators specialized in the disputed matters.
4.16. Socio-environmental Responsibility
The Company pursues operating with ethics and transparency, respecting the environment, supporting communities and developing human capital. Doing business with ethics and transparency has been a major concern for the Company since its inception. The Company is the first insurance company to integrate the BM&FBovespa’s Corporate Sustainability Index - ISE.
This Corporate Governance Policy was approved by the Governance and Disclosure Committee and the by Board of Directors, at meetings held respectively on April 29 and May 3, 2011, and any amendment or revision must be submitted to them.
This document establishes the procedures to be followed by Sul America S.A. and its subsidiaries ("Company") as well as by its employees, officers and shareholders in transactions with related parties and in situations where there is potential conflict of interest, as defined below ensuring the prevalence of the interests of the Company in accordance with the best corporate governance practices.
Under applicable regulations, in particular Resolution CVM (Deliberação) No. 642/2010, for purposes of this Policy, a person or legal entity that is related to the Company as follows is deemed a related party:
(a) A person is related to the Company if:
(i) it holds full or shared control of the Company;
(ii) holds significant influence over the Company; or
(iii) is a member of key personnel of the Company‘s management.
(b) A legal entity is related to the Company if any of the following is noticed:
(i) the legal entity and the Company are members of the same economic group;
(ii) the legal entity is the parent, subsidiary or affiliate company of the Company;
(iii) the legal entity and the Company are under common control;
(iv) the legal entity is controlled either fully or is under joint control by a person identified in clause (a);
(v) a person identified in clause (a), item (i) has significant influence on the legal entity, or is a member of key management personnel of the legal entity or the parent company of the legal entity.
Transactions with related parties are independent of the operation monetary value, being characterized by the parties involved.
The transactions entered into by the Company with related parties shall comply with market conditions, aiming at assuring its strictly commutative nature.
The Company shall disclose information on transactions with related parties through periodic financial statements, Company‘s Formulário de Referência or, further, when the operation configures a Material Fact, pursuant to applicable law, so as to ensure the transparency of the process to shareholders, investors and the market.
Conflicts of interest are configured when a part is not independent in relation to the matter under discussion and can influence or make decisions motivated by interests other than those of the Company.
In case there are interests that conflict with Company‘s interests by a shareholder or member of the board of directors in relation to a certain matter to be resolved in a collegiate meeting or general meeting, such conflict of interest or private interest shall be timely informed by the party, declaring that he is unable to participate in discussions and resolutions on the matter. If the party does not do so, another party present at the meeting may express the existent conflict, which shall be declared by a majority of votes of those present at that meeting.
The manifestation of a conflict of interest and subsequent abstention shall be recorded in the minutes of the respective meeting.
The following transactions with related parties are forbidden:
(i) those carried out under conditions other than the market conditions so as to harm the interests of the Company; and
(ii) loans to its controlling shareholder, officers and other related parties as defined in item 2 above.
It is also forbidden under the Company’s Code of Ethics, the involvement of officers and employees in private or personal nature businesses that could interfere or conflict with the interests of the Company or arise from the use of confidential information obtained due to the position they hold in the Company.
Any violation of the provisions of this Policy shall be referred to the Governance and Disclosure Committee, upon consultation with the Company‘s Ethics Committee and there shall be taken the appropriate penalties, without prejudice to the penalties provided for in applicable law.
The main grounds of this Policy is Law 6404/76, CVM Resolution (Deliberação) No. 642/2010 and Corporate Governance Level 2 Listing Rules of the BM&FBovespa, ensuring transparency of transactions involving related parties and reaffirming the good corporate governance practices adopted by the Company.
It is further noteworthy that certain subsidiaries of the Company are subject to regulatory bodies, such as the Superintendence of Private Insurance ("SUSEP"), the National Health Agency (ANS) and the Central Bank of Brazil (BCB), and, thus, they must comply with their respective rules on related party transactions where they are concerned.
This Policy was approved by the Board of Directors of Sul America S.A., in a meeting held on February 23, 2011, and any amendment or revision must be submitted to it.
The specific terms provided for herein shall be applicable to this Policy when the regulation does not provide for the matter.
The cases not provided for herein shall be decided by the Board of Directors and/or the Committee on Governance and Disclosure, as applicable.
This Compensation Policy (or "Policy") sets forth the guidelines to be complied with regarding the compensation of key management personnel of Sul América S.A. and its subsidiaries (together "Sul América" or "Company").
The Company’s key management personnel comprises, according to this Policy, members of the board of directors, executive board, fiscal council and advisory committees of the board of directors, statutory and non statutory ("Key Management Personnel”).
The overall compensation of the members of the Company’s board of directors and executive board ("Board of Directors" and "Executive Board") shall be set by the General Meeting, and is incumbent upon the Board of Directors to determine the monthly fees of its members and members of the Executive Board.
The compensation of the members of the Company’s Fiscal Council ("Fiscal Council"), once installed, and shall be determined by the General Meeting which elects them, respecting the minimum amounts established by law.
The members of the Company’s committees ("Committees") shall be compensated as determined by the Board of Directors.
The Company’s Board of Directors shall be assisted by a compensation committee ("Compensation Committee") in matters related to the compensation of Key Management Personnel.
It is incumbent upon the Compensation Committee to propose compensation to the Key Management Personnel consistent with the best practices adopted by the market where the Company operates, which should contribute to the stimulation and retention of duly qualified professionals to perform their duties and, therefore, to attract new resources whenever necessary.
The Compensation Committee, upon request of the Board of Directors, may determine the compensation of Key Management Personnel.
The main purpose of the Company‘s Compensation Policy is to align the interests of Key Management Personnel with the Company‘s goals, based on the best market practices.
The overall compensation of Key Management Personnel may be composed as follows: (i) fixed compensation; (ii) variable compensation; (iii) post-employment benefits; (iv) benefits from termination of contract; (v) share-based compensation; and (vi) other compensation that the Board of Directors or the Compensation Committee may eventually establish.
It shall be incumbent upon the Board of Directors or the Compensation Committee to determine the ratio of each Key Management Personnel compensation component, among those listed above.
I. Fixed Compensation
Key Management Personnel’s fixed compensation shall be based on each position’s responsibilities and individual experience. To determine such compensation, the Compensation Committee or the Board of Directors may require the assistance of a specialized consulting firm.
The fixed compensation may be revised annually at the discretion of the Compensation Committee or the Board of Directors, in order to be in line with market practices or monetarily restated.
II. Variable Compensation
Key Management Personnel, in particular the members of the Company’s Executive Board, may participate in an annual bonus program aimed at promoting greater interest and alignment of their goals with those of the Company. The amounts to be allocated within the scope of the program should result from a subjective and objective evaluation of the participant. Objective evaluation may result from the achievement of annual goals established in the management contract, while subjective evaluation may be performed by superiors, peers and/or subordinates, as shall be determined by the Compensation Committee or the Board of Directors.
Bonus will be paid in the 12-month period following the close of the fiscal year evaluated.
b) Profit Sharing
Members of the Board of Directors and the Executive Board may be entitled to profit sharing, as determined by the Annual General Meeting and the Company’s Bylaws.
III. Post-employment Benefits;
Key Management Personnel are entitled to, at the discretion of the Board of Directors or Compensation Committee, post-employment benefits, represented among others by: (a) supplementary retirement benefits; (b) annuity benefits; or (c) personal insurance.
IV. Benefits from termination of contract
Benefits from the termination of term of office of Key Management Personnel may be paid in exceptional cases, at the discretion of the Board of Directors or the Compensation Committee.
V. Share-based Compensation
Share-based compensation shall be approved by the General Meeting of the respective General Stock or Unit Option Plan issued by the Company ("General Plan"), which may grant the competence of its management to the Board of Directors or the Compensation Committee.
In compliance with the General Plan approved by the General Meeting, the Board of Directors or the Compensation Committee, as the case may be, may periodically adopt Stock or Unit Option Programs ("Programs"), which shall specify the assumptions for the grant and its respective beneficiaries.
Additionally, the Programs must be compatible with the Company‘s available funds and comply with the established limits on the number of outstanding shares.
The granting of stock or unit options aims to foster the expansion, success and social objectives of the Company and to align the interests of its shareholders with those of Key Management Personnel.
In addition to the compensation set forth to Committee members, those who also participate in other Company bodies may have their compensation attributed to one or more positions they hold, while respecting the limits set forth in the Company’s applicable guidelines.
The compensation of Fiscal Council members shall be established by the General Meeting which elects them, in accordance with applicable law, and may be increased by the reimbursement of expenses incurred by the board member when performing his duties.
Omissions shall be decided by the Company’s Board of Directors, who may delegate this responsibility to the Compensation Committee.
Article 1. The Audit Committee (“Committee” or “CAE”) of Sul América S.A (“SulAmérica” or “Company”) is the advisory body directly subordinated to the Board of Directors, operates on a permanent basis and is governed by the provisions of the Company’s By-Laws, of the applicable law, especially CVM Regulation No. 509 of November 16, 2011, and of this charter (“Charter”), which provides for its composition, the duties and responsibilities of its members, and its performance and operation.
Article 2. The Committee is composed of a minimum of three (3) and a maximum of six (6) members, elected by the Company’s Board of Directors (“Board of Directors”) for unified terms of office of one year, reelection being allowed, provided that the total term of permanence of any member in the Committee shall not exceed ten (10) consecutive years.
Paragraph One. The Committee composition shall fulfill the following requirements:
I - at least one (1) member of the Company’s Board of Directors shall not be a member of the executive board; and
II- a majority of the members shall be independent.
Paragraph Two. For compliance with the independence requirement set forth in item II of paragraph one above, the Committee’s member:
I - shall not be, nor shall have been, in the last five (5) years: a) an officer or employee of the Company, its controlling company, controlled company, associated company or company under common control, directly or indirectly; or b) the technical person in charge of the team involved in the audit works of the institution; and
II - shall not be a spouse, direct or collateral relative up to third degree, and by affinity, up to second degree, of the persons referred to in item I.
Paragraph Three. Once the Committee’s members have exercised terms of office for any period of time, they shall solely form part of such body of the Company again after a minimum of three (3) years have elapsed since the end of the latest term of office.
Paragraph Four. At least one (1) of the Committee’s members shall have knowledgeable experience in corporate accounting matters, as well as: (i). knowledge about the generally accepted accounting principles and financial statements; (ii). skill in evaluating the application of said principles in relation to the main accounting estimates; (iii). experience preparing, auditing, reviewing or evaluating financial statements that have a level of coverage and complexity comparable to those of the Company; (iv). education compatible with the knowledge of corporate accounting required for the CAE activities; and (v). knowledge of internal controls and procedures of corporate accounting.
Paragraph Five. The fulfillment of the requirements set forth in § 4 above shall be evidenced by means of the documentation kept at the Company’s principal place of business, available to CVM for five (5) years as from the last day of the term of office of the Committee’s member.
Paragraph Six. The Committee’s members shall have an impartial and skeptical posture in the performance of their activities, especially in relation to the estimates set forth in the financial statements and to the Company’s management.
Paragraph Seven. The Committee’s members shall fulfill the requirements set forth in article 147 of Law No. 6404, of December 15, 1976.
Paragraph Eight. The replacement of any Committee’s member shall be notified to CVM within 10 days as from such replacement.
Article 3. The Chairman of the Board of Directors shall appoint one of the members of the Committee to hold the position of Committee chairman, as set forth in Sole Paragraph below (“Chairman”).
Sole paragraph. In addition to the duties set forth in article 21, the Committee’s Chairman shall:
(a) meet with the Board of Directors at least on a quarterly basis, accompanied by other Committee’s members as required or convenient;
(b) attend the Annual Shareholders Meeting, accompanied by other members of the CAE as required or convenient;
(c) invite the Committee’s members for the meetings of that body, as set forth in article 11 of this Charter;
(d) request to the Company’s management and to the independent auditors any information and/or clarifications that may be required as set forth in Articles 7 and 20; and
(e) preside over the Committee’s meetings.
Article 4. The Committee should guide the Board of Directors to take appropriate measures to ensure that the Company’s businesses are conducted in a manner that supports full financial controls and best practices so as that the operations are conduct in comply with the Company’s Codes of Ethics and Compliance and with the requirements of the regulatory agencies; it is also its duty to examine and appraise situations which involve conflicts of interest, related parties transactions, internal controls and operational risks.
Article 5. The Committee shall have operating autonomy and budget, whether on an annual basis or per project, up to the limits approved by the Board of Directors, to conduct or cause the conduction of consultations, evaluations and investigations within the scope of its activities, including with the engagement and use of outside independent experts.
Sole Paragraph - The Committee’s members are forbidden, pursuant to the Policy for Transactions with Related Parties and other situations involving Conflicts of Interest, from taking part in any discussion in which they may have a conflict of interest with the Company.
Article 6. The Committee is also responsible for maintaining channels of communication between management, internal audit and independent audit.
Article 7. The Committee may hire a specialized professional service, within its attributions, to support it during the conduction of any investigation, and its members may also request at any time clarification or additional information to internal and independent auditors, as well as to the board of executive officers. Such information and/or clarifications shall be available to all Committee members.
Article 8. The Companys management is responsible for the development, implementation and maintenance of an effective system of internal controls, being incumbent upon the Committee to supervise such activities.
Article 9. The Committee shall receive reports, whether confidential or not, internal and external to the Company, on any matters related to the scope of its activities.
Sole paragraph. Such report shall be sent to the Company’s principal place of business and addressed to the Committee, and shall be received as soon as possible by its chairman, who shall submit such repot to the next meeting of the Committee after receipt thereof, a Committee’s meeting which shall be called as provided for by article 11.
Article 10. Under corporate and capital market law, as well as under the Company’s Policy on Disclosure of Material Acts or Facts and Securities Trading, the Committee members have a duty of diligence and loyalty to the Company, so as not to disclose to third parties documents or information on the Companys business, and shall keep confidential all information relevant, privileged or strategic obtained by reason of their attributions, being forbidden to use such information to obtain any kind of advantage for themselves or third parties.
Article 11. The Committee shall meet:
Article 12. The call notices shall be sent to the Committee’s members (and to any other members of the meeting, as applicable) together with the agenda of the matters to be resolved on and, to the extent available, with any applicable documents, at least six (6) business days before the meeting or four (4) business days before any meeting in which the Committee’s members may take part by means of the conference call or of video conference system.
Sole paragraph. Committee members may attend meetings by telephone conference or video conference, provided that such members approve and sign the respective meetings’ minutes once they are approved by the Committee.
Article 13. The meetings of the Committee may be attended, as invited by its Chairman or at the request of any member of the Board of Directors, by any management member, internal and external employee and/or member of the fiscal council who may, at the discretion of the Chairman or of any other Committee’s member, hold any relevant information or contribute to the discussion of the matters set forth in the agenda for the meeting.
Article 14. The necessary quorum for the holding of any meeting of the Committee shall consist of at least half of the members of the Committee, plus one. In case a duly convened meeting is not held due to lack of quorum, a second meeting shall be convened to discuss the same agenda of such unheld meeting, provided a notice thereof is delivered at least 2 (two) business days in advance, or 1 (one) business day in advance in the case of a meeting that members may attend by telephone or video conference. The necessary quorum for the holding of a meeting convened by second call shall consist of at least half of the members of the Committee.
Article 15. A member’s attendance at a meeting of the Committee shall constitute a waiver of notice unless such member states at the beginning of such meeting his objection to the discussion of business because the meeting was not duly called or convened.
Article 16. Decisions of the Committee shall be approved by a majority of votes of the attending members, and any defeated member may have his/her adverse vote recorded on the minutes of such meeting. In case of tie of votes, the Committee’s Chairman shall have the cast vote in addition to his/her own vote.
Article 17. In the event of temporary absence or impediment of the Committee’s Chairman, another member of the Committee may be appointed thereby to perform the chairman’s activities. Such appointment shall be sent in writing to all members of the Committee.
Article 18. Minutes of each of the meetings of the Committee shall be drawn up, approved and signed by all those present and filed at the Company’s principal place of business.
Article 19. The Company’s Corporate Governance Secretary shall act as the secretary of any meetings of the Committee.
Article 20. It is the Committee’s duty to:
a) of the independent auditors, in order to evaluate: (i). their independence; (ii). the quality of the services provided; and (iii). the fitness of the services provided to the Company’s needs and the annual planning of the outside audit works;
b) of the Company’s internal controls area;
c) of the Company’s internal audit area; including: (i). Evaluate any recommendations to hold the position of officer in charge of the Company’s internal audit; (ii) Evaluate, by recommendation of the Board of Directors, the performance of the officer in charge of the internal audit;
d) of the area in charge of preparing the Company’s financial statements;
Article 21. It is the Committee’s chairman duty, along with others established in this Charter, to:
Article 22 - The Company shall keep at its principal place of business and available to CVM, for five (5) years, a detailed annual report prepared by the Committee, containing the description of: I - its activities, the results and conclusions reached and the recommendations made; and II - any situations in which there is any significant divergence between the Company’s management, the independent auditors and the Committee in relation to the Company’s financial statements.
Article 23. This Charter may only be amended by the Board of Directors, on its own initiative or by recommendation of the Committee.
Article 24. Cases not dealt with herein shall be decided by the Board of Directors.
Rio de Janeiro, April 27, 2012
* * * * * * * *
Last updated on 05/08/2012