Overview

GENERAL & EXTRAORDINARY SHAREHOLDER MEETINGS

At our shareholders’ meetings, our shareholders have the authority to take any action relating to our activities and to adopt such resolutions as they deem necessary. Shareholders at the annual shareholders’ meeting have the exclusive right to approve our financial statements and to determine the allocation of our profit for the period and the payment of dividends with respect to the fiscal year ended immediately prior to the shareholders’ meeting. Members of our fiscal council may be elected at the annual shareholders’ meeting.

A special shareholders’ meeting may be held at any time, including concurrently with the annual shareholders’ meeting. Under Brazilian Corporate Law and according to our bylaws, the following actions, among others, may be taken only at a shareholders’ meeting:

  • amendment to our bylaws;
  • election and dismissal of the members of our board of directors and fiscal council;
  • approval of year-end audited financial statements;
  • approval of the valuation of assets offered by a shareholder to us as payment for the subscription of our shares;
  • approval of the issuance of shares in excess of the limit of our authorized capital or issuance
  • securities convertible into or exchangeable for our shares;
  • determination of the global compensation of our management and fiscal council, if and when constituted;
  • approval of any transaction involving our transformation into a limited liability company (sociedade limitada), consolidation (fusão), merger (incorporação or incorporação de ações) or spin-off (cisão);
  • approval of any transaction involving our dissolution or liquidation, the appointment and dismissal of the respective liquidator, the official review of the reports prepared by such liquidator and the election of a fiscal council to function during the course of the dissolution process;
  • authorization to delist from the Novo Mercado;
  • authorization to cancel our registration with the CVM as a public company;
  • appointment of a specialized company responsible for preparing an appraisal report of our shares in the event of the cancellation of our registration as a publicly-listed company;
  • approval of stock option plans for our directors, executive officers and certain key employees, or those of our subsidiaries or controlled companies, or for individuals rendering services to us or to our direct or indirect subsidiaries or to our controlled companies;
  • performance of other actions authorized by the applicable laws and regulations; and
  • deliberations regarding the allocation of each year’s profit and its distribution to our shareholders in accordance with a proposal presented by our management.

Quorum

As a general rule, Brazilian Corporate Law provides that a quorum for purposes of opening a shareholders’ meeting consists of shareholders representing no less than 25.0% of our share capital with the right to vote, and on second call, consisting of any number of shareholders with the right to vote. When the purpose of a shareholders’ meeting is to amend our bylaws, a quorum consists of shareholders representing at least two thirds of our issued and outstanding capital on the first call, and any percentage on the second call.

The affirmative vote of shareholders representing the majority of the common shares present at a shareholders’ meeting in person or represented by proxy is sufficient to ratify any corporate action.

Abstentions and blank votes are not taken into account. However, the approval of shareholders holding at least one-half of our shares is required for the following:

  • reduction of mandatory dividends percentage, as established by our bylaws;
  • change of our corporate purpose;
  • merger or consolidation into another company;
  • spin-off of certain assets or liabilities;
  • participation in a group of companies (as defined by the Brazilian Corporate Law);
  • cancellation of liquidation;
  • dissolution;
  • merger of our shares with another company; and
  • the issuance of a founder’s share, which is a share having certain prescribed privileges not conferred by our other common shares.

For publicly held corporations with a significant free float, as evidenced by cases where the company’s three previous shareholders’ meetings were attended by common shareholders representing less than 50% of its total voting capital stock, the CVM may authorize a reduction of such quorum.

In addition, the listing rules of the Novo Mercado require special quorums for the approval of certain matters. For instance, the delisting of the Novo Mercado may occur without a tender offer, if the majority of the votes of our minority shareholders present at the relevant meeting which, in the first call, must have shareholders representing at least two-thirds of our outstanding shares, excluding shares held by our controlling shareholders and our directors and officers, or, in the second call, with any number of shareholders.

Notice of our Shareholders’ Meetings

According to the Brazilian Corporate Law, notices for all shareholders’ meetings must be published on three different dates in the Diário Oficial do Estado do Rio de Janeiro, the official newspaper of the state of Rio de Janeiro, and in a widely circulated newspaper, as well as through our investor relations website. The first notice must be published no later than 15 days prior to the date of the meeting and the second notice must be published no later than eight days prior to the meeting. Notices of shareholders’ meeting must include the place, date, time and the agenda of the meeting and, in the case of a proposed amendment to our bylaws, a description of the proposed amendment.

In certain circumstances, at the request of any shareholder (and as per additional regulations from CVM) and after hearing us, the CVM may (i) require that the first notice be published 30 days in advance of the shareholders’ meeting, and (ii) declare the suspension of call notices for up to 15 days in order to analyze the agenda and proposals subject to shareholder vote at the meeting.

Location of our Shareholders’ Meetings

Our shareholders’ meetings take place at our headquarters, in the city of Rio de Janeiro, State of Rio de Janeiro, at Rua Visconde de Caravelas, 14, 2nd floor, Botafogo, 22.271-022. Brazilian Corporate Law allows our shareholders to hold general meetings outside our headquarters in the event of force majeure, provided that the relevant notice contains a clear indication of the place where the meeting will occur.

Who May Call Our Shareholders’ Meetings

In addition to our board of directors, shareholders’ meetings may be called by:

  • any shareholder, if our board of directors fail to call a shareholders’ meeting within 60 days after the date they were required to do so under Brazilian Corporate Law and our bylaws;
  • shareholders holding at least 5.0% of our share capital, if our board of directors fails to call a meeting within eight days after receipt of a justified request to call the meeting by those shareholders indicating the proposed agenda;
  • shareholders holding at least 5.0% of our common shares, if our board of directors fails to call a meeting within eight days after receipt of a request to call the meeting for the installment of the fiscal council; and
  • our fiscal council, if and when installed, if the board of directors fails to call an annual shareholders’ meeting within one calendar month after the date it was required to do so under applicable law. The fiscal council may also call a special shareholders’ meeting if it believes that there are important or urgent matters to be addressed.

Conditions for Admission to Our Shareholders’ Meetings

Shareholders attending a shareholders’ meeting must present to us evidence of their status as shareholders and evidence that they hold the shares they intend to vote, by means of their respective identification cards and the certificate issued by the depositary institution of our common shares. Shareholders who fail to provide such proof may be deprived from participating in the meeting.

A shareholder may be represented at a shareholders’ meeting by a proxy appointed within a year before the meeting, which proxy must be a shareholder, a corporate officer, a lawyer or a financial institution. An investment fund must be represented by its investment fund officer.

BOARD OF DIRECTORS

Our board of directors is the main deliberative body responsible for determining the direction of our business operations. Our board of directors consists of five effective members. Our bylaws outline the general attributes of our board of directors. The members of our board of directors are elected at our shareholders’ meeting and serve one-year terms. They may be reelected and are subject to removal at any time by our shareholders.
Meetings of our board of directors generally take place at least four times during a year, or, extraordinarily, as needed, when called upon by the president of the board of directors, the vice-president of the board of directors as provided in our shareholders’ agreement or by any two directors acting jointly. Decisions of the board of directors are made by an affirmative vote of the majority of its members present in a meeting. In accordance with Brazilian Corporate Law, a member of the board of directors is prohibited from voting in any meeting, or participating in any business operation or activity, in which such member has a conflict of interest with us.
The compensation of our directors is determined by our shareholders at the annual shareholders’ meeting that approves the previous fiscal year’s financial statements.

Election of Members of Our Board of Directors
According to the regulations of the Novo Mercado, two members or at least 20.0% of the members of our board of directors, whichever is greater, must be independent directors, meaning that none of these directors: (1) has any direct link to us, our direct or indirect controlling shareholders and their respective officers, directors or fiscal council members, our subsidiaries, associated companies or other companies under common control with us, (2) is, directly or indirectly, our controlling shareholder, (3) has been an employee or director of our Company, of our controlling shareholder or of an entity controlled by us in the last three years, (4) is subject to the provisions relating to voting rights under a shareholders’ agreement in respect of our Company, or (5) is a spouse or at least second-degree relative of our controlling shareholder, any executive of our Company or any executive of the controlling shareholder.
Brazilian Corporate Law permits the adoption of cumulative voting upon a request by shareholders representing at least 10.0% of our voting capital, according to which each share receives a number of votes corresponding to the number of members of the board of directors. Shareholders holding, individually or jointly, at least 10.0% of our common shares are entitled to vote separately to appoint one director. As provided in CVM Instruction No. 282/1998, the threshold to trigger cumulative voting rights may vary from 5.0% to 10.0% of the total voting share capital. Taking into consideration our current capital, shareholders representing 5.0% of our voting share capital may request the adoption of cumulative voting to elect the members of our board of directors. If cumulative voting is not requested, our directors will be elected by the majority vote of the holders of our common shares, in person or represented by a proxy.
In accordance with the Novo Mercado regulations, upon taking office, our directors must adhere to the B3 Arbitration Chamber Clause, as established by Article 30 of our bylaws.

AUDIT COMMITTEE

Our audit committee is a collective advisory board established by our board of directors pursuant to our bylaws and is comprised of a minimum of three members, of which at least one is an independent member and one has a recognized experience in corporate accounting matters. The main purpose of our audit committee is to (i) evaluate the hiring and dismissal of independent auditors; (ii) evaluate our quarterly financial information, interim statements and financial statements; (iii) monitor the activities of our internal audit and controls areas; (iv) supervise the activities of our financial statements area; (v) evaluate and monitor our risk exposure; (vi) evaluate, monitor, and recommend the correction or improvement of our internal policies, and (vii) receive and process information about non-compliance with legal and normative provisions applicable to us, in addition to internal regulations.

FISCAL COUNCIL

The Fiscal Council will operate on a non-permanent basis and, when installed, will be composed of 3 (three) members and an equal number of alternates, all resident in the country, shareholders or not, elected, and removable at any time by a Shareholders’ Meeting for a term until the first Annual General General Meeting to be held after its election, with reelection permitted. The Fiscal Council will be composed, installed, and remunerated in accordance with the legislation in force. The Fiscal Council does not have internal regulations and once installed; it will have the competence provided for in the applicable legislation.

There is currently no Fiscal Council installed.

EXECUTIVE OFFICERS

Our executive officers are our legal representatives and are mainly responsible for our day-to-day management and for implementing the policies and general guidelines established by our board of directors. Pursuant to our bylaws, our board of executive officers is comprised of up to five members. According to Brazilian Corporate Law, all of our executive officers must be residents of Brazil. In addition, a maximum of one third of our directors may also serve as our executive officers. Our executive officers are elected at a meeting of our board of directors for one-year terms, reelection being permitted. Our board of directors may remove executive officers at any time.

In accordance with the Novo Mercado regulations, upon taking office our officers must declare their submission to the B3 Arbitration Chamber Clause, as established by Article 30 of our bylaws.