Annual Report of a Foreign Private Issuer — Form 20-F Filing Table of Contents
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CHAPTER I — NAME, PURPOSE, HEAD OFFICE AND DURATION
Article 1 — COMPANHIA VALE DO RIO DOCE, referred to in abbreviated form as CVRD, is a joint-stock
company governed by the present By-Laws and by applicable legislation.
Article 2 — The purpose of the company is:
I. the exploitation of mineral deposits in Brazil and abroad by means of extraction,
processing, industrialization, transportation, shipment and commerce of mineral assets;
II. the building and operation of railways and the exploitation of own or third party rail
traffic;
III. the building and operation of own or third party marine terminals, and the exploitation
of nautical activities for the provision of support within the harbor;
IV. the provision of logistics services integrated with cargo transport, comprising
generation, storage, transshipment, distribution and delivery within the context of a
multimodal transport system;
V. the production, processing, transport, industrialization and commerce of all and any
source and form of energy, also involving activities of production, generation, transmission,
distribution and commerce of its products, derivatives and subproducts;
VI. the carrying-on, in Brazil or abroad, of other activities that may be of direct or
indirect consequence for the achievement of its corporate purpose, including research,
industrialization, purchase and sale, importation and exportation, the exploitation,
industrialization and commerce of forest resources and the provision of services of any kind
whatsoever;
VII. constituting or participating in any fashion in other companies, consortia or
associations directly or indirectly related to its business purpose.”
Article 3 — The head office and legal venue of the company shall be in the city of Rio de Janeiro,
State of Rio de Janeiro, the company being empowered for the better
realization of its activities to set up branch offices, subsidiary branch offices, depots, agencies,
warehouses, representative offices or any other type of establishment in Brazil or abroad.
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Article 4 — The term of duration of the company shall be unlimited.
CHAPTER II — CAPITAL AND SHARES
Article 5 — The capital stock is in the amount of R$ 19,492,400,974.56 (nineteen billion, four
hundred and ninety-two million, four hundred thousand, nine hundred and seventy-four reais and
fifty-six cents) corresponding to 2,459,657,058 (two billion, four hundred fifty nine million, six
hundred fifty seven thousand and fifty eight) shares, being R$ 9,007,032,395.62 (nine billion,
seven million, thirty-two thousand, three hundred and ninety-five reais and sixty-two cents)
divided into 1,499,898,858 (one billion, four hundred ninety nine million, eight hundred ninety
eight thousand, eight hundred fifty eight) common shares and R$ 10,485,368,578.94 (ten billion,
four hundred and eighty-five million, three hundred and sixty-eight thousand, five hundred and
seventy-eight reais and ninety-four cents), divided into 959,758,200 (nine hundred fifty nine
million, seven hundred fifty eight thousand and two hundred) Class A preferred shares, including
six (6) Special Class shares, all without par value.
§ 1 — The shares are common shares and preferred shares. The preferred shares comprise
class A and special class.
§ 2 — The special class preferred share shall belong exclusively to the Federal Government.
In addition to the other rights which are expressed and specifically
attributed to these shares in the current By-Laws, the special class shares shall possess the same rights as
the class A preferred shares.
§ 3 — Each common, class A preferred share and special class shares shall confer the right
to one vote in decisions made at General Meetings, the provisions of § 4 following being
observed.
§ 4 — The preferred class A and special shares will have the same political rights as the
common shares, with the exception of voting for the election of Board Members, excepting
the provisions set forth in §§ 2 and 3 of Article 11 following, and also the right to elect
and dismiss one member of the Fiscal Council, and its respective alternate.
§5 — Holders of class A preferred and special class shares shall be entitled to receive
dividends calculated as set forth in Chapter VII in accordance with the following criteria:
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a) priority in receipt of dividends specified in § 5 corresponding to: (i) a minimum
of 3% (three percent) of the stockholders’ equity of the share, calculated based on the
financial statements which served as reference for the payment of dividends, or (ii) 6%
(six percent) calculated on the portion of the capital formed by this class of share,
whichever higher;
b) entitlement to participate in the profit distributed, on the same conditions as those
for common shares, once a dividend equal to the minimum priority established in accordance
with letter “a” above is ensured; and
c)
entitlement to participate in any bonuses, on the same conditions as those for common shares, the priority specified for the distribution of dividends being observed.
§6 — Preferred shares shall acquire full and unrestricted voting rights should the company
fail to pay the minimum dividends to which they are entitled during 3 (three) consecutive
fiscal years, under the terms of §5 of Article 5.
Article 6 — The company is authorized to increase its share capital up to the limit of
1.800.000.000 (one billion and eight hundred million) common shares and 3.600.000.000 (three
billion and six hundred million) class A preferred shares. Within the limit authorized by the
present Article, the company shall, by means of a decision by the Board of Directors, be entitled
to increase the share capital without any alteration of the By-Laws by means of the issuance of
common shares and/or preferred shares.
§ 1 — The Board of Directors shall determine the conditions for issuance, including the
price and the period of time prescribed for paying up.
§
2 — At the option of the Board of Directors the preemptive right in the issuance of shares, bonds convertible into shares and subscription bonuses, the placement of which on
the market may be by sale on the stock exchange or by public subscription as per the
prescriptions set forth in Law no. 6.404/76, may be rescinded.
§ 3 — Provided that the plans approved by the General Meeting are complied with, the
company shall be entitled to delegate the option of share purchase to its administrators
and employees, with shares held in Treasury or by means of the issuance of new shares, the
shareholders’ preemptive right being excluded.
Article 7 — The special class share shall possess a veto right regarding of the following subjects:
I.
change of name of the company;
II.
change of location of the head office;
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III.
change of the corporate purpose with reference to mineral exploitation;
IV.
the winding-up of the company;
V. the sale or cessation of the activities of any part or of the whole of the following
categories of the integrated iron ore systems of the company: (a) mineral deposits, reserves
and mines; (b) railways; (c) ports and marine terminals;
VI. any alteration of the rights assigned to the types and classes of the shares issued by
the company in accordance with the prescriptions set forth in the present By-Laws;
VII. any alteration of the present Article 7 or of any of the other rights assigned to the
special class share by the present By-Laws.
CHAPTER III — GENERAL MEETING
Article 8 — The ordinary Shareholders’ General Meeting shall be held within the first four months
following the end of the fiscal year and, extraordinarily, whenever called by the Board of
Directors.
§ 1 — An extraordinary Shareholders’ General Meeting shall be competent to discuss the
subjects specified in Article 7.
§ 2 — The holder of the special class share shall be formally requested by the company to
attend for the purpose of discussing the subjects specified in Article 7 by means of
personal correspondence addressed to its legal representative, a minimum period of notice
of 15 (fifteen) days being given.
§ 3 — Should the holder of the special class share be absent from the General Meeting
called for this purpose or should it abstain from voting, the subjects specified in Article
7 shall be deemed as having been approved by the holder of the said special class.
Article 9 — At an Ordinary or Extraordinary General Meeting, the chair shall be taken by the
Chairman, or in his absence by the Vice-Chairman of the Board of Directors of the company, and the
Secretary of the Board of Directors shall act as secretary, as per § 14 of Article 11.
Sole
Paragraph — In the case of temporary absence or impediment of the Chairman or Vice-Chairman of
the Board of Directors, the General Meeting of Shareholders shall be chaired by their respective
alternates, or in the absence or impediment of such alternates, by an Officer specially appointed
by the Chairman of the Board of Directors.
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CHAPTER
IV — ADMINISTRATION
Article 10 — The Board of Directors and the Executive Board shall be responsible for the
administration of the company.
§1 — The members of the Board of Directors and the Executive Board shall take office by
means of signing the Minute Book of the Board of Directors or the Executive Board, as the
case may be.
§2 — The term of office of the members of the Board of Directors and the Executive Board
shall be extended until their respective successors have taken office.
§3 — The General Meeting shall fix the overall amount for the remuneration of the
administrators, benefits of any kind and allowances being included therein, taking into
account the responsibilities of the administrators, the time devoted to the performance of
their duties, their competence and professional repute and the market value of their
duties, their competence and professional repute and the market value of their services.
The Board of Directors shall apportion the fixed remuneration among its members and the
Executive Board.
§4 — The Board of Directors shall be supported by technical and consultant bodies,
denominated Committees, regulated as set forth in Section II — Committees hereinafter.
SECTION I — BOARD OF DIRECTORS
Subsection I — Composition
Article 11 — The Board of Directors, a joint decision-making body, shall be elected by the General
Meeting and shall be formed of 11 (eleven) effective members and their respective alternates, all
being shareholders in the company, and one of whom shall be the Chairman of the Board and another
shall be the Vice-Chairman.
§1 — The term of office of the members of the Board of Directors shall be 2 (two) years,
their re-election being permitted.
§2 — Under the terms of Article 141 of Law # 6,404/76, 1 (one) member and his alternate of
the Board of Directors, may be elected and removed, by means of a separate vote at the
general meeting of shareholders, excluding the controlling shareholder, by the majority of
holders, respectively, of:
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I — common shares representing at least 15% (fifteen percent) of the total shares with
voting rights; and
II — preferred shares representing at least 10% (ten percent) of share capital.
§3 — Having ascertained that neither the holders of common shares or preferred shares have
respectively formed the quorum required in sections I and II of §2 above, they shall be
entitled to combine their shares to jointly elect a member and an alternate to the Board of
Directors, and in such hypothesis the quorum established in section II of §2 of this
Article shall be observed.
§4 — The entitlement set forth in §2 of this Article may only be exercised by those
shareholders who are able to prove uninterrupted ownership of the shares required therein
for a period of at least 3 (three) months, immediately prior to the general shareholders
meeting which elected the members of the Board of Directors.
§5 — From among the 11 (eleven) effective members and their respective alternates of the
Board of Directors, 1 (one) member and his alternate shall be elected and/or removed, by
means of a separate vote, by the employees of the company.
§6 — The Chairman and the Vice-Chairman of the Board of Directors shall be elected among
the members thereof during a Meeting of the Board of Directors to be held immediately after
the General Meeting which has elected them.
§7 — In the case of impediment or temporary absence, the Vice-Chairman shall replace the
Chairman, and during the period of such replacement the Vice-Chairman shall have powers
identical to those of the Chairman, the alternate of the Chairman being nevertheless
entitled to exercise the right to vote in his capacity as a member of the Board of
Directors.
§8 — Should a vacancy occur in the office of Chairman or Vice-Chairman, the Board of
Directors shall elect the respective alternates in the first Meeting to be held after the
vacancy.
§9 — During their impediments or temporary absences, the members of the Board of Directors
shall be replaced by their respective alternates.
§10 — Should a vacancy occur in the office of a member of the Board of Directors or of an
alternate, the vacancy shall be filled by nomination by the remaining members of an
alternate who shall serve until the next General Meeting, which shall decide on his
election. Should vacancies occur in the majority of such offices, a General Meeting shall be
convened in order to proceed with a new election.
§11 — Whenever the Board of Directors is elected under the multiple vote regime, as
established in Article 141 of Law # 6,404/1976, the Chairman of the shareholders meeting
shall inform those shareholders present that the share which elected a member of the Board
of Directors, by means of a separate vote in accordance with §§2 and 3 of Article 11, may not participate in
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the multiple vote regime and, evidently, may
not participate in the calculation of the respective quorum. Once the separate vote has been
held, then the ratio may be definitively defined in order to proceed with the multiple vote.
§12
— With the exception of the effective members and their respective alternates, elected
by means of separate vote, respectively, by the employees of the company and by the holders
of preferred shares, under section II, §2 of Article 11, whenever the election for the
Board of Directors is held under the multiple vote regime, the removal of any member of the
Board of Directors, effective or alternate, by the general shareholders meeting, shall
imply in the removal of the other members of the Board of Directors, and consequently a new
election shall be held; in other cases of vacancy, in the absence of an alternate, the
first general shareholders meeting shall elect the whole Board.
§13 — Whenever, cumulatively, the election of the Board of Directors is held under the
multiple vote system and the holders of common shares or preferred shares or company
employees exercise the right established in §§ 2, 3 and 5 above, the shareholder or group
of shareholders under vote agreement who hold over 50% (fifty percent) of shares with
voting rights, shall be ensured the right to elect officers in a number equal to those
elected by the other shareholders, plus one, irrespective of the number of officers
established in the caption of Article 11.
§14 — The Board of Directors shall have a Secretary, appointed by the Chairman of the Board
of Directors, who shall necessarily be an employee or administrator of the company, in
whose absence or impediment shall be replaced by another employee or administrator as
designated by the Chairman of the Board of Directors.
Subsection
II — Workings
Article 12 — The Board of Directors shall meet on an ordinary basis once a month and extraordinary
whenever called by the Chairman or, in his absence, by the Vice-Chairman of the Board or by any 2
(two) members acting together.
Article 13 — Meetings of the Board of Directors shall only be held with the presence of and
decisions shall only be taken by the affirmative vote of a majority of its members.
§1 — The minutes of the meetings of the Board of Directors shall be recorded in the Book of
Minutes of Meetings of the Board of Directors which, after having been read and approved by
the officers present at the meetings, shall be signed in a number sufficient to constitute
the majority necessary for approval of the subjects examined.
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§2 — The Secretary shall be responsible for the recording, distribution, filing and
safeguard of the respective minutes of the meetings of the Board of Directors, as well as
for the issuance of abstracts of the minutes and certificates of approvals of the Board of
Directors.
Subsection
III — Responsibilities
Article 14 — The Board of Directors shall be responsible for:
I. electing, evaluating and at any time removing the Executive Officers of the company, and
assigning functions to them;
II. distributing the remuneration established by the general shareholders meeting among its
members and those of the Executive Board;
III. assigning the functions of Investor Relations to an Executive Officer;
IV. approving the policies relating to selection, evaluation, development and remuneration of
members of the Executive Board;
V. approving the company’s human resources general policies as submitted to it by the
Executive Board;
VI. establishing the general guidance of the business of the company, its whollyowned
subsidiary companies and controlled companies;
VII. approving the strategic guidelines and the strategic plan of the company submitted
annually by the Executive Board;
VIII. approving the company’s annual and multi-annual budgets, submitted to it by the
Executive Board;
IX. monitoring and evaluating the economic and financial performance of the company, and may
request the Executive Board to provide reports with specific performance indicators;
X. approving investments and/or divestiture opportunities submitted by the Executive Board
which exceed the limits established for the Executive Board as defined by the Board of
Directors;
XI. issuing opinions on operations relating to merger, split-off, incorporation in which the
company is a party, as well as share purchases submitted by the Executive Board;
XII. with the provisions set forth in Article 2 of the present By-Laws being complied with,
making decisions concerning the setting-up of companies, or its transformation into another kind of company, direct or indirect participation in
the capital of other companies,
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consortia, foundations and other organizations, by means of
the exercise of rights withdrawal, the exercise of non-exercise of rights of subscription, or
increase or sale, both direct and indirect, of corporate equity, or in any other manner
prescribed by law, including but not limited to, merger, split-off and incorporation in
companies in which it participates;
XIII. approving the corporate risks and financial policies of the company submitted by the
Executive Board;
XIV. approving the issuance of simple debentures, not convertible into share and without
collateral submitted by the Executive Board;
XV. approving the accounts of the Executive Board, substantiated in the Annual Report and
the Financial Statements, for subsequent submission to the Ordinary General Meeting;
XVI. approving the employment of profit for the year, the distribution of dividends and,
when necessary, the capital budget, submitted by the Executive Board, to the later direction
to the appreciation of the Ordinary Shareholders Meeting;
XVII. selecting and removing external auditors of the company, based on the Fiscal
Council’s recommendation, in accordance with section (ii) of §1º of Article 39;
XVIII. appointing and removing the person responsible for the internal auditing and for the
Ombud of the company, who shall report directly to the Board of Directors;
XIX. approving the policies and the annual audit plan of the company submitted by the person
responsible for internal auditing, as well as to acknowledge the respective reports and
determine the adoption of necessary measures;
XX. overseeing the management of the company by the Executive Officers and examining at any
time, the books and documents of the Company, requesting information about contracts signed
or about to be signed, and about any other actions, in order to ensure the financial
integrity of the Company;
XXI. approving alterations in corporate governance rules, including, but not limited to, the
process of rendering of accounts and the process of disclosure of information;
XXII. approving policies of employee conducts based on ethical and moral standards described
in the Code of Ethics of the Company, to be observed by all administrators and employees of
the Company, its subsidiaries and controlled companies;
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XXIII. approving policies to avoid conflicts of interests between the Company and its
shareholders or its administrators, as well as the adoption of the measures considered
necessary in the event such conflicts arise;
XXIV. approving policies of corporate responsibility of the Company, mainly those related
to: the environment, health and labor safety, and social responsibility of the Company,
submitted by the Executive Board;
XXV. establishing criteria for the Executive Board in relation to the purchase of, sale of
and placing of liens on fixed assets and for the constitution of encumbrances, the
provisions set forth in Article 7 of the present By-Laws being complied with;
XXVI. approving the provision of guarantees in general, and establishing criteria for the
Executive Board in relation to the contracting of loans and financing and for the signing of
other contracts;
XXVII. establishing criteria for the Executive Board in relation to the signing of
commitments, waiving of rights and transactions of any nature, except for the waiver of its
preemptive rights in the subscription and purchase of shares, under section XII of Article
14;
XXVIII.approving any matters which are not the competence of the Executive Board, under the
terms of the present By-Laws, as well as matters whose limits exceed the criteria
established for the Executive Board, as established in Article 14;
XXIX. approving any reformulation, alteration, or amendment of shareholders’ agreements or
consortia contracts, or of agreements among the shareholders or among the consortia parties
of companies in which the company participates, as well as approving the signing of new
agreements and/or consortia contracts that address subjects of this nature;
XXX. authorize the negotiation, signing or alteration of contracts of any kind of value
between the company and (i) its shareholders, either directly or through intermediary
companies (ii) companies which directly or indirectly participate in the capital of the
controlling shareholder or which are controlled, or are under joint control, by companies
which participate in the capital of the controlling shareholder, and/or (iii) companies in
which the controlling shareholder of the company participates, and the Board of Directors
may establish delegations, with standards and procedures, which meet the requirements and
nature of the operations, without prejudice of keeping the aforementioned group duly
informed of all company transactions with related parties;
XXXI. expressing its opinion regarding any matter to be submitted to the General Meeting of
Shareholders;
XXXII. authorizing the purchase of shares of its own issuance for maintenance in treasury,
cancellation or subsequent sale;
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XXXIII.
approving the recommendations submitted by the Fiscal Council of the Company in
the exercise of its legal and statutory attributions.
§1 — The Board of Directors shall be responsible for appointing, as submitted by the
Executive Board, the persons who shall form part of the Administrative, Consulting and
Audit bodies of those companies and organizations in which the company participates,
directly or indirectly.
§2 — The Board of Directors may, at its discretion, delegate the assignment mentioned in
the prior paragraph to the Executive Board.
SECTION II — COMMITTEES
Article 15 — The Board of Directors, shall have, for advice on a permanent basis, 5 (five)
technical and advisory committees, denominated as follows: Executive Development Committee,
Strategic Committee, Finance Committee, Accounting Committee and Governance and Sustainability
Committee.
§1 — The Board of Directors, at its discretion, may also establish, for its consulting
support, other committees to fulfill consultant or technical tasks, other than those
permanent committees as set forth in the caption of this Article.
§2 — The members of the committees shall be remunerated as established by the Board of
Directors, and those members who are administrators of the company shall not be entitled to
additional remuneration for participating on the committees.
Subsection
I — Mission
Article 16 — The mission of the committees shall be to provide support to the Board of Directors,
which includes the follow up of the activities of the Company, in order to increase the efficiency
and quality of its decisions.
Subsection
II — Composition
Article 17 — The members of the committees shall have proven experience and technical skills in
relation to matters that are the object of the respective committee’s responsibility and shall be
subject to the same legal duties and responsibilities as the administrators.
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Article 18 — The composition of each committee shall be defined by the Board of Directors.
§1 — The members of the committees shall be appointed by the Board of Directors and may belong to
company administration bodies or not.
§2 — The term of management for the members of the committees shall begin as of their appointment
by the Board of Directors, and termination shall coincide with the end of the management term of
the members of the Board of Directors, and reappointment shall be permitted.
§3 — During their management, members of the committees may be removed from office by the Board of
Directors.
Subsection
III — Workings
Article 19 — Standards relating to the workings of each committee shall be defined by the Board of
Directors.
§1 — The committees established within the company shall not have decision making power and
their reports and proposals shall be submitted to the Board of Directors for approval.
§2 — The committees’ reports do not constitute a necessary condition for the presentation
of matters for scrutiny and approval by the Board of Directors.
Subsection
IV — Responsibilities
Article 20 — The main duties of the committees are set forth in Article 21 and subsequent articles,
whereas their detailed duties shall be defined by the Board of Directors.
Article 21 — The Executive Development Committee shall be responsible for:
I — issuing reports on the human resources general policies of the Company submitted by the
Executive Board to the Board of Directors;
II — analyzing and issuing reports to the Board of Directors on the restatement of
remuneration of members of the Executive Board;
III — submitting and ensuring up-to-dateness of the performance evaluation methodology of the
members of the Executive Board; and
IV — issuing reports on potential conflicts of interest between the company and its
shareholders or administrators.
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Article 22 — The Strategic Committee shall be responsible for:
I — issuing reports on the strategic guidelines and the strategic plan submitted annually by
the Executive Board;
II — issuing reports on the company’s annual and multi-annual investment budgets submitted by
the Executive Board to the Board of Directors;
III — issuing reports on investment and/or divestiture opportunities submitted by the
Executive Board to the Board of Directors;
IV — issuing reports on operations relating to merger, split-off, incorporation in which the
company and its controlled subsidiaries are a party, and on share purchases submitted by the
Executive Board to the Board of Directors.
Article 23 — The Finance Committee shall be responsible for:
I — issuing reports on the corporate risks and financial policies and the internal financial
control systems of the Company;
II — issuing reports on the compatibility between the remuneration level of shareholders and
the parameters established in the annual budget and financial scheduling, as well as its
consistency with the general policy on dividends and the capital structure of the company.
Article 24 — The Accounting Committee shall be responsible for:
I — recommending the appointment of the person responsible for the internal auditing of the
Company to the Board of Directors ;
II — issuing reports on the policies and the Company’s annual auditing plan submitted by the
employee responsible for internal auditing, and on its execution;
III — tracking the results of the Company’s internal auditing, and identifying, priorizing,
and submitting actions to be accompanied by the Executive Board to the Board of Directors;
IV — analyzing the Annual Report, as well as the Financial Statements of the company and
making recommendations to the Board of Directors.
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Article 25 — The Governance and Ethics Committee shall be responsible for:
I — evaluating the efficiency of the company’s governance practices and the workings of the
Board of Directors, and submitting improvements;
II — submitting improvements to the code of ethics and in the management system in order to
avoid conflicts of interests between the company and its shareholders or company
administrators; and
III- issuing reports on policies relating to corporate responsibility, such as the
environment, health, safety and social responsibility of the company submitted by the
Executive Board.
SECTION III — EXECUTIVE BOARD
Subsection
I — Composition
Article 26 — The Executive Board, the executive administration body of the company, shall consist
of 6 (six) to 9 (nine) members, one of whom shall be the Chief Executive Officer and others shall
be Executive Officers.
§1 — The Chief Executive Officer shall submit to the Board of Directors the names of
candidates for the Executive Board with renowned knowledge and specialization in the
subject of responsibility of the respective operational area, and may also at any time
submit to the Board of Directors a motion to remove.
§2 — The Executive Officers shall have their individual duties defined by the Board of
Directors.
§3 — The management term of the members of the Executive Board shall be 2 (two) years, and
re-election shall be permitted.
Subsection
II — Workings
Article 27 — In the case of temporary impediment of the Chief Executive Officer, same shall be
replaced by another member of the Executive Board designated by majority vote of the members of the
Executive Board, and in the case of absence, the Chief Executive Officer may designate his own
substitute, who shall assume all legal, statutory and regulatory duties and responsibilities.
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§1 — In the case of temporary impediment or absence of any Executive Officer, same
shall be replaced by one of the Executive Officers appointed by the Chief Executive
Officer, who shall accumulate the legal, statutory and regulatory responsibilities of the
absent or impeded Executive Officer, for the term of exercise of the post of the
substituted Executive Officer, excluded the right to vote at Executive Board meetings.
§ 2 — Should a vacancy occur in the office of an Executive Officer, the substitute member
shall be selected and his name shall be submitted by the Chief Executive Officer to the
Board of Directors who shall elect him to complete the remaining term of the substituted
officer.
§ 3 — Should a vacancy occur in the office of the Chief Executive Officer, the Executive
Officer in charge of Finance shall substitute the Chief Executive Officer, accumulating his
own duties, rights and responsibilities with those of the Chief Executive Officer until the
Board of Directors holds a new election for the office of Chief Executive Officer.
Article 28 — In respect of the limits established for each Executive Officer, the decisions on
matters affecting his specific operational area, provided that the matter does not affect the
operational area of another Executive Officer, shall be taken by himself or in conjunction with the
Chief Executive Officer, in matters or situations pre-established by the latter.
Article 29 — The Executive Board shall meet on an ordinary basis once a fortnight and
extraordinarily whenever called by the Chief Executive Officer or his substitute.
Sole Paragraph — The Chief Executive Officer shall convene an extraordinary meeting of the
Executive Board by virtue of the request of at least 3 (three) members of the Executive Board;
Article 30 — The meetings of the Executive Board shall only begin with the presence of the majority
of its members.
Article 31 — The Chief Executive Officer shall chair the meetings of the Executive Board in order
to priorize consensual approvals amongst its members.
§1 — When there is no consent among members of the Board, the Chief Executive Officer may
(i) withdraw the issue from the agenda, (ii) attempt to form a majority, with the use of
his casting vote or, (iii) in the interests of the company and by
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grounded presentation,
decide individually on the matters raised for joint approval, including those listed in
Article 32, and in respect of the exceptions stated in §2 following;
§2 — Decisions relating to annual and multi-annual budgets and to the strategic plan
and the Annual Report of the company shall be taken by majority vote, considered to be all
Executive Officers, provided that the favorable vote of the Chief Executive Officer is
included therein.
§3 — The Chief Executive Officer shall inform the Board of Directors the utilization of the
prerogative concerning item (iii), §1 stated above, in the first Board of Directors meeting
which succeed the corresponding decision.
Subsection
III — Responsibilities
Article 32 — The Executive Board shall be responsible for:
I — approving the creation and elimination of Executive Departments subordinated to each
Executive Director;
II — preparing and submitting to the Board of Directors the company’s general policies on
human resources, and executing the approved policies;
III — complying with and ensuring compliance with the general guidelines and business
policies of the Company laid down by the Board of Directors;
IV — preparing and submitting, annually, to the Board of Directors, the company’s strategic
guidelines and the strategic plan, and executing the approved strategic plan;
V — preparing and submitting the Company’s annual and multi-annual budgets to the Board of
Directors, and executing the approved budgets;
VI — planning and steering the company’s operations and reporting the company’s economic and
financial performance to the Board of Directors, and producing reports with specific
performance indicators;
VII — identifying, evaluating and submitting investment and/or divestiture opportunities to
the Board of Directors which exceed the limits of the Executive Board as defined by the Board
of Directors, and executing the approved investments and/or divestitures;
VIII — identifying, evaluating and submitting to the Board of Directors operations relating
to merger, split-off, incorporation in which the company is a party, as well as share
purchases, and conducting the approved mergers, split-offs, incorporations and purchases;
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IX — preparing and submitting the company’s finance policies to the Board of Directors,
and executing the approved policies;
X — submitting to the Board of Directors the issuance of simple debentures, not convertible
into shares and without collateral;
XI — defining and submitting to the Board of Directors, after the drawing up of the balance
sheet, the employment of profit for the year, the distribution of company dividends and,
when necessary, the capital budget;
XII — preparing in each fiscal year the Annual Report and Financial Statements to be
submitted to the Board of Directors and the General Meeting;
XIII — adhere to and encourage adhesion to the company’s code of ethics, established by the
Board of Directors;
XIV — preparing and submitting to the Board of Directors the company’s policies on corporate
responsibility, such as the environment, health, safety and social responsibility, and
implementing the approved policies;
XV — authorizing the purchase of, sale of and placing of liens on fixed and non fixed assets
including securities, the contracting of services, the company being the provider or
receiver of such, being empowered to establish standards and delegate powers, all in
accordance with the criteria and standards established by the Board of Directors;
XVI — authorizing the signing of agreements, contracts and settlements that constitute
liabilities, obligations or commitments on the company, being empowered to establish
standards and delegate powers, all in accordance with the criteria and standards established
by the Board of Directors;
XVII — propose to the Board of Directors any reformulation, alteration, or amendment of
shareholders’ agreements or of agreements among the shareholders of companies in which the
company participates, as well as suggesting the signing of new agreements and consortia
contracts that address subjects of this nature;
XVIII- authorizing the opening and closing of branch offices, subsidiary branch offices,
depots, agencies, warehouses, representative officer or any other type of establishment in
Brazil or abroad;
XIX — authorizing the undertaking of commitments, waiver of rights and transactions of any
nature, liens on securities being excepted, under the terms of section XII of Article 14,
being empowered to establish standards and delegate powers in accordance with the criteria
and standards established by the Board of Directors;
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XX — establishing and informing the Board of Directors on the individual limits of the
Executive Officers, in respect of the limits of the Executive Board jointly, as established
by the Board of Directors;
XXI — establishing, based on the limits fixed for the Board of Directors, the limits
throughout the whole of the company’s administrative organization hierarchy.
§1 — The Executive Board shall be empowered to lay down voting guidelines to be followed at
the General Meetings by its proxies in the companies, foundations and other organizations in
which the company participates, directly or indirectly, the investment plans and programs of
the company, as well as the respective budgets being complied with, the limit of
responsibility being observed as regards, among others, indebtedness, the sale of assets,
the waiver of rights and the reduction of corporate equity investments.
§ 2 — The Executive Board shall take steps to appoint persons who shall form part of the
Administrative, Consultant and Audit bodies of those companies and organizations in which
the company participates directly or indirectly.
Article 33 — The responsibilities of the Chief Executive Officer are to:
I — take the chair at meetings of the Executive Board;
II — exercise executive direction of the Company, with powers to coordinate and supervise
the activities of the other Executive Officers, exerting his best efforts to ensure
faithful compliance with the decisions and guidelines laid down by the Board of Directors
and the General Meeting;
III — coordinate and supervise the activities of the business areas and units that are
directly subordinated to him;
IV — select and submit to the Board of Directors the names of candidates for Executive
Officer posts to be elected by the Board of Directors, and also to propose the respective
removal;
V — coordinate the decision making process of the Executive Board, as provided for in
Article 31 of Subsection II – Workings;
VI — grant vacation and leave to the members of the Executive Board, and designate other
Executive Officers as their alternates;
VII — keep the Board of Directors informed about the activities of the company;
VIII — together with the other Executive Officers, prepare the annual report and draw up
the balance sheet;
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Article 34 — The Executive Officers are to:
I — organize the services for which they are
responsible;
II — participate in meetings of the Executive Board, contributing to the definition of the
policies to be followed by the company and reporting on matters of the respective areas of
supervision and coordination;
III — comply with and ensure compliance with the policy and general guidance of the
company’s business laid down by the Board of Directors, each Executive Officer being
responsible for his business units and specific area of activities;
IV
— contract the services described in §2º of Article 39, in compliance with
determinations of the Fiscal Council.
Article 35 — The company shall be represented as plaintiff or defendant in courts of law or
otherwise, including as regards the signature of documents constituting responsibility for this, by
2 (two) members of the Executive Board, or by 2 (two) proxies established in accordance with § 1 of
this Article, or by 1 (one) proxy jointly with an Executive Officer.
§ 1 — Except when otherwise required by law, proxies shall be appointed by a power of
attorney in the form of a private instrument in which the powers granted shall be
specified, the term of validity of powers of attorney “ad negotia” expiring on December 31
of the year in which it is granted.
§ 2 — The company may, moreover, be represented by a single proxy at the General Meetings
of shareholders of the companies, consortia and other organizations in which it
participates or for acts arising out the exercise of powers specified in a power of
attorney “ad judicia” or: (a) at agencies at any level of government, customs houses and
public service concessionaires for specific acts for which a second proxy is not necessary
or not permitted; (b) for signing of contract instruments in solemnity or at which the
presence of a second proxy is not possible; (c) for signing of documents of any kind which
imply in an obligation for the company whose monetary limits shall be established by the
Executive Board.
§ 3 In the case of commitments assumed abroad, the company may be represented by a single
member of the Executive Board, or by an attorney in-fact with specific and limited powers
according to the present By-Laws.
§ 4 — Summons and judicial or extrajudicial notifications shall be made in the name of
the Executive Officer responsible for Investor Relations, or by proxy as established in § 1
of this Article.
CHAPTER V — FISCAL COUNCIL
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Article 36 — The Fiscal Council, a permanently functioning body, shall be formed of 3 (three)
to 5 (five) effective members and an equal number of alternates, elected by the General Meeting,
which shall fix their remuneration.
Article 37 — The members of the Fiscal Council shall carry out their duties until the first
Ordinary General Meeting to be held following their election, their re-election being permitted.
Article 38 — In their absence or impediment, or in cases of vacancy of office, the members of the
Fiscal Council shall be replaced by their respective alternates.
Article 39 – The Fiscal Council shall be responsible to exercise the functions attributed to it by
the applicable prevailing legislation, in these By-Laws, and as regulated by its own Internal Rules
to be approved by its members;
§
1º— The Internal Rules of the Fiscal Council shall regulate, in addition to the attributions
already established in Law 6.404/76, imperatively, the following:
(i) to establish the procedures to be adopted by the Company to receive, process and
treat denunciations and complaints related to accounting, internal accounting controls
and auditing matters, and ensure that the procedures for receiving complaints will
guarantee secrecy and anonymity to the complainants;
(ii) to recommend and assist the Board of Directors in the selection, remuneration and
dismissal of the external auditors of the Company;
(iii) to deliberate concerning the contracting of new services that may be rendered by
the external auditors of the Company;
(iv) to supervise and evaluate the work of the external auditors, and to direct the
management of the Company concerning any need to withhold the remuneration of the
external auditor, as well as to mediate any disputes between management and the
external auditors regarding the financial statements of the Company;
§ 2º — For adequate performance of its duties, the Fiscal Council may determine the contracting of
services from lawyers, consultants and analysts, and other resources that may be necessary for the
performance of its duties, while observing the budget, proposed by the Fiscal Council and approved
by the Board of Directors, without prejudice to the provisions established in §8º of Article 163 of
Law 6.404/76;
§3º — The members of the Fiscal Council shall provide, within at least 30 (thirty) days before
the Annual Shareholders’ Meeting is held, their analysis of the management report and the financial
statements.
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CHAPTER VI — COMPANY PERSONNEL
Article 40 — The company shall maintain a social security plan for its employees administered by a
foundation established for this purpose, the provisions of prevailing legislation being complied
with.
CHAPTER VII — FINANCIAL YEAR AND DISTRIBUTION OF PROFITS
Article 41 — The fiscal year of the company shall coincide with the calendar year, thus finishing
on December 31, when the balance sheets shall be prepared.
Article 42 — After the constitution of the legal reserve, the employment of the remaining portion
of the net profit verified at the end of each financial year (which shall coincide with the
calendar year) shall, on the motion of the Administration, be submitted to the decision of the
General Meeting.
Sole Paragraph — The amount of the interest, paid or credited in the form of interest on
stockholders’ equity in accordance with the prescriptions of Article 9, § 7 of Law # 9,249 dated
December 26, 1995 and of relevant legislation and regulations, may be ascribed to the compulsory
dividend and to the minimum annual dividend on the preferred shares, such amount for all legal
purposes forming the sum of the dividends distributed by the company.
Article 43 — The proposal for distribution of profit shall include the following reserves:
I. Depletion Reserve, to be constituted in accordance with prevailing fiscal legislation;
II. Investments Reserve, in order to ensure the maintenance and development of the main
activities which comprise the company’s purpose, in an amount not greater than 50% (fifty
percent) of distributable net profit up to a maximum of the company’s share capital.
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Article 44 — At least 25% (twenty-five percent) of the net annual profit, adjusted as per the
law, shall be devoted to the payment of dividends.
Article 45 — At the proposal of the Executive Board, the Board of Directors may determine the
preparation of the balance sheets in periods of less than a year and declare dividends or interest
on stockholders’ equity on account of the profit verified in these balances as well as to declare
for the account of accrued profits or profit reserves existing in the latest annual or semi-annual
balance sheet.
Article 46 — The dividends and interest on stockholders’ equity mentioned in the Sole Paragraph of
Article 42 shall be paid at the times and at the places specified by the Executive Board, those not
claimed within 3 (three) years after the date of payment reverting in favour of the company.
This attachment constitutes part of the Minutes of the Ordinary and Extraordinary General
Shareholders Meetings held on April 27, 2006.