Registration of Securities of a Foreign Private Issuer — Form 20-F
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 20FR12B Form 20-F 131 780K
2: EX-1.1 Charter Documents (Portuguese) 18 48K
3: EX-1.2 Charter Documents (English) 16 60K
4: EX-2.1 Deposit Agreement 61 213K
5: EX-10.1 Local Switched Fixed Line Service (Portuguese) 60 157K
6: EX-10.2 Local Concession for Fixed Companies (English) 53 164K
7: EX-10.3 National Concession for Fixed Companies (Portug.) 54 150K
8: EX-10.4 Std. Concession Agrmt., Domestic Ldsfl (English) 50 160K
9: EX-23.1 Consent of Kpmg Peat Marwick LLP 1 6K
EX-1.2 — Charter Documents (English)
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EXHIBIT 1.2
CHARTER OF
TELESP PARTICIPACOES S.A.
CHAPTER I
CHARACTERISTICS OF THE COMPANY
Art. 1 TELESP PARTICIPACOES S.A., a corporation, is subject to the
jurisdiction of the Ministry of Communication and is the controlling shareholder
of Companies providing public fixed-line telephone services in Region III, as
referred to in the General Concession Plan approved by Decree No. 2,543 of
April 2, 1998.
Sole Paragraph The Company is governed by the Corporation Law, special
provisions of federal law, telecommunications legislation, this Charter,
commercial law and practices and other applicable legal provisions.
Art. 2 The purposes of the Company are:
I. to exercise control over the companies providing public fixed-line
telephone services in Region III, as referred to in the General
Concession Plan approved by Decree No. 2,543 of April 2, 1998;
II. to promote, through subsidiaries or affiliates, the expansion and
establishment of fixed-line telephone services in its concession
area;
III. to promote, carry out or direct the acquisition of funds from
external sources to by used by the Company or by its subsidiaries;
IV. to promote and foster study and research activities aimed at the
development of the fixed-line telephone sector;
V. to provide, through subsidiaries or affiliates, specialized
technical services in the fixed-line telephone sector;
VI. to promote, foster, and coordinate, through its subsidiaries or
affiliates, the education and training of the personnel required
in the fixed-line telephone sector;
VII. to carry out and promote the importation of goods and services for
its subsidiaries or affiliates;
VIII. to carry out other activities that are similar or related to its
corporate purposes; and
IX. to invest in shares of other companies.
Art. 3 The principal office of the Company is situated in the Federal
District, and the Company may, by decision of the Board of Directors, open or
close subsidiaries, agencies, branches, offices, departments and representative
offices anywhere in Brazil or abroad.
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Art. 4 The duration of the Company is indefinite.
CHAPTER II
CORPORATE CAPITAL
Art. 5 The corporate capital, fully subscribed and paid in, is
R$3,236,420,616.47 (three billion, two hundred thirty six million, four hundred
twenty thousand, six hundred sixteen reais and forty seven centavos),
represented by 334,399,027,592 (three hundred thirty four billion, three hundred
ninety nine million, twenty seven thousand, five hundred and ninety two) shares,
consisting of 124,369,030,532 (one hundred twenty four billion, three hundred
sixty nine million, thirty thousand, five hundred and thirty two) registered
common shares and 210,029,997,060 (two hundred ten billion, twenty nine million,
nine hundred ninety seven thousand and sixty) registered preferred shares, all
without par value.
Art. 6 The Company is authorized to increase its capital, by decision of
the Meeting of Shareholders, up to 700,000,000,000 (seven hundred billion)
shares of common or preferred stock.
Sole Paragraph Within the limit on the authorized capital provided for
herein, the Meeting of Shareholders may grant stock purchase options to its
managers and employees and to individuals who perform services on behalf of the
Company or its subsidiaries.
Art. 7 The corporate capital is represented by common and preferred
shares, without par value, and the Company is not required to maintain the
proportions of common and preferred shares when the corporate capital is
increased, subject to applicable law and this Charter.
Art. 8 The shareholders may decide to eliminate preemptive rights to
subscribe to shares, convertible debentures and subscription rights that are to
be:
I. placed by public issue or sale on a stock exchange;
II. exchanged for shares in a public offer for acquisition of control,
as provided in Arts. 257 and 263 of the Corporation Law; or
III. issued to take advantage of tax incentives, as provided by special
law.
Art. 9 Each common share is entitled to one vote at meetings of
shareholders.
Art. 10 Preferred shares are not entitled to voting rights except as
provided in the sole paragraph of Art. 13 of this Charter but are entitled to
priority in the repayment of corporate capital, without premium, and in the
payment of minimum non-cumulative dividends of 6% (six percent) per year, on the
amount computed by dividing the corporate capital by the total number of shares
of the Company.
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Sole Paragraph Preferred shares will become entitled to vote if the
Company fails to pay the minimum dividends as provided herein for a period of 3
(three) consecutive years.
Art. 11 Shares of the Company shall be in book entry form, shall be
held on deposit, with a financial institution in the names of the owners and
shall not be certificated.
CHAPTER III
MEETINGS OF SHAREHOLDERS
Art. 12 The Meeting of Shareholders is the highest body of the Company,
with the power to make decisions regarding all matters related to the corporate
purposes and to take the steps that is deems advisable for the protection and
development of the Company.
EXCLUSIVE POWERS
Art. 13 Only the Meeting of Shareholders shall have the power:
I. to amend this Charter;
II. to authorize the issuance of debentures or convertible debentures,
or sell them from treasury, or to authorize the sale of
convertible debentures of subsidiaries owned by the Company; the
Meeting of Shareholders may delegate to the Board of Directors the
power to decide on maturity and repayment and redemption terms,
the interest terms and timing of interest payments, equity
participations, and redemption premiums, if any, and the method of
subscription or placement, as well as the type of debentures;
III. to consider appraisals of assets being contributed by shareholders
to the Company's capital;
IV. to decide on changes of corporate form, mergers, consolidations
and split-ups of the Company and its dissolution and liquidation,
and to appoint liquidators, remove them from office and approve
their accounts;
V. to authorize the issuance of guaranties by the Company of
obligations of third parties other than its subsidiaries;
VI. to suspend the rights of shareholders who do not comply with
obligations imposed by law or this Charter;
VII. to elect members of the Board of Directors and members of the
Statutory Audit Committee and remove them from office at any time;
VIII. to decide on the aggregate or individual compensation of the
members of the Board of Directors, the Executive Officers, and the
members of the Statutory Audit Committee;
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IX. to receive the annual accounts from management and decide on the
financial statements that they submit;
X. to decide on the institution by the Company of proceedings against
members of management for damages caused to its assets, as
provided in Art. 159 of the Corporation Law;
XI. to authorize the disposition, in whole or in part, of shares of a
subsidiary;
XII. to decide on increases in capital through the issuance of new
shares;
XIII. to authorize waivers of rights to subscribe to shares or
convertible debentures of its subsidiaries;
XIV. to decide on the issuance of any other instruments or securities,
in Brazil or abroad;
XV. to authorize the exchange of shares or other securities;
XVI. to decide on the issuance of shares and subscription rights within
the limits of the authorized capital, as provided by law and in
this Charter; and
XVII. to approve before execution any long-term contracts between the
Company or its subsidiaries, on the one hand, and the controlling
shareholder or subsidiaries, affiliates, entities under common
control or controlling shareholders of the latter, or companies
that are otherwise related parties with respect to Company, on the
other hand, except when the contracts consist of standard forms.
Sole Paragraph Without prejudice to the provisions of (S) 1 of Art. 115
of Law No. 6,404/76, preferred shareholders shall have the right to vote on
decisions taken at Meetings of Shareholders of the kind referred to in item XVII
of this article, as well as those relating to the amendment or revocation of the
following provisions of this Charter:
I. item XVII of Art. 13;
II. the sole paragraph of Art. 14; and
III. Art. 46.
Art. 14 Meetings of Shareholders shall be called by the Board of
Directors, and minutes of meetings shall be approved by the Chairman or as
provided in the Sole Paragraph of Art. 123 of Law No. 6,404/76.
Sole Paragraph In the cases provided for in Art. 136 of Law No.
6,404/76, the first notice of the Meeting of Shareholders shall be given at
least 30 (thirty) days in advance and the second notice shall be given at least
10 (ten) days in advance.
Art. 15 The Meeting of Shareholders shall be opened by the President of
the Company and shall proceed to the election of the officers of the meeting,
consisting of a chairman and a secretary selected from among the shareholders
present at the meeting.
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Art. 16 Minutes of Meetings of Shareholders shall be prepared and shall be
signed by the officers and by shareholders present at the meeting who represent
at least the minimum required for the decisions made.
(S) 1 The minutes shall be prepared in summary factual form and shall
reflect dissenting opinions and protests.
(S) 2 Unless the meeting decides to the contrary, the minutes shall be
published without the signatures of the shareholders.
Art. 17 An Annual Meeting of Shareholders shall be held within four months
of the end of each fiscal year for the purpose of:
I. receiving the accounts of management and reviewing, discussing and
voting on the financial statements;
II. deciding on the allocation of the net profits for the fiscal year and
the distribution of dividends; and
III. electing the members of the Statutory Audit Committee and, when
applicable, the members of the Board of Directors.
Art. 18 A Special Meeting of Shareholders shall held whenever the
interests of the Company so require.
CHAPTER IV
MANAGEMENT OF THE COMPANY
SECTION I
MANAGEMENT BODIES
BOARD OF DIRECTORS
Art. 19 The Company shall be managed by the Board of Directors and by the
Executive Officers.
(S) 1 - The Board of Directors, acting as a collegiate body, shall be
responsible for managing the policies of the Company.
(S) 2 - The Board of Executive Officers is the executive body for corporate
management, with each Executive Officer acting in accordance with his or her
powers.
(S) 3 - The authority and powers conferred by law upon each of the
management bodies may not be granted to any other body.
SECTION II
BOARD OF DIRECTORS
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Art. 20 The Board of Directors shall:
I. set the general business policy of the Company and ensure the
execution thereof;
II. call Meetings of Shareholders;
III. approve and submit to the Meeting of Shareholders the financial
statements and the report of management, including the
consolidated financial statements;
IV. elect the Company's Executive Officers and remove them from office
at any time, and establish their powers, in accordance with
applicable law and the provisions of this Charter;
V. approve, on the basis of a recommendation of the Board of
Executive Officers, the appointment or removal from office of the
Internal Auditor;
VI. approve the general plans of the Company;
VII. decide on the terms for the issuance of debentures, by delegation
of the Meeting of Shareholders;
VIII. approve the Internal Regulations of the Company, define its
organizational structure and specify the powers of each Executive
Officer, in accordance with applicable law and the provisions of
this Charter;
IX. authorize disposals of real property of the Company;
X. supervise the management of the Company by the Executive Officers;
examine the Company's books at any time; and request information
regarding contracts that have been concluded or that are in the
process of being concluded, or any other documents;
XI. appoint the independent auditors and remove them from office;
XII. approve or amend the Internal Regulations of the Board;
XIII. grant leaves of absence and vacations to members of the Board,
indicating the respective alternates;
XIV. approve equity investments by the Company in other companies and
disposals thereof, including the formation of subsidiaries;
XV. authorize purchases of shares of the Company for cancellation or
retention in treasury and subsequent disposal;
XVI. authorize the issuance of commercial paper; and
XVII. carry out other activities assigned to it by law, by this Charter,
by the Meeting of Shareholders or by the Ministry of
Communications;
Art. 21 The Board of Directors shall be composed of 4 (four) members,
including a representative of minority shareholders elected in accordance with
Art. 239 of Law No. 6,404/76 and a representative of the Minister of State for
Planning and Budget.
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Sole Paragraph The members of the Board of Directors shall be elected by
the Meeting of Shareholders for a term of 3 (three) years, a year consisting of
the period between 2 (two) Annual Meetings of Shareholders.
Art. 22 The members of the Board of Directors, except the representatives
of minority shareholders and of the Minister of State for Planning and Budget,
shall be appointed by the Minister of State for Communications and shall be
Brazilians of recognized knowledge and experience, moral integrity, and
unblemished reputation, one of whom shall be designated as Chairman of the
Board.
Art. 23 The alternate Chairman of the Board, if any, shall be selected by
the Board of Directors itself from among its members who are also Executive
Officers.
Sole Paragraph In the event of absences or abstentions that prevent a
decision from being made, the Board members present at the meeting may call upon
on Executive Officers to join the Board.
Art. 24 The Board of Directors shall hold a regular meeting once a month
and shall hold special meetings when they are called by the Chairman or by 2
(two) members of the Board of Directors, and minutes of meetings shall be
prepared.
Art. 25 The Board of Directors shall act by majority vote, with a majority
of the members present; the Chairman shall have a casting vote in addition to
his regular vote, and he shall be responsible for approving the minutes of
meetings, as necessary.
SECTION III
BOARD OF EXECUTIVE OFFICERS
Art. 26 The Board of Executive Officers shall consist of 1 (one) President
and 1 (one) Vice President.
Sole Paragraph Up to 1/3 (one third) of the members of the Board of
Directors may be elected as Executive Officers.
Art. 27 The Executive Officers shall be elected by the Board of Directors;
the President must be chosen from among the members of the Board.
Art. 28 The term of the Board of Executive Officers shall be 3 (three)
years, and the Executive Officers shall be eligible for reelection and may be
removed from office at any time.
Sole Paragraph For the purposes of this article, a year shall consist of
the period between two Annual Meetings of Shareholders.
Art. 29 In the event of absences or impediments, the President shall be
automatically replaced by the Vice President, and the Vice President shall be
replaced by the President.
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Art. 30 The Board of Executive Officers shall have the power:
I. to establish specific policies and guidelines within the general
business policies established by the Board of Directors;
II. to approve agreements between its subsidiaries and entities that
provide telecommunications services and to submit to the Meeting
of Shareholders, through the Board of Directors, contracts of the
kind referred to in Art. 13, XVII, and to ensure that its
subsidiaries do the same;
III. to evaluate the budget and general plans of the Company and submit
the budget and plans to the Board of Directors for approval;
IV. to approve proposals of its subsidiaries relating to corporate
strategy, general organizational guidelines, corporate guidelines
for developing market and network strategies, capital investment
plans and budgets;
V. to report periodically to the Board of Directors on the general
progress of the Company's business;
VI. to approve lists of proposals of the Company and its subsidiaries
for negotiations with the regulatory agency;
VII. to decide on investments by the Company in telecommunications
services concessionaires in accordance with the activities and
concession areas of the Company, after consultation with the
regulatory agency;
VIII. to appoint representatives of the Company to participate in the
management of companies in which it has invested;
IX. to submit to the Board of Directors proposals regarding the
appointment or removal from office of the Internal Auditor;
X. to propose compensation criteria for the executive officers,
members of the boards of directors and members of statutory audit
committees of its subsidiaries;
XI. to make proposals to the Board of Directors regarding disposals of
real property of the Company, and to authorize the disposal of
other permanent assets, with the exception of instruments or
securities, in Brazil or abroad;
XII. to approve proposals of the Board of Directors regarding the
Internal Regulations of the Company and the related organizational
structure, and to express views on those of the Company's
subsidiaries;
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XIII. to authorize reasonable contributions for the benefit of employees
or the community, bearing in mind the Company's social
responsibilities;
XIV. to evaluate the balance sheet and the other financial statements
and the Company's Annual Report, and to make recommendations
regarding distributions of profits, submitting them to the
Statutory Audit Committee, the Independent Auditors and the Board
of Directors;
XV. to decide on representative offices of the Company anywhere in
Brazil or abroad, after consultation with the Board of Directors;
XVI. to submit to the Minister of Communications an investment plan for
each fiscal year, after consultation with the Board of Directors;
XVII. to define the powers of the President, Vice President and
employees:
a) to take actions that create or amend obligations of the
Company, and those that release third parties;
b) to authorize exemptions from bidding rules and the
application of fines or other penalties;
c) to authorize the payment of fines imposed on the Company, and
to investigate the causes and implement any necessary
administrative measures;
d) to approve purchases; and
e) to approve proposals relating to promotions of employees;
XVIII. to approve proposals to the Board of Directors regarding the
chart of staff positions and salaries, work rules, the workforce
chart, and the Company's employee benefits plan;
XIX. to approve and submit to the Ministry of Communications the
Company's International Cooperation Plan and those of its
subsidiaries;
XX. to decide on the structuring and implementation of training and
human resources management plans and programs;
XXI. to approve purchases of insurance for the Company;
XXII. to approve pay schedules and adjustments and benefits granted to
employees and their families;
XXIII. to decide on proposals regarding the management and development
of human resources that are formulated by its subsidiaries,
including those concerning workforce charts;
10
XXIV. to approve the opening of accounts with financial institutions
and borrowings by the Company, in Brazil or abroad, in
accordance with applicable law;
XXV. to approve the creation of liens on property of the Company to
secure financings of the Company and its subsidiaries;
XXVI. to decide on financings, borrowings, and the granting of
sureties, bonds and other similar guaranties and the relending
of funds to its subsidiaries;
XXVII. to approve proposals, to be submitted to the National
Telecommunications Agency ANATEL (Agencia Nacional de
Telecomunicacoes ANATEL), for the adjustment of tariffs and
prices for telecommunications services in accordance with the
activities and the concession areas of the Company;
XXVIII. to approve rules for the extension of loans to employees by
financial institutions with the participation of the Company;
XXIX. to authorize the disposal, by the Company's subsidiaries, of
permanent assets used in providing telecommunications services
in accordance with the activities and concession areas of the
Company and the constitution of liens on such assets; and
XXX. to decide on other matters deemed to be under the collective
jurisdiction of the Board of Executive Officers, or matters
referred by the Board of Directors.
POWERS OF THE MEMBERS OF THE EXECUTIVE OFFICERS
Art. 31 The specific powers of each member of the Board of Executive
Officers are as follows:
I PRESIDENT:
1. to represent the Company in court or otherwise, vis-a-vis its
subsidiaries, the shareholders and the general public, with power to
appoint attorneys in fact or name representatives;
2. to supervise the Company's activities;
3. to keep the Minister of Communications and the Board of Directors
informed at all times on the business of the Company and its
subsidiaries;
4. to delegate authority to the Vice President and to employees to
carry out specific actions;
5. to draw up documents that reflect the decisions of the Board of
Executive Officers or that derive from those decisions;
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6. to appoint persons to represent the Company at meetings of
shareholders of subsidiaries and of other companies in which it has
an equity interest;
7. to authorize the publication of the Annual Report on the Company's
Activities;
8. to direct activities related to the management of regulations, legal
advice and auditing;
9. to call meetings of the Board of Executive Officers;
10. to decide on requests to second employees of the Company to the
Ministry of Communications, the regulatory agency, subsidiaries, or
bodies or entities entitled by law or federal decree to request
secondment (secondment being prohibited in all other cases unless
the employee leaves the Company's employ), for a maximum of 2 (two)
years, without cost to the Company, such cases to be decided on by
the Board of Executive Officers;
11. to supervise compliance with governmental guidelines related to the
activities of the Company and its subsidiaries;
12. to decide on matters within his jurisdiction, in accordance with the
policies and guidelines established by the Board of Executive
Officers, with the exception of the cases referred to in Art. 30;
and
13. to carry out emergency actions referred to him by the Board of
Executive Officers.
II VICE PRESIDENT:
1. to replace the President in the event of absence or impediment;
2. to assist the President in the performance of his duties;
3. to direct the coordination of business planning and development for
the Company and its subsidiaries;
4. to evaluate the performance of its subsidiaries;
5. to administer the Company's shareholdings in its subsidiaries;
6. to draft the Annual Report on the Company's Activities;
7. to decide on matters within his jurisdiction, in accordance with the
policies and guidelines established by the Board of Executive
Officers, with the exception of the cases referred to in Art. 30;
and
8. to carry out other tasks delegated to him by the President.
SECTION IV
PROVISIONS COMMON TO MEMBERS OF MANAGEMENT
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Art. 32 Members of the Company's management are prohibited from belonging,
in any manner whatsoever, to the management or staffs of manufacturing
companies, equipment suppliers, contractors or service providers, other than
TELEBRAS System companies.
Sole Paragraph Members of management who are also part of the management
or staff of other TELEBRAS System companies are prohibited from receiving double
compensation, with the exception of special cases approved by the Minister of
Communications, or pro rata apportionment or supplemental compensation.
Art. 33 Besides cases of death, resignation and removal from office and
other cases provided for by law, a position shall be deemed vacant when a member
of management fails to take office within 30 (thirty) days after his election or
fails to perform his duties for more than 30 (thirty) consecutive days or a
total of 90 (ninety) days during the term of office without just cause in the
opinion of the Board of Directors.
(S) 1 - Board vacancies shall be filled as provided in Art. 32 of this
Charter until the next Meeting of Shareholders, at which time a new member shall
be elected to complete the current term.
(S) 2 - If 2/3 (two thirds) of the positions of the Board positions
become vacant, the remaining members shall immediately call a Meeting of
Shareholders.
(S) 3 - In the event of a vacancy in an Executive Officer position, the
Board shall elect a replacement to complete the member's term.
(S) 4 - Resignation from a management position shall be accomplished by
written notice to the body to which the resigning party belongs and shall be
effective vis-a-vis the Company at that time, and vis-a-vis third parties after
the notice of resignation is filed with the commercial registry and published.
Art. 34 The compensation of members shall be determined in the aggregate
or individually by the Meeting of Shareholders.
Sole Paragraph An employee of the Company or of a TELEBRAS System company
who is elected as a member of management of the Company may opt to continue to
be paid his salary, in accordance with criteria established by the Board of
Directors.
CHAPTER V
STATUTORY AUDIT COMMITTEE
Art. 35 The Statutory Audit Committee is the body that audits the
management of the Company, and it shall function on a permanent basis.
Art. 36 The Statutory Audit Committee shall be composed of 3 (three)
regular members and 3 (three) alternates, who need not be shareholders, elected
by the Meeting
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of Shareholders; one of the regular members and his alternate shall be named by
the Minister of Finance, as representative of the National Treasury, in addition
to those elected by minority shareholders of common and by the preferred shares.
(S) 1 - The members of the Statutory Audit Committee shall be elected at
the Annual Meeting of Shareholders for a term of 1 (one) year, consisting of the
period between two Annual Meetings of Shareholders, and they shall be eligible
for reelection.
(S) 2 - At the first meeting of the members of the Statutory Audit
Committee, they shall elect a Chairman, who shall be responsible for
implementing the decisions of the committee.
(S) 3 - The Statutory Audit Committee may ask the Company to appoint
qualified personnel to act as secretary and to provide technical support.
Art. 37 The duties of the Statutory Audit Committee shall be:
I. to audit the actions of management and verify compliance with
the requirements of law and this Charter;
II. to provide opinions regarding the annual report of management,
indicating any additional information that it deems necessary or
useful for the Meeting of Shareholders;
III. to provide opinions regarding the proposals of the management
bodies to be submitted to the Meeting of Shareholders, regarding
changes to the corporate capital, the issuance of debentures or
subscription rights, capital investment plans and budgets,
distributions of dividends, changes in corporate form,
consolidations, mergers or split-ups;
IV. to report to the management bodies and, if the latter do not
take the necessary steps to protect the interests of the
Company, to the Meeting of Shareholders, on any errors, frauds,
or crimes that it discovers and to recommend necessary steps to
the Company;
V. to call the Annual Meeting of Shareholders if the management
bodies delay in calling it for more than 1 (one) month, and to
call a special meeting if serious or urgent reasons exist,
including in the agendas of the meetings the matters that it
deems necessary;
VI. to analyze, not less frequently than quarterly, the interim
balance sheet and other financial statements prepared
periodically by the Company;
VII. to examine the financial statements for the fiscal year and
provide an opinion regarding them; and
VIII. to carry out the duties stipulated by law or defined by the
Meeting of Shareholders in the event of the liquidation of the
Company.
Art. 38 The Statutory Audit Committee shall hold a regular meeting once
a month and shall hold special meetings as necessary.
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(S) 1 - Meetings shall be called by the President of the Company or by
any member of the Committee.
(S) 2 - The Committee shall act by majority vote, with a majority of the
members present.
Art. 39 Each member of the Statutory Audit Committee shall be replaced,
in the event of absence or impediments, by the respective alternate member.
Art. 40 Besides cases of death, resignation and removal from office and
other cases provided for by law, a position shall be deemed vacant when a member
of the Statutory Audit Committee fails, without just cause, to attend 2 (two)
consecutive meetings or a total of 3 (three) meetings during a year.
(S) 1 - Vacancies shall be filled as provided in Art. 39 of this
Charter.
(S) 2 - If more than half of the positions become vacant and there are
no alternates to meet, a Meeting of Shareholders shall be called to elect
replacements.
Art. 41 The compensation of the members of the Statutory Audit Committee
shall be determined by the Meeting of Shareholders that elects them, and it
shall not be less, for each active member, than one tenth, on average, of the
compensation of each Executive Officer, not including profit sharing.
(S) 1 - The compensation shall be paid in the same manner as that of the
Executive Officers.
(S) 2 - Active alternate members shall be entitled to compensation
during the periods in which they act as replacements, counting from month to
month.
CHAPTER VI
FISCAL YEAR AND FINANCIAL STATEMENTS
Art. 42 The fiscal year shall have a duration of 12 (twelve) months,
beginning on the 1st (first) of January of each year and ending on the last day
of December.
Art. 43 Along with the financial statements, the management bodies of
the Company shall submit to the Meeting of Shareholders proposals regarding the
employees' share in the profits, on the terms and conditions authorized by the
Council for Coordination and Supervision of State-Owned Companies CCE (Conselho
de Coordenacao e Controle das Empresas Estatais CCE), and regarding the
distribution of the net profits for the year.
(S) 1 - The net profits shall be allocated as follows:
a) 5% (five percent) to the legal reserve, up to 20% (twenty
percent) of the paid-in capital; and
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b) 25% (twenty five percent) of the net profits adjusted in
accordance with items II and III of Art. 202 of Law No. 6,404/76
shall be distributed as minimum mandatory dividends to all
shareholders, in accordance with the provisions of the following
article, and this amount shall be increased until it equals the
amount to be paid as preferred dividends on the preferred
shares.
(S) 2 - The balance of the net profits not allocated to the payment of
the minimum mandatory dividend or the preferred dividends on preferred shares
shall be allocated to an additional reserve for expansion of the Company's
businesses, which may not exceed 80% (eighty percent) of the corporate capital.
Once this limit is reached, the Meeting of Shareholders shall allocate the
balance, proceeding with distributions to the shareholders or an increase in the
corporate capital.
Art. 44 The minimum mandatory dividend amount shall be allocated first
to payment of the preferred dividends on preferred shares, up to the preferred
limit, and thereafter by payments to the holders of common shares up to the same
limit as the preferred shares. The balance, if any, shall be paid pro rata to
all the shares on equal terms.
(S) 1 - Amounts owed to the National Treasury and the remaining
shareholders as dividends or profits or earnings shall bear interest at a rate
equal to the Reference Rate (Taxa Referencial TR), beginning at the close of the
fiscal year and ending on the date of actual payment to the National Treasury
and distribution to the remaining shareholders.
(S) 2 - Unless otherwise decided by the Meeting of Shareholders, the
dividends shall be paid pro rata on a daily basis counting from the date shares
are paid in.
(S) 3 - The management bodies are authorized to pay or credit interest
on capital as provided in (S) 7 of Article 9 of Law 9,249/95 of 12/26/95 and
applicable law and regulations, up to the limit of the minimum mandatory
dividends provided for in Article 202 of Law 6,406/76, which shall be credited
against said dividends, even when included in the minimum dividend for preferred
shares.
(S) 4 - Dividends not claimed within 3 (three) years shall revert to the
Company.
CHAPTER VII
LIQUIDATION OF THE COMPANY
Art. 45 The Company shall be liquidated in the cases provided for by law,
or by decision of the Meeting of Shareholders, which shall determine the manner
of liquidation, shall select the liquidator, and shall install a Statutory Audit
Committee for the period of the liquidation, elect its members and determine
their compensation.
CHAPTER VIII
GENERAL AND TRANSITORY PROVISIONS
16
Art. 46 Approval by the Company, through its representatives, of
mergers, split-ups, consolidations, or dissolutions of its subsidiaries shall be
preceded by an economic-financial analysis performed by an independent company
of recognized international standing, to confirm that all of the companies
involved are being treated equitably; the shareholders of the companies involved
shall have full access to the report on the analysis.
Art. 47 If government control of the Company is relinquished as provided
in Arts. 188 to 195 of Law No. 9,472 of July 16, 1997, and without prejudice to
any other modifications that may be decided after the aforementioned
privatization:
I the following shall be automatically revoked:
a) Art. 21 (regarding the election of the members of the Board of
Directors in accordance with Art. 239 of Law No. 6,404/76 and by
appointment of the Minister of State for Communications and the
Minister for Planning and Budget);
b) Art. 22;
c) items XVI, XVII(b) (the latter regarding exemptions from bidding)
and XIX (regarding submission of the International Cooperation Plan
to the Minister of Communications) of Art. 30;
d) Art. 31, item 1, numbers 3 (regarding the reference to the Minister
of Communications) and 10;
e) Art. 32 and its Sole Paragraph;
f) the Sole Paragraph of Art. 34;
g) Art. 43 (regarding the reference to the CCE); and
h) (S)(S) 1 and 2 of Art. 44.
II. The Statutory Audit Committee shall then be composed of 3
(three) to 5 (five) regular members and an equal number of
alternates, the reference in Art. 36 to the appointment of a member
of the Committee by the Minister of Finance shall cease to have
effect, and the permanent character of the Committee shall be
maintained.
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘20FR12B’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 9/18/98 | | | | | | | None on these Dates |
| | 4/2/98 | | 1 |
| | 7/16/97 | | 16 |
| List all Filings |
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