EXHIBIT 11.1
INTRODUCTION
This Code of Conduct and Transparency for the Disclosure and Use of Information
and Trading of Securities Issued by Contax Participacoes S.A. ("Contax") was
duly approved by its Board of Directors at a meeting held on March 2, 2005,
pursuant to the applicable law and regulations.
SECTION I
PURPOSE AND SCOPE
1.1. This Code of Conduct and Transparency is designed to establish high
standards of conduct and transparency to be necessarily followed by (i)
Directors and Officers (regular and alternate members of the Board of
Directors, and executive officers), (ii) Controlling Shareholders
(shareholders or group of shareholders bound by a shareholders' agreement
or under common control, with power to control the Company, pursuant to
Law no. 6,404/76 as amended), (iii) shareholders who have elected a member
of the Company Board of Directors or Audit Committee, (iv) members of the
Audit Committee (whether regular or alternate), (v) employees and
executives with access to confidential information ("Employees"), and (vi)
members of other technical and consulting bodies now existing or that may
be created by the Contax by-laws, as well as (vii) any individual who, by
virtue of his/her position, function or standing in the Company,
Subsidiaries (entities in which the Company's direct or indirect interests
entitle it to determine corporate resolutions and elect the majority of
board members) or Associated Companies (entities in which the Company
holds at least ten per cent of the capital stock, but does not control),
becomes aware of Relevant Information on the Company, in order to bring
the internal policy in line with the principles of transparency and sound
practices in connection with the use and disclosure of relevant
information on, and negotiation of securities of, the Company, such that
the applicable rules are complied with.
1.2. Without prejudice to the generality of item 1.1 above, the provisions of
this Code are directly and particularly applicable to Contax as "Company",
and the rules for disclosing information and dealing with securities
issued by such entities must be complied with in all instances.
1.3. The individuals described in item 1.1 above must sign the respective
Statement of Agreement with this Code, pursuant to articles 15, Section
1(0), item I, and 16, Section 1(0), of CVM Instruction no. 358/02 and in
accordance with the proper form ("Statement of Agreement"), which shall be
maintained at the Company headquarters as long as such individuals are
associated with the Company, and in any event for at least five (5) years
thereafter.
1.4. The Company shall maintain at its headquarters an updated list of the
individuals who have signed the Statement of Agreement, describing their
standing, position or function, address and enrollment number with the
Finance Ministry National Registry of Companies (CNPJ) or National
Registry of Individuals (CPF). Such list shall be made available to the
CVM at all times.
SECTION II
PRINCIPLES
2.1. The conduct of Directors, Officers, Controlling Shareholders, Members of
Audit Committees, Employees and members of other technical and consulting
Company bodies shall be driven by the principles of good faith, loyalty
and truthfulness, as well as the general principles set forth hereinafter.
2.1.1. All efforts to promote market efficiency must aim at allowing that
the competition between investors for better returns be carried out
based on the analysis and interpretation of information publicly
disclosed, as opposed to privileged access to such information.
2.1.2. Company Directors, Officers, Controlling Shareholders, members of
Audit Committees, Employees and members of other technical and
consulting bodies must always keep in mind that transparent,
accurate and timely information represents the main instrument
available to
ensure that investors, in particular Company shareholders, be given
the required fair treatment.
2.1.3. The Company relationship with players and opinion makers in the
securities market must be consistent and transparent.
2.1.4. It is also the responsibility of Company Directors, Officers,
Controlling Shareholders, members of Audit Committees, Employees
and members of other technical and consulting bodies to ensure that
all information disclosed on the Company financial position is
accurate, complete and continuous, and covers changes in share
ownership.
SECTION III
DEFINITIONS
3.1. Securities. The term "Securities" as used herein is wide in scope and
includes any stocks, debentures, subscription warrants, receipts and
subscription rights, promissory notes, call or put options, and
derivatives of any kind, as well as other bonds or collective investment
agreements issued by the Company or linked to Company bonds which,
pursuant to the law, are considered securities.
3.2. Relevant Act or Event. A Relevant Act of Event is defined as (a) any
decision by Controlling Shareholder(s), resolution of a general meeting or
management bodies of the Company; or (b) any other act or event of a
political/administrative, technical, business, or economical/financial
nature in the normal course of, or in connection with, Company business,
with potential significant impact on:
(i) the perception of the Company value;
(ii) the quotation of Securities;
(iii) the investor's decision to buy, sell or hold such Securities; or
(iv) the investor's decision to exercise any rights attached to such
Securities.
3.2.1. Relevant Act of Event - Examples
Potentially Relevant Acts or Events include the following, without
limitation:
(i) a contract or agreement is signed to transfer the Company share
control, however under suspensive or resolutory condition;
(ii) the Company control changes, including as a result of signing,
amendment or termination of a shareholders' agreement;
(iii) the Company signs, amends or terminates a shareholders' agreement;
(iv) a strategic partner, or a partner who provides operating, finance,
technological or administrative services, whether or not under an
agreement, joins or leaves the Company;
(v) the trading of Company Securities in any domestic or foreign
market is authorized;
(vi) the decision to delist a company is taken;
(vii) the Company or related companies are involved in a merger or
split-up process;
(viii) material assets are acquired or disposed of;
(ix) the Company is transformed or dissolved;
(x) the Company asset mix is changed;
(xi) accounting criteria change;
(xii) debt is assumed, settled in advance or renegotiated;
(xiii) the implementation of stock option plans is approved;
(xiv) Company Securities have their rights and privileges changed;
(xv) shares are split or grouped, or stock bonuses are allocated;
(xvi) Company shares are acquired for Treasury or cancellation and
subsequently disposed of;
(xvii) Company loss or net income and appropriation of dividends or
interest on own capital;
(xviii) an agreement is entered into, terminated, or has an unsuccessful
outcome, when the expectation of a successful outcome is known to
the public at large;
(xix) a project is approved, modified or abandoned, or has its
implementation delayed;
(xx) the production or sale of a product, or the rendering of a
service, begins, is resumed or discontinued;
(xxi) technology or Company resources are discovered, changed or
developed;
(xxii) laws or regulations affecting the Company are enacted;
(xxiii) projections disclosed by the Company are changed;
(xxiv) Company management bodies approve a public offer subject to
registration with the CVM;
(xxv) a controlling interest in a publicly-traded company is acquired.
3.2.2. Developments associated with a Relevant Act of Event must be
reviewed for materiality not in absolute terms but in the context
of the Company normal activities and size, bearing in mind
previously disclosed information, in order not to trivialize the
disclosure of Relevant Acts of Events, which might impair the
analysis of Company prospects by the market.
3.3. Relevant or Insider Information. Insider or Relevant Information is
considered the information in connection with a Relevant Act or Event
which has not yet been disclosed to the investor community.
SECTION IV
DUTY TO DISCLOSE RELEVANT ACT OR EVENT OR INFORMATION OF ANY TYPE
4.1 The Investor Relations Officer must disclose in leading newspapers
commonly used by the Company, and on the Internet, in addition to
communicating to the Comissao de Valores Mobiliarios ("CVM"), Securities
and Exchange Commission ("SEC") and stock exchanges and organized
over-the-counter markets where Company Securities are or may be listed,
both in Brazil and abroad ("Stock Exchanges), relevant acts or events with
respect to, or in connection with, the Company, as well as arrange that
such information be promptly, widely and simultaneously released in all
markets where the Securities are listed.
4.1.1. As an alternative, the Company may publish Relevant Acts or Events
in newspapers in summary format, containing the minimum
information required to make them comprehensible, provided that
the adequate addresses on the World Wide Web be also disclosed,
where investors can find the complete information including the
same contents sent to the CVM and Stock Exchanges.
4.2. Relevant acts or events disclosed in any media or at meetings with
professional entities, investors, analysts or selected participants must
be simultaneously disclosed by the Investor Relations Officer to the
market at large.
4.3. Meetings with professional entities, investors, analysts or selected
individuals, in Brazil or abroad, can only be held by Company Directors
and Officers when the Investor Relations Officer, or an individual
appointed by the latter for this purpose, is also present.
4.4. All information on a Relevant Act or Event shall be centralized by the
Investor Relations office. Directors, Officers, Controlling Shareholders,
Audit Committee members, Employees and members of other technical or
consulting bodies must communicate any Relevant Act or Event that they
become aware of to the Investor Relations Officer, who will be then take
the necessary steps for its full disclosure.
4.4.1. If such communication is made (and when the decision to keep it
confidential, pursuant to art. 6 of CVM Instruction no. 358/02,
has not been taken), and the individuals described in item 4.4
above find out that the Investor Relations Officer has failed to
perform his communication and disclosure duties, then the former
must promptly communicate the Relevant Act or Event to the CVM,
otherwise they will also be held responsible.
4.5. It is the responsibility of the Investor Relations Officer, or in his/her
absence or impediment the Company Chief Executive Officer, to provide any
information, whatever the nature, to the media, in addition to confirming,
rectifying or clarifying information on a Relevant Act or Event to the
CVM, SEC and Stock Exchanges. All other Company Officers and Directors, as
well as Employees, shall not be allowed to speak on behalf of, or provide
information on, the Company to any media vehicles, except if previously
authorized in writing to do so by the Company Investor Relations Director
or Chief Executive Officer; provided, however, that the communication
refer exclusively to the functional area of the individuals involved. The
provisions of this item also apply to the participation in Seminars,
Forums, Conferences, public meetings and similar gatherings, including
those instances when such individuals serve as lecturers, debaters or in a
similar capacity. Such participation shall also be submitted to, and
previously approved by, the Investor Relations Officer.
4.6. Relevant acts of events should be disclosed, whenever possible, before or
after the closing of domestic or foreign Stock Exchanges. Should this be
impossible due to time zone differences or otherwise, the
business hours of the Brazilian market shall prevail.
4.7. If it is imperative that a Relevant Act or Event be disclosed during
trading hours, the Investor Relations Officer should consider whether a
request should be simultaneously made to Brazilian and foreign Stock
Exchanges to suspend trading until such a time when the news has been
adequately disseminated.
4.7.1. The trading suspension provided for in the preceding item shall
not take effect in Brazil while a foreign stock exchange or
organized over-the-counter market where Securities are listed is
open for business and the trading of Securities is carried on.
4.8. Directors, Officers and Controlling Shareholders may promptly communicate
to CVM their decision to keep certain Relevant Acts or Events
confidential, provided that in their view such disclosure would clearly
jeopardize the Company's legitimate interests. In such circumstances, they
may communicate their decision to the CVM's President on a confidential
basis.
4.9. If Controlling Shareholders or Directors choose not to disclose a Relevant
Act or Event, it is still their duty to promptly disclose such Relevant
Act or Fact via Investor Relations Director, should there be an
information leak or an atypical fluctuation in the quotation, price or
volume of trade of Company Securities.
4.10. Any Director, Officer, member of Audit Committees, or member of other
technical or consulting bodies who becomes aware of a Relevant Information
on the Parent Company or Subsidiary Company, must promptly communicate
such information to the Investor Relations Officer, who in turn must
promptly contact the Investor Relations Officer of the Parent Company or
Subsidiary Company, as applicable, in order to take a decision whether or
not to disclose such Relevant Act of Event.
SECTION V
DUTY NOT TO USE INSIDER INFORMATION STILL UNDISCLOSED
5.1. Directors, Officers, direct and indirect Controlling Shareholders, the
Company, members of Audit Committees, Employees and members of technical
or consulting Company bodies, as well as all individuals who, by virtue of
their position, function or standing in the Company, Subsidiaries and
Associated Companies, have signed the Statement of Agreement shall:
5.1.1. Maintain confidential all information they are aware of and that
has not yet be disclosed to the investors, in connection with a
Relevant Act or Event, except for the disclosure of information
required for effectively carrying out normal Company business, and
provided that there are no reasons or signs to believe that the
information recipient will misuse it, as well as see to it that
their subordinates and trusted third parties do likewise, being
jointly liable for any confidentiality breach.
5.1.2 Refrain from trading Securities as long as an insider information
has not been disclosed to the investor community.
5.1.3. Refrain from recommending or otherwise suggesting that any person
buy, sell or hold Securities if the information which they are
aware of can potentially impact any of the above decisions.
5.1.4. Refrain from trading Securities in connection with insider
information within twenty-four (24) hours after disclosure to the
investor community.
5.1.5. Clearly warn those persons to whom Insider Information is required
to be disclosed of the confidentiality duty of all individuals
involved and the legal prohibition to take advantage of such
information while dealing with Securities to promote their own or
third parties' interests.
5.1.6. Communicate Insider Information of which they become aware to the
Company Investor Relations Officer, who shall keep it confidential
and shall not use it to gain advantage or favor third parties on
trading Securities in connection with the Insider Information.
5.1.7. Consult with the Company Investor Relations Officer prior to
carrying out any transaction
involving Securities, to ascertain whether any Relevant Acts
and/or Events have occurred and are yet to be disclosed, which
might prohibit the trading of the related Securities.
5.1.8. Refrain from trading Securities during the following periods:
(i) one month before Company quarterly information (ITR) and
annual information (DFP and IAN) is disclosed or published,
as applicable; and
(ii) the period from the date when the relevant corporate body
takes the decision to increase or decrease capital stock,
distribute dividends or stock dividends or issue Securities,
through the date when the respective notice, announcement or
Relevant Event is published.
5.1.9. Refrain from trading Securities within one hundred and eighty
(180) days from acquisition, except in the case of extraordinary
reasons, duly explained in advance to the Investor Relations
Officer.
5.1.10. Upon withdrawal from Company management and if an event or
business initiated during their mandate is still to be disclosed,
refrain from trading Securities for the six (6) month-period
following such withdrawal.
5.2. Restrictions set forth herein also cover transactions of a speculative
nature, which include, without limitation, transactions in the futures
market with short positions and the like.
SECTION VI
DUTY TO DISCLOSE THE RESPECTIVE SHARE OWNERSHIP
6.1. Directors, Officers, member of Audit Committees and members of other
technical and consulting bodies must communicate their ownership of
Company Securities, whether held by them or Related Persons, as well as
changes in such ownership.
6.1.1. "Related Persons" means the following persons with respect to
Directors, Officers, members of Audit Committees and members of
technical or consulting Company bodies: (i) spouse, except when
judicially separated, (ii) companion; (iii) any dependent included
in the annual income tax return, and (iv) subsidiaries controlled
directly or indirectly by Directors and the like, or by Related
Persons.
6.1.2. Such communications must be made to CVM and Stock Exchanges in the
proper form.
6.1.3. The communication to CVM must be made (i) immediately upon taking
office and (ii) within the maximum period of ten (10) days after
the end of the month when there are changes in ownership, stating
the final ownership position for the period.
6.2. Direct and indirect Controlling Shareholders, as well as those
shareholders who have elected members of the Company Board of Directors or
Audit Committee, must communicate and disclose information on the
acquisition or disposal of share ownership corresponding directly or
indirectly to five per cent (5%) or more of the type or class of shares in
the Company capital stock ("Material Ownership").
6.2.1. Such disclosure shall be made in leading newspapers normally used
by the Company and/or on the Internet.
6.2.2. The statement covering the acquisition or disposal of a Material
Ownership shall be sent to the CVM and Stock Exchanges, including
the information contained in the proper form.
6.2.3. Such communication to the CVM and Stock Exchanges must be made
immediately upon attaining a Material Ownership.
SECTION VII
PROHIBITIONS AGAINST TRADING SECURITIES
7.1. Trading Securities is prohibited until such time as a Relevant Act or
Event is disclosed to the market by the Company, Directors, Officers,
members of Audit Committees, Employees with access to Relevant Information
and members of other technical or consulting Company bodies, as well as by
any individual who, by virtue of his/her position, function or standing in
the Subsidiaries and Associated Companies, who has signed the Statement of
Agreement, becomes aware of a Relevant Information on the Company,
whenever a corporate merger, total or partial split up, transformation or
reorganization is being contemplated.
7.1.1. The prohibition above will cease within twenty-four (24) hours
from the moment when the Company publicly discloses a Relevant Act
or Event, except if the trading of Company shares by any
individual mentioned above, after the disclosure of a Relevant Act
of Event, might potentially impact the Company business
conditions, to the detriment of Company shareholders or the
Company itself.
7.2. Direct or indirect Controlling Shareholders, Directors and Officers shall
not trade Securities whenever options or mandates for the acquisition or
disposal of shares issued by the Company are in the process of being
granted or have been granted by the Company, Subsidiary and Associated
Companies or any other company under common control with them.
7.3. The Company Board of Directors shall not determine the acquisition or
disposal of own shares until the following transactions are made known to
the public through the publication of a Relevant Event:
(i) signing of any contract or agreement designed to transfer the
Company shareholding control;
(ii) granting of options or mandates for the purposes described in item
"i" above; or
(iii) plans to carry out a corporate merger, total or partial split up,
transformation or reorganization.
SECTION VIII
OTHER PROVISIONS
8.1. Without prejudice to the provisions of CVM Instruction no. 358/02, the
prohibitions and disclosure obligations prescribed in this Code:
(i) are applicable to both trading on stock exchanges and
over-the-counter markets, whether or not organized, and trading
carried out without the intermediary of a financial institution
that is part of the securities dealer system; and
(ii) cover trading directly or indirectly carried out by the persons
mentioned in CVM Instruction no. 358/02, whether such trading is
carried out through a subsidiary or through unrelated persons who
are a party to trust or share portfolio management agreements.
8.2. The provisions herein do not eliminate the responsibility arising from
legal prescriptions imposed on individuals or legal entities not
explicitly mentioned in this Code.
8.3. Any amendments or revisions to this Code shall be submitted to the Board
of Directors of Contax.