1.1. The purpose of these Internal Rules is to regulate: (a) the functioning of the Board of Directors of MAHLE Metal Leve S.A. (“Company”); (b) the functioning of the advisory committees to the Board, when established; (c) the relationship between the Board and the other corporate bodies of the Company; and (d) the rights and duties of the members of the Board of Directors.
1.2. The Board of Directors is a deliberative body, of collegiate nature, which authority is defined under the Company’s Bylaws and the applicable legal and regulatory rules, especially the Brazilian Corporation Law (“BCL”), and the Rulings issued by CVM.
2.1. The Board’s mission is to protect and increase the value of the Company, as well as maximize the return on investment, be fully aware of Company’s principles, the shareholders’ purposes and beliefs, ensuring their improvement.
2.2. Without prejudice to the activities set forth in Article 15 of the Company’s Bylaws, the Board of Directors shall establish the general guidelines for the Company’s business and decide on strategic matters, aiming at carrying out the following directives: (i) foster and observe the corporate purpose of the Company and of its subsidiaries; (ii) care for the interests of the shareholders, without losing sight of the interests of other stakeholders; (iii) care for the Company’s continuity, within a long-term and sustainable perspective that incorporates economic, social, environmental considerations and good corporate governance, in the definition of the business and operations; (iv) adopt an efficient management structure, comprising of qualified professionals of unblemished reputation; (v) establish the guidelines for the management of the Company and of its subsidiaries, to be reflected in the annual budget; (vi) ensure that strategies and guidelines are effectively enforced by the Board of Executive Officers without, however, interfering with operational matters; and (vii) prevent and manage conflicts of interests or divergent opinions, ensuring that the Company’s interest shall always prevail.
3.1. Composition. The Board of Directors shall comprise of five (5) members and up to equal number of alternates, all of them with unified term of office of two (2) years, reelection admitted.
3.2. Investiture. The Members of the Board of Directors shall be vested in their position upon signing the Investiture Term, as per the provisions of the Company’s Bylaws and of the Brazilian Corporate Law, besides the obligation to comply with the arbitration clause, as provided in the Listing Rules of the Novo Mercado, as well meeting any other legal or regulatory applicable requirements.
3.3. Replacement. The members of the Board of Directors shall be replaced in their absence, impediment or in the event of vacancy, pursuant to these Internal Rules and the Bylaws.
4.1 In addition to the powers provided in the Company’s Bylaws and the Brazilian Corporate Law, the Board of Directors has the authority:
4.2. Information and documents shall be provided or made available to all the Directors, and not one sole Director or group of Directors can have access to information not made available to the others.
5.1 Chairman. The Chairman of the Board of Directors has the following duties, without prejudice to others that may be provided under the Company’s Bylaws and the applicable law:
5.2. Secretary. The Board of Directors may, upon nomination by the Chairman, appoint an employee of the Company to act as Secretary, which, in this position, shall be subject to the Chairman of the Board of Directors, with the following main duties:
6.1. Frequency. The Board of Directors shall meet, ordinarily, every quarter, and, extraordinarily, whenever called pursuant to Section 6.2. below.
|March||Examination and analysis of the financial statements for the last quarter of the previous fiscal year; Examination and analysis of the financial statements for the previous fiscal year (DFP); Examination and approval of the proposed remuneration for the members of the Board of Directors and for the Executive Officers, pursuant to Section 5.1.(vi) above.|
|April||Election of the Chairman of the Board of Directors|
|May||Examination and analysis of the financial statements for the first quarter of the current fiscal year (1st ITR)|
|August||Examination and analysis of the financial statements for the second quarter of the current fiscal year (2nd ITR); Examination and analysis of the financial statements for the first semester of the current fiscal year|
|November||Examination and analysis of the financial statements for the third quarter of the current fiscal year (3rd ITR); Examination and approval of the Business Plan and the Annual Budget for the following fiscal year.|
6.2. Call. The meetings of the Board of Directors shall be called by the Chairman, at least, with 7 (seven) days in advance, by written notice sent to each of the other Directors via electronic mail (e-mail) or any other written means of communication with proof of receipt, which shall state the agenda of the meeting. The material for discussion at the meetings also shall be sent at least with seven (7) days in advance, allowing the analysis in appropriate detail.
6.3. Agenda. The matters included in the agenda shall be clearly and objectively indicated and previously forwarded to the members of the Board of Directors together with the relevant call notice.
6.4. Quorum and Vote. The meetings shall be installed with the attendance of the majority of the members of the Board and their resolutions shall be passed by majority vote, each Board member having the right to one (1) vote, except for the Chairman, who shall have the casting vote.
6.5. Confidentiality. Any meeting of the Board of Directors may be confidential, in whole or in part, if, at the discretion of its Chairman, the nature of a matter that is to be discussed requires confidentiality, including with regard to the disclosure of the decisions taken.
6.6. Drawing up of Minutes. The minutes of meetings of the Board of Directors shall be drawn up in the appropriate books of the Company, and the signatures of all the Directors shall be secured thereupon, by the Secretary of the Board of Directors.
7.1. The Board of Directors may, whenever it deems necessary, establish committees (“Committees”), which shall operate full time or part time, with specific advisory and guidance duties for matters in connection with which they have been established, subject to the provisions of their respective Internal Rules, these Internal Rules, and the Company’s Bylaws, as applicable.
8.1. As provided in the applicable law and the Company’s Bylaws, and subject to the provisions of these Internal Rules, the Board of Directors shall monitor and oversee the Executive Officers’ managerial performance and may examine the books and records and request information on contracts entered into or about to be entered into, and on any other documents or acts.
8.2. In the monitoring of the Executive Officers and for its consistent and organized conduction, all requests for information, including, without limitation, requests for documents, books, records, presentations from Executive Officers or employees of the Company or requests for information and/or clarification addressed to the independent auditors of the Company shall be forwarded by email through the Chairman, after majority deliberation by the Board of Directors.
8.3. Notwithstanding the provisions of the preceding Sections and, except for any Conflicts of Interest as set forth in the Annex to these Internal Rules, the Directors may, individually, and always reasonably, clearly justified and with the sole purpose of exercising their legal and statutory duties, request the Company, through the Chairman of the Board, the corporate documents and any information they consider necessary for the conduction of their activities.
9.1. The Directors shall perform their duties as provided the Company’s Bylaws, in strict accordance with these Internal Rules, the provisions of the BCL, and with the responsibilities indicated in the Annex to these Internal Rules.
9.2. Apart from the duties provided for in the BCL, in the applicable regulations and in the By-laws, each member of the Board of Directors shall:
10.1. The dispositions contained in these Internal Rules shall reflect the contents of the Company’s Bylaws and may not conflict with the provisions therein or of the applicable law. In the event of any conflict between the provisions set out in these Internal Rules and those provided for in the Company`s By Laws, the latter shall always prevail.
10.2. Any omission in these Internal Rules, questions of interpretation and changes in their provisions shall be settled by the Board of Directors, in accordance with the applicable law and the Company’s Bylaws.
10.3. These Internal Rules shall become effective as of the date of their approval by the Board of Directors and shall be kept at the Company’s headquarters.
These Internal Rules shall be immediately observed by the Company, by the Directors and by the Executive Officers; as well as by the members of the advisory committees, if any, and by the other areas of the Company, and may only be amended by resolution of the Board of Directors.
3 – Composition and Investiture
Item 3.1.1. Pursuant to the Rules of Listing of the B3 for the New Market segment, are also considered as independent members those elected in accordance with Article 141, paragraphs 4 and 5 of the BCL.
Item 3.2.1. The statements indicated in sub items (iii) to (vii) are provided for in Article 147, paragraphs 1, 2 and 3, of the BCL.
Item 3.3.5. The definitive vacancy of the position of member of the Board of Directors may also take place as a result of dismissal, resignation, death, disablement, loss of the position or in other situations provided for in the applicable rules.
Item 3.3.7. In accordance with Article 141, paragraph 3, of the BCL, whenever the election of the members of the Board of Directors takes place through the multiple voting process (processo de voto múltiplo), the dismissal of any of its members shall result in the dismissal of all the other members, being incumbent upon the General Shareholders’ Meeting to proceed to a new election.
4. Powers of the Board of Directors
Item 4.1. In accordance with Article 142 of the BCL, the Board of Directors has the powers to:
6. Drawing up of minutes.
Item 6.6.5. In accordance with art. 142, §1º, of the BCL, whenever the minutes of the meetings of the Board of Directors contain resolutions intended to have effects before third parties, it shall be filed in the trade register, published and disclosed in accordance with the laws and regulations in force, In the latter case, sending it to the CVM, by the Empresas Net system, as provided for in CVM Instruction 480/09.
9. Rights, Duties, and Responsibilities – Arts. 153 to 156 of the BCL
9.1. Once elected, a Director shall perform solely to pursuit the purposes and in the interest of the Company, subject to the public good requirements and corporate role of company, always performing as independently as possible from the shareholders or group of shareholders that have elected him/her.
9.2. In the discharge of their duties, Directors shall use care and diligence that any active and trustworthy individual would usually use in managing their own affairs.
9.3. If any Director becomes aware of a business opportunity that may be of interest to the Company, Director shall present it at the first subsequent regular meeting of the Board of Directors or, if applicable, request the convening of an extraordinary meeting.
9.4. Directors may not intervene with corporate transaction in which they have interests that conflict with the Company as well as in the deliberation taken in this regard by other managers.
9.5. A Director shall communicate any Conflict of Interest circumstance arising in relation thereto if he/she determines that any decision of the Board on a matter in the agenda to be voted upon could result in gain to him/her or others, with or without prejudice to the Company.
9.6. A Director finding himself/herself in a Conflict of Interest with the Company shall declare so at the Board meeting or notify the Chairman of the Board, and shall be required to inform him/her of his/her impediment and ensure that such impediment is reflected in the minutes of the Board meeting as well as the nature and extent of such interest.
9.7. A Director in a Conflict of Interest circumstance, after declaring himself/herself impeded, cannot participate in the discussion or vote on matter in connection with which he/she has a Conflict of Interest, and shall leave the meeting as the Board proceeds to discuss such matters.
9.8. Information sent to the Board by the Company or third parties relating to the matter in relation to which a Director has declared to be in a Conflict of Interest circumstance, shall not be sent to said Director and such information shall be not communicated thereto by the other Directors.
9.9. Regardless of notice referred to in section 9.6., whenever any person identifies a circumstance that may consist Conflict of Interest involving a certain Director with respect to any matter to be resolved by the Board, shall state about it. The Chairman shall notify said Director so that he/she, within the time indicated, voice his/her opinion in that respect, in compliance with the provisions of sections 9.6 and 9.7.
9.10. Directors have a fiduciary duty to the Company, may not disclose to third parties any information about the Company’s business, shall keep the confidentiality of any material, insider, or strategic information of the Company obtained by virtue of his/her office as well as ensure that third parties do not have access thereto, and are forbidden to use said information for his/her own gain or the gain of others.
9.11. Directors shall keep the confidentiality of information to which they have insider access due to the position they hold until the information is disclosed to the market, all in accordance with the applicable rules and regulations.
9.12. Directors, in the event of trading in Company’s securities, shall comply with the Company’s Information Disclosure and Use and Securities Trade Policy.
9.13. Upon request from the Chairman, the Board of Directors, or the Company, the Directors shall return any documents in their possession as members of the Board of Directors and they may not retain any copies, records, or notes in relation thereto.
9.14. A Director who, after being elected, conducts activity that competes directly with activities of the Company or holds a position in company that is a direct competitor of the Company, shall notify that to the Chairman of the Board and the Company and shall offer to resign from the Board, being unable to attend any meetings of Board or perform any act as Director, until the General Shareholders’ Meetings the Company, pursuant to article 147 (§ 3) of the Brazilian Corporate Law, shall make provisions in that respect.