REPORT ON THE BRAZILIAN CORPORATE GOVERNANCE CODE
MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.
Reference Date: July 29, 2022
Recommended Practice | Adopted? | Explanation | |
The Company's capital stock consists of common shares and preferred shares, but the | |||
stake of the capital stock traded on the stock exchange is composed only of common | |||
shares, thus ensuring adherence to the principle of "one share, one vote" for all outstanding | |||
shares. The totality of the preferred shares, since the opening of the Company's capital, is | |||
owned by shareholder 1700480 Ontario Inc., a member of the Company's controlling block, | |||
which, at that time, was subject to restrictions imposed by the law of its home country | |||
(Canada) that prevented it from holding more than 30% of the voting shares capable of | |||
electing members of the Board of Directors. For this reason, the Company's preferred | |||
1.1.1 - The share capital should be | shares (i) are not admitted for trading on any regulated market; (ii) have the same voting | ||
comprised | only of common | No | rights conferred on the common shares, except for the election and dismissal of members |
shares. | of the Board of Directors; and (iii) pursuant to Article 5, Paragraph 3, of the Company's | ||
Bylaws, are freely convertible into common shares, in the proportion of 1:1, upon request | |||
of the respective holder of preferred shares, and subject to approval at a General | |||
Shareholders' Meeting to be specially called for this purpose. Moreover, the Company is | |||
listed at Level 2 Governance Rules of B3. This listing segment allows listed companies to | |||
hold preferred shares (PN) and establishes differentiated governance rules, including the | |||
tag along right of 100% of the price paid for the controlling shareholder's common shares | |||
in the event of sale of shares. controlling interest (as reflected in Article 42 of the Company's | |||
Bylaws). | |||
The Company's control is exercised by its controlling shareholders Multiplan Participações | |||
S.A. and 1700400 Ontario Inc., pursuant to the shareholders' agreement executed on July | |||
4, 2007 ("Shareholders' Agreement"), which is fully available for public access through the | |||
Empresas.NET System, accessible on the CVM's website on the world wide web, and on | |||
the Company's investor relations website (http://ri.multiplan.com.br/), and further described | |||
1.2.1 - Shareholders' agreements | in Item 15.5 of the Reference Form (version 1.0, filed on May 30, 2022). The shareholders | ||
should not bind the exercise of | who signed the Shareholders' Agreement assumed the commitment to orienting the votes | ||
voting rights of any members of | No | to be proffered by the members of the Board of Directors, in accordance with the basic | |
management | or supervisory and | principles and other rules provided for therein (professional management, social interest, | |
control bodies. | generate further return, maximization and distribution of profits, excellence, among others). | ||
The purpose of the binding of the votes of the members of the Board of Directors, pursuant | |||
to Article 118 of Law 6.404/1976, is to ensure the effectiveness of such commitment. For | |||
information on the provisions of the Company's Shareholders' Agreement that establish a | |||
link to the exercise of the voting rights of members of the Board of Directors, see Item 12.3 | |||
(b) of the Company's Reference Form (version 1.0, filed on May 30, 2022). | |||
Recommended Practice | Adopted? | Explanation | ||||||||
1.3.1 - The executive management | ||||||||||
should | use | the | shareholders | |||||||
'meeting to communicate how the | ||||||||||
company's | business | is | being | |||||||
conducted, | for | which | reason | Yes | By answering "Yes" to this item, it is not possible to include an explanation in the Report. | |||||
management | should | publish | a | |||||||
handbook with the purpose of | ||||||||||
facilitating | and | stimulating | ||||||||
participation | in | shareholders' | ||||||||
meetings. | ||||||||||
1.3.2 - Minutes should enable full | ||||||||||
understanding of the discussions | ||||||||||
occurred | during | the | meetings, | Yes | By answering "Yes" to this item, it is not possible to include an explanation in the Report. | |||||
even if they are recorded in | ||||||||||
summary form, and identify the | ||||||||||
votes cast by the shareholders. | ||||||||||
The mechanism for the protection of the shareholding dispersion set forth in the Company's | ||||||||||
Bylaws was adopted in 2006, in the context of the bylaws' amendment that aimed to prepare | ||||||||||
the Company for IPO and listing in differentiated governance segments. At the time, the | ||||||||||
Company's shareholders and management analyzed the advantages and disadvantages of | ||||||||||
adopting the measure, in light of the economic environment and trends in the Brazilian | ||||||||||
capital market, and chose to establish a mechanism for the protection of the shareholding | ||||||||||
1.4.1 | - The board | of directors | dispersion that requires a public tender offer of shares ("OPA") to the one who acquire or | |||||||
become owner of shares issued by the Company in a quantity equal to or greater than 20% | ||||||||||
should conduct a critical analysis | ||||||||||
of its shares. | ||||||||||
of | the | advantages | and | |||||||
disadvantages of the anti-takeover | Yes | Therefore, the prospectus of the initial public offering of the Company (IPO), in 2007, and, | ||||||||
mechanism and its characteristics, | ||||||||||
thereafter, the prospectus of the subsequent offer, in 2009, addressed the issue, clarifying | ||||||||||
and especially of the triggers and | ||||||||||
that the mechanism has the effect of avoiding the concentration of shares issued by the | ||||||||||
price | parameters, | if | applicable, | |||||||
Company in the hands of a small group of investors, in order to promote a more dispersed | ||||||||||
providing the related explanations. | ||||||||||
shareholder base and to explain their characteristics, triggers and price parameters. | ||||||||||
Since then, there has been no opportunity for further critical analysis of the defense | ||||||||||
measure and its characteristics to be required by the Board of Directors. | ||||||||||
For additional information on this shareholder protection mechanism, see Item 18.2 of the | ||||||||||
Company's Reference Form (version 1.0, filed on May 30, 2022). | ||||||||||
Article 50, Paragraph 12 of the Bylaws provides that shareholders voting in favor of the | ||||||||||
amendment or exclusion of the share dispersion protection mechanism shall be required to | ||||||||||
1.4.2 | - | Provisions | that | prevent | make a public offer for the acquisition of shares issued by the Company. The deletion of | |||||
this "entrenched clause" involves complex legal aspects. Notwithstanding CVM Orientation | ||||||||||
removal of the measure from the | ||||||||||
No | Opinion No. 36/2009, to exclude the application of penalties to shareholders who vote for | |||||||||
bylaws, the so-called "entrenched | ||||||||||
the suppression or alteration of the stock dispersion protection mechanism, it can not be | ||||||||||
clauses", should not be used. | ||||||||||
ruled out that an arbitration decision could adopt an understanding contrary to said Opinion, | ||||||||||
determining that the shareholders who vote in favor of the suppression must conduct the | ||||||||||
OPA in the manner set forth in Article 50 of the Bylaws. | ||||||||||
Recommended Practice | Adopted? | Explanation | ||||||
The rule for determining the price of the OPA in article 50, paragraph 3 of the Bylaws | ||||||||
1.4.3 - If the bylaws determine that | provides that the purchase price of each share issued by the company may not be less than | |||||||
a tender offer should be carried | the higher amount between: (i) the economic value assessed in the appraisal report; (ii) | |||||||
out, whenever a shareholder or | 150% of the issue price of the shares in any capital increase through a public distribution | |||||||
group of shareholders directly or | occurred in the period of 24 months prior to the date of compulsory implementation of the | |||||||
indirectly | achieves | significant | OPA by share dispersion, duly updated by the IGP-M until the time of payment; and (iii) | |||||
participation in the voting capital, | Partially | 150% of the average unitary price of the company's common shares during the period of | ||||||
the rule for determination of the | 90 days preceding the implementation of the OPA in the stock market in which there is the | |||||||
offer price should not impose | largest trading volume of the company's shares. The Company understands that, in general, | |||||||
addition of premiums substantially | such parameters are reasonable and do not represent a substantial premium, since the | |||||||
greater than the economic value | adoption of a minimum price in clauses protecting the stock dispersion is a widespread | |||||||
or market value of the shares. | practice among publicly held companies whose main benefit is to discourage unsolicited | |||||||
and opportunistic acquisition offers. | ||||||||
1.5.1 - The company's bylaws | ||||||||
should | provide | that: | (i) | |||||
transactions where there is direct | ||||||||
or indirect transfer of control | ||||||||
should be followed by a tender | ||||||||
offer directed to all shareholders, | ||||||||
for the same price and in the same | ||||||||
conditions obtained by the selling | ||||||||
shareholder; | (ii) | management | Yes | By answering "Yes" to this item, it is not possible to include an explanation in the Report. | ||||
should issue an opinion on the | ||||||||
terms and conditions of corporate | ||||||||
reorganizations, capital increases, | ||||||||
and other transactions that result | ||||||||
in change of control, and state | ||||||||
whether they ensure fair and | ||||||||
equitable | treatment | to | the | |||||
company's shareholders. | ||||||||
1.6.1 - The bylaws should provide | ||||||||
that the board of directors should | ||||||||
issue an opinion in relation to any | ||||||||
tender offer related to shares and | ||||||||
securities | convertible | into | or | |||||
exchangeable | for | shares | of | the | Yes | By answering "Yes" to this item, it is not possible to include an explanation in the Report. | ||
company, | which | shall | contain, | |||||
among other relevant information, | ||||||||
opinion of the board of directors | ||||||||
on the acceptance of the tender | ||||||||
offer and on the company's | ||||||||
economic value. |
Recommended Practice | Adopted? | Explanation | ||||
1.7.1 - The company should | ||||||
prepare and disclose a profit | ||||||
allocation | policy | established | by | |||
the board | of directors. Among | The Company does not have a formally approved policy for results allocation. | ||||
other aspects, such policy should | ||||||
provide | the | frequency | of | No | For additional information on the Company's history of allocation of results in the last 3 fiscal | |
payments | and | the | reference | |||
years, see Item 3.4 of the Company's Reference Form (version 1.0, filed on May 30, 2022). | ||||||
parameter to be used for definition | ||||||
of the related amount (percentage | ||||||
of the adjusted net profit and of the | ||||||
free cash flow, among others). | ||||||
1.8.1 - The bylaws should clearly | ||||||
and precisely identify the public | ||||||
interest that justified the creation | Not applicable | Not applicable. | ||||
of the mixed-capital company, in a | ||||||
specific chapter. | ||||||
1.8.2 - The board of directors | ||||||
should monitor | the | company's | ||||
activities and establish policies, | ||||||
mechanisms, and internal controls | ||||||
for verification of any costs of | Not applicable | Not applicable. | ||||
serving the public interest and any | ||||||
refunds to the company or other | ||||||
shareholders and investors by the | ||||||
controlling shareholders. | ||||||
Recommended Practice | Adopted? | Explanation |
2.1.1 - The board of directors, without prejudice to other legal or statutory attributions and to other practices foreseen in this Code, should: (i) define business
strategies, taking into consideration the impacts of thecompany's activities on society and the environment,seeking the
company's continuity and long- | For information on the performance of the Board of Directors with regard to sustainability, | ||||||||
term | value | creation; | (ii) | risk management, integrity, ethics and governance, see items 5.1, 5.2, 5.4, 7.8, 12.1 (a) and | |||||
periodically assess the company's | 12.12 of the Company's Reference Form. Company (version 1.0, filed on May 30, 2022). | ||||||||
risk exposure andeffectiveness of | |||||||||
the | risk management | systems, | Yes | It is important to highlight that Multiplan annually discloses its economic, financial, social, | |||||
internal controls, and of the | and environmental results through the publication of its Annual Report. The latest report | ||||||||
integrity/compliance | system, | and | available up to this date, regarding 2020, is available on the Empresas.NET System, | ||||||
approve a risk management policy | accessible on the CVM's website on the world wide web, and on the Company's investor | ||||||||
compatible | with | the | business | relations website (http://ri.multiplan.com.br/). | |||||
strategies; | (iii) | define | the | ||||||
company's | values | and ethical | |||||||
principles | and | ensure | the | ||||||
company's | transparency | ||||||||
maintaining the relationship | with | ||||||||
all | stakeholders; | (iv) | annually | ||||||
review the corporate governance | |||||||||
system and | seek | improvement | |||||||
thereof. | |||||||||
2.2.1 - The bylaws should provide | The Company's Bylaws follow the parameters of the Level 2 Governance Rules of B3 S.A. - | ||||||||
that: | (i) the | board | of | directors | |||||
Brasil, Bolsa, Balcão, special corporate governance segment in which the Company is listed. | |||||||||
should be composed of a majority | |||||||||
Accordingly, Article 15 of the Bylaws establishes that the Board of Directors must be | |||||||||
of | external | members, | where at | ||||||
composed of, at least, 20% of independent members. In addition, although the Company's | |||||||||
least | one | third | shall | be | |||||
Bylaws does not foresee a reserve of seats for external members, they represent the | |||||||||
independent | members; | (ii) | the | ||||||
Partially | majority of the makeup of the Company's Board of Directors. Moreover, it should be noted | ||||||||
board of directors should assess | |||||||||
that, when the General Meetings are called to elect members of the Board of Directors, the | |||||||||
and | disclose annually | who | the | ||||||
Company provides all the information made available to it regarding the candidates in the | |||||||||
independent members are, as well | |||||||||
documents attached to management's proposals, provided that their independence is | |||||||||
as | indicate | and | justify | any | |||||
assessed by the shareholders when discussing and resolving the matter at the General | |||||||||
circumstances | that | could | |||||||
Meeting, in accordance with the applicable legislation and regulations. | |||||||||
compromise their independence. | |||||||||
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Multiplan Empreendimentos Imobiliários SA published this content on 31 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2022 00:12:07 UTC.