THE TOTAL NUMBER OF PAGES CONTAINED IN THIS DOCUMENT IS [28].
FORM 6 - K
----------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of the
Securities Exchange Act of 1934
For the month of February 2002
NATIONAL TELEPHONE COMPANY OF VENEZUELA (CANTV)
-----------------------------------------------
(Translation of Registrant's Name into English)
EDIFICIO CANTV
AVENIDA LIBERTADOR
CARACAS, VENEZUELA
------------------
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F ____
---
Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Act of 1934
Yes ____ No X
---
If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82 - _______________
This report consists of an English translation of the Minutes of the
Extraordinary Assembly of Shareholders of Compania Anonima Nacional Telefonos de
Venezuela ("CANTV") held on December 13, 2001 (the "Extraordinary Assembly"),
which includes the text of the Bylaws of CANTV, as amended pursuant to the
Extraordinary Assembly .
2
MINISTRY OF THE INTERIOR AND JUSTICE
FIRST MERCANTILE REGISTRY
OF THE JUDICIAL CIRCUMSCRIPTION OF THE CAPITAL DISTRICT AND STATE OF MIRANDA
Dr. Judith Marcano, FIRST MERCANTILE REGISTRAR OF THE JUDICIAL CIRCUMSCRIPTION
OF THE CAPITAL DISTRICT AND STATE OF MIRANDA
CERTIFIES
That the entry in the Commercial Registry that is transcribed below, the
original of which is registered in Volume: 240-A-Pro... Number: 11 of the year
2001
As well as the Participation, Note and Document that are also copied, are a
faithful copy of their originals, and read as follows:
THIS PAGE BELONGS TO:
COMPANIA ANONIMA NACIONAL TELEFONOS DE VENEZUELA (CANTV)
20/MAR
3
MINISTRY OF THE INTERIOR AND JUSTICE
FIRST MERCANTILE REGISTRY
OF THE JUDICIAL CIRCUMSCRIPTION OF THE CAPITAL DISTRICT AND STATE OF MIRANDA
Caracas, December fourteen (14), year 2001 (191 and 142). The above
participation is presented by its SIGNATORY, for its registration in the
Mercantile Registry, setting and publication. Do so accordingly and add the
original to the docket of the Company together with the attached documents.
Issue a copy of the publication. The above document, drafted by Dr. ARMANDO
ANZOLA C., is registered in the Commercial Registry under No. 11, Volume
240-A-PRO Fees paid Bs. 394650.00. According to List RM No. 508585, Bank No.
100752144, in the amount of Bs.92400.00. The identification was done as follows:
RIVAS DE BELMONTE, MARIELA, C.I. (IDENTITY CARD), C.I. 3982872.
The First Mercantile Registrar
Signed. Dr. Judith Marcano
THIS PAGE BELONGS TO:
COMPANIA ANONIMA NACIONAL TELEFONOS DE VENEZUELA (CANTV)
20/MAR
4
Citizen
First Mercantile Registrar
Of the Judicial Circumscription of the
Federal District and State of Miranda
Your office.
I, Mariela Rivas de Belmonte, Venezuelan, of legal age, attorney by profession,
holder of identity card No. 3.982.872, acting in my capacity as Secretary of the
Board of Directors of Compania Anonima Nacional Telefonos de Venezuela (CANTV),
organized as a Commercial Company domiciled in Caracas, registered in the
Mercantile Registry kept in the Court of Commerce of the Federal District on
June 20, 1930, under No.2, Volume 387, the last Bylaw Amendment of which was
registered in the Registry for which you are responsible on December 5, 2000,
under No. 64, Volume 217 A-PRO, before you come with the proper respect to
request the registration of the following documents: (I) Minutes of the
Extraordinary Assembly of Shareholders of Compania Anonima Nacional Telefonos de
Venezuela (CANTV), held on December 13, 2001. (II) List of the Quorum issued by
Banco Venezolano de Credito S.A.C.A. (III) A Newspaper Clip of the Call to the
Extraordinary Assembly of Shareholders.
I petition the citizen Registrar to issue two (2) certified copies of this brief
and of the record that provides it for the ensuing legal purposes.
In Caracas on the date of its presentation.
/s/ MARIELA RIVAS DE BELMONTE
-----------------------------
Mariela Rivas de Belmonte
5
The undersigned, Mariela Rivas de Belmonte, Venezuelan, holder of identity card
No. 3.982.872, acting in my capacity as Secretary of the Board of Directors of
CANTV, hereby certifies: that the following text is a faithful and exact copy of
the Minutes of the Extraordinary Assembly of Shareholders, held on December 13,
2001.
/s/ MARIELA RIVAS DE BELMONTE
-----------------------------
Mariela Rivas de Belmonte
Secretary of the Board of Directors
MINUTES OF THE EXTRAORDINARY ASSEMBLY OF SHAREHOLDERS OF COMPANIA ANONIMA
NACIONAL TELEFONOS DE VENEZUELA (CANTV) HELD ON DECEMBER 13, 2001
On this date, December 13, 2001, at 11:00 a.m., the following persons met in the
Cantv Theater located on the first floor of the NEA Building, Av. Libertador, in
the city of Caracas, to hold an Extraordinary Assembly of Shareholders of
Compania Anonima Nacional Telefonos de Venezuela "C.A.N.T.V.": Representing
VenWorld Telecom, C.A., Patricia Macedo, holder of identity card No. 11.314.773,
owner of 305,469,959 Class "A" Shares; representing Banco Mercantil, Banco
Universal, Mrs. Aury Oliveros, holder of identity card No. 5.564.351, owner of
350,986 Class "A" Shares; representing the Banco de Desarrollo Economico y
Social de Venezuela (BANDES), formerly Fondo de Inversiones de Venezuela, Mrs.
Angela Flores Darias, holder of identity card No. 5.221.046, owner of 51,899,000
Class "B" Shares; representing the Ministry of Infrastructure, Mrs. Coralia
Jimenez Delgado, identity card No. 3.170.133, representing one (1) share; for
the Class "C" Shares, authorized by the Trust Banks, the following persons: for
the Banco Mecantil, Mrs. Maria Natalia Gomez de Ferreira, holder of identity
card No. 6.141.128, representing 8,746 Class "C" Shares and 9,378,422 of the
Premio a la Excelencia Trust; for Unibanca, Mr. Rafael Corona G., holder of
identity card No. 4,974.227, representing 3,998,774 Shares; for Banco
Provincial, Raisa Bortone, holder of identity card No. 2.980.314, representing
41,022 Shares; for the Banco Venezuela, Mr. Jose Pacheco, holder of identity
card No. 6.256.284, representing 45,759 Shares; for Citibank, Nora Gonzalez,
holder of identity card No. 10.181.176, representing 34,769 Shares; and the
holders of Class "C" Shares, whether present or represented, which are
identified in the attached annex, labeled "Annex 1", which is an integral part
of these minutes. For the Class "D" Shares, authorized by the Trust Banks, the
following persons are present: for the Banco Mercantil, Mrs. Maria Natalia Gomez
de Ferreira, holder of identity card No. 6.141.128, representing, representing
13,503 Shares; Banco Venezuela, Mr. Jose Pacheco, holder of identity card No.
6.256.284, representing 8,791 Share; for Banco Caribe, Mr. Rafael Ramos, holder
of identity card No. 5.865.900, representing 612 Class "D" Shares; Citibank
N.A., Nora Gonzalez, holder of identity card No. 10.181.176, representing
1,556,782 Class "D" Shares of the shareholders: Banque Privee Edmond de
Rothschild, Bear Stearns Secur Corp., BT Pyramid Trust, Commonwealth Funds
Manag. LTD., Credit Lyonnais Securities USA Inc., Fondo Mutual de Venezuela,
FMICA, Interacciones FMI Cap. Abierto, S.A., Kapital Fonds L.K., Kodak
Retirement Income Plan Trust, National Westminster Life Assurance, New York
State Common Retirement FD, Philips Electronics North America, UAM Funds Inc.,
Acadian Em. MKTS., Venezuela Emerging Mkt. Index Comm Trust, The IBM Task [sic]
Deferred Savings Plan. Representing the depository bank of the ADRs, Bank of New
York, is Mrs. Gabriela Sanchez, holder of identity card No. 7.444.187,
6
representing 282,787,043 Shares. Likewise, representing Class "D" Shares they
own, are the shareholders that are present or represented, that are identified
in the attached list labeled "Annex 2", which is an integral part of these
minutes. All of the shares present amount to 660,983,490, which is equal to
71.378% of the capital stock of the company, which constitute the quorum for the
Assembly.
Also present at the Assembly were Mr. Gustavo Roosen, holder of identity card
No. 2.938.282, President of CANTV, and Mrs. Mariela Rivas de Belmonte, holder of
identity card No. 3.982.872, Secretary of the Board of Directors. Also present
were the Comptrollers of the Company.
Given that the majority of the capital stock of the Company was present and
represented, which is required for there to be quorum, the President declared
the Extraordinary Assembly of Shareholders of CANTV to be validly open for
business, welcoming the shareholders.
Thereafter the Secretary of the Board of Directors read the Call published for
such purposes, the content of which is the following:
"COMPANIA ANONIMA NACIONAL TELEFONOS DE VENEZUELA
Subscribed and paid capital: Bs. 34,172,466,977.34
CALL TO A SHAREHOLDERS' MEETING
"In accordance with Articles 8 and 9 of the Company Bylaws, the Shareholders of
this Company are called to an Extraordinary Assembly of Shareholders of CANTV,
to be held on December 13, 2001 at 11:00 a.m., in the Cantv theater located on
the first floor of the NEA building, Av. Libertador, Caracas. The only point of
agenda is:
Amendment of the Bylaws of the Company (Article 5, literal e)
NOTE:
----
The shareholder who cannot or does not wish to personally attend such Assembly,
may be represented via Letter-Power of Attorney, which designates the person who
shall represent it at the Shareholder Assembly. The model of this Letter-Power
of Attorney may be found at the office of the Secretary of the Board of
Directors. Once such power of attorney is granted, it must be submitted
forty-eight (48) hours in advance of the Assembly at the same office.
The shareholders of the Company are hereby notified that the Draft of the
Amendment of the Company Bylaws shall be available to them as of 11/27/2001 at
the office of the Secretary of the Company, located at the following address:
CANTV, Edificio NEA, Primer Piso, Av. Libertador, Caracas.
Caracas, November 20, 2001. The Board of Directors."
The President of the Company submitted to the Assembly's consideration the First
and only Point of the Call, "Amendment of the Company Bylaws (Article 5, literal
e) numeral 2" and
7
explained that this Extraordinary Assembly had been called to complete a process
that the Board of Directors approved October 15 this year. Such process has as
its immediate goal the adoption of an amendment to the bylaws that allows the
class C shareholders to offer their shares at prices and percentages that are
similar to those of the Third Share Buyback Program, which shall be purchased by
two Benefit Plans or Trusts established by the company. He also pointed out that
it provided for the shares owned by such Benefit Plans to be able to be acquired
anew by the class C shareholders through finance programs or distributed as
function of incentives and acknowledgments for good performance. Immediately
thereafter, the President read the proposed Bylaw Amendment.
Having submitted the amendment of article 5, literal e) numeral 2 of the Bylaws
to a vote, the Assembly by majority vote resolved the following:
IT IS RESOLVED: To modify article 5, literal e) numeral 2 of the Bylaws to
--------------
henceforth read as follows:
"(2) The process for the transfer of Available Shares shall take
place twice per month in the following manner (the "Internal Market"):
(2.1) During the first four (4) business days of each monthly
15-day period (each such four-day period, an "Offer Presentation Period"), the
Company shall receive from all Participants, and Other Holders of Class "C"
Shares, offers for the sale of Available Shares, indicating: (i) the amount of
shares that they wish to sell; (ii) the lowest price at which its Available
Shares may be sold, including a discount percentage onthe price of its Available
Shares determined pursuant to Article 5(e)(2.2) which the selling shareholder
may be willing to grant. Such discount may be established in advance, between
one percent (1%) and ten percent (10%), by the Participants and Other Holders of
Class "C" Shares.
(2.2) The sale price for the Available Shares (the "Fixed
Price") will be determined on the last banking day of each Offer Presentation
Period. The Fixed Price will be the average of the daily closing prices of the
Class "D" Shares in the Caracas Stock Exchange during the four (4) banking days
of each of the "Offer Presentation Periods".
(2.3) The "Offer Publication Day" shall occur on the business
day next succeeding each Offer Presentation Period. On the Offer Publication
Day, the Company will have to publish internal company notices at national level
indicating the offers to sell received, so that they can be known by all
Participants, Benefit Plans and Workers Companies, who will have the right to
acquire any or all the Available Shares.
Said internal notice will contain the following information: (i) the number of
Available Shares; (ii) the Fixed Price for such shares; (iii) the last day on
which the Participants, Benefit Plans and Workers Companies may exercise their
preferred rights; and (iv) the instructions as to the mechanism to advise the
Company of their intention to purchase said shares.
(2.4) The "Preferred Right Period" shall be the three (3)
business day period next succeeding the Offer Publication Day. During each
Preferred Right Period, all Participants, Benefit Plans and Workers Companies
interested in purchasing any number of
8
Available Shares may exercise their preferred right by stating their intention
to purchase the Available Shares, indicating the number of shares they wish to
purchase and the purchase price, which may be equal or higher than the Fixed
Price, except in case of discounts granted pursuant to Article 5(e)(2.1).
The preferred right shall be exercised in strict order of presentation of the
offers, except in case of any offers at a price higher than the Fixed Price,
which shall have priority to acquire a pro rata amount of Available Shares owned
by each selling shareholder
(2.5) The sale of the shares will be consummated upon knowledge
by the seller that the buyer has accepted the offer, which shall be deemed to
occur when the buyer deposits the purchase price for the seller's shares with
the trustee who holds the seller's shares or when the buyer delivers a copy of a
cashier's check in the seller's name to the Investor Relations Office of CANTV.
The sale so consummated shall be irrevocable. If either the buyer or the seller
fails to fulfill such party's obligations, such party's activities in the
Internal Market will be suspended for three (3) months, without prejudice of any
legal recourse that either the seller or the buyer may pursue.
(2.6) Any Participant, Ex-Worker and Other Holders of Class "C"
Shares, except for Workers Companies and Benefit Plans, may dispose of any
number of Class C shares, in which case, it will only be necessary to pay the
debt for the amount of the shares to be sold each time, following the procedures
established by the Company.
(2.7) Any Available Shares not acquired by Participants, Benefit
Plans or Workers Companies within the Preferred Right Period will remain
the property of the holder, who may, at such holder's discretion: (i) sell
them to third parties; (ii) re-offer them in the Internal Market Process;
and (iii) solicit in writing from the Company the conversion into an equal
amount of Class "D" Shares, provided that any debt to the Social and
Economic Development Bank (BANDES) is paid."
It is hereby recorded that 75,558,609 Shares represented by the Bank of New York
voted against the proposed amendment.
IT IS FURTHER RESOLVED: That the amendments authorized by the Shareholder
----------------------
Assembly to the Company Bylaws be made into one single text, which shall read as
follows:
A. "BYLAWS OF COMPANIA ANONIMA
NACIONAL TELEFONOS DE VENEZUELA (CANTV)
I
NAME, DOMICILE, PURPOSE AND DURATION
Article 1.- The name of the Company is "Compania Anonima Nacional Telefonos de
Venezuela (CANTV)", it has its principal domicile in the city of Caracas and may
establish anywhere in the Republic or abroad such agencies, branches or offices
as may be deemed necessary or expedient for the good conduct of its business.
9
Article 2.- The purpose of the Company is to administer, provide, develop, and
operate local telephone and national and international long distance telephone
services; national and international telex, radio telephone, and cellular
telephone services; value added services, telephotography, data transmission,
means for transmitting television and radio broadcasting programs, supply of
telegraphic channels and any other telecommunications service; possess
telecommunications equipment and facilities; adopt and exploit new services
determined by technical advances in telecommunication; issue bonds and
obligations in accordance with legal requisites; sign agreements or arrangements
with foreign administrations or companies with respect to everything related to
the activities of the Company; participate in associations, institutes or
international groups devoted to the improvement of telecommunications or to
scientific and technology research; participate in international agencies
engaged in telecommunications; and, promote and create companies to perform
activities related to and connected with those constituting the corporate
purpose. The Company may carry out all commercial acts directly or indirectly
related to its purpose.
Article 3.- The Company's duration shall be indefinite.
II
CAPITAL STOCK AND SHARES OF STOCK
Article 4.- a) The capital stock of the company is thirty-four billion one
hundred seventy-two million four hundred sixty-six thousand nine hundred
seventy-seven Bolivars and thirty-four cents (Bs. 34,172,466,977.34) fully
subscribed and paid-in, represented by nine hundred twenty-six million
thirty-seven thousand three hundred eighty-five (926,037,385) registered shares,
each with a par value of Bs. 36.90182224915.
b) The shares shall be classified in four (4) classes, designated
"A", "B", "C" and "D", as set forth in Article 5.
Article 5.- a) Share certificates shall be numbered and may include any number
of shares. They shall indicate the class of shares they represent, bear the seal
of the Company, and be signed by two Principal Directors.
b) The shares shall be classified in four Classes, namely: "A",
which will initially include 400,000,000 shares; "B" which will initially
include 490,000,000 shares; "C", which will initially include 110,000,000
shares; "D", which will be formed by the shares issued as a result of the
capital stock increases and the conversion of the Classes "A", "B" and "C"
shares as provided for in these Bylaws.
c) The initial number of the Class "A", "B" and "C" shares shall
decrease with the conversion of such shares into Class "D" shares, as a result
of the transfer of same or other events provided for in this paragraph c); and
the number of Class "D" shares shall increase with the conversion of the Class
"A", "B" and "C" shares into Class "D" shares, as provided for in this paragraph
c). The Class "B" shares acquired by active and retired workers of the company
in compliance with article 13 of the Privatization Law shall at the time of
their transfer be
10
converted into an equal number of Class "C" shares and may not be traded until
November 1998. These shares in turn shall be converted into Class "D" shares
when any of the events set forth in this article 5 occurs, which produces the
automatic conversion of Class "C" shares into Class "D" shares.
After January 1, 2001, any transfer of Class "A" shares to any person other than
VENWORLD TELECOM, C.A., (the "Operator"), GTE Corporation, AT&T International
Ind., T.I. Telefonica Internacional de Espana, S.A.C.A., La Electricidad de
Caracas, C.A., S.A.I.C.A., S.A.C.A. and Consorcio Inversionista Mercantil Cima
C.A., S.A.C.A., S.A.I.C.A. (these persons being hereinafter called the
"Participants in the Consortium") or any other affiliated company totally owned
and controlled by any of them, shall mean that such shares will automatically be
converted into an equal number of Class "D" shares. Such conversion will become
effective with the transfer of the Class "A" shares. Should any Class "A" shares
be transferred on or before January 1, 2001, as permitted under the terms of
paragraph ch) of this Article 5, to a person or entity other than a Participant
in the Consortium, on January 2, 2001, such transferred Class "A" shares shall
automatically be converted into an equal number of Class "D" shares.
The Class "B" shares may only be owned by the Republic of Venezuela and other
Venezuelan public agencies. The transfer of any Class "B" shares to any private
person shall mean that, except as provided in the first paragraph of this letter
c), such transferred shares shall automatically be converted into an equal
number of Class "D" shares. Such conversion shall become effective with the
transfer of such Class "B" shares.
The Class "C" shares may only be owned by: (i) the active workers of the Company
and its affiliates, who are engaged under contract for an indefinite period of
time, (ii) the retired workers of the Company, (iii) companies one hundred
percent (100%) of the capital stock of which is owned by the persons stated in
clauses (i) and (ii), and having as sole corporate purpose the purchase and
possession of the shares of the Company ("Workers Companies"), (iv) trust funds
and benefit plans established for the benefit of the active or retired workers
of the Company ("Benefit Plans"), (v) ex-workers of the Company who have decided
to maintain ownership of their shares at the time of ending their employment
relation, (vi) the successors of Class "C" shareholders who have received the
shares through legacy or inheritance, (vii) the ex-spouses of Class "C"
shareholders who hold shares as a result of the liquidation of marriage
community property, (viii) by the active and retired workers of the affiliates
of the company. For the purpose of this paragraph c) and of paragraph e) or this
Article 5, the affiliates of the Company will be understood to be those
companies in which the Company is the owner of more than fifty percent (50%) of
the capital stock; and the workers and retired workers of the Company or its
affiliates are hereinafter, collectively, the "Participants". The sale of any
Class "C" shares to any person or entity that is not a Participant or a Benefit
Plan or a Workers Company, will mean that such transferred Class "C" shares will
automatically be converted into an equal number of Class "D" shares upon their
transfer in the Shareholders Book.
After any transfer producing a conversion of Class "A", "B" or "C" shares into
Class "D" shares, such converted shares shall thereafter have only the right
assigned to the holders of the Class "D" shares. Each holder of a Class "A", "B"
or "C" share that has been converted into a Class "D" share in accordance with
this Article 5, shall immediately turn over such share to the Company,
11
and the Company shall issue a replacement certificate representing an equal
number of Class "D" shares.
ch) Before January 1, 1997, the Class "A" shares and the rights
thereunder may not be transferred or encumbered in any manner, including,
without limitation, as a result of the imposition or creation of any lien,
charge, guarantee, pledge, security or similar interest, or by the granting of
any option or any other right with respect to such shares or the rights arising
therefrom (collectively, the "Liens"). On or after January 1, 1997, but before
January 1, 1999, the Class "A" shares may be transferred or encumbered, provided
that the Operator and the Participants in the Consortium maintain the direct
ownership, free from any Liens, of Class "A" shares, which together with any
other shares of the Company directly owned by the Operator or the Participants
in the Consortium, free from any Liens, represent in the aggregate at least
thirty percent (30%) of the capital stock of the Company. On or after January 1,
1999, but before January 1, 2001, the Class "A" shares may be transferred or
encumbered, provided that the Operator and the Participants in the Consortium
maintain the direct ownership, free from any Liens, of Class "A" shares which
together with any other shares of the Company directly owned by the Operator or
the Participant in the Consortium, free from any Liens, represent in the
aggregate at least twenty percent (20%) of the capital stock of the Company. In
addition, and notwithstanding any provision contained in these Bylaws, before
January 1, 2001 no Class "A" shares may be transferred in any manner to, and no
Lien with respect to such shares may be created in favor of, any company whose
main corporate purpose is the manufacture of telecommunications equipment. After
January 1, 2001, the Class "A" shares shall not be subject to the restrictions
contained in this paragraph ch).
Any transfer or Lien of the Class "A" shares in violation of the provisions of
this paragraph ch), shall be considered null and void; this restriction shall be
mentioned in the corresponding certificates of the Class "A" shares.
d) Notwithstanding the provisions of this paragraph d), the
preferential right of the Operator described below shall not be applicable to
any transfer of shares in a public offering that does not prohibit or limit the
Operator from acquiring any or all of the shares offered in such manner. Should
any holder of the Class "B" shares intend to sell any share of the Company to
any person of the private sector, in a manner other than as stipulated in such
offering, such holder shall first make a written offer to the Operator, for the
latter to purchase such shares, except in the case of those sales made by Class
"B" shareholders to Placement Agents or entities related thereto, as required in
capital markets, in order to make a public offering of their shares. Such offer
shall state the price and terms of such offer.
The Operator shall respond as to whether or not it wishes to acquire some or all
of the shares offered, within a period of thirty (30) banking business days
after receiving the offer, and complete the purchase within that same period. If
a notice of acceptance is not given with respect to all of the shares offered,
or at least with respect to the number of shares (the "Minimum Number") which
would make the Operator and the Participants in the Consortium become direct or
indirect owners of shares representing in the aggregate more than fifty percent
(50%) of the capital stock of the Company on the date of such offer, or if the
purchase is not completed within the period specified, or if the Operator has
given a written notice of its decision
12
not to purchase such shares, those shares offered and not purchased, or
determined not to be purchased, may be sold to third parties within the
succeeding sixty (60) banking business days at a price and under terms which
should not be more favorable to the transferee than those offered to the
Operator. If no sale is completed within the indicated period of sixty (60)
banking business days, any purchase proposed at a later date, subject to the
provisions set forth hereinafter, shall again be subject to the preferred right
of the Operator as set forth in this paragraph d). After January 1, 1997, the
Operator may assign the Operator's right to acquire the shares offered to it in
accordance with this paragraph d) to the Participants in the Consortium. All
rights granted to the Operator in this paragraph d) shall be terminated, and the
preferential right of the Operator to acquire the shares of any holder of Class
"B" shares shall cease, on the first date on which any of the following events
occurs: (1) the Operator and the Participants in the Consortium and their
affiliates, are the joint direct or indirect owners of a number of shares
representing more than fifty percent (50%) of the capital stock of the Company;
(2) the Operator and the Participants in the Consortium abstain from purchasing
any shares, or at least, the minimum number of shares offered in accordance with
this paragraph d), provided that after the abstention by the Operator from
purchasing any of such Class "B" shares, those shares are sold by the holder at
a price and under terms not more favorable to the buyer than those offered to
the Operator, within the period of sixty (60) banking business days mentioned
above; (3) the Class "A" shares held by the Operator, together with any other
shares of the Company directly or indirectly owned by the Operator and the
Participants in the Consortium, represent less than forty percent (40%) of the
capital stock of the Company; (4) the holders of Class "B" shares and any other
public agency are the joint direct or indirect owners of a number of shares
representing not more than twenty percent (20%) of the capital stock of the
Company.
e) The Class "C" share holders may sell their shares and rights
thereunder according to the following options: (i) in the internal market
according to the procedure described hereinafter; and (ii) to third parties,
individually, once released from the preferential right and the pledge.
(1) If a Participant wishes to transfer any Class "C" share in
the internal market, it shall first give notice to the Company, and the
remaining Participants, Benefit Plans and Worker Companies shall be entitled to
acquire all or any portion of the Class "C" shares which are intended to be
transferred, in accordance with the provisions of this paragraph e). The Workers
of the affiliates, ex-workers of the Company and the other holders of Class "C"
shares as a result of succession or liquidation of marriage community property,
hereafter the other Class "C" Shareholders, who wish to transfer any number of
Class "C" shares held by them, shall also address the Company, and the
Participants, Benefit Plans and Worker Companies shall be entitled to acquire
all or any portion of the Class "C" shares offered for sale. All Class "C"
shares available for purchase by the Participants, Benefit Plans and Worker
Companies in accordance with this paragraph e) (1), shall be hereafter
designated the "Available Shares".
(2) The process for the transfer of Available Shares shall take
place twice per month in the following manner (the "Internal Market"):
(2.1) During the first four (4) business days of each monthly
15-day period (each such four-day period, an "Offer Presentation Period"), the
Company shall receive from all Participants, and Other Holders of Class "C"
Shares, offers for the sale of Available
13
Shares, indicating: (i) the amount of shares that they wish to sell; (ii) the
lowest price at which its Available Shares may be sold, including a discount
percentage onthe price of its Available Shares determined pursuant to Article
5(e)(2.2) which the selling shareholder may be willing to grant. Such discount
may be established in advance, between one percent (1%) and ten percent (10%),
by the Participants and Other Holders of Class "C" Shares.
(2.2) The sale price for the Available Shares (the "Fixed Price")
will be determined on the last banking day of each Offer Presentation Period.
The Fixed Price will be the average of the daily closing prices of the Class "D"
Shares in the Caracas Stock Exchange during the four (4) banking days of each of
the "Offer Presentation Periods".
(2.3) The "Offer Publication Day" shall occur on the business day
next succeeding each Offer Presentation Period. On the Offer Publication Day,
the Company will have to publish internal company notices at national level
indicating the offers to sell received, so that they can be known by all
Participants, Benefit Plans and Workers Companies, who will have the right to
acquire any or all the Available Shares.
Said internal notice will contain the following information: (i) the number of
Available Shares; (ii) the Fixed Price for such shares; (iii) the last day on
which the Participants, Benefit Plans and Workers Companies may exercise their
preferred rights; and (iv) the instructions as to the mechanism to advise the
Company of their intention to purchase said shares.
(2.4) The "Preferred Right Period" shall be the three (3)
business day period next succeeding the Offer Publication Day. During each
Preferred Right Period, all Participants, Benefit Plans and Workers Companies
interested in purchasing any number of Available Shares may exercise their
preferred right by stating their intention to purchase the Available Shares,
indicating the number of shares they wish to purchase and the purchase price,
which may be equal or higher than the Fixed Price, except in case of discounts
granted pursuant to Article 5(e)(2.1).
The preferred right shall be exercised in strict order of presentation of the
offers, except in case of any offers at a price higher than the Fixed Price,
which shall have priority to acquire a pro rata amount of Available Shares owned
by each selling shareholder
(2.5) The sale of the shares will be consummated upon knowledge
by the seller that the buyer has accepted the offer, which shall be deemed to
occur when the buyer deposits the purchase price for the seller's shares with
the trustee who holds the seller's shares or when the buyer delivers a copy of a
cashier's check in the seller's name to the Investor Relations Office of CANTV.
The sale so consummated shall be irrevocable. If either the buyer or the seller
fails to fulfill such party's obligations, such party's activities in the
Internal Market will be suspended for three (3) months, without prejudice of any
legal recourse that either the seller or the buyer may pursue.
(2.6) Any Participant, Ex-Worker and Other Holders of Class "C"
Shares, except for Workers Companies and Benefit Plans, may dispose of any
number of Class C shares, in which case, it will only be necessary to pay the
debt for the amount of the shares to be sold each time, following the procedures
established by the Company.
14
(2.7) Any Available Shares not acquired by Participants, Benefit
Plans or Workers Companies within the Preferred Right Period will remain the
property of the holder, who may, at such holder's discretion: (i) sell them to
third parties; (ii) re-offer them in the Internal Market Process; and (iii)
solicit in writing from the Company the conversion into an equal amount of Class
"D" Shares, provided that any debt to the Social and Economic Development Bank
(BANDES) is paid.
3) CANTV may adopt its own inspection procedure to insure that all
Worker Companies satisfy the condition of clause (iii), paragraph (c), Article
5. CANTV may inspect the Bylaws and shareholders books of such Worker Companies
and annually certify their qualification as such. If CANTV determines that a
Worker Company does not satisfy the requirements of such clause, CANTV shall
notify the Workers Company in writing that it has to remedy the default in a
period of fifteen (15) days from such notice; otherwise, any purchase of shares
made by such company will be null and not recognized for registration in the
Shareholders Book. In addition, the Workers Company will lose the preferential
right to continue to buy Class "C" shares.
4) A Participant who terminates his employment relation with the
Company or any of its affiliates may maintain the ownership of his shares and if
he decides to transfer such shares he shall offer to the Participants, Benefit
Plans and Worker Companies the right of first refusal to purchase all or any
portion of such shares.
The termination of the employment relation means that the ex-worker loses the
condition necessary to belong to a Workers Company. Therefore, upon the
termination, the Workers Company to which the terminated worker belongs shall
agree to deliver to such worker the Class "C" shares corresponding to him, who
shall follow the procedure set forth in the second to the last paragraph of
literal c) of this article.
The deadlines set forth in the Article 5, paragraph e), concerning the procedure
for the transfer of Available Class "C" Shares may be modified by the Board of
Directors by unanimous decision of all members present at the meeting where such
business is discussed.
Any transfer of Class "C" shares in violation of the provisions of this
paragraph e) shall be considered null and void, and a statement of this
restriction shall be made in the respective certificates of such shares.
Article 6.- Each share gives its holder the right to one vote at the
Shareholders' Meetings.
III
SHAREHOLDERS' MEETINGS
Article 7.- The decisions of the Shareholders' Meetings within the limits of
its powers shall be binding on all shareholders. The President of the Company,
or whomever substitutes for him, shall preside over the Shareholders' Meetings.
15
Article 8.- The Shareholders' Meetings may be either regular or special.
Regular Shareholders' Meetings shall occur within the first three (3) months
following the end of each annual fiscal year of the Company, to discuss the
issues referred to in Article 275 of the Code of Commerce, for which purpose the
Board or Director shall establish the date and time of the Meeting in advance.
Special Shareholders' Meetings shall occur every time required by the Company's
interests, at the discretion of the Board of Directors, the Comptrollers or a
number of shareholders representing twenty percent (20%) of the entire capital
stock. All Shareholders' Meetings shall be held in the city of Caracas.
Article 9.- The Shareholders' Meetings, both regular and special, shall be
called by the Board of Directors of the Company through a notice to be published
in one of the newspapers of greater circulation in Caracas not less than fifteen
(15) calendar days before the date of the Meeting. The notice shall clearly
state the place, date and purpose of the Meeting and will be an indispensable
requisite for its validity. However, if the shareholders holding one hundred
percent (100%) of the capital stock entitled to vote at such Meeting are
present, they may hold a Meeting without prior notice and in this case shall
agree upon the respective agenda.
Article 10.- The Shareholders' Meetings, whether regular or special, regardless
of purpose, may be validly constituted only if at least fifty percent (50%) of
the voting shares of the capital stock are represented or, in the case of a
Meeting with the sole purpose of appointing or removing Directors, at least
fifty percent (50%) of the shares of the capital stock entitled to vote with
respect to such Directors, in accordance with Article 14, and their decisions
shall be adopted by absolute majority of the votes present. The quorum and the
majority established herein, are applicable even in those cases for which the
Code of Commerce requires greater majorities and representation. Notwithstanding
the foregoing, (1) the favorable vote of the holders of a majority of the Class
"B" shares will be required for the Meeting to adopt decisions regarding the
matters provided for in letters c) and d) of Article 11; (2) until January 1,
2001, the favorable vote of the holders of a majority of the Class "A" shares
will be necessary for the Meeting to adopt decisions regarding the matters
provided for in letters c), ch) and d) of Article 11, and, after such date, the
favorable vote of the holders of the Class "A" shares shall continue to be
necessary for such decisions as long as the Class "A" shares together with any
other shares of the Company held by the Operator and the Participants in the
Consortium, represent in the aggregate at least forty percent (40%) of the
capital stock on the date of the resolution of the Shareholders' Meeting and the
preferred right of the Operator set forth in Article 5 d) has not expired, and
(3) the votes per applicable class established in Article 11, shall also be
required to amend some of the provisions of these Bylaws in the manner and to
the extent set forth in Article 11.
Article 11.- The only attributions of the Shareholders' Meeting are:
a) To discuss, approve or modify the Balance Sheet to be
submitted by the Board of Directors, with a review of the Comptroller's Report.
b) To appoint and remove the President, the eight Principal
Directors, the two (2) Shareholder's Representatives and the respective
Alternates, and setting the remuneration for the latter.
16
c) To resolve regarding the company's dissolution or merger
with another company, or any other extraordinary operation involving the Company
or the payment or reduction of the capital stock
ch) To decide on any capital stock increase.
d) To authorize the sale of corporate assets.
e) To amend these Bylaws, provided, however, that for any
amendment affecting any of Articles 2, 4 b), 5, 6, 8, 9, 10, 11 c), 11 ch), 11
d), 11 e), 14, 15, 16, 17, 18, 19, 20 b), (1) the favorable vote of the holders
of the majority of Class "B" shares will be required and, (2) until January 1,
2001, the favorable vote of the holders of the majority of the Class "A" shares
shall continue to be necessary, provided the Class "A" shares together with any
other shares of the Company held by the Operator and the Participants in the
Consortium, jointly represent at least forty percent (40%) of the capital stock
on the date of the resolution of the Shareholders' Meeting and the preferred
right of the Operator set forth in Article 5 d) has not expired; and
f) To designate the external auditors of the Company.
g) To designate the Transfer Agent of the Company.
h) To decide on the amount, frequency and form of payment of
dividends, in accordance with article 28 of these Bylaws.
Article 12.- If the number of shareholders necessary to constitute a quorum at
a Shareholders' Meeting is not present, the rules set forth in the Code of
Commerce shall be followed. If the required number of shareholders is not
present at the time set for the Meeting, it shall be deemed that there is no
quorum.
Article 13.- Minutes shall be kept of the Shareholders' Meetings, containing
the name of all persons present at the Meeting and indicating the class and
number of shares held or represented as well as the agreements and decisions
made. The Minutes shall be certified by the Secretary of the Board of Directors
of the Company or the person acting in his stead.
IV
ADMINISTRATION
Article 14.- To the greatest extent permitted by law, the management and
administration of the Company shall be exercised by a Board of Directors
constituted by the President of the Company and eight Principal Directors, each
of whom shall have an Alternate. The Board Meetings shall be presided by the
President of the Company and in his temporary absences, by his Alternate
Director. In the case of absolute absences by the President, and until the
Special Shareholders' Meeting to elect a new President takes place, the
President's Alternate Director
17
shall represent the Company. The Directors of the Company may designate from
their midst a Special Director to preside the Board Meetings.
The members of the Board of Directors shall be designated at the Shareholders'
Meeting as follows:
a) Until January 1, 2001 the President of the Company and four
(4) Principal Directors and their respective Alternates shall be appointed by
the holders of the majority of the Class "A" shares. If as of January 1, 2001
the Class "A" shares together with other shares of the company directly or
indirectly held by the Operator and the Participants in the Consortium represent
at least forty percent (40%) of the Company's capital stock on such date, they
will have the right to elect the President and four (4) Principal Directors and
their respective Alternates until the date on which any of the following events
first occurs: (1) the Operator, the Participants in the Consortium and their
respective affiliates directly or indirectly hold shares representing more than
fifty percent (50%) of the Company's capital stock; (2) the Class "A" shares
together with any other shares of the Company directly or indirectly held by the
Operator and the Participants in the Consortium represent less than forty
percent (40%) of the Company's capital stock; or (3) the preferred right of the
Operator set forth in paragraph d) of Article 5, has expired. In these cases and
thereafter, the President and the four (4) Principal Directors and their
respective Alternates shall be elected by the majority of all votes of all
shareholders present at the Shareholders' Meeting, regardless of class of shares
held by them.
b) Until January 1, 2001, two (2) Principal Directors and their
respective Alternates shall be appointed by the holders of the majority of Class
"B" shares. After such date, the Republic of Venezuela shall have the right to
appoint one Principal Director and his Alternate, regardless of the number of
Class "B" shares it may hold, and the other Principal Director and his Alternate
shall be appointed by majority vote of all shareholders present at the
Shareholders' Meeting, regardless of the class of shares they hold.
c) The Class "C" shareholders shall have the right to elect two
Principal Directors and their respective Alternates provided the aggregate of
Class "C" shares represents at least 8% of the capital stock of the company.
They shall elect only one Principal Director and his Alternate if the Class "C"
shares represent less than 8% but at least 3% of the capital stock of the
company. If the Class "C" shares in the aggregate represent less than 3%, they
shall have no right to elect Directors. Consequently, the Principal Directors
and their Alternates shall be appointed by a majority of all shareholders
present at the Shareholders' Meeting, regardless of the class of shares they
hold. These percentages shall apply only under the assumption that the Venezuela
Investment Fund (FIV), when making a public offering of its shares, transfers or
reserves 9% of the capital stock of the company to the workers and retired
workers of the company. If the FIV makes no public offering, the Class "C"
shareholders shall have the right to elect two (2) principal Directors and two
(2) Alternates, regardless of the number of shares they own.
The candidates for Principal Directors and their respective Alternates, in
addition to being Class "C" shareholders, shall be retired workers or active
workers under a contract with an indefinite term, and with a minimum of five (5)
full years of uninterrupted services to the company,
18
provided in a period immediately prior to their appointment, and shall be chosen
through a universal selection process that will have as a requirement the direct
and secret vote of the class "C" shareholders. Such process shall de performed
annually at least one week prior to the Regular Shareholders' Meeting. The Class
"C" shareholders will be timely notified of the date and procedure for the
selection of the candidates and the form of the vote.
The Principal Directors and their Alternates so chosen shall be appointed by the
shareholders by a majority of the votes issued in the Shareholders' Meeting in
the following way: Any vote of a holder of Class "A", "B" or "D" shares in favor
of any of the other respective Principal Directors and their Alternates
appointed in paragraphs a) and b) above, shall also constitute a vote in favor
of the candidates proposed by the Class "C" shareholders, as set forth in this
paragraph c).
Article 15.- Until the vacancy is covered in accordance with the preceding
article, the temporary and absolute absence of the Principal Directors shall be
filled by the respective Alternates without need to be formally called and
without having to justify before third parties the absence of the Principal.
Before taking office, each Director shall deposit or cause the deposit in the
corporate treasury a Share of any class, for the purposes set out in Article 244
of the Code of Commerce. With respect to the Directors appointed by the holders
of Class "A" shares, the shares may be deposited on behalf of such Directors by
the Operator, and such deposit does not mean a violation of the provisions of
these Bylaws nor a transfer for the purposes of Article 14 a) and Article 5d).
Article 16.- The Members of the Board of Directors, whether Principal or
Alternate, shall be persons of proven experience and executive capability, and
must be competent to manage the operations of the Company in general.
Article 17.- The Board of Directors shall meet at least once every three (3)
months with a prior notice given no less than forty-eight (48) hours in advance
and an agenda signed by the President. It shall also hold special meetings
whenever it is called at least forty-eight (48) hours in advance by the
President on his own initiative or at the request of two (2) Principal
Directors. All meetings of the Board of Directors shall take place in Caracas,
unless all Directors unanimously agree to hold any meeting in another city. The
quorum to take action shall be at least five (5) members, who may be either
Principal Directors or Alternates.
Article 18.- The resolutions of the Board of Directors shall be passed by
absolute majority of its Members present, who are not prohibited by law to vote
on the subject matter, and Minutes shall be kept of the discussions and signed
by the Members present.
Article 19.- The Company shall not perform any operation that is related to or
involves any person or entity directly or indirectly controlling the Company, or
any shareholder or affiliate of such person, or any shareholder holding shares
representing more than one percent (1%) of the capital stock of the Company, or
any affiliate of such shareholder, or any Director of the Company or an entity
in which a Director has a direct o indirect interest, unless any such operation
is under terms at least as favorable to the Company as those which the Company
could
19
obtain from non-related third parties. For the purpose of this Article 19,
paragraph a) of Article 14, and paragraph d) of Article 5, an affiliate shall be
understood to be a person who directly or indirectly or through one or more
intermediaries controls, is being controlled by or is under common control with,
the specified person. Any business in violation of this Article 19 shall not be
enforceable against the Company, and the Directors taking part in such business
may be deemed to have committed a serious breach that may warrant their removal.
Article 20.- As limited by these Bylaws, the Board of Directors has the power
to direct, dispose and administer the Company, especially the following
attributions:
a) To establish the policies for the preparation of the Company's
plans, programs and budgets and the policies for the remuneration of its
workers; to approve such policies and become periodically informed of their
progress.
b) To authorize the execution of all kinds of contracts, including
loan agreements with local, foreign and international credit institutions; the
purchase, sale or encumbrance of real and personal property; the issuance,
acceptance, endorsement, discount and guarantee of bills of exchange, promissory
notes, and other negotiable instruments and securities; the granting of
security, and, in general, as many contracts as may be necessary for the
accomplishment of the corporate purpose.
The President will not require authorization to approve or sign contracts up to
the level that is periodically authorized by the Board of Directors. In such
cases, at each Board Meeting, the President shall present a Report of the terms
of any contract which does not require authorization from the Board of Directors
executed by the Company since the last Board Meeting.
c) To propose to the Shareholders' Meeting the amount, frequency and
form of payment of dividends; to decide on when to pay the dividends; and to
comply with the Shareholders' Meeting's instructions regarding dividends; all in
accordance with the second paragraph of article 28 of these Bylaws.
ch) To allocate the funds necessary for the formation of the legal
reserves and the other reserves deemed necessary.
d) To establish and recommend the policies concerning the
administrative organization and operation of the Company.
e) To comply with the decisions and resolutions of the Shareholders'
Meetings.
f) To designate the Vice Presidents and the Secretary of the Board
of Directors from the candidates nominated by the President, determine their
duties and powers and fix the remuneration of the Members of the Board of
Directors. The Secretary of the Board of Directors may be elected from other
than the member of said Board.
20
The Board of Directors may delegate its Company administration responsibilities
to the President and other high ranking executives of the Company who will
remain under the supervision of the Board of Directors.
g) The Board of Directors shall create such "consulting and/or
management" Committees as it may deem advisable to the interests of the Company,
establishing for them such powers and duties as in its discretion will be
necessary for the proper performance of their functions.
Article 21.- The Board of Directors may agree to temporarily assign one or
more of its Members on a full or a part time basis to fulfill certain
specifically designated tasks.
V
THE PRESIDENT
Article 22.- The president of the Company has the following duties and powers:
a) To administer the Company according to his powers and to the
decisions of the Shareholders' Meeting and the Board of Directors.
b) To exercise the ultimate direction and legal representation of
the Company, except for judicial matters that are reserved for the Principal
Judicial Representative and the Assistant Judicial Representative.
c) To open, use and close bank and deposit accounts. This power may
be delegated to the General Finance Manager of the Company.
ch) To approve and sign on behalf of the Company all contracts,
documents, instruments and correspondence in which the Company may have an
interest or to which the Company may be a party, up to the level authorized by
the Board of Directors. This authority may be delegated by the President to the
Executive Vice President, General Managers, Managers or any other Company
Executive; indicating the acts the signatures of which it delegates and the
nature and amount of the acts to which the delegation refers. This delegation
must be expressly made by the President. The President may resume the delegated
functions and exercise them by himself whenever he so deems convenient.
d) To resolve and order regarding the administrative structure and
organization as well as the operation of the Company.
e) To propose to the Board of Directors, in accordance with the
provisions under letter g) of Article 20, the candidates for Executive Vice
President, General Managers and Secretary of the Board of Directors.
f) To appoint and remove the workers of the Company except as
provided for in Articles 20 g), 23 and 26 of these Bylaws, and, in general, to
manage the Company's personnel.
21
This power may be delegated by the President to the Executive Vice President and
some General Managers of the Company.
g) To designate commissioners and commissions to carry out studies on
technology, administration, or any other studies of interest to the Company.
h) To supervise the work of the Executive Vice President, the General
Managers and the other executives of the Company.
i) To designate commercial agents and other extrajudicial
attorneys-in-fact.
j) Such other powers vested in him under these Bylaws.
k) The President may delegate one or more of his powers, responsibilities
or attributions to the employees he deems convenient. These powers may be
resumed by the President whenever he deems necessary.
VI
JUDICIAL REPRESENTATION
Article 23.- The representation of the Company in Judicial matters shall be
exercised by the Principal Judicial Representative and the Assistant Judicial
Representative who will be designated by the Board of Directors vesting in them
the necessary powers and setting their compensation as well as the time during
which they will remain in office, although they may be removed by the Board of
Directors at any time without need to support such decision and without giving
rise to any indemnity whatsoever.
Article 24.- The Principal Judicial Representative shall have the following
powers: to represent the Company in all judicial matters that are of its
concern, for which purpose it may file and answer claims, suits and proceedings
of every nature or kind, file and answer exceptions and counterclaims, and file
and answer joinders of parties; follow lawsuits in all steps and jurisdictional
levels until they have ended completely; accept service of process or summons;
abandon, agree, settle, appoint arbitrators in equity or at law; make bids at
auctions with power for principal and accessory matters; disclaim documents;
make and accept payment of sums of money or property of any kind on behalf of
the Company and issue the respective receipts of cancellation documents; request
preventive measures or file administrative and judicial appeals of every type
and kind, including the ordinary appeal and the extraordinary appeals of
cassation, invalidity, annulment and petition in error; and, in general,
exercise all powers necessary for the best representation of the Company, since
the foregoing list is only illustrative and not restrictive. To settle in the
judicial and extrajudicial proceedings, the Judicial Representative shall
require the prior approval and/or delegation of the Board of Directors, which
may be general or particular to each case. These powers may be assumed by the
Assistant Judicial Representative when so authorized by the Principal Judicial
Representative or in the latter's absence.
22
Article 25.- Any legal process shall be served upon the Principal Judicial
Representative or the Assistant Judicial Representative, when the latter is
acting in the former's stead.
The Principal Judicial Representative shall be the only person authorized to
make sworn depositions for the Company, and he may grant and revoke judicial
powers of attorney, whether general o special, and vest the Assistant Judicial
Representative or the attorneys he appoints all or some of the aforementioned
powers, including the power to be summoned and to make sworn depositions. Such
powers shall not prevent the personal intervention of the Principal Judicial
Representative or of the Auxiliary Judicial Representative when previously
authorized to do so, in the cases that have been entrusted to the attorneys.
VII
COMPTROLLERS
Article 26.- The Company shall have two (2) Principal Comptrollers and two (2)
Alternate Comptrollers who will fill for the former in the event of their
temporary or absolute absence. They shall be appointed by the Shareholders'
Meeting by public and separate elections and will be in office for one (1) year.
However, they will remain in office until the new Comptrollers appointed to
replace them shall take over.
The Comptrollers will have the right and powers provided for them in the Code of
Commerce, the Capital Markets Law and these Bylaws. The Shareholders' Meeting
may designate such persons as it thinks fit to cooperate with the Comptrollers
in the proper fulfillment of their duties.
VII
II. BALANCE SHEET, RESERVES, PROFITS AND DIVIDENDS
Article 27.- On December 31 of each year the accounts will be closed and the
general balance sheet and profit and loss statement to be presented in due
course to the Comptroller will be signed, so that together with such
Comptroller's report, they are submitted by the Board of Directors to the
consideration of the Shareholders' Meeting.
Article 28.- In order to determine the profits in the fiscal year, the necessary
amounts shall be deducted to cover the expenses for depreciation, maintenance,
obsolescence, liabilities under the Organic Labor Law and Collective Bargaining
Agreement, provision for doubtful accounts, and any other expenses applicable to
the fiscal year. Five percent (5%) of the net profits thus obtained shall be
applied to the legal reserve fund until it reaches ten percent (10%) of the
capital stock.
The company shall, as its dividend policy, distribute the amount of profits that
is consistent with the Company's investment plans for the upcoming years, the
availability of cash and any other asset with which the respective dividends are
intended to be paid, and the general economic condition of the Company and the
country. In any case, the Company shall have as its policy the compliance with
all rules and regulations contained in the Capital Market Law and the Code of
Commerce, with respect to the declaration and payment of dividends.
23
The Board of Directors shall propose to the Shareholders' Meeting the frequency
and form of payment of the ordinary and extraordinary dividends. The
Shareholders' Meeting shall decide on the aforementioned issues, for which the
following majorities shall be required: (i) whenever the Shareholders' Meeting
decides to totally approve the proposal of the Board of Directors, a simple
majority of the votes that are represented at the respective Shareholders'
Meeting shall be required; (ii) whenever the Shareholders' Meeting decides to
modify the Board of Directors' proposition in any way, the favorable vote of
sixty-six point sixty-six percent (66.66%) of the votes represented at the
respective Shareholders' Meeting shall be required. When exercising such powers,
the Meeting may instruct the Board of Directors to make the decisions it deems
convenient with respect to any fiscal year, taking into consideration the
economic conditions and the conditions of the treasury of the Company and the
country, and the company's investment plans for the upcoming years. In this
latter case, the Shareholders' Meeting may make recommendations to the Board of
Directors with respect to the aforementioned matters. The Board of Directors
shall determine the time to pay the dividends that are declared in accordance
with this article.
IX
III. INDEMNITIES
Article 29.- The Company shall indemnify the Principal and Alternate Directors
as well as all persons designated by the Board of Directors who may be an
affected party in judicial or extrajudicial proceedings in any civil,
administrative and criminal action, suit or proceeding, whether pending,
existing or terminated, and for the expenses resulting from such proceedings in
Venezuela or abroad, by reason of the responsibility assigned to him as a
Director or Officer in order to assist in the gathering of information and
documents required for the Offering of the Shares and GDRs of CANTV by Fondo de
Inversiones de Venezuela.
Such indemnity shall be for expenses (including legal fees), judgments, fines
and any sum paid in settlement, actually originated by such person in relation
to the defense or settlement of any action, suit or proceeding, unless it is
found that the act or omission of the person that originated the proceeding was
incurred in bad faith or was the result of willful misconduct, and that the
person actually obtained a direct or indirect undue benefit in money, properties
or services or that, in case of a criminal proceeding, the person had reasonable
cause to believe that the act or omission was unlawful. Provided, however, that
if the action or proceeding was by or in the right of the Company, no indemnity
shall be given when the liability of such person to the Company has been
verified. The termination of any action, suit or proceeding is not a presumption
that the person did not comply with the standard of conduct required as
aforesaid. The expenses (including legal fees) incurred by any person in the
defense of an action, suit or proceeding, whether civil or criminal, may be paid
by the Company prior to the final determination of such action, suit or
proceeding, on receipt of a commitment from such person or on his behalf, to
reimburse the sum if it is finally determined that the person has no right to be
indemnified by the Company, as authorized in this clause.
The indemnity and advance of expenses authorized by this clause, shall not be
deemed exclusive of any other right, through indemnity or otherwise, to which
any person is entitled under any agreement, resolution of shareholders or
resolution of Directors or otherwise, and shall continue
24
with respect to a person who has ceased to be a Principal and Alternate Director
or an officer designated by the Board of Directors, and shall inure to the
benefit of his heirs, executors and administrators. The Company shall be
authorized to carry and maintain insurance on behalf of any such person, against
any liability of the person incurred with the above mentioned capacity or
arising from his capacity as a Director and/or officer.
Repeat in case it is eventually determined that his beneficiaries were not
entitled to the same.
The Company may comply with the obligation referred to in this clause by
contracting insurance for such purpose."
After fulfilling the agenda, the meeting was adjourned, and Dr. Mariela Rivas de
Belmonte, Secretary of the Board of Directors, was authorized to request its
registration with the Mercantile Registry and make the corresponding
publication.
25
The attendees sign below.
/s/ GUSTAVO ROSEN /s/ PATRICIA MACEDO
----------------- -------------------
Gustavo Roosen Patricia Macedo
President of CANTV Representative of VenWorld Telecom, C.A.
/s/ AURY OLIVEROS /s/ ANGELA FLORES DARIA
----------------- -----------------------
Aury Oliveros Angela Flores Daria
Banco Mercantil Representative of Banco de Desarrollo
"A" Shares Economico y Social de Venezuela (BANDES)
/s/ CORALIA JIMENEZ DELGADO /s/ RAFAEL CORONA G.
--------------------------- --------------------
Coralia Jimenez Delgado Rafael Corona G.
Representative of the Ministry of Unibanca
Infrastructure
/s/ MARIA NATALIA GOMEZ
DE FERREIRA /s/ RAFAEL RAMOS
----------------------- ----------------
Maria Natalia Gomez de Ferreira Rafael Ramos
Banco Mercantil "C" Shares Banco Caribe
/s/ RAISA BORTONE /s/ JOSE PACHECO
----------------- ----------------
Raisa Bortone Jose Pacheco
Banco Provincial Banco Venezuela
/s/ GABRIELA SANCHEZ /s/ NORA GONZALEZ
-------------------- -----------------
Gabriela Sanchez Nora Gonzalez
The Bank of New York Citibank, C.A.
/s/ QUISQUEYA PLANAS /s/ EUDORO BARRETO
-------------------- ------------------
Quisqueya Planas Eudoro Barreto
CANTV Comptroller CANTV Comptroller
/s/ MARIELA RIVAS DE BELMONTE
-----------------------------
Mariela Rivas de Belmonte
Secretary of the Board of Directors
26
CARACAS, December Fourteen (14), OF THE YEAR TWO THOUSAND ONE (2001).
(SIGNED). RIVAS DE BELMONTE, MARIELA, Dr. Judith Marcano. THIS CERTIFIED COPY OF
A PUBLICATION IS ISSUED UNDER ROLL NUMBER 508585.
20/MAR
/s/ JUDITH MARCANO
------------------
Dr. Judith Marcano
FIRST MERCANTILE REGISTRAR
27
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPANIA ANONIMA NACIONAL
TELEFONOS DE VENEZUELA, (CANTV)
By: /s/ ARMANDO YANES
-----------------
Armando Yanes
Chief Financial Officer
Date: February 15, 2002
28