Centrais Eletricas Brasileiras : Policy of Disclosure and Use of Relevant Information and Negotiation

POLICY OF DISCLOSURE AND USE OF RELEVANT INFORMATION AND NEGOTIATION OF ELETROBRAS COMPANIES'

SECURITIES

POLICY OF DISCLOSURE AND USE OF RELEVANT INFORMATION

AND NEGOTIATION

OF ELETROBRAS COMPANIES'

SECURITIES

Version 1.0 11/28/2018

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POLICY OF DISCLOSURE AND USE OF RELEVANT INFORMATION AND NEGOTIATION OF ELETROBRAS COMPANIES'

SECURITIES

Contents

Introduction ............................................................................................................... 3

• 1 Purpose ............................................................................................................. 4

• 2 Concepts ........................................................................................................... 4

• 3 References ........................................................................................................ 8

• 4 Principles .......................................................................................................... 8

• 5 Guidelines ......................................................................................................... 9

  • 5.1 Scope .............................................................................................................. 9

  • 5.2 Practices of Disclosure of Relevant Information ................................................... 10

  • 5.3 Investor Relations Officer's Duties ..................................................................... 15

  • 5.4 Bound Persons' Duties ..................................................................................... 16

  • 5.5 Controlling Shareholders' Duties ....................................................................... 16

  • 5.6 Disclosure of Annual and Quarterly Results ......................................................... 17

  • 5.7 Meetings and Teleconferences with Analysts and Investors ................................... 18

  • 5.8 Website of Eletrobras' Investor Relations ............................................................ 18

  • 5.9 Relationship of the other Departments of Eletrobras with the Investor Relations

  Department ............................................................................................................. 18

  • 5.10 Disclosure of Information in Public Offerings .................................................... 19

  • 5.11 Crisis Situations ........................................................................................... 19

  • 5.12 Disclosure of Information about Negotiations of Managers, Fiscal Council Members and Members of any Bodies with Technical or Consulting Assignments created by Statutory

  Provision and Related Persons ................................................................................... 20

  • 5.13 Disclosure of Transactions with Related Parties ................................................ 22

  • 5.14 Disclosure of Information on Relevant Negotiation ............................................ 22

  • 5.15 Preclusions to the Negotiations of Securities .................................................... 23

  • 5.16 Exceptions for the Preclusion of Negotiation of Securities .................................. 24

  • 5.17 Severe Penalties and Breaches ....................................................................... 26

• 6 Responsibilities ............................................................................................... 26

• 7 General Provisions .......................................................................................... 26

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POLICY OF DISCLOSURE AND USE OF RELEVANT INFORMATION AND NEGOTIATION OF ELETROBRAS COMPANIES'

SECURITIES

Introduction

This "Policy of Disclosure and Use of Relevant Information and for the Negotiation of Securities Issued by Eletrobras" (hereinafter referred to as "Policy"): (i) governs the disclosure of Relevant Information on Eletrobras and its subsidiaries, as well as it regulates the access to Confidential Information, under the terms of CVM Instruction No. 358, and other applicable laws; and (ii) provides for guidelines and procedures that govern, in an orderly manner and within the limits established under the law, the negotiation of securities of Eletrobras, which should be met by Bound Persons and the Company itself, aiming at ensuring the transparency in transactions, in such a way to prevent the use of Confidential Information concerning Eletrobras to the benefit of the Bound Persons themselves, and that of third party, according to CVM Instruction No. 358, and further applicable laws.

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POLICY OF DISCLOSURE AND USE OF RELEVANT INFORMATION AND NEGOTIATION OF ELETROBRAS COMPANIES'

SECURITIES

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Purpose

Establishing and governing the mandatory practices for the use and disclosure of Relevant Information within the scope of Eletrobras, as well as negotiating Securities of its issuance, with the purpose, moreover, of establishing rules and procedures to be mandatorily abided by the Subject Persons, concerning the disclosure of Relevant Information, the keeping of its confidentiality and the access to Confidential Information, negotiations of Securities, in accordance with the legal, statutory provisions, and further internal regulations, thus preventing the undue use of Confidential Information, and ensuring the egalitarian treatment of Eletrobras' investors.

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Concepts



Controlling shareholder

Federal Government and/or other shareholders that fall under the concept established by Article 116 of the Brazilian Corporate Law (Law No. 6,404/1976). It may also be referred to as "Parent Company."



Managers

Officers and their deputies and members of Eletrobras' Board of Directors - CA.



American Depositary Receipts (ADR's)

Stock certificates issued by US financial institutions pegged to the securities of a foreign company.



Investor Relations Department

A technical department of Eletrobras that is responsible for the relationship with shareholders, securities investors and regulatory bodies.



Extraordinary General Meeting of Shareholders - AGE

The upper instance in the company operating for deliberating purposes only, which is set up by the meeting of shareholders, duly summoned and opened, to deliberate on business of interest of Eletrobras, in accordance with the assignments established in the Bylaws and in the Corporations Act.



Stock Exchange

It is the organized market entity where securities issued by the Eletrobras are accepted for negotiations, either domestically or abroad, such as Brasil, Bolsa, Balcão ("B3"), The New York Stock Exchange ("NYSE") and Madrid Stock Exchange for the Latin American Market ("LATIBEX").



Bonds

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POLICY OF DISCLOSURE AND USE OF RELEVANT INFORMATION AND NEGOTIATION OF ELETROBRAS COMPANIES'

SECURITIES

Debt securities issued by Eletrobras abroad, not referred to by the shares, by means of which the purchase of the security receives periodical interests, and the principal on the security's maturity.

•  Associates

The companies wherein Eletrobras has significant influence, under the terms of Article 243, Paragraph 1 of the Brazilian Corporate Law (Law No. 6,404/1976).



Brazilian Securities and Exchange Commission (or "CVM")

Government agency connected to the Ministry of Finance, created by Law No. 6,385, dated December 7, 1976, with the purpose of inspecting, standardizing, governing, and developing the securities market in Brazil.



Market Announcement

An instrument by means of which the Company makes public information that may be useful for shareholders and investors, but which not is not Relevant Information, under the terms of CVM Instruction 358;



Fiscal Council Members

Acting members and deputies of Eletrobras' Fiscal Council.



Commercial Contacts

Every individual or corporation that is acquainted with Company's Confidential Information or that of its subsidiaries, as a result of business, professional or trust relationship, such as independent auditors, securities analysts, lawyers, consultants, partners, service providers, rating agencies, advisors, and accountants.



Subsidiaries

All companies that are under the Company's control, either directly or indirectly, in Brazil and abroad, as established under Article 243 of the Corporations Act.



Investor Relations Officer

Eletrobras' Officer, appointed under the terms of the Bylaws of the company or upon delegation, as responsible for the company's agency and reporting to investors and shareholders, to CVM, SEC and Stock Exchanges, as well as for duly updating the publicly-held company's database of Eletrobras.



Employees and executives with access to relevant information

The employees, Eletrobras' officers, and its advisors that, as a result of their position or job title in the Company, have access to any Confidential Information;



Former Managers

The Company's Managers and Fiscal Directors after no longer holding their positions/job titles, owing to license, resignation, removal or substitution.



Registration Form

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