Ata 136 by ashrafp

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									ELETROBRÁS -Centrais Elétricas Brasileiras S.A. – 136

MINUTES OF THE 136th EXTRAORDINARY STOCKHOLDERS’ GENERAL
MEETING OF CENTRAIS ELÉTRICAS BRASILEIRAS S.A. – ELÉTROBRÁS

         On July 19, 2002, at 10:00 am, at the head office of the Company, located at Setor
Autarquias Norte, Rua Dois, PETROBRÁS’ Building, 4th andar [floor], in Brasília,
Distrito Federal, the 136th Extraordinary Stockholders’ General Meeting of Centrais
Elétricas Brasileiras S.A – ELETROBRÁS was held, an Open Corporate, with NIRE
[Company Roll Registration Number] under number 53300000859 and enrolled in the
Corporate Taxpayers’ Roll under number 00001180/0001-26, with the presence of
stockholders holding common stocks in a number sufficient for the legal enforceability of
the present General Stockholders’ Meeting, according to the records set out on page 32 of
the Book of Attendance no. 4. Pursuant to provisions set out in article 35 of the
Company’s By-Laws, the Director of ELETROBRÁS, Dr. NEREU RAMOS NETO was
appointed President and declared the meeting open, inviting AFRÂNIO ALENCAR
MATOS FILHO to act as secretary to the general meeting, under the approval of all
present stockholders. The President recorded the presence of the General Legal Counsel
Mrs. Maria Aparecida de A. P. Seabra Fagundes and of the General Auditor, Mr. Jorge
José Teles Rodrigues, both from ELETROBRÁS. After the Presiding Board of the general
meeting was duly appointed, the President declared the one hundred and thirty sixth
(136th) Extraordinary Stockholders’ General Meeting opened and informed that the
general meeting was lawfully called through invitation notices published in the Official
Gazette on days 4, 5 and 8 and in the newspapers O Globo, Gazeta Mercantil, Valor
Econômico and Correio Brasiliense on July 4, 5 and 6, 2002, with the following wording:
“MINISTRY OF MINES AND ENERGY - Centrais Elétricas Brasileiras S.A. –
ELETROBRÁS – (Open Corporate) CNPJ. [Corporate Taxpayers’ Roll] no.
00001180/0001-26 – Call Notice – 136th Extraordinary Stockholders’ General Meeting.
The Stockholders of Centrais Elétricas Brasileiras S.A. – ELETROBRÁS are invited to
meet at the head office of the Company, located at Setor de Autarquias Norte, Rua Dois,
PETROBRÁS Building - 4th andar [floor], in Brasília, Distrito Federal, on July 19, 2002 at
10:00 am on a first call, and at 10:30 am on second call, for the General Stockholders’
Meeting in order to deliberate upon the following subjects: 1. Consolidation of the by-
laws reform by virtue of the provision set forth in article 135 of Law 6404/76 and
deliberation of the 135th General Extraordinary Stockholders’ Meeting held on May 15,
2002, which proposal is at the stockholders’ disposal at the Company’s head office, in the
Investors Relations Division, in Rio de Janeiro, and on the site
http://www.eletrobras.gov.br/invest. The attendance to the mentioned meeting is subject to
the proof of delivery at ELETROBRÁS of a declaration issued by the depositary financial
institution, identifying the stockholder status. The referred to delivery must be made up to
July 16, 2002, in the Funding and Investors Relations Department - DFR, Investors
Relations Division - DFRM, at Avenida Presidente Vargas, 409 – 9th andar [floor], in the
city of Rio de Janeiro, State of Rio de Janeiro, from 8:00 am to 12:00 pm and from 2:00
pm to 5:00 pm Brasília, July 04, 2002. (signed) FRANCISCO LUIZ SIBUT GOMIDE -
President of the Administrative Management Council.” After the Call Notice reading, the
President submitted to the present stockholders appreciation the single item the Meeting
Agenda. The President gave the floor to the representative of the Federal Government,
Mrs. KÁTIA APARECIDA ZANETTI DE LIMA, who voted favorable to the
consolidation of the Company’s By-Laws Reform, as proposed by the Senior
Management and as deliberated in the One hundred and thirty-fifth (135th) General
Extraordinary Stockholders’ Meeting held on May 15, 2002, noting that article 2 must be
consolidated by adding the expression “dated April 25, 1961”, after the sentence “shall be
governed by the Federal Law no. 3.890-A”, with the purpose of keeping in line with the
wording currently in force, and was followed by the other stockholders, except the
stockholder CI Mirante IBX Fundo de Investimentos em Ações, represented by Mr.
RICARDO JOSÉ MARTINS GIMENEZ, who abstained from voting. The President
declared the consolidation of ELETROBRÁS By-Laws Reform approved according to the
following wording, its enforcement resting subject to the approval of His Excellency, the
President of the Republic, by Decree, pursuant to article 5 of Law no. 3.890-A.

           “CENTRAIS ELÉTRICAS BRASILEIRAS S.A. – ELÉTROBRÁS

                                        BY-LAWS

                                       CHAPTER 1

                 Name, Organization, Head Office, Duration and Purpose

Article 1 - Centrais Elétricas Brasileiras S.A. – ELETROBRÁS is a mixed capital
corporation, constituted in compliance with the authorization provided by Federal Law no.
3.890-A, dated April 25, 1961 and organized according to the present By-laws.

Article 2 - ELETROBRÁS, as an entity subject to the indirect federal public management
shall be governed by Law 3.890-A, dated April 25, 1961, as amended, by the legislation
applicable to joint stock companies, by the special provisions of federal laws, when
applicable, and by the present By-Laws.

Article 3 - ELETROBRÁS has its head offices in the Federal Capital and central office in
the City of Rio de Janeiro - RJ, and will operate directly or through its subsidiaries or
companies to which it may become associated, and aiming to carrying out its corporate
purpose, create offices in Brazil and abroad.

1st Paragraph – ELETROBRÁS may directly allocate funds and minority participation in
companies or consortia of companies holding concession for the generation or
transmission of electric power, as well as in those companies they create to carry out their
corporate purpose.

2nd Paragraph - In the subsidiary companies which ELETROBRÁS may constitute,
subject to previous legislation authorization, the general principles of Law no. 3890-A,
dated April 25, 1961, shall also be considered when applicable, except in respect of the
administrative structure, which may be adapted to the specific standards and to the
importance of the services provided by each company, as well as to the conditions of
participation of the other partners.

3rd Paragraph - The subsidiary companies shall comply with the administrative, financial,
technical and accounting principles, as standardized as possible, set by ELETROBRÁS.
4th Paragraph - The representatives of ELETROBRÁS in the administration of the
companies, subsidiaries or not, in which ELETROBRÁS holds a participation, shall be
chosen by the CAE [Administrative Management Council], by majority votes.

5th Paragraph - The Company is constituted for indeterminate duration.

Article 4 - The corporate purpose of ELETROBRÁS is:

a) to carry out studies, projects, construction and operation of power plants and
transmission lines and distribution of electric power, as well as the execution of business
transactions in connection with these activities, such as the trade of electric power;

b) to cooperate with the Ministry to which it is connected in the development of the
country’s power policy;

c) to grant loans to electric power public utilities concessionaires under its control, and to
provide guarantees in Brazil or abroad, in favor of said companies, as well as to purchase
debentures of their issue;

d) to grant loans and guarantees in Brazil or abroad, in favor of technical-scientific
research entities under its controls;

e) to promote and support researches of interest to the power sector, in connection with
the generation, transmission and distribution of electric power, as well as studies
regarding the utilization of reservoirs for multiple purposes;

f) to contribute to the training of the technical personnel required by the Brazilian electric
power sector, as well as to the preparation of qualified labor, by means of specialized
courses, whereto it may also grant assistance to educational entities in Brazil or
scholarships abroad and may sign agreements with entities which cooperate in the
qualification of specialized technical personnel;

g) to technically and administratively cooperate with companies in which it holds a stock
participation and with the divisions of the Ministry to which it is has a connection.


                                       CHAPTER II

                                Operations and Obligations

Article 5 - ELETROBRÁS shall, as the technical, administrative and financial
coordinating entity of the electric power sector, as well as through delegation of the public
power, in compliance with the legal provisions in force, among other obligations:

a) promote, through its regional subsidiaries, the construction and the respective operation
of power centers of exceeding the state interest and of high and extra-high tension
transmission systems, aiming at an inter-state integration of the electric and transmission
systems destined to the transport of the electric power produced in bi-national generating
companies;
b) to promote studies of power plants based upon non-conventional primary sources of
power;

c) give its opinion on concessions of electric power generation requested to the ANEEL
[National Agency of Electric Energy], including on the technical, economic and
financial adequacy of projects of electric-nuclear plants to the systems of concessionaires
of electric power utility services;

d) to develop rural power supply programs;

e) to participate in associations or organizations of technical, scientific and entrepreneurial
nature, of regional, national or international scope, of interest to the electric power sector;

f) to promote the elaboration, follow-up and control of the multi-annual budget of the
electric power sector;

g) to act as an executive body of the statistics information system of the electric power
sector;

h) to cooperate in the protection of the environment, by means of a proper utilization of
the natural available resources, and the protection of the hydro resources, forests, fauna
and flora, and avoid pollution in any of its forms, within the scope of its activities;

i) to coordinate the activities connected with the promotion and incentive of the national
industry of materials and equipment intended for the electric power sector;

j) to develop programs of technical regulation, standardization and quality control of the
materials and equipment designed for the electric power sector;

l) to develop programs, projects and activities to motivate and guide the consumers, in
order to reach a balance between electric power supply and demand.



                                       CHAPTER III

                                   The Capital and Stocks

Article 6 - The capital stock of the Company amounts to twenty billion, six hundred and
twelve million, one hundred and ninety five thousand, nine hundred and nine reais and
forty eight cents (R$ 20,612,195,909.48) divided into 452,511,763,550 common stocks,
73,460,000 Class “A” preferred stocks and 84,917,297,330 class “B” preferred stocks, all
of them without par value.
Article 7 - ELETROBRÁS’ stocks shall be:

a) - common, under nominative form, bearing voting right;

b) - preferred, under nominative form, non-voting right in the general meetings.
1st Paragraph – Both types of stocks indicated above may be kept in deposit accounts in
the names of their respective holders, in the form of book entry stocks, without the issue
of stock certificates, with a financial institution appointed by the CAE of ELETROBRÁS.

2nd Paragraph – Whenever a transfer of stocks ownership is made, the depositary financial
institution may charge to stockholder selling the stocks for the cost of the transfer
services, subject to the maximum limit set by the CVM [Brazilian Securities
Commission].

Article 8 – The preferred stocks cannot be converted into common stocks and shall be
entitled to priority in the reimbursement of capital and in the distribution of dividends.

1st Paragraph – The Class “A” preferred stocks, which are those subscribed until June 23,
1969, and bonus stocks resulting from said stocks, shall be entitled to priority in the
distribution of dividends not below 2% per year, at the legal rate of remuneration of the
investment in electric power companies, said dividends to be calculated over the own
capital in connection to that stock type and class, the dividends to be equally prorated
between them.

2nd paragraph – The class “B” preferred stocks, which are the stocks subscribed as from
June 23, 1969, shall be entitled to priority in the distribution of dividends, at the rate of six
per cent (6%) per year, over the own capital in connection to that type and class of stocks,
to be equally prorated between them.

3rd Paragraph – The preferred stocks shall participate, in equal terms, with common stocks
in the distribution of dividends, after the former have been assured the minimum dividend
provided for in preceding paragraphs.

Article 9 – ELETROBRÁS capital increases shall be implemented by means of public or
private subscription and incorporation of reserves, capitalizing the resources in
compliance with the applicable laws.

Sole Paragraph – Upon the capital increases, the legal entities governed by internal public
law shall be ensured the preemptive right to ELETROBRÁS stocks; the Federal
Government to subscribe, in common stocks, a number of stocks sufficient to guarantee
the minimum of 50% plus one stock of the voting capital.

Article 10 – The payment of stocks shall comply with the ruling and conditions set by the
CAE of ELETROBRÁS.

Sole Paragraph - The stockholder that does effect the payment in compliance with the
rules and condition referred to in this article shall be lawfully in arrears, subject to
monetary restatement, interests at the rate of twelve per cent (12%) per year plus a penalty
of ten per cent (10%) over the value of the overdue obligation.

Article 11 - ELETROBRÁS may issue multiple stock certificates. The grouping or split
off shall be made upon the stockholder request; the expenses incurred with the
replacement of certificates shall be at the stockholders’ expenses, which may not exceed
its cost.

Sole Paragraph - The services of stocks conversion, transfer, transfer and split off may be
temporarily suspended, in compliance with the standards and limitations set by the laws in
force.

Article 12 - ELETROBRÁS may issue debentures, covered or not by guarantee of the
National Treasury.


                                     CHAPTER IV
                                    The Management

Article 13 - The Management of ELETROBRÁS, in compliance with these By-laws and
based on governing legislation, is under the responsibility of the Administrative
Management Council, herein already referred to as CAE, and of the DEE [Executive
Board of Directors].

Article 14 - Only Brazilian citizens are entitled to take seats at the Administration of
ELETROBRÁS, the members of the CAE must be stockholders of the Company, and the
members of the DEE, may be stockholders or not, in both cases, a management guarantee
is required, pursuant to the provision set forth in Article 148, of Law 6404, dated
December 15, 1976.

1st Paragraph - The minutes of the Stockholders’ General Meeting, or meeting of the CAE,
which elected, respectively, administration counselors and Company’s directors, must
include the qualifications of each elected officer and the term of office, and when given
requirements to take office in a seat of the Company’s Management are set by law, only
nominees that have shown the necessary evidence of said requirements, which certified
copy shall be filed with the head office, may be elected and take office.

2nd Paragraph - Persons declared not qualified by the CVM [Brazilian Securities
Commission], or who are otherwise under impediment by special law or convicted of
bankruptcy crime, violation of law, graft or bribery, extortion, embezzlement of public
money, crime against the popular economy, public belief or property, or subject to
criminal punishment that may impede, even if temporarily, the access to public positions,
are not qualified to take seat at the management of the Company.

Article 15 - The CAE of ELETROBRÁS shall consist of nine (9) members, elected by
Stockholders’ General Meeting, out of which one member shall be appointed President,
the term of office for all members not to exceed three years, reelection permitted,
organized as follows:

I – seven (7) Counselors appointed among Brazilian citizens of renown knowledge and
experience, moral good standing and excellent reputation, appointed by the Minister of
Mines and Energy;
II – one (1) Counselor appointed by the Minister of Planning, Budget and Management,
pursuant to article 61 of Law 9.649, dated May 27, 1998;

III – one (1) Counselor elected by minority stockholders, individuals and legal entities
governed by private law.

Article 16 – The DEE shall consist of the President and Directors.

1st Paragraph - The President of ELETROBRÁS shall be appointed among the members
of the CAE.

2nd Paragraph - The President and the Directors may not exercise managerial,
administrative or advisory positions in private companies, concessionaires of public
electric power services or in legal entities governed by private law which are somehow
associated to the electric power sector, except in subsidiary companies, controlled
companies and concessionaires under the States control, in which ELETROBRÁS holds a
stock participation, where they may take office in the Management Council, subject to the
provisions set forth by Law no. 9.292, dated July 12, 1996, in respect of their
remuneration.

Article 17 - Each member of the Administration bodies shall, prior to taking office, submit
a statement of assets, which shall be recorded in a proper book.

Article 18 - Counselors and Directors shall take office by signing an instrument of
investiture, signed by the President and by the Counselor or Director that took office, in
the Minutes Book of the Administrative Management Council of ELETROBRÁS, or the
Board of Directors, as the case may be.

1st Paragraph - In the event that the President of ELETROBRÁS is taking office, the
Minister of State to which ELETROBRÁS is subordinated, will also sign the instrument
of investiture.

2nd Paragraph - In the event that such instrument of investiture is not signed within thirty
(30) days following the election, the appointment shall be canceled, except in case of a
justification accepted by the administration body to which the member had been elected.

Article 19 – The CAE and the DEE shall deliberate when the majority of their members
are present.

1st Paragraph – For each meeting held, the Minutes shall be drawn up signed by all present
members.

2nd Paragraph - The CAE of ELETROBRÁS shall meet ordinarily, once a month, and the
Board of Directors, once a week. It is the responsibility of their respective Presidents, or
of the majority of the members of each department of the Company’s administration, to
call, extraordinarily, the meetings of CAE or the DEE.

3rd Paragraph - The respective Presidents are entitled to the casting vote, in addition to
their personal vote, in the deliberations of the CAE and decisions of the DEE.
                                        CHAPTER V

                      The Administrative Management Council - CAE

Article 20 – The CAE shall be responsible to establish the fundamental guidelines for the
administration of ELETROBRÁS, by initiatives of its members or proposed initiatives, for
purposes of examination and deliberation by the DEE, as well as the senior control on
ELETROBRÁS, through the supervision of the established guidelines, following up the
execution of approved programs and verification of the results obtained.

Article 21 – The term of office of the Counselor not attending two (2) consecutive
meetings without a supporting justification shall be cancelled.

Article 22 – In the exercise of its capacity, the CAE is also responsible for:

a) to decide on the organization of subsidiary companies or the termination of
ELETROBRÁS share participation in the referred to companies;

b) to decide on the integration, through minority participation, to consortia of companies
holding concessions for the generation or transmission of electric power, and
participation, as minority stockholder, in the capital stock of companies holding
concessions for the generation or transmission of electric power;

c) to decide on the minority participation in the capital stock of companies created by
consortia of companies holding concessions for the generation or transmission of electric
power in order to carry out its corporate purpose;

d) to define the policy for granting of loans and financing facilities;

e) to issue opinions on acts and approve contracts which involve financial resources in an
amount above zero point zero two per cent (0.02%) of the company’s net equity, including
among those acts or contracts, but not limited to, granting loans to concessionaires of
electric power public services under its control, and funding loans in Brazil or abroad;

f) to approve the granting of guarantee to loans borrowed in Brazil or abroad, in favor of
concessionaires of electric power public services under its control;

g) to decide on the organization of technical scientific research entities of interest to the
electric power sector, as well as granting loans and guarantees to those entities under its
control;

h) to call the Stockholders’ General Meeting, in the events provided by the Corporations
Law, or whenever deemed convenient;

i) to set the distribution of functions among the members of the DEE;
j) to propose to the Stockholders’ General Meeting capital increase, issue of stocks,
subscription bonus and debentures of ELETROBRÁS, as well as the acquisition or sale of
the Company’s stocks, in compliance with the applicable law;

k) to deliberate on negotiation of stocks or debentures;

l) to authorize the sale of permanent assets and the creation of real property liens;

m) to approve the estimates of revenues, general appropriation of expenses and provision
for investments of ELETROBRÁS in each fiscal year, carrying out the respective control;

n) to elect and remove the Company’s directors, to inspect the management of its
members, and to examine, at any time, the books and reports of ELETROBRÁS;

o) to approve the management report and the DEE accounts;

p) to select and to discharge the independent auditors and also to select and to discharge
the financial institution which will be responsible for keeping ELETROBRÁS’ stocks in
deposit accounts, in the name of their respective holders, in book entry form, without issue
of stock certificates, in compliance with the provisions of paragraph 1, Article 7 of the
present By-Laws;

q) to establish the fundamental guidelines of the administrative organization of
ELETROBRÁS;

r) select ELETROBRÁS representatives in the management of controlled or not controlled
companies, in which Eletrobrás holds a share participation; such positions to be preferably
filled by the Company’s or its controlled companies’ employees;

s) to decide on expropriations;

t) to decide on relevant matters regarding the activities of ELETROBRÁS;

u) to develop and to amend the Company’s Internal Guidelines;

v) to decide on the statement of interim dividends and on the payment of interest on own
capital, proposed by the Executive Board of Directors, in compliance with Article 26, item
“i” of the present By-Laws;

w) to grant vacations or home leave to the members of the DEE;

x) to establish the number of positions of trust in the Senior Management of
ELETROBRÁS , pursuant to the provisions set out in subsection II, Article 44 of these
By-Laws;

y) to decide on cases not provided for in these By-Laws.
Sole Paragraph - The minutes of meetings of the CAE of ELETROBRÁS containing
decisions to produce legal effects before third parties shall be filed with the State Trade
Registration and published.

Article 23 - In each fiscal year, the CAE shall submit to the approval by the Ordinary
Stockholders’ General Meeting, the Management Report, balance sheet, income
statements, Statement of profit and loss, Statement of Changes in Financial Position as
well as the proposal for the distribution of dividends and use of excess proceeds, attaching
its opinion and the opinion of the Fiscal Council, shortly CFE, pursuant to item “i” of
article 26, and the certificate issued by the independent auditors.


                                      CHAPTER VI
                          The Executive Board of Directors (DEE)

Article 24 - The DEE of ELETROBRÁS shall consist of the President and directors, and
shall be responsible for the general management of ELETROBRÁS, subject to the
guidelines established by CAE.

Article 25 – The members of the executive DEE members cannot be absent from their
offices for more than thirty (30) consecutive days, except in the case of vacation or home
leave, under the penalty of removal from office.

1st Paragraph – The granting of vacations or home leave to any member of the Executive
Board of Directors will be under the authorization of the Administrative Management
Council, according to the provisions set forth in item "w" of Article 22, of the present By-
Laws.

2nd Paragraph - In the case of temporary impediment, home leave or vacation of any
member of the DEE, the substitution shall be carried out as determined by the remaining
directors provided that such substitute is a member of ELETROBRÁS staff.

3rd Paragraph - If a position is definitely vacant in the DEE, the same criteria set forth in
the second paragraph for the substitution of the director leaving the company shall apply
until the meeting of the CAE is held to decide on the definitive replacement and invest the
new director, thus filling the vacant position for the remainder of the term of office of the
replaced member.

Article 26 – In the exercise of its responsibilities, the DEE is especially responsible for:

a) propose the key guidelines for the administrative organization of ELETROBRÁS to the
CAE of ELETROBRÁS, as well as to examine, deliberate and approve the subject matter
provided for in item “a” to item “y” of article 22 of these By-Laws, except item “u”;

b) to manage ELETROBRÁS, take all measures necessary for the full execution of the
guidelines and deliberation of the CAE and to issue opinions on acts and approve
contracts which involve financial resources in amounts equal to or below zero point zero
two per cent (0.02%) of the company’s net equity, including among those acts or
contracts, but not limited to, granting loans to concessionaires of electric power public
services under its control, and funding loans in Brazil or abroad;

c) to establish     administrative,   technical,   financial   and   accounting    standards
ELETROBRÁS;

d) to prepare ELETROBRÁS budgets ;

e) to approve changes to the organizational structure of ELETROBRÁS, within the scope
of its authority;

f) to approve plans which provide for admission, career, access, benefits and discipline
system for the employees of ELETROBRÁS;

g) to approve the names appointed by the Directors for positions under its direct report;

h) to release opinion in the cases of admission, award, punishment, transfer and dismissal
of employees under direct report of the Directors;

i) to delegate authority to Directors to individually decide on issues included within the
scope of the DEE responsibilities;

j) to delegate powers to Directors and employees for the approval of expenses, setting the
limits and conditions;

l) for each fiscal year, prepare the Balance Sheet of ELETROBRÁS, the income
statements, Statement of profit and loss, Statement of Changes in Financial Position as
well as the proposal for the distribution of dividends and the payment of interests on own
capital and the use of excess revenues, to be submitted to the CAE and the CFE [Fiscal
Council], and to the examination and deliberation by the Stockholders’ General Meeting;

m) to prepare plans for the issue of debentures, for the appreciation by CAE of
ELETROBRÁS and submitted to the Stockholders’ General Meeting;

n) to establish administrative, technical, financial and accounting standards for the
controlled companies or for entities in which ELETROBRÁS has a majority participation;

o) to control the activities of the subsidiaries, associated and controlled companies, and of
entities in which ELETROBRÁS holds a majority participation;

p) to appoint representatives of ELETROBRÁS to attend the general meetings of
companies in which Eletrobrás participates as a stockholder, issuing instructions for their
performance;

q) to decide about the appointment of independent auditors for the controlled companies;
and

r) to release its opinion on concessions of electric power generation requested to the
National Agency of Electric Energy - ANEEL, including aspects in respect of technical,
economic and financial adequacy of nuclear power plant projects units to the systems of
concessionaires of electric power public service.


                                      CHAPTER VII

                     Responsibilities of the President and Directors

Article 27 – The President is responsible for driving the administrative policy of
ELETROBRÁS, calling and presiding the meetings of the DEE, as well as:

a) to supervise the business of ELETROBRÁS;

b) to represent ELETROBRÁS judicially or extra judicially, or before other companies,
stockholders or the public in general, and may delegate such powers to any Director or
Counselor, as well as appoint representatives, attorneys in fact, agents or proxies;

c) to preside the Stockholders’ General Meetings;

d) to engage and dismiss employees;

e) to formalize the appointments approved by the DEE;

f) to have the annual report on the activities of ELETROBRÁS published;

g) jointly with another Director, operate funds of ELETROBRÁS, sign deeds and
agreements; such power may be delegated to the other Directors and to attorneys in fact or
employees of ELETROBRÁS, subject to the approval of the DEE.

Article 28 - The President and the Directors, in addition to their own duties and
responsibilities, shall act as managers of the business areas assigned by the CAE.


                                      CHAPTER VIII

                                The Fiscal Council (CFE)

Article 29 - The Fiscal Council is held permanently and is composed of five (5) effective
members, and their respective substitutes, elected by Stockholders’ General Meeting, all
Brazilian citizens domiciled in the Country, subject to the requirements and impediments
set by the Limited Liability Corporations Law, stockholders or not, out of which one
member shall be elected by holders of minority common stocks and another member shall
be elected by holders of preferred stocks, in separate voting.

1st Paragraph - Among the members of the CFE, one member shall be indicated by the
Minister of Finance, as representative of the National Treasury.
2nd Paragraph - In case of vacancy, resignation, impediment or unjustified absence to two
consecutive meetings, the member of the CFE shall be replaced by his substitute up to the
end of the term of office of the replaced member.

3rd Paragraph - The term of office of the CFE members is of one year, reelection
permitted.

Article 30 – The responsibility of the CFE is:

a) to supervise, by any of its members, the acts taken by the managers and to check the
execution of their legal and statutory duties;

b) to issue opinion on the annual report presented by the management, including the
complementary information considered necessary or useful for the deliberation by the
Stockholders’ General Meeting;

c) to issue an opinion on the proposals made by the administrative bodies, to be submitted
to the Stockholders’ General Meeting, in respect of the change in the capital stock, issue
of debentures or subscription bonus, investment plans or capital budget, distribution of
dividends, transfer, incorporation, merger or split off;

d) to denounce errors, frauds or crimes found and suggest useful measures, through by any
of its members, to the administrative bodies, and in the event that they do not take the
necessary measures to protect ELETROBRÁS interests, to the Stockholders’ General
Meeting;

e) to call the Ordinary Stockholders’ General Meeting, in the event that the administrative
bodies delay said call for more than a month, and the Extraordinary Stockholders’
Meeting whenever serious or urgent reasons occur, including the subject considered
necessary in the meeting agenda;

f) to analyze, at least quarterly, the interim balance sheet and other financial statements,
produced on a regular basis by ELETROBRÁS;

g) to examine the financial statements for the fiscal year and to issue the respective
opinion;

h) during the liquidation, to carry out its duties in compliance with the special governing
legislation;

1st Paragraph - The administration bodies are liable to, through written notice, make
available to the members of the CFE within ten (10) days, copies of their minutes of
meetings and within fifteen days after receipt, copies of interim balance sheet and other
financial statements prepared regularly and the report on the execution of budgets.

2nd Paragraph – The members of CFE shall attend the meetings of the CAE or DEE which
meeting agenda includes subjects requiring their opinion (subsections “b”, “c” and “h”, of
this article).
Article 31 – The CFE shall meet ordinarily once a month, and extraordinarily, whenever
called by the President of the CAE, by the President of ELETROBRÁS, or by any of its
members.

Sole Paragraph – The minimum attendance for meeting is of three (3) counselors the
approval of the subjects proposed to its deliberation require favorable vote of at least three
(3) of its members.



                                      CHAPTER IX
                            The Stockholders’ General Meetings

Article 32 – The Ordinary Stockholders’ General Meeting shall be held within the four
months immediately subsequent to the end of the fiscal year, at a date and time previously
scheduled, in order to render the managers accounts, examine, discuss and vote the
financial statements, decide on the use of the net profit earned during the fiscal year and
on the distribution of dividends; elect the members of CAE and CFE; and set the
remuneration of the Management and of the CFE, as the case may be, subject to the
applicable law.

Article 33 – In addition to the cases provided for in applicable laws, the Stockholders’
General Meeting shall meet whenever CAE deems convenient and, especially, to decide
on the following matters:

I – sale of all or any portion of the capital stock of ELETROBRÁS or its controlled
companies;

II – increase of capital through the subscription of new stocks;

III - waiver to rights to subscribe stocks or debentures convertible into stocks of controlled
companies;

IV - issue of debentures convertible into stocks or sale in case they are retained at the
treasury department;

V - sale of debentures convertible into stocks owned by ELETROBRÁS, issued by its
controlled companies;

VI - the issue of any other credit instrument or securities in Brazil or abroad;

VII – operation of spin-off, merger or incorporation;

VIII - any exchange of stocks or other securities.

Sole Paragraph – Pursuant to CVM [Brazilian Securities Commission] Instruction no. 342,
dated July 13, 2000, based on the provisions set forth in article 18, section II, item “a” of
Law 6.385, dated December 7, 1976, and in article 21 of the Annex V attached to the
Resolution issued by the National Monetary Council no. 1.289, dated March 20, 1987, the
minimum term between the first call notice and the date of the general meeting shall be of
fifteen days, in such a way to make it possible for stockholders non resident in the country
to attend the meeting and exercise their voting right.

Article 34 - The board that will preside the deliberations of the Stockholders’ General
Meeting shall be constituted of the President of ELETROBRÁS or his substitute and a
secretary, appointed among the present stockholders.

Article 35 - The call notice shall set the condition for the stockholder attendance to the
General Meeting to the compliance with the requirements set forth in law for that purpose.

Sole Paragraph - The filing with ELETROBRÁS of documents evidencing the ownership
of stocks may be required up to seventy two (72) hours prior to the General Meeting.

Article 36 – In the General Meetings, the stockholders may be represented in compliance
with the provisions set forth in paragraph 1 of article 126 of Law no. 6.404, fated
December 15, 1976; the signature notarization in the instrument of investiture granted by
stockholders, non-resident in Brazil and by owners of Depositary Receipts to their
attorneys in fact is released.

Sole Paragraph – The representation of the Federal Government at the Stockholders’
General Meetings of ELETROBRÁS shall be made pursuant to the provision set forth in
the specific federal law.


                                       CHAPTER X

                        The Fiscal Year and Financial Statements


“Article 37. The fiscal year shall match the calendar year, starting on January 1 and
ending on December 31 every year and, in respect of the financial statements, shall
comply with the provisions set forth in Law no. 3.890-A, dated April 25, 1961, as
amended, in the federal legislation on electric power, in the legislation on corporations
and in these By-Laws.

 1st Paragraph. In each fiscal year, the distribution of dividends shall be mandatory, not
below twenty five per cent (25%) of the net profit, adjusted in compliance with applicable
laws.

2nd Paragraph - Financial charges shall be accrued to the amount of dividends and interest
payable or to be credited as remuneration on own capital, from the end of the fiscal year to
the date of the effective payment thereof, irrespective of the incidence of interest in
arrears, whenever such amount has not been paid on the date scheduled for that purpose
by the Stockholder’s General Meeting.

3rd Paragraph - The amount of interest paid or credited, as interest on own capital,
pursuant to article 9, Paragraph 7 of Law 9.249, dated December 26, 1995 and applicable
laws and regulations, may be imputed to the holders of common stocks and to the
minimum annual dividend of the preferred stocks, including such value in the amount of
dividends distributed by ELETROBRÁS, to all legal effects.”

Article 38 - The Stockholders’ General Meetings shall deliberate on the allocation of the
following items, in addition to the legal reserve, calculated over the fiscal year net
income:

I – one per cent (1%) under “Reserve for Studies and Projects”, in order to meet the
execution of studies and projects of technical and economic viability of the electric power
sector, which accrued balance may not exceed two per cent (2%) of the paid-in capital
stock;

II – fifty per cent (50%) under “Reserve for Investments”, allocated to investments of the
concessionaires of electric power public services, which accrued balance may not exceed
seventy five per cent (75%) of the paid-in capital stock.

Article 39 - The General Meeting shall allocate, every year, the amount corresponding to
up to one per per cent (1%) calculated over the net profit, subject to the limit of one per
cent (1%) over the paid-in capital, in order to render social assistance to its employees, in
compliance with the plans approved by DEE.

Article 40 - ELETROBRÁS shall allocate every year, resources amounting to at least zero
point five per cent (0.5%) of the paid-in capital stock at the closing of the immediately
preceding fiscal year, for the application in programs of technological development,
including that amount in the company’s budget.

Article 41 - When the dividends reach six per cent (6%) of the paid-in capital stock, the
General Meeting may fix percentages or bonus on account of profits to be granted to
ELETROBRÁS Management.

Article 42 – The claim subject of a lawsuit filed with the purpose of judicially requesting
the payment of dividends shall expire within three years, such dividends, if not claimed in
due time shall revert to the benefit of ELETROBRÁS.


                                      CHAPTER XI
                                       Personnel

Article 43 – The employees of ELETROBRÁS, its subsidiaries, affiliated and controlled
companies shall be subject to, whenever applicable, the provisions of the Labor Law, to
Law no. 3.890-A, dated April 25, 1961, as amended, and to these By-Laws.

Article 44 – The personnel of ELETROBRÁS shall consist of:

I – personnel hired for positions of permanent career, through selection process, consisted
of tests, or tests and diplomas;
II – personnel holding positions of trust in the senior management, which quantitative
shall be determined by the CAE, in compliance with the provisions set forth in subsection
“x” of article 22 of these By-Laws;

III – personnel hired under a contract for pre-determined period, in compliance with the
applicable law.

Sole Paragraph – The positions of trust in the senior management and the powers and
responsibilities of their respective effective members shall be defined in the Staffing and
Compensation Plan ELETROBRÁS.

Article 45 - After the end of each fiscal year of ELETROBRÁS and once the accumulated
losses are deducted and the provision for Income Tax and profits of any nature have been
made, the employees shall be entitled the profit sharing, subject to compliance with the
rules included in the conventions and collective labor agreements signed by
ELETROBRÁS, and specific guidelines set by the Executive Power.

Article 46 - ELETROBRÁS shall provide social welfare assistance to its employees,
through Fundação Eletrobrás de Seguridade Social – ELETROS [ELETROBRÁS Social
Security Foundation] in compliance with the provisions set by the DEE.


                                    CHAPTER XII
                                   General Provisions

Article 47 - In the organization of controlled companies, ELETROBRÁS shall comply
with the general principles of Law no. 3.890-A, dated April 25, 1961, as amended,
whenever applicable, except in respect of the administrative structure, which may be
adapted to the specific standards and to the importance of the services provided of each
company, as well as to the conditions of participation of the other shareholders.

Sole Paragraph - The controlled companies shall comply with the administrative,
financial, technical and accounting principles, as standardized as possible.

Article 48 – ELETROBRÁS, through its management, is obliged to render information to
the Minister of Mines and Energy, to the Federal Government controlling bodies, as well
to the Federal Audit Court and to the National Congress, in such case, through the
Minister of Mines and Energy.

Sole Paragraph - The President, when called, is obliged to personally attend any of the
commissions of any Congress Houses, in order to render information on previously
defined subject, under to the penalty of removal from office in case of unjustified non
attendance.

Article 49 - ELETROBRÁS may contract with the Federal Government, directly or
through companies in which it participates, the execution of works and services, for which
special financial resources have been allocated.
1st Paragraph – The facilities built in compliance with this article may be incorporated to
ELETROBRÁS or its controlled companies by decision of the Federal Union, provided
that in the respective operation, the legal system of service at the cost is complied with.

2nd Paragraph – While the requirement set in the first paragraph is not fulfilled, the
facilities subject of this article may be operated by ELETROBRÁS or its controlled
companies, under agreement executed with and at the expense of the Federal Government.

Article 50 - The DEE shall have the Federal Official Gazette publish the following, after
approval by the Minister of State to whom ELETROBRÁS is under report:

I - the regulation governing public bids;

II – the personnel regulation, including the rights and duties of employees, the discipline
system and the guidelines for verification of responsibility;

III - the personnel, with the indication in three columns of the total number of employees,
the number of effective and vacant positions, detailed by career or category, on June 30
and on December 31 every year;

IV – the plan for compensation, benefits, advantages and any other portions included in
the payment of its employees.”

Nothing else to be deliberated, the President closed the One Hundred and Thirty Sixth
Extraordinary Stockholders’ Meeting, of which I, AFRÂNIO DE ALENCAR MATOS
FILHO, draw up these Minutes, which after read and approved is signed by me, by the
President and by all present stockholders, bearers of voting common stocks, taking a
certified copy of the minutes for legal purposes. The Book of Attendance of this General
Meeting was signed by the stockholders (signed) NEREU RAMOS NETO – President;
(signed) KÁTIA APARECIDA ZANETTI DE LIMA – Representative of the Federal
Union; (signed) ANDRÉ CARVALHO TEIXEIRA – Representative of BNDES
Participações S.A. – BNDESPAR; (signed) MÁRCIO FERRO CATAPANI –
Representative of BBA Icatu Taurus FIA, BBA Icatu FEF FIA, Icatu Hartford Fundo de
Pensão, BBA Icatu Aquarius FIA; BBA Icatu Ibovespa Private FIA, BBA Icatu Ibovespa
Institucional FIA, BBA Icatu IBX Institucional FIA, BBA Icatu Slabs IBX FIA; Fapers –
Fundação Assistencial e Previdenciária da Extensão Rural do Rio Grande do Sul,
Fundação Previdenciária IBM; Previd Exxon – Sociedade de Previdência Privada; Icatu
Hartford Seguros S/A; BBA Icatu FESC FIA; BBA Icatu Premium Institucional IBX FIA;
BBA Icatu Investprev FIA; BBA Icatu Amazonas FIA; BBA Icatu Index Ibovespa FIA;
FIA; PGBL Icatu Hartford Composto 20 B FIF; PGBL Icatu Hartford Composto 20 C
FIF; PGBL Icatu Hartford Composto 20 E FIF; PGBL Icatu Hartford Composto 49 C FIF;
PGBL Icatu Hartford Composto 49 B FIF; PGBL Icatu Hartford 49 E FIF; PGBL Fincor
Composto 20 C FIF (former PGBL Investcorreios Hartford Composto 20 C FIF); Icatu
Hartford Composto 10 C FIF; PGBL Icatu Hartford Composto 10 B FIF; PGBL Icatu
Hartford Composto 10 E FIF; BBA Icatu IBX Private FIA; PGBL UBS Composto I FIF,
BBA Top Safira FIA, Mellon Brascan Stuttgart FIA, and (signed) RICARDO JOSÉ
MARTINS GIMENEZ – Representative of CI Mirante IBX Fundo de Investimentos em
Ações, Morgan Stanley Investment Management Emerging Markets Trust, The Wellcome
Trust Limited, John Hancock Variable Series Trust I – Emerging Markets Equity
Portfolio, Frank Russel Investment Company Emerging Markets Fund, The Emerging
Markets Portfolio of the AMR Investment Services Trust, The State of Connecticut
Combined Investment Funds, State of Minnesota State Employees Retirement Plan,
Templeton Emerging Markets Funds Inc., Templeton Emerging Markets Fund, Templeton
Developing Markets Trust, Templeton International Emerging Markets Fund, Templeton
Emerging Markets Series, Templeton Emerging Markets Appreciation Fund, Inc.,
Templeton Developing Markets Securities Fund, State Street Emerging Markets, SSGA
Emerging Markets Fund, Brazil MSCI Emerging Markets Index Common Trust, Daily
Active Emerging Markets Fund, Frank Russel Investment Company Emerging Markets
Fund, IBM Tax Deferred Savings Plan, Daily Active Emerging Markets Securities
Lending Common T. Fund, Templeton Emerging Markets Investment Trust PLC, The
California State Teachers Retirement System, SEI Institutional International Emerging
Markets Equity Fund, State Street Bank and Trust Funds for Employee Trusts, Morgan
Stanley EMMKTS Fund, Inc, Morgan Stanley INS F Inc. em MKTS Port., Morgan
Stanley INST F Inc. Lat. AM Port, Morgan Staley Offshore Emer MKTS Fund, Morgan
Stanley Sicav em MKTS Equity Fund, The Latin America Discovery Fund, Inc., The
Universal I FD, Inc. e MKT e Portfolio, Van Kampen S FD Inc., Van Kampen EM MKT
FD, Van Kampen Series FD, Inc., Van K L A Fund. Acting as Secretary of the One
Hundred and Twenty Sixth Extraordinary Stockholders’ General Meeting of the
Company, I declare that the above text is a full transcription of the minutes recorded in the
5th Minutes Book of the General Meetings of Centrais Elétricas Brasileiras –
ELETROBRÁS, on page 190 and subsequent pages.


                                  Brasília, July 19, 2002.

                       AFRÂNIO ALENCAR DE MATOS FILHO
                                   Secretary

								
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