Linx is an innovative company that invests in research and development and is in a strategic sector for the country, the one of information technology. The Company has a defined plan and has fulfilled its goals, agreed with the investors at the time of the IPO. Linx has the concern of respecting its investors and, therefore, seeks continuous improvement of its corporate governance." Bruno AranhaIndependent Board Member - Linx

Linx prioritized in recent years a structure based on internal processes that are transparent and focused on the professionalization of its management. With the entry of new external shareholders - BNDESPar and General Atlantic, from 2010 - the Company began to incorporate the best corporate governance practices to the dynamic management of its business. Since that time the prospect of becoming a public company, Linx already had preconditions to take over this step.

After the IPO in February 2013, Linx became a listed company at Novo Mercado of the BM&FBovespa. The structure to conform to the highest level of governance, however, was initiated years before the adoption of good practices. Among them, it can be highlighted the maintenance of at least 25% of capital in a free float, the full disclosure of shareholder agreements, stock option to purchase shares, annual events calendar, Code of Ethics and the composition of capital entirely in Common shares among others.

Code of Ethics

With the IPO, Linx has updated its Code of Ethics for the new scenario of the Company. The purpose of the code is to provide guidelines that guide the conduct of employees, directing them to maintain standards of behavior aligned with the values of Linx and its business strategies. It also aims to ensure the Company's reputation, improve processes and strengthen relationships.

According to the Code of Ethics, employees must always act in Linx's best interests, maintaining secrecy about projects and operations, as well as information about customers and suppliers projects. The code formalizes the Linx relationship and what is expected from employees in the relationship with customers, colleagues, shareholders, suppliers, regulators and society, and presents guidelines for behavior in social networks and the press. It is noteworthy, for example, the prohibition of accepting gifts, benefits or advantages that may represent an improper relationship or financial or moral loss for Linx. Politically, the Company remains neutral and expects its employees to adopt the same approach in their work environment.

The Human Resources Department is responsible for both the implementation and the disclosure of the Code of Ethics. It is also the focal point for any complaints regarding violations of the Code. If deemed necessary, the Human Resources area can trigger other areas of the Company to form committees and judge specific cases. It is also the area to assess for events to be submitted for the analysis of the Managing Director. In 2012, Linx did not receive any complaints related to human rights.

Governance Structure

In 2011 Linx began an organizational restructuring, which directly reflected in its governance. This process was completed in 2012. In that year, the Board of Directors and a number of new executive positions, such as the Investor Relations, were also implemented. Next, each of these structures is shown.
 

Board of Directors

The Linx Board of Directors is composed of nine members, four of whom are independent, elected at the general meeting, with mandates of up to two years. Five of these members are also part of the Executive Board.

The Board of Directors has the purpose of guiding the Company's business and monitoring its performance, among other activities. It meets quarterly or on the call of the Chairman or any other member. In 2012, there were five board meetings, four ordinary and one extraordinary. In these meetings, the main topic discussed was the consolidation of a new structure that offers the necessary conditions for the IPO.

Recommendations to the board may be made by employees, through the Code of Ethics channel, and shareholders, with the help of the Investor Relations area . All suggestions are forwarded to the Board for review.

For 2013, it is foreseen the creation of the Remuneration Committees and Audit Committees, both made up of professionals elected by the Board of Directors for a two year term. The first, which will consist of up to four members, aims to formulate policies and guidelines for the remuneration of directors and executive officers. Whereas, the Audit Committee, which will consist of up to three members, will carry out advisory functions, whenever necessary, as established in the Bylaws.
 

Executive Board

The Linx Executive Board has recently undergone restructuring with the creation of new hierarchical levels. The restructuring was required to support the strategic growth plan and absorb talents arising from acquisitions, preparing the Company for the IPO. In addition to creating new layers of management, Linx searched the market for professionals with specific skills who could add more expertise to the management, making the operation more productive and profitable. 2012 was the consolidation and integration of this structure.
 

Composition of the Statutory Board on 12/31/2012

By-laws

Between the good governance practices provided in the Linx By-laws and aligned to the Novo Mercado of the BM&FBovespa are:

• Have at least 20% of the Board composed of independent members and expressly stated as such in the minutes of the General Meeting electing them, also being considered as independent are the elected Director that were elected by the mechanism provided by Article 141, § § 4 and 5 and Article 239 of the Law of Public Corporations.
• Denial of access or participation in meetings of the Board members who have a conflict of interest with the Company in the determination of specific topics.
• In the accumulation of the posts of Chairman of the Board and the Managing Director or CEO of the Company.

Corporate structure