B3, the Brazilian stock exchange, established three special trading segments: Level 1, Level 2, and Novo Mercado.
Track&Field has a unique ownership structure and seeks to protect the long-term interests of all its stakeholders. The Company is listed at the Level 2 segment with two types of shares: common and preferred. This structure was inspired by the super-voting stock model which is broadly used in the US capital market. Our bylaws foresee that each common or preferred share holds one vote in all deliberations made during shareholder meetings, but our preferred shares have an economic right that is 10 times higher than that of our common shares.
This allows the Company to issue one-tenth of the number of preferred shares compared to what would be required for investors to be eligible to an economic value corresponding to 10 common shares. Thus, our three founding shareholders currently hold 100% of the common shares, and control the company’s interest, with a percentage of economic rights substantially lower than what would be required if there was only one type of share issued. Our bylaws include a sunset provision which foresees preferred shares being automatically converted into common shares at the ratio of 10 common shares per preferred share. This is only if and when the percentage of interest in dividends represented by the total number of common shares issued by the company, excluding the treasury shares, is lower than 10%.