Document:

EX-10.1

 

	 	 	 	 	 

EXHIBIT 10.1

Cash Incentive Awards

On February 15, 2006, the Compensation and Personnel Committee (the “Committee”) of the Company’s
Board of Directors awarded the following 2005 annual cash incentives:

	 	 	 	 	 
	Ramani Ayer

	 	$	3,100,000	 
	Thomas Marra

	 	$	1,870,000	 
	David Zwiener

	 	$	1,975,000	 
	David Johnson

	 	$	1,400,000	 
	Neal Wolin

	 	$	1,300,000	 

Base Salary

The 2006 base salary for each named executive officer, which became effective as of February 1, 2006, is set forth below:

	 	 	 	 	 
	Ramani Ayer

	 	$	1,150,000	 
	Thomas Marra

	 	$	990,000	 
	David Zwiener

	 	$	990,000	 
	David Johnson

	 	$	700,000	 
	Neal Wolin

	 	$	700,000	 

The 2005 base salary for each named executive officer, which became effective on February 1, 2005, is set forth below:

	 	 	 	 	 
	Ramani Ayer

	 	$	1,150,000	 
	Thomas Marra

	 	$	990,000	 
	David Zwiener

	 	$	990,000	 
	David Johnson

	 	$	650,000	 
	Neal Wolin

	 	$	650,000	 

Stock Options1

On February 15, 2006, options to purchase the number of shares of common stock listed below, at an
exercise price of $83.00 per share (the New York Stock Exchange closing price on the date of the
grant), were awarded to each named executive officer:

	 	 	 	 	 
	Ramani Ayer

	 	 	71,750	 
	Thomas Marra

	 	 	37,789	 
	David Zwiener

	 	 	37,789	 
	David Johnson

	 	 	19,731	 
	Neal Wolin

	 	 	15,546	 

On February 17, 2005, options to purchase the number of shares of common stock listed below, at an
exercise price of $71.27 per share (the New York Stock Exchange closing price on the date of the
grant), were awarded to each named executive officer:

	 	 	 	 	 
	Ramani Ayer

	 	 	79,454	 
	Thomas Marra

	 	 	43,339	 
	David Zwiener

	 	 	43,339	 
	David Johnson

	 	 	21,669	 
	Neal Wolin

	 	 	17,335	 

 

			
	1	 	The stock options awarded in 2006 will vest
upon the later of: (i) the date upon which the closing price of the underlying
stock on the New York Stock Exchange equals or exceeds $103.75 (125% of the
option exercise price) for a period of at least 10 consecutive trading days,
and (ii) three years from the grant date.

 

 

Restricted Stock

No shares of restricted stock have been awarded to any named executive officers in 2006 to date.

On February 17, 2005, 12,600 and 14,000 shares of restricted stock were awarded to Messrs. Ayer and
Johnson, respectively.

Restricted Stock Units2

On February 15, 2006, the named executive officers were granted restricted stock units in the
amounts listed below:

	 	 	 	 	 
	Ramani Ayer

	 	 	24,096.386	 
	Thomas Marra

	 	 	12,690.763	 
	David Zwiener

	 	 	12,690.763	 
	David Johnson

	 	 	6,626.506	 
	Neal Wolin

	 	 	5,220.884	 

On February 17, 2005, the named executive officers were granted restricted stock units in the amounts listed below:

	 	 	 	 	 
	Ramani Ayer

	 	 	25,723.7734	 
	Thomas Marra

	 	 	14,031.1492	 
	David Zwiener

	 	 	14,031.1492	 
	David Johnson

	 	 	7,015.5746	 
	Neal Wolin

	 	 	5,612.4597	 

Performance Shares3

On February 15, 2006, the named executive officers were granted performance shares for the
performance period from January 1, 2006 through December 31, 2008 in the amounts listed below:

	 	 	 	 	 
	Ramani Ayer

	 	 	25,520	 
	Thomas Marra

	 	 	13,441	 
	David Zwiener

	 	 	13,441	 
	David Johnson

	 	 	7,018	 
	Neal Wolin

	 	 	5,529	 

On February 17, 2005, the named executive officers were granted performance shares for the
performance period from January 1, 2005 through December 31, 2007 in the amounts listed below:

	 	 	 	 	 
	Ramani Ayer

	 	 	25,724	 
	Thomas Marra

	 	 	14,031	 
	David Zwiener

	 	 	14,031	 
	David Johnson

	 	 	7,016	 
	Neal Wolin

	 	 	5,612	 

 

			
	2	 	Each restricted stock unit represents a
contractual right to receive one share of common stock of the Company at the
end of a three year service period.
	 
	3	 	Performance shares represent shares of common
stock of the Company which vest upon the Company’s achievement of one or
more performance objectives over the performance period established by the
Committee. The performance shares will not vest and become payable unless and
until the Committee determines, following the end of the performance period,
that the performance objectives have been met. Depending on the
Company’s performance relative to the specific financial performance
goals set for the performance period, payouts may range between zero percent
and 200 percent of the number of performance shares, with a target of 100
percent.

 

 

Performance Share Award Payouts

On February 15,
2006, the Committee determined that: (i) based on the Company’s performance during
the period from January 1, 2003 through December 31, 2005, the performance shares granted on
February 20, 2003 should be paid-out at the maximum amount (200% of target) equal to the
common stock amounts set forth below for each named executive officer, and (ii) such payouts to the
named executive officers would be paid in cash at a price of $83.00 per share (the New York Stock
Exchange closing price of a share of common stock on February 15, 2006):

	 	 	 	 	 
	Ramani Ayer

	 	 	108,376	 
	Thomas Marra

	 	 	74,926	 
	David Zwiener

	 	 	74,926	 
	David Johnson

	 	 	40,140	 
	Neal Wolin

	 	 	17,394EX-10.2

 

Exhibit 10.2

The Hartford Financial Services Group, Inc.

2006-2007 Compensation of Non-Employee Directors

— For the annual service period beginning on May 17, 2006, the date of the next Annual Meeting of Shareholders—

	 	 	 
	Standard Fees	 	Description
	 
	Annual Restricted Stock Award

	 	· $150,000 valuation
	 

	 	· Granted on the date of the Annual Meeting of Shareholders
	 

	 	· Vests three years from the date of the award
	 
	Annual Retainer Payable in Cash

	 	· $45,000
	 

	 	· Payable following the Annual Meeting of Shareholders
	 
	 	 
	 
	Meeting Fee for each meeting of the Board of Directors attended

	 	· $2,500 per meeting
	 
	 	 
	 
	Fee for each Committee meeting attended

	 	· $2,000 per Committee meeting
	 
	 	 
	 
	Committee Chairperson Annual Retainer

	 	· $10,000 for the chairpersons of each of the Compensation
and
   Personnel Committee, the Legal and Public Affairs Committee
and
   the Nominating and Corporate Governance Committee
	 

	 	· $25,000 for the chairperson of the Audit Committee
	 
	Other
	 	 
	 
	Deferred Compensation Plan

	 	· May defer all or any portion
of cash compensation into The Hartford
   Deferred Compensation Plan
	 

	 	· May defer all of any portion
of cash compensation into The Hartford
   2005 Incentive Stock Plan.
	 
	Insurance

	 	· $100,000 of group life insurance and $750,000 of AD&D
	 

	 	· Directors may purchase additional voluntary AD&D insurance
	 
	Reimbursable Expenses

	 	· Travel and related expenses
incurred in connection with service
on
   the Board of Directors and its Committees
	 

	 	· All reasonable expenses incurred for director education<PAGE>
                AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT

This Agreement is entered into by and among:

I - THE PARTIES:

     (a)  TAM - EMPREENDIMENTOS E PARTICIPACOES S.A. (hereinafter individually
          called "TEP"), with main place of business at Rua Monsenhor Antonio
          Pepe, 331, in the city of Sao Paulo, State of Sao Paulo, registered
          with the CNPJ under no. 03.168.654/0001-17, herein represented as per
          its articles of association;

     (b)  AEROSYSTEM S.A. EMPREENDIMENTOS E PARTICIPACOES (hereinafter
          individually called "AEROSYSTEM"), with main place of business at Rua
          Monsenhor Antonio Pepe, 94, in the city of Sao Paulo, State of Sao
          Paulo, registered with the CNPJ under no. 63.904.585/0001-94, herein
          represented as per its articles of association;

     (c)  BRASIL PRIVATE EQUITY FUNDO DE INVESTIMENTO EM PARTICIPACOES
          (hereinafter individually called "FUNDO BRASILEIRO"), an investment
          fund with head offices at Avenida Brigadeiro Faria Lima, 3064, 13th
          floor, in the city and State of Sao Paulo, herein represented by its
          administrator, the CREDIT SUISSE FIRST BOSTON DISTRIBUIDORA DE TITULOS
          E VALORES MOBILIARIOS S.A. (hereinafter individually called "CSFB"),
          with head offices at Av. Brigadeiro Faria Lima, 3064, 13th floor, in
          the city of Sao Paulo, State of Sao Paulo, registered with the CNPJ
          under no. 30.121.792/0001 - 13, by its undersigned legal
          representatives;

     (d)  BRAZILIAN EQUITY INVESTMENTS III LLC, c/o The Corporation Trust
          Company (hereinafter individually called "BEI III"), an investment
          fund with head offices at Orange Street, 1209, Wilmington, New Castle,
          Delaware, 19801, by its undersigned legal representatives;

     (e)  BRAZILIAN EQUITY LLC, c/o The Corporation Trust Company, (hereinafter
          individually called "BEL"), an investment fund with head offices at
          Orange Street, 1209, Wilmington, New Castle, Delaware, 19801, by its
          undersigned legal representatives;

     (f)  LATIN AMERICA CAPITAL PARTNERS II LLC (hereinafter individually called
          LATCAP II"), a limited liability company) organized and existing under
          the laws of the State of Delaware, USA, with head offices at 1209
          Orange Street, Wilmington, Delaware, 19801, by its undersigned legal
          representatives;

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

     (g)  LATIN AMERICA CAPITAL PARTNERS PIV LLC (hereinafter individually
          called "LATCAP PIV"), a limited liability company organized and
          existing under the laws of the State of Delaware, USA, with head
          offices at 1209 Orange Street, Wilmington, Delaware 19801, by its
          undersigned legal representatives.

II - THE CONSENTING PARTIES:

     (a)  TAM S.A (hereinafter individually called "TAM S.A."), a company with
          main place of business in the city of Sao Paulo, State of Sao Paulo,
          at Av. Jurandir, 856, Lote 4, 3rd floor, registered with the CNPJ
          under no. 01.932.635/0001-18, herein represented as per its Articles
          of Association;

     (b)  CSFB, already qualified;

     (c)  CREDIT SUISSE FIRST BOSTON (BAHAMAS) LIMITED (hereinafter individually
          called "CSFB-BAHAMAS"), with head offices at the Bahamas Financial
          Center, 4th Floor, Shirley and Charlotte Streets, P.O. Box N-3721,
          Nassau Bahamas, by its undersigned legal representatives;

WHEREAS, on November 20, 2002 the PARTIES hereto entered into a Stockholders'
Agreement so as to discipline their mutual relationships in the capacity of
stockholders of TAM S.A. ("2002 AGREEMENT");

WHEREAS, the PARTIES are interested in enhancing certain provisos of the 2002
AGREEMENT, in such a way to make it consistent with the Level 2 requirements set
forth in the Sao Paulo Stock Exchange (BOVESPA)'s Corporate Governance.

NOW, THEREFORE, the PARTIES hereto decide to amend and consolidate the 2002
AGREEMENT, which shall be fully superseded by this Amended and Consolidated
Stockholders' Agreement (the "AGREEMENT"), in compliance with the following
covenants and conditions:

1.   AGREEMENT PURPOSE

1.1. The purpose of this AGREEMENT is to discipline the relationships among the
PARTIES (hereinafter called "PARTIES" or "PARTY", "STOCKHOLDERS" or
"STOCKHOLDER", according to the context), in the capacity of STOCKHOLDERS of TAM
S.A., particularly with regard to:

     (a)  the establishment of rules related to the transfer of stock,
          specifying criteria to restrict its free circulation; and

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

     (b)  the establishment of rules to define their mutual relationship before
          TAM S.A., stipulating the significance of their vote in the
          composition of the company's management.

1.2 For the purpose of the AGREEMENT referred to, stockholders FUNDO BRASILEIRO,
BEI III, BEL, LATCAP II, and LATCAP PIV, hereinafter called INVESTMENT FUNDS
and/or their successors or AFFILIATES, on the one side, as well as TEP and/or
its successors or AFFILIATES, on the other, shall always be jointly regarded as
a stockholders block, each one acting as if they were a single stockholder,
except with regard to: (a) Section 10 which addresses the preemptive right and
other provisions related to the disposal and encumbrance of stock; (b) to clause
17.1, which addresses the persons entailed to the AGREEMENT.

1.3. For the purposes of the provided in this AGREEMENT, AFFILIATE shall mean:

     (a)  with regard to stockholder TEP, any persons who, either individually
          or collectively, de jure or de facto, directly or indirectly, (i)
          controls it (including natural persons), (ii) is controlled by same,
          (iii) is subject to the same control;

     (b)  with regard to stockholder TEP, whomever succeeds it in instances of
          dissolution, capital reduction against the surrender of stock of TAM
          S.A., split-up and other corporate events;

     (c)  with regard to the INVESTMENT FUNDS, any person controlling them
          (including natural persons), or being controlled by same and, also,
          legal entities or funds in a condominium managed or co-managed by CSFB
          or CSFB-BAHAMAS; and

     (d)  with regard to the INVESTMENT FUNDS, their partners or quotaholders,
          in the event same may come to be liquidated, if they quotas or shares
          are redeemed, or if dividends are paid against the surrender of stock
          representative of TAM S.A's corporate capital.

1.4 This AGREEMENT is entered into with the purpose of renewing the PARTIES'
interest in attaining the purposes of their association, formalized by means of
the Investment and Association Agreement, entered into on 8/28/1997, ratifying
it for all effects (except in connection with Clause 2, which implementation
took place in a different way, which is now ratified), and to re-ratify the
Stockholders' Agreement entered into on 11/28/1997, and the 2002 AGREEMENT,
superseding them - for all purposes - by this AGREEMENT.

2.   PRELIMINARY STATEMENTS

2.1. The corporate capital - subscribed and paid up - totals one hundred twenty
million seven hundred forty-nine thousand six hundred thirty-nine Brazilian
reais sixty-six cents (R$

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

120,749,639.66), divided into one hundred twenty-two million seven hundred
twenty-nine thousand three hundred forty-two (122,729,342) shares of stock, of
which fifty-nine million eight hundred sixteen thousand two hundred forty-eight
(59,816,248) common shares of stock, and sixty-two million nine hundred thirteen
ninety-four (62,913,094) preferred shares of stock, all of them nominative
shares, with no face value and indivisible as to the Company.

2.2. TAM S.A. is the legitimate owner of the entirety of the stock
representative of the corporate capital of TAM LINHAS AEREAS S.A., headquartered
at Av. Jurandir, 856, Lote 4, 2nd floor, in the city of Sao Paulo (SP),
registered with the CNPJ under no. 02.012.862/0001-60 (hereinafter "TLA").

2.3. This AGREEMENT entails all shares of stock issued by TAM S.A. belonging to
the STOCKHOLDERS on this date (the SHARES), which are free and clear of any
charges or encumbrances whatsoever, either judicial or extrajudicial, and no
other agreements, options or settlements concerning rights to purchase stock,
debentures, subscription bonus and/or beneficial parties exist.

3.   MANAGEMENT PRINCIPLES

3.1. The PARTIES agree to set out the following basic principles which shall
guide the decisions and the exercise of their respective voting rights at the
General Stockholders Meeting of TAM S.A., as well as the decisions to be made by
TAM S.A, by means of its representatives, at the general stockholders' meeting
of TLA, and of any other companies in which TAM S.A. has or may have an
interest, directly or indirectly, including by means of TLA, either in Brazil or
abroad (hereinafter, TLA and these companies shall be called simply
"COMPANIES"):

     (a)  the purpose of TAM S.A. is solely to have an interest in the corporate
          capital of companies dedicated to activities involving air
          transportation, particularly an interest in the COMPANIES, in which it
          retains or may retain the corporate and operating control and
          supervision of its activities

     (b)  the management of TAM S.A's and the COMPANIES' businesses shall be
          exercised by experienced, skilled, and independent professionals who
          boast the necessary qualifications for the positions they hold;

     (c)  the strategic decisions of TAM S.A. and the COMPANIES in the
          operating, financial, and commercial areas as well as the human
          resources policy shall always be motivated by the best interest of TAM
          S.A. and the COMPANIES, seeking to ensure the PARTIES the best return
          on their investments by means of a consistent dividend policy;

     (d)  the commercial relationships and dealings in general of TAM S.A. and
          the COMPANIES shall always be contracted considering, primarily, the
          interest of

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

          TAM S.A. and the COMPANIES, and be compatible with the conditions and
          practices similar to those of the market, verified at the time such
          dealings are contracted; the deals between TAM S.A. and/or the
          COMPANIES, on the one side, and the PARTIES shall comply with the
          provided hereof and be submitted to TAM S.A's Board of Directors,
          pursuant to the Articles of Association and Law no. 6404/76;

     (e)  the strategic decisions in connection with TAM S.A. and the COMPANIES
          shall have the profitability and value creation for their stockholders
          as basic objectives;

     (f)  the management of TAM S.A. and the COMPANIES shall always pursue high
          security, efficiency, productivity, and competitiveness levels in
          their activities;

     (g)  the management of TAM S.A. and the COMPANIES shall be responsible for
          the appropriate management of the relationships with the consumers,
          regulatory agencies, minority stockholders, the community, and public
          institutions which TAM S.A. and the COMPANIES have to relate to; and

     (h)  TAM S.A. shall adhere to and abide by the rules and regulations which
          constitute the "Differentiated Practices of Corporate Governance",
          applicable at least to those companies classed as Level 2 by BOVESPA's
          rules.

3.2. TAM S.A. and the COMPANIES shall continue to be audited by an
internationally renowned audit firm, from among the four (4) main firms in the
business.

3.3. The financial statements of TAM S.A. and the COMPANIES and other management
and accounting reports required by this Agreement and its exhibits shall be
posted according to the Brazilian corporate legislation, accompanied by an
additional explanatory note demonstrating the reconciliation of the period's
result with the net equity ascertained according to the generally accepted
accounting principles in the United States of America (USA GAAP), evidencing the
main differences between the two accounting principles applied, without
prejudice to the drawing up of the other financial statements required under the
law or by force of the "Differentiated Practices of Corporate Governance",
applicable to companies classed as Level 2 as per the Sao Paulo Stock Exchange
(BOVESPA)'s rules, and the costs of this posting shall be borne by TAM S.A.

3.4. TAM S.A. and the COMPANIES shall be managed in such a way that their
activities are self-sustainable, without the need to obtain additional resources
with their stockholders.

3.5. TAM S.A. shall be managed in such a way to reach a remarkable reputation as
to the disclosure of information to the stock market and the equal treatment of
its minority stockholders.

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

3.6. The PARTIES undertake to commit their vote at the General Stockholders
Meetings, as well as instruct their representatives in the Board of Directors,
to ensuring the observance of the basic principles set forth in this Section 3
as well as in the other items of this AGREEMENT.

3.7. the COMPANIES shall be managed observing the terms of the provisions set
forth in this AGREEMENT, including as regards the election of their members.

4.   PUBLIC OFFER OF STOCK

4.1. It the market conditions allow so, TAM S.A. shall make a primary offer of
preferred stock in the stock market of the United States of America (USA), in no
later than two (2) years as of the signing date of the 2002 AGREEMENT. The
minimum amount of this public offer of preferred stock shall be fifty million
U.S. dollars (US$ 50,000,000.00). The public offer shall allow TAM S.A. to have
deposit receipts of its preferred stock traded at the New York Stock Exchange on
a preferential basis.

4.1.1. In the event the primary public offer of preferred stock referred to in
clause 4.1. above is not possible to make, due to adverse conditions in the
national and international market, up to the end of the time frame mentioned in
the preceding item the INVESTMENT FUNDS shall have the right to make a secondary
public offer of their stock at stock markets either in Brazil or abroad. The
STOCKHOLDERS shall be compelled to causing TAM S.A. to take all actions in order
to allow this purpose to be attained in no later than six (6) months computed as
of the termination of the two(2)-year time frame stated in the preceding
subitem.

4.1.2. Notwithstanding the provided in Clause 10.3 and 10.5 below, the right to
make a secondary public offer of TAM S.A's stock referred to in subitem 4.1.1
above is exclusive to the INVESTMENT FUNDS, and is not applicable to the other
STOCKHOLDERS, unless the market conditions allow their participation without
losing - at the discretion of the financial institution hired to intermediate
the offer -the economical/financial benefit of the INVESTMENT FUNDS.

4.1.3. In case it is previously verified - through information provided by the
financial institution hired for placing and/or intermediating the secondary
offer referred to in item 4.1.1 above - that the stock under the offer can be
purchased by less than four (4) principals who do not qualify as investors, with
an exclusively financial interest (such as pension funds and financial
institutions for acquisition for their funds or security portfolios - "FINANCIAL
INVESTORS"), then, the procedure provided in Clause 10.3 and its subitems shall
be applied to such an assumption;

4.2. From this date on, TEP and its AFFILIATES can only issue securities if they
do not use for such any corporate name, brand or designation - at an Stock
Exchange - equal or equivalent to the expression "TAM". The provision stated in
this clause is not applicable to TAM - Transportes Aereos Del Mercosur S/A., a
TEP affiliate, unless that, and when, it comes to be acquired by TAM S.A.

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

5.   BUDGETARY PLANS AND DIVIDEND POLICIES

5.1. TAM S.A's Board of Directors shall approve the annual budgetary plans and
the development plans of TAM S.A. and the COMPANIES up to November 30 of each
year, relative to the following fiscal year, and shall follow them up in every
ordinary meeting by the Board of Directors.

5.2. In the event any plan is not approved by the Board of Directors up to its
implementation date, such plan shall then be the budget of the immediately
preceding fiscal year, plus monetary correction according to the variation of
the IGPM/FGB index.

5.3. The failure to approve any specific plan during three (3) years within any
five-year period shall result in an Impasse, in accordance with Section 11
below.

5.4. Except when necessary, in compliance with the budgetary and development
plans, the allocation of investment resources, the PARTIES shall vote, and
recommend the members of the Board of Directors appointed by same to vote, for
TAM S.A. to distribute dividends to its stockholders as provided in its Articles
of Association, and for the COMPANIES to also distribute dividends to their
stockholders in keeping with their statutory provisions, the latter being able
to come to distribute the entirety of the net profit ascertained in each fiscal
year.

5.5. The dividends paid to TAM S.A. in legal currency by the COMPANIES shall be
paid by TAM S.A. to its stockholders as soon as possible, except as provided in
the preceding item.

6.   GENERAL STOCKHOLDERS MEETINGS - EXERCISE OF VOTING RIGHT

6.1. The deliberations of TAM S.A's general meetings shall be made by the
majority votes OF STOCKHOLDERS, except as to the subject-matters indicated in
item 6.3 below.

6.2. Upon observing the provided in clause 1.2, the INVESTMENT FUNDS, as a
stockholder block and always represented by CSFB, on the one side, and any
contingent successors of TEP, on the other, as another stockholder block,
undertake - in any events and observing the exceptions expressly contemplated in
this AGREEMENT, particularly in connection with the deliberations in the
General Stockholders Meetings - to vote jointly and to adopt a single position,
acting jointly as if they were a single stockholder and taking all previous
actions which are necessary in order for this to occur.

6.2.1 Considering the provided in Clauses 1.2 and 6.2 above, the INVESTMENT
FUNDS undertake - in any events, particularly in connection with the
deliberations in the General Stockholders Meetings, and with the appointment of
members of the Board of Directors and Statutory Audit Committee - to vote
jointly so as to appoint two members of the Board of Directors and one or two
member(s) of the Statutory Audit Committee (in keeping with the

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

specific provisions of this AGREEMENT about the matter), and to adopt a single
position, acting jointly as if they were a single stockholder and taking all
previous actions which are necessary in order for this to occur.

6.2.2. The STOCKHOLDERS shall meet previously ("PREVIOUS MEETINGS") to the
holding of any general stockholders meeting of TAM S.A., in order to define the
vote they will cast, on a uniform way, at the meetings referred to. The PREVIOUS
MEETINGS shall be called by the director who has called the general stockholders
meeting (or by the chairman of the Board of Directors, in case the calling is
made by third parties), against the delivery of a notice by mail, email or fax,
with receipt registry. The vote to be professed by the STOCKHOLDERS at the
general stockholders meetings shall be defined in the PREVIOUS MEETINGS by the
majority votes of STOCKHOLDERS attending them, determined based on the
corresponding interests in TAM S.A's total corporate capital, with or without
voting right, except for the matters about which a personal right has been
expressly assigned to a given STOCKHOLDER.

6.2.3. The deliberations made in the PREVIOUS MEETINGS shall be stated in
minutes, of which copies will be made in order to be presented to the chairman
of TAM S.A's general stockholders meetings.

6.2.4. Any deliberation made without observing the provided in this item shall
be null and void, invalid, and ineffective, therefore, not producing any effects
before the STOCKHOLDERS, TAM S.A. and/or third parties.

6.3. The PARTIES agree it shall be necessary at least TEP's favorable vote and
the INVESTMENT FUNDS' favorable vote, these duly represented by the CSFB, in
order to approve the deliberations or the practice of acts regarding the
following matters:

     (a)  approval of TAM S.A's statutory amendments related to the corporate
          purpose, corporate capital, rights conferred upon the stock,
          preemptive rights, administration, and dividends;

     (b)  dissolution, liquidation, and extinction;

     (c)  transformation, split-up, merger, incorporation;

     (d)  acquisition or maintenance of mutual interest;

     (e)  setting up of a wholly-owned subsidiary (also by purchasing stock),
          and the admission of new stockholders in already existing wholly-owned
          subsidiaries;

     (f)  acquisition or control of or interest in other companies, consortiums
          or the setting up of a company group;

     (g)  conveyance and encumbrance of corporate interests;

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

     (h)  exclusion of preemptive right;

     (i)  decision about TAM S.A or the COMPANIES' interest in businesses which
          are not related to the attainment of the respective corporate
          purposes;

     (j)  creation of preferred stock or increase of the existing classes
          without keeping a proportion with the other types and classes, unless
          already provided in or authorized by the articles of association;

     (k)  change in the preferences, advantages, and conditions for the
          redemption or amortization of one or more classes of preferred stock,
          or creation of a more favored new class; and

     (l)  decision to discontinue the exercise of the Differentiated Practices
          of Corporate Governance imposed on companies classed as BOVESPA Level
          2.

6.4. The vote by the STOCKHOLERS referred to in item 6.3 of this Agreement shall
be expressed in a General Stockholders Meeting.

6.5. The Parties as of now undertake to abstain from voting in the Previous
Meetings and the General Stockholders Meeting of Company, in case any conflict
of interests arises. For the purpose of this Stockholders Agreement, a Party
shall be regarded to be in a "CONFLICT OF INTERESTS" when - considering that the
purpose of the General Meeting is to deliberate about the entering into of any
agreements between the Company and any of its stockholders or companies in which
the stockholder or the Company retains any representative interest of five per
cent (5) or above in the corporate capital - the terms and conditions of such
agreements are NOT regarded as fair and reasonable according to the market
practice (arms' length) pursuant to the provisions of clause 6.5.1.

6.5.1. The Parties agree as of now that, for the purpose of determining a
Conflict of Interests pursuant to the terms provided in clause 6.5 above, if
requested by any of the Parties, a specialized company shall be selected by the
COMPANY'S Board of Directors in order to review the adequacy to the market
conditions (arms' length) of the terms and conditions of agreements between one
of the Parties and/or companies in which such Party referred to retains a
representative interest of, at least, 5% in the corporate capital, and the
COMPANY and/or organizations in which COMPANY retains a representative interest
of, at least, 5% of the corporate capital. The company to be chosen by the Board
of Directors shall have access to all relevant information and data in order to

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

assess the intended deal and profess its opinion.

7.   BOARD OF DIRECTORS

7.1. At the General Stockholders Meetings of TAM S.A., in which agenda there is
a subject-matter referring to the election and/or replacement of members of the
Board of Directors, the STOCKHOLDERS, by this AGREEMENT, undertake to contribute
with their vote in such a way that:

     (a)  TEP indicates six (6) members, one of them being the Chairman and the
          other the Vice-Chairman of the Board of Directors; and

     (b)  the INVESTMENT FUNDS, jointly and duly represented by the CSFB,
          indicate two (2) members of the Board of Directors.

7.1.1. In case stockholders retaining preferred stock shall indicate a member
of the Board of Directors based on article 141 of Law 6404/76, the PARTIES as of
now agree that TEP shall now indicate only five (5) members of the Board of
Directors and the INVESTMENT FUNDS shall keep the right to indicate two (2)
members.

7.2. When any position in TAM S.A's Board of Directors becomes vacant, the
indication right shall return to the party having exercised it, as provided in
item 7.1.

7.3. None of the SHAREHOLDERS has the right to veto the indication made as
provided in item 7.1, and all of them shall jointly elect the persons indicated
as provided for hereunder.

7.4. The Board of Directors shall meet ordinarily every month and
extraordinarily against a calling by the Chairman, Vice-Chairman or any two
Directors, when the corporate interests require so, the following being
observed:

     (a)  the ordinary meetings by the Board of Directors shall be held on the
          third Wednesdays of every month, and shall review and deliberate on
          the following subject-matters: (i) monthly financial statements of TAM
          S.A. and the COMPANIES; (ii) compliance with the approved budget of
          TAM S.A. and the COMPANIES and any contingent adjustments; (iii)
          dealings of TAM S.A. and the COMPANIES with parties related to the
          SHAREHOLDERS, as per the conditions previously approved by the Board
          of Directors; and (iv) information about the economical/financial
          performance of TAM S.A. and the COMPANIES.

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

     (b)  the ordinary meetings shall be held irrespective of any call, the
          Management Board being responsible for sending to the members of the
          Board of Directors, with five (5) days in advance, the required
          documents for the deliberation;

     (c)  Any Director may include matters to be submitted to the Board of
          Directors, provided that he/she does so in no later than (10) days
          from the holding of the next meeting.

7.4.1. In addition to observing the statutory quorum for the installation, the
meetings by the Board of Directors shall only be validly installed with the
presence of at least one of the Directors indicated by the INVESTMENT FUNDS and
four Directors indicated by TEP.

7.4.2. The matters submitted to the appreciation of the Board of Directors shall
be approved, as per the terms of the articles of association, by the favorable
votes of at least five (5) members of the Board, the following conditions being
observed:

     (I)  the matters referred to in sections (I), (V) through (XI), (XIII),
          (XV), (XVII) through (XIX), (XXI) through (XXVI) in article 24 of the
          Articles of Association shall have the favorable vote of at least:

     a)   one of the Directors indicated by stockholder INVESTMENT FUNDS; and

     b)   two Directors indicated by stockholder TEP;

     c)   in case there is a vote impediment due to Conflict of Interest on the
          part of Directors indicated by TEP or by the INVESTMENT FUNDS, such
          matters shall be approved as follows:

          c.1.) in case the impeded director or directors have been indicated by
               TEP, the matter shall be approved by a favorable vote of at least
               one director indicated by the INVESTMENT FUNDS; and

          c.2.) in case the impeded director or directors have been indicated by
               the INVESTMENT FUNDS, the matter shall be approved by a favorable
               vote of at least two of the directors indicated by TEP.

7.4.2.1. When in the capacity of Directors to the Board of Directors, the
Parties as of now undertake to abstain from voting in the Previous Meetings and
in the Meetings of the Company's Board of Directors in case of Conflict of
Interests. For the purposes of this Stockholders Agreement, a Party shall be
regarded to be in a "CONFLICT OF INTERESTS" when, considering that the purpose
of Board of Directors Meeting is to deliberate about the entering into any
agreements

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

between the Company and the concerned Party (Director Stockholder) or companies
in which the concerned Party (Director Stockholder) retains a representative
interest of five per cent (5%) or above in the corporate capital - the terms and
conditions of such agreements are NOT regarded as fair and reasonable according
to the market practice (arms' length), pursuant to the terms of clause 6.5.1,
applying the procedure set forth in the clause referred to, as well as the
provided in Section XXIII, article 24 of the Articles of Association.

7.5. The Board of Directors meetings shall have the presence of the Management
Board members, whenever necessary, at the discretion of any Director, in view of
the subject-matters to be discussed.

7.6. The STOCKHOLDERS shall instruct the Directors indicated by them in order
for such directors to observe the instructions given by them in connection with
the provided in this AGREEMENT.

7.7. The STOCKHOLDERS shall advise the members of the Board of Directors in such
a way that - when they prepare and approve the vote to be professed by TAM S.A.,
in the capacity of the COMPANIES stockholder, in a General Stockholders Meeting
called for the election of members of the COMPANIES management entities -
persons indicated by TAM S.A's stockholders be indicated to form such entities,
and the indication of FUNDO BRASILEIRO to hold a position in the COMPANIES'
Management Board shall be respected; and all the other Management Board
positions shall be held by persons indicated by stockholder TEP. With regard to
FUNDO BRASILEIRO, the person to be indicated to take part in the COMPANIES'
management board shall always be the same person indicated and elected for the
position of TAM S.A's Chief Financial Officer.

8.   MANAGEMENT BOARD

8.1. The STOCKHOLDERS shall instruct the Board of Directors members indicated by
them, in the election of the Management Board members, to vote in such a way:

     (a)  to elect as Officers the persons indicated by the Directors appointed
          by stockholder TEP, in a number of three (3), in case the Management
          Board consists of four (4) to five (5) members, or in a number of four
          (4) in case the Management Board consists of six (6) members, one of
          them being the President and the other the Vice-President;

     (b)  to elect as Chief Financial Officer the person indicated by the
          director appointed by FUNDO BRASILEIRO, the directors appointed by
          stockholder TEP having a vetoing right.

8.2. It is incumbent upon the Board of Directors to elect TAM S.A's President
and approve the indication to elect the COMPANIES' President pursuant to the TAM
S.A's articles of association

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

and the special provisions contained in this AGREEMENT. Such deliberations shall
rely on the favorable vote of at least six (6) members of TAM S.A's Board of
Directors, one of them being necessarily professed by a Director indicated by
the INVESTMENT FUNDS.

9.   STATUTORY AUDIT COMMITTEE

9.1. At General Stockholders Meetings which agenda contains a matter related to
the indication of members of TAM S.A's Statutory Audit Committee, the
STOCKHOLDERS undertake to contribute with their vote in such a way that said
Statutory Audit Committee is made up of:

(a) Three (3) members indicated by stockholder TEP; and

(c) up to two (2) members indicated by FUNDO BRASILEIRO, this being ensured the
right to indicate at least one (1) member, in case it is possible for other
minority stockholders to elect the other member.

10.  PREFERRED RIGHT AND OTHER PROVISIONS REGARDING THE ALIENATION, ENCUMBRANCE
     AND CONVERSION OF SHARES

10.1. The total or partial transfer or transmission of SHARES subject to this
AGREEMENT to third parties shall not be permitted without the previous consent
in writing by the other SHAREHIOLDERS which, under the penalty of absolute
nullity and by operation of law, shall have preference the for the purchase, on
the basis of equality of conditions.

10.1.1. For the purposes of the foregoing item, the SHAREHOLDER who wishes to
alienate or transfer its SHARES to third parties shall notify the other
SHAREHOLDERS, in writing, of its intention, specifying the number and kind of
SHARES, name and qualification of the possible buyer, price and other conditions
of the transaction.

10.1.2. The SHAREHOLDERS, once they are notified in the form of the foregoing,
shall have 15 (fifteen) days, from the date of receipt of the notification, to
exercise their preferential right. In the case that more than one SHAREHOLDER
wishes to make use of its preferential right, each one shall be entitled to
purchase the offered SHARES in the exact proportion of its participation in the
corporate capital of TAM S.A., the well the to purchase the SHARES remaining due
to the disinterest or partial use of the preferential right by any, of the
SHAREHOLDERS. In any case, the whole lot of offered SHARES shall be purchased by
one or more SHAREHOLDERS making use of their preferential right, otherwise, the
Offering SHAREHOLDER is free to negotiate with third parties the exact
conditions foreseen in the notification mentioned in item 10.1.1 above.

10.1.3. If 15 (fifteen) days from the receipt of the notification to which the
item 10.1.1 above refers there is no representation of interest in the purchase
of the offered SHARES by the other SHAREHOLDERS, the Offering SHAREHOLDER shall
be free to alienate and transfer the SHARES

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

to third parties, under the exact terms and conditions mentioned in the
notification referred to in item 10.1.1 above, within a period of 30 (thirty)
days, alter which, if said transfer does not occur, the SHARES shall be offered
again to the other SHAREHOLDERS, and the same procedure as determined above is
applied.

10.2. The INVESTMENT FUNDS are prohibited from alienating to third parties its
Common SHARES representing corporate capital of TAM S.A.

10.3. The SHAREHOLDERS may, at their discretion, alienate its Preferred SHARES
to third parties, without observing item 10.1 above, as long as the subitems of
this Clause 10.3 are observed.

10.3.1. In the event that the SHAREHOLDERS wish to their Preferred SHARES issued
by TAM S.A. in a deal that requires the use of the negotiation procedure, under
the terms of CVM [Brazilian Securities and Exchange Commission] Instruction no
168, of 12/23/1991, observing the provision of item 10.3 above, any SHAREHOLDER
may alienate its SHARES as long as it notifies the other SHAREHOLDERS in this
sense in accordance with the terms, conditions and terms foreseen for the
divulgation of auction notices in accordance with art. 80 sole paragraph, and
Attachment I of CVM Instruction no 168/91.

10.3.2. Should the SHAREHOLDERS wish to alienate their Preferred SHARES issued
by TAM S.A. through a second distribution, they shall notify the other
SHAREHOLDERS 10 (ten) days before the date foreseen for the closing of the deal,
specifying its characteristics, especially the number of SHARES to be alienated
and the minimum price if applicable. In this event, the other SHAREHOLDERS may,
if the wish, request that the alienating SHAREHOLDER follows the procedure
described in item 10.3.1, as long as the offer a minimum price guarantee up to 5
(five) days after receipt of the notification concerning the secondary
distribution.

10.4. The alienation or encumbrance of Preferred SHARES issued by TAM S.A.
purchased by the SHAREHOLDERS after this date is not subject to the restrictions
foreseen in this AGREEMENT.

10.5. In the case of pledge, attachment or seizure of SHARES subject to this
AGREEMENT on the initiative of third parties, be they SHAREHOLDERS or not, if
the holder of the SHARES does not release them within a period of 30 (thirty)
days, counted from the mandatory registration of the encumbrance in the books
TAM S.A., it is understood that such holder offered them for sale so that TAM
S.A. should notify in writing all SHAREHOLDERS, so that those, if they wish, may
exercise their preferential right for the purchase of those SHARES and discharge
them for the settlement or liquidation of the debt which has originally led to
the embargo. In this event, the transfer of the discharged SHARES to the name of
the SHAREHOLDER who purchased them, as soon as the encumbrance has been lifted,
may be done by TAM S.A., independently from the intervention of the transferring
debtor. In order to settle a possible difference, to above or to below, between
the value of the liquidated debt and the SHARES that were object of the pledge,

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

attachment or seizure, their value shall be considered merely for accounting
purposes, based on the last balance TAM S.A. on the date of discharge.

10.6. Under observance of the provision of Clause 10.1 above, in the event that
any SHAREHOLDER ("SELLING SHAREHOLDER") wants tip sell any SHARES issued by TAM
S.A. and that are in his property ("CO-SALE TRANSACTION"), this SHAREHOLDER
shall grant the other SHAREHOLDERS (the "HOLDERS") the right and the opportunity
to sell the SHARES issued TAM S.A. in the property of the HOLDER as follows:

     (a)  the SELLING SHAREHOLDER shall submit a written notification to the
          HOLDERS at least 15 (fifteen) days before making any CO-SALE
          TRANSACTION ("CO-SALE NOTIFICATION") specifying i) the quantity of
          SHARES issued by TAM S.A. that the SELLING SHAREHOLDER wants to sell,
          ii) the total percentage of the total number of SHARES issued by TAM
          S.A. that the SELLING SHAREHOLDER wants to sell, iii) the identity of
          the potential buyer of the SHARES, iv) the amount receivable and other
          conditions inherent to the CO-SALE TRANSACTION, and v) the estimated
          closing date of the CO-SALE TRANSACTION. The CO-SALE NOTIFICATION
          shall offer the HOLDER the opportunity to sell a quantity of SHARES to
          the potential buyer until a maximum limit corresponding to half the
          number of SHARES that the SELLING SHAREHOLDER wants to sell;

     (b)  If the HOLDERS wish to sell any of their SHARES issued by TAM S.A. in
          the CO-SALE TRANSACTION, in accordance with the terms and provisions
          of this Clause, they shall present a written notification ("OPTION
          NOTIFICATION") to the SELLING SHAREHOLDER within 10 (ten) days to be
          counted from the CO-SALE NOTIFICATION, specifying the quantity of
          those SHARES issued by TAM S.A. of which it is HOLDER at such moment
          and a quantity of SHARES it wishes to sell, up to the previously
          mentioned maximum limit. The non-submittal of the OPTION NOTIFICATION
          within 10 (ten) days, shall be considered, for the purposes of the
          present AGREEMENT, as evident refusal on the part of the HOLDER to
          sell any of its SHARES issued by TAM S.A. For the CO-SALE TRANSACTION,
          the SELLING SHAREHOLDER shall then have the right to sell the quantity
          of SHARES issued by TAM S.A., pursuant to the terms and conditions set
          forth in the CO-SALE NOTIFICATION;

     (c)  After submitting the OPTION NOTIFICATION, the HOLDERS shall be
          obliged, by means of request of the Selling SHAREHOLDER, to carry out
          the sale of the SHARES identified by these HOLDERS in the OPTION
          NOTIFICATION, except in the event of a significant change in the terms
          and conditions of the CO-SALE TRANSACTION in relation to those
          specified in the CO-SALE NOTIFICATION. Nothing of what this AGREEMENT
          contains

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

          shall represent a requirement imposed upon the SELLING SHAREHOLDER to
          carry out any proposed CO-SALE TRANSACTION, even in the case of
          submittal of a CO-SALE NOTIFICATION or OPTION NOTIFICATION in
          accordance with the present AGREEMENT.

10.7. In the event that TEP, and/or its AFFILIATES, separately or together,
alienate or in any form transfer the SHARES representing the control of TAM S.A.
(to be read as control and ownership over 50% of the Common SHARES plus one
common share issued by TAM S.A.) directly or indirectly to third parties, they
shall notify the INVESTMENT FUNDS of their intention, so that the INVESTMENT
FUNDS, if they wish, may alienate or transfer, as the case may be, the total
amount of their SHARES of the corporate capital of TAM S.A. under the same terms
and conditions offered by third parties to the SHAREHOLDER TEP and/or its
AFFILIATES, separately or together.

10.7.1.In the event of the foregoing item, the SHAREHOLDER TEP shall notify the
INVESTMENT FUNDS, as soon as it receives a firm offer to alienate the control of
TAM S.A., so that they may exerciser, if they wish, the right guaranteed above,
and the notification shall contain:

     (a)  the number of SHARES that are object of the offer;

     (b)  the conditions of payment, guarantees and all other conditions of the
          deal; and

     (c)  the name of the potential purchaser.

10.7.2.The INVESTMENT FUNDS shall have 30 (thirty) days counted from the receipt
of notification mentioned in item 10.7.1 above, to inform the shareholder TEP
regarding its right to alienate its SHARES.

10.8. Respecting the preferential right as determined in clause 10.1 and the
right de CO-VENDA set forth in Clause 10.6, in the event the INVESTMENT FUNDS
wish to alienate SHARES issued by TAM S.A. of their ownership, that represent at
least 2% (two percent) of the corporate capital represented by Preferred SHARES,
such SHAREHOLDERS may request, by means of a notification containing all
specifications set for the CO-SALE NOTIFICATION in item 10.6 "a"), that TEP also
alienates, in the same sales transaction, Preferred SHARES (exclusively
Preferred SHARES) at a proportion of 01 (one) share alienated by the INVESTMENT
FUNDS for each share alienated by TEP, in a quantity representing, at most 10%
(ten percent) if the total volume of Preferred SHARES held jointly by TEP. The
obligation to alienate SHARES, that TEP assumes in the present clause, is
restricted to a lot of Preferred SHARES representing at most 10% (ten percent)
of the total volume of Preferred SHARES held by TEP, regardless whether one or
several sales transactions are to be realized to sell the SHARES; thus, once
alienated, in one or more transactions, Preferred SHARES representing 10% (ten
percent) of the total amount of Preferred SHARES held by TEP, the obligation of
TEP as foreseen in this clause does not exist any longer. TEP may only refuse to
carry out the sale if the offered price for each share is less than 85%

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

(eighty-five percent) of the average quotation of the Preferred SHARES of TAM
S.A. at BOVESPA for the 30 (thirty) proclamations before the sale.

10.9. The direct or indirect alienation, the transmission or the encumbrance, in
any form, of SHARES issued by TAM S.A., that does not comply totality or
partially with the present instrument shall be considered null and void by
operation of law before TAM S.A.

10.10. Under observance of the prohibition foreseen in clause 10.2 and despite
the provision in this Section 10, the SHAREHOLDERS are authorized to alienate
their SHARES to their AFFILIATES, whereby it is sufficient to notify the other
SHAREHOLDERS of its intention 10 (ten) days before executing the deal, and it
shall be guaranteed that the purchaser of the SHARES that are object of the deal
subrogates all the rights and obligations arising from the present instrument by
means of the execution of the term of membership to the present instrument.

10.10.1. In the cases foreseen in letter "d" of clause 1.3, the potential
successors of the INVESTMENT FUNDS shall execute a legal instrument that enables
them to exercise together and not isolatedly the rights and obligations foreseen
in this AGREEMENT, as if they were one SHAREHOLDER only, within a maximum and
unextardable period of 30 (thirty) days, counted from the liquidation, under the
penalty that they would not be bound any longer to the present AGREEMENT and
lose all rights and prerogatives that the AGREEMENT ensures the succeeded
SHAREHOLDERS.

10.10.2. In the cases foreseen in letter "b" of clause 1.3, the successors of
SHAREHOLDER TEP, mentioned in the same provision, shall execute a legal
instrument that enables them to exercise together and not isolatedly the rights
and obligations foreseen in this AGREEMENT, as if they were one SHAREHOLDER
only, within a maximum and unextendable period of 30 (thirty) days, counted from
the corporate event from which the succession originated.

10.11. TEP may only exercise the right to request the conversion of Common
SHARES into Preferred SHARES, pursuant to what is foreseen in art. 80, Paragraph
20, of the By-Laws mentioned in item 4.3. of this agreement, after January 01,
2007 or 1 (one) year after the public offer of the SHARES, the distribution of
which was submitted for approval by the Securities and Exchange Commission in
April 2005, whatever happens last.

11. RESOLUTION OF IMPASSES

11.1. DEFINITION OF IMPASSE

11.1.1. For the purposes of this Section, an "IMPASSE" occurs whenever:

     (a)  the SHAREHOLDERS or, depending on the case, the Board of Directors do
          not reach a decision in three consecutive General Meetings or Board
          meetings,

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

          with relation to matters that under the terms of this agreement depend
          on a joint decision;

     (b)  there is no quorum in three consecutive Board meetings due to the non-
          attendance of Directors that had been indicated by this SHAREHOLDER;
          or

     (c)  the provision of clause 5.3 is applicable.

11.1.2. An IMPASSE is supposed in the case when no decision has been taken after
one of the SHAREHOLDERS has notified the other SHAREHOLDER that there is a
matter to be decided and a term of 30 (thirty) days counted from the receipt of
such notification has elapsed.

11.1.3. The default according to any clause of this agreement or the exercise of
the veto right guaranteed in this instrument and in the By-Laws is not
considered Impasse.

11.2. PURCHASE OPTION IN THE CASE THAT THE IMPASSE CONTINUES

11.2.1. In the event of an IMPASSE, the SHAREHOLDER who has presented or
received the notification in accordance with Clause 11.1.2, shall have the
right, for the period of 30 (thirty) days after the end of the period of 30
(thirty) days specified in the same Clause 11.1.2, to appeal to this Clause by
means of a notification to the other SHAREHOLDER, indicating the price for which
the SHAREHOLDER which submits the notification agrees to sell all its SHARES
issued by TAM S.A. or to buy all the SHARES issued by TAM S.A. in the ownership
of the notified SHAREHOLDER ("PURCHASE OPTION"). Such price (expressed in
reais/Brazilian currency) shall be indicated by share, regardless of the kind of
SHARES issued by TAM S.A.

11.2.2. The SHAREHOLDER that receives the notification shall have 120 (one
hundred and twenty) days to decide if it buys all SHARES from the SHAREHOLDER
that sent it the notification or if it sells all its SHARES to the notifying
SHAREHOLDER. The absence of a representation on the part of the notified
SHAREHOLDER, within the period of 30 (thirty) days, shall be equivalent to a
affirmative answer that the notified SHAREHOLDER agrees to buy or sell all
SHARES of the SHAREHOLDER which has submitted the notification for the price
offered by such SHAREHOLDER.

11.2.3. The quittance of the purchase of the SHARES that are object of the
option provided for by this Clause, shall be given on the 15th (fifteenth) day
counted from the elapsing of the term mentioned in the previous paragraph, in
the office of TAM S.A., and the selling PARTY shall assign such SHARES entirely
free and unencumbered from any burden, encumbrance or lien. At the closing, the
SHAREHOLDERS shall sign the documents considered necessary to make the
transaction. The closing costs (including legal fees and registration fees)
shall be divided into equal parts by the SHAREHOLDERS.

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

11.2.4. The SHAREHOLDERS that wish to purchase SHARES of TAM S.A. in accordance
with the provision in items 11.2.1 to 11.2.3 above may assign or transfer, at
their exclusive discretion, the right to do so to AFFILIATES.

12.  SPECIFIC EXECUTION

12.1. All obligations assumed in this AGREEMENT are subject to specific
execution during the entire term of validity, under the conditions foreseen in
this AGREEMENT, whose terms shall be observed unrestrictedly by TAM S.A.

12.2. Observing the provision in this AGREEMENT with reference to the exercise
of the voting right, the following obligations are set up:

     (a)  The undersigning SHAREHOLDERS confer to the chairman of any General
          Assembly of TAM S.A., whether ordinary or extraordinary, exclusive
          competency, within the scope of the meeting, with full and
          unrestricted powers, in order to supervise the exact fulfillment of
          the terms of this agreement, and in the voting on any matted governed
          by this pact, the board may not compute any vote of the SHAREHOLDERS
          that totally or partially contradicts the voting convention hereby
          agreed upon, under the penalty of absolute nullity and ineffectiveness
          by operation of law of the resulting decision;

     (b)  The convening SHAREHOLDERS irrevocably and irrepealably acknowledge
          that the obligations assumed in this AGREEMENT, governing the exercise
          of the voting right, constitute an active obligation, in the sense
          covenanted in this pact, observing the specific execution, under the
          terms of article 118, paragraph 30, of Law 6.404/76 and articles 639
          and 641 in connection with art. 461, of the Civil Procedure Code, to
          be considered as express and anticipated representation to vote, for
          all effects of law;

     (c)  The convening SHAREHOLDERS are prohibited from abstaining from voting
          in General Meetings of TAM S.A. on matters governed by this AGREEMENT.
          If this provision is not complied with, the board shall consider the
          vote of the breaching convener as given with equal tenor as the vote
          of the other convener in the sense stipulated in this corporate
          agreement;

     (d)  When one of the SHAREHOLDERS gives a vote contrary to the provision in
          this AGREEMENT, the chairman of the board is obliged, for the valid
          formation of the corporate will, to make the vote of the breaching
          party valid and give it the tenor of the vote of the other convener as
          long as he acts in compliance with the obligations assumed in this
          pact;

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

     (e)  The disregard on the part of the bcard, on whatever pretext it may be,
          of the rights that this AGREEMENT ensures for the SHAREHOLDERS, shall
          cause the absolute nullity and ineffectiveness by operation of law of
          the resulting decision and/or of any act directly or indirectly
          carried out in consequence of such violation;

     (f)  The SHAREHOLDERS expressly acknowledge that the violation of any
          provision of this agreement shall justify, besides the specific
          execution foreseen by law, the immediate granting of a preliminary
          order "initio litis", in provisional remedy, since they admit that
          such violation by itself characterizes the legal requirements
          therefore, especially "periculum in mora" and "fumus boni iuris". The
          equally acknowledge that the general remedy power of the judge, as
          foreseen in arts. 798 and 799 of the Civil Procedure Code, is
          applicable and shall be activated so that the harmed PARTY obtains a
          soon reestablishment or execution of its breached right, even if in
          the phase of judicial cognizance.

     (g)  Concerning the blocking of SHARES, it is covenanted that any
          alienation, assignment or encumbrance of the SHARES, at whatever title
          it may be, that breaches the provision in this AGREEMENT, shall be
          regarded null and void by operation of law, and does not constitute an
          obligation, under any pretext, for TAM S.A., which shall not be liable
          for any harm caused to third parties.

     (h)  All provisions set forth in this AGREEMENT concerning the restrictions
          to the circulation of SHARES, constitute reciprocal rights and
          obligations of the SHAREHOLDERS, but shall be supervised and fulfilled
          by TAM S.A., as set forth herein.

13.  WAIVERS

13.1. The fact that any PARTY omits to request, at any time, the fulfillment of
a provision in this AGREEMENT or omits to exercise any option, alternative or
right granted upon him, shall not mean a waiver of any of its provisions nor
shall it affect its total or partial validity or right, and any PARTY shall have
the right to later request the fulfillment of any and all provision of this
agreement, as well as to exercise said option, alternative or right, except if
expressly provided otherwise in this AGREEMENT.

13.2. No waiver of any provision of this agreement shall be effective before the
other PARTIES, unless in writing and made by the legal representative of the
waiving PARTY.

14.  COMMUNICATIONS

14.1. All communications foreseen or allowed by this AGREEMENT shall be made in
writing and shall be considered as duly made when sent by telex, telegram, fax
or e-mail (in each case subject

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

to the receipt code or any confirmation de receipt), or when delivered in person
or by means of registered mail at the addresses indicated in Attachment II to
the present instrument.

15.  TERM OF VALIDITY

15.1. This AGREEMENT enters into force on this date and shall remain in force
until November 28, 2007. In the event that the public offer of the sale of the
SHARES to which Clause 4.1 of the present Agreement refers is not made until
November 28, 2007, the date on which this agreement ends shall automatically be
extended until November 28, 2008, regardless of any representation between the
PARTIES.

15.2. Without prejudice to the provision in sub-clause 15.1 above, the present
AGREEMENT shall be terminated with anticipation by operation of law, in the
event and from the moment on in which the INVESTMENT FUNDS hold together less
than 10% (ten percent) of the representative shares of the corporate capital of
TAM S.A., taking into consideration the sum of its Common and Preferred SHARES.

16.  ARBITRATION

16.1. The SHAREHOLDERS undertake to settle controversies, litigation or
conflicts among themselves, that do not constitute an Impasse, and result from
this agreement ("Controversy") by means of the following procedures:

     (a)  The SHAREHOLDERS shall try to resolve any Controversy by means of
          consultations and negotiations;

     (b)  If the Controversy is not settled within 30 (thirty) days after on of
          the PARTIES has notified the other PARTY in relation to the object of
          it, the PARTIES irrevocably and irrepealably undertake to settle the
          Controversy by means of final and obligatory arbitration, in
          accordance with Lei no 9.307/96 and with the Regulation of the
          Arbitration Chamber of the Market, of the Sao Paulo Stock Exchange
          ("Arbitration Regulation");

     (c)  The arbitration shall be administered by the Arbitration Chamber of
          the Market. The PARTY that requests the beginning of the arbitration
          shall necessarily opt for ordinary arbitration, under the terms of the
          Arbitration Regulation. The arbitration may only be summary if the
          PARTIES previously and expressly agree so;

     (c)  The arbitration shall be judged by an Arbitration Chamber composed of
          03 (three) arbiters, if ordinary, or of one single arbiter, in the
          event the PARTIES have opted for summary arbitration. The indication
          of the arbiters, in any of the cases, shall be according to the terms
          of the Arbitration Regulation;

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

     (d)  The PARTIES elect Portuguese as arbitration language and the City of
          Sao Paulo as arbitration venue, whereby the court of the jurisdiction
          of Sao Paulo is elected as competent for any provisional remedies or
          writs of prevention regarding a potential arbitration procedure
          incepted by force of this Clause, as well as for any judicial
          execution of the arbitral award, under the terms of this Clause 16.

     (e)  The arbitration shall be judged on the basis of the rules of law, and
          the possibility of an equity judgment shall be eliminated, whereby the
          underlying law to be applied to the arbitral award shall be the law of
          the Federative Republic of Brazil. The arbitral award shall be
          definitive and binding for the PARTIES and its successors, and shall
          not be subject to homologation or to any appeal before the Judiciary;
          and

     (f)  The SHAREHOLDERS shall continue to carry out their obligations,
          regardless of the existence or non-existence of an ongoing arbitral
          process.

17.  MISCELLANEOUS

17.1. The present AGREEMENT is entered into irrevocably and irrepealably, and
exclusively and automatically obliges (i) the PARTIES, (ii) the heirs of the
PARTIES, and (iii) the successors of the PARTIES, in the cases specified in
clause 1.3 and under the terms of clause 10.10. The successors of the
SHAREHOLDERS are not bound, under any circumstance, to this AGREEMENT and are
not PARTY to it, at any other title than those mentioned above, with the
exception of the provision in this clause and in clause 10.10 of this
instrument.

17.2. This AGREEMENT may be amended only in writing.

17.3. In the event the PARTIES abstain from exercising any rights resulting from
this agreement, such abstention shall not affect in any aspect those rights that
may be exercised at any moment.

17.4. If any provision of this agreement is considered illegal or ineffective,
such illegality or ineffectiveness shall not affect the other provisions which
shall remain valid and full force.

17.5. Observing the limitations that they are imposed by the contractual and/or
corporate instruments that govern their relationship with the INVESTMENT FUNDS,
CSFB and CSFB- BAHAMAS sign this AGREEMENT in order to undertake to make their
best efforts in the sense of making the INVESTMENT FUNDS comply with the
obligations assumed in this instrument.

17.5.1. The agreement of CSFB and CSFB-BAHAMAS of the foregoing item does not
cause any co-obligation or joint or subsidiary responsibility of CSFB and of
CSFB-BAHAMAS with relation to the obligations assumed by the INVESTMENT FUNDS,
including those of monetary character.

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

17.6. This AGREEMENT is governed by Brazilian legislation, and the PARTIES elect
the Central Court of the Capital of the State of Sao Paulo ("Forum Joao Mendes
Junior") to and exclude any other, as privileged as it may be, to settle any
judicial actions arising from the terms of clause 16(d) above.

IN WITNESS WHEREOF, THE PARTIES SIGN THE PRESENT AGREEMENT IN 08 (EIGHT)
COUNTERPARTS OF EQUAL TENOR AND EFFECT, IN THE PRESENCE OF THE WITNESSES THAT
ALSO SIGN IT.

                            Sao Paulo, May 16, 2005.

TAM - EMPREENDIMENTOS E PARTICIPACOES S.A.

By:
    ------------------------------------
Position:
          ------------------------------

BRASIL PRIVATE EQUITY FUNDO DE INVESTIMENTO EM PARTICIPACOES

By:
    ------------------------------------
Position:
          ------------------------------

BRAZILIAN EQUITY INVESTMENTS III LLC.

By:
    ------------------------------------
Position:
          ------------------------------

BRAZILIAN EQUITY LLC.

By:
    ------------------------------------
Position:
          ------------------------------

LATIN AMERICA CAPITAL PARTNERS II LLC.

By:
    ------------------------------------
Position:
          ------------------------------

LATIN AMERICA CAPITAL PARTNERS - PIV LLC.

By:
    ------------------------------------
Position:
          ------------------------------

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

AEROSYSTEM S.A. EMPREENDIMENTOS E PARTICIPACEOS

By:
    ------------------------------------
Position:
          ------------------------------

CONSENTING PARTIES:

TAM S.A.

By:
    ------------------------------------
Position:
          ------------------------------

 CREDIT SUISSE FIRST BOSTON DISTRIBUIDORA DE TITULOS E VALORES MOBILIARIOS S.A.

By:
    ------------------------------------
Position:
          ------------------------------

CSFB (BAHAMAS) LIMITED

By:
    ------------------------------------
Position:
          ------------------------------

Witnesses:

1.
   -------------------------------------
Name
     -----------------------------------

RG [Brazilian ID card]
CPF [Individual Taxpayers' Registry]

2.
   -------------------------------------
Name
     -----------------------------------
RG
   -------------------------------------
CPF
    ------------------------------------

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

                                  ATTACHMENT I
             STOCK DISTRIBUTION OF TAM S.A. AMONG THE SHAREHOLDERS

1) TEP: 80.505.200 SHARES

COMMON - 58.180.638
PREFERRED - 22.324.562

2)AEROSYSTEM: 8.516.428

COMMON - 1.515.948
PREFERRED - 7.000.480

2) BRAZILIAN EQUITY INVESTMENTS III LLC: 4.457.758 SHARES

COMMON: 16.928
PREFERRED: 4.440.830

3) LATIN AMERICA CAPITAL PARTNERS PIV LLC: 1.356.056 SHARES

COMMON: 02
PREFERRED: 1.356.054

4) BRASIL PRIVATE EQUITY FUNDO DE INVESTIMENTO EM PARTICIPACOES : 20.640.572
SHARES

COMMON: 02
PREFERRED: 20.640.570

5) BRAZILIAN EQUITY LLC: 1.178.464 SHARES

COMMON: 4.474
PREFERRED: 1.173.990

6) LATIN AMERICA CAPITAL PARTNERS II LLC: 5.330.238 SHARES

COMMON: 02
PREFERRED: 5.330.236

7) MINORITY SHAREHOLDERS (MARKET): [665.094]

COMMON: [18.722]
PREFERRED: [646.372]

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

<PAGE>

                                  ATTACHMENT II
                             ADDRESSES AND CONTACTS

INVESTMENT FUNDS CSFB AND CSFB-BAHAMAS:
Av. Brigadeiro Faria Lima no 3064, 130 andar
[01451-000]-Sao Paulo, SP
Fax: 55 11 3841-6303
Email: mauro.bergstein@csam.com
Att: Sr. Mauro Bergstein

W/c to:
Ulhoa Canto, Rezende & Guerra Advogados
Rua Bela Cintra 1.149, 12.0 andar
01415-001 -Sao Paulo, SP
Fax: (11) 3081-5804
Att: Dr. Aloysio Meirelles de Miranda F.O

TEP:
Rua Monsenhor Antonio Pepe, 331
04357-080 - Sao Paulo, SP
Fax:5582-8991
Email: noemy.amaro@tam.com.br
Att: Sra. Noemy Almeida Oliveira Amaro

W/c to:
Turci Advogados Associados
Rua Afonso Bras, 473 - 14.0 andar, Cj. 141/142
0451 1 -011 - SAO Paulo, SP
Phone: (11) 3841-2521
Fax: (11) 3044-6527
Email: turci@turci.com
Att: Dra. Flavia Turci

TAM S.A.:

Av. Jurandir, 856, Lote 4,40 andar
[CEP] - Sao Paulo, SP
Fax: (11) 5581-9167
Email: marco.bologna@tam.com.br
Att: Sr. Marco Antonio Bologna

(AMENDED AND CONSOLIDATED STOCKHOLDERS' AGREEMENT - TAM S.A. DATED MAY 16, 2005)

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