ALPARGATAS S.A. Publicly-Held Company. Summary of Minutes of the Special Shareholders Meeting held on November 1, 2017

Transcription

1 ALPARGATAS S.A. National Corporate Taxpayers Register of the Ministry of Finance (CNPJ/MF) No / State Registration Number (NIRE) Publicly-Held Company Summary of Minutes of the Special Shareholders Meeting held on November 1, 2017 Date, Time and Place: On November first (1 st ), 2017, at 10:00 a.m., in the conference room of the head offices of Alpargatas S.A., located in the City of São Paulo, State of São Paulo, at Avenida Doutor Cardoso de Melo, 1.336, 14 th floor, Vila Olímpia, postal code ( Company ). Call Notice and Publications: Call Notice published by the Official Gazette of the State of São Paulo and by Valor Econômico in the editions of October 17, 18 and 19, In addition, the documents required by Article 135, paragraph 3 of Law No /76 and by CVM Instruction No. 481/09 were made available and disclosed to the market, pursuant to the applicable regulations. Attendance: Attendance of shareholders representing 64.5% of the Company s total capital stock, in compliance with the minimum legal quorum, as provided for by article 135 of Law No /76, in accordance with the signatures on the Shareholders Attendance Register. The meeting was also attended by the members of the Company s Fiscal Council, Mr. Carlos Augusto Reis de Athayde Fernandes and Mr. Marcos Reinaldo Severino Peters. Presiding Officers: Chairman: Mr. Márcio Luiz Simões Utsch; and Secretary: Adalberto Fernandes Granjo. Agenda: (i) election of new permanent members and alternate members of the Company s Fiscal Council, as a result of the resignation and for a term of office until the Annual Shareholders Meeting of 2018; (ii) amendments to and restatement of the Company s Bylaws, in accordance

2 with the Management Proposal disclosed to the shareholders, in accordance with the applicable law; and (iii) establishment of the Audit Committee of a permanent and statutory nature. Resolutions: After examination and discussion of the items set forth in the agenda, the following resolutions were adopted: (i) The election of the following new permanent members and alternate members of the Company s Fiscal Council was unanimously approved, in replacement of the permanent members and alternate members who resigned from their positions on September 20, 2017: (a) Fernando Marques Cleto Duarte, Brazilian, single, economist, resident and domiciled in the City of São Paulo, State of São Paulo, at Rua Guararapes, 78, apartment 174, bearer of identity card RG No SSP-SP and enrolled with the Individual Taxpayers Register of the Ministry of Finance (CPF/MF) under No , as permanent member, as well as his respective alternate member, Pedro Soares Melo, Brazilian, married, administrator, resident and domiciled in the City of São Paulo, State of São Paulo, at Rua Pensilvânia, 1.342, apartment 151, bearer of identity card RG No SSP-SP and enrolled with the CPF/MF under No ; (b) Guilherme Tadeu Pereira Júnior, Brazilian, married, administrator, resident and domiciled in the City of São Paulo, State of São Paulo, at Av. Professor Alceu Maynard Araujo, 650, apartment 184B, bearer of identity card RG No SSP-SP and enrolled with the CPF/MF under No , as permanent member, as well as his respective alternate member, Renato Roberto Cuoco, Brazilian, widower, engineer, domiciled in the City of São Paulo, State of São Paulo, at Av. Angélica, 2530, 6 th floor, suite 6162, bearer of identity card RG No SSP-SP and enrolled with the CPF/MF under No ; and (c) Pedro Wagner Pereira Coelho, Brazilian, married, businessperson, domiciled in the City of São Paulo, State of São Paulo, at Av. das Nações Unidas, , block III, 15 th floor, bearer of identity card RG No IFP/RJ and enrolled with the CPF/MF under No , as permanent member, as well as his respective alternate member, João Costa, Brazilian, married, economist, resident and domiciled in the City of São Paulo, State of São Paulo, at Rua Dr. Abílio Martins de Castro, 75, bearer of identity card RG No SSP-SP and enrolled with the CPF/MF under No The members of the Fiscal Council hereby elected (a) represent, subject to the penalties of law, that all of them meet the requirements established by the applicable law in order to be vested in their respective positions; (b) shall be vested in their positions upon execution of the respective instruments of investiture. The term of office of the permanent members of the Fiscal Council and the alternate members hereby elected is unified and shall expire at the next Company s Annual Shareholders Meeting. As approved at the Annual Shareholders

3 Meeting held on April 19, 2017, the remuneration of the Fiscal Council was established in the minimum limit provided for by Article 162, paragraph 3 of Law No /76. (ii) (iii) The amendment to the Company s Bylaws was unanimously approved in the terms of the Management Proposal disclosed to the shareholders. Accordingly, the Company s restated Bylaws shall be hereinafter in effect with the wording set forth in Exhibit I to these minutes. The establishment of the Audit Committee of a permanent and statutory nature was unanimously approved, as provided for by Article 19 of the Company s Bylaws. Closing: There being no further business to be transacted, and as no one wished to speak, the meeting was adjourned and these minutes were drawn up in summary form, which may be published with omission of signatures of the shareholders present, as provided for by paragraphs 1 and 2 of Article 130 of Law No /76. Then the minutes were read, found to conform and signed. Signatures: Presiding Officers: Chairman: Mr. Márcio Luiz Simões Utsch; and Secretary: Adalberto Fernandes Granjo. Shareholders: ITAUSA INVEST ITAU S/A; CAMBUHY ALPA HOLDING S/A; CAMBUHY I FIP; SILVIO TINI DE ARAUJO; BONSUCEX HOLDING S/A; JOAO JOSE OLIVEIRA DE ARAUJO; CARLOS AUGUSTO REIS DE A FERNANDES; CARLOS ROBERTO ZANELATO; FIDELITY INVESTMENTS MONEY MANAGEMENT INC and ODAIR TOGNATO. I hereby declare that the minutes above are a true copy of the minutes drawn up on the proper book. São Paulo, November 1, Márcio Luiz Simões Utsch Chairman of the Meeting

4 Exhibit I to the Minutes of the Special Shareholders Meeting held on November 1, 2017 ALPARGATAS S.A. Publicly-Held Company BYLAWS CHAPTER I CORPORATE NAME, PRINCIPAL PLACE OF BUSINESS, DURATION AND BUSINESS PURPOSE Article 1 ALPARGATAS S.A. ( Company ), organized on April 3, 1907, is a joint-stock company governed by these bylaws ( Bylaws ) and by the applicable legal provisions. Sole Paragraph As a result of the Company s listing with the special listing segment named Corporate Governance Level 1 of B3 S.A. Brasil, Bolsa, Balcão (respectively Level 1 and B3 ), the Company, its shareholders, Managers and members of the Fiscal Council, when in place, are subject to the provisions of B3 Corporate Governance Level 1 Listing Regulations ( Level 1 Regulations ). Article 2 The Company has its head offices and legal jurisdiction in the City of São Paulo, State of São Paulo, and may open and close branches and other establishments in Brazil, at the discretion of the Executive Board. Upon resolution of the Board of Directors, the Company may also organize and wind up companies abroad, and the respective branches abroad may be opened and closed at the discretion of the Executive Board. Article 3 The Company shall operate for an indefinite term. Article 4 The Company has the following business purpose: (a) manufacturing, sale, import and export of (i) footwear and fashion items, clothes and accessories in general, including those used as Personal Protective Equipment PPE; (ii) sports articles; (iii) leather and fabric articles and other textile items; (iv) gifts and promotional materials; (v) threads, fabrics, synthetic resins and natural or artificial rubber, and any other inputs and components of these products; (b) exploitation of trademarks, patents and any other industrial or intellectual property rights;

5 (c) commercial agency of Brazilian or foreign companies in Brazil or abroad; (d) manufacturing of other products and exploitation of related activities which are directly or indirectly associated with the Company s business purpose; (e) import and export of machines, components, accessories, equipment and raw materials, as well as manufacturing and sale of machines, parts and accessories for machines; (f) manufacturing and sale of packaging materials; (g) growing, preparation and sale of any types of fibers; (h) development of franchising activities as a franchiser or franchisee; and (i) equity interest in other companies, in Brazil or abroad, of any type and business purpose, as a partner, member or shareholder. CHAPTER II CAPITAL STOCK AND SHARES Article 5 The Company s capital stock is six hundred and forty-eight million, four hundred and ninety-seven thousand, two hundred and thirty Reais and ninety-seven cents (R$648,497,230.97), fully subscribed and paid-in, represented by four hundred and seventy million, four hundred and forty-nine thousand, seven hundred and seventy-seven (470,449,777) registered shares, of bookentry type with no par value, being (i) two hundred and forty-one million, six hundred and eight thousand, five hundred and fifty-one (241,608,551) common shares; and (ii) two hundred and twenty-eight million, eight hundred and forty-one thousand, two hundred and twenty-six (228,841,226) preferred shares. Paragraph 1 It shall be incumbent upon the Board of Directors to set the issue price of shares arising out of any capital increases, and part of such price may be allocated for formation of capital reserve, with due regard for the legal provisions. Paragraph 2 The Company is authorized to increase its capital stock by up to thirty million (30,000,000) common shares and/or up to sixty million (60,000,000) preferred shares, which shall be registered, of book-entry type with no par value, regardless of amendment to the Bylaws, upon resolution of the Board of Directors, which shall established the issue conditions, provided that it shall not be required to maintain the proportion between common shares and preferred shares upon any such issue. Paragraph 3 Upon the issue, within the limit of authorized capital, of new shares, debenture stock or subscription warrants, the placement of which shall be made by means of sale in stock exchange, public subscription or share exchange in public offering of control acquisition, the

6 Board of Directors may exclude the right of first refusal for the former shareholders in the subscription, or reduce the term for exercise thereof. Paragraph 4 The Board of Directors may create any long term incentive plan involving shares or stock options, as approved by the Shareholders Meeting, to managers and/or employees of the Company or of companies under its control. There shall be no right of first refusal for the shareholders upon granting or exercise of any stock option. Paragraph 5 Any subscribers that fail to make the payment of the amount of the subscribed securities within the established term shall be deemed to be in default by operation of law, and shall pay legal interest and monetary restatement to the Company, in addition to a fine of five percent (5%) on the concerned amount. Paragraph 6 The capital stock may be represented by up to two-thirds (2/3) of preferred shares. Paragraph 7 The Company may, at any time and at the discretion of its Shareholders Meeting, create new classes of preferred shares or increase the quantity of preferred shares of existing classes, without maintaining the proportion to the other classes, provided that the amount of preferred shares without voting right shall not exceed two-thirds (2/3) of the capital stock. Article 6 All Company s shares are of book-entry type, without issue of certificate, and shall be held in a checking account on behalf of their holders with a financial institution authorized by the Brazilian Securities Commission ( CVM ) and designated by the Board of Directors. Article 7 The shares representing the capital stock are indivisible in relation to the Company. Each common share entitles its holder to one (1) vote in resolutions of the Shareholders Meeting, and the preferred shares shall have no voting right. Article 8 The preferred shares shall be entitled to the following advantages: (i) receipt of dividend per preferred share that is ten percent (10%) greater than the dividend attributed to each common share; and (ii) priority in capital reimbursement, without premium, up to the amount of the capital installment represented by such shares, in case of Company s liquidation. CHAPTER III SHAREHOLDERS MEETING Article 9 The Shareholders Meeting shall be ordinarily held every year within the first four months after the end of the fiscal year and on a special basis whenever so required by the

7 Company s interests, by means of call notice as provided for by law and by the Bylaws. The Shareholders Meeting shall be declared open and presided over by the Chairman of the Board of Directors or, in his absence or impediment, by any other Director, Officer or shareholder elected by the present shareholders, and the chairman of the Shareholders Meeting shall choose the secretary thereof. Paragraph 1 The Shareholders Meeting shall be called by the Board of Directors, or by the Chairman of the Board of Directors under the law, in first call at least fifteen (15) days in advance of the term of the first publication of the announcement. In case the Shareholders Meeting is not held, another announcement of second call shall be published at least eight (8) days in advance. The call notice shall be exempted if all shareholders are present at the Shareholders Meeting. Paragraph 2 In order to attend and vote at the Shareholders Meeting, the shareholder shall demonstrate its capacity as a shareholder, by means of original documentation or copy thereof sent to the Company by , by submitting the following, preferably two (2) business days in advance of the date of the corresponding Shareholders Meeting, (i) identity card and (ii) proof of the shareholder s shares issued by the depositary institution. The attorneys-in-fact of shareholders shall present the respective powers of attorney by the time and by the aforementioned means. Article 10 The Shareholders Meetings shall be held on the day and time set forth in the respective call notice, to resolve on the matters stated in the agenda. Article 11 The Shareholders Meeting shall have the following duties, in addition to any duties provided for by law and by these Bylaws: (a) receive the managers accounts in relation to the last fiscal year; (b) examine, discuss and vote on the financial statements; (c) resolve on the allocation of the net profit for the fiscal year and on the distribution of dividends; (d) elect and remove the members of the Board of Directors and of the Fiscal Council; (e) set the global annual remuneration of the members of the Board of Directors and of the Executive Board, as well as of the members of the Fiscal Council;

8 (f) elect the liquidator and the Fiscal Council to operate during the liquidation period; (g) amend these Bylaws; (h) resolve on the amalgamation, merger, merger of shares, full or partial spin-off, and conversion; (i) resolve on the cancellation of listing as a publicly-held company with the CVM or change of the governance level; (j) attribute warrants in shares issued by the Company, as well as resolve on redemptions, amortizations, grouping and splitting of shares issued by the Company; (k) resolve on the Company s dissolution and liquidation, as well as on the election and removal of Company s liquidators and the approval of their accounts; (l) resolve on any petition for court-supervised or extrajudicial reorganization or for bankruptcy of the Company; and (m)select the institution or specialized company in charge of the Company s valuation in the events provided for by Law No /76 and by these Bylaws. Article 12 Except in the events provided for by law and with due regard for the provisions in these Bylaws, resolutions and approvals shall be passed by shareholders representing a majority of the Company s voting capital stock present at the Shareholders Meeting. CHAPTER IV MANAGEMENT Article 13 The Company shall be managed by a Board of Directors and an Executive Board. Paragraph 1 The investiture of the managers shall depend on the execution of the respective instrument of investiture drawn up on the proper book within thirty (30) days following the election and on prior execution of the Instrument of Consent of the Managers required by the Level 1 Regulations, as well as on compliance with the applicable legal requirements. Paragraph 2 In case the instrument of investiture is not executed within thirty (30) days following such appointment, it shall become ineffective, unless a justification is accepted by the management body for which the member has been elected.

9 Paragraph 3 The term of office of the Board of Directors or of the Executive Board shall be extended until the new elected managers are vested in their positions. Paragraph 4 The substitute elected to fill a vacant position shall complete the term of office of the substituted person. SECTION I BOARD OF DIRECTORS Article 14 The Board of Directors shall be composed of up to six (6) permanent members and the same number of alternate members, resident in Brazil or not, all of them elected and removed by the Shareholders Meeting at any time. Paragraph 1 In case of absences or impediment of permanent members, each of them shall be substituted by their respective alternate member. In case of vacancy of the position of Director, if there is no alternate member, the Board of Directors shall elect as many substitute directors as there are vacant positions, and the term of office of the directors elected under this Article shall expire upon the next Shareholders Meeting to be held. Paragraph 2 The members of the Board of Directors shall be elected for a term of office of one (1) year, reelection permitted. Article 15 The Board of Directors shall elect a Chairman among its members, by a majority of votes of the Directors present at the first Meeting of the Board of Directors held immediately after expiration of each term of office of the Board of Directors, or upon any resignation from or vacancy of the position of Chairman. Sole Paragraph In case of absence or temporary impediment of the Chairman, the duties of the Chairman shall be carried out by any other member of the Board of Directors designated by a majority of votes of the other Directors. Article 16 The Board of Directors shall ordinarily meet at least six (6) times each fiscal year, on a day and time established in the annual corporate schedule, and on a special basis whenever called by its Chairman or by one-third (1/3) of its members, at least five (5) days in advance of the date of such meeting. Paragraph 1 The call notices of the meetings shall be made in writing, by letter, electronic mail ( ) or any manner that enables confirmation of receipt of the call notice by the addressee, shall contain the agenda, place and time of the meeting and include any documentation

10 relating to the agenda. Without prejudice to the provisions above, in case of urgency the meetings of the Board of Directors may be called on a special basis at least two (2) business days in advance of the date of the meeting. Paragraph 2 The call notice referred to in this Article shall be excused in case all permanent members of the Board of Directors are present at the meeting. The members of the Board of Directors may attend and vote at meetings of the Board even if they are not physically present at such meetings, provided that (i) everyone shall be capable of taking part in the discussions by means of conference call, video conference or any other electronic communication system; and (ii) said directors shall express their vote by means of prior written vote or by written vote transmitted by fax, electronic mail ( ) or any other communication means before the end of the concerned meeting. The respective minutes shall be subsequently signed by all members that took part in the meeting. Paragraph 3 The quorum for holding the meeting of the Board of Directors shall be a majority of the permanent members. Paragraph 4 The meetings of the Board of Directors shall be presided over by its Chairman in office, who shall designate the Secretary of the meeting, and their resolutions shall be adopted by a majority of the votes of those present. Paragraph 5 In resolutions of the Board of Directors, each Director, including the Chairman of the Board of Directors, shall be entitled to one vote. Paragraph 6 Minutes of meetings of the Board of Directors shall be drawn up on the proper book. Article 17 The Board of Directors shall have the following duties, in addition to any other duties established in other provisions of these Bylaws or the law: (a) establish the general direction of the Company s business; (b) oversee the management of the members of the Executive Board; (c) election and removal of the Company s Officers, establishment of their duties, and inspection of their management, as well as previous statement on the election of the members of the Board of Directors of its controlled companies;

11 (d) definition of the policies and relevant strategic issues for the success of the venture developed by the Company and its controlled companies, including but not limited to approval of industrial projects and establishment of annual investment plans; (e) submission of proposals to the Shareholders Meeting involving transactions that imply any change in the Company s capital stock, amalgamation, merger, merger of shares, spin-off or any other forms of corporate restructuring involving the Company and its controlled companies; (f) definition of the vote in relation to the matters under its liability as listed in this Article, to be resolved on at Shareholders Meetings and at Meetings of the Board of Directors of the companies in which the Company holds an equity interest; (g) appointment and removal of the independent auditors of the Company and its controlled companies; (h) creation or discontinuation of advisory and/or consulting committees of the Board of Directors, and definition of their duties and remuneration, if applicable; (i) (j) election of the Chairman of the Board of Directors of the Company and its controlled companies; approval of direct and indirect investments and divestures in equity interests, as well as of the organization of controlled companies, including wholly-owned subsidiary, whenever they represent any amount in excess of ten percent (10%) of the net equity, in accordance with the Company s financial statements for the immediately preceding fiscal year; (k) authorization for purchase of shares issued by the Company for cancellation or maintenance in treasury, as well as subsequent disposal and approval of capital increase within the limit of authorized capital; (l) statement on the management report and the accounts of the Executive Board, together with the opinion of the independent auditors; (m) prior resolution on the disposal or encumbrance of Company s properties, whenever they represent any amount in excess of ten percent (10%) of the net equity, in

12 accordance with the Company s financial statements for the immediately preceding fiscal year; (n) previous resolution on the creation of liens, encumbrances, provision of aval guarantees, securities or any other personal guarantees or collaterals in favor of third parties, including controlled companies, except (i) any wholly-owned subsidiary; and (ii) any guarantees provided by the Company in residential lease agreements entered into by its employees, which shall comply with the provisions in Article 25, paragraph 1 below; (o) execution, amendment, acceleration, pre-payment of loans or financings (including by means of debt issue) resulting in (i) consolidated net debt of the Company more than three times (3x) the Company s consolidated EBITDA; and/or (ii) in case of contracting by a controlled company, consolidated net debt of the controlled company more than three times (3x) the consolidated EBITDA of the concerned controlled company; (p) agreements with related parties (as this term is defined by the accounting rules), regardless of the involved amount; (q) issue of debentures not convertible into shares, commercial papers and other debt notes not convertible into shares; (r) execution of, termination of or amendment to agreements of any kind whatsoever, including with customers and suppliers, in any amount, per transaction or series of transaction, in excess of ten percent (10%) of the net equity, in accordance with the Company s financial statements for the immediately preceding fiscal year; and (s) resolve on calling the Shareholders Meetings. Article 18 The maximum remuneration of the managers shall be set by the Shareholders Meeting, and its distribution shall be made at the discretion of the Board of Directors. Article 19 The Board of Directors shall designate an Audit Committee, an internal body of a statutory and permanent nature, directly related to the Board of Directors, to be composed of a minimum of three (3) and a maximum of five (5) members. Paragraph 1 The Board of Directors shall define the amount intended for remuneration of the members of the Audit Committee, with due regard for the market parameters, as well as the

13 budget intended to cover the expenses of its operation, including the engagement of experts to help the fulfillment of its duties. Paragraph 2 The Audit Committee shall be governed by the applicable law and by its own internal regulations approved by the Board of Directors. SECTION II EXECUTIVE BOARD Article 20 The Company s Executive Board shall be composed of a minimum of two (2) and a maximum of four (4) members, shareholders or not, resident in Brazil, being one (1) Chief Executive Officer, one (1) Chief Investor Relations Officer, and the other Officers with no specific designation. Paragraph 1 The members of the Executive Board shall be elected for a term of office of one (1) year, reelection permitted. Paragraph 2 The members of the Executive Board shall be elected by the Board of Directors, which may designate up to one-third (1/3) of the total members to hold positions in the Executive Board, and any of them may accumulate the duties performed in the Board of Directors with the duties to be carried out in the Executive Board, with due regard for the provisions in paragraph 3 of this Article. Paragraph 3 The positions of Chairman of the Board of Directors and of Chief Executive Officer or principal executive of the Company shall not be accumulated by the same person. Article 21 In cases of absence or temporary impediments, the members of the Executive Board may be substituted by any of their peers, at the discretion of the Chairman of the Board of Directors. In case of vacancy of any position in the Executive Board, the Board of Directors may fulfill the position if it thinks fit. Article 22 Duties shall be attributed as follows: (a) Chief Executive Officer: the following duties, in addition to any other duties that may be established by the Board of Directors: (i) liability for strict compliance with the policies

14 and guidelines established by the Shareholders Meeting and the Board of Directors; (ii) presiding over Meetings of the Executive Board; and (iii) determination of specific duties of each of the Officers, with due regard for the limits imposed by the Company s Board of Directors; (b) Chief Investor Relations Officer: in addition to any other duties that may be established by the Board of Directors, management of the investor relations area, in accordance with the applicable law; and (c) Officer with no specific designation: in addition to any other duties that may be established by the Board of Directors, the performance of the guidelines established by the Board of Directors in his/her respective areas of liability. Paragraph 1 The Board of Directors may establish additional duties and liabilities in addition to those described above, as well as duties and liabilities to the Officers with no specific designation, in accordance with the Company s interests. Paragraph 2 The Executive Board is liable for the management of the Company s business, exercising its powers in accordance with the law, these Bylaws, the resolutions of the Shareholders Meeting and of the Board of Directors. Article 23 Any acts and documents implying any liability or obligation to the Company shall be mandatorily signed: (a) by any two (2) Officers; (b) by any one (1) Officer together with one (1) attorney-in-fact, who shall have been granted power of attorney with specific powers and been appointed by any two (2) Officers jointly; or (c) by any two (2) attorneys-in-fact, who shall have been granted power of attorney with specific powers and been appointed by any two (2) Officers jointly. Paragraph 1 The Company may be represented by only one (1) Officer or one (1) attorney-infact in the performance of simple acts of administrative routine, including those performed in government bodies, government-controlled private companies, the Brazilian Federal Revenue Office, State Finance Offices, Municipal Finance Offices, Commercial Registries, Labor Courts,

15 National Social Security Institute INSS, Unemployment Compensation Fund FGTS and their collecting banks and any other entities of an identical nature. Paragraph 2 The Board of Directors may authorize the performance of any other acts not set forth in paragraph 1 above by only one (1) Officer or one (1) attorney-in-fact, acting individually, or by means of approval of liability delimitation criteria which enable, in certain cases, the Company s representation by only one (1) Officer or one (1) attorney-in-fact. Paragraph 3 The Company shall be individually represented by any of the members of the Executive Board, without the formalities established in this Article, in case of service of summons or judicial and extrajudicial notices and provision of personal testimony. Article 24 The appointment of attorneys-in-fact shall be formalized at all times by means of a written, express instrument of power of attorney containing the joint signatures of any two (2) members of the Executive Board, and the instruments of power of attorney shall have the powers properly specified and a definite term of effectiveness, except for powers of attorney for judicial purposes, which may be granted for an indefinite term of effectiveness. Article 25 The Executive Board, within the limits established by law and by these Bylaws, shall be vested in management powers that enable the Company s regular operation and may, for that purpose, perform all legal acts required for creation, modification or revocation of any obligations on behalf of the Company. Paragraph 1 The Executive Board shall be in charge of resolving on the provision of guarantee by the Company in residential lease agreements entered into by its employees. Paragraph 2 Any act performed by any manager, attorney-in-fact or employee of the Company involving it in any obligations concerning any business and transactions not related to its business purpose is expressly forbidden and shall be null and void by operation of law, without prejudice to civil or criminal liability, as applicable, to which the infractor of this provision shall be subject. Article 26 The Executive Board shall validly meet upon attendance of two (2) Officers, one of whom shall be the Chief Executive Officer at all times, and shall pass resolutions upon the vote of a majority of those present, provided that the Chief Executive Officer shall have the casting vote in case of tie. Paragraph 1 The Executive Board shall meet whenever called by the Chief Executive Officer or by a majority of its members. Meetings of Executive Board may be held by means of

16 conference call, videoconference or any other communication means that enable identification and simultaneous communication among the Officers and all other persons present at the meeting. Paragraph 2 Call notices of meetings shall be made by means of a written communication delivered at least one (1) business day in advance, containing the agenda, date, time and place of the meeting. Paragraph 3 Minutes of meetings of the Executive Board shall be drawn up on the proper book and signed by the Officers present. CHAPTER V FISCAL COUNCIL Article 27 The Fiscal Council, with the duties provided for by law, shall operate on a nonpermanent basis and be composed of a minimum of three (3) permanent members and three (3) alternate members and a maximum of five (5) permanent members and five (5) alternate members, shareholders or not, elected by the Shareholders Meeting, for a term of office until the date of the Annual Shareholders Meeting held in the fiscal year following that of the election. Paragraph 1 The members of the Fiscal Council who are actually performing their duties shall be entitled to monthly fees set by the Shareholders Meeting that elects them, with due regard for the minimum legal fees. Paragraph 2 The Shareholders Meeting shall establish the number of members of the Fiscal Council within the limits set forth in the main provision of this Article. Paragraph 3 The investiture of the members of the Fiscal Council shall be conditioned to execution of the respective instrument of investiture. CHAPTER VI FISCAL YEAR, FINANCIAL STATEMENTS AND PROFITS Article 28 The fiscal year starts on January 1 and ends on December 31 of each year, the base date in relation to which the financial statements corresponding to the fiscal year shall be prepared and the respective result shall be ascertained, with due regard for the legal provisions. Paragraph 1 The Company, upon resolution of the Board of Directors, may prepare special balance sheets on June 30 and September 30 of each year, based on which the Board of Directors shall be entitled to declare installments of advance annual dividend and/or the payment of interest on equity, as provided for by Article 30, as well as to establish the payment terms.

17 Paragraph 2 Without prejudice to the provisions in paragraph 1 of this Article, the Company may prepare other special balance sheets at any time and, by resolution of the Board of Directors, may carry out the distribution of dividends and/or interest on equity based on the results ascertained therein, with due regard for the provisions in paragraph 1 of article 204 of Law No /76, while the Board of Directors shall be in charge of defining the payment terms. Paragraph 3 Any interim dividend and interest on equity that may be paid to the shareholders shall be attributed, net of withholding income tax, to the amount of the annual mandatory dividend established by paragraph 1 of article 30 of these Bylaws. Article 29 Accrued losses, if any, and income tax provision shall be deducted from the result of the fiscal year. Paragraph 1 The Board of Directors may recommend to the Shareholders Meeting the payment of profit sharing to the managers in relation to the fiscal year, which shall not exceed their annual remuneration or one-tenths (0.1) of the profits remaining after the deductions set forth in the main provision of this Article, whichever is smaller. Paragraph 2 With due regard for the limits referred to in this Article, the global profit sharing of the managers in relation to the fiscal year and the distribution thereof shall be established by the Board of Directors. Article 30 The Board of Directors shall recommend to the Annual Shareholders Meeting the allocation of the net profit of the fiscal year, mandatorily allocating five percent (5%) to comprise the legal reserve, until it reaches the maximum limit established by law, as well as the installment required for establishment of the reserve for contingencies, when so required by the circumstances. Paragraph 1 Out of the profit remaining after the legal deductions, at least twenty-five percent (25%) shall be allocated for payment of the minimum mandatory dividend of the shareholders, which may be paid as interest on equity under the applicable law. Paragraph 2 By proposal of the Board of Directors, the Shareholders Meeting may resolve on the allocation of funds to the Special Reserve, which shall be intended to ensure: (i) financial means for the Company s operation; (ii) funds for payment of dividends, including as interest on equity or advances thereof; and (iii) the exercise of the right of first refusal in the subscription of capital increases in the invested companies; provided that such Special Reserve shall be composed of up to the total remaining portion of the net profit of the fiscal year, adjusted as provided for by article 202 of Law No /76 that remains after the legal deductions and the payment of the minimum mandatory dividend provided for by paragraph 1 of this Article, not to exceed ninety-five percent (95%) of the capital stock.

18 Paragraph 3 The balance of the reserve of retained earnings, together with the balance of the legal reserve, except those for contingencies, of tax incentives and profits to realize, shall not exceed the capital stock. Once such limit has been reached, the Shareholders Meeting, based on a proposal to be submitted by the Board of Directors, shall resolve on the application of the surplus in the capitalization or distribution of dividends to the shareholders. Article 31 The dividend shall not be mandatory in any fiscal year when the Board of Directors understands that it is incompatible with the Company s financial situation, with due regard for the provisions in paragraph 4 of article 202 of Law No /76. Sole paragraph In the case established in this Article, the managers shall not be entitled to the statutory profit sharing. Article 32 The dividend of each fiscal year may be paid in advance in four or more quarterly installments or at shorter intervals, on account of the result of the fiscal year, retained profits or reserve of retained earnings, with due regard for the provisions in paragraphs 1 and 2 of article 204 of Law No /76 or as interest on equity under the applicable law. Paragraph 1 Any advance payments of dividends and/or payment of interest on equity shall be declared by the Board of Directors and backed by the last quarterly or end-of-fiscal year balance sheets, as the case may be. Paragraph 2 The dividend and/or interest on equity shall be paid within sixty (60) days as from the date of the meeting of the Board of Directors or the Shareholders Meeting that declares it. Paragraph 3 The Shareholders Meeting may extend the term established in paragraph 2 of this Article, but the payment of the dividend and/or interest on equity shall be made at all times within the fiscal year in which it is declared. CHAPTER VII DISSOLUTION AND LIQUIDATION Article 33 In case of winding-up of the Company in the events provided for by law, or as determined by the Shareholders Meeting, the Board of Directors shall be maintained, appoint the liquidator, and set the liquidator s remuneration, and may remove the liquidator at any time.

19 CHAPTER VIII MISCELLANEOUS Article 34 Any cases omitted from or dubious in these Bylaws shall be resolved by the Shareholders Meeting and regulated in accordance with the provisions of Law No /76, the Level 1 Regulations, and any other applicable legal provisions. Article 35 The provisions of the Level 1 Regulations shall prevail over any statutory provisions in case of any loss to the rights of the addressees of the public offerings provided for in these Bylaws. Article 36 Capitalized terms used but not expressly defined in these Bylaws shall have the meanings attributed to them by the Level 1 Regulations. Article 37 Any Shareholders Agreements duly filed at the Company s principal place of business which, among other provisions, provide for sections and conditions for purchase and sale of shares issued by the Company, preference in their purchase, exercise of the voting right or control power shall be complied with by the Company, its Managers and the Chairmen of the Shareholders Meetings and Meetings of Board of Directors. * * * * * *