SECTION I - COMMON PROVISIONS
Article 14: The management of the Company shall be exercised by the Board of Directors and the Executive Board, as established by law and these Bylaws.
- Paragraph 1: The tenure of the members of the Board of Directors and the Executive Board shall be in accordance with the terms recorded in the corporate records, signed by the vested administrator, waiving any management guarantee, and shall be conditioned on the prior signing of the Consent Agreement for Administrators, under the terms of the Novo Mercado Regulations, and in compliance with the applicable legal requirements.
- Paragraph 2: The members of the Board of Directors and the Executive Board shall adhere to the Material Act or Fact Disclosure Policy and to the Securities Trading Policy.
- Paragraph 3: The administrators shall remain in office until the investiture of their successors, unless otherwise resolved by the Shareholders’ Meeting or by the Board of Directors, as appropriate.
- Paragraph 4: The Shareholders’ Meeting shall establish the overall annual compensation to be paid to the administrators and the Board of Directors shall assign the payments on an individual basis.
- Paragraph 5: The prior call notice for the meeting of any management body shall only be dispensed as a condition of its validity in the presence of all of its members.The members of the management body are considered present if they cast their vote through delegation made to another member of the same body, through prior written vote and by written vote transmitted by fax, email or any other means of communication.
SECTION II - BOARD OF DIRECTORS
Article 15: The Board of Directors shall be composed of a minimum of five (5) and a maximum of seven (7) members, shareholders or not, resident of Brazil or residing abroad, all elected and removable by the Shareholders’ Meeting, with unified terms of two (2) years, with reelection permitted.
- Paragraph 1: A minimum of twenty percent (20%) of the members of the Board of Directors must be Independent Members, and expressly declared as such in the minutes of the Shareholders’ Meeting that appoints them, with the member(s) appointed through the powers provided for in Article 141, paragraphs 4 and 5 of the Brazilian Corporation Law also considered independent.
- Paragraph 2: When the observance of the percentage referred to in the paragraph above results in a fractional number of Board Members, the rounding shall be carried out in accordance with the Novo Mercado Regulations.
- Paragraph 3: As defined in the Novo Mercado Regulations, Independent Board Members are characterized by: (i) having no affiliation with the Company, except through equity holdings; (ii) not being a Controlling Shareholder, spouse or relative within the second degree of a Controlling Shareholder, or not being or not having been, within the last three (3) years, affiliated with any company or entity related to the Controlling Shareholder (people affiliated with public teaching and/or research institutions are excluded from this restriction); (iii) not having been, within the last three (3) years, an employee or Executive Officer of the Company, of the Controlling Shareholder, or of a company controlled by the Company; (iv) not being a supplier or purchaser, directly or indirectly, of services and/or products of the Company, to an extent that implies a loss of independence; (v) not being an employee or Administrator of the Company or any entity that offers or requests services and/or products from the Company, to an extent that implies a loss of independence; (vi) not being a spouse or relative to the second degree of any Administrator of the Company; and (vii) not receiving other compensation from the Company in addition to that received for the position of Board Member (earnings from equity holdings are excluded from this restriction).
- Paragraph 4: One Chairman and one Vice-Chairman shall be selected from among the members of the Board of Directors, by a majority vote of those present at the first meeting of the Board of Directors to take place after the members have taken office, appointed in accordance with Article 15 above.
- Paragraph 5:The positions of Chairman of the Board of directors and Chief Executive Officer of the Company may not be simultaneously held by the same person.
- Paragraph 6: In the event of a vacancy in office or permanent incapacity of any member of the Board of Directors that results in less than five (5) Board Members, the remaining members of the Board of Directors shall name the substitute who shall serve until the next Shareholders’ Meeting of the Company, which must be held within ninety (90) days from the date of the vacancy or incapacity.If the substitute is confirmed by the respective Shareholders’ Meeting, they shall complete the term of the replaced Board Member.
Article 16: The Board of Directors shall ordinarily meet at least three (3) times a year and, extraordinarily, whenever the Company’s corporate interests so require.The Chairman of the Board of Directors shall preside over the meetings of the Board of Directors.The majority of the attending members of the Board of Directors shall decide who shall chair the meeting in the absence of the Chairman of the Board of Directors and, in all cases, which Board Member shall act as Secretary for the meeting.
- Paragraph 1: The meetings of the Board of Directors shall be convened by written notice sent via regular mail, fax or email, all with return receipt requested, to the addresses previously indicated by each Board Member for such purposes.The call notice shall contain information about the location, date, time and agenda for the meeting, and shall be sent with all of the documents to be resolved upon.The first call notice shall be sent at least five (5) working days prior to the date of the meeting, and, in the event that the meeting is not held, a second call notice shall be sent at least two (2) days prior to the new date of the meeting.
- Paragraph 2: The meetings of the Board of Directors shall be considered validly convened with the presence of at least four (4) of its members, upon either the first or second call notice.
- Paragraph 3: The Board Members may participate in the meetings of the Board of Directors via videoconference, teleconference or any other similar means.The Board Members who are unable to participate in the meeting by any of the means cited above must send their votes in writing to Secretary via fax or email up to the moment in which to meeting is closed, which shall be registered in the respective minutes.
- Paragraph 4: The members of the Board of Directors may also consent to waive the meeting and resolve on the matters of the meeting in writing, if they consider such matters to have been sufficiently debated through any other means and provided that all of the Board Members sign the document to formalize such consent.
- Paragraph 5: Notwithstanding the formalities above, all of the meetings at which all of the members of the Board of Directors are in attendance shall be considered validly convened.
- Paragraph 6: Minutes of the meetings shall be filed in the corporate records, signed by all of the members in attendance and all those minutes that contain resolutions that will affect third parties are to be filed with the Board of Trade.
- Paragraph 7: The Executive Officers shall supply the Board of Directors with any and all required information with respect to the Company and its subsidiaries and affiliates, and, if requested, must attend the meetings of the Board of Directors in order to provide clarifications.
Article 17: Except in the special circumstances set forth in the Brazilian Corporation Law, and the provisions of the sole paragraph of Article 19 of these Bylaws, the resolutions of the Board of Directors shall be made through the affirmative vote of a simple majority of those present at the respective meeting, not counting blank votes.The Chairman of the Board of Directors shall case the deciding vote in the event of tie in the deliberations of the Board.In the absence of the Chairman, the deciding vote shall be cast by the Vice-Chairman of the Board of Directors.
Article 18: The Board of Directors, for its advisory needs, may create executive or consultative committees, on a temporary or permanent basis, to analyze and issue opinions on any matters determined by the Board of Directors, always in order to advise the Board of Directors in its duties.The members of these committees, who may or may not be shareholders, must have specific experience in the areas of expertise of their respective committees, and be appointed and have any compensation established by the Board of Directors, with compensation available exclusively to external members.
Article 19: It is the duty of the Board of Directors, in addition to the duties established by law:
- to elect and remove members of the Executive Board and establish their duties;
- to oversee, supervise, advise and assist the Executive Board in fulfilling the Company’s corporate purpose;
- to convene the Shareholders’ Meetings when deemed appropriate, or in cases provided for in the Brazilian Corporation Law;
- to provide prior opinions on the votes to be cast within the framework of subsidiaries and affiliates, relative to the transactions involving (a) incorporations, spin-offs, mergers and reorganizations, (b) acquisitions, sales and encumbrances of fixed assets and (c) changes to the corporate contracts and internal regulations;
- to appoint the administrators of the Company’s subsidiaries;
- to establish the general guidelines and strategic direction of the businesses of the Company and its subsidiaries;
- to select and dismiss the independent auditor of the Company and/or the Company’s subsidiaries;
- to opine on the management report and the accounts of the Executive Board;
- to authorize the practice, by its subsidiaries, of acts that require the Company’s approval, unless otherwise provided for in the respective contract or bylaws.
- any substantial change in the Company’s strategy;
- the Company’s participation in any joint venture, consortium, trust or similar enterprise;
- approval of the annual budget and any major changes relating thereto;
- any agreement in a lawsuit or arbitration proceeding involving an amount equal to, or greater than, the amount defined by the Board of Directors in its first annual meeting;
- once the overall limit established in the annual budget has been exceeded, the assumption of debt and/or the execution of financial contracts involving amounts equal to, or greater than, the amount set by the Board of Directors at its first annual meeting, in a single transaction or in a series of related transactions;
- individual capital investments not forecast in the annual budget whose amount is equal to, or greater than, the amount defined by the Board of Directors at its first annual meeting;
- the execution of any contract, agreement or commitment (except the assumption of debt and financial contracts, which are governed by the provisions of item (xiv) above) not forecast in the annual budget and not related to the maintenance of the normal turnover of the Company’s business activities that represents an amount equal to, or greater than, the amount established by the Board of Directors at its first annual meeting, in a single transaction or in a series of related transactions;
- the purchase, sale or disposal of the Company’s fixed assets not forecast in the annual budget and that involves an amount equal to, or greater than, the amount established by the Board of Directors at its first annual meeting, in a single transaction or in a series of related transactions;
- the waiver, by the Company, of any rights (including agreements with customers) the amount of which is equal to, or greater than, the amount established by the Board of Directors at its first annual meeting, in a single transaction or in a series of related transactions;
- the commission of any of the acts cited in items (x) to (xviii) above by the Company’s subsidiaries;
- to express views in favor or against any tender offer for shares issued by the Company, through a prior reasoned opinion, released at least fifteen (15) days prior to the publication of the tender offer, that must address, at a minimum, (i) the appropriateness and timeliness of the tender offer with respect to the interests of the shareholders and in relation to the liquidity of the securities held by them; (ii) the repercussions of the tender offer on the Company’s interests; (iii) the strategic plans released by the offering party in relation to the Company; (iv) other points that the Board of Directors deems appropriate, as well as the information required by the applicable rules established by the CVM;
- to prepare a list of three companies that specialize in the economic appraisal of companies, for the preparation of the appraisal report on the Company’s shares in the event of a tender offer for the cancellation of the Company’s registration as a publicly-held company or its delisting from the Novo Mercado;
- to appoint and remove members of the CAE (as defined in clause 20 of these Bylaws), indicating, among them, to coordinator of the CAE (as defined in clause 21 of these Bylaws);
- to establish the annual budget of the CAE;
- to review and approve changes to the bylaws of the CAE, as well as its operating rules and operations;
- the fulfillment of the other duties established by law and these Bylaws; and
- approve transactions between the Company and any of its related parties in excess of annually, either individually or in the aggregate, R$ 5,000,000.00 (five million Reais), which are the responsibility of the Shareholders' Meeting.
- Sole Paragraph: Transactions entered into between the Company and any of its related parties referred to in item "xxvi" above shall be approved by a majority of the Independent Directors of the Board of Directors, also observing the provisions of the sole paragraph of article 13 above. After approval of such operations by the Board of Directors, subject to the provisions of this Sole Paragraph, any and all necessary measures for their implementation may be taken by the Company's management, and no additional corporate approval is required.
SECTION III - STATUTORY AUDIT COMMITTEE
Article 20: The Company shall have a Statutory Audit Committee ("CAE") as an advisory body to the Board of Directors, with duties established by Brazilian Securities and Exchange Commission Instruction no. 308, of May 14, 1999, as amended ("CVM Instruction 308"), and its internal regulations, which shall include a detailed description of its functions and operating procedures.
- Paragraph 1: The CAE shall have operational autonomy and an authorized budget, on an annual or project basis, to conduct or order consultations, evaluations and investigations within the scope of its activities, including the contracting and use of independent external experts.
- Paragraph 2: Subject to the applicable legal provisions, the CAE shall have the means for receiving complaints (including anonymously) from within and outside the Company, on matters related to its duties.
Article 21: The CAE shall be composed of a minimum of three (3) members, all of them appointed by the Board of Directors, with one CAE Coordinator, whose activities shall be defined by the body’s internal regulations.
- Paragraph 1: At least one (1) of the members of the CAE must have recognized experience in corporate accounting matters, under the terms of the internal regulations.
- Paragraph 2: At least one (1) of the members of the CAE must be a member of the Board of Directors, but they may not also be a member of the Executive Board.
- Paragraph 3: Members of the Executive Board of the Company, its subsidiaries, its controlling shareholder, its affiliates or jointly-held companies, either directly or indirectly, are prohibited from participating in the CAE.
- Paragraph 4: The majority of the CAE members must be independent members, in accordance with the internal regulations, and they must be expressly declared as such in the minutes of the Board of Directors Meeting in which they are appointed.
Article 22: The members of the CAE shall serve a maximum term of ten (10) years.
- Paragraph 1: Having served for any period of time, members of the CAE may only be reelected after the passage of at least three (3) from the end of their term.
- Paragraph 2: In the event of a permanent disability or vacancy of office by a member of the CAE, the Board of Directors shall elect a substitute who shall complete the term of the substituted member.
Article 23: The CAE shall meet whenever necessary, at least every two months, so that the financial information is always assessed prior to its release.All of the resolutions passed at the meetings of the CAE shall be included in the minutes signed by the attending members.
- Sole Paragraph: The internal regulations of the CAE shall contain rules and procedures that complement those contained in these Bylaws with respect to the committee’s meetings.
Article 24: In addition to the functions, duties and powers conferred upon the CAE by the Board of Directors and its internal regulations, and subjects to all applicable regulations, the CAE shall:
- issue opinions on the hiring and dismissal, by the Company, of the independent audit for the preparation of the independent external audit or any other service;
- supervise the activities (a) of the independent audits to evaluate their independence, the quality of the services provided and the appropriateness of the services provided to the needs of the Company; (b) of the Company’s internal controls area; (c) of the Company’s internal audit area; and (d) of the area responsible for the preparation of the Company’s financial statements;
- monitor the quality and integrity (a) of the internal control mechanisms; (b) of the Company’s quarterly information, interim statements and financial statements; (c) of the information and measurements disclosed based on the adjusted accounting data and on the non-accounting data that add elements not provided for in the structure of the usual financial statement reports;
- evaluate and monitor the Company’s risk exposure, with the ability to request detailed information about the policies and procedures related to (a) the compensation of management; (b) the use of the Company’s assets; and (c) the expenses incurred on behalf of the Company;
- evaluate and monitor, together with the administrative bodies and the internal auditing area, the appropriateness of the transactions with related parties carried out by the Company and their respective disclosures; and
- prepare an annual summary report, to be presented together with the financial statements, containing a description of:(a) its activities, results, conclusions reached and recommendations made; and (b) any situations in which there was a significant divergence between the Company’s management, the independent auditors and the CAE in relation to the Company’s financial statements.
- Sole Paragraph: The internal regulations of the CAE may establish additional functions beyond those established in this article, subject to all applicable legislation.
SECTION IV - EXECUTIVE BOARD
Article 25: The Executive Board shall be composed of a minimum of two (2) and a maximum of five (5) members, one of whom shall be the Chief Executive Officer, one Investor Relations Officer and the other Executive Officers without specific designations, who may or may not be shareholders, residents of Brazil, appointed for a unified term of three (3) years, with reelection permitted.The Executive Officers shall remain in office until the investiture of their respective substitutes.
- Paragraph 1: Only those who fulfill the following requirements may be appointed Executive Officers of the Company and administrators of the companies controlled by the Company:
- hold a university degree;
- have the professional experience, as well as the technical and management ability appropriate to the positions to be held;
- be no older than sixty-seven (67) at the time of their election, and no older than seventy (70) while in office, after which the Executive Officer must be deprived of their duties.
Paragraph 2: The Executive Officers are exempted from providing collateral, as provided for by law.
Paragraph 3: The position of Investor Relations Officer may be held by another Executive Officer with the Company.The Investor Relations Officer must provide the relevant information to investors, the market in general, the CVM and the BM&FBOVESPA, as well as other functions established by law and all applicable regulations.
Article 26: The Executive Board shall meet:
- every two months, on dates to be previously established at the first meeting following the election of its members, in order to monitor and analyze the execution of the business strategy, compliance with the budget and targets, the capital structure, and to evaluate the market strategy and the competition;
- extraordinarily, whenever corporate interests so require; and
- in cases where it must manifest itself about matters within its competence.
- Paragraph 1: The meetings of the Executive Board shall be held at the Company’s headquarters, and the respective call notices may be issued by any Executive Officer.
- Paragraph 2: The call notices shall be made in writing and must contain the date of the meeting, the agenda and the documents needed to support the decisions to be made by the Executive Officer.The call notices must be sent at least five (5) days prior to the event, by letter, fax or email, all with return receipt requested.
- Paragraph 3: The meetings of the Executive Board shall only be convened and validly pass resolutions with the presence of at least two (2) Executive Officers, regardless of the matters contained on the agenda.
- Paragraph 4: The resolutions of the Executive Board shall be adopted by a majority vote of the Executive Officers present at the meeting, with the Chief Executive Officer casting any necessary deciding votes.
Article 27: The duties of the Executive Board, subject to the provisions of these Bylaws, especially those listed in Article 19, shall include:
- the exercise of the powers that the law and these Bylaws confer upon it to ensure the full and regular functioning of the Company and its subsidiaries, affiliates and business divisions;
- present, annually, by the close of each fiscal year, for consideration by the Board of Directors, the proposal for the general guidance of the business of the Company, its subsidiaries and business divisions, relative to the next fiscal year, including:
- the business strategy of the business divisions of the Company and its subsidiaries and affiliates;
- the operational structure of the business, appointing the Executive Officer who shall be responsible for monitoring each of these divisions;
- the budget and targets for each business division;
- the investment and divestment policy for each business division;
- the compensation for the administrators of each business division;
- the capital structure necessary to implement the budget and the targets for each business division; and
- planning for the payment of interest on equity.
- present, annually, during the three (3) months following the close of the fiscal year, to the Board of Directors and the shareholders, its report and other documents related to the accounts for the fiscal year, as well as the proposal for the allocation of net income, subject to the legal constraints contained in Chapter V of these Bylaws;
- coordinate the sale of shares representing the capital stock, subject to the provisions of the law and these Bylaws;
- the election and removal of the administrators of subsidiary and affiliated companies in accordance with recommendations made by the Board of Directors;
- 82 open and close branches, warehouses, offices or representative outposts in any location in Brazil or abroad, when deemed beneficial to the corporation.
- open, use and close bank and investment accounts;
- compromise, waive, withdraw, sign agreements, make commitments, contract debt, make investments, acquire, encumber or sell assets and issue guarantees, signing the respective terms and contracts;
- approve transactions entered into between the Company and any of its related parties at a lower amount annually, individually or in aggregate, at R$ 5,000,000.00 (five million reais);
- represent the Company, in and out of court, actively and passively, before any third parties, including government agencies or federal, state and municipal authorities; and
- carry out all other duties established by the Company’s Board of Directors, by law and by these Bylaws.
Article 28: In the event of a vacancy in the position of Executive Officer, a Board of Directors meeting will be held to appoint the respective substitute, who will complete the term of the substituted Executive Officer.
Article 29: Subject to the provisions of these Bylaws, any act or contract that implies responsibility or obligations for the Company must mandatorily be jointly signed by:
- two (2) Executive Officers;
- one (1) Executive Officer and one (1) proxy with specific powers; or
- two (2) proxies with specific powers.
- Paragraph 1: The powers of attorney granted by the Company shall always be jointly signed by two (2) Executive Officers.
- Paragraph 2: The powers of attorney must always be specific to the acts to be performed by the representative and, except for those granted for legal purposes or the defense of the Company in administrative processes, they shall be subject to terms of one (1) year.
Article 30: The use of the corporate name in documents in favor of others and unrelated to corporate objective, such as letters of credit, guarantees or endorsements, except those for the benefit of the Company’s subsidiaries in the normal course of business, is prohibited.
SECTION V - FISCAL COUNCIL
Article 31: The Company shall have a Fiscal Council composed of three (3) sitting members and an equal number of alternates, who will not serve on a permanent basis and will only be convened for resolutions by the Shareholders’ Meeting, or at the request of shareholders, in cases provided for by law.
- Paragraph 1: The members of the Fiscal Council, individuals residing in Brazil, legally qualified, shall be appointed by the Shareholders’ Meeting that resolved on the installation of the body, and shall hold office until the first Annual Shareholders’ Meeting after their appointment.
- Paragraph 2: The members of the Fiscal Council shall be entitled to the compensation assigned to them by the Shareholders’ Meeting.
- Paragraph 3: The tenure of the members of the Fiscal Council shall be subject to the prior signing of the Consent Agreement for Members of the Fiscal Council, under the terms of the Novo Mercado Regulations, as well as in compliance with the applicable legal requirements.
- Paragraph 4: In the event of a vacancy in one of the positions with the Fiscal Council, the respective alternate member shall assume the position.
- Paragraph 5: Appointment to the Fiscal Council is prohibited for individuals who maintain relationships with companies that may be considered competition to the Company ("Competition"), with appointment of the following persons, among others, prohibited:(i) employees, partners, shareholders or members of a management, technical, advisory or fiscal body of a Competitor or the Controlling Shareholder, Subsidiary or company under Joint Control of a Competitor; (ii) spouses, or relatives to the second degree of partners, shareholders or members of a management, technical, advisory or fiscal body of a Competitor or the Controlling Shareholder, Subsidiary or company under Joint Control of a Competitor.
Article 32: The Fiscal Council, when installed, shall have the duties prescribed by law, and the duties of its members cannot be delegated.10The Internal Regulations of the Fiscal Council shall be prepared, discussed and voted upon by its members at the first meeting convened after its installation.