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Article 1.Springs Global Participações S.A. ("Company") is a joint-stock company governed by these Articles of Incorporation and by the legal provisions applicable thereto.
Article 2. The object of the Company is to participate in other companies, in Brazil or abroad.
Article 3. The Company has its registered office and jurisdiction in the city of Montes Claros, State of Minas Gerais, at Avenida Lincoln Alves dos Santos nº955, parte, CEP 39404-005, and office in the City of São Paulo, State of São Paulo, at Av. Paulista, 1.754, 2a sobreloja, parte, Cerqueira César, CEP 01310-920, and it may, by resolution of the Board of Directors, open, transfer or dissolve branches, agencies, departments, offices, warehouses or any other establishments in any part of the national territory or abroad.
Article 4. The Company has undetermined term of duration.
Article 5. The subscribed and realized capital stock is R$1,860,263,807.68, represented by 50,000,000 shares, all of them common and with no par value.
§1. The capital stock will be always divided exclusively into common shares and the issue of preferred shares is prohibited.
§2. Shares in the Company are uncertificated and are kept in a deposit account in the name of their holders, at a financial institution authorized by the Brazilian Securities Commission ("Comissão de Valores Mobiliários") appointed by the Board of Executive Officers, with no issue of certificates, the shareholders being accountable for the cost of the share transfer services charged by the depositary financial institution, subject to the limits occasionally set forth by the legislation in force.
§3. Each common share will grant its holder the right to one vote in resolutions of the Shareholders Meeting.
Article 6. The capital stock may be increased irrespective of an amendment to the articles of incorporation, by resolution of the Board of Directors, which will set forth the issue conditions, until reaching the limit of 62,500,000 common shares.
§1. It will be the duty of the Board of Directors to fix the issue price and number of shares to be issued, as well as the payment term and conditions, it being certain, however, that the full payment of shares in property will depend on the approval of the respective valuation report by the Shareholders Meeting, as per law.
§2.Within the limit of the authorized capital, the Board of Directors may, further:
(a)resolve on the issue of subscription bonus:
(b) according to the plan approved by the Shareholders Meeting, grant a share call option to its managers or employees, or to individuals that render services to the Company or the corporation under its control, without the shareholders having a preemptive right in the grant of the purchase option or in the share subscription; and
(c) approve the capital stock increase upon capitalization of profits or reserves, with or without share bonus.
Article 7.The issue of new shares, debentures convertible into stock or subscription bonus, the placement of which is made upon sale in a stock exchange, public subscription or share exchange in public takeover offer pursuant to sections 257 to 263 of Law No. 6,404/76, or still, pursuant to a special law on tax incentives, may occur without the shareholder being granted the preemptive subscription right or with reduction of the minimum term provided by law for the exercise thereof.
Article 8. The issue of beneficiary parties is prohibited.
Article 9. The Shareholders Meeting will convene on a regular basis in the first four months following the end of the corporate year, and on a special basis whenever the corporate interest or law so require.
§1. The Shareholders Meeting will be called by the Board of Directors or, in the cases provided by law, by shareholders or by the Audit Committee, upon announcement published, at first call, at least 30 days before the meeting and at second call at least eight days before the meeting. Notwithstanding the call formalities, the Shareholders Meeting attended by all shareholders will be considered a regular one.
§2.The Shareholders Meeting will be installed and chaired by one of the Co-Chairpersons of the Board of Directors, or, in the absence of both the Co-Chairpersons of the Board of Directors, by another director, or, still, in the absence of the other Company directors, by an Officer that is a shareholder. The chairperson of the Shareholders Meeting will select one of present members to assist him as secretary.
§3. Prior to installing the Shareholders Meeting, the shareholders will sign the "Shareholders’ Attendance Book", informing their name and residence and amount of shares they are holder of.
§4. The list of shareholders present will be closed by the Presiding Officer, soon after the Shareholders Meeting is installed.
Article 10. To take part in the Shareholders Meeting, the shareholder should submit, on the date the respective meeting is held: (i) receipt issued by the institution depositary of uncertificated shares owned by the shareholder, pursuant to section 126 of Law No. 6,404/76, dated from no later than two business days prior to the date the Shareholders Meeting is held; and (ii) instrument of power of attorney, duly regularized as per law and these Articles, in the event the shareholder is represented by a proxy. The shareholder or his legal representative should attend the Shareholders Meeting with the documents that evidence his identity.
Sole Paragraph.The Company will waive the submission of the receipt mentioned in item (i) of these Articles’ caption by the holder of uncertificated shares appearing the list of shareholders provided by the depositary institution.
Article 11.Resolutions of the Shareholders Meeting, save for the exceptions provided by law and these Articles, will be taken by absolute majority of shareholders’ votes, irrespective of whether they are present or duly represented, and blank votes will not be considered.
Article 12. Without prejudice to all other duties fixed by law and these Articles, the Shareholders Meeting will be privately have the following duties:
(a) to take the management accounts, to examine, discuss and vote the financial statements;
(b) to resolve, according to proposal submitted by the Board of Directors, on the allocation of the net profit for the fiscal year and on the payment of dividends;
(c)to elect and remove members of the Board of Directors, appointing their Co-chairpersons, and the Audit Committee, if installed;
(d) to fix the compensation of members of the Board of Directors, Board of Officers, as well as members of the Audit Committee, if installed;
(e) to approve a share call option grant plan to managers or employees, or to individuals that render services to the Company or a corporation under its control;
(f)to approve the attribution of gainsharing to managers, subject to the legal limits, and to the Company employees, considering the human resources policy of the Company;
(g) to resolve on the proposal of the Company’s withdrawal from the New Market ("New Market") and on the cancellation of its registration as a publicly-held company;
(h) to select an expert institution or company responsible for determining the economic value of the Company and preparing the respective valuation report, in case of cancellation of its registration as a publicly-held company or withdrawal from the New Market, as provided for in CHAPTER IX of these Articles;
(i) to suspend the exercise of the rights of a shareholder who fails to comply with the obligation prescribed by law or by these Articles, pursuant to sec. 120 of Law No. 6,404/76;
(j) to resolve on the liquidation, filing for bankruptcy, dissolution, takeover or other form of association, merger, split-up or similar operation involving the Company or its Subsidiaries;
(k)to authorize the execution of, amendment to or termination, by the Company or any of its Subsidiaries, of any contract, commitment or agreement between, on one side, the Company or any of its Subsidiaries and, on the other side, any Controlling Shareholder or Related Party to any Controlling Shareholder of the Company, or, still, waiver of any right of the Company or its Subsidiaries resulting from or related to such contracts, commitments or agreements;
(l)to resolve on the relevant taking, refinancing or restructuring of an indebtedness by the Company or the Subsidiaries (except for the previously approved revolving credit facilities), which result or may result, if the facility is totally used, in a leverage rate of 3.5:1 or more (defined as the relation between the total consolidated debt and the Consolidated EBITDA of the Company and its Subsidiaries in the immediately previous four calendar quarters);
(m) to resolve on the property purchase or sale (including any disposal and acquisition of assets or any investment) by the Company or any of its Subsidiaries (except if between the Company and one of its Subsidiaries) outside the regular course of business, in one single transaction or in many related transactions, in which the acquisition price or fair market price is higher than the equivalent in Brazilian Reais to Fifty Million Dollars (US$ 50,000,000.00);
(n) to approve capital disbursements for any investments and/or projects involving amount equal to or higher than the equivalent in Brazilian Reais to Fifty Million Dollars (US$ 50,000,000.00);
(o)to approve the involvement in any other business other than the Company’s or its Subsidiaries’ business; and
(p) to resolve on the change of the Company’s or its Subsidiaries’ registered office location.
Article 13. The Company management will be incumbent upon the Board of Directors and the Board of Officers.
Article 14.Members of the Board of Directors and Board of Officers should be vested in their offices upon signature of the instrument of investiture in the proper book and the Instrument of Consent of Managers to which the New Market Listing Regulation refers, remaining in their offices until the new elected managers are vested in their offices.
§1. The Company managers should adhere to the Manual of Disclosure and Use of Information and Policy for Trading Securities issued by the Company, upon signature of the respective Instrument.
§2. The investiture of a member of the Board of Directors resident and domiciled abroad is conditioned to the appointment of a legal representative resident in the Country, with specific powers to receive summons, upon power of attorney granted as per section 146, paragraph 2, of Law No. 6,404/76.
Article 15. The Shareholders Meeting will fix the global amount of the managers’ compensation and the distribution thereof will be incumbent upon the Board of Directors, which will take into account the responsibilities, time devoted to the duties, capacity, professional reputation and the value of the respective services in the market.
Article 16. The Board of Directors is composed of at least five and at most 15 members, all shareholders, residing or not in the Country, elected and removable by the Shareholders Meeting at any time, with one year unified term of office, their reelection being permitted.
§1. The Shareholders Meeting may appoint, among the directors, one Chairperson of the Board of Directors. In case of permanent impediment or absence of the Chairperson, the chair will be taken by a director elected by the Shareholders Meeting. In case of vacancy of any other directors, the other members of the Board of Directors will appoint an interim alternate, who will serve until the first Shareholders Meeting that will elect the alternates, subject to the criteria provided for in §4 of this Article, in case it is a vacancy of an Independent Director office.
§2. The management period of each member of the Board of Directors will end on the date of the first Annual Shareholders Meeting held after his election.
§3. The Board of Directors may adopt Internal Regulations that will provide, among other matters that are deemed convenient, for the running of the entity and the advisory committees subordinated to it, rights and duties of members of the Board of Directors and relationship of the Board of Directors with the Board of Officers and other corporate bodies.
§4. At least 20% of the directors will be Independent Directors, such "Independent Directors" being understood, for purposes of these articles, as those who meet the independence criteria fixed by the New Market Listing Regulation. When, as a result of observing this percentage, there is a fractional number of directors, a rounding up will be made to an integer number; (i) immediately superior, if the fraction is equal to or higher than five tenths (0.5); or (ii) immediately inferior if the fraction is lower than five tenths (0.5) .
§5. Directors elected pursuant to sec. 141, §§4 and 5 of Law No. 6,404/76 will also be considered independent, as provided in the New Market Listing Regulation.
§6. It will be the duty of the shareholder who appoints candidates to the Board of Directors to evaluate and, further, at the Shareholders Meeting, to consider, when exercising his voting right, if candidates fall into the following situations, in which a conflict of interests is presumed to exist;
(a)if the candidate has a duty or office, particularly in the management or in advisory boards and audit committees, in other legal persons that may be considered competitors of the Company in the market; or
(b) if the candidate has, cumulatively (i) been elected by a shareholder or Group of Shareholders who also have elected a manager or member of the statutory board or audit committee of a corporation that is a market competitor and (ii) he is not characterized as an Independent Director in relation to shareholder(s) that has(have) elected him.
§7. For purposes of this Article 16, letter (b), §6, it is considered that a Director was elected by (i) the shareholder or Group of Shareholders that have done so individually or (ii) the shareholder or Group of Shareholders whose votes, considered individually, have been sufficient for the director’s election, in case the multiple voting system is adopted (or that would have been sufficient, in view of the number of shareholders present, should the same system had been adopted) or composing the minimum percentages required by Sec. 141, §4, of Law No. 6,404/76 for the exercise of the right to separate election of a member of the Company’s Board of Directors.
§8. The shareholder or Group of Shareholders that appoints candidates to the Board of Directors should inform, once the evaluation mentioned in §6 above is made, and when applicable, at the election moment, of its awareness that the candidate falls into any of the events of ineligibility or presumed conflicts contemplated by Law No. 6,404/76 of the regulation of the Brazilian Securities Commission or these Articles, in order to allow the Shareholders Meeting to examine the existence of a conflict in the concrete case or waiver thereof, as the case may be.
§9. For purposes of the provisions of Sec. 115 of Law No. 6,404/76, it will be considered abusive the exercise of the voting right for election of a director by a shareholder or Group of Shareholders that, aware of a conflict of interest situation or ineligibility reason, fails to inform the Company, pursuant to §7 above and, further, the Shareholders Meeting, of the existence of such ineligibility reason or of facts leading to presume the conflict of interest of the elected Director.
§10. If, after the Director’s election, a fact takes place that configures the same hypotheses of conflict of interests presumption referred to in §6 of this Article, said Director will be in charge of informing the fact to the Chairperson of the Board of Directors. Should the supervening impediment factor be connected with the electing shareholders and not personal to the Director himself, the electing shareholder(s) will be in charge of notifying the fact to the Chairperson of the Board of Directors, so that he submits the matter to the Shareholders Meeting.
Article 17.In the election of members of the Board of Directors, shareholders are entitled to require the adoption of the multiple voting process, according the regulations in force.
§1. The Company will, immediately after receiving the request, disclose a notice to the shareholders informing that the election of members of the Board of Directors will be made by the multiple voting process.
§2. Once the Shareholders Meeting is installed, the Presiding Chairperson will calculate, based on the Shareholders’ Attendance Book and the number of shares owned by the shareholders present, the number of votes each shareholder will be entitled to. Each shareholder will be entitled to accumulate the votes he is assigned in one candidate or to distribute them among many.
§3. Candidates receiving the highest number of votes will be declared elected.
§4. Should there be a parity of votes in filling the offices, there will be a new voting, by the same process, between candidates that have received equal number of votes.
§5. Whenever an election has been held by the multiple voting process, the removal of any member of the Board of Directors by the Shareholders Meeting will imply removal of the other members, and a new election will be held; in other vacancy cases, the election of the entire Board will be held at the first shareholders meeting.
Article 18.The Board of Directors will meet on a regular basis once every quarter and on a special basis whenever necessary. Meetings of the Board of Directors should be called by at least two directors, upon written call containing, in addition to the place, date and time of the meeting, the agenda, and followed by the relevant documentation to be discussed at the meeting. Meetings of the Board of Directors will be held in the city of São Paulo, State of São Paulo, Brazil, between 12 noon and 6 p.m. and will be convened at least 10 days before the meeting. Irrespective of the call formalities, a meeting attended by all members of the Board of Directors will be considered regular.
Sole Paragraph. Matters distinct from object of the agenda appearing in the call notice should not be object of resolution at meetings of the Board of Directors, except if the meeting is attended by all directors and they agree, by unanimity, to consider such matters.
Article 19. Meetings of the Board of Directors will be installed, at first call, with the presence of the majority of its members and, at a second call, with any number of directors.
§1. Members of the Board of Directors may be represented at meetings of the Board of Directors by another director, expressly appointed by proxy containing the specific statement of vote of the absent director for such purpose, and that director will accumulate the duties and the voting rights of the director he represents.
§2.Directors may participate in meetings of the Board of Directors by means of conference call, video conference or by any other communication means that allows the director’s identification and the simultaneous communication with all other people present at the meeting. In this case, they will be considered present at the meeting and should sign the respective meeting minutes.
§3. No member of the Board of Directors may have access to information, take part in resolutions and discussions of the Board of Directors or any management bodies, exercise the vote or intervene in any way in subjects in case such member is, directly or indirectly, in a situation of conflicting interest with the Company’s interests, pursuant to law.
Article 20. Resolutions of the Board of Directors will be taken by majority of votes, and each director will be entitled to one vote.
Article 21. Without prejudice to other attributions fixed by law or in these Articles of Incorporation, it will be the exclusive duty of the Board of Directors to resolve on the following matters::
(a)regulating the Company’s activities, and it may review and discuss any matter that is not exclusive responsibility of the Shareholders Meeting or the Board of Executive Officers;
(b) establishing the general guidance of the Company’s business;
(c) electing and removing the Company’s officers;
(d) determining the Company officers’ attributions, including appointment of the Chief Investor Relations Officer, when applicable;
(e) convening Shareholders Meeting whenever deeming it convenient or as provided in Sec. 132 of Law No. 6,404/76;
(f)inspecting the Officers’ activities, examining, at any time, the Company books and documents and requesting information on contracts entered or to be entered into, as well as on any other acts.
(g) reviewing the Company’s quarterly results;
(h) appointing and removing the Company’s independent auditors;
(i) convening the Company’s auditors to provide explanations deemed necessary;
(j) voicing its opinion on the report and accounts of the Board of Officers, as well as on the submission thereof to the Shareholders Meeting;
(k) organizing or dissolving subsidiaries and the acquisition by the Company of interests in other corporations;
(l) opening, maintaining or dissolving branches, agencies, departments, offices, warehouses or any other establishments in any part of the national territory or abroad;
(m) holding inspections, audit or rendering accounts in the Company subsidiaries, controlled or affiliated companies, as well as in foundations sponsored by the Company;
(n) voicing its opinion on any subject prior to the respective submission thereof to the Shareholders Meeting;
(o) resolving on the issuance of simple non-collateralized debentures;
(p) approving and amending the Internal Regulations of the Board of Directors;
(q) acquiring shares issued by the Company for maintenance in treasury, cancellation or further sale;
(r) the Company’s rendering of any guarantees to third parties;
(s) determining the maximum amount of the Company assets that may be sold or given in guarantee without prior authorization of the Board of Directors, it being certain that some of these operations will be subject to the prior authorization of the Board of Directors; and
(t) directing the votes to be cast by the Company’s representative at shareholders meetings of corporations in which the Company has an interest.
Article 22. The Board of Executive Officers is the Company’s representation body and it is responsible for practicing all management acts of the corporate businesses.
Article 23. The Board of Executive Officers is not a full board, but it may meet at discretion of the Chief Executive Officer or the majority of its members to address operating aspects.
§1. Meetings of the Board will be convened in writing with at least three days prior notice, and the call notice must inform, in addition to the place, date and time of the meeting, the agenda. Notwithstanding the call formalities, the meeting attended by all members of the Board of Executive Officers will be considered a regular one.
§2. Meetings of the Board of Executive Officers will be chaired by the Chief Executive Officer and will be installed with the presence of officers representing the majority of members of the Board of Executive Officers. Resolutions will be taken by majority of votes, and the presence of the Chief Executive Officer at the meetings is mandatory.
§3. In case of impediment of any member of the Board of Executive Officers, the remaining members will appoint an interim replacement, who will perform the duties until the first Meeting of the Board of Directors where the new member will be elected for the time remaining for the replaced member.
§4. Officers may be represented at Meetings of the Board of Officers by another officer they appoint, in writing. The participation of officers at meetings of the Board of Officers may be made at distance, by conference call, video conference or any other communication means that ensures the authenticity of the officers’ vote, provided a copy of the meeting minutes to be drawn-up in the book of Minutes of the Board Meetings is signed, via fac-simile, on the same date of the meeting, and the respective original is subsequently signed by all participating officers.
Article 24. The Board of Executive Officers is composed by at least two and at most four officers, elected and removable by the Board of Directors, with a unified one-year term of office, and their reelection is permitted.
Article 25. Among the elected officers, one will be appointed Chief Executive Officer, one will be appointed Chief Financial Officer, one will be appointed Chief Investor Relations Officer and the other will be appointed Chief Corporate Affairs Officer, and the offices of CFO may remain vacant, in which case the Chief Executive Officer will accumulate the CFO’s or the Chief Corporate Affair Officer’s duties.
§1. The duties of the Chief Executive Officer will be as follows:
(a) to convene, install and chair the meetings of the Board of Executive Officers;
(b) to supervise, coordinate, control and direct the performance of the respective plans related to the industrial, commercial, administrative and financial departments;
(c) to prepare and cause the Company’s annual budged to be performed; and
(d)to represent the Company as plaintiff and defendant, in and out of court, before authorities, trade associations, public or private organizations.
§2. The duties of the Chief Financial Officer will be as follows:
(a) to submit work plans and current and annual capital budgets, investment plans and new development programs of the Company to the approval of the Shareholders Meeting, promoting the performance thereof pursuant to the terms approved;
(b) to manage the Company’s activities in the financial and treasury area, signing always jointly with the Chief Executive Officer, including to transact amounts in bank accounts owned by the Company, to make and endorse checks, payment orders and charges to bank accounts, to issue collection and debt instruments, trade bills, bills of exchange and exchange agreements, acceptances thereof, endorsements and collateral signatures and to make payments of obligations on the Company’s behalf;
(c) to coordinate with other competent areas the performance of the Company’s activities in the economic-financial area, with respect to the Company’s accounting, preparation of financial statements and the management report, balance sheets, interim balance sheets and review of results;
(d) to manage and administrate financial commitments of the Company, the raising and investment of funds in the financial and capital market, and controlling the management of the Company’s funds.
(e) to supervise the accounting, treasury, and tax and legal records of the Company;
(f) to perform economic and financial budgets for each fiscal year
(g) to conduct macro economic analyses and studies;
(h) to develop economic-financial projects and reviews;
(i) to manage the Company’s welfare funds; and
(j) to perform other activities determined by the Chief Executive Officer.
§3. The duties of the Chief Investor Relations Officer will be as follows
(a) to disclose and inform the Brazilian Securities Commission and the São Paulo Stock Exchange, as the case may be, of any material act or fact occurred or related to the Company business, as well as to care for the broad and immediate spreading thereof, simultaneously in all markets where such securities are admitted for trading, in addition to other attributions defined by the Board of Directors;
(b) to provide information to investors; and
(c)to keep the Company records updated, providing the necessary information therefor, all in agreement with the applicable regulation of the Brazilian Securities Commission.
§4. The duties of the Chief Corporate Affairs Officer will be as follows:
(a) to promote the development of the Company’s activities;
(b) to coordinate the activities of companies controlled by the Company, trying to maximize synergies;
(c) to prospect new areas of action for the Company;
(d) to coordinate the work of his area with that of the other Board of Officers; and
(e) to perform other attributions assigned by the Chief Executive Officer.
Article 26. The Company will be represented and will only be considered validly bound by act or signature:
(a) of two Officers, one of them being obligatorily the Chief Executive Officer; or
(b) of the Chief Executive Officer jointly with an attorney-in-fact; or
(c) of two attorneys-in-fact with specific powers.
Sole Paragraph. Powers of attorney will be always granted or revoked by two Officers, of which one of them must obligatory be the Chief Executive Officer, and they will establish the powers of the attorney-in-fact and, except for powers of attorney granted for legal purposes, their term will not exceed one year.
Article 27. The Company will have an Audit Committee that will not work on permanent basis, composed of three to five effective members and an equal number of deputies elected by the Shareholders Meeting. The attributions and duties of the Audit Committee will be those defined by law and its fees will be fixed by the Shareholders Meeting that elects its members.
Sole Paragraph. When installed, the vestiture in office will be made by an instrument drawn-up in a proper book, signed by the member of the Audit Committee vested in office, and by the previous subscription of the Instrument of Consent of the Audit Committee Members, as provided in the New Market Listing Regulation.
Article 28. For purposes of electing the Audit Committee members, it should be checked if the candidate falls into any of the ineligibility or presumed conflict events contemplated by Law No. 6,404/76, of the Brazilian Securities Commission regulations or these Articles of Incorporation, in order to allow the Shareholders Meeting to review the existence of conflict in the concrete case and waiver thereof, as the case may be, as provided for in Section 16, §8 of these Articles.
Article 29. The corporate year will begin in January 1, and end in December 31 of each year. Financial statements prescribed by law will be prepared at the end of each corporate year.
Article 30. In each fiscal year, shareholders will be entitled to a mandatory dividend corresponding to 1/3 of the net profit for the year, adjusted as follows:
(a)the net profit for the year will be reduced or increased by the following amounts:
i. . the amount allocated to book the legal reserve; and
ii. the amount allocated to form a reserve for contingency, and reversal of such reserve formed in previous years;
(b) payment of dividend determined pursuant to this Article’s caption may be limited to the net profit amount for the year that has been realized, provided the difference is booked as unrealized income reserve; and
(c) profits booked in the unrealized income reserve, when realized and if they have not been absorbed by losses in subsequent years, will be added to the first dividend stated after realization.
§1. The dividend provided for in this Article will not be mandatory in the corporate year in which the Board of Directors informs the Annual Shareholders Meeting that it is inconsistent with the Company’s financial condition; the Audit Committee, if installed, should provide an opinion on such information and the Company managers will forward to the Brazilian Securities Commission, within five days after the Shareholders Meeting is held, an explanation justifying the information transmitted to the Meeting.
§2. Profits that are not distributed pursuant to §1 above will be booked as special reserve, and, if they are not absorbed by losses in subsequent years, they should be paid as dividend, as soon as the Company’s financial condition so permits.
Article 31. The Company will keep a Reserve for Investments, and for its booking there may be allocated, by proposal of the Board of Directors, a portion of up to 63% of the adjusted net profit for each year, with the purpose of: (i) ensuring funds for the development of activities of its controlled companies, without prejudice to the profit withholding pursuant to Sec. 196 of Law 6,404/76; and it may further (ii) be used in operations for redemption, refund or acquisition of the Company’s capital shares.
§1. The Shareholders Meeting, according to proposal of the Board of Directors, may at any time distribute dividends to the Investment Reserve account or allocate the balance thereof, wholly or in part, for increasing the capital stock, including with bonus in new shares.
§2. The Shareholders Meeting, according to proposal of the Board of Directors, may at any time distribute dividends to the Investment Reserve account or allocate the balance thereof, wholly or in part, for increasing the capital stock, including with bonus in new shares.
Article 32. The Company may, by resolution of the Board of Directors, survey half-year, quarterly or monthly balance sheets, as well as declare dividends to the income account determined in these balance sheets. The Company may also, by resolution of the Board of Directors, declare interim dividends to the accumulated income or income reserve account existing in the last annual or half-year balance sheet.
Article 33. The Board of Directors may pay or credit, in each corporate year, by referendum of the Annual Shareholders Meeting that will examine the financial statements for the year, interest on own capital, pursuant to the income tax legislation.
Article 34. Dividends distributed and interest on own capital credited pursuant to Article 32 and Article 33 will be ascribed to the mandatory dividend.
Article 35. Dividends not received or unclaimed will forfeit within three years from the date they have been made available to the shareholder, and will revert on the Company’s benefit.
Article 36. The Shareholders Meeting may attribute a profit sharing to the Company managers, subject to the legal limit.
Sole Paragraph. The profit sharing may only be attributed in the fiscal year in which the mandatory dividend referred to in Article 30 is paid to the shareholders.
CHAPTER IX - Disposal of Control, Cancellation of Registration as Publicly-held Company, Withdrawal from New Market and Protection of Equity Dispersion
Disposal of Control
Article 37. Disposal of the Company Control, either through a single transaction or through successive transactions, should be made under the suspensive or resolutive condition that the Control acquirer undertakes to consummate a public offer for the acquisition of all other shares of the other Company shareholders, subject to conditions and terms provided for in the laws in force and the New Market Listing Regulation, in order to ensure equal treatment to that given to the Seller Controlling Shareholder.
Article 38. The public offer referred to in the previous Article will be further required:
(a) when there is an onerous assignment of shares and other securities subscription rights related to securities convertible into shares or that entitle to the subscription thereof, resulting in the Disposal of the Company Control; or
(b) in case of disposal of control of a corporation that holds the Company Controlling power, and, in this case, the Seller Controlling Shareholder will be required to state to the São Paulo Stock Exchange the amount assigned to the Company in this disposal and attach documentation evidencing that.
Article 39. Anyone that is holder of Company shares and acquires the Controlling power by virtue of a private share purchase agreement entered into with the Controlling Shareholder involving any amount of shares, will be required to:
(a) consummate the public offer mentioned in Article 37
(b) refund the shareholders from whom he has purchased shares in the stock exchange in the six months prior to the date the Company Control was disposed of, to whom he should pay the difference between the price paid to the Seller Controlling Shareholder and the amount paid in the stock exchange for Company shares in this same period, duly updated, up to the payment moment, according to the General Market Price Index (IGP-M) or another equivalent index that replaces it; and
(c) as the case may be, take all actions applicable to recompose the minimum percentage of 25% of the total outstanding shares of the Company, within six months subsequent to the Takeover.
Article 40. The Company will not record any share transfer to the purchaser or to the one(s) acquiring the Controlling Power, while the latter do(es) not subscribe the Instrument of Consent of Controlling Shareholders to which the New Market Regulation refers.
Sole Paragraph. The Company will not record a Shareholders Agreement that provides for the exercise of the Controlling Power while its signatories do not subscribe the Instrument of Consent referred to in this Article’s caption.
Withdrawal from the New Market and Cancellation of Registration as Publicly-Held Company
Article 41. Should the withdrawal of the Company from the New Market be approved at the Shareholders Meeting, either so that its securities are registered for trading outside the New Market or by corporate reorganization operation, where the company resulting from such reorganization is not admitted for trading in the New Market, the Controlling Shareholder should consummate the public offer for the acquisition of shares belonging to the other Company shareholders, and the minimum price to be offered should correspond to the Economic Value calculated in a valuation report, pursuant to Article 43.
Article 42. Should the cancellation of the Company’s registration as publicly-held company be approved, the Controlling Shareholder or the Company should consummate the public offer for the acquisition of shares belonging to the other Company shareholders, and the minimum price to be offered should correspond to the Economic Value calculated in an valuation report, pursuant to Article 43.
Article 43. Valuation reports mentioned in Article 41 and Article 42 should be prepared by an expert institution or company, with proven experience and independence as to the decision power of the Company, its Managers and/or Controlling Shareholder, in addition to satisfying the requirements of section 8, §1, of Law No. 6,404/76 and include the responsibility prescribed in §6 of the same section.
§1. The choice of an expert institution or company liable for determining the Company’s Economic Value is a private competence of the shareholders meeting, beginning from the submission, by the Board of Directors, of a triple list, and the respective resolution should be taken, not computing the blank votes, by the majority of votes of the shareholders representing Outstanding Shares present in that meeting that, if installed at a first call, should be attended by shareholders representing at least 20% of the total Outstanding Shares, or, if installed at a second call, may be attended by any number of shareholders representing Outstanding Shares.
§2. The costs for preparing the valuation report should be fully undertaken by the offerer.
Article 44. In the event there is a Diffuse Control of the Company:
(a) whenever the cancellation of registration as publicly-held company is approved at a Shareholders Meeting, the public offer for the acquisition of shares should be consummated by the Company itself and, in this case, the Company may only acquire shares owned by shareholders that have voted for the cancellation resolution after having acquired the shares of all other shareholders that have not voted for said resolution and that have accepted said public offer; and
(b) whenever the Company’s withdrawal from the New Market is approved at the Shareholders Meeting, either in view of the registration for trading securities outside the New Market, or by virtue of corporate reorganization where the company resulting from such reorganization is not admitted for trading in the New Market, the public offer for the acquisition of shares should be consummated by shareholders that have voted for said resolution.
Article 45. In the event there is a Diffuse Control and the São Paulo Stock Exchange determines that the prices of securities issued by the Company are to be disclosed in separate or that the trading of securities issued by the Company are suspended in the New Market in view of failure to comply with the obligations of the New Market Listing Regulation by act or fact of the management, a Shareholders Meeting should be convened pursuant to section 123 of Law No. 6,404/76, aimed at removing and replacing the Board of Directors or make the decisions necessary to remedy the non-compliance with the obligations appearing in the New Market Listing Regulation.
Article 46. Should the decisions mentioned in Article 45 do not remedy the non-compliance with the obligations appearing in the New Market Listing Regulation within the term defined in the São Paulo Stock Exchange to remedy the violation committed and if there is withdrawal of the Company from the New Market by virtue of such non-compliance, the Company should, subject to the legal provisions, consummate the public offer for the acquisition of shares for cancellation of registration as publicly-held company directed to all shareholders.
Sole Paragraph. In case it is resolved, at a Shareholders Meeting, to maintain the Company’s registration as publicly-held company, the public offer for the acquisition of shares should be consummated by shareholders that have voted for such resolution.
Article 47. In case there is a Diffuse Control and if the Company’s withdrawal from the New Market occurs in view of non-compliance with the obligations appearing in the New Market Regulation by resolution at the Shareholders Meeting, the public offer for the acquisition of shares should be consummated by shareholders that have voted for the resolution that implied the non-compliance.
Protection of the Equity Basis Dispersion
Article 48.Any Purchaser Shareholder (as defined below) that acquires or becomes the holder of shares issued by the Company, including by virtue of beneficial ownership that ensures such shareholder political rights of a partner, in amount equal to or higher than 25% of the total shares issued by the Company, excluding treasury shares for purpose of this calculation, should, within 60 days from the acquisition date or event that resulted in the ownership of shares in this amount, make or request the registration of a public offer for the acquisition of the total shares issued by the Company ("OPA") subject to the provisions of the applicable regulation of the Brazilian Securities Commission, the regulations of the São Paulo Stock Exchange and the terms of this Chapter.
§1.The price to be offered for shares issued by the Company object of the OPA ("Offer Price") should be the highest between the following amounts:
(a) the fair price, understood as the valuation amount of the Company, calculated by using a recognized methodology or based on another criterion that is defined by the Brazilian Securities Commission, according to the valuation report prepared by an internationally reputed institution with proven experience in the economic and financial evaluation of publicly-held companies, ensuring review of the offer value pursuant to §3 of this Article;
(b)125% of the share issue price in any capital increase made upon public distribution taking place within the period of 12 months prior to the date it is mandatory to held the OPA pursuant to this Article, duly updated by the IGP-M or by an equivalent index that replaces it, up to the payment moment; and
(c) 125% of the weighted average unit quoted price of shares issued by the Company during the 90-day period prior to the publication of the OPA notice.
§2. The OPA should obligatorily observe the following principles and procedures, in addition, as applicable, to others expressly provided in section 4 of CVM Instruction No. 361 of March 5, 2002 or a rule that replaces it:
(a) to be addressed indistinctly to all the Company shareholders;
(b) to be consummated at an auction to be held at the São Paulo Stock Exchange;
(c) to be held in order to ensure fair treatment to addressees, allowing them adequate information as to the Company and the seller, and provide them with the necessary elements to make a reflected and independent decision as to the public offer acceptance;
(d) to be unchangeable and irrevocable after publication in the offer notice, pursuant to CVM Instruction No. 361/02, subject to the provisions of §5 of this Article;
(e) to be launched for the price determined as provided in this Article and paid on demand, in lawful national money; and
(f) to be documented with the Company’s valuation report prepared upon using an acknowledged methodology or based on another criterion to be defined by the CVM, prepared by an internationally reputed institution, with proven experience in the economic-financial evaluation of publicly-held companies, and that does not have a conflict of interests that decreases its necessary independence for performing its duties.
§3. Shareholders owners of at least 10% of the Company shares, excluding from such calculation shares owned by the Purchaser Shareholder, may require the Company managers to convene a special meeting of shareholders owners of such shares to resolve on the performance of a new Company valuation for purposes of reviewing the Offer Price, the report of which should be prepared in the same manner as the valuation report mentioned in letter (f) of §2 of this Article, according to the procedures provided for in section 4-A of Law No. 6,404/76 and observing the provisions of the applicable regulations of CVM, the regulations of the São Paulo Stock Exchange and pursuant to this Chapter.
§4. In the special meeting referred to in §3 above, only all the holders of Company shares may vote, with exception of the Purchaser Shareholder.
§5. Should the special meeting mentioned in §3 above resolves for the performance of a new valuation and the valuation report determines an amount higher than the initial OPA amount, the Purchaser Shareholder may waive it, undertaking, in this case, to observe, as applicable, the procedure provided in Sections 24 and 28 of CVM Instruction No. 361/02 and to dispose of the exceeding interest within three months counted from the date of the same special meeting.
§6. The OPA requirement provided in the caption of this Article will not exclude the possibility of another Company shareholder or, as the case may be, the Company itself, making another concurring or isolated public offer, pursuant to the applicable regulations.
§7. The obligations appearing in Sec. 254-A of Law No. 6,404/76 and in Articles 48 to 50 of these Articles do not exclude the compliance by the Purchaser Shareholder of the obligations appearing in this Article.
§8. The provisions of this Article do not apply in case a person becomes the holder of shares issued by the Company in amount higher than 25% of its total issued shares as a result of:
(a) takeover of another corporation by the Company or of the Company by another corporation;
(b) takeover of shares of another corporation by the Company or takeover of shares of the Company by another corporation;
(c) subscription of Company shares, held in one single primary issue, that has been approved at the Shareholders Meeting called by the Board of Directors and the capital increase proposal of which has determined the establishment of the issue price of shares based on Economic Value obtained from a valuation report of the Company prepared by an expert institution that meets the requirements of Article 43 of these Articles; or
(d) an OPA that meets the provisions of this Article.
§9. The provisions of this Article do not apply, further, to Company shareholders that are holders of 25% or more of the total shares issued by the Company on the date of its registration as publicly-held company at the Brazilian Securities Commission and respective successors, including and particularly the Company’s controlling shareholders, as well as partners/shareholders of said controlling shareholders that succeed them in the direct interest in the Company by virtue of corporate reorganizations, applying, thus, exclusively to those investors that acquire shares and become shareholders of the Company after it has obtained its registration as publicly-held company with the Brazilian Securities Commission and the beginning of the trading of shares issued by the Company at the São Paulo Stock Exchange.
§10. Once there is publication of any OPA notice, formulated pursuant to the terms of this Article, including determination of the Offer Price or formulated pursuant to the regulations in force, the Board of Directors should meet within 10 days to consider the OPA terms and conditions, observing the following principles:
(a) the Board of Directors may hire expert external advisory that meets the provisions of letter (e) of above §2, with the purpose of analyzing the convenience and opportunity of the offer, in the general interest of shareholders and economic segment where the controlled companies of the Company act; and
(b) it will be responsibility of the Board of Directors to justifiably disclose to shareholders its understanding on the OPA’s convenience and opportunity.
§11. For purpose of calculating the percentage of 25% of total shares issued by the Company described in the caption of this Article, involuntary increases of equity interest resulting from the cancellation of treasury shares, redemption of shares or decrease of the Company’s capital stock with the share cancellation will not be computed.
§12. The provisions of the New Market Regulation will prevail on the articles’ provisions in case of loss of rights of public offer addressees provided for in these Articles of Incorporation.
§13. In case the Purchaser Shareholder does not comply with the obligations set forth in this Article, including as regards the compliance with terms (i) for performing or requesting the OPA registration; or (ii) for satisfying occasional CVM requests or requirements, the Company Board of Directors will call a Special Shareholders Meeting in which the Purchaser Shareholder may not vote, to resolve on the suspension of the exercise of the Purchaser Shareholder’s rights, as provided for in Section 120 of Law No. 6,404/76.
Article 49. For purposes of these Articles of Incorporation, the following capitalized terms will have the following meanings:
(a) "Purchaser Shareholder" means any person (including, as example, any natural or legal person, investment fund, joint ownership, securities portfolio, worldwide rights, or another form of organization, resident, with domicile or head office in Brazil or abroad), or group of persons bound by voting agreement with the Purchaser Shareholder and/or that acts representing the same interest of the Purchaser Shareholder, that subscribes and/or purchases Company shares. There are included, within the examples of a person acting or representing the same interest as the Purchaser Shareholder, any person (i) that is directly or indirectly controlled or managed by such Purchaser Shareholder; (ii) that controls or manages, under any way, the Purchaser Shareholder; (iii) that is directly or indirectly controlled or managed by any person that directly or indirectly controls or manages such Purchaser Shareholder; (iv) in which the controlling entity of such Purchaser Shareholder has, directly or indirectly, a corporate interest equal to or higher than 30% of the capital stock; (v) in which such Purchaser Shareholder has, directly or indirectly, a corporate interest equal to or higher than 30% of the Capital stock; or (vi) it has, directly or indirectly, a corporate interest equal to or higher than 30% of the Purchaser Shareholder’s capital stock.
(b)"Controlling Shareholder" means the shareholder or group of shareholders bound by a shareholders agreement or under common Control that exercises the Controlling Power of the Company.
(c) "Controlling Power" or "Control" means the power effectively used to manage the corporate activities and guide the running of the Company bodies, whether directly or indirectly, in fact or under law. There is relative presumption of the Control ownership in relation to a person or group of persons bound by shareholders agreement or under the common Control (group of Control) that is holder of shares that have ensured him absolute majority of votes of the shareholders present in the last three Company Shareholders Meeting, even if he is not the owner of shares that entitles him absolute majority of the voting capital.
(d) "Seller Controlling Shareholder", "Outstanding Shares", "Disposal of Company Control", "Diffuse Control", "Controlling Company", "Controlled Company", "Economic Value", have the meanings assigned to such terms in the New Market Listing Regulation.
(e) "Group of Shareholders", the group of two or more people (i) bound by contracts or agreements of any nature, including shareholders agreements, oral or written, either directly or by means of corporations controlling, controlled by, or under common control with such corporation; or (ii) between which there is a Control relationship, either directly or indirectly; or (iii) under Common Control; or (iv) that act representing a common interest. The following are included in examples of persons representing a common interest (a) a person owning, directly or indirectly, a corporate interest equal to or higher than 15% of the capital stock of that other person; and (b) two persons that have a third investor in common that is directly or indirectly the owner of corporate interest equal to or higher than 15% of the capital of each of the two other persons.
Any joint ventures, investment funds or clubs, foundations, associations, trusts, joint ownerships, cooperatives, securities portfolios, worldwide rights, or any other forms of organization or undertaking organized in Brazil or abroad, will be considered part of a same Group of Shareholders, whenever two or more of such entities are (x) managed or administered by the same legal person or by parties related to a same legal person; or (y) have in common the majority of their managers.
(f) "Consolidated EBITDA" means, for any period, the consolidated net income for the same period, adding (i) without duplicity and in case there was deducted, in determining the consolidated net profit for the period, the sum of (A) income tax, licensing rate and taxes on the shareholders’ equity for the period (including all expenses with state taxes), (B) social contribution on net income of the Company and its Subsidiaries, (C) financial expenses, amortization or write-off of discount in the financial debt or costs originating from the issue of debt and commissions and discounts and other commissions and payments associated with the indebtedness, (D) any cost similar to interest expense associated with the financing backed on receivables for the period, if booked as financial expense or loss in the sale of receivables, (E) expenses with depreciation and amortization, (F) other expenses that do not represent cash disbursement (excluding expenses that are additions to reserves for cash disbursements in any future period), (G) any extra expense or loss (including losses in the sale of assets, except in the sale of inventory in the regular course of business) and (H) commissions and expenses incurred in connection with transactions contemplated by the Shareholders Agreement and less (ii) without duplicity and in case it has been included in determining the net income for the period, the sum of (A) any extra revenue or gain (including gain with the sale of assets, save for the sale of inventory in the regular course of business), except when originating from discontinued operations, (B) revenues that do not represent cash entry (excluding revenues that represent cash received in prior periods or in the future) included in the consolidated net income for the period and (C) financial revenues, always booked on consolidated basis.
(g) "Related Parties" means any natural person or legal entity that directly or indirectly controls another natural person or legal entity, is controlled by it or is under its common control. The control of any natural person or legal entity consists in the capacity of directing the management and the policies of such person (either through the ownership of voting securities, by contract, or otherwise) and will be considered as existent when there is ownership of securities that ensure its holder the exercise of over 50% of the voting right in the election of directors (or other people or bodies with similar roles).
(h) "Subsidiaries" means any person (i) of which shares or securities representing the right to vote in the election of directors and other managers the Company or its Subsidiaries are holders of over 50%, or (ii) in case there are no issued shares or securities (such as, for example, in a joint venture), a person in relation to which the Company or its Subsidiaries are holders of over 50% of the right to make decisions.
Article 50. The Company will be dissolved and liquidated in the cases provided for by law, and the Shareholders Meeting will be in charge of establishing the liquidation manner and elect the liquidator, or liquidators, and the Audit Committee that should work during the liquidation period, fixing their powers and compensation.
Article 51. The Company, its shareholders, managers and members of the Audit Committee, if installed, undertake to settle by arbitration any and all dispute or controversy that may arise between them, related with or originating from, particularly, the application, validity, effectiveness, construction, violation and its effects, of the provisions contained in these articles, in the provisions of Law No. 6,404/76, in the rules edited by the National Monetary Council, by the Central Bank of Brazil and by the Brazilian Securities Commission, in other rules applicable to the operation of the capital market in general, in addition to those appearing in the New Market Listing Regulation, the New Market Participation Contract, the Arbitration Regulation of the Market Arbitration Chamber, which should be conducted with the Market Arbitration Chamber instituted by the São Paulo Stock Exchange, according to the Regulation of said Chamber.
Article 52. Contingencies not covered by law will be settled by the Shareholders Meeting, based on the legislation applicable to the issue.
Article 53. On January 24, 2006, the Company and the totality of Company shareholders entered into a shareholders agreement, which was filed at the Company’s head office and annotated with the records of the depositary bank of the Company shares for purposes of Section 118 of Law No. 6,404/76 (the "Shareholders Agreement"). On May 31, 2007, certain Company shareholders also entered into an agreement complementary to the Shareholders Agreement, which was filed at the Company’s head office and annotated with the records of the depositary bank of the Company shares for purposes of Section 118 of Law No. 6,404/76 (together with the Shareholders Agreement, the "Shareholders Agreements"). Copies of the Shareholders Agreements are available for consultation at the Company’s head office. Shares owned by the parties in the Shareholders Agreements are subject to certain restrictions as to the transfer and exercise of the voting right and other provisions of the Shareholders Agreements, including, as example, the submission to arbitration as an exclusive means to settle disputes. No share transfer will be effected, under penalty of being considered null and void, in case it is not accompanied by evidence of being in accordance with the terms of the Shareholders Agreements. The Company is subject to the provisions of the Shareholders Agreements. Any operation between the Company and the parties in the Shareholders Agreements that is in violation therewith will be considered null and void.
The provisions appearing in CHAPTER IX of these Articles of Incorporation, as well as the rules related to the New Market Listing Regulation, particularly those appearing in Section 14, §1, and Section 28, will be effective only from the date the shares issued by the Company in the São Paulo Stock Exchange start to be traded.
Consolidations of the Articles of Incorporation - Special Shareholders Meeting (SSM) held on May 31, 2007, published in the newspaper "Minas Gerais" on 06/21/2007.
Amendment to caption of Article 5 and 6- SSM held on June 29, 2007, published in the newspaper "Minas Gerais" on 07/07/2007.
Amendment to Article 21 and 31 and revocation of Paragraph 2º of Article 36 - SSM held on July 06, 2007, published in the newspaper "Minas Gerais" on 07/11/2007.
Amendment to caption of Article 5 - SSM held on April 30, 2008, published in the newspaper "Minas Gerais" on 05/22/2008.
Revocation of article 5º (capital reduction) and Paragraph 1º of Article 6 - SSM held on April 30, 2009, published in the newspaper "Minas Gerais" on 05/08/2009.