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CHAPTER I - NAME, MAIN OFFICES, DURATION, AND PURPOSE
MARCOPOLO S.A. is a publicly-traded corporation governed by these Articles of Incorporation and the applicable legal provisions.
The Company’s admission to the “BM&FBOVESPA” special listing section called Level 2 Corporate Governance subjects the Company, our stockholders, managers, and Audit Committee members, upon taking office, to the provisions of “Level 2 Regulations”.
Level 2 regulation provisions will prevail over the provisions in the articles of incorporation, in case the rights of those to whom the public offerings provided for in these Articles of Incorporation are addressed are violated.
The company has its principal place of business and legal jurisdiction in the city of Caxias do Sul - RS, and may, at the discretion of the Executive Board, open and close agencies, offices, and branches anywhere in Brazil and abroad.
The Company will remain in operation for an unspecified length of time.
The purpose of the company is to manufacture and sell buses, automotive vehicles, bodies, tractors, auto parts, farming machinery, industrial machinery and motors, iron and steel devices and furniture, tools, hardware, cutlery, and metal frames, as well as to treat materials used to manufacture those products, HVAC hook-up supplies, repair, restoration, and reconditioning services, including technical assistance for all products manufactured, sold, negotiated, and represented by the company, imports and exports of those products and services, farming, forestation, and reforestation, including the ability to take part in other companies in Brazil and abroad.
CHAPTER II - CAPITAL AND STOCK
The company capital, fully subscribed and paid in, is BRL 1,264,622,468.00 (one billion, two hundred and sixty-four million, six hundred and twenty-two thousand, four hundred and sixty-eight reais), split into 925,196,009 (nine hundred and twenty-five million, one hundred and ninety-six thousand and nine) shares, of which 341,625,744 (three hundred and forty-one million, six hundred and twenty-five thousand, seven hundred and forty-four) are common stock in book-entry form and 583,570,265 (five hundred and eighty-three million, five hundred and seventy thousand, two hundred and sixty-five) are preferred stock in book-entry form, all without nominal value.
The company is hereby authorized to increase the capital up to the limit of 2,100,000,000 (two billion and one hundred million) shares, of which 700,000,000 (seven hundred million) are common stock and 1,400,000,000 (one billion and four hundred million) are preferred stock. The Board of Directors or the General Meeting will be responsible for deliberating on the issuance of preferred shares at every capital increase.
Within the authorized capital limit and upon decision by the Board of Directors, the company may increase the capital regardless of amendments to the Articles of Incorporation, and both common and preferred stock may be issued.
The stock is indivisible before the company.
Under a plan approved by the General Meeting and within the authorized capital limit, the Company may grant stock options to its managers or employees, or to natural persons providing services to the company or the latter’s controlled companies.
All company shares are held in book-entry form and will remain in deposit accounts on behalf of their holders at the institution appointed by the Board of Directors, without the issuance of certificates.
Stockholders may freely assign and transfer their shares.
The stockholders’ preemptive right to subscribe shares, debentures convertible into shares, and subscription bonuses, placed under the law, may be either granted or not by decision of the General Meeting or the Board of Directors. The timeframe to exercise the preemptive right may be shortened, also by decision of the General Meeting or the Board of Directors.
In General Meeting deliberations, each common share entitles the holder thereof to cast one vote, and each preferred share entitles the holder thereof to cast one restricted vote as provided for in Article 10 of these Articles of Incorporation.
Preferred shares entitle the holder thereof to cast restricted votes exclusively for deliberating on the following matters:
- transformation, merger, consolidation, or spin-off of the Company;
- approval of agreements between the Company and its controlling stockholder, directly or via third parties, as well as of other companies in which the controlling stockholder has an interest, whenever legal provisions or the Articles of Incorporation require that the approval of such agreements be deliberated by the General Meeting;
- appraisal of assets meant to pay in the Company’s capital increase;
- choosing an expert institution or company to appraise the Company’s economic worth, under Article 32, Paragraph 1 of these Articles of Incorporation; and
- amending or revoking provisions in these Articles of Incorporation which amend or change any of the requirements prescribed in Section IV, item 4.1 of the BM&FBOVESPA Level 2 Corporate Governance Listing Rules (“Level 2 Regulations”), set forth by BM&FBOVESPA S.A. - Stock, Commodities and Futures Exchange (“BM&FBOVESPA”), except that such voting right will prevail while the Level 2 Corporate Governance Participation Agreement remains in effect.
Preferred shares entitle the holder thereof to the following advantages and priorities:
- Participation in the same conditions as common shares in the distribution of stock by the company, in the event capital reserves are split or consolidated or assets are revaluated;
- In the event the company is wound up, priority in the reimbursement of the capital up to the equity amount of this type of stock; next, common shares will be reimbursed, equally up to the limit of the equity amount of this type of stock, and then the remaining balance will be distributed in equal parts among all shares, whether common or preferred; and
- In the event the controlling power is disposed of under article 40, caption, of these Articles of Incorporation, the right to receive an amount per share corresponding to at least 80% (eighty percent) of the amount paid to stockholders who actually exercise the “Controlling Power”, according to the definition contained in Sole Paragraph, Article 40 of these Articles of Incorporation.
The General Meeting may set up a fund dedicated to redeem preferred shares, and deliberate on the application of said reserve, including the conditions for and how to carry out the operation.
In case not all preferred shares are encompassed, preferred shares can only be redeemed via random selection.
Preferred shares cannot be redeemed at a price below the preferred share Stock Exchange rate (6) six months before the General Meeting that deliberated on the operation, and never at a price below the equity amount of each preferred share.
The General Meeting may allow stockholders to convert common shares into preferreds, prorated to the shares held, until the total number of said shares reaches 2/3 of the shares issued.
The Company is allowed to issue debentures either convertible into shares or not upon approval of the General Meeting, pursuant to the legal provisions and regulations governing the matter.
CHAPTER III - MANAGEMENT
The Company will be managed by a Board of Directors and an Executive Board.
Managers are released from providing security and will take office upon signing the take-office document in the dedicated book, at which time the statements required by law will be made.
The managers’ investiture is conditioned to their prior subscription of the Managers’ Consent Agreement under the provisions of “Level 2 Regulations” as well as their compliance with the applicable legal requirements.
Managers will receive the compensation assigned to them by the General Meeting. In case the General Meeting establishes the Managers’ compensation globally, each one will receive the amount assigned to them by the Board of Directors within the global limit set forth by the General Meeting.
The managers will be entitled to thirteen (13) compensation payments every year, and the Board of Directors will be in charge of distributing them.
The Board of Directors and the Executive Board will convene when called by any of their respective members whenever company interests or the law may require, as long as at least the majority of their members are in attendance, who will deliberate by majority of the votes, and the person chairing the meeting will have the casting vote in addition to his/her personal vote. Board of Directors’ meetings will be chaired by the Chairman of the Board, and Executive Board meetings will be chaired by the chief officer appointed at each meeting.
Whenever necessary, the Board of Directors will call the Chief Officers to attend the former’s meetings.
The Board of Directors will be staffed by at least 5 (five) and at most 7 (seven) members, of whom at least 20% (twenty percent) must be independent directors, as per the definition contained in Level 2 Regulations, and expressly declared as such in the minutes electing them. The Directors must be elected by the General Meeting and may be removed by the latter at any time, for a unified term of up to 2 ( two) years, whose administration will be extended until the new managers elected take office, their reelection being allowed.
When, due to compliance with the percentage mentioned in the caption of this article, a fractional number of members results, said number will be rounded out as prescribed in the “Level 2 Regulations”.
The Board of Directors will choose their Chairman and Deputy Chairman from among their members.
In the event the Chairman and Deputy Chairman are unable to serve or their offices become vacant, the remaining Directors will choose a Director to replace them. In the event the Chairman of the Board of Directors is absent or temporarily unable to serve, he/she will be replaced by the Deputy Chairman.
In the event a Director position becomes vacant, a General Meeting will be called to elect the substitute Director in case the number of remaining directors is below five.
The Board of Directors will have a Secretary appointed by the Chairman of the Board of Directors, and such Secretary may be a manager or employee of the company or a third party, and in the Secretary’s absence or inability he/she will be replaced by another manager, employee, or third party also appointed by the Chairman of the Board of Directors.
The positions of Chairman of the Board of Directors and Company CEO cannot be held by the same person.
The duties of the Board of Directors are to:
- Generally steer the Company’s business;
- Elect and remove the company Chief Officers and set their duties, both individually and as a Board, under the provisions in these Articles of Incorporation and the applicable legislation;
- Set the managers’ individual compensation, pursuant to the limits established by the General Assembly, as well as the compensation of Committee and Board members, as applicable, pursuant to the provisions in Paragraph 6, Article 20 of these Articles of Incorporation;
- Control, monitor, and assess the Chief Officers’ management, examine the company’s books and papers at any time, request information on contracts executed or about to be executed, and any other acts;
- Call the General Meeting at the Board’s discretion and when doing so is necessary to meet the company’s interests and the applicable provisions in the law and the Articles of Incorporation;
- Issue opinions about management reports and the executive board accounts;
- Choose and remove independent auditors;
- Deliberate on capital increases and issuance of subscription bonuses up to the authorized capital limit, and set forth the issuance conditions, price, and payment deadline;
- Deliberate on the negotiation of shares issued by the Company for purposes of purchasing, cancelling, keeping them as treasury stock, selling them, and granting share purchase or subscription options, hereby authorizing the Executive Board in advance to do so when any of those actions is interesting and convenient for the Company;
- Declare dividends to the account of retained earnings or reserves existing in the latest annual balance sheet or that of shorter periods;
- Deliberate on the payment or credit of interest on company capital, calculated over the stockholders’ equity, in the manner and under the conditions mentioned in Paragraph 2, Article 35 of these Articles of Incorporation;
- Approve the issuance of simple debentures not convertible into shares and without security interest, as well as to deliberate, within the authorized capital limit, on the issuance of debentures convertible into shares, and specify the debenture conversion-derived capital increase in terms of amount of capital or number of shares, besides the types of shares that may be issued;
- Under the terms set by the General Meeting and under the provisions in paragraph 1, article 59 of Law no. 6404/76, set forth the rules and conditions for issuing debentures, as well as to change, extend and/or renegotiate such rules and conditions;
- Deliberate on the issuance of Commercial Papers, and set forth the issuance conditions;
- Define and submit to the General Meeting the triple list of institutions or companies specializing in corporate economic appraisal to prepare the appraisal report on Company shares at their economic value, in the event of IPOs for cancelling the registration as a publicly-traded company or to exit Level 2 Corporate Governance;
- Approve the signature of agreements between the Company and its managers and/or controlling stockholder, or between the company and parties directly or indirectly controlled by or controlling the controlling stockholder;
- Approve the business plan, the Company annual and multiannual budget, and expansion, investment, and disinvestment projects;
- Approve and monitor the Company’s strategic plans;
- Set up and extinguish committees, under Paragraph 3 of Article 20, and appoint and remove their members;
- Upon proposal by the Executive Committee, authorize the acquisition, sale, increase or decrease of ownership in controlled or affiliate companies, as well as the acquisition of ownership in other companies;
- Authorize the practice of actions entailing the acquisition, sale, encumbrance, and mortgage of real estate when the amounts involved exceed 5% of the stockholders’ equity, according to the balance sheet prepared in the month preceding that of the respective authorization;
- approve or refuse any IPO relative to shares issued by the Company, by means of a substantiated prior opinion released up to 15 (fifteen) days before the IPO notice is published, which opinion must address at least the following topics: (i) the convenience and timeliness of the IPO regarding the stockholders’ shared interests and the liquidity of the securities held by them; (ii) the IPO impact on the Company’s interests; (iii) the strategic plans disclosed by the offeror relative to the Company; (iv) other topics deemed pertinent by the Board of Directors, and information required by the applicable regulations set forth by the Brazilian Securities Commission.
The Chairman of the Board of Directors is responsible for chairing the Board of Directors’ meetings.
The Board of Directors will have a permanent technical, advisory committee called Executive Committee to help, advise, and support the former regarding the Company management.
The Executive Committee will be staffed by up to seven members, either company managers or not and appointed by the Board of Directors, of whom three will be sitting members working full-time for the Company, two will be nominated members, and the others, guest members.
Whenever they deem necessary, the Board of Directors may set up and extinguish other Committees whose technical or advisory roles are other than those assigned to the Executive Committee, and establish their duties, competencies, and compensation, as applicable. The members of those other committees may be either Company managers or not, and will be appointed by the Board of Directors.
The Board of Directors will appoint a Coordinator for each Committee.
In the event they are compensated, Committee members will be entitled to 13 (thirteen) compensation payments a year.
When applicable, the compensation of Executive Committee sitting members and members of the other Committees will be set by the Board of Directors within the global amount established by the General Meeting to pay management fees.
The Executive Committee is responsible for:
- Helping the Board of Directors analyze and make recommendations about specific matters that require a closer study;
- Submitting to the Board of Directors the relevant changes to the Company’s organizational framework;
- Assisting and monitoring the execution and fulfillment of the annual budget and the Company’s expansion and investment projects;
- Finding new business and market opportunities;
- Suggesting to the Board of Directors the acquisition, sale, increase or decrease of ownership in controlled or affiliate companies, as well as the acquisition of ownership in other companies;
- Authorizing the practice of actions entailing the acquisition, sale, encumbrance, and mortgage of real estate when the amounts involved are up to 5% of the stockholders’ equity, according to the balance sheet prepared in the month preceding that of the respective authorization; When the amounts involved exceed 5% of the stockholders’ equity, they require approval from the Board of Directors;
- Authorizing the appointment of attorneys-in-fact, under Paragraph 2 of Article 26;
- Providing opinions, advising, and assisting the Executive Board in all of the latter’s activities.
The Executive Committee will convene whenever called by any of its sitting members. The meetings will be called to order once the majority of its sitting members are in attendance, and their opinions and decisions will be adopted and made by the majority of votes by those present. Guest members will not be entitles to vote.
Executive Committee sitting and nominated members are subject to the same rights, duties and liabilities under the law and the Articles of Incorporation prescribed to managers.
The Executive Board will be staffed by at least 2 (two) and at most 7 (seven) members holding the position of Chief Officers, who must reside in Brazil and may or may not be stockholders, elected by the Board of Directors for a term of 3 (three) years, whose time in office will be extended until new Chief Officers are invested, and who may be reelected.
In the event the position of any Chief Officer becomes vacant, the Board of Directors will elect his/her replacement, who will complete the replaced person’s term in office.
The chief officers will have the powers and duties bestowed upon them by these Articles of Incorporation, the Board of Directors, and the applicable legislation.
The Executive Committee sitting members and Executive Board members will be entitled to share in the Company’s profits, in the business year regarding which the mandatory dividend provided for in letter "b" of Article 36 is attributed; however, the total profits shared among such managers cannot exceed their annual compensation or 10% of the profits, whichever is lowest.
The Board of Directors may approve profit sharing, in addition to the one provided for in the caption of this article, for company officers other than those in the control group and in years when the company performance exceeded the net profit goals.
The Chief Officers are responsible for actively and passively representing the company in or out of court and in the company’s relationship with third parties.
For the acts practiced by the Executive Board to be valid they must be signed by 2 (two) Chief Officers.
Upon authorization from the Executive Committee, the Chief Officers may appoint attorneys-in-fact and agents to either separately or not practice all the acts assigned to them by these Articles of Incorporation, including to dispose of, encumber, exchange, or assign the company’s real estate, as well as to provide accommodation or sureties when the company’s interests so require, whose related instruments must list the acts and operations they may practice and the timeframe of their appointment, which may be for an unspecified length of time in case of in-court representation.
Pursuant to the provisions in Paragraph 1, Article 26 of these Articles, the Chief Officers may sign agreements and/or issue industrial credit notes to any banking institutions, as well as dispose of, exchange, assign or encumber under mortgage or pledged guarantee any of the Company’s chattel or real estate, and also provide accommodation or sureties when the company’s interests so require.
Acts entailing the purchase, disposal, encumbrance, and mortgaging of real estate must abide by the provisions in letter “v”, Article 19, and letter “f”, Article 21 of these Articles of Incorporation.
Executive Board acts which according to the law and/or these Articles depend on prior authorization from the Board of Directors or the Executive Committee may only be practiced after said authorization is granted.
CHAPTER IV - THE HONORARY PRESIDENT AND RESPECTIVE DUTIES
The office of Honorary President is hereby created exclusively as a tribute-paying, personal, non-transferrable position. The office of Honorary President will be extinguished in the event it becomes vacant. The Honorary President will not be replaced during his absence or temporary inability to serve.
The Honorary President’s duties include:
- Working to preserve Marcopolo’s culture in an effort to strengthen the company’s values and ethical principles;
- Helping enhance the actions dedicated to people management to ensure employees are constantly motivated;
- Working as a mentor for company executives;
- Monitoring the company’s political and corporate activities;
- Working to enhance Marcopolo’s brand and image and for the fulfillment of the company’s social role.
The Honorary President may attend the meetings of any bodies of the company.
CHAPTER V - THE AUDIT COMMITTEE AND RESPECTIVE DUTIES
The Audit Committee will be staffed by at least 3 (three) and at most 5 (five) sitting members and an equal number of alternates, either stockholders or not, residing in Brazil, who may be reelected pursuant to the provisions in the legislation in force.
The Audit Committee will not operate on a permanent basis but will be set up only in business years when such arrangement is requested by stockholders, under the law.
The investiture of the members elected to staff the Audit Committee, when set up, is conditioned to their prior subscription of the Audit Committee members’ Consent Agreement under the provisions of “Level 2 Regulations” as well as their compliance with the applicable legal requirements.
The Audit Committee decisions will be made by a majority of its members and its meetings will be called to order as long as the majority of Audit Committee members are in attendance.
The Audit Committee will convene on a quarterly basis or when called by any Director upon written notice sent to Audit Committee members at least 5 (five) days in advance of the meeting by the Audit Committee Chairman or, in the absence of the latter, by any Director.
The Audit Committee may independently request and obtain from the Company or the Company’s Independent Auditors any information the Audit Committee deems necessary to perform its duties, in the event the Audit Committee has requested such information from the Chairman of the Board and the latter has failed to procure it.
Minutes will be prepared from the Audit Committee meetings and entered in the dedicated book, which is to remain available to stockholders at the Company’s main offices.
The General Meeting to which a request for setting up the Audit Committee is submitted will elect the respective sitting and alternate members, pursuant to the provisions contained in the law.
The compensation of Audit Committee sitting members will be set by the General Meeting that elects them, according to the limits prescribed by law.
CHAPTER VI – THE GENERAL MEETING
The General Meeting will ordinarily convene within the 4 (four) months following the end of the business year, and extraordinarily whenever company interests so require.
In addition to the matters provided for in these Articles of Incorporation and under the law, the General Meeting is responsible for choosing the expert institution or company, out of those nominated by the Board of Directors, in charge of preparing the economic appraisal report on the Company’s share price for purposes of the IPOs mentioned in Chapters VIII and IX of these Articles of Incorporation.
The decision mentioned in Paragraph 1 of this Article 32 must be made by the absolute majority of the votes of those holding outstanding Company-issued shares, null votes excluded, and each share regardless of its species or class will entitle the holder thereof to one vote in such decision. For purposes of the decision provided for in this paragraph, the controlling stockholder, the people connected to him/her, and the Company managers will not vote on it, pursuant also to the provisions in the Sole Paragraph of Article 43.
General Meetings will be called by the Board of Directors or as provided for by law, upon notices published in the press according to legal provisions.
The decisions by the majority of the capital carrying voting or restricted voting rights, as applicable, will always prevail at the General Meetings where such capital is represented, except as otherwise provided for by law or these Articles of Incorporation.
At General Meetings, only stockholders whose common or preferred shares entitling the holder thereof to a restricted voting right, as applicable, are registered with the Relevant Registries will be allowed to vote.
Stockholders may be represented at General Meetings by an attorney-in-fact appointed less than one year before, as long as said attorney-in-fact is a Company stockholder, Company manager, attorney, or a financial institution.
General Meetings will be chaired by the Chairman of the Board of Directors, who will appoint the Secretary.
CHAPTER VII – BUSINESS YEAR, PROFITS, AND DISTRIBUTION THEREOF
The business year comprises 12 (twelve) months and ends on December 31 of each year.
Besides the general balance sheet to be prepared on December 31, balance sheets covering shorter periods may be prepared, and the Board of Directors may declare dividends to the determined profits account as well as declare interim dividends to the retained earnings account or reserves.
Upon decision by the Board of Directors, the company may pay or credit interest to the stockholders as remuneration on company capital and calculated over the Stockholders’ Equity, and the net amount of said interest, when credited or paid, may be ascribed to the amount of the mandatory dividend provided for in letter “b”, Article 36 of these Articles of Incorporation.
After the deductions provided for by law, including the creation of the employee profit sharing provision, when applicable, and the provision of up to 10% (ten percent) for manager profit sharing mentioned in Article 25 of these Articles of Incorporation, the determined net profits will be allocated as follows:
- 5% (five percent) to set up the legal reserve, pursuant to the provisions in Article 193 of Law no. 6404/76;
- at least 25% (twenty-five percent) of the remainder to pay a dividend on all Company shares, as the mandatory dividend;
- By proposal of the Management and after the creation of the reserves allowed by law which may occasionally be set up, the remaining net profit balance will be entirely allocated to the creation of the following Articles of Incorporation-mandated reserves: Reserve for future capital increase, to be used for a future capital increase, set up by 70% of the remaining net profit balance in each business year, and which cannot exceed 60% of the company capital; Reserve to pay interim dividends, to be used to pay the interim dividends provided for in Paragraph 1, Article 35 of these Articles of Incorporation, to be set up by 15% of the remaining net profit balance in each business year, and which cannot exceed 10% of the company capital; and Reserve for acquisition of company shares, to be used to purchase company-issued shares, cancel them, keep them as treasury stock, and/or dispose of them, to be set up by 15% of the remaining net profit balance in each business year, and which cannot exceed 10% of the company capital.
When the balance of any of the legal and/or articles of incorporation-mandated reserves individually exceeds the limit set forth by the Articles of Incorporation but which balance collectively does not exceed the limit of 100% of the company capital, the surplus amount will be distributed to the other Articles of Incorporation-mandated reserves which have not reached the maximum limit set forth by the Articles of Incorporation, at the same ratio prescribed in letter “c” of the caption of this Article 36.
When the total balance of the appropriated retained earnings (legal reserves and Articles of Incorporation-mandated reserves), except those for contingencies, tax incentives, and unrealized profits, collectively, exceeds the limit of 100% of the company capital, the General Meeting is to decide whether to use the surplus to pay in or increase the capital or yet to distribute dividends.
The management may also propose that the General Meeting retain a portion of the year’s net profits as provided for in a capital budget previously approved by the Meeting.
The dividends will be paid or credited within 60 (sixty) days counted from the date the Minutes of the General Meeting that approved the respective year’s accounts are published.
CHAPTER VIII – COMPANY DISSOLUTION AND LIQUIDATION
The company will dissolve or go into liquidation in the cases provided for by law.
The General Meeting that decides on the dissolution or liquidation will also appoint a liquidating commission and the respective Audit Committee, and such choice may fall upon the members of the Board of Directors or non-stockholders.
The same General Meeting will also establish the form of liquidation and the powers to be granted to the liquidators as well as their compensation.
CHAPTER IX – DISPOSAL OF CONTROLLING POWER
The disposal of the Company’s controlling interest, either by means of a single operation or through successive operations, must be agreed upon on the suspensive or resolutive condition that the buyer promises to carry out an IPO regarding the shares of all the other Company stockholders, pursuant to the conditions and timeframes provided for by law and the “Level 2 Regulations”, so as to ensure that: the stockholders holding common chares receive the same treatment given to the selling controlling stockholder; and that the stockholders holding preferred shares carrying either no voting rights or restricted voting rights receive an amount per share corresponding to at least 80% (eighty percent) of the price offered to the holders of common shares.
“Controlling Power” means the power actually wielded to steer company activities and guide the operation of Company bodies, either directly or indirectly, de facto or de jure, regardless of the ownership held. There is the relative assumption that the control belongs to the person or group of stockholders owning shares that have ensured them the absolute majority of votes by the stockholders attending the latest three General Meetings of the Company, even though they may not own the shares ensuring them the absolute majority of the voting capital.
The IPO mentioned in Article 40 of these Articles of Incorporation will also be required when:
- there is a burdensome assignment of rights to subscribe shares and other securities or rights related to securities convertible into shares issued by the Company and which may result in the disposal of the Company Control;
- the control of a company holding the Company control power is disposed of, in which case the selling controlling stockholder will be under the obligation to declare to BM&FBOVESPA the price attributed to the Company in such disposal and attach the documents proving such price.
The one acquiring the Control Power, deriving from a private share purchase agreement signed with the controlling stockholder and involving any number of shares, will be under the obligation to carry out an IPO under the provisions in Article 40 of these Articles of Incorporation and the “Level 2 Regulations”, and to pay, under the terms provided for below, an amount equivalent to the difference between the IPO price and the amount paid per share occasionally purchased in the stock market in the 6 (six) months prior to the acquisition of the Control Power, duly updated up to the payment date. Said amount is to be distributed among all persons selling Company shares in the trading days on which the buyer made the acquisitions, prorated to each one’s daily selling net balance, and BM&FBOVESPA will be responsible for carrying out the distribution under its regulations.
CHAPTER X – PUBLICLY-TRADED COMPANY LISTING CANCELLATION
Notwithstanding the legal and regulatory provisions, the cancellation of the Company’s listing as a publicly-traded company with the Brazilian Securities Commission (CVM) must be preceded by an IPO to be carried out by the controlling stockholder or the Company, and whose minimum price must correspond to the economic worth of the Company and its stock to be ascertained in an appraisal report to be prepared by an expert institution or company with proven experience and independence from the decision power of the Company, its Managers and/or Controlling Stockholder(s), besides fulfilling the requirements in Paragraph 1, Article 8 of Law 6404/76, and contain the responsibility provided for in Paragraph 6 of the same Article.
The choice of the expert institution or company responsible for determining the Company’s economic worth is under the exclusive jurisdiction of the general meeting, based on the Board of Directors’ supply of a triple list, and the respective decision, excluding null votes and entitling the holder of each share, regardless of species or class, to one vote, must be made by the majority of votes of stockholders representing the outstanding shares and present at the general meeting which, for it to be held on first call, must be attended by stockholders representing at least 20% of the total outstanding shares or, for it to be held on second call, may be attended by any number of stockholders representing outstanding shares.
In the event the appraisal report mentioned in Article 43 of these Articles of Incorporation is not ready when the market is notified about the decision to cancel the publicly-traded company listing, the offeror must inform the maximum price per share or batch of 1000 shares at which the IPO is going to be made.
The IPO will be under the condition that the price determined in the appraisal report mentioned in Article 43 of these Articles of Incorporation is not higher than the price informed by the offeror, as provided for in the caption of this Article.
In the event the share price determined in the appraisal report is higher than the price informed by the offeror, the decision to cancel the publicly-traded company listing will be revoked, except when the offeror expressly agrees to carry out the IPO at the economic value determined in the appraisal report, in which case the offeror is to inform the market about the decision made.
The appraisal report must be prepared by an expert institution or company with proven experience and independence from the decision power of the Company, its managers and/or controlling stockholder, besides fulfilling the other legal requirements. The costs incurred to prepare the report will be fully borne by the offeror.
CHAPTER XI - EXIT FROM LEVEL 2
In the event the Company stockholders convened at an Extraordinary General Meeting approve the Company’s exit from Level 2, so that the securities issued by the Company can be registered to be negotiated outside Level 2, or approve the business combination operation in which the company resulting from such combination does not have its securities authorized to be negotiated at Level 2, within 120 (one hundred twenty) days counted from the date of the general meeting that approved said operation the Company’s controlling stockholder must carry out an IPO for the shares belonging to the other stockholders at a price corresponding to at least the economic worth to be determined under the provisions in article 43 of these Articles of Incorporation and the other applicable legal and regulatory provisions.
In the event the exit from Level 2 takes place due to the cancellation of the publicly-traded company listing, all the procedures prescribed by law must be complied with, in addition to carrying out the IPO, where the minimum price offered will be the economic worth of the share determined under Article 43, in which case it will not be necessary to hold the General Meeting mentioned in the caption of this Article.
The Company’s controlling stockholder will be exempted from carrying out the IPO provided for in this article in case the Company exits Level 2 because its shares have been listed to be traded in the “BM&FBOVESPA” New Market, or in case the company resulting from the business combination obtains authorization to trade securities in the New Market within 120 (one hundred twenty) days counted from the date of the general meeting that approved said operation.
In the event there is no controlling stockholder, in case the decision is made for the Company to exit Level 2 Corporate Governance, so that the securities issued by the Company can be registered for trading outside Level 2, or as a result of the business combination operation in which the company resulting from such combination does not have its securities authorized for trading in Level 2 or in the New Market within 120 (one hundred twenty) days counted from the date of the general meeting that approved such operation, the exit is conditioned to an IPO being carried out under the same conditions prescribed in the previous article.
The aforementioned general meeting is to appoint the person(s) in charge of carrying out the IPO, and said person(s) attending the general meeting must expressly take on the obligation to carry out the offering.
In the event no one is appointed to carry out the IPO, in the case of a business combination operation in which the company resulting from such combination does not have its securities authorized for trading at Level 2 Corporate Governance, the stockholders who voted for the business combination will be responsible for carrying out said offering.
The Company’s exit from Level 2 Corporate Governance due to its failure to fulfill the obligations contained in the Level 2 Regulations is conditioned to the controlling stockholder carrying out the IPO at least for the economic worth of the shares, as determined by the appraisal report mentioned in Article 43 of these Articles of Incorporation and under the applicable legal and regulatory provisions.
In the event there is no controlling stockholder and the exit from Level 2 Corporate Governance as mentioned in the caption derives from a decision by the general meeting, the stockholders who voted for the deliberation that led to the respective non-performance must carry out the IPO prescribed in the caption.
In the event there is no controlling stockholder and the exit from Level 2 Corporate Governance as mentioned in the caption derives from a management act or fact, the company managers are to call the stockholders’ general meeting whose agenda will be to deliberate on how to remedy the non-performance of the obligations contained in the Level 2 Regulations or, as the case may be, deliberate on the company’s exit from Level 2 Corporate Governance.
In the event the general meeting mentioned in Paragraph 2 above decides the company is to exit Level 2 Corporate Governance, said general meeting is to appoint the person(s) in charge of carrying out the IPO prescribed in the caption, and said person(s) attending the general meeting must expressly take on the obligation to carry out the offering.
CHAPTER XII – ARBITRATION
The Company, its stockholders, managers, and Audit Committee members hereby commit to solving via arbitration any and all disputes or controversies that may arise among them related to or deriving from particularly the application, validity, efficacy, interpretation, violation and the effects thereof, of the provisions contained in the Law of Corporations, the Company’s Articles of Incorporation, the rules issued by the National Monetary Council and the Brazilian Central Bank and Securities Commission, as well as the other regulations applicable to the operation of exchange markets in general, besides those contained in the “Level 2 Regulations”, the Level 2 Corporate Governance Participation Agreement, the Arbitration Regulations of the Market Arbitration Chamber, and the Sanction Rules, before the Market Arbitration Chamber, as set up by BM&FBOVESPA.
CHAPTER XIII - MISCELLANEOUS PROVISIONS
Pursuant to the law, the General Meeting may decide to change the company’s business type.
The stockholders’ agreements duly registered at the Company’s main offices which, among other provisions, set forth clauses and conditions for the disposal of Company-issued shares, and regulate preemptive rights or the exercise of the stockholders’ voting rights must be complied with by the Company and its Management.
The obligations and responsibilities resulting from such agreements will be valid against and binding upon third parties as soon as such agreements have been duly entered in the Company’s record books and share certificates, when issued. Company Managers will enforce such agreements and the chairman of the General Assembly or meetings of the Board of Directors, as the case may be, must declare the invalidity of the vote cast by a stockholder or director contrary to the provisions in such agreements, or yet, in the absence or abstention of stockholders or directors, the other stockholders harmed or directors elected by the stockholders harmed may vote with the shares or votes belonging to the absent or abstained stockholders or directors, as the case may be, under Article 118, paragraphs 8 and 9 of Law no. 6404/76.
The Company will not register any transfer of shares to the “Control Power” buyer or to the one who comes to hold the “Controlling Power” before the Controllers’ Consent Agreement mentioned in the “Level 2 Regulations” has been signed, nor will the Company register a stockholders’ agreement providing for the exercise of the “Controlling Power” before the agreement subscribers have signed the aforementioned Controllers’ Consent Agreement.
The cases not provided for in these Articles of Incorporation will be settled by the legislation in force and in compliance with the Level 2 Regulations.
The stockholders hereby accept the responsibilities placed upon them by the law and approve these Articles of Incorporation in all of its provisions.