Article 1 – ROSSI RESIDENCIAL S/A is a publicly traded corporation governed by these bylaws and the applicable laws and regulations.
Paragraph 1. With the subscription of the Company into the listing segment of the B3 S.A – Brasil, Bolsa, Balcão (“B3”) known as the Novo Mercado, the Company, its shareholders including controlling shareholders, its managers and its members of the Fiscal Council, when such body is installed, are subject to the Regulations of the Novo Mercado.
Paragraph 2. The provisions of the Novo Mercado Regulations shall prevail over the provisions herein in situations of infringement upon the rights of the recipients of the public offerings provided for in these Bylaws.
Article 2. The Company’s registered office and forum are located in the City and State of São Paulo.
Sole Paragraph. The Company may open a subsidiary, branch office, warehouse, office and any other kind of establishment in Brazil or abroad, including changing the Company‘s headquarters by a resolution of the Executive Board.
Article 3. TThe purpose for which the Company is organized is to conduct real estate buying and selling, property subdivision, real estate development and the construction of properties for sale.
Article 4. The period of the Corporation’s duration is indeterminate.
Article 5. The subscribed and paid-up capital of the Company is two billion, six hundred thirty-three million, five hundred sixty-two thousand, six hundred and eighteen reais and eighty-six cents (R$ 2.633.562.618,86), divided into 17,153,337 (seventeen million , one hundred fifty -three thousand, three hundred thirty-seven) book-entry, registered shares of common stock without par value.
Article 6. The Company is authorized to increase, independent of a resolution taken by the Shareholders’ Meeting and an amendment to the Bylaws, the capital stock up to the limit of 20,000,000 (twenty million) common shares, with the Board of Directors holding the authority to define the number of shares to be issued, for public or private distribution in Brazil or abroad, the price and other subscription and payment conditions, as well as to decide on preemptive rights, in accordance with governing law and these Bylaws.
Paragraph 1. The Company may, within the limit of the authorized capital and in accordance with the plan approved by the Shareholders’ Meeting, grant stock options to its managers or employees or to natural persons who provide services to the Company or its subsidiaries, by resolution of the Board of Directors, in accordance with these Bylaws and governing law, for which the preemptive rights of shareholders do not apply.
Paragraph 2. The Company is prohibited from issuing preferred shares and profit-sharing bonds.
Article 7. The Company’s capital stock shall be exclusively represented by common shares and each common share will be entitled to one vote in the resolutions of the Shareholders’ Meeting.
Article 8. All shares in the capital stock of the Company will be in book-entry form and be deposited on behalf of each shareholder with a financial institution licensed by the Securities and Exchange Commission of Brazil (CVM) and selected by the Company, in accordance with Articles 34 and 35 of Federal Law 6,404 of December 15, 1976 (“Federal Law 6,404/76”)and all other applicable laws and regulations.
Article 9. In the event of a capital increase via the subscription of new shares, convertible debentures and/or warrants, shareholders will have preemptive rights in the subscription of said securities, in accordance with Article 171 of Federal Law 6,404/76.
Sole Paragraph. In the event of a capital increase via the subscription of shares, convertible debentures or warrants whose placement is carried out via (i) a sale on the stock exchange or a public subscription; or (ii) a shares exchange under a public tender offer for the transfer of control, the Board of Directors may eliminate or shorten the legal period for the exercise of preemptive rights.
Article 10. The Company may, by a resolution of the Board of Directors, acquire its own shares for subsequent cancellation or sale, in accordance with the conditions and requirements stated in Article 30 of Federal Law 6,404/76 and all other applicable laws and regulations.
Article 11. The General Meeting will be convened once each year and extraordinarily when called in accordance with governing law and these Bylaws.
Paragraph 1. The decisions of the Shareholders’ Meeting will be taken by an absolute majority of votes, blank votes not being counted, exceptfor the specific quorums provided in the legislation and regulations, including the Novo Mercado regulation.
Paragraph 2. The General Meeting may only deliberate on matters on the agenda published in the respective call notices, except fot he legal hyphoteses, which must be included in the respective call notice to be published at least 3 (three) times whith a minimum advance of 15 (fifteen) days, and must contain date, time and place of the General Meeting.
Paragraph 3. Shareholders must present, at least seventy-two (72) hours in advance, an identity document and proof of their shareholdings issued by the transfer agent.
Paragraph 4. Notwithstanding the above, shareholders who appear before the commencement of the Shareholders’ Meeting bearing the documents stipulated in Paragraph 3 above may participate and vote even if they have not submitted said documents in advance.
Article 12. The Shareholders’ Meeting will be convened and presided over by the Chairman of the Board and assisted by a secretary chosen by the Chairman.
Sole Paragraph. In the absence of the Chairman of the Board or his substitute, the Chairman and the Secretary of the General Meeting will be chosen by the attending shareholders.
Article 13. In addition to the authority provided for by law, the General Meeting also has the powers to: (i) elect and remove from office, at any time, the members of the Board of Directors and of the Fiscal Council, when installed; (ii) receive, on an annual basis, the accounts from the managers and decide on the financial statements presented by them; (III) determine the aggregate compensation of the members of the Board of Directors and the Executive Board, as well as compensation of the members of the Fiscal Council, if installed; (iv) grant stock bonuses and decide on any stock splits and reverse splits; (v) approve stock option programs for its managers and employees, as well as for the managers and employees of other companies directly or indirectly controlled by the Company; (vi) decide on, in accordance with the proposal presented by the management, the allocation of net income for the fiscal year and the distribution of dividends; (vii) decide on the conversion, consolidation, merger and spin-off of the Company, as well as its dissolution and liquidation, and elect the liquidator and the Fiscal Council that will function during the liquidation period; (viii) exemption from conductiing a public offer for the acquisition of shares as a requirement for the Company‘s delisting from the Novo Mercado, in compliance with the procedure provided in the Novo Mercado regulation.
Sole Paragraph. The Chairman of the Shareholders’ Meeting must abide by and enforce the provisions of the shareholders’ agreements filed at the Company’s registered office, not allowing votes granted in breach of the content of said agreements to be counted.
Article 14. The Company is managed by the Board of Directors and by the Executive Board.
Paragraph 1. To take office, managers must sign the Investiture Instrument entered in the corporate books, without any guarantee of the exercise of office.
Paragraph 2. The managers must remain in office until the investiture of their substitutes.
Article 15. The Shareholders’ Meeting determines the aggregate annual compensation of the managers, with the Board of Directors responsible for the individual distribution of these funds, in accordance with these Bylaws.
Article 16. Any meeting of the management bodies will be validly convened with the attendance of a majority of its members, with its decisions based on the vote of the majority of those in attendance.
Sole Paragraph. The requirement of sending a call notice sent in advance to validly convene the meeting is only waived if all members are present, with votes cast by another member acting as delegate or cast in writing admitted for this purpose.
Section I – Board of Directors – Article 17. The Board of Directors is composed of a minimum of five (5) and a maximum of seven (7) members, with one member appointed Chairman, one member appointed Vice-Chairman and the remaining members designated as Directors, all of whom are elected to and removed from office by the Shareholders’ Meeting, with a unified term of office of two years, with reelection permitted.
Paragraph One. Of the members of the Board of Directors, at least 2 (two) or 20% (twenty percent), whichever is greater, must be independent directors, as defined in the Novo Mercado regulation, with the characterization of those appointed to the Board of Directors as independent directors, and be deliberated in the General Metting which elects them. When as a result of calculating this percentage, a fractional number of directors results, rounding up to entire number will proceed.
Paragraph Two. The members of the Board od Directors and the Fiscal Council will be invested in their positions by signing the Term od Office, drwan up in the appropriate book, which contain their submission to the arbitration clause. The member od the Board of Directors and the Fiscal Council shall remain in theis positions and in the exercise of their functions untill their decided by the General Shareholder‘s Meeting, pursuant to the provisions of the Novo Mercado regulation, as well as acompliance with applicable legal provisions. The members of the Board of Directors and of the Fiscal Council shall, immediately after investing in the position, communicate to the Company the quantitiy and characteristics of the securities issued by the Company that they hold, directly or inderectly, including their derivatives, in compliance with the CVM instruction 358/2002.
Paragraph Three. In accordance with Article 115, Paragraph 1 of Federal Law 6,404/76, the exercise of voting rights in the election of Directors is prohibited in cases that constitute conflicts of interest with the Company.
Paragraph Four. Directors are prohibited from having access to information or participating in meetings of the Board of Directors related to matters for which they have or represent interests that conflict with those of the Company.
Article 18. In elections of Directors, the Shareholders’ Meeting will determine, by majority vote, the number of Directors to be elected.
Article 19. The Directors, in their first meeting, must appoint, by a majority of votes, the Chairman and Vice-Chairman, with the person serving as Chairman of the Board prohibited from simultaneously serving as the Chief Executive Officer or principal executive of the Company.
Sole Paragraph. The Vice Chairman of the Board of Directors will be responsible for replacing the Chairman in his absences or impediments.
Article 20. The Board of Directors will meet on an ordinary basis four times each year and on an extraordinary basis whenever convened by the Chairman or by a majority of Directors. Meetings of the Board of Directors may be held exceptionally by conference call, videoconference, e-mail or any other electronic means of communication.
Paragraph 1. Call notices for meetings must be made at least seventy-two (72) hours in advance.
Paragraph 2. All decisions of the Board of Directors must be recorded in the respective minutes book and signed by all Directors in attendance.
Paragraph 3. At meetings of the Board of Directors, votes by made by delegation on behalf of another Director and votes made in advance in writing and votes submitted by facsimile, e-mail or any other means of communication are permitted, with the Directors who voted using such methods considered as present.
Article 21. In addition to their other powers established by law or by these Bylaws, the Board of Directors has the authority to:
(i) exercise the rulemaking functions of the activities of the Company, and may assume the examination and deliberation of any matter that does not fall under the exclusive authority of the Shareholders’ Meeting or the Executive Board;
(ii). determine the general orientation of the activities of the Company;
(iii). elect and remove the Officers of the Company;
(iv) call Shareholders’ Meetings when deemed convenient or in the cases described in Article 132 of Federal Law 6,404/76;
(v). Law 6,404/76
(vi) supervise the management activities of the Officers, examining at any time the books and documents of the Company and requesting information on contracts entered into or to be entered into, as well as on any other acts;
(vii). examine the quarterly results of the operations of the Company;
(viii). select and remove the independent auditors;
(ix). call on the independent auditors to provide any clarifications deemed necessary;
(x). approve the Management Report and the accounts of the Executive Board and decide on their submission to the Shareholders’ Meeting;
(xi). decide on the conduction of inspections, audits and examination of the accounts of subsidiaries and affiliated companies, as well as of the foundations sponsored by the Company;
(xii). change the widely circulated newspaper in which the Copany carries out its legal publicatons;
(xiii) Recommend in favor or against any public offering for the acquisition of shares in the Company, through a reasoned report disclosed within fifteen (15) days of the publication of the stock tender offer notice, which should at minimum address: (a) the convenience and opportunity of the stock tender offer regarding the interests of shareholders as a whole and the liquidity of the securities they hold; (b) regarding the strategic plans disclosed by the Company in relation to the Company; (c) respect for alternatives to accepting the public offering of shares available on the market;
(xiv) authorize the issuance of the Company;s shares whithin the limits authorized by the Bylwas, establishing the issuance conditions, including price and payment period, and may also exclude or reduce the preemptive right in the issuance of shares, subscription bonuses and converible debentures, whose placement is made by sale on the stock exchange or by public subscription or in a public offer for acquisition of control, under the terms established by law;
(xv) to resolve on the acquisition by the Company of shares of its own issue, to be held in treasury and / or later cancellation or sale.
(xvi) submit, for decision by the Shareholders’ Meeting, stock option programs for its managers and employees, as well as the managers and employees of other companies directly or indirectly controlled by the Company, without preemptive rights for shareholders;
(xvii). authorize the issuance of any credit instruments, including bonds, notes, commercial papers and any other securities typically used in the market to raise funds, and also decide on the conditions for their issuance and redemption;
(xviii). determine the value of the share in profits of the officers, managers and employees of the Company;
(xix). decide on the issuance of bonds, non-convertible debentures and unsecured debentures;
(xx) decide, in accordance with these Bylaws and governing law, on the order of its works and also adopt or issue internal rules governing its functioning;
(xxi) XIX. approve the contracting of the depositary institution to provide bookkeeping services for its shares;
(xxii) improve the performance of its duties, create committees or working groups with specific objectives that act as auxiliary bodies without deliberative powers to advise the Board of Directors, formed by persons it appoints from among the members of its management and/or other persons directly or indirectly related to the Company.
(xxiii) set limits for the practice of acts by the Company‘s Officers, as well as previously approve or ratify the practice of acts outside the limits or above the determined limits.
Article 22. The Board of Directors of the Company may indicate one or more observers for its meetings who do not have the right to vote and will not count for quorum purposes, in order to support the Board of Directors in all of its meetings.
Section II – Executive Board – Article 23. The Executive Board is composed of a minimum of two (2) and a maximum of five (5) members, who are elected and may be removed at any time by the Board of Directors, shareholders or not, with terms of office of three (3) years, with reelection permitted, who are designated as Chief Executive Officer, Investor Relations Officer, Chief Financial Officer, Chief Sales Officer, Chief Engineering Officer and Chief Legal Officer, and with the remaining Officers not holding a specific portfolio.
Sole Paragraph. The Officers will be invested in their positions by signing the instrument of investiture to bedrwan up in the proper book, observing the legal requirements and the terms of the Novo Mercado Regulation, waiving any management guarantee under the provisions of the Novo Mercado Regulation, as well as compliance with applicable legal provisions. The members of the Executive Board shall, immediately after taking office, inform the Company of the number and characteristics of the securities issued by the Company that they hold, directly, or indirectly, including their derivatives.
Article 24. Observing the provisions of the law and these Bylaws pertinent to the decisions of the Shareholders’ Meeting and the powers of the Board of Directors, the Officers have the authority to:
(i) manage the Company;
(ii) direct and delegate the internal management services and tasks of the Company;
(iii) instruct and supervise the accounting services of the Company;
(iv) prepare the Management Report and the Financial Statement of the Company and submit them for review by the Board of Directors and for approval by the Shareholders’ Meeting;
(v) decide on the opening or closing of subsidiaries, branch offices, warehouses, offices and any other kind of establishment in Brazil or abroad including changing the Company‘s headquarters; and
(vi) resolve on the sale and disposal of assets of the non-current asets of the Company and its subsidiaries, subject to the limits and limits set by the Board of Directors;
(vii) enter into Consortium agreements, in accordance with articles 278 and 279 of Federal Law 6,404/76, and pledge accommodations, suretyships and guarantees to subsidiaries and other companies in which it holds interests, with the objective of developing real estate projects as a real estate development activity in accordance with Federal Law 4,591/64 and as an urban land subdivision activity in accordance with Federal Law 6,766/79.
(viii) provide sureties, sureties and guaranteed for controlles companies and others of which it is a part, aiming at the development of real estate projects in the forma of real estate development in accordance with Law 4,591/64, and the forma of subdivision of urban land in accordance with Law 6,766/79; and
(ix) present to the Board of directors‘resolution the proposals for the Company to practice any acts that exceed the limits and limits set by the Board of Directors.
Paragraph 1. In addition to coordinating the activities of the Officers and managing the execution of the activities related to the general planning of the Company, the Chief Executive Officer has the authority to:
(i) call and preside over the meetings of the Executive Board;
(ii) keep the members of the Board of Directors informed on the activities of the Company and the evolution of its operations; and
(iii) propose and monitor the targets and budgets for the performance and results of the various areas of the Company.
Paragraph 2. Among other powers of the office, the Chief Financial Officer has the authority to:
(i) plan, coordinate, organize, supervise and direct the activities related to operations of a financial nature of the Company; (
ii) prepare the financial statements and the annual management report of the Company; and
(iii) coordinate the assessment and implementation of investment opportunities and operations, including financing, as well as prospecting, analyzing and negotiating such investments for the realization of activities of interest to the Company.
Paragraph 3. The Officers with no specific portfolio have the duty to assist the Chief Executive Officer in supervising, coordinating, directing and managing the activities and businesses of the Company and in all tasks to which they are assigned.
Article 25. The meetings of the Executive Board must be preceded by a call notice sent to all members by the Chief Executive Officer and convened with the presence of the majority of its members, with decisions duly taken by the majority of officers present and the CEO holding, in addition to his/her own vote, the deciding vote in the event of a tie.
Sole Paragraph. Any Officer or attorney-in-fact acting alone may (i) represent the Company in court and, (ii) give receipts and discharges and gather information on security and guarantees at public or private entities.
Article 26 – Any acts, agreements, bills of exchange, checks, documents and papers entailing a liability to the Company or discharging obligations of others to the Company are only valid if signed by two Officers, by an Officer and an attorney¬-in-fact or by two attorneys-in-fact, irrespective of the express authorization of the Shareholders’ Meeting or the Board of Directors.
Sole Paragraph. Any Officer or attorney-in-fact acting alone may (i) represent the Company in court and, (ii) give receipts and discharges and gather information on security and guarantees at public or private entities.
Article 27. Powers of attorney are granted, always on behalf of the Company, by two Officers and must specify the authority conferred and duration, except for cases of representation in court.
Section III – Fiscal Council – Article 28. The Fiscal Council of the Company, with the authority conferred to it by law, is composed of a minimum of three (3) members, a maximum of five (5) members and an equal number of alternates and is only installed upon request by the shareholders, in accordance with the law.
Sole Paragraph. To take office, the members of the Fiscal Council must sign the Investiture Instrument entered in the corporate books. To take office, the members of the Fiscal Council must sign the Consent to Appointment, in accordance with the Novo Mercado Regulations and with governing law. Immediately after they take office, the members of the Fiscal Council must notify the B3 of the number and characteristics of the securities issued by the Company that they directly or indirectly hold, including any derivatives of these securities.
Article 29. The fiscal year commences on January 1 and ends on December 31 of each year, when the financial statements required under Federal Law 6,404/76 and complementary legislation are prepared.
Paragraph 1. The Company and managers must hold, at least once each year, a public meeting with analysts and any other stakeholders to disclose information on the economic-financial situation, projects and prospects of the Company.
Paragraph 2. The Executive Board may, at its discretion, prepare quarterly balance sheets on the basis of which dividends may be declared and paid, in accordance with these Bylaws and the legal formalities, and may also declare interim dividends in accordance with Paragraph 2, Article 204 of Federal Law 6,404/76.
Article 30. The Company must distribute, in each fiscal year, mandatory dividends of at minimum twenty five percent (25%) of adjusted net income, calculated in accordance with Article 202 of Federal Law 6,404/76.
Article 31. The Board of Directors may pay or credit, to shareholders, interest on equity, in accordance with governing law, which are calculated towards the dividends established in these Bylaws by combining this amount with the amount of dividends distributed by the Company.
Article 32. In accordance with Article 190 of Federal Law 6,404/76, the Shareholders’ Meeting that approves the accounts for the fiscal year may determine the distribution of ten percent (10%) of net income for the fiscal year, following the adjustments established in Article 189 of Federal Law 6,404/76, to the managers of the Company, as profit sharing.
Paragraph 1. The distribution of profit sharing to managers may be awarded only in the fiscal years when the payment of the minimum mandatory dividend provided for in these by-laws is assured to shareholders.
Paragraph 2. The Board of Directors has the authority to determine the criteria for attributing profit sharing to the managers.
Article 33. The Company will maintain a profit reserve designated “Expansion Reserve” that will ensure resources for financing additional investments in fixed and working capital and will be formed from up to one hundred percent (100%) of the net income remaining after the deductions established by law and in these Bylaws, with said reserve not surpassing the lesser of the following values: (i) 80% of the capital stock; or (ii) the difference between the value of the capital stock less the balance of the other profit reserves, except for the contingency and unrealized profit reserves.
Article 34. The direct or indirect sale of Control of the Company either through a single operation, or through successive operations, must be contracted on condition that the Control Purchaser undertakes to carry out a public offer for the acquisition of shares, having as object the shares issued by the Company owned by the offer shareholders, observing the conditions and terms provided fot in the legislation and regulations in force and in the Novo Mercado Regulation, in order to ensure equal treatment to that given to the Selling Controlling Shareholder.
Paragraph 1. The Selling Controlling Shareholder may not transfer the ownership of its shares and the Company may not register any transfer of shares to the Acquirer unless it signs the Consent to Appointment of the Controlling Shareholders referred to in the Novo Mercado Regulations.
Paragraph 2. The Company may not register any transfer of shares to the person(s) that come(s) to hold the Power of Control unless it(they) sign(s) the Consent to Appointment referred to in the Novo Mercado Regulations, which must be immediately submitted to the B3.
Paragraph 3. No Shareholders’ Agreement governing the exercise of the Power of Control may be filed at the registered office of the Company unless its signatories have signed the Consent of Appointment referred to in Paragraph 2 of this article, which must be immediately submitted to the B3.
Article 35. The tender offer referred to in the previous article must also be carried out: I. in cases of the onerous assignment of subscription rights for shares and for other securities or rights involving convertible securities that results in the Transfer of Control of the Company; or II. in cases of the transfer of control of the company that held the Power of Control of the Company, in which case the Selling Controlling Shareholder is required to declare to the B3 the value attributed to the Company in the sale and to attach the substantiating documentation.
Artigo 36. In the event that shareholders convened at the Extraordinary Shareholders’ Meeting decide on the delisting of the Company from the Novo Mercado (i) in order for the securities issued by the Company to be registered for trade outside of the Novo Mercado or (ii) as a result of a corporate reorganization in which the securities of the company resulting from this reorganization are not admitted for trade on the Novo Mercado within one hundred and twenty (120) days from the date of the Shareholders’ Meeting that approved said operation, the Controlling Shareholder must carry out a tender offer to acquire the shares held by the remaining shareholders of the Company, whose minimum price must correspond to the Economic Value ascertained in the valuation report referred to in Article 43 of these Bylaws, in accordance with all applicable laws and regulations. The news of the stock tender offer must be communicated to the BM&FBOVESPA and disclosed to the market immediately after the Shareholders’ Meeting of the Company that approves said delisting or reorganization.
Article 37. In the event that a Controlling Shareholder does not come to exist: I. whenever the delisting of the Company from the Novo Mercado is approved by the Shareholders’ Meeting, whether due to the registration of its securities for trade outside of the Novo Mercado or to the corporate reorganization provided for by Article 13 of these Bylaws, the stock tender offer must be carried out with the same conditions provided for in Article 13 above.
Paragraph 1.In the event that a Controlling Shareholder does not come to exist and the delisting of the Company from the Novo Mercado segment is due to the breach of the obligations set forth in the Novo Mercado Regulations (i) if the breach is due to the decision of the Shareholders’ Meeting, the shareholders that voted in favor of the decision that resulted in the breach must carry out the tender offer; and (ii) if the breach is due to an act or fact of the management, the managers of Company, after notifying the B3, must convene a Shareholders’ Meeting whose agenda is to decide on how to resolve the breach of the obligations stipulated in the Novo Mercado Regulations or, depending on the case, to decide on the delisting of the Company from the Novo Mercado segment, in which case the Company must define the person(s) responsible for carrying out the tender offer for the cancellation of its registration as a publicly held company, which, at the Shareholders’ Meeting, must expressly assume the obligation to carry out the tender offer, which will be directed to all shareholders of the Company.
Paragraph 2. For the purposes of this article, shares in circulation are consideres only those shares whose holders expressly agree with the whitdrawal from the Novo Mercado or qualify for the auction of the public offer for the acquisition of shares, pursuant to the regulations issued by the CVM applicable to pblic offers acquisition of a publicly-held company for cancellation or registration;
Paragraph 3. If the quorum mentioned in the paragraph 1, point (B) is reached: (i) the acceptors of the public offer for acquisition of shares may not be subject to apportionment in the sale of theis participation, subject to the procedures for waiving the limits provided for the regulations issued by CVM applicable to public offerings for acquisition of shares, and (ii) the offeror will be obligated to acquire outsanding shares for a period of 1 (one) month, counted from the date of the auction, at the effective payment, pursuant to the terms of the notice and the regulations in force, which shall occur whitin a maximum of 15 (fifteen) days from the date of exercuse of the option by the shareholder.
Article 38. The delisting of the Company from the Novo Mercado segment due to the breach of the obligations set forth in the Novo Mercado Regulations is conditioned upon the realization of a tender offer for, at minimum, the Economic Value of the shares, to be determined by the valuation report described in last Article of these Bylaws, in accordance with the applicable laws and regulations.
Article 39. Any shareholder or Shareholder Block that reaches a direct or indirect interest in the Free Float Shares equal to or greater than twenty five percent (25%) of the capital stock of the Company through stock ownership, voting agreements or other rights on the shares issued by the Company (“New Relevant Shareholder”), must carry out a tender offer to acquire all shares issued by the Company, in accordance with the applicable regulations of the CVM and the B3 and the terms of this article. The New Relevant Shareholder must carry out the tender offer or request its registration at the CVM, if required by the applicable regulations, within a maximum period of thirty (30) days from the date of the event that resulted in the ownership of Free Float Shares in an amount equal to or greater than twenty five percent (25%) of the capital stock of the Company.
Paragraph 1. The selection of the specialized company responsible for ascertaining the Economic Value of the Company in the event of the cancellation of the registration of the Company as a publicly held company or its delisting from the Novo Mercado is the sole responsibility of the Shareholders’ Meeting, as from the presentation by the Board of Directors of the list of three companies, with the respective decision taken by the majority of the votes of shareholders representing the Free Float Shares present at the Shareholders’ Meeting deciding on the matter, with blank votes not counted. The Shareholders’ Meeting provided for in this Paragraph 1, if installed on the first call, must be attended by shareholders representing at minimum twenty percent (20%) of total Free Float Shares or, if installed on second call, may be attended by any number of shareholders representing the Free Float Shares.
Paragraph 2. The costs incurred with preparing the valuation report must be borne in their entirety by the person(s) responsible for carrying out the tender offer.
Section IV – Disperse Stock Ownership Protection – Article 44.
Paragraph 1. The stock tender offer must be (i) directed indiscriminately to all shareholders of the Company; (ii) carried out via an auction held on the B3; (iii) immutable and irrevocable after its publication in the tender offer notice, notwithstanding the provisions of Paragraph 12 of this article; (iv) launched at the price determined based on the provisions of Paragraphs 2 or 3 on this article, as applicable; (v) settled in cash, in local currency, against the acquisition in the offer of shares issued by the Company; and (vi) presented with the valuation report prepared by the institution that complies with the provisions of Article 43 of these Bylaws, in the case of Paragraph 2 of this article.
Paragraph 2. Notwithstanding the provisions of Paragraph 3 of this article, the acquisition price in the tender offer for each share issued by the Company must not be lower than the highest of the following values (i) the Economic Value ascertained by the valuation report; (ii) one hundred and twenty-five percent (125%) of the average unit price of the shares issued by the Company during the period of three (3) months prior to the date on which carrying out a tender offer became mandatory in accordance with the terms of this article, weighted by the trading volume registered on the stock exchange with the highest volume of trades in the shares of the Company; (iii) one hundred and twenty-five percent (125%) of the highest share issue price verified in any public rights offering carried out in the period of twenty-four (24) months prior to the date on which carrying out a tender offer became mandatory in accordance with the terms of this article, with this value restated by the variation in the SELIC interest rate, or the corresponding index that comes to replace it, from the share issue date under the rights offering of the Company up to the date on which the tender offer is carried out in accordance with the terms of this article; and (iv) one hundred and twenty-five percent (125%) of the highest price paid by the New Relevant Shareholder to acquire shares issued by the Company, during the period of sixty (60) months prior to the date on which carrying out a tender offer became mandatory in accordance with the terms of this article, with this value restated by the variation in the SELIC interest rate, or the corresponding index that comes to replace it, from the acquisition date up to the date on which the tender offer is carried out in accordance with the terms of this article. If the regulations of the CVM applicable to the offer in this case determine the adoption of calculation criteria for determining the acquisition price per share of the Company in the offer that results in a higher acquisition price, the acquisition price to prevail in the offer will be that calculated in accordance with the regulations of the CVM.
Paragraph 3. If the interest in the Free Float Shares equal to or greater than twenty five percent (25%) of the capital stock of the Company referred to in the head paragraph of this article occurs due to a private share purchase agreement entered into with the Controlling Shareholder, involving any quantity of shares, the New Relevant Shareholder is obligated to carry out a tender offer for the remaining shareholders at the same acquisition price per share paid to the Controlling Shareholder, in order to assure treatment equal to that given to the Controlling Shareholder, even if Transfer of Control has not occurred.
Paragraph 4. The realization of the tender offer cited in the head paragraph of this article does not exclude the possibility of another shareholder of the Company, or, depending on the case, the Company itself formulating a competing offer, in accordance with the applicable regulations.
Paragraph 5. The New Relevant Shareholder is required to meet any requests or demands from the CVM that are formulated based on governing law regarding the tender offer within the maximum terms set forth in the applicable regulations.
Paragraph 6. If the New Relevant Shareholder does not comply with the requirements imposed by this article, even those regarding meeting the maximum terms (i) for carrying out or requesting the registration of the tender offer; or (ii) for responding to any requests or demands from the CVM, the Board of Directors of the Company must call an Extraordinary General Meeting in which the New Relevant Shareholder will not be allowed to vote in order to decide on the suspension of the exercise of rights of the New Relevant Shareholder that did not comply with any of the requirements of this article, in accordance with Article 120 of Federal Law 6,404/76, notwithstanding the responsibility of the New Relevant Shareholder for any losses and damages caused to the remaining shareholders arising from its failure to comply with the requirements of this article.
Paragraph 7. The public offering provided for in this article is not required in the event that the New Relevant Shareholder reaches the ownership interest stipulated in the head paragraph of this article: (a) through a public tender offer for all shares issued by the Company, provided that the minimum price has been paid, which corresponds to the price determined in accordance with Paragraphs 2 and 3 of this article, depending on the case; (b) involuntarily as a result of the redemption or cancelation of shares; (c) through the subscription of shares in a private primary offering held due to the amount not being entirely taken up by the holder of preemptive rights and the New Relevant Shareholder having subscribed to shares in the apportionment and/or auction of unsubscribed shares or in a public primary offering that did not have a sufficient number of interested investors; (d) as a result of a consolidation, merger or stock merger involving the Company; (e) as a result of: (i) the advancement of legitime, donation or hereditary succession, provided it is made to a descendant or spouse; or (ii) the transfer to a trust or similar fiduciary entity whose beneficiary is the actual shareholder or Shareholder Block, their descendants or spouses; (f) through participation in voting agreements with the Controlling Shareholder or the acquisition of shares bound by a voting agreement with the Controlling Shareholder, which as such are not considered Free Float Shares; (g) through the subscription or acquisition of shares (or acquisition of share rights) as a result of (i) the granting of preemptive rights or unsubscribed shares, (ii) guarantees based on shares (for the purposes of their constitution and/or the execution of guarantees), (iii) stock loans, and/or (iv) derivatives underlying the shares, with cases (i) to (iv) requiring the operations to be contracted with the Controlling Shareholder, except if through private share purchase agreements, in which case Paragraph Three above applies; or (h) in the event of the loss of the Power of Control by the Controlling Shareholder, in which case its shares are considered part of the Extended Free Float Shares.
Paragraph 8. In the events provided for by items (b), (c) and (d) of Paragraph 7, the New Relevant Shareholder may not increase its ownership interest, except in the event of (i) a new increase resulting from the situations provided for in items (b), (c) and (d) of Paragraph 7, (ii) the waiver of the requirement to hold a Shareholders‘ Meeting in accordance with Paragraph 9, or (iii) through a public tender offer for all shares issued by the Company, provided the minimum price is paid, which corresponds to the price determined in accordance with Paragraphs 2 and 3 of this article, depending on the case.
Paragraph 9. The Shareholders’ Meeting may discharge the New Relevant Shareholder from the requirement to carry out the tender offer set forth in this article, provided it is not in the interest of the Company.
Paragraph 10. Shareholders holding a minimum of ten percent (10%) of the shares issued by the Company, excluding the shares held by the New Relevant Shareholder, may request that the managers of the Company call an Extraordinary Shareholders’ Meeting to deliberate on the new valuation of the Company for the purpose of reviewing the offering price, for which the valuation report must be in accordance with the procedures established in Article 4-A of Sociedade das Açõe‘s Law and the applicable regulations of the CVM and this Bylaw‘s Terms.
Paragraph 11. At the Special Meeting referred to in the caput of the article, all holders of shares of the Company may vote, with the exception of the Relevant Shareholder.
Paragraph 12. If the Extraordinary Shareholders’ Meeting referred to the caput deliberates on the preparation of a new valuation and the valuation report determines a value higher than the initial value of the tender offer, the New Relevant Shareholder may withdraw from it, being obliged in this case, to observe, where applicable, the procedure provided for in article 28 of CVM Instruction 361/02, or a rule that may replace it, and to dispose of the excess participation in the within three (3) months from the date of the same Special Meeting
Paragraph 13. The acquisition of the Extended Free Float Shares by the Controlling Shareholder is subject to the rules and limitations provided by law and by Articles 38 to 43 in these Bylaws, with the rules of this article not applicable, since the shares of the Controlling Shareholder are not considered Extended Free Float Shares.
Article 40. A single stock tender offer may be formulated that serves more than one of the purposes provided for in this Chapter VI of these Bylaws, in the Novo Mercado Regulations or in the regulations of the CVM, provided it reconciles the procedures of all types of tender offers, it does not cause damages to the recipients of the offer and it is approved by the CVM when required by applicable legislation.
Sole Paragraph. Notwithstanding the provisions of this article and of Articles 39 and 41 of these Bylaws, the provisions of Novo Mercado Regulations will prevail in situations involving the loss of rights of the recipients of the offers mentioned in said articles.
Paragraph 1. Said Shareholders’ Meeting must define the person(s) responsible for carrying out the stock tender offer, which, at the Shareholders’ Meeting, must expressly assume the obligation to carry out the tender offer.
Paragraph 2. If the person(s) responsible for carrying out the tender offering is(are) not defined by the Meeting, in the case of a corporate reorganization in which the resulting company does not have securities admitted for trade on the Novo Mercado, the shareholders that voted in favor of the corporate reorganization must carry out said tender offer.
Article 41. The shareholders responsible for carrying out the tender offers provided for in this Chapter VI of these Bylaws, in the Novo Mercado Regulations or in the regulations of the CVM may assure its realization through the intermediation of any shareholder or third party. The Company or its shareholders, depending on the case, are not exempt from the obligation to carry out the tender offer until it is concluded in accordance with the applicable rules.
Article 42. The Company and its shareholders, managers and Fiscal Council members are required to settle, through arbitration, before the Market Arbitration Chamber, in the forms of regulation, any controversies that arise, especially those related to or arising from the application, related to or arising from its status as issuer, shareholders, administrators, and members of the Fiscal Council. in particular, arising from the provisions contained in Law 6,404/76, in the Company‘s Bylaws, in the rules issued by the National Monetary Council, the Central Bank of Brazil and the CVM, as well as in the offer rules applicable to the functioning of the capital market in general, in addition to those contained in the Novo Mercado Regulation and the offer B3 regulations and the Contract of Participation of Novo Mercado.
Paragraph 1. Notwithstanding the validity of this arbitration clause, the request by the Parties for urgency measures prior to the constitution of the Arbitration Court will be submitted to the Support Arbitrator, in accordance with Item 5.1 of the Arbitration Regulations of the Market Arbitration Chamber.
Paragraph 2. The laws of Brazil will be the only ones applicable to all and any controversies, as well as to the execution, interpretation and validity of this arbitration clause. The Arbitration Court will consist of judges chosen in accordance with the Arbitration Regulations of the Market Arbitration Chamber. The jurisdiction of the arbitration will be the City and State of São Paulo, where the arbitration decision will be issued. The arbitration will be administrated by the Market Arbitration Chamber and conducted and tried in accordance with the pertinent provisions of the Arbitration Regulations.
Article 43. The Company will enter into liquidation in the cases determined by law, with the Shareholders’ Meeting having the authority to appoint the liquidator or liquidators and the members of the Fiscal Council that will function during this period, observing the legal formalities.
Article 44. The Company must observe the shareholders’ agreements filed at its registered office, with the members of the presiding board of the Shareholders’ Meeting or the Board of Directors prohibited from accepting vote declarations from any shareholder that is a signatory to the shareholders’ agreement duly filed at the registered office that contradicts those stipulated in the agreement, with the Company expressly prohibited from accepting and executing the transfer of shares and/or pledges and/or the granting of preemptive rights in the subscription of shares and/or other securities that do not comply with that provided for and regulated by the shareholders’ agreement.
Article 45. The Company is prohibited from granting financing or sureties of any kind to third parties, in any form, to businesses unrelated to its corporate interests.
Update: July 20, 2020