Bylaws

 

 

 

CHAPTER I – NAME, PRINCIPAL PLACE OF BUSINESS, BUSINESS PURPOSE, AND DURATION

Article 1 – COMPANHIA DE LOCAÇÃO DAS AMÉRICAS (“Company”), which adopts the trade name “Unidas”, is a corporation with authorized capital, governed by these Articles of Incorporation (“Articles of Incorporation”) and by the applicable legal provisions, in particular, Law 6,404, of December 15, 1976, as amended (“Brazilian Corporations Law”).

 

Paragraph 1 – With the admission of the Company in the special listing segment referred to as Novo Mercado of B3 S.A. – Brasil, Bolsa, Balcão (“Novo Mercado” and “B3”, respectively), the Company, its shareholders, administrators and members of the Audit Committee, whenever installed, shall be subject to the provisions of the Novo Mercado Regulations of B3 (“Novo Mercado Regulations”).

 

Paragraph 2 – The provisions of the Novo Mercado Regulations shall prevail over the provisions of the by-laws in the events of loss of rights of the addressees of the public offerings provided in these Articles of Incorporation.

 

Article 2 – The registered office of the Company is in the city of São Paulo, State of São Paulo, at Avenida Engenheiro Caetano Álvares, No. 150, District of Limão, Postal Code 02546-000, and legal domicile in the city of Belo Horizonte, State of Minas Gerais, at Avenida Raja Gabaglia, 1.781, 12th and 13th floors, District of Luxemburgo, Postal Code: 30380-403.

 

Sole Paragraph – The Company may, by resolution of the Executive Board, open, transfer and/or close branches, offices or establishments of any type, at any location of the Brazilian territory or abroad, without previous authorization from the Board of Directors.

 

Article 3 – The business purpose of the Company is to (i) engage in the national or imported car rental activity, with or without drivers, and (ii) share interest in other companies, in the capacity of partner or shareholder.

 

Article 4 – The Company shall operate for indefinite period of time.

 


CHAPTER II – CAPITAL STOCK

Article 5 – The capital of the Company is R$ 2,006,289,984.08 (two billion, six million, two hundred and eighty-nine thousand, nine hundred and eighty-four Reais and eight cents), totally subscribed and paid-in, divided into 149,243,137 (one hundred and forty-nine thousand, two hundred and forty-three thousand, one hundred and thirty-seven) common shares, all registered, book-entry and with no par value.

 

Paragraph 1 – – The capital of the Company is represented exclusively by common shares.

 

Paragraph 2 – Each common registered share is entitled to one vote in the resolutions of the General Meetings of the Company.

 

Paragraph 3 – All Company’s shares are book-entry and maintained in deposit account, on behalf of their holders, in financial institution authorized by the Securities Commission (“CVM”), with which the Company maintains custody agreement in effect, with no issuance of certificates. The depositary institution may collect from the shareholders the cost of the service of transfer and annotation of ownership of book-entry shares, as well as the cost of services related to the shares in custody, with due regard for the maximum limits established by CVM.

 

Paragraph 4 – The Company may not issue preferred shares or profit-sharing bonds.

 

Paragraph 5 – Shares are indivisible in relation to the Company. Whenever one share belongs to more than one person, the rights inherent thereto shall be exercised by the condominium representative.

 

Paragraph 6 – Shareholders have preemptive right in the proportion of their respective interests in the subscription of shares, debentures convertible into shares or subscription warrants issued by the Company, which may be exercised within the legal timeframe, with due regard for the provisions of paragraph 3 of article 6 of these Articles of Incorporation.

 

Article 6 – The Company is authorized to increase the capital up to the limit of R$ 1,500,000,000.00 (one billion, five hundred thousand Reais), regardless of amendment to the articles of incorporation, by resolution of the Board of Directors, which shall be responsible for establishing the issuance conditions, including price, term and form of its payment.

 

Paragraph 1 – In the event of subscription of new shares in capital increase with payment in assets, the respective appraisal report shall be previously approved by the General Meeting, the Audit Committee, if installed, being consulted.

 

Paragraph 2 – Within the limit of the authorized capital, the Company may, by resolution of the Board of Directors, issue common shares, subscription warrants and debentures convertible into common shares.

 

Paragraph 3 – At the discretion of the General Meeting or of the Board of Directors, as the case may be, the preemptive right may be excluded or the term for its exercise may be reduced in issuances of common shares, debentures convertible into common shares or subscription warrants, the placement of which is made by (i) sale in stock exchange or public subscription, or (ii) exchange of shares, in takeover bid, under the terms of the law and, in the case of the Board of Directors, within the limit of the authorized capital.

 

Article 7 – The Company may, by resolution of the Board of Directors, acquire its own shares to remain in treasury and for subsequent disposal or cancellation, with no capital reduction, with due regard for the applicable legal and regulatory provisions.

 

Article 8 – The Company may, by resolution of the Board of Directors and according to plan approved by the General Meeting, grant purchase option or subscription of shares, with no preemptive right to the shareholders, in favor of the administrators, employees and cooperators, and such option may be extended to administrators and employees of companies Controlled by the Company, directly or indirectly.

 

Article 9 – All those that acquire or dispose shares issued by the Company, even if they are already shareholders or group of shareholders, shall disclose, by means of communication (i) to the Company, and the Company to CVM, to the stock exchanges in which the securities issued thereby are traded; and (ii) to CVM, the acquisition or disposal of shares exceeding, either as increase or reduction, the levels of 5% (five percent), 10% (ten percent), 15% (fifteen percent), and so on and so forth, of the Company’s capital.

 

Sole Paragraph – Likewise, the owners of debentures or of other bonds and securities convertible into shares and of subscription warrants that guarantee to their owners the acquisition of shares in the percentages provided in this article shall assume the same obligation. Without prejudice to the other penalties provided in law and in the CVM regulations, the shareholders that fail to comply with such obligation shall have their rights suspended, pursuant to article 120 of the Brazilian Corporations Law and of Article 30 of these Articles of Incorporation, with exception of the essential rights provided in article 109 of the Brazilian Corporations Law, suspension being ceased as soon as the obligation has been fulfilled.


CHAPTER III – MANAGEMENT

SECTION I – MISCELLANEOUS

 

Article 10 – The Company shall be administered by a Board of Directors and by an Executive Board, according to the powers granted by these Articles of Incorporation, by the Brazilian Corporations Law and by the applicable regulations.

 

Article 11 – Investiture of the members of the Board of Directors, of the Executive Board and of the Audit Committee, actual or deputy members, is subject to the signature of instrument of investiture, which shall contemplate that the members of the Board of Directors, of the Executive Board and of the Audit Committee, actual or deputy members, shall be subject to the arbitration section referred to in Article 50 of these Articles of Incorporation and to the satisfaction of the applicable legal requirements.

 

Paragraph 1 – The administrators shall, immediately subsequently to being vested in their office, communicate to the Company, its controllers or controlled companies, in the event of controllers or controlled companies, provided that they are publicly-held companies, the number and characteristics of securities issued by the Company, owned thereby, directly or indirectly, including their Derivatives.

 

Paragraph 2 – For the purposes of these Articles of Incorporation, “Derivatives” means bonds and securities traded in future liquidation markets or other assets the collateral or subject matter of which are securities issued by the Company.

 

Paragraph 3 – The Company’s administrators shall adhere to the policy of disclosure of relevant act or fact and to the policy of trade of securities issued by the Company, by signing the respective instrument of adherence.

 

Article 12 – The Board of Directors may create technical or advisory committees to assist it in the Company’s administration, with purposes and functions determined.

 

Paragraph 1 – The Company shall have (i) one Audit and Risk Management Committee, (ii) one Compliance Committee, (iii) one Used Vehicles Committee, (iv) one Personnel Management Committee, (v) one Rent a Car Committee, (vi) one Fleet Management Committee. The Board of Directors shall establish the rules applicable to such committees, including function, composition, term of management, remuneration and operation.

 

Paragraph 2 – The same obligations and prohibitions imposed to the Company’s administrators by Law and by these Articles of Incorporation shall be applicable to the members of the committees.

 

Paragraph 3 – The Audit and Risk Management Committee, advisory body bound to the board of directors, shall be composed of, at least, three (3) members, out of which, at least, one (1) shall be independent board member of the Company and, at least, one (1) shall have acknowledged experience of corporate accounting issues.

 

Paragraph 4 – The same member of the Audit and Risk Management Committee may accumulate both characteristics referred to in paragraph three.

 

Paragraph 5 – The activities of the coordinator of the Audit and Risk Management Committee shall be established in its internal rules of procedure, approved by the board of directors.

 

Paragraph 6 – Among other issues, the Audit and Risk Management Committee shall:

 

(i) provide opinion on the engagement and dismissal of independent audit services;

 

(ii) assess quarterly information, interim statements and financial statements;

 

(iii) follow-up activities of the internal audit and of the area of internal controls of the Company;

 

(iv) assess and monitor the Company’s exposures to risks;

 

(v) assess, monitor and recommend to the administration the correction or enhancement of the internal policies of the Company,

including the policy of transactions between related parties; and

 

(vi) provide means to receive and handle information on noncompliance with legal and regulatory provisions applicable to the Company, in addition to internal regulations and codes, including provision of specific procedures to protect the provider and the confidentiality of information.

 

Paragraph 7 – The Rent a Car Committee (RAC), advisory body that supports the Board of Directors, shall be composed of 3 (three) members and shall be responsible, among other functions, for assisting and providing recommendations to the executive board and to the board of directors of the Company, of its subsidiaries and its franchises, including, but not limited to, (i) preparing business plan; (ii) assessing the market conditions of the RAC segment; (iii) price and operation strategies; (iv) following-up and monitoring the activities of the RAC segment; and (v) issues submitted thereto by the Executive Board or Board of Directors, as well as issues deemed relevant thereby.

 

Paragraph 8 – The Fleet Management Committee, advisory body that supports the Board of Directors, shall be composed of 3 (three) members and shall be responsible, among other functions, for assisting and providing recommendations to the executive board and to the board of directors of the Company and of its subsidiaries, including, but not limited to, (i) preparing business plan; (ii) assessing the market conditions of the Fleet Outsourcing and Management segment; (iii) price and operation strategies; (iv) following-up and monitoring the activities of the Fleet Outsourcing and Management segment; and (v) issues submitted thereto by the Executive Board or Board of Directors, as well as issues deemed relevant thereby.

 

Article 13 – The Annual General Meeting shall establish limit of annual global remuneration of the Company’s administrators and the Board of Directors shall decide upon its distribution among its members.

 

SECTION II – Board of Directors

 

Article 14 – The Board of Directors is composed of, at least, 5 (five) and, at most, 7 (seven) members, all elected and dismissed by the General Meeting, with unified term of office of 2 (two) years, reelection being permitted.

 

Paragraph 1 – Out of the members of the board of directors, at least, 2 (two) or 20% (twenty percent), whichever is higher, shall be independent board members and the characterization of those appointed to the board of directors as independent board members shall be decided in general meeting that elects them. Board member(s) elected according to the option provided in article 141, paragraphs 4 and 5, of the Brazilian Corporations Law, shall be further deemed independent, without prejudice to the definition provided in Article 41 of these Articles of Incorporation, in the event that there is controlling shareholder.

 

Paragraph 2 – Independent board member shall be deemed the Board Member that: (i) has no relations with the Company, with exception of equity capital; (ii) is not controlling shareholder, spouse or relative up to second degree thereof, or is not or has not been, within the past 3 (three) years, bound upon company or entity related to the controlling shareholder (persons bound to public education and/or research institutions are excluded from such restriction); (iii) has not been, within the past 3 (three) years, employee or Executive Officer of the Company, of the controlling shareholder or of company controlled by the Company; (iv) is not supplier or buyer, direct or indirect, of services and/or products of the Company, in magnitude that results in loss of independence; (v) is not employee or administrator of company or entity offering or demanding services and/or products to the Company, in magnitude that results in loss of independence; (vi) is not spouse or relative up to second degree of any administrator of the Company; and (vii) does not receive any other remuneration from the Company in addition to the remuneration related to the office of Board Member (amounts in cash resulting from sharing interest in the capital are excluded from such restriction).

 

Paragraph 3 – Whenever the result is a fraction number as a result of the calculation of the percentage referred to in the previous paragraph, the Company shall proceed with the rounding to the whole number immediately higher.

 

Paragraph 4 – The members of the Board of Directors shall be vested in their offices by the signature of instrument of investiture drawn up in the Book of Minutes of Meetings of the Board of Directors within 30 (thirty) days subsequently to their election. The members of the Board of Directors may be dismissed at any time by the General Meeting and shall remain in their respective offices and exercising their functions up to the investiture of their successors, unless otherwise decided by the General Meeting.

 

Paragraph 5 – The members of the Board of Directors shall have excellent reputation and, except upon express waiver by the General Meeting that elects them, the following may not be elected: (i) members that occupy positions in companies deemed competitors of the Company; or (ii) members that have or represent interests that conflict with the Company’s interests. The voting right may not be exercised by the members of the Board of Directors in the event that the impediment factors indicated in this paragraph are subsequently verified.

 

Paragraph 6 – The members of the Board of Directors may not have access to information or attend meetings of the Board of Directors related to issues in relation to which they have or represent interests that conflict with the Company’s interests and they are expressly prohibited from exercising their voting right.

 

Paragraph 7 – The members of the Board of Directors may not withdraw from the exercise of their functions for period longer than 30 (thirty) consecutive days, under penalty of losing their term of office, except in the event of license granted by the Board of Directors.
Paragraph 8 – The offices of chairman of the board of directors and chief executive officer or head executive of the Company may not be accumulated by the same individual.

 

Article 15 – The Board of Directors shall have 1 (one) Chairman and 1 (one) Vice-Chairman, which shall be elected by the absolute majority of votes from those present, in the first meeting of the Board of Directors held immediately subsequently to the investiture of such members or whenever such offices are vacant.

 

Article 16 – The Board of Directors shall gather, (i) on ordinary basis, every month; and (ii) on extraordinary basis, whenever called by any of its members, by means of communication, by telegram, facsimile, electronic mail or any other written form (with proper receipt confirmation) delivered, at least, 2 (two) business days in advance, including the date, time and agenda including the issues to be addressed.

 

Paragraph 1 – Issues that have not been included in the agenda presented in the call notice related to the respective meeting may not be approved in the meetings of the Board of Directors of the Company, unless otherwise agreed upon by the totality of the board members of the Company.

 

Paragraph 2 – The meetings of the Board of Directors shall be held on first call with the presence of the majority of its members and, on second call, with any number.

 

Paragraph 3 – Regardless of the call formalities provided in this article, the meeting in which all Board Members are present shall be deemed regular.

 

Paragraph 4 – Resolutions of the Board of Directors shall be taken by favorable vote of the majority of the members present, including those that have cast their vote pursuant to article 17, paragraph 1, of these Articles of Incorporation.

 

Paragraph 5 – In the event of tie in relation to the resolutions, the Chairman of the Board of Directors or, as the case may be, the member of the Board of Directors substituting him, shall, in addition to his own vote, have the casting vote.

 

Article 17 – The meetings of the Board of Directors shall be presided by the Chairman of the Board of Directors and whoever is appointed thereby shall act the secretary of such meetings. In the event of temporary absence of the Chairman of the Board of Directors, such meetings shall be presided by the Vice-Chairman of the Board of Directors or, in his absence, by Board Member selected by the majority of votes of the other members of the Board of Directors and the chairman of the meeting shall appoint the secretary.

 

Paragraph 1 – In the event of temporary absence of any member of the Board of Directors, the respective member of the Board of Directors may, based upon the agenda including the issues to be addressed, cast their vote in writing, by letter or facsimile delivered to the Chairman of the Board of Directors, on the date of the meeting or, further, by electronic mail, digitally certified. In the event of temporary absence of the Chairman, of the Vice-Chairman or of any other member of the Board of Directors, the Chairman, the Vice-Chairman or any other member of the Board of Directors may be represented in the meetings of the Board of Directors by another member of the Board of Directors indicated in writing, which, in addition to his own vote, shall cast the vote of the Board Member temporarily absent.

 

Paragraph 2 – In the event of vacancy in the office of any member of the Board of Directors, the substitute shall be appointed by General Meeting to complete the respective term of office. In the event of vacancy of the majority of the offices, General Meeting shall be immediately called to proceed with the election of the substitutes, which shall complete the term of office of the substituted members. For the purposes of this paragraph, vacancy occurs with dismissal, death, resignation, evidenced impediment, absence for period longer than 30 (thirty) days or disability.

 

Paragraph 3 – Resignation from the office of board member shall be presented by written communication to the Company, addressed to the Chairman of the Board of Directors or, in the event of resignation of the Chairman of the Board of Directors, to the shareholders, becoming effective before the Company from the occasion of delivery of the communication and, before third parties, subsequently to the publication of the filing of the document of resignation with the Commercial Registry.

 

Article 18 – The meetings of the Board of Directors shall be held, preferably, at the head office of the Company. Meetings held by teleconference or videoconference or other means of communication shall be admitted and such participation shall be deemed personal presence in such meeting. In that event, the Board Members that remotely participate in the meeting of the Board may cast their votes, on the date of the meeting, by letter or facsimile or electronic mail digitally certified.

 

Paragraph 1 – Upon conclusion of the meeting, minutes shall be drawn up and signed by all Board Members physically present in such meeting, and subsequently transcribed in the Book of Registration of Minutes of the Board of Directors of the Company. Votes cast by Board Members that remotely participate in the meeting of the Board or that have cast their vote pursuant to article 17, paragraph 1, of these Articles of Incorporation, shall likewise be included in the Book of Registration of Minutes of the Board of Directors and the copy of the letter, facsimile or electronic message, as the case may be, containing the vote of the Board Member, shall be attached to the Book immediately subsequently to the transcription of the minutes.

 

Paragraph 2 – Minutes of meeting of the Board of Directors of the Company that contain resolution intended to produce effects before third parties shall be published and filed with the public registry of commercial companies.

 

Paragraph 3 – The Board of Directors may admit other participants in their meetings with the purpose of following up the resolutions and/or providing clarifications of any nature, however, such participants shall not be entitled to vote.

 

Article 19 – Without prejudice to the other attributions provided in law, the Board of Directors shall:

 

(i) establish the general business orientation of the Company, providing for its good performance;

 

(ii) call General Meetings in the events provided in law or whenever deemed convenient thereby;

 

(iii) provide previous statement on any proposal to be submitted to General Meetings;

 

(iv) elect and dismiss the Executive Board and establish thereto the attributions and remuneration and decide upon the change of the number of members and composition, with due regard for the applicable provisions of these Articles of Incorporation and of the applicable legislation;

 

(v) distribute among the Board Members and Executive Officers, individually, the share of the annual global remuneration of the administrators established by General Meetings;

 

(vi) approve the creation of technical or advisory committees to assist the Board of Directors;

 

(vii) provide statement on the administration’s report and the Executive Board accounts and on the financial statements of the year that shall be submitted to the Annual General Meeting and submit to the Annual General Meeting proposal for allocation of the net profit of each financial year;

 

(viii) approve the annual business plan and the annual budget of the Company, any expansion projects and investment programs, and follow up their execution;

 

(ix) analyze the quarterly results of the Company;

 

(x) approve (i) any acquisition or disposal of interest in the capital of any Controlled company, affiliate or any other company or consortium, and (ii) creation and extinguishment of subsidiaries and Controlled companies, in Brazil or abroad;

 

(xi) approve the assumption of financial obligations by the Company and its controlled companies the amount of which, taken into account individually, exceeds R$ 50,000,000.00 (fifty million Reais);

 

(xii) inspect the Executive Board management, examine at any time the books and papers of the Company, request for information on agreements entered into or on the verge of being entered into by the Company and on any other acts deemed necessary thereby;

 

(xiii) approve the human resources policy and remuneration criteria, rights and advantages of administrators and employees of the Company;

 

(xiv) grant stock option plans to its administrators and employees, with no preemptive right to the shareholders under the terms of the plans approved in General Meetings, under the terms of Article 8 of these Articles of Incorporation;

 

(xv) select and dismiss independent auditors;

 

(xvi) submit to General Meetings proposals for capital increase exceeding the limit of the authorized capital or with payment in assets, and for amendment to the Articles of Incorporation;

 

(xvii) authorize the issuance of shares or debentures convertible into shares within the limit of the authorized capital, debentures not convertible into shares or other bonds or securities, as well as issuances to raise funds, such as notes, commercial papers or others of common use in the market, deciding upon their issuance and redemption conditions, with further powers to exclude (or reduce term of) the preemptive right in issuance of shares, subscription warrants and convertible debentures within the authorized capital the call of which is made by (i) sale in stock exchange, or (ii) public subscription, or (iii) exchange by shares in takeover bid, under the terms established in the applicable law;

 

(xviii) decide upon the acquisition of shares issued by the Company to be cancelled or to remain in treasury, and upon their resale, replacement in the market or cancellation, with due regard for the rules issued by CVM and other applicable legal provisions;

 

(xix) declare interim and periodical dividends, as well as interest on net equity, under the terms of the Brazilian Corporations Law and other applicable laws;

 

(xx) approve the provision of any guarantees;

 

(xxi) provide favorable or opposite statement as regards any public offering of acquisition of shares the subject matter of which are the shares issued by the Company by means of previous justified opinion, disclosed within up to 15 (fifteen) days from the publication of the public notice of the public offering of acquisition of shares, which shall contemplate, at least: (i) the convenience and opportunity of the public offering of acquisition of shares in relation to the interest of the group of shareholders, including in relation to the price and potential impacts for the liquidity of shares; (ii) repercussions of the public offering of acquisition of shares on the Company’s interests; (iii) strategic plans disclosed by the offering party in relation to the Company; (iv) alternatives to the acceptance of the public offering of acquisition of shares available in the market; and (v) other issues deemed relevant by the Board of Directors, as well as information required by the applicable rules established by CVM;

 

(xxii) decide upon any other issue that is submitted thereto by the Executive Board;

 

(xxiii) approve the acquisition or disposal of any assets, including real estate properties (either in one single transaction or in a sequence of related transactions), by the Company and/or any subsidiary in amount exceeding ten million R$ 10,000,000.00 (ten million Reais), if such acquisition or disposal has not been provided in the annual business plan or in the annual budget of the Company;

 

(xxiv) approve the creation of burdens, charges or other in rem guarantees on the assets of the Company and/or of its subsidiaries off the regular course of the activities of the Company and/or of its subsidiaries, as the case may be, in amount exceeding R$ 10,000,000.00 (ten million Reais);

 

(xxv) approve the signature of, amendment to and/or extinguishment of agreement of any nature, with clients, suppliers and/or service provider, with individual amount exceeding 100% (one hundred) of the net equity of the Company and/or of its controlled companies;

 

(xxvi) approval of obligations or expenses, by the Company, in amount exceeding 10% (ten percent) of the provisions of the annual budget of the Company; and

 

(xxvii) contracting or assumption of, or practice of any act that binds the Company or any of its controlled companies upon any indebtedness that provides that the ratio of Net Debt/EBITDA of the Company, calculated on quarterly basis and taking into consideration the EBITDA amounts of the past 12 (twelve) months, exceeds 3.25 (three point twenty-five); and

 

(xxviii) approve the following transactions between the Company and its related parties, with exception of its affiliates: (a) loan/financing agreements; (b) sale of vehicles up to the amount of R$ 12,000,000.00 (twelve million reais) per year, provided that the prices adopted are in accordance with the minimum prices established in the month of the sale by the Used Vehicles Committee; (c) sale and lease of vehicles to Cooperators, provided that with due regard for the terms and conditions provided in the Benefits Policy in effect on the occasion of sale; and (d) acquisition of parts and services up to the amount of R$ 4,000,000.00 (four million reais) per year, provided that with due regard for the terms and conditions provided in the Purchase Policy in effect on the occasion of acquisition. (For the purposes of this article: (i) affiliate means any legal entity controlled, directly or indirectly, by the Company; and (ii) related parties mean the shareholders, executive officers and members of the Board of Directors of the Company, as well as their respective spouses, siblings, ascendants or descendants of first or second degree or any entities in which the shareholders, executive officers appointed pursuant to the by-laws and members of the Board of Directors of the Company may elect, by law, voting trust or another form of agreement, one (1) or more executive officers appointed pursuant to the by-laws or members of the Board of Directors), or exercise influence on the management of the business activities or orientation of bodies).

 

Sole Paragraph – The members of the Board of Directors that are Executive Officers shall abstain from casting their vote in the issues provided in items (v), (xiii) and (xiv) of this article 19, without prejudice to other restrictions imposed by law.

 

Article 20 – The Chairman or the Vice-Chairman of the Board of Directors shall represent the Board of Directors in the General Meetings.

 

 

Section III – Executive Board

 

Article 21 – The Executive Board of the Company shall be composed of, at least, 2 (two) and, at most, 5 (five) members, either shareholders or not, resident in Brazil, elected by the Board of Directors, accumulation of functions by an Executive Officer being authorized, appointing one (1) Chief Executive Officer, 1 (one) Chief Financial Officer, 1 (one) Executive Officer of Relations with Investors and New Businesses, 1 (one) Rent a Car (RAC) Head Executive Officer and 1 (one) Executive Officer with no specific title.

 

Article 22 – The Executive Officers shall be elected by vote of the majority of the members of the Board of Directors, with unified term of office of 2 (two) years, reelection being permitted, and shall be exempt from posting bonds to guarantee their management. The executive officers shall be vested in their offices by the signature of instrument of investiture in proper book and shall remain in their offices up to the election and investiture of their successors.

 

Paragraph 1 – The Executive Officers may be dismissed at any time by the Board of Directors.

 

Paragraph 2 – In the event of vacancy in the Executive Board, either by resignation, dismissal, impediment or temporary absence, the Board of Directors shall, within up to 10 (ten) days from the date of vacancy, elect their substitute for the remaining term of office and the Chief Executive Officer shall perform the functions of the vacant office of executive board up to the respective election of the substitute, except in the events of vacancy in the office of Chief Financial Officer or Executive Officer of Relations with Investors and New Businesses, the functions of which may be accumulated by the Executive Officer of Relations with Investors and New Businesses or by the Chief Financial Officer, respectively, as the case may be, with no need to proceed with new election, up to the end of the term of office.

 

Paragraph 3 – The Executive Officers may not withdraw from the exercise of their functions for period longer than 30 (thirty) consecutive days, under penalty of losing their term of office, except in the event of license granted by the Executive Board.

 

Article 23 – The Executive Board shall gather whenever the Company’s businesses require so and meetings of the Executive Board shall be called by the Chief Executive Officer or by any of the other Executive Officers, and meetings shall solely be held with the presence of the majority of its members.

 

Paragraph 1 – The meetings of the Executive Board may be held by teleconference, videoconference or other means of communication, and such participation shall be deemed personal presence in such meeting. In that event, the members of the Executive Board shall cast their votes by letter, facsimile or electronic mail digitally certified.

 

Paragraph 2 – In the event of temporary absence of any Executive Officer, the respective Executive Officer may, based upon the agenda including the issues to be addressed, cast their vote in writing, by letter or facsimile delivered to the Chief Executive Officer or, further, by electronic mail digitally certified, against receipt confirmation by the Chief Executive Officer. In the event of temporary absence of the Chief Executive Officer or of any other member of the Executive Board, the Chief Executive Officer or any other member of the Executive Board may be represented in the meetings of the Executive Board by another Executive Officer indicated in writing, which, in addition to his own vote, shall cast the vote of the Executive Officer temporarily absent, agreeing, however, to observe the provisions of article 26 of these Articles of Incorporation as regards representation of the company.

 

Paragraph 3 – Upon conclusion of the meeting, minutes shall be drawn up and shall be signed by all Executive Officers physically present in such meeting, and subsequently transcribed in the Book of Registration of Minutes of the Executive Board. Votes cast by Executive Officers that remotely participate in the meeting of the Executive Board or that have cast their vote pursuant to paragraph 1 of this article, shall likewise be included in the Book of Registration of Minutes of the Executive Board, and the copy of the letter, facsimile or electronic message, as the case may be, containing the vote of the Executive Officer, shall be attached to the Book immediately subsequently to the transcription of the minutes.

 

Article 24 – Resolutions in meetings of the Executive Board shall be taken by the majority of votes of those present in each meeting or that have cast their vote pursuant to article 23, paragraph 2, of these Articles of Incorporation. In the event of tie in relation to the resolutions, the Chief Executive Officer shall have the casting vote.

 

Article 25 – The Executive Board shall be responsible for administering the Company’s businesses in general and, for so, carrying out all acts necessary or convenient, with exception of those in relation to which, by law or by these Articles of Incorporation, the jurisdiction is attributed to the General Meeting or to the Board of Directors. In the exercise of their functions, the Executive Officers may carry out all operations and all acts of ordinary administration necessary to fulfill the purposes inherent to their function, with due regard for the provisions of these Articles of Incorporation as regards the form of representation, jurisdiction for the practice of certain acts and the general orientation of businesses established by the Board of Directors.

 

Paragraph 1 – The Executive Board shall be exclusively responsible for:

 

a) complying and providing compliance with these Articles of Incorporation and the resolutions of the Board of Directors and of the General Meeting;

 

b) preparing and proposing to the Board of Directors, the annual business plan and the annual budget of the Company, any expansion projects and investment programs and complying and providing compliance with their guidelines;

 

c) representing the Company, in accordance with the attributions and powers established in these Articles of Incorporation, by the General Meeting and by the Board of Directors;

 

d) deciding upon opening, transferring and/or closing branches, offices or establishments of any type, at any location of the Brazilian territory or abroad;

 

e) submitting, annually, to analysis by the Board of Directors, the Administration Report and the Executive Board accounts, followed by the report from the independent auditors, as well as the proposal for allocation of profits ascertained in the previous year;

 

f) approving assumptions of financial obligations with due regard for the limits of the obligations attributed to the Board of Directors; and

 

g) deciding upon any issue for which the General Meeting or meeting of the Board of Directors is not exclusively responsible.

 

Paragraph 2 – In addition to constantly coordinating the activities of the Executive Officers and managing performance of the activities related to the general planning of the Company, the Chief Executive Officer shall: (i) plan, coordinate, organize, supervise and manage the activities of the Company; (ii) implement the guidelines and compliance with the resolutions taken in General Meetings and in the meetings of the Board of Directors and Executive Board; (iii) call and preside the meetings of the Executive Board, being entitled to vote, including casting vote; (iv) establish the business, legal, political, corporate and institutional guidelines in the development of the Company’s activities; (v) generally supervise the responsibilities and attributions of the Executive Board; (vi) exercise other powers and responsibilities not attributed to the other executive officers and those that are, from time to time, attributed thereto by the Board of Directors.

 

Paragraph 3 – Among other attributions that may be established thereto, the Cheif Financial Officer shall: (i) substitute the Chief Executive Officer in his attributions during his absences and impediments; (ii) plan, coordinate, organize, supervise and manage the activities related to the financial and accounting transactions of the Company and controlled companies, including management of the treasury departments, investment and raise of funds, control of receivables and of accounts payable, budget and operations and planning control, including preparing the Company’s budget; (iii) participate in negotiations for acquisitions, mergers, associations, etc. with other companies, aiming at the growth and consolidation of businesses, whenever requested; and (iv) conduct activities delegated by the Chief Executive Officer, whenever requested.

 

Paragraph 4 – Among other attributions that may be established thereto, the Executive Officer of Relations with Investors and New Businesses shall: (i) represent the Company before the control bodies and other institutions that operate in the capital market, being responsible for providing information to investors, to CVM, to the Central Bank of Brazil, to the Stock Exchanges in which the Company maintains its securities traded and other bodies related to the activities developed in the capital market, according to the applicable legislation, in Brazil and abroad; (ii) participate in decisions upon feasibility of new businesses of the Company; and (iii) participate in negotiations for acquisitions, mergers, associations, etc. with other companies, aiming at the growth and consolidation of businesses, whenever requested.

 

Paragraph 5 – Among other attributions that may be established thereto, the The Rent a Car (RAC) Head Executive Officer shall: (i) plan, coordinate, organize, supervise and manage the activities of the Company, its subsidiaries and franchises, related to the RAC Segment; (ii) implement the guidelines and compliance with the resolutions taken in General Meetings and in the meetings of the Board of Directors and Executive Board related to the RAC Segment; (iii) assess the market conditions of the RAC segment; and (iv) represent the Company before the controlling bodies and the RAC Segment.

 

Article 26 – The Company shall be deemed bound whenever represented:

 

a) by 2 (two) Executive Officers jointly, out of which one shall be the Chief Executive Officer; or

 

b) by 1 (one) Executive Officer jointly with 1 (one) attorney-in-fact duly constituted under the terms of paragraph 1 of this article; or

 

c) by 2 (two) attorneys-in-fact jointly, duly constituted under the terms of paragraph 1 of this article; or

 

d) by any 2 (two) Executive Officers jointly, in the events of items (a) and/or (c) of Paragraph 3 below.

 

Paragraph 1 – The powers of attorney granted by the Company shall be signed necessarily by the Chief Executive Officer, however, always jointly with the Chief Financial Officer, Executive Officer of Relations with Investors and New Businesses or Rent a Car Head Executive Officer, except whenever related to the representation of the Company for the purposes of letter “d” of Paragraph 3 of this article, event in which the powers of attorney may be granted by the Company by the individual signature of the Chief Executive Officer and shall, in all events, contain specific powers and term of effectiveness of, at most, 1 (one) year, delegation of powers being prohibited (unless expressly authorized in any power of attorney granted), with exception, in any event, of concession of powers of attorney for judicial purposes.

 

Paragraph 2 – During their absences or temporary impediments, the Executive Officers shall be substituted by attorney-in-fact duly constituted under the terms provided in paragraph 1 above.

 

Paragraph 3 – Notwithstanding the provisions above, for acts binding the Company:

 

a) In amounts up to R$ 10,000,000.00 (ten million Reais) in one single transaction or in a sequence of related transactions, the Company shall be represented: (i) by any two (2) Executive Officers jointly; (ii) by any of the Executive Officers jointly with one attorney-in-fact duly constituted pursuant to the provisions of these Articles of Incorporation; or (iii) by 2 (two) attorneys-in-fact, jointly, duly constituted pursuant to the provisions of these Articles of Incorporation;

 

b) For acts binding the Company in amounts exceeding R$ 10,000,000.00 (ten million Reais) in one single transaction or in a sequence of related transactions, the Company shall be solely represented by the signature, jointly, of the Chief Executive Officer and of the Chief Financial Officer, with exception of the acts directly related to the fulfillment of the business purpose of the Company, i.e., signature of car rental contracts in which the Company appears as lessor, event in which the Company shall be represented pursuant to letter “a” above;

 

c) For acts binding the Company upon financial obligations the amount of which, taken into consideration individually, exceeds R$ 50,000,000.00 (fifty million Reais) and that are approved by the Board of Directors under the terms of item (xi) of article 19 of these Articles of Incorporation, (i) by any 2 (two) Executive Officers jointly; (ii) by any of the Executive Officers jointly with one attorney-in-fact duly constituted pursuant to the provisions of these Articles of Incorporation; or (iii) by 2 (two) attorneys-in-fact, jointly, duly constituted pursuant to the provisions of these Articles of Incorporation; and

 

d) For acts of representation of the Company before public bodies, departments and entities, federal, state or municipal, including Departments of Motor Vehicles (Detrans) and Detran units (Ciretrans), related to the transfer of vehicles; or before class entities, unions and Labor Justice; or for representation of the Company in judicial, administrative and arbitration proceedings, to provide clarifications in testimonies, in the capacity of representative or witness, (i) by 1 (one) executive officer; or (ii) by 1 (one) attorney-in-fact, duly constituted pursuant to the provisions of these Articles of Incorporation.

 

Paragraph 4 – In the event that the Chief Executive Officer and the Chief Financial Officer fail to reach an agreement in relation to the practice of any act and/or signature of any document binding upon the Company under the terms of paragraph 3 above, such decision shall be submitted to extraordinary resolution by the Board of Directors.

 

Article 27 – Under the terms of these Articles of Incorporation and of the law, the Executive Board may not carry out acts that are subject to previous approval or authorization from the General Meeting or from the Board of Directors, as the case may be, prior to obtaining the respective approval or authorization.

 

Sole Paragraph – Any acts carried out by Board Members, Executive Officers, attorneys-in-fact or employees in operations or businesses unrelated to the business purpose, such as “aval” guarantee, surety, mortgage, security, pledge, endorsement or any other guarantees, shall be expressly prohibited, being void and ineffective in relation to the Company, except in the events of concession of “aval” guarantee, surety, mortgage, security, pledge, endorsement or any other guarantees of the Company to the companies Controlled directly or indirectly by the Company and vice-versa. In those events, the Board of Directors shall expressly admit the concession of such guarantees.


CHAPTER IV – SHAREHOLDERS’ MEETINGS

Article 28 – General Meetings shall be held, on ordinary basis, within the first 4 (four) months subsequently to the end of each financial year and, on extraordinary basis, whenever required by the Company’s interests, with due regard, in relation to their call notice, instatement and resolutions, for the applicable legal provisions and the provisions of these Articles of Incorporation.

 

Paragraph 1 – General Meetings shall be called, at least, 15 (fifteen) consecutive days in advance on first call, and 8 (eight) days in advance, on second call, if necessary.

Paragraph 2 – The General Meetings shall be presided by the Chairman of the Board of Directors, which shall appoint the secretary and, in the event of his absence or impediment, by any member of the Board of Directors or, in the absence of both, by any executive officer present selected by the shareholders.

 

Paragraph 3 – Regardless of the call formalities, General Meetings in which all shareholders are present shall be deemed regular.

 

Article 29 – To take part in General Meetings, the shareholder shall present, up to 24 (twenty-four) hours prior to the date of the respective Meeting: (i) proof issued by the financial institution depositary of the book-entry shares owned thereby or in custody thereof, pursuant to article 126 of the Brazilian Corporations Law, and/or in relation to the shareholders participating in the fungible custody of registered shares, the statement containing the respective ownership interest, issued by the competent body and dated, at most, 2 (two) days prior to the date of the General Meeting; and (ii) instrument of power of attorney, duly regularized pursuant to the law and to these Articles of Incorporation, in the event of representation of shareholder. The shareholder or his legal representative shall attend the General Meeting bearing documents that evidence his identity.

 

Paragraph 1 – Shareholders may be represented in General Meetings by attorney-in-fact constituted less than 1 (one) year prior thereto, either shareholder, administrator of the Company, counsel, financial institution or administrator of investment funds representing the condominium members.

 

Paragraph 2 – Resolutions of the General Meeting, with exception of special events provided in law and in these Articles of Incorporation, shall be taken by the absolute majority of votes of those present, disregarding blank votes.

 

Paragraph 3 – The minutes of the Meetings shall be drawn up in summary form in relation to the facts occurred, including dissents and protests, containing the transcription of the resolutions taken, with due regard for the provisions of paragraph 1 of article 130 of the Brazilian Corporations Law.

 

Paragraph 4 – The General Meeting shall be held, on first call, with the presence of shareholders representing, at least, 25% (twenty-five percent) of the total number of shares issued by the Company, except whenever the law requires higher quorum and with due regard for the provisions of these Articles of Incorporation; and, on second call, with any number of shareholders.

 

Article 30 – The General Meeting may suspend the exercise of the rights, including voting right, of the shareholder that fails to comply with any obligation imposed by the Brazilian Corporations Law, by its regulations or by these Articles of Incorporation.

 

Paragraph 1 – The General Meeting that approves the suspension of political rights of the shareholder shall establish, in addition to other aspects, the extent of such suspension, suspension of the inspection rights and of request for information guaranteed by law being prohibited.

 

Paragraph 2 – The suspension of rights shall cease as soon as the obligation that has given rise to such suspension has been regularized.

 

Article 31 – In addition to the other attributions provided in law, the General Meeting shall:

 

a) take the accounts of the administrators, examine, discuss and vote the financial statements;

 

b) elect and dismiss, at any time, the members of the Board of Directors and of the Audit Committee, whenever installed;

 

c) establish the annual global remuneration of the members of the Board of Directors and of the Executive Board, and of the members of the Audit Committee, if installed;

 

d) amend the Articles of Incorporation;

 

e) decide upon any corporate restructuring, including operation of consolidation, spin-off or merger (or merger of shares) and/or another form of combination of businesses, pursuant to CVM Resolution No. 665, of August 4, 2011 (or another rule that may substitute it or amend it), as well as any other operation with similar effects (such as, among others, drop-down of assets) involving the Company or any of its subsidiaries;

 

f) decide upon dissolution, liquidation, extinguishment or authorization for request for court-supervised or out-of-court reorganization or acknowledgement of bankruptcy by or of the Company or any of its subsidiaries;

 

g) attribute bonus shares and decide upon possible groupings and splitting of shares;

 

h) approve the creation and adjustments of stock option plans to its administrators and employees and individuals that provide services to the Company, as well as to the administrators and employees of other companies that are controlled directly or indirectly by the Company;

 

i) decide, according to proposal presented by the administration, upon the establishment or change of the dividends policy and allocation of profits and results of the year of the Company (including distribution of dividends, among others), and declare and distribute dividends in amount exceeding 25% (twenty-five percent) of the net profit of the Company or interest on net equity in amount exceeding the amount permitted by the applicable legislation;

 

j) decide upon increase or reduction of the capital, or issuance of shares or other securities convertible into shares issued by the Company, except whenever in accordance with the provisions of article 6 of these Articles of Incorporation.

 

k) elect the liquidator, as well as the Audit Committee that shall operate during the liquidation period;

 

l) decide upon the cancellation of registration of publicly-held company with CVM;

 

m) decide upon the withdrawal of the Company from the Novo Mercado, which shall be communicated to B3 in writing, 30 (thirty) days in advance;

 

n) suspend the exercise of rights of the shareholders, under the terms of article 120 of the Brazilian Corporations Law;

 

o) select specialized company responsible for preparing appraisal report in the events of and pursuant to the provisions of these Articles of Incorporation;

 

p) approve the conduction of operations between the Company and related parties, with exception of its affiliates, involving (a) sale of vehicles exceeding the amount of R$ 12,000,000.00 (twelve million Reais) per year, provided that the prices adopted are in accordance with the minimum prices established in the month of the sale by the Used Vehicles Committee; and (b) acquisition of parts and services exceeding the amount of R$ 4,000,000.00 (four million Reais) per year, provided that with due regard for the terms and conditions provided in the Purchase Policy in effect on the occasion of the acquisition. (For the purposes of this article: (i) affiliate means any legal entity controlled, directly or indirectly, by the Company; and (ii) related parties mean the shareholders, executive officers and members of the Board of Directors of the Company, as well as their respective spouses, siblings, ascendants or descendants of first or second degree or any entities in which the shareholders, executive officers appointed pursuant to the by-laws and members of the Board of Directors of the Company may elect, by law, voting trust or another form of agreement, 1 (one) or more executive officers appointed pursuant to the by-laws or members of the Board of Directors), or exercise influence on the management of the business activities or orientation of its bodies);

 

q) acquisition, by the Company, of another company that operates in the car rental field (rental company) with fleet of more than 10,000 (ten thousand) vehicles or of car rental brand other than a substitute of the brand “Unidas”;

 

r) public offering of shares, by the Company, in which the appraisal of the Company used for such purpose is lower than R$ 2,500,000,000.00 (two billion, five hundred million Reais), pre-money; and

 

s) repurchase or redemption of shares or securities issued by the Company, with exception of repurchase or redemption of shares up to the limit of 4% (four percent) of its capital to be transferred to beneficiaries of the purchase option plans granted by the Company.


CHAPTER V – FISCAL COUNCIL

Article 32 – The Audit Committee of the Company shall operate on a temporary basis and, whenever installed, shall be composed of 3 (three) actual members and equal number of deputy members, shareholders or not, elected and dismissed at any time by the General Meeting. The Audit Committee of the Company shall be composed, installed and remunerated in accordance with the legislation in effect.

 

Paragraph 1 – The members of the Audit Committee shall be vested in their offices by the signature of the respective instrument, drawn up in proper book. Investiture of the members of the Audit Committee shall be subject to the signature of instrument of investiture, which shall contemplate that the members of the Audit Committee shall be subject to the arbitration section referred to in Article 50 of these Articles of Incorporation and to the satisfaction of the applicable legal requirements.

 

Paragraph 2 – The members do Audit Committee shall, further, immediately subsequently to being vested in their office, communicate to the Company the number and characteristics of the securities issued by the Company, its controllers or controlled companies, in the event of controllers or controlled companies, provided that they are publicly-held companies, owned thereby, directly or indirectly, including Derivatives.

 

Paragraph 3 – The members of the Audit Committee shall elect their Chairman in the first meeting of the Audit Committee to be held subsequently to its installation.

 

Paragraph 4 – The members of the Audit Committee shall be substituted, in the event of absence and impediments thereof, by the respective deputy member.

 

Paragraph 5 – In the event of vacancy in the office of member of the Audit Committee, the respective deputy member shall occupy his office. In the event that there are no deputy members, General Meeting shall be called to proceed with the election of member for the vacant office.

 

Paragraph 6 – The following may not be elected for the office of member of the Audit Committee of the Company: those that maintain relation with company that may be deemed competitor of the Company and, among others, the election of the following individuals shall be prohibited: (a) individuals that are employees, shareholders or members of the administration, technical or tax body of competitors or of controlling or controlled shareholders of competitors; (b) individuals that are spouses or relatives up to second degree of member of administration, technical or tax body of competitors or of controlling or controlled shareholders of competitors.

 

Paragraph 7 – In the event that any shareholder intends to indicate one or more representatives to compose the Audit Committee, which have not been members of the Audit Committee in the period subsequent to the last Annual General Meeting, such shareholder shall notify the Company in writing within up to 25 (twenty-five) days in advance in relation to the date of the General Meeting that shall elect the Board Members, informing name, identification and full professional résumé of the candidates.

 

Article 33 – Whenever installed, the Audit Committee shall gather, under the terms of the law, whenever necessary, and shall analyze, at least, quarterly, the financial statements.

 

Paragraph 1 – Regardless of any formalities, the meeting in which the totality of the members of the Audit Committee are present shall be deemed regularly called.

 

Paragraph 2 – The Audit Committee shall express their opinion by absolute majority of votes, present the majority of its members.

 

Paragraph 3 – All resolutions of the Audit Committee shall be transcribed in minutes drawn up in the respective book of Minutes and Opinions of the Audit Committee and signed by the Board members present.

 

Article 34 – The General Meeting that elects the Audit Committee shall establish its remuneration, which shall not be lower, for each member in office, than one tenth of the remuneration that, in average, is attributed to each Executive Officer, not including benefits, representation amounts and profit sharing.


CHAPTER VI – FISCAL YEAR, FINANCIAL STATEMENTS AND DISTRIBUTION OF PROFITS

Article 35 – The financial year shall commence on January 1st and end on December 31 of each year, occasion on which the balance sheet and the other financial statements related to the ended financial year shall be prepared.

 

Sole Paragraph – The administration shall prepare, to be presented jointly with the financial statements of the year, proposal for allocation of the net profits, in accordance with the provisions of these Articles of Incorporation.

 

Article 36 – Out of the year result, the accrued losses, if any, and the provision for income tax and social contribution on profits, shall be deducted prior to any interest.

 

Paragraph 1 – The net equity of the year shall be allocated as follows:

 

a) 5% (five percent) shall be allocated, prior to any other allocation, to the constitution of legal reserve, which shall not exceed 20% (twenty percent) of the capital. In the year in which the balance of the legal reserve, in addition to the amount of capital reserves, referred to in paragraph 1 of article 182 of the Brazilian Corporations Law, exceed 30% (thirty percent) of the capital, the allocation of part of the net profits of the year to the legal reserve shall not be compulsory;

 

b) a portion shall be allocated to the payment of minimum annual compulsory dividend to the shareholders, not lower than 25% (twenty-five percent) of the net profits ascertained in the year, with due regard for the provisions of the main provision of this article, paragraph 3 below and article 202 of the Brazilian Corporations Law;

 

c) a portion, as proposed by the administration bodies, may be allocated to form reserve for contingencies under the terms of article 195 of the Brazilian Corporations Law;

 

d) a portion, as proposed by the administration bodies, may be withheld based upon capital budget previously approved, under the terms of article 196 of the Brazilian Corporations Law; and

 

e) the balance shall be allocated as established by the General Meeting, with due regard for the legal provisions.

 

Paragraph 2 – The Company shall maintain profit reserve pursuant to the by-laws referred to as “Investments Reserve”, with the purpose of reinforcing the cash to conduct the Company’s business and enabling the organic growth of the Company, and which shall be composed of 100% (one hundred percent) of the net profits remaining subsequently to deductions and allocations according to the law and to the by-laws, unless otherwise decided by the shareholders, gathered in General Meeting. The maximum limit to constitute the Investments Reserve shall be the amount corresponding to the amount of the capital of the Company subtracted from the balances of the other profit reserves of the Company, under the terms of article 199 of the Brazilian Corporations Law and, once such limit has been reached, the General Meeting shall decide upon the allocation of the exceeding amount to pay or increase the capital or to distribute dividends.

 

Paragraph 3 – The shareholders shall be entitled to receive minimum compulsory dividend of 25% (twenty-five percent) of the net profits of the year, subtracting or adding the following amounts: (i) amount intended to compose legal reserve; (ii) amount intended to compose reserve for contingencies and reversal of such reserves formed in previous years, (iii) amount resulting from reversal of the profit reserve to be realized formed in previous years, under the terms of article 202, item II, of the Brazilian Corporations Law.

 

Paragraph 4 – The amount of the compulsory dividend may be limited to the amount of the net profits realized, under the terms of the law.

 

Paragraph 5 – The dividend provided in paragraph 4 of this article 36 shall not be compulsory in the financial year in which the Board of Directors informs to the Annual General Meeting whether the payment of such dividend is incompatible with the financial status of the Company. Such fact shall be communicated to CVM within 5 (five) days from the Annual General Meeting, duly followed by justification presented by the Board of Directors and opinion from the Audit Committee in that regard.

 

Article 37 – As proposed by the Executive Board, approved by Board of Directors, ad referendum of the General Meeting, the Company may pay or credit interest on net equity to the shareholders, with due regard for the applicable legislation, which may be attributed to the amount of the compulsory dividend provided in these Articles of Incorporation.

 

Paragraph 1 – In the event of credit of interest to the shareholders throughout the financial year and allocation thereof to the amount of the compulsory dividend, the shareholders shall be entitled to the payment of any outstanding balance. In the event that the amount of the dividends is lower than the amount that has been credited thereto, the Company may not charge the exceeding balance from the shareholders.

 

Paragraph 2- The actual payment of interest on net equity, in the event of credit throughout the financial year, shall be made by resolution of the Board of Directors, throughout the financial year or in the subsequent year.

 

Article 38 – The Company may prepare bi-annual balance sheets or within shorter periods, and declare, by resolution of the Board of Directors:

 

a) payment of dividend or interest on net equity, to the profit account ascertained in bi-annual balance sheet, attributed to the amount of compulsory dividend, if any;

 

b) distribution of dividends within periods shorter than 6 (six) months, or interest on net equity, attributed to the amount of compulsory dividend, if any, provided that the total dividends paid in each semester of the financial year does not exceed the amount of the capital reserves; and

 

c) payment of interim dividend or interest on net equity, to the account of accrued profits or of profit reserve existing in the latest annual or bi-annual balance sheet, attributed to the amount of compulsory dividend, if any.

 

Article 39 – The General Meeting may decide upon the capitalization of profit reserves or of capital, including those instituted in interim balance sheets, with due regard for the applicable legislation.

 

Article 40 – Dividends not received or claimed shall forfeit within 3 (three) years from the date on which they have been made available to the shareholder and shall revert in favor of the Company.


CHAPTER VII – DISPOSAL OF SHARE CONTROL, CANCELLATION OF PUBLICLY-HELD COMPANY REGISTRATION AND WITHDRAWAL FROM THE NOVO MERCADO

Article 41 – The direct or indirect disposal of control of the Company, either in one single transaction or in a sequence of successive transactions shall be implemented under the condition that the control acquirer agree to implement OPA the subject mater of which are the shares issued by the Company owned by the other shareholders, with due regard for the conditions and terms provided in the legislation and in the regulations in effect and in the Novo Mercado Regulations, to guarantee thereto treatment equal to the treatment provided to the Selling Shareholder.

 

Paragraph 1 – For the purposes of this Article 41, “control” and its related terms mean the power actually exercised by shareholder to manage the business activities and guide the operation of the Company’s bodies, either directly or indirectly, in fact or by operation of law, regardless of the ownership interest held.

 

Paragraph 2 – In the event of indirect disposal of control, the acquiror shall disclose the amount attributed to the Company for the purposes of determining the price of the OPA, and disclose the justified demonstration of such amount.

 

Article 42 – Subsequently to a transaction of disposal of control of the Company and subsequent implementation of public offering of acquisition of shares referred to in article 41, the control acquirer, whenever necessary, shall adopt applicable measures to recompose the minimum percentage of 25% (twenty-five percent) of the total number of outstanding shares of the Company, within 18 (eighteen) months subsequently to the acquisition of control.

 

Article 43 – Any individual or legal entity, investment fund or investor of another nature that acquires or becomes owner of interest, directly or indirectly, equal to or higher than 20% (twenty percent) of the capital shall, within, at most, 60 (sixty) days from the date of acquisition or of the event that resulted in the ownership, direct or indirect, of interest equal to or higher than 20% (twenty percent) of the total number of shares issued by the Company, register or request for the registration of, as the case may be, public offering of acquisition of the totality of the shares issued by the Company, with due regard for the provisions of the applicable regulations of CVM, the Novo Mercado Regulations, other B3 regulations and the terms of this article.

 

Paragraph 1 – The public offering of acquisition of shares shall observe the following principles, in addition, as applicable, to others expressly provided in CVM Instruction No. 361, of March 5, 2002: (i) the public offering of acquisition of shares shall be addressed indistinctively to all shareholders of the Company; (ii) the public offering of acquisition of shares shall be implemented in auction to be conducted at B3; (iii) the public offering of acquisition of shares shall be launched at the price determined according to the provisions of Paragraph 2 of this article; and (iv) the public offering of acquisition of shares shall be paid on demand, in national currency, against acquisition in the public offering of acquisition of shares issued by the Company.

 

Paragraph 2 – The purchase price, in the public offering of acquisition of shares, of each share issued by the Company shall be the highest amount between: (i) 130% (one hundred and thirty percent) of the fair value of the Company, ascertained in appraisal report prepared under the terms of article 47 of these Articles of Incorporation, divided by the total number of shares issued by the Company; (ii) 130% (one hundred and thirty percent) of the price of issuance of each one of the shares in the latest capital increase implemented by public distribution occurred within the period of 24 (twenty-four) months prior to the public offering of acquisition of shares, duly updated by the IPCA up to the occasion of the payment; and (iii) 130% (one hundred and thirty percent) of the weighted average unit quote of shares issued by the Company during 90 (ninety) days prior to the announcement regarding the implementation of the public offering of acquisition of shares.

 

Paragraph 3 – The implementation of the public offering of acquisition of shares referred to in the main provision of this article shall not exclude the possibility of another shareholder of the Company or, as the case may be, the Company, formulating rival public offering of acquisition of shares, under the terms of the applicable regulations.

 

Paragraph 4 – The implementation of the public offering of acquisition of shares referred to in the main provision of this article may be waived by favorable vote of shareholders gathered in General Meeting called specifically for such purpose, with due regard for the following rules: (i) waiver of the implementation of the public offering of acquisition of shares shall be deemed approved with the vote of the simple majority of shareholders present, either on first call or second call; and (ii) for purposes of quorum to pass resolutions, shares held by the acquirer shall not be taken into account, as per item (i) above.

 

Paragraph 5 – The acquirer agrees to comply with any requests or satisfy any requirements made by CVM in relation to the public offering of acquisition of shares, within the maximum terms provided in the applicable regulations.

 

Paragraph 6 – In the event that the acquirer fails to comply with the obligations imposed by this article, including in relation to compliance with the maximum terms (i) to register or request for the registration of the public offering of acquisition of shares, or (ii) to comply with any requests or satisfy any requirements made by CVM, the Board of Directors of the Company shall call Special General Meeting, in which the acquirer may not vote, to decide upon suspension of the exercise of the rights of the acquirer that has failed to comply any obligation imposed by this article, as provided in article 120 of the Brazilian Corporations Law, without prejudice to the responsibility of the Acquiring Shareholder for losses and damages caused to the other shareholders as a result of noncompliance with the obligations imposed by this article.

 

Paragraph 7 – Any individual or legal entity, investment fund or investor of another nature that acquires or becomes owner of other rights, including (i) other rights of corporate nature, such as usufruct or entailment in relation to the shares issued by the Company, purchase options, subscription or exchange, in any way, which may result in acquisition of shares issued by the Company or any other right that guarantee thereto, on permanent or temporary basis, political or equity rights of shareholder in relation to shares issued by the Company, in relation to number equal to or higher than 20% (twenty percent) of the total number of shares issued by the Company, or which may result in acquisition of shares issued by the Company in number equal to or higher than 20% (twenty percent) of the total number of shares issued by the Company; or (ii) Derivatives that grant right to shares of the Company representing 20% (twenty percent) or more of shares of the Company, likewise agrees, within, at most, 60 (sixty) days from the date of such acquisition or such event, to register or request for the registration, as the case may be, of public offering of acquisition of shares, under the terms described in this Article 43.

 

Paragraph 8 – The obligations provided in article 254-A of the Brazilian Corporations Law and of Articles 41 and 42 of these Articles of Incorporation do not exclude compliance, by the acquirer, with the obligations provided in this article.

 

Paragraph 9 – The provisions of this Article 43 shall not be applicable in the event that a person becomes owner of shares issued by the Company in number equal to or higher than 20% (twenty percent) of the total number of shares issued thereby as a result of (i) merger of another by the Company; (ii) merger of Shares of another company by the Company; (iii) cancellation of shares in treasury; (iv) redemption of shares; (v) subscription of shares of the Company, implemented in one single primary issuance, which has been approved in General Meeting and the proposal of which for capital increase has determined the establishment of the price of issuance of the shares based upon the Economic Value obtained in economic-financial appraisal report of the Company prepared by specialized institution or company with evidenced expertise in appraisal of publicly-held companies or by the bookbuilding procedure within the context of public offering of distribution of shares; or (vi) succession by operation of corporate restructuring or legal provision – including succession by operation of inheritance – involving shareholders of the Company and (a) its respective controlled companies, direct or indirect, or (b) its respective Controlling companies, direct or indirect. For purposes of this paragraph, control means the ownership of, at least, 50% (fifty percent) plus one share of the voting capital of the controlled company and exercise of the rights referred to in letters (a) and (b) of article 116 of the Brazilian Corporations Law.

 

Paragraph 10 – For purposes of calculating the percentage of 20% (twenty percent) of the total number of shares issued by the Company described in this article, involuntary increases of ownership interest resulting from cancellation of shares in treasury, reduction of the Company’s capital with cancellation of shares, or any redemption or reimbursement of shares, shall be disregarded.

 

Paragraph 11 – The provisions of this Article 43 shall be further observed in the events in which the percentage of interest, direct or indirect, of, at least, 20% (twenty percent) of the capital has been reached by the acquirer by implementation of compulsory public offering of acquisition of shares, under the terms of CVM Instruction No. 361/02 or of any other rule that substitutes it. Any difference of the unit price per share ascertained between the public offering of acquisition of shares made based upon this article and the public offering of acquisition of shares made under the terms of CVM Instruction No. 361/02 referred to above shall be paid in favor of the shareholders that accept the public offering of acquisition of shares.

 

Article 44 – In addition to the provisions of Article 9 of these Articles of Incorporation, as from the date on which the Company is no longer controlling shareholder, any individual or legal entity, investment fund or investor of another nature that reaches, directly or indirectly, interest in Outstanding Shares equal to or higher than 5% (five percent) of the capital of the Company, and which intends to make new acquisition of Outstanding Shares, agrees to make each new acquisition at B3, private negotiations or negotiations in over-the-counter market being prohibited.

 

Article 45 – In the public offering of acquisition of shares, to be made by the controlling shareholder or by the Company, to cancel the publicly-held company registration of the Company, the minimum price to be offered shall correspond to the fair price ascertained in appraisal report, with due regard for the applicable legal and regulatory rules.

 

Article 46 – Withdrawal of the Company from the Novo Mercado shall be (i) previously approved in General Meeting and (ii) communicated to B3 in writing, at least, 30 (thirty) days in advance.

 

Sole Paragraph: The Company, its administrators and shareholders shall observe the provisions established in the Regulations for Listing of Issuers and Admission for Trade of Securities, including rules related to withdrawal and exclusion of trade of securities admitted to trade in organized markets administered by B3.

 

Article 47 – The appraisal report referred to in the previous articles of these Articles of Incorporation shall be prepared by specialized institution or company with evidenced expertise and independence in relation to power to make decisions of the Company, its administrators and controlling shareholders, in addition to satisfying the requirements of paragraph 1 of article 8 of the Brazilian Corporations Law, and containing the responsibility provided in paragraph 6 of article 8 of the Brazilian Corporations Law.

 

Paragraph 1 – The General Meeting shall be exclusively responsible for selecting the specialized institution or company responsible for determining the fair price of the Company and the respective resolution, disregarding blank votes, shall be taken by the majority of votes of the shareholders representing the Outstanding Shares present in such General Meeting, which, if held on first call, shall be held with the presence of shareholders representing, at least, 20% (twenty percent) of the total number of Outstanding Shares or which, if held on second call, shall be held with the presence of any number of shareholders representing the Outstanding Shares.

 

Paragraph 2 – Costs to prepare the appraisal report required shall be fully borne by the offering party.

 

Article 48 – One single public offering of acquisition of shares may be made, with the purpose of fulfilling more than one of the purposes provided in this Chapter VII, in the Novo Mercado Regulations or in the regulations issued by CVM, provided that it is possible to match the procedures of all modalities of public offering of acquisition of shares and provided that there are no losses to the offering addressees and authorization from CVM has been obtained, whenever required by the applicable legislation.

 

Article 49 – The Company or the shareholders responsible for making the public offering of acquisition of shares provided in this Chapter VII, in the Novo Mercado Regulations or in the regulations issued by CVM may guarantee its implementation through any shareholder, third party and, as the case may be, by the Company. The Company or the shareholder, as the case may be, are not exempt from the obligation to make the public offering of acquisition of shares up to the occasion of its conclusion, with due regard for the applicable rules.


CHAPTER VIII – ARBITRATION TRIBUNAL

Article 50 – The Company, its shareholders, administrators and members of the Audit Committee (if installed), actual and deputy members, agree to resolve, by means of arbitration, before the Market Arbitration Chamber, pursuant to its regulations, any and all disputes or controversies that may arise between them, related too r arising from, their condition of issuer, shareholders, administrators and members of the audit committee, in particular, resulting from the provisions of Law No. 6,385/76, Law No. 6,404, of the Articles of Incorporation of the Company, rules issued by the National Monetary Council, Central Bank of Brazil and CVM, and other rules applicable to the capital market operations in general, in addition to those provided in the Novo Mercado Regulations, Arbitration Regulations of the Market Arbitration Chamber, B3 regulations and the Agreement of Participation in the Novo Mercado.

 

Paragraph 1 – The Brazilian legislation shall be the sole legislation applicable to the merit of any and all controversies, and to the performance, construction and effectiveness of this arbitration section. The arbitration Tribunal shall be composed of arbitrators selected pursuant to the provisions established in the Arbitration Regulations. The arbitration proceeding shall be conducted in the City of São Paulo, State of São Paulo, venue in which the arbitration award shall be rendered. The arbitration shall be administered by the Market Arbitration Chamber and shall be conducted and judged according to the applicable provisions of the Arbitration Regulations.

 

Paragraph 2 – Without prejudice to the effectiveness of this arbitration section, the request for urgent measures by the Parties, prior to the constitution of the Arbitration Tribunal, shall be addressed to the Judiciary Branch, pursuant to item 5.1.3 of the Arbitration Regulations of the Market Arbitration Chamber.


CHAPTER IX – LIQUIDATION

Article 51 – The Company shall be dissolved and liquidated in the events provided in law and the General Meeting shall establish the form of liquidation, elect the liquidator and, as the case may be, the Audit Committee for such purpose.


CHAPTER X – FINAL AND TEMPORARY PROVISIONS

Article 52 – The Company shall observe the shareholders’ agreements filed at its head office and the presiding officers of the General Meeting or of the Board of Directors shall be expressly prohibited from observing vote statement of any shareholder, signatory of shareholders’ agreement duly filed at the registered office, which is cast in disagreement with the provisions agreed upon in such agreement, and the Company shall be further expressly prohibited from accepting and proceeding with the transfer of shares and/or encumbrance and/or assignment of preemptive right to subscribe shares and/or other securities that conflict with the provisions and regulations established in shareholders’ agreement.

 

Sole Paragraph – The Company shall provide for and conclude, within 30 (thirty) days from the request made by the shareholder, the filing of shareholders’ agreements at the head office of the Company, as well as the annotation of its obligations or burdens in the books of registrations of the Company.

 

Article 53 – Omissions in these Articles of Incorporation shall be resolved by the General Meeting and regulated according to the provisions of the Brazilian Corporations Law, with due regard for the Novo Mercado Regulations.

 

Article 54 – With due regard for the provisions of article 45 of the Brazilian Corporations Law, the amount of reimbursement to be paid to dissident shareholders shall be based upon the equity value provided in the latest balance sheet approved by the General Meeting.

 

Article 55 – Publications required by the Brazilian Corporations Law shall be made in the State Official Gazette of the State of São Paulo and in another newspaper of wide circulation.

 

Article 56 – The provisions of article 43 and 44 of these Articles of Incorporation shall not be applicable to current shareholders or Group of Shareholders of the Company (individually or jointly taken into consideration) that are already owners of number equal to or higher than 20% (twenty percent) of the total number of shares issued by the Company and its successors on the date of publication of the announcement of commencement of the first public distribution of shares issued by the Company, being applicable exclusively to investors that acquire shares and become shareholders of the Company as from such date of publication.