Bylaws

 

 

 

Below, the translation of each chapter:

 

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

Article 1 – Companhia de Locação das Américas (“Company”), which adopts the trading name “Unidas”, is a joint -stock company with authorized capital, governed by these By-Laws (“By-Laws”) and by the applicable provisions of law, especially Law No. 6404, of December 15, 1976, as amended (“Corporation 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, managers and members of the Fiscal Council, when 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 event of prejudice to the rights of the offerees of the public offerings provided for in these By-Laws.

 

Article 2 – The principal place of business 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 registered office in the City of Belo Horizonte, State of Minas Gerais, at Avenida Raja Gabaglia, 1781, 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 places of business of any kind, anywhere in Brazil or abroad, without prior authorization of the Board of Directors.

 

Article 3 – The business purpose of the Company consists of (i) the business of national and imported car rental, with or without chauffeur, and (ii) holding interest in other companies, as member or shareholder.

 

Article 4 – The duration of the Company shall be indefinite.

 


CHAPTER II – CAPITAL STOCK

Article 5 – The capital stock of the Company is Nine Hundred and Seventy-Seven Million, Five Hundred and Seventeen Thousand, Eleven Reais, and Thirty-Four Cents (R$977,517,011.34), fully subscribed and paid-in, divided into One Hundred and Sixteen Million, Eight Hundred and Sixty-Three Thousand, Eight Hundred and Twenty-Seven (116,863,827) registered book-entry common shares without par value.

 

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

 

Paragraph 2 – Each registered common share entitles its holder to one vote in the resolutions of the Shareholders’ Meetings of the Company.

 

Paragraph 3 – All shares of the Company are book-entry shares kept in a deposit account held in the name of the holders with a financial institution authorized by the Brazilian Securities Commission (“CVM”), with which the Company has entered into a custody agreement which is in effect, without the issue of certificates. The depositary institution may charge to the shareholders the cost of the services of transfer and registration of the ownership of the book-entry shares, as well as the cost of the services relating to the shares kept in custody, subject to the maximum limits set by CVM.

 

Paragraph 4 – The Company may not issue preferred shares or founder’s shares.

 

Paragraph 5 – The shares are indivisible in which regards the Company. Whenever a share is held by more than one person, the rights conferred by it shall be exercised by the representative of the joint owners.

 

Paragraph 6 – The shareholders have a preemptive right, proportionally to their respective shareholding interest, to subscribe for shares, debentures convertible into shares or warrants issued by the Company, which may be exercised within the legal timeframe, subject to the provisions of paragraph 3, article 6, of these By-Laws.

 

Article 6 – The Company is authorized to increase the capital stock up to the limit of One Billion and Five Hundred Million Reais (R$1,500,000,000.00), regardless of amendment to the By-Laws, upon resolution of the Board of Directors, and the Board of Directors shall establish the conditions for the issue, including the price, term and form of payment.

 

Paragraph 1 – Upon subscription of new shares in capital increase with payment in assets, the respective valuation report shall be previously approved by the Shareholders Meeting, after the opinion of the Fiscal Council, if installed.

 

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

 

Paragraph 3 – At the discretion of the Shareholders Meeting or the Board of Directors, as applicable, the preemptive right may be excluded or the period of time for the exercise thereof may be reduced in the issues of common shares, warrants, and debentures convertible into shares or warrants, the placement thereof is made upon (i) sale in stock exchange or public subscription, or (ii) swap of shares in public offering for acquisition of control, according to the law, and, in the event 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 keep them as treasury shares and subsequently dispose of or cancel them, without reduction in the capital stock, subject to the applicable provisions of law and regulations.

 

Article 8 – The Company may, by resolution of the Board of Directors and according to a plan approved by the Shareholders’ Meeting, grant options to buy or subscribe for shares, without preemptive rights of shareholders, to the managers, employees, and collaborators, and such option may also be given to the managers and employees of the companies directly or indirectly controlled by the Company.

 

Article 9 – Any party that acquires or disposes of shares issued by the Company, even if it is already a shareholder or group of shareholders, is required to disclose, upon notice (i) to the Company, and the Company shall in turn disclose to the CVM, the stock exchanges in which the securities issued by it are traded; and (ii) to the CVM, the acquisition or disposal of shares exceeding, upwards or downwards, five percent (5%), ten percent (10%), fifteen (15%), and so on successively, of the capital stock of the Company.

 

Sole Paragraph – Such obligation shall similarly apply to the holders of debentures or other securities convertible into shares and warrants conferring on their holders the right to acquire shares in the percentages provided for in this article. Without prejudice to the other penalties provided for by law and in the CVM’s regulations, the shareholder that fails to comply with such obligations shall have its rights suspended, pursuant to article 120 of the Corporation Law and Article 30 of these By-Laws, except for the essential rights provided for in article 109 of the Corporation Law, provided that such suspension shall cease as soon as the obligation is performed.


CHAPTER III – MANAGEMENT

SECTION I – MISCELLANEOUS

 

Article 10 – The Company shall be managed by a Board of Directors and by an Executive Board, which shall be vested with the powers conferred upon them by these By-Laws, the Corporation Law and the applicable regulations.

 

Article 11 – The sitting and alternate members of the Board of Directors, Executive Board and Fiscal Council shall take office upon signing an oath of office, which shall include their agreement to comply with the arbitration clause referred to in Article 50 of these By-Laws, and with the applicable statutory requirements.

 

Paragraph 1 – Immediately after taking office, the managers shall notify the Company, its controlling or controlled companies, in the latter two cases so long as they are publicly-held companies, of the number and the characteristics of the securities issued by the Company that are directly or indirectly owned by said managers, including its Derivatives.

 

Paragraph 2 – For purposes of these By-Laws, “Derivatives” means securities traded in the futures market or other assets backed by or related to securities issued by the Company.

 

Paragraph 3 – The managers of the Company shall comply with the policy on disclosure of relevant act or fact and the policy on the trade of securities issued by the Company upon the signature of the respective adhesion agreement.

 

Article 12 – The Board of Directors may create technical or supervisory committees to assist it in the management of the Company, with defined objectives and duties.

 

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

 

Paragraph 2 – The same obligations and prohibitions imposed on the managers by the Company and by the Laws and these By-Laws shall also apply to the members of the committees.

 

Paragraph 3 – The Audit and Risk Management Committee, which is an advisory body related to the Board of Directors, shall consist of at least three (3) members, provided that at least one (1) of them shall be an independent director of the Company, and at least one (1) of them shall be a reputed and experienced expert on corporate accounting matters.

 

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

 

Paragraph 5 – The duties of coordinator of the Audit and Risk Management Committee shall be defined in its internal rules, as approved by the Board of Directors.

 

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

 

(i) give opinion on the hiring and removal of the independent auditors;

 

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

 

(iii) follow up on the internal audit and the internal control of the Company;

 

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

 

(v) assess, monitor and recommend to the management the correction or improvement of the Company’s internal policies, including the policy on transactions between related parties; and

 

(vi) have means to receive and deal with information about noncompliance with legal and normative provisions applicable to the Company, as well as internal regulations and codes, including with provision of specific procedures to protect the provider and the confidentiality of the information.

 

Paragraph 7 – The Rent a Car Committee (RAC), which is a supporting advisory body of the Board of Directors, shall consist of three (3) members and shall have, among other functions, the duty to assist and give recommendations to the Executive Board and to the Board of Directors of the Company, its subsidiaries and its franchises, including, but not limited to, (i) the preparation of the business plan; (ii) the valuation of the market conditions of the segment of the RAC; (iii) the price and performance strategies; (iv) the following-up and monitoring of the activities of the RAC segment; and (v) the issues that may be submitted to it by the Executive Board or the Board of Directors, as well as those that it deems relevant.

 

Paragraph 8 – The Fleet Management Committee, which a supporting advisory body of the Board of Directors, shall consist of three (3) members and shall have, among other functions, the duty to assist and make recommendations to the Executive Board and the Board of Directors da Company and its subsidiaries, including, but not limited to, (i) the preparation of the business plan; (ii) the assessment of the market conditions of the segment of Outsourcing and Management of Fleets; (iii) the price and performance strategies; (iv) the following-up and monitoring of the activities of the segment of Outsourcing and Management of Fleets; and (v) the issues that may be submitted to it by the Executive Board or the Board of Directors, as well as those that it deems relevant.

 

Article 13 – The Annual Shareholders’ Meeting shall set the limit of annual global remuneration of the managers of the Company, and the Board of Directors shall resolve on its distribution among its members.

 

SECTION II – Board of Directors

 

Article 14 – The Board of Directors consists of at least five (5) and no more than seven (7) members, all elected and removable from office by the Shareholders Meeting, with a unified term of office of two (2) years, and reelection is permitted.

 

Paragraph 1 – The greater of at least two (2) members of the Board of Directors or twenty percent (20%) of its members, shall be independent directors, and the characteristics of those appointed to the Board of Directors as independent directors shall be resolved at the Shareholders Meeting at which they are appointed. Any director elected as provided for in article 141, paragraphs 4 and 5 of the Corporation Law shall also be deemed to be an independent director, without prejudice to the definition given in Article 41 of these By-Laws, in the case of a controlling shareholder.

 

Paragraph 2 – An independent director shall be a Director who: (i) has no relation with the Company other than interest in its capital; (ii) is not a controlling shareholder or spouse or relative until the second degree of a controlling shareholder, or is not and has not been in the last three (3) years related to a company or entity related to the controlling shareholder (persons related to learning and/or research public institutions are excluded from this restriction); (iii) has not been in the last three (3) years an employee or Officer of the Company, of the controlling shareholder of a company controlled by the Company; (iv) is not a direct or indirect supplier or buyer of services and/or products of the Company in a quantity that implies loss of independency; (v) is not an employee or manager of any company or entity that is supplying or demanding services and/or products to the Company in a quantity implying loss of independence; (vi) is not a spouse or relative until the second degree of any manager of the Company; and (vii) does not receive remuneration from the Company other than the remuneration as Director (amounts in cash from interest in the capital are excluded from this restriction).

 

Paragraph 3 – If, as result of the calculation of the percentage referred to in the paragraph above, a fractional number may arise, the Company shall round such number to the next immediately succeeding upper whole number.

 

Paragraph 4 – The members of the Board of Directors shall take office upon signing their oath of office in the Book of Minutes of Meetings of the Board of Directors within thirty (30) days after being elected. The members of the Board of Directors may be removed from office at any time by the Shareholders’ Meeting, and shall remain in their respective offices until their successors take office, except as otherwise resolved by the Shareholders’ Meeting.

 

Paragraph 5 – The members of the Board of Directors shall be have good reputation, and no person may be elected, except with the express waiver of the Shareholders Meeting at which he/she is elected, who: (i) holds office in companies deemed competitors of the Company; or who (ii) has or represents to have interests in conflict with those of the Company. No right to vote may be exercised by the members of the Board of Directors if it is verified thereafter that they are prohibited to exercise such right as provided for in this paragraph.

 

Paragraph 6 – The members of the Board of Directors may not have access to information or attend meetings of the Board of Directors relating to matters in which they have or represent interests in conflict with those of the Company, and they shall be expressly prohibited from exercising their voting right on such matters.

 

Paragraph 7 – The members of the Board of Directors may not be absent from the performance of their duties for more than thirty (30) consecutive calendar days, under penalty of being removed from office, except in the event of leave of absence granted by the Board of Directors itself.

 

Paragraph 8 – No person may simultaneously hold office as Chairman of the Board of Directors and chief executive officer or principal executive of the Company.

 

Article 15 – The Board of Directors shall have one (1) Chairman and one (1) Vice-Chairman, who shall be elected by absolute majority of votes of the attending members at the first meeting of the Board of Directors immediately after said members take office, or whenever a vacancy occurs in said positions.

 

Article 16 – The Board of Directors shall meet (i) regularly, every month; and (ii) extraordinarily whenever it is convened by any of its members upon notice by telegram, facsimile, email or any other written means (with acknowledgment of receipt) given at least two (2) business days in advance, specifying the date, time and agenda of the meeting.

 

Paragraph 1 – No issue that has not been included in the respective agenda informed in the call notice may be approved at the meetings of the Board of Directors of the Company, except as otherwise agreed by all the directors of the Company.

 

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

 

Paragraph 3 – Regardless of the call notice requirements provided for in this article, if all Directors attend a meeting, such meeting shall be deemed a regular meeting.

 

Paragraph 4 – The resolutions of the Board of Directors shall be taken by affirmative vote of the majority of the attending parties, including those casting their vote in the manner provided for in article 17, paragraph 1, of these By-Laws.

 

Paragraph 5 – In the event of equality in the resolutions, the Chairman of the Board of Directors or his alternate shall be entitled to a second or casting vote.

 

Article 17 – The meetings of the Board of Directors shall be chaired by the Chairman of the Board of Directors and the secretary shall be whomever the Chairman may appoint. In the event of temporary absence of the Chairman of the Board of Directors, these meetings shall be chaired by the Vice-Chairman of the Board of Directors or, in his/her absence, by a Director chosen by a majority of the votes of the other members of the Board of Directors, and the chairman of the meeting shall appoint the Secretary.

 

Paragraph 1 – In case of temporary absence of any member of the Board of Directors, the respective member of the Board of Directors may, based on the agenda of the matters to be discussed, express their vote in writing, by means of a letter or facsimile delivered to the Chairman of the Board of Directors, on the date of the meeting, or by digitally certified electronic mail. In the event of temporary absence of the Chairman, the Vice-Chairman or any other member of the Board of Directors, they may be represented at meetings of the Board of Directors by another member of the Board of Directors appointed in writing, who, in addition to their own vote, shall express the vote of the Director who is temporarily absent.

 

Paragraph 2 – In case of vacancy in the office of any member of the Board of Directors, the substitute shall be appointed, to complete the respective term of office, by the Shareholders’ Meeting. In the event of vacancy in most of the offices, the Shareholders’ Meeting shall be immediately called to elect the substitutes, who shall complete the term of office of those who have been replaced. For purposes of this paragraph, vacancy occurs upon removal from office, death, resignation, proven impediment, absence for more than thirty (30) days or disability.

 

Paragraph 3 – The resignation of a director from office shall be made by means of a written notice to the Company addressed to the Chairman of the Board of Directors or, in case of resignation of the Chairman of the Board of Directors, to the shareholders, and it shall become effective with respect to the Company as from the time of delivery of the notice and, with respect to third parties, after publication of filing of the resignation document with the Commercial Registry.

 

Article 18 – The meetings of the Board of Directors shall be preferably held at the Company’s principal place of business. Meetings can be held by teleconference or videoconference, or other means of communication, and attendance in such a way shall be deemed attendance in person at said meeting. In this case, Directors who attend the Board meeting remotely may express their votes, on the date of the meeting, by means of a letter or facsimile or digitally certified electronic mail.

 

Paragraph 1 – At the end of the meeting, minutes shall be drawn up, which shall be signed by all Directors physically present at the meeting, and later transcribed in the Book of Minutes of the Board of Directors of the Company. The votes cast by Directors who attend the Board meeting remotely or who have pronounced pursuant to article 17, paragraph 1 of these By-Laws shall also be recorded in the Book of Minutes the Board of Directors, and a copy of the letter, facsimile or electronic message, as the case may be, containing the vote of the Director, shall be attached to the Book as soon as the minutes have been transcribed.

 

Paragraph 2 – The minutes of the meetings of the Company’s Board of Directors that contain resolutions designed to have effects in relation to third parties shall be published and filed with the public registry of mercantile companies.

 

Paragraph 3 – The Board of Directors may admit other attendees in its meetings, with the purpose of monitoring the resolutions and/or providing clarifications of any nature, however, they shall be barred from voting.

 

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

(i) establish the general orientation of the Company’s business, ensuring its proper performance;

 

(ii) convene the Shareholders’ Meeting in the cases provided for by law or whenever deeming convenient;

 

(iii) previously pronounce on any proposal to be submitted to the Shareholders’ Meeting;

 

(iv) elect and remove from office the members of the Executive Board and establish their duties and compensation, as well as resolve on the change in the number of members and composition, subject to the provisions applicable under these By-Laws and the applicable laws;

 

(v) distribute among the Directors and Executive Officers, individually, the portion of the annual global compensation of the managers set by the Shareholders’ Meeting;

 

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

 

(vii) pronounce on the management report and the accounts of the Executive Board, as well as on the financial statements for the year to be submitted to the Annual Shareholders’ Meeting and submit to the Annual Shareholders’ Meeting a proposal for the allocation of net income for each fiscal year;

 

(viii) approve the Company’s annual business plan and annual budget, any expansion projects and investment programs, and monitor the implementation thereof;

 

(ix) review the Company’s quarterly results;

 

(x) approve (i) any acquisition or disposal of equity interest in the capital stock of any Controlled Company, affiliate or any other company or consortium; and (ii) creation and dissolution of subsidiaries and Controlled Companies, in Brazil or abroad;

 

(xi) approve any commitment with financial obligations by the Company and its controlled companies at an amount, individually considered, in excess of fifty million Reais (R$50,000,000.00);

 

(xii) supervise the management of the Executive Board, examine at any time the books and papers of the Company, request information on contracts execution or in the process of execution by the Company and on any other acts deemed necessary;

 

(xiii) approve the human resources policy and compensation criteria, rights and advantages of the Company’s managers and employees;

 

(xiv) grant stock options to its managers and employees, without preemptive right to shareholders under the terms of the plans approved by the Shareholders’ Meeting, pursuant to Article 8 of these By-Laws;

 

(xv) choose and remove independent auditors;

 

(xvi) submit to the Shareholders’ Meeting proposals for capital increase above the authorized capital limit, or with payment in assets, as well as amendments to the By-Laws;

 

(xvii) authorize the issuance of shares or bonds convertible into shares within the limit of the authorized capital, bonds not convertible into shares or other securities, as well as issues to raise funds, such as notes, commercial papers or others of common use in the market, deciding on the issuance and redemption conditions, and may also exclude (or reduce term) the preemptive right in the issuance of shares, warrants and convertible bonds within the authorized capital whose call is made through (i) sale on a stock exchange or (ii) public subscription or (iii) exchange for shares in a public offering for acquisition of control, under the terms established in the applicable law;

 

(xviii) resolve on the acquisition of shares issued by the Company for cancellation or to be held as treasury shares, as well as on resale, repositioning in the market or cancellation, subject to the norms issued by the CVM (Brazilian Securities and Exchange Commission) and other applicable legal provisions;

 

(xix) declare interim dividends, as well as interest on shareholders’ equity, pursuant to the Brazilian Corporation Law and other applicable laws;

 

(xx) approve the provision of any guarantees;

 

(xxi) express a favorable or contrary opinion to any public offering for the acquisition of shares for the shares issued by the Company by means of a prior informed opinion, disclosed within fifteen (15) days of the publication of the notice of the public offering for acquisition of shares, which should address, at least: (i) the convenience and timeliness of the public offering for the acquisition of shares regarding the interest of all shareholders, including in relation to the price and potential impacts to the liquidity of the shares; (ii) the repercussions of the public offering for acquisition of shares over the Company’s interests; (iii) the strategic plans disclosed by the offeror in relation to the Company; (iv) regarding alternatives to the acceptance of the public offering for the acquisition of shares available in the market; and (v) other points that the Board of Directors may deem pertinent, as well as the information required by the applicable rules established by the CVM;

 

(xxii) vote on any other matter submitted to it by the Executive Board;

 

(xxiii) approve the acquisition or disposal of any assets, including real estate (whether in a single transaction or in a series of related transactions), by the Company and/or any subsidiary for more than ten million Reais (R$10,000,000.00), if such acquisition or disposal is not provided for in the Company’s annual business plan or annual budget;

 

(xxiv) approve the creation of liens, encumbrances or any other security interest on the assets of the Company and/or its subsidiaries outside the normal course of activities of the Company and/or its subsidiaries, as the case may be, for an amount in excess of ten million Reais (R$10,000,000.00);

 

(xxv) approve the execution, amendment and/or termination of a contract of any kind with customers, suppliers and/or service providers, whose individual value of the respective contract is greater than one hundred percent (100%) of the Company’s shareholders’ equity and/or that of its controlled companies;

 

(xxvi) approval of obligations or expenses, by the Company, in an amount greater than ten percent (10%) of the amount foreseen in the Company’s annual budget; and

 

(xxvii) engagement in or assumption or commitment of any act that renders the Company or any of its controlled companies liable for any indebtedness that causes the Company’s Net Debt/EBITDA ratio, calculated on a quarterly basis and considering the EBITDA values of the last twelve (12) months, to be greater than three point twenty-five (3.25).

 

(xxviii) approve the following transactions between the Company and its related parties: (a) loan contracts; (b) alienation of vehicles up to the value of R$ 12,000,000.00 per year, provided that the practiced prices are in line with the minimum prices defined in the selling month by the Used Cars Committee; (c) alienation of vehicles for Employees, provided that the terms and conditions established in the Benefit Policy in force at the time of sale are respected; (d) acquisition of parts and services up to the value of R$ 4,000,000.00 per year since the terms and conditions established in Purchase Policy in force at the time are respected; and (e) Company’s vehicles rental necessary to attend rental demand. (For purposes of this article: (i) it is considered affiliated any natural person or legal entity that has, directly or indirectly, the control of the Company, any controled legal person, direct or indirectly, by the Company, or any legal person direct or indirectly under Company’s common control; and (ii) it is considered related parts the shareholders, officers and members of the Company’s Board of Directors, as well as their respectively spouses, brothers ascending or descending of first or second degree, or any entity in which the shareholders, statutory directors and members of the Board of Directors may elect, by law, vote agreement or any other form of contract , 1 (one) or more statutory directors or members of the Board of Directors), or have influence over the social activities direction or orientation of its organs).

Sole Paragraph – The members of the Board of Directors who are also Executive Officers shall abstain from voting on matters provided for 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 Shareholders’ Meetings.

 

Section III – Executive Board

 

Article 21 – The Company’s Executive Board shall be composed of at least two (2) and at most five (5) members, who may be shareholders or not, resident in Brazil, elected by the Board of Directors, authorized to having roles accumulated by a same Executive Officer, with the following designations: one (1) Chief Executive Officer, one (1) Chief Financial Officer, one (1) Investor Relations and Business Development Officer, one (1) Head Rent a Car Officer (RAC) and one (1) Officer without specific designation.

 

Article 22 – The Executive Officers shall be elected by the vote of a majority of the members of the Board of Directors, with a unified term of office of two (2) years, reelection being permitted, being exempted from providing security as performance bond. The executive officers shall take office upon signing the instrument of investiture in the proper book and shall remain in office until 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 – If there is a vacancy in the Executive Board, whether due to resignation, removal, impediment or temporary absence, the Board of Directors shall, within ten (10) days as from the date of vacancy, elect the replacement for the remaining term of office, and the Chief Executive Officer shall perform the duties of the vacant executive board office until the respective substitute is elected, except in cases of vacancy of the office of Chief Financial Officer or Investor Relations and Business Development Officer, whose duties may be cumulated by the Investor Relations and Business Development Officer or by the Chief Financial Officer, respectively, as the case may be, without the need for a new election, until the end of the term of office.

 

Paragraph 3 – The Executive Officers may not fail to perform their duties for more than thirty (30) consecutive calendar days under penalty of loss of office, except in the case of a leave granted by the Executive Board itself.

 

Article 23 – The Executive Board shall meet whenever required by the Company’s business, and such meetings shall be convened by the Chief Executive Officer or by any of the other Officers, and the meeting shall be opened only with the presence of the majority of its members.

 

Paragraph 1 – Meetings of the Executive Board may be held by teleconference, videoconference or other means of communication, and attendance in such a way shall be deemed an attendance in person at said meeting. In this case, the members of the Executive Board shall express their votes by means of a letter, facsimile or digitally certified electronic mail.

 

Paragraph 2 – In the event of temporary absence of any Executive Officer, such Executive Officer may, based on the agenda of the matters to be addressed, express his/her vote in writing, by means of a letter or facsimile delivered to the Chief Executive Officer, or by electronic mail digitally certified, with proof of receipt 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, he/she may be represented at meetings of the Executive Board by another Executive Officer appointed in writing, who, in addition to his/her own vote, shall express the vote of the temporarily absent Executive Officer, and shall, however, comply with the provisions of article 26 of these By-Laws regarding the representativeness of the company.

 

Paragraph 3 – At the end of the meeting, minutes shall be drawn up, which shall be signed by all Executive Officers physically present at the meeting, and later transcribed in the Book of Minutes of the Executive Board. The votes cast by Executive Officers who attend the meeting of the Executive Board remotely or who have manifested themselves in the manner set forth in paragraph 1 of this article shall also be recorded in the Book 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 as soon as the minutes have been transcribed.

 

Article 24 – The resolutions at meetings of the Executive Board shall be passed by majority vote of those present at each meeting, or who have expressed their vote pursuant to article 23, paragraph 2 of these By-Laws. In the event of a tie in the resolutions, the Chief Executive Officer shall have the casting vote.

 

Article 25 – The Executive Board shall manage the company’s affairs in general and engage, to that effect, in all necessary or convenient acts, except for those which, by law or by these By-Laws, are assigned to the Shareholders’ Meeting or to the Board of Directors. In the exercise of their duties, the Executive Officers may carry out all transactions and perform all acts of ordinary administration necessary for the attainment of the objectives of their office, subject to the provisions of these By-Laws as to the form of representation, the powers to perform certain acts, and the general business orientation established by the Board of Directors.

 

Paragraph 1 – The Executive Board shall exclusively:

 

 a) comply with and enforce these By-Laws and the resolutions of the Board of Directors and of the Shareholders’ Meeting;

 

b) prepare and propose to the Board of Directors the Company’s annual business plan and annual budget, any expansion projects and investment programs, and comply with and enforce the guidelines thereof;

 

c) represent the Company, in accordance with the responsibilities and powers established in these By-Laws, by the Shareholders’ Meeting and by the Board of Directors;

 

d) vote on the opening, transfer and/or closing of branches, offices or establishments of any kind, in any part of the national territory or abroad;

 

e) submit annually to the consideration of the Board of Directors the Management Report and the accounts of the Executive Board, together with the report of the independent auditors, as well as the proposal to allocate the profits established in the previous year;

 

f) approve any commitments with financial obligations, subject to the limits under the powers conferred on the Board of Directors; and

 

g) vote on any matter that does not fall within the exclusive responsibility of the Shareholders’ Meeting or the Board of Directors.

 

Paragraph 2 – The Chief Executive Officer shall, in addition to constantly coordinating the activities of the Executive Officers and directing the performance of the activities related to the Company’s general planning: (i) plan, coordinate, organize, supervise and direct the Company’s activities; (ii) implement the guidelines and compliance with the resolutions taken at Shareholders’ Meetings and at the meetings of the Board of Directors and Executive Board; (iii) call and chair the meetings of the Executive Board, with voting rights, including casting vote; (iv) establish the corporate, legal, policy and institutional guidelines in the development of the Company’s activities; (v) exercise the general supervision of the responsibilities and duties of the Executive Board; (vi) exercise other powers and responsibilities that are not conferred on the other executive officers and those that may be vested from time to time by the Board of Directors.

 

Paragraph 3 – The Chief Financial Officer shall be responsible for the following, among other duties that may be established: (i) replace the Chief Executive Officer in his/her duties in his/her absences and disqualifications; (ii) plan, coordinate, organize, supervise and direct activities related to financial and accounting operations of the Company and its subsidiaries, including the management of treasury areas, application and fundraising, receivables control and accounts payable, budgeting and control of operations and planning, including preparation of the Company’s budget; (iii) participate in negotiations for acquisitions, mergers, associations, etc. with other companies, aiming at the growth and consolidation of the business, whenever requested; and (iv) conduct activities delegated by the Executive President, when requested.

 

Paragraph 4 – It is incumbent upon the Investor Relations and New Businesses Officer, among other attributions that may be established for him/her: (i) represent the Company before the controlling entities and other institutions that operate in the capital markets, and he/she shall be responsible for providing information to investors, the CVM, the Central Bank of Brazil, the Stock Exchanges where the Company has its securities traded and other bodies related to the activities carried out in the capital markets, in accordance with applicable law, in Brazil and abroad; (ii) participate in decisions regarding the feasibility of new business of the Company; and (iii) participate in negotiations for acquisitions, mergers, associations etc. with other companies, aiming at the growth and consolidation of the business, whenever requested.

 

Paragraph 5 – It is the responsibility of the Head Rent a Car Officer  (RAC), among other responsibilities that may be established: (i) to plan, coordinate, organize, supervise and direct the activities of the Company, its subsidiaries and franchises, related to the RAC Segment; (ii) implement the guidelines and compliance with the resolutions adopted at General Meetings and in the meetings of the Board of Directors and Executive Board related to the RAC Segment; (iii) evaluate the market conditions of the RAC segment; and (iv) represent the Company before the control bodies and the RAC Segment.

 

Article 26 – The Company shall assume obligations when represented:

a) by two (2) Officers acting jointly, one of them being the Chief Executive Officer; or

 

b) by one (1) Officer jointly with one (1) attorney-in-fact duly appointed pursuant to paragraph 1 of this article; or

 

c) by two (2) joint attorneys-in-fact, duly appointed pursuant to paragraph 1 of this article; or

 

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

 

Paragraph 1 – The powers of attorney granted by the Company must be signed by the Chief Executive Officer, but always jointly with the Chief Financial Officer, Chief Investor Relations and New Business Officer or Head Rent a Car Officer, except insofar as they are related to the Company’s representation for the purposes of paragraph d) of Paragraph 3 of that article, in which case the powers of attorney may be granted by the Company by means of the individual signature of the Chief Executive Officer, and in all cases they shall contain specific powers and terms of validity not exceeding one (01) year, delegation of powers being prohibited (unless expressly authorized in any power of attorney granted), except, in any case, for the grant of powers of attorney for judicial purposes.

 

Paragraph 2 – In their absences or temporary disqualifications, the Officers shall be replaced by a duly appointed attorney under the terms set forth in paragraph 1 above.

 

Paragraph 3 – Notwithstanding the above, for acts that create obligations for the Company:

a) In amounts up to ten million reais (R$ 10,000,000.00) in a single transaction or in a series of interconnected transactions, the Company shall be represented: (i) by any two (2) Officers acting jointly; (ii) by any of the Officers jointly with a duly appointed attorney in the manner set forth in these By-Laws; or (iii) by two (2) attorneys-in-fact, acting jointly, duly appointed pursuant to these By-Laws;

 

b) In amounts exceeding ten million reais (R$ 10,000,000.00) in a single transaction or in a series of interconnected transactions, the Company shall be represented only by the joint signature of the Chief Executive Officer and of the Chief Financial Officer, except for those acts directly related to the Company’s corporate purpose, namely, the signing of the car rental agreements in which the Company is listed as a lessor, in which case the Company shall be represented as “a” above;

 

c) In financial obligations whose value, individually considered, exceeds fifty million Reais (R$ 50,000,000.00) and which are approved by the Board of Directors pursuant to item (xi) of article 19 of these By-Laws, (i) by any two (2) Officers acting jointly; (ii) by any of the Officers jointly with a duly appointed attorney in the manner set forth in these By-Laws; or (iii) by two (2) attorneys-in-fact, acting jointly, duly appointed pursuant to these By-Laws; and

 

d) For acts of representation of the Company before bodies, departments and public, federal, state or municipal entities, including Detrans (State Traffic Departments) and Ciretrans (Regional Traffic Jurisdictions), regarding the transfer of vehicles; or before class entities, trade unions and labor courts; or for representation of the Company in lawsuits, administrative and arbitration proceedings, to provide clarifications in testimony, as an agent or witness, (i) by one (1) officer; or (ii) by one (1) attorney-in-fact, duly appointed in the manner set forth in these By-Laws.

 

Paragraph 4 – In the event that there is no consensus between the Chief Executive Officer and the Chief Financial Officer in relation to the performance of any act and/or the signature of any document binding upon the Company pursuant to paragraph 3 above, the decision shall be taken by an  extraordinary resolution of the Board of Directors.

 

Article 27 – The Executive Board, under the terms of these By-Laws and the law, is prohibited from performing acts that depend on prior approval or authorization of the Shareholders’ Meeting or Board of Directors, as the case may be, before obtaining their approval or authorization.

 

Sole Paragraph – Any acts performed by Directors, Officers, attorneys-in-fact or employees in operations or businesses that are not related to the corporate purpose, such as aval guarantee, surety, mortgage, pledge, endorsement or any other guarantees are void and ineffective in relation to the Company, except in the event of granting an aval guarantee, surety, mortgage, surety, pledge, endorsement or any other guarantees of the Company to the companies Controlled directly or indirectly by the Company and vice-versa. In such cases, the Board of Directors shall expressly authorize the granting of such guarantees.


CHAPTER IV – SHAREHOLDERS’ MEETINGS

Article 28 – The Shareholders’ Meeting shall meet, annually, within four (4) months following the end of each fiscal year and, extraordinarily, whenever the corporate interests so require it, observing in its call notice, opening and resolution the applicable legal provisions and the provisions of these By-Laws.

 

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

 

Paragraph 2 – The Shareholders’ Meetings shall be chaired by the Chairman of the Board of Directors, who shall appoint the secretary and, in the event of his or her absence or impediment, by any member of the Board of Directors, or in his or her absence, by any attending officer chosen by the shareholders.

 

Paragraph 3 – The Shareholders’ Meeting attended by all shareholders shall be deemed regular, regardless of the call notice formalities.

 

Article 29 – To take part in the Shareholders’ Meeting, the shareholder shall submit up to twenty-four (24) hours prior to the date of the respective Meeting: (i) a proof issued by the depositary financial institution of the book-entry shares held or held in custody, pursuant to article 126 of the Brazilian Corporation Law and/or to the shareholders participating in the fungible custody of registered shares, the statement containing the respective share issued by the competent body dated up to two (2) business days prior to the Shareholders’ Meeting; and (ii) power of attorney, duly regularized in accordance with the law and these By-Laws, in the event of shareholders representation. The shareholders or their legal representatives shall also attend the Shareholders’ Meeting with documents that prove their identity.

 

Paragraph 1 – The shareholder may be represented at the Shareholders’ Meeting by an attorney-in-fact appointed less than one (1) year before, who may be a shareholder, a manager of the Company, a lawyer, a financial institution or an investment fund manager who represents the joint owners.

 

Paragraph 2 – The resolutions of the Shareholders’ Meetings, except for the special events provided for by law and these By-Laws, shall be taken by absolute majority of votes among those present, not counting blank votes.

 

Paragraph 3 – Minutes of the Shareholders’ Meetings shall be drawn up in the form of a summary of the facts that occurred, including dissent and protest, containing a transcription of the resolutions made, in compliance with the provisions of paragraph 1 of article 130 of the Brazilian Corporation Law.

 

Paragraph 4 – The Shareholders’ Meeting shall be opened, in the first call, upon attendance of shareholders representing at least twenty-five percent (25%) of the total shares issued by the Company, except when the law requires a higher quorum and in compliance with the provisions of these By-Laws; and, on second call, with any number of shareholders.

 

Article 30 – The Shareholders’ Meeting may suspend the exercise of the rights, including the right to vote, of the shareholder who fails to comply with any obligation imposed by the Brazilian Corporation Law, by its regulation or by these By-Laws.

 

Paragraph 1 – The Shareholders’ Meeting that approves the suspension of the direct political rights of the shareholder shall establish, in addition to other aspects, the scope of the suspension, it being understood that the suspension of the rights of inspection and request of information secured by law shall be prohibited.

 

Paragraph 2 – The suspension of rights shall cease as soon as the obligation giving rise to the suspension has been rectified.

 

Article 31 – It is incumbent upon the Shareholders’ Meeting, in addition to the other attributions provided by law:

a) to review the accounts of managers, examine, discuss and vote on the financial statements;

 

b) to elect and remove from office, at any time, the members of the Board of Directors and of the Fiscal Council, when instated;

 

c) to set the annual global compensation of the members of the Board of Directors and of the Executive Board, as well as of the members of the Fiscal Council, if installed;

 

d) to amend the By-Laws;

 

e) to resolve on any corporate reorganization, including merger, spin-off or consolidation (or of shares) and/or another form of business combination, pursuant to CVM Resolution no. 665 of August 4, 2011 (or another rule that replaces or amends it), as well as any other transaction with similar effects (such as, but not limited to, drop down of assets) involving the Company or any of its subsidiaries;

 

f) resolve on the dissolution, liquidation, termination, or authorization for a request for court-supervised or out-of-court reorganization or confession of bankruptcy by either the Company or any of its subsidiaries;

 

g) to grant share bonuses and resolve on any stock split or reverse split;

 

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

 

i) to resolve, in accordance with a proposal submitted by the management, on the establishment or modification of the policy on dividends and allocation of profits and results of the fiscal year of the Company (including, but not limited to, the distribution of dividends), and to declare and distribute dividends in any amount in excess of twenty-five percent (25%) of the Company’s net profit or interest on equity in any amount in excess of the amount permitted by the applicable law;

 

j) to resolve on any capital increase or reduction or on the issue of shares or other securities convertible into shares issued by the Company, unless otherwise provided for in article 6 of these By-Laws;

 

k) to elect the liquidator, as well as the Fiscal Council that shall operate during the liquidation period;

 

l) to resolve on delisting as a publicly-held company with the CVM;

 

m) to resolve on the Company’s withdrawal from Novo Mercado, which shall be notified to B3 in writing, at least thirty (30) days in advance;

 

n) to suspend the exercise of rights of the shareholders, as provided for by article 120 of the Corporation Law;

 

o) to choose a specialized company to prepare the valuation report in the events and as provided for in these By-Laws;

 

p) to approve transactions between the Company and its affiliates or related parties that involves (a) vehicles alienation up to R$ 12,000,000.00 per year, provided that practiced prices are in line with the minimum prices defined in the selling month by the Used Cars Committee; and (b) acquisition of parts and services up to the value of R$ 4,000,000.00 per year, provided that the terms and conditions established in the Purchase Policy in force at the time of the acquisition are respected.  (For purposes of this article (i) it is considered affiliated any natural person or legal person that has, direct or indirectly, the control of the Company, any controled legal person, direct or indirectly, by the Company, or any legal person direct or indirectly under Company’s common control; and (ii) it is considered related parties the shareholders, officers and members of the Company’s Board of Directors, as well as their respectively spouses, brothers, ascending or descending of first and second degree, or any entity in which shareholders, statutory directors and members of the Company’s Board of Directors may elect, by law, vote agreement or any form of contract, 1 (one) or more statutory directors or members of the Board of Directors), or have influence over the direction of social activities or orientations of its bodies);

 

 

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

 

r) the performance of a public offering of shares by the Company, whereby the Company’s valuation used for that purpose is smaller than two billion and five hundred million Reais (R$2,500,000,000.00) on a pre-money basis; and

 

s) repurchase or redemption of shares or securities issued by the Company, except for the repurchase or redemption of shares up to the limit of four percent (4%) of its capital stock for transfer to the beneficiaries of the call option plans granted by the Company.

 


CHAPTER V – FISCAL COUNCIL

Article 32 – The Company’s Fiscal Council shall operate on a non-permanent basis and, whenever in operation, it shall be composed of three (3) sitting members and the same number of alternate members, who may be shareholders or not, and who may be elected and removed from office by the Shareholders’ Meeting at any time. The Company’s Fiscal Council shall be composed, implemented and remunerated in compliance with the applicable law.

 

Paragraph 1 – The members of the Fiscal Council shall be vested in office upon signature of the corresponding instrument drawn up on the proper book. The investiture in office of the members of the Fiscal Council shall be conditional upon execution of the instrument of investiture, which shall include their agreement to be subject to the arbitration clause set forth in Article 50 of these By-Laws, and to their compliance with the applicable legal requirements.

 

Paragraph 2 – The members of the Fiscal Council shall also, immediately after they are vested in office, communicate to the Company the number and characteristics of the securities issued by the Company, its controlling and controlled companies, in these last two cases to the extent that they are publicly-held companies, which are directly or indirectly held by such members, including Derivatives.

 

Paragraph 3 – The members of the Fiscal Council shall elect their Chairman at the first meeting of the Fiscal Council to be held after creation thereof.

 

Paragraph 4 – The members of the Fiscal Council shall be replaced by their respective alternate members whenever they are absent or impeded.

 

Paragraph 5 – In case of vacancy in office as member of the Fiscal Council, the respective alternate member shall hold office. If there is no such alternate member, the Shareholders’ Meeting shall be called to elect a member for the vacant office.

 

Paragraph 6 – No person who has a relationship with any company that may be deemed a competitor of the Company may be elected member of the Company’s Fiscal Council, and no person in the following capacities shall be elected as a member of the Fiscal Council: (a) employee, shareholder or member of any management, technical or fiscal body of a competitor or of a controlling or controlled company of a competitor; (b) spouse or relative up to 2nd degree of any member of any management, technical or fiscal body of a competitor or of a controlling or controlled company of a competitor.

 

Paragraph 7 – In case any shareholder wishes to appoint one or more representatives for the Fiscal Council who were members of the Fiscal Council in the period following the last Annual Shareholders’ Meeting, such shareholder shall notify the Company in writing twenty-five (25) days in advance of the date of the Shareholders’ Meeting that shall elect the Directors, informing the name, identification and full professional résumé of the candidates.

 

Article 33 – Whenever the Fiscal Council is in operation, it shall meet whenever required under the law, and review the financial statements at least on a quarterly basis.

 

Paragraph 1 – A meeting shall be deemed regularly called, regardless of any formalities, if attended by all members of the Fiscal Council.

 

Paragraph 2 – The Fiscal Council shall make statements by a qualified majority of votes whenever a majority of its members is present.

 

Paragraph 3 – All resolutions of the Fiscal Council shall be recorded in minutes drawn up in the respective Book of Minutes and Opinions of the Fiscal Council, signed by the Members present.

 

Article 34 – The Shareholders’ Meeting that elects the Fiscal Council shall set the remuneration of its members, which shall not be smaller, for each sitting member, than one-tenth of the average remuneration set for each Officer, not computing benefits, representation allowances and profit sharing.


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

Article 35 – The fiscal year shall begin on January 1st and end on December 31 of each year, when the balance sheet and the other financial statements for the fiscal year ended shall be prepared.

 

Sole Paragraph – The management shall prepare, for presentation with the financial statements of the fiscal year, a proposal of allocation of the net profit, in compliance with the provisions of these By-Laws.

 

Article 36 – Accrued losses, if any, and the provision for income tax and social contribution on net profit shall be deducted from the result of the fiscal year before any equity interest.

 

Paragraph 1 – The net profit for the fiscal year shall be allocated as follows:

 

a) five percent (5%) shall be allocated, prior to any other allocation, to the legal reserve, which shall not exceed twenty percent (20%) of the capital stock. In any fiscal year in which the balance of the legal reserve accrued by the amount of the capital reserves referred to in paragraph 1 of Article 182 of the Corporation Law exceeds thirty percent (30%) of the capital stock, the allocation of part of the net profit of the fiscal year to the legal reserve shall not be mandatory;

 

b) a portion shall be allocated for payment of the annual minimum mandatory dividend to the shareholders, which shall not be smaller than twenty-five percent (25%) of the net profit ascertained in the fiscal year, with due regard for the main provision of this article, paragraph 3 below, and article 202 of the Corporation Law;

 

c) a portion, as recommended by the management bodies, may be allocated for creation of reserve for contingencies, as provided for by article 195 of the Corporation Law;

 

d) a portion, as recommended by the management bodies, may be withheld based on the previously approved capital budget, as provided for by article 196 of the Corporation Law; and

 

e) any balance shall be allocated as provided by the Shareholders’ Meeting, with due regard for the legal provisions.

 

Paragraph 2 – The Company shall maintain the statutory reserve of retained earnings named “Reserve of Investments”, which shall be designed for cash reinforcement to conduct of the Company’s business and to enable the organic growth of the Company, to be composed of one hundred percent (100%) of the net profit remaining after the legal and statutory deductions and allocations, unless otherwise resolved by the shareholders at a Shareholders’ Meeting. The maximum limit for establishment of the Reserve of Investments shall be the amount corresponding to the Company’s capital stock amount, minus the balances of the other reserves of retained earnings of the Company, as provided for by article 199 of the Corporation Law, and once said limit has been reached, the Shareholders’ Meeting shall resolve on the application of the surplus to capital payment or increase or to the distribution of dividends.

 

Paragraph 3 – The shareholders shall be entitled to receive an annual minimum mandatory dividend of twenty-five percent (25%) of the net profit for the fiscal year, decreased or increased by the following amounts: (i) amount allocated for establishment of a legal reserve; (ii) amount allocated for formation of reserve for contingencies and reversal of the same reserves established in previous fiscal years, (iii) amount resulting from reversal of the reserve of retained earnings to realize established in previous fiscal years, as provided for by article 202, item II of the Corporation Law.

 

Paragraph 4 – The amount of the mandatory dividend may be limited to the amount of the net profit realized under the law.

 

Paragraph 5 – The dividend established in paragraph 4 of this article 36 shall not be mandatory in such fiscal year when the Board of Directors notifies the Annual Shareholders’ Meeting that the payment of such dividend is incompatible with the Company’s financial situation. Said situation shall be notified to the CVM, within five (5) days as from the Annual Shareholders’ Meeting, together with the justification submitted by the Board of Directors and with an opinion of the Fiscal Council in that regard.

 

Article 37 – By a proposal of the Executive Board, approved by the Board of Directors, “ad referendum” of the Shareholders’ Meeting, the Company may pay or record the credit interest on equity to the shareholders, with due regard for the applicable law, which may be attributed to the amount of the mandatory dividend established in these By-Laws.

 

Paragraph 1 – In case of recording of credit of interest to the shareholders during the fiscal year and their attribution to the amount of mandatory dividend, the shareholders shall be ensured the payment of any remaining balance thereof. In case the amount of the dividends is smaller than the amount of recording of credit to them, the Company shall not charge the shareholders for the surplus balance.

 

Paragraph 2 – The actual payment of interest on equity, in case of recording of credit during the fiscal year, shall be made by resolution of the Board of Directors, in the course of the fiscal year or in the subsequent fiscal year.

 

Article 38 – The Company may prepare balance sheets biannually or in shorter frequency and its Board of Directors may resolve to:

a) declare dividends or interest on shareholders’ equity to be paid into the income account, to be calculated on the biannual balance sheet and charged to mandatory dividends, if any;

 

b) distribute dividends for periods of less than six (6) months, or interest on shareholders’ equity to be charged to mandatory dividends, if any, provided that the total dividend paid out in each half of the fiscal year do not exceed the amount of capital reserves; and

 

c) declare interim dividends or interest on shareholders’ equity paid into the retained earnings or profit reserve account in the latest full- or half-year balance, to be charged to mandatory dividends, if any.

 

Article 39 – The Shareholders’ Meeting may decide to capitalize profit or capital reserves, including those recognized in interim balance sheets, subject to the applicable law.

 

Article 40 – Dividends not received or claimed will be barred by the statute of limitations within three (3) years as from the date on which they were available to the shareholder, and will then revert in favor of the Company.

 


CHAPTER VII – SALE OF CONTROLLING INTEREST, DELISTING AND LEAVING THE NOVO MERCADO TRADING SEGMENT

Article 41 – The direct or indirect disposal of the Company’s control through a single transaction or a series of successive transactions shall be agreed on condition that the acquirer of control undertakes to hold a public offering for Company shares owned by other shareholders subject to conditions and terms stipulated in the applicable law and regulations and in the Novo Mercado segment rules, in order to ensure that they are given the same treatment as the Selling Shareholder.

 

Paragraph 1 – For purposes of this Article 41, “control” and its related terms shall be understood as the power actually used by a shareholder to manage corporate business and directly or indirectly exercise significant influence over the actions of the Company’s bodies, on a de facto or a legal basis, irrespective of the equity interest held by it.

 

Paragraph 2 – In case of indirect disposal of the Company’s control, the acquirer shall disclose the value attributed to the Company for the purpose of setting the public offering price and release a statement showing the basis for setting this price.

 

Article 42 – After a transaction to sell the Company’s control and the subsequent public offering referred to in article 41, the acquirer of control, whenever necessary, shall take appropriate measures to obtain at least twenty-five percent (25%) of the Company’s total outstanding shares within eighteen (18) months as from acquisition of the control.

 

Article 43 – Any individual or legal entity, investment fund or other type of investor who acquires or becomes the holder of a direct or indirect equity interest of twenty percent (20%) or more in the capital stock shall, within sixty (60) days as from the date of acquisition or from the event that resulted in direct or indirect ownership of equity interest amounting to twenty percent (20%) or more of the Company’s total shares, register or request the registration, as applicable, of a public offering for all of the Company’s shares, subject to the applicable CVM regulations, Novo Mercado rules, other B3 regulations and the provisions of this article.

 

Paragraph 1 – The public offering for acquisition of shares shall comply with the following principles, and if applicable, others expressly stipulated in CVM Instruction No. 361 of March 5, 2002: (i) it shall be addressed to all shareholders of the Company without distinction; (ii) be made at an auction to be held at B3; (iii) offer a price determined as per Paragraph 2 hereof; and (iv) be paid in cash in Brazilian currency against acquisition in the public offering for the Company’s shares.

 

Paragraph 2 – The purchase price set in the public offering for each share issued by the Company shall be the greater of: (i) 200% of the Company’s fair value determined by a valuation report prepared as per Article 47 of these By-Laws, divided by the total number of shares issued by the Company; (ii) 200% of the issue price of each of the shares in the last capital increase made through public distribution in the period of twenty-four (24) months before the public offering of shares, duly adjusted for inflation using the IPCA up to the time of payment; and (iii) 200% of the weighted average unit share price of the Company’s shares during the ninety (90) days preceding the announcement of the public offering.

 

Paragraph 3 – The public offering for shares as mentioned in the head provision of this article shall not exclude the possibility of another shareholder of Company, or the Company itself, if applicable, formulating a competing public offering for shares, as per applicable regulations.

 

Paragraph 4 – The public offering for shares mentioned in the head provision of this article may be waived by means of the favorable vote of shareholders at a Shareholders’ Meeting specially called for this purpose, subject to the following rules: (i) the waiver of acquisition of shares will be deemed approved by a simple majority vote of the attending shareholders, on the first or second call; and (ii) the shares held by the acquirer for purposes of obtaining a quorum for resolution as per item (i) above shall not be computed.

 

Paragraph 5 – The acquirer shall comply with any CVM requests or requirements related to the public offering for shares within the maximum periods stipulated in the applicable regulations.

 

Paragraph 6 – If the acquirer does not fulfill the obligations set forth in this article, including with respect to compliance with the maximum terms (i) for registering or applying to register the public offering for shares, or (ii) to meet any CVM requests or requirements, the Company’s Board of Directors shall call a Special Shareholders’ Meeting at which the acquirer shall not be able to vote, to resolve on the suspension of the exercise of the rights of an acquirer that has not complied with any obligation under this article, pursuant to article 120 of Brazilian Corporation Law, without prejudice to the Acquiring Shareholder’s liability for losses and damages caused to other shareholders as a result of noncompliance with the obligations set forth in this article.

 

Paragraph 7 – Any individual or legal entity, investment fund or other type of investor that acquires other rights or becomes a holder of other rights, including (i) other rights under corporate law, such as usufruct or succession to shares issued by the Company, purchase or subscription options or exchange, for any reason, which may result in the acquisition of shares issued by the Company or any other right that permanently or temporarily grants them shareholders’ political or equity rights over shares issued by the Company amounting to twenty percent (20%) or more of all Company total shares, or which may result in the acquisition of Company shares amounting to twenty percent (20%) or more of all shares issued by the Company; or (ii) Derivatives that have rights to shares amounting to twenty percent (20%) or more of the Company’s shares, shall also register or request the registration, as the case may be, of a public offering for shares on the terms set forth in this Article 43 within sixty (60) days as from the date of said acquisition or event.

 

Paragraph 8 – The obligations stated in Article 254-A of the Brazilian Corporation Law and in articles 41 and 42 of these By-Laws shall not exclude the acquirer’s fulfillment of the obligations set forth in this article.

 

Paragraph 9 – The provisions of this Article 43 shall not apply in case a person becomes a holder of shares issued by the Company in an amount equal to or in excess of twenty percent (20%) of the total shares issued by it as a result of (i) another company being absorbed by the Company; (ii) the shares of another company being absorbed by the Company; (iii) treasury shares being cancelled; (iv) shares being redeemed; (v) Company’s shares being subscribed in a single primary offering approved by the Shareholders’ Meeting for a proposed capital increase that has determined the shares’ issue price based on the Economic Value obtained as per an economic-financial valuation report for the Company compiled by a specialized institution or company with proven experience of the valuation of publicly-held companies or through a bookbuilding procedure in the context of a public offering of shares; or (vi) succession due to corporate reorganization or legal provision – including succession by inheritance – involving Company’s shareholders and (a) their respective direct or indirect subsidiaries, or (b) their respective direct or indirect controlling shareholders. For purposes of this paragraph, control means owning at least fifty percent (50%) plus one share of the voting stock of the controlled company and exercising the rights mentioned in subparagraphs (a) and (b) of Article 116 of the Brazilian Corporation Law.

 

Paragraph 10 – For purposes of calculating twenty percent (20%) of all shares issued by the Company as mentioned herein, the following shall not be computed: involuntary shareholding increases resulting from treasury shares being cancelled, decreases in the Company’s capital stock with shares being canceled, redeemed or reimbursed.

 

Paragraph 11 – The provisions 50% of this Article 43 shall also be observed whenever the direct or indirect holding of at least twenty percent (20%) of the capital stock is reached by the acquirer through a public offering required by CVM Instruction No. 361/02 or any other rules that may replace it. Any difference in unit price per share determined between a public offering based on this article and one as required by the abovementioned CVM Instruction No. 361/02 shall be paid in favor of the shareholders accepting the public offering for shares.

 

Article 44 – In addition to the provisions of Article 9 of these By-Laws, as from the date on which the Company no longer has a controlling shareholder, any individual or legal entity, investment fund or other type of investor whose direct or indirect equity interest reaches five percent (5%) or more of the Company’s capital stock and who wishes to acquire more outstanding shares, shall make each new acquisition in B3, it being understood that private trading or trading on the over-the-counter market shall be prohibited.

 

Article 45 – In public offerings made by the controlling shareholder or by the Company, when cancelling the Company’s listing as a publicly-held corporation, the minimum price to be offered shall correspond to the fair price determined by the valuation report, subject to the applicable legal and regulatory requirements.

 

Article 46 – The Company’s delisting from the Novo Mercado segment shall be (i) previously voted by the Shareholders’ Meeting and (ii) notified in writing to B3 at least thirty (30) days in advance.

 

Sole Paragraph: The Company, its senior management and shareholders must comply with the Listing Regulations for Issuers and Admission to the Trading in Securities, including rules for withdrawal and exclusion of trading in securities admitted to trading on organized markets managed by B3.

 

Article 47 – The valuation report stipulated in the above articles of these By-Laws shall be compiled by a specialized institution or company with proven experience and independence in relation to the Company’s decision-making power, its managers and controlling shareholders, in addition to meeting the requirements of paragraph 1, article 8 of the Brazilian Corporation Law, and state liabilities as set forth in paragraph 6 of the same article.

 

Paragraph 1 – Selecting the institution or specialized company responsible for determining the Company’s fair price is the exclusive competence of the Shareholders’ Meeting, and the respective resolution, for which blank votes shall not be computed, shall require a majority of votes of shareholders representing outstanding shares who attend the Shareholders’ Meeting, which, if opened on the first call, must be attended by shareholders representing at least twenty percent (20%) of all outstanding shares or, if opened on second call, may proceed with the presence of any number of shareholders representing the outstanding shares.

 

Paragraph 2. – The costs of preparing the required valuation report shall be entirely borne by the offeror

 

Article 48 – One single public offering for shares may be formulated for more than one of the purposes set forth in this Chapter VII under Novo Mercado segment rules or CVM regulations, provided that the procedures for all types of public offering for shares may be reconciled, there is no loss for the offering’s addressees, and the CVM’s authorization is obtained if required by the applicable legislation.

 

Article 49 – The Company or the shareholders responsible for making the public offering for shares stipulated in this Chapter VII, in Novo Mercado segment rules or CVM regulations, may ensure effectiveness thereof through any shareholder, third party or, if applicable, through the company. The Company or shareholder, as applicable, shall not be exempted from the obligation to hold a public offering for shares through to its conclusion, in compliance with the applicable rules.

 


CHAPTER VIII – ARBITRATION COURT

Article 50 – The Company, its shareholders, senior management and sitting and alternate members of the Fiscal Council (if any), hereby undertake to submit to arbitration conducted by the Market Arbitration Chamber under its rules for all and any dispute or controversy that may arise between them, related to or arising from their status as issuer, shareholders, directors and officers, or fiscal council members, in particular, those arising from Law 6.385/76, Law 6.404, the Company’s By-Laws, as well as the National Monetary Council, Central Bank of Brazil and CVM rules, and any other rules applicable to the operation of the capital market in general, in addition to those stated in the Novo Mercado segment rules, the Market Arbitration Chamber’s rules, B3 regulations and the Novo Mercado segment’s participation contract.

 

Paragraph 1 – The Brazilian law alone shall be applicable to the merits of any and all matter of controversy, as well as to the execution, interpretation and validity of this arbitration clause. The arbitral tribunal shall consist of arbitrators selected in the manner required by the Arbitration Rules. The proceedings shall take place in the City of São Paulo, State of São Paulo, where the arbitral award shall be rendered. The arbitration shall be administered by the Market Arbitration Chamber itself and be conducted and judged as per the relevant provisions of the Arbitration Rules.

 

Paragraph 2 – Without prejudice to the validity of this arbitration clause, any request for urgent measures submitted by the Parties before an Arbitral Tribunal has been created shall be referred to the Judicial Branch pursuant to item 5.1.3 of the Market Arbitration Chamber’s arbitration rules.

 


CHAPTER IX – LIQUIDATION

Article 51 – The Company shall be dissolved and liquidated in the cases set forth by law, and its incumbent upon the Shareholders’ Meeting to determine the type of liquidation, and elect the liquidator and Fiscal Council, should this be the case, for this purpose.


CHAPTER X – FINAL AND TRANSITORY PROVISIONS

Article 52 – The Company shall be subject to shareholders’ agreements filed at its principal place of business, it being understood that the members chairing Shareholders’ Meetings or sitting on the Board of Directors are expressly prohibited from accepting a declaration of vote by any shareholder that is a signatory to a shareholders’ agreement duly filed at the Company’s principal place of business, to the extent that it is cast in noncompliance with the provisions of said agreement, and the Company is also expressly prohibited from accepting and transferring shares and/or encumbering and/or assigning the preemptive right for the subscription of shares and/or other securities that do not comply with the provisions and rules of a shareholder’s agreement.

 

Sole Paragraph – Within thirty (30) days as from a request made by any shareholder, the Company shall file shareholders’ agreements at the Company’s principal place of business and have their obligations or encumbrance recorded in the Company’s books.

 

Article 53 – Cases not covered by these By-Laws shall be resolved by the Shareholders’ Meeting and regulated in accordance with the provisions of the Brazilian Corporation Law and the Novo Mercado rules.

 

Article 54 – Pursuant to Article 45 of the Brazilian Corporation Law, the amount of reimbursement to be paid to dissenting shareholders shall be based on shareholder equity posted in the most recent balance sheet approved by a Shareholders’ Meeting.

 

Article 55 – Publications required under the Brazilian Corporation Law shall be published in the Official Gazette of the State of São Paulo and in another mass circulation newspaper.

 

Article 56 – Articles 43 and 44 of these By-Laws shall not apply to the current shareholders or Group of Shareholders of the Company (individually or jointly) who already hold twenty percent (20%) or more of the total number of shares issued by the Company and its successors on the date of publication of the notice of commencement of the first public distribution of Company’s shares, applicable exclusively to those investors who acquire shares and become shareholders of the Company as from this publication date.