By Laws

 

CHAPTER I - NAME, SEAT, OBJECT AND DURATION

Article 1 - MPX ENERGIA S.A. (“Company”) is a corporation governed by the present Bylaws, by Law No. 6,404 of December, 1976 (“Law No. 6,404/76”) and by the other applicable laws and regulations.

Sole Paragraph – The Company, its stockholders, managers and members of the Fiscal Council, when in operation, will also be subject to the provisions of the Regulations of the so-called Novo Mercado of Bolsa de Valores de São Paulo S.A. - BVSP (São Paulo Stock Market) (respectively, “Novo Mercado Regulations” and “Bovespa”).

Article 2 – The Company’s principal place of business is located in the City of Rio de Janeiro, State of Rio de Janeiro, at Praia of the Flamengo, nº 66, 9º andar, CEP:22210-903, and the Company is authorized to open branches and agencies anywhere in Brazil or abroad.

Sole Paragraph – The Company may, upon a resolution of the Executive Committee, open, transfer and/or close branches of any type anywhere in Brazil or abroad.

Article 3 - The Company’s corporate objective is the generation, distribution and trading of electric energy and the participation, in the capacity as partner, quotaholder or stockholder, in the capital of other civil or commercial companies, either in Brazil or abroad, irrespective of their corporate objectives. In order to meet its corporate objective, the Company may establish subsidiaries under any corporate form.

Article 4 - The Company’s term of duration is indefinite.

 

CHAPTER II - CAPITAL AND STOCKS

Article 5 - The Company’s capital stock, fully subscribed and paid up, is equal to two billion, forty-six million, two hundred and twelve thousand, nine hundred and twenty-one Reais and twenty-two centavos (R$ 2,046,212,921.22) represented by one hundred and thirty-six million, six hundred and ninety-two thousand and six hundred and eighty (136.,692,680) nominative common shares in book-entry form and with no par value.

Paragraph 1 – The Company’s capital stock shall be represented exclusively by common stocks.

Paragraph 2 – Each nominative common stock entitles its holder to one vote in the resolutions of the Company’s General Meetings.

Paragraph 3 – All of the Companies’ stocks are in book entry form and shall be kept in an escrow account in the name of its holders, at a financial institution authorized by the Brazilian Securities Commission (Comissão de Valores Mobiliários - “CVM”) with which the Company holds a valid custody agreement, without the issuance of certificates. The custodian institution may collect from the stockholders the cost of transfer and annotation of the ownership of the book entry stocks, as well as the service relative to the stocks kept in custody, with due regard for the maximum limits fixed by CVM.

Paragraph 4 – The Company is forbidden to issue preferred shares and founder’s shares.

Paragraph 5 – The stocks shall be indivisible in relation to the Company. Whenever one stock belongs to more than one person, the rights granted to such stock shall be exerted by the representative of the joint ownership.

Paragraph 6 – Except for the provisions of Article 6, Paragraph 3, the stockholders have the right of first refusal, proportionately to their own interest, to subscribe for stocks, debentures convertible into stocks or subscription warrants issued by the Company, which right can be exerted within the legal timeframe of 30 days.

Article 6 – The Company is authorized to increase the capital stock up to the limit of four hundred million (400,000,000) common stocks, including the stocks already should, irrespective of what any amendments to its bylaws.

Paragraph 1 – The capital increase will be implemented upon a resolution of the Board of Directors, which will be responsible for setting forth the conditions for the issue, including the price, term and form of payment. In case of subscription and payment with assets, the General Meeting shall be competent to resolve on the capital increase, after hearing the Fiscal Council, if installed.

Paragraph 2 – With due regard for the limit of the authorized capital, the Company may issue common stocks and subscription warrants.

Paragraph 3 – At the discretion of the Board of Directors, the right of first refusal can be excluded or the timeframe addressed §4 of art. 171 of Law No. 6,404/76 can be reduced upon the issuance of common stocks, and subscription warrants, the placement of which is made by means of (i) sale in the stock market or public subscription, or (ii) swap of stocks, in a public takeover bid, pursuant to law and with due regard for the limit of the authorized capital.

Article 7 – At the discretion of the Board of Directors, the Company may acquire its own stocks to keep in treasury and to subsequently dispose of or cancel them, up to the amount of the balance of profits and reserves, except for the legal reserve, without decrease of the capital stock, with due regard for the applicable legal and regulatory provisions.

Article 8 – At the discretion of the Board of Directors and with due regard for the plan approved by the General Meeting, the Company grant, to the benefit of its managers, employees or individuals rendering service to the Company, an option intended to the purchase or subscription of stocks without the stockholders being entitled to the right of first refusal, which option can be extended to the managers or employees of companies directly or indirectly controlled by the Company.

 

CHAPTER III - MANAGEMENT

Section I - General Provisions

Article 9 - The Company shall be managed by one Board of Directors and one Executive Committee, in accordance with the duties and powers granted by the applicable legislation and by these Bylaws.

Article 10 - After the adherence, by the Company, to the so-called Novo Mercado of Bovespa, the investiture of the managers is conditioned to the prior execution of the Instrument of Consent by the Management mentioned in the Novo Mercado Regulation. Immediately after taking office, the managers must inform Bovespa about the quantity and characteristics of the securities issued by the Company directly or indirectly held by them, including their derivatives.

Article 11 - The Annual General Meeting shall fix the annual overall amount of the remuneration of the Company’s management and the Board of Directors shall resolve on the distribution thereof.

Section II - Board of Directors

Article 12  - The Board of Directors will be composed of a minimum of five (5) and a maximum of eleven (11) members, all shareholders of the Company elected by the General Shareholders´ Meeting with a unified term of one (1) year, with re-election allowed.

Paragraph 1 - Before the election, the General Meeting will determine, upon the vote of the absolute majority, the blank votes not to be computed, the number of positions in the Board of Directors to be fulfilled in each term of office, with due regard for the minimum of five (5) members and the maximum of eleven (11) members.

Paragraph 2 - At least twenty per cent (20%) of the members of the Board of Directors shall be Independent Board Members. Independent Board Member is any member that (i) is not related to the Company in any manner other than through its interest in the capital stock; (ii) is not a controlling stockholder, spouse or relative up to the second degree of kinship of the controlling stockholder, is not and has not been, for the past three years, related to the Company or related to the controlling stockholder (persons related to public education and/or research institutions are excluded from this restriction); (iii) has not been, in the past three years, an employee or Executive Officer of the Company, of the controlling stockholder or a company controlled by the Company; (iv) is not a direct or indirect supplier or purchaser of services of products of the Company, to an extent that entails loss of independence; (v) is not an employee or manager of the company or an entity that is offering or receiving services and/or products to and from the Company; (vi) is not the spouse or relative up to the second degree of kinship of a manager of the Company; or (vii) does not receive any compensation from the Company of the than the compensation payable to a board member (cash proceeds deriving from an interest occasionally held in the capital are excluded from this restriction). Any board member elected pursuant to the terms of paragraphs 4 and 5 of article 141 of the Corporation Law is also considered an Independent Board Member. The qualification as independent board member shall be expressly declared in the minutes of the General Meeting that elects him.

Paragraph 3 – Whenever the result of the application of the percentage defined above reflects a fractional number of board members, this number will be rounded up for the integer number: (i) immediately above it, if the fraction is equal to or greater than five tenths (0.5); or (ii) immediately below it, if the fraction is smaller than five tenths (0.5).

Paragraph 4 – The members of the Board of Directors shall take office upon the execution of the instrument of investiture drawn up in the Book of Minutes of Meetings of the Board of Directors. The members of the Board of Directors may be removed at any time by the General Meeting, and shall remain in their positions until their successors take office.

Article 13 – The Board of Directors shall have one (1) Chairman and one (1) Vice Chairman, which shall be elected by the absolute majority of the votes present, in the first meeting of the Board of Directors held immediately after such members take office, or whenever such positions go vacant. In case of absence or temporary impairment of the Chairman of the Board of Directors, the Vice Chairman will assume the duties of the Chairman. In case of absence or temporary impairment of the Chairman and Vice Chairman of the Board of Directors, the duties of the chairman will be assumed by another member of the Board of Directors designated by the chairman.

Article 14 - The regular meetings Board of Directors shall take place on a quarterly basis and, on extraordinary basis, whenever called by its Chairman or Vice Chairman, upon a written notice delivered without prior notice of at least three (3) business days and informing the agenda.

Paragraph 1 – The meetings of the Board of Directors may be called by its Chairman without regard for the timeframe set forth above whenever any urgent matters so require, provided that all other board members are unequivocally aware of it. The calls may be made by a letter against notice of receipt, fax or any other means, electronic or otherwise, that issues a proof of receipt.

Paragraph 2 – Irrespective of the formalities provided for in this article, any meeting to which all Board Members are present will be considered regular.

Article 15 – The meetings of the Board of Directors shall be convened in the first call with the attendance of the majority of its members and, in the second call, with any number of board members.

Paragraph 1 – The meetings of the Board of Directors Shelby presided by the Chairman of the Board of Directors and any person appointed by him may act as Secretary. In case of temporary impairment 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 any board member elected by the majority of the votes of the other members of the Board of Directors, the chairman of the meeting being responsible for designating the Secretary.

Paragraph 2 – In case of temporary absence of any member of the Board of Directors, the relevant member of the Board of Directors may, based on the agenda, express his/her vote in writing, by means of a letter or fax delivered to the Chairman of the Board of Directors, on the date of the meeting or by means of a digitally certified e-mail.

Paragraph 3 – Should any position of the Board of Directors go vacant for any reason, the substitute will be appointed by the Extraordinary General Meeting for the remainder of the corresponding term of office. For the purposes of this paragraph, the positions of the Board of Directors may go vacant as a consequence of dismissal, death, resignation, proven impairment or disability.

Paragraph 4 – The resolutions of the Board of Directors may be passed upon the favorable vote of the majority of the members present or who may have cast their votes as provided for by article 15, paragraph 2 of these Bylaws.

Paragraph 5 – In case of a deadlock, the siting Chairman will have a casting vote.

Article 16 – The meetings of the Board of Directors shall be preferably held at the company’s principal place of business. The meetings may be held by conference call or video conference, which may be recorded and deleted. Any members who attend the meeting as expressed above will be considered personally present to the abovementioned meeting. In this case, the members of the Board of Directors remotely present to the meeting of the board may cast their votes on the date of the meeting by means of a letter or fax or digitally certified e-mail.

Paragraph 1 – Upon adjournment of the meeting, the minutes of the corresponding meeting shall be drawn up and signed by all board members physically present to the meeting and subsequently transcribed in the Book of Minutes of Meetings of the Company’s Board of Directors. The votes cast by board members remotely present to the meeting of the board or who have manifested themselves as provided for in article 15, paragraph 2 of these Bylaws shall also be reflected in the Book of Minutes of Meetings of the Company’s Board of Directors and a copy of the letter, fax or e-mail message, as the case may be, contain the vote of the board member shall be attached to the book immediately after the transcription of the minutes.

Paragraph 2 – The Minutes of Meetings of the Company’s Board of Directors containing resolutions intended to produce effects before third parties shall be published and filed at the commercial registry.

Paragraph 3 – The Board of Directors may allow other persons to attend its meetings, with a view to follow up the resolutions and/or render clarifications of any nature; such their parties being, however, forbidden to vote.

Article 17 – The primary role of the Board of Directors is the general direction of the Company’s business, as well as the control and inspection of the performance thereof and, especially, in addition to any other duties and signed by law or by the Bylaws:

I. To exert the normative duties of the Company, being entitled to evoke any matter which is not in the scope of the private competence of the General Meeting or of the Executive Committee;

II. To outline the general guidelines of the Company’s business;

III. To elect and dismissed the Company’s Executive Officers;

IV. To assign to the Executive Officers their respective duties, attributions and limits of competence not specified in these Bylaws, as well as to appoint the Investor Relations Officer, with due regard for the provisions of these Bylaws;

V. To resolve on the call of the General Meeting, when deemed expedient or, in the case of article 132 of the Corporation Law (Law No. 6404/76);

VI. To inspect the management of the Executive Officers examining, at any time, the Company’s books and papers and requesting information about contracts executed or about to be executed and any other deeds;

VII. To appreciate the quarterly results of the Company’s operations

VIII. To elect and dismiss the independent auditors observing, in the election thereof, the provisions of the applicable legislation. The external audit company shall report to the Board of Directors;

IX. To summon the independent auditors to render any clarifications deemed necessary;

X. To appreciate the Management Report and the accounts of the Executive Committee and to resolve on the submission thereof to the General Meeting;

XI. To approve the Company’s annual budgets and their alterations;

XII. To manifest itself prior to the referral of any matter to the General Meeting for appreciation;

XIII. To resolve on the capital increase and the issuance of the company’s stocks, with due regard for the limits authorized pursuant to Article 6 of these Bylaws, stipulating the conditions for issuance, including price and terms for payment, as well as to exclude (or reduce the timeframe for) the right of first refusal in the issuance of stocks, subscription warrants and convertible debentures the placement of which is made by means of a sale in the stock market or public takeover bid, pursuant to terms provided for by law;

XIV. To resolve on the acquisition, by the Company, of its own stocks or on the launching of put and call options referenced to stocks issued by the Company, to keep in treasury and/or subsequent cancellation or disposal;

XV. To resolve on the issuance of subscription warrants;

XVI. To grant a call option to its managers and collaborators, as well as to the managers and collaborators of other companies directly or indirectly controlled by the Company, without the right of first refusal to the stockholders pursuant to the terms of the programs approved by the General Meeting;

XVII. To resolve on the issuance of debentures not convertible into stocks and not covered by in rem guarantees, as well as on the issuance of commercial papers;

XVIII. To authorize the Company to offer guarantees to obligations of its controlled companies and/or wholly owned subsidiaries, the offer of guarantees to obligations incurred by any other third parties being expressly forbidden;

XIX. To approve the creation of in rem guarantees covering the Company’s assets or the offer of guarantees to third parties on account of obligations incurred by the Company itself;

XX. To resolve on the application for registration of the Company as a publicly-held company before CVM;

XXI. To define the triple list of companies specialized in the economic assessment of companies for purposes of elaboration of the appraisal report on the companies’ stocks, in case of cancellation of registration of the company as a publicly held company and withdrawal from Novo Mercado; and

XXII. To file for bankruptcy, judicial or extrajudicial recovery by the Company;  

Sole paragraph – The Board of Directors may authorize the Executive Committee to perform any of the acts mentioned in items XVIII and XIX, with due regard for the limits of the amounts per act or series of acts.

Article 18 - It falls to the Chairman of the Board of Directors to represent the Board of Directors in the General Meetings.

Article 19 - For advisory purposes, the Board of Directors may stipulate the formation of technical and advisory committees with clear purposes and duties, which committees may be formed by members of the Company’s administrative bodies or otherwise.

Sole paragraph – The Board of Directors shall be responsible for setting forth the norms applicable to the committees, including the rules on membership, term of office, remuneration, operation, scope and the area of activity.

Section III Executive Committee

Article 20 - The Company’s Executive Committee shall consist of at least two (2) and at most seven (7) members, whether stockholders or not, domiciled in this country and elected by the Board of Directors, the accumulation of duties by the same executive officer being permitted, being designated one Chief Executive Officer, one General Counsel, one Business Development Officer, one Chief Financial Officer, one Officer of Regulatory Affairs and Energy Trading, one Chief Operations Officer and one Investor Relations Officer.

Article 21 – The term of office of the members of the Executive Committee shall be of two years, with reelection being permitted.

Article 22 – The Executive Committee shall meet whenever required by the Company’s business and shall be convened by the Chief Executive Officer with a minimum prior notice of 24 hours, or by 2/3 of the Executive Officers and, in this case, with a minimum prior notice of 48 hours, in the meeting shall only be convened by the presence of the majority of its members.

Paragraph 1 – In case of absence or impairment, the Chief Executive Officer shall be replaced by the Financial Officer and, in his absence, by the General Counsel.

Paragraph 2 – In case of temporary absence of any executive officer, such executive officer may, depending on the agenda, manifest his vote in writing, by letter or fax surrendered to the chief executive officer or even by means of digitally certified e-mail as proof of receipt thereof by the Chief Executive Officer.

Paragraph 3 – In case of vacancy in the Executive Committee, it is the duty of the collegiate Executive Committee to appoint, among its members, a substitute that will accumulate the duties of the member replaced, the temporary replacement to last until the position is finally occupied by means of a decision made in the first meeting of the Board of Directors to be held no later than 30 days after the position goes vacant, the substitutes then elected to remain in office for the remainder of the term of office of the Executive Committee.

Paragraph 4 – The Executive Officers may not refrain from performing their duties for a period longer than 30 consecutive days under penalty of losing their office, unless in case of a leave of absence granted by the Executive Committee.

Paragraph 5 – The meetings of the Executive Committee may be held by means of a conference call, video conference or any other communication media. Participating in a meeting as expressed above will be deemed personal attendance to the abovementioned meeting. In this case, the members of the Executive Committee remotely present to the meeting of the Executive Committee shall cast their votes by means of a letter, fax or any digitally certified e-mail.

Paragraph 6 – Upon adjournemnt of each meeting, the corresponding minutes shall be drawn up and signed by all Executive Officers physically present to the meeting and subsequently transcribed in the Book of Minutes of Meetings of the Executive Committee. The votes cast by Executive Officers remotely present to the meeting of the Executive Committee or who have manifested themselves as provided for in paragraph 2 of this article, shall likewise be included in the Book of Minutes of Meetings of the Executive Committee, the copy of the letter, fax or e-mail, as the case may be, containing the vote of the Executive Officer to be attached to the book right after the transcription of the minutes.

Article 23 - The resolutions made in the meetings of the Executive Committee shall be passed by the majority of the votes of those present to each meeting or who may have cast their votes as provided for in article 22, paragraph 2 of these bylaws. In case of a deadlock, the Chief Executive Officer will be entitled to a casting vote.

Article 24 – It is the duty of the Executive Committee to manage the company’s business in general and the performance, to this effect, of all acts deemed necessary or expedient except for those which, pursuant to law or these Bylaws, the General Meeting or the Board of Directors is specifically competent to perform. In the exercise of their duties, the Executive Officers may carry out all operations and perform all acts required for the pursuance of the objectives of their positions, with due regard for the provisions of these Bylaws as regards the form of representation, competence to perform certain acts and the general direction of the businesses set forth by the Board of Directors, including to resolve on the approval and allocation of proceeds, compromise, waive, assign rights, confess debts, enter into agreements, execute commitments, contract obligations, execute contracts, acquire, dispose of and encumber movable and immovable assets, offer guarantees, aval guarantees and surety, issue, endorse, pledge, discount, withdraw and secure bonds in general, as well as to opened, operates and close accounts in credit establishments, with due regard for the legal restrictions and the ones set forth in these Bylaws.

Paragraph 1 – The following are also duties of the Executive Committee:

I. To comply and cause these Bylaws and the resolutions of the Board of Directors and of the General Meeting de Stockholders to be complied with;

II. To submit, on an annual basis, to the appreciation of the Board of Directors, the Management Report and the accounts of the Executive Committee, accompanied by the independent auditors report, as well as the proposal for the allocation of the profits assessed in the previous year;

III. To submit the annual budget to the Board of Directors; and

IV. To submit to the Board of Directors, on a quarterly basis, the detailed economic and financial balance sheet of the Company and its controlled companies.

Paragraph 2 – It is the duty of the Chief Executive Officer to coordinate the action of the Executive Officers and to guide the performance of the activities related to the company’s general planning, as well as the duties, attributions and powers assigned to him by the Board of Directors, with due regard for the policy and guidelines previously outlined by the Board of Directors:

I. To call and preside over the meetings of the Executive Committee;

II. To oversee the management duties of the Company, and coordinate and supervise the activities of the members of the Executive Committee;

III. To suggest, without an exclusive initiative on the part of the Board of Directors, the assignment of duties to each executive officer at the time of the election;

IV. To represent the Company either as a plaintiff or defendant, whether in or out of court, with due regard for the provisions of article 25 of these Bylaws;

V. To coordinate the personnel, organizational, managerial, operating and marketing policy of the Company;

VI. On an annual basis, to elaborate and submit to the Board of Directors the Company’s annual plan and annual; and

VII. To generally manage the corporate matters.

Paragraph 3 – It is the duty of the General Counsel, in addition to the duties, attributions and powers vested in him by the Board of Directors, and with due regard for the policy and guidelines previously outlined by the Board of Directors, to:

I. assist the Chief Executive Officers to carry out his duties; and

II. plan, coordinate, organize, supervise and direct the activities related to legal and regulatory issues of the Company’s Legal Department.

Paragraph 4 – It is the duty of the New Business Officer, in addition to the duties, attributions and powers vested in him by the Board of Directors, and with due regard for the policy and guidelines previously outlined by the Board of Directors, to:

I. Assist the Chief Executive Officer to perform his duties;

II. Plan, define, coordinate, identify, develop and control the new power operations, activities and projects to make up the Company’s portfolio in an optimum manner, by the health, environment and safety area; and

III. See to the management of partnerships.

Paragraph 5 - It is the duty of the Financial Officer, in addition to the duties, attributions and powers vested in him by the Board of Directors, and with due regard for the policy and guidelines previously outlined by the Board of Directors, to:

I. Assist the Chief Executive Officer to perform his duties;

II. Coordinate and direct the activities related to the Company’s financial operations;

III. Coordinate and supervise the performance and results of the financial areas according to the targets stipulated;

IV. Optimize and manage information and financial results;

V. Manage and invest financial resources and the operating and non-operating income;

VI. Control the compliance with the financial commitments as regards the legal, administrative, budgetary, tax and contractual requirements of the transactions, interacting with the company’s boddies and parties involved;

VII. Coordinate the implementation of financial and managerial information systems;

VIII. Promote studies and suggest alternatives for the Company’s financial and economic balance;

IX. Prepare the Company’s financial statements;

X. Be responsible for the Company’s accounting matters in order to meet the applicable legal provisions; and

XI. Perform all other duties or attributions from time to time vested in him as stipulated by the Chief Executive Officer.

Paragraph 6 - It is the duty of the Energy Marketing and Regulation Officer, in addition to the duties, attributions and powers vested in him by the Board of Directors, and with due regard for the policy and guidelines previously outlined by the Board of Directors, to:

I. Assist the Chief Executive Officer in the performance of his duties;

II. Coordinate the purchase and sale of power in the regulated and free markets; and

III. Handle, coordinate and direct the electric energy capacity of the Company’s system, with a view to meet the regulation applicable to the electric energy market and the Company’s power plants.

Paragraph 7 - It is the duty of the Implementation and Operation Officer, in addition to the duties, attributions and powers vested in him by the Board of Directors, and with due regard for the policy and guidelines previously outlined by the Board of Directors, to:

II. Assist the Chief Executive Officer in the performance of his duties;

II. Manage the implementation of the Company’s projects; and

III. Coordinate the operation and maintenance of the Company’s power plants.

Paragraph 8 - It is the duty of the Investor Relations Officer, in addition to the duties, attributions and powers vested in him by the Board of Directors, and with due regard for the policy and guidelines previously outlined by the Board of Directors, to:

I. Represent the Company before the controlling entities and other institutions operating in the capital market;

II. Render information to investors, to CVM, to the Stock Markets in which the Company deals in its securities and other bodies related to the activities performed in the capital market, according to the applicable legislation, in Brazil and abroad; and

III. Keep the registration of the company as a publicly-held company duly updated before CVM.

 

Article 25 - The Company will consider to have incurred obligations when represented as follows:

a) By two (2) Directors jointly;

b) By one (one) Director jointly with one (1) proxy with special powers, duly authorized;

c) By two (2) proxies jointly, with special powers duly authorized; and

d) By one (1) proxy, according to the powers contained in the respective instrument of assignment, in this case exclusively for the practice of specific acts.

Paragraph 1 - The powers of attorney will be granted in the Company’s name by two (2) Directors jointly, and shall stipulate the powers assigned, and except for those described in Paragraph Two herein will have a validity term of one (1) year.

Paragraph 2 - Powers of attorney for legal purposes may be granted for indefinite terms and those granted for purposes of complying with contractual clauses may be granted for the term of validity of the contract to which they are linked.
 

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CHAPTER IV - GENERAL MEETINGS

Article 26 - The General Meeting shall ordinarily take place within the four (04) months following the end of each fiscal year and, on extraordinary basis, whenever required by the Company’s interests with due regard for applicable provisions and the provisions of these bylaws as regards the call and installation thereof and resolutions passed therein.

Sole paragraph – The General Meetings shall be called with a prior notice of at least fifteen (15) consecutive days and presided over by the Chairman of the Board of Directors or, in his absence, by the Vice-Chairman of the Board of Directors, with a stockholder elected by the chairman of the general meeting among those present to the meeting to act as Secretary.

Article 27 - In order to attend the General Meeting, the stockholder must present, on the date of occurrence of the corresponding General Meeting: (i) a document issued by the financial institution in which the stocks in book entry form are held or kept custody, as provided for by article 126 of the Corporation Law, and/or as regards the stockholders participating in the fungible custody of comments of stocks, the excerpt containing their shareholding, such excerpt to have been issued by the competent body no later than 2 business days before the holding of the General Meeting; or (ii) power of attorney duly formalized as provided for by law and these Bylaws, in case of representation of the stockholder. The stockholder or his/her legal representative shall attend the General Meeting bring in the documents proving his/her identity.

Paragraph 1 – In the General Meeting, the stockholder may be represented by an attorney retained less than one year ago, who may be a stockholder, manager of the Company, legal counsel, financial institution or manager of an investment fund that represents the joint owners.

Paragraph 2 – Except for the special hypotheses provided for by law and by these Bylaws, the resolutions of the General Meeting shall be adopted by the absolute majority of the votes, the blank votes to not be computed.

Paragraph 3 – The minutes of the General Meetings shall be drawn up as a summary of the facts occurred, including dissidence and protest, and contain a transcription of the resolutions made, with due regard for the provisions of § 1, article 130 of the Corporation Law.

Article 28 - It is the duty of the General Meeting, in addition to the other attributions provided for by law, to:

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

b) elect and remove the members of the Board of Directors;

c) stipulate the annual overall remuneration of the members of the Board of Directors and of the Executive Committee, as well as of the members of the Fiscal Council, if any;

d) reform the Bylaws;

e) resolve on the dissolution, liquidation, merger, spinoff, amalgamation of the Company, or of any other company in the Company;

f) allocate bonuses and discuss on occasional grouping and breakdown of stocks;

g) approve the granting of stock option plans to its managers and employees and individuals rendering service to the Company, as well as to the managers and employees of other companies directly or indirectly controlled by the Company;

h) resolve, according to the proposal submitted by the management, on the allocation of the net profits of the year and distribution of dividends;

i) resolve on the increase of the capital stock, in accordance with the provisions of these Bylaws;

j) elect the liquidator, as well as the Fiscal Council to function during the liquidation period;

k) resolve on the cancellation of the registration of the Company as a publicly-held company before CVM;

l) resolve on the withdrawal from Novo Mercado, which shall be informed to Bovespa in writing with a prior notice of 30 days; and

m) elect a specialized company responsible for the elaboration of the appraisal report in the case provided for by articles 39 and 42 of these Bylaws, from among the companies indicated in the triple list of companies elaborated by the Board of Directors.

 

CHAPTER V - FISCAL COUNCIL

Article 29 – The Fiscal Council of the Company shall function on nonpermanent basis and, when installed, shall consist of three (3) sitting members and the same number of alternates, stockholders or not, elected and liable to be removed at any time by the General Meeting. The Fiscal Council of the Company shall be formed, installed and remunerated according to the prevailing legislation.

Paragraph 1 –The members of the Fiscal Council will take office upon the execution of the corresponding document and, after the company adheres to Novo Mercado of Bovespa, it will be subject to the execution of the Instrument of Consent of the Members of the Fiscal Council provided for by the Novo Mercado Regulation of Bovespa.

Paragraph 2 – After the adherence, by the Company, to Novo Mercado , which is a segment of Bovespa, the members of the Fiscal Council shall, immediately after taking office, inform Bovespa about the quantity and characteristics of the securities issued by the Company directly or indirectly held by them, including directives.

Paragraph 3 – In case of absence and impairment, the members of the Fiscal Council shall be replaced by their corresponding alternates.

Paragraph 4 – In case of vacancy of any position in the Fiscal Counci, the corresponding alternate shall act in his stead. Should there be no alternate for such position, the General Meeting shall be convened to elect the member for the vacant position.

Paragraph 5 – No person related to a company that may be considered a competitor of the Company can be elected for the position of member of the Fiscal Council, neither can any person that: (a) is an employee, stockholder or member of the management, technical or inspection body of any competitor or controlling or controlled stockholder of a competitor; (b) spouse or relative up to the second degree of kinship of a body of the management, technical or inspection body of a competitor or of a controlling or controlled Stockholder of a competitor.

Paragraph 6 - Should any stockholder wish to appoint one or more representatives to make up the Fiscal Council and if such persons were not members of the Fiscal Council in the period following the last Annual General Meeting, such stockholder shall notify the Company in writing with a prior notice of ten (10) days in relation to the date of the General Meeting that will elect the members, informing the name, qualifications and full professional background of the candidates.

Article 30 – Pursuant to law, when installed, the Fiscal Council shall meet whenever necessary and, at least on a quarterly basis, will analyze the financial statements.

Paragraph 1 – Irrespective of any formalities, any regular meeting to which all members of the Fiscal Council are present will be considered duly convened.

Paragraph 2 – The Fiscal Council makes valid resolutions upon the absolute majority of its votes cast by the majority of its members.

Paragraph 3 - All resolutions of the Fiscal Council shall be reflected in the minutes in the corresponding book of Minutes and Opinions of the Fiscal Council and executed by the members present.

 

CHAPTER VI - FISCAL YEAR, FINANCIAL STATEMENTS AND PROFIT ALLOCATION

Article 31 - The financial year shall start on January 1^st and finish on December 31^st and, as regards the financial statements, will observe the Novo Mercado Regulations of Bovespa and the applicable legal provisions.

Paragraph 1 – Upon a resolution of the Board of Directors, the Company may (i) draw its balance sheets on a semiannual, quarterly or shorter basis, and declared evidence or interest over equity capital of the profits assessed in such balance sheets; or (ii) declare interim dividends or interest over equity capital, to the accrued profit or profit reserve accounts existing in the latest annual balance sheet.

Paragraph 2 – The interim dividends distributed and the interest over equity capital may be attributed to the mandatory dividend provided for in article 32 below.

Paragraph 3 – The Company and the management shall, at least once a year, hold a public meeting with analysts and with any other interested parties to disclose information regarding the economic and financial situation, projects and perspectives of the Company.

Article 32 – The accrued losses, if any, shall be deduced from the results of the financial year before any distributions, as well as the provision for income tax and social contribution on profits.

Paragraph 1 – The General Meeting may distribute to the Managers a participation in the profits corresponding to up to 1/10 of the profits of the financial year, such distribution to be made with the remaining balance. The distribution of the mandatory dividends to the stockholders as provided for in paragraph 3 of this article is a requirement for the payment of such participation.

Paragraph 2 – The net profit of the financial year shall be distributed as follows:

a) Five per cent (5%) shall, before any other allocation, be used to form the legal reserve, which shall not exceed twenty per cent (20%) of the capital stock. The allocation of part of the net profits of the fiscal year to the legal reserve shall not be mandatory in any fiscal year in which the balance of the legal reserve plus the amount of the capital reserves addressed in paragraph 1 of article 182 of the Corporation Law exceeds thirty per cent (30%) of the capital stock;

b) As suggested by the management bodies, part of the net profits may be allocated to the formation of a contingency reserve and a reversal of the same reserves formed in previous financial years, pursuant to the terms of article 195 of the Corporation Law;

c) Part of the net profits shall be allocated to the payment of the mandatory minimum annual dividend payable to the stockholders, as provided for in paragraph 4 of this article;

d) In any financial year in which the amount of the mandatory dividend calculated pursuant to the terms of paragraph 4 of this article, exceeds the realized portion of the profits of the financially year the General Meeting may, as suggested by the management bodies, allocate the surplus to the formation of a realizable profit reserve, with due regard for the provisions of article 197 of the Corporation Law;

e) As suggested by the management bodies, part of the net profits may be retained based on a previously approved budget pursuant to the terms of article 196 of the Corporation Law;

f) The Company shall keep a statutory profit reserve denominated “Investment Reserve”, the purpose of which will be to finance the expansion of the activities of the Company and/or of any companies controlled and associated to it, including by means of the subscription of capital increases or creation of new undertakings, which may be constituted of up to one hundred per cent (100%) of the remainder of the net profit after the legal and statutory deductions and the balance of which, plus the balance of the other profit reserves, except for the realizable profit reserves and the contingency reserves, may not exceed one hundred per cent (100%) of the Company’s capital stock, duly subscribed; and

g) The balance to be located as stipulated by the General Meeting, with due regard for the legal provisions.

Paragraph 3 – The stockholders are entitled to an annual mandatory dividend at least equal to twenty-five per cent (25%) of the net profit of the financial year, plus the following amounts: (i) the amount intended to form the legal reserve; and (ii) the amount intended to form the contingency reserve and reversal of the same reserves formed in previous financial years.

Paragraph 4 – Pursuant to law, the payment of the mandatory dividend may be limited to amount of the realized net profit.

Article 33 – As suggested by the Executive Committee and upon the approval of the Board of Directors, ad referendum of the General Meeting, the Company may pay or credit interest on behalf of the stockholders, by way of remuneration of their equity capital, with due regard for the applicable legislation. Any amounts possibly disbursed on this account may be attributed to the amount of the mandatory dividend provided for in these Bylaws.

Paragraph 1 – Should such interest be credited to the stockholders throughout the financial year and the amount of the mandatory dividend be attributed to such stockholders, the stockholders will be ensured the right to receive any possible remaining balance. Should the value of the dividends be smaller than the amount credited to them, the Company may not collect the surplus from the stockholders.

Paragraph 2 – Should the amount be credited throughout the financial year, the actual payment of the interest over equity capital shall occu r upon a resolution of the Board of Directors, during the current financial year or in the subsequent financial year.

Article 34 – The General Meeting may resolve on the capitalization of profits or capital reserves, including the ones instituted in interim balance sheets, with due regard for the applicable legislation.

Article 35 – Dividends not received or claimed shall forfeit within three years counting from the date on which they were made available to the stockholder and shall revert to the benefit of the Company.

 

CHAPTER VII - DISPOSAL OF CONTROL

Article 36 – The disposal of the Company’s control whether by means of a single transaction or by means of a series of successive transactions may only be implemented under the suspensive or resolutory condition that the purchaser undertakes to make a public offer for purposes of the acquisition of the other stocks of other stockholders of the Company, with due regard for the conditions and timeframes provided for in the prevailing legislation and in the Regulation of the Novo Mercado, in order to guarantee conditions equal to those guaranteed to the disposing controlling stockholder and, additionally, with due regard for the procedures stipulated by Bovespa and by the Brazilian Securities’ Commission (Comissão de Valores Mobiliários – CVM).

Sole Paragraph – The public offer mentioned in the main section of this article shall also be required in case of an onerous assignment of the rights to subscribe for stocks and other securities or rights related to securities convertible into stocks that may entail the disposal of the company’s control and for the of disposal of the control of a company that controls the Company; however, in this case, the selling controlling stockholder will be obligated to declare to Bovespa the value assigned to the Company in this disposal and to attach documents proving such value.

Article 37 – The public offer provided for in article 36 shall also be implemented if the parties are of the control is already a stockholder of the Company and acquires the Company’s control by virtue of the private instrument of purchase of stocks executed with the controlling stockholder involving any amount of stocks. In this hypothesis, the purchaser shall reimburse the stockholders from which the purchaser has purchased stocks in the stock market in the six (6) months preceding the date of disposal of the control and pay the balance of the price paid to the selling controlling stockholder and the amount paid in the stock market per stock of the Company in this period, duly updated.

Article 38 – The Company shall not report any transfer of stocks to the purchaser of the controlling power or to anyone who may hold the controlling power for as long as such purchaser or purchasers do not execute the Instrument of Consent of the control is provided for in the Regulation of Novo Mercado of Bovespa.

Sole Paragraph – Similarly, no stockholders’ agreement providing for the exercise of the controlling power may be registered at the Company’s principal place of business for as long as its signatories have not executed the instrument of consent mentioned in this article.

 

CHAPTER VIII - CANCELLATION OF THE COMPANY’S REGISTRATION AS A PUBLICLY HELD COMPANY

Article 39 – The cancellation of the registration of the Company as a publicly-held company before the Brazilian Securities’ Commission (Comissão de Valores Mobiliários – CVM) shall be preceded by a public offer for the acquisition of stocks which shall have, as its minimum price, at least, the value of the company and its stocks determined by means of an appraisal report elaborated by a specialized company, by using the economic value of the stocks as criterion for the appraisal thereof, by means of a well-known methodology of or based on another criterion to be defined by the Brazilian Securities’ Commission (Comissão de Valores Mobiliários – CVM). The choice of the specialized company will be made as provided for by Article 41 of these Bylaws.

Paragraph 1 – With due regard for the other terms of the Novo Mercado Regulation of Bovespa, these Bylaws and the prevailing legislation, the public offer for cancellation of registration shall also provide for the swap of securities of the other publicly held companies, to be accepted depending on the offer.

Paragraph 2 – The cancellation shall be preceded by an Extraordinary General Meeting specifically resolving on such cancellation.

Article 40 – Should the Appraisal Report mentioned in Article 39 be not ready until the Extraordinary General Meeting called to resolve on the cancellation of the registration as a publicly-held company, the controlling stockholder, the group of stockholders that holds the company’s controlling power or by the Company itself may inform, in this general meeting, the maximum value per stock or lot of thousand stocks on which the public offer will be based.

Paragraph 1 – The condition for the public offer will be that the value assessed in the appraisal report mentioned in Article 39 does not exceed the value disclosed by the controlling stockholder, group of controlling stockholders or the company itself, in the meeting mentioned in the main section of this article.

Paragraph 2 – Should the value of the stocks determined in the appraisal report be in excess of the value informed by the stockholder, group of controlling stockholders or by the Company itself, the resolution mentioned in the main section of this article will be automatically cancelled and such information shall be widely disclosed in the markets, unless in case the controlling stockholder expressly agrees to make the public offer at the amount assessed in the appraisal report.

Article 41 – The Appraisal Report mentioned in Article 39 and Article 42 shall be elaborated by the specialized company with proven expertise and independent as regards the decision making power of the company, its managers and/or controlling stockholder, as well as to meet the requirements of paragraph 1 of article 8 of the Corporation Law, and reflect the responsibility provided for in o paragraph 6 of the same article.

Paragraph 1 – The election of the specialized company is the sole duty of the of the General Meeting after the submission, by the Board of Directors, of a triple list, the corresponding resolution to be made, without regard for the blank votes, by the majority of the votes of the total outstanding stocks present in the meeting which, if installed in the first call, may be installed with the presence of stockholders representing at least 20% of the aggregate Outstanding Stocks or, if installed in the second call, may be attended by any number of stockholders representing the Outstanding Stocks.

Paragraph 2 – The costs incurred with the elaboration of the report shall be borne by the stockholder or group of controlling stockholders of by the Company itself, as the case may be.

 

CHAPTER IX - WITHDRAWAL FROM NOVO MERCADO

Article 42 – Should the Extraordinary General Meeting of the Company’s stockholders the site for the withdrawal of the Company from Novo Mercado of Bovespa, (i) so that its stocks be registered for negotiation outside Novo Mercado, or (ii) so that, by virtue of the Company’s corporate restructuring in which the company’s stocks resulting from such restructuring be not admitted for negotiation in Novo Mercado, the stockholder of group of the company’s controlling stockholders shall make a public offer for the acquisition of stocks pertaining to the other stockholders at an amount equivalent to, at least, the economic value of the stocks as assessed in the appraisal report provided for by article 41, with due regard for the applicable legal and regulatory norms.

Sole Paragraph – The public offer provided for in this article shall, to the extent possible, observe the provisions of articles 39, 40, 41 above.

 

CHAPTER X - ARBITRATION COURTS

Article 43 - The Company, its stockholders, managers and members of the Fiscal Council (if installed) undertake to solve, by means of arbitration, any and all disputes that may arise between them related or deriving, particularly, from the application, validity, effectiveness, construction, violation and the its effects, of the provisions of the Corporation Law, these bylaws, the norms published by the Brazilian Monetary Council (Conselho Monetário Nacional), the Central Bank of Brazil (Banco Central of the Brasil) and CVM, as well as the other norms applicable to the operation of the capital market in general, as well as those contained in the Novo Mercado Regulation, in the regulation of the Arbitration Chamber of Novo Mercado and Novo Mercado Participation Agreement.

Sole Paragraph – Without adverse effects to the validity of this arbitration clause, any party to the arbitration proceedings will be entitled to revert to the Judiciary Branch for purposes of, if and when necessary, file for the precautionary measures with a view to protecting its rights, whether in an arbitration proceeding already commenced or otherwise. In this regard, as soon as any such measure is granted, the competence to decide on its merit shall be immediately returned to the Arbitration Court already instituted or about to be instituted.

 

CHAPTER XI - LIQUIDATION

Article 44 – The Company shall be liquidated and dissolved in the cases provided for by law and the General Meeting shall be responsible for establishing the form of liquidation, elect the liquidator and, as the case may be, the Fiscal Council to this effect.

 

CHAPTER XII - GENERAL PROVISIONS

Article 45 – The Company shall observe the stockholders’ agreement filed at its head office and the members of the board of the General Meeting or Board of Directors are forbidden to accept any vote from any stockholder who is a signatory of any stockholders’ agreement duly filed at the company’s head office which is not in accordance with the provisions of the abovementioned agreement. Similarly, the company is also expressly forbidden to accept and transfer stocks and/or encumber and/or assign the rights of first refusal in the subscription of stocks and/or other securities without regard for the provisions and regulations of the stockholders agreement.

Article 46 – The cases not addressed in these Bylaws shall be handled by the General Meeting and regulated according to the precepts of the Corporation Law.

Article 47 – With due regard for the provisions of article 45 of the Corporation Law, the value of the reimbursements to be paid to the dissident stockholders will be based on the equity value reflected in the latest balance sheet approved by the General Meeting.

Article 48 – The publications stipulated by the Corporation Law shall be made on newspapers Valor Econômico and Diário Oficial of the Estado of the Rio de Janeiro.

Article 49 – The payment of dividends approved by the General Meeting, as well as the distribution of stocks as a consequence of a capital increase will be made no later than 60 days as of the date of publication of the relevant minutes.

Article 50 – The Company may negotiate its own stocks, with due regard for the legal provisions and the norms to be issued by the Brazilian Securities’ Commission (Comissão de Valores Mobiliários).

Article 51 – The provisions contained in the sole paragraph of Art. 1, in the main section of Article 10, in paragraph 1 of Article 29, in the main section of Article 31 and, lastly, in Articles 36 through 42 shall only be fully effective as of the effectiveness of the Novo Mercado Participation Agreement by the Company before Bovespa, conditioned to the publication of the announcement of commencement of public distribution relative to the first public placement of stocks issued by the company object of Application for Registration No. RJ/2007- 12685 filed at CVM on October 22^nd, 2007.

 

Article 25 - The Company will consider to have incurred obligations when represented as follows:

 

a) by two (2) Directors jointly;

b) by one (one) Director jointly with one (1) proxy with special powers, duly authorized;

c) by two (2) proxies jointly, with special powers duly authorized; and

d) by one (1) proxy, according to the powers contained in the respective instrument of assignment, in this case exclusively for the practice of specific acts.

 

Paragraph 1 - The powers of attorney will be granted in the Company’s name by two (2) Directors jointly, and shall stipulate the powers assigned, and except for those described in Paragraph Two herein will have a validity term of one (1) year.

 

Paragraph 2 - Powers of attorney for legal purposes may be granted for indefinite terms and those granted for purposes of complying with contractual clauses may be granted for the term of validity of the contract to which they are linked.”