Annual General Shareholders' Meeting - 04.18.2011 - Management Proposal

7/30/2019 Annual General Shareholders' Meeting - 04.18.2011 - Management Proposal

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So Paulo, March 30, 2011.

BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros hereby

submits for the consideration of shareholders convening in the extraordinarymeeting called to convene on April 18, 2011, the Management Proposal set

forth below.

EXTRAORDINARY SHAREHOLDERS MEETING

1. Amendments to the Bylaws of BM&FBOVESPA.(A) Adjusting the Bylaws to the recently revisedNovo Mercado rules

BM&FBOVESPA is a public company listed on the Novo Mercado listingsegment, which rules went through a reviewing process in 2010, when it was

submitted to a closed hearing ofNovo Mercado listed issuers. Given this,

Management proposes to amend the Bylaws pursuant to the wording

provided in Attachment I to this Proposal, for consistency with the revised

Novo Mercado Regulation approved at the closed hearing. The paragraphs

below discuss the proposed amendments, providing a background and

justification for the changes, including discussion of related legal or

financial effects, in line with the requirement of article 11, item II, of

Instruction 481/09 promulgated by the Brazilian Securities Commission(Comisso de Valores Mobilirios), or CVM.

(A.1) Adoption of a sole paragraph under article 1 of the Bylaws,

emphasizing that the Company, its shareholders, the directors and officers

and the fiscal council members are all subject to the provisions of the Novo

Mercado Regulation: this inclusion is justified by the fact that the Bylaws

are the document that regulates the relations between the Company and its

shareholders, applying indiscriminately to every shareholder of the

Company, each of whom is bound by the Novo Mercado Regulation

regardless of actual size of ownership interest;

(A.2) To amend article 7 of the proposed Bylaws, in order to eliminate the

1% voting cap currently established for changes to, or deletion of this article

7: the purpose here is to eliminate the 1% voting cap currently applicable to

shareholders meeting aimed to change or delete the provisions of article 7,

which establishes a general 7% voting cap. The purpose of this proposal is to

adjust the Bylaws to the new rule of the revised Novo Mercado Regulation

approved in the public hearing concluded in 2010, which sets at 5% the


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lower threshold to cap the voting rights of a shareholder or group of

shareholders;

(A.3) To adopt a sole paragraph in article 20 of the Bylaws, towards

establishing that no person will be allowed to accumulate the functions ofChairman of the Board and Chief Executive Officer or main officer of the

Company: the purpose of the amendment is to give the Board independence

to exercise management oversight and to avoid the concentration of power in

a single person, which could be detrimental to adequate management

oversight, perhaps undercutting corporate governance effectiveness;

(A.4) To amend article 29 of the Bylaws for adoption of an additional item

(item v) requiring the Board to issue an opinion regarding any tender offer

initiated for shares of the Company. Consistent with this amendment, tocross reference the provision in item b under paragraph 5 of a renumbered

article 70 of the proposed Bylaws: in line with current international

practices, a Boards reasoned opinion regarding a tender offer serves theprimary purpose of providing support for shareholder decision-making.

Shareholders are then guided (but not bind) towards rejecting or accepting

the bid. In particular, the opinion of the Board can be of great value for less

experienced investors who may not be sufficiently familiar with the terms

and concepts of a tender offer bid, and would have difficulty deciding

whether or not to tender their shares;

(A.5) To amend article 61 of the Bylaws (as renumbered) to establish the

obligation of a shareholder obtaining control in a tender offer made due to

the execution of a private shares purchase agreement by and between such

shareholder and the Controlling Shareholder, to pay to holders selling shares

in the market over the preceding 6-month period, the difference between bid

price and the stock market price at which the shares were sold: the purposes

of the amendment are (i) to reduce the operational constraints for payment

currently foreseen; (ii) to widen the universe of persons entitled to

compensation for having sold shares in stock market transactions carried outin the same trading sessions at which the acquirer of control was trading to

buy shares in the six months prior to the acquisition of control, which we

believe to be a more fair and equitable course of action, as the

reimbursement contemplates any sales taking place in these trading sessions;

and (iii) to eliminate day trade transactions from the universe of transactions

making a seller eligible to compensation, given that day trades by definition

would imply zero net settlement balance at the end of a trading session;


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(A.6) To amend article 63 of the Bylaws (as renumbered) for adjustments of

its wording and definitions to the new provisions of the Novo Mercado

Regulation, as amended pursuant to the closed hearing concluded in 2010,

and to include a provision to establish that the Controlling Shareholder shall

be obliged to conduct a tender offer in case of a delisting from the NovoMercado in the aftermath of a corporate restructuring process where the

unlisted surviving company fails to list the shares on the Novo Mercado

within 120 days after the restructuring approval in a shareholders meeting:the amendment aims to set the deadline within which the unlisted surviving

company is expected to list the shares on the Novo Mercado, failing which

the tender offer requirement will be triggered;

(A.7) To adopt paragraphs 1 and 2 in article 64 of the Bylaws (as

renumbered), in order to regulate how to establish the shareholdersresponsible for conducting the tender offer in a going private or delisting

from theNovo Mercado process (per the main provision of the article): in a

company characterized by wide dispersion of ownership, with no controlling

shareholder or controlling shareholders, it is important to have clarity about

the shareholder or shareholders that shall bear responsibility for carrying out

a tender offer for going private or delisting from the Novo Mercado.

Accordingly, the proposed paragraphs contemplate an alternative permitting

the shareholders meeting that decides on a going private process (forcancellation of the registration as a public company) or delisting from the

Novo Mercado process to appoint the shareholder or group of shareholders

responsible for conducting the required tender offer, to the extent that the

company does not have a controlling shareholder or controlling

shareholders. Likewise, the alternative applies also regarding the delisting

from the Novo Mercado as a result of a corporate restructuring process

where the surviving company is not listed to trade onNovo Mercado; in such

case, if the shareholders meeting that decides forthe corporate restructuringprocess were to fail to appoint the potential bidder or bidders, the tender

offer obligation will lie with all shareholders that voted for the corporate

restructuring process (per paragraph 2 of article 64 of the proposed Bylaws);

(A.8) New wording for article 65 and paragraphs 1 to 4 to consolidate and

adjust the provisions under articles 64 to 66 of the current Bylaws, which

regulate the tender offer requirement triggered by noncompliance

with theNovo Mercado Regulation: the new provisions aim primarily at the

conjunction of these provisions (articles 64 to 66 of the current Bylaws) to

form a clear, consistent and systematic set of rules.


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Accordingly, the wording of these provisions clearly assign the controlling

shareholder (if any) responsibility for fulfilling the tender offer requirement

in the event of noncompliance with the listing rules. However, absent a

controlling shareholder, the provisions elect as tender offer bidders all the

shareholders voting to pass the motion ultimately leading to noncompliancewith the Novo Mercado Regulation. If an event of noncompliance derives

from action or decision taken by management, the directors and officers will

be required to call a shareholders meeting to decide on whether to takeaction to remedy the noncompliance or, in the alternative, to delist from the

Novo Mercado segment, in which case the shareholders will also be

expected to appoint the shareholder or group of shareholders responsible for

carrying out the required tender offer; and

(A.9) Articles 29 (item q), 59, 60, 61, 62 (main provision and paragraph2), 63 (paragraph 1), 64 (main provision), 65 (paragraph 3) and 76 of the

proposed Bylaws (each, as renumbered) include amendments for

adjustments to the definitions found in theNovo Mercado Regulation and for

a clearer wording. These are amendments of a formal nature, related to

adjustments (also of a formal nature) adopted in the revised Novo Mercado

Regulation.

(B) Other amendments

The proposed Bylaws include other amendments for improvement and better

wording of, or minor adjustments to, the provisions of the existing Bylaws.

These are discussed below and include background explanation and

justification, and discussion of related legal or financial effects.

(B.1) Amendment of the wording of article 5 of the Bylaws for the

provision to refer specifically to common registeredshares, as the presentwording failed to refer to the form of BM&FBOVESPA shares, i.e.,

registered shares;

(B.2) Amendment of a formal nature in item g of article 16 of the Bylawsfor deletion of the definition of Novo Mercado, as the definition is nowfound in the sole paragraph of article 1;

(B.3) To amend paragraph 2 of article 18 of the Bylaws to include the term

Group of Shareholders, as under article 18 a suspension of shareholderrights may affect either a shareholder individually or a group of shareholders

(as defined);


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(B.4) Given the corporate restructuring and integration process which in

2008 combined BM&F and BOVESPA, former two independent exchanges,

references to BOVESPA have been replaced with references toBM&FBOVESPA in the following provisions of the Bylaws: article 23

(paragraph 3), article 24 (paragraph 1), article 58 (paragraph 1), articles 60and 68, article 70 (paragraph 1, item b) and article 76 (each, as

renumbered);

(B.5) To amend article 29, item g, to refer to new item e of article 38.See also item (B.7) below. Item e of article 38 provides that entering intoor renewing liquidity facility transactions falls exclusively within the scope

of authority of the executive management, regardless of amount involved

and whether or not included in the annual budget. Accordingly, item g of

article 29 has been amended to except liquidity facility transactions from theprovision requiring board authorization for the Company to enter into certain

other transactions related to the business.

(B.6) To amend the main provision of article 34 of the Bylaws to cross

reference the sole paragraph added to article 20 (see item (A.3) above),

which disallows a person accumulating functions as Chairman of the Board

and Chief Executive Officer or main officer of the Company. The

amendment has been included as a proviso, since article 34 tackles eligibility

to act as chief executive officer, such that the person serving as Chairman of

the Board is ineligible;

(B.7) To amend article 38 of the Bylaws for inclusion of item e, towardsclarifying that the executive management has authority to enter into and

renew liquidity facility transactions irrespective of amount involved;

(B.8) To amend article 45and to include new provisions added as article 51

of the proposed Bylaws, for inclusion of the Risk Committee amidst the

board advisory committees established in the Bylaws, in order to turn it into

a permanent and mandatory committee. The risk committee has beenestablished previously, pursuant to a decision of the board of directors, and

is currently operating. As proposed, article 51 mirrors the existing

committee, which shall be composed of at least four members, whose

responsibilities include (i) assessing and monitoring exposure to risks

intrinsic to the business activities of the Company, with particular focus on

structural and strategic risk management; (ii) assessing and recommending

the Companys risk management guidelines and strategies; and (iii)

conducting periodic reassessments of the risk management strategies

adopted by the Company.


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(B.9) To amend item a ofarticle 47in order to delete the requirement forAudit Committee ratification of the Boards choice of independent auditorsbecause this decision is based on the committee recommendations. Given

that under item a it is incumbent on the Audit Committee to makerecommendations to the Board of Directors regarding the appointment of the

independent auditors, and that the final decision is a prerogative of the

Board, there is no need or reason to require the Audit Committeesratification of the Boards decision concerning the auditors;

(B.10) To amend articles 69 (main provision) and 70 (paragraphs 4 and 6)

of the Bylaws (each, as renumbered) for adoption of a tender offer

requirement triggered by accumulation of interest in at least 30% of the

corporate capital. Accordingly, any shareholder that accumulates direct orindirect ownership interest in at least 30% of the corporate capital, or

otherwise purchases shareholder rights at least representing 30% of the

Companys corporate capital, will be required to conduct a tender offer;

(B.11) To amend article 70 of the Bylaws (as renumbered) for the bid price

in a tender offer triggered by accumulation of 30% or more interest to be

determined on the basis of the highest price the acquiring shareholder (as

defined) paid for shares purchased in the market in the six-month period

preceding the date the shareholder reaches the trigger threshold (30% or

more ownership), in lieu of being determined on the basis of the economicvalue per share (as the present wording provides). This changes the criterion

determining the minimum bid price, which in this case would not require a

valuation of the shares;

(B.12) To delete item b of article 74 of the existing Bylaws (i.e., article 73in the proposed Bylaws), as the terms contemplated therein are defined in

the Novo Mercado Regulation. This dispenses with a repeat definition, in

particular given the addition of a sole paragraph to this article (article 73, as

renumbered), such as set forth in item B.13 below;

(B.13) To adopt a sole paragraph in article 73 of the Bylaws (as

renumbered) to the effect that terms not defined in the Bylaws have the

meaning defined in the Novo Mercado Regulation. This avoids replicating

definitions included in theNovo Mercado Regulation and the need for future

amendments to the Bylaws in case the definitions of the Novo Mercado

Regulation change;


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(B.14) As a result of the renumbering of articles mentioned in item (B.15)

below, to correct crossed references throughout the Bylaws as follows:

article 7 (main provision and paragraph 1); article 15 (main provision and

paragraph 1); article 33; article 55 (paragraph 5); article 58 (main provision);

articles 60 and 61; article 64 (main provision); article 70 (paragraphs 3, 4and sub-items, 5 and items a and e, and paragraph 6), each as

renumbered; and

(B.15) Renumbering adjustments to the following provisions (as

renumbered): paragraphs 2 to 4 of article 7; item f of article 38; and

articles 52 through 79 (and some of their items and paragraphs) of the

proposed Bylaws.

Attachment I to this proposal sets forth a comparative table between theexisting and the proposed Bylaws, and justifications for the proposed

amendments.2. Proposed consolidation of the Bylaws.

Management further proposes to consolidate the Bylaws, in line with the

amendments proposed under item 1 above. Attachment II to this proposal

provides a consolidated version of the proposed Bylaws.

3. Changes to the Stock Options Plan.

The primary purpose of the proposed modification in the Stock Options Plan

is giving the Company the ability to grant a selected group of executives

special options (Additional Options) which by rewarding outstanding

performance should represent additional incentives geared towards enhanced

alignment of interests and long-term value generation.

Set forth in Attachment III to this proposal is a transcript of the proposed

Stock Options Plan. The information which CVM Instruction 481/09

requires to be provided under Annex 13 is set forth in Attachment IV to this

proposal.

We remain at your disposal for any additional clarification you may require.

Yours sincerely,

Eduardo Refinetti Guardia

Chief Financial, Corporate Affairs and Investor Relations Officer


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DRAFT BYLAWS OF BM&FBOVESPA REFLECTING AMENDMENTS TO BE PROPOSED TO THE EXTRAORDINARY SHAREHOLDERS MEETING OF APRIL 18,2011

CURRENT BYLAWS AMENDED BYLAWS JUSTIFICATION

CORPORATE BYLAWS OF BM&FBOVESPA S.A.

BOLSA DE VALORES, MERCADORIAS e FUTUROS

CORPORATE BYLAWS OF BM&FBOVESPA S.A.

BOLSA DE VALORES, MERCADORIAS e FUTUROS

CHAPTER I CHAPTER I

NAME, HEADQUARTERS, VENUE, PURPOSE AND

DURATION

NAME, HEADQUARTERS, VENUE, PURPOSE AND

DURATION

Article 1.A BM&FBOVESPA S.A. BOLSA DE VALORES,MERCADORIAS E FUTUROS (Company) is a company

that is governed by these Bylaws and by applicable law.

Article 1. BM&FBOVESPA S.A. BOLSA DE VALORES,

MERCADORIAS E FUTUROS (Company) is a corporation

governed by these Bylaws and by applicable law.

Currently absent provision Sole paragraph. The shares of BM&FBOVESPA S.A. Bolsade Valores, Mercadorias e Futuros (BM&FBOVESPA), the

Brazilian Securities and Derivatives Stock Exchange, have

been listed to trade on the Stock Exchange special listing

segment named Novo MercadoNovo Mercado. Accordingly, the

Company, the shareholders, the Directors and Officers andthe Fiscal Council members (if the council is active) are bound

by the Novo Mercado Listing Rules (Novo Mercado ListingRules)

Amended for consistency with the

Novo Mercado Listing Rules. (NMregulation), as revised and approved

by listed issuers (consolidated version

set to be released in due course).

This provision stresses that theCompany, the directors, officers, fiscal

council members and the shareholders,

all are bound by the Novo MercadoListing Rules, including with no

exceptions all of the shareholders.

Article 2.The Company has its headquarters and venue in Article 2. The Company has registered office and jurisdiction


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fungible and non-fungible custody of commodities, securities

and any other physical and financial assets;

fungible and non-fungible custody of commodities, securities

and any other physical and financial assets;

V Rendering of customization, classification, analysis,

quotation, preparation of statistics, training of personnel,

preparation of studies, publications, information, library and

software development services related to the participants of

the markets under the Companys direct or indirect

surveillance and its interests;

V Rendering of customization, classification, analysis,

quotation, preparation of statistics, training of personnel,

preparation of studies, publications, information, library and

software development services related to the participants of

the markets under the Companys direct or indirect

surveillance and its interests;

VI Rendering of technical, administrative, softwaredevelopment and management support for market

development, as well as undertaking of educational,

promotional and publishing activities related to its corporate

purpose and to the markets which are under the Companys

surveillance;

VI Rendering of technical, administrative, softwaredevelopment and management support for market

development, as well as undertaking of educational,

promotional and publishing activities related to its corporate

purpose and to the markets which are under the Companys

surveillance;

VII Undertaking of other similar or related activities

expressly authorized by the Securities Commission; and

VII Undertaking of other similar or related activities

expressly authorized by the Securities Commission; and

VIII Holding shares in the capital of other companies or

associations, headquartered in Brazil or abroad, whether as a

partner, shareholder or associate, under the regulations in

effect.

VIII Holding shares in the capital of other companies or

associations, headquartered in Brazil or abroad, whether as a

partner, shareholder or associate, under the regulations in

effect.

Paragraph 1.Within the powers that are conferred to it byLaw 6,385/1976 and by the regulations in effect, the Company

must:

Paragraph 1. Within the powers that are conferred to it by

Law 6,385/1976 and by the regulations in effect, the Company

must:

(a) issue regulations relating to the granting of accessauthorizations to different trading, registration and

settlement systems under the Companys surveillance or

by companies that are controlled by the it (Access

(a) issue regulations relating to the granting of access

authorizations to different trading, registration and

settlement systems under the Companys surveillance or

by companies that are controlled by the it (Access


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Authorizations), establishing the terms, conditions and

procedures for the granting of such authorizations

(Access Regulation);

Authorizations), establishing the terms, conditions and

procedures for the granting of such authorizations

(Access Regulation);

(b) establish rules safekeeping equitable commercial andtrading principles and high ethical standards for people

who act in the markets under the direct or indirect

surveillance of the Company, as well as to regulate the

transactions and decide operating questions involving

the holders of Access Authorizations;

(b) establish rules safekeeping equitable commercial and

trading principles and high ethical standards for people

who act in the markets under the direct or indirect

surveillance of the Company, as well as to regulate the

transactions and decide operating questions involving the

holders of Access Authorizations;

(c) regulate the activities of the holders of AccessAuthorizations in the systems and markets under the

Companys surveillance;

(c) regulate the activities of the holders of Access

Authorizations in the systems and markets under the

Companys surveillance;

(d) establish mechanisms and rules to mitigate the risk ofbreach of obligations by the holders of Access

Authorizations, as to the transactions undertaken and/or

registered in any of the Companys trading, registration

and clearing systems;

(d) establish mechanisms and rules to mitigate the risk of

breach of obligations by the holders of Access

Authorizations, as to the transactions undertaken and/or

registered in any of the Companys trading, registration

and clearing systems;

(e) monitor the transactions traded and/or registered in anyof the Companys trade, registration, clearing and

settlement systems, as well as all of those regulated by it;

(e) monitor the transactions traded and/or registered in any

of the Companys trade, registration, clearing and

settlement systems, as well as all of those regulated by it;

(f) monitor the activities of the holders of AccessAuthorizations, as participants and/or intermediaries to

the transactions undertaken and/or registered in any of

the trade, registration and clearing systems under the

surveillance of the Company, as well as all those

regulated by it; and

(f) monitor the activities of the holders of Access

Authorizations, as participants and/or intermediaries to

the transactions undertaken and/or registered in any of

the trade, registration and clearing systems under the

surveillance of the Company, as well as all those

regulated by it; and

(g) impose penalties to those who violate legal, regulatory (g) impose penalties to those who violate legal, regulatory


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and operating rules, under the surveillance of the

Company.

and operating rules, under the surveillance of the

Company.

Article 4.The Company has an unlimited duration. Article 4. The Company has an unlimited duration.

CHAPTER II CHAPTER II

CAPITAL STOCK, SHARES AND SHAREHOLDERS CAPITAL STOCK, SHARES AND SHAREHOLDERS

Article 5.The capital stock of the company is R$R$2,540,239,563.88, fully paid in and divided into

2,044,014,295 common shares, with no par value, with the

issuance of preferred shares and founders shares being

prohibited.

Article 5. The capital stock of the company is

[R$2,540,239,563.88], fully paid in and divided into

2,044,014,295 common registered shares, with no par value,

with the issuance of preferred shares and founders shares

being prohibited.

Amendment to refer specifically to the

form of the shares: registered

Article 6.All of the shares issued by the Company are book-entry and deposited with a financial institution authorized

by the Securities Commission (Comisso de ValoresMobilirios), or CVM, in the name of their holders.

Article 6. All of the shares issued by the Company are book-

entry and deposited with a financial institution authorized by

the Brazilian Securities Commission (Comisso de ValoresMobilirios), or CVM, in the name of their holders.

Sole paragraph. The cost of the transfer and registration, as

well as the cost of the service related to book-entry shares can

be charged directly to the shareholder by the transfer agent,

as may come to be defined in the book-entry share contract.

Sole paragraph. The cost of the transfer and registration, as

well as the cost of the service related to book-entry shares can

be charged directly to the shareholder by the transfer agent,

as may come to be defined in the book-entry share contract.

Article 7.Each common share corresponds to the right to onevote in the decisions in an Annual or Special Shareholders

General Meeting, with it being the case, however, that no

shareholder or Group of Shareholders (Group of

Shareholders, as defined in Article 74) can cast votes in a

number greater than 7% of the number of shares into which

the capital stock is divided, subject to the terms and

Article 7. Each common share entitles the holder to one vote

in decisions taken in Annual or Extraordinary Shareholders

Meetings, provided however that, due regard given to the

provision in item (d) of paragraph 5 of Article 70, no

shareholder or Group of Shareholders (as defined under

Article 73) shall be entitled to vote shares in excess of 7% of

the total number of shares issued and outstanding at any

Cross reference to former paragraph 2

deleted, along with the former

paragraph 2

Other cross references corrected due to

provision renumbering.


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conditions of paragraph 2 of this Article and of item (d), of

paragraph 8 of Article 71.

given time. .

Paragraph 1.Subject to the terms and conditions ofparagraph 3 below, in case of any shareholders agreements

provision casting votes, all signatories to this agreement shall

be considered members of a Group of Shareholders, for

purposes of the application of the limitation to the number of

votes stated in the lead paragraph of this Article.

Paragraph 1. For purposes of the voting cap established in the

main provision, but without prejudice to the provision set

forth in paragraph 2 of this Article, where two or more

shareholders enter into voting agreement, or any other

agreement for concerted exercise of voting rights, each and all

of the signatory parties to such agreement shall be deemed to

constitute, and vote as a Group of Shareholders, subject

therefore to the voting cap.

Cross reference corrected

Paragraph 2.In any Extraordinary Shareholders GeneralMeeting for the purpose of amending or revoking any

provision of this Article, no shareholder or Group of

Shareholders shall cast votes in a number greater than 1% of

the number of shares in which the capital stock is divided,

except as provided for in items (c) and (d) of paragraph 8 of

Article 71.

Eliminated In line with the NM regulation ban ofvoting caps below 5%, this provision

has been deleted to exclude the 1%

voting cap previously set regarding

shareholder action to amend or delete

the provisions of article 7.

Paragraph 3.The pre-establishment in a ShareholdersAgreement of a block voting agreement regarding the

majority of votes of shareholders of the Company for any

Shareholders General Meeting with a blocking voting

agreement with number of votes exceeding the number of

votes established in paragraph 2 and the lead paragraph ofthis Article is prohibited, independent of whether the

Shareholders Agreement is filed in the Companys

headquarters.

Paragraph 2. Shareholders agreements or vote pooling or

block voting or any other agreements or arrangements for

aggregation of voting power that in any way circumvent the

voting cap established in the main provision of this Article,

whether or not filed at the Companys registered office, are

expressly forbidden.

Provision renumbered

Cross reference to former paragraph 2

deleted, along with the former

paragraph 2

Paragraph 4.The Chairperson of the Shareholders GeneralMeeting is responsible for the enforcement of the rules

provided for in this article and to inform the number of votes

Paragraph 3. In a shareholders meeting, the chair shall be

responsible for enforcing the provisions of this Article 7, and

for declaring the number of votes each shareholder or Group



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that can be cast by each shareholder or Group of

Shareholders who are present.

of Shareholders is entitled to cast when polled.

Paragraph 5.The votes that exceed the limits established inhis Article shall not be counted in a Meeting.

Paragraph 4. No vote in excess of the votes eligible to be cast

by a shareholder or Group of Shareholders shall be computed

for purposes of determining the outcome of a poll.


Article 8.The Company is authorized to increase its capitalstock up to the limit of two billion five hundred million

(2,500,000,000) common shares, as approved by the Board of

Directors, independently of any bylaws amendment.

Article 8. The Company is authorized to increase its capital

stock up to the limit of two billion five hundred million

(2,500,000,000) common shares, as approved by the Board of

Directors, independently of any bylaws amendment.

Paragraph 1.In the case provided for in the lead paragraphof this Article, the Board of Directors shall determine the

issuance price and number of shares to be issued, as well as

the payment date and conditions for paying in the shares.

Paragraph 1. In the case provided for in the main provision of

this Article, the Board of Directors shall determine the

issuance price and number of shares to be issued, as well as

the payment date and conditions for paying in the shares.

Paragraph 2.Within the limit of the authorized capital, theBoard of Directors can also: (i) decide regarding the issuance

of warrants; (ii) in accordance with a plan approved by the

Shareholders General Meeting, grant stock purchase options

to the management and employees of the Company or of a

controlled company, or to individuals who provide services

to it, without the shareholders having preemptive rights in

the granting or subscription for these shares; and (iii) decide

on the increase of the capital stock through the capitalization

of profits or reserves, with or without bonus shares.

Paragraph 2. Within the limit of the authorized capital, the

Board of Directors can also: (i) decide regarding the issuance

of warrants; (ii) in accordance with a plan approved by the

Shareholders Meeting, grant stock purchase options to the

management and employees of the Company or of a

controlled company, or to individuals who provide services

to it, without the shareholders having preemptive rights in

the granting or subscription for these shares; and (iii) decide

on the increase of the capital stock through the capitalization

of profits or reserves, with or without bonus shares.

Article 9.Any delay by a shareholder in paying in the capitalsubscribed for shall result in a 1% a month interest charge,

monetary correction accrued on the basis of the General

Market Price Index (ndice Geral de PreosMercado), or IGP-M, accrued with the lowest frequency legally applicable, and

Article 9. Any delay by a shareholder in paying in the capital

subscribed for shall result in a 1% a month interest charge,

monetary correction accrued on the basis of the General

Market Price Index (ndice Geral de PreosMercado), or IGPM,accrued with the lowest frequency legally applicable, and a


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a fine of 10% of the amount of the outstanding amount,

without prejudice to other applicable legal sanctions.

fine of 10% of the amount of the outstanding amount, without

prejudice to other applicable legal sanctions.

Article 10.Every shareholder or Group of Shareholders mustdisclose, through a notice to the Company, which must

contain the information provided for in Article 12 of CVM

Instruction No. 358/2002, the acquisition of shares, that

together with those already owned, exceed 5% of the capital

of the Company, as well as, after reaching that percentage,

the acquisition of shares that correspond to the acquisition of

an additional 2.5% of the capital of the Company or multiplesof that percentage.

Article 10. Every shareholder or Group of Shareholders must

disclose, through a notice to the Company, which must

contain the information provided for in Article 12 of CVM

Instruction No. 358/2002, the acquisition of shares, that

together with those already owned, exceed 5% of the capital

of the Company, as well as, after reaching that percentage, the

acquisition of shares that correspond to the acquisition of an

additional 2.5% of the capital of the Company or multiples ofthat percentage.

Paragraph 1.In cases in which the acquisition results in orhad been undertaken for change of control or management of

the Company, as well as in cases in which this acquisition

creates the obligation to make a public tender offer for the

acquisition of shares, in accordance with the terms of

CHAPTER VIII and the legislation and regulation in effect,

the acquiring shareholder or Group of Shareholders must

also cause the publication of a notice containing the

information provided for in Article 12 of CVM Instruction

No. 358/2002, in widely-known newspapers commonly used

by the Company.

Paragraph 1. In cases in which the acquisition results in or

had been undertaken for change of control or management of

the Company, as well as in cases in which this acquisition

creates the obligation to make a tender offer for the

acquisition of shares, in accordance with the terms of

CHAPTER VIII and the legislation and regulation in effect,

the acquiring shareholder or Group of Shareholders must also

cause the publication of a notice containing the information

provided for in Article 12 of CVM Instruction No. 358/2002, in

widely-known newspapers commonly used by the Company.

Paragraph 2.The obligations provided for in this Article alsoapply to the owners of debentures convertible into shares,

warrants and stock purchase options that assure their owners

the acquisition of shares in the percentages provided for here.

Paragraph 2. The obligations provided for in this Article alsoapply to the owners of debentures convertible into shares,

warrants and stock purchase options that assure their owners

the acquisition of shares in the percentages provided for here.

Paragraph 3.The shareholders or Groups of Shareholdersshall also disclose, as provided for in the lead paragraph of

this Article, any time their shareholding is reduced by 5% of

Paragraph 3. The shareholders or Groups of Shareholders

shall also disclose, as provided for in the main provision of

this Article, any time their shareholding is reduced by 5% of


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the total number shares issued by the Company due to any

alienation or extinction of shares and other securities

mentioned in the previous paragraph.

the total number shares issued by the Company due to any

alienation or extinction of shares and other securities

mentioned in the previous paragraph.

Paragraph 4.The breach of the provisions of this Article shallsubject the breaching party(ies) to the penalty provided for in

Article 16, item (i), and in Article 18.

Paragraph 4. The breach of the provisions of this Article shall

subject the breaching party(ies) to the penalty provided for in

Article 16, item (i), and in Article 18.

Paragraph 5.The Investor Relations Officer must send thecommunications provided for in this Article, to the CVM and

to the stock exchanges on which the securities issued by theCompany are traded, as soon as they are received.

Paragraph 5. The Investor Relations Officer must send the

communications provided for in this Article, to the CVM and

to the stock exchanges on which the securities issued by theCompany are traded, as soon as they are received.

Article 11.The issuance of new shares, debenturesconvertible into shares or warrants placed by sale on a stock

exchange, public subscription or share swap in public tender

offers for the acquisition of control under Articles 257

through 263 of Law No. 6,404/76, or, also, under a special tax

incentive law, can take place without the shareholders being

given a preemptive right in the subscription or with a

reduction in the minimum period provided for in law to

exercise it.

Article 11. The issuance of new shares, debentures

convertible into shares or warrants placed by sale on a stock

exchange, public subscription or share swap in tender offers

for the acquisition of control under Articles 257 through 263

of Brazilian Corporate Law*, or, also, under a special tax

incentive law, can take place without the shareholders being

given a preemptive right in the subscription or with a

reduction in the minimum period provided for in law to

exercise it.

CHAPTER III CHAPTER III

SHAREHOLDERS GENERAL MEETING SHAREHOLDERS MEETING

Article 12.The shareholders shall meet ordinarily within thelast four months after the close of the fiscal year, to decide

regarding the matters provided for in Article 132 of Law No.

6,404/1976, and, extraordinarily, in the interests of the

Article 12. The shareholders shall meet ordinarily within the

last four months after the close of the fiscal year, to decide

regarding the matters provided for in Article 132 of Brazilian

Corporate Law*, and, extraordinarily, in the interests of the


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Company. Company.

Paragraph 1.The Shareholders General Meeting has theauthority to decide on all acts related to the Company, as

well as to decide in the best interests of the Company.

Paragraph 1. The Shareholders Meeting has the authority to

decide on all acts related to the Company, as well as to decide

in the best interests of the Company.

Paragraph 2.The Annual Shareholders General Meeting andthe Extraordinary Shareholders General Meeting can be

called cumulatively and held at the same place, date and

time, and recorded in a single set of minutes.

Paragraph 2. The Annual Shareholders Meeting and the

Extraordinary Shareholders Meeting can be called

cumulatively and held at the same place, date and time, and

recorded in a single set of minutes.

Paragraph 3.A Shareholders General Meeting shall be calledby the Board of Directors on the decision of the majority of its

members or, also, in the cases provided for in these Bylaws

and in the sole paragraph of Article 123 of Law No.

6,404/1976.

Paragraph 3. A Shareholders Meeting shall be called by the

Board of Directors on the decision of the majority of its

members or, also, in the cases provided for in these Bylaws

and in the sole paragraph of Article 123 of Brazilian

Corporate Law*.

Paragraph 4.The documents pertinent to the matter to bedecided on at the Shareholders General Meetings must be

made available to the shareholders, at the headquarters of the

Company, on the date of the publication of the first call

notice, except in those cases in which the law or a regulation

in effect requires that they be made available for a longer

period.

Paragraph 4. The documents pertinent to the matter to be

decided on at the Shareholders Meetings must be made

available to the shareholders, at the headquarters of the

Company, on the date of the publication of the first call

notice, except in those cases in which the law or a regulation

in effect requires that they be made available for a longer

period.

Paragraph 5.The Shareholders General Meeting shall beheld, on the first call, with the presence of shareholders

representing at least 25% of the capital stock, except when the

law requires a higher quorum; and, on the second call, with

any number of shareholders.

Paragraph 5. The Shareholders Meeting shall be held, on the

first call, with the presence of shareholders representing at

least 25% of the capital stock, except when the law requires a

higher quorum; and, on the second call, with any number of

shareholders.

Paragraph 6.An Extraordinary Shareholders GeneralMeeting that has as its purpose the amendment of these

Paragraph 6. An Extraordinary Shareholders Meeting that

has as its purpose the amendment of these Bylaws shall be


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Bylaws shall be held, on the first call, with the presence of

shareholders who represent, at least, two thirds of the capital

stock, but may be instated on the second call with any

number of presents.

held, on the first call, with the presence of shareholders who

represent, at least, two thirds of the capital stock, but may be

instated on the second call with any number of presents.

Paragraph 7.Shareholders General Meetings shall bepresided over by the Chairperson of the Board of Directors or

by the person appointed by the Chairperson. In the absence

of the Chairperson, a Shareholders General Meeting shall be

chaired by the Vice Chairperson of the Board of Directors, or

by the person appointed by the Vice Chairperson. Thechairperson of the Shareholders General Meeting shall

choose one of those present to act as secretary.

Paragraph 7. Shareholders Meetings shall be presided over

by the Chair of the Board of Directors or by a person

appointed by the Chair. In the absence of the Chair, a

Shareholders Meeting shall be presided over by the Vice

Chair or an appointee.. The chair of the Shareholders

Meeting shall appoint one of the attendees to act as secretary.

Paragraph 8.It shall be the exclusive responsibility of theChairperson of the Meeting, subject to the rules established

in these Bylaws, to make any decision regarding the number

of votes of each shareholder, which decision may be

appealed to the Shareholders General Meeting itself, in

which decision the interested party shall not vote.

Paragraph 8. It shall be the exclusive responsibility of the

Chair of the Meeting, subject to the rules established in these

Bylaws, to make any decision regarding the number of votes

of each shareholder, which decision may be appealed to the

Shareholders Meeting itself, in which decision the interested

party shall not vote.

Article 13.Before the Shareholders General Meeting isinstated, the shareholders shall sign the Shareholder

Attendance Book, stating their name and residence and the

number of shares they own.

Article 13. Before the Shareholders Meeting is instated, the

shareholders shall sign the Shareholder Attendance Book,

stating their name and residence and the number of shares

they own.

Paragraph 1.The list of shareholders present shall be closedby the Chairperson of the Meeting, immediately after the

instatement of Shareholders General Meeting.

Paragraph 1. The list of shareholders present shall be closed

by the Chair of the Meeting, immediately after the

instatement of Shareholders Meeting.

Paragraph 2.The shareholders who appear at Meeting afterthe closing of the list of shareholders present shall be able to

participate in the meeting, but they shall not have the right to

Paragraph 2. The shareholders who appear at Meeting after

the closing of the list of shareholders present shall be able to

participate in the meeting, but they shall not have the right to


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vote in any corporate decision. vote in any corporate decision.

Article 14.The Company must begin the registration of theshareholders to take part in the Shareholders General

Meeting at least forty-eight (48) hours in advance, it being the

responsibility of the shareholder to present: (i) certificate

issued by the transfer institution for the book-entry shares

owned, in accordance of terms and conditions of Article 126

of Law No. 6,404/76. This proof shall be dated no later five

days before the date of the Shareholders General Meeting.

The Company, at its discretion, may dispense thepresentation of this proof; and (ii) a proxy statement and/or

documents that evidence the powers of legal representation

of the shareholder. The shareholder or its legal

representatives shall present the Shareholders General

Meeting documents that prove his or her identity.

Article 14. The Company must begin the registration of the

shareholders to take part in the Shareholders Meeting at least

forty-eight (48) hours in advance, it being the responsibility of

the shareholder to present: (i) certificate issued by the transfer

institution for the book-entry shares owned, in accordance of

terms and conditions of Article 126 of Brazilian Corporate

Law*. This proof shall be dated no later five days before the

date of the Shareholders Meeting. The Company, at its

discretion, may dispense the presentation of this proof; and(ii) a proxy statement and/or documents that evidence the

powers of legal representation of the shareholder. The

shareholder or its legal representatives shall present the

Shareholders Meeting documents that prove his or her

identity.

Article 15.The decisions of the Shareholders GeneralMeeting shall be passed by a majority vote of those present,

with blank votes not being counted, except as provided for in

law and observing the provisions in Article 7 and in

paragraph 2 of Article 62.

Article 15. Unless otherwise provided by law, and giving due

regard to the provisions of Article 7 and of paragraph 2 of

Article 63 of these Bylaws, at Shareholders Meetings

decisions shall pass by the affirmative vote of holders of

record of a majority of the shares represented at the meeting,

not computing abstentions.

Cross reference corrected

Paragraph 1.A decision of a Shareholders General Meetingregarding the amendment or exclusion of the provisions ofArticle 70, which restricts the right of the shareholders to

make a public tender offer for the acquisition of shares

provided for in that Article 70, shall be taken in accordance

with the casting of voting limits provided for in Article 7.

Paragraph 1. Decisions taken in a shareholders meeting to

amend or eliminate any of the provisions set forth underArticle 69, in particular where the effects thereof curtail

shareholder rights under a tender offer requirement, shall

strictly adhere to the voting cap set forth in Article 7 of these

Bylaws.

Cross reference corrected. .

Paragraph 2.Shareholders General Meetings can onlydecide matters included in the agenda, contained in their

Paragraph 2. Shareholders Meetings shall deliberate and

decide only on matters included in the order of business, such

Provision renumbered.


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respective call notice, with the approval of matters under a

general heading being prohibited.

as announced in the related call notice, with no open-ended

discussions.

Paragraph 3.Minutes shall be prepared based on the workand decisions of the Shareholders General Meeting and

these shall be signed by the members of the presiding board

and by the shareholders present.

Paragraph 3. The minutes of Shareholders Meetings shall be

prepared based business transacted and action taken at the

meetings, certified by the proper officers and signed by the

attending shareholders

Provision renumbered.

Article 16.It is the responsibility of the ShareholdersGeneral Meeting, in addition to the other responsibilities

provided for in law or in these Bylaws:

Article 16. It shall be incumbent on shareholders convening

in a Shareholders Meeting, among other actions prescribed

by law and these Bylaws to decide on the matters set forthbelow. :

(a) Review and approve the management report and theCompanys financial statements;

(a) Review and judge the management report and financial

statements;

(b) Determine the allocation of the companys fiscal year netincome and its distribution to the shareholders as

proposed by the Companys management;

(b) Determine the allocation of net income for the yearthe

companys fiscal year net income and approve dividend

its distributions based on the management proposal to

the shareholders as proposed by the Companys

management;

(c) elect and remove the members of the Board of Directorsand of the Fiscal Council, if formed;

(c) Elect and remove the Directors and the members of the

Fiscal Council, if active;

(d) determine the compensation of the members of theBoard of Directors and of the Executive Committee, as

well as of the members of the Fiscal Council, if formed,

observing the provisions of Article 17;

(d) Set the aggregate compensation of the members of the

Board of Directors and the Executive Management Board,

as well as the compensation of fiscal council members, if

elected, having regard for the provisions of Article 17;

(e) approve stock option or subscription option plans for itsmanagement and employees, as well as of for the

management and employees of other companies that are

controlled by the Company or third-party service

(e) Approve stock option plans of any type concerning

options attributable to officers, employees and service

providers of the subsidiaries;


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providers;

(f) approve the profit sharing distribution for themanagement of the Company within the legal limits,

and to the employees of the Company, in accordance

with the human resources policy of the Company;

(f) Approve profit sharing programs for management

members giving regard to applicable legal limits, and

employee profit sharing plans, in accordance with the

human resources policy of the Company;

(g) approve the delisting of the Company from the NovoMercado (Novo Mercado) listing segment or thecancellation of the registration as a publicly-traded

company;

(g) Approve proposals for the Company to delist from the

Novo Mercado listing segment or a going private processultimately resulting in cancellation of the registration as a

publiccompany;

The term (Novo Mercado) has beendefined above, in the sole paragraph of

article 1.

(h) select a company responsible for the determination ofthe Companys economic value and preparation of the

respective shares evaluation, in case of the cancellation

of the registration as a publicly-traded company or

delisting from the Novo Mercado, as provided for inCHAPTER VIII, from among the companies indicated

by the Board of Directors;

(h) Based on a list of selected firms provided by the Board of

Directors, appoint a specialized firm to determine the

economic value of the Company shares and prepare the

valuation report, in the event of a going private process

for cancellation of the registration as a public company,

or of delisting from the Novo Mercado, as contemplatedunder CHAPTER VIII hereof;

(i) suspend the rights of a shareholder as provided for inArticle 120 of Law No. 6,404/76 and Article 18;

(i) Suspend the rights of a shareholder, as provided under

Article 120 of Brazilian Corporate Law* and Article 18 of

these Bylaws;

(j) approve the participation of the Company as a holdingin other companies and/or associations, consortiums or

joint ventures if the respective participation amounts are

three times the Reference Amount;

(j) Approve acquisitions of ownership interest in other

companies and/or associations or joint ventures or

consortia, where the value of any such interest is in excess

of three times the Reference Amount;

(k) approve the alienation of a substantial part of assets ortrademarks of the Company; and

(k) Approve any disposition of a material portion of the

Company assets or its trademarks; and

(l) approve the merger of the Company, or its issuedshares, into other company, the merger, spin-off, change

(l) Approve transactions for the Company or its shares to be

merged into another company, and for a consolidation or


22/146

in type of organization, dissolution, according to the

legal quorum, except if previously authorized by CVM,

regarding the matters provided for in paragraph Second

Article 136 of Law No. 6,404/1976, the reduction of

quorum for these decisions.

spin-off transaction, or a transformation of corporate

type, or the Companys dissolution, for this purpose

giving regard to the legally prescribed quorum to resolve,

unless the CVM shall have given prior consent for a

lower quorum to prevail, such as foreseen in paragraph 2

of article 136 of Brazilian Corporate Law.

Article 17.The Shareholders General Meeting shall set thetotal compensation of the members of the Board of Directors

and of the Executive Officers, specifying the portion of that

amount to be allocated to each body.

Article 17. The Shareholders Meeting shall set the aggregate

compensation of the members of the Board of Directors and

Executive Management Board, and shall allocate the portion

attributable to each body.

Paragraph 1.The Board of Directors shall set thecompensation to be allocated to the Chief Executive Officer

and the Chief Executive Officer, in turn, shall determine the

individual compensation of each Officer, in accordance with

the provision of the lead paragraph of this Article.

Paragraph 1. Due regard given to the compensation allocation

established by the Shareholders Meeting, as provided in the

main provision of this Article, the Board of Directors shall set

the compensation of the Chief Executive Officer, and the

latter shall determine the individual compensation of each

Executive Officer.

Paragraph 2.The members of the Board of Directors and theOfficers shall only have the right to profit sharing in the fiscal

years the shareholders receive the mandatory dividend

provided for in Article 202 of Law No. 6,404/1976.

Paragraph 2. The Directors and Executive Officers shall only

be entitled to profit sharing payments relative to years in

which profits are sufficient to ensure the shareholders are

paid the mandatory dividend established under Article 202 of

Brazilian Corporate Law*.

Article 18.The Shareholders General Meeting can suspendthe exercise of the rights, including the right to vote, of a

shareholder or Group of Shareholders who fail to fulfill a

legal, regulatory or bylaws obligation.

Article 18. Shareholders convening in a shareholders

meeting shall be entitled to approve a suspension of the

rights, including voting rights, of any shareholder or Group

of Shareholders for noncompliance with any legal or

regulatory provision or the provision of these Bylaws.

Paragraph 1.The shareholders representing at least 5% of thecapital stock can call a Shareholders General Meeting

Paragraph 1. In the event contemplated in this Article,

shareholders individually or jointly representing at least 5%


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mentioned in the lead paragraph of this Article when the

Board of Directors fails to hold it within the period of eight

days a meeting, with the evidence of the obligation not

complied with and the identification of the shareholder or

Group of Shareholders who are not in compliance.

of the outstanding shares shall be entitled to call a

shareholders meeting to decide on suspending the rights of a

noncompliant shareholder if, having given reasoned notice

requesting the Board of Directors to do so, the latter were to

let eight days elapse without calling the meeting. The notice

to the Board of Directors shall identify the event of

noncompliance and the noncompliant shareholder or Group

of Shareholders.

Paragraph 2.It shall be the responsibility of theShareholders General Meeting to approve the suspension ofthe rights of the shareholder and also to establish, among

other things, the suspension period and its extent. No rights

of inspection and request information shall be suspended.

Paragraph 2. Any Shareholders Meeting that decides for

suspending the rights of a shareholder or Group ofShareholders shall be responsible, among other things, for

deciding on the extent and period of suspension, provided,

however, no such action may suspend a shareholders legally

prescribed rights to monitor corporate management and

request information from management.

Wording revised for consistency with

the remainder of the article, as asuspension of rights may affect either a

shareholder or Group of Shareholders.

Paragraph 3.The suspension of rights of a shareholder shallcease as soon as the obligation is fulfilled.

Paragraph 3. The suspension of rights shall cease as soon as

the shareholder resumes compliance and fulfills the

obligation.

Article 19.No interested shareholder shall vote in anytransaction in which it has or represents a conflict of interest

with the Company. A vote cast by a interested shareholder

shall be considered abusive for the purposes of the provision

of Article 115 of Law No. 6,404/76.

Article 19. Where a shareholder has or represents interests

that conflict with the interest of the Company in any matter

submitted for consideration at a shareholders meeting, such

shareholder shall be required to abstain from interfering in

the deliberations and voting the relevant motion. Underarticle 115 of Brazilian Corporate Law*, a shareholder thatinterferes in, or votes on any matter in which he or she or it

has or represents conflicting interest, shall be deemed to be

acting in abuse of voting power.


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CHAPTER IV CHAPTER IV

MANAGEMENT MANAGEMENT

Section IGeneral Provisions for the Management Bodies Section IGeneral Provisions for the Management Bodies

Article 20.The management of the Company is comprised bythe Board of Directors and the Executive Office.

Article 20. The management of the Company is comprised by

the Board of Directors and the Executive Management Board.

Currently absent provision Sole paragraph. The roles of Board Chair and Chief ExecutiveOfficer are separate, and no person may accumulate the two

functions.

Provision added for consistency with

the NM requirement, the rationale

being the two roles board chair and

lead executive - are separate and the

functions should not be accumulated to

avoid power concentration to the

detriment of management oversight.

Article 21.The members of the Board of Directors and of theExecutive Office shall take office in their respective positions

by signing, in the 30 days after their respective election, the

instrument of instatement in the appropriate book and the

Statement of Consent from the Managers that is referred to in

the Novo Mercado Listing Regulations, and shall remain intheir positions until the new managers elected take office.

Article 21. The members of the Board of Directors and of the

Executive Management Board shall take office in their

respective positions by signing, in the 30 days after their

respective election, the instrument of instatement in the

appropriate book and the Statement of Consent from the

Managers that is referred to in the Novo Mercado ListingRegulations, and shall remain in their positions until the new

managers elected take office.

Sole paragraph. The managers of the Company must adhere

to the Manual for the Disclosure and Use of Information and

Policy for Trading Securities Issued by the Company, by

signing the respective Instrument.

Sole paragraph. The managers of the Company must adhere

to the Manual for the Disclosure and Use of Information and

Policy for Trading Securities Issued by the Company, by

signing the respective Instrument.


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Section IIBoard of Directors Section IIBoard of Directors

Subsection IComposition Subsection IComposition

Article 22.The Board of Directors shall be comprised of atleast seven and up most 11 members, all of whom are elected

and removable by the Shareholders General Meeting, with a

unified term of office of two years, with reelection allowed.

Article 22. The Board of Directors shall comprise at least

seven and at most 11 members, elected by the Shareholders

Meeting for unified two-year terms, removal and reelection

being permitted.

Paragraph 1.No member of the Board of Directors shall holdoffice in the Executive Office of the Company or appointed to

the Executive Office of its controlled companies.

Paragraph 1. The Directors shall not hold positions in the

Executive Management Boards of either the Company or its

subsidiaries.

Paragraph 2.The Board of Directors shall adopt InternalRules that shall provide for, among other matters that are

considered to be convenient, its own operating guidelines,

rights and duties of the members of the Board of Directors

and the relationship of the Board of Directors with the

Executive Office and other corporate bodies.

Paragraph 2. The Board of Directors shall adopt an Internal

Regulation establishing its own operating guidelines, rules on

the rights and responsibilities of the Directors and the

relationships with the Executive Management Board and with

other corporate bodies.

Paragraph 3.It shall be the responsibility of the Chairpersonof the Shareholders General Meeting, in conducting the

work related to the election of the members of the Board of

Directors, to determine the voting system for the election of

the Directors as provided for in Article 23 and Article 24.

Paragraph 3. With regard to the voting process for election of

Directors, it shall be incumbent on the Chair of the

Shareholders Meeting to determine the voting system by

which the shareholders will be polled, while having due

regard for the provisions of Articles 23 and 24 of theseBylaws.

Paragraph 4.except otherwise excused by the approval in theShareholders General Meeting, only the persons who in

addition to the legal and regulatory requirements, may be

elected to the Board of Directors if they meet the following

conditions:

Paragraph 4. Unless otherwise decided by the Shareholders

Meeting, eligible candidates for the Board of Directors shall

be those persons that meet all applicable legal and regulatory

requirements and the following additional requirements, to

the exclusion of any other person:


26/146

(a) are more than 25 years old; (a) being over 25 years old;(b) have spotless reputation and knowledge and experience

in the functioning of markets managed by the Company

and/or by its controlled companies;

(b) having an upstanding reputation, and knowledge of the

functions, operations and practices of the capital markets

operated and managed by the Company and/or its

subsidiaries;

(c) do not have a spouse, companion or relative as to thesecond degree who occupies management positions or

has an employment relationship with the Company orits controlled companies; and

(c) not having a spouse, domestic partner or relative to the

second degree serving as director or officer of, or

employed with, the Company or any of its subsidiaries;and

(d) does not hold positions in a company that could beconsidered a competitor of the Company or of its

controlled companies, and does not have, or represent, a

conflict of interest with the Company or with its

controlled companies, with a conflict of interest being

presumed for a person who, cumulatively: (i) has been

elected by a shareholder who has also elected the

Director in the management of a competing company;

and (ii) has a relationship of subordination with a

shareholder who elected him or her.

(d) not holding a position in any company deemed to be a

competitor of the Company or its subsidiaries and, in

addition, neither having, nor representing any party that

has, a conflict of interest with the Company or its

subsidiaries. A conflict of interest is presumed to exist

relative to any person that, cumulatively: (i) has been

elected by a shareholder that has also elected a director in

a competitor company; and (ii) has ties arising from a

subordinate relationship with the shareholder voting for

his or her election.

Paragraph 5.For the purposes of item (d) of paragraph 4 ofArticle 22, a member of the Board of Directors shall be deemed

elected if: (i) a shareholder of Group of Shareholders haveelected him/her separately; or (ii) the shareholder or Group of

Shareholders which votes, counted in separately, were sufficient

for the election of the member of the Board of Directors in a

cumulative voting procedure (or would be sufficient based on

the total of shareholders present to the meeting, if the

cumulative voting system had been adopted); or (iii) the

shareholder or Group of Shareholders which votes, counted in

Paragraph 5. For the purposes of item (d) of the above

paragraph 4 of this Article 22, a Director shall be deemed to

have been elected by: (i) the shareholder of Group ofShareholders whose individual votes were sufficient to elect a

Director; or (ii) the shareholder or Group of Shareholders

whose individual votes were sufficient to elect a Director in a

cumulative voting process (or would have been sufficient

based on the total of attendee shareholders, had the

cumulative voting system been adopted); or (iii) the

shareholder or Group of Shareholders whose individual votes


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separate, were sufficient for the compliance of minimum

requirements for the exercise of right to vote in separate of the

members of the Board of Directors, as established in

paragraph 4 of Article 141 of Law No. 6,404/1976.

were sufficient to meet the percentage thresholds required

under paragraph 4 of Article 141 of Brazilian Corporate Law*,

which allow for the election of Directors in a separate voting

process.

Paragraph 6.A majority of the Directors of the Companyshall be Independent Directors, with Independent Directors,

for the purposes of these Bylaws, being understood to be

those who meet:

Paragraph 6. A majority of the Directors of the Company

shall be Independent Directors, herein defined as persons that

meet the following requirements:

(a) cumulatively, the criteria for independence establishedin the Listing Regulations of the Novo Mercado and inCVM Instruction No. 461/07;

(a) all of the independence standards established in the NovoMercado Listing Rules and in CVM Instruction No. 461/07,cumulatively; and

(b) do not hold, direct or indirectly, voting interest equal orhigher than 5% of the Companys total capital stock or

voting capital stock or do not have any relationship with

a shareholder with interest equal or higher than 5% of

the Companys total capital stock or voting capital stock.

(b) not holding, and not having ties with any shareholder that

holds, whether directly or indirectly, ownership interest

in 5% or more of the issued and outstanding shares of

stock, or voting stock of the Company.

Paragraph 7.Directors elected under article 141, paragraphs4 and 5, of Law No. 6,404/76 shall also be considered

Independent Directors, regardless of whether they meet the

criteria for independence provided for in this Article.

Paragraph 7. Directors elected under paragraphs 4 and 5 of

article 141 of Brazilian Corporate Law* shall also be

considered Independent Directors, regardless of whether they

meet the independence standards established in this Article.

Paragraph 8.In addition to the requirements established inthe preceding paragraphs, no more than one Director who

maintains a relationship with the same owner of an Access

Authorization or with the same entity, conglomerate or

economic-financial group can be a member of the Board of

Directors.

Paragraph 8. In addition to the requirements set forth in the

preceding paragraphs, the members of the Board of Directors

shall at no time include more than one Director having ties

with a holder of permit for access to the Companys markets,

or having ties with the same entity, conglomerate or

economic group.

Paragraph 9.For the purposes of this Article, a relationship is Paragraph 9. For the purposes of this Article, having ties


28/146

considered to be: with a party is defined as:

(a) an employment relationship; or one resulting from apermanent professional services agreement or

participation in any management, advisory, fiscal or

deliberative body;

(a) an employment relationship, or one arising from any

agreement for provision of professional services on a

continuing basis or from participation in any

management or advisory or deliberative body or fiscal

council of an entity;

(b) a direct or indirect ownership interest in a percentageequal to or greater than 10% of the total capital or of the

voting capital; or

(b) any direct or indirect ownership interest in exceeds 10%

of the issued and outstanding shares of stock or voting

stock of the Company; or

(c) being a spouse, companion or relative up to the seconddegree.

(c) a relationship established through a spouse, domestic

partner or relative to the second degree.

Paragraph 10.The members of the Board of Directors who nolonger fulfill, due to a supervening fact or one that was

unknown at the time of their election, the requisites

established in this Article, must be immediately replaced.

Paragraph 10. Any Director that ceases to meet the eligibility

requirements established in this Article, due to a supervening

event or circumstance unknown at the time of the election,

shall be replaced promptly upon disclosure of such event or

circumstance.

Subsection IIElection Subsection IIElection

Article 23.Subject to the terms and conditions of Article 24,the election of the members of the Board of Directors shall

observe the slate system.

Article 23. Without prejudice to the provision of Article 24, a

slate system shall be adopted inelections of the members of

the Board of Directors.

Paragraph 1.In the election provided for in this Article 23,only the following slates of candidates may run: (i) those

nominated by the Board of Directors, as advised by the

Governance and Appointment Committee; or (ii) those that

are appointed by any shareholder or Group of Shareholders

in the manner provided for in paragraph 3 of his Article.

Paragraph 1. In the election provided for in this Article 23,

only the following slates of candidates may run: (i) those

nominated by the Board of Directors, as advised by the

Nominations and Corporate Governance Committee; or (ii)

those that are appointed by any shareholder or Group of

Shareholders in the manner provided for in paragraph 3 of


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this Article.

Paragraph 2.The Board of Directors, as advised by theGovernance and Appointment Committee shall, on the date

the Shareholders General Meeting that is to elect the

members of the Board of Directors is called, make available

at the Companys headquarters any statement signed by each

of the members of the slate of candidates appointed,

containing: (i) his or her complete identifying information;

(ii) a complete description of his or her professional

experience, mentioning the professional activities previouslyperformed, as well as professional and academic

qualifications; and (iii) information regarding the

disciplinary and judicial proceedings that have been decided

and have become unappealable in which he or she was

subject to a sanction, as well as to state, if relevant, the

existence of an impediment or conflict of interest under

Article 147, paragraph 3, of Law No. 6,404/1976.

Paragraph 2. The Board of Directors, as advised by the

Nominations and Corporate Governance Committee shall, on

the date the Shareholders Meeting that is to elect the

members of the Board of Directors is called, make available at

the Companys headquarters any statement signed by each of

the members of the slate of candidates appointed, containing:

(i) his or her complete identification information; (ii) a

complete description of his or her professional experience,

including previous work experience qualifications academicqualifications; and (iii) information regarding disciplinary or

judicial proceedings in which a judgment of guilty has been

entered under a final and unappealable decision issued, in

addition to information on impediments or conflict of interest

with the Company, if any, such as prescribed under Article

147, paragraph 3, of Brazilian Corporate Law*.

Paragraph 3.The shareholders or group of shareholders whowish to propose a different slate to compete for slots on the

Board of Directors must, at least five days before the date set

for the Shareholders General Meeting, forward to the Board

of Directors statements signed individually by the candidates

they have recommended, containing the information

mentioned in the previous paragraph, the Board of Directors,as advised by the Governance and Appointment Committee

having the duty immediately to disclose, through a notice

inserted in the Companys page on the internet and by

forwarding, electronically, to the CVM and the equity trading

segment of the manager of the stock exchange market

(BOVESPA), the information that the documents relating

to the other slates presented are available for the

Paragraph 3. Where a shareholder or Group of Shareholders

wishes to propose a different slate of candidate nominations

to the Board of Directors, it shall forward to the Board of

Directors at least five days before the date of the

Shareholders Meeting, statements signed individually by the

candidates they nominate, containing the information

required in the preceding paragraph. The Board of Directors,as advised by the Nominations and Corporate Governance

Committee shall promptly post notice in the Companys

Internet site advising shareholders that the documents

concerning other slates and related information are available

at the registered office, and shall forward the same

information via computer to the CVM and

(BM&FBOVESPA)..

Adjusted for consistency with the

integration process that combined

BM&F and BOVESPA into

BM&FBOVESPA.


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shareholders at the Company headquarters.

Paragraph 4.The names recommended by the Board ofDirectors or shareholders must be identified, if appropriate,

as candidates for Independent Directors, observing the

provision in paragraphs 6 and 7 of Article 22.

Paragraph 4. Candidates nominated by the Board of Directors

or any shareholder to serve as independent directors shall be

identified as such, due regard being given to the eligibility

requirements set forth in Paragraphs 6 and 7 of Article 22 of

these Bylaws..

Paragraph 5.The same person may be part of two or moreslates, including that recommended by the Board of

Directors.

Paragraph 5. A single person may be nominated in two or

more slates, including the one proposed by the Board of

Directors.

Paragraph 6.Each shareholder may only vote for one slateand the votes shall be calculated in accordance with the

limits provided for in Article 7, with the candidates of the

slate with the highest number of votes at the Shareholders

General Meeting being declared elected.

Paragraph 6. Any shareholder shall vote for just one slate,

and the candidates nominated in the slate that receives the

highest number of votes shall be declared elected.

Cross reference to article 7 deleted.

Paragraph 7.Whenever candidates are recommendedindividually, the voting shall not be taken by the use of slates

and shall take place through individual voting.

Paragraph 7. Where the candidates are nominated

individually, the voting system shall dispense with the slate

system and votes shall be cast relative to each individual

candidate.

Article 24.In the election of the members of the Board ofDirectors, shareholders who represent at least 5% of the

capital stock have the right to request the adoption of

cumulative voting procedure, so long as their request is

made at least 48 hours before the Shareholders General

Meeting.

Article 24. In elections of the members of the Board of

Directors, shareholders individually or jointly representing

interest in at least 5% of the outstanding shares are entitled to

request adoption of cumulative voting system, provided they

so request at least 48 hours prior to the Shareholders

Meeting.

Paragraph 1.Immediately after receiving the request, theCompany must disclose, through a notice inserted on the

Companys page on the internet and by electronic means,

Paragraph 1. Promptly upon receiving the request, the

Company shall release notice thereof in the Companys

Internet site advising shareholders that the election will take

Adjusted for consistency with the

integration process that combined

BM&F and BOVESPA into


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forward to the CVM and BOVESPA, the information that the

cumulative voting procedure will be used in the election.

place in a cumulative voting process, and shall forward the

same information, via computer, to the CVM and

BM&FBOVESPA.

BM&FBOVESPA

Paragraph 2.With the Shareholders General Meetinginstated, the Presiding Board shall calculate, based on the

signatures in the Attendance Book and the number of shares

owned by each of the shareholders present, the number of

votes attributable to each shareholder or Group of

Shareholders, subject however, to the limit established in

Article 7. The number of members of the Board of Directorsto be elected must be multiplied by the number of shares that

shall not exceed 7% of the total of the Companys issued

shares.

Paragraph 2. On convening the meeting, the presiding

officers shall determine the number of eligible votes

attributable to each shareholder or Group of Shareholders,

based on the signatures affixed to the Shareholders

Attendance List, provided that for purposes of the voting cap

established in Article 7 of these Bylaws, the number of board

seats to be filled in the election shall be multiplied by thenumber of eligible votes, meaning votes not exceeding the

cap threshold of 7% of the outstanding shares.

Paragraph 3.Where the election of the members of the Board ofDirectors takes place using the cumulative voting procedure,

the election shall not be by slates: the candidates for positions as

members of the Board of Directors shall be those who are part of

the slates mentioned in Article 23, as well as the candidates who

come to be recommended by a shareholder who is present, so

long as the statements signed by these candidates, with the

content mentioned in paragraph 2 of Article 23, are presented to

the Shareholders General Meeting.

Paragraph 3. Where the election of Directors adopts a

cumulative voting process, the slate system shall be

dispensed with and votes shall be cast individually on the

candidates nominated in slates presented by the Board and

shareholders according to Article 23, provided each candidate

shall have signed and presented to the meeting a statement

containing the information required under paragraph 2 of

Article 23 of these Bylaws..

Paragraph 4.Each shareholder or Group of Shareholdersshall have the right to cumulate their votes for a single

candidate or distribute them between several. Those

candidates receiving the greatest number of votes shall be

declared elected.

Paragraph 4. Any shareholder or Group of Shareholders shallbe entitled to allot all of its votes to a single candidate or

spread out the votes among several. Candidates that receive

the highest number of votes shall be declared elected.

Paragraph 5.The offices whic

Annual General Shareholders' Meeting - 04.18.2011 - Management Proposal

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