By-Laws
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By-Laws
DIRECIONAL ENGENHARIA S.A.
CHAPTER I
NAME, HEAD OFFICE, PURPOSE AND DURATION
Article 1 – Direcional Engenharia S.A. (“Company”) is a publicly-held company with authorized capital, governed by these bylaws (“Bylaws”) and the applicable legislation, in particular Law 6,404, of December 15, 1976, as amended (“Brazilian Corporation Law”).
Paragraph 1 – As the Company was accepted in the special segment referred to as Novo Mercado of BM&FBOVESPA S.A. – Securities, Commodities and Futures Exchange (“Novo Mercado” and “BM&F BOVESPA”, respectively), the Company, its shareholders, officers and members of the Fiscal Council, when installed, are subject to the provisions of the Listing Rules of the Novo Mercado of BM&FBOVESPA S.A. (“Novo Mercado Listing Rules”).
Paragraph 2 – The provisions of the Novo Mercado ListingRules shall prevail over Bylaws provisions, in the event of any harm to the recipients‘ rights in the public tender offer provided for herein.
Article 2 – The Company has its registered office and jurisdiction at Rua Grão Pará, nº 466, Bairro Santa Efigênia, in the City of Belo Horizonte, in the State of Minas Gerais.
Sole Paragraph – The Company may open, transfer and/or and close branches of any kind in any part of the Brazilian territory or abroad upon resolution of the Board of Executive Officers.
Article 3 – The Company’s purpose is (i) the development, construction and sale of own or third-party real estate, (ii) the management of own assets, (iii) the rendering of engineering services relating to the duties of the technical responsible persons, (iv) the lease and management of real estate, (v) the ownership interest in other companies in the capacity of partner or shareholder, (vi) the rendering of real estate advisory and consulting services in connection with bank financing agreements and similar services and (vii) the purchase and sale of supplies and materials for civil construction.
Article 4 – The duration term of the Company is indeterminate.
CHAPTER II
CAPITAL STOCK
Article 5 – The Company’s fully subscribed and paid-up capital is seven hundred and fifty-two million, nine hundred and eighty-two thousand, three hundred and ninety-nine Brazilian reais (R$752,982,399.00), divided into one hundred and fifty-three million, three hundred and ninety-eight thousand, seven hundred and forty-nine (153,398,749) common shares, all of them registered, book-entryshares, without par value.
Paragraph 1 – The Company’s capital stock solely consists of common shares.
Paragraph 2 – Each registered common share confers upon the holder thereof the right to one vote at the resolutions of the Company’s Shareholders’ Meetings.
Paragraph 3 – All Company’s shares are book entry and shall be kept in a deposit account opened, in the name of the holders thereof, with a financial institution authorized to operate by the Brazilian Securities and Exchange Commission (“CVM”), with which the Company entered into a custody agreement, without issuance of certificates. The costs incurred in connection with the transfer and registration of the ownership of book-entry shares, as well as the costs incurred in connection with the services relating to the shares held in custody, may be charged against the shareholders by the trustee, subject to the maximum limits set out by CVM.
Paragraph 4 – The Company shall be prohibited from issuing preferred shares or founders’ shares.
Paragraph 5 – The shares shall be undivided in relation to the Company. In the event the share is held by more than one person, the rights conferred thereupon shall be exercised by the group’s representative.
Paragraph 6 – The shareholders have preemptive rights, proportionally to the respective ownership interests, in connection with the subscription of shares, debentures convertible into shares or warrants issued by the Company, which preemptive rights may be exercised within the legal term, in conformity with the provisions set forth in Paragraph 3 of Article 6 and Article 8 hereof.
Article 6 – The Company is authorized to increase its capital stock up to the limit of R$ 1,200,000,000.00 (one billion and two hundred million Brazilian reais), including common shares already issued, regardless of any amendments to the bylaws.
Paragraph 1 – The increase of the capital stock, in conformity with this Article 6, shall be carried out upon resolution of the Board of Directors, which shall determine the issuance terms and conditions, including price, payment term and method. In the event of subscription upon payment by means of assets, the authority to take resolution on the increase of the capital stock shall be incumbent upon the Shareholders’ Meeting, upon consultation to the Fiscal Council, if any.
Paragraph 2 – The Company may, upon resolution of the Board of Directors, issue common shares, debentures convertible into common shares and warrants within the limit of the authorized capital.
Paragraph 3 – At the discretion of the Board of Directors, the preemptive right may be excluded or the term of exercise thereof may be reduced, in the event of issuance of common shares, debentures convertible into common shares and warrants, which placement is carried out upon (i) sale in stock exchange or public subscription, or (ii) exchange for stock in a tender offer, as set forth in the legislation and within the limit of authorized capital.
Article 7 – The Company may, upon resolution of the Board of Directors, purchase own shares to be held in treasury and for purposes of subsequent sale or cancellation, without reduction of the capital stock, in conformity with the applicable legal and regulatory provisions.
Article 8 – The Company may, upon resolution of the Board of Directors and in accordance with the plan approved by the Shareholders’ Meeting, grant call options or subscription rights, without preemptive right to shareholders, on behalf of the officers, directors, employees and representatives. Any such option or right may be extended to the officers, directors and employees of the companies directly or indirectly controlled by the Company.
CHAPTER III
MANAGEMENT
Section I – General Provision
Article 9 – The Company shall be managed by the Board of Directors and the Board of Executive Officers, with the powers conferred upon by these Bylaws, the Brazilian Corporation Law and the applicable regulation.
Article 10 – The investiture of members of the Board of Directors and Board of Executive Officers shall be subject to the previous signature of the Management Statement of Consent, pursuant to the Novo Mercado Listing Rules, as well as the compliance with legal applicable requirements.
Paragraph 1 – The officers and directors shall, immediately after the investiture in the respective offices, inform the BM&FBOVESPA about the number and the characteristics of the securities issued by the Company held, whether directly or indirectly, by such officers and directors, including their derivatives.
Paragraph 2 – The Company’s officers and directors shall abide by the policy for disclosure of material fact or event and the policy for trading of securities issued by the Company upon execution of the respective instrument of consent.
Article 11 – The Board of Directors may determine the creation of other technical or advisory committees with defined purposes and duties in order to assist the Board of Directors. The determination of the rules applicable to the committees, including composition, term of office, compensation and operation, shall be incumbent upon the Board of Directors.
Article 12 – The aggregate annual compensation payable to the Company’s officers and directors shall be established by the Annual Shareholders’ Meeting, and the Board of Directors shall take resolution on the distribution of such compensation among the Company’s officers and directors.
Article 13 – The positions of Chairman of the Board of Directors and Chief Executive Officer or top executive of the Company cannot be cumulated by same person.
Section II – Board of Directors
Article 14 – The Board of Directors consists of, at least, five (5) and, at most, nine (9) members and the same number of alternates, elected and removed from office by the Shareholders’ Meeting for two-(2) years combined term of office and re-election is allowed.
Paragraph 1 – Out of the members of the Board of Directors, at least twenty per cent (20%) shall be independent members, as defined by the Novo Mercado Listing Rules, which shall be expressly declared as independent members in the minutes of the Shareholders’ Meeting electing them, and also those elected as authorized by Article 141, Paragraphs 4 and 5 of the Brazilian Corporation Law shall be deemed as independent board members.
Paragraph 2 – When as a result of the observance to the percentage referred to in Paragraph 1 of this Article, there is a fractional number of board members, this number shall be rounded, pursuant to the Novo Mercado Listing Rule.
Paragraph 3 -The members of the Board of Directors shall be invested in the offices upon the signature of an instrument drawn in the Book of Minutes of Meetings of the Board of Directors within a period of 30 (thirty) days counted from the election thereof. The members of the Board of Directors may be removed on any time by the Shareholders’ Meeting and shall remain in the respective offices and exercise the respective duties up to the investiture of the successors thereof, except if otherwise decided by the Shareholders’ Meeting.
Paragraph 4 – The members of the Board of Directors shall have honorable reputation and any person (i) holding any office in companies that may be considered competitors of the Company; or (ii) who has or represents interests conflicting with those of the Company shall not be elected, unless otherwise expressly provided for by the Shareholders’ Meeting which elected such members. The members of the Board of Directors shall not have any voting rights in the event of subsequent verification of the impediment events set forth in this paragraph.
Paragraph 5 – In case of vacancy of office of any member of the Board of Directors, the alternate shall take office to complete the term of office. In case of vacancy of the position alternate member that has assumed the office, the replacement shall be appointed at the Shareholder’s Meeting to complete the respective term of office. For purposes of this paragraph, vacancy occurs with dismissal, death, resignation, proven inability to act or invalidity.
Paragraph 6 – The members of the Board of Directors shall not absent from exercising the duties thereof for a period greater than 30 (thirty) consecutive days under penalty of removal from the office, except in the event of an absence license granted by the Board of Directors itself.
Article 15 – The Board of Directors shall consist of 01 (one) Chairman and 01 (one) Vice Chairman, which shall be elected by the absolute majority of votes of the attending members in the first meeting of the Board of Directors held immediately after the investiture of such members, in the event of vacancy in such offices or whenever a new election is required by the majority of the members of the Board of Directors. In the event of temporary absence or impediment of the Chairman of the Board of Directors, the Vice Chairman shall exercise the duties thereof. In the event of temporary absence or impediment of the Chairman and Chairman of the Board of Directors, the powers conferred upon the Chairman shall be exercised by another member of the Board of Directors appointed by the Chairman or, in the absence of the person appointed, in up to five (5) days from the date of absence or temporary impediment of the Chairman or Vice Chairman of the Board of Directors, by an Executive Officer chosen by the majority of votes of the members of the Board of Directors.
Article 16 – The Board of Directors shall meet ordinarily at every 3 (three) months and extraordinarily whenever called by any of the members, by means of a notice in writing delivered, at minimum, 05 (five) business days in advance, which notice shall contain the date, hour and agenda of the matters to be discussed.
Sole Paragraph – Notwithstanding the provisions set forth in this Article, the meeting attended by all Directors shall be deemed as a regular on.
Article 17 – The shareholders shall be permitted to request the adoption of multiple vote process upon the election of the members of the Board of Directors, in conformity with Article 141 of the Brazilian Corporation Law, CVM Instruction nr. 165, of December 11, 1991, as amended, and any other applicable legal and regulatory regulations.
Paragraph 1 – Upon receipt of any request in this regard, the Company shall immediately inform, through a notice inserted into its webpage and sent electronically to the CVM and BM&FBOVESPA, that the election of the members of the Board of Directors shall be carried out by means of the multiple vote process.
Paragraph 2 – Upon regular instatement of the Shareholders’ Meeting which elected the members of the Board of Directors by means of the multiple vote process, the Chairman of the Board of Directors shall carry out, in reliance upon the Book of Attendance of Shareholders and the number of shares held by the attending shareholders, the calculation of the number of votes of each shareholder. Each shareholder shall have the right to cast the votes attributable to such shareholder in one single candidate or distribute among various candidates.
Paragraph 3 – The offices which remain vacant by virtue of tie shall be subject to a new election by means of the same process and the number of votes of each shareholder shall be adjusted based on the number of vacant offices.
Paragraph 4 – Whenever the election is carried out upon the adoption of multiple vote process, the removal of any member of the Board of Directors by the Shareholders’ Meeting shall give rise to the removal of the other members and a new election shall be carried out.
Article 18 – The meetings of the Board of Directors shall be held with the presence of the majority of the members on the first call and with any number of members on the second call.
Paragraph 1 – The meetings of the Board of Directors shall be presided over by the Chairman of the Board of Directors. The Chairman shall appoint the secretary of the meeting. In the event of temporary absence or impediment of the Chairman of the Board of Directors, the meetings shall be presided over by the Vice Chairman of the Board of Directors or, in his absence, by a Director appointed by the majority of the votes of the other members of the Board of Directors, it being understood that the Chairman of the meeting shall be responsible for the appointment of the secretary.
Paragraph 2 – In the event of temporary absence of any member of the Board of Directors, such member may, based on the agenda of the meeting, exercise its vote in writing, by means of letter or fax delivered to the Chairman of the Board of Directors, on the date of the meeting, or also, by means of digitally certified email. The temporarily absent director may also be represented in the meetings of the Board of Directors by his alternate or, in the event of impossibility of the alternate, by another director indicated in writing who, in addition to the own vote, shall cast the vote of the temporarily absent.
Paragraph 3 – The resolutions of the Board of Directors shall be taken upon the affirmative vote of the majority of the attending members or the members who exercised their votes pursuant to Article 18, Paragraph 2 hereof. In the event of a tie, the Chairman of the Board of Directors or, however the case may be, the substitute member of Board of Directors shall have the casting vote.
Article 19 – The meetings of the Board of Directors shall be preferably held in the Company’s head office. The meetings may also be held by means of telephone or video conference call, the recording and the transcription thereof being permitted. The attendance in the meeting by means of telephone or video conference call shall be deemed as attendance in person in such meeting. In any such case, the members of the Board of Directors who attend the meeting by remote means may exercise their votes, on the date of the meeting, through letter, fax or digitally certified email.
Paragraph 1 – At the end of the meeting, all resolutions shall be drawn up in minutes, which shall be signed by all Directors physically in attendance, and subsequently included in the Book of Register of Minutes of the Company’s Board of Directors. The votes exercised by the Directors who attended the meeting by remote means or who have exercised their votes pursuant to Article 18, Paragraph 2 hereof, shall also be included in the Book of Register of Minutes of the Company’s Board of Directors. The copy of the letter, fax or email, however the case may be, which contains the vote of the directors, shall be attached to the Book immediately after the preparation of the minutes.
Paragraph 2 – The minutes of the meeting of the Company’s Board of Directors that include a resolution deemed to cause effects before third parties shall be disclosed and filed with the public corporate registry.
Paragraph 3 – The Board of Directors may permit other participants to participate in the meetings in order to monitor the resolutions and/or provide information of any nature. However, such participants shall not be entitled to voting rights.
Article 20 – The Board of Directors’ primary purpose is to guide the Company’s business in general and control and inspect the performance thereof, in particular:
a) lay down general guidelines for the Company’s operations;
b) approve and modify the Company’s strategic plans, annual budgets and investment plans, as well as monitor the implementation thereof;
c) elect and remove the Company’s Executive Officers and define the responsibilities and compensation of each Executive Officer, in conformity with the applicable provisions set forth herein and in the applicable legislation;
d) take resolution on the modification of the number of members, the composition or method of appointment of the members of the Company’s Board of Executive Officers or Executive Committee, pursuant to the provisions of these Bylaws, and approve the establishment of technical or advisory committees;
e) call the Shareholders’ Meeting as provided for by the law or whenever deemed necessary;
f) inspect the management of the Board of Executive Officers, audit the Company’s books and papers on any time, request information on agreements entered or to be entered into by the Company and perform any other actions necessary for the exercise of their duties;
g) issue an opinion on the report and accounts of the Board of Executive Officers, as well as on the financial statements for the year which shall be submitted to the Annual Shareholders’ Meeting;
h) approve any investments in projects of social nature whose annual individual amount exceeds five percent (5.0%) of the Company’s consolidated annual net income, based on the last audited annual financial statements available;
i) approve the purchase of properties or assets or the Company’s or any subsidiary’s investment including, among others, the acquisition of lands in cash or by means of exchange of units, whose individual amount corresponds to or exceeds ten percent (10%) of the Company’s consolidated shareholders’ equity, based on the last audited annual financial statements available, except if provided for in the strategic plans;
j) approve the sale of real estate units by the Company or any subsidiary, whose amount, individually or in a series of similar transactions carried out with the same counterparty corresponds to or exceeds fifty million reais (R$50,000,000.00) in a twelve(12)-month period, except if provided for in the strategic plans, and except for the transfer of real estate units built by the Company within the scope of the municipal, state or federal government’s housing programs;
k) approve the sale of any other Company’s or any subsidiary’s properties or assets, the value of which, by means of one single transaction or a series of similar transactions carried out within a period of 12 (twelve) months, is equivalent to or greater than fifty million reais (R$50,000,000.00), except if provided for in the strategic plans;
l) take resolution on any transaction, agreement or expense with any of the Company’s or any subsidiary’s related party, shareholder, officer or director, such as, for example, the grating of call option or subscription of shares to officers and directors;
m) take resolution, upon proposal of the Board of Executive Officers, and except in connection with any matters events solely incumbent upon the Board of Executive Officers, on the tendering by the Company of collaterals, pledges, sureties, endorsements or any other guarantees on behalf of third parties;
n) approve the contracting of any financing, loans, securitization, the issuance of debentures (in conformity with the provisions set forth in “u” below), promissory notes (commercial papers), other securities commonly used in the market, and any other debt securities by the Company or any subsidiary, whose individual or aggregate amount corresponds to or exceeds one hundred million Brazilian reais (R$ 100,000,000.00) (commercial papers), except if provided for in the strategic plans;
o) appoint and dismiss the independent auditors;
p) take resolution on matters submitted by the Board of Executive Officers;
q) propose the approval, by the Shareholders’ Meeting, of the distribution of the outstanding balance of the profits for each year;
r) submit to the Shareholders’ Meeting any proposals for increase of capital stock in excess of the limit of authorized capital or by means of payment in assets, as well as the amendment to the Bylaws;
s) take resolution on the issuance, placement, price, terms and conditions for payment of shares, debentures convertible into common shares and warrants, within the limits of authorized capital, pursuant to Article 6 hereof, including for purposes of exercising call options or subscription of shares in conformity herewith;
t) take resolution, subject to the duties set forth in Article 59 of the Brazilian Corporation Law, on the issuance of simple and unsecured debentures not convertible into shares, the subscription or placement method and the class of debentures to be issued, the remuneration and interest payment terms and conditions, profit sharing and reimbursement premium thereof, if any;
u) take resolution on the purchase of shares issued by the Company for purposes of cancellation or holding in treasury, and also on the resale or replacement in the market or cancellation, in conformity with the rules promulgated by the Brazilian Securities and Exchange Commission (CVM) and other applicable legal rules;
v) approve the engagement of the trustee which renders services relating to the book-entry shares;
w) declare intermediate and interim dividends, as well as interest attributed to equity, in conformity with the Brazilian Corporation Law and any other applicable legislation;
x) determine the work agenda and set forth the regulatory rules for the operation thereof, in conformity with the provisions set forth herein;
y) distribute, among the Directors and Officers, on individual basis, the amount of the aggregate annual compensation determined by the Shareholders’ Meeting;
z) take resolution on the events not provided for herein and perform any other duties not conferred upon any other Company’s body by operation of law or hereby;
aa) to agree or disagree with any public tender offer aiming the Company shares through previous substantiated opinion, released within fifteen (15) days as of the publication of the call notice for the public tender offer, which shall include, at least, (i) the convenience and the appropriateness of the public tender offer as to the interest of group of shareholders and in relation to the liquidity of their securities; (ii) the repercussions of the public tender offer over the Company’s interests; (iii) the strategic plans revealed by offeror in relation to the Company; (iv) other issues the Board of Directors deems relevant, as well as the information required by CVM‘s applicable rules; and
bb) define the triple list of companies specialized in the economic evaluation of companies for purposes of preparation of the appraisal report on the Company shares, in cases of public tender offer for the company’s deregistering as a publicly-held company or delisting from Novo Mercado..
Sole Paragraph – The members of the Board of Directors who are also Officers shall abstain from voting the matters set forth in items (f) and (y) of this Article 20.
Article 21 – It shall be incumbent upon the Chairman or Vice Chairman of the Board of Directors to represent the Board of Directors in the Shareholders’ Meeting.
Section III – Executive Committee
Article 22 – The Company shall have an Executive Committee, elected by the Board of Directors, which shall operate on permanent basis and without decision power in order to assist and make recommendations to the Company’s and its subsidiaries’ Boards of Directors, in particular in connection with the conduction of the business and recommendation about the matters to be discussed in the strategic plans.
Article 23 – The Executive Committee shall consist of 04 (four) members with a two-year (2) joint term of office, except for removal, reelection being permitted.
Article 24 – The members, upon the performance of the duties thereof, shall submit unanimous recommendations to the Board of Directors and shall not be entitled to any compensation, other than any potential minimum compensation set forth in the legislation.
Section IV – Board of Executive Officers
Article 25 – The Company’s Board of Executive Officers shall consist of, at least, 02 (two) and, at most, 07 (seven) officers, whether shareholders or not, resident in Brazil, and who shall be elected by the Board of Directors. The holding of more than one office by any Officer shall be permitted. Such officers shall consist of one Chief Executive Officer, one Vice-Chief Executive Officer, one Investor Relations Officer, one Chief Financial Officer and one Engineering Officer. The other officers shall have no specific title.
Article 26 – The joint term of office of the members of the Board of Executive Officers shall be 02 (two) years, reelection being permitted, and shall end on the date of the second Annual Shareholders’ Meeting subsequent to the meeting that elected such members. The officers shall remain in the office up to the election and investiture of the successors thereof.
Sole paragraph – In the event of vacancy in the office, it shall be incumbent upon the Board of Executive Officers to appoint, among its members, an alternate who shall temporarily accumulate the functions of the substituted member. Such temporary substitution shall endure until the final election for the position carried out on the first meeting of the Board of Directors held thereafter, and the substitute member shall remain in the office until the end of the term of office of the Board of Executive Officers.
Article 27 – The Board of Executive Officers shall meet whenever required. The meeting of the Board of Executive Officers shall be called by the Chief Executive Officer, with prior notice of at least 24 (twenty four) hours, or by any of the other executive officers and, in any such case, with prior notice of at least 48 (forty eight) hours, and the meeting shall only be held with the presence of the majority of the members.
Paragraph 1 – In the event of temporary absence of any officer, such officer may, based on the agenda of the meeting, exercise its vote in writing, by means of letter or fax delivered to the Chief Executive Officer or also, by means of digitally certified email, with confirmation of receipt by the Chief Executive Officer. The temporarily absent Officer may also be represented in the meetings of the Board of Executive Officers by another Officer indicated in writing who, in addition to the own vote, shall vote on behalf of the temporarily absent Officer.
Paragraph 2 – The officers shall not absent from exercising f their responsibilities for a period greater than 30 (thirty) consecutive days under penalty of removal from the office, except in the event of an absence license granted by the Board of Executive Officers itself.
Paragraph 3 – The meetings of the Board of Executive Officers may be held by means of telephone or video conference call or other means of communication. The attendance in the meeting by means of telephone or video conference call or other means of communication shall be deemed as attendance in person in such meeting. In any such case, the members of the Board of Executive Officers who attend the meeting by remote means may exercise their votes through letter, fax or digitally certified email.
Paragraph 4 – At the end of the meeting, all resolutions shall be drawn up in minutes, which shall be signed by all officers physically in attendance, and subsequently included in the Book of Register of Minutes of the Company’s Board of Executive Officers. The votes exercised by the officers who attended the meeting of the Board of Executive Officers by remote means or who have exercised their votes pursuant to Paragraph 1 of this Article, shall also be included in the Book of Register of Minutes of the Company’s Board of Executive Officers. The copy of the letter, fax or email, however the case may be, which contains the vote of the officer, shall be attached to the Book immediately after the preparation of the minute.
Article 28 – The resolutions of the Board of Executive Officers shall be taken upon the majority of the votes of the members in attendance in each meeting, or who exercised their votes pursuant to Article 267, Paragraph 1 hereof. In the event of a tie, the Chief Executive Officer shall have the casting vote.
Article 29 – It shall be incumbent upon the Board of Executive Officers to manage the corporate activities in general and to perform, for this purpose, each and any action deemed necessary or convenient, except for those which, by operation law or hereunder, are incumbent upon the Shareholders’ Meeting or the Board of Directors. In the exercise of their functions, the officers may carry out all transactions and perform each and any action in connection with the general management necessary to fulfill the purpose of its position, in conformity with the provisions herein in relation to the type of representation and level of authority for the performance of certain actions, and the general guidelines of the business set forth by the Board of Directors, including to take resolution on the investment of funds, commit, waive or confer rights, acknowledge debts, enter into agreements or commitments, assume obligations, acquire, dispose and encumber assets and properties, tender escrow, pledges and sureties, issue, endorse, pledge, redeem, withdraw and guarantee securities in general, and open, transfer funds from/to and close accounts in loan institutions, in conformity with the legal rules and the provisions set forth herein.
Paragraph 1 – The following duties shall be solely incumbent upon the Board of Executive Officers:
a) comply and cause compliance with these Bylaws and the resolutions of the Board of Directors and Shareholders’ Meeting;
b) represent the Company, in conformity with the duties and powers set forth herein and conferred upon by the Shareholders’ Meeting;
c) submit, on annual basis, to the approval of the Board of Directors, the Management Report and the accounts of the Board of Executive Officers, in conjunction with the report of the independent auditors, as well as the proposal for allocation of the profits recorded in the previous year;
d) prepare the Company’s organization plan and issue the respective rules;
e) prepare and submit to the approval of the Board of Directors, on annual basis, Company’s business, operating and investment plans, including the strategies for investment in new business, in conformity with the strategic plans;
f) encumber the Company’s permanent asset items and lands, solely by virtue of financing and loans, the beneficiary of which is the Company, its subsidiaries or affiliates;
g) approve any investments, debts or expenses, subject to the authority level attributed to the Board of Directors and the guidelines set forth in the business plans, annual budgets and investment plans approved by the Board of Directors;
h) approve the bringing of any claims or legal proceedings of any nature;
i) approve the incorporation and liquidation of subsidiaries and controlled companies and the Company’s ownership interest in the capital stock of other companies, in Brazil or abroad;
j) approve the transfer of real estate units built by the Company within the scope of the municipal, state or federal government’s housing programs;
k) establish the content of the vote to be cast by the Company in the Shareholders’ Meetings, meetings, contractual amendments, however the case may be, relating to any subsidiary; and
l) approve the tendering, by the Company, of collaterals, pledges, sureties, endorsements or any other guarantees on behalf of the Company’s subsidiaries or affiliates, in any event, exclusively in businesses related to the Company’s purpose.
Paragraph 2 – It shall be incumbent upon the Chief Executive Officer, in addition to the continuous coordination of the work of the officers and the supervision of the performance of the activities in connection with the Company’s planning in general, to: (i) plan, coordinate, organize, supervise and guide the Company’s activities; (ii) implement the guidelines and the performance of the resolutions approved by the Shareholders’ Meetings and the meetings of the Board of Directors and Board of Executive Officers; (iii) call and preside over the meetings of the Board of Executive Officers, with voting rights, including casting vote; (iv) establish the corporate, legal, political, business and institutional guidelines in connection with the performance of the Company’s activities; (v) supervise, in general, the level of authority and duties of the Board of Executive Officers; (vi) exercise any other powers and duties not conferred upon to the other officers and those from time to time conferred upon by the Board of Directors.
Paragraph 3 – It shall be incumbent upon the Vice-Chief Executive, among other responsibilities to be conferred thereupon, from time to time, by the Chief Executive Officer or by the Board of Directors (i) to coordinate the activities of the Chief Financial Officer, Investor Relations Officer and Engineering Officer, (ii) to plan, coordinate, organize, supervise and monitor the Company’s business, and (iii) to plan, coordinate, organize, supervise and monitor the activities of the areas supporting the Company, namely human resources and administrative, legal, information technology services and administrative proceedings.
Paragraph 4 – It shall be incumbent upon the Investor Relations Officer, among other responsibilities to be conferred thereupon, from time to time, by the Chief Executive Officer or by the Board of Directors, to plan, coordinate, organize, oversee and establish the guidelines for the representation of the Company in its interaction with regulatory authorities and other institutions operating in the capital market, in addition to provide information to investors, the CVM, the Central Bank of Brazil, the Stock Exchanges where the Company’s securities trade and other authorities related to activities conducted in the capital market, in accordance with the applicable legislation in Brazil and abroad.
Paragraph 5 – It shall be incumbent upon the Chief Financial Officer, among other responsibilities conferred thereupon, from time to time, by the Chief Executive Officer or by the Board of Directors, to plan, coordinate, organize, supervise and monitor the activities in connection with the Company’s and subsidiaries’ transactions of financial nature, including the management of the treasury department, fund raising and investment, accounts receivable and payable, budget, transaction and planning control and the preparation of the Company’s budget.
Paragraph 6 – It shall be incumbent upon the Engineering Officer, among other responsibilities conferred thereupon, from time to time, by the Chief Executive Officer or by the Board of Directors: (i) to coordinate the implementation of the Company’s developments; (ii) approve the construction processes and technical methods adopted in the construction sites; (iii) coordinate the quality guarantee area; and (iv) supervise the purchase of the material used in the construction sites.
Article 30 – Except as otherwise set forth in Paragraph 1 below, the Company shall be legally bound when represented by:
a) the Chief Executive Officer, on individual basis;
b) two (2) officers, without distinction, or 01 (one) officer jointly with 01 (one) attorney-in-fact duly retained in conformity with Paragraph 3 of this Article; and
c) two (2) attorneys-in-fact, collectively, with specific powers, duly retained in conformity with Paragraph 3 of this Article.
Paragraph 1 – Without prejudice to the provisions set forth in the caput, the Company may be represented by 01 (one) Officer, or also, individually, by 01 (one) attorney-in-fact with specific powers, in the following events:
a) in connection with routine matters in the normal course of the Company’s business, defined as such those which value does not exceed the value of R$500,000.00 (five hundred thousand Brazilian reais), including, but not limited to, before the Company’s subsidiaries and affiliates, federal, state and local private and public agencies or bodies, instrumentalities and mixed capital companies, including, but not limited to, the National Institute of Social Security (INSS), the Unemployment Guarantee Fund (FGTS), managed by Caixa Econômica Federal, the Brazilian Federal Revenue Department, including, Inspection Agencies, Departments and Agencies of the Brazilian Federal Revenue Department, State and/or Municipal Finance Departments, State Trade Boards, the National Institute of Industrial Property, the Central Bank of Brazil, CVM, IBAMA and any other environmental agencies, Stock and Commodities Exchanges, Governmental and Development Banks;
b) in transactions relating to real estate units purchase and sale agreements and respective public deed, in actions relating to the condominium, registration and annotation in real estate registry offices and notary offices, including, but not limited to, real estate financing agreements before financial institutions relating to such real estate units;
c) the signature of mails relating to routine matters;
d) the Company’s, its subsidiaries’ and affiliates’ representation in the Shareholders’ Meetings; and
e) the Company’s representation before direct and indirect public administration bodies, solely to participate in bidding processes, public calls and other types of selection, aiming at contracting a company to execute real estate projects. The signature of the agreements and the selection conditions shall, in any assumption, comply with the provisions in the caput of Article 30 herein.
Paragraph 2 – Any actions performed by the Officers, Directors, attorneys-in-fact or employees in connection with transactions or business which are not related to the Company’s purpose, such as any surety, pledge, mortgage, escrow, bond, endorsement or any other guarantees, without the previous and express approval pursuant to terms and conditions set forth herein, shall be expressly prohibited and shall be deemed as null and void with respect to the Company.
Paragraph 3 – The powers of attorneys granted by the Company shall be individually signed by the Chief Executive Officer, or jointly by 02 (two) Officers and shall contain the specific powers and the validity period shall not exceed 02 (two) years. The delegation of powers shall be prohibited (except for the granting of powers of the ad judicia clause, which may be granted by one (1) Executive Officer and effective for an indefinite term and delegation of powers is authorized.
CHAPTER IV
SHAREHOLDERS’ MEETINGS
Article 31 – The Shareholders’ Meeting shall be held ordinarily, in the 4 (four) months subsequent to the end of each fiscal year and, extraordinarily, whenever necessary, subject to the applicable legal provisions and the provisions set forth herein in connection with the calling, holding and resolution thereof.
Paragraph 1 – The Shareholders’ Meetings shall be called with, at minimum, 15 (fifteen) consecutive days in advance on the first call, and 08 (eight) days in advance on the second call, if necessary. The Shareholders’ Meetings shall be presided over by the Chairman of the Board of Directors or, in his absence, by the alternate member. The Chairman of the Shareholders’ Meeting shall appoint the secretary, which shall be chosen among the shareholders attending the meeting.
Paragraph 2 – The Shareholders’ Meeting shall be held, on the first call, with the presence of shareholders representing, at minimum, a percentage rate of 25% (twenty five percent) of the total shares issued by the Company, except if a higher quorum is required by the law and subject to the provisions set forth herein and, on the second call, with any number of shareholders.
Paragraph 3 – The shareholders representing, at least, a percentage rate of five percent (5%) of the total shares issued by the Company may call the Shareholders’ Meeting stated in the caput of this Article 31 in the event the Board of Directors fails to fulfill, within a period of 08 (eight) days, the call notice submitted by any such shareholders.
Article 32 – In order to attend the Shareholders’ Meeting, the shareholder shall submit, within twenty-four (24) hours prior to the date of the respective Meeting: (i) a certificate issued by the trustee of the book-entry shares held by the shareholder or held in custody, pursuant to Article 126 of the Brazilian Corporation Law and/or with respect to the shareholders participating in the fungible custody of the registered shares, the statement containing the respective ownership interest, issued by the applicable body and dated up to 02 (two) business days prior to the date of the Shareholders’ Meeting; and (ii) a power of attorney, duly issued in conformity with the law and hereby, in the event of representation of the shareholder. The shareholder or its legal representative attending the Shareholders’ Meeting shall present documents that confirm its identity.
Paragraph 1 – The shareholder may be represented at the Shareholders’ Meeting by an attorney-in-fact appointed less than 01 (one) year, who shall be a shareholder, officer or director of the Company, lawyer, financial institution or administrator of investment funds representing the members thereof.
Paragraph 2 – The resolutions of the Shareholders’ Meeting, except for the extraordinary events provided for in the law and pursuant to provisions set forth in Article 52 herein, shall be taken by the absolute majority of votes, excluding bank votes.
Paragraph 3 – The minutes of the Meetings shall be drawn up in the format of summary of the events occurred, including discrepancies and oppositions, containing the transcription of the resolutions taken, in conformity with Paragraph 1 of Article 130 of the Brazilian Corporation Law.
Article 33 – The Shareholders’ Meeting may suspend the exercise of any rights, including the voting right, of any shareholder which failed to perform any obligation provided for in the Brazilian Corporation Law, the meeting’s regulation and herein.
Paragraph 1 – The Shareholders’ Meeting which approved the suspension of the shareholder’s political rights shall establish the scope of the suspension, among other aspects. The suspension of inspection rights and information requests set forth in the legislation shall be prohibited.
Paragraph 2 – The suspension of rights shall cease immediately after the performance of the obligation that gave rise to any such suspension.
Paragraph 3 – The call notice of the Shareholders’ Meeting to be held for purposes of suspension of the rights of any shareholders shall contain the obligation not performed and the identification of the non-performing shareholder.
Article 34 – It shall be incumbent upon the Shareholders’ Meeting, in addition to the attributions provided for by law and in other provisions set forth herein:
a) analyze the officers’ and directors’ accounts, analyze, discuss and approve the financial statements;
b) modify the number of members, composition or appointment method of the Board of Directors;
c) establish the aggregate annual compensation of the members of the Board of Directors and that of the Board of Executive Officers and the compensation of the members of the Fiscal Council, if installed;
d) amend the Bylaws;
e) approve any merger, split-up or grouping (or those relating to the shares) or any other transaction with similar effects (such as drop-down of assets, among others), involving the Company or any of the subsidiaries;
f) approve any winding up, liquidation or dissolution or authorization for judicial or extrajudicial reorganization or adjudication of bankruptcy by or on behalf of the Company or any of the subsidiaries;
g) grant share bonuses and take resolution on any potential split or reverse split of shares;
h) approve stock option plans to its managers and employees or to natural persons who provide services to the Company or to the company under its control and to managers and employees of other companies that are directly or indirectly controlled by the Company;
i) take resolution, according to the proposal submitted by the management, on the establishment or modification of the Company’s dividend policy and allocation of profits and net income for the year (including the distribution of dividends, among others);
j) take resolution on the increase or reduction of the capital stock, or the issuance of shares or other securities convertible into shares issued by the Company, in conformity with the provisions set forth herein;
k) elect and remove the members of the Fiscal Council, if any;
l) appoint the liquidator and the members of the Fiscal Council that will be installed during liquidation period;
m) take resolution on the Company’s deregistering as a publicly-held company before CVM;
n) take resolution on the Company’s delisting from the Novo Mercado, which withdrawal shall be informed to BM&FBOVESPA in writing, with prior notice of 30 (thirty) days;
o) take resolution on the conduction of a tender offer of shares and/or other securities issued by the Company or any of the subsidiaries, except when pursuant to the provisions of Article 6 hereof;
p) suspend the exercise of the shareholders’ rights, in conformity with Article 120 of the Brazilian Corporation Law; and
q) select the specialized company responsible for the preparation of the appraisal report in the events and as provided for by these Bylaws, among the companies indicated by means of a triple list prepared by the Board of Directors.
CHAPTER V
FISCAL COUNCIL
Article 35 – The Company’s Fiscal Council shall operate on non-permanent basis and, if established, shall consist of 03 (three) active members and equal number of alternates, whether shareholders or not, who shall be elected and removed on any time by the Shareholders’ Meeting. The Company’s Fiscal Council shall be created, established and remunerated in conformity with the legislation in force.
Paragraph 1 – The investiture of the members of the Fiscal Council shall be subject to the previous signature of the Term of Consent of the Members of the Fiscal Council pursuant to the provisions set forth in the Novo Mercado Listing Rules, as well as to comply with applicable legal requirements.
Paragraph 2 – The members of the Fiscal Council shall, immediately after the investiture in the respective positions, communicate BM&FBOVESPA about the number and the characteristics of the securities issued by the Company held by them, directly or indirectly, including their derivatives.
Paragraph 3 – The members of the Fiscal Council shall elect the President in the first meeting of the Fiscal Council to be held after the establishment thereof.
Paragraph 4 – The members of the Fiscal Council shall be substituted, in the event of any absence and impediment, by the respective alternate.
Paragraph 5– In the event of vacancy in the position of any member of the Fiscal Council, the respective alternate shall hold the position. In the event of lack of any alternate, the Shareholders’ Meeting shall be called to elect the member for the vacant position.
Paragraph 6 – Any person who has any relationship with any company which may be deemed as the Company’s competitor shall not be elected for the position of member of the Company’s Fiscal Council, and it shall be prohibited, among others, the election of any person who: (a) is an employee, shareholder or member of any management, technical or fiscal body of any competitor or competitor’s Controlling Shareholder or Subsidiary (as defined in Article 43); (b) is the spouse or relative up to the second degree of any member of any management, technical or fiscal body of any competitor or competitor’s Controlling Shareholder or Subsidiary.
Paragraph 7 – If any shareholder wishes to appoint one or more representatives to participate in the Fiscal Council, provided that not members of the Fiscal Council in the period following the last Annual Shareholders’ Meeting, any such shareholder shall notify the Company in writing, within a period of 10 (ten) business days prior to the date of the Shareholders’ Meeting which will elect the Directors, and shall inform the name, qualification and complete curriculum vitae of the candidates.
Article 36 – The Fiscal Council, upon establishment, shall meet whenever necessary in conformity with the legislation and shall analyze, at minimum, on quarterly basis, the financial statements.
Paragraph 1 – Notwithstanding any provisions set forth herein, the meeting attended by all members of the Fiscal Council shall be deemed as a regular one.
Paragraph 2 – The Fiscal Council shall take resolution by means of the absolute majority of the votes upon attendance of the majority of the members.
Paragraph 3 – Any and all resolutions taken by the Fiscal Council shall be included in minutes drawn up in the respective Book of Minutes and Opinions of the Fiscal Council, signed by the attending members.
CHAPTER VI
FISCAL YEAR, FINANCIAL STATEMENTS AND PROFIT SHARING
Article 37 – The fiscal year shall start on January 1 and end on December 31 (thirty one) of each year, the date in which the balance sheets and any other financial statements shall be prepared.
Paragraph 1 – Any intermediate or interim dividends and interest attributed to equity distributed may be included in the mandatory dividend set forth in Article 38 below.
Paragraph 2 – The Company, officers and directors shall, at minimum once a year, hold a public meeting with analysts and any other interested parties for purposes of disclosure of information relating to the Company’s financial and economic condition, projects and prospects.
Article 38 – Accumulated losses, if any, and the provision for income tax and social contribution on net income shall be deducted from the net income for the year, before any profit sharing.
Paragraph 1 – Of the outstanding balance of the net income, the Shareholders’ Meeting may allocate to the Officers and Directors a profit sharing based on the compensation policy approved by the Board of Directors. In any event, the allocation of a mandatory dividend to the shareholders, as set forth in paragraph 2 of this Article, is a condition to the payment of any such profit sharing.
Paragraph 2 – The net income for the year shall be allocated as follows:
a) 5% (five percent) shall be allocated, prior to any other allocation, to the legal reserve, which shall not exceed twenty percent (20%) of the capital stock. In the year in which the balance of legal reserve increased by capital reserves, set forth in paragraph 1 of Article 182 of Brazilian Corporation Law, exceeds the percentage rate of (30%) of the capital stock, the allocation of a portion of the net income for the year to the legal reserve shall not be required;
b) a portion, upon proposal of the management bodies, may be allocated to the provision for contingencies, as set forth in Article 195 of the Brazilian Corporation Law;
c) a portion shall be allocated to the payment of the minimum mandatory annual dividend to the shareholders, subject to the provisions set forth in paragraph 3 of this Article;
d) in the year in which the amount of the mandatory dividend, calculated pursuant to paragraph 3 of this Article, exceeds the realized portion of the net income for the year, the Shareholders’ Meeting may, upon proposal of the management bodies, allocate the excess amount to the establishment of the unrealized profits reserve, in conformity with Article 197 of the Brazilian Corporation Law;
e) a portion, upon proposal of the management bodies, may be retained based on a previously approved capital budget, in conformity with Article 196 of the Brazilian Corporation Law;
f) the Company shall keep a statutory profit reserve denominated as “Investment Reserve”, which shall be used to increase cash to conduct the Company’s businesses, as well as to finance the growth of the Company’s and/or its subsidiaries’ and affiliates’ business, including by means of the subscription of capital increases or the implementation of new development, which reserve shall not exceed the percentage rate of eighty percent (80%) of the Company’s subscribed capital and to which resources not lower than five percent (5%) and not greater than seventy-five percent (75%) of the net income remaining after the legal and statutory deductions shall be allocated; and
g) the balance shall be allocated as determined by the Shareholders’ Meeting, in conformity with the applicable legal provisions.
Paragraph 3 – Shareholders shall be entitled to receive a minimum mandatory percentage of twenty five percent (25%) of the net income for the year, increased or decreased by the following values: (i) the value allocated to the establishment of the legal reserve; (ii) the value allocated to the establishment of the provision for contingencies and reversal of such provision for contingencies in prior years, (iii) the value arising out of the reversal of the unrealized profit reserve established in prior years, in conformity with Article 202, item II of the Brazilian Corporation Law.
Paragraph 4 – The value of the mandatory dividend may be limited to the value of the realized net income, in conformity with the legislation.
Paragraph 5 – The dividend provided for in Paragraph 4 of this Article 38 shall not be mandatory in the fiscal year in which the Board of Directors informs the Annual Shareholders’ Meeting that the payment of any such dividend is incompatible with the Company’s financial conditions. Any such event shall be informed to CVM, within a period of five (5) days counted from the holding of the Annual Shareholders’ Meeting, duly accompanied by the explanation submitted by the Board of Directors and the opinion of the Fiscal Council thereon.
Article 39 – Upon proposal submitted by the Board of Executive Officers, approved by Board of Directors, ad referendum the Shareholders’ Meeting, the Company may pay or credit interest to the shareholders, as interest attributed to the equity thereof, in conformity with the applicable legislation. Any potential values to be paid in this manner may be included in the value of the mandatory dividend set forth herein.
Paragraph 1 – In the event of payment interest attributed to equity to the shareholders during the fiscal year and inclusion thereof in the value of the mandatory dividend, the shareholders shall be entitled to the payment of any potential outstanding balance. In the event the value of the dividends is lower than the value paid, the Company shall not charge the excess balance against the shareholders.
Paragraph 2– The actual payment of the interest attributed to equity, in the event of payment during the fiscal year, shall be carried out upon resolution of the Board of Directors, during the fiscal year in progress or the following fiscal year.
Article 40 – The Company may prepare half-yearly balance sheets or balance sheets for shorter periods, and declare based thereon, upon resolution of the Board of Directors:
a) the payment of dividends or interest attributed to equity out of the net income recorded in the half yearly balance sheet, included in the value of the mandatory dividend, if any;
b) the distribution of dividends in periods lower than six (6) months, or interest attributed to equity, included in the value of the mandatory dividend, if any, provided that the total dividends paid in each six-month period of the fiscal year does not exceed the value of the capital reserves; and
c) the payment of interim dividend or interest attributed to equity out of the retained earnings or profit reserve account recorded in the last annual or six-month period balance sheet, included in the value of the mandatory dividend, if any.
Article 41 – The Shareholders’ Meeting may take resolution on the capitalization of profit or capital reserves, including those recorded in quarterly balance sheets, subject to the applicable legislation.
Article 42 – Any dividend that are not received or remains unclaimed shall prescribe within a period of three (3) years, counted from date in which they were made available to the shareholders shall revert to the Company.
CHAPTER VII
TRANSFER OF THE SHAREHOLDING CONTROL, DEREGISTERING AS A PUBLICLY-HELD COMPANY AND DELISTING FROM NOVO MERCADO
Article 43 – The transfer of the Company’s control, whether by means of a single transaction or a series of successive transactions, shall be carried out on precedent or resolutory condition that the Buyer undertakes to carry out a public offering for the acquisition of shares held by other Company’s shareholders, pursuant to the conditions and terms set forth in the legislation in effect and in Novo Mercado Listing Rules, in order to ensure that the other shareholders will be entitled to the same conditions granted to the Selling Controlling Shareholder.
Paragraph 1 – The tender offer referred to in the caput above will also be required in the event of:
(i) remunerated assignment of rights of subscription of shares and other securities or rights in connection with securities convertible into shares issued by the Company, resulting in the transfer of the Company’s control; or
(ii) in case of disposal of the controlling shareholder’s ownership stake, and, in this case, the seller controlling shareholder is required to declare to BM&FBOVESPA the value ascribed to the Company upon disposal and to attach the supporting documentation.
Paragraph 2 – For the purposes hereof, the words starting in capital letters shall have the following meaning:
(a) “Acquirer” means the one to whom the Selling Controlling Shareholder transfers the Controlling Shares in the Sale of the Company’s Control.
(b) “Controlling Shareholder” means the shareholder(s) or group of shareholders which exercises the Company’s Power of Control.
(c) “Selling Controlling Shareholder” means the Controlling Shareholder, in the event any such Controlling Shareholder carries out the Transfer of the Company’s Control.
(d) “Controlling Shares” mean the group of shares which directly or indirectly confers upon the holder(s) thereof the individual and/or joint exercise of the Company’s Power of Control.
(e) “Outstanding Shares” mean any and all shares issued by the Company, other than the shares held by the Controlling Shareholder, any persons related to the Controlling Shareholder, the Company’s officers and directors, those held in treasury and preferred shares of special class which purpose is to ensure differentiated political rights, both non-transferable and solely held by the selling entity.
(f) “Transfer of the Company’s Control” means the transfer to any third party, on remunerated basis, of the Controlling Shares.
(g) “Independent Director” means the member who: (i) does not have any relationship with the Company, other than ownership interest in the capital stock; (ii) is not a Controlling Shareholder, spouse or second-degree relative of the Controlling Shareholder, nor is or has been in the last 3 (three) years related to a company or entity related to the Controlling Shareholder (persons related to public education and/or research institutions are excluded from this restriction); (iii) has not been in the last 3 (three) years employed by or worked as a Director of the Company, the Controlling Shareholder or other company controlled by the Company; (iv) is not a direct or indirect supplier or purchaser of the Company’s services or products, to an extent that results in loss of independence; (v) is not an employee or manager of a company or entity that supplies or purchases services and/or products to/from the Company, to the extent that implies loss of independence; (vi) is not a spouse or a second-degree relative of any manager of the Company; and (vii) does not receive any other compensation from the Company, other than the one related to the position of director (cash proceeds from ownership interest in the capital stock are excluded from this restriction).
(h) “Control” (as well as its related terms: “Power of Control”, “Controlling Shareholder”, “under Common Control” or “Subsidiary”) means the power used to guide the corporate activities and manage the operation of the Company’s bodies, whether directly or indirectly, in fact or by operation of law, regardless of the interest held. There is relative assumption of ownership of Power of Control with respect to any person or Group of Shareholders which holds shares that guaranteed the absolute majority of the votes of the attending shareholders in the 3 (three) last Shareholders’ Meetings of the Company, although not the holder of shares which guarantee the absolute majority of the voting capital.
(i) “Derivatives” mean marketable securities traded on futures settlement markets or other assets backed by securities issued by the Company.
(j) “Group of Shareholders” meansthe group of persons: (i) bound by contracts or voting agreements of any nature, whether directly or through subsidiaries, parent companies or under common control; or (ii) among which there is a relation of Control, whether directly or indirectly; or (iii) under Common Control.
(k) “Other Corporate Rights” mean (i) usufruct or trust over shares issued by the Company; (ii) purchase, subscription or swap options, on any account, that may result in the acquisition of shares issued by the Company; or (iii) any other right ensuring, permanently or temporarily, the shareholder’s political or equity rights over shares issued by the Company.
(l) “Market Value” means the Company’s and its shares’ value to be established by a specialized company, upon the adoption of a recognized methodology or in reliance upon any other criteria to be defined by CVM.
Article 44– Whoever to acquire the Power of Control, as a result of private stock purchase agreement executed with Controlling Shareholder, involving any number of shares, shall undertake to: (i) conduct the public tender offer referred to in Article 43 of these Bylaws; and (ii) pay, as per the following terms, the amount equivalent to the difference between the public tender offer and the amount paid per share eventually acquired at the stock exchange within 6 (six) months preceding the date of acquisition of Power of Control, duly updated up to the payment date. Said amount shall be distributed among all persons who sold the Company shares at the trading sessions where the Acquirer made the acquisitions, proportionally to the daily selling net balance of each one, and BM&FBOVESPA shall operate the distribution, pursuant to its rules.
Sole Paragraph – After the Sale of the Company’s Control operation and subsequent public tender offer referred to in Article 43 and caput of this Article 44, the acquirer of Control shall, if necessary, adopt the applicable measures to recover the minimum percentage of twenty-five percent (25%) of all the Company’s outstanding shares, within six (6) months following the acquisition of Control.
Article 45 – Any shareholder to acquire or to become owner of shares issued by the Company, in amount equal to or exceeding twenty-five percent (25%), shall, within sixty (60) days as of the date of acquisition or the event that resulted in the ownership of shares in amount equal to or exceeding twenty-five percent (25%) of total shares issued by the Company, conduct or request the registration, where applicable, of a public tender offer for all shares issued by the Company, pursuant to CVM’s applicable rules, the Novo Mercado Listing Rules, BM&FBOVESPA’sregulations and the terms and conditions of this Article.
Paragraph 1 – The public tender offer shall: (i) be indistinctively addressed to all shareholders of the Company, (ii) conducted in auction to be held at the BM&FBOVESPA, (iii) recorded by the price established according to Paragraph 2 of this Article, and (iv) paid on demand, in domestic currency, against the acquisition in the public tender offer for the acquisition of shares issued by the Company;
Paragraph 2 – The acquisition price in the public tender offerof shares issued by the Company will be defined in appraisal report prepared pursuant to Article 52 hereof, and may not be lower than one hundred percent (100%) of the highest among the following amounts: (i) weighted average, per trading volume, of the last ninety (90) trading sessions prior to the date of event referred to in the caput of this Article; (ii) the share price in the last public tender offer held within twenty-four (24) months prior to the date of event referred to in the caput of this Article, monetarily restated by the variation of the Extended Consumer Price Index – IPCA, published by the Brazilian Institute of Geography and Statistics – IBGE; and (iii) the Company’s Economic Value, calculated based on the appraisal report referred to in Article 52 hereof.
Paragraph 3 – The execution of the public tender offer mentioned in thecaput of this Article shall not exclude the possibility of another shareholder of the Company, or, where applicable, the Company itself, to prepare a competing public tender offer, pursuant to applicable rules.
Paragraph 4 – The public tender offer mentioned in the caput of this Article may be waived by means of affirmative vote of shareholders at the Shareholders’ Meeting especially convened for this purpose, pursuant to the following rules:
a) referred Shareholders’ Meeting shall be installed pursuant to Article 31, Paragraph 2 hereof;
b) the waiver for the public tender offer shall be considered approved with the absolute majority of votes among attending shareholders, whether in first or second call, not counting absentee’s votes;
c) shares held by acquiring shareholder for the purposes of resolution quorum shall not be counted, as per item “b” above.
Paragraph 5 – The acquiring shareholder shall answer any CVM requests or requirements related to the public tender offer, within the maximum terms set forth in applicable regulation.
Paragraph 6 – If the acquiring shareholder does not comply with the obligations imposed by this Article, including referring to the compliance with maximum terms (i) to conduct or register the public tender offer; or (ii) to answer any CVM requests or requirements, the Company’s Board of Directors shall call an Extraordinary Shareholders’ Meeting, where the acquiring shareholder cannot vote to resolve on the suspension of exercise of rights of acquiring shareholder who did not comply with any obligation imposed by this Article, as provided for in Article 120 of the Brazilian Corporation Law.
Paragraph 7 – Any acquiring shareholder to acquire or to become holder of other rights, including (i) Other Corporate Rights over an amount equal to or exceeding twenty-five percent (25%) of total shares issued by the Company or that may result in the acquisition of shares issued by the Company in amount equal to or higher than twenty-five percent (25%) of total shares issued by the Company, or (ii) Derivatives conferring rights to the Company shares representing twenty-five percent (25%) or more of the Company shares, shall be equally required to, within sixty (60) days as of the date of such acquisition or the event, conduct or request the registration, where applicable, of a public tender offer, pursuant to this Article 45.
Paragraph 8 – The obligations provided for in Article 254-A of the Brazilian Corporation Law do not exclude the compliance by the acquiring shareholder with the obligations set forth in this Article.
Paragraph 9 – The provisions of this Article 45 shall not apply in the event a person becomes holder of shares issued by the Company in amount equal to or exceeding twenty-five percent (25%) of total shares issued by the Company in view of: (i) the merger of another entity into the Company; (ii) the merger of shares of another entity into the Company; (iii) the cancellation of treasury shares; (iv) the shares redemption; or (v) the subscription of the Company shares made in a single primary issuance approved at the Company’s Shareholders’ Meeting summoned by its Board of Directors and whose capital increase proposal has determined the share issue price based on the Economic Value calculated in the valuation report referred to in Article 52 hereof or by means of bookbuilding procedure within the context of the public tender offer, or (vi) succession by force of corporate restructuring or legal provision – including succession by force of heritage – involving Company’s shareholders and (a) respective direct or indirect subsidiaries, or (b) respective direct or indirect controlling shareholders. For the purposes of this paragraph, control means the ownership of, at least, fifty percent (50%) plus another share of the subsidiary’s voting capital and the exercise of rights referred to in items (a) and (b) of Article 116 of the Brazilian Corporation Law.
Paragraph 10 – For the purposes of calculating the percentage of twenty-five percent (25%) of total shares issued by the Company provided for in this Article 45, involuntary additions of shareholding will not be calculated resulting from the cancellation of shares held in treasury or the Company’s capital stock decrease with the cancellation of shares.
Article 46 – The Selling Controlling Shareholder shall not transfer the ownership of his shares to that one (those) to hold the Power of Control, while the latter does not sign the Controlling Shareholders Statement of Consent pursuant to the Novo Mercado Listing Rules.
Article 47 – The Company shall not register any transfer of shares to the Acquirer of Control or to that one (those) to own the Power of Control, while this (these) shareholder(s) does (do) not sign the Controlling Shareholders Statement of Consent referred to in the Novo Mercado Listing Rules.
Article 48 – No Shareholders Agreement providing for the exercise of the Power of Control may be registered at the Company’s head offices, while its signatories do not sign the Controlling Shareholders Statement of Consent, referred to in Novo Mercado Listing Rules.
Article 49 – At the public tender offer to be conducted by Controlling Shareholder or by the Company for the Company’s deregistering as a publicly-held company, the minimum price to be tendered shall correspond to the Economic Value calculated in the valuation report referred to in Article 52 hereof, in compliance with the legal and regulatory applicable rules.
Article 50 – The Company’s delisting from Novo Mercado shall be (i) previously approved at the Shareholders’ Meeting; and (ii) notified in writing to BM&FBOVESPA, at least, thirty (30) days in advance.
Article 51 – In the event the shareholders resolve on the Company’s delisting from the Novo Mercado, so that its securities are then registered to be traded out of Novo Mercado, or due to corporate restructuring in which the company resulting from this restructuring does not have its securities accepted for trading at the Novo Mercado within one hundred and twenty (120) days as of the Shareholders’ Meeting which approved said operation, the Controlling Shareholder shall conduct the public tender offer for the acquisition of shares held by other Company’s shareholders, at least, by their respective Economic Value, to be calculated in valuation report prepared pursuant to Article 52 of these Bylaws, in compliance with applicable legal and regulatory rules.
Article 52 – The valuation report referred to in the Articles above of these Bylaws shall be prepared by specialized institution or company with proven experience and independence as to the Company’s making-decision power, its Management and/or Controlling Shareholders, and report shall also meet the requirements of Paragraph 1of Article 8 of the Brazilian Corporation Law, as well as mention the responsibility provided for in Paragraph 6 of this same Article.
Paragraph 1 – The selection of the specialized company or institution liable for calculating the Company’s Economic Value shall be privately incumbent upon the Shareholders’ Meeting. The Board of Directors shall submit a three-name list of companies and respective resolution, not counting absentee’s votes, shall be taken by majority vote of shareholders representing the Outstanding Shares in attendance at the Shareholders’ Meeting, which if installed in first call, shall rely on the attendance of shareholders representing, at least, twenty percent (20%) of total Outstanding Shares or, if installed in second call, may rely on the attendance of any number of shareholders representing the Outstanding Shares.
Paragraph 2 – Any costs to prepare the valuation report shall be fully borne by offeror.
Article 53 – In the event there is no Controlling Shareholder, if approved the Company’s delisting from Novo Mercado so that its securities are then registered for trading out of Novo Mercado, or due to corporate restructuring in which the company resulting from this restructuring does not have its securities accepted for trading at the Novo Mercado within one hundred and twenty (120) days as of the date of the Shareholders’ Meeting that approved said operation, the Company’s delisting shall be subject to the materialization of the public tender offer under same conditions provided for in Article 51 above.
Paragraph 1 -Said Shareholders Meeting shall define the one (those) in charge of conducting the public tender offer, who in attendance of the meeting shall expressly undertake the obligation of conducting the offer.
Paragraph 2 – If those in charge of conducting the public tender offer are not defined, in the event the corporate restructuring operation in which the company resulting from this restructuring does not have its securities accepted for trading at the Novo Mercado, the shareholders who favorably voted on the corporate restructuring shall conduct said tender offer.
Article 54 – The Company’s delisting from Novo Mercado due to the failure to comply with the Novo Mercado Listing Rules is subject to a public tender offer, at least, by the shares Economic Value to be calculated in valuation report referred to in Article 52 hereof, observing the applicable legal rules and regulations.
Paragraph 1 – The Controlling Shareholder shall conduct the public tender offer provided for in the caput of this Article.
Paragraph 2 – In the event there is no Controlling Shareholder and the Company’s delisting from the Novo Mercado, referred to in the caput, occurs as a result of resolutions taken at the Shareholders’ Meeting, the public tender offer shall be conducted by shareholders who voted in favor of the resolution which implied the failure to comply.
Paragraph 3 – In the event there is no Controlling Shareholder and the Company’s delisting from the Novo Mercado referred to in thecaputoccurs as a result of act or fact of the Management, the Company’s Management shall call a Shareholders’ Meeting whose agenda shall resolve on how to remedy the failure to comply with the obligations provided for in the Novo Mercado Listing Rules, or, where applicable, resolve on the Company’s delisting from the Novo Mercado.
Paragraph 4 – If Shareholders’ Meeting referred to in Paragraph 3 above resolves on the Company’s delisting from the Novo Mercado, said Shareholders’ Meeting shall define that one (those) in charge of the public tender offer provided for in the caput, who in attendance of the meeting, shall expressly undertake the obligation of conducting the offering.
Article 55 – The preparation of a single public tender offer is authorized, aiming more than one of the purposes provided for in this Chapter VII, in the Novo Mercado Listing Rules or in the regulation issued by CVM, provided that the procedures of all types of offerings may be compatible and that there is no harm for the offer’s recipients and that an authorization is obtained from CVM when required by applicable laws.
Article 56 – The Company or its shareholders liable for conducting the public tender offer provided for in this Chapter VII, in the Novo Mercado Listing Rules or in the regulation issued by CVM may ensure its effectiveness through any shareholder or third party, where applicable. The shareholder does not hold himself harmless from the obligation of conducting the public tender offer until it is concluded, pursuant to applicable rules.
CHAPTER VIII
ARBITRATION
Article 57 – The Company, its shareholders, officers, directors and members of the Fiscal Council (if any) undertake to resolve, upon arbitration, before the Market Arbitration Panel, any and all dispute or conflict that may arise out among each other, relating to or deriving from, specifically, the application, validity, effectiveness, interpretation, breach and the effects thereof, of the provisions set forth in the Brazilian Corporation Law, herein, the rules issued by the National Monetary Council, the Central Bank of Brazil and CVM, as well as any other rules applicable to the operation of the capital markets in general, in addition to those included in the Novo Mercado Listing Rules, the Arbitration Rules, the Sanction Rules and the Novo Mercado Listing Agreement.
Sole Paragraph – Without prejudice to the validity of this arbitration clause, the requirement of urgent measures by the parties, before installingthe arbitration court, shall be sent to a support arbitrator, as per item 5.1 of the Market Arbitration Panel Rules.
CHAPTER IX
LIQUIDATION
Article 58 – The Company shall be wound up and liquidated in the events provided for in the legislation, it being understood that the Shareholders’ Meeting shall determine the method of liquidation and appoint the liquidator and, if applicable, the establishment of the Fiscal Council for any such purpose.
CHAPTER XI
FNAL AND TERMPORARY PROVISIONS
Article 59 – The Company shall comply with the shareholders’ agreements filed in the Company’s head office, and the members of the Shareholders’ Meeting or the Board of Directors shall be prohibited from accepting a statement of vote of any shareholder which is party to any shareholders’ agreement duly filed in the Company’s head office, which statement of vote is contrary to the provisions set forth in the aforesaid shareholders’ agreement. The Company shall be also expressly prohibited from accepting and conducting the transfer of shares and/or encumbrance and/or assignment of preemptive rights in connection with the subscription of shares and/or other securities which is contrary to the provisions set forth in the shareholders’ agreement.
Sole Paragraph – The Company shall arrange for and conclude, within a period of 30 (thirty) days counted from the request submitted by the shareholder, the filing of the shareholders’ agreements in the Company’s head office, as well as the registration of the Company’s obligations or liens in the Company’s register books.
Article 60 – The matters not provided for herein shall be resolved by the Shareholders’ Meeting and governed in accordance with the Brazilian Corporation Law, pursuant to Novo Mercado Listing Rules.
Article 61 – The Company shall send, by means of email, any and all notifications, notices, financial statements and periodical information disclosed or delivered to CVM, to any and all shareholders which made any such request in wiring and informed the e-mail thereof. Any such communication shall not substitute any publications required in the legislation and the shareholder shall expressly hold the Company harmless from and against any failures or omissions in connection with the delivery thereof.
Article 62 – Subject to the provisions set forth in Article 45 of the Brazilian Corporation Law, the value of the reimbursement to be paid to the dissenting shareholders shall be based upon the book value included in the last balance sheet approved by the Shareholders’ Meeting.
Article 63 – Any and all publications provided for in the Brazilian Corporation Law shall be disclosed in the Official Gazette of the State of Minas Gerais and in any other widely circulated newspaper.
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- OBJECTIVES
This Internal Control and Risk Management Policy has the purpose of establishing the risk management guidelines and responsibilities of Direcional Engenharia S.A. (“Company”), specially regarding the creation of mechanisms to identify and analyze risks that may affect the Company, as well as controls and monitoring procedures to prevent or minimize impacts.
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- COVERAGE
This Policy applies to the Company’s macro-processes, processes and sub-processes.
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- CONCEPTS
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- Risks: are uncertain factors or events that may negatively impact the Company, hindering or preventing the achievement of its goals.
- Business risks: are those associated with the Company’s strategy (political and social environment, market, competition, mergers and acquisitions, availability of raw materials), financial situation (economic environment, cash generation, indebtedness, investments and fundraising, capital markets, exchange variation), compliance (compliance with laws and regulations), image and reputation and operations (technology, business model, business culture, training and human resources succession).
- Operational risks: are those arising from inadequate or failed internal processes, people or technology environment, which may hinder or prevent the achievement of the Company’s goals. These risks are associated with the industrial process and the management of administrative areas, such as marketing and sales, supply, logistics, occupational health and safety, environment, information technology, people management and union relations.
- Tolerance to exposure to risks: is associated with the level of risk that the Company would be willing to accept to achieve the goals established in its strategic plan.
- Risk owner: any employee who faces risk situations in the course of the Company’s businesses.
- Internal controls: are actions that should enable the management to monitor operational and financial processes, as well as the risks of noncompliance with this policy.
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- RESPONSIBILITIES
4.1. Board of Directors
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- To approve the Internal Control and Risk Management Policy and its amendments;
- To monitor the results of activities that manage Operational Risk;
- To resolve on strategic issues of the operational risk management process, such as the Company’s level of tolerance to risks;
- To analyze the executive committee’s proposals regarding the Internal Control and Risk Management Policy, recommending actions to be taken by the Company.
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4.2. Executive Committee
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- To systematically monitor internal controls and risk management to guarantee its efficacy and the achievement of the Company’s goals;
- To support the Board of Directors in evaluating the limits of tolerance of exposure to risks;
- To assist the Company’s risk management, analyzing the guidelines to be observed;
- To issue an opinion on the risk associated with new businesses, products and processes or relevant changes to the Company’s businesses, products and processes;
- To support, give feedback and monitor investment decisions, ensuring that they are compatible with the guidelines established by the operational area in the context of the investment strategy adopted by Direcional.
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4.3. Executive Board
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- To sponsor the implementation of the Company’s internal controls and risk management processes. For this matter, the necessary resources must be allocated to process and define the appropriate infrastructure;
- To prepare and periodically review risk management policies, standards and procedures;
- To implement the resolutions of the Board of Directors to reduce or eliminate the Company’s operational and business risks.
- To maintain flows and processes updated through continuous monitoring;
- To evaluate the recommendations of external auditors and consultants regarding faults and improvements in internal control and risk management processes.
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4.4. Risk owner
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- To timely communicate the existence of new and not previously identified unmapped risks;
- To monitor the risks under his/her responsibility;
- To support the establishment and implementation of action plans required to address the risks.
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- GUIDELINES
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- The Company identifies the business and operational risks by taking them into account in the decision-making process in order to ensure the achievement of the goals set out in its strategic plan.
- Risks are identified and evaluated according to their probability of occurrence and impact on the business and on the Company’s image. Every decision takes into account benefits, negative aspects and underlying risks of the situation, assessing the relationship between impact and mitigation.
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FINAL CONSIDERATIONS
This policy should be reviewed whenever resolved by the competent body(ies). Any amendment must be submitted to the Board of Directors’ approval.
This policy was approved at the Board of Directors’ meeting and will become effective immediately.
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- OBJECTIVE
This Policy for Transactions with Related Parties (“Policy”) has the purpose of establishing guidelines and consolidating the procedures for said transactions, so that said transactions are carried out taking the interests of the Company and its shareholders into account, ensuring the transparency of this process and the Company’s adherence to the best corporate governance practices.
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- DEFINITION OF RELATED PARTIES
For the purposes of this Policy, related parties are the individuals or legal entities related to the Company in accordance with the criteria and definitions established in the Technical Pronouncement CPC 5 approved by CVM Resolution 560, of December 11, 2008 (“Resolution 560/08”).
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- PROCEDURES TO BE FOLLOWED WHEN CARRYING OUT TRANSACTIONS WITH RELATED PARTIES
The Company’s Executive Board will ensure that transactions with related parties:
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- are conducted observing the same contracting standards and criteria used by the Company to select independent service providers;
- are carried out in accordance with market conditions, i.e., respecting prices, terms and usual market rates or previous negotiations at an arm’s length conditions; and
- are clearly reflected in the financial statements pursuant to the deadlines and regulations in force.
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- PROCEDURES TO BE FOLLOWED BY THE EXECUTIVE OFFICERS INVOLVED IN TRANSACTIONS WITH RELATED PARTIES OR OTHER POTENTIAL CONFLICTS OF INTEREST
This Policy complies with the requirements of Law 6,404/76, particularly Articles 155 and 156, which describe executive officers’ necessary loyalty to the Company, where the Company’s interests should always be given priority over the personal interests of the decision makers. In addition, in case of conflict of interest, the executive officer involved should inform the other officers, as well as the Board of Directors, of the conflicting situation, and he/she will be prohibited from intervening in the operation. The nature and extent of his/her interest should be recorded in the Board of Directors’ minutes.
Under this policy, a Company’s executive officer who is involved in transactions with related parties or other situation that represents potential conflict of interest should (i) express his/her conflict of interest, explaining his/her involvement and providing details about the situation, (ii) not participate in the discussions involving the decision on said topic and (iii) refrain from voting in deliberations on the matter.
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- MANDATORY DISCLOSURE
The Company must disclose transactions with related parties in accordance with Article 247 of Law 6,404, of December 15, 1976 (“Law 6,404/76”) and in accordance with CVM Resolution 642/10, to allow the identification of the Related Parties, thus granting the shareholders the possibility to supervise and monitor the Company’s management process, as well as allow users of the financial statements, the possibility to assess the extent to which the Company’s financial position and results may have been affected by the existence of transactions and balances with related parties.
In addition, the Novo Mercado listing regulations of the BM&FBOVESPA, of which Company is a signatory, adopt provisions concerning the obligation to include transactions with related parties in the explanatory notes to the quarterly information (ITRs), including the disclosures provided for in the accounting rules applicable to the annual financial statements.
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- PENALTIES
The breaches or violations to the terms of this Policy shall be examined by the Board of Directors, which will take the appropriate measures, in accordance with the Company’s internal rules, without prejudice to eventual applicable administrative, civil and criminal penalties.
To view the full Code of Conduct, click here.
(*) Information available in Portuguese only