NAME, OBJECT, REGISTERED OFFICE, JURISDICTION AND DURATION
Article 1. Companhia de Tecidos Norte de Minas – COTEMINAS (“Company”) is a joint-stock Company governed by these Bylaws and by the legal provisions to which it is subject.
Article 2. The Company’s object shall be to produce and sell yarns, fabrics, to manufacture textile articles in general, to import and export, and may hold interest in other companies and acquire negotiable securities in the capital market
Article 3. The Company’s registered office and jurisdiction shall be in the city of Montes Claros, State of Minas Gerais, at Av. Lincoln Alves dos Santos, 955, Distrito Industrial, CEP 39404-005, with offices in the city of Belo Horizonte, at Rua Aimorés, nº 981, Funcionários, whereas the Company may, by decision of the Board of Directors, open, hold and close subdivisions, branches, agencies, departments, offices, or warehouses, anywhere in the domestic territory or abroad.
Article 4. The Company’s term of duration is indeterminate.
CAPITAL STOCK AND SHARES
Article 5. The Company’s capital stock is of R$ 882,235,698,00, fully subscribed and paid-in, divided into 30,636,457 shares, all of which are nominative and with no par value, of which 13,912,800 are common shares and 16,723,657 preferred shares, with no voting rights.
§ 1. The capital stock may be increased without an amendment hereto, up to the limit of 10,000,000 preferred share and 1,667,500 common shares. by resolution of the Board of Directors, which shall establish the type, class and number of shares to be issued, the issue price and the conditions for subscription, payment and placement.
§ 2. Preferred shares have no voting rights to their holders, and will have the following advantages:
a) priority in the repayment of capital, in the event of liquidation; and
b) the right to be included in the public offer for sale of control, at the same price and under the same conditions offered to the selling controlling shareholder, with a dividend at least equal to that of common shares.
§ 3. The Company may issue preferred shares without keeping the proportionality between these and the common shares, until the limit of 2/3 (two thirds) of the total issued shares is reached.
§ 4. Preferred shares without voting rights will acquire the exercise of this right if the company, for a period of three consecutive years, fails to pay the minimum dividends provided for in these Bylaws, a right that they will retain until payment.
§ 5. Within the limit of the authorized capital and according to the plan approved by the Shareholders Meeting, the Company may grant a purchase option to its managers, employees and / or individuals that provide services to the Company or company under the Company’s control.
Article 6. Once the legal requirements are satisfied, the shares may be represented by multiple securities or precautions that temporarily replace them, which must be signed by two officers, one of whom being the CEO, or be authenticated with a mechanical seal, upon exact reproduction of the signatures of mentioned officers.
§ 1. The company may issue, as required by the shareholder, multiple securities representing the respective shares or split them, bearing the expenses on behalf of the shareholder, at a price not exceeding the cost.
§ 2. The company may suspend the services of transferring and splitting shares and certificates to meet the determination of the Shareholders Meeting, however, it cannot do so for more than 90 (ninety) days interspersed during the year, nor for more than 15 ( fifteen) consecutive days.
§ 3. The company is obliged to communicate to the Stock Exchanges, in which its shares are traded, the transient suspension of transfers, conversions or splits of shares and certificates, 15 (fifteen) days in advance, accepting requests that are presented on a date previous.
Article 7. Within the limit of authorized capital, the Board of Directors will be competent to resolve on the issue of shares or subscription bonuses, establishing the means in which the securities are placed on the market, whether by public or private subscription, the payment conditions, the characteristics of the shares to be issued and the issue price of the shares.
Sole Paragraph. Shares, subscription bonuses, and debentures convertible into shares may be issued, without preemptive rights to former shareholders, provided that the respective placement is made through sale on the Stock Exchange or public subscription or through the exchange of shares in a public offering acquisition of control, pursuant to articles 257 to 263 of Law No. 6,404 of 12.15.1976.
Article 8. The Board of Directors may approve the purchase of the Company’s own shares, to be held in treasury or canceled.
Article 9. Treasury shares in the company will not have voting rights until they are placed on the market again.
Article 10. The shareholders’ general meeting is the sovereign body of the company.
Article 11. The Shareholders Meeting shall convene annually within the first four months following the end of the corporate year, and extraordinarily whenever the corporate interests so require.
Sole Paragraph. The Shareholders Meeting shall be chaired by a shareholder, an Executive Officer or not, elected by those present. The chairperson of the Shareholders Meeting shall select one of the attending shareholders to act as the secretary.
Article 12. Resolutions at the Shareholders Meeting, save for the exceptions established by law, shall be taken by absolute majority of shareholders’ votes.
Article 13. The Company’s management shall be incumbent upon the Board of Directors and the Board of Executive Officers.
BOARD OF DIRECTORS
Article 14. The Board of Directors shall be composed of, at least, seven (7) members, and, at most, twelve (12) members, resident in the country or not, of which one (1) Chairman and one (1) Vice-Chairman, all of whom shall be elected and subject to dismissal by the Shareholders Meeting, with a unified term of office of one (1) year, reelection being permitted. The General Meeting may elect one or more alternates, who will replace, in the event of impediment or absence, the sitting members appointed by it.
§ 1. Its members will be entitled to a remuneration fixed by the General Meeting and will remain in office until the replacement is installed, and they may be reelected.
§ 2. The Board of Directors will meet when called by the Chairman or by the majority of its members, and at least two thirds of its members must always be present, for the validity of the resolutions.
§ 3. Resolutions by the Board of Directors shall be taken by majority of votes, being mandatory the presence of the Chairman, and will be summarized, or in full, in the Book of Minutes of Meetings of the Board of Directors, being filed with the Commercial Registry of the State of Minas Gerais , whenever they take effect before third parties.
§ 4. From the members of the Board of Directors, at least twenty per cent (20%) must be independent members (as defined below), and expressly declared as such in the minutes of the General Meeting that elects them, being also considered as independent the director (s) elected through the option provided for in article 141, §§ 4 and 5 of Law 6,404 / 76.
§ 5. When, because of observing the percentage referred to in the paragraph above, a fractional number of directors results, rounding will be carried out to the whole number: ((i) immediately higher, when the fraction is equal to or greater than 0.5, or (ii) immediately lower, when the fraction is less than 0.5.
§ 6. For the purposes of these Bylaws, “Independent Director” is a person who will meet all of the following characteristics: (i) not have any relationship with the Company, except for capital participation; (ii) not being a controlling shareholder, spouse or relative up to the second degree of that person, or not being or not having been, in the last 3 (three) years, linked to a company or entity related to the controlling shareholder (people linked to public educational institutions and / or research are excluded from this restriction); (iii) not having been, in the last 3 (three) years, an employee or officer of the Company, of the controlling shareholder or of a company controlled by the Company; (iv) not being a supplier or buyer, direct or indirect, of services and / or products of the Company, in a magnitude that implies loss of independence; (v) not being an employee or manager of a company or entity that is offering or demanding services and / or products to the Company, in a magnitude that implies loss of independence; (vi) not being a spouse or relative to the second degree of any manager of the Company; and (vii) not receiving any remuneration from the Company other than that related to the position of director (cash earnings from equity participation are excluded from this restriction).
Article 15. In the event of vacancy of any of the other Directors’ office, and if there is no alternate, the other members of the Board of Directors shall appoint a temporary substitute to take the vacant office of the replaced Director, that will exercise the functions until the first General Assembly, in which the new member will be elected for the time that was missing to the replaced.
Sole Paragraph. In the event of the impediment of more than one (1) member, and with no alternate, the General Assembly shall be called immediately, which shall elect the substitutes for the time remaining for the replaced.
Article 16. The Board of Directors is responsible for:
a) Establish the general orientation of the Company’s business, as well as the criteria and plans that define the principles and policy of the company, with regard to industrial, commercial, financial and management activities;
b) inspection of the Executive Officers’ activities, examining, at any time, the Company’s books and documents, and requesting information regarding executed agreements, or agreements to be executed, as well as any other acts;
c) calling of the Shareholders Meeting;
d) indication of opinion regarding the Board of Executive Officers’ reports and accounts;
e) resolution upon the issuance and placement of shares and subscription bonuses, within the limits of the authorized capital, with a prior hearing of the Fiscal Council if in operation, and to make the capital calls;
f) resolution upon the opportunity to issue debentures, the method of subscription or placement and the type of debentures to be issued, the time and conditions for payment of interest, profit sharing and the debentures reimbursement premium, if any, and the time and conditions for the maturity, amortization or redemption of the debentures;
g) resolution upon the issuance of promissory notes (“Commercial Paper”);
h) election and dismissal of Company’s Executive Officers and establish their duties;
i) appointment and dismissal of the Company’s independent auditors;
j) indication of favorable or contrary opinion as regards any public share acquisition offer, whose object is shares issued by the Company, by means of prior predicated opinion disclosed within up to fifteen days following publication of the notice of the public share acquisition offer, which shall discuss, at least
(i) convenience and opportunity of the public share acquisition offer as regards the Company’s and the shareholders’ interest, including with respect to the price and potential impacts on the shares’ liquidity, (ii) the repercussions of the public offering for the acquisition of shares on the interests of the Company, (iii) the strategic plans disclosed by the offering party as regards the Company, and (iv) other issues that the Board of Directors deems to be pertinent, as well as information required by the applicable rules established by the Brazilian Securities Commission;
k) definition of the triple list of companies specialized in economic valuation of companies for the preparation of an appraisal report for the Company’s shares, in the case of a public offering for cancellation of registration as a publicly-held company, as provided for in Article 24 of these Bylaws.
l) assignment of investor relations functions to a Company’s Executive Officer, which functions may be exercised cumulatively with other executive functions. The Executive Officer designated for investor relations functions will be responsible for providing information to investors, the CVM – Brazilian Securities and Exchange Commission and the Stock Exchanges in which the company has its securities traded, pursuant to the relevant legislation
m) authorization of:
1. acquisition, disposal of, commitment, assignment, exchange, accord and satisfaction, rounding up, and transfer of ownership or possession of real estate;
2. mortgage, pledge, liens and encumbrances of real estate, chattel and movable property, titles, policies, and any and all valuables;
3. transfer of rights and shares, confession of debts, and offering of guarantees and warranties regarding third parties’ obligations;
4. acquisition, subscription or disposal of shares or quotas representing the capital stock of other companies at which it holds interest;
5. the application of the profits determined, as decided by the General Meeting and pursuant to these Bylaws
6. the distribution of interim dividends to the profit account, as determined in interim balance sheets.
BOARD OF EXECUTIVE OFFICERS
Article 17. The Board of Executive Officers shall be composed of at least two (2) and a maximum of four (4) members, whether shareholders or not, residing in the country, who shall be elected and subject to dismissal by the Board of Directors, whose unified terms of office shall be of one (1) year, reelection being permitted, of whom one shall be the Chief Executive Officer, one shall be a Vice President Executive Officer, and two Executive Officer shall have no specific designation.
§ 1. The Chief Executive Officer, the Vice Chief Executive Officer, as well as the other Executive Officers, will act in full integration of purposes and efforts to benefit the interests of society.
§ 2. Each Executive Officer shall hold office until the replacement is installed.
§ 3. The members of the Board of Directors, up to a maximum of one third, may be elected as Executive Officers.
§ 4. Should the Board of Executive Officers’ membership be incomplete, the functions shall be accumulated by any one of the Executive Officers, as indicated by the Board of Directors.
§ 5. The members of the Executive Board will be entitled to a compensation that will be fixed by the General Meeting.
Article 18. In performing their functions, the Executive Officers, subject to compliance with the provisions established by Law and these Articles of Incorporation, shall act in perfect harmony, whereas the Chief Executive Officer shall be responsible for:
(a) Calling, convening, and presiding the Board of Executive Officers meetings;
(b) Supervising, coordinating, controlling, and commanding performance of the respective plans relating to the industrial, commercial, administrative, and financial departments as established by the Board of Directors;
(c) Preparing and requiring compliance with the Company’s annual budget;
(d) Representing the Company as plaintiff or defendant, either in or out of court, before authorities, professional associations, public and private agencies; and
(e) Maintaining a permanent connection between the Board of Executive Officers and the Board of Directors;
(f) Accumulate functions of other Executive Officers whenever indicated by the Board of Directors; and
(g) Leading the Industrial, Commercial, Administrative and Financial departments, taking the necessary actions for their regular operation.
The Vice Chief Executive Officer shall be responsible for:
a) replace the Chief Executive Officer in case of temporary absence or impediment;
b) Representing the Company as plaintiff or defendant, either in or out of court, before authorities, professional associations, public and private agencies; and
c) Accumulate functions of other Executive Officers whenever indicated by the Board of Directors
The other two Executive Officers shall be responsible for:
a) Perform the duties set by the Board of Directors, in internal regulations or set by the Chief Executive Officer; and
b) Accumulate functions of other Executive Officers whenever indicated by the Board of Directors
Article 19. In addition to the attributions and powers established by Law and referred to in these Articles of Incorporation, the Board of Executive Officers may further, subject to signature by the Vice Chief Executive Officer or one of the Executive Officers, always jointly with the Chief Executive Officer while performing their functions, and bearing the Company’s interest in mind, perform the following acts: sign proposals to open bank accounts and operate same, issue and endorse checks, make withdrawals upon receipts, authorize debits, transfers and payments by means of letters, request balances, account statements, and request check books for use by the Company, signing the required receipts and giving release, operate the account linked to the FGTS – Mandatory Indemnity Fund, receive any amounts payable to the Company, signing the required receipts and giving release, issue, accept and endorse invoices, cash, guarantee, and deliver for collection by the bank invoices, duplicates, bills of exchange, checks, and promissory notes, signing the respective proposals and bank reports, guarantee and cash warrants, bills of landing, propose discounts, abatements and extensions of maturities of titles, protest and return payment slips.
Sole Paragraph. The Chief Executive Officer’s signature shall be required to appoint attorney-in-fact or attorneys-in-fact to represent the Company, to grant powers to represent same as plaintiff and defendant, whether in or out of court, to contract loans, as well as to execute agreements in general, by means of public or private instrument.
Article 20. The company will have a permanent Fiscal Council, composed of three effective members and three alternates, elected by the General Meeting. The attributions and duties of the Fiscal Council are those defined by law and their fees will be fixed by the General Meeting that elects them.
FISCAL YEAR, FINANCIAL STATEMENTS AND PROFITS
Article 21. The fiscal year shall end on December 31st each year, when the financial statements established by law shall be prepared.
§ 1. Half-yearly balance sheets, or shorter periods, may be drawn up and interim dividends declared against the profit account calculated therein, always as an advance of the mandatory dividend.
§ 2. The Company may pay interest on capital, to the credit of annual or interim dividends.
Article 22. The net income calculated on the balance sheet under the terms of Law 6,404/ 76 will be distributed as follows:
a) 5% (five percent) destined to the Legal Reserve Fund up to 20% (twenty percent) of the Capital Stock;
b) 1/3 (one third) for payment of dividends to shareholders owning common and preferred shares, with the inclusion of the equity in earnings of the Subsidiaries;
c) Having complied with the precepts and limit established by the Law, the Executive Officers will have the right to a participation of up to 10% (ten percent), calculated under the terms of art. 190 of Law 6,404 / 76, of the remaining period, distributed at the discretion of the Board of Directors;
d) The balance, if any, will be allocated, by resolution of the General Meeting, as proposed by the management bodies.
§ 1. Dividends will be made available to shareholders within 60 (sixty) days from the date of their declaration, unless otherwise decided by the General Meeting and, in any case, within the fiscal year in which it is declared.
§ 2. Unclaimed dividends, 3 (three) years after the beginning of their distribution, will lapse in favor of society.
DISPOSAL OF CONTROL, AND CANCELLATION OF REGISTRATION AS PUBLICLY-HELD COMPANY
Disposal of Control
Article 23. The disposal of the Company’s control, both by means of a single operation, and by means of successive operations, must be the object of an agreement that establishes the condition that the acquirer undertakes to perform a public share acquisition offer, the object of which is the Company’s shares held by the other shareholders, subject to the conditions and time limits established by the laws and regulations in force, in order to ensure that the shareholders holding common and preferred shares issued by the Company receive equal treatment to that given to the alienating controlling shareholder, including that they receive a corresponding amount per share 100% (one hundred percent) of the amount paid per share of the selling shareholder.
Cancellation of Registration as Publicly-Held Company
Article 24. If the intention is to cancel the registration of the Company’s publicly-held company, the controlling shareholder or the Company must make a public offer for the acquisition of common and preferred shares belonging to the other shareholders, and the minimum price to be offered must correspond, without prejudice the provisions of article 4, §4, of Law 6,404 / 76, the economic value determined in an appraisal report, prepared by a specialized institution or company, with proven experience and independence as to the decision-making power of the Company, its managers and / or of the controlling shareholder, in addition to meeting the requirements of § 1, of article 8 of Law No. 6,404 / 76, and contain the responsibility provided for in § 6 of the same article.
§ 1. Without prejudice to the other provisions of Articles 4 and 4-A of Law No. 6,404 / 76, the choice of the specialized institution or company responsible for preparing the report referred to in the caput of this Article is the exclusive competence of the General Meeting, as from of the presentation, by the Board of Directors, of a triple list, with the respective resolution, not counting the blank votes, being taken by the majority of the votes of the shareholders representing the outstanding shares (as defined in article 4-A, § 2, of Law No. 6,404/76) present at that Meeting, which, if installed on the first call, must have the presence of shareholders representing at least 20% of the total outstanding shares, or which, if installed on the second call, may count on the presence of any number of shareholders representing the outstanding shares.
§ 2. The costs of preparing the appraisal report must be fully borne by the offeror.
LIQUIDATION AND OMMISSIONED CASES
Article 25. The company will go into liquidation in the cases provided for by law, and it is incumbent upon the General Meeting to establish the method of liquidation, elect the liquidators and the Fiscal Council, which shall operate during the liquidation period.
Article 26. Omitted cases will be resolved by the General Shareholders’ Meeting, based on the legislation applicable to the type.
Bylaws and amendments:
- Consolidated at the EGM held on 06/14/2013.
- Amendment to Article 3 of the Bylaws, at the EGM held on 04/30/2014.
- Amendment of Article 5 and paragraph 1 of the Bylaws, at the EGM held on 9/4/2015.