**Exhibit 1.01**

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**Sadia Bylaws**

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**SADIAS.A.**

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# **BYLAWS**

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**RESTATEDAT THE EXTRAORDINARY SHAREHOLDERS MEETING HELD ON 12.15.2005 AND AMENDED BY THEEXTRAORDINARY SHAREHOLDERS MEETINGS HELD ON JANUARY 12, 2007 (01/12/2007) , MARCH 01,2007 (03/01/2007) AND APRIL, 2008 (04/17/2008)**

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**CHAPTER I**

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**THE COMPANY,  ITS HEADQUARTERS AND PURPOSE**

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**ARTICLE 1**

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SADIA S. A. is a company governed by these Bylaws, by the Joint StockCompany Act and by all other Laws and Regulations applicable to the Company andits business purpose.

 

**ARTICLE 2**

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The Company’s headquarters is located at Rua Senador Attilio Fontana no86, Centro, in the County of Concórdia, State of Santa Catarina, withjurisdiction in the same county.

 

**ARTICLE 3**

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The duration of this Company is indefinite.

 

**ARTICLE 4**

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The purpose of this Company is to engage in:

 

a)                                      Agricultural, industrial and commercialactivities related to food products, generally;

 

b)                                     The operation of slaughterhouses,tanneries, meat packing plants, factories producing preserves, whether or notcanned, meats, fats and dairy products, processing of vegetable oils, as wellas the operation of cold storage depots including meat warehousing,preservation, storage and classification;

 

c)                                      Meats, generally, byproducts and selectedcuts;

 

d)                                     Processing and sale of wheat, othergrains and their by-products;

 

e)                                      Livestock farming (cattle, swine, sheep,goat and poultry);

 

f)                                        Lumber mills;

 

g)                                     Road transportation of own and thirdparty goods and rental of cold stores, silos and warehouses;

 

h)                                     All activities related to agriculture andagribusiness and marketing of grains and other primary and/or processedproducts in the domestic and foreign market;

 

i)                                         Processing and marketing of substancesand products, generally, for human food and animal feed;

 

j)                                         Processing and marketing of chemical,sanitary and veterinary products for use in agriculture, poultry, cattle andswine raising, i.e., livestock, generally;

 

k)                                      Forestry and reforestation activities;

 

l)                                         Any other agricultural, industrial andcommercial activities correlated to the purposes of the Company;

 

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m)                                   Planning and development of agriculturaland engineering projects, under the responsibility of professionals dulyqualified by the appropriate bodies.

 

Sole clause -                             Leasing cold storage chambers, silos anddepots, as described in letter “g” of this Article, does not fall under generalwarehouse activities as set out in Executive Order No. 1102, of21/11/1903.

 

**CHAPTER II**

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**CAPITAL STOCK**

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**SECTION I**

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**SUBSCRIBED CAPITAL**

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**ARTICLE 5**

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Capital Stock is two billion reais (R$ 2,000,000,000.00), fullypaid-in, divided into six hundred and eighty-three million (683,000,000) no parvalue shares, of which two hundred and fifty-seven million (257,000,000) arecommon shares and four hundred and twenty-six million (426,000,000) arepreferred shares with no voting rights.

 

**SECTION II**

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**CAPITAL INCREASE**

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**ARTICLE 6**

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The Company may increase the capital stock upon a resolution by theShareholders Meeting, proposed by the Board of Directors, and after hearing theAudit Committee, using:

 

a)                                      The reserves, retained or suspendedearnings, surplus capital or special reserves resulting from monetaryrestatement;

 

b)                                     Annual restatement of the monetaryexpression of the capital stock, observing the provision in Article 7 ofthe Bylaws;

 

c)                                      Issuance and placement of shares bysubscription.

 

Paragraph 1 -                          The capital increases described in items “a”and “b” will observe the provision in Article 17, clause 4, of Law No. 6404/76.

 

Paragraph 2 -                          Resolutions relating to capital stockincrease shall indicate the number and type of shares to be issued and shall betranscribed in the minutes of the Meeting.

 

Paragraph 3 -                          The Executive Management Board shallsubmit the corresponding minutes of the Shareholders Meeting to the CommercialRegistry for annotation and filing, within 30 (thirty) days from the capitalincrease.

 

**ARTICLE 7**

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Regardless of having reached the limit contemplated in item I of Article 297of Law No. 6404/76, the Shareholders Meeting shall make a resolution inthe year following that of its calling about the transfer of the capitalreserve to the capital stock as referred to in Article 167 of the sameLaw.

 

**ARTICLE 8**

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The following conditions for subscription and payment shall be observedin the issuance and placement of capital shares:

 

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I. In increases by subscription, the Shareholders Meeting shallindicate:

 

a)                                      Whether the payment shall be made in cashor in kind, on demand or by installments;

 

b)                                     The deadline for placing or subscribingthe issuance;

 

c)                                      The period of time for subscribing theshares;

 

d)                                     The price of issuance of the shares.

 

II. Whenever the issuance of shares permits a term subscription orsubscription by installments, the Subscription Bulletin shall specify the downamount, the number and amount of the installments and the respective paymentdates as follows:

 

a)                                      A minimum payment of 10% (ten per cent)of the subscribed amount must be paid at the time of subscription; this amountmay be received by the Company, whether or not by means of a bank deposit;

 

b)                                     If the shareholder fails to make anypayment of the subscription installment on the due date, this shall imply,regardless of any notice:

 

b.1)                            Accelerated maturity of all subsequentinstallments which shall become due by the shareholder;

 

b.2)                            A default and, consequently, subject tointerest on arrears at the rate of one percent (1%) of the amount of theoverdue and unpaid installments plus restatement based on the nominal variationof the National Treasury Bonds (OTNs) or any other official index, at thediscretion of the Board of Directors;

 

b.3)                            The Company’s right to file, at itsdiscretion, against the shareholder and joint debtors, an execution action tocollect the amounts due or to sell the shares at the Stock Exchange, at theShareholders’ account and risk, as permitted by Law.

 

III. Whenever capital is increased by subscription, the COMPANY shallestablish a period no shorter than thirty (30) days for the shareholders toexercise their preemptive rights.

 

**ARTICLE 9**

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Upon a resolution of the Board of Directors and observing theprovisions of Article 30 of Law 6404/76, the COMPANY may negotiate its ownshares.

 

**CHAPTER III**

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**THE SHARES**

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**SECTION I**

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**PROVISIONS APPLYING TO SHARES**

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**ARTICLE 10**

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The following provisions apply to Company shares:

 

I.                                         All company shares shall be book-entryshares and remain in deposit accounts with BANCO BRADESCO S.A., on behalf oftheir holders, no certificate being issued, pursuant to Articles 34 and 35 ofLaw No.  6404/76, dated 12/15/1976.

 

II.                                     Preferred and common shares are entitledto a compulsory minimum dividend of twenty-eight percent (28%) of the netincome for the year, established in accordance with Article 202, items Ito III, Law No. 6404/76, also observing the provisions of letter “b” of Article 12of these Bylaws.

 

III.                                 Ordinary and preferred shares shallparticipate equally in capital increases derived from net income and reserves,revaluation of assets and yearly capital restatement.

 

IV.                                 In capital increases, classes of sharesmay be created or shares may be issued without observing the previouslyexisting proportional relation between classes and kinds of shares.

 

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V.                                     Provided that the maximum limitsestablished by the Brazilian Securities Exchange Committee are observed, themaintenance agreement relating to book-entry share services may authorize thefinancial institution to charge the shareholder a fee for assignment of thetitle of ownership to the shares.

 

**SECTION II**

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**COMMON SHARES**

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**ARTICLE 11**

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Only COMMON shares are entitled to vote the resolutions of theShareholders Meeting.

 

Sole Paragraph – Fifty-one percent (51%) of the capital with votingrights shall be owned by Brazilian citizens.

 

**SECTION III**

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**PREFERRED SHARES**

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**ARTICLE 12**

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PREFERRED shares are not entitled to vote and shall enjoy the followingadvantages:

 

a)                                      priority in the proportional receipt oftwenty-eight percent (28%) of the net income for the year, as minimumnoncumulative dividend, competing in equal terms with common shares in anydividend allocated to them above that percentage;

 

b)                                     right to be included in the publicoffering for the disposal of the shareholding control under the conditions setforth in art. 254-A, with the wording given by Law 10303, dated 10.31.2001,with a guaranteed price at least equal to eighty percent (80%) of the amountpaid per share with voting right and which is an integral part of the controlblock ;

 

c)                                      priority in capital reimbursement in caseof Company windup.

 

Sole Paragraph – Preferred shares with no voting right may acquire thisright if the Company fails to pay, for at least three (3) consecutiveyears, the minimum dividend to which they are entitled and such right shallcontinue up to the payment of the first next dividend.

 

**ARTICLE 13**

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Shareholders agreements on purchase and sale or preemptive rights onthe acquisition of shares or on exercising voting rights shall be valid, beforethe Company, only after being filed in the Company’s headquarters.

 

**CHAPTER IV**

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**THE MANAGEMENT**

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**ARTICLE 14**

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The Company shall be managed by a Board of Directors and an ExecutiveManagement Board, both formed by Brazilian citizens or a majority of Braziliancitizens domiciled in that country, whose powers shall prevail indecision-making.

 

Paragraph 1 – The term of office of the members of the Board ofDirectors and of the Executive Directors shall be unified and last one year,extending up to the entry upon office of the new administrators, reelectionbeing permitted.

 

Paragraph 2 -                          The members of the Board of Directors andthe Executive Directors shall enter upon office by signing the correspondinginstallation certificate or by subscribing the minutes of the meeting of 

 

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election in the corresponding books of minutes of meetings at whichtime a Declaration of Principles shall also be signed.

 

**SECTION I**

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**BOARD OF DIRECTORS**

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**ARTICLE 15**

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The Board of Directors shall comprise a minimum of seven (7) to amaximum of eleven (11) members, all of them necessarily shareholders, and shallbe governed by an Internal Regulation that will establish, among other mattersdeemed convenient, the operation of this body and of its subordinatedCommittees, the rights and duties of the Board members and the relationship ofthe Board of Directors with the Executive Management Board and other corporatebodies.

 

Paragraph 1 – The Shareholders Meeting shall elect the Board Membersand among them, the Chairman and one or more Vice Chairman who, following theorder of election, shall substitute for the Chairman in cases of absence,impediment or vacancy.

 

Paragraph 2 - If a vacancy occurs whereby the number of Board Membersis reduced below the minimum number fixed in these Bylaws, a ShareholdersMeeting shall be called within thirty (30) days to fill the vacant positions.The term of office of the new members of the Board of Directors, elected tofill the vacancies, shall coincide with that of the other Board Members.

 

Paragraph 3 - Any shareholder desiring to nominate one or more member(s) tothe Board of Directors shall inform the Company the name, qualification and full professional résumé of the candidates,the positions that they occupy in other companies, as the case may be, andevidence of compliance with the requirements of art  147, Paragraph 4, of Law No. 6404/76,and with the Brazilian Securities Exchange Committee – CVM regulations,confirming thereon that there are no impediments to the election as contemplatedin the aforementioned legal statute, regulations and in these Bylaws. TheCompany will transmit immediately to CVM and to São Paulo Stock Exchange -BOVESPA, by electronic means, the communications received and their supportingdocumentation and, if received on time, will inform the shareholders that allof the above are at their disposal at the company’s main address and in itsInternet Site.

 

Paragraph 4 – It shall be incumbent upon the shareholder that nominatescandidates to the Board of Directors to evaluate and, later, upon theShareholders Meeting to consider, in making a resolution about the election ofmembers to the Board of Directors, the adequacy of the candidates in thefollowing situations in which the existence of a conflict of interests may bepresumed:

 
| (i).   | a candidate holding a job or function, particularly  in the management, or in advisory and audit committees, of other legal  entities that may be considered competitors of this Company in the market, or                                                                                                                                                           |
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| (ii).  | a candidate that, cumulatively, (a) has been  elected by a shareholder who has also been elected an administrator or  Statutory or Audit member of a competing business in the market and  (b) cannot be characterized as an independent member in relation to the  shareholder(s) who elected that member, as per definition in Paragraph 5  below). |

 

Paragraph 5 - A Board Member will be considered independent when theMember: (i) has no relationship with the Voting Shareholder, exceptinterest in the capital; (ii) is not a controlling shareholder, spouse orrelative up to the second degree of the Voting Shareholder or who has not had,in the last twelve (12) months, a relationship to, and/or has not beenassociated with a company or entity related to the Voting Shareholder (personsrelated to public educational and/or research institutions are excluded fromthis restriction); (iii) has not been, in the last twelve (12) month, anemployee, administrator or member of the statutory council of the VotingShareholder, of the respective controlling shareholder or of the companycontrolled by them or associated to them; (iv) has not been a direct orindirect supplier or buyer of services and/or products of the VotingShareholder to a magnitude implying loss of independence; (v) has not beenan employee or administrator of a Company or entity offering or acquiringservices and/or products to and from the Voting Shareholder; (vi) is not aspouse or relative up to the second degree of the administrator of the VotingShareholder; (vii) does not receive other compensation from the VotingShareholder, its controlling shareholder or the entity controlled or sponsoredby it (cash income from interest in capital is excluded from this restriction).

 

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Paragraph 6 – Any shareholder that nominates candidates to the Board ofDirectors shall inform, if applicable and at the time of election, afterconducting the evaluation referred to in the above paragraph 5, whether thecandidate falls under any of the ineligibility or presumed conflict provisionscontemplated in Law 6404/76, in CVM regulations or in these Bylaws, to enablethe Shareholders Meeting to examine whether a conflict exists in the actualcase and whether to waive it.

 

Paragraph 7 - For the purposes of the provisions in article 115 of Law6404/76, the vote  to elect a member tothe Board of Directors shall be considered abusive if cast by a VotingShareholder who, aware of the existence of a conflict of interest or reason forineligibility, fails  to inform the Companyas prescribed in the above paragraph 6 and, later, the Shareholders Meeting,about the existence of such reason for ineligibility or of facts that mightlead to the presumption of a conflict of interest on the part of the electedmember.

 

Paragraph 8 - If, after the election of the Member, a fact fallingunder the same assumptions leading to a presumption of conflict of interest asdescribed in Para. 4 occurs, it shall be incumbent upon the Board member tocommunicate such fact to the Chairman of the Board of Directors. If thesupervening fact is related to the Voting Shareholders and is not personallyrelated to the Board member, it shall be incumbent upon the Voting Shareholdersto inform the fact to the Chairman of the Board of Directors who, in turn, willsubmit the matter to the Shareholders Meeting.

 

Paragraph 9 - For the purpose of Paragraphs 4, item (ii), letter (a) and8 of this article,  a Board member shallbe considered as having been elected as such when (i) the shareholder whohas done it did it on an individual basis or (ii) the votes of thatshareholder, if individually considered, were essential to complete the minimumpercentage required by Paragraph 4 of art. 141 of Law No. 6404/76 forexercising the right to a separate election of the member of the Board ofDirectors of this Company.

 

Paragraph 10 - No member of the Board of Directors shall have access toinformation, participate in meetings of the Board of Directors or of anyadministrative bodies, vote or in any way intervene in matters in which,directly or indirectly, such member is in a situation of conflicting interestwith the company’s interests, in accordance with Paragraph 4, item (ii), letter(a) of this article.

 

**ARTICLE 16**

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The ordinary meetings of the Board of Directors will be held at leaston a quarterly basis, on the dates fixed in advance in the annual calendarprepared by the Chairman of the Board of Directors. The extraordinary meetingswill be held whenever required, upon a call made to its members made at least twenty-four(24) hours in advance, indicating date, time and place of the meeting, with abrief description of the Order of Business.

 

Paragraph 1 -                          Notices shall be given by the Chairpersonof the Board of Directors or at the request of three (3) of its membersand, should the Chairperson fail to comply with it within five (5) days,those members may call the meeting directly, however, it shall be held at thesame address of the Company’s Executive Management.

 

Paragraph 2 -                          The quorum for the meetings of the Boardof Directors shall be a minimum of six (6) of its members present inperson.

 

Paragraph 3 – In the meetings of the Board of Directors, each membershall be entitled to one (1) vote.

 

Paragraph 4 – Save for the provisions in the Sole Paragraph to Article 17,the decisions of the Board of Directors shall be adopted, in any case, by themajority voting of the members present and the Chairperson is entitled to thecasting vote, without prejudice of his/her own vote.

 

Paragraph 5 -                          The meetings of the Board of Directorsshall be entered in the Book of Minutes of Meetings of the Board of Directorsand the resolutions destined to be effective before third parties shall betranscribed as determined by the Board of Directors.

 

**ARTICLE 17**

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It is incumbent upon the Board of Directors to:

 

I -                                     Establish and monitor the generaldirection of the Company’s business and of any other companies under itscontrol.

 

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II –                              Establish and monitor all operational andadministrative Company regulations, particularly those related to:

 

a)                                      Personnel hiring and management,allocation, careers, levels, salaries and wages as well as fringe benefits ofthe Company’s employees;

 

b)                                     Controls, audit, accounting andstatistics;

 

c)                                      Acquisition, administration and disposalof permanent assets.

 

III –                          Elect and remove the Executive Directorsand define their titles and duties, scope of activities  and, in case an aggregate amount isestablished by the Shareholders Meeting, individual fees.

 

IV –                          Make a resolution, at any time, about thedistribution of interim dividends from interim balance sheet accounts, orRetained Earnings or Profit Reserve.

 

V.-                                 Approve:

 

a)                                      The Company’s administrative structureand respective positions, duties and salaries;

 

b)                                     The Strategic Plan;

 

c)                                      The Yearly Operational Plan and thecorresponding capital, investment and financial budgets as well asdivestitures;

 

d)                                     Interim balance sheets prepared by theCompany;

 

e)                                      The balance sheet, statements of incomeand annual report to be submitted to the Shareholders Meeting;

 

f)                                        The acquisition of assets under property,plant and equipment whenever, due to their nature and/or cost, the amountexceeds that contemplated in a specific project which is an integral part ofthe Yearly Operational Plan;

 

g)                                     The disposal of assets under property,plant and equipment when, due to its nature and/or amount, they have not beenincluded in the Yearly Operational Plan;

 

h)                                     Interest in other Companies of anynature, as a shareholder or quota holder;

 

i)                                         Nomination of administrators for thecontrolled, affiliate or associated companies; and

 

j)                                         Any operation exceeding the scope of theExecutive Management Board or which fails to meet the approved budgets,policies and rules of the Board of Directors.

 

VI –                         Call the Shareholders Meetings whenrequired by Law and by these Bylaws or whenever deemed convenient.

 

VII -                        Approve proposals to be submitted to the ShareholdersMeetings and relating to:

 

a)                                      Amendment to the Bylaws;

 

b)                                     Modification of the Capital Stock;

 

c)                                      Merger with another Company, amalgamationinto or of other Company;

 

d)                                     Creation of other statutory reserves;

 

e)                                      Distribution of the profits determined inthe annual balance sheet.

 

VIII -  Authorize the ExecutiveManagement Board to:

 

a)                                      Waive Corporate rights, unless thoserights are derived from the normal course of corporate businesses, and in thecase of donations aiming to provide support to social, philanthropic andsimilar projects and programs, provided that in this case the limit establishedin the Yearly Operational Plan, letters “g” and “h” to Article 23 of theseBylaws, is observed;

 

b)                                     Acquire and dispose of shares or quotasand encumber them, always observing the provisions of Article 36 of theseBylaws

 

c)                                      Offer collaterals, except in the case offinancial operations contemplated in the Yearly Operational Plan;

 

d)                                     Assign, by means of an agreement with acommercial purpose, and for a definite period of time, whether or notrenewable, the use of the trademark “SADIA”, logos, emblems, symbols and otherdistinct 

 

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signs which identify the Company, as well as other trademarks,know-how, intellectual property works and patents which are, or may come to be,its property, except in the case of its use in relation to products which, eventhough processed by third parties, are destined to be exclusively marketed bythe Company, provided that observing Article 23, letter “f” of theseBylaws; and

 

e)                                      Dispose of, by means of a definitiveassignment, trademarks, patents, know-how, characters or any other intellectualwork owned by the Company.

 

IX –                         Require, at any time, the examination ofspecific corporate matters or business and issue general rules orinstructions about them to be observed by the Executive Management Board.

 

X -                                Follow up the management and theperformance of the Executive Management Board.

 

XI –                         Create, at any time, on a temporary orpermanent basis, committees or work groups, always presided by a member of theBoard of Directors and formed by administrators, employees or hiredprofessionals, for the specific purpose of preparing projects, carrying outanalysis and making recommendations on certain matters or following upactivities in any Corporate area.

 

XII -                        Prepare and approve the InternalRegulation of the Board of Directors and the Company’s Code of Conduct.

 

XIII -                    Evaluate formally the results achieved bythe Company.

 

Sole Paragraph - The matters referred to under numbers I, III, IV,letters “a”, “b”, “c”, “f” and “g”  ofnumber V; under number VII, letters “a” and  “c”  of number VIII and under number XII may onlybe approved by the vote of at least half plus one of the acting members of theBoard of Directors.

 

XIV – Appoint and remove independent auditors for the Company.

 

**ARTICLE 18**

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It is incumbent upon the Chairperson of the Board of Directors:

 

I  –                               Comply with and enforce compliance with these Bylaws,the Internal Regulation of the Board of Directors, the Company’s Code ofConduct, the resolutions of the Shareholders Meeting and of the Board ofDirectors and keep abreast of the corporate operations.

 

II  –                           Safeguard, within the scope of its duties, theeffectiveness of the shareholders agreement filed in its headquarters.

 

III -                             Formally convene the ShareholdersMeetings and chair them.

 

IV -                             Call and chair the meetings of the Boardof Directors.

 

V –                              Provide guidance to the ExecutiveManagement Board on resolutions approved by the Board of Directors.

 

**SECTION II**

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**AUDIT COMMITTEE**

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**ARTICLE 19**

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The Audit Committee is a technical permanent body whose duty is toassist the Board of Directors. It is formed by three (3) to five (5) membersof the Board of Directors, elected by the Board of Directors for an annualunified term of office. Three (3) of those members shall be compulsorilyindependent members as defined in its Internal Regulation. At least one (1) ofthe independent members shall have proven experience and knowledge of financeand controls, including some understanding of international accounting standards.

 

Paragraph 1 -                          The Audit Committee shall have, among itsmembers, a Coordinator appointed by the Board of Directors at the same meetingthat formed it.

 

Paragraph 2 -                          The Internal Regulation of the AuditCommittee shall establish how it shall be called, the frequency of meetings andany other formalities regarding the participation of guests and the resolutionsto be made by this body.

 

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Paragraph3 -                          The non-independent members of the AuditCommittee shall not be entitled to vote the collegiate resolutions of thisbody.

 

**ARTICLE20**

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Itis specifically incumbent upon the Audit Committee, without prejudice of abetter detailing of its duties in its Internal Regulation:

 

a)                                      Monitor the effectiveness of the proceduresrelating to the preparation of the annual and other regular financial reportsof this Company;

 

b)                                     Verify the maintenance of efficientaccounting systems and internal controls, monitoring them on an ongoing basis;

 

c)                                      Monitor the risk management system relatingto the internal control environment of this Company;

 

d)                                     Analyze in advance the reports to besubmitted to the Brazilian and to the U.S. Securities and Exchange Commission  (CVM and SEC);

 

e)                                      Select and refer external auditors to beengaged, including their respective work proposals and fees, to the Board ofDirectors, for approval;

 

f)                                        Approve in advance the engagement, by theCompany, of all other services to be rendered by external auditors,particularly consulting services, ensuring compliance with the applicablelegislation;

 

g)                                     Establish procedures for investigating andtaking action in cases of misconduct as well as in relation to receiving,handling and responding to accusations relating to accounting practices,internal controls in the issuance of financial reports and internal audit;

 

h)                                     Analyze, prior to submitting to the Board ofDirectors, transactions with Related Parties, as referred to in the currentlegislation;

 

i)                                         Submit a proposal to the Chairperson of theBoard of Directors, when preparing the operational plan, to include therequired amount to fund the activities of the Audit Committee in the annualbudget of the Board of Directors ; and

 

j)                                         Supervise the services and prepare a formalevaluation of the performance of the internal audit of this Company.

 

**SECTION III**

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**THE EXECUTIVE MANAGEMENT BOARD**

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**ARTICLE21**

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TheExecutive Management Board  shallcomprise a minimum of seven (07) and a maximum of thirty-five (35) members,whether or not shareholders, being one of them appointed Managing Director andthe remaining appointed Directors, all of them elected by the Board ofDirectors. In the election act, the Board of Directors shall also designatetheir titles and respective fees.

 

**ARTICLE22**

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TheExecutive Management Board  shall beconvened at least once a month, called by the Managing Director or, in his/herabsence, by at least three (3) Directors jointly, whatever their titles,and the minutes of such meetings shall be transcribed in the pertinent book.

 

Paragraph1 –The meetings of the Executive Management Board shall be presided by theManaging Director or, in his/her absence, by any Director, as provided for in Article 23,letter “m”.

 

Paragraph2 – The quorum for meetings of the Executive Management Board shall be at leastseven (7) Directors and the resolutions shall be approved by majorityvoting.

 

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**ARTICLE23**

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Withthe observance of the scope of duties of the Board of Directors, it shall beincumbent upon the Executive Management Board :

 

a)                                      Manage the corporate business seeking tosafeguard the Company’s interests, carrying out and enforcing compliance withthe laws, these Bylaws and the resolutions approved by the Shareholders Meetingand by the Board of Directors.

 

b)                                     Submit to the Board of Directors the mattersreferred to under Article 17, item IV and V, letters “b”,  “c”,  “d”  and  “e”  of item VIII and item IX of these Bylaws.

 

c)                                      Approve or validate borrowing, financing andleasing operations;

 

d)                                     Approve the acquisition, disposal and rentingof assets under property, plant and equipment, observing the provisions ofletters “f” and “g” of item V, Article 17 of these Bylaws;

 

e)                                      Approve the offer of collaterals in financialoperations contemplated in the Yearly Operational Plan as well as the provisionof guarantees and/or collaterals to its subsidiaries in borrowing, funding andleasing operations;

 

f)                                        Approve the assignment for temporary use of trademarks,know-how, patents and intellectual property works, owned by the Company,provided that (1) this is made in connection with industrial processing bythird parties, of products to be marketed by the Company on an exclusive basis;or (ii) authorization is granted for the use of trademarks andintellectual property works solely for the purposes of dissemination, notintended for commercial use;

 

g)                                     Waive Corporate rights, observing theprovisions in Article 17, item VIII, letter “a” of these Bylaws;

 

h)                                     Approve donations aiming to provide supportto social, philanthropic and similar projects and programs, provided that thelimit established in the Yearly Operational Plan is observed;

 

i)                                         import machines, equipment pieces andproducts for own use, transformation or resale;

 

j)                                         Approve the appointment of proxies orattorneys-in-fact, representatives or agents in the Brazilian territory andabroad, observing the provisions in Article 24, item I, letter “e” ofthese Bylaws;

 

k)                                      Approve the setting up and windup ofindustrial, commercial and service units as well as branches and deposits;

 

l)                                         Designate to any of its member the duties ofa Director in case of absence or incapacitation.

 

SoleParagraph -         Notwithstanding the provisions in Paragraph 1of Article 22, the meetings of the Executive Management Board forresolution on the matters referred to under letter “d” shall necessarily bepresided by the Managing Director.

 

**ARTICLE24**

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Exceptfor the acts within the exclusive scope of the Executive Management Board, as acollective body, it shall be incumbent upon the Executive Directors:

 

I-                                     SEVERALLY

 

a)                                      Carry out and enforce compliance with theseBylaws and the resolutions approved by the Shareholders Meeting and by theBoard of Directors.

 

b)                                     Represent the Company before Courts or thirdparties and Governmental, State and Municipal Authorities.

 

c)                                      Hire and dismiss technicians or employees inany category, in accordance with letter “a”, item II of Article 17;

 

d)                                     Receive, release, issue, endorse, discount andaccept trade bills, pay and redeem notes, promote collections, open accounts inbanking establishments, endorse checks for deposits and make interaccounttransfers of money on behalf of the Company;

 

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e)                                      Sign instruments relating to the actionsauthorized by the Board of Directors, as referred to in item IX of Article 17,and those approved by the Board of Directors, as per letters “c” to “l” of Article 23of these Bylaws;

 

f)                                        Practice all other acts required for thedevelopment of corporate businesses which, according to law and these Bylaws,are not dependent upon a prior authorization by the Shareholders Meeting or theBoard of Directors or a decision by the Executive Management Board .

 

II–                              JOINTLY, UPON THE SIGNATURE OF TWO DIRECTORS

 

a)                                      Issue and endorse Promissory Notes and acceptBills of Exchange;

 

b)                                     Issue checks or Rural Promissory Notes;

 

Paragraph1 -                          The powers under item I and letter “b” ofitem II may be granted through a power-of-attorney.

 

Paragraph2 -                          Exceptionally, whenever issuing checks forpayment of raw materials at individual purchasing stations, these powers may,at the discretion of the Executive Management Board, be exercised by one soleDirector or by an attorney-in-fact.

 

Paragraph3 –                       In the companies in which the Company is ashareholder, the Company may be represented by any Director appointed inadvance by the Executive Management Board for this purpose or by anattorney-in-fact with special powers, as provided for in Paragraph 1 of article126 of Law No. 6404/76.

 

**SECTION IV**

** **

**ADVISORY COUNCIL**

** **

**ARTICLE25**

** **

TheAdvisory Council shall comprise a minimum of seven (7) to a maximum offifteen (15) members, whether or not shareholders, one of them being appointedChairperson and another Vice Chairperson, elected and removed at any time bythe Board of Directors, for a term of office of one (1) year, reelectionbeing permitted.

 

Paragraph1 – When electing the members to the Advisory Council, the Board of Directorsshall appoint its Chairperson and Vice Chairperson.

 

Paragraph2 -                          Except for the Chairperson and ViceChairperson of the Board of Directors – who shall be native members of theAdvisory Board – no other Management member is permitted to be a member of thisbody.

 

Paragraph3 -                          The members of the Advisory Council shallenter their respective offices by signing the Installation Certificate, to betranscribed on the book of minutes of meetings of this body.

 

**ARTICLE26**

** **

TheAdvisory Council shall convene ordinary meetings on a quarterly basis and,extraordinary meetings whenever requested by the Board of Directors through itsChairperson.

 

Paragraph1 –                       It is incumbent upon the Chairperson of theAdvisory Board or, in his/her absence, to the Vice Chairperson, to call,convene and chair the meetings of this body.

 

Paragraph2 -                          The quorum for the meetings of the AdvisoryCouncil shall be a minimum of half plus one of its acting members.

 

**ARTICLE27**

** **

Itis incumbent upon the Advisory Council to issue an opinion on matters of relevantinterest to the Company and, irrespective of any request, to keep the Board ofDirectors, informed about relevant matters which may come to the knowledge ofits members.

 

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**CHAPTER V**

** **

**SHAREHOLDERS MEETINGS**

** **

**SECTION I**

** **

**CONVENING MEETINGS AND MAKING RESOLUTIONS**

** **

**ARTICLE28**

** **

Alawfully called and convened Shareholders Meeting is the highest body of theCompany, capable of resolving all matters and making any resolutions, includingthose relating to amendments to these Bylaws.

 

**ARTICLE29**

** **

ShareholdersMeetings are held, on an ordinary basis, within the four (4) monthsfollowing the closing of the fiscal year, for the purposes contemplated in theLaw and, on an extraordinary basis, whenever corporate interests so require.

 

**ARTICLE30**

** **

Savefor the exceptions contemplated in the Law, a Shareholders Meeting isconstituted whenever, on a first call, shareholders representing a minimum oftwenty-five percent (25%)  of the CapitalStock with voting rights are present and, on a second call, any number of theshareholders present.

 

**ARTICLE31**

** **

Regularlymade resolutions of the Shareholders Meetings shall bind all shareholders, inspite of those absent or dissenting, as provided for by the Law and theseBylaws.

 

**ARTICLE32**

** **

ShareholdersMeetings convened in accordance with the Law shall be chaired by theChairperson of the Board of Directors who will appoint one or more secretariesfrom among the shareholders present.

 

SoleParagraph -         In the absence of the Chairperson, theShareholders Meeting shall be chaired by one of the Vice Chairpersons of theBoard of Directors, observing the order of election and, in the absence ofboth, by a member of the Board of Directors appointed by the shareholders.

 

**ARTICLE33**

** **

Inthe event that the Shareholders Meeting cannot be held on the scheduled date,due to lack of legal quorum, a second call shall be made in the same manner ofthe first, spaced by a minimum of eight (8) days between the firstpublication of the advertisement and the date of the Shareholders Meetingwhich, in this case, shall be convened with any number of attendees.

 

**SECTION II**

** **

**ORDINARY SHAREHOLDERS MEETINGS**

** **

**ARTICLE34**

** **

OrdinaryShareholders Meetings shall be held to:

 

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I–                                  Receive the Management accounts and examine,discuss and vote the financial statements;

 

II–                              Make a resolution about the appropriation ofnet income for the year and the distribution of dividends.

 

III-                             Elect the members of the Board of Directorsand of the Audit Council, as the case may be.

 

IV-                                Approve the restatement of the Capital Stockin the cases contemplated by Law No. 6404/76 and by these Bylaws.

 

V-                                 Fix the compensation of the administratorsand of the members of the Audit Council, when called.

 

**SECTION III**

** **

**EXTRAORDINARY SHAREHOLDERS MEETINGS**

** **

**ARTICLE35**

** **

Wheneverheld on an extraordinary basis, a Shareholders Meeting shall make resolutionsonly about the matters for which it was called.

 

**ARTICLE36**

** **

Itis incumbent upon the Shareholders Meeting to authorize the disposal or pledgeof quotas or shares with voting rights of a legal entity whose control of thevoting capital is directly or indirectly owned by the Company whenever thedisposal or pledge implies the risk of losing that control.

 

**CHAPTER VI**

** **

**THE AUDIT COMMITTEE**

** **

**ARTICLE37**

** **

TheAudit Committee shall be permanent and have the powers  established in the Law, being formed by aminimum of three (3) and a maximum of five (5) permanent members andan equal number of substitutes, whether or not shareholders, elected by theShareholders Meeting for a one-year mandate.

 

SoleParagraph – In addition to the persons referred to in Article 147 of Law No. 6404/76,as already stated in Article 14 of these Bylaws, the persons referred toin Article 162, Paragraph 2 of Law No. 6404/76 cannot be elected tothe Audit Council.

 

**CHAPTER VII**

** **

**THE FISCAL YEAR, THE BALANCE SHEET AND THE RESULTS**

** **

**SECTION I**

** **

**THE FISCAL YEAR AND THE BALANCE SHEET**

** **

**ARTICLE38**

** **

Thefiscal year shall end at December 31 of every year, when the ExecutiveManagement Board shall prepare the Company ́s financial statements, based on thecommercial accounting of the Company and expressing clearly its situation andthe changes occurred in the year:

 

I–                                  Balance Sheet;

 

II–                                 Statement of Year-to-Date net income andlosses or changes in shareholders equity;

 

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III-                             Statement of income for the year;

 

IV- Statement of changes in financial position.

 

**ARTICLE39**

** **

Thebooks and records of the Company shall be examined by an independent audit firmselected by the Board of Directors.

 

**SECTION II**

** **

**DISTRIBUTIONOF NET INCOME**

** **

**ARTICLE40**

** **

TheShareholders Meeting shall make a resolution about the distribution of netincome for the year as determined by the balance sheet and proposed by theBoard of Directors, accompanied by the opinion of the Audit Council, if active,observing the following criteria:

 

I-                                     Five percent (5%) of the net income for theLegal Reserve Fund, up to the amount established by the Law on Capital Stock.

 

II–                              An amount equivalent to twenty-eight percent(28%) of Net Income for the year as a portion required for the payment of theminimum dividend of preferred and common shares, such net income being reducedor increased by the amounts contemplated in items I, II and III, Article 202of Law No. 6404/76, also observing the provisions of item “b” of Article 12of these Bylaws.

 

III-                             Up to ten percent (10%), after deducting anyaccumulated losses and the provision for income tax, as the participation ofthe administrators.

 

IV-                             A minimum of fifteen percent (15%) and amaximum of sixty percent (60%) on net income, as Special Expansion Reserve,destined to fund the expansion plans of the Company, up to reaching seventypercent (70%) of the capital.

 

V-                                 Up to five percent (5%) to set up a SpecialFund for Research and Development, up to reaching ten percent (10%) of thecapital.

 

VI–                          The remainder shall be destined as proposedby the administration bodies to the Shareholders Meeting.

 

Paragraph1  –                    The amount corresponding to the participation of the administratorsshall be distributed solely if the minimum dividend to the shareholderscontemplated in these Bylaws has been guaranteed.

 

Paragraph2 -                          The distribution of dividends and bonusesshall observe the periods of time defined in the Law.

 

Paragraph3  –                    Whenever the subscribed capital is increased, the dividendscorresponding to that period may be distributed on a “pro rata tempore” basisfrom the paid-up capital.

 

Paragraph4  –                    The amounts paid from pre-existing Retained Earnings and/or ProfitReserves accounts are an integral part of the minimum dividend established initem II of this article.

 

Paragraph5  –                    If the minimum dividend is paid from the pre-existing Retained Earningsand/or Profit Reserves accounts, a portion of the Net Income for the year,corresponding to the amount of the paid dividend, may be appropriated toreestablish the reserves used.

 

Paragraph6 -                          The Company may pay interest on theshareholders’ own capital as dividends.

 

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**CHAPTER VIII**

** **

**COMPANY WINDUP**

** **

**ARTICLE41**

** **

TheCompany may be liquidated in the cases contemplated in the Law or upon aresolution of the Shareholders Meeting.

 

SoleParagraph -         It is incumbent upon the Shareholders Meetingto establish the liquidation mode and to elect the liquidators and the membersof the Audit Council who will be active during the liquidation period.

 

**CHAPTER IX**

** **

**MISCELLANEOUS**

** **

**ARTICLE42**

** **

Inaddition to the official gazette *DiárioOficial do Estado de Santa Catarina,* the publications required bythe Law and by these Bylaws shall be made**onthe same press institution where the minutes or the abstract of the minutes ofthe Shareholders Meeting approving these Bylaws have been published until anychange is advised to the shareholders for annotation in the minutes of theOrdinary Shareholders Meeting.

 

**Icertify that these Bylaws are a faithful copy of the text approved by theExtraordinary Shareholders Meeting held on 12.15.2005, as entered and signed inthe Book of Minutes of the Shareholders Meetings No. 01 of this Companyand amended by the Extraordinary Shareholders Meetings held on January 12,2007 (01/12/2007) and March 01, 2007 (03/01/2007).**

** **

**MAURO E. GUIZELINE/JOSENESTOR C.HOPF/PAULO CEZAR ARAGÃO**

** **

**Secretaries**

 

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