**Exhibit 1.1**

 

**TELEFÔNICA BRASIL S.A.**

Publicly-held company

CNPJ.02.558.157/0001-62- NIRE 35.3.0015881-4

 

**CHAPTER I – COMPANY CHARACTERISTICS**

 

 

 

**LEGAL SYSTEM**

 

Article 1 - *Telefônica BrasilS.A.* is a corporation ruled by these present Bylaws and other legal applicable provisions, with indeterminate duration.

 

 

 

**CORPORATE PURPOSE**

 

Article 2 - The purpose of the Companyis:

 

a) the exploration of telecommunicationservices; and

 

b) the development of activities necessaryor useful to execute these services, in compliance with concessions, authorizations and permits granted thereto.

 

Sole Paragraph - In the execution of itspurpose, the Company may incorporate third party assets and rights into its capital, as well as:

 

I - hold equity interest in other companies,aiming at complying with Brazil’s national telecommunications policy;

 

II - incorporate wholly-owned subsidiariesto perform the activities covered by its purpose and which are advised to be decentralized;

 

III - promote goods and services importsnecessary to perform the activities covered by its purpose;

 

IV - provide technical support servicesto the telecommunication companies, by performing common interest activities;

 

V - conduct studies and researches, aimingthe development of the telecommunications industry;

 

VI - execute agreements and covenants withother telecommunication companies or any individuals or entities, with a view to ensuring the operation of services, without prejudiceto the duties and responsibilities;

 

VII - perform other related or similaractivities assigned thereto by the Brazilian Telecommunications Regulatory Agency - ANATEL; and

 

VIII - trade equipment and supplies necessaryor useful to explore telecommunications services.

 

**HEAD OFFICES**

 

Article 3 - The Company’s head officesare located in the City and State of Săo Paulo, and may establish and extinguish branches, agencies, local offices, departmentsand delegations, by decision of the Board of Executive Officers, as provided for in Article 22, (vii) of these Bylaws.

 

**CHAPTER II -CAPITAL**

 

**AUTHORIZED CAPITAL**

 

Article 4 - The Company is authorized toincrease its capital stock up to the limit of 1,850,000,000 (one billion eight hundred and fifty million) common or preferred shares,and the Board of Directors is the body authorized to resolve on the capital increase and accordingly, the issuance of new shares,within the limit of authorized capital.

 

Paragraph 1 - The capital increases donot require to maintaining symmetry between the number of shares of each type, however, it must observe that the number of non-votingor restricted vote preferred shares cannot exceed 2/3 of the issued shares.

 

Paragraph 2 - Shareholders will be entitledto preemptive right for capital increase subscription, proportionally to the number of shares they hold. By decision of the Boardof Directors, the preemptive right may be removed in the issuance of shares, debentures convertible into shares and warrants, incase the placement is made on the stock exchanges or via public subscription, share swap in a takeover bid, pursuant to Articles257 and 263 of the Brazilian Corporation Law, as well as the utilization of tax benefits, pursuant to special laws, as authorizedby Article 172 of Law 6,404/76.

 

**SUBSCRIBED CAPITAL**

 

Article 5 - The subscribed capital stock,fully paid-up is R$ 63,571,415,865.09 (sixty-three billion, five hundred and seventy-one million, four hundred and fifteen thousand,eight hundred and sixty-five reais and nine cents), divided into 1,690,984,923 (one billion, six hundred and ninety million, ninehundred and eighty-four thousand, nine hundred and twenty-three) shares, of which 571,644,217 (five hundred and seventy-one million,six hundred and forty-four thousand, two hundred and seventeen) are common shares and 1,119,340,706 (one billion, one hundred andnineteen million, three hundred and forty thousand, seven hundred and six) are preferred shares, all of them are non-par, book-entryshares.

 

Sole Paragraph - Shares will be held ina deposit account at a financial institution on behalf of its holders, without issuing certificates.

 

**CHAPTER III - SHARES**

 

**COMMON SHARES**

 

Article 6 - Each common share correspondsto one vote at the General Shareholders’ Meetings resolutions.

 

**PREFERRED SHARES**

 

Article 7 - Preferred shares are not entitledto vote, except for the assumptions provided for in Articles 9 and 10 below, ensuring them priority in capital reimbursement, withoutpremium, and to receive dividend ten per cent (10%) higher than that one assigned to each common share.

 

Sole Paragraph - Full voting right willbe granted to preferred shares, should the Company fail to pay the minimum dividends to which these shares are entitled duringthree (3) consecutive fiscal years, right that will prevail until payment of dividends.

 

**CHAPTER IV - GENERAL SHAREHOLDERS’MEETING**

 

Article 8 - General Shareholders’Meetings shall be held: (i) ordinarily, once a year, within the first four (4) months following the end of each fiscal year, pursuantto Article 132 of Law 6,404/76 and, (ii) extraordinarily, whenever necessary, whether due to company’s interests or provisionshereof, or when the applicable laws so require.

 

Sole Paragraph - General Shareholders’Meeting shall be called by the Board of Directors, and its Chairman shall reiterate this act.

 

Article 9 - The following shall be submittedto the previous approval of the General Shareholders’ Meeting (i) the execution of agreements with related parties, whoseterms and conditions are more burdensome for the Company than those usually adopted by market in agreements of same nature, observingin any case, the provisions of Article 117 of Law 6,404/76; and (ii) the execution of managerial service agreements, includingtechnical support services with foreign entities linked to the Company’s controlling shareholder, in this case, preferredshareholders will be entitled to vote.

 

Sole Paragraph: In addition to the mattersreferred to in the “caput” of this Article, preferred shares will have voting right to (i) elect one (1) member ofthe Board of Directors in a separate vote and (ii) in resolutions referring to Bylaws amendments aiming at annulling preferredshareholders’ right to elect in a separate vote a member of the Board of Directors.

 

Article 10 - Without prejudice to Paragraph1, Article 115 of Law 6,404/76, preferred shareholders will be entitled to vote at the Shareholders’ Meetings resolutionsreferred to in Article 9, as well as those referring to the amendment or revocation of the following Bylaws provisions:

 

(i) - Article 9;

 

(ii) - Sole Paragraph of Article 11; and

 

(iii) - Article 30.

 

Article 11 - The General Shareholders’Meetings shall be presided over by the Chairman of the Board of Directors, who shall appoint the Secretary among the attendees.In the event the Chairman of the Board of Directors is absent, shareholders will nominate the Chairman and the secretary of thepresiding board.

 

Sole Paragraph - in the assumptions ofArticle 136 of Law 6,404/76, the first call of the General Shareholders’ Meeting shall occur at least, thirty (30) days inadvance, and at least, ten (10) days in advance upon second call.

 

Article 12 - Only shareholders whose sharesare registered with their names in the Company’s records may participate and vote at the General Shareholders’ Meeting,within seventy-two (72) hours before the date scheduled for said meeting.

 

Paragraph 1 - The call notice may determinethat the shareholder to attend the meeting shall file at the Company’s head offices a proof of its shareholder capacity issuedby the Company or by the Company shares depositary institution, at least, seventy-two (72) hours before the date scheduled forthe General Shareholders’ Meeting.

 

Paragraph 2 - The call notice may alsodetermine that the shareholder’s representation by proxy at the meeting shall file the respective power of attorney at theCompany’s head offices, at least, seventy-two (72) hours before the date scheduled for the General Shareholders’ Meeting.

 

**CHAPTER V - MANAGEMENT OF THE COMPANY**

 

Article 13 - The management of the Companyis incumbent upon the Board of Directors and Board of Executive Officers, with powers granted by laws and by these present Bylaws.Its members shall be elected for a three-(3) year term of office, and reelection is authorized. They are exempted from offeringmanagement pledge.

 

Paragraph 1 - All members of the Boardof Directors and Board of Executive Officers shall take office by signing the corresponding instruments and remaining in respectiveoffice until the effective investiture of their successors.

 

Paragraph 2 - The General Shareholders’Meeting shall define the Company’s Management global compensation, including benefits of any nature and procuration fees,and the Board of Directors is responsible for distributing this compensation among its members and executive officers.

 

Paragraph 3 - The General Shareholders’Meeting may attribute Company’s profit sharing to the managers, as long as the provision of Article 152, Paragraphs 1 and2 of Law 6,404/76 are observed, as per management’s proposal.

 

Paragraph 4 - The Company and its controllingshareholder shall maintain during concession term and its renewal, the effective existence in national territory of centers ofdeliberation and implementation of strategic, managerial and technical decisions involved in the compliance with the concessionagreements to which the Company is party.

 

**BOARD OF DIRECTORS**

 

**STRUCTURE**

 

Article 14 - The Board of Directors shallbe composed of, at least, five (5) and at most (17) members, all Company’s shareholders, elected and removed from officeby general shareholders’ meeting, observing the applicable laws provisions, including in this figure, the member electedby preferred shareholders pursuant to sole paragraph of Article 9 hereof and the member elected by minority shareholders, whereapplicable.

 

Sole Paragraph - The Board of Directorsshall appoint among its members, the Chairman of the Board, or his deputy, in the event of vacancy. The Vice Chairman of the Boardof Directors may be appointed and/or removed from office at the discretion of the Board of Directors.

 

**REPLACEMENT**

 

Article 15 - In the event of impedimentor absence of Chairman of the Board of Directors, he shall be replaced by Deputy Chairman, if any. During the absence of DeputyChairman, the Chairman shall be replaced by another board member appointed by him.

 

Paragraph 1 - In the event of impedimentor absence of any other member of the Board of Directors, the impeded or absent board member shall appoint in writing his deputyamong other members of the Board of Directors to represent him and approve resolutions at the meeting to which he will not be ableto attend, pursuant to Paragraph 3 of Article 19 hereof.

 

Paragraph 2 - The members of the Boardof Directors appointing representatives, as provided for in the previous paragraph, shall be deemed, for all legal purposes, asattendees of respective meeting.

 

Article 16 - In the event of vacant positionof members of the Board of Directors, remaining a number lower than the minimum number of members provided for in Article 14 above,a General Shareholders’ Meeting shall be called to elect the deputies.

 

**POWERS OF THE BOARD OF DIRECTORS**

 

Article 17 - The Board of Directors shallbe responsible for:

 

(i) - establishing the Company’sgeneral business guidance;

 

(ii) - approving the Company’s budgetand annual business plan;

 

(iii) - calling for the General Shareholders’Meetings;

 

(iv)- approving the Company’s financialstatements and the Management report and submit them to the General Shareholders’ Meeting;

 

(v) - electing or removing from office,at any time, the members of the Board of Executive Officers, defining their duties, in compliance with legal and bylaws provisions;

 

(vi) - approving the creation of technicaland advisory Committees that will advise in issues of the Company’s interest, electing members of these Committees and approvingtheir charters, which shall contain specific rules related to the structure, duties, powers, compensation and operation;

 

(vii) - overseeing the Company’sOfficers, examining, at any time, the Company’s records, requesting information about agreements executed or to be executed,or any other acts;

 

(viii) - approving the Company’sorganizational structure, and may establish limits to the Board of Executive Officers in performance of their duties, observinglegal and Bylaws provisions;

 

(ix) - approving and amending the charterof the Board of Directors;

 

(x) - resolving on the Company’sissuance of shares, including capital increase, within the limit of authorized capital, defining the terms and conditions of suchissuance;

 

(xi) - resolving on the issuance of warrants;

 

(xii) - resolving, by delegation of theGeneral Shareholders’ Meeting on the following aspects referring to the issuance of debentures by the Company: (i) issuanceopportunity, (ii) period and maturity, amortization or redemption conditions, (iii) period and payment conditions for interestrates, profit sharing and reimbursement premium, if any, (iv) mode of subscription or placement and, (v) type of debentures;

 

(xiii) - resolving on the issuance of unsecurednon-convertible debentures;

 

(xiv) - resolving on the issue of promissorynotes for public offering (“Commercial Papers”) and on the submission of the Company shares to the deposit system totrade respective certificates (“Depositary Receipts”);

 

(xv) - authorizing the acquisition of theCompany shares to be cancelled or to be held in treasury and subsequent disposal;

 

(xvi) - authorizing the disposal of assetsdirected connected to telecommunications public utilities;

 

(xvii) - authorizing the disposal of realproperties, creation of security interest and tendering of guarantees for third parties obligations, and may establish limits tothe Board of Executive Officers practice these acts;

 

(xviii) - establish in the Company’srules the limits to the Board of Executive Officers authorize the disposal or encumbrance of permanent assets, including thoserelated to telecommunications public utilities which are out of service or unworthy;

 

(xix) - approving the Company’s participationin consortia in general, as well as the terms of this participation, and may delegate this duty to the Board of Executive Officers,within the limits to be established, always aiming the development of the Company’s activities;

 

(xx) - setting the limits so that the Boardof Executive Officers authorizes the practice of reasonable gratuitous acts to the benefit of employees or the community wherethe Company operates, including the donation of unworthy goods to the Company;

 

(xxi) - approving the creation and theshutting down of the Company’s subsidiaries, in the country or abroad;

 

(xxii) - approving the assumption of anyliability not foreseen in the Company’s budget in amount exceeding R$250,000,000.00 (two hundred and fifty million reais);

 

(xxiii) - authorizing the execution ofagreements, not foreseen in the Company’s budget, in amount exceeding R$250,000,000.00 (two hundred and fifty million reais);

 

(xxiv) - approving investments and assetacquisition, not foreseen in the budget, in amount exceeding R$250,000,000.00 (two hundred and fifty million reais);

 

(xxv) - authorizing the acquisition ofequity interest on a permanent basis in other companies and the encumbrance or the disposal of equity interest;

 

(xxvi) - approving the distribution ofinterim dividends;

 

(xxvii) - appointing or removing from officethe independent auditors;

 

(xxviii) - appointing and removing fromoffice the head of internal audit, which will report to the Board of Directors through the Control and Audit Committee, when inoperation, as well as the officer in charge of retail, who is also responsible for all customer service, sale and delivery of productsrelating to the sale of retail products; and

 

(xxix) - approving the job position andsalary plan, incentive and professional development policies, regulation and the Company’s staff, as well as the terms andconditions of collective bargaining agreements to be settled with unions that represent the professional categories of the Company’semployees, the adhesion or termination of supplementary pension plans, all the aforementioned related to the Company’s employees,and the Board of Directors, when necessary, may establish limits to the Board of Executive Officers resolve on these matters.

 

Article 18 - Specific duties of the Chairmanof the Board of Directors include: (a) to represent the Board when the General Shareholders’ Meeting is called; (b) presideover the General Shareholders’ Meeting and appoint his secretary among attendees; and (c) call and preside over the Boardof Directors meetings.

 

**MEETINGS**

 

Article 19 - The Board of Directors shallmeet (i) ordinarily, once every three months and (ii) extraordinarily, through call of its Chairman, drawing up the minutes ofthese meetings.

 

Paragraph 1 - The Board meetings shallbe called in writing, at least, forty-eight (48) hours in advance, and call shall contain the agenda and the matters to be discussedin said meeting.

 

Paragraph 2 - The Board of Directors shallapprove resolutions by majority vote with the attendance of the majority of its acting members, and Chairman shall be liable forthe casting vote, in addition to his common vote, in the events of tie vote.

 

Paragraph 3 - Any member of the Board maybe represented by another board member in the meetings to which he will not be able to attend, provided that proxy powers are grantedthrough written instrument.

 

Paragraph 4 -Without prejudice to the subsequentsignature of respective minutes, the Board of Directors meetings may also be held via conference call, video conference or anyother means of communication that allows to identifying the attendees, as well as their simultaneous communication. The board membersmay also vote in writing, even if they do not physically attend the meeting.

 

**BOARD OF EXECUTIVE OFFICERS**

 

**STRUCTURE**

 

Article 20 - The Board of Executive Officersshall be composed of, at least, three (3) and, at most, fifteen (15) members, shareholders or not, resident in the country, whoshall be elected by the Board of Directors, as follows: (a) Chief Executive Officer; (b) Chief Financial, Corporate Resources andInvestor Relations Officer; (c) General Secretary and Legal Officer; (d) other officers without specific designation.

 

Paragraph 1 - The individual duties ofOfficers without specific designation shall be defined by the Board of Directors, which also may establish specific designationfor said offices.

 

Paragraph 2 - One Officer may be electedto accumulate the duties of another executive officer.

 

Article 21 - In the event of temporaryabsences and impediments, the Chief Executive Officer shall designate among the members of the Board of Executive Officers, hisdeputy as well as the deputy of other Officers. In the event of vacant position in the Board of Executive Officers, the respectivereplacement shall be resolved by the Board of Directors.

 

**POWERS OF THE BOARD OF EXECUTIVE OFFICERSAND COMPANY’S REPRESENTATION**

 

Article 22 - The Board of Executive Officersis the body that actively and inactively represents the Company and its members shall be individually liable for, where applicable,to comply with and cause the compliance with these Bylaws, the resolutions of the Board of Directors and General Shareholders’Meeting, as well as practice all the acts necessary or convenient to manage the Company’s businesses. Jointly, the Boardof Executive Officers shall be responsible for the following:

 

(i) - proposing the Company’s generalplans and programs to the Board of Directors, specifying the investment plans concerned with the plant expansion and remodeling;

 

(ii) - authorizing, within the limits establishedby Board of Directors in its appropriate charter, the disposal or encumbrance of permanent assets, including those related to telecommunicationspublic utilities which are out of service or unworthy, as well as submitting to said body the disposal or encumbrance of assetsexceeding these limits;

 

(iii) - submitting to the Board of Directorsand Fiscal Council, the Annual Management Report and the Financial Statements accompanied by independent auditors’ report,as well as a proposal for the allocation of year’s profits;

 

(iv) - approving, according to the limitsestablished by the Board of Directors: a) purchase of supplies, equipment, goods, works and services; b) assets disposal;

 

(v) - approving the execution of otheragreements, not mentioned above, according to the limits imposed by the Board of Directors;

 

(vi)- annually approving the financialoperations planning and on a quarterly basis, a summary of compliance with said planning;

 

(vii) - approving the creation and shuttingdown of the Company’s branches, offices, agencies and delegations in the country;

 

(viii) - approving, when assigned by theBoard of Directors, the Company’s organizational structure, keeping the Board of Directors informed about it;

 

(ix) - ensuring the compliance with theCompany’s ethics standards established by the Board of Directors;

 

(x) - preparing and proposing the Company’sinstitutional responsibility policies to the Board of Directors, such as environment, health, safety and social responsibilityand implement the policies approved;

 

(xi) - authorizing, according to the limitsestablished by the Board of Directors, the practice of reasonable gratuitous acts to the benefit of employees or the communitywhere the Company operates, including the donation of unworthy goods to the Company; and

 

(xii) - approving the creation of technicaland advisory Committees that will advise in issues of the Company’s interest, electing members of these Committees and approvingtheir charters, which shall contain specific rules related to the structure, duties, powers, compensation and operation.

 

Paragraph 1 - The Board of Executive Officers’resolutions shall be taken by majority vote of its members and the Chief Executive Officer, besides his common vote, shall be liablefor the casting vote, in the events of tie vote.

 

Paragraph 2 - Except for the cases providedfor in Paragraph 4 and observing the provisions contained herein, the Company may be legally bound as follows: i) by the jointsignature of two (2) officers appointed pursuant to Bylaws, except for urgent cases, which shall authorize the individual signatureof the Chief Executive Officer and subject to the approval of the Board of Executive Officers, pursuant to Article 23, A-5 hereof;ii) by the signature of one (1) Officer appointed pursuant to Bylaws jointly with one (1) attorney-in-fact; and iii) by the jointsignature of two (2) attorneys-in-fact, as long as they are vested of specific powers.

 

Paragraph 3 - Except for the cases providedfor in Paragraph 4, the powers of attorney shall always be granted by two (2) Officers and shall specify the powers granted, andexcept for those powers of attorney for legal purposes, they shall be valid for at most one (1) year.

 

Paragraph 4 -The Company may be representedby only one Officer or one Attorney-in-Fact, vested of specific powers to practice the following acts:

 

(i) receipt and payment;

 

(ii) signature of instrument not creatingliabilities for the Company;

 

(iii) Company’s representation atmeetings and partners meetings of companies in which it holds interest;

 

(iv) granting of proxy to attorney forlegal representation or in administrative proceedings;

 

(v) representation in court or in administrativeproceedings, except for the practice of acts that imply waiver of rights;

 

(vi) representation in public bids andprivate contest biddings in which the Company participates, aiming the rendering of services covered by its purpose; and

 

(vii) practice of administrative routines,including before public agencies, mixed public-private corporation, boards of trade, labor court, INSS (Brazilian Social SecurityInstitute), FGTS (Government Severance Indemnity Fund for Employees) and related.

 

**DUTIES OF THE BOARD OF EXECUTIVE OFFICERS**

 

Article 23- These are the following specificduties of the Board of Executive Officers:

 

**A - CHIEF EXECUTIVE OFFICER:**

 

1. To represent the Company in or out ofcourt, before shareholders and general public, and may appoint attorneys-in-fact jointly with another Officer and designate agents,delegate duties to other Officers to practice specific acts;

 

2. To follow up and oversee the implementationof Board of Directors’ decisions in relation to their activities and duties;

 

3. To set out guidelines, coordinate andoversee activities of the Company related to: finance and control; corporate resources; the legal department in general; institutionalrelations; regulation; corporate communication; Fundação Telefônica; human resources; network and field operations;strategy and corporate planning; information technology; customer service and quality; corporate business; mobile business; fixedbusiness;

 

4. Call for the Board of Executive Officersmeetings;

 

5. To practice urgent acts subject to theapproval of the Board of Executive Officers; and

 

6. To perform other duties assigned bythe Board of Directors.

 

**B - CHIEF FINANCIAL, CORPORATE RESOURCESAND INVESTOR RELATIONS OFFICER:**

 

1. To set out guidelines and oversee Company’sactivities in the economic-financial area and management of securities issued by Company, accounting, management control and corporateresources, as well as oversee the supplementary private pension fund management;

 

2. To represent the Company before theBrazilian Securities and Exchange Commission – CVM, stock exchanges and other stock market watchdogs;

 

3. To delegate, where applicable, the powersto other Officers in order to practice specific acts;

 

4. To represent the Company as providedfor herein; and

 

5. Execute other activities assigned tohim by the Board of Directors.

 

**C - GENERAL SECRETARY AND LEGAL OFFICER:**

 

1. To establish the guidelines and overseethe Company’s activities in the legal area in general;

 

2. To delegate powers, where applicable,to other Officers in order to practice specific acts;

 

3. To represent the Company as providedfor herein; and

 

4. To perform other activities assignedto him by the Board of Directors.

 

**D- OFFICERS WITHOUT SPECIFIC DESIGNATION:**

 

1. To perform the individual duties andresponsibilities assigned by the Board of Directors;

 

2. To jointly sign with another Officerappointed pursuant to Bylaws the documents and acts requiring the signature of two Officers; and

 

3. To represent the Company as providedfor herein.

 

**CHAPTER VI - FISCAL COUNCIL**

 

Article 24 - The Fiscal Council, on a permanentbasis, shall be composed of at least, three (3) and at most five (5) sitting members and equal number of deputies.

 

Paragraph 1 - The compensation of FiscalCouncil members, besides the reimbursement for commuting and accommodation expenses necessary to perform their duties, shall bedefined at the General Shareholders’ Meeting to elect them and cannot be lower than 10% for each acting member, which onaverage is attributed to each Officer, not including benefits of any nature, procuration fees and profit sharing.

 

Paragraph 2 - In the event of vacant positionof Fiscal Council member, he/she shall be replaced by his/her respective deputy. In the event of vacant position of most of positions,the General Shareholders’ Meeting shall be called to elect the deputies.

 

Paragraph 3 - The Fiscal Council shallmeet, (i) ordinarily, once every quarter and, (ii) extraordinarily, through call of the Chairman of the Board of Directors, ortwo (2) members of the Fiscal Council, drawing up the minutes of the meetings.

 

Paragraph 4 - The Fiscal Council meetingsshall be called in writing, at least, forty-eight (48) hours in advance, and call shall include the agenda, a list of the mattersto be discussed at the respective meeting.

 

**CHAPTER VII - FISCAL YEAR AND FINANCIALSTATEMENTS**

 

**FISCAL YEAR**

 

Article 25 - The fiscal year shall coincidewith calendar year and half-yearly, quarterly balance sheets may be drawn up, besides the annual balance sheet or in shorter periods.

 

**PROFIT ALLOCATION**

 

Article 26 - Together with the financialstatements, the Board of Directors shall submit to the Annual Shareholders’ Meeting a proposal for (i) managers and employeesprofit sharing and (ii) the full allocation of net income.

 

Paragraph 1 - Out of net income for theyear: (i) five percent (5%) shall be set aside to legal reserve, aiming at ensuring the physical integrity of the capital stock,restricted to twenty percent (20%) of paid-up capital stock; (ii) twenty-five percent (25%) of the adjusted net income as providedfor in sections II and III, Article 202 of Law 6,404/76 shall be mandatorily distributed as mandatory minimum dividend to all shareholders;and (iii) the remaining balance, after complying with the provisions contained in previous items of this article, shall have theallocation resolved at the General Shareholders’ Meeting, based on the Board of Directors’ proposal contained in the

 

financial statements. If balance of profitreserves exceeds capital stock, the General Shareholders’ Meeting shall resolve on using the surplus to pay or increase capitalstock or on distributing additional dividends to shareholders.

 

Paragraph 2 Dividends not claimed withinthree (3) years, as of resolution on its distribution shall revert to the Company.

 

Article 27 - By decision of the Board ofDirectors, the Company may declare dividends: (i) to the profit account verified in half-yearly balance sheets; (ii) to the accountof profits verified in quarterly balance sheets, or in shorter periods, as long as total dividends paid each half year do not exceedthe amount of capital reserves referred to in Paragraph 1, Article 182 of Law 6,404/76, or (iii) to the retained earnings accountor profit reserve account verified in the last annual or half-yearly balance sheet.

 

Sole Paragraph - Interim dividends distributedpursuant to this Article shall be attributed to the mandatory minimum dividend.

 

Article 28 - By resolution of the Boardof Directors and observing legal provisions, the Company may pay interest on equity to its shareholders, which may be attributedto the mandatory minimum dividend, subject to the approval of the general shareholders’ meeting.

 

**CHAPTER VIII - FINAL PROVISIONS**

 

Article 29 - The Company shall enter intoliquidation in cases provided for by laws, and the General Shareholders’ Meeting shall determine the mode of liquidationand appoint the liquidator.

 

Article 30- The Company’s approvalthrough its agents of merger, spin-off, amalgamation or dissolution operations of its subsidiaries shall be preceded by an economicand financial analysis prepared by internationally renowned independent company, reiterating that equal treatment has been givento all related companies, whose shareholders shall have broad access to the referred analysis report.

 

Article 31 - Referring to the issues notcovered by these present Bylaws, the Company shall be ruled by legal and applicable provisions.

 

São Paulo, May 28, 2015