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PLAN OF CONCESSION OF STOCK OPTION

1. OBJECTIVE AND DIRECTIONS OF THE PLAN

Duratex S.A. introduces the Plan of Concession of Stock Option (“PLAN”) in order to involve officers (“ADMINISTRATORS” or “ADMINISTRATOR”, as the case may be) in the middle and long-term development process of Duratex, giving them the choice to participate in the value that their work and dedication will add to the shares of the Duratex capital.

1.1. The options will entitle their proprietors to, observing the conditions set out in the PLAN, subscribe common shares of the authorized capital of Duratex.

1.2. At the discretion of Duratex, the exercise of options shall be performed by selling treasury shares for reissuance, applying to them in all respects the same directions set out in the PLAN.

1.3. Each option shall entitle to subscribe one share.

1.4. The operating rules and procedures concerning the PLAN shall be proposed by a committee to be appointed by the BOARD OF DIRECTORS Duratex for the purposes of this PLAN (“PERSONS COMMITTEE”).

1.5 Periodically, the PERSONS COMMITTEE shall submitted to the approval of the BOARD OF DIRECTORS, the proposals regarding the PLAN application.

2. BENEFITIARIES OF THE OPTIONS

The PERSONS COMMITTEE shall identify and propose, periodically, the ADMINISTRATORS of Duratex who will be offered the options, in the quantities to be specified.

2.1. Exceptionally, the options may be granted to ADMINISTRATORS from controlled companies or to categorized employees of Duratex or of described companies.

2.1.1. The options may also be assigned to highly qualified persons upon the engagement with Duratex or controlled companies.

2.2. The options shall be personal and nontransferable, save by “causa mortis” succession.

2.3. The PERSONS COMMITTEE shall submit to approval of the BOARD OF DIRECTORS the option concession proposal.

3. CONDITION AND ANNUAL LIMIT TO GRANT OPTIONS

3.1. Options shall only be granted with respect to the years when sufficient profits have been amassed to enable the allotment of the mandatory dividend to shareholders.

3.2. The total quantity of options to be granted each year shall not exceed the maximum limit of 0.5% (half per cent) of the total shares of Duratex which the minority and majority shareholders own on the date of the closing balance sheet of that same year.

4. OPTIONS QUANTIFICATION AND CHARACTERISTICS

4.1. The PERSONS COMMITTEE shall set forth the total quantity of options to be granted with respect to each year, stipulating the characteristics of each series, particularly the price for the year (item 6), the legal term (item 7) and the waiting period (item 8).

5. DISTRIBUTION OF OPTIONS AMONG THE OFFICERS

5.1. THE PERSONS COMMITTEE shall choose the BENEFICIARIES who shall receive the options and set the quantity of each series to be assigned to each, evaluating, at its sole discretion, the performance of the eligible persons in the corresponding year, the remuneration already paid in the year and the other evaluations deemed applicable. 

6. PRICE FOR THE YEAR

6.1 The price for the year, to be paid to Duratex, shall be stipulated by the PERSONS COMMITTEE upon the option concession. To set out the annual price of the options in general, the PERSONS COMMITTEE shall consider the average price of common shares of Duratex on the trading floors of M&FBOVESPA S.A. Stock, Futures and Commodities Exchange, in a period of, at least, five and, at the most, ninety trading floors prior to the options issuing date, at the discretion of the PERSONS COMMITTEE, choosing also, an adjustment by up to 30%, give or take. The stipulated prices shall be readjusted up until the month prior to the exercise of the option by the IGP-M or, in its absence, by another index that the PERSONS COMMITTEE may designate, which must be paid within a period similar to the one in effect to liquidate operations at the BM&FBOVESPA S.A. Stock, Futures and Commodities Exchange.

6.2. The acquired shares shall be entitled to dividends and other benefits as if they had been purchased, on the same date, at the BM&FBOVESPA S.A. Stock, Futures and Commodities Exchange.

7. OPTIONS LEGAL TERM

The options shall be in effect during the term stipulated by the THE PERSONS COMMITTEE upon their concession, which shall automatically expire at the end of such a term.

7.1. The legal term of each series shall begin on the date of the respective issuance and expire at the end of a period which may range between at least AE+5 years and AE+10 years at the most, where AE (Issuance Year) means the calendar issuance year, so that the legal term shall always expire on the last business day of the last calendar year of such a term.

7.2. The legal terms shall legally expire for the options whose owners resign or are dismissed from Duratex and/or controlled companies. The options of ADMINISTRATORS shall expire on the date when they leave office, either by resignation, or imposed by the body which has elected them. With respect to an employee, the expiration will occur on the date when his/her work contract is terminated.

7.3. The Board of Directors may approve or not the expiration under 7.2. if the removal of the ADMINISTRATOR occurs by failure to reelect or if removal of the employee has not happened due to a serious fault. In this case, the option of ownership of the beneficiary may be exercised up until the end of the legal term (item 7.1), or up until the end of a 3 (three) year period from the date of removal, which expires first.

7.4. Should the option owner die, before the removal, the successors may exercise it up until the end of the legal term (item 7.1), or up until the end of a 3 (three) year period from the date of the demise, which expires first.

7.4.1. If the demises occurs after the removal performed under the terms of item 7.3, the successors may exercise the options during the remain legal term of the proprietor, according to the same item.

8. OPTIONS EXERCISE

8.1. The options, without prejudice to the legal term (item 7), may only be exercised after the waiting period and out of the suspension periods stipulated by the PERSONS COMMITTEE.

8.2. The waiting period of each series shall be stipulated by the PERSONS COMMITTEE upon issuance, and its duration may range between the AE+1 and AE+5-year term, where the AE is the calendar issuance year, so that the waiting period will always end on the last day of the last calendar year of this term.

8.3. The waiting period shall expire if the owner is removed under the conditions set out in item 7.3, or his/her demise.

8.4. The suspension periods for the options exercise shall be determined, whenever necessary, to coordinate the subscription works.

8.5. The options owner shall tell the area in charge of managing the PLAN at when the options will be exercised, at least 48 hours in advance.

8.6. The owner of more than one series of exercisable options may exercise all or just some, totally or partially.

9. OPTIONS QUANTITY ADJUSTMENTS

To preserve the purpose of the PLAN (item 1), the quantities of options granted and not exercised, may be adjusted up or down in order to restore the values originally granted, when the quotation level of the Duratex shares at the Stock Exchanges changes substantially, due to decisions made by the BOARD OF DIRECTORS or the Shareholders’ Meeting of Duratex on (a) share split, clustering or bonus; (b) issuance of a high number of share to increase the capital; (c) dividend allotment, capital remuneration interest and/or cash bonus, in exceptional amounts; (d) merger, incorporation, split or acquisition of control over large institutions; (e) others procedures of similar nature and relevance.

9.1. The PERSONS COMMITTEE shall submit the adjustment proposals to the Board of Directors.

10. STOCK AVAILABILITY

10.1. The owner may freely dispose of half the stock subscribed by exercising the option.

10.2. The other half shall be unavailable for 2 (two) years, from the option exercise date, declaring this unavailability as and for the purposes stipulated under article 40 of Law nº 6.404, dated 12.15.76.

10.3. The unavailability stipulated in item 10.2 does not apply to the subscription of shares by exercising the option in the second half of the legal term (item 7).

10.4. At the beginning of the second half of the option term, all the shares till then unavailable of said option will be released.

10.5. The unavailability under item 10.2 also applies to other shares subscribed, at any time, by the removed owner under the conditions set out in item 7.3 or by the successors of the deceased owner (item 7.4).

10.6. The shares encumbered with the unavailability under item 10.2 shall be released if and when the removal under the conditions stipulated under 7.3 or the demise of the owner.

11. OMISSIVE CASES

The Board of Directors shall decide on the omissive case under the PLAN.

Updated on February, 2010