Stock Option Plan

1.1 The expressions below, when capitalized herein, shall be construed as follows, unless expressly established otherwise:

“Shares” means registered book-entry no-par value common shares issued by the Company;

“Own Shares” means Shares to be acquired by Beneficiaries by using a portion of their Bonuses, as provided under item 5.3 below;

“Beneficiaries” means management, employees or service providers of the Company or one of its subsidiaries to whom the Company grants one or more Options under the terms of this Plan;

“BM&FBOVESPA” means BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros [Securities, Commodities and Futures Exchange];

“Bonus” means the variable compensation paid by the Company to Eligible Persons for achieving goals set by the Company;

“Committee” means the committee created to advise the Plan Administration Board under the terms of item 4.1 below;

“Company” means Cyrela Brazil Realty S.A. Empreendimentos e Participações;

“Board of Directors” means the Company’s Board of Directors;

“Stock Option Agreement” means the private instrument granting stock options entered into between the Company and the Beneficiary, by means of which the Company grants Options to the Beneficiary;

“Grant Date” means, in relation to the Options granted to each one of the Beneficiaries, the execution date of the Stock Option Agreement by means of which these Options are granted;

“Termination of Service” means the termination of the Beneficiary’s legal obligation as a senior manager, employee or service provider to the Company or one of its subsidiaries for any reason, including but not limited to resignation or removal from the executive position, voluntary or involuntary dismissal-for or without cause-termination of service agreements, retirement, long-term disability and death.

“Options” means the stock options granted by the Company to the Beneficiaries under the terms of this Plan.

“Lock-Up Period” means the period in which a Beneficiary’s Own Shares will remain unavailable for trading pursuant to item 5.5 below.

“Eligible Persons” means the people who can be designated as Beneficiaries under the terms of item 3.1 below.

“Plan” means this Stock Options Plan and

“Exercise Price” means the price to be paid by Beneficiaries to the Company for the Shares that they purchase when they exercise their Options as determined in item 7.1 below.

2.1. The Plan is intended to allow Eligible Persons to purchase Shares, under certain conditions, in order to: (a) promote the Company’s expansion and success, as well as the achievement of its corporate goals; (b) align the Company’s shareholders’ interests with those of the Eligible Persons; and (c) allow the Company and its subsidiaries to attract and retain Eligible Persons.

3.1. The Company’s or any of its subsidiaries’ senior, middle and low-level managers, as well as service providers, can be designated as Beneficiaries of Options under the terms of the Plan.

4.1. The Plan shall be administered by the Board of Directors, which may appoint a committee specially created to assist it in administering the Plan

4.2. Provided that the general provisions of the Plan and the guidelines set by the Company’s Shareholders’ Meeting are complied with, the Board of Directors and the Committee, as the case may be, shall have full power and authority (as far as permitted by law and the Company’s Bylaws) to establish such rules and regulations as it may deem appropriate for the proper plan administration, including:

1. creating and enforcing general rules for Option grants, under the terms of the Plan, and issue interpretations of the Plan;
2. setting performance goals for Eligible Persons to establish objective criteria for electing Beneficiaries;
3. electing Beneficiaries and authorizing Options grants in their favor, by establishing all the conditions for the Options to be granted, as well as altering such conditions when needed or convenient, and
4. issuing new Shares within the limit of the authorized capital or approving the sale of treasury Shares to allow the exercise of Options granted under the Plan.

4.3. In the exercise of its powers, the Board of Directors shall only be subject to the limits established by law, the regulations of CVM [Comissão de Valores Mobiliários, or Brazilian Securities and Exchange Commission] and the Plan. The Board of Directors may give special treatment to the Company’s or any of its subsidiaries’ managers or other employees who may be in similar situations and shall be in no way obliged, by force of any equality rules, to extend to all employees the conditions that it deems applicable for just one or some of them.

4.4. Decisions of the Company’s Board of Directors or the Committee, as the case may be, shall be binding on the Company concerning all issues related to the Plan.

5.1. The Company’s Board of Directors shall approve Option grants on a yearly basis or whenever it deems appropriate. It shall also elect the Beneficiaries to whom such Options shall be granted under the terms of the Plan, as well as establish the Exercise Price, the payment conditions for such Options, the deadlines and conditions for them to be exercised and any other conditions related to such Options.

5.2. Each Option shall entitle each Beneficiary to purchase one (1) share, subject to the terms and conditions established in his or her respective Stock Option Agreement.

5.3. In order to be entitled to Option Grants under the terms of this Plan, each Beneficiary shall use part or all of his or her Bonus to purchase Own Shares traded on a stock exchange by means of a financial institution appointed by the Company.

5.4. For each Own Share acquired under the terms above, the Company shall grant up to two (2) Options in accordance with criteria to be established by the Board of Directors.

5.5. Own Shares shall be subject to a Lock-Up Period of three (3) years starting from the Grant Date.

5.6. Options shall be granted, under the terms of the Plan, by means of Stock Option Agreements between the Company and Beneficiaries which shall specify, with no prejudice to other conditions established by the Board of Directors or the Committee, as the case may be: (a) the number of Options granted, (b) the terms and conditions for being entitled to exercise the Options, (c) the deadline to exercise the Options and (d) the Exercise Price and the payment conditions.

5.7. The Board of Directors or the Committee, as the case may be, may impose certain conditions for Options to be exercised, as well as restrictions on the transfer of Shares purchased under the Options. They may also grant the Company exclusive repurchase rights or first refusal rights should the Beneficiary decide to sell the aforementioned Shares.

5.8. Stock Option Agreements shall be prepared individually for each Beneficiary. The Board of Directors or the Committee, as the case may be, may establish different terms and conditions for each Stock Option Agreement, with no need to apply any equality rules among the Beneficiaries even though they may be in similar or identical situations. The Board of Directors may, at its own discretion and whenever it deems in the best interests of the Company, exempt Beneficiaries from acquiring Own Shares as a condition to be granted Options or establish different conditions from those described in items 5.3 to 5.5 above.

5.9. Options granted under the terms of the Plan, as well as their exercise by Beneficiaries, have no connection with and are not subject to Beneficiaries’ fixed or variable compensation, or any profit sharing schemes.

5.10. Without prejudice to any of the provisions of Plan or the Stock Option Agreement determining otherwise, Options granted under the terms of the Plan shall automatically expire, thus becoming null and void, in the following cases:

1. upon their full exercise;
2. after the expiration date of the Option;
3. after cancellation of the Stock Option Agreement;
4. upon dissolution, liquidation or bankruptcy of the Company or
   in the events described under item 9.2 herein.

6.1. Subject to the adjustments provided for in item 11.2 below, the total number of Shares that may be acquired over the term of the Plan shall not exceed three percent (3%) of the Shares of the Company’s total capital stock (not including Shares issued owing to the exercise of Options based on this Plan), provided that the total number of Shares issued or issuable under the Plan remains within the limits of the Company’s authorized capital. Should any Options expire or be cancelled prior to their full exercise, the Shares corresponding to such Options shall be made available for future Option grants.

6.2. In order to allow the exercise of the Options granted under the terms of the Plan, the Company may, at the discretion of the Board of Directors, issue new Shares up to the limit of the authorized capital or sell treasury Shares.

6.3. Shareholders shall not have the right of first refusal in Option grants or exercises under the terms of the Plan, pursuant to Section 171, Paragraph 3, of Law 6.404/76.

6.4. Shares acquired upon the exercise of an Option under the terms of the Plan shall have all the rights applicable to their class, except for the cases described in item 7.2.1 below or in the event of any decisions to the contrary by the Board of Directors.

7.1. Unless decided otherwise by the Board of Directors, Beneficiaries shall have to offer no pecuniary considerations other than the amounts paid for the Own Shares to exercise the Options. Such price is an integral part of Beneficiaries’ obligation to acquire and maintain the Own Shares for the Lock-Up Period.

7.2. The Exercise Price, if any, shall be paid by Beneficiaries under the conditions and within the deadlines set by the Board of Directors.

7.2.1. Shares acquired upon the exercise of Options under the terms of the Plan may not be sold to third parties prior to the full payment of the Exercise Price unless previously authorized by the Board of Directors, in which case the proceeds from the sale shall be primarily used to settle the Beneficiary’s debt with the Company.

8.1. Without prejudice to the other terms and conditions established in the respective Stock Option Agreements, the Options will become exercisable as the respective Beneficiaries either remain employed as management members or in other positions, or remain independent contractors of the Company or one of its subsidiaries, for a period starting on the Grant Date and ending on a date between the third (3rd) and the fifth (5th) year of the Grant Date’s anniversary, at the discretion of the Board of Directors.

8.1.1. Options not exercised under the conditions and within the deadlines set by the Board of Directors shall be deemed automatically expired, with no compensation rights, after the Option expiration date, which shall be eight (8) years after the Grant Date.

8.1.2. In exceptional cases, the Board of Directors or the Committee, as the case may be, may accelerate the expiration date established in item 8.1 above to no less than two (2) years after the Grant Date, at its own discretion, provided that no more than five percent (5%) of the total Options under the Plan, pursuant to Clause 6.1., are subject to such exercise period of less than five (5) years.

8.2. Beneficiaries wishing to exercise their Options shall notify the Company of their intention in writing and specify the number of Options to be exercised, following the notification template to be introduced by the Board of Directors or the Committee, as the case may be.

8.3. The Board of Directors or the Committee, as the case may be, may suspend the Option exercise right whenever situations that may hinder or prevent Beneficiaries from trading Shares under the terms of the law or regulations in effect are observed.

8.4. No Beneficiaries shall have any shareholder rights or privileges before exercising their Options, under the terms of the Plan and their respective Stock Option Agreements. No Shares shall be given to a holder owing to the exercise of an Option unless all the legal and regulatory requirements have been fully complied with.

9.1. In the event of a Termination of Service, all rights to which a Beneficiary is entitled under the terms of the Plan may be lost or altered, pursuant to item 9.2 below.

9.2. Should a Beneficiary at any time:

1. 1. resign voluntarily from his or her position-whether or not as a manager- (i) the Options not yet exercisable under the terms of their respective Stock Option Agreement on the Service Termination date shall expire automatically regardless of a prior notice or notification, with no compensation rights; and (i) the Options exercisable under the terms of their respective Stock Option Agreement on the Service Termination date may be exercised up to thirty (30) days starting from the Service Termination Date and expire automatically thereafter, regardless of a prior notice or notification, with no compensation rights;
   2. be dismissed for cause or ousted from his or her management position for breaching his or her duties, all the Options-whether or not exercisable yet under the terms of their respective Stock Option Agreement on the Service Termination date-shall expire automatically regardless of a prior notice or notification, with no compensation rights;
   3. be dismissed without cause or ousted from his or her management position for reasons other than breaching his or her duties: (i) the Options not yet exercisable under the terms of their respective Stock Option Agreement on the Service Termination date shall expire automatically regardless of a prior notice or notification, with no compensation rights; and (i) the Options exercisable under the terms of their respective Stock Option Agreement on the Service Termination date may be exercised up to thirty (30) days starting from the Service Termination Date and expire automatically thereafter, regardless of a prior notice or notification, with no compensation rights;
   4. leave the Company due to retirement or permanent disability: (i) the Options not yet exercisable under the terms of their respective Stock Option Agreement on the Service Termination date shall expire automatically regardless of a prior notice or notification, with no compensation rights, and if the Termination of Service occurs after a period of at least two (2) years after the Grant Date, the vesting period of the Options shall be shortened, and the Options may be exercised at any time after the Termination of Service provided that the maximum exercise period under item 8.1.1 above is complied with; and (ii) the Options exercisable under the terms of their respective Stock Option Agreement on the Service Termination date may be exercised provided that the maximum exercise period under item 8.1.1 above is complied with; and

die while still in service: (i) the Options not yet exercisable under the terms of their respective Stock Option Agreement on the Service Termination date shall expire automatically regardless of a prior notice or notification, with no compensation rights, and if the death occurs after a period of at least two (2) years after the Grant Date, the vesting period of the Options shall be shortened, and the Options may be exercised at any time after the death provided that the maximum exercise period under item 8.1.1 above is complied with by the Beneficiary’s heirs or successors; and (ii) the Options exercisable under the terms of their respective Stock Option Agreement on the date of death may be exercised by the Beneficiary’s heirs or successors provided that the maximum exercise period under item 8.1.1 above is complied with.

9.3. Notwithstanding the provisions in item 9.2 above, the Board of Directors or the Committee, as the case may be, may disregard the rules established by item 9.2 and give a Beneficiary special treatment at its own discretion and whenever it deems in the best interests of the Company.

10.1. The Plan shall go into effect on the date of its approval by the Company’s Shareholders’ Meeting and remain in effect for five (5) years. It may be terminated at any time by the Shareholders’ Meeting. The termination of the Plan shall not affect non-expired Options granted under the Plan.

11.1. Option Grants under the terms of the Plan shall not prevent the Company from becoming involved in restructuring operations, such as changes in type of organization, mergers, consolidations, split-ups and share exchanges. The Company’s Board of Directors and other entities involved in these operations may, at their discretion and without prejudice to any other fairness-related measures: (a) replace the Shares subject to the options by shares or other securities issued by the successor company, (ii) accelerate the vesting of the Options to ensure that the Shares subject to them are included in the operation in question and/or (c) pay in cash the amount to which Beneficiaries would be entitled under the terms of the Plan.

11.2. Should the number, forms or classes of Shares existing on the date of the approval of the Plan be altered as a result of bonuses as well as stock splits, reverse splits or conversions from one form or class to another, or the conversion of stock into other securities issued by the Company, the Company’s Board of Directors or Committee, as the case may be, shall adjust the number, form and class of the Shares subject to granted Options and their respective Exercise Prices accordingly so that the balance among the parties is maintained, thus preventing distortions in the application of the Plan, including for the purposes of item 6 herein and within the limits of the Plan.

11.3. No provisions of the Plan or Options granted under the terms of the Plan shall entitle any Beneficiary to remain in a management or any other position in the Company, nor shall it affect, in any way, the Company’s right to terminate the employment or term of a manager at any time, subject to the legal and contractual provisions.

11.4. Each Beneficiary shall adhere to the terms of the Plan expressly in writing, without any restrictions, under the terms established by the Board of Directors or the Committee, as the case may be.

11.5. The Board of Directors, in the best interest of the Company and its Shareholders, may alter the terms of Plan provided that its basic principles remain unchanged.

11.6. Any significant legal changes affecting the regulations for corporations and publicly-held companies, the labor legislation and/or the tax effects of a stock option plan may cause the Plan to be reviewed in its entirety.

11.7. The Options granted under the terms of this Plan are individual and non-transferable so that Beneficiaries shall not, under any circumstance, assign, sell or in any other way transfer them or the rights and obligations arising from them to any other third parties.

11.8. Any disputes shall be settled by the Board of Directors or the Committee, as the case may be, and the General Shareholders’ Meeting may be consulted when appropriate. All Options granted under the terms of the Plan are subject to all the terms and conditions stipulated herein, which shall prevail in the event of any inconsistencies with respect to the provisions of any agreement or document mentioned herein.