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PROGRAM FOR THE GRANTING OF CALL OPTION OR SUBSCRITPION OF
COMMON SHARES OF NATURA COSMÉTICOS S.A.
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PROGRAM FOR THE GRANTING OF
CALL OPTION OR SHARE SUBSCRITPION
REGULATION

I - CONCEPT
The Program consists of the granting of call option or subscription of NATURA
COSMÉTICOS S.A.'s common shares to its executive officers, managers and
employees, as well as executive officers, managers and employees of other
companies under the direct or indirect control of NATURA COSMÉTICOS S.A., whether
these are domestic or foreign corporations.

By means of the granting of call options or share subscription, the Participants may
acquire, within term and price previously set out, the Company's shares, as long as all
the terms and conditions provided for in this Regulation are met.
II - DEFINITIONS

For the purposes of this present Program, it is understood by:

Shares ­ the nominative common shares, which shall be or were already issued by
the Company in view of the Program for the Granting of Call Option or Share
Subscription;
Qualified Collaborator ­ all Natura Cosméticos S.A.'s executive officers, managers
and employees, as well as other companies pertaining to the Natura Group;
Company ­ the company Natura Cosméticos S.A.;
Option Agreement ­ the Private Instrument for the Granting of Call Option or
Share Subscription executed between the Company and the Qualified Collaborator,
through which, the latter acquires the capacity as Program Participant, declaring to
be aware and accept all terms and conditions of the Program and respective Plans;

Exercise of Options ­
the effective share subscription or purchase related to the
options previously granted to the Participants, under the terms of the Program and
respective Plans;
Natura Group- the set of companies Natura Cosméticos S.A. and other controlled
companies or to be controlled, whether directly or indirectly by Natura Cosméticos
S.A., where these are domestic or foreign companies, already organized or to be
organized;

Option(s) ­ the possibility of the Participants to subscribe or acquire the
Company's shares by a price previously determined, as long as all the terms and
conditions of this present Program are met;
Mature Option(s) ­ the Option, which met the conditions set out for the exercise
of right to subscribe or purchase shares, therefore, liable to be exercised;
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Non-Mature Option(s) ­ the Option, which has not met the conditions set out for
the exercise of right to subscribe or purchase shares yet, therefore, not yet liable to
be exercised;
Participant ­ the Collaborator Qualified to whom a call option or share subscription
under the conditions of this Regulation and respective Plans was granted, after
having signed the Option Agreement;
Maturity Duration for the Options ­ a period comprising between the date of
granting of options and date from which the Options may be exercised, within such
period the options may not be exercised;
Period for the Exercise of Options- This is the period comprised between the
date on which the Options became mature and the limit date for the exercise of
these options, within such period the Options may be exercised under the terms of
this present Regulation and respective Plans;
Maximum Term for the Exercise of Options ­ this is the maximum term (limit
date) for the exercise of the Mature Options, under the penalty of loss of procedural
right;
Subscription or Purchase Price ­ this shall correspond to the Company's Share
Value on the date the Options are granted;
Program ­ the Call Option or Share Subscription Program of Natura Cosméticos
S.A., formalized by means of this present Regulation;

Plan ­ the Call Option or Share Subscription Plan, which based on the Program, is
approved by the Board of Directors for a certain year of validity of the Program;
and

Regulation ­
This present Instrument, through which the Program rules and
criteria are formalized.

Share value
­ the Value verified for each share under the terms defined in this
present Program.
III - PURPOSES
The Program's purposes are:

a) to encourage the improvement of the Company's management and of the
companies under its direct or indirect control, granting to the Participants the
possibility of becoming Company's shareholders, stimulating them to work in the
optimization of all the aspects which may valorize the Company, and providing
them a corporate view, conciliating and improving the relations among the Natura
Group's corporations;
b) to motivate the permanence of executive officers, managers and employees, and

c) to expand the attractiveness of the Company and of the Natura Group's
companies.
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IV ­ QUALIFIED COLLABORATORS

The executive officers, managers and employees of the Company and other Natura
Group's companies are the Qualified Collaborators.

External Collaborators shall not be eligible to receive any call option or share
subscription through this Program.
V ­ REQUIREMENTS TO OBTAIN THE CONDITION AS PARTICIPANT

In order to become a Participant of the Program, the Qualified Collaborator shall be
formally appointed by the Board of Directors, under the terms defined in this
Regulation. In addition, as a basic condition to his/her appointment to be deemed as
valid and binding, the Qualified Collaborator appointed as Participant shall sign the
Option Agreement, expressly adhering to the Plan prepared in view of this present
Program and declaring to be aware of all its terms and conditions, including the
restrictions contained therein.
VI ­ PROGRAM BASIC STRUCTURE
VI.1 ­ Annual Plans

In every year of effectiveness of the Program, the Board of Directors may create a
Plan, which if implemented, shall be structured based on the criteria defined in this
Regulation.

It shall be exclusively incumbent upon the Board of Directors to decide on the
opportunity and convenience whether or not to implementing the referred plans
every year of effectiveness of the Program.

VI.2 ­ Election of the Participants

Each Plan shall elect amongst the Qualified Collaborators, the Program Participants.
The Board of Directors, as long as the limits approved in the authorized capital and
in the Program are observed, may include new Participants in Plans already
approved and still in force, granting them the Options deemed as appropriate. The
inclusion of new Participants in Plans already approved and still in force only will be
possible up to the end of the year in which the Plan has been approved.


VI.3 ­ Definition of the number of Options to each plan and the form of
their distribution amongst the various Participants
For each Plan, the Board of Directors, in accordance with this Regulation, shall
define the number of Options to be distributed amongst the Participants.

It shall also be incumbent upon the Board of Directors to define in each Plan, the
Qualified Collaborators who shall have right to the Options, as well as the quantity
of Options to which each Participant shall be entitled.
Taking into account that the Participants may become the Company's shareholders,
the definition about which Qualified Collaborators shall be Participants, as well as
about the quantity of Options each one shall be entitled to, shall be freely set by
the Board of Directors in view of the importance and requisite of the position, the
Participant's potentiality, his/her involvement in strategic projects and the added-
value he/she offers to the Company, without requiring to attribute the condition as
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Participant in all the categories or even to all those integrating a same category,
besides, in relation to two or more Participants of a same category, different
quantities of Options may be attributed.
VI.4 ­ Total limit of shares available in the Program
The total number of shares destined to the Program may not exceed the maximum
limit of three per cent (3%) of the total Company's shares.

For the purposes of this limit, the sum of the following Options and Shares shall be:
·
Non-mature options;
·
Mature options;
·
Options, whether or not mature, granted based on the Plans previously
approved by the companies Natura Participações S/A and Natura
Empreendimentos S/A, and which, as a result of the merger processes, were
assumed by the Company;
·
Shares already subscribed or purchased based on the Program and
respective Plans, which are under the possession of the Participants or at
Treasury.
VI.5 ­ Granting of the options- effective commitment with the Company's
results
As long as the requisites required by the Program and Plan are present, as being
qualified to attribute to the Qualified Collaborator the capacity as Participant, the
Company through the Board of Directors may grant him/her Options under the
limits and quantities previously provided for in the respective Plan.

The granting of Options shall only occur in the years in which the Company has
earned, in the year immediately prior thereto, earnings sufficient to allow the
distribution of compulsory dividends to the shareholders.
VI.6 ­ Restrictions to the transfer of options
The Options, whether or not Mature, executed between the Company and the
Participants shall be not transferable, unless in the event of succession resulting
from the Participant's decease. In this case (Participant's decease), the Options
may be exercised by the successors under the terms set out in this present
Regulation.

VI.7 ­Exercise of Options

The requirements and conditions provided for in this Regulation and respective
Plans being met and provided that the Maturity Duration and Maximum Term for
the Exercise of Options are observed, the Participant shall have right to the
Exercise of these Options, i.e., to the subscription of new shares or to the purchase
of treasury shares, which have been issued or purchased in view of this Program
and respective Plans.
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VI.8 ­ Maturity Duration for the Options

The options granted under the terms of this present Program shall become
mature, i.e., they may be exercised, half by the end of the third year and
the other half by the end of the fourth year, from March 30 of the year in
which the respective Plan granting the Options is approved, in compliance
with the provisions provided for in item VI.5 mentioned above.
In this regard: i) by the end of the third year, 50% of the options shall
be liable to be exercised; ii) by the end of the fourth year, the totality of
options shall be deemed as mature, therefore, liable to be exercised.
The Participant may, at his/her exclusive discretion, whether or not exercise
his/her options in so far as these become mature, i.e., the Participant may
exercise, by the end of the third and fourth years, the options becoming mature
under the terms explained above, or, if he/she so wishes, may postpone this
exercise to the moment deemed as more appropriate, provided that the
maximum term for the exercise of options is observed, under the terms defined
in item VI.9 below.

VI.9 ­ Maximum term for the exercise of options

The Program Participant shall have a six(6)-year maximum term, from March 30
of the year in which the respective Plan granting the Options is approved, to
exercise the options becoming mature, under the terms set forth in item VI.8
above, under the penalty of loss of procedural right to the referred exercise.

VI.10 ­Date of Exercise and Formal Procedures for the exercise of
Options
The Participant intending to exercise his/her Options shall inform the Company, in
written, about hits/her intention, under the terms of the notice model to be released
by the Board of Directors or by the Managing Committee of the Program.

Once the Company is informed, the effective Exercise of Options shall always occur
when Board of Directors' ordinary meetings are held, only on these dates the
Options may be exercised.

The Board of Directors may determine the suspension of right to the Exercise of
Options, whenever situations are verified, which under the terms of the legislation in
effect, restricting or preventing the trading of shares on the part of the Company's
employees and administrators.

VI.11 ­Share subscription or purchase price

The Subscription or Purchase price of each share shall correspond to the
Company's Share Value, determined according to the criteria provided for in
letters "a" and "d" below, calculated on the date the Board of Directors has
approved the Plan through which, the Qualified Collaborator has been elected as
Participant. The Share Value shall be calculated based on the following criteria:
a)
the amount corresponding to the simple average of the ten (10) last
trading sessions occurred over the past sixty (60) calendar days, counted
from the date, including, the approval of the Plan, by always adopting the
daily average quotation of each session;
b)
in the event of not occurring ten (10) trading sessions within a sixty-(60)
day term mentioned above, the average referred to above shall be
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obtained taking into account the totality of trading sessions occurred in
the referred period (9,8,7,6,5,4 or 3 trading sessions), up to a minimum
of three (03) trading sessions;
c)
in the event of not occurring at least three (03) trading sessions within
the sixty (60) days mentioned above, the last trading sessions prior to
these 60 days shall be considered, until completing the minimum number
of three (03) trading sessions.
The price adjusted under the terms above shall be monetarily updated by IBGE's
(Brazilian Institute of Geography and Statistics) IPCA (Amplified Consumer Price
Index) up to the effective date of Exercise of Options, as this is the case. For the
purposes of carrying out the referred update, the following formula shall be
adopted:

Subscription or purchase price updated at t=
(Subscription or purchase price at s) * (IPCA at t) / (IPCA at s)
where
t = month of subscription
s = month in which the option was granted
When the IPCA index at t is not available, this shall be estimated by the
previous month, i.e., the IPCA at t ­ 1. In the subsequent month, this
estimated IPCA shall be replaced by the index published for the respective
month.
In the event the IPCA is extinguished, the Board of Directors shall opt for
another index to replace the former and reflecting the real inflation for the
period.
The price previously referred shall be provided for in the Option Agreement and
it shall be the same for all the Participants of a same Plan.

VI.12 ­ Payment of subscribed shares

The share subscription or purchase corresponding to the Program shall be paid
in cash, with own funds of the Participant.
On an exceptional basis, it shall be incumbent upon the Board of Directors, at its
exclusive discretion, whether or not to authorize the funding of purchase or
subscription price, observing that this term payment shall be effective by means
of funding of at most, ninety per cent (90%) of the subscription or purchase
price, based on the following conditions:

a.1) amortization, in monthly installments, without grace period, annually
adjusted, or within reduced term if allowed by law, IBGE's IPCA or in the event
of its extinguishment, by another index reflecting the real inflation for the
period;

a.2) funding maximum term of four (04) years;

a.3) 0.5% simple interest-bearing per month, calculated over the debit balance;

a.4) amortization of the debit balance at any moment, with Participant's own
funds; and
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a.5) compulsory amortization by allocating: i) fifty per cent (50%) of the net
amount received by the Participant related to his/her interest in profits and
results, and ii) one hundred per cent (100%) of amounts received on the sale of
shares, up to the limit of his/her debt with the Company.

In the event of non-punctuality of the Participant as to the payment of portions
agreed upon for the subscription of purchase of shares acquired through this
present Program, the early maturity of debt in full shall be considered.

The Company may at its exclusive discretion accept the payment of the
installment overdue, maintaining the normal maturity of the other installments.
VI.13 ­ Type of shares and rights entitled thereto

For the purposes of this present Program, nominative common shares shall be issued,
under the limits of the authorized capital and in accordance with the availabilities
provided for in each Plan, which shall ensure the same rights provided for the other
common shares issued by the Company.
VI.14 ­ Sale of shares
The Shares purchased or subscribed under the terms of this present Program
may be freely sold by the Participant, under the terms of the legislation in force.

VI.15 ­ Preemptive right

Under the terms of provisions in the Article 171, paragraph 3, of the Law
#6404/76, the preemptive right shall not occur in the granting and in the
exercise of call options or share subscription, whether in relation to the current
shareholders, or in relation to those obtaining this capacity by force of this
Program and respective Plans.
VI.16 ­ Consequences for the Participants' withdrawal
In the event of Participants' withdrawal, this shall have the following treatment:
·
Participant's withdrawal due to good cause or at his/her request:
- options not yet mature shall be cancelled;
- mature options, but which have not been exercised yet, may not be exercised.
·
Withdrawal without cause:
- options not yet mature shall be cancelled;
- mature options, but which have not been exercised yet, may be exercised, as
long as the following conditions are observed: (i) Maturity Duration and (ii)
Maximum Term for the Exercise of Options; and
·
Withdrawal due to Participant's retirement, disability or decease:
-
options not yet mature may be exercised in the future, provided that the
following conditions are observed: (i) Maturity Duration and (ii) Maximum Term
for the Exercise of Options;
-
mature options, but which have not been exercised yet, may be exercised
within the Maximum Term for the Exercise of Options;
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In the event of Participant's decease, the Options only may be exercised by the
Participant's successors/heirs, duly defined in regular probation proceeding and
estate settlement or by any other means and/or proceeding provided for by law
and clearly identifying the successors and/or heirs.

The price to be paid on the occasion of the exercise of options, under the terms
explained above, shall be calculated based on the criteria defined in the items
VI.11 of this Regulation.

The term for the successors to exercise their Options, under the terms of this
item shall be 12 months from the Participant's decease, and the Company, at its
exclusive discretion, may extend this term up to the expiration of the probation
proceeding and estate settlement, always in compliance with the Maximum Term
for the Exercise of Options.
VII - MANAGEMENT ­ DEFINITION OF INCUMBENCIES

The Program shall be managed by the Company's Board of Directors, which shall
have the incumbency of resolving on the issue of shares, purpose of this present
Program (Article 168, paragraph 1, "b" of Law #6404/76). This incumbency may
not be delegated to another Company's body.
Within this incumbency, it shall be incumbent upon the Board of Directors any
and all resolution on the Program:

a) define, within the parameters of this Program, the annual plans, as well as
carry out any alteration in relation to the plans already created;
b) define, under the terms of this Program, its Participants;

c) define, within the limit of authorized capital and observing the maximum limit
of shares attributable to the Program, the quantity of options and the form of
distribution among these Participants;

d) determine the Subscription or Purchase Price;

e) grant the Options to the Participants;

f) take any other measures deemed as necessary for the administration of the
Program, as long as they do not imply in its alteration; and

g) propose amendments to the Program to be submitted for the extraordinary
general meeting's approval.

VII.1 ­ Program Managing Committee

The Board of Directors may attribute to a Managing Committee the management
of the Program. Nevertheless, its acts shall always be approved by the Board.

VIII ­ CHANGE IN THE SHARE CONTROL
In the event of a direct or indirect change in the Company's share control, the
Programs and Plans already implemented shall be observed.
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IX - MERGER, SPIN-OFF, INCORPORATION AND TRANSFORMATION OF THE
COMPANY ­ INCORPORATION OF SHARES
In cases of merger, spin-off, with or without the extinguishment of the transferee,
merger or transformation of the Company, as well as in case of incorporation of
shares, the Programs and Plans already created shall be observed, making the
adjustments necessary in the number of Options, including in compliance with the
swap relations used for the purposes of the operations above.

X ­ ALTERATION TO THE NUMBER, TYPE AND CLASS OF SHARES

In cases of alterations to the number, type and class of Company's shares, as a
result of reserve split, splitting, bonus shares, as well as in cases of conversion of
shares of one type or class into another or the conversion into shares of other
securities issued by the Company, the necessary adjustments shall be made in the
Programs and Plans already created, especially in relation to the number of Options
and the type or class of Shares to which the Options refer, with a view to avoiding
distortions and damages to the Company or Participants.

XI - ALTERATION, SUSPENSION AND EXTINGUISHMENT OF THE
PROGRAM AND RESPECTIVE PLANS

It shall be incumbent upon the Extraordinary General Meeting to approve and
therefore, alter, suspend or extinguish the Program, as well as amend the By-
Laws in order to establish the Board of Directors' incumbency to provide for the
issues and the conditions under which these issues may occur (Article 122
concurrently with Article 135 of Law #6404/76).

Any and all alteration to the Program proposed by the Board of Directors shall
be submitted to the approval of the Extraordinary General Meeting, and once
approved, only may reach the call options subsequent thereto.
Amongst the causes, which may give rise to the alteration or extinguishment of
the Program, including in relation to the Plans already implemented and options
already granted, but not yet exercised: the occurrence of factors causing serious
change in the economic scenario and those compromising the Company's
financial status.

XII ­SPECIFIC PERFORMANCE
The Company and the Participants shall be entitled to claim in court the specific
performance of the obligations assumed by the other party, under the terms of
this Regulation, pursuant to the applicable provisions of the Brazilian Civil Code
Procedure, especially the provisions contained in the Articles 461, 632, 639 and
following.
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XIII ­ PROGRAM TERM OF EFFECTIVENESS

This Program shall be valid up to the end of year 2010.
In witness whereof and having agreed thereupon, the legal representatives of
Natura Cosméticos sign this present instrument in three (3) counterparts of equal
tenor and form.
Itapecerica da Serra ­ São Paulo, April 26, 2004.

NATURA COSMÉTICOS S.A.