Cia Hering : Material Fact - Payment of Dividends

CORPORATE TAXPAYERS ID 78.876.950/0001-71

PUBLICLY-HELD COMPANY

Blumenau - Santa Catarina

MATERIAL FACT PAYMENT OF DIVIDENDS

We communicate to all Shareholders that the Board of Directors at a meeting held on October 26th, 2016 approved the dividends distribution to shareholders in the amount of thirty-nine million, nine hundred eighty-five thousand, thirteen reais and fifty-two cents (R$ 39,985,013.52), corresponding to R$ 0.2485 per share.

The payment will be made on November 29th, 2016, based on the shareholders' position dated November 4th, 2016. The Company's shares will be negotiated ex-dividends from November 7th, 2016 on.

Shareholders will have their credit available according to the bank address provided to Banco Itaú

S.A. - Depositary Institution of Shares, from the start date of this right's distribution. To the shareholders which registers do not contain the entry of the CPF/CNPJ (National Registry of Legal Entities/ Individual Taxpayer's Registry) number or the indication of the "Bank/Agency/Current Account", the dividends will only be credited from the 3rd business day, starting from the date of the register's update in the electronic files of Banco Itaú S.A., which can be performed through any agency of Banco Itaú S.A. The shareholders using Custodies will have their dividends credited according to the procedures adopted by the Stock Exchange.

Blumenau, October 26th, 2016.

Frederico de Aguiar Oldani Chief Financial and Investor Relations Officer