Magnesita Refratarios : Management Proposal - Extraordinary Shareholders Meeting

MAGNESITA REFRATÁRIOS S.A.

CNPJ nº 08.684.547/0001-65 NIRE 31.300.026.485

MANAGEMENT PROPOSAL EXTRAORDINARY GENERAL MEETING NOVEMBER 30, 2017

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MANAGEMENT PROPOSAL

Dear Shareholders,

We present the following Management's Proposal ("Proposal") regarding the matters on the agenda of the Company's Extraordinary Shareholders Meeting to be held at the Company's headquarters, on November 30, 2017, at 12:00am., located at Praça Louis Ensch, 240 - CEP: 32210-902 - Cidade Industrial | Counting | MG | Brazil.

The Call Notice will be published in the newspapers Hoje em Dia (MG) and the Diário Oficial do Estado de Minas Gerais, and sent to the websites of CVM, B3 S.A. - Brasil, Bolsa, Balcão

and Company's Investor Relations website (www.magnesita.com) with the going on public today, under the terms of Article 8 of CVM Instruction 559/15.

first publication

The following matters on the agenda shall be resolved at the Meeting:

1. To approve the appointment of a list of three appraisal companies to draft an appraisal report on the economic value of the Company's common shares, with regard to a public offering of acquisition of all Company's common shares in the market free float, in order to terminate the registration of the Company as company and to withdraw the Novo Mercado segment, pursuant a publicly-held to articles 4th, Paragraph 4th of the Brazilian Corporate Law, CVM Instruction No. 361, dated as March 5, 2002 and the Novo Mercado Listing

   At a meeting held on October 27, 2017, the Company's Board of Directors approved the following appraisal companies:

2. BR Partners Assessoria Financeira Ltda.;

3. Greenhill & Co do Brasil Assessoria Ltda.; e

4. G5 Consultoria e Assessoria Ltda.

Accordingly, shareholders may choose, for the preparation of the appraisal report referred to in item 10.1 of the Novo Mercado Regulation, one of the three appraisal companies appointed by the Board of Directors.

We clarify that, pursuant Article 21 of CVM Instruction 481/09, the information contained in Exhibit 21 of CVM Instruction 481/09 is detailed in Annex I to this Proposal.

We further clarify that, as indicated in the material fact disclosed by the Company on October 27, 2017, RHI Magnesita NV and / or its subsidiaries will submit to the CVM and B3, through an intermediary institution, an application for registration of a public offering of the Company's acquisition of shares to be launched as a result of the sale of the Company's control ("OPA of 254-A"), as well as a lawsuit to unify the OPA of 254-A with the public offer for the cancellation of the publicly-held company of the Company and the public offer for the Company to exit the Novo Mercado ("Unified Offer"). Accordingly, the Unified Offer will only

be launched upon approval

of the registration by the CVM and B3, subject to the other

conditions set forth in such relevant fact.

5. Election of members and respective alternates of the Board of Directors.

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   The information, pursuant items 12.5 to 12.10 of the Reference Form, for applicants is available in Annex II to this Proposal.

   Considering that the Company's Board of Directors is composed of a fixed number of nine (9) members, and in view of the vacancy of certain positions, as provided for in the Meetings of the Board of Directors on June 7, 2017 and October 27, 2017, pursuant to Article 12, paragraph 7th

   of the Company's Bylaws

   and Art. 150 of the Brazilian Corporate

   Law, Magnesita's

   Management recommends the election of the following members to be members of the Board of Directors, with term of office until the General Meeting of the Company that approves the accounts for the fiscal year ended on December 31, 2018:
6. STEFAN BORGAS, German, married, business manager, bearer of

   German passport no. C4JTCMZ87, domiciled

   in Austria, at

   Wienerbergstrasse 9, 1100, Vienna, as Vice-President of the Board of Directors, and GERD SCHUBERT, German, married, business manager, bearer of German passport no. CG6PMRC1L, domiciled in Austria, at Wienerbergstrasse 9, 1100, Vienna, as his alternate member for the Vice-President position of the Board of Directors.

7. ROBERT RANFTLER, Austrian, divorced, lawyer, bearer of Austrian passport no. P3315715, domiciled in Austria, at Wienerbergstrasse 9, 1100, Vienna, as member of the Board of Directors, and Ms. LÍVIA MARIZ JUNQUEIRA, Brazilian, married, lawyer, bearer of the identity card no. 28.507.702-8, issued by SSP-SP, enrolled before the Individual Taxpayer's Registry (CPF/MF) under no. Dr. Eduardo de Souza Aranha,

   387 -

   5th floor, Vila Nova Conceição, ZIP Code 04543-121, as his

   alternate member of the Board of Directors.

8. EDUARDO GUARDIANO LEME GOTILLA, Brazilian, married, economist, bearer of the identity card no. 10.191.051-1, issued by SSP- RJ, enrolled before the Individual Taxpayer's Registry (CPF/MF) under

   no. 016.697.767-51, resident and domiciled in

   London, United

   Kingdom, at 22A St James Square SW1Y 4JH, as member of the Board of Directors; and ALEXANDER SCHILLINGER, Austrian, business manager, bearer of Austrian passport no. U1536714, resident and domiciled in Austria, at -1100 Vienna, Wienerbergstrasse 9, as his alternate member of the Board of Directors;

9. GILMAR FAVA CARRARA, Brazilian, married, business manager, bearer of the identity card no. MG1577298, issued by SSP/MG, enrolled before the Individual Taxpayer's Registry (CPF/MF) under no. 236.560.936-87, with office in the City of Contagem, state of Minas Gerais, at Praça

Louis

Ensch, nº 240, Cidade Industrial, ZIP Code 32210-050, as

member of the Board of Directors, and GUSTAVO PECORARI, Brazilian, married, business manager, bearer of the identity card no. 32.209.286-3,

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issued by SSP-SP, enrolled before the Individual Taxpayer's Registry (CPF/MF) under no. 303.459.698-71Dr. Eduardo de Souza Aranha, 387

- 5th floor, Vila Nova Conceição, ZIP Code 04543-121, as his alternate

member of the Board of Directors.;

We clarify that, under the terms of art. 10 of CVM Instruction 481/09, the information on items 12.5 to 12.10 of the Reference Form established by CVM Instruction 480/09 referring to the candidates for positions of members of Company's Board of Directors indicated above are detailed in Annex II to this Proposal.

2. To approve the amendment of Article 5th of Company's Bylaws in order to reflect the current number of shares that compose company's capital, in accordance with the terms approved by the Board of Directors at a meeting held on October 11, 2017, as well as the consolidation of the Bylaws of the Company.

As a result of the cancellation of shares held in treasury considering Company's 5th Share Buyback Program, pursuant to the terms approved at a meeting of the Company's Board of Directors held on October 11, 2017, Management submits to the Company's shareholders meeting a proposal to amend article 5th of the Company's Bylaws in order to reflect the new number of shares that compose Company's capital, as well as the consolidation of the Company's Bylaws, in the terms indicated in Annex III to this proposal.

We clarify that, under the terms of art. 11 of CVM Instruction 481/09, a copy of the by-laws

containing the proposed changes in highlight; and report detailing

the origin and

justification of the proposed amendments and analyzing their legal and economic effects are detailed in Annex III to this Proposal.

Regards,

MANAGEMENT

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