Consecutive term of offices
José Ronaldo Vilela Rezende
|
06/07/1962
|
Fiscal Council
|
04/24/2020
|
Until the 2021 AGM
|
501.889.846-15
|
Accountant
|
Fiscal Council (full member) / elected by controlling shareholder
|
05/06/2020
(estimated)
|
Yes
|
Not applicable, since the only position held in the Company is member of the Fiscal Council.
|
|
|
|
Member elected by controlling shareholder
|
|
|
|
5th term of office
|
|
|
|
Elidie Palma Bifano
|
05/16/1947
|
Fiscal Council
|
04/24/2020
|
Until the 2021 AGM
|
395.907.558 - 87
|
Lawyer
|
Fiscal Council (full member) / elected by controlling
|
05/06/2020
(estimated)
|
Yes
|
Not applicable, since the only position held in the Company is member of the Fiscal Council.
|
|
|
|
Member elected by controlling shareholder
|
|
|
|
2nd term of office
|
|
|
|
Vinicius Balbino Bouhid
|
08/06/1961
|
Fiscal Council
|
04/24/2020
|
Until the 2021 AGM
|
667.460.867/04
|
Bank employee and civil engineer
|
Fiscal Council (full member) / elected by minority shareholders
|
05/06/2020
(estimated)
|
No
|
Not applicable, since the only position held in the Company is member of the Fiscal Council.
|
|
|
|
Member elected by minority shareholders.
|
1st term of office
|
|
|
|
Carlos Tersandro Fonseca Adeodato
|
01/02/1954
|
Fiscal Council
|
04/24/2020
|
Until the 2021 GM
|
337.770.397/72
|
Economist
|
Board member (alternate) / elected by minority shareholders
|
05/06/2020
(estimated)
|
No
|
Not applicable, since the only position held in the Company is member of the Fiscal Council.
|
|
|
|
Member elected by minority shareholders.
|
1st term of office
|
|
|
|
Emanuel Sotelino Schifferle
|
02/27/1940
|
Fiscal Council
|
04/24/2020
|
Until the 2021 AGM
|
009.251.3 67-00
|
Engineer
|
Fiscal Council (alternate) / elected by controlling shareholder
|
05/06/2020
(estimated)
|
Yes
|
Not applicable, since the only position held in the Company is member of the Fiscal Council.
|
|
|
|
Member elected by the controlling shareholder
|
|
|
|
8th term of office
|
|
|
|
Eduardo Rogatto Luque
|
07/06/1969
|
Fiscal Council
|
04/24/2020
|
Until the 2021 AGM
|
142.773.658-84
|
Contador
|
Fiscal Council (alternate) / elected by controlling shareholder
|
05/06/2020
(estimated)
|
Yes
|
Not applicable, since the only position held in the Company is that of Fiscal Council member.
|
|
|
|
Member elected by the controlling shareholder
|
|
|
|
8th term of office
|
|
|
|
108
Professional experience / Declaration of any convictions
|
|
|
|
|
José Ronaldo Vilela Rezende – 501.889.846-15
Over the past five years, he held the following positions with the following companies / institutions for the periods shown: (i) member of the audit committee of Cerradinho Bioenergia S.A. since September 2016; (ii) member of the audit committee of Diagnósticos da America S.A. – DASA since April 2017; and (iii) full member of the Company’s Fiscal Council. In addition, he performed the duties of risk management partner of the consulting practice at PricewaterhouseCoopers Brazil from 2005 to 2011, principal activity auditing services; PricewaterhouseCoopers's Agribusiness industry leader in Brazil (2006-2014) and the Americas (2009-2014); and PricewaterhouseCoopers partner in charge of delivering Risk Assurance Services (RAS) (related to auditing processes and systems) from 1998. He is Fiscal Council member certified by the Brazilian Institute of Governance (IBGC). Bachelor's degree in Accounting from UMA in Belo Horizonte and master's in Agroenergy from Fundação Getúlio Vargas (FGV) in São Paulo. Mr. José Vilela Rezende has declared that, for all legal purposes, he has not in the last five years been subject to the effects of any criminal conviction, any conviction or penalty arising from administrative proceedings before the CVM, or any final verdict in the judicial or administrative sphere, that led to suspension or disqualification from the practice of any professional or commercial activity.
Elidie Palma Bifano - 395.907.558 - 87
Over the past five years, she held the following positions with the following companies / institutions for the periods shown: (i) partner of Mariz de Oliveira and Siqueira Campos Law Firm; (ii); (ii) professor of the Professional Master's Course of the São Paulo Law School of Fundação Getúlio Vargas - FGV, in the course Business Structuring; (iii) Professor of the post-graduation courses strictu sensu of IBDT, IBET, CEU, COGEAE / PUC; and (iv) member of the Audit Committee of Banco Santander (Brasil) S.A., from 2012 to 2018. In addition, she was audit partner of the tax consultancy area at PricewaterhouseCoopers – PWC, from 1974 to 2012. Mrs. Elidie Palma Bifano declared that for all legal purposes she has not in the last five years been subject to the effects of any criminal conviction, any conviction or penalty in administrative proceedings before the CVM or any final verdict in the judicial or administrative sphere that led to suspension or disqualification from the practice of any professional or commercial activity.
Vinicius Balbino Bouhid - 667.460.867/04
Over the past five years he has held the following positions in the following companies for the periods stated: (i) regular fiscal council at Norte Energia S.A. since May 2017; and (ii) alternate fiscal council at the Company. In addition, he performed the duties of statutory director general (CEO) of the London asset management firm BB Securities Ltd. from 2013 to 2015, where he introduced new governance structure with a compliance team and new processes; executive manager from 2009 to 2013, responsible for corporate governance and private equity at BB Securities Ltd. in London; member of the board of directors of Banco do Brasil Securities in London from 2013 to 2015; and member of the Fiscal Council of Companhia de Eletricidade do Estado da Bahia (Coelba), which operates in the electricity sector from 2011 to 2013. Holder of a Civil Engineering degree from Universidade de Brasília and an Executive MBA from Universidade de Mato Grosso. Mr. Vinicius Balbino Bouhid declared that for all legal purposes in the last five years he has not been subject to the effects of any criminal conviction, any conviction or penalty in administrative proceedings before the CVM or any final verdict in the judicial or administrative sphere that led to suspension or disqualification from the practice of any professional or commercial activity.
Carlos Tersandro Fonseca Adeodato - 337.770.397/72
Over the past 5 years, he has been involved in advising and consulting at the Company Comatrix Soluções Ltda., located in Rio de Janeiro, and at DOT Digital Group, located in Santa Catarina, besides being the representative in Brazil of HydroCarbon Dynamics (HCDi), subsidiary of Indago Energy, with headquarters in Australia. In addition, he performed the duties of Chief Financial and Investor Relations Officer at HRT Participações em Petróleo and of Chief Financial Officer at HRT Exploração em Petróleo Ltda from 2010 to 2013.
Bachelor of Economic Sciences from Universidade Federal do Rio de Janeiro (Federal University of Rio de Janeiro). Mr. Carlos Tersandro Fonseca Adeodato declared that for all legal purposes he has not in the last five years been subject to the effects of any criminal conviction, any conviction or penalty in administrative proceedings before the CVM or any final verdict in the judicial or administrative sphere that led to suspension or disqualification from the practice of any professional or commercial activity.
109
Emanuel Sotelino Schifferle - 009.251.367-00
Over the past five years, he has held the following positions in the following companies for the periods stated: (i) managing partner of ASPA Assessoria e Participações S/C Ltda., a company whose main activity is advising companies on restructuring, acquisition, negotiating contracts and transitional management, having managed companies under judicial recovery, reorganizing and restructuring companies, and renegotiating contracts among other activities; and (ii) alternate member of the Company’s Fiscal Council. In addition, he performed the duties of member of the Fiscal Council, from 2004 to 2009, of América Latina Logística (ALL), a listed company whose main activity is providing rail and road transportation services; alternate member of the Fiscal Council from 2005 to 2014 at Companhia de Bebidas das Américas (Ambev), succeeded by the Company as of January 2, 2014; member of the board of directors from 2007 to 2011 of São Carlos Empreendimentos e Participações S.A., a listed company whose main activity is managing property development projects for itself and third parties; member of the Fiscal Council of Estácio Participações S.A., a listed company whose main activities are development and management of educational activity and institutions; and member of the Fiscal Council from 2011 to 2015 of Allis Participações S.A., a publicly listed company whose main business is providing marketing and sales services for various segments. Mr. Emanuel Sotelino Schifferle has declared for all legal purposes that in the last five years he has not been subject to the effects of any criminal conviction, any conviction or penalty in administrative proceedings before the CVM or any final verdict in the judicial or administrative sphere that led to suspension or disqualification from the practice of any professional or commercial activity.
Eduardo Rogatto Luque - 142.773.658-84
In the past 5 years, he has held the following positions in the following companies/institutions: (i) Managing Partner and leader of the areas of Quality and Technical Committee of the Irko Group, since August, 2016; (ii) full member of the Fiscal Council of Qualicorp S.A. (Coordinator), Itaúsa S.A. and Fundação Zerrenner, since May, 2019; (iii) Strategy Director at ABRAPSA - Brazilian Association of Administrative Service Providers, since 2019; (iv) member of the Institute of Independent Auditors of Brazil (IBRACON); (v) member of California AICPA (CALAICPA); (vi) member of the Brazilian Institute of Corporate Governance (IBGC), since 2016, and (vii) member of the Brazilian Accounting Institutes (CRC and CFC). In addition, he was a partner at PricewaterhouseCoopers, from 2004 to 2016, a company he worked for for 27 years. He holds a BA in Accounting from the Pontifical Catholic University of São Paulo (PUC-SP) and an MBA in Controllership from the University of São Paulo (USP). Mr. Eduardo Rogatto Luque declared, for all legal purposes that, in the last 5 years, he has not been subject to the effects of any criminal conviction, any conviction or penalty in an administrative proceeding before the CVM or any final verdict in the judicial or administrative sphere that led to suspension or disqualification from the practice of any professional or commercial activity.
110
12.6- For each person who acted as a member of the board of directors or the Fiscal Council in the last year, state in tabulated format their percentage attendance at meetings held by the respective body in the same period that occurred after taking office.
Fiscal Council
|
Total meetings held by the respective body since date of taking office*
|
Member's percentage attendance at meetings held by the respective body in the same period, after taking office
|
José Ronaldo Vilela Rezende
|
8
|
100%
|
Elidie Palma Bifano
|
8
|
100%
|
Aldo Luiz Mendes
|
8
|
88%
|
Vinicius Balbino Bouhid
|
8
|
100%
|
Emanuel Sotelino Schifferle
|
8
|
88%
|
Ary Waddington
|
8
|
88%
|
Eduardo Rogatto Luque
|
Not applicable; this will be his first term.
|
Not applicable; this will be the first term.
|
* Meetings held from 05/06/2019 (when all members took office) until 03/15/2020.
12.7 - Provide information mentioned in item 12.5 in relation to members of the statutory committees and of the audit, risk, financial and compensation committees, even if such committees or structures are not statutory.
Not applicable. None of the members designated for the Fiscal Council are part of any of the Company's committees.
12.8 - For each person who acted as a member of the statutory committees or the audit, risk, financial and compensation committees, even if such committees or structures are not statutory, state in tabular format, their percentage attendance at meetings held by the respective body in the same period that occurred after taking office.
Not applicable. None of the members designated for the Fiscal Council are part of any of the Company's committees.
12.9 - Any marital, 'stable union' or kinship relationship up to the 2nd degree related to management of the issuer, its subsidiaries or controlling shareholders
e) the Company's management:
Not applicable, since there are no cases of marital, 'stable union' or kinship relations to the second degree among those nominated for positions as members of the Fiscal Council and its management.
b) members of Company's management and its directly and indirectly held subsidiaries:
Not applicable, since there are no cases of marital, 'stable union' or kinship relations to the second degree among those nominated for positions as members of the Fiscal Council and managers of the Company's directly or indirectly held subsidiaries
c) members of Company's management and its directly or indirectly held subsidiaries:
Not applicable, since there are no cases of marital, 'stable union' or kinship relations to the second degree among those nominated for positions as members of the Fiscal Council and the Company's directly or indirectly controlling shareholders.
d) members of Company's management and its directly or indirectly held subsidiaries:
Not applicable, since there are no cases of marital, 'stable union' or kinship relations to the second degree among those nominated for positions as members of the Fiscal Council and the management of the Company's directly or indirectly controlling shareholders.
111
12.10 - Relationships of subordination, providing services or control between management and subsidiaries, controlling shareholders or another
d) company directly or indirectly controlled by the Company, except those in which the Company directly or indirectly holds all share capital:
Not applicable, since there are no relations of subordination, service or control maintained in the last three fiscal years, among those nominated for the Fiscal Council members and those of any company directly or indirectly controlled by the Company, except those in which the Company directly or indirectly holds all share capital.
e) directly or indirectly controlling shareholder of the Company:
Identification
Position/duties
|
Taxpayer No. (CPF/CNPJ)
|
Relationship between manager and related person
|
Type of related person
|
Manager of the issuer
|
Eduardo Rogatto Luque
|
142.773.658-84
|
Service Supplier
|
Direct controlling shareholder
|
Member of the Company's Fiscal Council
|
Related Person
|
Fundação Zerrenner
|
60.480.480/0001-67
|
|
|
Member of Fundação Zerrenner’s Fiscal Council.
|
Note
|
N/A
|
f) if material, supplier, client, debtor or creditor of the Company, its subsidiaries or parent companies or subsidiaries of any of these persons, if material:
Not applicable, since there are no relevant relations of subordination, service or control maintained in the last three fiscal years among those nominated for the Company's Fiscal Council member positions and any supplier, client, debtor or creditor of the Company, its subsidiaries or controlling shareholders or subsidiaries of any of these persons.
***
112
Exhibit A.V – Compensation of the Management
(as item 13 of Exhibit 24 to CVM Instruction 480/09)
13.1 Compensation policy and practice for the Board of Directors, Board of Officers, Fiscal Council, Statutory Committees and Audit, Risk, Financial and Compensation Committees regarding the following aspects:
a. purposes of the compensation policy or practice, informing if the compensation practice was formally approved, the body responsible for its approval, approval date and, if the issuer discloses the policy, websites in which the document may be found:
The main purpose of the compensation policy of the Company is to establish a compensation system applicable to the management which encourages the development of a culture of high performance, keeping key personnel of the Company over the long term, while ensuring that the best people are hired and retained, and the interests of the management are aligned with those of shareholders.
The Company has a "Remuneration and Stock Option Policy for the Board of Officers", whose provisions were consolidated and approved at a meeting of the Board of Directors held on September 19, 2018. The Remuneration and Stock Option Policy for the Board of Officers may be found at the following electronic address: ri.ambev.com.br, in the section “Corporate Governance”, “Policies and Codes”, “Remuneration Policy for the Board of Officers”.
There is no policy formally approved for the remuneration of the Board of Directors and its advisory committees, nor the Fiscal Council.
b. compensation elements, indicating:
i. description of the elements of the compensation and the purposes of each of them
Pursuant to article 15, paragraph 1, of Company’s Bylaws, the global amount of the Company’s compensation is fixed annually by the Annual General Meeting, the compensation being distributed among the bodies by the Board of Directors.
The elements of the compensation of these bodies are described below:
a) Board of Directors
The compensation of the members of the Board of Directors is divided into: (i) a fixed compensation that is in line with market average; and (ii) a variable compensation, considering the sustainable growth of the Company and its long-term businesses, designed to stimulate and reward significant accomplishments by means of participation on the results. The Company also has a Stock Option Plan (“Option Plan”) and a Share-Based Payment Plan (“Stock Plan” and, together with the Option Plan, “Plans”), for more information see item 13.4 of this Reference Form. Additionally, certain members of the Board of Directors also participate in a private pension fund to which the Company also makes partial contributions, as described in item 13.10 of this Reference Form.
b) Board of Officers
Executive Officers have their compensation divided into fixed and variable components, provided that the base pay (the fixed component) is in line with market average, while the main focus is on the variable compensation (participation on the results) and on the long-term incentives. The members of the Board of Directors are also entitled to stock and/or options granted under the Plans, and, potentially, in the case of executives identified to have high potential in the long term, the granting of Share Appreciation Rights (as defined in item 13.4 below). The goal is to stimulate the alignment of interests for long-term value generation.
The Executive Officers are entitled to the benefits provided for in the benefits policy of the Company, pursuant to item 14.3(2) of the Company’s Reference Form. Such benefits include medical, dental, educational and social assistance to executive officers and their dependents, free of costs or at a reduced
cost. In addition, certain executive officers participate in a private pension plan to which the Company makes partial contributions, as described in item 13.10 of this Reference Form.
113
c) Fiscal Council
The members of the Fiscal Council receive a fixed compensation that corresponds, at least, to the legal minimum resolved by the Shareholders’ Meeting. The compensation paid to each member should not be lower than ten percent of the compensation assigned to each Executive Officer, considering the average amount received by the Executive Officers, excluding any benefits, representation allowances and participation on the results. The compensation of the alternate members is equivalent to 50% of the compensation of the effective members. Additionally, the members of the Fiscal Council shall be mandatorily reimbursed for transportation and lodging expenses, which may be necessary to perform their functions. The members of the Fiscal Council are not entitled to receive variable compensation.
d) Committees
All members of the Related Parties and Antitrust Conducts Committee and the members of the Operations, Finance and Compensation Committee that are part of the Board of Directors of the Company do not receive any specific compensation for their activities in those Committees. Members, who do not meet this condition, receive annual fixed fees aligned with the market average and annually updated based on the IPCA variation and are not entitled to receive variable compensation. Additionally, all members of the Committees shall be mandatorily reimbursed for transportation and lodging expenses, which may be necessary to perform their functions.
ii. regarding the 3 last fiscal years, what is the participation of each element in total compensation
2019
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Committees
|
Fixed Compensation
|
45.35%
|
31.72%
|
100%
|
100%
|
Fees
|
37.79%
|
25.37%
|
83.33%
|
100%
|
Direct and indirect benefits
|
0.00%
|
1.37%
|
-
|
-
|
Charges
|
7.56%
|
4.97%
|
16.67%
|
-
|
Variable compensation
|
7.84%
|
11.43%
|
-
|
-
|
Share-based payment and stock Options
|
46.82%
|
56.85%
|
-
|
-
|
2018
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Committees
|
Fixed Compensation
|
44.09%
|
36.85%
|
100%
|
100%
|
Fees
|
36.74%
|
28.69%
|
83.28%
|
100%
|
Direct and indirect benefits
|
0.00%
|
2.10%
|
-
|
-
|
Charges
|
7.35%
|
6.06%
|
16.72%
|
-
|
Variable compensation
|
3.26%
|
5.80%
|
-
|
-
|
Share-based payment and stock options
|
52.65%
|
57.36%
|
-
|
-
|
2017
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Committees
|
Fixed Compensation
|
33.50%
|
26.70%
|
100%
|
100%
|
Fees
|
27.91%
|
20.90%
|
83.33%
|
100%
|
Direct and indirect benefits
|
0.00%
|
1.62%
|
-
|
-
|
Charges
|
5.58%
|
4.18%
|
16.67%
|
-
|
Variable compensation
|
10.67%
|
20.29%
|
-
|
-
|
Share-based payment and stock options
|
55.84%
|
53.01%
|
-
|
-
|
114
The proportion of the elements of compensation of the Board of Directors and the Board of Officers described above tends to repeat, to a greater or lesser degree, in years when the Company meets the eligible targets for distribution of variable compensation.
Variable compensation is determined according to the performance verified in relation to pre-established targets. Consequently, in case the minimum targets established are not fulfilled, no variable compensation will be due.
The compensation of the members of the Fiscal Council is 100% fixed, of which 83.33% corresponds to fees and 16.67% corresponds to charges on remuneration (percentages applicable to the years 2019, 2018, and 2017) and are reimbursed for their travels and lodging expenses required for the performance of their duties.
The members of the Committees that are not part of the Company’s Board of Directors have 100% of their compensation composed of annual fixed fees and are reimbursed for their travels and lodging expenses required for the performance of their duties.
iii. methodology for calculation and restatement of each of the compensation elements
The overall compensation of the management, as approved by the Annual Shareholders’ Meeting, is restated annually based on a market research carried out according to the terms indicated in sub-item (h) (ii) below and periodically assessed by the Company’s People & Management area, so as to secure that the amounts paid are sufficient to meet the specific objectives in relation to the market.
The variable compensation, when paid in cash, is calculated as a multiple of fixed compensation, provided that the target conferred on the manager and the Company have been achieved.
Regarding the determination of the amount of stock options to be granted under the Option Plan, please refer to items 13.4 and 13.8 below. For a description of the determination of the benefit resulting from Share Appreciation Rights, please refer to item 13.4 below. For a description related to the Stock Plan, please refer to item 13.4 below.
Both for the purpose of compensation and for the purpose of granting stock / options are also taken into account the achievement of annual targets and other results delivered in the year, meritocracy criteria and the seniority level of the executive.
Please refer to sub-item “h” below for further information.
iv. reasons behind the compensation elements
Compensation of the management is defined to encourage its members to meet short and long-term results for the Company. On this regard, the Company secures a fixed compensation based on market research, however, encouraging the achievement of expressive results to obtain a variable compensation above market average. Therefore, Company’s targets must be challenging but achievable.
The possibility of granting options and shares encourages the blending of interests of the shareholders and the management over the long-term, upon the free or onerous receipt, as the case may be, of the Company’s shares by its management, which shares shall be subject to restrictions on sale or delivery, contingent upon continued employment with the Company for a certain period of time. Also, additional shares may be granted depending on the reinvestment level of the variable compensation.
Finally, the Company has decided to adopt, for certain executives deemed strategic and with high performance potential, the granting of Share Appreciation Rights, enabling such participants to receive cash bonus based on the value of the shares of the Company. The granting of Share Appreciation Rights, however, is contingent upon the continued employment of executives with Company for a long or very long term, since the amounts have a lock-up period of five or ten years, then encouraging the retaining of strategic talent and generating value for shareholders in the long term.
115
In relation to the Fiscal Council and the Committees, the intention is to secure compensation compatible with the limits defined in applicable legislation, ensuring that its members are duly rewarded to perform their duties.
v. the existence of members who do not receive compensation and the reason for that
In addition to the alternate members, there are five members of the Board of Directors that do not receive compensation from the Company. Said members are also part of the management of the Parent Company (Anheuser-Busch InBev S.A./N.V - “ABI”), which bears payment of compensations to these members.
c. key performance indicators taken into account for determining each compensation element:
The key performance indicators for purposes of defining the variable compensation based on the achievement of goals either for the Company or its management are: EBITDA, cash flow and net revenues, in addition to other specific indicators for the various departments of the Company, according to their respective functions and competencies.
d. how is the compensation structured to reflect the progress of performance indicators:
The variable compensation (profit sharing) is defined according to the following basis: (i) below a certain level of target achievement, no variable compensation shall be due, but, on the other hand, outstanding accomplishments of targets must be compensated with participation on the results comparable to or even higher than top levels in the market; and (ii) variable compensation will only be granted if both the targets of the Company and those targets of the manager are achieved.
The managers have the possibility to reinvest their variable compensation in the Company, by using said compensation, in total or in part, for the exercise of the stock option granted within the Option Plan. In this event, the Company may grant to said executives additional shares or options, depending on the reinvestment level of their variable compensation.
For high potential executives, the Company also adopts a variable pay practice defined as Share Appreciation Rights. According to such practice, the executives receive, after vesting periods varying between five and ten years, a value per share corresponding to the closing price of shares or American Depositary Receipts (“ADRs”) issued by the Company at B3 S.A. - Brasil, Bolsa, Balcão (“B3”) or at the New York Stock Exchange (“NYSE”), as applicable, on the trading session immediately before the respective vesting periods.
e. how the compensation policy or practice is aligned with short, medium and long-term interests of the Company:
The fixed compensation is a compensation based on market research, but as the segment cycle in which the Company operates in is the segment of medium and long term, the alignment of the compensation to the interests of the Company is verified by means of the granting of a substantial portion of compensation referred to those periods.
The medium-term income is aligned with the compensation policy of the Company as to the payment of the profit sharing. In this case, the income of the Company and the results of its management during the year will affect the amount to be assigned as variable pay.
Additionally, the Option Plan requires a commitment of funds over the long-term, by virtue of the vesting term, the restriction on sale applicable to the corresponding shares or the delivery of stock options or shares being contingent upon the executive continued employment with the Company.
The Stock Plan reinforces the need for a long-term commitment, once the delivery of the Company’s shares is contingent upon the executive continued employment with the Company and the lapse of a vesting period.
Share Appreciation Rights occasionally granted to elected high potential executives by the Company, align the long-term and very long-term interests by means of the possibility of receiving, after the vesting
periods of five or ten years, the amount corresponding to the appreciation of the shares issued by the Company, to encourage the retaining of talent as well as such appreciation of shares.
116
As such, it is understood that the compensation policy of the Company is totally aligned with the monitoring of its performance and, therefore, reaffirms the sharing of the risk and profits among the Company’s managers.
f. existence of compensation borne by direct or indirect subsidiaries or controlling companies:
On November 25, 2008, some Company managers received stock options of shares issued by ABI, the controlling shareholder of the Company, totaling approximately five million options, with approximately one million options for members of the Board of Officers, at the time, and approximately 4 million for members of the Board of Directors, at the time. Each of such options entitles the acquisition of one common share issued by ABI. One half of those options became exercisable on January 1st, 2014 and the other half became on January 1st, 2019. In both cases the options may be exercised within five years at an exercise price of €10.32, corresponding to the market price of the shares of ABI on the date the options were granted. Moreover, the exercise of such options also depended on ABI’s net debt to EBITDA ratio to fall below 2.5 before December 31, 2013, which has been achieved. In 2016, there was a grant of restricted shares issued by ABI, in accordance with the applicable lock-up terms, in a total amount of approximately one hundred and seven thousand restricted shares, of which approximately two thousand and five hundred for members of the Board of Executive Officers and one hundred and four thousand restricted shares to the members of the Board of Directors.
In 2017, certain members of the Board of Directors received 2.1 million in stock options relating to shares issued by ABI and certain members of the Board of Officers received 2.2 million in stock options relating to shares issued by ABI, being 3.75 million in stock option conditional on achieving CAGR EBITDA of 7% in the fifth year. In case the condition is not met, a new evaluation will be made for the sixth year and later for the seventh year. The remaining stock options do not have a performance condition and have a vesting term of 5 years. In addition, in 2017, there was a concession of restricted shares issued by ABI in the total amount of 0.4 million shares with a vesting term of 5 years
In 2018, certain members of the Board of Directors received 2.3 million in ABI options and certain members of the Board of Officers received 0.01 million in ABI options, being 1.7 million in options that are conditional on achieving CAGR EBITDA of 7% in the fifth year. In the case the condition is not met, a new evaluation will be made for the sixth year and later for the seventh year. The remaining stock options do not have a performance condition and have a vesting term of 5 years. In addition, in 2018, there was a concession of restricted shares issued by ABI in a total of 0.2 million shares with vesting term of 5 years.
In 2019, certain members of the Board of Directors received 0.5 million in ABI options and no member of the Board of Officers received ABI options. The options have a vesting term of 5 years. In addition, in 2019, there was a concession of restricted shares issued by ABI in a total of 0.4 million shares with vesting term of 5 years.
g. existence of any compensation or benefit connected to the occurrence of a certain corporate event, such as the sale of corporate control of the Company:
Not applicable once there is no compensation or benefit connected to the occurrence of any corporate event.
h. practices and procedures adopted by the Board of Directors to define the individual compensation of the Board of Directors and Board of Officers, appointing:
i. the bodies and committees of the issuer that participate in the decision-making process, identifying the form in which they participate
The following bodies participate in the decision-making process for the definition of the individual compensation of the Board of Directors and the Board of Officers of the Company: the Operations, Finance and Compensation Committee and the Board of Directors. The Compensation, Financial and Operation Committee is responsible for providing an opinion on the management’s proposal to be
assessed by the Board of Directors concerning the definition of the compensation policy for the high-performance management and employees of the Company, including their individual compensation packages, in order to the ensure that the beneficiaries have the proper compensation and incentives to reach an exceptional and sustainable performance. On the other hand, the Board of Directors is responsible for deciding on the recommendation presented by the Operations, Finance and Compensation Committee, as well as defining the criteria for the granting of stock / options, compensation and benefits (indirect benefits, participation on the results etc.) of the top management and employees (that is, the managers or holders of equivalent officer positions) of the Company.
117
ii. criteria and methodology used to establish the individual compensation, appointing if studies were used to verify the market practices and, if yes, the comparison criteria and scope of said studies
The fixed and variable individual compensation of the members of the Board of Directors was defined based on a remuneration survey conducted with large public companies and is updated annually based on the IPCA variation until the Board of Directors deems it necessary to engage at a new compensation survey. All directors receive the same remuneration, being noted that (i) the directors compensated by the controlling shareholder and the alternates do not receive any fees from the Company; and (ii) the co-chairman of the Board of Directors compensated by the Company has different compensation due to his unique experience in the sector in which the Company operates, his greatest attributions and his longer time of dedication.
The fixed and variable individual compensation of the members of the Board of Officers is defined based on an annual remuneration survey, using the group of companies classified as “non-durable consumer goods” in the comparison. For the definition of fees, the monthly amount paid by the median of the companies involved in the survey is used as reference. If there is a positive variation of this indicator in relation to the previous year, the reference of the previous year is updated. After updating the market benchmark for each position level, the fees are set by varying according to meritocracy criteria and the seniority level of the executive. Without prejudice to the evaluation by the Operations, Finance and Compensation Committee and by the Board of Directors, as indicated in item (i) above, the fees of the Board of Officers are analyzed annually by the Company’s People & Management area, which may make adjustment recommendations, if necessary. Any recommendations need to be approved by the CEO to be implemented.
iii. the frequency and method in which the Board of Directors assesses the adequacy of the compensation policy of the issuer
Annually, the Operations, Finance and Compensation Committee evaluates the retention of the Company’s talents, which includes the analysis of the need to adapt the compensation practices adopted by the Company. If this Committee deems it necessary, it is proposed to the Board of Directors to adjust these practices. In addition, the goals of executives, whose achievement is decisive in the determination of the amount to be paid by the Company as variable compensation and the amount of stock options to be granted are reviewed and validated by the Board of Directors annually.
118
13.2. Regarding the compensation of the Board of Directors, Board of Officers and Fiscal Council recognized in the income statement for the three previous fiscal years and forecasts for current year
Forecast for 2020
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of Members
|
13.00
|
11.67
|
6.00
|
30.67
|
No. of members receiving compensation
|
8.00
|
11.67
|
6.00
|
25.67
|
Annual Fixed Compensation
|
-
|
-
|
-
|
-
|
Salary/fees
|
5,866,441.00
|
15,030,603.00
|
1,802,250.00
|
22,699,294.00
|
Direct and indirect benefits
|
-
|
-
|
-
|
-
|
Compensation for sitting on Committees
|
-
|
-
|
-
|
-
|
Other
|
1,173,288.00
|
2,999,299.00
|
360,450.00
|
4,533,037.00
|
Description of other fixed compensation
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
-
|
Variable Compensation
|
-
|
-
|
-
|
-
|
Bonus
|
-
|
-
|
-
|
-
|
Profit sharing
|
5,761,394.00
|
42,587,950.00
|
-
|
48,349,344.00
|
Compensation for attending meetings
|
-
|
-
|
-
|
-
|
Commissions
|
-
|
-
|
-
|
-
|
Other
|
-
|
-
|
-
|
-
|
Description of other variable compensation
|
-
|
-
|
-
|
-
|
Post-Employment Benefits
|
-
|
919,080.00
|
-
|
919,080.00
|
Termination Benefits
|
-
|
-
|
-
|
-
|
Share-based compensation, including stock options (i)
|
6,998,916.00
|
29,742,159.00
|
-
|
36,741,075.00
|
Observation
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
-
|
Total compensation
|
19,800,039.00
|
91,279,091.00
|
2,162,700.00
|
113,241,830.00
|
2019
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of Members
|
13.00
|
10.92
|
5.67
|
29.58
|
No. of members receiving compensation
|
8.00
|
10.92
|
5.67
|
24.58
|
Annual Fixed Compensation
|
-
|
-
|
-
|
-
|
Salary/fees
|
5,413,489.00
|
15,434,648.00
|
1,598,250.00
|
22,446,387.00
|
Direct and indirect benefits
|
-
|
-
|
-
|
-
|
Compensation for sitting on Committees
|
-
|
-
|
-
|
-
|
Other
|
1,082,698.00
|
3,025,520.00
|
319,650.00
|
4,427,868.00
|
Description of other fixed compensation
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
-
|
Variable Compensation
|
-
|
-
|
-
|
-
|
Bonus
|
-
|
-
|
-
|
-
|
Profit sharing
|
1,122,565.00
|
6,955,545.00
|
-
|
8,078,110.00
|
Compensation for attending meetings
|
-
|
-
|
-
|
-
|
Commissions
|
-
|
-
|
-
|
-
|
Other
|
-
|
-
|
-
|
-
|
Description of other variable compensation
|
-
|
-
|
-
|
-
|
Post-Employment Benefits
|
-
|
835,527.00
|
-
|
835,527.00
|
Termination Benefits
|
-
|
-
|
-
|
-
|
Share-based compensation, including stock options
|
6,706,482.00
|
34,586,878.00
|
-
|
41,293,360.00
|
Observation
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
-
|
Total compensation
|
14,325,234.00
|
60,838,118.00
|
1,917,900.00
|
77,081,252.00
|
119
2018
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of Members
|
13.00
|
10.67
|
5.58
|
29.25
|
No. of members receiving compensation
|
8.33
|
10.67
|
5.58
|
24.58
|
Annual Fixed Compensation
|
-
|
-
|
-
|
-
|
Salary/fees
|
5,300,357.00
|
11,602,815.00
|
1,490,306.00
|
18,393,478.00
|
Direct and indirect benefits
|
-
|
-
|
-
|
-
|
Compensation for sitting on Committees
|
-
|
-
|
-
|
-
|
Other
|
1,060,071.00
|
2,450,542.00
|
299,254.00
|
3,809,867.00
|
Description of other fixed compensation
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
-
|
Variable Compensation
|
-
|
-
|
-
|
-
|
Bonus
|
-
|
-
|
-
|
-
|
Profit sharing
|
469,575.00
|
2,344,266.00
|
-
|
2,813,841.00
|
Compensation for attending meetings
|
-
|
-
|
-
|
-
|
Commissions
|
-
|
-
|
-
|
-
|
Other
|
-
|
-
|
-
|
-
|
Description of other variable compensation
|
-
|
-
|
-
|
-
|
Post-Employment Benefits
|
-
|
849,976.37
|
-
|
849,976.37
|
Termination Benefits
|
-
|
-
|
-
|
-
|
Share-based compensation, including stock options(i)
|
7,595,577.00
|
23,201,114.00
|
-
|
30,796,691.00
|
Observation
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
-
|
Total compensation
|
14,425,580.00
|
40,448,713.00
|
1,789,560.00
|
56,663,853.00
|
(i) Amounts arising from the accounting effects provided for in CPC 10 - Share-based Payment.
120
2017
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of Members
|
13.00
|
11.00
|
6.00
|
30.00
|
No. of members receiving compensation
|
9.00
|
11.00
|
6.00
|
26.00
|
Annual Fixed Compensation
|
-
|
-
|
-
|
-
|
Salary/fees
|
5,432,873.00
|
11,038,940.00
|
1,546,354.00
|
18,018,167.00
|
Direct and indirect benefits
|
-
|
-
|
-
|
-
|
Compensation for sitting on Committees
|
-
|
-
|
-
|
-
|
Other
|
1,086,575.00
|
2,207,788.00
|
309,271.00
|
3,603,634.00
|
Description of other fixed compensation
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
Others: refers to INSS employer’s contribution
|
-
|
Variable Compensation
|
-
|
-
|
-
|
-
|
Bonus
|
-
|
-
|
-
|
-
|
Profit sharing
|
2,075,768.00
|
10,713,235.00
|
-
|
12,789,003.00
|
Compensation for attending meetings
|
-
|
-
|
-
|
-
|
Commissions
|
-
|
-
|
-
|
-
|
Other
|
-
|
-
|
-
|
-
|
Description of other variable compensation
|
-
|
-
|
-
|
-
|
Post-Employment Benefits
|
-
|
854,052.00
|
-
|
854,052.00
|
Termination Benefits
|
-
|
-
|
-
|
-
|
Share-based compensation, including stock options(i)
|
10,866,993.00
|
27,998,463.00
|
-
|
38,865,456.00
|
Observation
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
The number of members of each body corresponds to the average annual number of members of each body determined on a monthly basis to two decimal places.
|
|
Total compensation
|
19,462,209.00
|
52,812.478.00
|
1,855,625.00
|
74,130,312.00
|
(i) Amounts arising from the accounting effects provided for in CPC 10 - Share-based Payment.
Note: the alternate members of the Board of Directors and of the Fiscal Council are accounted for in the “number of members” included in the tables above.
121
13.3. Regarding the variable compensation of the Board of Directors, the Board of Officers and the Fiscal Council for the three previous fiscal years and the forecasts for current fiscal year:
Variable compensation – forecast for 2020
|
Body
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of members
|
13.00
|
11.67
|
6.00
|
30.67
|
No. of members receiving compensation
|
1.00
|
11.67
|
0.00
|
12.67
|
Bonus
|
-
|
-
|
-
|
-
|
Minimum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Maximum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Amount provided for in compensation plan in case the targets are met
|
-
|
-
|
-
|
-
|
Amount effectively recognized in the income statement for the fiscal year
|
-
|
-
|
-
|
-
|
Profit sharing
|
|
|
|
|
Minimum amount according to compensation plan
|
210,051
|
1,525,891
|
-
|
1,735,942
|
Maximum amount according to compensation plan
|
5,761,394
|
42,587,950
|
-
|
48,349,344
|
Amount provided for in compensation plan in case the targets are met
|
2,400,581
|
17,387,694
|
-
|
19,788,275
|
Amount effectively recognized in the income statement for the fiscal year
|
-
|
-
|
-
|
-
|
Variable compensation – fiscal year ended on December 31, 2019
|
Body
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of members
|
13.00
|
10.92
|
5.67
|
29.58
|
No. of members receiving compensation
|
1.00
|
10.92
|
0.00
|
11.92
|
Bonus
|
-
|
-
|
-
|
-
|
Minimum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Maximum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Amount provided for in compensation plan in case the targets are met
|
-
|
-
|
-
|
-
|
Amount effectively recognized in the income statement for the fiscal year
|
-
|
-
|
-
|
-
|
Profit sharing
|
|
|
|
|
Minimum amount according to compensation plan
|
204,526
|
1,473,022
|
-
|
1,677,548
|
Maximum amount according to compensation plan
|
5,609,855
|
41,089,772
|
-
|
46,699,627
|
Amount provided for in compensation plan in case the targets are met
|
2,337,440
|
16,834,535
|
-
|
19,171,975
|
Amount effectively recognized in the income statement for the fiscal year
|
1,122,565
|
6,955,545
|
-
|
8,078,110
|
122
Variable compensation – fiscal year ended on 12/31/2018
|
Body
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of members
|
13.00
|
10.67
|
5.58
|
29.25
|
No. of members receiving compensation
|
1.00
|
10.67
|
0.00
|
11.67
|
Bonus
|
-
|
-
|
-
|
|
Minimum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Maximum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Amount provided for in compensation plan in case the targets are met
|
-
|
-
|
-
|
-
|
Amount effectively recognized in the income statement for the fiscal year
|
-
|
-
|
-
|
-
|
Profit sharing
|
|
|
|
|
Minimum amount according to compensation plan
|
504,674
|
2,782,303
|
-
|
3,286,977
|
Maximum amount according to compensation plan
|
4,249,890
|
23,429,920
|
-
|
27,679,810
|
Amount provided for in compensation plan in case the targets are met
|
3,162,886
|
15,499,729
|
-
|
18,662,615
|
Amount effectively recognized in the income statement for the fiscal year
|
469,575
|
2,344,266
|
-
|
2,813,841
|
123
Variable compensation – fiscal year ended on 12/31/2017
Body
|
Board of Directors
|
Board of Officers
|
Fiscal Council
|
Total
|
No. of members
|
13.00
|
11.00
|
6.00
|
30.00
|
No. of members receiving compensation
|
1.00
|
11.00
|
0.00
|
12.00
|
Bonus
|
-
|
-
|
-
|
-
|
Minimum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Maximum amount according to compensation plan
|
-
|
-
|
-
|
-
|
Amount provided for in compensation plan in case the targets are met
|
-
|
-
|
-
|
-
|
Amount effectively recognized in the income statement for the fiscal year
|
-
|
-
|
-
|
-
|
Profit sharing
|
|
|
|
|
Minimum amount according to compensation plan
|
186,364
|
1,153,034
|
-
|
1,339,398
|
Maximum amount according to compensation plan
|
3,923,454
|
24,274,405
|
-
|
28,197,859
|
Amount provided for in compensation plan in case the targets are met
|
969,878
|
6,000,633
|
-
|
6,970,511
|
Amount effectively recognized in the income statement for the fiscal year
|
2,075,768
|
10,713,235
|
-
|
12,789,003
|
(1) As shown in the table of item 13.2 above, the Company only pays profit sharing. Therefore, bonus payment does not apply for the purposes of this item 13.3.
Note: the alternate members of the Board of Directors and of the Fiscal Council are accounted for in the “number of members” included in the tables above.
124
13.4. Regarding the share-based compensation plan applicable to the Board of Directors and Board of Officers in force for the last fiscal year and forecasted for current fiscal year
a. general terms and conditions:
Option Plan
The Option Plan was approved by the Extraordinary Shareholders’ Meeting of the Company held on July 30, 2013 and provides for the general conditions applicable to the granting of options, the criteria to determine its exercise price, its general terms and conditions, and the restrictions on the transfer of shares acquired by its exercise.
The Option Plan is managed by the Board of Directors which grants options establishing the specific terms and conditions applicable to each grant through stock option programs, such as the identification of the beneficiaries, the options’ exercise price, any restrictions to the acquired shares, the vesting periods and the option exercise periods and rules applicable to the termination of the beneficiary’s employment contract, and it may also establish targets related to the performance of the Company. The Board of Directors may further define specific rules applicable to beneficiaries of the Company who have been transferred to other countries, including to the Company’s controlling companies its subsidiaries.
Under the Option Plan, senior employees and management of the Company or its direct or indirect subsidiaries (beneficiaries) are eligible to receive stock options of the Company or ADR based in shares issued by the Company, in the event the beneficiaries do not live in Brazil. Currently, approximately 580 people (including managers and employees) hold stock options for shares of the Company, taking all the programs of the Option Plan the together.
Share Appreciation Right
The Company also received the long-term incentive, approved by the Board of Directors of Companhia de Bebidas das Américas – Ambev on August 26, 2011, granted to some executives identified as high potential by the Company (and such incentive is denominated “Share Appreciation Rights”). Such incentive is beyond the scope of the Option Plan, since it does not involve settlement by the granting or acquisition of shares. Within the scope of the Share Appreciation Rights program, each beneficiary will receive two separate lots of Share Appreciation Rights – (lot A and lot B), as the case may be, in which each Share Appreciation Right will correspond to a share or ADR, as the case may be, subject to lock-up periods of five and ten years, respectively as of the date of their granting. Once such five or ten-year term has elapsed, as applicable, the beneficiary who remains at the Company or in any entity of its group will receive in funds immediately available the amount in Brazilian Reais corresponding to the closing price of shares or ADRs of the Company at B3 or NYSE, respectively, at the trading session immediately before the end of such lock-up terms. The Share Appreciation Rights granted do not concern the delivery, subscription or acquisition of shares or ADRs, and, therefore, will not ascribe to the beneficiary the condition of shareholder of the Company or to any right or prerogative as a result of such condition. The benefits ascribed to the granting of Share Appreciation Rights shall be considered as variable compensation.
Stock Plan
The Company implemented a Stock Plan, approved by the Extraordinary Shareholders’ Meeting held on April 29, 2016, under which certain employees and members of the management of the Company or its subsidiaries, direct or indirect, are eligible to receive shares of the Company including in the form of ADRs, in the event of persons living outside Brazil. The shares that are subject to the Stock Plan are designated “Restricted Shares”.
The Board of Directors has broad powers of organization and management of the Stock Plan, in accordance with its general terms and conditions, and must establish the terms and conditions applicable to each Restricted Shares program (Share-Based Payment Program - “Stock Programs”), which, for its turn, sets the terms and conditions specific to the participants of that program, including the conditions and procedures for transferring the Restricted Shares and rules applicable in case of termination of the employment contract.
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Under the Stock Plan, the participants may receive up to 0.3% of shares corresponding to the Company’s capital stock, and the delivery of the Restricted Shares is exempt from financial consideration.
b. main purposes of the Plan:
The main purposes of the Plan are: (a) to encourage the expansion, the success and the achievement of Company’s corporate purposes and the interests of its shareholders, allowing executives and senior employees to be owners of shares of the Company, in the terms of the Plans, encouraging this way their integration with the Company; and (b) enabling the Company to obtain and maintain, effectively, the services of its executives and senior employees by offering them the possibility of becoming shareholders of the Company, in the terms of the Plans.
The purposes of the Share Appreciation Right incentive are the same described above, aiming at encouraging the alignment of interests for the generation of value in the long term, except for the fact that there is no delivery of shares.
c. how does these plans contribute to these objectives:
The possibility of acquiring or receiving shares issued by the Company under advantageous conditions provided for in the Plans allows the introduction of considerable incentives for the employees and management of the Company to commit to create value over the long term, seeking the future appreciation of shares. In addition, it allows the employees and the managers of the Company to join the interests of the shareholders, the corporate purposes and the growth plans of the Company, maximizing their results. Also, the adopted model expects to be efficient as a mechanism of retention of the key employees and managers due to, mainly, the sharing of the appreciation of the Company’s shares.
d. how does the Plan fit into the Company compensation policy:
The Plans and the incentive of the Share Appreciation Rights encourage the direct commitment of the respective beneficiaries or participants, as the case may be, with the performance of the Company in the medium and long term, once the most substantial portion of asset increase is connected to said performance.
In addition, the Option Plan contains elements that encourage the commitment of beneficiaries by giving them the option to allocate their own funds to purchase shares. Additionally, the Option Plans and the Share Appreciation Rights incentive stimulate the continued employment of executives that the Company deems highly strategic to its business and activities, upon the granting of an attractive variable compensation additional in the long or very long term.
e. how does the Plan aligns the interests of the management with those of the Company in the short, medium and long term:
The options granted under the Option Plan provide for mechanisms that enable lining up the interests of the management in different time horizons. In the short term, the managers participating in the Option Plan are encouraged to contribute to high earnings of the Company, since, at the end of the respective grace periods, when the beneficiaries become owners of the shares of the Company, they will also have the right to receive dividends. Regarding the medium and long term, the models used by the Company to grant stock options allow the allocation of a percentage of the beneficiary’s share on the results to the immediate exercise of the options which will give right to shares that will be subject to restrictions on transfer and delivery contingent upon continued employment of the beneficiary with the Company. For this reason, beneficiaries are expected to have their interests aligned with expectations of appreciation of the shares of the Company in the medium and long term, once the relevant shares will be subject to a lock-up, that is, a period during which they cannot be transferred (please refer to item “l” below). In addition, there are granting models in which the options granted to the beneficiaries are subject to a vesting period during which such shares may not be exercised and, therefore, convertible into shares. Therefore, the granting of options with said characteristics serves as a powerful incentive to align the interests of employees with those of the management of the Company in the long term, due to the possibility of expressive gains in the event of appreciation of the stocks of the Company.
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In the case of the Share Appreciation Rights incentive, grants are essentially designed to align interests in the long and very long term. Any amounts may only be paid by the Company to the beneficiary after the applicable lock-up period of five or ten years, then encouraging a sustainable value generation over the time, and primarily encouraging continued employment of executives deemed strategic or of high potential in relation to the Company’s long-term targets for a term of two to ten years (depending on the program).
The same logic is applicable to the Stock Plan, programs of which the participants only receive the shares after long vesting periods and, further, conditioned to the continuance of the participant in the Company.
f. maximum number of shares covered:
The Option Plan does not provide for a maximum number of options potentially covered by the plan. Nevertheless, the Stock Plan provides for that the global amount of shares to be granted to employees and managers of the Company is up to 0.3% of shares representing the Company’s capital stock.
On December 31, 2019, the maximum number of shares covered by options not yet exercised, in relation to the members of the Board of Officers and the Board of Directors, totaled 20,091,273 common shares issued by the Company, already including the effects of the dilution resulting from the exercise of all options under all programs within the scope of the outstanding Option Plan.
g. maximum number of options to be granted:
The Option Plan does not provide the maximum number of options potentially covered by the plan, it being incumbent upon the Board of Directors to establish the options upon the approval of each program.
Considering that each option ensures to the beneficiary the right to acquire a common share of the Company, the quantity of granted options is connected to the dilution limit described in the second paragraph of item “f” above”. On December 31, 2019, this amount corresponds, in relation to the members of the Board of Directors and Board of Officers, to 20,091,273 options within the scope of all programs in the Option Plan.
This item does not apply to the Stock Plan and the Share Appreciation Rights incentive.
h. conditions to acquire shares:
In relation to the last five fiscal years and in relation to the current fiscal year, in the Company’s programs named Programs 2014.1, 2014.2, 2014.3, 2015.1, 2015.2, 2015.3, 2016.1, 2016.2 e, 2016.3, 2017.1, 2017.2, 2017.4, 2018.1, 2018.2, 2018.4, 2019.1, 2019.2, 2019.4, 2019.5 and 2020.1, all within the Scope of the Option Plan, two types of grant were awarded, as follows: (i) in one type of grant,, the exercise price of the options must be paid on demand (or within five business days), although the delivery of a substantial part of the shares acquired is contingent upon continued employment of the beneficiary with the Company for a term of two to ten years (depending on the program) as of the exercise date; and (ii) in the other type of grant, a beneficiary may only exercise his/her options after a vesting period of five years, upon payment of exercise price on demand, in consideration for the delivery of shares. Under this new model the exercise of options is not conditioned to meeting the Company’s performance targets.
The Share Appreciation Rights incentive does not involve exactly the acquisition of shares. The cash payment by the Company to the beneficiary of the amounts determined based on market prices of shares or ADRs issued by the Company is subject to continued employment with the Company for a term of five years for lot A and ten years for lot B, and it is not contingent upon the Company meeting performance targets.
In the Programs 2018.1, 2018.3, 2018.4, 2019.1, 2019.3, 2019.6 and 2020.1, within the scope of the Stock Plan, the granting was made free of charges and the shares will only be transferred to the participants after the vesting period of five years, and provided that the participant maintains the employment/statutory bond with the Company until the end of said term. There is no binding of the participants to the reaching of the Company’s performance goals.
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i. criteria to set the acquisition or exercise price:
The price of the exercise of the shares arising from the Programs 2014.1, 2014.2, 2014.3, 2015.1, 2015.2, 2015.3, 2016.1, 2016.2, 2016.3, 2017.1, 2017.2, 2017.4, 2018.1, 2018.2, 2018.4, 2019.1, 2019.2, 2019.4, 2019.5 and 2020.1, all in the scope of the Option Plan, corresponds to the closing price of the Company’s stocks traded at B3 on the trading session immediately before the grant date, traded at B3, and a discount may be applied depending on the program.
The Share Appreciation Rights incentive does not involve the acquisition of shares, but rather the payment of a cash amount by the Company to the beneficiary. Such amount is determined at the end of the lock-up period applicable to each lot, based on the closing price of Company’s shares or ADRs on the trading session of B3 or NYSE, as applicable, immediately before the date of payment. Each Share Appreciation Right shall correspond to the right related to one share or ADR, as applicable.
In the Programs 2018.1, 2018.3, 2018.4, 2019.1, 2019.3, 2019.6 and 2020.1, within the scope of the Stock Plan, the granting of shares shall be made free of charge to the participants, under the terms of the Stock Plan and of the relevant program.
j. criteria to set the final term for exercise:
Within the scope of the Option Plan, according to the Programs 2014.1, 2014.2, 2014.3, 2015.1, 2015.2, 2015.3, 2016.1, 2016.2, 2016.3, 2017.1, 2017.2, 2017.4, 2018.1, 2018.4, 2019.1, 2019.5 the lots may only be exercised (i) in full upon the execution of the option grant agreement by the beneficiary; or (ii) in a period of five years after the verification of the vesting period of the relevant options. The programs 2018.2, 2019.2, 2019.4 and 2020.1 have single lots that may be exercised, in total or in part, within 45 days from the granting date.
The criteria used in the establishment of said terms takes into account the short, medium and long-term goals of this incentive form.
With regard to the Share Appreciation Rights, lot A provides for a term of five years to receive the relevant amounts, while in the case of lot B, there is a term of ten years. The main purpose of grace periods is to retain executives deemed of high potential and strategic for the business and activities of the Company, encouraging their continued employment with the Company in view of the possibility of receiving, in the long term, potentially attractive amounts linked to the value of shares issued by the Company.
Within the scope of the Stock Plan, according to the Programs 2018.1, 2018.3, 2018.4, 2019.1, 2019.3, 2019.6 and 2020.1 the delivery of Restricted Shares will be made after the vesting period of five years.
k. form of settlement:
In the case of the Option Plan, the Company may use treasury stocks to satisfy the exercise of options, and may, when applicable, use ADRs backed by shares issued by the Company. The Company may also issue new shares, upon an increase in capital stock, upon a resolution of the Board of Directors within the limits of authorized capital. The rule is that the exercise price must be paid on demand upon the exercise of the options within a period of up to five days as of their exercise date, depending on the program.
The Share Appreciation Rights do neither involve the effective delivery of shares, nor the payment of any amount by the beneficiary. They are settled upon the payment of the cash benefit by the Company directly to the beneficiary, immediately after the end of the relevant grace period.
Within the scope of the Stock Plan, according to the Programs 2018.1, 2018.3, 2018.4 and 2019.1, the Restricted Shares shall be delivered by the Company to the respective participant after the vesting period of five years. For purposes of the Stock Plan, the Company shall use existing shares held in treasury.
l. restrictions to the transfer of shares:
Within the Programs 2014.1, 2014.2, 2014.3, 2015.1, 2015.2, 2015.3, 2016.1, 2016.2, 2016.3 as well as the Programs 2017.1, 2017.2, 2017.4, 2018.1, 2018.2, 2018.4, 2019.1, 2019.2, 2019.4, 2019.5 and 2020.1, under terms of the Option Plan, the shares resulting from the option exercise may (i) be free and clear and
may be transferred at any time, respected the preemptive right of the Company; or (ii) be subject to a lock-up of, at least, five years as of the date of the option exercise, depending on the program.
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Share Appreciation Rights incentive by the Company does not involve the l delivery of shares. Therefore, there is nothing to say about any restriction to the transfer of shares. Please note, however, that the receipt of the amounts under the share appreciation rights program is subject to the grace periods described in sub-item “h” above.
Within the scope of the Stock Plan, according to the Programs 2018.1, 2018.3, 2018.4, 2019.1, 2019.3, 2019.6 and 2020.1, the delivered shares will be free and clear, and may be transferred at any time, respected the preemptive right of the Company.
m. criteria and event that, once verified, will result in the suspension, amendment or termination of the Plan:
The Plans may be amended or terminated by the Board of Directors, pursuant to the terms under said Plans. Regardless of the authority of the Board of Directors, no decision may change the rights and obligations of the Company or beneficiaries or participants in force.
In addition, in case of dissolution, transformation, merger, consolidation, spin-off or reorganization of the Company, the existing options will be subject to the rules established by the Board of Directors on this matter.
n. effects of withdrawal of a manager from the bodies of the Company on the rights provided under share-based compensation plan:
Pursuant to the Plans, the Board of Directors or a committee, as the case may be, shall establish, in each Program, the rules applicable to the cases of severance of Company’s beneficiaries and participants due to the termination of the employment agreement, end of term of office, dismissal or resignation from executive office, as well as to the cases of retirement, permanent disability or death of participants.
Programs (Option Plan)
- Programs 2014.2, 2014.3, 2015.1, 2015.2, 2015.3, 2016.2, 2016.3, 2017.1, 2017.4, 2018.1, 2018.4, 2019.1 and 2019.5: For these Programs, in the event of termination of the beneficiary’s employment contract, the following rules shall apply, as per each described event, namely: (i) in the event of termination for cause or similar reason, renouncement or resignation or leave without pay for a period exceeding 24 months, any options not qualified to be exercised will lapse and any options already qualified to be exercised may be so within 90 days as of the severance date, after which they will be canceled; (ii) in the event of dismissal without cause or severance resulting from outsourced services, sale of affiliate company or business unit of the Company, any options not qualified to be exercised will lapse and any options already qualified to be exercised may be so within 180 days as of the severance date, after which they will be canceled; (iii) in the event of severance after a beneficiary has cumulatively achieved 70 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), any options qualified to be exercised may be so, while in relation to any options not qualified to be exercised, in case severance has occurred within 24 months after the option grant, the beneficiary may only exercise his/her options on a pro rata basis if he/she has participated, upon destination of his/her variable net compensation, of other Option Programs that he/she has participated as beneficiary, conditioned to the execution of a non-compete agreement and, in case severance has occurred after 24 months, the beneficiary may exercise his/her options on a pro rata basis also conditioned to the execution of the above-mentioned non-compete agreement; (iv) in the event of severance after a beneficiary has cumulatively achieved 80 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), any options qualified to be exercised may be so within their respective terms, provided that he/she executes the above-mentioned non-compete agreement if this is so resolved by the Board of Directors of the Company; and (v) in case of death or permanent disability, any options already qualified to be exercised may be so within their respective terms, and any options not yet qualified to be exercised may nevertheless be so immediately, provided, however, that the Board of Directors of the Company may, in case of permanent disability, condition such exercise to the execution of a non-compete agreement.
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- Programs 2014.1, 2015.1, 2016.1, and 2017.2: For these Programs, in the event the employment agreement or term of office of the beneficiary terminates during the vesting period, for any reason, except for the cases set forth below, the beneficiary will lose the right to receive said shares. In the event of termination of the employment contract or term of office after 24 months as of grant date, for any reason other than (a) for cause, renouncement or resignation, or (b) the events provided below: (i) the beneficiary shall be entitled to receive, always on a pro rata basis to the number of calendar months completed during which he/she has remained performing his/her functions to the Company, its subsidiaries, controlling companies and affiliates as of the date the options were granted, the shares assigned to him/her until the termination of his/her functions to the Company, its subsidiaries, controlling companies and affiliates, provided that the Board of Directors may resolve that such receipt is contingent upon the execution and performance by the beneficiary of a non-compete agreement with the Company according to the terms and conditions established by the Board of Directors; and (ii) the restrictions to the transfer of shares provided for in the Program shall remain in force. In the event of severance after a beneficiary has cumulatively achieved seventy (70) years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), any options qualified to be exercised may be so, while in relation to any options not qualified to be exercised: (i) in case severance has occurred within 24 months after the option grant, the beneficiary will lose his/her right to receive the shares, except if the beneficiary shall have allocated 100% of his Bonus to full exercise of options in the last five years (or in such shorter period in which he/she has become eligible to participate in the Company’s Programs), in which case the beneficiary shall be entitled to receive, always on a pro rata basis to the number of calendar months completed during which he/she has remained in his/her office at the Company, its subsidiaries, controlling companies and affiliates, as of the grant date, the shares assigned to him/her until the date of termination of his/her employment with the Company, its subsidiaries, controlling companies and affiliates, provided that the Board of Directors may determine that receipt thereof shall be contingent upon the execution and performance, by the beneficiary, of a non-compete agreement with the Company; and (ii) if the severance occurred after 24 months after the granting of options, the beneficiary shall be entitled to receive, at all times proportional to the number of complete civil months which he/she remained in the performance of his/her duties to the Company, or to its controlled or controlling companies and affiliates, since the stock granting date, the shares that were attributed to him/her until the termination of their duties to the Company or to its controlling or controlled companies and affiliates, it being certain that the Board of Directors may establish that the receipt is conditioned to the execution of and compliance with the non-compete agreement with the Company by the beneficiary.
In the event of severance after a beneficiary has cumulatively achieved 80 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), he/she shall be entitled to receive the shares after complying with the vesting period provided for in the Program. In this case, restrictions on the transfer of shares under the Program shall remain force.
In case of death or permanent disability of the beneficiary – in the latter case, contingent upon the execution and performance, by the beneficiary, of a non-compete agreement with the Company according to the terms and conditions established by the Board of Directors – he/she or his/her heirs or successors, as applicable, shall be entitled to immediately receive the shares resulting from the options granted, as well as the shares already assigned in the period, all of them free and clear.
- Programs 2018.2, 2019.2, 2019.4 and 2020.1: For such Programs, in the event the employment agreement or term of office of the beneficiary terminates (a) after the exercise date, for any reason, the beneficiary will remain entitled to the shares acquired under the program, as well as those acquired due to bonus, split, subscription or other acquisition form related to said shares or (b) prior to the exercise date, the beneficiary will lose right to the exercise of the options.
Share Appreciation Rights
In relation to lot A:
In the events of (i) dismissal for cause or similar reason; (ii) leave without pay for a period exceeding 24 months; (iii) renouncement or resignation; (iv) dismissal without cause; (v) severance resulting from outsourced services, sale of subsidiary, affiliate company or business unit of the Company; and (vi) severance after a beneficiary has cumulatively achieved 70 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), the Share Appreciation Rights will be canceled and terminated by operation of law.
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In the events of (i) severance after a beneficiary has cumulatively achieved 80 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date); and (ii) permanent disability, the Share Appreciation Rights granted during the period starting on their grant date and ending on the severance date shall remain valid and their settlement shall comply with the vesting periods provided for in the relevant agreement, provided that receipt of the corresponding bonus shall be contingent upon the beneficiary executing and performing a non-compete agreement with the Company.
In the event of death of the beneficiary, the Share Appreciation Rights shall be settled on a pro rata basis according to a formula calculated based on the number of calendar months completed during the effectiveness of his/her employment contract with the Company and the beneficiary or, as applicable, his/her term of office as manager of the Company since the grant date.
In relation to lot B:
In the events of (i) dismissal for cause or similar reason; (ii) leave without pay for a period exceeding twenty-four (24) months; and (iii) renouncement or resignation, the Share Appreciation Rights shall be canceled and terminated by operation of law.
In the events of (i) dismissal without cause; (ii) severance resulting from outsourced services, sale of subsidiary, affiliate company or business unit of the Company; and (iii) severance after a beneficiary has cumulatively achieved 70 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), the following rules shall apply: (a) severance before the 5-year vesting term: - the Share Appreciation Rights shall be canceled and terminated by operation of law; and (b) severance between 5 and 10 years of grant date anniversary: - the Share Appreciation Rights shall be settled on a pro rata bass according to a formula calculated based on the number of calendar months completed during the effectiveness of his/her employment contract with the Company and the beneficiary or, as applicable, his/her term of office as manager of the Company since the grant date.
In the events of (i) severance after a beneficiary has cumulatively achieved 80 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date); and (ii) permanent disability, the Share Appreciation Rights granted during the period starting on the grant date and ending on severance date shall remain valid and their settlement shall comply with the vesting periods provided for in the relevant agreement, provided that receipt of the corresponding bonus shall be contingent upon the beneficiary executing and performing a non-compete agreement with the Company.
In the event of death of the beneficiary, the Share Appreciation Rights shall be settled on a pro rata basis according to a formula calculated based on the number of calendar months completed during the effectiveness of his/her employment contract with the Company and the beneficiary or, as applicable, his/her term of office as manager of the Company since the grant date.
Program (Stock Plan)
- Program 2018.1, 2019.1, 2019.3 and 2020.1:
For such Programs, in the event the employment agreement or term of office terminates during the vesting period, for any reason, except for the events described below, the beneficiary will lose the right to receive said shares. In the event of termination of the employment contract or term of office after 24 months as of grant date of the Restricted Shares, for any reason other than (a) termination for cause or similar reason, renouncement or resignation or leave without pay for a period exceeding 24 months, or (b) the events provided below: (i) the beneficiary shall be entitled to receive the corresponding shares, on a pro rata basis corresponding to the result of Restricted Shares and additional shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the Board of Directors may establish that the receipt be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company, under the terms established by the Board of Directors; and (ii) the restriction on the sale of shares, set forth in the Program, will remain in effect.
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In the event of severance after a beneficiary has cumulatively achieved 70 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), except for the events of dismissal for cause, in relation to the Restricted Shares and additional shares that are not yet free to be delivered to the beneficiary: (i) if the severance occurred 24 months after the stock grant date and the beneficiary has participated, upon the destination of its net variable compensation (that is, total amount of the annual gratification, bonus or participation on the results, net of income tax and other levied charges), of all stock option programs of the Company approved by the Board of Directors of the Company in which his/her name appeared in the list of beneficiaries in the 5 years immediately prior to the severance date (or, in the event the beneficiary has become eligible to participate in such programs less than five years from the severance date, as many years as the years the beneficiary has become eligible), the beneficiary shall be entitled to receive the Restricted Shares and the additional shares, under the terms of the Program, on a pro rata basis corresponding to the result of Restricted Shares and additional shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the Board of Directors may establish that the receipt be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company, under the terms established by the Board of Directors; and (ii) if the severance occurs after 24 months subsequent to the grant date of shares, the beneficiary shall be entitled to receive the Restricted Shares and the additional shares, under the terms of the Program, on a pro rata basis corresponding to the result of Restricted Shares and additional shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company, under the terms established by the Board of Directors. In both cases, the restriction on the sale of shares, set forth in the Program, will remain in effect.
In the event of severance after a beneficiary has cumulatively achieved 80 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), except for the events of dismissal for cause, the beneficiary will receive the Restricted Shares and the additional shares that are not yet free to delivery, it being certain that the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company. In this case, the restriction on the sale of shares, set forth in the Program, will remain in effect.
In case of death or permanent disability, the beneficiary (or his heirs or successors) will immediately receive the Restricted Shares and additional shares that are not yet free to be delivered under the Program, it being certain that in the event of permanent disability, the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company. In case of death, all shares will be free and clear for sale at any moment. In case of permanent disability, the restriction on the sale of shares, set forth in the Program, will remain in effect.
- Program 2018.3:
For this Program, in the event the employment agreement or term of office of the beneficiary terminates during the vesting period, for any reason, the beneficiary will lose the right to receive said Restricted Shares, except for the events provided for as follows: In the event of severance by direct termination without case, in relation to the Restricted Shares that are not yet free to be delivered to the beneficiary: (1) if (a) the severance has occurred before 24 months after granting, and (b) the beneficiary has participated, through the allocation of part or all of its net variable remuneration (i.e., annual gratification, bonus or participation on the results, net of income tax and other levied charges) of all the Company’s stock option programs approved by the Company’s Board of Directors in which its name has been included in the list of beneficiaries in the 5 years immediately prior to its severance (or if the beneficiary has become eligible to participate in such programs for less than 5 years, as many years as the years the beneficiary has become eligible), the beneficiary will receive Restricted Shares pro rata equivalent to the result of the Restricted Shares held by the beneficiary on the date of severance multiplied by the complete civil months of employment or office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the Board of Directors may establish that the receipt be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company, under the terms established by the Board of Directors, and (2) if the severance occurred 24 months after the stock grant date, the beneficiary
will receive the Restricted Shares on a pro rata basis corresponding to the result of Restricted Shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or term of office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the receipt will be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary with the Company, under the terms established by the Board of Directors. In both cases, the restriction on the sale of shares, set forth in the Program, will remain in effect.
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In case of death or permanent disability, the beneficiary (or his heirs or successors) will immediately receive the Restricted Shares that are not yet free to be delivered under the Program, it being certain that in the event of permanent disability, the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary with the Company. In case of death, all shares will be free and clear for sale at any moment. In case of permanent disability, the restriction on the sale of shares, set forth in the Program, will remain in effect.
- Program 2018.4:
For this Program, in the event the employment agreement or term of office of the beneficiary terminates during the vesting period, for any reason, the beneficiary will lose the right to receive said Restricted Shares, except for the events provided for as follows: (i) Severance (1) by direct termination without case, or (2) after a beneficiary has cumulatively achieved 70 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date): except for the events of dismissal for cause, in relation to the Restricted Shares that are not yet free to be delivered to the beneficiary: (i) if (a) the severance occurred within 24 months after the granting and (b) the beneficiary has participated, upon the destination of part or all its net variable compensation (i.e., annual gratification, bonus or participation on the results, net of income tax and other levied charges), of all stock option programs of the Company approved by the Board of Directors of the Company in which his/her name appeared in the list of beneficiaries in the 5 years immediately prior to the severance date (or, in the event the beneficiary has become eligible to participate in such programs less than five years from the severance date, as many years as the years the beneficiary has become eligible), the beneficiary shall receive the Restricted Shares on a pro rata basis corresponding to the result of Restricted Shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or term of office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the Board of Directors may establish that the receipt be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company, under the terms established by the Board of Directors; and (ii) if the severance occurs after 24 months subsequent to the grant date of shares, the beneficiary shall be entitled to receive the Restricted Shares and the additional shares, under the terms of the Program, on a pro rata basis corresponding to the result of Restricted Shares and additional shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary with the Company, under the terms established by the Board of Directors. In both cases, the restriction on the sale of shares, set forth in the Program, will remain in effect.
In the event of severance after a beneficiary has cumulatively achieved 80 years (i.e. sum of his/her age and the duration of his/her service with the Company at severance date), except for the events of dismissal for cause, the beneficiary will receive the Restricted Shares that are not yet free to delivery, it being certain that that the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary with the Company. In this case, the restriction on the sale of shares, set forth in the Program, will remain in effect.
In case of death or permanent disability, the beneficiary (or his heirs or successors) will immediately receive the Restricted Shares that are not yet free to be delivered under the Program, it being certain that in the event of permanent disability, the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary with the Company. In case of death, all shares will be free and clear for sale at any moment. In case of permanent disability, the restriction on the sale of shares, set forth in the Program, will remain in effect.
133
- Program 2019.6:
For this Program, in the event the employment agreement or term of office of the beneficiary terminates during the vesting period, for any reason, the beneficiary will lose the right to receive said Restricted Shares, except for the events provided for as follows: In the case of (i) severance by direct termination without cause, in relation to the Restricted Shares that are not yet free to be delivered to the beneficiary: (1) if (a) the severance occurred within 24 months after the granting and (b) the beneficiary has participated, upon the destination of part or all its net variable compensation (i.e., annual gratification, bonus or profit sharing, net of income tax and other levied charges), of all stock option programs of the Company approved by the Board of Directors of the Company in which his/her name appeared in the list of beneficiaries in the 5 years immediately prior to the severance date (or, in the event the beneficiary has become eligible to participate in such programs less than five years from the severance date, as many years as the years the beneficiary has become eligible), the beneficiary shall receive the Restricted Shares on a pro rata basis corresponding to the result of Restricted Shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or term of office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the Board of Directors may establish that the receipt be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary, with the Company, under the terms established by the Board of Directors; and (2) if the severance occurs after 24 months subsequent to the grant date of shares, the beneficiary shall be entitled to receive the Restricted Shares and the additional shares, under the terms of the Program, on a pro rata basis corresponding to the result of Restricted Shares and additional shares owned by the beneficiary on the severance date, multiplied by the complete civil months of employment or office by the period between the grant date and the relevant termination of the relation with the Company (which will always be inferior to 60 months), divided by 60, it being certain that the receipt shall be conditioned to the execution and compliance with a non-compete agreement, by the beneficiary with the Company, under the terms established by the Board of Directors. In both cases, the restriction on the sale of shares, set forth in the Program, will remain in effect.
In case of death, the beneficiary (or his heirs or successors) will immediately receive the Restricted Shares that are not yet free to be delivered under the Program, it being certain that in the event of permanent disability, the receipt shall be conditioned to the lapse of the grace period and to the execution and compliance with a non-compete agreement, by the beneficiary with the Company. In case of death, all shares will be free and clear for sale at any moment. In case of permanent disability, the restriction on the sale of shares, set forth in the Program, will remain in effect.
134
13.5 In relation to share-based payments made to the Board of Directors and Board of Officers recognized in the income statement of the last three fiscal years and the forecast for current year:
Share-based compensation estimated for the current fiscal year (*)
Body
|
Board of Directors
|
Board of Officers
|
No. of Members
|
13.00
|
11.67
|
No. of members receiving compensation
|
10.00
|
11.00
|
Weighted average exercise price:
|
|
|
(a) Options outstanding in the beginning of fiscal year
|
15.53
|
16.97
|
(b) Options lost during the fiscal year
|
N/A
|
N/A
|
(c) Options exercised during the fiscal year
|
N/A
|
N/A
|
(d) Options expired during the fiscal year
|
N/A
|
N/A
|
Potential dilution upon exercise of all options granted
|
0.0517%
|
0.0760%
|
(*) Based on the best estimate of the Company's management based on data for the fiscal year ended on 2019.
Share-based compensation – fiscal year ended on 12/31/2019
Body
|
Board of Directors
|
Board of Officers
|
No. of Members
|
13.00
|
10.92
|
No. of members receiving compensation
|
10.00
|
11.00
|
Weighted average exercise price:
|
|
|
(a) Options outstanding in the beginning of fiscal year
|
14.51
|
13.69
|
(b) Options lost during the fiscal year
|
0.00
|
0.00
|
(c) Options exercised during the fiscal year
|
0.00
|
10.66
|
(d) Options expired during the fiscal year
|
0.00
|
6.49
|
Potential dilution upon exercise of all options granted
|
0.0517%
|
0.0760%
|
Share-based compensation – fiscal year ended on 12/31/2018
|
Board of Directors
|
Board of Officers
|
No. of Members
|
13.00
|
10.67
|
No. of members receiving compensation
|
10.00
|
10.00
|
Weighted average exercise price:
|
-
|
-
|
(a) Options outstanding in the beginning of fiscal year
|
13.62
|
11.64
|
(b) Options lost during the fiscal year
|
0.00
|
0.00
|
(c) Options exercised during the fiscal year
|
6.26
|
11.35
|
(d) Options expired during the fiscal year
|
0.00
|
0.00
|
Potential dilution upon exercise of all options granted
|
0.0414%
|
0.0923%
|
Share-based compensation – fiscal year ended on 12/31/2017
|
|
|
|
Board of Directors
|
Board of Officers
|
No. of Members
|
13.00
|
11.00
|
No. of members receiving compensation
|
11.00
|
11.00
|
Weighted average exercise price:
|
-
|
-
|
(a) Options outstanding in the beginning of fiscal year
|
11.76
|
10.24
|
(b) Options lost during the fiscal year
|
0.00
|
0.00
|
(c) Options exercised during the fiscal year
|
0.78
|
7.54
|
(d) Options expired during the fiscal year
|
0.00
|
0.00
|
Potential dilution upon exercise of all options granted
|
0.0648%
|
0.0846%
|
135
Note: the alternate members of the Board of Directors are accounted for in the “number of members” included in the tables above.
For each grant recognized in income for the past three fiscal years and the current fiscal year
|
Current Fiscal Year (*)
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Stock Options
|
12/01/2015
|
12/01/2015
|
12/22/2015
|
12/01/2016
|
12/01/2016
|
12/22/2016
|
Grant Date
|
583,155
|
385,083
|
505,918
|
640,888
|
846,178
|
292,226
|
Number of Options Granted
|
12/01/2020
|
12/01/2020
|
12/22/2020
|
12/01/2021
|
12/01/2021
|
12/22/2021
|
Vesting Period
|
12/01/2025
|
12/01/2025
|
12/22/2025
|
12/01/2026
|
12/01/2026
|
12/22/2026
|
Term for exercise of the Options
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
NA
|
Lock-up Period
|
4,664,391.41
|
3,080,103.64
|
3,817,662.86
|
3,868,825.36
|
5,108,092.07
|
1,665,447.22
|
Fair value of options on grant date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Fiscal Year (*)
Cont. I
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
02/10/2017
|
12/01/2017
|
12/01/2017
|
02/22/2018
|
02/22/2018
|
12/03/2018
|
Number of Options Granted
|
454,902
|
619,168
|
1,153,375
|
229,367
|
550,481
|
858,080
|
Vesting Period
|
02/10/2022
|
12/01/2022
|
12/01/2022
|
02/22/2023
|
02/22/2023
|
12/03/2023
|
Term for exercise of the Options
|
02/10/2027
|
12/01/2027
|
12/01/2027
|
02/22/2028
|
02/22/2028
|
12/03/2028
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
2,501,834.63
|
4,194,181.24
|
7,812,845.29
|
1,627,748.03
|
3,906,596.69
|
4,516,888.33
|
|
|
|
|
|
|
|
Current Fiscal Year (*)
Cont. II
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
|
Stock Options
|
|
|
|
|
Grant Date
|
03/12/2018
|
02/21/2019
|
12/02/2019
|
12/02/2019
|
Number of Options Granted
|
1,298,165
|
903,019
|
1,141,452
|
2,466,103
|
Vesting Period
|
03/12/2023
|
02/21/2024
|
12/02/2024
|
12/02/2024
|
Term for exercise of the Options
|
03/12/2028
|
02/21/2029
|
12/02/2029
|
12/02/2029
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
6,833,472.79
|
4,849,514.79
|
4,613,265.13
|
9,966,942.96
|
(*) Based on the best estimates of the Company’s management and on data for the current fiscal year.
|
136
12/31/02019
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
12/01/2014
|
12/01/2014
|
12/22/2014
|
12/01/2015
|
12/01/2015
|
12/22/2015
|
Number of Options Granted
|
903,038
|
418,952
|
155,045
|
583,155
|
385,083
|
505,918
|
Vesting Period
|
12/01/2019
|
12/01/2019
|
12/22/2019
|
12/01/2020
|
12/01/2020
|
12/22/2020
|
Term for exercise of the Options
|
12/01/2024
|
12/01/2024
|
12/22/2024
|
12/01/2025
|
12/01/2025
|
12/22/2025
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
5,501,997
|
2,552,575.51
|
944,652.54
|
4,664,391.41
|
3,080,103.64
|
3,817,662.86
|
|
|
|
|
|
|
|
12/31/02019
Cont. I
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
12/01/2016
|
12/01/2016
|
12/22/2016
|
02/10/2017
|
12/01/2017
|
12/01/2017
|
Number of Options Granted
|
640,888
|
846,178
|
292,226
|
454,902
|
619,168
|
1,153,375
|
Vesting Period
|
12/01/2021
|
12/01/2021
|
12/22/2021
|
02/10/2022
|
12/01/2022
|
12/01/2022
|
Term for exercise of the Options
|
12/01/2026
|
12/01/2026
|
12/22/2026
|
02/10/2027
|
12/01/2027
|
12/01/2027
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
3,868,825.36
|
5,108,092.07
|
1,665,447.22
|
2,501,834.63
|
4,194,181.24
|
7,812,845.29
|
|
|
|
|
|
|
|
12/31/02019
Cont. II
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
02/22/2018
|
02/22/2018
|
12/03/2018
|
12/03/2018
|
02/21/2019
|
12/02/2019
|
Number of Options Granted
|
229,367
|
550,481
|
858,080
|
1,298,165
|
903,019
|
1,141,452
|
Vesting Period
|
02/22/2023
|
02/22/2023
|
12/03/2023
|
12/03/2023
|
02/21/2024
|
12/02/2024
|
Term for exercise of the Options
|
02/22/2028
|
02/22/2028
|
12/03/2028
|
12/03/2028
|
02/21/2029
|
12/02/2029
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
1,627,748.03
|
3,906,596.69
|
4,516,888.33
|
6,833,472.79
|
4,849,514.79
|
4,613,265.13
|
|
|
|
|
|
|
|
12/31/02019
Cont. III
|
Board of Officers
|
|
Stock Options
|
|
Grant Date
|
12/02/2019
|
Number of Options Granted
|
2,466,103
|
Vesting Period
|
12/02/2024
|
Term for exercise of the Options
|
12/02/2029
|
Lock-up Period
|
N/A
|
Fair value of options on grant date
|
9,966,942.96
|
|
137
|
12/31/2018
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
12/02/2013
|
12/02/2013
|
12/19/2013
|
12/01/2014
|
12/01/2014
|
12/01/2015
|
Number of Options Granted
|
715,299
|
199,325
|
82,164
|
903,038
|
323,084
|
583,155
|
Vesting Period
|
12/02/2018
|
12/02/2018
|
12/19/2018
|
12/01/2019
|
12/01/2019
|
12/01/2020
|
Term for exercise of the Options
|
12/02/2023
|
12/02/2023
|
12/19/2023
|
12/01/2024
|
12/01/2024
|
12/01/2025
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
4,830,901.44
|
1,346,177.51
|
522,790.35
|
5,501,997.08
|
1,968,474.44
|
4,664,391.41
|
|
|
|
|
|
|
|
12/31/2018
Cont. I
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Officers
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
12/01/2015
|
12/22/2015
|
12/01/2016
|
12/01/2016
|
12/22/2016
|
02/10/2017
|
Number of Options Granted
|
569,590
|
769,838
|
640,888
|
1,043,741
|
292,226
|
454,902
|
Vesting Period
|
12/01/2020
|
12/22/2020
|
12/01/2021
|
12/01/2021
|
12/22/2021
|
02/10/2022
|
Term for exercise of the Options
|
12/01/2025
|
12/22/2025
|
12/01/2026
|
12/01/2026
|
12/22/2026
|
02/10/2027
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
4,555,891.15
|
5,809,206.12
|
3,868,825.36
|
6,300,713.47
|
1,665,447.22
|
2,501,834.63
|
|
|
|
|
|
|
|
12/31/2018
Cont. II
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
12/01/2017
|
12/01/2017
|
02/22/2018
|
02/22/2018
|
12/03/2018
|
12/03/2018
|
Number of Options Granted
|
619,168
|
1,661,228
|
229,367
|
550,481
|
370,643
|
1,391,689
|
Vesting Period
|
12/01/2022
|
12/01/2022
|
02/22/2023
|
02/22/2023
|
12/03/2023
|
12/03/2023
|
Term for exercise of the Options
|
12/01/2027
|
12/01/2027
|
02/22/2028
|
02/22/2028
|
12/03/2028
|
12/03/2028
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
4,194,181.24
|
11,252,990.01
|
1,627,748.03
|
3,906,596.69
|
1,951,045.40
|
7,325,778.25
|
|
138
|
|
|
|
|
|
|
12/31/2017
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
11/30/2012
|
11/30/2012
|
12/20/2012
|
12/02/2013
|
12/02/2013
|
12/01/2014
|
Number of Options Granted
|
1,322,880
|
499,990
|
90,960
|
1,204,633
|
491,377
|
1,582,208
|
Vesting Period
|
11/30/2017
|
11/30/2017
|
12/20/2017
|
12/02/2018
|
12/02/2018
|
12/01/2019
|
Term for exercise of the Options
|
11/30/2022
|
11/30/2022
|
12/20/2022
|
12/02/2023
|
12/02/2023
|
12/01/2024
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
7,420,076.38
|
2,804,459.96
|
522,781.27
|
8,135,707.30
|
3,318,603.63
|
9,640,019.36
|
|
|
|
|
|
|
|
12/31/2017
Cont. I
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Stock Options
|
|
|
|
|
|
|
Grant Date
|
12/01/2014
|
12/01/2015
|
12/01/2015
|
12/22/2015
|
12/01/2016
|
12/01/2016
|
Number of Options Granted
|
677,502
|
612,965
|
785,962
|
505,918
|
684,057
|
1,118,079
|
Vesting Period
|
12/01/2019
|
12/01/2020
|
12/01/2020
|
12/22/2020
|
12/01/2021
|
12/01/2021
|
Term for exercise of the Options
|
12/01/2024
|
12/01/2025
|
12/01/2025
|
12/22/2025
|
12/01/2026
|
12/01/2026
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Fair value of options on grant date
|
4,127,859.54
|
4,902,828.03
|
6,286,552.29
|
3,817,662.86
|
4,129,422.10
|
6,148,233.38
|
|
|
|
|
|
|
|
12/31/2017
Cont. II
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
|
Stock Options
|
|
|
|
|
Grant Date
|
02/10/2017
|
12/01/2017
|
12/01/2017
|
|
Number of Options Granted
|
454,902
|
659,232
|
1,074,538
|
|
Vesting Period
|
02/10/2022
|
12/01/2022
|
12/01/2022
|
|
Term for exercise of the Options
|
02/10/2027
|
12/01/2027
|
12/01/2027
|
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
|
Fair value of options on grant date
|
2,501,834.63
|
4,465,570.72
|
6,255,011.18
|
|
|
-
Whenever necessary, the number of options granted and fair value were adjusted to reflect all stock splits that took place within the relevant period.
Calculation log of the potential dilution resulting from the exercise of options
The potential dilution mentioned in the tables above and represented in the table below considers that 100% of the options granted to the members of the Board of Directors and the Board of Officers are exercised on the base date of this Reference Form, this is to say, December 31, 2019, and that the Company issues new shares as a result thereof, that is, it does not consider the use of any shares held in treasury. The dilution is calculated by the ratio between the number of new shares issued and the total number of shares of the capital stock after such issuance.
139
Body
|
Grant Date
|
Number of Options
|
Shares of the Capital Stock at the End of the Year (12/31/2019)
|
Potential dilution if all options are exercised
|
Board of Directors
|
03/30/2010
|
852,850
|
15,733,575,289
|
0.00542%
|
08/19/2010
|
58,050
|
15,733,575,289
|
0.00037%
|
11/30/2011
|
887,850
|
15,733,575,289
|
0.00564%
|
11/30/2012
|
645,175
|
15,733,575,289
|
0.00410%
|
12/02/2013
|
715,299
|
15,733,575,289
|
0.00455%
|
12/01/2014
|
903,038
|
15,733,575,289
|
0.00574%
|
12/01/2015
|
583,155
|
15,733,575,289
|
0.00371%
|
12/01/2016
|
640,888
|
15,733,575,289
|
0.00407%
|
12/01/2017
|
619,168
|
15,733,575,289
|
0.00394%
|
02/22/2018
|
229,367
|
15,733,575,289
|
0.00146%
|
12/03/2018
|
858,080
|
15,733,575,289
|
0.00545%
|
12/02/2019
|
1,141,452
|
15,733,575,289
|
0.00725%
|
Board of Officers
|
03/30/2010
|
87,500
|
15,733,575,289
|
0.00056%
|
11/30/2010
|
795,650
|
15,733,575,289
|
0.00506%
|
11/30/2011
|
909,320
|
15,733,575,289
|
0.00578%
|
12/21/2011
|
32,360
|
15,733,575,289
|
0.00021%
|
11/30/2012
|
212,610
|
15,733,575,289
|
0.00135%
|
12/20/2012
|
79,590
|
15,733,575,289
|
0.00051%
|
12/02/2013
|
280,331
|
15,733,575,289
|
0.00178%
|
12/19/2013
|
130,093
|
15,733,575,289
|
0.00083%
|
12/01/2014
|
418,952
|
15,733,575,289
|
0.00266%
|
12/22/2014
|
155,045
|
15,733,575,289
|
0.00099%
|
12/01/2015
|
385,083
|
15,733,575,289
|
0.00245%
|
12/22/2015
|
505,918
|
15,733,575,289
|
0.00322%
|
12/01/2016
|
846,178
|
15,733,575,289
|
0.00538%
|
12/22/2016
|
292,226
|
15,733,575,289
|
0.00186%
|
02/10/2017
|
454,902
|
15,733,575,289
|
0.00289%
|
12/01/2017
|
1,153,375
|
15,733,575,289
|
0.00733%
|
02/22/2018
|
550,481
|
15,733,575,289
|
0.00350%
|
12/03/2018
|
1,298,165
|
15,733,575,289
|
0.00825%
|
02/21/2019
|
903,019
|
15,733,575,289
|
0.00574%
|
12/02/2019
|
2,466,103
|
15,733,575,289
|
0.01567%
|
(1) When required, the number of options and fair value were adjusted to reflect the stock splits consummated in the period.
(2) According to the accounting method of predecessor cost adopted by Ambev S.A., data related to periods before 2014 related to Companhia de Bebidas das Américas – Ambev historical information.
140
13.6. Information regarding outstanding options held by the Board of Directors and Executive Management at the end of the last fiscal year:
12/31/2019
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Number of members
|
13.00
|
10.92
|
13.00
|
10.92
|
13.00
|
10.92
|
10.92
|
13.00
|
10.92
|
10.92
|
No. of members receiving compensation
|
1
|
1
|
1
|
4
|
4
|
7
|
1
|
4
|
5
|
1
|
Grant Date
|
03/30/10
|
03/30/10
|
08/19/10
|
11/30/10
|
11/30/11
|
11/30/11
|
10/25/11
|
11/30/12
|
11/30/12
|
12/20/12
|
Options not qualified for exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Number of Options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Date on which they may be exercised
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Maximum term for exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Lock-up Period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Weighted average exercise price
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Fair value of options on the last day of the fiscal year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Options qualified for exercise
|
|
|
|
|
|
|
|
|
|
|
Number of Options
|
852,850
|
87,500
|
58,050
|
795,650
|
887,850
|
909,320
|
32,360
|
645,175
|
212,610
|
79,590
|
Maximum term for exercise
|
03/30/20
|
03/30/20
|
08/19/20
|
11/30/20
|
11/30/21
|
11/30/21
|
03/30/20
|
11/30/22
|
11/30/22
|
12/20/22
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Weighted average exercise price
|
1.77
|
1.77
|
7.47
|
9.36
|
11.97
|
11.97
|
11.97
|
17.20
|
17.20
|
17.84
|
Fair value of options on the last day of the fiscal year
|
16.41
|
16.41
|
11.18
|
8.96
|
6.43
|
6.43
|
6.43
|
3.46
|
3.46
|
3.20
|
Fair value of the total of options on the last day of the fiscal year
|
13,993,560.37
|
1,435,699.75
|
649,159.91
|
7,125,593.84
|
5,709,672.25
|
5,847,743.62
|
208,103.84
|
2,232,622.31
|
735,735.00
|
254,633.86
|
|
|
|
|
|
|
|
|
|
|
|
141
12/31/2019
Cont. I
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Number of members
|
13.00
|
10.92
|
10.92
|
13.00
|
10.92
|
10.92
|
13.00
|
10.92
|
10.92
|
13.00
|
No. of members receiving compensation
|
5
|
6
|
1
|
7
|
6
|
1
|
7
|
7
|
1
|
6
|
Grant Date
|
12/02/13
|
12/02/13
|
12/19/13
|
12/01/14
|
12/01/14
|
12/22/14
|
12/01/15
|
12/01/15
|
12/22/15
|
12/01/16
|
Options not qualified for exercise
|
|
|
|
|
|
|
|
|
|
|
Number of Options
|
-
|
-
|
-
|
-
|
-
|
-
|
583,155.00
|
385,083.00
|
505,918.00
|
640,888.00
|
Date on which they may be exercised
|
-
|
-
|
-
|
-
|
-
|
-
|
12/01/20
|
12/01/20
|
12/22/20
|
12/01/21
|
Maximum term for exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
12/01/25
|
12/01/25
|
12/22/25
|
12/01/26
|
Lock-up Period
|
-
|
-
|
-
|
-
|
-
|
-
|
N/A
|
N/A
|
N/A
|
N/A
|
Weighted average exercise price
|
-
|
-
|
-
|
-
|
-
|
-
|
18.64
|
18.64
|
18.00
|
17.15
|
Fair value of options on the last day of the fiscal year
|
-
|
-
|
-
|
-
|
-
|
-
|
3.88
|
3.88
|
4.13
|
4.69
|
Options qualified for exercise
|
|
|
|
|
|
|
|
|
|
|
Number of Options
|
715,299
|
280,331
|
130,093
|
930,038
|
418,952
|
155,045.00
|
-
|
-
|
-
|
-
|
Maximum term for exercise
|
12/02/23
|
12/02/23
|
12/19/23
|
12/01/24
|
12/01/24
|
12/22/24
|
-
|
-
|
-
|
-
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
-
|
-
|
-
|
-
|
Weighted average exercise price
|
17.56
|
17.56
|
16.70
|
16.85
|
16.85
|
16.85
|
-
|
-
|
-
|
-
|
Fair value of options on the last day of the fiscal year
|
3.66
|
3.66
|
4.05
|
4.24
|
4.24
|
4.65
|
-
|
-
|
-
|
-
|
Fair value of the total of options on the last day of the fiscal year
|
2,617,199.79
|
1,025,700.07
|
526,739.94
|
3,832,841.45
|
1,778,193.82
|
720,776.87
|
2,263,273.45
|
1,494,539.41
|
2,087,377.29
|
3,007,169.97
|
142
12/31/2019
Cont. II
|
Board of Officers
|
Board of Officers
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Officers
|
Number of members
|
10.92
|
10.92
|
10.92
|
13.00
|
10.92
|
13.00
|
10.92
|
13.00
|
10.92
|
10.92
|
No.º of members receiving compensation
|
8
|
1
|
1
|
7
|
8
|
1
|
1
|
8
|
9
|
2
|
Grant Date
|
12/01/16
|
12/22/16
|
02/10/17
|
12/01/17
|
12/01/17
|
02/22/18
|
02/22/18
|
12/03/18
|
12/03/18
|
02/21/19
|
Options not qualified for exercise
|
|
|
|
|
|
|
|
|
|
|
Number of Options
|
846,178.00
|
292,226.00
|
454,902.00
|
619,168.00
|
1,153,375.00
|
229,367.00
|
550,481.00
|
858,080.00
|
1,298,165. 00
|
903,019.00
|
Date on which they may be exercised
|
12/01/21
|
12/22/21
|
02/10/22
|
12/01/22
|
12/01/22
|
02/22/23
|
02/22/23
|
12/03/23
|
12/03/23
|
02/21/24
|
Maximum term for exercise
|
12/01/26
|
12/22/26
|
02/10/27
|
12/01/27
|
12/01/27
|
02/22/28
|
02/22/28
|
12/03/28
|
12/03/28
|
02/21/29
|
Lock-up Period
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Weighted average exercise price
|
17.15
|
16.34
|
16.89
|
20.56
|
20.56
|
22.40
|
22.40
|
16.92
|
16.92
|
18.15
|
Fair value of options on the last day of the fiscal year
|
4.69
|
4.24
|
4.65
|
3.88
|
3.88
|
4.13
|
4.13
|
4.69
|
4.69
|
4.24
|
Options qualified for exercise
|
|
|
|
|
|
|
|
|
|
|
Number of Options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Maximum term for exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Lock-up Period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Weighted average exercise price
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Fair value of options on the last day of the fiscal year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Fair value of the total of options on the last day of the fiscal year
|
3,970,430.21
|
1,240,319.82
|
2,114,759.19
|
2,403,042.92
|
4,476,345,07
|
946,349.94
|
2,271,240.68
|
4,026,276.68
|
6,091,240.29
|
3,832,760.81
|
143
12/31/2019
Cont. III
|
|
|
Board of Directors
|
Board of Officers
|
Number of members
|
|
|
13.00
|
10.92
|
Nº of members receiving compensation
|
|
|
8
|
10
|
Grant Date
|
|
|
12/02/19
|
12/02/19
|
Options not qualified for exercise
|
|
|
|
|
Number of Options
|
|
|
1,141,452.00
|
2,466,103.00
|
Date on which they may be exercised
|
|
|
12/02/24
|
12/02/24
|
Maximum term for exercise
|
|
|
12/02/29
|
12/02/29
|
Lock-up Period
|
|
|
N/A
|
N/A
|
Weighted average exercise price
|
|
|
18.05
|
18.05
|
Fair value of options on the last day of the fiscal year
|
|
|
4.65
|
4.65
|
Options qualified for exercise
|
|
|
|
|
Number of Options
|
|
|
-
|
-
|
Maximum term for exercise
|
|
|
-
|
-
|
Lock-up Period
|
|
|
-
|
-
|
Weighted average exercise price
|
|
|
-
|
-
|
Fair value of options on the last day of the fiscal year
|
|
|
-
|
-
|
Fair value of the total of options on the last day of the fiscal year
|
|
|
5,306,409.10
|
11,464,478.05
|
(1) Whenever necessary, the number of options granted and fair value were adjusted to reflect all stock splits that took place within the relevant period.
(2) According to the accounting method of predecessor cost adopted by the Company, data related to periods before 2014 relates to Companhia de Bebidas das Américas – Ambev historical information.
Note: the alternate members of the Board of Directors are accounted for in the “number of members” included in the tables above.
144
13.7. In relation to the options exercised and shares transferred as share-based compensation to the Board of Directors and Board of Officers in the last three fiscal years:
December 31, 2019
|
Board of Directors
|
Board of Officers
|
No. of members
|
13.00
|
10.92
|
No. of members receiving compensation
|
2.00
|
9.00
|
Options exercised
|
|
|
Number of shares
|
-
|
2,681,735
|
Weighted average exercise price
|
R$ 0.00
|
R$ 10.66
|
Difference between the exercise price and the market value of the shares resulting from the options exercised
|
R$ 0.00
|
R$ 20,537,474.10
|
Shares transferred
|
|
|
Number of shares transferred
|
327,562
|
161,578
|
Weighted average acquisition price
|
16.87
|
16.87
|
Difference between the acquisition price and the market value of the shares acquired
|
-1,076,232
|
-927,683
|
December 31, 2018
(i)
|
Board of Directors
|
Board of Officers
|
No. of members
|
13.00
|
10.67
|
No. of members receiving compensation
|
4.00
|
8.00
|
Options exercised
|
-
|
-
|
Number of shares
|
1,392,135
|
1,551,470
|
Weighted average exercise price
|
R$ 6.26
|
R$ 11.35
|
Difference between the exercise price and the market value of the shares resulting from the options exercised
|
17,188,301
|
14,756,426
|
Shares transferred
|
-
|
-
|
Number of shares transferred
|
301,074
|
91,835
|
Weighted average acquisition price
|
17.69
|
17.69
|
Difference between the acquisition price and the market value of the shares acquired
|
1,423,478
|
434,196
|
(i) Amounts arising from the accounting effects provided for in CPC 10 - Share-based Payment.
December 31, 2017
|
Board of Directors
|
Board of Officers
|
No. of members
|
13.00
|
11.00
|
No. of members receiving compensation
|
3.00
|
8.00
|
Options exercised
|
-
|
|
Number of shares
|
989,925
|
849,860
|
Weighted average exercise price
|
R$ 0.78
|
R$ 7.54
|
Difference between the exercise price and the market value of the shares resulting from the options exercised
|
19,983,774
|
9,079,088
|
Shares transferred
|
-
|
|
Number of shares transferred
|
477,306
|
142,254
|
Weighted average acquisition price
|
14.40
|
14.40
|
Difference between the acquisition price and the market value of the shares acquired
|
1,388,960
|
413,959
|
Note: the alternate members of the Board of Directors are accounted for in the “number of members” included in the tables above.
145
13.8. Information required to understand the data disclosed in items 13.5 to 13.7, including the pricing method applied to determine the value of shares and options):
a. pricing model:
The fair value of the options granted under the Option Plan is determined based on Hull Binomial Pricing Model. The model is based on the assumption that price of a share in future periods may follow two possible ways: one upward and another downward. Then, a binomial tree is built in relation to the share price. The upward and downward factors are determined based on volatility of the share and the time frame between the steps in the tree. The trajectories for share price are determined until maturity. In parallel, a tree is also constructed to represent the option value per period. The option value is determined backwards, it starts from the expiration of vesting period. In the final period, the holder of the option shall decide whether to exercise the option or not.
In the case of Share Appreciation Rights, at the end of vesting period of each lot, the number of Share Appreciation Rights shall be converted into an amount equal to the closing price of shares or ADRs issued by the Company and traded at B3 or NYSE, respectively, on the trading session immediately before such term, it being certain that each Share Appreciation Rights shall correspond to one share or ADR, as applicable.
For grants of deferred shares and grants under the Stock Plan, the fair value corresponds to the closing price of shares or ADR traded at B3 or NYSE, as the case may be, on the day immediately before its grant date, and a discount may be applied under certain conditions as provided in each program. For the programs under the Stock Plan, the shares will be granted free of charge after the five-year grace period and provided that the participant maintains the employment and / or statutory relationship with the Company until the end of such term, observing the other terms of the Stock Plan and of each program. For specific information about such programs, refer to item 13.4.
b. data and assumptions used in the pricing model, including the weighted average price of shares, the exercise price, the expected volatility, the duration of the option, expected dividends and risk free interest rate:
Calculation date
According to Technical Pronouncement CPC 10 – Share-Based Payment, options must be assessed on the date of their respective grant.
Weighted average price of shares
The price of the shares of the Company taken as basis to calculate the value of the respective options is their Market Value, as defined below.
Exercise price
Programs from 2008 to 2010
Lot A and lot C options (as specified in such programs) must be exercised for an exercise price corresponding to the average closing prices of shares traded at B3 over a 30-day window before grant date, or, in specific cases (e.g., to employees of subsidiaries of the Company headquartered abroad), the average closing price of ADRs traded at NYSE in the period (“Market Value”) under any specific provisions set forth in the Program. For the options belonging to lot B, the exercise price is the Market Value, applying a 10% discount.
In the case of the supplementary options set forth in said programs as belonging to lot C, the amounts corresponding to dividends and interest on own capital effectively paid out by the Company on the underlying shares during the period between grant date and exercise date is deducted from the exercise price.
146
Programs from 2010 to 2019
The exercise price of each option granted under the Option Plan corresponds to the closing price, in Brazilian Reais, of the Company’s shares traded on B3 in the trading session immediately prior to the grant date.
Expected volatility
The options’ expected volatility is based on historical volatility calculated since March 29, 2004. Based on the Hull Binomial Model, it is assumed that all employees would exercise their options immediately if the price of the shares of the Company would reach 2.5 times the exercise price. The Company will not use the sliding window method, in which volatility estimate is fixed length “m” (i.e., for each daily update information from the previous day is aggregated and the information of m+1 days ago is disregarded). To calculate the expected volatility, the Company used the daily stock returns of the Company. For every daily update of the calculation, information concerning that day is added to the base and no information is disregarded. Therefore, the base has mobile extension beginning on March 29, 2004 until the date of calculation.
Duration of options
Programs from 2008 to 2010
According to the option granting model used by the Company, the options belonging to the lots A and B must be immediately exercised, since they have a duration equal to zero. The supplementary options belonging to the lot c, in turn, have a total duration of ten years, considering a five-year vesting period and a five-year exercise period.
Programs from 2010 to 2019
Under the Option Plan, the options have a grace period of five years from the date of grant, and the beneficiary may exercise them within five years after the grace period ends, upon payment of the exercise price until five business days from the exercise date, as a compensation to the delivery of the shares, therefore, having a term of up to ten years.
Expected dividends (dividends distribution rate)
The dividends distribution rate represents the ratio between the dividend per share paid out over a certain period and the price of share in the market. The Company’s dividend distribution rate of 5% was calculated based on its history of dividends distribution and payment of interest on own capital.
However, in cases in which the options granted are protected in terms of dividends (programs prior to 2010), meaning that the amounts paid out as dividends and interest on own capital are deducted from their exercise price, the Company’s dividends distribution rate is zero for purposes of calculating the fair value of the options.
Risk-free interest rate
The risk-free interest rates were obtained based on the closing price of the futures contract DI1 (Future of Average Rate of One-Day Interbank Deposits) disclosed by B3 on the respective grant dates for similar maturity.
For illustrative purposes, the data explained in this item “b” was the following for the options granted in the fiscal years of 2017, 2018 and 2019:
147
OPTION PRICING MODEL
Assumptions
|
2019
|
Pricing Model
|
Hull Binomial
|
Fair value of options granted
|
4.50
|
Share price
|
17.66
|
Exercise price
|
17.66
|
Expected volatility
|
23.8%
|
Vesting (years)
|
5
|
Expected dividends
|
5%
|
Risk-free interest rate
|
7.8%
|
Assumptions
|
2018(i)
|
Pricing Model
|
Hull Binomial
|
Fair value of options granted
|
5.62
|
Share price
|
18.04
|
Exercise price
|
18.04
|
Expected volatility
|
26.2%
|
Vesting (years)
|
5
|
Expected dividends
|
5%
|
Risk-free interest rate(ii)
|
9.6%
|
Assumptions
|
2017(i)
|
Pricing Model
|
Hull Binomial
|
Fair value of options granted
|
6.51
|
Share price
|
19.80
|
Exercise price
|
19.80
|
Expected volatility
|
26.7%
|
Vesting (years)
|
5
|
Expected dividends
|
5%
|
Risk-free interest rate(ii)
|
10.1%
|
(i) Information based on the weighted average of the programs granted, exception made to the estimate on dividends and risk-free interest rate
(ii) The percentages include the stock options and ADRs granted during the fiscal year, whereas ADRs are denominated in US Dollars.
c. method used and assumptions made to incorporate the expected effects of early exercise of options:
Based on the Hull Binomial Model used by the Company, the immediate exercise of all options granted is assumed if the price of the shares issued by the Company reaches 2.5 times the exercise price. The premise for the period in which the option will be exercised after the expiration of the grace period is related to the behavior of the beneficiaries of the options, which differs from individual to individual. Despite the measurement of past behavior of the beneficiaries to estimate future behavior, in general, prove to be more appropriate, Option Plan, underwent significant changes, especially in relation to the protection of dividends, capable to influence the decision on the exercise of the option. Accordingly, the Company chose to use as a premise the average result of two studies cited by Hull himself, and carried out by Huddart Lang and Carpenter, the conclusion of which established that the exercise of options in a compensation program would occur when the price of the stock issued by the Company reached 2.8 and 2.2 times the exercise price, respectively.
d. how the expected volatility is determined:
For the 2009 option programs, the expected volatility (approved by Companhia de Bebidas das Américas – Ambev and received by the Company) is based on historical data of the last 252 days. As of the 2010 option programs, the expected volatility is measured since March 2004. As explained in “c”, above, the
Hull Binomial Model, adopted by the Company, assumes that all employees would exercise their options immediately if the price of the shares issued by the Company reached 2.5 times the exercise price.
148
e. has any other characteristic of the option been incorporated to the determination of its fair value:
Other characteristics were not incorporated in the measurement of the fair value of the options.
13.9 Shares or quotas directly or indirectly held, in Brazil or abroad, and other securities convertible into shares or quotas issued by the Issuer, its direct or indirect shareholders, subsidiaries or affiliates by members of the Board of Directors, Board of Officers and Fiscal Council, grouped by body:
Instruments issued by Ambev – 12/31/2019
Body
|
No. Shares and ADRs
|
No. of Deferred Shares
|
No. Options
|
Total
|
Board of Directors
|
34,288,097
|
728,325
|
8,134,372
|
43,150,794
|
Board of Officers
|
7,278,433
|
5,030,791
|
11,956,901
|
24,266,125
|
Fiscal Council
|
7,225
|
0
|
0
|
7.225
|
Total
|
41,573,755
|
5,759,116
|
20,091,273
|
67,424,144
|
Instruments issued by ABI – 12/31/2019
Body
|
No.º Shares and ADRs
|
No. of Deferred Shares
|
No. Options
|
Total
|
Board of Directors
|
4,332,700
|
545,862
|
12,945,065
|
17,823,627
|
Board of Officers
|
2,896,481
|
67,820
|
4,909,677
|
7,873,978
|
Fiscal Council
|
0
|
0
|
0
|
-
|
Total
|
7,229,18
|
613,682
|
17,854,742
|
25,697,605
|
13.10. In relation to pension plans in effect granted to the members of the Board of Directors and Board of Officers:
RETIREMENT BENEFITS
|
Board of Directors
|
Board of Officers
|
No. of members
|
13.00
|
10.92
|
No. of members receiving compensation
|
6.00
|
10.00
|
Name of the plan
|
Defined Contribution
|
Defined Contribution
|
Number of managers that are eligible to retire
|
3
|
0
|
Conditions to early retirement
|
53 years of age and 11 years of plan
|
53 years of age and 11 years of plan
|
Updated amount of contributions accrued until the end of the last fiscal year, after deducting the amounts corresponding to contributions made directly by the managers
|
R$ 11,436,515.81
|
R$ 7,359,848.36
|
Total amount of contributions made during the last fiscal year, after deducting the amounts corresponding to contributions made directly by the managers
|
R$ 990,926.88
|
R$ 835,526.83
|
Possibility of and conditions to early redemption
|
Yes, in the event of termination of employment contract with the Company and provided that participant is neither eligible to a retirement benefit under the Plan, nor elects the pro rata deferred benefit, the portability or self-sponsorship. The amount redeemed shall correspond to the contributions made by the participant him/herself.
|
Yes, in the event of termination of employment contract with the Company and provided that participant is neither eligible to a retirement benefit under the Plan, nor elects the pro rata deferred benefit, the portability or self-sponsorship. The amount redeemed shall correspond to the contributions made by the participant him/herself.
|
149
13.11. Compensation of the Board of Directors, Board of Officers and Fiscal Council in the last three fiscal years:
12/31/2019
Body
|
No. of Members
|
No. of members receiving compensation
|
Highest Individual Compensation
|
Lowest Individual Compensation
|
Average Individual Compensation
|
Board of Directors
|
13.00
|
8.00
|
9,036,710.50
|
299,839.45
|
1,790,654.25
|
Fiscal Council
|
5.67
|
5.67
|
443,492.45
|
221,746.22
|
338,452.94
|
Board of Officers
|
10.92
|
10.92
|
14,170,295.57
|
3,058,226.62
|
5,572,957.37
|
12/31/2018
Body
|
No. of Members
|
No. of members receiving compensation
|
Highest Individual Compensation
|
Lowest Individual Compensation
|
Average Individual Compensation
|
Board of Directors
|
13.00
|
8.33
|
8,659,261.70
|
484,455.99
|
1,731,069.60
|
Fiscal Council
|
5.58
|
5.58
|
425,508.48
|
212,754.24
|
320,518.21
|
Board of Officers
|
10.67
|
10.67
|
12,177,219.57
|
2,120,323.95
|
3,792,066.84
|
12/31/2017
Body
|
No. of Members
|
No. of members receiving compensation
|
Highest Individual Compensation
|
Lowest Individual Compensation
|
Average Individual Compensation
|
Board of Directors
|
13.00
|
9.00
|
10,292,851.37
|
412,360.99
|
2,162,467.67
|
Fiscal Council
|
6.00
|
6.00
|
412,360.99
|
206,180.50
|
309,270.83
|
Board of Officers
|
11.00
|
11.00
|
14,065,113.97
|
2,466,975.34
|
4,801,134.36
|
Notes:
Board of Officers
|
12/31/2019
|
- The average compensation of the Board of Officers presented in this item is calculated taking into account the number of members of the Board of Officers (10.92 members) that receive compensation from the Company for their services.
- Includes stock-based compensation of the Company and of the Controlling Company.
- The member that received the highest individual compensation worked for 12 months.
|
12/31/2018
|
- The average compensation of the Board of Officers presented in this item is calculated taking into account the number of members of the Board of Officers (10.67 members) that receive compensation from the Company for their services.
- Includes stock-based compensation of the Company and of the Controlling Company.
- The member that received the highest individual compensation worked for 12 months.
|
12/31/2017
|
- The average compensation of the Board of Officers presented in this item is calculated taking into account the number of members of the Board of Officers (11 members) that receive compensation from the Company for their services.
- Includes stock-based compensation of the Company and of the Controlling Company.
- The member that received the highest individual compensation worked for 12 months.
|
Board of Directors
|
12/31/2019
|
- The average compensation of the Board of Directors presented in this item is calculated taking into account the number of members of the Board of Directors (8 members) that receive compensation from the Company for their services.
- Includes stock-based compensation of the Company and of the Controlling Company.
- The member that received the highest individual compensation worked for 12 months.
|
12/31/2018
|
- The average compensation of the Board of Directors presented in this item is calculated taking into account the number of members of the Board of Directors (8,33 members) that receive compensation from the Company for their services.
- Includes stock-based compensation of the Company and of the Controlling Company.
- The member that received the highest individual compensation worked for 12 months.
|
12/31/2017
|
- The average compensation of the Board of Directors presented in this item is calculated taking into account the number of members of the Board of Directors (9 members) that receive compensation from the Company for their services.
- Includes stock-based compensation of the Company and of the Controlling Company.
- The member that received the highest individual compensation worked for 12 months.
|
150
Fiscal Council
|
12/31/2019
|
- It was considered the 2.67 full members and the three alternate members of the Fiscal Council.
- The member that received the highest individual compensation worked for 12 months.
|
12/31/2018
|
- It was considered the 2.58 full members and the three alternate members of the Fiscal Council.
- The member that received the highest individual compensation worked for 12 months.
|
12/31/2017
|
- It was considered the three full members and the three alternate members of the Fiscal Council.
- The member that received the highest individual compensation worked for 12 months.
|
Note: the alternate members of the Board of Directors are accounted for in the “number of members” included in the tables above.
13.12. Contractual arrangements, insurance policies and other instruments structuring compensation or indemnification mechanisms for the management in the event of dismissal from their job or retirement (including the financial consequences to the Company):
There are no contractual arrangements, directors’ and officers’ liability insurance policies (“D&O”), or other instruments that structure compensation mechanisms or indemnification for the specific administrators for the hypothesis of removal from office or retirement specifically.
As stated on item 12.11 of the Reference Form, the Company has D&O, contracted with the Insurer Zurich Minas Brasil Seguros S/A, for the period from November 30, 2019 to November 30, 2020, with premium value of approximately US$ 35 mil, for the coverage of losses and damages to third parties, for acts related to the exercise of functions and attributions of the administrators, during and after their respective mandates, up to the amount of US$ 25 million.
For more information on the insurance policies for payment or reimbursement of expenses borne by the Company's managers, see item 12.11 of the Reference Form.
13.13. In relation to the three last fiscal years, give the percentage of the overall compensation of each body recognized in the earnings of the Company regarding the members of the Board of Directors, Board of Officers and Fiscal Council that are parties related to the direct or indirect controlling shareholders, as defined by applicable accounting rules on the matter:
December 31, 2019
Body
|
No. of Members
|
Related Party’s Compensation
|
Total Compensation
|
%
|
Board of Directors
|
6.00
|
549,665.45
|
14,325,234.00
|
4
|
Fiscal Council
|
-
|
-
|
1,917,900.00
|
-
|
Board of Officers
|
-
|
-
|
60,838,118.00
|
-
|
Total
|
6.00
|
549,665.45
|
77,081,252.00
|
1
|
151
December 31, 2018
Body
|
No. of Members
|
Related Party’s Compensation
|
Total Compensation
|
%
|
Board of Directors
|
5.00
|
484,455.99
|
14,425,580.00
|
3
|
Fiscal Council
|
-
|
-
|
1,789,560.00
|
-
|
Board of Officers
|
-
|
-
|
40,448,713.00
|
-
|
Total
|
5.00
|
484,455.99
|
56,663,853.00
|
1
|
December 31, 2017
Body
|
No. of Members
|
Related Party’s Compensation
|
Total Compensation
|
%
|
Board of Directors
|
6.00
|
690,908.00
|
19,462,209.00
|
4
|
Fiscal Council
|
-
|
-
|
1,855,625.00
|
-
|
Board of Officers
|
-
|
-
|
52,812,478.00
|
-
|
Total
|
6.00
|
690,908.00
|
74,130,312.00
|
1
|
Note: the alternate members of the Board of Directors are accounted for in the “number of members” included in the tables above.
13.14. Regarding the three last fiscal years, the amounts recognized in the income statement of the Company as compensation to the members of the Board of Directors, Board of Officers or Fiscal Council, grouped by body, for any reason other than their position in the Company, such as, for instance, commissions or fees for consultancy or advisory services rendered:
There are no amounts recognized in the Company’s results for the last three fiscal years as compensation for members of the Board of Directors, Executive Board or the Supervisory Board, since they do not receive compensation from the Company for any other reason (e.g., consulting, advisory etc.), except as a result of the exercise of their positions.
13.15. In relation to the three last fiscal years, the amounts recognized in the income statement of direct and indirect controlling shareholders, affiliates and subsidiaries of the Company, as compensation paid to the members of the Board of Directors, the Board of Officers and Board of Officers of the Company, grouped by body, specifying the reason why such amounts were assigned to those individuals:
Fiscal Year ended December 31, 2019 – Compensation received due to the position in the issuer
|
Board of Directors(i)
|
Board of Officers
|
Fiscal Council
|
Total(ii)
|
Direct and indirect shareholders
|
225,805,583.01
|
8,546,989.01
|
-
|
234,352,572.02
|
Companies controlled by the issuer
|
-
|
-
|
-
|
-
|
Affiliates
|
-
|
-
|
-
|
-
|
Fiscal Year ended December 31, 2018 – Compensation received due to the position in the issuer
|
Board of Directors(i)
|
Board of Officers
|
Fiscal Council
|
Total(ii)
|
Direct and indirect shareholders
|
143,434,692.69
|
4,960,234.61
|
-
|
148,394,927.30
|
Companies controlled by the issuer
|
-
|
-
|
-
|
-
|
Affiliates
|
-
|
-
|
-
|
-
|
Fiscal Year ended December 31, 2017 – Compensation received due to the position in the issuer
|
Board of Directors(i)
|
Board of Officers
|
Fiscal Council
|
Total(ii)
|
Direct and indirect shareholders
|
105,107,234.59
|
6,494,841.30
|
-
|
111,602,075.89
|
Companies controlled by the issuer
|
-
|
-
|
-
|
-
|
Affiliates
|
-
|
-
|
-
|
-
|
(i) Original amounts in dollar, by converted into Brazilian Reais by the annual average rate of each fiscal year.
(ii) The amounts consider the accounting effects provided for in CPC 10 - Share-based Payment.
Note: the alternate members of the Board of Directors and of the Fiscal Council are accounted for in the “number of members” included in the tables above.
152
13.16. Other relevant information:
As described on item 13.4, the members of Company’s management are eligible to receive options with immediate exercise and five years lock up. We present in the table below information regarding the restricted shares as open of the Board of Directors and Board of Officers at the end of the last fiscal year.
12/31/2019
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
No. of members
|
2.00
|
6.00
|
2.00
|
8.00
|
1.00
|
Stock Options
|
|
|
|
|
|
Grant date
|
03/30/2015
|
03/30/2015
|
03/30/2016
|
03/30/2016
|
03/30/2017
|
Number of options granted
|
40,490
|
593,052
|
74,248
|
175,442
|
1,131
|
Number of shares transferred upon the exercise of options during the lock up period
|
111,140
|
216,431
|
203,537
|
822,027
|
5,625
|
Lock up period of restricted shares
|
03/30/2020
|
03/30/2020
|
03/30/2021
|
03/30/2021
|
03/30/2022
|
Weighted average exercise price:
|
18.430
|
18.430
|
18.250
|
18.250
|
17.210
|
Fair value of restricted shares on exercise date
|
2,048,310.20
|
3,988,823.33
|
3,714,550.25
|
15,001,992.75
|
96,806.25
|
Fair value of restricted shares on the last day of the fiscal year
|
2,000,520.00
|
3,895,758.00
|
3,663,666.00
|
14,796,486.00
|
101,250.00
|
Dilution after exercise of restricted shares
|
0.000706%
|
0.001376%
|
0.001294%
|
0.005225%
|
0.000036%
|
As described on item 13.4, the members of the Company's management are eligible to receive restricted shares subject to the Share Plan (options with immediate exercise). We present on the table below information on the restricted shares granted to the Board of Directors and to the Board of Officers within the scope of the Share Programs approved by the Board of Directors and with vesting periods still in progress at the end of the last fiscal year:
31/12/2019
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Board of Directors
|
Board of Officers
|
Total No. of members
|
2.00
|
9.00
|
1.00
|
10.00
|
1.00
|
11.00
|
Stock Options
|
-
|
-
|
-
|
-
|
-
|
-
|
Grant date
|
03/29/2018
|
03/29/2018
|
03/29/2019
|
03/29/2019
|
08/30/2019
|
08/30/2019
|
Number of options granted
|
86,898
|
205,368
|
26,266
|
119,476
|
40,078
|
217,957
|
Number of shares transferred upon the exercise of options during the lock up period
|
278,279
|
728,830
|
53,566
|
555,920
|
81,803
|
853.939
|
Lock up period of restricted shares
|
03/29/2023
|
03/29/2023
|
03/29/2024
|
03/29/2024
|
08/30/2024
|
08/30/2024
|
Weighted average exercise price:
|
22.340
|
22.340
|
16.830
|
16.830
|
19.800
|
19.800
|
Fair value of restricted shares on exercise date
|
6,216,752.86
|
16,282,062.20
|
901,515.78
|
9,356,133.60
|
1,619,699.40
|
16,907,992.20
|
Fair value of restricted shares on the last day of the fiscal year
|
5,009,022.00
|
13,118,940.00
|
964,188.00
|
10,006,560.00
|
1,472,454.00
|
15,370,902.00
|
Dilution after exercise of restricted shares
|
0.001769%
|
0.004632%
|
0.000340%
|
0.003533%
|
0.000520%
|
0.005427%
|
As described in item 13.4 above, as from 2011, the Board of Directors approved, for certain officers deemed by Management to have greater potential, the granting of Share Appreciation Rights. Since this compensation modality does not include equity instruments, it does not imply the issue of shares and, consequently, a dilution for other shareholders.
The table below discloses the same information required for plans that use options whose exercise is not immediate.
153
12/31/2019
|
Board of
Officers
|
Board of
Officers
|
Board of Officers
|
Board of
Officers
|
Board of Officers
|
No. of members
|
1.00
|
1.00
|
1.00
|
2.00
|
2.00
|
Grant date
|
12/15/2010
|
12/20/2012
|
12/22/2014
|
12/22/2015
|
12/22/2015
|
Number of shares for calculation of appreciation
|
117,094
|
73,313
|
97,420
|
377,612
|
377,611
|
Share quotation on grant date
|
9.72
|
17.84
|
15.95
|
18.00
|
18.00
|
Lock up period regarding share appreciation rights
|
12/15/2020
|
12/20/2022
|
12/22/2024
|
12/22/2020
|
12/22/2025
|
Note: the alternate members of the Board of Directors and of the Fiscal Council are accounted for in the “number of members” included in the tables above.
***
154
Exhibit B.I – Report on the Changes to the company’s bylaws
(as exhibit 11 of CVM Instruction 481/09)
CURRENT
ARTICLES OF THE BYLAWS
|
PROPOSED CHANGES
(IN MARKS)
|
JUSTIFICATION
|
CHAPTER II
CAPITAL STOCK AND SHARES
|
CHAPTER II
CAPITAL STOCK AND SHARES
|
|
Article 5 – The capital stock is of R$ 57,798,844,242.20, divided into 15,726,842,297 nominative common shares, without par value.
|
Article 5 – The capital stock is of R$ 57,798,844,242.2057,899,072,773.68, divided into 15,726,842,29715,735,117,965 nominative common shares, without par value.
|
Amendment to reflect the capital increases approved by the Company's Board of Directors, within the authorized capital limit until the date of the general meeting.
|
Article 8 – The Board of Directors may, based on a plan approved by the Shareholders’ Meeting, grant call options to management, employees or individuals that render services to the Company or companies under its control.
|
Article 8 – The Board of Directors may, also, within the limit of the authorized capital, (i) based on a plan approved by the Shareholders’ Meeting, grant call options to management, employees or individuals that render services to the Company or companies under its control; (ii) approve the capital increase by capitalizing profits or reserves, with or without the issuance of new shares; and (iii) resolve on the issuance of subscription bonus or debentures convertible into shares.
|
Amendment to expressly refer to other hypotheses for using the authorized capital limit by the Board of Directors, such as the capitalization of profits or reserves and the issuance of subscription bonuses or debentures convertible into shares, as provided for in the Law 6,404/76.
|
CHAPTER III
SHAREHOLDERS’ MEETINGS
|
CHAPTER III
SHAREHOLDERS’ MEETINGS
|
|
Article 11 – Shareholders’ Meetings shall be convened and presided over by one of the Co-Chairmen of the Board of Directors, or person appointed by them, who may designate up to two secretaries.
|
Article 11 – Shareholders’ Meetings shall be convened and presided over by the Chairman or one of the Co-Chairmen of the Board of Directors, as applicable, or person appointed by them, who may designate up to two secretaries.
|
Amendment due to the possibility of having a single Chairman of the Board of Directors, according to the proposed change to Article 17 of the Company's Bylaws ("Bylaws").
|
CHAPTER IV
MANAGEMENT OF THE COMPANY
|
CHAPTER IV
MANAGEMENT OF THE COMPANY
|
|
Article 15 – The Company shall be managed by a Board of Directors and a Board of Executive Officers, pursuant to law and these By-laws.
Paragraph 1 – The Shareholders’ Meeting shall establish the aggregate compensation of the Management, which shall be apportioned by the Board of Directors, as provided for in Article 21 hereof.
Paragraph 2 – The management must adhere to the Manual on Disclosure and Use of Information and Policy for the Trading with Securities Issued by the Company, by executing the Joinder Agreement.
No correspondence in the current Bylaws (new paragraph).
Paragraph 3 - The offices of Co-Chairmen of the Board of Directors and Chief Executive Officer of the Company may not be cumulated by the same person.
Paragraph 4 - At least two members of the Board of Directors of the Company will be Independent Directors, it being understood, for the purposes hereof, as Independent Directors those in compliance with the following requirements:
a) he/she must not be a Controlling Shareholder, or spouse or relative up to second-degree thereof;
b) he/she must not have been, for the last three years, an employee or officer (i) of the Company or of a company controlled by the Company, or (ii) of the Controlling Shareholder or of a company controlled thereby (“Jointly-Controlled Company”);
c) he/she must not be a supplier or buyer, whether direct or indirect, of services and/or products of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly-Controlled Company, in all cases in magnitude which implies in the loss of independence;
d) he/she must not be an employee or manager of a company or entity which is offering or requesting services and/or products of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly-Controlled Company, as per item (c) above;
e) he/she must not be a spouse or relative up to second degree of any manager of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly-Controlled Company;
f) he/she must not receive compensation by the Company, by a company controlled by the Company, by the Controlling Shareholder or by a Jointly-Controlled Company, except as a member of the Board of Directors (cash provisions from capital interests are excluded from this restriction).
Paragraph 5 - Directors elected pursuant to art. 141, paragraphs 4 and 5, of Law 6,404/76 will also be considered Independent Directors, notwithstanding of complying with the independence criteria provided in this Article.
|
Article 15 – The Company shall be managed by a Board of Directors and a Board of Executive Officers, pursuant to law and these By-laws.
Paragraph 1 – The Shareholders’ Meeting shall establish the aggregate compensation of the Management, which shall be apportioned by the Board of Directors, as provided for in Articlearticle 21 hereof.
Paragraph 2 – The management must adhere to the Manual on Disclosure and Use of Information and Policy for the Trading with Securities Issued by the Company, by executing the Joinder Agreement.
Paragraph 3 -– The Board of Directors will be composed, in its majority, by external members, that is, directors without current, employment or management relationship, with the Company, who may or may not be considered independent members, observed the provisions of paragraph 5 of this article 15.
Paragraph 4 – The offices of Chairman or Co-Chairmen of the Board of Directors, as applicable, and Chief Executive Officer of the Company may not be cumulated by the same person.
Paragraph 45 - At least two members of the Board of Directors of the Company will be Independent Directors, it being understood, for the purposes hereof, as Independent Directors those in compliance with the following requirements:
a) he/she must not be a Controlling Shareholder, or spouse or relative up to second-degree thereof;
b) he/she must not have been, for the last three years, an employee or officer (i) of the Company or of a company controlled by the Company, or (ii) of the Controlling Shareholder or of a company controlled thereby (“Jointly-Controlled Company”);
c) he/she must not be a supplier or buyer, whether direct or indirect, of services and/or products of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly- Controlled Company, in all cases in magnitude which implies in the loss of independence;
d) he/she must not be an employee or manager of a company or entity which is offering or requesting services and/or products of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly- Controlled Company, as per item (c) above;
e) he/she must not be a spouse or relative up to second degree of any manager of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly- Controlled Company;
f) he/she must not receive compensation by the Company, by a company controlled by the Company, by the Controlling Shareholder or by a Jointly- Controlled Company, except as a member of the Board of Directors (cash provisions from capital interests are excluded from this restriction).
Paragraph 56 - Directors elected pursuant to art. 141, paragraphs 4 and 5, of Law 6,404/76 will also be considered Independent Directors, notwithstanding of complying with the independence criteria provided in this Articlearticle.
|
Amendment to provide the Company's Board of Directors will be composed, in its majority, by external members, in accordance with the recommendations of the Brazilian Corporate Governance Code and with the practice already observed by the Company.
Amendment due to the possibility of having a single Chairman of the Board of Directors, according to the proposed change to article 17 of the Bylaws.
|
SECTION I
BOARD OF DIRECTORS
|
SECTION I
BOARD OF DIRECTORS
|
|
Article 16 – The Board of Directors shall be composed of three (3) to eleven (11) sitting members, with two (2) to eleven (11) alternates, bound or not to a specific sitting Director, and shall be elected by the Shareholders’ Meeting and be dismissed thereby at any time, with a term of office of three (3) years, reelection being permitted.
|
Article 16 – The Board of Directors shall be composed of threefive (35) to eleven (11) sitting members, with two (2) to eleven (11) alternates, bound or not to a specific sitting Director, and shall be elected by the Shareholders’ Meeting and be dismissed thereby at any time, with a term of office of three (3) years, reelection being permitted.
|
Amendment of the minimum number of effective members who must integrate the Board of Directors from 3 to 5, in order to ensure such body has a composition that allows it to maintain the quality and diversity of points of view in its discussions.
|
Article 17 - The Board of Directors shall have two (2) Co-Chairmen, with identical prerogatives and duties, who shall be elected by a majority of the members of the Board of Directors, immediately after said members are invested in office.
|
Article 17 - The Board of Directors shall have one Chairman or two (2) Co-Chairmen, withas defined by the vote of the majority of its members, and, in the case of Co-Chairmen, this must be done in a shared manner, with both Co-Chairmen having identical prerogatives and duties, who shall. The Chairman or Co-Chairmen of the Board of Directors, as applicable, will be elected by a majority of the members of the Board of Directors, immediately after said members are invested in office.
|
Amendment to provide for the possibility of having, as an alternative to the model of co-chairmen of the Board of Directors, a single Chairman, giving the directors freedom to choose the composition that is most appropriate for the time of the Company.
|
Article 18 - The Board of Directors shall meet, ordinarily, at least once each quarter and, extraordinarily, whenever necessary, upon call by any of its Co-Chairmen or by the majority of its members, through letter, email, telegram or personally, with at least 24 (twenty-four) hours in advance.
|
Article 18 - The Board of Directors shall meet, ordinarily, at least once each quarter and, extraordinarily, whenever necessary, upon call by the Chairman or any of its Co-Chairmen, as applicable, or by the majority of its members, through letter, email, telegram or personally, with at least 24 (twenty-four) hours in advance.
|
Amendment due to the possibility of having a single Chairman of the Board of Directors, according to the proposed change to article 17 of the Bylaws.
|
Article 19 - The Board of Directors shall be convened, operate and pass valid resolutions by the favorable vote of the majority of its members present in the meeting.
Paragraph 1 – The Directors may attend meetings by telephone, videoconferencing, telepresence or by previously sending their votes in writing. In this case, the Director will be considered to be present at a meeting in order to ascertain the quorum for declaring it open and voting, with this vote being deemed valid for all legal effects, being included in minutes of such meeting.
Paragraph 2 – In the event of a tie in the resolutions of the Board of Directors, none of the Co-Chairmen shall have the casting vote, but only their own personal votes.
|
Article 19 - The Board of Directors shall be convened, operate and pass valid resolutions by the favorable vote of the majority of its members present in the meeting.
Paragraph 1 – The Directors may attend meetings by telephone, videoconferencing, telepresence or by previously sending their votes in writing. In this case, the Director will be considered to be present at a meeting in order to ascertain the quorum for declaring it open and voting, with this vote being deemed valid for all legal effects, being included in minutes of such meeting.
Paragraph 2 – In the event of a tie in the resolutions of the Board of Directors, noneneither the Chairman nor any of the Co-Chairmen, as applicable, shall have the casting vote, but only their own personal votes.
|
Update of the spelling of words and changes due to the possibility of having a single Chairman of the Board of Directors, according to the proposed change to article 17 of the Bylaws.
|
Article 21 – The Board of Directors shall resolve on the matters listed below:
a) establish the general direction of the Company's business, approving the guidelines, corporate policies and basic objectives for all the main areas of performance of the Company;
b) approve the annual investment budget of the Company;
c) approve the three-year strategic plan of the Company;
d) elect and dismiss the Company's Officers, and set their attributions;
e) supervise the management of the Board of Executive Officers, review at any time the books and documents of the Company, and request information regarding any acts executed or to be executed by the Company;
f) attribute, from the aggregate value of the compensation established by the Shareholders’ Meeting, the monthly fees of each of the members of the Company's Management;
g) define the general criteria on compensation and benefit policy (fringe benefits, participation in profits and/or sales) for the management and senior employees (namely, managers or employees in equivalent direction positions) of the Company;
h) appoint the Company's independent auditors;
i) resolve on the issue of shares and warrants, within the limit of the authorized capital of the Company;
j) provide a previous manifestation on the management's report, the Board of Executive Officers' accounts, the financial statements for the fiscal year, and review the monthly balance sheets;
k) submit to the Shareholders’ Meeting of the proposal of allocation of the net profits for the year;
l) call the Annual Shareholders’ Meeting and, whenever it may deem advisable, the Extraordinary Shareholders’ Meetings;
m) approve any business or agreements between the Company and/or any of its controlled companies (except those fully controlled), management and/or shareholders (including any direct or indirect partners of the Company's shareholders), without impairment of item “q” below;
n) approve the creation, acquisition, assignment, transfer, encumbering and/or disposal by the Company, in any way whatsoever, of shares, quotas and/or any securities issued by any company controlled by the Company or associated to the Company; except in case of operations involving only the Company and companies fully controlled thereby or in case of indebtedness operation, in which case the provisions of item “o” bellow shall apply;
o) approve the contracting by the Company of any debt in excess of ten percent (10%) of the Company's shareholders’ equity reflected on the latest audited balance sheet; this amount shall be considered per individual transaction or a series of related transactions;
p) approve the execution, amendment, termination, renewal or cancellation of any contracts, agreements or similar instruments involving trademarks registered or deposited in the name of the Company or any of its controlled companies; except in the event of licensing of brands to be used in gifts, advertising materials or disclosure in events for periods under three (3) years;
q) approve the granting of loans and the rendering of guarantees of any kind by the Company for amounts exceeding one percent (1%) of the shareholders’ equity of the Company reflected on the latest audited balance sheet, to any third party, except in favor of any companies controlled by the Company;
r) approve the execution by the Company of any long-term agreements (i.e., agreements executed for a term exceeding one year), involving an amount in excess of five percent (5%) of the shareholders’ equity of the Company, as shown on the latest audited balance sheet; this amount shall be considered per individual transaction or a series of related transactions;
s) resolve on the Company's participation in other companies, as well as on any participation in other undertakings, including through a consortium or special partnership;
t) resolve on the suspension of the Company's activities, except in the cases of stoppage for servicing of its equipment;
u) authorize the acquisition of shares of the Company to be kept in treasury, be canceled or subsequently disposed of, as well as the cancellation and further sale of such shares, with due regard for applicable law;
v) resolve on the issuance of Trade Promissory Notes for public distribution, pursuant to CVM Ruling No. 134;
w) resolve, within the limits of the authorized capital, on the issuance of convertible debentures, specifying the limit of the increase of capital arising from debentures conversion, by number of shares, and the species and classes of shares that may be issued, under the terms of article 59 paragraph 2 of Law 6,404/76
x) authorize the disposal of fixed assets, excepted for the ones mentioned in item “n” of this Article, and the constitution of collateral in an amount greater than 1% (one percent) of the shareholders’ equity reflected in the latest audited balance sheet. This amount will be considered per individual transaction or a series of related transactions;
y) perform the other legal duties assigned thereto at the Shareholders’ Meeting or in these By-laws; and
z) resolve on any cases omitted by these By-laws and perform other attributions not conferred on another body of the Company by the law or these By-laws.
|
Article 21 – The Board of Directors shall resolve on the matters listed below:
a) establish the general direction of the Company's business, approving the guidelines, corporate policies and basic objectives for all the main areas of performance of the Company;
b) approve the annual investment budget of the Company;
c) approve the three-year strategic plan of the Company;
d) elect and dismiss the Company's Officers, and set their attributions;
e) supervise the management of the Board of Executive Officers, review at any time the books and documents of the Company, and request information regarding any acts executed or to be executed by the Company;
f) attribute, from the aggregate value of the compensation established by the Shareholders’ Meeting, the monthly fees of each of the members of the Company's Management;
g) define the general criteria on compensation and benefit policy (fringe benefits, participation in profits and/or sales) for the management and senior employees (namely, managers or employees in equivalent direction positions) of the Company;
h) appoint the Company's independent auditors;
i) resolve on the issue of shares and warrants, within the limit of the authorized capital of the Company;
j) provide a previous manifestation on the management's report, the Board of Executive Officers' accounts, the financial statements for the fiscal year, and review the monthly balance sheets;
k) submit to the Shareholders’ Meeting of the proposal of allocation of the net profits for the year;
l) call the Annual Shareholders’ Meeting and, whenever it may deem advisable, the Extraordinary Shareholders’ Meetings;
m) approve any business or agreements between the Company and/or any of its controlled companies (except those fully controlled), management and/or shareholders (including any direct or indirect partners of the Company's shareholders), without impairment of item “q” below;
n) approve the creation, acquisition, assignment, transfer, encumbering and/or disposal by the Company, in any way whatsoever, of shares, quotas and/or any securities issued by any company controlled by the Company or associated to the Company; except in case of operations involving only the Company and companies fully controlled thereby or in case of indebtedness operation, in which case the provisions of item “o” bellow shall apply;
o) approve the contracting by the Company of any debt in excess of ten percent (10%) of the Company's shareholders’ equity reflected on the latest audited balance sheet; this amount shall be considered per individual transaction or a series of related transactions;
p) approve the execution, amendment, termination, renewal or cancellation of any contracts, agreements or similar instruments involving trademarks registered or deposited in the name of the Company or any of its controlled companies; except (i) for the agreements entered into between the Company and its fully controlled companies, or (ii) in the event of licensing of brands to be used in gifts, advertising accessory materials connected to such brands, or disclosure in events for periods under three, or yet (3iii) yearsfor agreements in which the licensing of brands is an accessory element to the execution of its main purpose (provided they do not depend on the approval of the Board of Directors for any other reason provided in this article 21);
q) approve the granting of loans and the rendering of guarantees of any kind by the Company for amounts exceeding one percent (1%) of the shareholders’ equity of the Company reflected on the latest audited balance sheet, to any third party, except in favor of any companies controlled by the Company;
r) approve the execution by the Company of any long-term agreements (i.e., agreements executed for a term exceeding one year), involving an amount in excess of five percent (5%) of the shareholders’ equity of the Company, as shown on the latest audited balance sheet; this amount shall be considered per individual transaction or a series of related transactions, except in the case of agreements entered into between the Company and its fully controlled companies;
s) resolve on the Company's participation in other companies, as well as on any participation in other undertakings, including through a consortium or special partnership;
t) resolve on the suspension of the Company's activities, except in the cases of stoppage for servicing of its equipment;
u) authorize the acquisition of shares of the Company to be kept in treasury, be canceled or subsequently disposed of, as well as the cancellation and further sale of such shares, with due regard for applicable law;
v) resolve on the issuance of Trade Promissory Notes for public distribution, pursuant to CVM Ruling No. 134;
w) resolve, within the limits of the authorized capital, on the issuance of convertible debentures, specifying the limit of the increase of capital arising from debentures conversion, by number of shares, and the species and classes of shares that may be issued, under the terms of article 59 paragraph 2 of Law 6,404/76
x) authorize the disposal of fixed assets, excepted for the ones mentioned in item “n” of this Articlearticle, and the constitution of collateral in an amount greater than 1% (one percent) of the shareholders’ equity reflected in the latest audited balance sheet. This amount will be considered per individual transaction or a series of related transactions;
y) perform the other legal duties assigned thereto at the Shareholders’ Meeting or in these By-laws; and
z) resolve on any cases omitted by these By-laws and perform other attributions not conferred on another body of the Company by the law or these By-laws.
|
Adjustment to the list of matters subject to prior approval by the Board of Directors, in order to exclude those that, given their relevance and potential impact on the Company's operation and results, should be within the competence of the Company's Officers.
|
155
|
|
|
SECTION II
BOARD OF EXECUTIVE OFFICERS
|
SECTION II
BOARD OF EXECUTIVE OFFICERS
|
|
Article 22 – The Board of Executive Officers shall be composed of two (2) to fifteen (15) members, shareholders or not, of whom (i) one shall be the Chief Executive Officer (ii) one shall be the Sales Executive Officer, (iii) one shall be the People and Management Executive Officer, (iv) one shall be the Logistics Executive Officer, (v) one shall be the Marketing Executive Officer, (vi) one shall be the Industrial Executive Officer, (vii) one shall be the Chief Financial and Investor Relations Officer, (viii) one shall be the General Counsel, (ix) one shall be the Soft Drinks Executive Officer, (x) one shall be the Corporate Affairs Executive Officer, (xi) one shall be the Shared Services and Information Technology Executive Officer, and (xii) the remaining Officers shall have no specific designation; all of whom shall be elected by the Board of Directors, and may be removed from office by it at any time, and shall have a term of office of three (3) years, reelection being permitted.
|
Article 22 – The Board of Executive Officers shall be composed of two (2) to fifteen (15) members, shareholders or not, of whom (i) one shall be the Chief Executive Officer (ii) one shall be the Commercial Vice President Officer, (iii) one shall be the Sales ExecutiveVice President Officer, (iiiiv) one shall be the People and Management ExecutiveVice President Officer, (ivv) one shall be the Logistics ExecutiveVice President Officer, (vvi) one shall be the Marketing ExecutiveVice President Officer, (vivii) one shall be the Industrial ExecutiveVice President Officer, (viiviii) one shall be the Chief Financial and Investor Relations Officer, (viiiix) one shall be the General Counsel, (ix) one shall be the Soft Drinks ExecutiveLegal Vice President Officer, (x) one shall be the Corporate Affairs ExecutiveNon-Alcoholic Beverages Vice President Officer, (xi) one shall be the Shared Services andCompliance Vice President Officer, and (xii) one shall be the Information Technology ExecutiveVice President Officer, and (xiixiii) the remaining Officers shall have no specific designation; all of whom shall be elected by the Board of Directors, and may be removed from office by it at any time, and shall have a term of office of three (3) years, reelection being permitted.
|
Assignment of new names to the positions of the Executive Board and creation/exclusion of positions of Vice-President Directors to reflect a new organizational structure.
|
Article 23 – The Executive Board, whose presidency will be held by the Chief Executive Officer, shall meet as necessary, it being incumbent upon the Chief Executive Officer to call and to be the chairman of the meeting.
|
Article 23 – The Executive Board, whose presidency will be held by the Chief Executive Officer, shall meet as necessary, it being incumbent upon the Chief Executive Officer to call and to be the chairman of the meeting.
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 24 – It is the Chief Executive Officer’s responsibility to:
|
Article 24 – It is the Chief Executive Officer’s responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
No correspondence in the current Bylaws (new paragraph).
|
Article 25 – It is the Sales ExecutiveCommercial Vice President Officer’s responsibility to:
a) be responsible for the direction, strategic planning and control of the Company's sales and marketing areas; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
|
Inclusion of the competence details attributed to the new position of Commercial Vice President Officer.
|
Article 25 – It is the Sales Executive Officer’s responsibility to: (...)
|
Article 26 – It is the Sales Vice President Officer’s responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 26 – It is the People and Management Executive Officer’s responsibility to: (...)
|
Article 2627 – It is the People and Management ExecutiveVice President Officer’s responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 27 - It is the Logistics Executive Officer’s responsibility to: (...)
|
Article 2728 - It is the Logistics ExecutiveVice President Officer’s responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 28 - It is the Marketing Executive Officer’s responsibility to: (...)
|
Article 2829 - It is the Marketing ExecutiveVice President Officer’s responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 29 – It is the Industrial Executive Officer’s responsibility to: (...)
|
Article 2930 – It is the Industrial ExecutiveVice President Officer’s responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 30 – It is the Chief Financial and Investor Relations Officer’s responsibility to:
a) manage and respond for the budget control of the Company;
b) provide managerial and financial information;
c) be responsible for the control over the cash flow and financial investments of the Company;
d) provide any and all information to investors, to the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários) and to BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
e) maintain the registration of the Company as an openly-held company updated; and
f) exercise the other prerogatives conferred upon it by the Board of Directors.
|
Article 3031 – It is the Chief Financial and Investor Relations Officer’s responsibility to:
a) manage and respond for the budget control of the Company;
b) provide managerial and financial information;
c) be responsible for the control over the cash flow and financial investments of the Company;
d) provide any and all information to investors, to the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários) and to BM&FBOVESPAB3 S.A. –- Brasil, Bolsa de Valores, Mercadorias e Futuros, Balcão;
e) maintain the registration of the Company as an openly- held company updated; and
f) exercise the other prerogatives conferred upon it by the Board of Directors.
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws and update to the corporate name of the Brazilian Stock Exchange.
|
Article 31 - It is the General Counsel’s responsibility to: (...)
|
Article 3132 - It is the General Counsel’sLegal Vice President Officer responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 32 – It is the Soft Drinks Executive Officer’s responsibility to: (...)
|
Article 3233 – It is the Soft Drinks ExecutiveNon-Alcoholic Beverages Vice President Officer’s responsibility to: (...)
|
Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws.
|
Article 33 – It is the Corporate Affairs Executive Officer’s responsibility to:
a) respond for the external communication, as well as the Company’s corporate and governmental relations; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
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Article 3334 – It is the Corporate Affairs ExecutiveCompliance Vice President Officer’s responsibility to:
a) implement, manage and operationalize the Company's compliance program, ensuring compliance, effectiveness and continuous improvement;
b) investigate any allegations of violations to the Company's compliance program; and
c) exercise the other prerogatives conferred upon it by the Board of Directors.
Paragraph 1 – It is granted to the Compliance Vice-President Officer, in the exercise of his/her duties, direct access to the Board of Directors.
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Adjustment to reflect the new organizational structure of the Executive Board, as proposed in article 22 of the Bylaws, including competence details attributed to the new position of Compliance Vice President Officer.
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Article 34 – It is the Shared Services and Information Technology Executive Officer’s responsibility to:
a) respond for the direction, planning and control of the information technology sector of the Company, as well as of its shared services center; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
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Article 35 – It is the Information Technology Vice President Officer’s responsibility to:
a) respond for the external communication, as well asdirection, planning and control of the information technology sector of the Company’s corporate and governmental relations; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
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Adjustment in the name of the positions of the Executive Board due to the proposed amendment to article 22 of the Bylaws and in the competence of the Information Technology Vice President Officer, who is no longer responsible for shared services.
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Article 35 – It is incumbent upon the other Executive Officers to exercise the prerogatives conferred upon them by means of a Meeting of the Board of Directors, which may establish specific titles for their positions.
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Article 3536 – It is incumbent upon the other Executive Officers to exercise the prerogatives conferred upon them by means of a Meeting of the Board of Directors, which may establish specific titles for their positions.
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Article renumbering.
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Article 36 - The Documents involving the Company in any commercial, banking, financial or equity liability, such as agreements in general, check endorsements, promissory notes, bills of exchange, trade bills and any credit instruments, debt acknowledgments, granting of aval guarantees and sureties, credit facility agreements, acts performed by branches, ad negocia and ad judicia powers of attorney, and any other acts creating any liability for the Company or waiving third-party obligations or obligations to the Company, shall be valid upon the signature of two members of the Executive Board.
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Article 3637 - The Documents involving the Company in any commercial, banking, financial or equity liability, such as agreements in general, check endorsements, promissory notes, bills of exchange, trade bills and any credit instruments, debt acknowledgments, granting of aval guarantees and sureties, credit facility agreements, acts performed by branches, ad negocia and ad judicia powers of attorney, and any other acts creating any liability for the Company or waiving third-party obligations or obligations to the Company, shall be valid upon the signature of two members of the Executive Board.
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Article renumbering.
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CHAPTER V FISCAL COUNCIL
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CHAPTER V FISCAL COUNCIL
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Article 37 – The Company shall have a Fiscal Council, on a permanent basis, composed of three (3) to five (5) members and an equal number of alternates. All of its members shall be elected at a Shareholders’ Meeting and by it removed at any time. Their term of office shall expire at the Annual Shareholders’ Meeting to be held following their election, reelection being permitted.
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Article 3738 – The Company shall have a Fiscal Council, on a permanent basis, composed of three (3) to five (5) members and an equal number of alternates. All of its members shall be elected at a Shareholders’ Meeting and by it removed at any time. Their term of office shall expire at the Annual Shareholders’ Meeting to be held following their election, reelection being permitted.
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Article renumbering.
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Article 38 – The compensation of the Fiscal Council's members shall be established by the Shareholders’ Meeting that elects them.
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Article 3839 – The compensation of the Fiscal Council's members shall be established by the Shareholders’ Meeting that elects them.
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Article renumbering.
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CHAPTER VI FISCAL YEAR, BALANCE SHEET AND RESULTS
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CHAPTER VI FISCAL YEAR, BALANCE SHEET AND RESULTS
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Article 39 – The fiscal year shall have the duration of one year, and shall end on the last day of December of each year.
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Article 3940 – The fiscal year shall have the duration of one year, and shall end on the last day of December of each year.
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Article renumbering.
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Article 40 - At the end of each fiscal year, the financial statements determined by law shall be drawn up in accordance with the Company's bookkeeping.
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Article 4041 - At the end of each fiscal year, the financial statements determined by law shall be drawn up in accordance with the Company's bookkeeping.
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Article renumbering.
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Article 41 - From the profits ascertained in each year, accumulated losses and a provision for income tax shall be deducted prior to any other distribution.
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Article 4142 - From the profits ascertained in each year, accumulated losses and a provision for income tax shall be deducted prior to any other distribution.
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Article renumbering.
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CHAPTER VII LIQUIDATION, WINDING-UP AND EXTINGUISHMENT
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CHAPTER VII LIQUIDATION, WINDING-UP AND EXTINGUISHMENT
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Article 42 – The Company shall be liquidated, wound up and extinguished in the cases contemplated by law or by resolution of the Shareholders’ Meeting.
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Article 4243 – The Company shall be liquidated, wound up and extinguished in the cases contemplated by law or by resolution of the Shareholders’ Meeting.
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Article renumbering.
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CHAPTER VIII GENERAL PROVISIONS
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CAPÍTULO VIII DISPOSIÇÕES GERAIS
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Article 43 – The dividends attributed to the shareholders shall be paid within the legal time frames, and monetary adjustment and/or interest shall only be assessed if so determined by the Shareholders’ Meeting.
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Article 4344 – The dividends attributed to the shareholders shall be paid within the legal time frames, and monetary adjustment and/or interest shall only be assessed if so determined by the Shareholders’ Meeting.
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Article renumbering.
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Article 44 – The Company shall comply with the shareholders' agreements registered as provided for in article 118 of Law No. 6,404/76.
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Article 4445 – The Company shall comply with the shareholders' agreements registered as provided for in article 118 of Law No. 6,404/76.
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Article renumbering.
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Article 45 – The Company will provide the members of the Board of Directors, of the Board of Executive Officers and of the Fiscal Council, or the members of any corporate bodies with technical functions set up to advise the managers, a legal defense in lawsuits and administrative proceedings filed by third parties during or after their respective terms of office, for acts performed during the exercise of their functions, including through a permanent insurance policy, shielding them against liability for acts arising from the exercise of their positions or functions, including the payment of court costs, legal fees, indemnifications and any other amounts arising from such proceedings.
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Article 4546 – The Company will provide the members of the Board of Directors, of the Board of Executive Officers and of the Fiscal Council, or the members of any corporate bodies with technical functions set up to advise the managers, a legal defense in lawsuits and administrative proceedings filed by third parties during or after their respective terms of office, for acts performed during the exercise of their functions, including through a permanent insurance policy, shielding them against liability for acts arising from the exercise of their positions or functions, including the payment of court costs, legal fees, indemnifications and any other amounts arising from such proceedings.
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Article renumbering.
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***
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“BY-LAWS
“BYLAWS
CHAPTER I
NAME, HEADQUARTERS, PURPOSE AND DURATION
Article 1 - AMBEV S.A. (“Company”) is a corporation (sociedade anônima), which shall be governed by these By-laws and by applicable law.
Article 2 – The Company has its headquarters and jurisdiction in the City of São Paulo, State of São Paulo. Branches, offices, deposits or representation agencies may be opened, maintained and closed elsewhere in Brazil or abroad, by resolution of its Board of Directors, for achievement of the Company’s purposes.
Article 3 – The purpose of the Company, either directly or by participation in other companies, is:
· the production and trading of beer, concentrates, soft drinks and other beverages, as well as foods and drinks in general, including ready-to-drink liquid compounds, flavored liquid preparations, powdered or tubbed guaraná;
· the production and trading of raw materials required for the industrialization of beverages and byproducts, such as malt, barley, ice, carbonic gas, as well as apparatus, machinery, equipment, and anything else that may be necessary or useful for the activities listed in item (a) above, including the manufacturing and sale of packages for beverages, as well as the manufacturing, sale and industrial use of raw material necessary for the manufacturing of such packages;
· the production, certification and commerce of seeds and grains, as well as the commerce of fertilizers and fungicides and other related activities, as necessary or useful to the development of the main activities of the Company as stated in these By-laws;
· the packaging and wrapping of any of the products belonging to it or to third parties;
· the agricultural cultivation and promotion activities in the field of cereals and fruits which are the raw material used by the Company in its industrial activities, as well as in other sectors that require a more dynamic approach in the exploration of the virtues of the Brazilian soil, mainly in the food and health segments;
· the operation on the following areas: research, prospecting, extraction, processing, industrialization, commercialization and distribution of mineral water, in all national territory;
· the beneficiation, expurgation and other phytosanitary services, and industrialization of products resulting from the activities listed in item (d) above,
either for meeting the purposes of its industry or for trading of its byproducts, including, but not limited to, byproducts for animal feeding;
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· the advertising of products belonging to it and to third parties, and the trading of promotional and advertising materials;
· the rendering of technical, market and administrative assistance services and other services directly or indirectly related to the core activities of the Company;
· the importation of anything necessary for its industry and trade;
k) the exportation of its products;
· the direct or indirect exploration of bars, restaurants, luncheonettes and similar places;
· the contracting, sale and/or distribution of its products and the products of its controlled companies, either directly or through third parties, using the means of transport required for distribution of such products, byproducts or accessories, and adoption of any system or instruction that, at the discretion of the Board of Directors, may lead to the envisaged purposes;
· printing and reproduction of recorded materials, including the activities of printing, services of preprinting and graphic finishing and reproduction of recorded materials in any base.
Sole Paragraph – Additionally to the provisions of the caption of this Articlearticle, the Company may participate in or associate itself with other commercial and civil companies, as partner, shareholder or quotaholder, in Brazil or abroad.
Article 4 – The Company is established for an indeterminate term.
CHAPTER II
CAPITAL STOCK AND SHARES
Article 5 – The capital stock is of R$ 57,798,844,242.2057,899,072,773.68, divided into 15,726,842,29715,735,117,965 nominative common shares, without par value.
Paragraph 1 – Each common share shall be entitled to one vote in the resolutions of the Shareholders’ Meeting.
Paragraph 2 – The Company shares are in the book-entry form, and shall be held in a deposit account in the name of the respective holders, with a financial institution indicated by the Board of Directors.
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Paragraph 3 – The Company may suspend the services of transfer and splitting of shares and certificates in accordance with the Shareholders’ Meeting's determination, provided that this suspension does not exceed ninety (90) intercalary days during the fiscal year or fifteen (15) consecutive days.
Article 6 – The Company is authorized to increase its share capital up to the limit of 19,000,000 (nineteen billion) shares, irrespective of an amendment to the By-laws, by resolution of the Board of Directors, which shall resolve on the paying-up conditions, the characteristics of the shares to be issued and the issue price, and shall establish whether the increase shall be carried out by public or private subscription.
Sole Paragraph – The issuance of shares pursuant to any special laws regarding fiscal incentives (art. 172, sole paragraph, of Law 6,404/76) shall not give rise to preemptive rights to shareholders; provided, however, that shares subscribed with funds originated from fiscal incentives shall not carry preemptive rights for subscription in connection with any issuance of shares after such subscription.
Article 7 – The issuance of shares, debentures convertible into shares and subscription bonds, the placement of which shall be made (i) by sale on the stock exchange; (ii) by public subscription; or (iii) for share swap, in a public offering for acquisition of control which, under the terms of articles 257 and 263, of Law 6,404/76, may be carried out with exclusion of the preemptive right or with reduction in the period which is addressed in article 171, paragraph 4 of Law 6,404/76.
Article 8 – The Board of Directors may, also, within the limit of the authorized capital, (i) based on a plan approved by the Shareholders’ Meeting, grant call options to management, employees or individuals that render services to the Company or companies under its control; (ii) approve the capital increase by capitalizing profits or reserves, with or without the issuance of new shares; and (iii) resolve on the issuance of subscription bonus or debentures convertible into shares.
Article 9 – Failure by the subscriber to pay the subscribed value, on the conditions set forth in the bulletin or call shall cause it to be considered in default by operation of law, for purposes of articles 106 and 107 of Law 6,404/76, subjecting it to the payment of the amount in arrears, adjusted for inflation according to the variation in the General Market Price Index (IGP-M) in the shortest period permitted by law, in addition to interest at twelve percent (12%) per year, pro rata temporis, and a fine corresponding to ten percent (10%) of the amount in arrears, duly updated.
CHAPTER III
SHAREHOLDERS’ MEETINGS
Article 10 – The Shareholders’ Meeting has the power to decide on all businesses related to the object of the Company and to take any resolutions it may deem advisable for its protection and development.
Article 11 – Shareholders’ Meetings shall be convened and presided over by the Chairman or one of the Co-Chairmen of the Board of Directors, as applicable, or person appointed by them, who may designate up to two secretaries.
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Article 12 – Any resolutions of the Shareholders’ Meetings, except for the cases contemplated by law, shall be taken by an absolute majority of votes, excluding any blank votes.
Article 13 – Annual Shareholders’ Meetings shall be held within the first four months after the end of the fiscal year, and shall decide on matters under their authority, as set forth in law.
Article 14 – Extraordinary Shareholders’ Meetings shall be held whenever the interests of the Company so require, as well as in the events established in law and in these By-laws.
CHAPTER IV
MANAGEMENT OF THE COMPANY
Article 15 – The Company shall be managed by a Board of Directors and a Board of Executive Officers, pursuant to law and these By-laws.
Paragraph 1 – The Shareholders’ Meeting shall establish the aggregate compensation of the Management, which shall be apportioned by the Board of Directors, as provided for in Articlearticle 21 hereof.
Paragraph 2 – The management must adhere to the Manual on Disclosure and Use of Information and Policy for the Trading with Securities Issued by the Company, by executing the Joinder Agreement.
Paragraph 3 -– The Board of Directors will be composed, in its majority, by external members, that is, directors without current, employment or management relationship, with the Company, who may or may not be considered independent members, observed the provisions of paragraph 5 of this article 15.
Paragraph 4 – The offices of Chairman or Co-Chairmen of the Board of Directors, as applicable, and Chief Executive Officer of the Company may not be cumulated by the same person.
Paragraph 45 - At least two members of the Board of Directors of the Company will be Independent Directors, it being understood, for the purposes hereof, as Independent Directors those in compliance with the following requirements:
g) he/she must not be a Controlling Shareholder, or spouse or relative up to second-degree thereof;
h) he/she must not have been, for the last three years, an employee or officer (i) of the Company or of a company controlled by the Company, or (ii) of the Controlling Shareholder or of a company controlled thereby (“Jointly-Controlled Company”);
i) he/she must not be a supplier or buyer, whether direct or indirect, of services and/or products of the Company, of a company controlled by the Company, of
the Controlling Shareholder or of a Jointly- Controlled Company, in all cases in magnitude which implies in the loss of independence;
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j) he/she must not be an employee or manager of a company or entity which is offering or requesting services and/or products of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly- Controlled Company, as per item (c) above;
k) he/she must not be a spouse or relative up to second degree of any manager of the Company, of a company controlled by the Company, of the Controlling Shareholder or of a Jointly- Controlled Company;
l) he/she must not receive compensation by the Company, by a company controlled by the Company, by the Controlling Shareholder or by a Jointly- Controlled Company, except as a member of the Board of Directors (cash provisions from capital interests are excluded from this restriction).
Paragraph 56 - Directors elected pursuant to art. 141, paragraphs 4 and 5, of Law 6,404/76 will also be considered Independent Directors, notwithstanding of complying with the independence criteria provided in this Articlearticle.
SECTION I
BOARD OF DIRECTORS
Article 16 – The Board of Directors shall be composed of threefive (35) to eleven (11) sitting members, with two (2) to eleven (11) alternates, bound or not to a specific sitting Director, and shall be elected by the Shareholders’ Meeting and be dismissed thereby at any time, with a term of office of three (3) years, reelection being permitted.
Paragraph 1- Subject to the caption of this Articlearticle, the number of members that will make up the Board of Directors in each management period shall be previously established at each Shareholders’ Meeting whose agenda includes election of the members of the Board of Directors, and this matter shall be forwarded by the Chairman of the Shareholders’ Meeting.
Paragraph 2 - The Board of Directors may determine the creation of advisory committees formed in its majority by members of the Board of Directors, defining their respective composition and specific duties. The rules of article 160 of Law No. 6,404/76 shall apply to members of the advisory committees. It will be incumbent upon said committees to analyze and discuss the issues defined as being within the scope of their duties, as well as to formulate proposals and recommendations for deliberation by the Board of Directors.
Paragraph 3- The members of the Board of Directors shall be invested in office upon the execution of the respective instrument, drawn up in the proper book, and shall remain in office until they are replaced by their successors.
Paragraph 4 - The Director shall have an indisputable reputation, and cannot be elected, unless waived by the Shareholders’ Meeting, if it (i) occupies a position in companies that can be considered as a competitor of the Company, or (ii) has or
represents a conflicting interest with the Company; the voting rights of the Director cannot be exercised by him/her in case the same impediment factors are configured.
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Article 17 - The Board of Directors shall have one Chairman or two (2) Co-Chairmen, withas defined by the vote of the majority of its members, and, in the case of Co-Chairmen, this must be done in a shared manner, with both Co-Chairmen having identical prerogatives and duties, who shall. The Chairman or Co-Chairmen of the Board of Directors, as applicable, will be elected by a majority of the members of the Board of Directors, immediately after said members are invested in office.
Article 18 - The Board of Directors shall meet, ordinarily, at least once each quarter and, extraordinarily, whenever necessary, upon call by the Chairman or any of its Co-Chairmen, as applicable, or by the majority of its members, through letter, email, telegram or personally, with at least 24 (twenty-four) hours in advance.
Article 19 - The Board of Directors shall be convened, operate and pass valid resolutions by the favorable vote of the majority of its members present in the meeting.
Paragraph 1 – The Directors may attend meetings by telephone, videoconferencing, telepresence or by previously sending their votes in writing. In this case, the Director will be considered to be present at a meeting in order to ascertain the quorum for declaring it open and voting, with this vote being deemed valid for all legal effects, being included in minutes of such meeting.
Paragraph 2 – In the event of a tie in the resolutions of the Board of Directors, noneneither the Chairman nor any of the Co-Chairmen, as applicable, shall have the casting vote, but only their own personal votes.
Paragraph 3 – The Director shall not have access to information or take part in meetings of the Board of Directors related to matters in which it has conflicting interests with the Company.
Article 20 - In the case of permanent absence or impediment of any Director, and if there is an alternate Director, the Board of Directors shall decide whether the alternate shall fill the vacant office, or if the vacant office shall be filled by a substitute on a permanent basis; the substitute Director shall, in any case, complete the term of office of the absent or impeded Director.
Sole Paragraph – In the event of temporary absence or impediment, the members of the Board of Directors shall be replaced by the respective alternates, or in the absence thereof, by another Director appointed for such purpose by the absent Director. In this latter case, the Director that is replacing the absent or impeded Director shall cast the vote of the absent Director in addition to his own vote.
Article 21 – The Board of Directors shall resolve on the matters listed below:
· establish the general direction of the Company's business, approving the guidelines, corporate policies and basic objectives for all the main areas of performance of the Company;
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· approve the annual investment budget of the Company;
· approve the three-year strategic plan of the Company;
· elect and dismiss the Company's Officers, and set their attributions;
· supervise the management of the Board of Executive Officers, review at any time the books and documents of the Company, and request information regarding any acts executed or to be executed by the Company;
· attribute, from the aggregate value of the compensation established by the Shareholders’ Meeting, the monthly fees of each of the members of the Company's Management;
· define the general criteria on compensation and benefit policy (fringe benefits, participation in profits and/or sales) for the management and senior employees (namely, managers or employees in equivalent direction positions) of the Company;
· appoint the Company's independent auditors;
· resolve on the issue of shares and warrants, within the limit of the authorized capital of the Company;
· provide a previous manifestation on the management's report, the Board of Executive Officers' accounts, the financial statements for the fiscal year, and review the monthly balance sheets;
· submit to the Shareholders’ Meeting of the proposal of allocation of the net profits for the year;
· call the Annual Shareholders’ Meeting and, whenever it may deem advisable, the Extraordinary Shareholders’ Meetings;
· approve any business or agreements between the Company and/or any of its controlled companies (except those fully controlled), management and/or shareholders (including any direct or indirect partners of the Company's shareholders), without impairment of item “q” below;
· approve the creation, acquisition, assignment, transfer, encumbering and/or disposal by the Company, in any way whatsoever, of shares, quotas and/or any securities issued by any company controlled by the Company or associated to the Company; except in case of operations involving only the Company and companies fully controlled thereby or in case of indebtedness operation, in which case the provisions of item “o” bellow shall apply;
· approve the contracting by the Company of any debt in excess of ten percent (10%) of the Company's shareholders’ equity reflected on the latest audited balance sheet; this amount shall be considered per individual transaction or a series of related transactions;
· approve the execution, amendment, termination, renewal or cancellation of any contracts, agreements or similar instruments involving trademarks registered or deposited in the name of the Company or any of its controlled companies; except (i) for the agreements entered into between the Company and its fully controlled companies, or (ii) in the event of licensing of brands to be used in gifts, advertising accessory materials connected to such brands, or
disclosure in events for periods under three, or yet (3iii) yearsfor agreements in which the licensing of brands is an accessory element to the execution of its main purpose (provided they do not depend on the approval of the Board of Directors for any other reason provided in this article 21);
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· approve the granting of loans and the rendering of guarantees of any kind by the Company for amounts exceeding one percent (1%) of the shareholders’ equity of the Company reflected on the latest audited balance sheet, to any third party, except in favor of any companies controlled by the Company;
· approve the execution by the Company of any long-term agreements (i.e., agreements executed for a term exceeding one year), involving an amount in excess of five percent (5%) of the shareholders’ equity of the Company, as shown on the latest audited balance sheet; this amount shall be considered per individual transaction or a series of related transactions, except in the case of agreements entered into between the Company and its fully controlled companies;
· resolve on the Company's participation in other companies, as well as on any participation in other undertakings, including through a consortium or special partnership;
· resolve on the suspension of the Company's activities, except in the cases of stoppage for servicing of its equipment;
· authorize the acquisition of shares of the Company to be kept in treasury, be canceled or subsequently disposed of, as well as the cancellation and further sale of such shares, with due regard for applicable law;
· resolve on the issuance of Trade Promissory Notes for public distribution, pursuant to CVM Ruling No. 134;
· resolve, within the limits of the authorized capital, on the issuance of convertible debentures, specifying the limit of the increase of capital arising from debentures conversion, by number of shares, and the species and classes of shares that may be issued, under the terms of article 59 paragraph 2 of Law 6,404/76
· authorize the disposal of fixed assets, excepted for the ones mentioned in item “n” of this Articlearticle, and the constitution of collateral in an amount greater than 1% (one percent) of the shareholders’ equity reflected in the latest audited balance sheet. This amount will be considered per individual transaction or a series of related transactions;
· perform the other legal duties assigned thereto at the Shareholders’ Meeting or in these By-laws; and
· resolve on any cases omitted by these By-laws and perform other attributions not conferred on another body of the Company by the law or these By-laws.
Paragraph 1 – The decisions of the Board of Directors shall be recorded in minutes, which shall be signed by those present in the meeting.
Paragraph 2 – Any favorable vote cast by a Company representative in connection with any resolution on the matters listed above, in Shareholders’ Meetings and in other corporate bodies of the companies controlled by the Company, either directly or
indirectly, shall be conditional on the approval of the Board of Directors of the Company.
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SECTION II
BOARD OF EXECUTIVE OFFICERS
Article 22 – The Board of Executive Officers shall be composed of two (2) to fifteen (15) members, shareholders or not, of whom (i) one shall be the Chief Executive Officer (ii) one shall be the Commercial Vice President Officer, (iii) one shall be the Sales ExecutiveVice President Officer, (iiiiv) one shall be the People and Management ExecutiveVice President Officer, (ivv) one shall be the Logistics ExecutiveVice President Officer, (vvi) one shall be the Marketing ExecutiveVice President Officer, (vivii) one shall be the Industrial ExecutiveVice President Officer, (viiviii) one shall be the Chief Financial and Investor Relations Officer, (viiiix) one shall be the General Counsel, (ix) one shall be the Soft Drinks ExecutiveLegal Vice President Officer, (x) one shall be the Corporate Affairs ExecutiveNon-Alcoholic Beverages Vice President Officer, (xi) one shall be the Shared Services andCompliance Vice President Officer, and (xii) one shall be the Information Technology ExecutiveVice President Officer, and (xiixiii) the remaining Officers shall have no specific designation; all of whom shall be elected by the Board of Directors, and may be removed from office by it at any time, and shall have a term of office of three (3) years, reelection being permitted.
Paragraph 1 – Should a position of Executive Officer become vacant or its holder be impeded, it shall be incumbent upon the Board of Directors to elect a new Executive Officer or to appoint an alternate, in both cases determining the term of office and the respective remuneration.
Paragraph 2 – It is incumbent upon the Executive Board to exercise the prerogatives that the law, the By-laws and the Board of Directors confer upon it for the performance of the actions required for the Company to function normally.
Paragraph 3 – The Executive Officers shall be invested in office upon the execution of the respective instrument, drawn up in the proper book, and shall remain in office until their successors are vested in office.
Article 23 – The Executive Board, whose presidency will be held by the Chief Executive Officer, shall meet as necessary, it being incumbent upon the Chief Executive Officer to call and to be the chairman of the meeting.
Article 24 – It is the Chief Executive Officer’s responsibility to:
a) submit the annual work plans and budgets, investment plans and new Company expansion programs to the Board of Directors for approval, causing them to be carried out, pursuant to their approval;
b) formulate the Company’s operating strategies and guidelines, as well as establishing the criteria for executing the resolutions of the Shareholders’ Meetings and of the Board of Directors, with the participation of the other Executive Officers;
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c) supervise all the Company’s activities, providing the guidelines best suited to its corporate purpose;
d) coordinate and oversee the activities of the Board of Executive Officers; and
e) exercise the other prerogatives conferred upon it by the Board of Directors.
Article 25 – It is the Sales ExecutiveCommercial Vice President Officer’s responsibility to:
a) be responsible for the direction, strategic planning and control of the Company's sales and marketing areas; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
Article 26 – It is the Sales Vice President Officer’s responsibility to:
a) develop the strategic sales planning of the Company;
b) be responsible for the management of the commercial team and develop and implement an action model for the sector; and
c) exercise the other prerogatives conferred upon it by the Board of Directors.
Article 2627 – It is the People and Management ExecutiveVice President Officer’s responsibility to:
Ø organize and manage the Company’s human resources; and
Ø exercise the other prerogatives conferred upon it by the Board of Directors.
Article 2728 - It is the Logistics ExecutiveVice President Officer’s responsibility to:
· establish, manage and be responsible for the pre-production and post-production distribution and logistics strategy of the Company; and
· exercise the other prerogatives conferred upon it by the Board of Directors.
Article 2829 - It is the Marketing ExecutiveVice President Officer’s responsibility to:
a) be responsible for the direction, planning and control of the marketing area of the Company; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
Article 2930 – It is the Industrial ExecutiveVice President Officer’s responsibility to:
a) manage the branches, warehouses, industrial plants and other units of the Company related to its industrial production; and
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b) exercise the other prerogatives conferred upon it by the Board of Directors.
Article 3031 – It is the Chief Financial and Investor Relations Officer’s responsibility to:
1. manage and respond for the budget control of the Company;
2. provide managerial and financial information;
3. be responsible for the control over the cash flow and financial investments of the Company;
4. provide any and all information to investors, to the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários) and to BM&FBOVESPAB3 S.A. –- Brasil, Bolsa de Valores, Mercadorias e Futuros, Balcão;
5. maintain the registration of the Company as an openly- held company updated; and
6. exercise the other prerogatives conferred upon it by the Board of Directors.
Article 3132 - It is the General Counsel’sLegal Vice President Officer responsibility to:
Ø establish, manage and coordinate the legal strategy adopted by the Company, and to supervise its judicial and administrative proceedings;
Ø be responsible for the Company’s corporate documents; and
Ø exercise the other prerogatives conferred upon it by the Board of Directors.
Article 3233 – It is the Soft Drinks ExecutiveNon-Alcoholic Beverages Vice President Officer’s responsibility to:
· coordinate and supervise the non-alcoholic and non-carbonated drinks sector, and establish its planning strategy; and
· exercise the other prerogatives conferred upon it by the Board of Directors.
Article 3334 – It is the Corporate Affairs ExecutiveCompliance Vice President Officer’s responsibility to:
a) implement, manage and operationalize the Company's compliance program, ensuring compliance, effectiveness and continuous improvement;
b) investigate any allegations of violations to the Company's compliance program; and
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c) exercise the other prerogatives conferred upon it by the Board of Directors.
Paragraph 1 – It is granted to the Compliance Vice-President Officer, in the exercise of his/her duties, direct access to the Board of Directors.
Article 35 – It is the Information Technology Vice President Officer’s responsibility to:
a) respond for the external communication, as well asdirection, planning and control of the information technology sector of the Company’s corporate and governmental relations; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
Article 34 – It is the Shared Services and Information Technology Executive Officer’s responsibility to:
a) respond for the direction, planning and control of the information technology sector of the Company, as well as of its shared services center; and
b) exercise the other prerogatives conferred upon it by the Board of Directors.
Article 3536 – It is incumbent upon the other Executive Officers to exercise the prerogatives conferred upon them by means of a Meeting of the Board of Directors, which may establish specific titles for their positions.
Article 3637 - The Documents involving the Company in any commercial, banking, financial or equity liability, such as agreements in general, check endorsements, promissory notes, bills of exchange, trade bills and any credit instruments, debt acknowledgments, granting of aval guarantees and sureties, credit facility agreements, acts performed by branches, ad negocia and ad judicia powers of attorney, and any other acts creating any liability for the Company or waiving third-party obligations or obligations to the Company, shall be valid upon the signature of two members of the Executive Board.
Paragraph 1 – The representation of the Company in the aforementioned documents may be delegated to an attorney-in-fact, and such documents may be executed by an Attorney-in-Fact in conjunction with an Officer, or by two Attorneys-in-Fact, jointly, provided that the instruments of power of attorney appointing these attorneys-in-fact are executed by two Officers.
Paragraph 2 - The Company shall be represented, individually, by any of the Officers or by a duly appointed Attorney-in-Fact, as regards receipt of service of process or judicial notices and rendering of personal deposition.
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CHAPTER V
FISCAL COUNCIL
Article 3738 – The Company shall have a Fiscal Council, on a permanent basis, composed of three (3) to five (5) members and an equal number of alternates. All of its members shall be elected at a Shareholders’ Meeting and by it removed at any time. Their term of office shall expire at the Annual Shareholders’ Meeting to be held following their election, reelection being permitted.
Paragraph 1 – In order for the Fiscal Council to function, the majority of its members must attend its meeting.
Paragraph 2 - It shall be incumbent upon the Fiscal Council to elect its Chairman in the first meeting to be held after its instatement.
Paragraph 3 - In addition to the duties conferred to it by these By-laws and by law, the Fiscal Council shall establish in its Internal Regiment the procedures for receiving, recording and treating complaints received in connection with accounting, internal accounting controls and matters related with the auditing of the Company, as well as any other communication received on such matters.
Paragraph 4 - The provisions of Paragraph 2 of Articlearticle 15 of these By-laws apply to the members of the Fiscal Council.
Article 3839 – The compensation of the Fiscal Council's members shall be established by the Shareholders’ Meeting that elects them.
CHAPTER VI
FISCAL YEAR, BALANCE SHEET AND RESULTS
Article 3940 – The fiscal year shall have the duration of one year, and shall end on the last day of December of each year.
Article 4041 - At the end of each fiscal year, the financial statements determined by law shall be drawn up in accordance with the Company's bookkeeping.
Paragraph 1 – The Board of Directors may resolve to draw up half-yearly balance sheets or for shorter periods, and approve the distribution of dividends and/or interest on net equity based on the profits ascertained in such balance sheets, subject to the provisions set forth in Article 204 of Law No. 6,404/76.
Paragraph 2 – At any time, the Board of Directors may also resolve on the distribution of interim dividends and/or interest on net equity based on the accrued profits or existing profits reserves presented in the latest yearly or half-yearly balance sheet.
Paragraph 3 – The interim dividends and interest on net equity shall always be considered as an advance on the minimum mandatory dividends.
Article 4142 - From the profits ascertained in each year, accumulated losses and a provision for income tax shall be deducted prior to any other distribution.
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Paragraph 1 – Over the amount ascertained as provided for in the caption of this Articlearticle, it will be calculated:
a) the statutory participation of the Company’s employees up to the maximum limit of 10% (ten percent), to be distributed according to the parameters to be established by the Board of Directors; and
b) the statutory participation of the management, up to the maximum legal limit.
Paragraph 2 – Over the amount ascertained as provided for in the caption of this Articlearticle, it may be calculated, in addition, up to the limit of 10% (ten percent), a contribution for the purpose of meeting the charges of the assistance foundation for employees and management of the Company and its controlled companies, with due regard for the rules established by the Board of Directors to this effect.
Paragraph 3 – The following allocations shall be made from the net income of the fiscal year, obtained after the deductions dealt with in the previous paragraphs:
a) five percent (5%) shall be allocated to the legal reserve, up to twenty percent (20%) of the paid-in capital stock or the limit established in article 193, paragraph 1 of Law No. 6,404/76;
b) from the balance of the net profit of the fiscal year, obtained after the deduction mentioned in item (a) of this Articlearticle and adjusted pursuant to article 202 of Law No. 6,404/76, forty percent (40%) shall be allocated to pay the mandatory dividend to all its shareholders; and
c) an amount not greater than sixty percent (60%) of the adjusted net profits shall be allocated to the formation of an Investment Reserve, for the purpose of financing the expansion of the activities of the Company and its controlled companies, including through subscription of capital increases or the creation of new business developments.
Paragraph 4 – The reserve set out in item (c) of paragraph 3 of this Articlearticle may not exceed eighty percent (80%) of the capital stock. Upon reaching this limit, the Shareholders’ Meeting shall resolve either to distribute the balance to the shareholders or increase the Company’s corporate capital.
CHAPTER VII
LIQUIDATION, WINDING-UP AND EXTINGUISHMENT
Article 4243 – The Company shall be liquidated, wound up and extinguished in the cases contemplated by law or by resolution of the Shareholders’ Meeting.
Paragraph 1 – The manner of liquidation shall be determined at a Shareholders’ Meeting, which shall also elect the Fiscal Council that will function during the liquidation period.
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Paragraph 2 - The Board of Directors shall appoint the liquidator, establish its fees and determine the guidelines for its operation.
CHAPTER VIII
GENERAL PROVISIONS
Article 4344 – The dividends attributed to the shareholders shall be paid within the legal time frames, and monetary adjustment and/or interest shall only be assessed if so determined by the Shareholders’ Meeting.
Sole Paragraph – The dividends not received or claimed shall become time-barred within three years from the date on which they were made available to the shareholder, and shall revert to the benefit of the Company.
Article 4445 – The Company shall comply with the shareholders' agreements registered as provided for in article 118 of Law No. 6,404/76.
Article 4546 – The Company will provide the members of the Board of Directors, of the Board of Executive Officers and of the Fiscal Council, or the members of any corporate bodies with technical functions set up to advise the managers, a legal defense in lawsuits and administrative proceedings filed by third parties during or after their respective terms of office, for acts performed during the exercise of their functions, including through a permanent insurance policy, shielding them against liability for acts arising from the exercise of their positions or functions, including the payment of court costs, legal fees, indemnifications and any other amounts arising from such proceedings.
Paragraph 1 – The guarantee set forth in the caption of this Articlearticle extends to employees working regularly to comply with powers-of-attorneys granted by the Company or the subsidiaries controlled by the Company.
Paragraph 2 – If any of the persons mentioned in the caption or in Paragraph 1 of this Articlearticle be sentenced by a final court decision due to negligent or criminal conduct, the Company must be reimbursed by such person for all costs and expenses disbursed on legal assistance, as set forth by law.”
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* These Bylaws were approved at the Company's Ordinary and Extraordinary Shareholders' Meeting held on April 2624, 20192020.
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Exhibit B.II – Share-Based Compensation Plan
(as per CVM Ruling 481/09, annex 13)
There is no related party, as defined by the accounting rules for this matter, that has a special interest in the approval of the Share-Based Compensation Plan of Ambev S.A.
1. Provide a copy of the proposed plan
“AMBEV S.A.
CNPJ/ME [National Corporate Taxpayers Register] No. 07.526.557/0001-00
NIRE [Corporate Registration Identification Number] 35.300.368.941
SHARE-BASED COMPENSATION PLAN
Approved at the Extraordinary General Meeting held on April 24, 2020
1. Purpose of Share-Based Compensation Plan
1.1. The purpose of the Share-Based Compensation Plan of Ambev S.A. ("Company"), established in accordance with applicable legislation and regulations ("Stock Plan") is to allow managers or employees of the Company or other companies under its direct or indirect control (included in the concept of Company for the Stock Plan's purposes), to receive payments in the form of Company shares, subject to certain conditions, in order to: (i) stimulate the Company's growth, success and objectives while catering for the interests of its shareholders, thus incentivizing the integration of these Company executives and employees; and (ii) enable the Company to effectively engage and retain the services of its senior managers and high-level staff.
2. Eligible participants
2.1. The Company's managers or employees may be designated to participate in the Stock Plan ("Participants").
3. Administration of Stock Plan
3.1. The Stock Plan will be administered by the Board of Directors, which may, subject to restrictions under applicable law, use a committee specifically or otherwise designated to advise and help administer the Stock Plan ("Committee").
3.2. The Board of Directors or Committee, depending on the case, will have extensive powers subject to the terms of the Stock Plan, and in the case of the Committee to guidelines determined by the Board of Directors, to organize and administer the Stock Plan and Company share based compensation, including by means of American Depositary Receipts, issued by the Company ("Restricted Shares").
3.2.1. Notwithstanding the abovementioned representations, excepting adjustments permitted by the Stock Plan or any adjustments that may be made as a result of altering
pertinent legislation, no decision of the Board of Directors or Committee may: (i) increase the maximum number of shares that may be granted, as stipulated in item 5 below; and / or (ii) alter or diminish Participants' rights or obligations without their prior consent in relation to share-based payments under the Stock Plan.
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3.3. The Board of Directors or Committee may, at any time, in all cases pursuant to item 3.2.1 above: (i) alter or extinguish the Stock Plan; (ii) accelerate any vesting periods under the Stock Plan; and (iii) determine rules applicable to cases of omission.
4. Terms and conditions for granting Restricted Shares
4.1. Based on the Company's compensation policy, The Board of Directors or the Committee, depending on the case, will periodically run programs to award Restricted Shares ("Programs"), in which it will determine, among other conditions: (i) the Participants; (ii) the quantity of Restricted Shares covered by the corresponding program; (iii) the form of transferring Restricted Shares, which may be in lots; (v) the acquisition period for transfer of Restricted Shares; and (vi) any provisions governing penalties.
4.2. The Board of Directors or the Committee, depending on the case and in all cases within the overall maximum stipulated in item 5.1 below, and where appropriate limits voted by general meetings, may add new Participants to ongoing Programs, and determine the number of Restricted Shares to which Participants will be entitled.
4.3. As each Program is launched, the Board of Directors or the Committee, depending on the case, will set terms and conditions for the transfer of Restricted Shares in the agreement to be entered into between the Company and each Participant ("Agreement"), in all cases in accordance with this Stock Plan and the corresponding Program.
4.4. Restricted Shares may only be transferred to Participants under the terms and conditions of this Stock Plan in the programs and agreements, therefore granting the right to receive shares does not in itself assure Participants any rights over Restricted Shares or provide a guarantee of receiving them.
4.5. Shares awarded to Participants will have the rights set forth in this Stock Plan and corresponding programs and agreements, and Participants will not have any of the rights and privileges of a Company shareholder, in particular being paid dividends and interest on shareholder equity in relation to the Restricted Shares until such date as the Restricted Shares are transferred to the Participants.
4.6. Notwithstanding the provisions of the above Clause 4.5, the Board of Directors or Committee, depending on the case, may have the Program require payment of an amount equivalent to such dividends and interest in money or in shares in the form to be determined in the corresponding program and agreement.
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4.7. No shares will be awarded Participants unless all legal, regulatory and contractual requirements have been met in full.
4.8. No provision in the Stock Plan, in any Program or Agreement will grant any Participant the right to remain as a Company manager or employee and will not in any way interfere with the Company's right to terminate a manager's mandate or employee's employment contract at any time.
4.9. Restricted Shares granted to Participants have no relationship or are bound to their fixed compensation or any profit sharing programs.
5. Stock Plan - Global Volume
5.1. Participants may be granted, under the Stock Plan, shares representing, at most, 3% of the total shares representing the Company's share capital as of April 24, 2020 ("Global Volume"). The Global Volume may only be adjusted without alteration to this Stock Plan in accordance with item 8.1.
5.2. For the purposes of the Stock Plan, the Company will use treasury shares subject to CVM rules.
6. Transferring Stock Plan shares
6.1. Subject to continuing employment and / or statutory relationship, depending on the case, of the Participant with the Company until the end of the applicable vesting period and subject to the rules set forth in each Agreement, the Company will transfer the Restricted Shares to the Participant in accordance with the lots and periods stipulated in the corresponding Program and / or Agreement.
6.1.1. The Company's management will take all measures required to formalize transfer of Restricted Shares covered by Agreements.
6.1.2. Restricted Shares will be awarded to Participants free of charge. The reference price per Restricted Share, for the purposes of this Stock Plan, will be the price of the Company's stock on B3 S.A. – Brasil, Bolsa, Balcão at the trading session immediately preceding the date of awarding the Restricted Shares.
6.2. Participants will be subject to rules restricting the use of insider information applicable to publicly listed companies in general and rules determined by the Company.
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7. Participant’s Leaving, Retirement, Disability or Decease
7.1. The Board of Directors or the Committee, as the case may be, will establish in each Program, the rules applicable to the cases of Participants leaving the Company, due to the expiry of employment contract, end of term of office, dismissal or resignation of executive position, as well as cases of retirement, permanent disability or decease of Participants.
8. Adjustments
8.1. If the number of the Company's shares is increased or decreased as a result of share bonuses, splits or reverse splits, appropriate adjustments will be made to the number of shares covered by programs and agreements that have yet to be transferred to Participants.
8.1.1. Adjustments under item 8.1 above will be made by the Board of Directors or the Committee depending on the case, and their decision will be final and binding. No fractional shares will be sold or issued as a result of any such adjustments.
8.2. In the event of a dissolution, transformation, merger, spin-off or reorganization of the Company, in which the Company is not the surviving entity or, is the surviving company but its shares are no longer admitted to trading on exchange, the Programs and Agreements in effect, at the discretion of the Board of Directors or the Committee, as the case may be: (i) may be transferred to the successor company; (ii) may accelerate their vesting; or (iii) may be maintained and settled in money.
9. Stock Plan duration
9.1. The Stock Plan will take effect when voted by the Company's General Meeting.
9.2. The end of the Stock Plan will not affect the efficacy of the Restricted Shares granted that are still in effect and that will be awarded to Participants by the corresponding dates under the Programs in effect.
9.3. The Stock Plan does not alter the provisions of the Stock Call Option Plan approved at the Extraordinary Shareholders’ Meeting held on July 30, 2013, which remains fully effective.
10. Sundry
10.1. Adhesion. Signing the Agreement will imply the Participants' express and irrevocable acceptance of all terms of the Stock Plan and Programs by Participants, who shall be bound to comply with them in full.
10.2. Specific execution The obligations stated in the Stock Plan, Programs and Agreements are undertaken irrevocably and will be valid as extrajudicial executive title under civil procedural law, binding the contracting parties and their successors under
any title at all times. The parties stipulate that these obligations have specific execution under article 501 of the Civil Procedure Code.
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10.3. Assignment. Rights and obligations under the Stock Plan, the Programs and Agreements are personal and non-transferable and may not be assigned or transferred in whole or in part by either party, nor given to guarantee obligations without prior written consent from the other party, except as expressly stipulated in this Stock Plan.
10.4. Novation. It is expressly agreed that either party's forbearance of exercising any right, power, recourse or faculty assured by law, the Stock Plan, Programs or Agreements, nor any tolerance of delay in fulfilling any obligations by either of the parties, which will not prevent the other party at its sole discretion from exercising at any time such rights, powers, recourses or faculties which are cumulative and do not exclude those stipulated by law.
10.5. Jurisdiction The parties elect the court of the city of São Paulo, State of São Paulo, to the exclusion of any other, however privileged, to settle any disputes that may arise with respect to the Stock Plan, the Programs and / or Agreements.
10.6. Omissions. Omissions, questions or disagreement that may arise on the part of the Company and / or the Participants in relation to the Stock Plan, Programs and / or Agreements will be regulated by the Board of Directors. Any payment in shares determined under the Stock Plan will be subject to all the terms and conditions set forth herein, which will prevail if there is any discrepancy concerning the provisions of any agreement or document mentioned herein.”
* * *
2. State the main characteristics of the proposed plan, identifying:
a. Potential beneficiaries
The amendment proposed herein does not modify the potential beneficiaries of the Stock Plan, which remain in force with no alterations. The rules of the Stock Plan determine that managers or employees of the Company or of other companies under its direct or indirect control may be designated to participate on the Stock Plan (Participants). The Board of Directors or the Committee, as applicable, will select, through the Programs, those that will be entitled to the compensation based on Restricted Shares.
When each Program is launched, the Board of Directors or Committee, depending on the case, will set the terms and conditions for the transfer of Restricted Shares in the agreement to be entered into by the Company and each Participant ("Agreement"), in all cases in accordance with the Stock Plan and the corresponding Program.
b. Maximum number of options to be granted
The Participants may be granted shares representing a maximum of 3% of the total
shares representing the Company's share capital on the date of approval of the amendment to the Stock Plan.
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c. Maximum number of shares covered by the plan
As stated in item "b" above, the Stock Plan will now stipulate that the shares covered by it will amount to at most 3% of the total number of shares comprising the Company's share capital on the date of approval of the amendment to the Stock Plan, which corresponds, on the date hereof, to 472,053,539 shares.
d. Conditions for acquisition
The amendment proposed herein does not modify the conditions of acquisition set forth in the Stock Plan, which remain in force with no alteration. Under the Stock Plan's rules and subject to the parameters stated therein, the Board of Directors or the Committee, depending on the case, will periodically create programs based on the Company's compensation policy, in which they will determine, among other conditions: (i) the Participants; (ii) the quantity of Restricted Shares to be awarded under the corresponding program; (iii) the form of transferring the Restricted Shares, which may be in lots; (v) the vesting period for the transfer of Restricted Shares; and (vi) any provisions governing penalties.
e. Detailed criteria for setting exercise price
The amendment proposed herein does not modify the criteria for setting the exercise price set forth in the Stock Plan, which remain in force with no alteration. The Stock Plan's purpose, among others is to have payments made in the form of the Company's shares but without Participants paying the exercise price. Thus, there is no option to purchase shares on the lines of article 168, §3 of Law No. 6404 / 76; instead there is compensation based on awarding shares to the Participants. Nevertheless, the reference price per Restricted Share, for the purposes of the Stock Plan, corresponds to the Company's share price traded on the B3, S.A. – Brasil, Bolsa, Balcão (“B3”) at the trading session immediately preceding the date of awarding the Restricted Shares
f. Criteria for setting exercise period
The amendment proposed herein does not modify the criteria for setting the exercise period set forth in the Stock Plan, which remain in force with no alteration. Thus, the Restricted Shares will be transferred by the Company to the Participant in accordance with the lots and for the periods set forth in the corresponding program and / or agreement. Participants will be entitled to receive the Restricted Shares if they are in the Company's employment until the end of the applicable vesting period, subject to the specific rules stipulated in each agreement, in the event of dismissal (with or without cause), removal from their position, end of mandate, resignation, voluntary termination, retirement or death.
g. Form of settling options
As mentioned in item "e" above, this compensation is based on the Company's shares without requiring financial consideration for Restricted Shares awarded to Participants. Therefore, once the conditions stipulated in the Stock Plan, the Programs and the Agreement have been met, the Participant will be entitled to receive these Restricted
Shares, and the Company's management must take all measures required to formalize their transfer.
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h. Criteria and events that, if taking place, would lead to suspension, alteration or termination of the plan
The amendment proposed herein does not modify the criteria and events that could result in suspension, alteration or termination of the Stock Plan, which remain in force with no alteration. Thus, the Stock Plan may be terminated at any time by a decision of the Board of Directors or the Committee. The ending of the Stock Plan will not affect the efficacy of the Restricted Share grants still in effect which will be awarded to Participants on the corresponding dates under the Programs in effect.
The Stock Plan also stipulates that in the event of any Company dissolution, transformation, merger, spin-off or reorganization event in which the Company is not the surviving entity, or is the surviving company but no longer has its shares admitted to trading on exchange, and at the discretion of the Board of Directors or the Committee, as the case may be, the agreements under programs in effect may (i) be transferred to the successor company; (ii) have their vesting accelerated; or (iii) be maintained and paid out in cash.
3. Reasons for the proposed plan, explaining:
It is important to note that, in this item, the amendment proposed to the Stock Plan does not modify its characteristics or objectives and, for such reason, this item 3 remains unaltered in relation to what has been previously presented to the shareholders.
a. The main objectives of the plan
The Stock Plan's main objective is to allow managers or high-level employees of the Company or other companies under its direct or indirect control, subject to fulfilling certain conditions, to receive payments in Company shares, including American Depositary Receipts, in order to (i) drive growth, success and ability to reach the Company's targets while attending to its shareholders interests, incentivizing these managers' and employees' integration with the Company; and (ii) enabling the Company to effectively engage and retain the services of its senior managers and high-level staff.
b. How the plan contributes to these objectives
Granting Restricted Shares means that Participants’ interests are aligned with those of the Company and its shareholders through incentives to meet targets related to the performance of their activities, since the better the Company's performance as reflected in its share price, the more the Participant's will gain financially.
c. How the plan engages with the company’s compensation policy
The Stock Plan contemplates the mechanism of flexible compensation that aligns with the Company’s medium- and long term-interests.
The focus on medium- and long-term flexible compensation reflects current market practices and offers attractive packages while catering for the Company's interests in the
most efficient manner. The Stock Plan aims to strengthen the focus on this form of compensation, offering the possibility of more attractive returns while requiring a strong show of commitment by Participants, who must meet targets related to the performance of their activities in the manner stated in the Company's compensation policy.
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d. How the plan aligns its beneficiaries’ short-, medium- and long-term interests with the company's
The Stock Plan stipulates mechanisms to align interests of participants over different timeframes but focuses on the medium and long term. This objective is served due to the vesting periods during which Restricted Shares will not be transferred to the Participants, thus favoring retention of professionals during these periods. The terms and conditions to be stipulated for each Program and Agreement should also help align interests.
4. Estimate the company’s expenses incurred by the plan under the accounting recognition rules covering this subject
The Company’s expenses arising from the Stock Plan will correspond to the market value of the shares to be granted, at the time of granting, which, in turn, corresponds to the closing price of shares of the same type in the trading session immediately prior to the grant date, traded on B3 and is recognized as per Technical Pronouncement CPC 10 on Share-Based Payment.
Exclusively for purposes of CVM Ruling 481/09, the Company estimates that the amount of expenses arising from the Stock Plan will be, on average, approximately R$ 250,000,000.00 per year. Since the ascertainment of such expenses depends on factors not yet known, such as the number of concessions to be effectively carried out and the market value of the Company’s shares, such estimation is based on (i) the number of concessions initially predicted under the Stock Plan; and (ii) the average closing price of the Company’s shares issued on B3 over the past 30 days.
***
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 24, 2020
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AMBEV S.A.
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By:
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/s/ Fernando Mommensohn Tennenbaum
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Fernando Mommensohn Tennenbaum
Chief Financial and Investor Relations Officer
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