Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  

Yes _______ No ___X____

  Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  

Yes _______ No ___X____

  Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:  

Yes _______ No ___X____

  If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):   N/A

Index

 

1. Message from the Chairman of the Board of Directors

Dear Shareholders,

I am very pleased to invite you, shareholder of Santander Brasil, to participate of the Extraordinary General Meeting (“EGM”) of Santander Brasil, called for December 21 ^st , 2016 at 4 p.m., in the Auditorium of the head offices of the Company located at Avenida Presidente Juscelino Kubitschek No. 2041 and 2235 – 1 ^st mezzanine –Vila Olímpia - São Paulo – State of São Paulo.

This Manual for Participation in General Meetings (“ Manual ”), an example of a sustainable relationship practice with you, our shareholder, aims to assist you on the comprehension of the presented matters, for the taking of decisions, anticipating relevant clarifications and voting orientations.

Pursuant to the Call Notice turned available, we shall take resolutions on the following matters:

(I) To ELECT two (2) new members to compose the Company´s Board of Directors, for a complementary mandate, confirming the current composition of the Company’s Board of Directors;

(II) To CONFIRM the annual global remuneration of the managers for fiscal year 2016; and

(III) To APPROVE the regulation related to the Long Term Incentive General Plan, for certain employees (including of management level) and managers of the Company and/or companies under its control, according to the proposal approved by the Board of Directors at meeting held on October 25 ^th , 2016.

In order to facilitate your analysis and appreciation of the matters to be resolved, we attach as exhibits to this Manual all documents related to the matter of the Call Notice, in attention to the CVM requirements.

Please read this carefully. We are at your disposal to clarify any doubts through our email address ri@santander.com.br .

We hope that this Manual will fulfill its purpose of assisting you with clarification on the matters to be resolved. Your participation in this important event is of the greatest benefit to our Company.

Very truly yours,

Jesús Maria Zabalza Lotina

Chairman of the Board of Directors

(in exercise)

 

2. Call Notice to be published in the Diário Oficial do Estado de São Paulo (São Paulo State Gazette), on November 19, 22 and 23, 2016, and in Valor Econômico on November 21, 22 and 23, 2016

BANCO SANTANDER (BRASIL) S.A.

Public-Held Company with Authorized Capital

Corporate Taxpayer ID (CNPJ/MF) 90.400.888/0001-42

Company Registration (NIRE) 35.300.332.067

CALL NOTICE - EXTRAORDINARY GENERAL MEETING - The shareholders are hereby called to attend the Extraordinary General Meeting to be held on December 21 ^st , 2016, at 4 p.m., at the Auditorium in the Company head offices, located in the City of São Paulo, State of São Paulo, at Avenida Presidente Juscelino Kubitschek No. 2.235, 1º mezzanine, Vila Olímpia, to resolve on the following Agenda:

(I) To ELECT two (2) new members to compose the Company´s Board of Directors, for a complementary mandate, confirming the current composition of the Company’s Board of Directors;

(II) To CONFIRM the annual global remuneration of the managers for fiscal year 2016; and

(III) To APPROVE the regulation related to the Long Term Incentive General Plan, for certain employees (including of management level) and managers of the Company and/or companies under its control, according to the proposal approved by the Board of Directors at meeting held on October 25 ^th , 2016.

General Instructions :

1.       As provided for in CVM Instruction No. 165/91, as amended by CVM Instruction No. 282/98, the minimum percentage of stake in the voting capital required to request the multiple voting process for the election of members of the Board of Directors is equal to five percent (5%);

2.       The shareholders or their legal representatives should attend the General Meeting bringing the relevant identity documents. In the event of representation of a shareholder by means of a proxy, the shareholders shall deliver at the Company’s head office, no less than seventy-two (72) hours before the General Meeting, a power of attorney granted according to the law; and

3.       The documents related to the matters to be analyzed at the General Meeting are available to shareholders (i) at the Company’s head office and also at its website ( www.ri.santander.com.br – in Corporate Governance > Minutes and Management Meetings); (ii) at the Brazilian Securities and Exchange Commission ( Comissão de Valores Mobiliários ) website (www.cvm.gov.br); and (iii) at BM&FBovespa S.A. - Bolsa de Valores, Mercadorias e Futuros website (www.bmfbovespa.com.br).

São Paulo, November 18 ^th , 2016 – Jesús Maria Zabalza Lotina - Chairman of the Board of Directors (in exercise) .

 

3. Participation of the Shareholders in the EGM

The shareholders of Santander Brasil may attend the EGM personally , or through a duly appointed and established attorney-in-fact .

The following documents will be required from the shareholders to attend the EGM:

3.1. Representation by attorney-in-fact

The shareholder may be represented at the EGM by an attorney-in-fact duly appointed and established by a public or private instrument, and on the terms of Article 126, First Paragraph of the Brazilian Corporate Law, the attorneys-in-fact shall have been appointed less than one (1) year before, and shall be (i) shareholders of the Company, (ii) managers of the Company, (iii) lawyers, or (iv) financial institutions, provided that investment funds quotaholders shall be represented by the investment fund administrator.

The originals or certified copies of the documents mentioned above shall be delivered at the head offices of the Company up to the time schedule for the EGM.

However, in order to facilitate the access of the shareholders to attend the EGM, we recommend to deliver these documents at least seventy-two (72) hours prior to the opening of the EGM.

For the documents sent by email, the originals or certified copies shall be delivered at the Company’s headquarters on the day of the EGM.

The documents must be delivered at the Company’ head offices, at Av. Presidente Juscelino Kubitschek, 2041, 9 ^th floor, Building A –Vila Olimpia - São Paulo – State of São Paulo – Jurídico Societário, M&A e Governança, telephones +55 11 3553-1865 and +55 11 3553-5641, email: juridsocietario@santander.com.br.

 

4. Matters to be resolved in the EGM

Below you shall find clarifications made by the Company’s management regarding each of the items to be resolved in the EGM.

According to the Call Notice available to shareholders, our EGM will deliberate about the following matters on the agenda:

(I) To ELECT two (2) new members to compose the Company´s Board of Directors, for a complementary mandate, confirming the current composition of the Company’s Board of Directors;

(II) To CONFIRM the annual global remuneration of the managers for fiscal year 2016; and

(III) To APPROVE the regulation related to the Long Term Incentive General Plan, for certain employees (including of management level) and managers of the Company and/or companies under its control, according to the proposal approved by the Board of Directors at meeting held on October 25 ^th , 2016.

4.1. To ELECT new members to compose the Company´s Board of Directors, for a complementary mandate

The board of directors is the supervisory board and, as set out in the Brazilian Corporate Law, the Company’s By-Laws and its Internal Regulation, it is responsible for the business general guidelines of Santander Brasil and its subsidiary and companies belonging to the Santander Brasil Group, analyzing the relevant matters of the Company and effectively overseeing its management. It has the main scope of promoting the long term success of the business, by means of an active posture and always considering the interest of Santander Brasil as well as of its shareholders.

The board of directors is comprised of a minimum of five (5) members and a maximum of twelve (12) members, elected by the shareholders meeting for terms of two (2) years. A minimum of twenty per cent (20.0%) of the members of the board of directors must be independent directors, according to Second and Third paragraphs of Article 14 of the Company’s Bylaws.

Currently, the Board of Directors is composed by nine (9) directors, of which three (3) are independent.

The Board of Directors members meet regularly four times a year and extraordinarily as often as required, by its Chairman.

The structure, operation and competencies of the Board of Directors are provided in articles 14 to 18 of the Company’s By-Laws and in its Internal Regulation, both available on the website www.ri.santander.com.br .

 

The Company, with the favorable recommendation of the Nomination and Remuneration Committee, proposes to the EGM the election of Mrs. Deborah Patricia Wright and Mr. José Luciano Duarte Penido , as independent members of the Company’s Board of Directors, for a complementary mandate valid until the Ordinary General Meeting of 2017, so that the Company’s Board of Directors composition will be as follows:

The information related to the election of the members of the Board of Directors of the Company, pursuant to article 10 of Instruction CVM No. 481, may be found on Exhibit I of this Manual.

___________________________________________________

4.2. To CONFIRM the annual global remuneration of the managers for fiscal year 2016

The management presented, in March 2016, a proposal for the management remuneration for the fiscal year 2016, in compliance with article 12, items I and II of CVM Instruction No. 481 and item 13 of the Reference Form, in accordance with Exhibit II of this Manual. The proposed remuneration was approved by the Ordinary General Meeting held on April 29, 2016 (“ 2016 OGM ”).

At the referred 2016 OGM, the amount proposed by the management as managers’ global remuneration (Board of Directors and Executive Board) of up to R$ 300,000,000.00 (three hundred million reais), considering fixed, variable and based on shares remuneration, for the period from January to December 2016, was approved.

The managers’ global remuneration amount approved by the 2016 OGM was equal to the maximum amount approved for the period from January to December 2015, without considering the social security charges, which estimation for the period from January to December 2016 is equal to R$ 41,940,000.00 (forty-one million, nine hundred and forty thousand reais).

 

According to article 17, item IV of the Company's Bylaws, the Board of Directors is responsible for establishing the remuneration, indirect benefits and other incentives of the Directors, within the global limit of the management remuneration approved by the general meeting.

The management submits to the shareholders in general meeting the proposal to ratify the amount of R$ 300,000,000.00 (three hundred million reais) as global remuneration of the Company's management for the period of twelve (12) months counted as of January 1 ^st , 2016.

___________________________________________________

4.3. To APPROVE the regulation related to the Long Term Incentive General Plan, for certain employees (including of management level) and managers of the Company and/or companies under its control, according to the proposal approved by the Board of Directors at meeting held on October 25 ^th , 2016

The Company developed a new Long Term Incentive General Plan, which is object of this resolution, seeking the alignment between the Santander Brasil Group, its shareholders and the Key Personnel, in line with the following principles: (a) Seek the business growth and profitability in a sustainable manner; (b) Allow the recognition of the Key Personnel’s contribution to the performance of the Santander’s Brasil Group activities; (c) Allow the retention of the Key Personnel in its staff by offering a competitive variable remuneration package in accordance with the best market practices; (d) Promote the Santander Brasil Group good performance in line with the interests of its shareholders through the Key Personnel long term commitment; and (e) Discourage behaviors which may increase the exposition to risks above levels considered prudent in the short, medium and long term strategies adopted by the Santander Brasil and controlled companies.

This Long Term Incentive General Plan is within the regulatory and governance conditions applicable to the Company, especially observing: (a) Under the regulatory aspect :  The Resolution No. 3.921 of the National Monetary Council, from November 25 ^th , 2015, which establishes the conditions to determine the financial institutions administrator’s remuneration policy, and the Law 6.404, of December 15 ^th , 1976, which regulates the Corporations, and (b) Under the corporate governance aspect : The requirements for the deferred payment of the variable remuneration’s portion, taking into account the long term sustainable financial basis and adjustments in the future payments due to risks taken and the oscillation of the cost of capital, as well as, the Corporate Milestones and Internal Policies of the Santander Brazil Group, especially in regard to what is set forth in the administrators remuneration police of the Company.

 

This Long Term Incentive General Plan shall be applicable to all the Santander Brazil and controlled companies as from the 2017 exercise and may be applied to all the subsequent exercises, consequently remaining in force for an undetermined term and being allow to be terminated, suspended or changed at any time, provided however that any Participants’ rights to receive any amounts which already are due to them shall be duly respected.

This Long Term Incentive General Plan, which establishes the rules of certain variable remuneration opportunities that shall be offered to the Key Personnel as per the guidelines indicated here-above, was approve by the Board of Directors of the Company in a meeting held on October 25 ^th , 2016, and now follows to the shareholders general meeting approval as per de administration recommendation.

The information regarding the “Long Term Incentive General Plan” are described on Exhibits III and III.1 of this Manual, pursuant to Article 13 of Normative Instruction CVM 481.

 

12.6. In relation to each of the persons who served as members of the board of directors or of the supervisory board in the last fiscal year, inform, in a table format, the percentage of participation in the meetings held by the respective organ in the same period that occurred after the office.

Not applicable for the members appointed to the election in this EGM.

12.7 Provide the information mentioned in item 12.5 with respect to members of statutory committees, as well as audit, risk, financial and compensation committees, even if such committees or structures are not statutory:

Not applicable for the members appointed to the election in this EGM.

12.8. In relation to each person who served as a member of the statutory committees, as well as the audit, risk, financial and compensation committees, even if such committees are not statutory, state in a table format the percentage of participation in the meetings Carried out by the respective body in the same period, that occurred after the tenure in office

 

Not applicable for the members appointed to the election in this EGM.

12.9. Inform the existence of a marital relationship, stable union or kinship up to the second degree between:

a. Issuer administrators

It does not apply, since there is no relationship between such persons.

b. (i) managers of the issuer and (ii) managers of the direct or indirect subsidiaries of the issuer

It does not apply, since there is no relationship between such persons.

c. (i) administrators of the issuer or its subsidiaries, direct or indirect and (ii) direct or indirect controllers of the issuer

It does not apply, since there is no relationship between such persons.

d. (i) managers of the issuer and (ii) managers of the issuer's direct and indirect controlling companies

It does not apply, since there is no relationship between such persons.

12.10. Inform relationships of subordination, service rendering or control kept, in the last 3 fiscal years, among managers of the issuer and:

a. company direct or indirectly controlled by the issuer

For information about this item, please consult item 12.9.

b. issuer’s direct or indirect controller company

Regarding the subordination item, Santander Brasil has two (2) members of the Board of Directors that has executive positions in Santander Spain Group, namely: José Antonio Alvarez Alvarez and José Maria Nus Badía.

c. If relevant, supplier, customer, debtor or creditor of the issuer, its subsidiary or controlling companies or subsidiaries of any of these persons

For information on this item, please check item 12.9.

* * * *

 

EXHIBIT II – (Pursuant to item II of Article 12 to CVM Instruction 481) ITEM 13 of Annex 24 of CVM Instruction 481– Reference Form

13. Remuneration of the Executives

13.1. Describe the Policy or Practice of Remuneration of the Board of Directors, Statutory and Non-Statutory Officers, Supervisory Board, Statutory Committees, and Audit, Risk, Finance and Remuneration Committees

13.1.1. Board of Directors

All Members of the Board of Directors are entitled to a Fixed Remuneration comprised of monthly fees and benefits. In exceptional and fully justified cases, the Chairman of the Board may receive also a yearly variable remuneration for services rendered, under resolution of the Remuneration Committee and the Board of Directors, and always within the overall threshold of such yearly remuneration as approved in Annual General Meeting. The Chairman of the Board of Directors is eligible to participate of the private pension plan offered by the Company.

Let us highlight that, when a member of the Board of Directors is also a member of the Audit Committee of the Company, then, pursuant to the applicable regulation and the provisions of the internal guidelines of the Audit Committee, such member shall opt for remuneration from one of such bodies. Regarding the remaining assistance committees, if either member of the Board of Directors is also a member thereof, then such member shall be entitled to the remuneration applicable to the position of member of the Board and shall receive a bonus at the individual amount of BRL 12,000.00 (twelve thousand BRL) per meeting held in such assistance committee. As regards the Coordinator of the Risk Committee, the bonus per meeting shall be BRL 18,000.00 (eighteen thousand BRL).

In the specific event that the Chairman of the Board of Directors of the Company is a member of any of the assistance committees, the Chairman shall be entitled only to such remuneration as applicable to the position of Chairman of the Board of Directors of the Company.

13.1.1.a. Objectives of the remuneration policy or practice for the Board of Directors

The remuneration policy of the Board of Directors seeks to assure the following premises:

·          To make sure to align the interests of shareholders and the public with whom the Company relates to; and

 

·          To promote the good performance of the Company ensuring the interests of shareholders through a long-term commitment.

13.1.1.b. Board of Directors’ remuneration composition, indicating:

I. Description of the remuneration elements and objectives of each

The remuneration of the Board of Directors is composed of:

·          Fixed Remuneration: Consists of monthly fees, based on data from market research prepared by specialized external consultants, the global maximum value is approved annually at the Annual General Meeting.

·          Variable Remuneration (Self-Management Program – PPG): If any variable remuneration is awarded to the Chairman of the Board, the calculation of such remuneration must take into account the individual performance, the business unit performance, and the organization performance as a whole. It must take into account the mode of payment and the different rates of deferment, according to the level of variable compensation received in the year, and comply with ‘Malus’ clause with possible reduction up to 100% of the variable remuneration value, in such events as predicted.

·          Benefits: The Company gives the Independent Directors and Advisers who do not exercise position on the Executive Board of the Company or another company of Santander Group, some benefits aligned to the dimension of the position and market practices, such as medical and dental care and life insurance. To the Chairman of the Board of Directors, in addition to these benefits mentioned, car and driver are provided as well. Likewise, to the Vice Chairman of the Board, car and fuel are available. To expatriate Board members, the Organization may also offer benefits such as expatriation housing assistance and reimbursement of children’s school fees, among others.

·          Private Pension: Private Pension is a financial planning tool that aims to provide future supplementary income. The main pension plan provided by the Company is the SantaderPrevi, which is currently the only one open to new subscriptions. The Chairman of the Board of Directors is eligible to participate of the private pension plan. To date, Members of the Board of Directors who are not officers or employees of the Company are not eligible for private pension.

·          Stock-Based Remuneration: To date, no stock-based remuneration for the members of this body was set.

 

II. In relation to the last 3 fiscal years, what is the proportion of each element in the total remuneration

The estimated size of each element in total Remuneration ratio is the following:

III. Calculation and adjustment methodology of each Remuneration element

·          Fixed Remuneration: There is no automatic methodology for adjustments. Every year, market researches are carried out to evaluate the competitiveness of the Board members’ compensation. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose to the Board of Directors.

·          Variable Income: There is no automatic methodology for adjustments. Every year, market researchers are carried out to evaluate the competitiveness of the compensation. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose to the Board of Directors.

·          Benefits: There is no automatic methodology for adjustments. Every year, market researchers are carried out to evaluate the competitiveness of the board members’ compensation, including benefits. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose to the Board of Directors.

·          Pension: As defined in the plan regulation. Please see item 13.10.

·          Stock-Based Remuneration: N/A

IV. Reasons for remuneration composition

The proposed remuneration considers the experience of the members of the Board, the need for retention of members in a competitive market and promotion of smooth Company performance.

V. The existence of members that are not remunerated by the issuer and the reason for this fact

 

The members of the Board holding executive positions in the Bank or the controlling shareholder are not remunerated for their positions in the Board of Directors, as they are already remunerated for their executive positions.

13.1.1.c. Key performance indicators that are taken into consideration in determining each remuneration element

The maximum setting of values is approved by the Annual General Meeting considering the results of the Company in the last fiscal year and expected results for the current fiscal year, including, but not limited to, net profits.

13.1.1.d. How remuneration is structured to reflect the evolution of performance indicators

The remuneration of the members of the Board of Directors is set considering the responsibility and seniority of members.

13.1.1.e. How the remuneration policy or practice is aligned with the short, medium and long-term interests of the issuer

The remuneration policy is aligned with the Company’s interests, by setting premises that are compatible with risk management, so as to avoid encouraging any behaviors that may expand exposure to risk above the levels deemed prudent, under short, medium and long-term strategies adopted by the Company, by communicating concepts, criteria and responsibilities regarding the modes of fixed and variable remuneration, encouraging the high performance thereof, always in line with the interests of the Company and its shareholders.

13.1.1.f. Existence of remuneration supported by subsidiaries or direct or indirect controlling or controlled entities

The remuneration of the members of the Board of Directors is not supported by subsidiaries or any entities directly or indirectly controlling or controlled by the Company. However, the members of the Board of Directors who also hold executive offices in Santander Spain or other entities controlled by Santander Spain are paid for such services directly by such entities, according to the office they hold.

13.1.1.g. Existence of any remuneration or benefit linked to the occurrence of certain corporate event, such as the transfer of control of the issuer corporate

No remuneration or benefit linked to the occurrence of certain corporate events.

 

13.1.2 Executive Board

Executive Board members earn: Fixed Remuneration consisting of monthly payments, benefits, pension and a variable remuneration, provided they are within the overall ceiling of the annual remuneration approved at the Annual General Meeting.

13.1.2.a         Objectives of the remuneration policy or practice

The purpose of the policy/practice of remuneration of Executive Directors is to support the strategy of the organization, to ensure the following assumptions:

·          Ensure alignment of the interests of shareholders and the public with whom the Company relates;

·          Recognize meritocracy, differing the individual contributions of the areas and the Company’s compliance with the objectives and implementation of business strategies proposed by the Executive Board and approved by the Board of Directors;

·          Promote good and recurrent company performance, and safeguard the interests of shareholders, through a long-term commitment of the members of the Executive Board;

·          Allow the career development of executives; and

·          Maintain the competitiveness of the Company’s Remuneration compared with major competitors in order to retain key executives.

13.1.2.b         Executive Board’ Remuneration composition, indicating:

I. Description of the remuneration elements and objectives of each

The remuneration of the Executive Board consists of fixed and variable parts, as detailed below:

·        Fixed Remuneration: Fixed remuneration consists of the contractual salary of each executive. Santander Brazil has twelve (12) levels of salary grades for Fixed Remuneration, and three (3) are of Directors. The salary is linked to the position held and the pay grade corresponding as reference. The individual salary also considers historical performance and seniority of occupants and is aligned with market practices, measured periodically through salary surveys performed by specialized consultants.

·        Benefits: In line with the scope of the office held and the market practices, namely:

 

·          Dental Care: Directors may opt for one of the two (2) plans covering dental care.

·          Life Insurance: Coverage in case of death or disability of the executive, including capital insured in case of death of spouse or children under twenty-one (21) years old.

·          Automobile: 0 KM car for mobility or money specific to that purpose.

·          Pension: Pension Plan is a financial planning tool made to provide future additional income. The main pension plan offered by the Company is SantanderPrevi which is currently the only one open to new members.

·          Variable Remuneration: The variable remuneration shall consist of the annual Variable Income Plan (PPG – Self-Management Program) and the Long Term Incentive (ILP) Plans.

Ø   Self-Management Program (PPG)

The objective of the Annual Variable Income plan (PPG) is to recognize, through meritocracy, the best performance in the Organization. This plan, to which the members of the Executive Board are eligible, takes into account the following criteria:

Individual performance: Measured through institutional performance assessment tool (objective direction sheet – DPO) and includes quantitative and qualitative indicators. It is monitored by the Financial, Strategy and Quality Vice-Presidency and has its indicators and targets approved by the Executive Committee.

Business unit performance: Measured through the objective direction sheet (DPO) of the area and reflects the goals of the area in the fiscal year. Its indicators and targets are approved by the Executive Committee and monitored monthly by the Financial, Strategy and Quality Vice-Presidency.

The institution’s performance as a whole: As of 2015, it involves compliance with the net profit indicator and the RoRWA (Return on Risk Weighted Assets) indicator, according to the following:

 

Modifier shall mean the net profit increase rate in comparison with the former year. This modifier is added to achievement of net profit vs. budget, as shown in the following table:

The annual variable income for the statutory officers is paid as follows:

In the case of the CEO, the deferral in this plan is at least 50%, with 25% at least of each of the items mentioned above.

The deferment ratio depends also on the level of variable compensation received in the fiscal year (includes the Long-Term Incentive (ILP) value in the year of the granting, valued at the granting price). In the event that the variable compensation value is between BRL 5.5 MM and BRL 8 MM, the deferment is 50%, where 25% of each installment is deferred and paid on demand. In the event that the variable compensation value is equal to or higher than BRL 8 MM, the deferment is 60%, where each deferred installment is 30% and each paid-on-demand installment is 20%.

As of 2015, for the President Director, or in the event that the variable compensation value is higher than BRL 5.5 MM, the payment of the deferred installments goes from three (3) to five (5) equal annual installments, with the lock up conditions being kept.

The plan is still subject to Malus, i.e., the Board of Directors, on the recommendation of the Nomination and Remuneration Committee (NRC), may approve reduction up to 100% of the value of each participant in the following cases:

·                                  Unsatisfactory financial performance of the Company;

 

·                                  Breach of internal rules applicable to the participant, including but not limited to risk management policies;

·                                  Substantial change in the financial condition of Santander Brazil, as opined by external auditors, except because of changes in accounting standards. Should the Board of Directors deem it necessary, Santander Group’s statements may also be taken into account in this analysis; or

·                                  Significant variations in capital base or qualitative risk assessment of Santander Brazil. Should the Board of Directors deem it necessary, the analysis of Santander Group’s capital variations may also be taken into account in this analysis.

The Performance of the Directors is measured by institutional tool (DPO = Direction by Objectives). There is the period of engagement of targets, which is held at the beginning of the year, after the six-month review, and finally, in a scale of 05 levels, performance score is assigned at the end of the year. This score is one of the items that are used in setting the value of the variable annual remuneration (PPG).

Ø   Long Term Incentive (ILP) Plans

The objective of the ILP is to align the interests of the Organization and the interests of participants, encouraging the retention of long-term career.

There are three (3) ILP plans in force, two (2) of them being Call Option Plans – the SOP 2014 and the SOP 2013 – and a Global Stock Plan (ILP CRDIV).

Stock Call Option Plans – Units which last about three (3) years and have an exercise period of two (2) years. The number of Units exercisable by the participants is determined according to the result of the determination of a company’s performance parameter: Total Shareholder Return (“TSR”) and may be reduced, if not achieved the objectives of reducers Return on Risk Weighted Assets (“RORWA”) or Return on Risk Adjusted Capital (“RORAC”) – depending on the plan – comparison between realized and budgeted in each year, as determined by the Board of Directors for each plan. Additionally, it is necessary that the participant remains with the Company during the term of the Plans to acquire a position to exercise those options.

Plans will be settled in Units, by the difference between the closing price on the exercise date and the “Strike Price”, net of PIT.

Plans are subject to a Malus clause, i.e., the Board of Directors, on the recommendation of the Nomination and Remuneration Committee (NRC), may adopt to reduce up to 100% of the value of each participant in the following events:

 

·            Poor financial performance of the Company;

·            Breach by the Participant, of rules and internal regulations, in particular those related to risk;

·            Substantial changes in the financial statements of Santander Brazil, or Santander Group, considered by the external auditors, except as a result of changes in accounting standards; or

·            Significant changes in the stock capital or qualitative risk assessment of Santander Brazil or Santander Group.

Plans also include an additional deferral of 40% (or 50% for the CEO) of the exercised shares in three (3) annual installments, and one (1) year from backup withholding, i.e., there is restriction on sale, for up to four (4) years from the date of exercise (1/3 for 2 years, 1/3 for 3 years and 1/3 for 4 years).

Ø   Global Plan – ILP CRDIV

In 2014, it was launched a stock delivery plan called Long-Term Incentive Program Global Award 2014 – ILP CRDIV. This plan is subject to achievement of performance indicator Total Shareholder Return (TSR) of Santander Group, comparing the evolution of the Group in this indicator for the main global competitors, and settlement will be in shares of Santander Group worldwide.

The Long-Term Incentive Program Global Award 2014 provides for the delivery of the shares resulting from the achievement of the plan in three annual installments in 2016, 2017 and 2018, with an additional restriction on sales of one year after each delivery, subject to achievement of indicator Total Shareholder Return of Santander Group in relation to its main competitors worldwide.

II. In relation to the last 3 fiscal years, what is the proportion of each element in the total remuneration

The estimated size of each element in total Remuneration ratio is the following:

III. Calculation and adjustment methodology of each Remuneration element

·          Fixed Remuneration: There is no automatic methodology for adjustments. Every year, market researches are carried out to evaluate the competitiveness of the officers’ compensation. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose to the Board of Directors.

 

·        Variable Income: There is no automatic methodology for adjustments. Every year, market researchers are carried out to evaluate the competitiveness of the officers’ compensation. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose to the Board of Directors.

·        Benefits: There is no automatic methodology for adjustments. Every year, market researchers are carried out to evaluate the competitiveness of the officers’ compensation, including benefits. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose to the Board of Directors.

·        Pension: As defined in the plan regulation. Please see item 13.10.

·        Stock-Based Remuneration: As defined in each plan regulation. Please see item 13.4.

IV. Reasons for Remuneration composition

The proposed remuneration considers the experience of Executive Officers, the need to retain talent in a competitive market and the promotion of good performance of the Organization through a long-term commitment of the members of the Executive Board.

V. The existence of members that are not remunerated by the issuer and the reason for this fact

There are no members that are not remunerated by the Executive Board.

13.1.2.c. Key performance indicators that are taken into consideration in determining each Remuneration element

·          Fixed Remuneration: Without any attached indicator.

·          Variable Remuneration: They are based on the Company’s result indicators, including indicators of recurrent net profit, Return on Risk Weighted Assets (RoRWA), results from areas and individual performance. Both quantitative factors that depend on the area and qualitative (aligning the Santander Brazil’s values, teamwork, etc.) are considered in the evaluation of the individual.

·          Benefits: Without any attached indicator.

·          Pension: Without any attached indicator.

·          Stock-Based Remuneration: ILP Plan, as described in item 13.4.

 

13.1.2.d. How the remuneration is structured to reflect the evolution of performance indicators

The Board of Directors assesses compliance with established objectives and budget of the Company for the purpose of verifying whether the results justify distributions of funds to the proposed limits.

13.1.2.e. How the policy or practice of Remuneration aligns the interests of the short, medium and long-term issuer

The remuneration policy of the Company offers to executives plans like the Self-Management Program (“PPG”), the ILP (global and local) Plans and the Deferral Plan in order to align the interests of the Organization and executives. There is a search, on one hand, for sustainable growth and profitability of the Company, and on the other hand, the recognition of the contribution of executives to the development activities of the Company.

13.1.2.f.        Existence of Remuneration supported by subsidiaries or direct or indirect controlled or controlling entities

The remuneration of the Executive Board is not supported by subsidiaries or direct or indirect controlled or controlling entities. However, the results of subsidiaries and affiliates influence on the consolidated results of the Company and, consequently, the variable remuneration of the Executive Board.

13.1.2.g. Any Remuneration or benefit linked to the occurrence of certain corporate events, such as the transfer of corporate control of the issuer

There is no Remuneration or benefit related to the occurrence of certain corporate events.

13.1.3. Audit Committee

The Audit Committee consists of a minimum of three (3) and maximum of six (6) members appointed by the Board of Directors from among persons, whether or not members of the Board of Directors, which meet legal and regulatory requirements to perform the duties.

            13.1.3.a.       Objectives of the policy or practice of Remuneration

The remuneration of the Audit Committee shall be suited to attract qualified, experienced professionals and recognize for the performance of their duties established in the corporate charter.

13.1.3.b. Audit Committee’s Remuneration composition, indicating

 

I. Description of the Remuneration elements and objectives of each

         The remuneration of the Audit Committee is composed of:

·          Fixed Remuneration: Twelve (12) installments, according to the amounts set annually by the Board of Directors.

·          Benefits: They are granted Medical and Dental Health care and Life Insurance.

·          Pension: Members of the audit committee are not eligible for private pension.

II. In relation to the last 3 fiscal years, what is the proportion of each element in the total remuneration

         The estimated size of each element in total Remuneration ratio is:

III. Calculation and adjustment methodology of each Remuneration element

·          Fixed Remuneration: There is no automatic methodology for adjustments. Every year, market researches are carried out to evaluate the competitiveness of the board members’ compensation. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose adjustments to the Board of Directors.

·          Variable Remuneration: N/A

·          Benefits: There is no automatic methodology for adjustments. Every year, market researchers are carried out to evaluate the competitiveness of the Audit Committee compensation, including benefits. Should any relevant difference in relation to the market be found, the Remuneration Committee shall consider the need to propose adjustments to the Board of Directors.

·          Pension: N/A

·          Stock-Based Remuneration: N/A

 

IV. Reasons for Remuneration composition

The proposed remuneration considers the experience of the members of the Audit Committee, the need for retention of members in a competitive market, the promotion of good performance of the Company and alignment with the strategy of the shareholders.

V. The existence of members that are not remunerated by the issuer and the reason for this fact

There are no members that are not remunerated by the Audit Committee.

13.1.3.c.        Key performance indicators that are taken into consideration in determining each Remuneration element

The maximum setting of values is approved by the annual general meeting considering the results of the Company in the last fiscal year and results expected for the current year, including, but not limited to, net profit.

13.1.3.d. How Remuneration is structured to reflect the evolution of performance indicators

The remuneration of the members of the Audit Committee is set annually by the Annual Shareholders’ Meeting and is not directly tied to performance of short and medium term.

13.1.3.e. How the policy or practice of Remuneration aligns with the interests of the short, medium and long-term issuer

The remuneration policy is aligned with the Company’s interests, by setting premises that are compatible with risk management, so as to avoid encouraging any behaviors that may expand exposure to risk above the levels deemed prudent, under short, medium and long-term strategies adopted by the Company, by communicating concepts, criteria and responsibilities regarding the modes of fixed remuneration, always in line with the interests of the Company and its shareholders.

13.1.3.f. Existence of Remuneration supported by subsidiaries or direct or indirect controlled or controlling entities

There is none.

13.1.3.g. Existence of any Remuneration or benefits linked to the occurrence of certain corporate events such as the transfer of control of the issuer

No remuneration or benefit linked to the occurrence of certain corporate events.

 

13.1.4. Nomination and Remuneration, Corporate Governance, and Sustainability & Risk Committees

At the Board of Directors’ meeting held in May 28, 2013, the remuneration of the members of the (i) Remuneration Committee; (ii) Nomination, Corporate Governance and Compliance Committee; (iii) Sustainability & Society Committee; and (iv) Risk Committee, in the individual value of BRL 12,000.00 (twelve thousand reais) for each meeting to be held, was approved, with which shall only be entitled to such remuneration those members who are not officers in the Executive Board, or as Chairman of the Board of Directors. Regarding the Coordinator of the Risk Committee and the Remuneration Committee, the bonus per meeting is BRL 18,000.00 (eighteen thousand BRL).

The members of the Nomination and Remuneration Committee are not entitled to receive any other form of Remuneration or benefit.

13.2. Total remuneration of the Board of Directors, Statutory Board and Audit Committee

The number of members per body corresponds to the yearly average determined on a monthly basis.

 

13.3. In relation to the variable remuneration in the last 3 fiscal years and expected remuneration for the current fiscal year of the Board of Directors and Statutory Board

Variable Remuneration in fiscal years 2013, 2014, 2015 and expected in 2016:

 

Year 2013

Amounts in BRL

 

Year 2014

Amounts in BRL

 

Year 2015    

Amounts in BRL

 

Year 2016    

Amounts in BRL

 

13.4.   Compensation plan based on the actions of the Board of Directors and the Statutory Board, in force in the last fiscal year and estimated for the current fiscal year

            13.4.a. General Terms and Conditions

The Company has three (3) long-term compensation plans, bound to the price performance in the stock market: Local Long-Term Incentive Program, Global Long Term Incentive Program, and Deferral Plan.

Officers and non-executive employees who are nominated by the Board of Directors are eligible for these plans. Plans have a duration of three (3) years, promoting eligible employees’ commitment to the long-term results.

            13.4.a.1. Local Plans

The Local Long Term Incentive Program encompasses two (2) different plans: the Stock Options Plan (SOP) for executives and the Performance Share Plan (PSP). SOP is a call option plan for stocks of the company (Units SANB11), for officers, while PSP is an incentive plan for all executives of all areas. The purpose of such plans is to keep the employees committed to the long-term results.

Stock Options Plan (SOP)

SOP is a stock option plan for units. The period to execute options is two years. The plan participant must stay with the Company during the plan’s effective term in order to be eligible to execute the options on their corresponding units.

SOP IPO

         On February 3, 2010, the shareholders approved the granting of SOP 2012 with execution period from June 30, 2012 to June 30, 2014. The number of executable units in this plan is determined at: (i) 50% (fifty percent) of achievement is bound to TSR (Total Shareholder Return); and (ii) 50% (fifty percent) is based on comparison ‘net profit’ vs. ‘budgeted profit’.

SOP for Delivery in 2014

On October 25, 2011, the shareholders approved the granting of SOP for Delivery in 2014, with execution period from June 30, 2014 to June 30, 2016. The number of executable units was determined according to TSR (Total Shareholder Return) and the number of executable units was reduced by the achievement of RORAC (Return on Risk Adjusted Capital) goals, in each fiscal year.

 

SOP 2013

On April 29, 2013, the shareholders approved the granting of SOP 2013, with execution period from June 30, 2016 to June 30, 2018. The number of executable units was determined according to the Company’s performance parameter calculation result: TSR (Total Shareholder Return), and may be reduced in the event that the goals of reducer RoRWA (Return on Risk Weighted Assets) are not achieved, when comparing ‘achieved’ vs. ‘budgeted’ in each year.

Local Plan – PSP (Performance Share Plan)

PSP consists of long-term remuneration based on Units and on cash indexed to the Unit.

PSP

On February 3, 2010, the shareholders approved the PSP Plan. Under such Plan, the participants receive 50% (fifty percent) of the remuneration in cash and 50% (fifty percent) in Units, attached to TSR and RoRWA indicators.

PSP 2013

On April 29, 2013, the shareholders approved the PSP 2013 plan. Within the framework of this plan, participants receive 100% (one hundred percent) of remuneration in Units. The amount of such Units may be reduced in the event that the goals of reducer RoRWA (Return on Risk Weighted Assets) are not achieved, based on a comparison ‘achieved’ vs. ‘budgeted’ in each year.

            13.4.a.2. Global Plans

Plans PI10, PI11, PI12, PI13 e PI14

The Board of Directors of Santander Spain, held on March 26, 2008, adopted the policy of Long-Term Incentives aimed at executives of Santander Spain and Santander Group (excluding Banesto). This policy provides compensation tied to stock performance of Santander Spain according to what was established in the Annual General Meeting.

The plan that makes up the aforementioned policy of incentives is the Action Plan for Performance.

 

The Plan involves cycles of three (3) years of delivery of shares to the recipients. The goal is to establish an appropriate sequence between the incentive plan expiration and the successive cycles of this plan. Thus, the first two (2) cycles started in July 2007, with the first cycle lasting two (2) years (PI09) and the other cycles having an average of three (3) years (PI10, PI11, PI12, PI13 and PI14).

For each cycle, a maximum number of shares is established for each beneficiary who remains in Santander Brazil during the plan. Cycles achieving the goals determined the number of shares to be delivered, defined by comparing the performance of Santander Spain with the performance of the financial institutions group used as a reference and linked to two parameters, namely Total Shareholder Return (TSR) and growth in earnings per share (EPS).

At the end of each cycle, the Total Shareholder Return (TSR) and growth in earnings per share (EPS) were calculated for Santander Spain and each of the reference companies, and the results were sorted in ascending order. Each of the two criteria (TSR and EPS) were weighted in proportion of 50% to calculate the percentage of shares to be delivered, according to the relative position of Santander Spain in the ranking among the reference financial institutions.

For plans PI12, PI13 and PI14, the goal that determines the number of shares was related only to a performance parameter, which has 100% weight in the percentage of shares to be distributed: the TSR of the Group.

         Global Plan – ILP CRDIV

A stock delivery plan known as Global Long Term Incentive Award 2014 (ILP CRDIV) was launched in 2014. This plan is subject to the achievement of performance indicator Total Shareholder Return (TSR) of Santander Group, comparing the evolution of the Group in this indicator with the main global competitors, and settlement will be in shares of the World Santander Group.

The Global Long Term Incentive Program Award 2014 provides for the delivery of the shares resulting from the achievement of the plan in three (3) annual installments in 2016, 2017 and 2018, with an additional restriction on sales of one (1) year after each delivery.

            13.4.a.3. Deferral Plans

The Deferral Plans are available to Statutory Directors, executives with management positions, and other eligible employees. As part of the Deferral Plan, participants receive the variable remuneration in a period of three (3) or five (5) years.

 

Deferral plans are renewed and updated each year. From 2015, there are four plans in place: one for each fiscal year 2012, 2013, 2014 and 2015.

Deferral Plan – 2014 and 2015

         In 2015, the plans were divided into two (2) programs:

·          Identified Collective Plan: Statutory and Executive Directors . Statutory and Executive Directors who take significant risks on behalf of Santander Brazil, and are responsible for the control areas. Deferred compensation is paid 50% (fifty percent) in cash and 50% (fifty percent) in shares (Units SANB11).

·          Unidentified Collective Plan – Employees . Eligible for this plan are the management level employees and other certain employees. Deferred compensation is paid 100% (one hundred percent) in cash.

Deferral Plan – 2012 and 2013

         In 2012 and 2013, the plans were divided into two (2) programs:

·          Identified Collective Plan: Statutory and Executive Directors . Statutory and Executive Directors who take significant risks on behalf of Santander Brazil, and are responsible for the control areas. Deferred compensation is paid 50% (fifty percent) in cash and 50% (fifty percent) in Units.

·          Unidentified Collective Plan – Employees . Eligible for this plan are the management level employees and other certain employees. Deferred compensation is paid 100% (one hundred percent) in cash.

          13.4.b. Main objectives of the plans

·          Align the interests of the Company and participants so as to, on the one hand, achieve the growth and profitability for the Company, and on the other hand, to recognize the contribution of participants in the development of Company’s activities;

·          Enable the Company to retain participants in its payroll, offering them an additional advantage, the opportunity to develop or increase their interest as shareholders of the Company; and

·          Promote the good performance of the Company and the interests of shareholders through a long-term commitment by participants.

 

13.4.c. How the plans contribute to the objectives

The Plans contribute to the mentioned objectives by encouraging executives to make an effort to achieve the following indicators: Total Shareholder Return (TSR), budgeted net profit vs. achieved net profit comparison, RORAC (Return on Risk Adjusted Assets), RoRWA (Return on Risk Weighted Assets) and growth in Earnings per Share (EPS). These indicators were defined in the Regulation of the respective Plans.

13.4.d. How the plans are included in the issuer’s remuneration policy

The plans are a key piece in the Company’s compensation strategy because they act as efficient tools for recognition and retention of members of the Executive Board in the short, medium and long term, and align the interests of executives with the interests of the Company.

          13.4.e. How the plans align the interests of officers and the issuer in the short, medium and long term

        The plans align the interests of members of the Executive Board and the Company’s interests in the short, medium and long term as the options are exercised and the shares are received only if the Company’s strategic objectives are achieved consistently for the cycle duration of the plans.

 

13.4.f.            Maximum number of shares covered

 

          13.4.g. Maximum number of options to be granted

 

13.4.h. Conditions to purchase shares

          13.4.h.1. Local Plans

          SOP IPO

Share Option Plan, in which new shares of the Company are issued (Units SANB11), promoting a commitment of the Board of Officers with the long-term results. The period commenced on June 30, 2012 and extends over two (2) years. The number of executable units in this plan was determined by (i) 50% (fifty percent) of achievement bound to Total Shareholder Return (TSR) and (ii) 50% (fifty percent) based on comparison ‘net profit’ vs. ‘budgeted profit’.

        PSP

A Variable Compensation Plan, in which (i) fifty percent (50%) consists of the delivery in Units, which cannot be sold during the period of one (1) year counted from the date of exercise, and (ii) fifty percent (50%) is paid in cash, which can be freely used by the participants (“Bonus”), after deductions of all applicable taxes, charges and withholdings. For the delivery of the units, such TSR and RoRWA indicators as specified in the regulation must be achieved.

        SOP for delivery in 2014

The amount of Units exercisable by the participants was determined according to the result of measurement of a performance parameter of the Company: Total Shareholder Return (TSR) and was be reduced upon failure to achieve the goals of the Return on Risk Adjusted Capital (RORAC), comparison between achieved and budgeted in each year. Additionally, the participant had to remain in the Company to be entitled to receive the options.

The plan shall be settled in Share Deposit Certificates (Units) by the difference between the closing price on the exercise date and the Strike Price, net of Personal Income Tax.

        SOP 2013

        The number of Units exercisable by participants shall be determined according to the measurement of performance parameters of the Company: Total Shareholder Return (TSR), and can be reduced on non-performance of return on risk weighted assets (RoRWA), comparison between realized and budgeted in each year, as determined by the Board of Directors. Additionally, the participant must remain in the Company during the term of the Plan to be entitled to exercise the Units corresponding to remuneration. In order to be entitled to receive options, the goals specified in the Regulation must be achieved.

 

             PSP 2013

Payment will be made upon delivery of the corresponding Units. The number of Units to be delivered to participants shall be determined according to the measurement of a performance criteria of the Company – Total Shareholder Return (TSR) – and can be reduced on non-performance of return on risk weighted assets (RoRWA), comparison between realized and budgeted in each year, as determined by the Board of Directors.

             13.4.h.2. Global Plans

For each cycle, a maximum number of shares was established for each beneficiary. In the first three (3) cycles, the goals determine the number of shares to be delivered, by comparing the performance of Santander Spain with the performance of the group of Financial Institutions used as reference and linked to two parameters, namely: Total Shareholder Return (TSR) and growth in earnings per share (EPS).

At the end of each cycle, the Total Shareholder Return (TSR) and growth in earnings per share (EPS) were calculated relative to Santander Spain and each of the reference companies and the results sorted in ascending order. Each of the two criteria (TSR and EPS growth) were weighted in proportion of 50% in the calculation of the percentage of shares to be delivered, according to the relative position of Santander Spain in the ranking of the reference financial institutions.

        For plans PI12, PI13 and PI14, the goal that determines the number of shares was related only to a Performance Parameter, which has 100% weight in the percentage of shares to be distributed: the TSR of the Group.

Global Plan – ILP CRDIV:

This plan, launched in 2014, is subject to the achievement of performance indicator Total Shareholder Return (TSR) of Santander Group, comparing the evolution of the Group in this indicator with the main global competitors, and settlement will be in shares of the World Santander Group.

The Global Long Term Incentive Program Award 2014 provides for the delivery of the shares resulting from the achievement of the plan in three (3) annual installments in 2016, 2017 and 2018, with an additional restriction on sales of one (1) year after each delivery.

 

          13.4.h.3. Deferral Plans

                Deferral – Cycle 1

The plan’s object was the payment in cash of part of the variable remuneration payable by the Company to participants of the plan, in the terms of its remuneration policy, which payment is subject to the future performance of Units SANB11. The plan did not cause dilution of the share capital of the Company, since the participants are not granted the status of shareholder of Santander Brazil, or any other rights or privileges attached to such status.

            Deferral – Cycle 2 (2011), Cycle 3 (2012), Cycle 4 (2013), Cycle 5 (2014) and Cycle 6 (2015)

The Plan is part of the current regulatory environment applicable to the Company, especially in light of the Resolution of the National Monetary Council No. 3921 of November 25, 2010 (“Resolution No. 3921/10”), by which financial institutions must meet certain requirements deferred for future payment of a portion of variable compensation payable to its managers and other employees, taking into account the sustainable financial basis of long-term adjustments in future payments depending on the assumed risks and the fluctuations in the cost of capital.

The plan is divided into 02 plans:

Identified Collective Plan

In 2011, were included in this rule participants of the Executive Committee and other executives who took significant risks on behalf of the Company and who were in charge of the control areas. The deferral was half in cash.

In 2012, this plan was implemented to comply with Resolution No. 3921/10. In 2012, all statutory Officers of the Group’s companies authorized to operate by the Central Bank of Brazil were included in this deferral plan.

For this group the rules for deferment of short-term variable income were applied as follows:

52

 

•       20% deferred in cash in three equal annual installments

In the case of the CEO, the deferral in this plan is at least 50%, with at least 25% each of the items mentioned above. The deferment ratio depends also on the level of variable compensation received in the fiscal year (includes the Long-Term Incentive Plan (ILP) value in the year of the granting, valued at the granting price). In the event that the variable compensation value is between BRL 5.5 MM and BRL 8 MM, the deferment is 50%, where 25% of each installment is deferred and paid on demand. In the event that the variable compensation value is equal to or higher than BRL 8 MM, the deferment is 60%, where each deferred installment is 30% and each paid-on-demand installment is 20%.

As of 2015, for the Chief Executive Officer, or in the event that the variable compensation value is higher than BRL 5.5 MM, the payment of the deferred installments goes from three (3) to five (5) equal annual installments, with the lock up conditions being kept.

•        Unidentified Collective Plan

The payment is made in cash in three (3) equal annual installments adjusted in accordance with CDI. There are no statutory officers in this group, because they are part of the identified collective plan.

13.4.i. Criteria to determine the purchase price or exercise

13.4.i.1. Local Plans

         SOP IPO

The exercise price of the options, to be paid by participants for the subscription of Units, was BRL 23.50.

         PSP

Not applicable, because the strike price was the market value on the date of exercise thereof.

            SOP for delivery in 2014

         The issued options have option price of BRL 12.7234 per Unit.

            SOP 2013

         The issued options have strike price of BRL 12.8423 per Unit.

         PSP 2013

Not applicable, because the strike price was the market value on the date of exercise thereof.

 

13.4.i.2. Global Plans

Not applicable, because the exercise price was the market value on the date of exercise thereof.

13.4.i.3. Deferral Plan (Cycles 1, 2, 3, 4, 5 and 6)

Not applicable, because the strike price was the market value on the date of exercise thereof.

13.4.j. Criteria for determining the exercise period

13.4.j.1. Local Plans

        SOP IPO

The Plan had a term of three (3) years, including three (3) financial years, promoting a commitment of the Executive Board with the long-term results. The exercise period spans over two (2) years after the exercise of the options.

        PSP

The cycles had duration of three (3) years, including three (3) financial years, promoting a commitment of members of the Executive Board with long-term results.

        SOP for delivery in 2014

The Plan had a term of three (3) years, promoting a commitment of the Executive Board with the long-term results. The period for the exercise is from June 30, 2014 until June 30, 2016.

          SOP 2013

The cycle has duration of three (3) years, promoting a commitment of Executive Officers with long-term results. The period for the exercise is from June 30, 2016 until June 30, 2018.

        PSP 2013

The cycle has a term of three (3) years, including three (3) financial years, promoting a commitment of the members of the Executive Board with the long-term results.

13.4.j.2. Global Plans

The cycles have duration of three (3) years, including three (3) financial years, promoting a commitment of the Executive Board with the long-term results.

 

13.4.j.3. Deferral Plan

Deferral – Cycles 1, 2, 3, 4, 5 and 6

The total number of shares referenced will be settled in three (3) installments and allocated equally to the three fiscal years subsequent to the base year.

13.4.k. Type of settlement

13.4.k.1. Local Plans

          SOP IPO: in Units

          PSP: 50% gratuity on paycheck and 50% in Units

          SOP for delivery in 2014: in Units

          PSP 2013: in Units      

          SOP 2013: in Units

13.4.k.2. Global Plans

Gratuity in paycheck for compulsory purchase of shares.

13.4.k.3. Deferral Plans

Cycle 1: Gratuity in paycheck

Cycles 2, 3, 4, 5 and 6: Made directly in Units (deferred installment in Units).

13.4.l. Restrictions on transfer of shares

13.4.l.1. Local Plans

        SOP IPO

The equivalent of one third of the Units resulting from the exercise of options exercisable could not be sold by the participant during the period of one (1) year from the date of acquisition of each Unit.

        PSP

        The amount of Units comprising 50% of net investment under this plan may not be sold by the participant during the period of one (1) year from the date of purchase.

        SOP for delivery in 2014

The equivalent of forty percent (40%) of the Investment Units of Participant, or if the Company’s CEO, fifty percent (50%) (“Restricted Percentage”), cannot be sold during the following periods described (“Lock up Period”):

 

·          One third (1/3) of the Restricted Percentage for a period of two (2) years from the date of acquisition of each Unit;

·          One third (1/3) of the Restricted Percentage for a period of three (3) years from the date of acquisition of each Unit; and

·          One third (1/3) of the Restricted Percentage for a period of four (4) years from the date of acquisition of each Unit.

          SOP 2013

The equivalent of 40% of the Units resulting from Bonus (“Restricted Percentage”) of each Participant and 50% (in the case of the Chief Executive Officer), cannot be sold during the following periods (“Lockup Period”), including in case of termination of agreement:

·             One third (1/3) of the Restricted Percentage for a period of two (2) years from the date of receipt of each Unit;

·             One third (1/3) of the Restricted Percentage for a period of three (3) years from the date of receipt of each Unit; and

·             One third (1/3) of the Restricted Percentage for a period of four (4) years from the date of receipt of each Unit.

13.4.l.2. Global Plans

In the Global Plan – ILP CRDIV, there is a restriction on the transfer of shares for 1 year after they are received. For the other global plans, there is no restriction on the transfer of shares after they are received.

13.4.l.3. Deferral Plan

Deferral – Cycle 1

Not applicable, since the plan provides for the gratification solely in cash.

Deferral – Cycles 2, 3, 4, 5 and 6

Administrators who belong to the Collective Identified Plan mentioned earlier, may not dispose of the Units received in this plan during the period of one (1) year from the date of receipt of each batch of Units.

13.4.m. Criteria and events that, when checked, will cause the suspension, amendment or termination of the plan

 

13.4.m.1. Local Plans

SOP IPO, PSP, SOP for delivery in 2014, SOP 2013 and PSP 2013

Any significant legal changes to the regulation of corporations and/or tax effects applicable to the Company and the participants can lead to a partial or full review of the plan, or even suspension or termination, at the sole discretion of the Board of Directors. Additionally, in the SOP, SOP for delivery in 2014 and SOP 2013 plans, in the case of direct or indirect sale by the controlling shareholders, either through a single transaction or a series of transactions, of the number of shares involving a change of control in the Company, the Board of Directors may, in its sole discretion, approve the options to be released in order to be exercised in whole or in part by the participant. The Board of Directors may establish special rules that allow the shares object of the options to be offering.

13.4.m.2. Global Plans

Changes in the plan may occur due to legal or regulatory reasons.

13.4.m.3. Deferral Plan

The plans may be terminated, suspended or amended at any time by the Board of Directors, and in case of suspension or termination of the plan, it must be respected the rights of the participants who already have installments of the referred bonus in Units to receive, under the following terms:

·          To preserve the plan’s objectives, the total quantity of Units shall be adjusted for more or less in the event of: split, reverse split of shares, or gratuity of shares, merger, incorporation, spin off, other procedures of similar nature and of relevance; and

·          The Human Resources Division, under the supervision of the Executive Committee, will execute those quantitative adjustments using the methods adopted by BM&FBOVESPA to make similar adjustments in its stock markets.

Deferral – Cycles 1, 2, 3 and 4

The Board of Directors of the Company may establish partial payment or non-payment of the plan, if verified the following assumptions:

·          Unsatisfactory financial performance of the Company;

·          Breach of internal rules applicable to the Participant, including, but not limited to risk management policies;

 

·          Substantial change in the financial condition of the Company, except as a result of changes in accounting standards;

·          Significant variations in capital base of the Company; or

·          Misrepresentation in risk management.

Deferral – Cycles 5 and 6

The plan is subject to ‘Malus’, i.e., the Board of Directors, pursuant to the recommendation of the Remuneration Committee (RC), may approve reduction up to 100% of the value of each participant in the following cases:

·          Unsatisfactory financial performance of the Company;

·          Breach of internal rules applicable to the participant, including but not limited to risk management policies;

·          Substantial change in the financial condition of Santander Brazil, as opined by external auditors, except as a result of changes in accounting standards; if the Board of Directors shall deem necessary, it may also take into account in this evaluation the financial statements of Santander Group; or

·          Significant variations in capital base of the Company or qualitative risk assessment of Santander Brazil; if the Board of Directors shall deem necessary, it may also take into account in this evaluation the financial statements of Santander Group.

13.4.n. Effects of departure of the manager of the issuer on the rights under the share-based compensation plan

13.4.n.1. Local Plans

        SOP IPO, PSP, SOP for delivery in 2014, SOP 2013 and PSP 2013

The ILP Plan shall be terminated and the participant loses the right to participate in the ILP Plan in advance, so that he/she will have no right to receive options or shares, in case the participant resigns, renounces or leaves the Company due to dismissal, just cause or removal from the position.

In case of dismissal of the participant by termination of the labor agreement due to acts performed by the Company pursuant to Article 483 of the Consolidation of Labor Law, due to dismissal without cause, by mutual agreement of the parties, in such case that the participant does not have employment relationship with the Company or in case of retirement, the participant will receive, at the time the payments are made to other participants in the cycle of the ILP Plan, the bonus amount proportional to the time spent as a participant of the ILP Plan, observed the percentage of the performance indicators.

 

In the event of death of the participant or in case of permanent disability of the participant, the delivery of shares or options will be done jointly with the other participants of the ILP Plan cycle, without applying the percentage of time that the participants remained in the applicable cycle plan, but regularly applying the percentage of performance indicators. In the case of death, the shares will be delivered to the participant’s successors.

13.4.n.2. Global Plans

        In case of retirement, due to dismissal without cause, removal, permanent disability or death, the right to receive the shares will remain as if none of the aforementioned conditions occurred, except for the following changes:

·          In case of death, the mentioned wright shall be transferred to the beneficiary’s successors;

·          The number of shares to be delivered will be the result of multiplying the maximum number of shares set by the quotient resulting from dividing the number of days from the date of launch of the plan up to the date of the death, retirement, pre-retirement, resignation, removal or other circumstance that determines the application of this rule, by the number of days of the plan.

·          In case of resignation by the participant, the participant will not be entitled to the plan’s benefits.

13.4.n.3. Deferral Plans

The plan shall be early terminated, legally, so that the participant shall loose the wright to participate of the plan and to receive the future installments, in case of dismissal due to resignation, renouncement or dismissal by just cause pursuant to Article 482 of the Consolidation of Labor Laws or removal of statutory position through unilateral decision of the Company.

In case of dismissal of the participant by termination of the labor agreement due to acts performed by the Company pursuant to Article 483 of the Consolidation of Labor Law, due to dismissal without cause, retirement or death, the participant will receive the shares jointly with the payments of the other participants in the respective cycle, the value of the referred bonus in Units’ installment applicable to that participant. In case of death, the shares shall be delivered to the participants’ successors. In case of permanent disability of the participant, stated by two medical reports (public or private institution), the participant will receive, at the time of payments to other participants of the respective cycle, the value of the referred bonus in Units’ installment applicable to that participant.

In case of suspension of the labor agreement due to disease or accident at work, the participant will receive, at the moment the payments are made to other participants of the respective cycle, the value of the referred bonus in Units’ installment applicable to that participant.

 

13.5.   In relation to stock-based compensation recognized in the outcome of the last 3 financial years and planned for the current fiscal year, the Board of Directors and the Statutory Board:

2016

 

2015

 

2014

 

2013

 

13.6. Regarding the outstanding options of the Board of Directors and Statutory Board at the end of last fiscal year:

On December 31, 2015, the management participating in SOP 2015 plan hold 379,500 outstanding options. These options on Units are executable until June 30, 2016 at the price of R$ 12.7234 per option.

13.7. In relation to options exercised and shares delivered regarding the stock-based remuneration for the Board of Directors and Statutory Board in the last three (3) fiscal years:

13.7.1. ILP Global Plan

The right to exercise options under Cycles 1 (PI09), 2 (PI10), 3 (PI11) and 4 (PI12) has already been used, as shown in the following tables:

 

The weighted average purchase price was equal to R$ 23.7252 per share in PI09; R$ 19.46496 in PI10; R$ 16.704464 in PI11; and R$ 12.0634515 in PI12.

The aggregate amount of the difference between the purchase price and the market value of the purchased shares is not applicable, since the amount of the gratuity that is credited corresponds to the market value on the delivery date.

No delivery was made for Cycle 5 (PI13) or Cycle 6 (PI14) since the performance goals attached to the Plans were not met.

13.7.2. Local Plan

The right to exercise options for Cycles 1, 2 and 3 – Local and SOP 2014 – has already been used as shown in the following tables:

 

13.8.   Brief description of information needed to comprehend the data disclosed in items 13.5 to 13.7, such as the explanation of shares and options value pricing method :

13.8.1. Global Plan

13.8.1.a Pricing model

The Monte Carlo pricing model (MMC) was used to calculate the fair value. It is a statistical method that simulates the price generation process based on the premise of risk neutrality.

13.8.1.b Data and assumptions used in the pricing model, including the average weighted price of the shares, strike price, expected volatility, option’s validity, expected dividends and risk-free interest rates.

See below the premises used in the pricing model.

The strike price, in all cycles and where the objectives established in the regulations are achieved, shall be the market value on the date of exercise.

 

13.8.1.c Method used and premises assumed to incorporate the expected effects of the early exercise

Not applicable given that the model does not allow early exercise.

13.8.1.d How expected volatility is determined

Estimated based on the historical volatility for the respective term.

13.8.1.e If any other characteristic of the option was incorporated in the fair value calculation

Not applicable since no other characteristic of the option was incorporated in the fair value calculation.

13.8.2 Local Plan

13.8.2.1 SOP IPO

13.8.2.1.a Pricing Model

The binomial pricing model was used to calculate the fair value. A price tree with the price track records is built to determine the share value in a future date.

 

13.8.2.1.b Data and assumptions used in the pricing model, including the average weighted price of the shares, strike price, expected volatility, option’s validity, expected dividends and risk-free interest rates

The data used in the pricing model are presented below:

13.8.2.1.c Method used and premises assumed to incorporate the expected effects of the early exercise

Not applicable given that the model does not allow early exercise.

13.8.2.1.d How to calculate the expected volatility

Estimated based on the historical volatility for the respective term.

13.8.2.1.e If any other characteristic of the option was incorporated in the fair value calculation

Not applicable since no other characteristic of the option was incorporated in the fair value calculation.

13.8.2.2 SOP delivery 2014

13.8.2.2.a Pricing Model

The Black&Scholes pricing model was used to calculate the fair value. A price tree with the value track records is built to determine the share value in a future date.

13.8.2.2.b Data and assumptions used in the pricing model, including the average weighted price of the shares, strike price, expected volatility, the option’s validity, expected dividends and risk-free interest rates

The data adopted in the pricing model are presented below:

 

13.8.2.2.c Method used and premises assumed to incorporate the expected effects of the early exercise

Not applicable given that the model does not allow for early exercise.

13.8.2.2.d How to calculate the expected volatility

Estimated based on the historical volatility of the respective term.

13.8.2.2.e If any other characteristic of the option was incorporated in the fair value calculation

Not applicable as no other characteristic of the option was incorporated in the fair value calculation.

13.8.2.3 SOP 2013

13.8.2.3.a Pricing Model

The Black&Scholes pricing model was used to calculate the fair value. A price tree is built to determine the share value in a future date.

13.8.2.3.b Data and assumptions used in the pricing model, including the average weighted price of the shares, strike price, expected volatility, the option’s validity, expected dividends and risk-free interest rates

 

The data adopted in the pricing model are presented below:

13.8.2.3.c Method used and premises assumed to incorporate the expected effects of the early exercise

Not applicable given that the model does not allow early exercise.

13.8.2.3.d How to calculate the expected volatility

Estimated based on the historical volatility for the respective term.

13.8.2.3.e If any other characteristic of the option was incorporated in the fair value calculation

Not applicable to ILP Plans, since no other characteristic of the option was incorporated in the fair value calculation.

Not applicable to Deferment Plans, since the purpose thereof is the payment, in Units, of part of the Variable Remuneration payable by the Company to the participants of the plan, according to the provisions of the remuneration policy.

13.9. Inform the number of 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 controller, controlled or under common control companies, by members of the Board of Directors, the Executive Board or the Audit Committee.

 

Base-date: 31.12.2015

(*) considers persons treated

13.10. Pension Plans in force, granted to members of the Board of Directors and executive officers

The main pension plan in force in the Company is SantanderPrevi.

Membership to SantanderPrevi pension plan is optional and the monthly contribution of the participant shall be equivalent to 2% of the salary* (limited to 13 UPs = R$ 5,535.53), plus 2% to 9% (at choice) of the salary, minus 13 UPs.

This amount is added by a contribution value on the part of Santander Brasil (known as matching) varying from 100% to 150% over the years, as shown in the following table.

 

(*)The period of time started being counted in the standardization of the benefits policies of Santander Brasil as of June, 2009.

The following table details the amounts contributed to SantanderPrevi pension plan and supplementary plans in 2015.

                                                                           Amounts in R$