Material Fact: Approval of "equity swap" derivative contracts

Rhea-AI Summary

Embraer (NYSE: ERJ) announced that its Board approved execution of equity swap derivative agreements with Banco Itaú Unibanco, effective Nov 7, 2025.

The swaps are cash-settled within 12 months, reference the company’s common shares and have a maximum exposure of 10,932,998 common shares under the limit set by CVM Resolution No. 77/22. Under the contracts the company will receive the price variation of its shares plus dividends and will pay CDI plus a spread. The stated purpose is to hedge share-price fluctuations

Positive

• Cash-settled swaps limit share issuance risk within 12 months
• Hedge designed to protect funding for long-term incentive (phantom) payments
• Counterparty is a major bank: Banco Itaú Unibanco

Negative

• Maximum exposure of 10,932,998 common shares creates sizeable derivative liability
• Company will incur cash costs paying CDI plus a spread during the contract term
• Counterparty and market settlement risk tied to cash settlement within 12 months

11/06/2025 - 10:49 PM

EMBRAER S.A.
Publicly Held Company 
CNPJ/MF 07.689.002/0001-89 
NIRE 35.300.325.761

SÃO JOSÉ DOS CAMPOS, Brazil, Nov. 6, 2025 /PRNewswire/ -- Embraer S.A. ("Company") (B3: EMBR3, NYSE: ERJ) informs its shareholders and the market that its Board of Directors, in a meeting held on November 6, 2025, according to the minutes published on the CVM and Investor Relations websites, approved the execution by the Company, with Banco Itaú Unibanco S.A., of derivative agreements of "Equity Swap", referenced in the shares issued by the Company. Equity Swap agreements will observe the following limits and conditions:

Equity Swap Settlement: cash settlement, within a maximum period of 12 months from November 7, 2025.

Maximum Exposure: up to 10,932,998 common shares, observing the limit established in CVM Resolution No. 77/22.

Conditions: the Equity Swap will allow the Company to receive the price variation related to its shares traded on the stock exchange plus any dividends distributed to the shares subject to the Equity Swap (active end) and pay CDI plus a spread (passive end), during the term of the agreement.

Purpose: need to mitigate fluctuations in the prices of shares issued by the Company, in view of future payments to be made by the Company within the scope of its long-term incentive plans (phantom shares).

Antonio Carlos Garcia
Executive Vice President, Financial & Investor Relations

View original content:https://www.prnewswire.com/news-releases/material-fact-approval-of-equity-swap-derivative-contracts-302608112.html

SOURCE Embraer S.A.

FAQ

What did Embraer (ERJ) approve on November 6–7, 2025 regarding equity swaps?

The Board approved executing cash-settled equity swap agreements with Banco Itaú, effective Nov 7, 2025, to hedge share-price exposure tied to incentive payments.

How long is the Embraer (ERJ) equity swap term and how will it settle?

The equity swaps are cash-settled within a maximum period of 12 months from Nov 7, 2025.

What is the maximum exposure in Embraer’s (ERJ) approved equity swap program?

The approved maximum exposure is 10,932,998 common shares, in line with CVM Resolution No. 77/22 limits.

What payments will Embraer (ERJ) make and receive under the equity swaps?

Embraer will receive share price variation plus dividends and will pay CDI plus a spread during the agreement term.

Why is Embraer (ERJ) using equity swaps for its incentive plans?

The company said the swaps are intended to mitigate share-price fluctuations ahead of future payments under long-term incentive (phantom share) plans.