TOTVS S A : Annual and Extraordinary General Meeting - 04/19/2023 - Management's Proposal

TOTVS S.A.

A publicly held corporation

Corporate Taxpayer Id. (CNPJ/ME) No. 53.113.791/0001-22 Company Registry (NIRE) 35.300.153.1714A

TOTVS S.A. - MANAGEMENT'S PROPOSAL

AEGM - 04/19/2023

SUMMARY

AGENDA OF ANNUAL GENERAL MEETING (AGM)	3
AGENDA OF EXTRAORDINARY GENERAL MEETING (EGM)	19
EXHIBIT I - OFFICERS' COMMENTS	21
EXHIBIT II - CAPITAL BUDGET	54
EXHIBIT III - ALLOCATION OF NET INCOME	55
EXHIBIT IV - PROPOSAL FOR THE MANAGEMENT MEMBERS' COMPENSATION	60
EXHIBIT V - INFORMATION ON CANDIDATE	128
EXHIBIT VI - SHARE-BASED INCENTIVE PLAN	131
EXHIBIT VII - INFORMATION REQUIRED BY EXHIBIT B OF CVM RESOLUTION 81/22	141
EXHIBIT VIII - INFORMATION RELATING TO THE AMENDMENT TO THE SHARE-BASED
INCENTIVE PLAN	156

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TOTVS S.A. - MANAGEMENT'S PROPOSAL

AEGM - 04/19/2023

Dear Shareholders,

The Management of the Brazilian corporation known as TOTVS S.A. (hereinafter referred to as "TOTVS", or the "Company") hereby submits its proposal ("Proposal") on the matters included in the agenda of the Company's Annual and Extraordinary General Meetings to be held, concurrently, on April 19, 2023, at 10:00 a.m., at the Company's headquarters (the "Meetings").

The Management hereby informs that the call for such Meetings, as well as the Proposal, were approved by the Company's Board of Directors at a meeting held on March 15, 2023.

For the Annual General Meeting:

1. Reviewing the Company's accounts as submitted by its Management, and also examine, discuss, and vote on the Company's Financial Statements for the fiscal year ended on December 31, 2022.

We hereby propose that the management accounts and audited financial statements for the fiscal year 2022 be approved with no restriction, as they were disclosed on February 14, 2023 on the websites of the Brazilian Securities and Exchange Commission ("CVM") and B3 S.A. - Brasil, Bolsa, Balcão ("B3"), and published on February 15, 2023 in the "Valor Econômico" newspaper.

Pursuant to article 10, III, of CVM Resolution No. 81, of March 29, 2022 ("CVM Resolution 81/22"), the officers' comments on the Company's financial status are detailed in EXHIBIT Iof the Management's Proposal.

2. Deciding on the capital budgeting for complying with article 196 of Brazilian Law 6,404/76 (the Brazilian Corporations Act);

As detailed in EXHIBIT IIof the Management's Proposal, we hereby propose the allocation, to face the Company's investment plan in 2023, related substantially to expansion projects, acquisition of assets, and strategic initiatives, in the amount of R$285,448,600.63, to be supported by retained earnings and own resources generated by the Company's operating activities.

3. Deciding on the allocation of net income for such fiscal year and the distribution of dividends.

As detailed in EXHIBIT IIIto the Management's Proposal, we hereby propose the following allocation of net income of the fiscal year 2022:

Net profit of the fiscal year 2022	R$498,135,942.00
Legal reserve	R$24,906,797.10
Interest on Net Equity, stated on August 1st, 2022	R$60,573,584.60
Interest on Net Equity, stated on December 26th, 2022	R$127,206,959.67
Retained earnings reserve	R$285,448,600.63

Of the total net profit for the year ended on December 31, 2022, in the amount of R$498,135,942.00 (four hundred and ninety-eight million, one hundred and thirty-five thousand, nine hundred and forty-two Reals), we propose that: (a) R$24,906,797.10 (twenty-four million, nine hundred and six thousand, seven hundred and ninety-seven Reals and ten cents) be allocated to create a legal reserve of 5% (five percent); (b) R$187,780,544.27 (one hundred and eighty-seven million, seven hundred and eighty thousand, five hundred and forty-four Reals and twenty-seven cents) to pay interest on own net equity to shareholders, of which R$60,573,584.60 (sixty million, five hundred and seventy-three thousand, five hundred and eighty-four Reals and sixty cents) had already been stated on August 1, 2022 and paid on September 23, 2022, and R$127,206,959.67 (one hundred and twenty-seven million, two hundred and six thousand, nine hundred and

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TOTVS S.A. - MANAGEMENT'S PROPOSAL

AEGM - 04/19/2023

fifty-nine Reals and sixty-seven cents) that had already been stated declared on December 26, 2022 and paid on January 27, 2023, as resolved at the Board of Directors' meetings held on August 1, 2022 and December 26, 2022, respectively, and the amount of R$285,448,600.63 (two hundred and eighty-five million, four hundred and forty-eight thousand, six hundred Reals and sixty-three cents) be intended to the retained earnings reserve account, based on the capital budget pursuant to Article 196 of the Brazilian Corporation Act, which is also submitted for approval by the General Meeting, pursuant to section (2) above.

4. Determining the annual global remuneration of the members of both the Board of Directors and the Board of Executive Officers for the fiscal year 2023.

We will start this section by demonstrating, for comparison purposes, in subsection (A), the overall annual compensation of the members of the Company's Board of Directors and Board of Executive Officers in the fiscal year 2022, and later, in subsection (B), the proposal for overall annual compensation of the Management for the fiscal year 2023:

1. Fiscal Year 2022

At the Annual General Meeting held on April 19, 2022, the total compensation amount of up to fifty-four million, two hundred and ninety thousand, two hundred and forty-one Reals and fifty-nine cents (R$54,290,241.59) was approved for the fiscal year 2022, comprising the Fixed, Variable (bonus) Compensation, Benefits and Share-Based Compensation of the Board of Directors and the Statutory Board of Executive Officers. Of the total amount approved, fifty-one million, two hundred and seventy-four thousand, two hundred and eighty-seven Reals and twenty-six cents (R$51,274,287.26) were effectively paid, as shown in the tables below:

PROPOSED VS. PERFORMED 2022

		Proposed 2022			Performed 2022
	Board of	Board of			Board of	Board of
	Executive	Fiscal Council	Total	Executive	Fiscal Council	Total
	Directors	Directors
	Officers			Officers
Number of Members	7.00	7.50	1.00	15.50	7.00	7.00	1.00	15.00
Fixed Annual Compensation (FC)
Salary or management fees	3,659,410.96	9,364,611.11	125,349.74	13,149,371.81	3,452,246.23	8,802,713.60	100,435.11	12,355,394.94
Direct and indirect benefits	132,119.25	1,560,992.41	0.00	1,693,111.66	128,669.06	1,548,438.76	0.00	1,677,107.82
Compensation for participations in Committees	1,417,026.32	0.00	0.00	1,417,026.32	1,321,105.58	0.00	0.00	1,321,105.58
Total FC	5,208,556.53	10,925,603.53	125,349.74	16,259,509.80	4,902,020.87	10,351,152.36	100,435.11	15,353,608.34
Variable Compensation (VC)
Bonuses	0.00	6,749,407.85	0.00	6,749,407.85	0.00	5,439,576.20	0.00	5,439,576.20
Total VC	0.00	6,749,407.85	0.00	6,749,407.85	0.00	5,439,576.20	0.00	5,439,576.20
Total FC + VC	5,208,556.53	17,675,011.37	125,349.74	23,008,917.64	4,902,020.87	15,790,728.56	100,435.11	20,793,184.54
Other
Post-employment benefits	0.00	430,922.65	0.00	430,922.65	0.00	292,073.37	0.00	292,073.37
Benefits for termination of tenure	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Total VC + Other	0.00	7,180,330.50	0.00	7,180,330.50	0.00	5,731,649.57	0.00	5,731,649.57
Total FC + VC + Other	5,208,556.53	18,105,934.02	125,349.74	23,439,840.29	4,902,020.87	16,082,801.93	100,435.11	21,085,257.91
Stock-based compensation (1)
Accounting recognition -	1,192,592.67	5,328,884.71	0.00	6,521,477.38	1,149,057.96	4,695,809.36	0.00	5,844,867.32
current year's granting
Accounting recognition -	4,608,516.62	19,720,407.30	0.00	24,328,923.92	4,623,754.70	19,720,407.33	0.00	24,344,162.03
previous years' granting
Total stock-based Compensation	5,801,109.29	25,049,292.01	0.00	30,850,401.30	5,772,812.66	24,416,216.69	0.00	30,189,029.35
Grand Total	11,009,665.82	43,155,226.04	125,349.74	54,290,241.59	10,674,833.53	40,499,018.62	100,435.11	51,274,287.26

1. Corresponding to the maximum projected amounts accounted for due to the accounting deferral determined by the applicable laws (CPC 10). Note: the amount performed in 2022 from the accounting recognition of previous years of the share-based compensation refers to two hundred and forty-four thousand, eighty-two Reals and ninety-eight cents (R$244,082.98), of the 2018 granting; one million, six hundred and twenty-seven thousand, seventy-five Reals and fifty-one cents (R$1,627,075.51), of the 2019 granting; eight million, three hundred and seventeen thousand, three hundred and ten Reals and eight cents (R$8,317,310.08), of the 2020 granting; and fourteen million, one hundred and fifty-five thousand, six hundred and ninety-three Reals and forty-six cents (R$14,155,693.46) of the 2021 granting. The number of members of each body was calculated as an annual average, in accordance with the methodology presented in Circular Letter/Annual-2023-CVM/SEP.

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TOTVS S.A. - MANAGEMENT'S PROPOSAL

AEGM - 04/19/2023

VARIATION PROPOSED VS. PERFORMED 2022

			Performed in 2022 versus Proposed for 2022
		Absolute variation			Percentage variation (%)
	Board of	Board of			Board of	Board of
	Executive	Fiscal Council	Total	Executive	Fiscal Council	Total
	Directors	Directors
	Officers			Officers
Number of Members	0.00	-0.50	0.00	-0.50	0.00%	-6.67%	0.00%	-3.23%
Fixed Annual Compensation (FC)
Salary or management fees	-207,164.73	-561,897.51	-24,914.63	-793,976.87	-5.66%	-6.00%	-19.88%	-6.04%
Direct and indirect benefits	-3,450.19	-12,553.65	0.00	-16,003.84	-2.61%	-0.80%	-	-0.95%
Compensation for participations in Committees	-95,920.74	0.00	0.00	-95,920.74	-6.77%	-	-	-6.77%
Total FC	-306,535.66	-574,451.17	-24,914.63	-905,901.46	-5.89%	-5.26%	-19.88%	-5.57%
Variable Compensation (VC)
Bonuses	0.00	-1,309,831.65	0.00	-1,309,831.65	-	-19.41%	-	-19.41%
Total VC	0.00	-1,309,831.65	0.00	-1,309,831.65	-	-19.41%	-	-19.41%
Total FC + VC	-306,535.66	-1,884,282.81	-24,914.63	-2,215,733.10	-5.89%	-10.66%	-19.88%	-9.63%
Other
Post-employment benefits	0.00	-138,849.27	0.00	-138,849.27	-	-32.22%	-	-32.22%
Benefits for termination of tenure	0.00	0.00	0.00	0.00	-	-	-	-
Total VC + Other	0.00	-1,448,680.92	0.00	-1,448,680.92	-	-20.18%	-	-20.18%
Total FC + VC + Other	-306,535.66	-2,023,132.09	-24,914.63	-2,354,582.38	-5.89%	-11.17%	-19.88%	-10.05%
Stock-based compensation (1)
Accounting recognition -	-43,534.71	-633,075.35	0.00	-676,610.06	-3.65%	-11.88%	-	-10.38%
current year's granting
Accounting recognition -	15,238.08	0.03	0.00	15,238.11	0.33%	0.00%	-	0.06%
previous years' granting
Total stock-based Compensation	-28,296.63	-633,075.32	0.00	-661,371.95	-0.49%	-2.53%	-	-2.14%
Grand Total	-334,832.29	-2,656,207.41	-24,914.63	-3,015,954.33	-3.04%	-6.16%	-19.88%	-5.56%

1. Corresponding to the maximum projected amounts accounted for due to the accounting deferral determined by the applicable laws (CPC 10). Note: The number of members of each body was calculated as an annual average, in accordance with the methodology presented in Circular Letter/Annual-2023-CVM/SEP.

PROPOSED VS. PERFORMED 2022

BOARD OF DIRECTORS

BOARD OF EXECUTIVE OFFICERS

TOTAL

*The value of the Proposal and Performed 2022 in the Total chart incorporates the sum of the Board of Directors and the Board of Executive Officers.

As shown in the tables above, the performance of 5.56% below the limit actually approved occurred due to the following factors:

• The new member of the Board of Executive Officers foreseen in the proposal for the second half of the fiscal year 2022 was not hired;

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