AMBEV S.A. | CIK:0001565025 |

There are different share-based payment programs and stock option plans which allow the senior management from the Company and its subsidiaries to receive or acquire shares of the Company. For all option plans, the fair value is estimated at grant date, using the Hull binomial pricing model, modified to reflect the IFRS requirement that assumptions about forfeiture before the end of the vesting period cannot impact the fair value of the option.

 

This current model of share based payment includes types of grants: Grant the beneficiary choose to allocate or of the amount related to the profit share he received in the year, at the immediate exercise of options, thus acquiring the corresponding shares of the Company, and the delivery of a substantial part of the acquired shares is conditioned to the permanency in the Company for a period of -years from the date of exercise; Grant the beneficiary exercise the options after a period of years.

 

Additionally, as a means of creating a long term incentive (wealth incentive) for certain senior employees and members of management considered as having “high potential,” the Company grant stocks to future delivery to those employees, pursuant to which the beneficiary shall receive separate lots – Lot A and Lot B – subject to maturation periods of and years, respectively.

 

In addition, the Company has implemented a Stock Based Payment Plan under which certain employees and members of the management of the Company or its direct or indirect subsidiaries are eligible to receive shares of the Company including in the form of ADR’s. The shares that are subject to the Stock Plan are designated as "Restricted Shares" and the restricted share price for the purposes of the stock plan will correspond to the price of the Company's shares on S.A.- Brasil, Bolsa, Balcão, in the trading session immediately prior to the stock concession Restricted.

 

The weighted average fair value of the options and assumptions used in applying the Ambev option pricing model for the “Grant of and grants are as follows:

 

In R$, except when otherwise indicated		2017			(i)		2016			(i)		2015			(i)
Fair value of options granted			6.51					6.21					7.84
Share price			19.80					17.18					18.41
Exercise price			19.80					17.18					18.41
Expected volatility			26.7	%				27.0	%				27.5	%
Vesting year			5					5					5
Expected dividends			5	%				5	%				5	%
Risk-free interest rate			10.1	%	(ii)			12.4	%	(ii)			15.9	%	(ii)

 

(i)    Information based on weighted average plans granted, except for the expected dividends and risk-free interest rate.

 

(ii) The percentages include the grants of stock options and ADR’s during the period, in which the risk-free interest rate of ADR’s are calculated in U.S. dollar.

 

The total number of outstanding options developed as follows:

 

Thousand options		2017				2016				2015
Options outstanding at January 1 st			131,244				121,770				126,149
Options issued during the period			20,435				24,806				16,568
Options exercised during the period			(13,548	)			(11,613	)			(19,975	)
Options forfeited during the period			(2,910	)			(3,719	)			(972	)
Options outstanding at ended year			135,221				131,244				121,770

 

The range of exercise prices of the outstanding options is between ( as of and as of and ( as of and as of and the weighted average remaining contractual life is approximately years ( years as of and years as of

 

Of the thousand outstanding options ( thousand as of thousand options are vested as at thousand as of

 

The weighted average exercise price of the options is as follows:

 

In R$ per share		2017				2016				2015
Options outstanding at January 1 st			13.87				12.36				10.07
Options issued during the period			19.82				17.18				18.42
Options forfeited during the period			17.88				12.83				20.35
Options exercised during the period			5.81				2.52				5.05
Options outstanding at ended period			15.27				13.87				12.36
Options exercisable at ended period			3.78				3.66				3.29

 

For the options exercised during the weighted average share price on the exercise date was ( as of

 

To settle the exercised stock options, the Company use treasury shares. The current limit of authorized capital is considered sufficient to meet all stock option plans if the issue of new shares is required to meet the grants awarded in the Programs.

 

During the period, Ambev issued thousand ( thousand in ) deferred stock units related to exercise of the options in the model “Grant These deferred stock units are valued at the share price of the day of grant, representing a fair value of approximately ( in ), and cliff vest after years.

 

The total number of shares purchased under the plan of shares by employees, whose grant is deferred to a future time under certain conditions (deferred stock), is shown below:

 

Thousand deferred shares		2017				2016				2015
Deferred shares outstanding at January 1 st			19,260				19,056				17,490
New deferred shares during the period			794				7,329				2,692
Deferred shares granted during the period			(2,874	)			(6,118	)			(804	)
Deferred shares forfeited during the period			(880	)			(1,007	)			(322	)
Deferred shares outstanding at ended year			16,300				19,260				19,056

 

Additionally, certain employees and directors of the Company receive options to acquire AB Inbev shares, the compensation cost of which is recognized in the income statement against equity.

 

These share-based payments generated an expense of in the year ended and for the year ended and respectively), recorded as administrative expenses.