Different share and share option programs allow company senior management and members of the board of directors to receive or acquire shares of AB InBev, Ambev or Budweiser APAC. AB InBev has three primary share-based compensation plans, the share-based compensation plan (“Share-Based Compensation Plan”), the long-term restricted stock unit plan for directors (“Restricted Stock Units Plan for Directors), and the long-term incentive plan for executives (“LTI Plan Executives”). For all option plans, the fair value of share-based payment compensation is estimated at grant date, using a binomial Hull model, modified to reflect the IFRS 2

Share-based Payment

requirement that assumptions about forfeiture before the end of the vesting period cannot impact the fair value of the option. All the company share-based payment plans are equity-settled. Amounts have been converted to US dollar at the average rate of the period, unless otherwise indicated.

Share-based payment transactions resulted in a total expense of 510m US dollar for 2021, of which 72m US dollar were reported in exceptional items representing the IFRS 2 cost related to the Zenzele Kabili scheme. For more details, refer to Note 22

Changes in equity and earnings per share

. Share-based payment transactions resulted in a total expense of 169m US dollar for 2020 and 340m US dollar for 2019.

During 2020, as a result of the

COVID-19

pandemic, the company reversed accrued cost for performance-related LTIs for which the conditions would not be met.

AB INBEV SHARE-BASED COMPENSATION PROGRAMS

Share-Based Compensation Plan for Executives

Under this plan, members of the Executive Committee and other senior employees receive their bonus in cash but have the choice to invest some or all of the value of their bonus in AB InBev shares, referred to as bonus shares. Half of the bonus shares will be subject to a

lock-up

period of three years and the other half to a

lock-up

period of 5 years. This voluntary investment of the bonus in AB InBev shares leads to a 20% discount to the market price of the shares. The company also matches such voluntary investment by granting three matching shares for each bonus share voluntarily invested in, up to a limited total percentage of each participant’s bonus. The percentage of the variable compensation that is entitled to get matching shares varies depending on the position of the executive. The matching is based on the gross amount of the variable compensation invested. The discount shares and matching shares are granted in the form of restricted stock units, half of which have a three-year vesting period and the other half has a five-year vesting period. Additionally, the holders of the restricted stock units may be entitled to receive from AB InBev additional restricted stock units equal to the dividends declared since the restricted stock units were granted.

During 2021, AB InBev issued 0.2m matching restricted stock units in relation to bonuses granted to company employees and management (2020: 0.2m matching restricted stock units). These matching restricted stock units represent a fair value of approximately 9m US dollar (2020: 9m US dollar).

Restricted Stock Units Plan for Directors

Since the annual shareholder meeting of 24 April 2019, the share-based portion of the remuneration of the directors of the company has been granted in the form of restricted stock units and will no longer be granted in the form of stock options as was previously the case. Such restricted stock units vest after 5 years and, upon vesting, entitle their holders to one AB InBev share per restricted stock unit.

During 2021, 0.1m restricted stock units with an estimated fair value of 4mUS dollar were granted to directors (2020: 0.1m with an estimated fair value of approximately 4m US dollar).

Annual and Exceptional LTI Plans for Executives

As from 1 July 2009, s

nior employees are eligible for an annual long-term incentive to be paid out in LTI stock options (or, in the future, similar share-based instruments), depending on management’s assessment of the employee’s performance and future potential.

During 2021, no LTI stock options were granted to Executives (2020: 38.1m LTI stock options were granted with an estimated fair value of 287m US dollar, out of which, 3.6m stock options were granted to members of the Executive Committee).

As from 1 December 2020, under a

sub-plan

of the company’s new base long-term Restricted Stock Units program, senior employees are eligible for an annual long-term incentive paid out in Restricted Stock Units, depending on management’s assessment of the employee’s performance and future potential. Half of the Restricted Stock Units cliff vest over a three-year period and the other half cliff vest over a five-year period. During 2021, AB InBev issued 2.8m Restricted Stock Units with an estimated fair value of 155m US dollar under this plan (2020: 1.7m with an estimated fair value of 116m US dollar under this plan). Out of these Restricted Stock Units, 0.2m restricted stock units were granted to members of the Executive Committee (2020: 0.1m restricted stocks units).

Recurring LTI Restricted Stock Units Plans for Executives

AB InBev has specific recurring long-term Restricted Stock Units incentive programs in place, including

•

A program allowing for the offer of restricted stock units to certain members of senior management in certain specific circumstances, e.g., as a special retention incentive or to compensate for assignments of expatriates in countries with difficult living conditions. The restricted stock units vest after five years and in the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. During 2021, no discretionary restricted stock units were granted. (2020: 7m discretionary restricted stock units with an estimated fair value of 307m US dollar of which 0.8m restricted stock units were granted to members of the Executive Committee).

•

A program allowing for certain employees to purchase company shares at a discount and that is aimed at providing a long-term retention incentive for (i) high-potential employees of the company, who are at a

mid-manager

level (“People bet share purchase program”) or (ii) newly hired employees. The voluntary investment in company shares leads to the grant of an amount of matching restricted stock units or stock options which vest after 5 years. In the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. In 2021, employees received approximately 0.1m restricted stock units under this program representing a fair value of

m US dollar (2020: 0.1m restricted stock units representing a fair value of 6m US dollar).

•

A series of

sub-plans

under the Company’s new base long-term Restricted Stock Units program (created in 2020) allowing for the offer of Restricted Stock Units to certain members of the company’s senior management in certain specific circumstances, e.g., as a special retention incentive or to compensate for assignments of expatriates in certain limited countries. Under this program, Restricted Stock Units can be granted under

sub-plans

with specific terms and conditions and for specific purposes. The Restricted Stock Units in principle vest after five years without a performance test and in the event of termination of service before the vesting date, forfeiture rules apply. The Board may set shorter or longer vesting periods for specific

sub-plans

or introduce performance tests similar to those described under the program above. In 2021, 0.8m restricted stock units with an estimated fair value of

m US dollar were granted under this program (2020: 1.7m restricted stock units with an estimated fair value of 120m US dollar). No restricted stock units were granted to members of the Executive Committee (2020: nil).

Performance related incentive plan for ZX Ventures

In 2016, the company implemented a new performance related incentive plan which substitutes the long-term incentive stock option plan for executives of ZX Ventures. ZX Ventures is our global growth and innovation group whose mandate is to invest in, incubate and develop new products and businesses that address emerging consumer needs.

During 2021, 1m performance units were granted to senior management of ZX Ventures (2020: 1.2m performance units). The value of the performance units will depend on the return of ZX Ventures. These units vest after 5 years provided that a performance test is met. Specific forfeiture rules apply in the event that the executive leaves the company.

Other programs

In order to maintain the consistency of benefits granted to executives and to encourage the international mobility of executives, an option exchange program can be executed whereby unvested options are exchanged for restricted shares that remain

locked-up

until 5 years after the end of the initial vesting period. The shares that result from the exercise of the options must in principle remain

locked-up

until 31 December 2023. In 2021,

no options were exchanged for ordinary blocked shares (2020: nil).

The Board has also approved the early release of vesting conditions of unvested stock options or restricted stock units that are vesting within 6 months of the executives’ relocation. The shares that result from the early exercise of the options or the early vesting of the restricted stock units must remain blocked until the end of the initial vesting period. In 2021, no restricted stock units were accelerated under this program for members of the senior management (2020: 0.1m restricted stock units).

The weighted average fair value of the options and assumptions used in applying the AB InBev option pricing model for the 2020 grants of awards described above are as follows. No stock options were granted in 2021.


Amounts in US dollar unless otherwise indicated	2020			2019
Fair value of options granted		7.54			11.79
Share price		46.35			78.46
Exercise price		46.35			78.46
Expected volatility		25	%		23	%
Expected dividends		3.00	%		3.00	%
Risk-free interest rate		-0.32	%		0.43	%

Expected volatility is based on historical volatility calculated over a

10-year

period. The binomial Hull model assumes that all employees would immediately exercise their options if the AB InBev share price is 2.5 times above the exercise price. As a result, no single expected option life applies.

The total number of outstanding AB InBev options developed as follows:


Million options	2021			2020			2019
Options outstanding at 1 January		113.3			88.7			92.6
Options issued during the year		—			38.1			13.8
Options exercised during the year		(1.3	)		(3.9	)		(10.7	)
Options forfeited during the year		(9.2	)		(9.0	)		(7.0	)

Options outstanding at the end of December		102.7			113.3			88.7

The range of exercise prices of the outstanding options is between 10.32 euro (11.69 US dollar)

and 121.95 euro (138.12 US dollar) while the weighted average remaining contractual life is 6.50 years.

Out of the 102.7m outstanding options, 24.3m are vested at 31 December 2021.

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


Amounts in US dollar	2021		2020		2019
Options outstanding at 1 January		71.22		79.66		94.74
Granted during the year		—		53.41		83.33
Exercised during the year		46.30		29.92		29.27
Forfeited during the year		89.56		117.82		108.44
Outstanding at the end of December		64.77		71.22		79.66
Exercisable at the end of December		98.27		99.54		65.33

For share options exercised during 2021, the weighted average share price at the date of exercise was 53.47 euro (60.56 US dollar)¹.

The total number of outstanding AB InBev restricted stock units developed as follows:


Million restricted stock units	2021			2020			2019
Restricted stock units outstanding at 1 January		19.1			9.9			6.0
Restricted stock units issued during the year		3.9			10.9			5.5
Restricted stock units vested during the year		(1.1	)		(0.7	)		(1.0	)
Restricted stock units forfeited during the year		(1.1	)		(0.9	)		(0.7	)

Restricted stock units outstanding at the end of December		20.9			19.1			9.9

AMBEV SHARE-BASED COMPENSATION PROGRAMS

Since 2005, Ambev has had in place a plan which is substantially similar to the Share-based compensation plan under which bonuses granted to company employees and management are partially settled in shares. Under the Share-based compensation plan, Ambev issued 0.1m deferred stock units with an estimated fair value of less than 1m US dollar in 2021 (2020: 0.2m deferred stock units with an estimated fair value of 1m US dollar).

Since 2018, Ambev has had in place a plan which is substantially similar to the Share-based compensation plan under which bonuses granted to company employees and management are partially settled in shares. Under the 2018 Share-based compensation plan, Ambev issued 20.6m restricted stock units in 2021 with an estimated fair value of 61m US dollar (2020: 21.1m restricted stock units with an estimated fair value of 61m US dollar).

As of 2010, senior employees are eligible for an annual long-term incentive to be paid out in Ambev LTI stock options (or, in the future, similar share-based instruments), depending on management’s assessment of the employee’s performance and future potential. In 2021, Ambev did not grant any LTI stock options (2020: 22 thousand LTI stock options with an estimated fair value of less than

m US dollar).

1	Amounts have been converted to US dollar at the closing rate of the respective period.

The weighted average fair value of the options and assumptions used in applying the option pricing model for the 2020 grants of awards described above are as follows. No stock options were granted in 2021.


Amounts in US dollar unless otherwise indicated 1	2020			2019
Fair value of options granted		0.78			1.12
Share price		3.47			4.38
Exercise price		3.47			4.38
Expected volatility		22	%		24	%
Expected dividends		0.00% - 5.00	%		0.00% - 5.00	%
Risk-free interest rate		6.80	%		7.80	%

The total number of outstanding Ambev options dev

loped as follows:


Million options	2021			2020			2019
Options outstanding at 1 January		127.3			141.8			141.3
Options issued during the year		—			—			24.6
Options exercised during the year		(5.2	)		(5.7	)		(7.8	)
Options forfeited during the year		(8.3	)		(8.8	)		(16.3	)

Options outstanding at the end of December		113.8			127.3			141.8

The range of exercise prices of the outstanding options is between 15.95 Brazilian real (2.86 US dollar) and 45.97 Brazilian real (8.24 US dollar) while the weighted average remaining contractual life is 6.7 years.

Of the 113.8m outstanding options 59.3m options are vested at 31 December 2021.

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


Amounts in US dollar 1	2021		2020		2019
Options outstanding at 1 January		3.81		4.60		4.17
Granted during the year		—		3.47		4.48
Exercised during the year		2.36		1.60		2.25
Forfeited during the year		4.53		4.42		5.27
Outstanding at the end of December		3.57		3.81		4.60
Exercisable at the end of December		3.79		4.56		4.74

For share options exercised during 2021, the weighted average share price at the date of exercise was 17.87 Brazilian real (3.2 US dollar).

The total number of outstanding Ambev deferred and restricted stock units developed as follows:


Million restricted stock units	2021			2020			2019
Restricted stock units outstanding at 1 January		49.6			31.7			25.0
Restricted stock units issued during the year		20.7			21.3			12.0
Restricted stock units vested during the year		(5.0	)		(1.9	)		(4.2	)
Restricted stock units forfeited during the year		(1.5	)		(1.5	)		(1.1	)

Restricted stock units outstanding at the end of December		63.8			49.6			31.7

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”, share appreciation rights in the form of phantom stocks have been granted to those employees, pursuant to which the beneficiary shall receive two separate lots – Lot A and Lot B – subject to lockup periods of five and ten years, respectively. In 2020 and 2021, Ambev did not issue any share appreciation rights.

During 2021, a limited number of Ambev shareholders who are part of the senior management of AB InBev were given the opportunity to exchange Ambev shares against a total of 3 thousand AB InBev shares (2020: 0.1m AB InBev shares) at a discount of 16.66% provided that they stay in service for another five years. The fair value of this transaction amounts to less than 1m US dollar (2020: 1m US dollar) and is expensed over the five years’ service period. The fair values of the Ambev and AB InBev shares were determined based on the market price.

BUDWEISER APAC SHARE-BASED COMPENSATION PROGRAM

LTI Stock Option Plans for Executives

In December 2019, Budweiser APAC set up a long-term incentive plan in which certain employees are eligible for an annual grant to be paid out in Budweiser APAC stock options (or, in the future, similar share-based instruments), depending on management’s assessment of the employee’s performance and future potential. In 2021, no stock options were granted (2020: 69.7m LTI stock options with an estimated fair value of 52m US dollar).

Discretionary Restricted Stock Units Plan

In December 2019, Budweiser APAC set up a discretionary restricted stock units plan which allows for the offer of restricted stock units to certain employees in certain specific circumstances, at the discretion of the Board, e.g., as a special retention incentive. The restricted stock units vest after three to five years and in the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. In 2021, no restricted stock units were granted under this program (2020: 29.7m restricted stock units with an estimated fair value of 84m US dollar).

1	Amounts have been converted to US dollar at the closing rate of the respective period.

Share-Based Compensation Plan

In March 2020, Budweiser APAC set up a program allowing for certain employees to invest some or all of their variable compensation in Budweiser APAC shares (Voluntary Shares). As an additional reward, employees who invest in Voluntary Shares also receive a company shares match of three matching shares for each Voluntary Share invested up to a limited total percentage of each employee’s variable compensation. In 2021, Budweiser APAC issued 0.1m matching restricted stock units in relation to bonuses granted to Budweiser APAC employees with an estimated fair value of less than 1m US dollar (2020: 0.2m matching restricted stock units with a fair value of approximately 1m US dollar).

New Restricted Stock Units Plan

In November 2020, Budweiser APAC set up a new restricted stock units plan which allows for the offer of restricted stock units to certain eligible employees in certain specific circumstances, at the discretion of the Board, e.g., as a long-term incentive. The vesting period of the restricted stock units is in principle five years without a performance test and in the event of termination of service before the vesting date, forfeiture rules apply. The Board may set shorter or longer periods for specific grants or introduce performance tests similar to other programs in the company. During 2021, 10m restricted stock units with an estimated fair value of 26m US dollar were granted under this program to a selected number of employees (2020: 6.8m restricted stock units with an estimated fair value of 23m US dollar).

People Bet Plan

In March 2020, Budweiser APAC set up a program allowing for certain employees to purchase Budweiser APAC shares at a discount which is aimed at providing a long-term retention incentive for high-potential employees of the company, who are at a

mid-manager

level (“People bet share purchase program”). The voluntary investment in company shares leads to the grant of an amount of matching restricted stock units which vest after 5 years. In the event that an employee’s service is terminated before the vesting date, special forfeiture rules apply. During 2021, no restricted stock units were granted under this program (2020: 0.6m restricted stock units with an estimated fair value of 2m US dollar were granted to a selected number of employees).