United states securities and exchange commission

Movements in share options

The following table illustrates the number of shares options and fixed exercise prices during the year:

 

		Number of share options				Exercise price in Mexican pesos				Total in thousands of Mexican pesos
Outstanding as of December 31, 2014			20,272,716				5.31				107,730
Granted during the year			—				—				—
Forfeited during the year			—				—				—
Exercised during the year			(4,414,860	)			5.31				(23,461	)
Outstanding as of December 31, 2015			15,857,856			Ps.	5.31			Ps.	84,269
Granted during the year			—				—				—
Forfeited during the year			—				—				—
Exercised during the year			(3,299,999	)			5.31				(17,536	)
Outstanding as of December 31, 2016			12,557,857			Ps.	5.31			Ps.	66,733

At December 31, 2016 and 2015, 12,557,857 and 15,857,856 share options pending to exercise were considered as treasury shares, respectively.

- MIP II

On February 19, 2016, the Board of Directors of the Company authorized an extension to the MIP for certain key employees. Such extension was modified as of November 6, 2016. Under MIP II, 13,536,960 share appreciation rights of our Series A shares were granted to be settled annually in cash in a period of five years in accordance with the established service conditions. In addition, a five year extension to the period in which the employees can exercise MIP II once the SARs are vested was approved.

Fair value of the SARs is measured at each reporting period using a Black-Scholes option pricing model, taking into consideration the terms and conditions granted to the employees. The amount of the cash payment is determined based on the increase in our share price between the grant date and the settlement date.

The carrying amount of the liability relating to the SARs as of December 31, 2016 was Ps.54,357. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits over the service period. During the year ended December 31, 2016, the Company recorded Ps.54,357 in the consolidated statement of operations. The vesting schedule is summarized in the table below.

 

Number of SARs				Exercisable date
	2,030,540			November 2017
	2,030,540			November 2018
	2,030,540			November 2019
	3,384,240			November 2020
	4,061,100			November 2021
	13,536,960

 

F-65

Table of Contents

d) The expense recognized for the Company’s retention plans during the year is shown in the following table:

 

		2016				2015				2014
Expense arising from cash-settled share-based payments transactions		Ps.	86,100			Ps.	44,699			Ps.	1,652
Expense arising from equity-settled share-based payments transactions			7,816				6,345				1,385
Total expense arising from share-based payments transactions		Ps.	93,916			Ps.	51,044			Ps.	3,037

 

18.

Equity