SOMFY - Annual financial report 2018

07 CONSOLIDATED FINANCIAL STATEMENTS

Gross remuneration of Management Board Note 10.2.2 and Supervisory Board members

Effective allocation of options and free shares is subject to conditions being fulfilled. Each beneficiary must be employed by the Group at the date options are exercised or free shares vested. For some employees, the ability to exercise options may also be governed by the achievement of predetermined objectives. Options were valued using the Black & Scholes model, which calculates the fair value of the benefit granted to date and takes account of various parameters such as the share price, exercise price, expected volatility, expected dividends, risk free interest rate and the life of the option. The fair value of free shares is determined using an approach that faithfully replicates the methodology that would be used by a bank’s trading room should beneficiaries request a price from the latter to monetise their shares. During the rights vesting period, the fair value of options and free shares thus determined is split in proportion to the acquisition of rights. This expense is posted to personnel expenses and offset by an increase in equity. Upon exercise of the options, the exercise price received is recorded under cash and offset in equity. The dilutive impact of outstanding options and free shares is reflected in the calculation of diluted earnings per share. In accordance with IFRS 2, stock options are valued at market value at the date of allocation and subsequently amortised through the income statement over the vesting period for all plans granted since 7 November 2002.

€ thousands

31/12/18

31/12/17

Short term benefits Post-employment benefits

1,707

1,583

24

22

As of 2017, short-term benefits include the payment of a premium in favour of Management Board members, introduced following the removal of the previous “Article 39” additional pension scheme. Post-employment benefits correspond to retirement benefits associated with the employment contracts of Management Board members.

SHARE-BASED PAYMENTS NOTE 10.3

Some Group employees, including senior executives, may be entitled to the allocation of free shares, subject to the achievement of certain performance conditions, and options entitling them to acquire Somfy SA shares at a price fixed in advance. The Group does not grant warrants to subscribe for shares.

At 31 December 2018, no more stock option plans existed. At its meeting on 21 February 2014 the Management Board of Somfy SA decided to allocate Somfy SA shares, free of charge, to 154 beneficiaries. The vesting of these free shares is subject to beneficiaries remaining employed by the Group and to business performance conditions based on internal financial criteria. In 2018, the final vesting related to 8,525 shares allocated to 55 beneficiaries who are non-French tax residents. At its meeting on 16 June 2017 the Management Board of Somfy SA decided to allocate Somfy SA shares, free of charge, to 195 beneficiaries. The vesting of these free shares is subject to beneficiaries remaining employed by the Group and to business performance conditions based on internal financial criteria. Final vesting will take place on 1 July 2019. The shares vested will be available immediately since they are not subject to a retention obligation. In addition, at its meeting on 12 November 2018 the Management Board of Somfy SA decided to allocate Somfy SA performance shares to seven beneficiaries who are employees of Somfy Protect by Myfox. The vesting of these performance shares is subject to a condition of continued employment within the Group. Final vesting will take place on 30 June 2021. The shares vested will be available immediately since they are not subject to a retention obligation.

At 31 December 2018, the free share position was as follows:

Plan date

Plan n°

Number of benefi- ciaries

Number of shares allocated

Price per share (€)

Allo- cation date

Vesting date

Revision of share number related to presence and performance conditions

Number of shares vested since plan inception

Number of shares not yet vested at 31/12/18

Number of shares poten- tially vested at 31/12/18

21/02/14

Residents AGA 2

86 68

36,350 35.98 30/06/16 01/07/18

-19,350 -17,000 -12,475 -9,125 -31,825 -26,125

– – –

N/A N/A N/A

21/02/14 Non-residents AGA 2

21,600 33.97 30/06/18

N/A

21/02/04

Total AGA 2

154

57,950

–

–

–

16/06/17 Residents and

195

138,325 88.82 01/07/19 01/07/19

-110,324

–

– 28,001

non-residents AGA 3

12/11/18 Myfox plan AGA 4

7

5,239 66.26 30/06/21 30/06/21

–

–

– 5,239

114

SOMFY – ANNUAL FINANCIAL REPORT 2018