AXWAY_REGISTRATION_DOCUMENT_2017

AXWAY GROUP AND ITS BUSINESS ACTIVITIES Notes to the financial statements

CORPORATE RESPONSIBILITY

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

Under the regulations governing the various stock option plans, shares resulting from the exercise of options may not be sold or converted into bearer shares during the statutory lock-up period. ForǾ2017, the cost of services provided by the personnel in consideration for the options received was recognized for the amount of €165Ǿthousand after allowing for canceled options. b. Bonus shares The expense recognized, as per IFRSǾ 2, for a bonus share allocation plan is equal to the fair value of shares granted to employees multiplied by the probable number of shares to be delivered to the beneficiaries who will be present on the vesting date (this number of shares is revised during the vesting period depending on the estimated changes in employee turnover). The fair value of the bonus shares is determined on the date of allocation based on the market price of the share adjusted to take into account the characteristics and conditions of share allocation. This amount is not reassessed later in the event of changes in the fair value.

The expense corresponding to the benefit granted to the employees in the form of bonus shares is recognized in the net profit using the straight-line method over the vesting period under the heading Expenses related to stock options and similar. A bonus share plan for employees in the United States was implemented in AprilǾ2015. The charge for this new bonus share plan for fiscal yearǾ2017 was €112Ǿthousand. A bonus share plan for 64 senior executives and Jean-Marc Lazzari was implemented in JuneǾ2017; the charge for this was €450Ǿthousand. A new bonus share plan for the Axway Leadership team, the members of the Executive Committee and other persons regarded as key for the Axway Group implemented in JuneǾ2017. The charge for this new bonus share plan was €692Ǿthousand in fiscal yearǾ2017. A new bonus share plan for Jean-Marc Lazzari was implemented in JuneǾ2017. The charge for this new bonus share plan in fiscal yearǾ2017 was €219Ǿthousand.

5.5 Compensation of senior executives (related parties) The items shown in the table below concern the directors and Executive Management.

31/12/2017

31/12/2016

31/12/2015

(in thousands of euros)

Short-term employee benefits (1)

1,243

1,582

1,064 1,218

Termination benefits

-

-

Shareholders’ equity compensation benefits

262

95

37

Total 2,319 (1) Short-term employee benefits include the fixed and variable components of compensation, as well as benefits in kind and directors’ fees. 1,505 1,676

In 2015, the item Shareholders’ equity compensation benefits relates to the value of the services rendered by Christophe Fabre, which were compensated through the granting of options in 2011. At its meeting of 22 June 2015, the Board of Directors of Axway, having noted the recommendations of the Remuneration Committee and having verified the achievement of the applicable performance criteria, authorized, in the interests of Axway Software, under Article L. 225-42-1 of the French Commercial Code, a settlement with Christophe Fabre following the non- renewal of his terms of office as Director and Chief Executive Officer. In 2015, the expenses of €1.4 million recognized for this transaction under other operating income and expenses notably include the transaction-based remuneration, noncompete benefits, pay in lieu of notice, insurance premiums for retirement, related expenses and the removal of the continued employment criterion for the exercise of share subscription options.

During its meeting on 6 April 2018, Axway's Board of Directors resolved to end Jean-Marc Lazzari's term of office as CEO and replace him with Patrick Donovan. For the year ended 31 December 2017, the Remuneration Committee dated 28 March 2018 advocated giving a variable portion of €0 to Jean-Marc Lazzari. This variable remuneration will be voted by the General Meeting, scheduled for June 6, 2018, on the basis of an amount proposed by the Board of Directors, after taking into account the recommendations of the Remuneration Committee. The General Meeting of 6 June 2017 set the amount of directors’ fees to be shared between the directors at €302 thousand. One of these directors waived his directors' fees totaling €39 thousand. In 2016 and 2017, the item Shareholders’ equity compensation benefits concerned the value of the services rendered by Jean- Marc Lazzari, which were compensated through the granting of performance-based shares.

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AXWAY - 2017 REGISTRATION DOCUMENT

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