BIC - 2019 Universal Registration Document

FINANCIAL STATEMENTS

Consolidated financial statements

NOTE 23

SHARE-BASED PAYMENTS

The Group issues shares to certain employees as compensation for services provided. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. This fair value on the vesting date is expensed over the vesting period, based on the Group’s estimate of the shares that will eventually be vested and adjusted for the effect of non-market-based vesting conditions. 23-1 From 2005, exercising the power placed at its disposal by successive Annual Shareholders’ Meetings, the Board of Directors resolved, upon the recommendation of the Compensation and Nomination Committee, to put in place a policy of free share awards subject to three-year performance conditions. The shares to be delivered by the current plans are existing shares. For plans Nos. 1 to 5, shares are granted either by SOCIÉTÉ BIC or BIC CORPORATION. Shares granted by SOCIÉTÉ BIC are delivered to the beneficiaries at the definitive grant date. Beneficiaries must hold the shares during an additional period of three years. For U.S. tax reasons, the shares granted by BIC CORPORATION will only be delivered at the conclusion of a three-year period following the definitive grant date. As compensation for dividends not received between the conclusion of the vesting period and the actual date of delivery, additional shares will be delivered at that time.

Fair value is measured using the method given below. The expected life used in the model has been adjusted, based on management’s best estimates, for the effect of non-transferability, exercise restrictions and behavioral considerations. Share-based payments are booked in staff costs (see Note 4 “Operating expenses” , line “staff costs” and in the lines of the income statement presented by functions).

Free share allocations with performance conditions

For plans nos. 6 to 15, shares are only granted by SOCIÉTÉ BIC. For French tax resident beneficiaries, shares are delivered at the definitive grant date. For foreign tax resident beneficiaries, shares are delivered at the conclusion of a three-year period following the definitive grant date. For plans nos. 6 and 7, as compensation for dividends not received between the conclusion of the vesting period and the actual date of delivery, additional shares will be delivered at that time. From Plan No. 8, this compensation system by delivery of shares has been terminated and is replaced by a cash compensation system. From Plan No. 13, shares still granted by SOCIÉTÉ BIC are delivered to the beneficiaries at the definitive grant date. The cash compensation system has been terminated.

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• BIC GROUP - 2019 UNIVERSAL REGISTRATION DOCUMENT •