LEGRAND_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL INFORMATION CONCERNING THE GROUP’S ASSETS, LIABILITIES, FINANCIAL POSITION AND RESULTS Consolidated financial statements in accordance with IFRS for the years ended December 31, 2017 and December 31, 2016

4.2

STOCK OPTION PLANS AND PERFORMANCE SHARE PLANS

During 2016, the Group: W acquired 1,300,000 shares for cancellation; W issued 396,772 shares under stock option plans;

The cost of stock options or performance shares is measured at the fair value of the award on the grant date, using the Black & Scholes option pricing model or the binomial model, and is recognized in the income statement under personel costs on a straight-line basis over the vesting period with a corresponding adjustment to equity. Changes in the fair value of stock options after the grant date are not taken into account. The expense recognized by crediting equity is adjusted at each period-end during the vesting period to take into account changes in the number of shares that are expected to be delivered to employees when the performance shares vest or the stock options are exercised.

W transferred 547,186 shares under performance share plans, out of the 462,290 shares bought back in 2016 and 90,024 bought back from previous years for this purpose; and W sold a net 1.217 shares under the liquidity contract. These movements were taken into account on an accrual basis in the computation of the average number of ordinary shares outstanding during the period, in accordance with IAS 33. If the shares had been issued and bought back on January 1, 2016, basic earnings per share and diluted earnings per share would have amounted to €2.363 and €2.338 respectively for the 12 months ended December 31, 2016.

4.2.1

Performance share plans

4.2.1.1 2015, 2016 and 2017 performance share plans The following performance share plans were approved by the Company’s Board of Directors:

Plan 2015

Plan 2016

Plan 2017

Date approved by shareholders

May 24, 2013

May 24, 2013

May 27, 2016

Grant date

May 29, 2015

May 27, 2016

May 31, 2017

Total number of performance share rights initially granted

388,769 (1)

495,615 (1)

484,583 (1)

o/w to Executive Director

14,583 (1)

15,281 (1)

12,324 (1)

Total IFRS 2 charge (in € millions)

16.3 (2)

20.3 (2)

24.8 (2)

End of vesting period

June 17, 2019

June 17, 2020

June 17, 2021

End of lock-up period

June 17, 2019

June 17, 2020

June 17, 2021

Number of performance shares acquired as of December 31, 2017

0

0

0

Number of performance share rights cancelled or forfeited

(19,329)

(12,073)

(5,925)

Performance share rights outstanding as of December 31, 2017

369,440

483,542

478,658

(1) Given the dividend distribution features approved at the General Meetings of Shareholders on May 29, 2015, on May 27, 2016 and on May 31, 2017, the number of remaining performance shares was adjusted to take into account the impact of these transactions on the interests of performance share beneficiaries in accordance with article L. 228-99 of the French Commercial Code. Moreover, the number of performance shares has been reduced following the Executive Director’s decision to waive part of his entitlement to performance shares granted under the 2015 and 2016 plans. (2) Total charge estimated at the grant date assuming a 100% achievement for each performance criteria. This charge is spread over the 4 years of the vesting period.

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REGISTRATION DOCUMENT 2017 - LEGRAND