NEOPOST_REGISTRATION_DOCUMENT_2017

5

Financial statements

Consolidated financial statements

Stock option plans 9-4-2: No more stock options have been granted since January 2013. Arrangements relating to plans still in force in 2015 are described in previous Neopost registration documents. Options have been valued based on the Bjerksund & Stensland (2002) model to which the non-transferability

value is added as calculated by the difference between the Bjerksund & Stensland model and the Black, Scholes & Merton (1973) model for options with a duration equivalent to the non-transferability period.

The terms and conditions of the shareholder-approved employee stock-option plans are as follows:

Adjusted number of options granted (a)

Of which subject to conditions (b)

Outstanding options 31/01/2017

Options cancelled or adjusted (a)

Outstanding options 31/01/2018

Adjusted exercise price (a)

Options expired

Start date

Expiry date

15/01/2008

473,839

-

€62.18

333,380 (333,380)

-

- 15/01/2018

03/07/2008

9,742

-

€63.49

8,760

-

-

8,760 03/07/2018

18/02/2009

332,734

64,600

€57.80

194,342

-

(19,825)

174,517 18/02/2019

12/01/2010

487,191 157,927 €52.22 – €52.86

287,692

-

(37,246)

250,446 12/01/2020

12/01/2011

245,585

41,018 €60.85 – €62.31

184,858

-

(18,180)

166,678 12/01/2021

12/01/2012

267,538

76,917 €47.75 – €48.84

181,655

-

(19,422)

162,233 12/01/2022

Adjusted number since the payment of the balance of the dividend partly issued from capital reserves. (a) Options granted with performance conditions. (b)

9-4-3:

Free share plans

Free sharesare granted for the purposes of:

The shares allocated with performance conditions are dependent on the performance indicators below: • current operating margin (current operating income • divided by consolidated sales); shareholder return (variation in the share price over the • period plus dividends compared with the average performance of companies belonging to the same index as Neopost). For these free shares allocated, the vesting period is three years divided in two blocks of 50% each: the first block is delivered at the end of the second year and the second block at the end of the third year. Since July 2016 attribution, the vesting period is three years in one block. Free share attributions made before 2016 are submitted to a lock-up period, starting at the delivery date, of two years for French tax resident beneficiaries. growth in consolidated sales;

attracting and retaining high potential employees; • acknowledging exceptional performance; • fostering strong motivation and commitment to the • Company’s performance by granting specific free share plans based on the Group’s future results. The fair value of the shares thus allocated is calculated based on the share price on the allocation date from which anticipated dividend are deducted. The overall expense was calculated by estimating a number of shares whose ownership will be transferred corresponding to a percentage of the maximum attributable amount. This assumption is considered the most likely on the date of allocation. This expense is spread out over the vesting period. The number of shares is adjusted at each closing date and the expense is revaluated consequently to ensure that the period expense corresponds to the number of shares effectively attributed.

138

REGISTRATION DOCUMENT 2017 / NEOPOST