SOMFY - Annual Financial Report 2020

05 CONSOLIDATED FINANCIAL STATEMENTS

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 employment and 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. 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 employee 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. At 31 December 2020, no more stock option plans existed. At its meeting of 12 November 2018, the Management Board of Somfy SA decided to allocate Somfy SA performance shares to 7 beneficiaries employed by Somfy Protect by Myfox. The vesting of these performance shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 1 July 2021 and will not be subject to a retention obligation. During 2019, the Management Board of Somfy SA agreed on the following allocations of Somfy SA performance shares: at its meeting of 20 May 2019, allocation of Somfy performance shares to 173 beneficiaries. The vesting of these performance shares is – subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 1 July 2021 and will not be subject to a retention obligation; at its meeting of 15 November 2019, allocation of Somfy performance shares to 1 beneficiary. The vesting of these performance shares is – subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 17 November 2021 since they will be subject to a retention obligation; at its meeting of 15 November 2019, allocation of Somfy performance shares to 10 beneficiaries. The vesting of these performance – shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 17 November 2021 since they will be subject to a retention obligation. During 2020, the Management Board of Somfy SA agreed on the following allocations of Somfy SA performance shares: at its meeting of 31 August 2020, allocation of Somfy performance shares to 52 beneficiaries. The vesting of these performance shares is – subject to the condition that they must remain employed by the Group. Final vesting will take place on 15 September 2022. The shares vested will be available from 16 September 2022 and will not be subject to a retention obligation; at its meeting of 25 November 2020, allocation of Somfy performance shares to 3 beneficiaries. The vesting of these performance shares – is subject to the condition that they must remain employed by the Group. Final vesting will take place on 28 November 2022. The shares vested will be available from 29 November 2022 and will not be subject to a retention obligation.

At 31 December 2020, the free share position was as follows:

Plan date

Plan n° Number of bene- ficiaries

Number of shares granted

Price per share (€)

Allocation date

Vesting date

Revision of the shares number related to presence and performance conditions

Number of shares vested in 2020

Number of shares potentially granted at 31/12/20

5,239

12/11/18

Myfox plan AGA 4

7 5,239 66.26 30/06/21 01/07/21 45 32,370 75.62 30/06/21 01/07/21 128 37,637 75.62 30/06/21 01/07/21

–

– – –

21,178 24,625

20/05/19 AGAP 2021 plan 20/05/19 AGA 2021 plan

-11,192 -13,012

AGAP 2021 plan n°2 Security Business Group plan

843

15/11/19

1 1,080 81.51 30/06/21 17/11/21

-237

–

–

15/11/19

10 6,015 81.51 30/06/21 17/11/21

-6,015

–

12,190

31/08/20 AGAP 2022 plan

52 17,340 100.83 15/09/22 16/09/22

-5,150

–

AGAP 2022 plan n°2

430

25/11/20

3

516 126.24 28/11/22 29/11/22

-86

–

143

SOMFY – ANNUAL FINANCIAL REPORT 2020