TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

For the 2011 and 2010 free shares granted as part of the MIP and the LTIP, Technicolor considered an expected turnover of 4% based on historical data of related beneficiaries, an average initial share price of €5.2 in 2011 (€5.5 in 2010), and a dividend rate of 0% (in 2011 and 2010). For the 2013 free shares granted as part of Free Share Plan, Technicolor considered an expected turnover of 5% based on historical data of related beneficiaries, an average initial share price of €3.87 and a dividend rate of 0%.

For the 2016 performance shares granted as part of the 2016 LTIP, Technicolor considered an expected turnover of 5% based on historical data of related beneficiaries, an average initial share price of €5.65 and a 3-years expected yearly dividend of €0.18. For the 2017 performance shares granted as part of the 2017 LTIP, Technicolor considered an expected turnover of 5% based on historical data of related beneficiaries, an average initial share price of €3.79 and a 3-years expected yearly dividend of €0.18.

Compensation expenses charged to income 9.3.3. The compensation expenses charged to income for the services December 31, 2017 and 2016. The counterpart of this expense has received during the period amount to €10 million for the years ended been credited to equity.

Key management compensation 9.4. Directors’ fees and compensation expenses (incl. Social security costs) amounted to €0.7 million and €0.7 million respectively in 2017 and 2016. The amounts due to Directors who are non-resident for French tax purposes are subject to a withholding tax. Fees due to Directors and advisors in respect to fiscal year 2017 will be paid in 2018.

Compensation expenses allocated by the Group to Members of the Executive Committee (including those who left this function during 2017 and 2016), during 2017 and 2016 are shown in the table below:

2017 (2)

2016 (2)

(in million euros)

Short-term employee benefits (1)

10

12

Share-based payment

4

2

TOTAL

14

14

In case of retirement the Group has an obligation almost nil as of December 31, 2016 and 2017. (1) 12 members in 2017 and 12 members in 2016. (2)

The Members of the Executive Committee can benefit from severance packages in case of an involuntary termination and in absence of fault, which represent a total estimated amount of €8 million.

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TECHNICOLOR

REGISTRATION DOCUMENT 2017