technicolor - 2018 Registration document

6 FINANCIAL STATEMENTS NOTE 9 EMPLOYEE BENEFIT

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. For the 2018 performance shares granted as part of the 2018 LTIP, Technicolor considered an expected turnover of 10% based on historical data of related beneficiaries, an average initial share price of €1.27 and a 3-years expected yearly dividend of €0. TO INCOME The compensation charged to income for the services received during the period amount to €9 million (income) and €10 million (expense) for the years ended December 31, 2018 and 2017. The counterpart of this expense has been credited to equity. COMPENSATION EXPENSES CHARGED 9.3.3

Factors that have been considered in estimating expected volatility for the long-term maturity Stock Option Plans include: the historical volatility of Technicolor’s shares over the longest period • available; adjustments to this historical volatility based on changes in • Technicolor’s business profile. For shorter maturity options, expected volatility was determined based on implied volatility on Technicolor’s share observable at grant date. 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 9.4 Directors’ fees and compensation expenses (incl. Social security costs) amounted to €0.7 million in 2017 and 2018. The amounts due to Directors who are non-resident for French tax purposes are subject to a withholding tax.

Key management compensation

Fees due to Directors and advisors in respect to fiscal year 2018 will be paid in 2019. Compensation expenses allocated by the Group to Members of the executive committee (including those who left this function during 2018 and 2017), during 2018 and 2017 are shown in the table below:

2018 (2)

2017 (2)

(in million euros)

Short-term employee benefits (1)

9

10

Termination benefits Share-based payment

1

-

(3)

4

TOTAL

7

14

In case of retirement the Group has an obligation almost nil as of December 31, 2017 and 2018. (1) 11 members in 2018 and 12 members in 2017. (2)

The share-based payment is a €3 million income in 2018, as the expense for services rendered related to incentive plans has been reversed further to non achieved targets. 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 2018