technicolor - 2019 Universal registration document

6 FINANCIAL STATEMENTS EMPLOYEE BENEFIT

CHANGES IN OUTSTANDING OPTIONS & FREE SHARES 9.3.2 Movements in the number of options and free shares outstanding with their related weighted average exercise prices are as follows for 2019 and 2018: Number of options and free shares Weighted Average Exercise Price (in euros) Outstanding as of December 31, 2017 (with an average remaining contractual life of 5 years – excluding free shares) 19,431,172 4.48 (ranging from 0 to 7) Of which exercisable 11,087,249 4.27 Granted* 637,000 na Delivered (Free Share Plan) - na Delivered (MIP) - na Forfeited & other (2,932,338) 5.48 Outstanding as of December 31, 2018 (with an average remaining contractual life of 4 years – excluding free shares) 17,135,834 4.30 (ranging from 0 to 7) Of which exercisable 10,652,013 4.30 Granted* 2,657,000 0.77 Delivered (Free Share Plan) - - Delivered (MIP) - - Forfeited & other (3,468,077) 5.70 Outstanding as of December 31, 2019 (with an average remaining contractual life of 3 years – excluding free shares) 16,324,757 3.43 Of which exercisable 9,853,731 4.14 Related to 2018 and 2019 Long-Term Incentive Plan (LTIP). *

Significant assumptions used The estimated fair values of the options granted were calculated using the Black&Scholes valuation model. The inputs into the model were as follows:

Stock options plan granted in

December 2015

June 2015

April 2015

October 2014

June 2014

March 2014

October 2013

May & June 2013

(in % and in euro)

Weighted average share price at measurement date Weighted average exercise price

7.05

6.13 5.88 40%

6.06 5.83 40%

4.71 4.92 40%

5.68 5.79 40%

4.88 4.53 40%

4.06 3.93 40%

3.2

7.11

3.19 40%

40%

Expected volatility Expected option life*

5 years

5 years

5 years

5 years

5 years

5 years

5 years

5 years

Risk free rate

0.12% 0.17% 0.17% 0.13% 0.31% 0.62% 0.77% 0.62%

Expected dividend yield Fair value of option at measurement date

0.70%

0.8% 0.80%

0%

0%

0%

0%

0%

2.27 1.06 Expected option life is shorter than the contractual option life as it represents the period from grant date to the date on which the option is expected to be exercised. * 1.91 1.88 1.45 1.82 1.73 1.4

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 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.

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019 250