30. Share-based Payment Plans

The table below shows the total expense of the share-based payment plans as well as the movements in liability and equity.

in thousands of EUR

Equity plan

Long-term incentive plan

Equity

Liability

Equity

At 1 January 2015

29,741

36,458

-

Incremental expense IAS 19 to IFRS 2

299

2,316

-

Conversion

-

- 28,278

28,278

Change in Income Statement

3,163

1,858

9,959

Settlements/ Vesting

- 7,663

- 9,809

- 8,370

Other

-

- 1,734

- 2,730

Exchange differences

-

65

65

At 31 December 2015

25,540

876

27,202

At 1 January 2016

25,540

876

27,202

Charges to Income Statement

1,523

95

13,685

Settlements/ Vesting

- 14,769

- 755

- 17,435

Exchange differences

-

-

29

At 31 December 2016

12,294

216

23,481

The long-term incentive plan (LTIP) represents conditional share and option awards. Option awards are in the form of stock-settled share appreciation rights, meaning that at exercise the participant receives shares which are in total equal in value to the total value of the exercised options.

The number of participants of the share-based payment plans per year-end 2016 is 153 (2015: 139).

The phantom plans issued in 2011, 2012, 2013 and 2014 were converted from cash-settled to equity-settled long-term incentive plans on the listing of GrandVision N.V. on Euronext Amsterdam in 2015. The phantom plans issued in 2009, 2010 and certain but limited plans relating to 2012, 2013 and 2014 remained cash-settled. Most of these plans were settled in 2016 and 2015.

The incremental expenses in 2015 relate to the conversion of the plans resulting from the listing, which was recognized in general and administrative costs in the Income Statement during 2015 and reported as a non-recurring item.

No new shares were issued in 2016 related to the share-based-payment plans. In 2015 new shares were issued that increased the number of shares held by the participants without having an impact on the value of GrandVision N.V. and the plans.

The table shows the valuation method of the Group's share-based payment plans:

Classification

Share awards

Option awards

Equity plan

Cash-settled

Share price at 31 December

Black-Scholes-Merton option model

n/a

Equity-settled

Share price at conversion and grant date

Black-Scholes-Merton option model

Share price at grant date

The equity and phantom plans are no longer granted since the listing of the Company's shares. Only share and option awards under the long-term incentive plans are being awarded since then.

The table below shows the movements in the number of shares of the equity plan for key management and employees:

Th. A. Kiesselbach (CEO)

P.J. de Castro Fernandes (CFO)

Employees

Total

At 1 January 2015

50,693

12,551

118,233

181,477

Adjustment for the issue of share capital

963,167

238,469

2,246,427

3,448,063

Settled

- 992,260

-

- 556,256

- 1,548,516

At 31 December 2015

21,600

251,020

1,808,404

2,081,024

At 1 January 2016

21,600

251,020

1,808,404

2,081,024

Settled

- 9,600

- 125,510

- 881,362

- 1,016,472

At 31 December 2016

12,000

125,510

927,042

1,064,552

Of those shares outstanding under the equity plan at 31 December 2016, for 480,920 shares (2015:1,235,086) the vesting period has ended. In 2016, the shares that were vested and unrestricted have been settled.

The table below shows the movements in the long-term incentive plan for key management and employees:

Th. A. Kiesselbach (CEO)

P.J. de Castro Fernandes (CFO)

Employees

Total LTIP awards

At 1 January 2015

11,603

4,870

176,278

192,751

Adjustment for the issue of share capital

220,463

92,534

3,349,274

3,662,271

Adjusted for performance conditions

15,546

53,764

200,568

269,878

Granted

23,412

11,578

264,940

299,930

Settled

- 5,316

-

- 1,223,306

- 1,228,622

Forfeited

-

-

- 256,316

- 256,316

At 31 December 2015

265,708

162,746

2,511,438

2,939,892

At 1 January 2016

265,708

162,746

2,511,438

2,939,892

Adjusted for performance conditions

22,234

13,536

226,838

262,608

Granted

23,125

10,580

366,634

400,339

Settled

- 76,175

- 26,242

- 980,477

- 1,082,894

Forfeited

-

-

- 221,104

- 221,104

At 31 December 2016

234,892

160,620

1,903,329

2,298,841

The table below shows the movements in the number of awards of the long-term incentive plan:

Share awards

Option awards

Weighted average exercise price in EUR per share

At 1 January 2015

74,817

117,934

142.87

Adjustment for the issue of share capital

1,421,525

2,240,746

-

Adjusted for performance conditions

78,209

191,669

5.98

Granted

246,239

53,691

24.59

Settled

- 296,402

- 932,220

8.32

Forfeited

- 162,746

- 93,570

6.45

At 31 December 2015

1,361,642

1,578,250

6.94

At 1 January 2016

1,361,642

1,578,250

6.94

Adjusted for performance conditions

76,105

186,503

6.66

Granted

256,165

144,174

27.47

Settled

- 324,903

- 757,991

6.10

Forfeited

- 125,809

- 95,295

6.64

At 31 December 2016

1,243,200

1,055,641

10.33

The weighted average fair value of the share awards granted in 2016 at grant date is €23.32 (2015: €22.76). The weighted average fair value of the option awards granted in 2016 at grant date is €2.83 (2015: €3.38).

The weighted average share price used for the exercise of the option awards during 2016 was €24.97 (2015: €22.35).

Of those option awards outstanding at 31 December 2016, 130,232 were exercisable (2015: 126,200). The weighted average exercise price of these exercisable option awards was €5.99 (2015: €6.64). As of 31 December 2016 the weighted average remaining contractual life for outstanding option awards was 1.1 years (2015: 2.8 years).

As a result of plans being settled, 2,483,832 shares were delivered to participants or became unrestricted in 2016 (2015: 1,079,241).

Most of the option awards related to 2011, 2012 and 2013 were converted to equity-settled on the listing. The fair value of the option awards is based on the Black-Scholes-Merton option pricing model. The following assumptions were used:

Option awards

LTIP 2011 (equity settled)

LTIP 2012 (equity settled)

LTIP 2013 (equity settled)

LTIP 2013 (cash-
settled)

LTIP 2015 (equity settled)

LTIP 2016 (equity settled)

Number of options outstanding

3,040

127,192

720,016

7,528

53,691

144,174

Exercise price in EUR

6.38

5.98

6.66

6.66

24.59

27.47

Share price in EUR

20.00

20.00

20.00

20.91

22.72

23.32

Volatility

23.8%

23.4%

22.1%

26.3%

24.0%

25.2%

Dividend yield

0.0%

0.7%

1.1%

1.3%

1.4%

1.6%

Expected remaining option life in years

2.30

3.30

4.30

2.41

5.00

5.00

Annual risk-free interest rate %

-0.19%

-0.19%

-0.18%

-0.79%

0.15%

-0.36%

The option awards can only be exercised at vesting and at distinct moments 1 and 2 years after vesting. Therefore no impact of early exercise is included in the valuation model. Volatility is determined by calculating a weigthed average of historical volatility of closing prices of the company itself and, due to limited historical share price data of GrandVision N.V., its peer group.

There were no option awards granted in 2014.

The following tables summarize the status of the outstanding equity and LTIP plans during 2016 for the individual Management Board members:

Outstanding share-based awards

Award

Awards per 1 January 2016

Granted in 2016

Adjusted in 2016

Settled in 2016

Awards per 31 December 2016

Exercise price option awards

Fair value at grant

Share price at vesting

Th. A. Kiesselbach (CEO)

GrandVision BV - Equity Plan 2012

Shares

21,600

-

-

- 9,600

12,000

-

8.12

23.32

GrandVision BV - LTIP 2011

Options

52,120

-

-

- 52,120

-

6.38

13.62

22.76

GrandVision BV - LTIP 2012

Shares

24,055

-

-

- 24,055

-

-

20.00

23.32

GrandVision BV - LTIP 2012

Options

58,961

-

-

-

58,961

5.98

13.81

23.32

GrandVision BV - LTIP 2013

Shares

17,900

-

6,444

-

24,344

-

20.00

-

GrandVision BV - LTIP 2013

Options

43,860

-

15,790

-

59,650

6.66

12.81

-

GrandVision BV - LTIP 2014

Shares

45,400

-

-

-

45,400

-

20.00

-

GrandVision NV - LTIP 2015

Shares

23,412

-

-

-

23,412

-

22.76

-

GrandVision NV - LTIP 2016

Shares

-

23,125

-

-

23,125

-

23.32

-

Total

287,308

23,125

22,234

- 85,775

246,892

Outstanding share-based awards

Award

Awards per 1 January 2016

Granted in 2016

Adjusted in 2016

Settled in 2016

Awards per 31 December 2016

Exercise price option awards

Fair value at grant

Share price at vesting

P.J. de Castro Fernandes (CFO)

GrandVision BV - Equity Plan 2012

Shares

251,020

-

-

- 125,510

125,510

-

8.12

23.32

GrandVision BV - LTIP 2012

Shares

26,242

-

-

- 26,242

-

-

20.00

23.32

GrandVision BV - LTIP 2012

Options

64,326

-

-

-

64,326

5.98

13.81

23.32

GrandVision BV - LTIP 2013

Shares

10,900

-

3,924

-

14,824

-

20.00

-

GrandVision BV - LTIP 2013

Options

26,700

-

9,612

-

36,312

6.66

12.81

-

GrandVision BV - LTIP 2014

Shares

23,000

-

-

-

23,000

-

20.00

-

GrandVision NV - LTIP 2015

Shares

11,578

-

-

-

11,578

-

22.76

-

GrandVision NV - LTIP 2016

Shares

-

10,580

-

-

10,580

-

23.32

-

Total

413,766

10,580

13,536

- 151,752

286,130

The vested option awards under GrandVision BV - LTIP 2011 were exercised in 2016, resulting in the delivery of 39,096 shares. The vested share awards under the GrandVision BV - LTIP 2012 plan were exercised in 2016, resulting in the delivery of 50,297 shares.

The GrandVision BV - LTIP 2013 plans were adjusted for performance based on the achievement of 2015 Revenue and EBITA.

Outstanding share-based awards

Award

Status per 31 December 2016

Vesting year

Holding period end

Performance conditions

GrandVision BV - Equity Plan 2012

Shares

Vested

2016

2017 (50%)

No

GrandVision BV - LTIP 2011

Options

Vested

2015

-

0-200% on Revenue/EBITA 2013

GrandVision BV - LTIP 2012

Shares

Vested

2016

-

0-200% on Revenue/EBITA 2014

GrandVision BV - LTIP 2012

Options

Vested

2016

-

0-200% on Revenue/EBITA 2014

GrandVision BV - LTIP 2013

Shares

Unconditional

2017

-

0-200% on Revenue/EBITA 2015

GrandVision BV - LTIP 2013

Options

Unconditional

2017

-

0-200% on Revenue/EBITA 2015

GrandVision BV - LTIP 2014

Shares

Unconditional

2017

-

No

GrandVision NV - LTIP 2015

Shares

Conditional

2018

2020

0-150% on Revenue/EPS 2015-2017

GrandVision NV - LTIP 2016

Shares

Conditional

2019

2021

0-150% on Revenue/EPS 2016-2018

Outstanding share-based awards

Award

Minimum # of shares

Maximum # of shares

Minimum # of shares

Maximum # of shares

Th. A. Kiesselbach (CEO)

P.J. de Castro Fernandes (CFO)

GrandVision BV - Equity Plan 2012

Shares

12,000

12,000

125,510

125,510

GrandVision BV - LTIP 2012

Options

42,111

42,111

45,943

45,943

GrandVision BV - LTIP 2013

Shares

24,344

24,344

14,824

14,824

GrandVision BV - LTIP 2013

Options

40,652

40,652

24,747

24,747

GrandVision BV - LTIP 2014

Shares

45,400

45,400

23,000

23,000

GrandVision NV - LTIP 2015

Shares

23,412

35,118

11,578

17,367

GrandVision NV - LTIP 2016

Shares

23,125

34,688

10,580

15,870

The minimum and maximum numbers of shares resulting from option awards is calculated based on the share price ultimo 2016 (€20.91).