30. Long-Term Incentive Plans

The table below shows the total expense of the share-based payment plans in 2015 as well as the movements in liability and equity caused by the change to the estimate of the probability of an IPO to 100% as well as the conversion of the plans. The increased probability resulted in the plans being fully classified as IFRS 2 share-based compensation plans in 2015 and has resulted in an incremental expense of €2,615, which was recognized in general and administrative costs in the Income Statement and reported as non-recurring item. The number of participants of all long-term incentive plans per year-end 2015 is 139.

in thousands of EUR

Real share plan

Phantom plan

Equity

Liability

Equity

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

31 December 2015

25,540

876

27,202

On 20 January 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 phantom plans issued in 2011, 2012, 2013 and 2014 have been converted from cash-settled to equity-settled on the listing of GrandVision N.V. on Euronext Amsterdam at 6 February 2015. The phantom plans issued in 2009 and 2010 remained cash-settled. Most of these plans were settled in 2015.

Classification

Phantom shares

Phantom options

Real shares

Cash-settled

Share price at 31 December 2015

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
No grants in 2015

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

Th. A. Kiesselbach (CEO)

P.J. de Castro Fernandes (CFO)

Employees

Total

Outstanding 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

Granted

-

-

-

-

Settled

- 101,386

-

- 556,256

- 657,642

Outstanding at 31 December 2015

912,474

251,020

1,808,404

2,971,898

Of those shares outstanding under the real share plan at 31 December 2015, for 1,235,086 shares the vesting period has ended.

The table below shows the movements in the phantom plan for key management and employees:

Th. A. Kiesselbach (CEO)

P.J. de Castro Fernandes (CFO)

Employees

Total phantom shares and options

Outstanding 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 at vesting

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

Outstanding at 31 December 2015

265,708

162,746

2,511,438

2,939,892

The table below shows the movements in the number of shares of the phantom plan:

Phantom shares

Phantom options

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 at vesting

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

Of those phantom shares outstanding under the phantom plan at 31 December 2015, 9,640 were vested.

Of those phantom options outstanding under the phantom plan at 31 December 2015, 126,200 were exercisable. As of 31 December 2015 the weighted average remaining contractual life for outstanding phantom options was 2.8 years.

The fair value of the phantom options, of which most were converted to equity-settled on the listing and new options granted in 2015, is based on the Black-Scholes-Merton option pricing formula. The following assumptions were used:

Phantom options

31 December 2015

Exercise price in EUR

5.98 - 24.59

Share price in EUR

20.00 - 27.66

Volatility

22.1% - 25.9%

Dividend yield

0.6% - 1.4%

Expected remaining option life in years

0.4 - 5.0

Annual risk-free interest rate %

-0.38% to 0.15%

The phantom options 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.