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4.1 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 7. Number of employees, personnel costs and employee benefits

DANONE

REGISTRATION DOCUMENT 2015

110

Defined benefit plan assets

The investment policy for plan assets depends, for each company, on the employees' age structure and the expected return on the various

asset classes.

Plan assets of retirement plan for senior managers

As of December 31

Retirement plan for senior managers

(in € millions, except percentage)

2014

2015

Fair value of plan assets

(172)

(165)

Main class of plan assets

Bonds

(a) (b)

98%

98%

Equities

(b)

–

–

Real estate and other asset classes

(b)

2%

2%

(a) These assets are diversified, and in particular exposure to individual sovereign credit risk is limited.

(b) Do not include any financial instruments issued by the Group

Defined contribution plans

Contributions paid as part of defined contribution plans are recognized under Trading operating income.

Note 7.4. Group performance shares and stock-options granted to certain employees

and corporate officers

Group policy

The Group has awarded long-term variable compensation in the

form of Group performance shares since 2010 and awarded such

compensation in the form of stock-options until 2010. Around 1,300

directors and senior executives worldwide, as well as the corporate

officers, have benefitted from these arrangements.

General principles applicable to Group performance shares

and termination of the stock-options program

The Group's long-term variable compensation takes the form of

Group performance shares (Company shares subject to performance

conditions). Group performance shares were introduced in 2010

by the Shareholders' Meeting held on April 22, 2010 to replace the

stock-option program that was consequently closed.

Group performance shares (GPS) are shares in the Company that are

subject to performance conditions, set by the Shareholders' Meeting

for each plan. In the case of all outstanding plans, the performance

conditions are based on aspects of the Company's performance.

The GPS are also subject to continuing employment conditions. The

vesting period is three or four years depending on the plan.

General principles applicable to stock-options

Stock-options are options to purchase shares in the Company that

were granted to certain employees and corporate officers up until

the Combined Shareholders' Meeting of April 22, 2010. No stock-

options have been granted since then and since the end of 2013, all

stock-options are exercisable: the last plans expire in 2017.

Group performance shares and stock-options in effect

Year ended December 31

(number of shares)

2014

2015

Group performance shares

As of January 1

2,488,418

1,950,995

Shares granted during the year

778,371

645,372

Shares that lapsed or were cancelled during the year

(810,867)

(141,003)

Shares delivered during the year

(504,927)

(467,657)

As of December 31

1,950,995

1,987,707

Stock-options

As of January 1

7,177,600

5,688,697

Options that lapsed or were cancelled during the year

(195,922)

(201,173)

Options exercised during the year

(1,292,981)

(4,142,353)

As of December 31

(a)

5,688,697

1,345,171

(a) As of December 31, 2015 and December 31, 2014, all options can be exercised and most are in the money.