Lagardère SCA Hedging terms of the stock-option plans on existing shares granted since 2001

Since 2001, Lagardère SCA has granted stock-options on existing shares to employees of the Group every year. The stock-option plans outstanding are:

• 2001 : strike price €46.48, maturity 19/12/2008, number of outstanding options 1,110,226;
• 2002 : strike price €51.45, maturity 19/12/2009, number of outstanding options 1,226,477;
• 2003 : strike price €51.45, maturity 18/12/2013, number of outstanding options 1,424,017;
• 2004 : strike price €51.92, maturity 20/11/2014, number of outstanding options 1,572,763;

i.e. a maximum aggregate of 5,333,483 outstanding options.

To satisfy its obligations under the above plans, Lagardère SCA executed a twofold transaction on 3 November 2005:

• The sale of 1,840,337 of its treasury shares to Barclays Capital Securities Limited. The disposal of those treasury shares was executed via a “vente à réméré”, i.e. a sale with a cancellation clause, for an average weighted price of €40.83, whereby Lagardère SCA has the right to repurchase all or part of such shares sold;
• The purchase by Lagardère SCA of 3,493,146 call options from Barclays Bank PLC.
  With this operation, Lagardère SCA has a perfect hedge on its stock-option plans on existing shares granted to employees of the Group since 2001.

The transaction has no significant impact on Lagardère SCA’s shareholders’ equity nor on its net indebtedness.

It also enables Lagardère SCA to freely use the 1,873,179 remaining shares held in treasury (i.e. 1.32% of the total issued share capital), which are currently allocated to the hedging of the outstanding stock-option plans on existing shares. Whole or part of these shares could either be held in treasury to meet the obligations arising from its employee share option programmes or be cancelled.

The transaction was entirely arranged by Barclays Capital, the investment banking division of Barclays Bank PLC which, until the maturity of the stock-option plans, may engage in transactions on Lagardère SCA’s shares pursuant to its hedging management policy.

The Lagardère Group is a market leader in the media sector (books, press, audiovisual, and distribution/retailing of cultural products). The Group also has interests in the high technology sector via a 15.09% interest in EADS.
The Group posted revenues of €12,296m in 2004, and employs nearly 47,300 people in over 40 countries.
The Lagardère Group is listed on the Premier Marché of the Paris Bourse.