LOREAL_Registration_Document_2017

5 2017 Parent Company Financial Statements * NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

Stock purchase or subscription options – Free shares NOTE 17

Share subscription or purchase options 17.1 The table below sets out data concerning option plans in force at 31 December 2017:

Exercise period

Number of options not yet exercised

Grant date 30.11.2007 25.03.2009 27.04.2010 22.04.2011

Number of options

From

To

Exercise price

4,000,000 3,650,000 4,200,000 1,470,000

-

01.12.2012 26.03.2014 28.04.2015 23.04.2016

30.11.2017 25.03.2019 27.04.2020 22.04.2021

91.66 50.11 80.03 83.19

333,148

1,292,620

608,007

All plans have a five-year exercise period and no performance-related conditions, except the 22 April 2011 plan (for all participants) and the 27 April 2010 and 25 March 2009 plans for members of the Management Committee. All of the performance conditions of these plans have been definitively fulfilled.

Free shares 17.2. The table below summarises data relating to the free share plan.

Grant date

Number of shares granted

Number of shares issued/allotted

Number of shares not definitively vested

Share subscription plans

Share purchase plans 22.04.2011

Vesting date 23.04.2015 18.04.2016 27.04.2017 18.04.2018 23.04.2019 21.04.2020 21.04.2021

1,038,000 1,325,050 1,057,820 1,068,565

939,300

- - -

17.04.2012 26.04.2013

1,233,900

988,180

17.04.2014 22.04.2015 20.04.2016 20.04.2017

1,050

1,015,515

860,150 906,100 906,000

675 125

830,625 898,150 906,000

-

For the conditional grant of shares, the plan provides for a four-year vesting period after which vesting is effective and final, subject to meeting the conditions of the plan. After this vesting period, a two-year mandatory holding period applies for French residents, during which the shares cannot be sold, for plans 2011 to 2015. The performance conditions concern: for the 20 April 2017, 20 April 2016, 22 April 2015, and s 17 April 2014 plans: for 50% of shares attributed, the increase in comparable • Cosmetics revenues for the 2018, 2019 and 2020 fiscal years under the 2017 plan; for the 2017, 2018 and 2019 fiscal years under the 2016 plan; for the 2016, 2017 and 2018 fiscal years under the 2015 plan; and the 2015, 2016 and 2017 fiscal years under the 2014 plan in relation to the growth in revenues for a panel of competitors; for 50% of shares granted, the increase over the same • period in the Group’s consolidated operating profit.

The calculation will be based on the arithmetic average of the performance in the 2018, 2019 and 2020 fiscal years under the 2017 plan; in the 2017, 2018 and 2019 fiscal years under the 2016 plan; in the 2016, 2017 and 2018 fiscal years under the 2015 plan; and in the 2015, 2016 and 2017 fiscal years under the 2014 plan; and will use a predefined allocation scale based on the performance percentage achieved. No performance condition applies below a block of 200 shares. The plans of 22 April 2011, 17 April 2012 and 26 April 2013 s were definitively vested by the allocation of, respectively, 936,300 shares on 23 April 2015, 1,230,850 shares on 18 April 2016 and 986,220 shares on 27 April 2017. At 31 December 2017, the performance conditions were deemed to have been met. A rebilling agreement concerning the cost of free shares has been set up between L’Oréal S.A. and the subsidiaries concerned for the plans 2011, 2012 and 2013.

REGISTRATION DOCUMENT / L'ORÉAL 2017

300