LOREAL_Registration_Document_2017

Stock Market Information Share capital SHAREHOLDER STRUCTURE*

Pre-emption clause (clause expired on 29 April 2014)

prohibition on constituting a concert party with any third party, composition of the Board of Directors and of the Strategy and Implementation Committee) continue to be effective until the expiry date mentioned in the 2004 deed. The Bettencourt Meyers family and Nestlé will continue to act in concert with regard to the L’Oréal Company beyond 29 April 2009 .”

The parties have reciprocally granted each other a pre-emption right concerning the L’Oréal shares they hold since the date of the merger, and those they will hold after such date. This pre-emption right, that came into force on expiry of the lock-up clause for a period of five years, expired on 29 April 2014. The parties have agreed for a period of ten years from the effective date of the merger not to conclude an agreement with any third party and not to form a concert party relating to the shares making up the share capital of L’Oréal. Breach of such undertaking entitles the other party to exercise its pre-emption right with regard to the shareholding of the party having committed such breach, for a price per share equal to the average of the share prices for the last thirty trading sessions prior to notification of exercise of the pre-emption right. Board of Directors The Memorandum of agreement did not provide for any change to the composition of the Board of Directors as compared to its composition at the date of signing, but did stipulate an undertaking by the parties to vote in favour of the appointment as Directors of three members proposed by the other party. The Bettencourt Meyers family and Nestlé also agreed to vote in favour of the appointment of two Vice-Chairmen of the Board of Directors, one proposed by the Bettencourt family, and the other by Nestlé. The parties provided for the creation on the Board of Directors of L’Oréal of a committee called the Strategy and Implementation Committee which has six members, and is chaired by the Chairman of the Board of Directors of L’Oréal and composed of two members proposed by the Bettencourt Meyers family, two members proposed by Nestlé and one other independent Director. The committee meets six times a year. Length Unless otherwise stipulated, the Memorandum of agreement will remain in force for five years from 29 April 2004, and in all cases until a period of six months has elapsed after the death of Mrs. Bettencourt. Agreement by the parties to act in concert The parties declared that they would act in concert for a period of five years from 29 April 2004. On 9 April 2009, the Bettencourt Meyers family and Nestlé published the following press release: “O n 3 February 2004, the Bettencourt Meyers family and Nestlé signed an agreement organising their relationship and the management of their stakes within the L’Oréal Company. The agreement is public and remains unchanged. It foresees the non-transferability of their respective stakes in the capital of L’Oréal until 29 April 2009, the other clauses (in particular, limitation on the shareholding, pre-emption, escrow , “No concert party” provision (clause expired on 29 April 2014)

Amendment signed on 6.3.5.2. 10 February, 2014

In meetings held on 10 February 2014, the respective Boards of Directors of Nestlé and L’Oréal approved by unanimous decision of their voting members a strategic transaction for both companies under which L’Oréal would buy 48.5 million of its own shares (8% of its share capital) from Nestlé. L’Oréal and Nestlé’s joint news release of 11 February 2014, describes this transaction in detail. The buyback was subject to fulfilment of a condition precedent, namely the closing of the acquisition by Nestlé of all the shares held by L’Oréal in the companies of the Galderma group. The condition was fulfilled and all the L’Oréal shares purchased by L’Oréal were cancelled; following the transaction, Nestlé’s stake in L’Oréal’s capital was reduced from 29.4% to 23.29% while the Bettencourt Meyers family’s stake increased from 30.6% to 33.31% of the capital at 31 December 2013. In order to reflect the change in the stake held by Nestlé in their agreements, on 10 February 2014, the Bettencourt Meyers family and Nestlé signed an amendment agreement to their memorandum of agreement of 3 February 2004. Ownership ceiling clause Subject to closing of the transaction and as from the date thereof, the clause limiting the respective shareholdings of the Bettencourt Meyers family and Nestlé both in terms of capital and voting rights will continue to apply under the same conditions, for the term of the memorandum of agreement, namely until the expiry of a period of six months after the death of Mrs. Liliane Bettencourt, and on the basis of their respective stakes in terms of capital and voting rights resulting from the transaction. Board of Directors Subject to closing of the transaction and as from the date thereof, it is provided that for the remaining term of the memorandum of agreement, the undertaking by the Bettencourt Meyers family to vote in favour of the appointment on L’Oréal’s Board of Directors of members proposed by Nestlé will from now on only concern two members, as against three previously. The reciprocal undertaking by Nestlé to vote in favour of the appointment on L’Oréal’s Board of Directors of members proposed by the Bettencourt Meyers family will continue to concern three members. Escrow agreement The escrow agreement for the L’Oréal shares respectively held by the Bettencourt Meyers family and by Nestlé was terminated prior to its expiry date.

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REGISTRATION DOCUMENT / L'ORÉAL 2017

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