LOREAL_Registration_Document_2017

Stock Market Information Share capital LONG-TERM INCENTIVE PLANS *

Conditional grants of shares granted 6.4.3.2. within the framework of the authorisation of 20 April 2016 (ACAs plan of 20 April 2017) On the basis of the proposals made by the General Management and examined by the Human Resources and Remuneration Committee, the Board of Directors decided, at its meeting on 20 April 2017, to make a conditional grant of shares within the scope of the authorisation granted by the Annual General Meeting on 20 April 2016. The share capital at 20 April 2017 consisted of 562,492,510 shares, which gave the possibility to distribute 3,374,955 shares. The Board of Directors used this authorisation at its meeting of 20 April 2017 by granting 906,000 free shares to 2,038 beneficiaries. This is a free grant of shares to be issued. Vesting of the shares is subject to a dual condition: of presence: the shares granted will only finally vest after a s period of four years at the end of which the beneficiary must still be an employee of the Group (save the exceptions provided for by law or the Plan regulations); of performance: s vesting of all or part of 50% of the shares granted will • depend on the growth in comparable cosmetics sales for financial years 2018, 2019 and 2020 as compared to those of a panel of L’Oréal’s biggest direct competitors consisting of Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Johnson & Johnson, Henkel, LVMH, Kao, Coty; vesting of all or part of 50% of the shares granted will • depend on growth in the Group’s consolidated operating profit, over the same period. The calculation will be made on the basis of the arithmetic mean of the performances for the 2018, 2019 and 2020 financial years.

Pursuant to the criterion relating to sales, in order for all the free shares granted to finally vest for the beneficiaries at the end of the vesting period, L’Oréal must outperform the average growth in sales of the panel of competitors. Below this level, the grant decreases. The Board defines a threshold, not made public for confidentiality reasons, below which no share will finally vest pursuant to this criterion. Pursuant to the criterion relating to operating profit, in order for all the free shares granted to finally vest for the beneficiaries at the end of the vesting period, a level of growth defined by the Board, but not made public for confidentiality reasons, must be achieved or exceeded. Below this level, the grant decreases. If the operating profit does not increase in absolute value over the period, no share will finally vest pursuant to this criterion. The Human Resources and Remuneration Committee is responsible for communicating to the Board of Directors the level of indicators recorded for the years to be used for the calculation of the performance conditions. The Board of Directors records, at the appropriate time, the level of performance achieved on which the number of shares that finally vests depends. The data recorded year after year to determine the levels of performance achieved are published in paragraphs 6.4.3.5 and 6.4.3.6. The vesting of the first 200 conditional shares (ACAs) is not subject to fulfilment of the performance conditions except for the members of the Executive Committee, including the Chairman and Chief Executive Officer. Shares granted to the ten employees 6.4.3.3. other than executive officers to whom the largest number of shares have been granted The total number of shares granted in 2017 to the ten employees other than corporate officers who received the largest number of shares amounts to 137,600 shares.

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REGISTRATION DOCUMENT / L'ORÉAL 2017

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