Saint Gobain - Registration document 2016

6 CORPORATE GOVERNANCE

2. Management and Directors’ compensation

applicable laws, of fulfillment of this performance condition, subject to the Board’s prior determination, in accordance with Payment of an indemnity for termination of office will be on his date of termination of office. office of the Chairman and Chief Executive Officer performance units in the event of termination of Stock options, performance shares and Executive Officer under circumstances qualifying him for In the event of termination of his office as Chairman and Chief compensation for termination of office (see the cases listed in proposal of the Nomination, Remuneration and Governance previous paragraph, the Board reserves the right, on the fulfillment of the performance condition described in the the paragraph “Forced departure” above), and subject to granted to him as of the date of termination and which have stock options, performance shares and performance units of Mr. Pierre-André de Chalendar’s rights to Saint-Gobain Committee, to decide whether or not to maintain all or some not been delivered as of this date, or for which the exercise times, the performance condition(s) set out in the plans period has not expired, as the case may be, provided at all concerned have been fulfilled. b) Non-compete indemnity irrevocable non-compete agreement with Compagnie de Mr. Pierre-André de Chalendar has signed a firm and for termination of office. terminated in circumstances qualifying him for compensation functions as Chairman and Chief Executive Officer are Saint-Gobain for a period of one year from the date his the Reference Compensation (see Paragraph (a) above), it Chalendar would receive a non-compete indemnity equal to In consideration for this commitment, Mr. Pierre-André de compensation under the non-compete agreement and the will, if necessary, be reduced so that the sum of the termination of office due to Mr. Pierre-André de Chalendar being specified that the amount of the compensation for than two times the Reference Compensation. compensation for termination of office amount to no more In accordance with the recommendations of the Chalendar’s duties as Chairman and Chief Executive Officer, in no later than the date of termination of Mr. Pierre-André de unilaterally waive application of the non-compete agreement, AFEP-MEDEF Code, the Board of Directors is entitled to shall be due to him on this account. which case he shall be free of any commitment and no sum c) Supplementary pension arrangements Pension commitments to Mr. Pierre-André de executive Director Chalendar in his capacity as non-employee basis as for all other beneficiaries of this plan. pension plan for engineers and executive staff, on the same provisions governing the so-called “SGPM” defined benefits Mr. Pierre-André de Chalendar continues to benefit from all Mr. Pierre-André de Chalendar does benefit from the SGPM differential type system, according to Article 39 of the the plan was closed to new entrants. It is a so-called Compagnie de Saint-Gobain before January 1, 1994, the date pension plan covering all employees who, as he did, joined

General Tax Code. As of December 31, 2016, 213 retired former be entitled to benefits on retirement. benefits under the plan and a further 31 active employees will employees of Compagnie de Saint-Gobain were receiving employees) are partly financed, in the amount of beneficiaries of the retirement system (current and retired Commitments made to Mr. Pierre-André de Chalendar and all risk. insurance companies, without transfer of the lifetime income approximately 60% of the total, through outsourcing to two To benefit from the plan, Mr. Pierre-André de Chalendar will forced to terminate his activity for health reasons. conditions, he will not be able to claim this benefit, unless leaves Compagnie de Saint-Gobain before fulfilling these contributing to the SGPM plan for at least 15 years. If he compulsory government-sponsored schemes after have to retire at 60 or over on a full pension under the Benefits under the plan are determined so that retirees (up to 35 years) and is determined on a declining scale for guaranteed amount depends on the retiree’s years of service receive a guaranteed total income in retirement. The benefits. for the purpose of calculating the plan’s total guaranteed during the period are deducted from the guaranteed amount retiree under other basic and compulsory pension plans exceptional or temporary payments. Benefits received by the each tranche of gross annual compensation excluding final year’s fixed compensation and his years of service with Mr. Pierre-André de Chalendar’s pension will be based on his which he joined the Saint- Gobain Group. If he were to leave the Group, calculated as from October 1, 1989, the date on of service under the SGPM plan, Mr. Chalendar would be after completing the maximum number of pensionable years rate of approximately 47% of his final year’s fixed pension schemes) representing a guaranteed replacement pension benefits paid under the basic and compulsory entitled to total guaranteed pension benefits (including difference between these guaranteed total benefits and Compagnie de Saint-Gobain therefore corresponds to the benefits under the SGPM plan that would be paid by compensation. The seniority-based supplementary pension latest fixed compensation set in the event of retirement at schemes and would therefore be approximately 35% of his benefits paid under the basic and compulsory pension maximum seniority. AFEP-MEDEF code’s recommended ceiling, which is 45% of retirement payout is significantly lower than the Mr. Pierre-André de Chalendar’s maximum supplementary 1.5% of his fixed compensation per year of seniority, and thus increase in Mr. Pierre-André de Chalendar’s potential rights is the sum of the fixed and variable compensations. The annual renewed. should Mr. Pierre-André de Chalendar’s term of office be compensation set by law, that will be applicable from 2018 represents only 50% of the 3% ceiling of the annual contribution on the premiums paid to the two insurance referred to above, the Company would be required to pay a of the seniority-based supplementary pension benefits Finally, with regard to expenses associated with the payment companies mentioned above, the rate of which is set at 24%.

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016