Saint Gobain - Registration document 2016

6 CORPORATE GOVERNANCE

2. Management and Directors’ compensation

France and outside France, who were granted a total of This plan covers 39 employees and officers of the Group, in 280,000 options (including allocations to the Chairman and Chief Executive Officer), with the type of options, whether for Chairman and Chief Executive Officer are less than the grant sub-cap defined by the General Shareholders' Meeting on June 2, 2016. new or existing shares, to be determined by the Board no later than by the end of the vesting period (noting that any options that may be exercised before their type is determined will be options to subscribe for new shares). Grants to the set at €40.43, without rebate or discount based on the average opening price of the Saint-Gobain shares in the 20 trading days preceding the date of the grant by the Board of Directors. The lifetime of the options is 10 years. The option price was The performance criteria applicable to the stock options plan implemented on November 24, 2016 entail, as in 2015, in addition to a performance condition external to the Saint-Gobain Group, an internal performance condition, that are identical but weighted differently, for all long-term compensation plans (stock options and performance shares).

following cumulative conditions (the same as those of the plan implemented in 2015): Exercise of the stock options is subject to fulfillment of the service condition: to be an employee or officer of a ‹ Saint-Gobain Group company throughout the period up to no-fault termination, negotiated departure, retirement, the exercise date of the stock options, without interruption, except in a number of defined specific cases such as death, disability (as defined in paragraphs (2) and (3) of Article L.341-4 of the French Social Security Code), Group; transfer to another position within the Group, or change of control of the grantee’s host company to outside the performance condition linked to the two following criteria: ‹ 70% of the options initially allocated are subject to a ‹ criteria linked to performance of the Saint-Gobain stock price versus the CAC 40 stock market index ; and 30% of the options initially allocated are subject to the ‹ criteria of Return On Capital Employed, including goodwill, of the Saint-Gobain Group (“ROCE”).

Stock market performance will be calculated by comparing the average opening prices quoted for Saint-Gobain shares for the six months to November 24, 2016 with average prices for the six months to November 24, 2020. The two performances will then be compared, and the options will be exercisable as follows:

Performance of the Saint-Gobain stock price compared to the CAC 40

Exercisable percentage of initially granted options, contingent upon stock market performance (i.e. 70% of allocation), exercisable

At least 15% higher

All

[(Saint-Gobain’s stock market performance/CAC 40 index) (1) - 85%]/[115% - 85%]

Between -15% and +15%

Over 15% lower

None

Saint-Gobain stock price performance/CAC 40 index performance (performance of the Saint-Gobain stock price versus performance of the CAC 40 index) is equal (1) to: 100% + the difference between the performance of the Saint-Gobain stock price and that of the CAC 40 index, in both cases expressed as a percentage.

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ROCE performance is calculated as follows:

Arithmetic average of the ROCE for the years 2017, 2018 and 2019

Percentage of options initially granted, contingent upon the ROCE (i.e., 30% of the allocation), exercisable

Greater than 12%

All

Between 9% and 12%

[Arithmetic average of the ROCE for the years 2017, 2018 and 2019 - 9%]/[12% - 9%]

Less than or equal to 9%

None

The performance conditions for stock options granted by the Group are demanding, as evidenced by the achievement rates for the three latest stock option plans for which the performance conditions have been determined (16.5% for the 2012 plan, 0% for the 2011 plan, and 0% for the 2010 plan).

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016