TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 4 CORPORATE GOVERNANCE AND COMPENSATION Compensation

Characteristics of the LTIP – Performance conditions

2 financial objectives of the Drive 2020 plan and of a complementary type reflecting the key indicators tracked by investors and analysts

Adjusted EBITDA objective assessed over a three-year period: if the sum of the annual adjusted EBITDA realized over a three-year ■ period were greater or equal to the sum of the objectives of the annual adjusted EBITDA announced to the public by the Company for the same period, 50% of the Performance Shares would be definitively earned in the opposite case, no Performance Shares would be earned ■

Group Free Cash Flow objective assessed over a three-year period: if the sum of the Group’s yearly Free Cash Flow ■ realized over three years were greater than or equal to the sum of the annual Free Cash Flow objectives for the Group announced to the public by the Company over the same period, 50% of the Performance Shares would be definitively earned in the opposite case, no Performance Shares would ■ be earned

Performance conditions

2017

2018

2019

Detailed objectives

Set objectives for the plan

Restated objective  (1) €326 million €32 million

Achieved

Determined objective by the Board of Directors  (1) The objectives determined in February 2018 will be disclosed in February 2019.

Determined objective by the Board of Directors  (1) The objectives will be determined in February 2019 and will be disclosed in February 2020.

Adjusted EBITDA Group Free Cash Flow

€306 million €66 million

(1) The LTIP 2017 plan rules, as designed by the Board of Directors of January 6, 2017, provided that the annual Adjusted EBITDA and Group Free Cash Flow objectives would be those announced to the market in February of yeach year. The Board of Directors took note of two issues relating to this rule. Firstly, following the December 18, 2017 announcement of the sale of the Patent Licensing business, the latter is considered as discontinued operations or held for sale operations. Hence, there is a gap between (i) the objectives announced in February 2017 which included the Patent Licensing business and (ii) the achievement of objectives announced in February 2018 which did not include the Patent Licensing business. Secondly, as Company did not release publication an annual guidance but only a medium-term guidance (2020), rules provided by the plan referring to the annual guidance announced in February are not relevant anymore. Pursuant to the AFEP-MEDEF Code, exceptional circumstances as a substantial change to scope justify modifying the performance conditions during the period of assessment. The Board of Directors considered therefore that the sale of Patent Licensing business and the end of the annual guidance constituted exceptional circumstances. The LTIP 2017 plan rules were thus amended to provide that: the Adjusted EBITDA and group Free Cash Flow objectives for 2017 should be restated by excluding the Patent Licensing ■ contribution (the 2017 Adjusted EBITDA objective is thus €326 million and the 2017 group Free Cash Flow objective is €32 million); the Adjusted EBITDA and group Free Cash Flow objectives for 2018 and 2019 would be determined by the Board of Directors in ■ February 2018 and February 2019, in line with the annual budget.

Review of the level of achievement of the performance condition

Review of this achievement shall be realized in 2020 by the Board

Characteristics of the LTIP – Presence condition Cases of forfeiture

Beneficiary of Performance Shares who would leave the Group before the expiration of the vesting period of at least three years. Case of legal premature exit (including cases of death, disability, retirement, termination without cause) and other customary exceptions decided upon by the Board of Directors.

Exceptions

The plan prevents beneficiaries who are members of the Executive Committee from using hedging instruments for the performance shares and requires that they retain a significant number of shares up until the termination of their positions within the Group. Long-Term Incentive Plan – LTIP 2016 Upon recommendation of the Remunerations Committee, the Board of Directors, making use of the authorization given by the Shareholders’ Meeting of April 29, 2016 in its twenty eighth resolution, granted Performance Shares. The table below summarizes the characteristics of these grants.

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TECHNICOLOR

REGISTRATION DOCUMENT 2017