TECHNICOLOR_REGISTRATION_DOCUMENT_2017

4 - CORPORATE GOVERNANCE AND COMPENSATION Compensation

Long-Term Incentive Plans 2016 – LTIP 2016 Shareholders’ Meeting authorizing the attributions Remunerations Committee recommending the grants

April 29, 2016 (28 th  resolution)

April 27, 2016 April 29, 2016

July 26, 2016 July 27, 2016

October 11, 2016 October 20, 2016

Board of Directors approving grants

Number of beneficiaries (as of December 31, 2017) Number of outstanding shares (as of December 31, 2017)

196

2,605,187 representing 0.63% of the share capital

Vesting period Holding Period

3 years

None except for: the members of the Executive Committee who should retain, until the term of their ■ contracts, at least 10% of the vested Performance Shares the CEO who should retain in registered form, until the end of his term of office, 20% of ■ the vested Performance Shares April 30, 2019 or as promptly as possible thereafter (subject to presence condition on that date)

Delivery Date

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:

Group Free Cash Flow objective assessed over a  three-year period:

Performance conditions

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 determined by the Board of Directors for the same period, 50% of the Performance Shares would be definitively earned in the opposite case, no Performance Shares would be earned ■

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 determined by the Board of Directors for the same period, 50% of the Performance Shares would be definitively earned in the opposite case, no Performance Shares would be earned ■

2016

2017

2018

Detailed objectives

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

Set objectives for the plan

Announced objective

Achieved

Restated objective (1) Achieved

Adjusted EBITDA €600 million

€565 million

€326 million

€306 million

Group Free Cash Flow

€240 million

€248 million

€32 million

€66 million

(1) The LTIP 2016 plan rules, as designed by the Board of Directors of April 29, 2016, provided that the annual Adjusted EBITDA and Group Free Cash Flow objectives would be those announced to the market in February of each 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 the Company did not release 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 constitute exceptional circumstances. The LTIP 2016 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 is determined by the Board of Directors in February 2018, in line ■ with the annual budget.

Review of the level of achievement of the performance condition

Review of this achievement shall be realized in 2019 by the Board

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TECHNICOLOR REGISTRATION DOCUMENT 2017