CORPORATE GOVERNANCE REPORT Compensation and benefits of executive corporate officers 5 d) Other elements of compensation For Jean-Michel Gault: On October 19, 2017, the Supervisory Board amended the currently suspended employment contract of Jean-Michel On-boarding package Gault in order to (i) record the latter’s agreement not to claim severance The awarding of an on-boarding package may be decided, in an amount exceeding two years of the last fixed and variable annual exceptionally, by the Supervisory Board to promote the arrival of a compensation received in his capacity as an Executive Board member new executive coming from a group outside Klépierre. (including for the termination of his employment contract) and (ii) establish a non-statutory severance mechanism in the event of Jean-Michel Gault’s The payment of this package, which can take different forms, is forced departure. These amendments are subject to the approval of designed to offset the loss of benefits to which the executive had been Klépierre’s General Meeting of April 24, 2018 (5th resolution). entitled. In compliance with Article 24.3.4 of the AFEP-MEDEF Code, The forced departure cases eligible for the compensation mechanism if such a package is granted, it must be explained and the amount will include all forced departure cases except for forced departure in the be made public at the time it is set, even in the case of payment by event of serious misconduct or gross misconduct and in the event of non- installments or deferred payment. renewal of the Executive Board member’s term of office or resignation. Severance package The amount of the non-statutory severance provided will be limited to two years of the last fixed and variable annual compensation For Jean-Marc Jestin: On February 2, 2017, the Supervisory Board received in his capacity as Executive Board member (less any authorized the establishment of a compensation mechanism in the event amount paid for any legally mandated severance or severance due of Jean-Marc Jestin’s forced departure from Klépierre. This mechanism under a collective bargaining agreement that Jean-Michel Gault was approved by the General Meeting of April 18, 2017 (5th resolution). may otherwise receive under his employment contract). Jean-Michel The forced departure cases eligible for the compensation mechanism Gault’s agreement not to claim severance in an amount exceeding include all forced departure cases except for forced departure in the two years of the last fixed and variable annual compensation received event of serious misconduct or gross misconduct and in the event of in his capacity as an Executive Board member (including for the non-renewal of the Executive Board member’s term of office. termination of his employment contract) allows the Company to contain the indemnification risk linked to any termination of the latter’s In the event of Jean-Marc Jestin’s forced departure, he could, pursuant employment contract, by limiting the indemnification to two years to this mechanism, receive severance payment in an initial amount of under all circumstances. Note that on the date of this registration one year’s annual compensation, calculated by reference to the last document, the amount of severance due under a collective bargaining fixed and variable compensation paid as at the date of termination; agreement to which Jean-Michel Gault may be entitled in case of on the understanding that this initial amount will be liable to increase the termination of his employment contract represents €551,395, i.e., on a linear basis according to Jean-Marc Jestin’s length of service as 7.3 months of his fixed and variable compensation due for fiscal year a corporate officer (on a basis of one month per one additional year 2017. of service with effect from January 1, 2017), subject to a maximum of Signing this amendment did not lead to any payment in favor of two years’ compensation, in accordance with the AFEP-MEDEF Code. Jean-Michel Gault. In terms of performance conditions, severance payment may only be The payment of the non-statutory severance will be moreover subject paid in the event that: to the achievement of the same performance conditions as applicable > in at least two of the three full fiscal years preceding the year of to Jean-Marc Jestin. termination of his term of office, Jean-Marc Jestin received or is Finally, in accordance with the AFEP-MEDEF Code, no severance will entitled to receive overall variable annual compensation (that is to be owed if the beneficiary is entitled to full retirement benefits, within say quantitative + qualitative) representing a sum equal to at least six months after termination of his functions. 90% of his fixed compensation (the maximum being 130%); and > the quantitative part of the variable annual compensation must, Any severance for the termination of the position of a future Chairman as a minimum, have been paid in an amount equal to the target or member of the Executive Board will be calculated in accordance in the two fiscal years taken into account for the purposes of with Article L. 225-90-1 of the French Commercial Code and may not consideration of the foregoing condition. For information, the net exceed two years of the last fixed and variable compensation paid to current cash flow per share target for fiscal year 2018 (leading to said corporate officer. a qualitative variable compensation of 55%) is €2.59. Exceptional compensation Finally, in accordance with the AFEP-MEDEF Code, no severance will The distribution of exceptional compensation is not part of the be owed if the beneficiary is entitled to retirement benefits under a general compensation policy except in very specific circumstances, supplementary pension plan, within six months after termination of in compliance with Article 24.3.4 of the AFEP-MEDEF Code. his functions. In compliance with Article L. 225-82-2 of the French Commercial Code, if it is decided to grant this compensation, its payment will, in any case, be subject to prior approval by the General Meeting. For 2018, no exceptional compensation will be paid to Executive Board members. KLÉPIERRE 2017 REGISTRATION DOCUMENT 251