SHARE CAPITAL, SHAREHOLDING, GENERAL MEETING OF SHAREHOLDERS Share capital and shareholding 6 6.1.5 Statutory Auditors’ report on related party agreements and commitments This is a translation into English of a report issued in French and it is provided solely for the convenience of English-speaking users. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France. To the Annual General Meeting, In addition, it is specified that, having regard to the automatic In our capacity as Statutory Auditors of your Company, we hereby reactivation of Mr. Jean-Michel GAULT’s employment contract in the report to you on related party agreements and commitments. event of termination of his functions as a corporate officer, he may, in certain circumstances, ask to have his salaried functions terminated The terms of our engagement require us to communicate to you, based within six months of the date of termination of his corporate office. on information provided to us, the principal terms and conditions of those agreements and commitments brought to our attention or which Terms and conditions we may have discovered during the course of our audit, as well as the This non-contractual payment would be subject to the achievement of reasons justifying why they benefit the Company, without expressing performance conditions identical to those applicable to Mr. Jean-Marc an opinion on their usefulness and appropriateness or identifying such JESTIN (Chairman of the Executive Board), and would only be made other agreements and commitments, if any. It is your responsibility, in the event that: pursuant to Article R. 225-58 of the French Commercial Code (Code de commerce), to assess the interest involved in respect of the > in at least two of the three full fiscal years preceding the year of conclusion of these agreements and commitments for the purpose termination of his term of office, Mr. Jean-Michel GAULT received of approving them. or was entitled to receive global variable annual remuneration (that Our role is also to provide you with the information provided for is to say quantitative and qualitative) representing a sum equal in Article R. 225-58 of the French Commercial Code (Code de to at least 90% of his fixed remuneration (the maximum being Commerce) in respect of the performance of the agreements and 130%); and commitments, already authorized by the Annual General Meeting and > the quantitative part of the variable annual representation would having continuing effect during the year, if any. have to be paid, as a minimum, in an amount equal to the target We conducted our procedures in accordance with the professional in the two fiscal years taken into account for the purposes of guidelines of the French Institute of Statutory Auditors (Compagnie consideration of the foregoing condition. nationale des commissaires aux comptes) relating to this engagement. In any event, the amount of the additional termination fee would be These guidelines require that we verify the consistency of the limited to two years of his last fixed and variable annual compensation information provided to us with the relevant source documents. received as a member of the Executive Board (less any amount paid in respect of the legal or contractual compensation to which Mr. Jean- Agreements and commitments submitted Michel GAULT might otherwise be entitled). for approval to the Annual General Meeting Reasons justifying why the Company benefits Agreements and commitments authorized from this agreement during the year Your Supervisory Board gave the following reasons: Pursuant to Article L. 225-88 of the French Commercial Code, the > Your Supervisory Board considers that it is in the interest of following agreements and commitments, previously authorized by Klépierre to proceed with the amendment of Mr. Jean-Michel your Supervisory Board, have been brought to our attention. GAULT’s employment contract, which was currently suspended, in order (i) to record the waiver on his right to claim any 1. With Mr. Jean-Michel GAULT, Executive Board member severance payment higher than two years of his latest fixed and variable annual compensation as Executive Board member Nature and purpose (including as a consequence of the termination of his employment Your Supervisory Board, held on October 19, 2017, on the recommen- agreement) and (ii) to put an additional termination fee in place dation of the Nomination and Compensation Committee (Comité in the event of the forced departure of Mr. Jean-Michel GAULT. des nominations et des rémunérations), decided to amend the These amendments would allow Klépierre to comply with the employment contract of Mr. Jean-Michel GAULT, which was currently expectations of investors and with the Afep-Medef Code, by suspended, to include: capping the amount of the severance payments liable to be due (including in respect of the employment contract) to two years of > a waiver on his right to claim any severance payment higher than gross annual remuneration. 2 years of his latest fixed and variable annual compensation as Executive Board member (including as a consequence of the 2. With Klécar Europe Sud, in which Klépierre termination of his employment agreement); and holds an 83% stake > the principle of an additional termination fee in case of forced Nature and purpose departure from the Group (that is to say, in the event of his revocation as member of the Executive Board and the subsequent Your Supervisory Board, held on December 14, 2017, authorized the termination of his employment contract within one year thereafter acquisition of the entire share capital of Klécar Foncier España SL, a upon Klépierre’s initiative). For the avoidance of doubt, the subsidiary of Klécar Foncier Iberica SL, itself owned by Klécar Europe following would not constitute a forced departure: non-renewal Sud. Klécar Foncier España SL owned the Spanish Meridiano and of his office as a member of the Executive Board, departure due Oviedo assets. to gross or willful misconduct, resignation, or in the event that Mr. Jean-Michel GAULT is entitled to receive full retirement Terms and conditions benefits within six months after termination of his functions or The acquisition of Klécar Foncier España SL by Klépierre is authorized keeps some other functions within the Klépierre Groupe. at a price equal to the NAV of the Company, calculated on the basis of an asset value of €197,21 million (including duties), €191,4 million of which for Meridiano. KLÉPIERRE 2017 REGISTRATION DOCUMENT 279