SHARE CAPITAL, SHAREHOLDING, GENERAL MEETING OF SHAREHOLDERS 6General Meeting of Shareholders 6.2.3 Report of the Supervisory Board to the Ordinary and Extraordinary General Meeting Approval of the financial statements for the fiscal We have no particular observations to make as regards the Executive year ended December 31, 2017 Board’s report or the parent company and consolidated financial statements for the fiscal year ended December 31, 2017. We therefore Dear Shareholders, invite you to approve these parent company and consolidated Pursuant to the provisions of Article L. 225-68 of the French financial statements for the fiscal year ended December 31, 2017 and Commercial Code, we are required to report our observations on the all of the proposed resolutions. financial statements as approved by the Executive Board and on the We wish to thank the Executive Board and all members of staff for Executive Board’s report submitted to you. their hard work and effort in 2017. The Supervisory Board has been kept regularly informed by the The Supervisory Board Executive Board about the operations and business of the Company and its Group, and has carried out the necessary audits and controls in the performance of its duties. The Supervisory Board is assisted in these duties by its special committees: the Investment Committee, the Audit Committee, the Nomination and Compensation Committee and the Sustainable Development Committee. 6.2.4 Description of the treasury share buyback program In compliance with Articles 241-1 et seq. of the General Regulation of 4. Objectives of the 2018 Share Buyback Program the French Financial Markets Authority (AMF), this section presents the share buyback program that will be submitted to a vote at the The objectives of the 2018 Share Buyback Program are the following: Ordinary and Extraordinary General Meeting of Shareholders on > to stimulate the secondary market in or liquidity of Klépierre April 24, 2018 (“the 2018 Share Buyback Program”). shares through an investment services provider in the context of a liquidity agreement complying with a Code of Conduct recognized 1. Date of the General Meeting of Shareholders by the French Financial Markets Authority; or called to approve the 2018 Share Buyback > to deliver shares (by way of exchange, payment or otherwise) Program in the context of acquisition, merger, spin-off or asset transfer April 24, 2018. transactions; or > to allocate bonus shares in accordance with the provisions of 2. Shares held by the Company as of February 28, 2018 Articles L. 225-197-1 et seq. of the French Commercial Code; or > to allocate or sell shares to the employees in relation to employee As of February 28, 2018, Klépierre directly or indirectly holds profit-sharing or the implementation of any employee savings plan 13,706,590 shares, representing 4.36% of its share capital for an overall under the conditions provided by law, and in particular Articles amount of 470,513,859.22 (at book value). L. 3332-1 et seq. of the French Labor Code, by selling shares This information, and that which follows, takes into account the total purchased in advance by the Company under the sixteenth number of shares that comprise the share capital of the Company as resolution presented at the Ordinary General Meeting of April 19, of February 28, 2018, i.e., 314,356,053 shares. 2016 or by making provision for a bonus allocation of those shares by way of a Company contribution in the form of the Company’s 3. Breakdown by objective of shares held securities and/or by way of replacement of the discount; or by Klépierre as of February 28, 2018 > to implement any Company stock purchase option plan in accordance with the provisions of Articles L. 225-177 et seq. of As of February 28, 2018: the French Commercial Code, or any similar plan; or > 2,251,832 shares are allocated to any stock purchase option plans > in general, to honor obligations associated with stock option the Company offers and to the award of bonus shares; and programs or other allocations of shares to the employees or > 267,894 shares are allocated for use in connection with the liquidity executive officers of the issuer or of an associated company; or agreement signed with Exane BNP Paribas in September 2005, > to deliver shares upon the exercise of rights attached to negotiable in accordance with market practices accepted by the French securities giving access to the capital by way of repayment, conversion, Financial Markets Authority (AMF) and the French Association exchange, presentation of a warrant or in any other way; or of Investment Firms (AFEI)’s Ethics Charter for such agreements, > to cancel all or part of the securities purchased in this way. authorizing their purchase, sale, conversion, disposal, transfer, loan, or making available, among other things, to stimulate trading in the market or counter adverse trends; > 11,186,864 shares are allocated for cancellation. 290 KLÉPIERRE 2017 REGISTRATION DOCUMENT