AIRBUS - 2019 Registration Document

REGISTRATION DOCUMENT 2018

Corporate Governance  /   4.2 Interests of Directors and Principal Executive Officers

Individual Component The individual element (“Individual Component”) focuses on Outcomes and Behaviour (as defined below). Individual performance is assessed in these two important dimensions:

- - Outcomes encompass various aspects of what the CEO can do to contribute to the success of the business: specific business results he helps achieve, projects he drives and processes he helps improve. The individual targets of the CEO are comprehensive and shared with all employees via the 2018 Company Priorities;

- - Behaviour refers to the way results have been achieved, which is also critical for long-term success: how the CEO and the Board of Directors work as a team, how the CEO leads the Executive Committee, quality of communication, encouragement of innovation, etc. A specific part of the behaviour assessment relates to ethics, R&S and quality issues.

e) Long-Term Incentive Plan There are two types of Long-Term Incentive Plans (“Long-Term Incentive Plans” or “LTIP”): until 2015, LTIP was made up of Performance Units (“Performance Units” or “Units”) only. Since 2016, following the approval of amendments by shareholders at 2016 AGM, the LTIP has been composed of a mix of Performance Units and Performance Shares (“Performance Shares” or “Shares”). The value of the CEO’s LTIP allocation is capped as a percentage of the Base Salary at the date of grant and subject to performance conditions. The achievement of the performance criteria is assessed over a three-year period based on relevant financial criteria with stringent targets set in advance and agreed by the Board of Directors, as demonstrated by past Company practices. Both Performance Units and Performance Shares that vest can vary between 0% and 150% of the Units and Shares granted, subject to cumulative performance over a three-year period. The level of vesting is subject to the following performance measures: - - 0-50% of the allocation: In principle, this element of the Performance Unit/Share award will not vest if the Company reports negative cumulated EBIT results. Nonetheless, in case the Company’s EBIT results are impacted by exceptional and unpredictable circumstances, the Board of Directors, upon recommendation of the RNGC, may decide that a maximum portion of 50% of the allocation will vest; - - 50-150% of the allocation: This element of the Performance Unit/Shares vests based on the two following performance criteria: average earnings per share (75%) (“Earnings Per Share” or “EPS”) and cumulative Free Cash Flow (25%). Before the 2013 plan, it used to vest according to one performance criteria only: average Earnings Per Share .

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Earnings per Share Average over 3 years

Measures cash generation Driven by cash provided by/used for operating and investment activities Free cash Flow Cumulated over 3 years, M€

Measures profitability Driven by net income and number of shares

For reasons of confidentiality, the precise targets set for the average EPS and cumulative Free Cash Flow, even though they have been properly established in a precise manner, cannot be publicly disclosed as these objectives are in part linked to the Company’s strategy. Nonetheless, for the sake of transparency and to ensure compliance with best market practices, retrospective information demonstrating the stringency of the targets set by the Board of Directors is provided for the previous Long-Term Incentive Plans. The vesting of Performance Units and Shares is subject to the following maximum cap: - - the maximum level of vesting is 150% of the number of Units/Shares granted. The vesting of Performance Units is subject to the following maximum caps: - - the value that could result from share price increases is capped at 200% of the reference share price at the date of grant; - - the overall pay-out is capped at 250% of the value at the date of grant

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Airbus / Registration Document 2018