HERMÈS - 2018 Registration document

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Corporate Governance

Other information from the executive management's report

STATEMENTS BY CORPORATE OFFICERS

The total number of free shares awarded under each of these delega- tions and the total number of stock options granted and not yet exercised are limited to 2% of the number of shares in the Company on the day of allocation, without taking into account those already granted under previous delegations. These delegations were not used in 2018. In table 9.1 on page 200, you will find details of free share allocation plan conditions (and, in particu- lar, vesting periods, holding periods and the application of performance conditions, where applicable) and, in table 9.2 on page 201, details of the free shares granted to the top 10 employee beneficiaries who are not Corporate Officers. In accordance with Articles L. 225-197-1 et seq. of the French Commercial Code, these allocations are always contingent on presence conditions and, for certain plans, also on performance conditions. With the aim of building long-term loyalty, the 2007, 2010 and 2012 plans were associated with a vesting period of four years for participants resi- ding in France and six years for participants abroad, and a mandatory lock-up period of the shares thus acquired of two years for participants resident in France. To harmonise the vesting conditions, the free shares allocated by ExecutiveManagement in 2016were accompanied by iden- tical vesting periods for Group employees in France and internationally. In line with its long-term strategy, the Executive Management has set the vesting periods for these awards at four and five years respectively. However, as permitted by applicable law (Article L. 225‑197-1 et seq. of the French Commercial Code) and in accordance with the 15th resolu- tion of the Combined General Meeting of 31 May 2016 (see p.140 of the 2016 registration document), no lock-up period was established, leaving each beneficiary employee free to decide how long to hold the shares acquired. Bonus share allocations do not dilute the share capital because they consist exclusively of existing shares in the Company. Their value at the allocation date, calculated according to the method used for the conso- lidated financial statements, is shown in the notes to the consolidated financial statements (Note 31, page 285). Stock purchase options TheExecutiveManagement was authorisedby theExtraordinaryGeneral Meeting to grant stock options to certain employees and Corporate Officers of the Company and of affiliated companies. These delegations of authority were not used in 2018. As shown in the table on page 199, no stock option plans existed at 31 December 2018. Stock subscription options All subscription option plans lapsed in 2009. No authorisation from the General Meeting allows theExecutiveManagement to grant subscription options. 3.3.3.3 3.3.3.4

3.3.2

According to the statements made to the Company by the Corporate Officers: s s no Corporate Officer was convicted of fraud in the last five years; s s no Corporate Officer was involved in any bankruptcy, sequestration or liquidation in the last five years in their capacity as a member of an administrative, management or supervisory body or as an Executive Vice-President; s s no Corporate Officer was barred by a court from acting as a member of an administrative, management or supervisory body of a listed company or from participating in the management or conducting the business of a listed company in the last five years; s s no Corporate Officer was accused or penalised in a court of law by a statutory or regulatory authority (including designated professional bodies).

ALLOCATION OF FREE SHARES AND STOCK OPTIONS

3.3.3

General free share and stock option allocation policies

3.3.3.1

Allocations of stock options and free allocations of shares form part of the Hermès Group’s long-term compensation and loyalty policy. Such allocations have historically been made on a multiyear basis (see com- ments below on the plans in force); they are exceptional and their bene- fits have always extended beyond the Corporate Officers and Senior Executives of the Group. Additional information on free share awards carried out by the Hermès Group and on the general long-term compensation policy and other ini- tiatives involving employees in theGroup’s performance are described in the section on “Corporate social responsibility information” on pages 76 and 77. Free share allocation plans in effect In accordance with Article L. 225-197-4 of the French Commercial Code, we hereby report to you on free shares granted in 2018. Executive Management was authorised by the Extraordinary General Meeting of 31May 2016 toaward free shares, ononeormoreoccasions, to some or all employees and/or Senior Executives of the Company or of affiliated companies, by granting existing shares in the Company for no consideration. The conditions of delegations of authority still in force are shown on pages 203 to 206. 3.3.3.2

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL