BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

In the United Kingdom ● There is a closed defined-benefit plan for a specified list of beneficiaries (plan closed to new entrants) and closed to the acquisition of further rights. An independent professional Trustee, an employer-representative Trustee and an employee-representative Trustee oversee the governance of the scheme. Plan assets are currently invested in a portfolio of stocks, bonds and real estate. Asset allocation is reviewed regularly to ensure that the assets held are still appropriate and sufficient to cover future pension obligations. Both schemes are subject to the same risks as the majority of final salary occupational pension schemes, i.e. inflation risks, investment risks, life expectancy risks, etc. The strategic asset allocation must comply with the investment guidelines laid out in the “Statement of Investment Principles” set up by the Trustee to limit the risks. In France ● Retirement indemnities are mandatory in France. The rights granted (expressed in months of salary) are determined by the national collective agreement for companies and on the employee’s seniority at retirement date. The benefit payment is subject to the employee working for the Company when he/she retires. The defined-benefit supplementary pension plan provides a percentage of the final salary for each year of service to senior managers working for BIC’s French companies. There is a ceiling applied to the pension benefits. The benefits are vested only if the beneficiary is working for the Company when he/she retires. In Canada ● The Plan is funded chiefly through employer contributions and investment earnings on Plan assets. Prior to 1992, beneficiaries were required to contribute to the Plan, however since January 1, 1992; they are no longer required or permitted to make contributions to the Plan. BIC Inc. contributions to the Plan comply with the minimum funding requirements of the “Pensions Benefits Act of Ontario”. The Pension fund set up to finance the retirement scheme for employees of BIC Inc. is held by an Independent Trust in the interests of beneficiaries. This fund is not part of the income or assets of BIC Inc. This Plan is closed to new employees hired after November 14, 2011. For hourly paid employees, the retirement benefit is defined as a fixed amount per year of service, whose value varies according to the date on which the beneficiary retires (400 CAD per year for retirement after January 1, 2010). For employees receiving a regular salary, the formula for calculating the retirement benefit is 1.5% of final average salary per year of service (the calculation of the final average salary is based on the highest three consecutive years out of the last 10 years preceding retirement). The total benefit under the Plan is capped by the limits imposed by the Income Tax Act in Canada. The normal retirement age is 65, however beneficiaries can retire from age 55, with a reduced benefit for early retirement. The benefit is unreduced at age 63 for members who commence their pension immediately following termination of employment.

In 2018, a Voluntary Retirement Package (VRP) was offered to twenty-seven eligible employees who were age 63 or older adding an enhancement of an additional two years to age and two years to service. Eighteen employees accepted the voluntary package and retired on September 1, 2018. These two schemes are subject to minimum funding requirements under U.S. law. The long-term objective of the Plan’s investment policy is to provide sufficient funding to cover expected benefit obligations, while assuming a prudent level of portfolio risk relative to the liability. The Plan’s assets are invested in the BIC Corporation Master Trust – with a target asset allocation of 9% U.S. equity, 2% global low volatility equity, 9% non-U.S. equity, and 80% fixed income. Salaried Retiree Medical and Life Insurance Plan c) Employees hired prior to 2007 are eligible to receive medical coverage if they are at least age 55 and have 20 or more years of service at retirement. The Plan is closed to new employees. Effective October 1, 2013, as part of an exchange, certain covered retirees and future retirees, age 65 and over, will receive a fixed payment of 3,500 U.S. dollars annually to purchase retiree medical coverage. This amount was increased to 4,020 on January 1, 2019. This benefit will be reviewed in the future to reflect the upward trends in healthcare costs. Retiree life insurance is available to employees who retire at or after age 55 with 10 or more years of service. Employees hired on or after January 1, 2018 are no longer eligible for this benefit. The benefit is equal to 100% of final salary with a cap ranging from 10,000 U.S. dollars for non-managerial employees to 100,000 U.S. dollars for BIC Level 4s and above. The Plan does not have any assets. Local 134L Retiree Medical and Life Insurance Plan d) Employees who retire at or after age 60 with 10 or more years of service are eligible to receive medical and life insurance coverage. Retirees prior to December 1, 2002 receive fixed annual payments ranging from 2,600 U.S. dollars to 3,500 U.S. dollars to purchase retiree medical coverage. Post-age 65 retirees who retire on or after December 1, 2002, receive a fixed annual payment of 900 U.S. dollars to purchase prescription drugs. The amounts will be reviewed in the future to reflect the upward trends in healthcare costs. The Plan is closed to new employees hired after November 30, 2012. Pre- age 65 eligible retirees and spouses, BIC pays 50% and the retiree pays 50% of the premium for the coverage in effect at the time of retirement. In 2018, employees hired before November 30, 2012 and under the age of 65 who accepted the Voluntary Retirement Package (VRP) received an enhanced retiree health benefit providing the retiree and spouse (if applicable) medical, prescription and dental benefits payable at the active employee contribution rates until age 65. Retiree life insurance benefits are 12,000 U.S. dollars for employees who retire on or after December 1, 2017 and will increase by 500 U.S. dollars on December 1, 2019. The Plan does not have any assets.

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• BIC GROUP - 2018 REGISTRATION DOCUMENT •