BIC - 2019 Universal Registration Document

CORPORATE GOVERNANCE

Corporate Officers’ compensation

Annual variable compensation 4.2.1.2.2 In compliance with the AFEP-MEDEF Code, the Chairman of SOCIÉTÉ BIC is not eligible to receive variable compensation. The annual variable compensation for the Chief Executive Officer and the Executive Vice-President of SOCIÉTÉ BIC is expressed as a percentage of the fixed compensation.

Annual variable part as a percentage of the fixed part, if objectives are 100% achieved

Maximum annual variable part, as a percentage of the fixed part

Position

Chief Executive Officer

125.0%

187.5%

Executive Vice-President and Chief Financial Officer

75.0%

112.5%

The annual bonus for 2020 will be calculated based on four criteria as shown below. There are some important updates versus the criteria that were used for 2019. These updates are made as BIC transforms to strengthen the linkage between company results and bonus payouts. There is a continued emphasis and an explicit focus on Corporate Social Responsibility (CSR) as part of the personal objectives.

Bonus Criteria (all at Group level)

2019

2020

Reasons for Criterion / Weighting

Net Sales

20%

25%

Normalized Income fromOperations

20%

25%

Working Capital (1)

-

20%

Simplify criteria and align with business priorities

Net Income

10%

-

Inventory

10%

-

Receivables

10%

-

Personal Objectives

30%

30%

The Corporate Officers personal objectives include CSR criteria. For 2020 an important component will be related to the execution of the Writing the Future Together Sustainable Development Program.

TOTAL

100% 100%

The annual financial objectives are based on the annual budget approved by the Board of Directors. Each of the financial criteria is accessed separately. For each the threshold for payment is 80% achievement. 4.2.1.2.3 Performance-based share grants to executives and other critical team members are a core element of BIC’s Total Rewards Strategy, aligning compensation with business results and a part of competitive overall compensation. Performance Share Plan

Since 2005, exercising the power placed at its disposal by the Shareholders’ Meeting, the Board of Directors put in place a policy of making share grants where payout is based on performance over a three-year period on results that align the needs of shareholders and our teammembers performance. For the Chief Executive Officer, the Executive Vice-President and Chief Financial Officer, the maximum value at grant that each executive may be allocated is per the table below.

MaximumValue of Performance Shares at Grant Date

Position

Chief Executive Officer

2,000,000 euros

Executive Vice-President and Chief Financial Officer

800,000 euros

The total number of shares under awards granted to the Corporate Officers will not exceed 0.4% of the share capital as of the date of the decision made by the Board of Directors to grant the shares. Performance is assessed according to the achievement of two objectives:

net sales growth on a comparable basis, aligned; ● net cash flow from operations and change in inventory, as a ● percentage of net sales, consistent with Group’s focus on Net Cash Generation.

Working capital: average trade receivables + average inventory - average trade payables (1)

152

• BIC GROUP - 2019 UNIVERSAL REGISTRATION DOCUMENT •