BIC_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE Corporate Officers’ compensation

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

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

Position

Non-executive Chairman

0.0%

0.0%

Chief Executive Officer

85.0% - 125.0%

127.5% - 187.5%

Group Executive Vice-President and Chief Operating Officer Group Executive Vice-President and Chief Financial Officer Other Executive Vice-President

85.0%

127.5%

75.0%

112.5%

45.0% - 55.0%

67.5% - 82.5%

The annual bonus is calculated based on six criteria: 20%: Group/Categories and/or geographical area Net Sales; ● 20%: Group/Categories Income from Operations; ● 10%: Group Net Income; ● 10%: Group/Categories Inventory; ● 10%: Group/geographical area Accounts Receivable; ● 30%: Individual Objectives and overall performance. ● The annual financial objectives are based on the annual budget approved by the Audit Committee. As a minimum, they are equivalent to the targets communicated externally.

At the end of the fiscal year, the individual and collective results are evaluated against the bonus criteria. No remuneration is paid if the percentage of achievement of the objective is inferior to 80%. 3.2.1.2.3. Performance Share Plan Free grant of performance shares since 2005 From 2005, exercising the power placed at its disposal by the Shareholders’ Meeting, the Board of Directors decided, upon the recommendation of the Compensation Committee, to put in place a policy of three-year performance-based free share grants. The number of granted shares varies based on the level of responsibilities of each position. At most, each executive may be allocated a number of shares as shown in the table below:

Position

Maximum

Chairman

-

Chief Executive Officer

27,000 18,000 12,000

Group Executive Vice-President and Chief Operating Officer Group Executive Vice-President and Chief Financial Officer

Other Executive Vice-President

5,000

No grant of stock options since 2011 As part of a policy recommended by the Compensation Committee, since 2011, the Board of Directors has decided to no longer award stock options and to replace them with free share grants. 3.2.1.2.4. Supplementary pension plans The Chairman, the Chief Executive Officer and the Executive Vice-Presidents of SOCIÉTÉ BIC benefit from supplementary pension plans as presented in detail in section 3.2.2.8. below. 3.2.1.2.5. Benefits in kind In the course of their regular duties, the Chairman, Chief Executive Officer and Executive Vice-Presidents may benefit from a company car (for Executive Corporate Officers based in France) or a car allowance (for Executive Corporate Officers based in the United States). 3.2.1.2.6. Termination Payment and Sign-on Bonus No Corporate Officer has received a Termination Payment or Sign-on Bonus. However, the Board reserves the right to make provision for Sign-on payments, in consideration of the personal situation of the person concerned when externally recruited (change in status, termination of an employment contract)

The total number of shares 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 at constant basis; ● net cash flow from operations and change in inventory, as a ● percentage of net sales. If the average percentage for the achievement of the two performance conditions is between 75% and 100%, and for each percent below 100%, the number of shares actually given to each beneficiary on the vesting date will be reduced by 2% compared to the initial grant. If the average percentage for the achievement of the two objectives is less than 75%, no shares will be given. BIC Corporate Officers are required to keep 20% of free shares given, until their mandate expires. The 20% requirement is reduced to 10% when the Chief Executive Officer owns five years of base compensation in BIC shares and when the Executive Vice-Presidents own three years of base compensation in BIC shares.

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BIC GROUP - 2017 REGISTRATION DOCUMENT