BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Consolidated financial statements

Plan characteristics 18-1 Types of post-employment benefits and other long-term benefits Pursuant to the laws and practices in force in the countries where it operates, the Group has obligations in terms of employee benefits, in particular post-employment benefits: In the U.S. ● Two pension plans (“Salaried Pension Plan” and “Local 134L Pension Plan”) are effective (depending on the site) and are funded by their respective pension funds. In addition to these plans, medical and life insurance plans exist (“Salaried Retiree Medical and Life Insurance Plan” and “Local 134L Retiree Medical and Life Insurance Plan” depending on the site): Salaried Pension Plan a) Beneficiaries hired prior to 2007 accrue retirement benefits under a final average pay formula that reflects years of service, average pay, and is integrated with Social Security retirement benefits. The formula provides for a life annuity, payable at normal retirement age (65), equal to 1.1% of average pay up to the average Social Security wage base multiplied by the number of years of service, which may not exceed 35 years plus 1.5% of average pay in excess of the average Social Security wage base, multiplied by the number of years of service, which may not exceed 35 years, plus 1.4% of average pay per year of service in excess of 35 years. (Average pay is based on the highest three consecutive years within the last 10 years). In addition, the Plan provides reduced early retirement benefits for beneficiaries prior to age 65 (or age 62 if they retire at or after age 55 with 10 or more years of service). Eligible beneficiaries who terminate employment after January 1, 2015 are eligible for a lump sum payment from the plan. Employees hired after 2006 accrue benefits under a Cash Balance Arrangement. These participants receive annual credits of 5% of their year’s pay for plan years before January 1, 2013, and for plan years after December 31, 2012, eligible beneficiaries receive annual credits of 5% for less than five years of service, 6% for at least five but less than 10 years of service, 7% for at least 10 but less than 15 years of service, 7.5% for at least 15 but less than 20 years of service and 8% for 20 or more years of service, which are accumulated with guaranteed interest equal to 30-year Treasury rates, to retirement. Participation in this plan is closed for BIC Graphic employees hired after January 1, 2011. The Plan is 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 Plan’s liability. The Plan’s assets are invested in the BIC Corporation Master Trust - with a target asset allocation of 32.5% U.S. equity, 5% global low volatility equity, 12.5% non-U.S. equity, and 50% fixed income. Local 134L Pension Plan b) For beneficiaries hired before December 4, 2007, benefits under the Plan are based on a participant’s years of service multiplied

by a fixed set amount (40.75 U.S. dollars per month for 2013, increasing by 1 U.S. dollar each year until 2017). Employees hired after December 4, 2007 accrue benefits under a Cash Balance Arrangement. These participants receive annual credits equal to 3.00% of pay through November 30, 2012, and 3.75% of pay beginning on December 1, 2012, which are accumulated with interest, equal to 30-year Treasury rates, to retirement. 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 13.6% U.S. equity, 1.8% global low volatility equity, 4.6% 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 January 1, 2011 post- retirement medical coverage was eliminated for BIC Graphic employees who were not at least age 50 with 15 or more years of service at December 31, 2010. 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 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. BIC Graphic employees hired after January 1, 2011 are no longer eligible for retiree life insurance. The benefit is equal to 100% of final salary with a cap ranging from 10,000 U.S. dollars for 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. Retiree life insurance benefits are 11,500 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 - 2017 REGISTRATION DOCUMENT