SOLOCAL_Registration Document_2017

RISK FACTORS 2.3 Legal Proceedings

based on a prudent assumption in a context of great legal uncertainty, increased recently by conflicting decisions of Employment Tribunals. As at 31 March 2018, the provision remaining in the accounts was €21.8 million. The Company continued to roll out its reorganisation plan and in 2016 launched a new PSE procedure for employees who could not be made redundant during the previous procedure because of it having been deemed invalid. A claim for damage caused by the State to PagesJaunes due to the erroneous validation of its employment protection plan is in progress. Initially, PagesJaunes made a request to the French state for damages with regard to the harm resulting from the payment of compensation after the ruling of the Regional Directorate for Enterprises, Competition Policy, Consumer Affairs, Labour and Employment was overturned, before bringing the case before the Administrative Court of Cergy-Pontoise in July 2017 to obtain a ruling compelling the French state to pay this sum. PagesJaunes has been sued by a former distributor for the sudden termination of commercial relations. The Company, which formally challenges all the applications submitted, recorded in its 2016 financial statements a provision according to the requirements and the criteria usually adopted. In 2016, PagesJaunes was the subject of an inspection by URSSAF (the French social security contribution collection agency) in respect of the 2013, 2014 and 2015 financial years. In particular, the Company has been notified of an adjustment of €2.0 million relating to the amount of employer contributions concerning bonus shares (AGA). Contesting this adjustment, the risk was provisioned as at 31 December 2016. On 14 November 2017, the Company submitted an appeal to the Bobigny Court of Social Security Affairs concerning the decision to maintain the adjustment, made by the URSSAF Ile de France Amicable Settlement Commission on 11 September 2017. The decision must be rendered in 2018. The relevant entities of the Group referred the matter to the URSSAF Amicable Settlement Commission on 28 March 2017, in the event of the priority issues of constitutionality, No. 2017-627 QPC and 2017-628 QPC concerning the employer contribution paid in respect of the unvested bonus shares, giving rise to a decision of unconstitutionality, in order to obtain the reimbursement of the employer contributions provided for by Article L. 137-13 of the Social Security Code which were paid in respect of bonus shares granted in 2014 and 2015. On 28 April 2017, the Council validated the constitutionality of the text but provided a reservation of interpretation stating that “the disputed provisions cannot prevent the return of this contribution when the conditions under which the allocation of bonus shares was dependent are not satisfied". Having ongoing procedures should allow the Group’s companies to be reimbursed for the 2014 and 2015 amounts (including adjusted amounts). Due to the fact that the 2014 and 2015 plans have not yet expired (19 June 2018 and 9 February 2019), only the amounts relating to employees who left the Group (€3.3 million) can be reimbursed to date. The employer’s contribution, claimed by URSSAF, was settled on 12 January 2017, with the provision being recorded in the financial statements as at 31 December 2017. URSSAF refused to make any repayments before the expiry of the plans for certain Group companies. The Group has therefore

During 2013, PagesJaunes had to be reorganised once again in order to guarantee its sustainability faced with a constantly changing and highly competitive professional environment. A project on changes to the model and the organisation of PagesJaunes was presented to the employee representation bodies concerned in September 2013. At the same time, the Management negotiated with the trade unions a majority agreement on employee support measures. This agreement was signed on 20 November 2013. Following completion of these negotiations with the employee representatives, this plan provided for restructuring combined with changes in the employment contracts of the whole sales force, and a plan with no compulsory redundancies which would ultimately create 48 additional jobs within the Company. This agreement received validation via a ruling of the DIRECCTE on 2 January 2014. 311 employees refused to change their employment contract related to the reorganisation implemented at the end of 2013, 280 of them being made redundant. One employee of the Company decided to dispute the decision to validate the collective agreement relating to the employment protection plan before the administrative courts. The Administrative Court of Appeal of Versailles, in a judgment of 22 October 2014 notified the following 5 November, overruled the validation decision rendered by DIRECCTE. On 22 July 2015, the Council of State rejected the appeal of the PagesJaunes and the Minister of Employment. As a result, multiple proceedings have been instituted before administrative and ordinary courts. The proceedings brought before the administrative courts are now finished. With regard to the proceedings before the ordinary courts, more than 200 legal proceedings were brought before Employment Tribunals by employees invoking the consequences of the overruling of the administrative decision validating the collective agreement relating to the employment protection plan by the Versailles Administrative Court of Appeal which enables them to claim compensation. As of the date of this document, 177 decisions have been rendered on the merits. The vast majority of these decisions reject the claims for the nullity of the redundancy and the consequential consequences of the redundancies and find that the redundancies are based on a genuine and serious cause and reject the claims seeking to call into question said redundancies (in particular no Employment Tribunal has so far invalidated the reason for employees being made redundant) but sentenced the Group to make payments on the basis of Article L. 1235-16 of the Employment Code at a level close to the compensatory ceiling provided by this text that is to say between six and seven months’ salary. In addition, some decisions grant ancillary applications: some relating to specific situations (contestation of the duration or conditions of execution of their reclassification leave, requests for backpay of commission for periods dating back prior to the plan), others relate to the payment of a sum in addition to the amount of the severance pay allowed for under the relevant collective agreement, paid at the time of the full and final settlement and a few different positions. The remaining substantive proceedings still in progress will be pleaded in 2018. Finally, a number of cases are also being appealed at the initiative of PagesJaunes or the employees. In the consolidated financial statements for 2015, the Company recognised the exceptional impact of the legal decisions overruling DIRECCTE’s ratification of the employment protection plan. This additional provision amounted to €35 million and is posted in the consolidated financial statements as at 31 December 2015. It was

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2017 Registration Document SOLOCAL