These indemnities, which are attached solely to termination of the employment contract and in strict application of the National Collective Bargaining Agreement for the Chemical Industries (Convention Collective Nationale des Industries Chimiques) and the company level agreements applicable to all L’Oréal managers, are automatically due pursuant to the public policy rules of French labour law. They are not subject to any condition other than those provided for by the National Collective Bargaining Agreement for the Chemical Industries or the above mentioned Company-level agreements. The same applies to the non compete clause and the related financial consideration.
Pursuant to the scale of indemnities under the National Collective Bargaining Agreement for the Chemical Industries, in the event of dismissal, except in the event of gross misconduct or gross negligence, the indemnity would be capped, in light of Mr Nicolas Hieronimus’ length of service, at 20 months’ remuneration under the suspended employment contract.
In respect of the employment contract, pursuant to the provisions of the National Collective Bargaining Agreement for the Chemical Industries and in the event of termination of the employment contract, the indemnity due in consideration of the non-compete clause would be payable monthly for two years on the basis of two thirds of the monthly fixed remuneration attached to the suspended employment contract unless Mr Hieronimus were to be released from application of the clause. This clause does not apply in the event of voluntary retirement or compulsory retirement on the Company’s initiative: no consideration for non competition would be paid in such a situation.
3) Defined benefit pension scheme
Mr Nicolas Hieronimus will continue to benefit, under his suspended employment contract during the exercise of the corporate office, from the “Garantie de Ressources des Retraites Anciens Cadres Dirigeants” (Retirement Income Guarantee for Former Senior Managers) scheme closed to new members effective from 31 December 2015. The income guarantee is calculated on the basis of the number of years of professional service in the Company up to 31 December 2019, up to a limit of 25 years. Generally, after 31 December 2019, no new rights are granted under this scheme, pursuant to French Order no. 2019-697 of 3 July 2019 concerning supplementary professional retirement schemes, which stipulated the closure of all defined benefit schemes governed by Article L. 137-11 of the French Social Security Code.
The main features of this scheme are as follows:
The pension rights of Mr Nicolas Hieronimus are no longer likely to change insofar as he has more than 25 years of service, the ceiling above which no additional annuity is granted under this scheme. For information purposes, the gross estimated amount of the pension that would be paid to Mr Nicolas Hieronimus, under L’Oréal’s “Garantie de Ressources des Retraités Anciens Cadres Dirigeants” (Retirement Income Guarantee for Former Senior Managers) scheme, had he been able to liquidate on 31 December 2023 his full rate pension rights under French Social Security, after 36 years of service within L’Oréal, would represent €1.68 million.
This information is given as an indication after estimating themain pension rights accrued by Mr Nicolas Hieronimus as a result of his professional activities, according to the rules for payment of such pensions in force at 31 December 2023, which may be subject to change. The amount of the pension paid to Mr Nicolas Hieronimus under L’Oréal’s “Garantie de Ressources Dirigeants” (income guarantee for senior managers) will only be calculated on the date when he applies for all his pensions.
As a reminder, the rights to the defined benefit pension are uncertain and conditional on the completion of the beneficiary’s career in the Company. The financing of this scheme by L’Oréal cannot be broken down individually by employee.
Mr Jean-Paul Agon notified the Company of the termination of his employment contract on 30 April 2021, in order to be able to draw his retirement benefits as from 1 May 2021, after a 42 year career with the organisation. Under his suspended employment contract, Mr Jean-Paul Agon is entitled to draw the pension cover for members of the Comité de Conjoncture (Garantie de Retraite des Membres du Comité de Conjoncture), a supplementary pension scheme that closed on 31 December 2000.
The annuity entitlement under this scheme was approved, in the context of the related-party agreements procedure, by the Annual General Meeting of 27 April 2010 and by the Annual General Meeting of 17 April 2018. In accordance with the remuneration policy applicable to Mr Jean Paul Agon in his position as Chairman of the Board of Directors, he irrevocably waived his right to receive all retirement annuity arrears resulting from this scheme from 1 May 2021 to 30 April 2024.
Mr Jean Paul Agon informed L’Oréal of his intention to draw this annuity from 1 May 2024.
