In the event of termination of his suspended employment contract during the exercise of the term of corporate office, and depending on the reasons for such termination, Nicolas Hieronimus would only be paid termination indemnities, except in the event of gross misconduct or gross negligence, or retirement indemnities in the event of voluntary retirement or at the Company's request pursuant to the suspended employment contract.
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 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 Nicolas 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.
In accordance with the AFEP-MEDEF Code, the aggregate amount of the contractual severance payment and the non-compete indemnity that would be due to Nicolas Hieronimus if his employment contract were terminated for any reason other than gross misconduct or gross negligence, would not exceed a sum equivalent to 24 months of his annual fixed and annual variable remuneration.
Nicolas Hieronimus will continue to benefit, under his suspended employment contract during the exercise of the corporate office, from a defined benefit pension scheme with non-vested rights, and not with vested rights.
This is the Retirement Income Guarantee for Former Senior Executives scheme (Garantie de Ressources des Retraités Anciens Cadres Dirigeants), which has been closed to new members effective from 31 December 2015. This is a non‑vested rights scheme, therefore Nicolas Hieronimus will only be eligible for the amounts accrued if he stays with the Company until the end of his career.
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 pension 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 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 pension amount to be paid to Nicolas Hieronimus after 38 years of service within L'Oréal, under L'Oréal's Retirement Income Guarantee for Former Senior Executives scheme (Garantie de Ressources des Retraités Anciens Cadres Dirigeants), had he been able to liquidate on 31 December 2025 his full-rate pension rights under French Social Security, would represent €1.72 million.
This information is given as an indication after estimating the main pension rights accrued by Nicolas Hieronimus as a result of his professional activities, according to the rules for payment of such pensions in force at 31 December 2025, which may be subject to change. The amount of the pension paid to Nicolas Hieronimus under L'Oréal's income guarantee for senior executives (Garantie de Ressources Dirigeants) 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.
