2 . • the Pension Cover may not exceed 40% of the calculation basis, plus 0.5% per year for the first 20 years, then 1% per year for the following 20 years, nor may it exceed the average of the fixed portion of the remuneration for the three years used as the calculation basis out of the last seven years prior to the end of the beneficiary’s career in the Company. The financing of this pension scheme is outsourced to an insurance institution. The premiums paid are deductible from the corporate income tax and are subject to the employer’s contribution as provided by Article L. 137-11, 2a) of the French Social Security Code at a rate of 24%. The above provisions are subject to the procedure for related- party agreements. The corresponding agreement was approved by the Annual General Meeting on 27  April 2010 making a decision with regard to the Special Report prepared by the Statutory Auditors. The provisions of this agreement remained unchanged within the scope of the appointment of Mr Jean-Paul Agon as Chairman and Chief Executive Officer as from 18 March 2011 and the renewal of his term of office on 17  April 2014 and 17  April 2018. Pursuant to Article  L.   225-40-1 of the French Commercial Code, this agreement was examined by the Board of Directors on 11 February 2021, which confirmed the relevance and terms thereof. The Annual General Meeting of 17 April 2018 approved, pursuant to the old Article L 225-42-1 of the French Commercial Code, the implementation of the provisions of Mr Jean-Paul Agon’s employment contract for the duration of the renewed corporate office, as approved by the Annual General Meeting on 27 April 2010, corresponding to defined benefit pension scheme commitments. The Board of Directors subordinated the increase in conditional rights for the period to the achievement of the performance conditions, assessed in light of the Company’s performance. The increase for a financial year therefore depends on the achievement of at least 80% of the performance targets taken into account to determine the annual variable remuneration of Mr Jean-Paul Agon. If the 80% threshold is not met, no increase will be granted for the financial year in question. Pursuant to the provisions of the agreement to suspend the employment contract on defined benefit pension commitments for the tenure of his new term of office, the Chairman and Chief Executive Officer benefits from: • the calculation basis of the Chairman and Chief Executive Officer’s pension will be revalued according to the salaries and contributions revaluation coefficient for pensions published by the French state pension fund (Caisse Nationale d’Assurance Vieillesse), as set out above; and • secondly, the Chairman and Chief Executive Officer will continue to accrue seniority during the renewed term of his corporate office, up to the date on which he reaches the upper limit of 40 years of service required under the scheme, namely, on 1 September 2018. As a result, no other supplementary annuity could subsequently be granted to him. At its meeting of 11 February 2021, the Board of Directors noted that the performance conditions were fully met. Therefore, the Board decided that the Chairman and Chief Executive Officer benefits from the principle of the revaluation of his pension on the basis of the salaries and contributions revaluation coefficient published by the French State pension system ( Caisse Nationale d’Assurance Vieillesse ) (coefficient equal to 1.004 for 2020). 2.4.3.6. Situation of Mr Jean-Paul Agon as  from 1 May 2021 Mr Jean-Paul Agon notified the company of the termination of his employment contract on 30 April 2021, in order to benefit from his retirement rights as from 1 May 2021, at the end of a 42-year career in the Company. All provisions relating to the retirement of Mr Jean-Paul Agon were approved by the Annual General Meeting on 27 April 2010. • Payment of a retirement indemnity stipulated by the National Collective Bargaining Agreement for the Chemical Industries A retirement indemnity, attached solely to the termination of the employment contract, was paid to Mr Agon over the month of May 2021 in strict application of the public order rules of French Labour law, the National Collective Bargaining Agreement for the Chemical Industries ( Convention Collective Nationale des Industries Chimiques ) and the collective agreements applicable to all L’Oréal’s senior managers. This indemnity was based on the amount of remuneration at the date of suspension of the employment contract in 2006, after applying the revaluation coefficient in respect of salaries and pension contributions published by the French state pension fund ( Caisse Nationale d’Assurance Vieillesse ). As of 1  January  2021, this revalued remuneration amounted to €1,731,000 for fixed remuneration and €1,442,500 for variable remuneration. The retirement indemnity was a gross amount of €2.12 million, representing eight months of the aforementioned revalued remuneration. The implementation of the non-compete clause is not applicable in the event of retirement: no non-compete indemnity will be paid to Mr Jean-Paul Agon. • Liquidation without payment of pension under the “Garantie de Retraite des Membres du Comité de Conjoncture” (Pension Cover of Members of the Comité de Conjoncture) scheme The gross amount of the pension that would be paid to Mr Jean-Paul Agon, under L’Oréal’s “Garantie de Retraite des Membres du Comité de Conjoncture” (Pension Cover of Members of the Comité de Conjoncture) scheme, represents €1.59 million, i.e. around 36% of the fixed and variable remuneration he received as corporate officer. The Board of Directors agreed to Mr Jean-Paul Agon’s wish to waive this supplementary pension during his term of office as Chairman of the Board of Directors so as not to combine it with the remuneration of €1,600,000 proposed by the Board of Directors on 11 February 2021, approved by the Annual General Meeting of 20 April 2021 in the context of the vote on the 14th resolution. The pensions that could have been paid for the period of his office as Chairman will be definitively lost for Mr Jean-Paul Agon without any increase in pension or any other subsequent compensation. 122 L ’ ORÉAL I UNIVERSAL REGISTRATION DOCUMENT 2021 CORPORATE GOVERNANCE Remuneration of directors and corporate officers