Korian: Decision Relating to the Performance Conditions for the Benefit That Would Become Due to Sophie Boissard on the Termination of Her Role as Chief Executive Officer

Regulatory News:

Korian (Paris:KORI):

It may be recalled that during its meeting of 18 November 2015, pursuant to the opinion of the Appointments and Compensation Committee, the Board of Directors authorised the commitments undertaken towards Sophie Boissard in respect of severance payments, in accordance with Article L. 225-42-1 of the French Commercial Code.

In the event of termination or non-renewal of her corporate office (excluding for gross negligence or misconduct) related to a change of strategy or control, Sophie Boissard will receive a severance payment equal to the Annual Base Compensation (as defined below) increased by 25% per year of service, without exceeding twice the Annual Base Compensation, after deducting any amount to be collected as non-compete compensation, if the Company has not waived it.

The Annual Base Compensation equals the fixed and variable annual compensation received for the twelve months preceding the date on which her office is terminated or not renewed, excluding compensation received for medium or long-term profit-sharing plans for the management teams and exceptional compensation that may be allocated occasionally by the Board of Directors on a discretionary basis.

A change of strategy is defined as a change in the Company's strategy that was the subject of the last financial communication made by the Chief Executive Officer or a significant transaction for the Group that does not fall within the scope of the last medium-term plan approved by the Board of Directors in agreement with the Chief Executive Officer.

A change of control is defined as a substantial acquisition of equity interests in the Company accompanied by the appointment of a number of directors that could constitute a decisive influence on the Board of Directors' decisions.

During its meeting of 23 March 2016, pursuant to the opinion of the Appointments and Compensation Committee, the Board of Directors set out the performance conditions for the payment of the severance payment as indicated below.

• In the event of termination (excluding for gross negligence or misconduct) related to a change of strategy or control until the 2016 closing date, no later than 31 March 2017, the performance will be measured as follows:
  • (i) in the event of departure from 26 January 2017, EBITDA for the last 12 months preceding the departure restated for the acquisitions made in 2016 = 95% of the 2015 EBITDA or (ii) in the event of departure before 26 January 2017, EBITDA calculated prorata temporis since the appointment of Sophie Boissard restated for the acquisitions made in 2016 = 95% of the 2015 EBITDA prorata temporis : payment equal to 100% of the Annual Base Compensation;
  • in the event of departure before 26 January 2017, the fixed compensation considered for the calculation of the Annual Base Compensation will be equal to €450,000;
  • the variable compensation considered for the calculation of the Annual Base Compensation will be the minimum variable compensation for 2016, i.e. 2/3 the fixed compensation, prorata temporis ;
  • the 25% added for each year in office will not be applicable.
• In the event of termination (excluding for gross negligence or misconduct) related to a change of strategy or control between the 2016 closing date, no later than 31 March 2017 and the 2017 closing date, no later than 31 March 2018, the performance will be measured by the target achievement rate used for calculating the variable portion of Sophie Boissard's annual compensation for 2016, as follows:
  • target achievement rate used for calculating the variable portion of the annual compensation for 2016 < 40%: no payment to be made;
  • 40% = target achievement rate used for calculating the variable portion of the annual compensation for 2016 < 60%: payment equal to 50% of the Annual Base Compensation;
  • 60% = target achievement rate used for calculating the variable portion of the annual compensation for 2016 < 100%: payment equal to 100% of the Annual Base Compensation.
• In the event of termination (excluding for gross negligence or misconduct) related to a change of strategy or control between the 2017 closing date, no later than 31 March 2018 and the 2018 closing date, no later than 31 March 2019, the performance will be measured by the average target achievement rate used for calculating the variable portion of Sophie Boissard's annual compensation for 2016 and 2017, as follows:
  • target achievement rate used for calculating the variable portion of the annual compensation for 2016 and 2017 < 40%: no payment to be made;
  • 40% = target achievement rate used for calculating the variable portion of the annual compensation for 2016 and 2017 < 60%: payment equal to 50% of the Annual Base Compensation;
  • 60% = target achievement rate used for calculating the variable portion of the annual compensation for 2016 and 2017 < 100%: payment equal to 100% of the Annual Base Compensation.
• In the event of termination (excluding for gross negligence or misconduct) related to a change of strategy or control from the 2018 closing date, no later than 31 March 2019, the performance will be measured by the average target achievement rate used for calculating the variable portion of Sophie Boissard's annual compensation for the three financial years preceding her departure, as follows:
  • target achievement rate used for calculating the variable portion of the annual compensation for the three financial years preceding her departure < 40%: no payment to be made;
  • 40% = target achievement rate used for calculating the variable portion of the annual compensation for the three financial years preceding her departure < 60%: payment equal to 50% of the Annual Base Compensation;
  • 60% = target achievement rate used for calculating the variable portion of the annual compensation for the three financial years preceding her departure < 100%: payment equal to 100% of the Annual Base Compensation.

Next press release: 4 May 2016, after close of trading
Revenues for the first quarter of 2016

ABOUT KORIAN

Korian, Europe’s leading Ageing Well specialist, founded in 2003, has the capacity to accommodate more than 70,000 residents and patients in Europe (France, Germany, Italy and Belgium) and employs around 45,000 staff members. The Group manages almost 700 facilities in four business lines: long-term care nursing homes, post-acute and rehabilitation care clinics, assisted living facilities and home-care services.

For more information, please visit the website: www.korian.com

Korian is listed on Euronext Paris Compartment A and is included in the following indices: SBF 120, CAC Health Care, CAC Mid 60, CAC Mid & Small and MSCI Global Small Cap

Euronext ticker: KORI - ISIN: FR0010386334 – Reuters: KORI.PA – Bloomberg: KORI.FP

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