Snecma and Republic of France - MRRS Decision

Headnote

MRRS -- application for relief from registration and prospectus requirements in respect of certain trades made pursuant to an employee share offering by a French issuer and a selling shareholder, the French state -- employee share offering involves the use of a collective employee shareholding vehicle, a fonds commun de placement d'entreprise ("FCPE") -- employee share offering does not contain a "leveraged fund" component -- relief granted to trades in shares by the selling shareholder to Canadian participants, trades in shares by Canadian participants made to or with the FCPE, and trades in units of the FCPE made to or with Canadian participants, subject to resale restrictions -- relief granted to the manager of the FCPE from the adviser registration requirement.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25, 53 and 74(1).

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO AND QUÉBEC

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

SNECMA, SNECMA OUVERTURE,

NATEXIS EPARGNE ENTREPRISE AND

THE REPUBLIC OF FRANCE

MRRS DECISION DOCUMENT

WHEREAS the Canadian securities regulatory authority or regulator (the "Decision Maker") in each of Ontario and Québec (the "Jurisdictions") has received an application from Snecma (the "Applicant") and its controlling shareholder, the Republic of France (the "Selling Shareholder"), for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that, subject to certain terms and conditions:

(a) the dealer registration requirement and the prospectus requirement shall not apply to:

(i) trades by the Selling Shareholder of ordinary shares ("Shares") of the Applicant to Qualifying Employees (including Former Employees, both as defined in paragraph 4 below) who choose to participate (the "Canadian Participants") in the global employee offering of the Applicant (the "Snecma Employee Share Plan 2004");

(ii) trades in the Shares made by Canadian Participants to Snecma Ouverture, a French collective employee shareholding vehicle (the "Fund", a fonds commun de placement d'entreprise or "FCPE"); or

(iii) certain trades of the securities (the "Units") of the Fund made to or with the Canadian Participants;

provided that, in each case, the first trade in any such Shares or Units acquired by a Canadian Participant under the Snecma Employee Share Plan 2004 in a Jurisdiction shall be deemed to be a distribution under the Legislation of such Jurisdiction; and

(b) the manager of the Fund, Natexis Epargne Entreprise (the "Manager"), is exempt from the requirements contained in the Legislation to be registered as an adviser (the "Adviser Registration Requirements") to the extent that its activities in relation to the Snecma Employee Share Plan 2004 require compliance with the Adviser Registration Requirements;

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS, unless otherwise defined, the terms herein have the meaning set out in National Instrument 14-101 Definitions or in Québec Commission Notice 14-101;

AND WHEREAS the Applicant and the Selling Shareholder have represented to the Decision Makers as follows:

1. The Applicant is a corporation formed under the laws of the Republic of France. The ordinary shares of the Applicant will be listed on Euronext Paris. The Applicant is not and has no current intention of becoming a reporting issuer (or equivalent) under the Legislation.

2. Messier-Dowty Inc., Turboméca Canada Inc., Techspace Aero Canada Ltée and other Canadian affiliates of the Applicant (the "Canadian Affiliates", and together with the Applicant and other affiliates of the Applicant, the "Snecma Group") are direct or indirect controlled subsidiaries of the Applicant and are not and have no current intention of becoming reporting issuers (or equivalent) under the Legislation.

3. The Selling Shareholder is the French state. The Selling Shareholder is currently approximately a 97.2% shareholder of the Applicant, and is not and has no current intention of becoming a reporting issuer (or equivalent) under the Legislation.

4. Current employees of the Snecma Group and former employees of the Snecma Group (the "Former Employees" and together with the current employees of the Snecma Group, the "Qualifying Employees") are invited to participate in the Snecma Employee Share Plan 2004 implemented in accordance with a French ministerial order enacted under French privatization law (the "Ministerial Order").

5. The Fund is a French collective employee shareholding vehicle ("fonds commun de placement d'entreprise" or "FCPE") established by the Manager to facilitate the participation of Qualifying Employees in the Snecma Employee Share Plan 2004 and to simplify custodial arrangements for such participation. The Fund is not and has no current intention of becoming a reporting issuer (or equivalent) under the Legislation. The Fund is a collective shareholding vehicle of a type commonly used in France for the conservation of shares held by employee investors and is registered and approved by the French Autorité des marchés financiers (the "French AMF"). Only Qualifying Employees are allowed to hold Units of the Fund, and such holdings will be in an amount reflecting the number of Shares held by the Fund on behalf of such Qualifying Employees.

6. The Manager is an asset management company governed by the laws of the Republic of France. The Manager is registered with the French AMF to manage French investment funds and complies with the rules of the French AMF. The Manager is not and has no current intention of becoming a reporting issuer (or equivalent) under the Legislation.

7. The sale of Shares by the Selling Shareholder will be made through a combined offering, consisting of i) a public offering in France and sales to institutional investors, and ii) the Snecma Employee Share Plan 2004.

8. Qualifying Employees will be invited to participate in the Snecma Employee Share Plan 2004 using one of two purchase options.

9. The purchase price for the Shares in Purchase Option #1 of the Snecma Employee Share Plan 2004 is the same as the initial public offering price for shares in the public offering, which will be determined by the Ministerial Order.

10. In Purchase Option #1, payment for the Shares must be made upon delivery.

11. The Shares purchased pursuant to Purchase Option #1 are not subject to any restrictions on resale and may be sold immediately.

12. A purchaser under Purchase Option #1 who retains his or her Shares for one year will receive additional free shares from the holdings of the Selling Shareholder offered at no cost to the subscriber ("Bonus Shares"). At the end of the one-year ownership period, a Canadian Participant will be entitled to one Bonus Share for each three Shares that he or she has purchased, subject to a limit on the combined value of all Bonus Shares received under Purchase Options #1 and #2. Canadian Participants will receive one Unit for each Bonus Share contributed to the Fund.

13. A Canadian Participant may (i) redeem Units with the Fund in exchange for cash; or (ii) continue to hold the Units and redeem them at a later date.

14. The purchase price for the Shares in Purchase Option #2 of the Snecma Employee Share Plan 2004 is the public offering price less a 20% discount.

15. In Purchase Option #2, payment for the Shares may be made upon delivery or in three instalments over a two-year period (30% upon delivery of the Shares, 30% at the end of year one, and 40% at the end of year two).

16. The Shares purchased pursuant to Purchase Option #2 cannot be sold for a period of two years (the "Hold Period") from the date of purchase.

17. A purchaser under Purchase Option #2 who retains his or her purchased Shares for three years will receive Bonus Shares. At the end of the three-year ownership period, an eligible subscriber will receive one Bonus Share for each share that he or she purchased, up to a limit on the value of the Bonus Shares received, and then one Bonus Share for each four additional Shares that he or she purchased, up to a limit on the value of all Bonus Shares received. The Bonus Shares received under this option are also subject to the limit on the combined value of all Bonus Shares received under Purchase Options #1 and #2. Canadian Participants will receive one Unit for each Bonus Share contributed to the Fund.

18. At the end of the Hold Period, a Canadian Participant may (i) redeem Units with the Fund in exchange for cash; or (ii) continue to hold the Units and redeem them at a later date.

19. The Shares subscribed for by the Canadian Participants under both Purchase Options #1 and #2 will be contributed to the Fund and the Canadian Participant will receive one Unit for each contributed Share.

20. Dividends paid on the Shares purchased under both Options #1 and #2 will be contributed to the Fund and used to purchase additional Shares. The Canadian Participants will receive additional Units representing such Shares.

21. For Canadian federal income tax purposes, the Canadian Participants will be deemed to receive any dividends paid on the Shares held by the Fund on their behalf, at the time such dividends are received by the Fund. This will be the case notwithstanding the reinvestment of such dividend amounts by the Fund to acquire additional Shares on behalf of the Canadian Participants. Consequently, the Canadian Participants will be required to fund the tax liabilities associated with the dividends without immediate recourse to the actual dividends.

22. In the event of an over-subscription of the Shares available under the Snecma Employee Share Plan 2004, the French Minister of the Economy, Finance and Industry may reduce the number of Shares that should be allocated to each subscriber in approximate proportion to the amount of his or her initial subscription.

23. The Fund will be established for the purpose of implementing the Snecma Employee Share Plan 2004. To facilitate the management of Shares purchased under each Purchase Option, as well as the arrangements for granting Bonus Shares and treatment of revenues thereon received under Purchase Options #1 and #2, three separate compartments will be created in the Fund: one in respect of Shares purchased under Purchase Option #1, one in respect of Shares purchased under Purchase Option #2, and one in respect of fractions of Bonus Shares and revenues (such as dividends paid on Shares, Bonus Shares and fractions of Bonus Shares). The Fund's portfolio will consist exclusively of Shares and, from time to time, cash in respect of dividends paid on the Shares and cash or cash equivalents which the Fund may hold for purposes of facilitating Unit redemptions. The Fund will not engage in any of the investment practices described in sections 2.3 through 2.6 of National Instrument 81-102 Mutual Funds except as described herein.

24. Except as described herein Shares purchased under the Snecma Employee Share Plan 2004 will be deposited in the Fund through Natexis Banques Populaires (the "Custodian"), a French bank subject to French banking legislation. Under French law, the Custodian must be selected by the Manager from among a limited number of companies identified on a list by the French Minister of the Economy, Finance and Industry and its appointment must be approved by the French AMF. The Custodian carries out orders to purchase, trade and sell securities in the portfolio and takes all necessary action to allow the Fund to exercise the rights relating to the securities held in its portfolio.

25. The Manager's asset management activities in connection with the Snecma Employee Share Plan 2004 and the Fund is limited to receiving the Shares from the Custodian on behalf of the Canadian Participants, and selling such Shares as necessary in order to fund redemption requests. The Manager is also responsible for preparing accounting documents and publishing periodic informational documents as provided by the rules of the Fund. The Manager's activities in no way affect the underlying value of the Shares, and the Manager will not be involved in providing advice to any Canadian Participants.

26. Under Purchase Options #1 and #2 as applicable, the initial value of a Unit in the Fund corresponds to the purchase price for the Shares under Purchase Options #1 and #2, respectively, when the Shares are transferred to the Fund. The Unit value of the Fund will be calculated on a daily basis and reported to the French AMF, based on the net assets of the Fund divided by the number of Units outstanding. The number of Units will be adjusted on the basis of the Shares and other assets (i.e. cash) held by the Fund, effective from the first date on which the net asset value is calculated and whenever Shares (i.e. Bonus Shares) or other assets are contributed to the Fund. The net asset value of a Unit in each compartment dedicated to Purchase Options #1 and #2 will remain equal to that of a Share.

27. Upon redemption of the Units, the Canadian Participant will be paid in cash on the basis of the net market price of the Shares corresponding to the Canadian Participant's Units. Any redemption charges, management charges and expenses relating to the Fund will be paid by the Applicant.

28. There are approximately 1,023 Qualifying Employees resident in Canada in the provinces of Ontario (767) and Québec (256), all of whom together account for less than 1.6% of the Qualifying Employees worldwide.

29. The Canadian resident Qualifying Employees will not be induced to participate in the Snecma Employee Share Plan 2004 by expectation of employment or continued employment.

30. The total amount invested by a Qualifying Employee cannot exceed €148,560 (approximately C$235,185, the official exchange rate being fixed on the day before the opening of the subscription period), subject to the availability of Shares, and a lower limit may be established for Canadian Participants by the Canadian Affiliates.

31. None of the Applicant, the Selling Shareholder, the Manager or any of their employees, agents or representatives will provide investment advice to the Canadian Participants with respect to an investment in the Shares or the Units.

32. The Canadian Participants will receive an information package in the French or English language, as applicable, which will include a summary of the terms of Snecma Employee Share Plan 2004 and a description of the relevant Canadian income tax consequences. Upon request, Canadian Participants may receive copies of the French Document de Référence and Note d'opération filed with the French AMF in respect of the Shares and a copy of the Fund's rules (which are analogous to company by-laws).

33. It is not expected that there will be any market for the Shares or the Units in Canada. The Units will not be listed on any exchange.

AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that:

(a) the prospectus requirement and the dealer registration requirement shall not apply to the following trades made pursuant to the Snecma Employee Share Plan 2004:

(i) trades in Shares by the Selling Shareholder to Canadian Participants;

(ii) trades in Shares by Canadian Participants made to or with the Fund; and

(iii) trades in Units of the Fund made to or with Canadian Participants;

provided that, in each case, the first trade (alienation) in any such Share or Unit acquired pursuant to this Decision shall be deemed a distribution under the Legislation of such Jurisdiction; and

(b) the Manager shall be exempt from the Adviser Registration Requirement, where applicable, in order to carry out the activities described in paragraph 25 above.

June 11, 2004.