Safran S.A.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Dual application for Exemptive Relief Applications -- Application for relief from the prospectus and registration requirements for certain trades made in connection with an employee share offering by a French issuer -- The issuer cannot rely on the employee exemption in section 2.24 of Regulation 45-106 respecting prospectus and registration exemptions as the securities are not being offered to Canadian employees directly by the issuer but rather through special purpose entities -- Canadian participants will receive disclosure documents -- The special purpose entities are subject to the supervision of the local securities regulator -- Canadian employees will not be induced to participate in the offering by expectation of employment or continued employment -- There is no market for the securities of the issuer in Canada -- The number of Canadian participants and their share ownership are de minimis -- Relief granted, subject to conditions.

Applicable Legislative Provisions

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

Regulation 45-106 respecting prospectus and registration exemptions, s. 2.24.

April 27, 2012

Translation

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the "Filing Jurisdictions")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

SAFRAN S.A.

(the "Filer")

DECISION

Background

The securities regulatory authority or regulator in each of the Filing Jurisdictions (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of the Filing Jurisdictions (the "Legislation") for:

1. an exemption from the prospectus requirements of the Legislation (the "Prospectus Relief") so that such requirements do not apply to

(a) trades in units (the "Units") of Safran International Leverage B (the "Compartment"), a compartment of an FCPE named Safran International, which is a fonds commun de placement d'entreprise (a form of collective shareholding vehicle of a type commonly used in France for the conservation and custodianship of shares held by employee-investors), made under the Employee Share Offering (as defined below) to or with Qualifying Employees (as defined below) of Canadian Affiliates (as defined below) resident in the Jurisdictions (as defined below) (collectively, the "Canadian Employees", and such Canadian Employees who subscribe for Units, the "Canadian Participants");

(b) trades in ordinary shares of the Filer (the "Shares") by the Compartment and another compartment of Safran International named Safran International Classic (the "Transfer Compartment") to or with Canadian Participants upon the redemption of Units and Transfer Compartment Units (as defined below), respectively, as requested by Canadian Participants;

(c) trades in Transfer Compartment Units made pursuant to the Employee Share Offering to or with Canadian Participants, including upon a transfer of the Canadian Participants' assets in the Compartment to the Transfer Compartment at the end of the Lock-Up Period (as defined below);

2. an exemption from the dealer registration requirements of the Legislation (the "Registration Relief") so that such requirements do not apply to the Safran Group (as defined below, the Compartment, the Transfer Compartment and Natixis Asset Management (the "Management Company") in respect of the following:

(a) trades in Units made under the Employee Share Offering to or with Canadian Participants not resident in Ontario;

(b) trades in Shares by the Compartment and the Transfer Compartment to or with Canadian Participants upon the redemption of Units and Transfer Compartment Units, respectively, as requested by Canadian Participants; and

(c) trades in Transfer Compartment Units made pursuant to the Employee Share Offering to or with Canadian Participants, including upon a transfer of the Canadian Participants' assets in the Compartment to the Transfer Compartment at the end of the Lock-Up Period;

(the Prospectus Relief and the Registration Relief, being collectively referred to hereinafter as the "Offering Relief").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application;

(b) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario; and

(c) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System ("Regulation 11-102") is intended to be relied upon in British Columbia, Alberta, New Brunswick, Newfoundland and Labrador, Prince Edward Island and Nova Scotia (collectively the "Other Jurisdictions" and, together with the Filing Jurisdictions, the "Jurisdictions").

Interpretation

Terms defined in Regulation 14-101 respecting Definitions, Regulation 45-102 respecting resale of securities, Regulation 45-106 respecting Prospectus and Registration Exemptions and Regulation 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation formed under the laws of France with its head office located in France. The Filer is not, and has no current intention of becoming, a reporting issuer under the Legislation or the securities legislation of the Other Jurisdictions. The Shares are principally traded through NYSE Euronext. They are not currently listed for trading on any stock exchange in Canada and there is no intention to have them so listed.

2. The Filer carries on business in Canada through certain subsidiaries that employ Canadian Employees (collectively, the "Canadian Affiliates" and, together with the Filer and other affiliates of the Filer, the "Safran Group"), including Messier Dowty Inc., Morpho Canada Inc., Safran Electronics Canada Inc., Turbomeca Canada Inc., L-1 Secure Credentialing Canada Co., Comnetix Inc. and Bioscrypt Inc.

3. Each of the Canadian Affiliates is a direct or indirect controlled subsidiary of the Filer and is not, and has no current intention of becoming, a reporting issuer under the Legislation or the securities legislation of the Other Jurisdictions.

4. As of the date hereof and after giving effect to the Employee Share Offering, Canadian residents do not and will not beneficially own (which term, for the purposes of this paragraph, is deemed to include all Shares held by the Compartment and the Transfer Compartment on behalf of Canadian Participants) more than 10% of the Shares and do not and will not represent in number more than 10% of the total number of holders of Shares as shown on the books of the Filer.

5. The Filer has established a global employee share offering for employees of the Safran Group (the "Employee Share Offering"). The Employee Share Offering involves an offering of Shares to be subscribed through the Compartment (the "Plan").

6. Only persons who are employees of a member of the Safran Group during the subscription period for the Employee Share Offering and who meet other employment criteria (the "Qualifying Employees") will be allowed to participate in the Employee Share Offering.

7. The Compartment and the Transfer Compartment have been established for the purpose of implementing the Employee Share Offering. There is no current intention for the Compartment and the Transfer Compartment to become reporting issuers under the Legislation or the securities legislation of the Other Jurisdictions.

8. The Safran International FCPE is, and the Compartment and the Transfer Compartment are compartments of, an FCPE, which is a shareholding vehicle of a type commonly used in France for the conservation and custodianship of shares held by employee investors.

9. The Safran International FCPE, the Compartment and the Transfer Compartment will be approved by and registered with, the Autorité des marchés financiers in France (the "French AMF") prior to the commencement of the subscription period in respect of the Employee Share Offering.

10. All Units acquired under the Plan by Canadian Participants will be subject to a hold period of approximately five years (the "Lock-Up Period"), subject to certain exceptions prescribed by French law (such as death, long term disability or involuntary termination of employment).

11. Canadian Participants will subscribe for Units, and the Compartment will then subscribe for Shares using the Employee Contribution (as described below) and the financing made available by Société Générale (the "Bank"), which bank is governed by the laws of France.

12. The subscription price for the Shares will be the average of the closing price of the Shares (expressed in Euros) on NYSE Euronext on the 20 trading days preceding the date of the fixing of the subscription price by the Chief Executive Officer or the Board of Directors of the Filer (the "Reference Price"), less a 20% discount.

13. Canadian Participants will contribute 10% of the price of each Share (expressed in Euros) they wish to subscribe for to the Compartment (the "Employee Contribution"). The Compartment will enter into a swap agreement (the "Swap Agreement") with the Bank. Under the terms of the Swap Agreement, the Bank will contribute the remaining 90% of the price of each Share (expressed in Euros) to be subscribed for by the Compartment (the "Bank Contribution").

14. The Compartment will apply the Employee Contribution and the Bank Contribution to subscribe for Shares of the Filer.

15. Pursuant to the Redemption Formula (as defined below), Canadian Participants effectively receive a share appreciation entitlement in the increase in value, if any, of the Shares subscribed on behalf of Canadian Participants, including with respect to the Shares financed by the Bank Contribution. Canadian Participants receive Units in the Compartment representing the Euro amount of the Employee Contribution and a multiple of the average increase in the Share price calculated in accordance with the Redemption Formula.

16. Under the terms of the Swap Agreement, the Compartment will remit to the Bank an amount equal to the net amounts of any dividends paid on the Shares held in the Compartment during the Lock-Up Period.

17. At the end of the Lock-Up Period, the Compartment will owe to the Bank an amount equal to A -- [B+C], where

(a) "A" is the market value of all the Shares at the end of the Lock-Up Period that are held in the Compartment (as determined pursuant to the terms of the Swap Agreement),

(b) "B" is the aggregate amount of all Employee Contributions,

(c) "C" is an amount (but only if positive, the "Appreciation Amount") equal to,

(i) 44% multiplied by the quotient obtained from dividing the Reference Price by the Average Trading Price.

The "Average Trading Price" is the average of the closing prices of the Shares on the last trading day of each week during the fifth year of the Lock-Up Period (i.e. a total of 52 share price readings during the fifth year of the Lock-Up Period).

However, in the event that the Share price on any day during the Lock-Up Period closes at a price that is equal to or greater than 115% of the Reference Price but less than 140% of the Reference Price, then an amount equal to 115% of the Reference Price will be the minimum Share price reading used in each of the readings to be recorded on or after such day for the purpose of determining the Average Trading Price.

Furthermore, in the event that the Share price on any day during the Lock-Up Period closes at a price that is equal to or greater than 140% of the Reference Price, then an amount equal to 140% of the Reference Price will be the minimum Share price reading used in each of the readings to be recorded on or after such day for the purposes of determining the Average Trading Price.

and further multiplied by

(ii) the number of Shares held in the Compartment (including the Shares purchased with the Bank Contribution).

and further multiplied by

(iii) an amount equal to the Average Trading Price minus the Reference Price.

18. In addition to the above, if, at the end of the Lock-Up Period, the market value of the Shares held in the Compartment is less than 100% of the Employee Contribution, the Bank will, pursuant to the terms and conditions of a guarantee contained in the Swap Agreement, make a contribution to the Compartment to make up any shortfall.

19. At the end of the Lock-Up Period, the Swap Agreement will terminate after the final swap payments are made. A Canadian Participant may request the redemption of his or her Units in consideration for cash or Shares with a value representing:

(a) the Canadian Participant's Employee Contribution; and

(b) the Canadian Participant's portion of the Appreciation Amount, if any

(the "Redemption Formula").

20. If a Canadian Participant does not request the redemption of his or her Units in the Compartment at the end of the Lock-Up Period, his or her investment in the Compartment will be transferred to the Transfer Compartment (subject to the decision of the supervisory board of Safran International and the approval of the French AMF).

21. Units of the Transfer Compartment ("Transfer Compartment Units") will be issued to such Canadian Participants in recognition of the assets transferred to the Transfer Compartment. Canadian Participants may request the redemption of the Transfer Compartment Units whenever they wish. However, following a transfer to the Transfer Compartment, the Employee Contribution and the Appreciation Amount, if any, will no longer be covered by the Swap Agreement (including the Bank's guarantee contained therein).

22. Pursuant to the terms of the guarantee contained in the Swap Agreement, a Canadian Participant will be entitled to receive 100% of his or her Employee Contribution at the end of the Lock-Up Period or in the event of an early unwind resulting from the Canadian Participant exercising one of the exceptions to the Lock-Up Period. The Management Company is permitted to cancel the Swap Agreement (which will have the effect of cancelling the guarantee) in certain strictly defined conditions where it is in the best interests of the holders of Units of the Compartment. The Management Company is required under French law to act in the best interests of the holders of the Units of the Compartment. In the event that the Management Company cancelled the Swap Agreement and this was not in the best interests of the holders of the Units of the Compartment, then such holders would have a right of action under French law against the Management Company. Under no circumstances will a Canadian Participant be responsible to contribute an amount greater than his or her Employee Contribution.

23. In the event of an early redemption resulting from the Canadian Participant satisfying one of exceptions to the Lock-Up Period prescribed by French law and meeting the applicable criteria, a Canadian Participant may request the redemption of Units from the Compartment using the Redemption Formula. The measurement of the increase, if any, from the Reference Price will be carried out in accordance with similar rules to those applied to redemption at the end of the Lock-up Period, but it will be measured using values of the Shares at the time of the early redemption instead.

24. Under no circumstances will a Canadian Participant in the Plan be liable to any of the Compartment, the Transfer Compartment, the Bank or the Filer for any amounts in excess of his or her Employee Contribution under the Plan.

25. For Canadian federal income tax purposes, a Canadian Participant in the Plan should be deemed to receive all dividends paid on the Shares financed by either the Employee Contribution or the Bank Contribution at the time such dividends are paid to the Compartment, notwithstanding the actual non-receipt of the dividends by the Canadian Participants.

26. The payment of dividends on the Shares (in the ordinary course or otherwise) is strictly determined by the shareholders of the Filer on the proposition of the Board of Directors of the Filer. The Filer has not made any commitment to the Bank as to any minimum payment of dividends during the term of the Lock-Up Period.

27. To respond to the fact that, at the time of the initial investment decision relating to participation in the Employee Share Offering, Canadian Participants will be unable to quantify their potential income tax liability resulting from such participation, the Filer or the Canadian Affiliates are prepared to indemnify each Canadian Participant for all tax costs to the Canadian Participants associated with the payment of dividends in excess of a specified amount of Euros per calendar year per Share during the Lock-Up Period such that, in all cases, a Canadian Participant will, at the time of the original investment decision, be able to determine his or her maximum tax liability in connection with dividends received by the Compartment on his or her behalf under the Employee Share Offering.

28. At the time the Compartment's obligations under the Swap Agreement are settled, the Canadian Participant will realize a capital gain (or capital loss) by virtue of having participated in the Swap Agreement to the extent that amounts received by the Compartment, on behalf of the Canadian Participant, from the Bank exceed (or are less than) amounts paid by the Compartment, on behalf of the Canadian Participant to the Bank. Any dividend amounts paid to the Bank under the Swap Agreement will serve to reduce the amount of any capital gain (or increase the amount of any capital loss) that the Canadian Participant would have realized. Capital losses (gains) realized by a Canadian Participant may generally be offset against (reduced by) any capital gains (losses) realized by the Canadian Participant on a disposition of the Shares, in accordance with the rules and conditions under the Income Tax Act (Canada) or comparable provincial legislation (as applicable).

29. The Compartment's portfolio will almost exclusively consist of Shares of the Filer as well as the rights and associated obligations under the Swap Agreement. The Compartment may also hold cash or cash equivalents pending investments in Shares and for the purposes of facilitating Unit redemptions.

30. As indicated above, a Canadian Participant's investment in the Compartment will only be transferred to the Transfer Compartment if such Canadian Participant does not elect to request the redemption of his or her Units at the end of the Lock-Up Period. A Canadian Participant will be able to request the redemption of Transfer Compartment Units at any time in consideration of the underlying Shares or a cash payment equal to the then market value of the Shares held by the Transfer Compartment.

31. Any dividends paid on the Shares held in the Transfer Compartment will be contributed to the Transfer Compartment and used to purchase additional Shares. To reflect this reinvestment, either new Transfer Compartment Units (or fractions thereof) will be issued to Canadian Participants or no additional Transfer Compartment Units will be issued and the net asset value of Transfer Compartment will be increased.

32. The Transfer Compartment's portfolio will almost entirely consist of Shares of the Filer but may also consist, from time to time, of cash in respect of dividends paid on the Shares which will be reinvested in Shares as well as cash or cash equivalents held for the purpose of investing in the Shares or funding the Transfer Compartment Unit redemptions.

33. The Management Company is a portfolio management company governed by the laws of France. The Management Company is registered with the French AMF to manage French investment funds and complies with the rules of the French AMF. To the best of the Filer's knowledge, the Management Company is not, and has no current intention of becoming, a reporting issuer under the Legislation or the securities legislation of the Other Jurisdictions.

34. The Management Company's portfolio management activities in connection with the Employee Share Offering and the Compartment are limited to subscribing for Shares from the Filer, selling such Shares as necessary in order to fund redemption requests, and such activities as may be necessary to give effect to the Swap Agreement. The Management Company's portfolio management activities in connection with the Transfer Compartment will be limited to purchasing Shares from the Filer using Canadian Participants' entitlement under the Employee Share Offering at the end of the Lock-Up Period (i.e. a Canadian Participant's Employee Contribution plus their portion of the Appreciation Amount, if any, based on the Redemption Formula) and selling Shares held by the Transfer Compartment as necessary in order to fund redemption requests.

35. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents in respect of the Compartment and the Transfer Compartment. The Management Company's activities will not affect the value of the Shares.

36. None of the Filer, the Management Company, the Canadian Affiliates or any of their directors, officers, employees, agents or representatives will provide investment advice to the Canadian Participants with respect to investments in the Shares or the Units.

37. Shares issued in the Employee Share Offering will be, subject to French banking legislation, deposited with Caceis Bank, a large French commercial bank (the "Depositary") in either the Compartment's or the Transfer Compartment's account as the case may be.

38. Participation in the Employee Share Offering is voluntary, and Canadian Employees will not be induced to participate in the Employee Share Offering by expectation of employment or continued employment.

39. The total amount that may be invested by a Canadian Participant in the Employee Share Offering cannot exceed the lesser of (a) the Canadian dollar equivalent of 1,000 Euros and (b) 25% of a Canadian Participant's estimated gross annual compensation for the 2012 calendar year (the 25% investment limit takes into account the Bank Contribution).

40. As there is no market for the Shares in Canada, and as none is expected to develop, any first trades of Shares by Canadian Participants will be effected through the facilities of, and in accordance with, the rules and regulations of an exchange outside of Canada.

41. The Filer will retain a securities dealer registered as a broker/investment dealer (the "Registrant") under the securities legislation of Ontario to provide advisory services to Canadian Employees resident in Ontario who express an interest in the Plan and to make a determination, in accordance with industry practices, as to whether an investment in the Plan is suitable for each such Canadian Employee based on his or her particular financial circumstances.

42. Canadian Participants will receive an information package in the French or English language, according to their preference, which will include a summary of the terms of the Employee Share Offering, a tax notice containing a description of Canadian income tax consequences of subscribing to and holding the Units and redeeming Units for cash or Shares at the end of the Lock-Up Period. The information package will also include a risk statement which will describe certain risks associated with an investment in Units. Canadian Participants may also consult the Filer's annual report on Form 20-F filed with the SEC as well as the Document de Référence filed with the French AMF in respect of the Shares and a copy of the Compartment and the Transfer Compartment's rules (which are analogous to company by-laws). Canadian Participants will also have access to copies of the continuous disclosure materials relating to the Filer that are furnished to holders of Shares generally.

43. Canadian Participants will receive an initial statement of their holdings under the Plan together with an updated statement at least once per year.

44. There are approximately 1,406 Qualifying Employees resident in Canada, with approximately 703 resident in Québec and 703 in Ontario, who represent, in the aggregate, less than 2% of the total number of employees in the Safran Group worldwide.

45. The Filer is not, and none of the Canadian Affiliates are, in default of the Legislation or the securities legislation of the Other Jurisdictions. To the best of the Filer's knowledge, the Management Company is not in default of the Legislation or the securities legislation of the Other Jurisdictions.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.

The decision of the Decision Makers under the Legislation is that the Offering Relief is granted provided that

1. the prospectus requirements of the Legislation will apply to the first trade in any Units or Shares acquired by Canadian Participants, unless the following conditions are met:

(a) the issuer of the security

(i) was not a reporting issuer in any jurisdiction of Canada at the distribution date, or

(ii) is not a reporting issuer in any jurisdiction of Canada at the date of the trade;

(b) at the distribution date, after giving effect to the issue of the security and any other securities of the same class or series that were issued at the same time as or as part of the same distribution as the security, residents of Canada

(i) did not own directly or indirectly more than 10% of the outstanding securities of the class or series, and

(ii) did not represent in number more than 10% of the total number of owners directly or indirectly of securities of the class or series; and

(c) the first trade is made

(i) through an exchange, or a market, outside of Canada; or

(ii) to a person or company outside of Canada and;

2. in Québec, the required fees are paid in accordance with Section 271.6(1.1) of the Securities Regulation (Québec).

"Jean Daigle"
Director, Corporate Finance