Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Application for relief from prospectus and dealer registration requirements in respect of certain trades in units of an employee savings fund made pursuant to a classic offering and a leveraged offering by French issuer -- Relief from prospectus and dealer registration requirements upon the redemption of units for shares of the issuer. The offering involves the use of collective employee shareholding vehicles, each a fonds communs de placement d'entreprise (FCPE) -- The Filer cannot rely on the employee prospectus exemption in section 2.24 of National Instrument 45-106 Prospectus and Registration Exemptions and the Manager cannot rely on the plan administrator exemption in section 8.16 of National Instrument 31-103 Registration Requirements and Exemptions as the shares are not being offered to Canadian employees directly by the issuer but through the FCPEs -- Canadian employees will receive disclosure documents -- The FCPEs are subject to the supervision of the French Autorité des marchés financiers -- Relief granted, subject to conditions.

Applicable Ontario Statutory Provisions

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

National Instrument 31-103 Registration Requirements and Exemptions, s. 8.16.

National Instrument 45-102 Resale of Securities.

National Instrument 45-106 Prospectus and Registration Exemptions.

Translation

August 6, 2010

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the "Jurisdictions")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

NEXANS

(the "Filer")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of the 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 ("Units") of Nexans Plus 2010 B (the "Fund"), a compartment of Nexans Plus 2010, a fonds communs de placement d'entreprise or "FCPE" made pursuant to the global employee share offering of the Filer (the "Employee Share Offering") to or with Qualifying Employees (as defined below) resident in the Jurisdictions and in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Nova Scotia (collectively, the "Offering Jurisdictions") who elect to participate in the Employee Share Offering (collectively, the "Canadian Participants");

(b) trades of ordinary shares of the Filer (the "Shares") by the Fund to Canadian Participants upon the redemption of Units at the request of Canadian Participants;

(c) the issuance of units ("Classic Units") of the Nexans Share Plan FCPE (the "Classic Fund") to holders of Units upon a transfer of the Canadian Participants' assets in the Fund to the Classic Fund at the end of the Lock-Up Period (defined below);

(d) trades of Shares by the Classic Fund to or with Canadian Participants upon the redemption of Classic Units at the request of Canadian Participants; and

2. an exemption from the dealer registration requirements of the Legislation (the "Registration Relief") so that such requirements do not apply to the Filer, the Fund, the Classic Fund, the Canadian Subsidiary (as defined below) and the Management Company (as defined below) in respect of the following:

(a) trades in Units made pursuant to the Employee Share Offering to Canadian Participants not resident in Ontario and Manitoba;

(b) trades in Shares by the Fund to Canadian Participants upon the redemption of Units at the request of the Canadian Participants;

(c) the issuance of Classic Units to Canadian Participants upon a transfer of the Canadian Participants' assets in the Fund to the Classic Fund at the end of the Lock-Up Period; and

(d) trades in Shares by the Classic Fund to the Canadian Participants upon the redemption of Classic Units at the request of the Canadian Participants.

(the Prospectus Relief and the Registration Relief collectively, 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 Filer has provided notice that section 4.7(1) of Regulation 11-102 Passport System ("Regulation 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, and Nova Scotia, and

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

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 and its head office is located in France. It is not, and has no current intention of becoming, a reporting issuer under the Legislation or under the securities legislation of the other Offering Jurisdictions. The Shares are listed on Euronext Paris.

2. The Filer carries on business in Canada through Nexans Canada Inc. (the "Canadian Subsidiary", and together with the Filer and other affiliates of the Filer, the "Nexans Group"). The head office of the Canadian Subsidiary is located in Ontario.

3. The Canadian Subsidiary is controlled by the Filer and is not, and has no current intention of becoming, a reporting issuer under the Legislation or under the securities legislation of the other Offering 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 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 the Shares as shown on the books of the Filer (for purposes of this representation, the calculation of Shares owned by Canadian residents after giving effect to the Employee Share Offering shall include Shares which could be received by Canadian Participants upon the redemption of Units or Classic Units held by Canadian Participants).

5. The Employee Share Offering is comprised of one subscription option which is an offering of Shares to be subscribed through the Fund (the "Leveraged Plan").

6. Only persons who are employees of a member of the Nexans Group during the subscription period for the Employee Share Offering and who meet other employment criteria (collectively, the "Qualifying Employees") will be invited to participate in the Employee Share Offering and hold Units and Classic Units.

7. The Fund and the Classic Fund are established for the purpose of implementing the Employee Share Offering. The Fund and Classic Fund are not, and have no current intention of becoming, reporting issuers under the Legislation or under the securities legislation of the other Offering Jurisdictions.

8. The Fund is a compartment of, and the Classic Fund is, a fonds communs de placement d'entreprise, or FCPE, which is a form of collective shareholding vehicle of a type commonly used in France for the conservation or custodianship of shares held by employee-investors and such collective shareholding vehicles are limited liability entities under French law. The Fund and Classic Fund are registered with and approved by the Autorité des marchés financiers in France (the "French AMF"). The Classic Fund is an existing FCPE used for previous employee share offerings implemented by the Filer.

9. Canadian Participants will subscribe for Units pursuant to the terms and conditions of the Leveraged Plan, and the Fund will then subscribe for Shares using the Employee Contribution (as defined below) and certain financing made available by Société Générale (the "Bank"), a bank governed by the laws of France.

10. Canadian Participants will be invited to participate in the Leveraged Plan of the Employee Share Offering under the following terms:

(a) The Shares will have a subscription price that is equal to the average price of the Shares on the 20 trading days preceding the date on which the subscription price is determined by the Board of Directors of the Filer (the "Reference Price"), less a 20% discount (the "Subscription Price").

(b) Canadian Participants will contribute 16.66% of the Subscription Price (expressed in Euros) to be paid by the Fund (the "Employee Contribution"). Canadian Participants will pay the equivalent of the Employee Contribution in Canadian dollars. The Fund will enter into a swap agreement (the "Swap Agreement") with the Bank. Under the terms and conditions of the Swap Agreement, the Bank will contribute the remaining 83.34% of the Subscription Price of each Share subscribed by the Fund (the "Bank Contribution").

(c) The Fund will apply the Employee Contribution and the Bank Contribution to subscribe for the Shares and the Canadian Participants will receive Units representing the subscribed Shares.

(d) Under the terms of the Swap Agreement, the Fund will remit to the Bank an amount equal to the net amounts of any dividends paid on the Shares held in the Fund.

(e) The Units 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 a release on death, long-term disability or involuntary termination of employment).

(f) The Swap Agreement provides that, at the end of the Lock-Up Period, the Fund will pay to the Bank an amount equal to the market value of the Shares (as determined under the Swap Agreement) held by the Fund, less

i. 100% of the Employee Contributions, plus

ii. an amount equal to a multiple of 3.83 of the increase, if any, above the Reference Price, of the then average price of the Shares held by the Fund, calculated on the basis of the average of 60 monthly readings of the closing prices of the Shares over the Lock-Up Period using the greater of (A) the actual closing market price on each monthly date of calculation or (B) the Reference Price (the "Appreciation Amount");

(collectively, the "Redemption Formula").

(g) If, at the end of the Lock-Up Period, the market value of the Shares held in the Fund is less than 100% of the Employee Contributions, the Bank will, under the terms and conditions of a guarantee agreement (the "Guarantee Agreement") make a contribution to the Fund to make up for any shortfall.

(h) At the end of the Lock-Up Period, a Canadian Participant may elect to request the redemption of his or her Units in consideration for cash or Shares with a value calculated pursuant to the Redemption Formula.

(i) If a Canadian Participant does not request the redemption of his or her Units at the end of the Lock-Up Period, his or her investment in the Fund will be transferred to the Classic Fund in consideration for Classic Units. Canadian Participants will be able to request the redemption of their Classic Units at any time thereafter. However, following the transfer to the Classic Fund, the Canadian Participants' investment will no longer be covered by the Swap Agreement and the Guarantee Agreement, and the value of the Classic Units will correspond to the value of the Shares on Euronext Paris.

(j) Pursuant to the terms and conditions of the Guarantee Agreement, a Canadian Participant having subscribed for Units under the Leveraged Plan may receive 100% of his or her Employee Contribution at the end of the Lock-Up Period or upon the occurrence of an early unwind resulting from the Canadian Participant exercising one of the exceptions to the Lock-Up Period. The manager of the Fund, BNP Paribas Asset Management SAS (the "Management Company"), is permitted to cancel the Swap Agreement (which will have the effect of cancelling the Guarantee Agreement) in certain strictly defined conditions where it is in the best interests of the holders of Units. The Management Company is required under French law to act in the best interests of the holders of the Units. In the event that the Management Company terminates the Swap Agreement and that such termination was not in the best interests of the holders of the Units, then such holders would have a right of action under French law against the Management Company. Under no circumstances will a Canadian Participant in the Leveraged Plan be responsible to contribute an amount greater than his or her Employee Contribution.

(k) In the event of an early unwind resulting from the Canadian Participant satisfying one of certain exceptions to the Lock-Up Period prescribed by French law and meeting the applicable criteria, a Canadian Participant may request the redemption of his or her Units for a value calculated using the Redemption Formula. The measurement of the increase above the Reference Price, if any, will be calculated using similar rules to those applied to a redemption at the end of the Lock-up Period, but the increase will be measured using the value of the Shares at the time of the early unwind instead.

11. Any dividends paid on the Shares held in the Classic Fund will be contributed to the Classic Fund and used to purchase additional Shares on Euronext Paris. To reflect this reinvestment, the value of the Classic Units will be increased.

12. The Classic Fund's portfolio will consist almost entirely of Shares of the Filer. It may also consist, from time to time, of cash resulting from dividends paid on the Shares which will be reinvested in Shares, as well as cash or cash equivalents pending investments in the Shares or held for the purposes of Classic Unit redemptions.

13. The Fund's portfolio will consist of Shares and may also include, from time to time, cash or cash equivalents pending investments in the Shares or held for the purposes of Unit redemptions. The Fund's portfolio will also include the Swap Agreement.

14. For Canadian federal income tax purposes, the Canadian Participants will likely 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 Fund, notwithstanding the actual non-receipt of the dividends' value by the Canadian Participants. Consequently, Canadian Participants will be required to fund the tax liability associated with the dividends without recourse to the actual dividends.

15. The payment of dividends on the Shares is approved at the shareholders' meeting of the Filer. The Filer has not made any commitment to the Bank as to any minimum payment in respect of dividends.

16. To respond to the fact that, at the time of the initial investment decision relating to participation in the Leveraged Plan, Canadian Participants will be unable to quantify their potential income tax liability resulting from such participation, the Filer or the Canadian Subsidiary will indemnify each Canadian Participant in the Leveraged Plan 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 Fund on his or her behalf under the Leveraged Plan.

17. At the time the Fund's obligations under the Swap Agreement are settled, the Canadian Participant will realize a capital gain (or capital loss) by virtue of having an interest in the Swap Agreement to the extent that amounts received by the Fund, on behalf of the Canadian Participant, from the Bank exceed (or are less than) amounts paid by the Fund, on behalf of the Canadian Participant to the Bank. To the extent that amounts equal to the value of the dividends on Shares that are deemed to have been received by a Canadian Participant are paid by the Fund to the Bank, such payments will reduce the amount of any capital gain (or increase the amount of any capital loss) to the Canadian Participant under the Swap Agreement. Capital losses (or gains) realized by a Canadian Participant under the Swap Agreement may generally be offset against (or reduced by) any capital gains (or 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).

18. 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. The Management Company is not, and to the best of the Filer's knowledge has no current intention of becoming, a reporting issuer under the Legislation or under the securities legislation of the other Offering Jurisdictions.

19. The Management Company's portfolio management activities in connection with the Employee Share Offering, the Fund and the Classic Fund are limited to purchasing Shares from the Filer using the Employee Contribution and the Bank Contribution, 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.

20. The Management Company is also responsible for preparing accounting documents and publishing periodic informational documents as provided by the rules of the Fund and the Classic Fund and by the French AMF's regulations. The Management Company's activities do not affect the underlying value of the Shares.

21. Shares issued under the Employee Share Offering will be deposited in the Fund and in the Classic Fund, as applicable, through BNP Paribas Securities Services (the "Depositary"), a large French commercial bank subject to French banking legislation.

22. Under French law, the Depositary must be selected by the Management Company from among a limited number of companies identified on a list maintained by the French Minister of the Economy, Finance and Industry and its appointment must be approved by the French AMF. The Depositary carries out orders to purchase, trade and sell securities in the portfolio and takes all necessary action to allow the Fund and the Classic Fund to exercise the rights relating to the securities held in its portfolio.

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

24. The total amount that may be invested by a Canadian Participant in the Employee Share Offering (including the Bank Contribution) cannot exceed 25% of his or her estimated gross annual remuneration for the 2010 calendar year.

25. The Fund is a limited liability entity and the offering documents provided to Canadian Participants will confirm that a Canadian Participant in the Leveraged Plan will not, under any circumstances, be liable to the Fund, the Bank or the Filer for amounts in excess of his or her Employee Contribution under the Leveraged Plan.

26. None of the Filer, the Management Company, the Canadian Subsidiary or any of their employees, agents or representatives will provide investment advice to Canadian Participants with respect to an investment in the Shares, the Units or the Classic Units.

27. It is anticipated that first trades of Shares by Canadian Participants will be effected through the facilities of, and in accordance with, the rules and regulations of Euronext Paris.

28. The Filer will retain a securities dealer registered as an investment dealer (the "Registrant") under the securities legislation of Ontario and Manitoba to provide advisory services to Canadian Participants resident in those provinces who wish to subscribe under the Leveraged Plan and to make a determination, in accordance with industry practices, as to whether an investment in the Leveraged Plan is suitable for each such Canadian Participant based on his or her particular financial circumstances.

29. Canadian Participants will receive an information package in the English or French language, at their choice, which will include a summary of the terms and conditions of the Employee Share Offering and a description of the relevant Canadian income tax considerations relating to subscribing for and holding the Units and redeeming Units 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 pursuant to the Leveraged Plan, and a tax calculation document which will illustrate the general Canadian federal income tax consequences of participating in the Leveraged Plan.

30. Canadian Participants may also consult the Filer's annual reports posted on the Filer's website and will have access to the continuous disclosure materials relating to the Filer that are furnished to the Filer's shareholders generally. In addition, upon request, a copy of the Fund's and Classic Fund's rules (which are analogous to company by-laws) and the French Document de Référence filed by the Filer with the French AMF will be available to Canadian Participants.

31. Canadian Participants will receive a statement indicating the number of Units they hold under the Leveraged Plan and the value of each Unit at least once a year.

32. There are approximately 538 Qualifying Employees in Canada residing in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec and Nova Scotia who represent, in the aggregate, less than 3% of the number of employees in the Nexans Group worldwide.

33. The Filer and the Canadian Subsidiary are not in default under the Legislation or under the securities legislation of the other Offering Jurisdictions. To the best of the Filer's knowledge, the Management Company is not in default under the Legislation or under the securities legislation of the other Offering 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 the first trade in Shares acquired by Canadian Participants pursuant to this Decision in a Jurisdiction is deemed a distribution or a primary distribution to the public under the Legislation of such Jurisdiction, unless the following conditions are met:

1. the issuer of the security

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

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

2. 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

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

b) 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

3. the first trade is made

a) through the facilities of an exchange, or a market, outside of Canada, or

b) to a person or company outside of Canada.

"Josée Deslauriers"
Director, Investment Funds and Continuous Disclosure