Glossary

AFG-ASFFI (French financial management association)
Association of collective management professionals composed of all segments of the management sector.

AMF (Autorité des Marchés Financiers)
The French financial security law of August 1, 2003 created the Autorité des Marchés Financiers (AMF) by combining the Commission des Opérations de Bourse, the Conseil des Marchés Financiers and the Conseil de Discipline de la Gestion Financière. The mission of the AMF, which is an independent legal public entity, is to protect savings invested in financial products, and ensure that investors received information and that the markets operate correctly. It also plays an active role at the international level.

AMF (Autorité des Marchés Financiers)
The French financial security law of August 1, 2003 created the Autorité des Marchés Financiers (AMF) by combining the Commission des Opérations de Bourse, the Conseil des Marchés Financiers and the Conseil de Discipline de la Gestion Financière. The mission of the AMF, which is an independent legal public entity, is to protect savings invested in financial products, and ensure that investors received information and that the markets operate correctly. It also plays an active role at the international level.

Annuities
Suite de versements effectués à intervalles de temps réguliers. Le versement qui peut être annuel, mensuel… est généralement destiné à constituer un capital ou à rembourser une dette.

Arbitrage
Possibility for changing the type of investment during the frozen period by transfer from one CMF to another.

Assignee
The person who has right to assets or who has the same rights as the person he represents. For example, in case of death, this term refers to the heirs.

Bond
A negotiable security issued by a company, a public entity or the government in the form of a loan, representing the issuer's debt to the lender. A bond can be in several forms: fixed or variable rate, convertible, redeemable for shares of stock.

CAC 40
The CAC 40 (base set at 1000 points on December 31, 1987) is the barometer for the performance of French stocks. This index is a weighted average of the prices of the largest 40 stocks, i.e. each stock has a relative weight to the market value of the entire company. The larger the company, the greater its influence on the index.

Capital gain or loss
Augmentation ou diminution de la valeur d’un bien (capital, immeuble…) entre la date d’acquisition et la date de revente. Sur un titre (action, obligation) ou une part de FCPE, elle est égale à la différence positive ou négative entre le prix de vente et le prix d’achat.

CCB (Frozen current account)
The sums coming from profit-sharing can be paid into a current account that is frozen for three or five years. In return for their investment, employees earn an interest rate that has been previously negotiated.

CET (Time savings account)
Gives employees the possibility of acquiring "Time Capital" consisting primarily of their rights to paid holidays and to use these rights during their employment or to take early retirement.

CMF share
This is the unit of account of the Fonds Commun de Placement, the original value or face value of which is decided freely by the creators of the fund.

CMF (Corporate Mutual Fund)
These funds are intended exclusively to hold the amounts from employee savings. They are managed by specially certified management companies. The securities held (stocks, bonds, etc.) form the portfolio of the CMF, the value of which changes with the prices.

Company shares
These are the securities issued by the company for which the employee works.

CRDS-CSG-PS (Contribution to Repayment of the Social Security Debt - General Social Security contribution - Social Security withholding)
All taxes applicable to gains when funds are withdrawn.

DDTEFP
French Departmental Office of Labor, Employment and Professional Training

Defined benefit plans
Plan in which the subscriber (the company) agrees to pay a pension, the amount of which is defined in a collective agreement. This is a "commitment of results". In fact, since this plan creates a commitment (or corporate liability) to be paid entirely by the company, the company creates a reserve fund to pay annuities. This plan can be applied to all employees or reserved for certain categories.

Defined contribution plans
Plan in which the subscriber (the company) agrees to pay a regular contribution, the amount of which is defined in a collective agreement. This is a "commitment of resources" that may be applied to all employees or be reserved for certain categories. The collective agreement may stipulate an employee portion of the contributions.

Dividend tax credit
Dividends on French shares are eligible for a tax credit. The tax credit is equal to half the net dividend paid by companies. The tax credit must be added to income on the shareholders' income tax return. The amount of the credit is then deducted from the income tax.

Dividend
Return on a share generally paid once a year. Represents the portion of earnings distributed to the shareholders.

DOW JONES
The most watched index on the New York Stock Exchange, composed of 30 stocks.

D.S.E.S. + (Double Security Employee Savings Plus)
Double Sécurité Epargne Salariale Plus (DSES +) : ce contrat d'assurance permet aux épargnants de préparer leur succession en cas de décès grâce au doublement de leur capital.

Early release
Cases related to the personal situtation of the employees which allow the early unfreezing of the amounts paid into a frozen current account or a company or inter-company savings plan. The employees in question must make a request for repayment for all or part of their rights. There are currently 9 cases of early unfreezing for the PEE or PEI savings plans.

Early release
Cases related to the personal situtation of the employees which allow the early unfreezing of the amounts paid into a frozen current account or a company or inter-company savings plan. The employees in question must make a request for repayment for all or part of their rights. There are currently 9 cases of early unfreezing for the PEE or PEI savings plans.

Employee savings
All employees savings and investment plans in the company (profit-sharing, bonuses, employer's contribution, PEE, PEI, PERCO, etc.).

Employee savings
All employees savings and investment plans in the company (profit-sharing, bonuses, employer's contribution, PEE, PEI, PERCO, etc.).

Employer's payment contribution
Amount paid by the company in addition to the amounts invested by the employees under an employee savings plan. Employee contributions, profit-sharing and, exclusively under PERCO, the profit-sharing may be eligible for a company contribution within the maximum rates and amounts defined by law.

Employer's payment contribution
Amount paid by the company in addition to the amounts invested by the employees under an employee savings plan. Employee contributions, profit-sharing and, exclusively under PERCO, the profit-sharing may be eligible for a company contribution within the maximum rates and amounts defined by law.

Equity capital
Total of a company's assets, minus all its debts.

Equity capital
Total of a company's assets, minus all its debts.

FCP (Fonds Commun de Placement)
Portfolio of jointly owned securities, managed by a management company. In practice, an FCP has the same advantages as Sicav.

Floor share value
In a case of a request for withdrawal, this is the amount below which the employee does not want to be paid. It is valid for 3 months.

Frozen current account
Profit-sharing investment method in which the amounts remain in the company and are remunerated by an interest rate.

Jointly-owned fund
Fonds détenant entre 5 et 10 % de titres émis par des entreprises solidaires agréées. Sont reconnues solidaires : • les entreprises qui comptent dans leur effectif au moins 1/3 de personnes en difficulté au moment de leur embauche (chômeurs de longue durée, handicapés), • les associations, coopératives, mutuelles, institutions de prévoyance… dès lors que les rémunérations de leurs dirigeants restent dans une fourchette déterminée (4 à 8 fois le salaire minimum, selon la taille de l’entreprise). Sont assimilées à des entreprises solidaires, les organismes dont au moins 40 % de l’actif est investi dans des entreprises solidaires et les établissements financiers dont 80 % des prêts sont effectués en faveur des entreprises solidaires.

Lifetime Annuity
Annuity paid for life to insureds under the terms of their policies, which may be reversible (transmissible to a third-party) as applicable. It is paid until the death of the last beneficiary.

Market capitalization
It represents the value of the company according to the stock market: it is calculated by multiplying the share price by the number of shares representing the capital.

Market indices
Basket of stocks measuring the performance of a market or an economic sector. Knowing an index lets an investor compare the performance of his/her portfolio with a market or a sector.

Money-market share or product
Financial security representing a short-term loan (generally less than one year).

Mortality table
Table describing the mortality rate for a generation from birth to the oldest persons.

Net asset value
Value obtained by dividing the amount of the assets of a CMF by the number of existing shares.

Net assets
Book value of all the assets held by a company, minus its debts.

PASS (Annual Social Security Cap)
The value used as the basis for calculating Social Security (12 times the Monthly Social Security Cap = 29,712 euros in 2004). It may be used by insurers to define the amount of a benefit expressed as a % of the Annual Social Security Cap (PASS).

PEE
The Corporate Savings Plan is a mechanism that lets employees create capital in securities with the help of their company. Employees can make voluntary contributions to the fund, contribute their bonus and/or all or part of their profit-sharing. They can also transfer to the fund any stake managed in a frozen current account that becomes available at the end of the 5-year frozen period.

PEI (Inter-company savings plan)
Requires a collective agreement by the corporate partners, either based on geographic location or on professional level. The employees of any company that are included under the agreement may make voluntary contributions to the PEI, even if their company has not individually joined. Each company may make an employer's contribution if it wishes to do so.

PERCO (Plan d'Epargne pour la Retraite Collectif)
The Collective Retirement Savings Plan (PERCO), created by the Fillon Act of August 21, 2003, is a retirement savings plan established through a collective agreement, combined with a short-term savings plan. Natexis Interépargne is offering a solution adapted to the size of companies.

Profit-sharing stake
Share in the earnings of a company redistributed to its employees. It is mandatory for companies with more than 50 employees. It allows employees to receive a portion of the profit earned during the year and offers income and social security tax advantages.

Profit-sharing
Profit-sharing is an optional mechanism to allow the employees of a company to benefit from a portion of gains in productivity or earnings. Profit-sharing bonsues are linked either to financial results or to the general performance of the company. Distribution may be uniform, based on gross salaries, years of service with the company, or based on both criteria. Profit-sharing may be invested in a PEE, PEI, PELT or PERCO or be directly collected by the employee.

Prospectus
Simplified document giving the essential information on the regulations of a Fonds Commun de Placement d'Entreprise.

RSP (Special profit-sharing reserve)
Corresponds to the amount of the profit-sharing to be distributed to employees. It is determined after the accounts for the year are closed using an accounting formula stipulated by law: R = 1/2(B - 5% C) x S/VA R : special profit-sharing reserve B : net earnings C : equity capital S : salaries VA : added value

Savings unavailability period
The period during which investors cannot request the repayment of their assets, unless they qualified for one of the cases of early unfreezing stipulated by law. This period begins on the date of investment of monetary amounts in the CMF. Under the Corporate Savings Plan (PEE), it ends on April 1 of the fifth year after the year of the investment. Under PERCO, it ends at retirement. The investment date is shown on the statements sent to investors. Example: a payment invested on December 5, 2004 in a PEE will be frozen until April 1, 2009.

Securities
Different securities representing either the capital of a company (share, etc.) or loans obtained by companies or the government (bonds, etc.). Securities can be listed for trading on a stock market and thus be purchased by the public.

Share
Negotiable ownership right representing a fraction of the capital of a capital stock company. A share gives the holder a right to information and to vote in a shareholders' meeting as well as financial rights (right to the dividend and preemptive right to subscribe to capital transactions).

SICAV (Société d'Investissement à Capital Variable)
A joint stock company which manages a portfolio of securities.

Supervisory Board
Organization composed of representatives of the employees and of the company which is responsible for overseeing the management of a CMF. Its role is to review the annual management report, exercise the rights attached to the capital equities held by the Fund and give prior approval to any amendments to the regulations of the CMF.

UCITS (Undertaking for collective investment in transferable securities)
Name that designates SICAVs and Fonds Communs de Placement. The assets of an UCITS may include French or foreign securities that may be traded (or not) on a regulated market, other UCITS and cash assets. An UCITS gives subscribers the benefits of collective management of their investments.

Valuation frequency
This is the frequency with which the share values of the CMF are calculated. It can be daily, weekly or monthly.

Valuation of a funds
Calculation of the value of a fund share. This value is obtained by dividing the total value of the shares in the fund by the number of shares issued.

Voluntary contribution
Under a Corporate Savings Plan, this is the amount paid by the employee from such employee's own resources.