NATIXIS_REGISTRATION_DOCUMENT_2017

FINANCIAL DATA Consolidated financial statements and notes

Share-based payments 5.17 Capital increases reserved for employees Stock optionsofferedto employeesunder the EmployeeSavings Plan, with a discountcomparedto the averagemarket price for a given period (called the referenceprice), are encumberedwith a lock-up period of five years. The advantagegranted is measured as the difference between the fair value of the acquired share, taking into account the lock-up condition and the purchase price paid by the employeeon the subscriptiondate, multipliedby the numberof sharessubscribed. The lock-up valuationmethod is based on the cost of a two-step strategy consisting of a five-year forward sale of the locked-up shares and purchasing the same number of shares in cash, by financing the purchase with a loan ultimately repayable at the end of the five years with the incomefrom the forwardsale. The loan interest rate is that which would have been granted to a market player seeking a non-affectedcash loan repayable in five yearswith an averagerisk profile. The main assumptionsapplied for valuing the advantagesrelated to capital increases reserved for employees are provided in Note 11.2.4. In accordance with the principles set out in Directive 2013/36/EU, known as “CRD IV”, and the Decree of November 3, 2014and according to the criteria determined by the European Banking Authority (EBA) in its regulatory technical standard published on December 16, 2013and approved by the EuropeanCommissionin CommissionDelegatedRegulation(EU) No. 604/2014 of March 4, 2014, Natixis has set up a deferred variable compensation plan applicable to the so-called “regulated” categories of staff and to a certain number of employees not covered by the provisions of the Decree of November 3, 2014. Some plans are settled in Natixis shares, while others are settled in cash indexed to the Natixis share price. Employee retention and performance plans settled in shares: Under IFRS 2 “Share-based payment”, employee free share awards give rise to an expenserepresentingthe fair value of the goods or services received at the grant date. This payroll expense is recognized against equity. The fair value of the services received is calculated by reference to the fair value of the shares at the grant date, less the present value of dividends forfeited by employees during the vesting period, taking into accountthe presenceconditions. The expense is recognized on a straight-line basis over the vesting period. The expense is adjusted over the vesting period to reflectany lossesof rights. Cash-settled employee retention and performance plans indexed to the value of the Natixis share: The accountingtreatmentapplicableto cash-settledshare-based paymentsis governedby IFRS 2“Share-basedpayment”. Under IFRS 2, the services acquired and the liability incurred are measured at fair value. Until the liability is settled, debt is remeasuredat each reportingdate and at the date of settlement, with any changes in fair value recognized in income for the Share-based employee retention and performance recognition plans

period. The remeasurementof the liability at the reporting date takes into account any changes in the value of the underlying shares, as well as whether or not the presence conditions and performancecriteriahave beenmet. Where the payment of compensationis subject to a continuing servicerequirement,the correspondingexpenseis recordedover the vesting period on a straight-line basis. When no continuing service requirement exists, the expense is recognized immediately as a debt. The latter is then remeasured at each reporting date taking into account performance criteria and any changesin the value of underlyingshares. Changesto the terms and conditionsof a cash-settledemployee retention and performance plan indexed to the value of the Natixis share which would lead to the latter being reclassifiedas an employee retention and performance plan settled in shares would trigger the derecognition of the debt recorded for the initial plan indexed to the value of the Natixis share and the recognitionof a debt equivalentto the services provided for the new employeeretention and performanceplan settled in shares as at the date of modification. The difference between the recognition in equity and the derecognitionof the debt is taken directlyto profit or loss. The details of these plans and their quantified impacts over the periodare providedin Note 11.2.2. Treasury shares and treasury share 5.18 derivatives All treasury shares held by Natixis are deducted from equity regardlessof the purpose for which they are acquired/held.Any gains or losses recognized in the parent company financial statements in respect of the sale, measurementor impairment of treasury shares held for trading or available-for-sale are eliminated in the consolidated financial statements through equity. Treasury share derivatives are recognized differently depending on how they are unwound: as equity instruments,if they are unwound by trading a fixed a number of treasury shares for a fixed amount of cash or another financial asset, and if this trade is the only possible unwinding method. In such case, the instruments are not subsequentlyrevalued; as derivatives,if they are unwoundvia a net cash settlementor a a net treasury shares settlement. In such case, the fair value changes in the instruments are recorded in the income statement. A contract obligating Natixis to buy its own shares creates a liability in the amount of the discounted acquisition price, regardless of how the derivative is classified, with a correspondingentry in equity. Fees and commissions received 5.19 The method of accounting for fees and commissions received depends on the end purpose of the services rendered and the method of accountingfor the financial instrumentsto which the service relates. Fees and commissions for one-off services, such as business providerfees, are recognizedin income as soon as the service is provided.

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Natixis Registration Document 2017