Document:

EX-4.10:

 

Exhibit 4.10

AVENTIS

Stock Option Continuity Plan 1999

Terms and Conditions

for the option rights issued on

September 7, 1999

by Hoechst AG

(the “Company”)

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Definitions

For purposes of these terms and conditions, the following terms shall be
defined as set forth below:

	 	 	 	 	 
	-

	 	Allottee
	 	as defined in Sec. 1.1
	 
	 	 	 	 
	-

	 	Aventis Group
	 	Aventis and any and all of its affiliated
companies as defined in Article L.233-3
of the New French Code of Commerce
	 
	 	 	 	 
	-

	 	Blackout Period
	 	as defined in Sec. 3.4
	 
	 	 	 	 
	-

	 	Company
	 	as defined on the cover page
	 
	 	 	 	 
	-

	 	Exercise Day
	 	as defined in Sec. 5
	 
	 	 	 	 
	-

	 	Exercise Notice Form
	 	as defined in Sec. 4.2
	 
	 	 	 	 
	-

	 	Exercise Period
	 	as defined in Sec. 3.3
	 
	 	 	 	 
	-

	 	Included Companies
	 	as defined in Sec. 7.1
	 
	 	 	 	 
	-

	 	Options Administrator
	 	as defined in Sec. 4.1
	 
	 	 	 	 
	-

	 	Option Right
	 	as defined in Sec. 1.1
	 
	 	 	 	 
	-

	 	Share
	 	as defined in Sec. 1.1
	 
	 	 	 	 
	-

	 	Strike Price
	 	as defined in Sec. 2
	 
	 	 	 	 
	-

	 	Vesting Period
	 	as defined in Sec. 3.2

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§ 1

Contents of the option rights

	1.1.	 	Each individual option right (the “Option Right”) entitles the holder
thereof (the “Allottee”) to purchase one share of Aventis, Strasbourg,
France, securities with identification number 925,700 (Frankfurt am Main
Stock Exchange, (each a “Share”) at the Strike Price.
	 
	1.2.	 	The Company may, at its own discretion, instead of settling any one
claim under an Option Right by delivery of one Share, fully settle such
claim by paying a sum equivalent to the difference between the closing
price (Schlußkurs) of Shares on the Frankfurt Stock Exchange (in XETRA) on
the Exercise Day and the Strike Price.

§ 2

Strike Price

The price at which one Share may be purchased after exercise of one Option
Right is € 42.01 per Share (the “Strike Price”).

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§ 3

Term, Vesting Period,

Exercise Period, Blackout Periods

	3.1.	 	The term of the Option Rights is 10 years. It ends on September 7, 2009
at 24.00 hours (Frankfurt am Main time).
	 
	3.2.	 	Option Rights may not be exercised prior to September 7, 2002 (the
“Vesting Period”) other than in the circumstances stated under Sec. 7.
	 
	3.3.	 	Option Rights may be exercised in the period beginning on September 7,
2002 (Frankfurt am Main time) and expiring on (and including) September 7,
2009 at 24.00 hours (Frankfurt am Main time) (the “Exercise Period”).
Option Rights not exercised by the end of the Exercise Period are
automatically forfeited without giving recourse to damages or
compensation.
	 
	3.4.	 	The Company may specify periods during the Exercise Period in which the
exercise of Option Rights is not permitted (the “Blackout Periods”). If
Option Rights are exercised during Blackout Periods, they are deemed not
to have been exercised. Generally, Blackout Periods shall not exceed a
period of 5 weeks each and shall be confined to the following periods:

	(a)	 	the period immediately preceding those days (and including
the actual day and up to two days after such day) on which current
data on Aventis or the Aventis Group as such is made available to
the public (e.g. publication of

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	 	 	provisional sales and profits figures, publication of annual,
half-yearly or quarterly results, general meetings),
	 
	(b)	 	the period in which the exercise of Option Rights, in the
reasonable discretion of the Management Board of Aventis, needs to
be prohibited in order to avoid material or immaterial harm to
Aventis or the Aventis Group, including the impression that the
Allottees could have made use of price-sensitive information not
publicly known, or to protect the overriding interests of Aventis or
the Aventis Group.

	3.5.	 	Regardless of Blackout Periods as defined in Sec. 3.4 above, the Company
reserves the right to designate specific Allottees as insiders for
reasonable periods of time under the conditions mentioned above in Sec.
3.4 lit. b) , thereby prohibiting these Allottees from exercising their
Option Rights within such periods of time.
	 
	3.6.	 	Notification of the Blackout Periods or periods as defined in Sec. 3.5
above will always be given reasonably in advance, unless the situation
does not allow for such in advance notification.

§ 4

Exercise of Option Rights

	4.1.	 	The Company will announce an external company (the “Options
Administrator”) responsible for the administration (exer-

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	 	 	cise, monitoring etc.) of the allotted Option Rights in the name of the
Company. Accordingly the Company will deliver to the Options
Administrator all information necessary for the administration. The
Company is entitled to replace the Options Administrator at its own
discretion.
	 
	4.2.	 	Option Rights are exercised by issuing to the Options Administrator as
designated by the Company from time to time in accordance with Art. 4.1
hereof, an exercise notice using the exercise notice form provided by the
Company or the Options Administrator (the “Exercise Notice Form”).
	 
	 	 	The exercise notice shall be considered properly issued and thus
valid only if the Exercise Notice Form is entirely filled out, without
deletions or unsolicited additions or amendments, and signed by the
Allottee. The form of transmission shall correspond to the specifications
in the Exercise Notice Form. The Exercise Notice Form may state
additional requirements for the proper and valid issue of the exercise
notice, notably payment of the Strike Price, as well as an appropriate
amount for taxes and fiscal charges to be withheld by the Company, or the
Allottee’s employer respectively, and evidence of entitlement to exercise
Option Rights. The Option Rights may also be exercised by issuing an
exercise notice in any form agreed upon between the Options Administrator
and the Company (e.g. web-based exercises).
	 
	4.3.	 	The number of Option Rights exercised on any Exercise Day must be at
least 500 or any multiple of 100 above this. If any

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	 	 	exercise of Option Rights would reduce the residual number of Option
Rights to less than 1,000, such residual Option Rights shall be deemed
to have been exercised together with those Option Rights whose
exercise would have resulted in that residual number.
	 
	4.4.	 	Any exercise of Option Rights is irrevocable.

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§ 5

Exercise Day

The “Exercise Day” is the day on which the Options Administrator receives the
Exercise Notice Form until 11.00 hours (Frankfurt am Main time) on any stock
exchange trading day in Frankfurt am Main (the “Exercise Day”). In case any
Exercise Notice Form is received by the Options Administrator on any given
stock exchange trading day after 11.00 hours (Frankfurt am Main) the Exercise
Day for the respective Option Right shall be deemed to be the following stock
exchange trading day. If Option Rights are exercised on a day that is not a
stock exchange trading day in Frankfurt am Main, the first subsequent stock
exchange trading day in Frankfurt am Main is deemed to be the Exercise Day for
the Option Rights so exercised.

§ 6

Non-Transferability, Heritability

	6.1.	 	Option Rights cannot be transferred, assigned, pledged or otherwise
disposed of.
	 
	6.2.	 	Option Rights are heritable. When Option Rights are inherited, all rights
of the Allottee pass to the heir(s). Section 7.6 remains unaffected. The
Company and the Options Administrator are entitled to request reasonable
evidence of such transfer upon exercise of any such transferred Option
Rights.

8

 

§ 7

Termination of Employment,

Withdrawal of a Company from the Aventis Group

	7.1.	 	Subject to the special rules in the following paragraphs, Option Rights
may be exercised only if (i) the Allottee has — up to (and on) the
Exercise Day — been continuously employed by Hoechst AG or any other
company of the Aventis Group whose managerial employees have been granted
Option Rights on the basis of the decision of the General Meeting of
Hoechst AG on May 4, 1999, and if (ii) the said Allottee is not under
notice of termination of his/her employment contract. Any move between any
two Included Companies does not affect these rights. If members of
executive bodies or senior executives have service or employment contracts
with a limited term owing to the nature of their functions, then for the
entire duration of employment these contracts shall be deemed to
constitute one continuous period of employment for the purposes of this
provision, provided that the respective contracts have been extended or
renewed without interruption in service, and that no notice of termination
has been given.
	 
	7.2.	 	If the employment ends for any reason before September 7, 2000, the
Option Rights are automatically forfeited without giving recourse to
damages or compensation.
	 
	7.3.	 	If the employment ends by mutual agreement or due to termination given
for organizational changes on or after September

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	 	 	7, 2000, the Option Rights are exercisable within 30 days immediately
following termination of employment but no later than September 7, 2009.
	 
	7.4.	 	If the employment is terminated by retirement (under the employer’s
retirement eligibility rules or applicable law) or disability on or after
September 7, 2000, the Option Rights continue to exist and may be
exercised as set out in these terms and conditions.
	 
	7.5.	 	If employment is terminated by death on or after September 7, 2000, the
Option Rights pass to the heir(s). The Option Rights are exercisable by
such heir(s) or devisees for one year from date of death but no later than
September 7, 2009.

	7.6.	 	If the employment of an Allottee ends on or after September 7, 2002 due
to notice of termination given by the Allottee, the Option Rights remain
exercisable until the end of 30 days after the termination date of
employment in accordance with these terms and conditions but in no
instance after September 7, 2009.
	 
	7.7.	 	If employment is terminated by the employer for cause (as defined in
applicable labour law, regulations, or contract of employment), the Option
Rights will cease without giving recourse to damages or compensation if
and to the extent that they have not been exercised at the time that
notice of termination is given.

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	7.8.	 	If a company, a business unit or section of a business unit by which the
Allottee is employed or to which he or she is assigned leaves the Aventis
Group before September 7, 2000 the Option Rights cease to exist without
giving recourse to damages or compensation unless any arrangement is made
to the contrary. This applies also if the Allottee, without other sound
reasons, invokes any rights of objection to the transfer of employment.
The date of leaving is deemed to be the day on which the Aventis Group
loses its majority shareholding and/or majority voting rights in the
company or that on which the assets essential to the business unit or
section of a business unit pass to the legal successor. If any of the
above described events occurs on or after September 7, 2000, the Option
Rights are exercisable within a period of six months immediately following
such event, but no later than September 7, 2009, unless another
arrangement is made regarding all affected Option Rights.
	 
	7.9.	 	If a change of control in Hoechst AG or Aventis occurs, the Company is
entitled, but not obliged, to terminate the Option Rights within a period
of six months, provided the Allottee receives compensation having at least
the same value as his or her Option Rights on the date of the change of
control, as determined by the Company. Such compensation may comprise a
facility to acquire options to purchase shares of the new controlling
company, options geared to the stock exchange price of the new controlling
company or a cash settlement. A change in control takes place if and as
soon as a notification is

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	 	 	made in accordance with § 21, § 22 of the German Securities Trading Law
(WpHG) or Article L.233-6 of the New French Commercial Code, by a party
required to give notice, that 50% or more of the voting rights in Hoechst
AG or Aventis, respectively, have been acquired.
	 
	7.10.	 	If a change takes place in the control of an Aventis Group Company other
than Hoechst AG or Aventis the Company is entitled, but not obliged, to
terminate the Option Rights within a period of six months on the condition
that the Allottee receives compensation having at least the same value as
the Option Rights on the date of the change of control. Such compensation
may comprise a facility to acquire options to purchase shares of the new
controlling company, options geared to the stock exchange price of the new
controlling company or a cash settlement.
	 
	7.11.	 	Any Option Rights not exercised by the end of any of the above defined
deadlines are automatically forfeited without giving recourse to damages
or compensation.

§ 8

Protection against Dilution of Equity

	8.1.	 	If, during the term of the Option Rights, there are changes in the
capital stock of Aventis or there are restructuring measures that have a
direct effect on the equity capital of Aventis (e.g. share split), the
Company is entitled, but not obliged, to adjust

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	 	 	the number of Option Rights and/or the terms and conditions in such a way
that the total value of the Option Rights available to an Allottee after
the relevant measure generally corresponds to the total value of the
Option Rights available to the Allottee immediately before the measure in
question was implemented,
	 
	8.2.	 	The Company will make no adjustment to the Option Rights or to the terms
and conditions if such adjustment is unlawful or is already being
undertaken as a legal requirement.

§ 9

Miscellaneous

	9.1.	 	Evidence of the Option Rights of all Allottees is recorded in one or more
multiple certificates that are deposited with the Options Administrator or
on behalf of the Options Administrator.
	 
	9.2.	 	Should any of the provisions of these terms and conditions be or become
invalid or inapplicable, the validity or applicability of the remaining
provisions will remain unaffected. Any gap resulting from such invalidity
or inapplicability and any other gap may be filled in by the Company in
its reasonable judgment reflecting the spirit of these terms and
conditions and paying due regard to the interests of those involved. This
applies also to the extent that the timescale of an action is affected
(duration, deadline); in such instances a timescale (duration, dead-

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	 	 	line) as close as legally possible to that desired replaces that
initially provided.
	 
	9.3.	 	Headings are provided solely for guidance and should not be taken into
account in any interpretation of the text.

§ 10

Applicable Law,

Place of Performance and Place of Jurisdiction

	10.1.	 	Except as otherwise specifically provided herein, the form and contents
of the Option Rights, as well as all rights and duties of the Allottees
and the contents of these terms and conditions, are governed in every
respect by the law of the Federal Republic of Germany to the exclusion of
the provisions of international private law and of uniform UN Sales Law.
	 
	10.2.	 	The place of performance is the corporate seat of the company having
granted the Option Rights to the Allottee. The non-exclusive place of
jurisdiction for all legal disputes arising from or in conjunction with
the Option Rights and matters governed by these terms and conditions is
the corporate seat of the company having granted the Option Rights to the
Allottee.

14EX-4.11:

 

Exhibit 4.11

RHONE-POULENC RORER INC.

1995 EQUITY COMPENSATION PLAN

[Amended and Restated Effective November 1, 1996]

     The purpose of the Rhone-Poulenc Rorer Inc. 1995 Equity Compensation Plan
(the “Plan”) is (i) to authorize the Executive Personnel and Compensation
Committee (the “Committee”) of the Board of Directors to provide designated
officers (including officers who are also directors), other employees and
directors who are not employees (“Non-Employee Directors”) of Rhone-Poulenc
Rorer Inc. and its subsidiaries (hereinafter collectively referred to as the
“Company”) and principals of organizations involved with the Company on
significant projects (“Key Advisors”) with certain rights to acquire common
stock of the Company and (ii) to provide for the grant of incentive stock
options, nonqualified stock options and stock appreciation rights. The Company
believes that the Plan will cause the participants to contribute materially to
the growth of the Company, thereby benefiting the Company’s shareholders and
will align the economic interests of the participants with those of the
shareholders. This Plan shall serve as the successor equity incentive program
to the Rorer Group Inc. Equity Compensation Plan.

     1. Administration

     The Plan shall be administered and interpreted by a committee (the
“Committee”) consisting of not less than two persons appointed by the Board of
Directors of the Company, all of whom shall be non-employee directors as
defined under Rule 16b-3 under the Securities Exchange Act of 1934 (the
“Exchange Act”) and “outside directors” as defined under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”) and related Treasury
regulations. The Committee shall have the sole authority to determine (i) the
employees and Key Advisors to whom options and awards shall be granted under
the Plan, (ii) the type, size and terms of the awards to be made to each such
individual, (iii) the time when the awards will be granted and the duration of
the exercise period and (iv) any other matters arising under the Plan.
Non-Employee Directors shall receive grants only pursuant to the provisions of
Section 6. The Committee shall have full power and authority to administer and
interpret the Plan, to make factual determinations and to adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and
for conduct of its business as it deems necessary or advisable, in its sole
discretion. The Committee’s interpretations of the Plan and all determinations
made by the Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interests in the Plan or in
any awards granted hereunder. All powers of the Committee shall be executed in
its sole discretion, in the best interest of the Company and in keeping with
the objectives of the Plan and need not be uniform as to similarly situated
individuals. Notwithstanding the foregoing, administration of Section 6 with
respect to nondiscretionary grants to Non-Employee Directors is intended to be
self-executing in accordance with the express terms and conditions of Section
6. However, to the extent that administrative determinations are required with
respect to Section 6, such

 

 

determinations shall be made by the members of the Board who are not
eligible to receive grants under Section 6, but in no event shall such
determinations affect the eligibility of optionees, the determination of the
exercise price, the timing of the grants or the number of shares subject to
such grants.

     2. Grants

     Incentives under the Plan shall consist of incentive stock options,
nonqualified stock options, restricted stock grants and stock appreciation
rights (hereinafter collectively referred to as “Grants”). All Grants shall be
subject to the terms and conditions set forth herein and to those other terms
and conditions consistent with this Plan as the Committee deems appropriate and
as are specified in writing by the Committee to the employee (the “Grant
Letter”). The Committee shall approve the form and provisions of each Grant
Letter to an employee or Key Advisor. Grants under a particular Section of the
Plan need not be uniform as among the employees or Key Advisors and Grants
under two or more Sections of the Plan may be combined in one instrument;
provided, however, that Grants to Non-Employee Directors shall be made only in
accordance with the provisions of Section 6.

     3. Shares Subject to the Plan

            (a) Subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company (“Company Stock”) that have been or may
be issued or transferred under the Plan is 5,000,000 shares. During the term of
the Plan, the maximum aggregate number of shares of Company Stock that shall be
subject to options or awards under the Plan to any single individual shall be
500,000 shares. The shares may be authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares repurchased by
the Company on the open market. If and to the extent options or stock
appreciation rights granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised, or if any
shares of restricted stock are forfeited, the shares subject to such option or
such award shall again be available for purposes of the Plan.

            (b) If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization,
stock split, or combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation in which the Company is the surviving
corporation, (iii) by reason of a reclassification or change in par value, or
(iv) by reason of any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company’s payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the price per share or the applicable market value of such Grants may
be proportionately

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adjusted by the Committee to reflect any increase or decrease in the
number or kind of issued shares of Company Stock to preclude the enlargement or
dilution of rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated. The
adjustments determined by the Committee shall be final, binding and conclusive.

     4. Eligibility for Participation

     Officers and other employees of the Company, Key Advisors designated by
the Committee and Non-Employee Directors shall be eligible to participate in
the Plan (hereinafter referred to individually as the “Participant” and
collectively as the “Participants”), provided that Key Advisors and
Non-Employee Directors shall not be eligible to receive Incentive Stock Options
(as defined in Election 5(b) below). The Committee shall select the employees
and Key Advisors to receive Grants (together with Non-Employee Directors
receiving Grants under Section 6, the “Grantees”) from among the Participants
and determine the number of shares of Company Stock subject to a particular
Grant in such manner as the Committee determines; provided, however, that
Non-Employee Directors shall only receive Grants pursuant to Section 6.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Company to grant options otherwise in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including options granted to employees
thereof who become employees of the Company, or for other proper corporate
purpose, or (ii) limit the right of the Company to grant stock options or make
other awards outside of this Plan.

     5. Granting of Options

            (a) Number
of Shares. The Committee shall grant to each Grantee who is an
employee or Key Advisor a number of stock options as the Committee shall
determine.

            (b) Type
of Option and Price.

                  (i) The Committee may grant options qualifying as incentive stock options
(“Incentive Stock Options”) within the meaning of Section 422 of the Code
and/or other stock options (“Nonqualified Stock Options”) or any combination of
Incentive Stock Options and Nonqualified Stock Options (hereinafter referred to
collectively as “Stock Options”), all in accordance with the terms and
conditions set forth herein.

                  (ii) The purchase price of Company Stock subject to an Incentive Stock
Option or a Nonqualified Stock Option shall be the fair market value of a share
of such Stock on the date such Stock Option is granted. Notwithstanding the
foregoing, with respect to a Stock Option other than an Incentive Stock Option,
the price at which Company Stock may be purchased may be equal to either (i)
the fair market value of Company Stock as of a date subsequent to the date of
grant as specified by the Committee in the Grant Letter or (ii) the average of
such fair market value over a

-3-

 

period of time as specified by the Committee in the Grant Letter, but only
when the price so established would not result in the disallowance of the
Company’s expense deduction pursuant to Section 162(m) of the Code.

                  (iii) The “fair market value” of Company Stock shall be the closing price
of a share of Company Stock on the New York Stock Exchange; provided, however,
that if shares of Company Stock shall not be listed on the New York Stock
Exchange, then the fair market value will be the closing price of a share of
Company Stock on the principal stock exchange on which such shares are listed
for trading, or if no sale takes place on such day on any such exchange, the
average of the closing bid and asked prices on such day as officially quoted on
any such stock exchange or if the Company Stock is not admitted to trading on
any stock exchange the fair market price shall be the last sale reported on the
NASDAQ National Market System published in the Wall Street Journal or, if no
such sale is so reported, the average of the reported closing bid and asked
prices on such day in the over-the-counter market, as furnished by the
National Association of Security Dealers Automated System, or, if such price at
the time is not available from such system, as furnished by any similar system
then engaged in the business of reporting such prices and selected by the
Company or, if there is no such system, as furnished by any member of the
National Association of Security Dealers, selected by the Company.

            (c) Exercise
Period. The Committee shall determine the option exercise
period of each Stock Option. The exercise period shall not exceed ten years
from the date of grant. Notwithstanding any determinations by the Committee
regarding the exercise period of any Stock Option, all outstanding Stock
Options shall become immediately exercisable upon a Change in Control of the
Company (as defined herein).

            (d) Vesting
of Options. The vesting period for Stock Options shall
commence on the date of grant and shall end on the third anniversary thereof,
with one-third of the shares of Company Stock subject to each Grant becoming
purchasable on each anniversary date of the grant, on a cumulative basis
(except as otherwise provided herein or in the Grant Letter or as otherwise
determined by the Committee). Notwithstanding any determinations by the
Committee regarding the vesting period of any Stock Option, all outstanding
Stock Options shall become immediately exercisable upon a Change in Control of
the Company (as defined herein).

            (e) Manner
of Exercise. A Grantee may exercise a Stock Option by
delivering a notice of exercise to the Committee with accompanying payment of
the option price. Such notice may instruct the Company to deliver shares of
Company Stock due upon the exercise of the Stock Option to any registered
broker or dealer designated by the Company (“Designated Broker”) in lieu of
delivery to the Grantee. Such instructions must designate the account into
which the shares are to be deposited. The Grantee may tender this notice of
exercise, which has been properly executed by the Grantee, and the
aforementioned delivery instructions to any Designated Broker.

-4-

 

            (f) Termination of Employment, Disability or Death.

                  (1) In the event the Grantee during his lifetime ceases to be an employee
of the Company or Key Advisor for any reason other than death, any Stock Option
which is otherwise exercisable by the Grantee shall terminate unless exercised
within six months and one day of the date on which he ceases to be an employee
or Key Advisor (or within such other period of time as may be specified in the
Grant Letter), but in any event no later than the date of expiration of the
option exercise period; provided, however, that in the case of a Grantee who is
disabled within the meaning of Section 22(e)(3) of the Code, such period shall
be one year rather than six months and one day (except as the Committee may
otherwise provide in the Grant Letter) and that in the case of Incentive Stock
Options, such period shall be 90 days rather than six months.

                  (2) In the event of the death of the Grantee while he is an employee or
Key Advisor of the Company or within not more than three months of the date on
which he ceases to be an employee or Key Advisor (or within such other period
of time as may be specified in the Grant Letter), any Stock Option which was
otherwise exercisable by the Grantee at the date of death may be exercised by
his personal representative at any time prior to the expiration of one year
from the date of death, but in any event no later than the date of expiration
of the option exercise period.

            (g) Satisfaction of Option Price. The Grantee shall pay the option price
in cash or by delivering shares of Company Stock already owned by the Grantee
for the period necessary to avoid a charge to the Company’s earnings for
financial reporting purposes and having a fair market value on the date of
exercise equal to the option price or with a combination of cash and shares.
The Grantee shall pay the option price and the amount of withholding tax due,
if any, at the time of exercise. Shares of Company Stock shall not be issued
or transferred upon exercise of a Stock Option until the option price is fully
paid.

            (h) Limits on Incentive Stock Options. Each Grant of an Incentive Stock
Option shall provide that the aggregate fair market value of the Company Stock
on the date of the Grant with respect to which Incentive Stock Options are
exercisable for the first time by a Grantee during any calendar year under the
Plan or any other stock option plan of the Company shall not exceed $100,000.
An Incentive Stock Option shall not be granted to any Participant who, at the
time of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company or parent of the Company,
unless the option price per share is not less than 110% of the fair market
value of Company Stock on the date of grant and the option exercise period is
not more than five years from the date of grant.

     6. Stock Option Grants to Non-Employee Directors

            (a) Number of Shares. Each individual who becomes a Non-Employee Director
after the effective date of this Plan as set forth in Section 18 shall receive
a

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grant of a Non-qualified Stock Option to purchase 20,000 shares of Company
Stock as of the date of the first meeting of shareholders at which he or she is
first elected to the Board of Directors or the first meeting of shareholders
after he or she becomes a director (whether or not he or she is a candidate for
election).

            (b) Option Price and Exercise Period. The purchase price of Company Stock
subject to such grants shall be the fair market value of a share of such stock
as of the date such Stock Option is granted. “Fair Market Value” shall be
determined pursuant to Section 5(b). Each Stock Option granted pursuant to
this Section shall have an exercise period of ten years from the date of grant.

            (c) Vesting of Options. The vesting period for such Stock Options shall
commence on the date of grant and shall end on the fifth anniversary thereof,
with 20% of the shares of Company Stock subject to each grant becoming
exercisable on each anniversary date of the grant, on a cumulative basis.
Notwithstanding the foregoing, all outstanding Stock Options granted pursuant
to this Section shall become immediately exercisable upon a Change in Control
of the Company (as defined herein).

            (d) Manner of Exercise and Satisfaction of Option Price. A Non-Employee
Director may exercise and satisfy the option price of Stock Options granted
pursuant to this Section in accordance with the provisions of Section 5(e) and
(g) respectively.

            (e) Termination of Relationship With the Company, Disability or
Death.

                  (1) In the event a Non-Employee Director during his lifetime ceases to
serve as a Non-Employee Director for any reason other than on account of
becoming an employee of the Company or death, any Stock Option granted pursuant
to this Section which is otherwise exercisable by the Non-Employee Director
shall terminate unless exercised within six months of the date on which he
ceases to serve as a Non-Employee Director, but in any event no later than the
date of expiration of the option exercise period; provided, however, that in
the case of a Non- Employee Director who is disabled within the meaning of
Section 105(d)(4) of the Code, such period shall be one year rather than six
months.

                  (2) In the event of the death of the Non-Employee Director while he is
serving as a Non-Employee Director or within not more than three months of the
date on which he ceases to be a Non-Employee Director, any Stock Option granted
pursuant to this Section which was otherwise exercisable by the Non-Employee
Director at the date of death may be exercised by his personal representative
at any time prior to the expiration of one year from the date of death, but in
any event no later than the date of expiration of the option exercise period.

-6-

 

     7. Restricted Stock Grants

     The Committee may issue or transfer shares of Company Stock to a
Participant under a grant (a “Restricted Stock Grant”) pursuant to an incentive
or long range compensation plan or program approved by the Committee and
adopted by the Board of Directors of the Company. Key Advisors shall not be
eligible to receive Restricted Stock Grants. The following provisions are
applicable to Restricted Stock Grants:

            (a) General Requirements. Shares of Company Stock issued pursuant to
Restricted Stock Grants will be issued for no consideration. Subject to any
other restrictions by the Committee as provided pursuant to this Section,
restrictions on the transfer of shares of Company Stock set forth in Section
7(d) shall lapse as to up to one-third of the shares covered by a Restricted
Stock Grant on each anniversary of the date of the grant or such other date as
the Committee may approve until the restrictions have lapsed on 100% of the
shares; provided, however, that upon a Change in Control of the Company (as
defined herein), all restrictions on the transfer of the shares which have not,
prior to such date, been forfeited shall immediately lapse. The period of
years during which the Restricted Stock Grant will remain subject to
restrictions will be designated in the Grant Letter as the “Restriction
Period.”

            (b) Number of Shares. The Committee shall grant to each Grantee a number
of shares of Company Stock pursuant to a Restricted Stock Grant in such manner
as the Committee determines.

            (c) Requirement of Employment. If the Grantee’s employment terminates
during a period designated in the Grant Letter as the Restriction Period, the
Restricted Stock Grant terminates as to all shares covered by the Grant as to
which restrictions on transfer have not lapsed, and those shares of Company
Stock must be immediately returned to the Company. The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
equitable.

            (d) Restrictions on Transfer and Legend on Stock Certificate. During the
Restriction Period, a Grantee may not sell, assign, transfer, pledge, or
otherwise dispose of the shares of Company Stock to which such Restriction
Period applies except to a Successor Grantee under Section 9. Each certificate
for a share issued or transferred under a Restricted Stock Grant shall contain
a legend giving appropriate notice of the restrictions in the Grant. The
Grantee shall be entitled to have the legend removed from the stock certificate
or certificates covering any of the shares subject to restrictions when all
restrictions on such shares have lapsed.

            (e) Voting Rights. Unless the Committee determines otherwise, during the
Restriction Period, the Grantee shall have the right to vote shares subject to
the Restricted Stock Grant and to receive any regular cash dividends paid on
such shares.

            (f) Lapse of Restrictions. All restrictions imposed under the Restricted
Stock Grant shall lapse upon the expiration of the applicable Restriction
Period;

-7-

 

provided, however, that upon a Change in Control of the Company (as
defined herein), all restrictions on the transfer of the shares which have not,
prior to such date, been forfeited shall immediately lapse. In addition, the
Committee may determine as to any or all Restricted Stock Grants, that all the
restrictions shall lapse, without regard to any Restriction Period, under such
circumstances as it deems equitable.

     8. Stock Appreciation Rights

            (a) The Committee may grant stock appreciation rights (“SARs”) to any
Grantee in tandem with any Stock Option, for all or a portion of the applicable
Stock Option, either at the time the Stock Option is granted or at any time
thereafter while the Stock Option remains outstanding; provided, however, that
in the case of an Incentive Stock Option, such rights may be granted only at
the time of the grant of such Stock Option. The exercise price of each SAR
shall be equal to (i) the exercise price or option price of the related Stock
Option or (ii) the fair market value of a share of Company Stock as of the date
of grant of such SAR, but only in such circumstances where the SAR is granted
subsequent to the date of grant of the related Stock Option and an exercise
price established in accordance with clause (i) above would result in the
disallowance of the Company’s expense deduction pursuant to Section 162(m) of
the Code and related Treasury regulations.

            (b) The number of SARs granted to a Grantee which shall be exercisable
during any given period of time shall not exceed the number of shares of
Company Stock which the Grantee may purchase upon the exercise of the related
Stock Option or Stock Options during such period of time. Upon the exercise of
a Stock Option, the SARs relating to the Company Stock covered by such Stock
Option shall terminate. Upon the exercise of SARs, the related Stock Option
shall terminate to the extent of an equal number of shares of Company Stock.

            (c) Upon a Grantee’s exercise of some or all of his SARs, the Grantee
shall receive in settlement of such SARs an amount equal to the value of the
stock appreciation for the number of SARs exercised, payable in cash, Company
Stock or a combination thereof. Subject to adjustments required pursuant to
Subsection (a)(ii), the stock appreciation for an SAR is the difference between
the option price specified for the related Stock Option and the fair market
value of the underlying Company Stock on the date of exercise of such SAR.

            (d) At the time of such exercise, the Grantee shall have the right to
elect the portion of the amount to be received that shall consist of cash and
the portion that shall consist of Common Stock, which for purposes of
calculating the number of shares of Company Stock to be received, shall be
valued at their fair market value on the date of exercise of such SARs. The
Committee shall have the right to disapprove a Grantee’s election to receive
cash in full or partial settlement of the SARs exercised, and to require that
shares of Company Stock be delivered in lieu of cash. If shares of Company
Stock are to be received upon exercise of an SAR, cash shall be delivered in
lieu of any fractional share.

-8-

 

            (e) An SAR is exercisable only during the period when the Stock Option to
which it is related is also exercisable.

     9. Transferability of Options and Grants

            (a) Only a Participant or his or her authorized legal representative may
exercise rights under a Grant. Such persons may not transfer those rights
except by will or by the laws of descent and distribution or, if permitted in
any specific case by the Committee in their sole discretion, pursuant to a
qualified domestic relations order as defined under the Code or Title I of
ERISA or the regulations thereunder. When a Participant dies, the personal
representative or other person entitled to succeed to the rights of the
Participant (“Successor Grantee”) may exercise such rights. A Successor
Grantee must furnish proof satisfactory to the Company of his or her right to
receive the Grant under the Participant’s will or under the applicable laws of
descent and distribution.

            (b) Notwithstanding the foregoing, the Committee may provide, in a Grant
Letter, that a Grantee may transfer Nonqualified Stock Options to family
members or other persons or entities according to such terms as the Committee
may determine; provided that the Grantee receives no consideration for the
transfer of an Option and the transferred Option shall continue to be subject
to the same terms and conditions as were applicable to the Option immediately
before the transfer.

     10. Change in Control of the Company

            As used herein, a “Change in Control” shall be deemed to have occurred if
Rhone-Poulenc S.A. and its Affiliates (as used herein, the term “Affiliates”
shall be deemed to include any corporation, joint venture, or other business
enterprise, whether incorporated or unincorporated, which Rhone-Poulenc S.A.
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with) cease to be the beneficial
owners (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding securities.

     11. Amendment and Termination of the Plan

            (a) Amendment. The Board of Directors of the Company, by written
resolution, may amend or terminate the Plan at any time; provided, however,
that any amendment that materially increases the benefits accruing to
Participants under the Plan, increases the aggregate number (or individual
limit for any single Grantee) of shares of Company Stock that may be issued or
transferred under the Plan (other than by operation of Section 3(b)), or
materially modifies the requirements as to eligibility for participation in the
Plan, shall be subject to approval by the shareholders of the Company if
required by applicable law, and provided, further, that the Board of Directors

-9-

 

shall not amend the Plan without shareholder approval if such approval is
required by Section 162(m) of the Code, or if such amendment would cause the
Plan or the Grant or exercise of an Incentive Stock Option under the Plan to
fail to comply with the requirements of Section 422 of the Code including,
without limitation, a reduction of the option price set forth in Section 5(b)
or an extension of the period during which an Incentive Stock Option may be
exercised as set forth in Section 5(c).

            (b) Termination of Plan. The Plan shall terminate on the tenth
anniversary of its effective date unless terminated earlier by the Board of
Directors of the Company or unless extended by the Board with the approval of
the shareholders.

            (c) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not result in the
termination or amendment of the Grant unless the Grantee consents or unless the
Committee acts under Section 19(b). The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 19(b) or may be amended by agreement of the
Company and the Grantee consistent with the Plan.

     12. Funding of the Plan

     This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.

     13. Rights of Participants

     Nothing in this Plan shall entitle any Participant or other person to any
claim or right to be granted an award under this Plan. Neither this Plan nor
any action taken hereunder shall be construed as giving any Participant any
rights to be retained by or in the employ of the Company.

     14. Withholding of Taxes

     The Company shall have the right to deduct from all Grants paid in cash,
or from other wages paid to the employee of the Company, any federal, state or
local taxes required by law to be withheld with respect to such cash awards
and, in the case of Grants paid in Company Stock, the Participant or other
person receiving such shares shall be required to pay to the Company the amount
of any such taxes which the Company is required to withhold with respect to
such Grants or the Company shall have the right to deduct from other wages paid
to the employee by the Company the amount of any withholding due with respect
to such Grants.

-10-

 

     15. Agreements with Participants

     Each Grant made under this Plan shall be evidenced by a Grant Letter
containing such terms and conditions as the Committee shall approve.

     16. Requirements for Issuance of Shares

     No Company Stock shall be issued or transferred upon payment of any Grant
hereunder unless and until all legal requirements applicable to the issuance or
transfer of such Company Stock have been complied with to the satisfaction of
the Committee. The Committee shall have the right to condition any Restricted
Stock Grant or Stock Option made to any Participant hereunder on such
Participant’s undertaking in writing to comply with such restrictions on his
subsequent disposition of such shares of Company Stock as the Committee shall
deem necessary or advisable as a result of any applicable law, regulation or
official interpretation thereof, and certificates representing such shares may
be legended to reflect any such restrictions.

     17. Headings

     Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

     18. Effective Date and Designation of the Board

     Subject to the approval of the Company’s shareholders, this Plan shall be
effective as of May 1, 1995.

     19. Miscellaneous

            (a) Substitute Grants. The Committee may make a Grant to an employee of
another corporation who becomes a Participant by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted stock grant granted by such corporation (“Substituted
Stock Incentives”). The terms and conditions of the substitute Grant may vary
from the terms and conditions required by the Plan and from those of the
Substituted Stock Incentives. The Committee shall prescribe the provisions of
the substitute Grants.

            (b) Compliance with Law. The Plan, the exercise of Grants and the
obligations of the Company to issue or transfer shares of Company Stock under
Grants shall be subject to all applicable laws and to approvals by an
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The
Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation.

-11-

 

The Committee may also adopt rules regarding the withholding of taxes on
payments to Grantees. The Committee may, in its sole discretion, agree to
limit its authority under this Section.

            (c) Ownership of Stock. A Grantee or Successor Grantee shall have no
rights as a shareholder with respect to any shares of Company Stock covered by
a Grant until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company; provided, however, that
such individuals shall have the right to vote shares of Company Stock subject
to a Restricted Stock Grant and to the payment of cash dividends on such shares
during the Restriction Period.

-12-

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