Document:

[LOGO]                                                               Exhibit 4.3

                                 DESCRIPTION OF
                        THE ALSTOM STOCK OPTION PLAN NO 3
                                  24 JULY 2001

1. STOCK OPTIONS

   Stock options give you the right,  under certain  conditions,  to subscribe a
   given number of ALSTOM  shares at a  pre-defined  price during a  pre-defined
   period.

   This Stock Option Plan is implemented  in accordance  with Article L. 225-177
   and following articles of the French Code of Commerce.

2. EXERCISE PRICE

   The exercise price of these options has been set by the Board of Directors on
   24 July 2001 and  corresponds  to the  average of the  opening  prices of the
   ALSTOM's  shares  quoted on the Paris Bourse  during the last 20 trading days
   preceding the Board Meeting, rounded up to the nearest euro, i.e. EURO 33.00.

3. EXERCISE PERIOD

   Options shall be partially or fully exercisable by lots of one third (subject
   to a minimum of ten (10)  shares per  exercise  of  option),  at each  annual
   maturity following the date of grant. Accordingly:

     - 1/3 of the options will be exercisable from 24 JULY 2002 INCLUSIVE,

     - 2/3  third of the  options  will be  exercisable  from 24 JULY  2003
       INCLUSIVE,

     - 100% of the options will be exercisable from 24 JULY 2004 TO 23 JULY
       2009 BOTH DATES INCLUSIVE,

   subject to the conditions set out below in paragraph 5.

   Shares acquired by beneficiaries  qualifying as employees of a French company
   of the ALSTOM  Group,  following  the exercise of their options in accordance
   with the terms above,  shall be in registered form (FORME  NOMINATIVE)  and
   shall not be  transferred  before  the  expiry of the tax  suspension  period
   provided  for in Article  163 bis C of the French tax code (CODE  GENERAL DES
   IMPOTS).

4. EXERCISE PROCESS

   You will receive in due time the  documentation  necessary  to exercise  your
   options.

<PAGE>

5. RULES IN CASE OF DEPARTURE FROM THE ALSTOM GROUP

   5.1. RESIGNATION

      If you resign,  you lose the right to exercise  your  options from the day
      you submit your resignation.

   5.2. DISMISSAL

      If your  employment is terminated by your employer,  you lose the right to
      exercise your options from the day you are notified of such termination.

   5.3. NEGOTIATED TERMINATION

      If your employment is terminated by mutual agreement,  you may continue to
      be eligible to  exercise  your  options,  after  having left the  company,
      during the same  exercise  period and on the same  exercise  conditions as
      other  beneficiaries.  Such cases need the  Chairman  and Chief  Executive
      Officer's  approval  who will report  these cases to the  Nominations  and
      Remuneration Committee.

   5.4. TRANSFER TO ANOTHER COMPANY

      If your  employment is transferred to another  company  outside the ALSTOM
      Group (through a business  disposal for instance),  you may continue to be
      eligible to exercise  your  options,  after having left the ALSTOM  Group,
      during the same  exercise  period and on the same  exercise  conditions as
      other  beneficiaries.  Such cases need the  Chairman  and Chief  Executive
      Officer's  approval  who will report  these cases to the  Nominations  and
      Remuneration Committee.

   5.5. RETIREMENT/PERMANENT WORK INCAPACITY

      If you retire or if your  employment is terminated  due to permanent  work
      incapacity,  you will  continue to be eligible to exercise  your  options,
      after having left the company,  during the same exercise period and on the
      same exercise  conditions as other  beneficiaries.  However,  the exercise
      conditions by lots mentioned in paragraph 3. above could be shortened on a
      case by case  basis.  Such cases  need the  Chairman  and Chief  Executive
      Officer's  approval  who will report  these cases to the  Nominations  and
      Remuneration Committee.

   5.6. DEATH

      If you die,  options  that are  exercisable  at the date of death,  can be
      exercised  by your  heirs  during a period  of 6 months  after the date of
      death.

<PAGE>

6. FORM, RIGHTS AND TRANSFERABILITY

   6.1 FORM

      The shares you are eligible to acquire when  exercising  your options will
      be delivered in registered  form ("FORME  NOMINATIVE"),  unless  otherwise
      stated.

      The shares may be delivered in bearer form ("AU PORTEUR") if  specifically
      requested by you.

   6.2. RIGHTS

      The shares  acquired upon  exercising  the options shall be subject to all
      provisions of law and of the Memorandum and Articles of Association of the
      Company,  and shall  carry  rights as from the first day of the  financial
      year during which the option is exercised.  As a  consequence,  the shares
      shall be entitled to the dividend paid for such financial year.

      They will have the same status as existing  shares after  payment to those
      existing  shares of the dividend  related to the financial  year preceding
      the one during which the option has been exercised.

   6.3. TRANSFERABILITY

      The shares must be paid in full upon subscription.  Details concerning the
      method of transfer of the shares will be provided  before the beginning of
      the exercise period.

7. SUSPENSION OF THE RIGHT TO EXERCISE THE OPTIONS

   The Board of  Directors  is entitled  to suspend  the right to  exercise  the
   options each time a financial  operation  concerning  ALSTOM's  share capital
   requires the prior knowledge of the number of outstanding shares or in case a
   financial operation occurs requiring an adjustment.

   In such case,  the  beneficiaries  will be notified of the date of suspension
   and the date at which the options can be exercised again.

   Such a suspension cannot defer the expiry date of the options as indicated in
   paragraph 3.

8. MAINTENANCE OF THE RIGHTS OF THE BENEFICIARIES OF OPTIONS

      PRICE ADJUSTMENT

      In the case where,  during the life of the  options,  ALSTOM were to carry
      out one of the financial  operations  stated below,  which could influence
      the share  value,  measures  will be taken so as to take into  account the
      consequences  of such  operation.  To this  end,  the  subscription  price
      corresponding to the options granted will be adjusted.

      In accordance with Article  L.225-181 of the above mentioned Code and with
      Articles 174-8 to 174-16 of the Decree of 23 March 1967,  the  maintenance

<PAGE>

      of the rights of beneficiaries, in case of operations carried by ALSTOM as
      detailed below,  will be protected by adjusting the subscription  price as
      described in  sub-paragraphs a, b, c, d and e, below. In no event will the
      adjusted price be less than the nominal value of the share.

      a) Issue of  securities  and/or  shares with a  preferential  subscription
         right offered to the shareholders.

         The then  prevailing  subscription  price  through  the  exercise of an
         option  will be reduced by an amount  equivalent  to this  subscription
         price multiplied by the ratio:

                         Value of the subscription right
                -------------------------------------------------
                Value of the share before this subscription right

         the  corresponding  amount being rounded up to the next  hundredth of a
         Euro.

         The  above  mentioned  calculations  will be  determined  by using  the
         average of the opening  prices  quoted on the Paris Bourse for same day
         trades  during all the trading  days  falling  within the  subscription
         period.

      b) In case of a capital increase by incorporation of reserves,  profits or
         issue premium with a bonus issue of shares fully paid up, as well as in
         case of either split or regrouping  of the shares  forming the capital,
         the  subscription  price  through  the  exercise  of an option  will be
         adjusted by  multiplying  this  subscription  price by the ratio of the
         existing  number of shares over the total  number of  existing  and new
         shares, i.e. by applying the formula:

                                                        number of shares
                                                      before the operation
         New price = Price before the operation x ------------------------------
                                                        number of shares
                                                      after the operation

         In case of a capital increase by incorporation of reserves and increase
         in the nominal  value of the shares there will be no  adjustment of the
         subscription price.

      c) In case of distribution of reserves in cash or in portfolio securities,
         the  subscription  price  through  the  exercise  of an option  will be
         reduced by an amount equivalent to this  subscription  price multiplied
         by the ratio:

                   Value of the cash or securities distributed
                   -------------------------------------------
                     Value of the share before distribution

         When calculating this ratio:

         o  The value of the share before  distribution  will be  determined  by
            using the average of the opening  prices  quoted on the Paris Bourse
            for same day trades during a period of one month preceding the first
            day of the month during which the distribution has started.

         o  The value of the securities distributed will be determined:

<PAGE>

            -  if these  shares are quoted on an  official  stock  exchange,  by
               using the average of the first  quotations on that stock exchange
               during a period of one month preceding the first day of the month
               during which the distribution has started;

            -  if the  shares  are not  quoted on a stock  exchange,  by using a
               valuation  of the  share  made by the  Board  of  Directors  upon
               special report from the auditors ("COMMISSAIRES AUX COMPTES").

      d) In case of reduction of the share capital attributable to losses:

            -  if the  share  capital  is  lowered  by  reducing  the  number of
               outstanding  shares,  the subscription price through the exercise
               of an option will be adjusted by applying the following :

                                                        Number of shares
                                                      before the reduction
         New price = Price before the reduction x ------------------------------
                                                        Number of shares
                                                      after the reduction

            -  if the share  capital is reduced  without  changing the number of
               shares, the subscription price will not be adjusted.

      e) In case of  purchase  by the  Company  of its own  shares at a purchase
         price  above the  quoted  price,  the  number of  shares,  which may be
         obtained through the exercise of options, will be adjusted.

         Such  adjustment  should  ensure,  rounded up to one  hundredth  of one
         share,  that the value of the shares  issued  through  the  exercise of
         options  after  the  operation  will be  identical  to the value of the
         shares that would have been  obtained in case of an exercise of options
         before such operation.

         To that  effect,  the adjusted  rights to subscribe  the shares will be
         calculated by applying the following ratio:

                                               (purchase price - value of the
                                               share before the purchase or the
                                                   possibility of purchase)
      Percentage of share capital purchased x ----------------------------------
                                                 value of the share before the
                                                 purchase or the possibility
                                                          of purchase

         The above value of the share will be determined by using the average of
         ten  consecutive  prices quoted on the Paris Bourse for same day trades
         chosen among the twenty  preceding the purchase or the  possibility  of
         purchase.

         Any  subsequent  adjustments  will be  calculated  on the  basis of the
         immediately  preceding  adjusted rights rounded to one hundredth of one
         share as mentioned above.

         ADJUSTMENT OF THE NUMBER OF SHARES

         In all the cases  mentioned in  sub-paragraphs  a, b, c, d and e above,
         the number of underlying shares through the exercise of options will be
         adjusted  so that,  for each  beneficiary,  he/she  will  receive a new
         number of shares  (rounded up if necessary to the next whole share) for

<PAGE>

         the same total subscription  price  corresponding to the options before
         adjustment.

9. SOCIAL SECURITY AND TAX TREATMENT OF OPTIONS

   The social  security and tax treatment  applicable  to Stock Options  depends
   upon the country where you are tax resident.

   Depending on countries, the regulations governing Stock Options may have some
   social security and/or tax  consequences at the time of the options grant, at
   the time of the exercise of the options, at the time of sale of the shares.

   A note will be sent to you,  explaining the social security and tax treatment
   of options that  currently  applies in the country where you are tax resident
   at the time of the options grant.

   It will be necessary for you to obtain  up-to-date  information on the social
   security and tax  treatment  applicable  in the country where you will be tax
   resident at the time when you exercise  your options and at the time when you
   sell your shares.

   For purposes of United States law, these options are "nonqualified options".

   For purposes of United  Kingdom  law,  this plan is an  "unapproved  employee
   share scheme".

   For purposes of Australian law, this plan is a "qualifying plan".

   For  purposes  of  Belgian  law,  this  plan is not set up  according  to the
   provisions of Article 45 of the Belgian Law of 27 December 1984.

10.  INSIDER TRADING REGULATIONS

   Article L. 465-1 of the CODE MONETAIRE ET FINANCIER and  Regulation  90-08 of
   the "COMMISSION  DES OPERATIONS DE BOURSE"  ("MANQUEMENT  D'INITIE")  provide
   criminal  sanctions and fines for any person who, having access to privileged
   information  on the  perspectives  or situation of a listed company or on the
   perspective of evolution of its quoted securities,  as a consequence of their
   position or function,  effect or permit another to effect, either directly or
   indirectly,  a stock  market  transaction  before the  information  is in the
   public knowledge.

   According  to  the  current   regulations   and   practices,   a  "PRIVILEGED
   INFORMATION"  is a non  public  information,  precise  (but  not  necessarily
   certain) which,  if publicly known,  could have an incidence on the quotation
   of the  security  concerned.  It can be related to the  knowledge of external
   growth, disposals or restructuring and, more generally, to any fact which can
   result in a fluctuation of the security quotation.

   These regulations, which apply in any case to the sale of shares by employees
   and  directors,  aim at ensuring the  transparency  of the market through the
   equal treatment of all investors with respect to information.

   As a consequence, you will find attached :

<PAGE>

   o  Article L. 465-1 of the CODE  MONETAIRE ET FINANCIER,  defining the "DELIT
      D'INITIE", which constitutes a criminal infraction to be dealt with by the
      Court ;

   o  Regulation  90-08 of the  "COMMISSION  DES  OPERATIONS  DE  BOURSE"  (COB)
      prohibiting   the  use  of  "privileged   information"   whose   violation
      constitutes  a  "MANQUEMENT  D'INITIE"  which  exposes  its  author  to an
      administrative procedure (fines) from the COB.

      It is  important  to note that the same act can be  sanctioned  under both
      infractions.

      Furthermore,   other  regulations   prohibiting  the  use  of  "PRIVILEGED
      INFORMATION",  and more generally concerning insider trading, may exist in
      countries other than France. It is your  responsibility to ensure that you
      are fully  aware of and comply  with such  regulations  applicable  in the
      country  where you are  resident  at the time you  exercise  your  options
      and/or sale your shares.

<PAGE>

               ARTICLE L.465-1 OF THE CODE MONETAIRE ET FINANCIER

EST PUNI DE DEUX ANS  D'EMPRISONNEMENT  ET D'UNE AMENDE DE 10 MILLIONS DE FRANCS
DONT LE MONTANT  PEUT ETRE  PORTE  AU-DELA DE CE  CHIFFRE,  JUSQU'AU  DECUPLE DU
MONTANT  DU  PROFIT  EVENTUELLEMENT  REALISE,  SANS  QUE  L'AMENDE  PUISSE  ETRE
INFERIEURE  A CE MEME  PROFIT,  LE  FAIT,  POUR  LES  DIRIGEANTS  D'UNE  SOCIETE
MENTIONNEE  A L'ARTICLE  L.225-108  DU CODE DE  COMMERCE  ET POUR LES  PERSONNES
DISPOSANT,  A L'OCCASION DE L'EXERCICE DE LEUR PROFESSION OU DE LEURS FONCTIONS,
D'INFORMATIONS  PRIVILEGIEES  SUR LES PERSPECTIVES OU LA SITUATION D'UN EMETTEUR
DONT LES TITRES SONT NEGOCIES SUR UN MARCHE  REGLEMENTE OU SUR LES  PERSPECTIVES
D'EVOLUTION  D'UN  INSTRUMENT  FINANCIER  ADMIS  SUR UN  MARCHE  REGLEMENTE,  DE
REALISER OU DE  PERMETTRE  SCIEMMENT  DE REALISER,  SOIT  DIRECTEMENT,  SOIT PAR
PERSONNE  INTERPOSEE,  UNE OU  PLUSIEURS  OPERATIONS  AVANT  QUE LE  PUBLIC  AIT
CONNAISSANCE DE CES INFORMATIONS.

EST PUNI DE SIX MOIS  D'EMPRISONNEMENT  ET DE 100.000 F D'AMENDE  LE FAIT,  POUR
TOUTE PERSONNE  DISPOSANT  DANS  L'EXERCICE DE SA PROFESSION OU DE SES FONCTIONS
D'UNE INFORMATION PRIVILEGIEE SUR LES PERSPECTIVES OU LA SITUATION D'UN EMETTEUR
DONT LES TITRES SONT NEGOCIES SUR UN MARCHE  REGLEMENTE,  DE LA COMMUNIQUER A UN
TIERS EN DEHORS DU CADRE NORMAL DE SA PROFESSION OU DE SES FONCTIONS.

EST PUNI DES PEINES PREVUES AU PREMIER ALINEA LE FAIT, POUR TOUTE  PERSONNE,  DE
REPANDRE  SCIEMMENT  DANS LE  PUBLIC  PAR DES VOIES ET  MOYENS  QUELCONQUES  DES
INFORMATIONS  FAUSSES OU TROMPEUSES  SUR LES  PERSPECTIVES  OU LA SITUATION D'UN
EMETTEUR  DONT LES TITRES  SONT  NEGOCIES  SUR UN MARCHE  REGLEMENTE  OU SUR LES
PERSPECTIVES   D'EVOLUTION  D'UN  INSTRUMENT   FINANCIER  ADMIS  SUR  UN  MARCHE
REGLEMENTE, DE NATURE A AGIR SUR LES COURS.

<PAGE>

         REGULATION NO 90-08 OF THE COMMISSION DES OPERATIONS DE BOURSE
              RELATIF A L'UTILISATION D'UNE INFORMATION PRIVILEGIEE

ART. 1. AU REGARD DU PRESENT REGLEMENT :

-  LE TERME "PERSONNE" DESIGNE UNE PERSONNE PHYSIQUE OU UNE PERSONNE MORALE ;

-  LE TERME "MARCHE" DESIGNE L'ENSEMBLE DES TRANSACTIONS PORTANT SUR DES VALEURS
   MOBILIERES, DES CONTRATS A TERME NEGOCIABLES OU DES PRODUITS FINANCIERS ADMIS
   AUX  NEGOCIATIONS  PAR LE  CONSEIL  DES  BOURSES  DE VALEURS OU LE CONSEIL DU
   MARCHE A TERME ;

-  LE TERME  "EMETTEUR"  DESIGNE UNE PERSONNE  MORALE DONT LES TITRES SONT ADMIS
   AUX NEGOCIATIONS SUR LA COTE OFFICIELLE OU SUR LA COTE DU SECOND MARCHE D'UNE
   BOURSE DE VALEURS ;

-  LE TERME  "INFORMATION  PRIVILEGIEE"  SIGNIFIE UNE  INFORMATION NON PUBLIQUE,
   PRECISE,  CONCERNANT  UN OU PLUSIEURS  EMETTEURS,  UNE OU  PLUSIEURS  VALEURS
   MOBILIERES,  UN OU PLUSIEURS  CONTRATS A TERME  NEGOCIABLES,  UN OU PLUSIEURS
   PRODUITS FINANCIERS COTES, QUI, SI ELLE ETAIT RENDUE PUBLIQUE, POURRAIT AVOIR
   UNE INCIDENCE SUR LE COURS DE LA VALEUR,  DU CONTRAT OU DU PRODUIT  FINANCIER
   CONCERNE.

LES   DISPOSITIONS   DU  PRESENT   REGLEMENT  SONT  EGALEMENT   APPLICABLES  AUX
NEGOCIATIONS SUR LE MARCHE HORS COTE.

ART. 2. LES PERSONNES  DISPOSANT D'UNE INFORMATION  PRIVILEGIEE A RAISON DE LEUR
QUALITE DE MEMBRES DES ORGANES  D'ADMINISTRATION,  DE DIRECTION, DE SURVEILLANCE
D'UN  EMETTEUR,  OU A RAISON DES  FONCTIONS  QU'ELLES  EXERCENT AU SEIN D'UN TEL
EMETTEUR  DOIVENT  S'ABSTENIR  D'EXPLOITER,  POUR  COMPTE  PROPRE OU POUR COMPTE
D'AUTRUI,  UNE TELLE  INFORMATION  SUR LE  MARCHE,  SOIT  DIRECTEMENT,  SOIT PAR
PERSONNE  INTERPOSEE,  EN ACHETANT OU EN VENDANT DES TITRES DE CET EMETTEUR,  OU
DES PRODUITS FINANCIERS LIES A CE TITRE.

LES PERSONNES MENTIONNEES A L'ALINEA PRECEDENT DOIVENT S'ABSTENIR DE COMMUNIQUER
L'INFORMATION  PRIVILEGIEE  A DES FINS  AUTRES  OU POUR UNE  ACTIVITE  AUTRE QUE
CELLES A RAISON DESQUELLES ELLE EST DETENUE.

ART. 3. LES PERSONNES  DISPOSANT  D'UNE  INFORMATION  PRIVILEGIEE A RAISON DE LA
PREPARATION  ET  DE  L'EXECUTION  D'UNE  OPERATION  FINANCIERE  NE  DOIVENT  PAS
EXPLOITER, POUR COMPTE PROPRE OU POUR COMPTE D'AUTRUI, UNE TELLE INFORMATION SUR
LE MARCHE NI LA  COMMUNIQUER  A DES FINS AUTRES OU POUR UNE  ACTIVITE  AUTRE QUE
CELLES A RAISON DESQUELLES ELLE EST DETENUE.

ART. 4. LES PERSONNES AUXQUELLES A ETE COMMUNIQUEE UNE INFORMATION PRIVILEGIEE A
L'OCCASION DE L'EXERCICE DE LEURS  PROFESSIONS OU DE LEURS  FONCTIONS NE DOIVENT
PAS EXPLOITER, POUR COMPTE PROPRE OU POUR COMPTE D'AUTRUI, UNE TELLE INFORMATION
SUR LE MARCHE OU LA COMMUNIQUER A DES FINS AUTRES OU POUR UNE ACTIVITE AUTRE QUE
CELLES A RAISON DESQUELLES ELLE A ETE COMMUNIQUEE.

ART. 5. TOUTE PERSONNE QUI, EN  CONNAISSANCE  DE CAUSE, POSSEDE UNE  INFORMATION
PRIVILEGIEE PROVENANT DIRECTEMENT OU INDIRECTEMENT D'UNE PERSONNE MENTIONNEE AUX
ARTICLES  2, 3 ET 4 DU PRESENT  REGLEMENT,  NE DOIT PAS  EXPLOITER,  POUR COMPTE
PROPRE OU POUR COMPTE D'AUTRUI, UNE TELLE INFORMATION SUR LE MARCHE.

ART. 6. LES  EMETTEURS  DONT LES  TITRES  SE  NEGOCIENT  SUR  UN  MARCHE  ET LES
PERSONNES  MENTIONNEES  A L'ARTICLE 19 DE LA LOI NO 88-70 DU 22 JANVIER 1988 SUR

<PAGE>

LES  BOURSES DE  VALEURS  SONT TENUS DE  PRENDRE  TOUTES  MESURES  UTILES EN VUE
D'EVITER   L'UTILISATION   ABUSIVE  ET  LA  CIRCULATION   INDUE   D'INFORMATIONS
PRIVILEGIEES.

ART. 7. LES DISPOSITIONS DU PRESENT REGLEMENT SONT APPLICABLES AUX DIRIGEANTS DE
L'EMETTEUR OU DE LA PERSONNE MORALE CONCERNES.[LOGO]                                                               Exhibit 4.4

                                 DESCRIPTION OF
                         THE ALSTOM STOCK OPTION PLAN OF
                                 8 JANUARY 2002

1. STOCK OPTIONS

   Stock options give you the right,  under certain  conditions,  to subscribe a
   given number of ALSTOM  shares at a  pre-defined  price during a  pre-defined
   period.

   This Stock Option Plan is implemented  in accordance  with Article L. 225-177
   and following articles of the French Code of Commerce.

2. EXERCISE PRICE

   The exercise price of these options has been set by the Board of Directors on
   8 January 2002 and  corresponds  to the average of the opening  prices of the
   ALSTOM's  shares  quoted on the Paris Bourse  during the last 20 trading days
   preceding the Board Meeting, i.e. EURO 13.09.

3. EXERCISE PERIOD

   Options shall be partially or fully exercisable by lots of one third (subject
   to a minimum of ten (10)  shares per  exercise  of  option),  at each  annual
   maturity following the date of grant. Accordingly:

     -  1/3 of the  options  will be  exercisable  from 8 JANUARY  2003 TO 7
        JANUARY 2010 BOTH DATES INCLUSIVE,

     -  2/3 third of the options will be exercisable  from 8 JANUARY 2004 TO
        7 JANUARY 2010 BOTH DATES INCLUSIVE,

     -  100% of the options  will be  exercisable  from 8 JANUARY  2005 TO 7
        JANUARY 2010 BOTH DATES INCLUSIVE,

     subject to the conditions set out below in paragraph 5.

     Shares  acquired  by  beneficiaries  qualifying  as  employees  of a French
     company of the ALSTOM  Group,  following  the exercise of their  options in
     accordance  with the  terms  above,  shall  be in  registered  form  (FORME
     NOMINATIVE)  and  shall not be  transferred  before  the  expiry of the tax
     suspension  period provided for in Article 163 bis C of the French tax code
     (CODE GENERAL DES IMPOTS).

4. EXERCISE PROCESS

   You will receive in due time the  documentation  necessary  to exercise  your
   options.

<PAGE>

5. RULES IN CASE OF DEPARTURE FROM THE ALSTOM GROUP

   5.1 RESIGNATION

      If you resign,  you lose the right to exercise  your  options from the day
      you submit your resignation.

   5.2. DISMISSAL

      If your  employment is terminated by your employer,  you lose the right to
      exercise your options from the day you are notified of such termination.

   5.3. NEGOTIATED TERMINATION

      If your employment is terminated by mutual agreement,  you may continue to
      be eligible to  exercise  your  options,  after  having left the  company,
      during the same  exercise  period and on the same  exercise  conditions as
      other  beneficiaries.  Such cases need the  Chairman  and Chief  Executive
      Officer's  approval  who will report  these cases to the  Nominations  and
      Remuneration Committee.

   5.4. TRANSFER TO ANOTHER COMPANY

      If your  employment is transferred to another  company  outside the ALSTOM
      Group (through a business  disposal for instance),  you may continue to be
      eligible to exercise  your  options,  after having left the ALSTOM  Group,
      during the same  exercise  period and on the same  exercise  conditions as
      other  beneficiaries.  Such cases need the  Chairman  and Chief  Executive
      Officer's  approval  who will report  these cases to the  Nominations  and
      Remuneration Committee.

   5.5. RETIREMENT/PERMANENT WORK INCAPACITY

      If you retire or if your  employment is terminated  due to permanent  work
      incapacity,  you will  continue to be eligible to exercise  your  options,
      after having left the company,  during the same exercise period and on the
      same exercise  conditions as other  beneficiaries.  However,  the exercise
      conditions by lots mentioned in paragraph 3. above could be shortened on a
      case by case  basis.  Such cases  need the  Chairman  and Chief  Executive
      Officer's  approval  who will report  these cases to the  Nominations  and
      Remuneration Committee.

   5.6. DEATH

      If you die,  options  that are  exercisable  at the date of death,  can be
      exercised  by your  heirs  during a period  of 6 months  after the date of
      death.

6. FORM, RIGHTS AND TRANSFERABILITY

   6.1 FORM

      The shares you are eligible to acquire when  exercising  your options will
      be delivered in registered  form ("FORME  NOMINATIVE"),  unless  otherwise
      stated.

<PAGE>

      The shares may be delivered in bearer form ("AU PORTEUR") if  specifically
      requested by you.

   6.2. RIGHTS

      The shares  acquired upon  exercising  the options shall be subject to all
      provisions of law and of the Memorandum and Articles of Association of the
      Company,  and shall  carry  rights as from the first day of the  financial
      year during which the option is exercised.  As a  consequence,  the shares
      shall be entitled to the dividend paid for such financial year.

      They will have the same status as existing  shares after  payment to those
      existing  shares of the dividend  related to the financial  year preceding
      the one during which the option has been exercised.

   6.3. TRANSFERABILITY

      The shares must be paid in full upon subscription.  Details concerning the
      method of transfer of the shares will be provided  before the beginning of
      the exercise period.

7. SUSPENSION OF THE RIGHT TO EXERCISE THE OPTIONS

   The Board of  Directors  is entitled  to suspend  the right to  exercise  the
   options each time a financial  operation  concerning  ALSTOM's  share capital
   requires the prior knowledge of the number of outstanding shares or in case a
   financial operation occurs requiring an adjustment.

   In such case,  the  beneficiaries  will be notified of the date of suspension
   and the date at which the options can be exercised again.

   Such a suspension cannot defer the expiry date of the options as indicated in
   paragraph 3.

8. MAINTENANCE OF THE RIGHTS OF THE BENEFICIARIES OF OPTIONS

      PRICE ADJUSTMENT

      In the case where,  during the life of the  options,  ALSTOM were to carry
      out one of the financial  operations  stated below,  which could influence
      the share  value,  measures  will be taken so as to take into  account the
      consequences  of such  operation.  To this  end,  the  subscription  price
      corresponding to the options granted will be adjusted.

      In accordance with Article  L.225-181 of the above mentioned Code and with
      Articles 174-8 to 174-16 of the Decree of 23 March 1967,  the  maintenance
      of the rights of beneficiaries, in case of operations carried by ALSTOM as
      detailed below,  will be protected by adjusting the subscription  price as
      described in  sub-paragraphs a, b, c, d and e, below. In no event will the
      adjusted price be less than the nominal value of the share.

      a) Issue of  securities  and/or  shares with a  preferential  subscription
         right offered to the shareholders.

<PAGE>

         The then  prevailing  subscription  price  through  the  exercise of an
         option  will be reduced by an amount  equivalent  to this  subscription
         price multiplied by the ratio:

                         Value of the subscription right
                ------------------------------------------------
                Value of the share before this subscription right

         the  corresponding  amount being rounded up to the next  hundredth of a
         Euro.

         The  above  mentioned  calculations  will be  determined  by using  the
         average of the opening  prices  quoted on the Paris Bourse for same day
         trades  during all the trading  days  falling  within the  subscription
         period.

      b) In case of a capital increase by incorporation of reserves,  profits or
         issue premium with a bonus issue of shares fully paid up, as well as in
         case of either split or regrouping  of the shares  forming the capital,
         the  subscription  price  through  the  exercise  of an option  will be
         adjusted by  multiplying  this  subscription  price by the ratio of the
         existing  number of shares over the total  number of  existing  and new
         shares, i.e. by applying the formula:

                                                        number of shares
                                                      before the operation
         New price = Price before the operation x ------------------------------
                                                        number of shares
                                                      after the operation

         In case of a capital increase by incorporation of reserves and increase
         in the nominal  value of the shares there will be no  adjustment of the
         subscription price.

      c) In case of distribution of reserves in cash or in portfolio securities,
         the  subscription  price  through  the  exercise  of an option  will be
         reduced by an amount equivalent to this  subscription  price multiplied
         by the ratio:

                   Value of the cash or securities distributed
                   -------------------------------------------
                     Value of the share before distribution

         When calculating this ratio:

         o  The value of the share before  distribution  will be  determined  by
            using the average of the opening  prices  quoted on the Paris Bourse
            for same day trades during a period of one month preceding the first
            day of the month during which the distribution has started.

         o  The value of the securities distributed will be determined:

            -  if these  shares are quoted on an  official  stock  exchange,  by
               using the average of the first  quotations on that stock exchange
               during a period of one month preceding the first day of the month
               during which the distribution has started;

            -  if the  shares  are not  quoted on a stock  exchange,  by using a
               valuation  of the  share  made by the  Board  of  Directors  upon
               special report from the auditors ("COMMISSAIRES AUX COMPTES").

<PAGE>

      d) In case of reduction of the share capital  attributable to losses:

            -  if the  share  capital  is  lowered  by  reducing  the  number of
               outstanding  shares,  the subscription price through the exercise
               of an option will be adjusted by applying the following :

                                                        Number of shares
                                                      before the reduction
         New price = Price before the reduction x ------------------------------
                                                        Number of shares
                                                      after the reduction

            -  if the share  capital is reduced  without  changing the number of
               shares, the subscription price will not be adjusted.

      e) In case of  purchase  by the  Company  of its own  shares at a purchase
         price  above the  quoted  price,  the  number of  shares,  which may be
         obtained through the exercise of options, will be adjusted.

         Such  adjustment  should  ensure,  rounded up to one  hundredth  of one
         share,  that the value of the shares  issued  through  the  exercise of
         options  after  the  operation  will be  identical  to the value of the
         shares that would have been  obtained in case of an exercise of options
         before such operation.

         To that  effect,  the adjusted  rights to subscribe  the shares will be
         calculated by applying the following ratio:

                                               (purchase price - value of the
                                               share before the purchase or the
                                                   possibility of purchase)
      Percentage of share capital purchased x ----------------------------------
                                                 value of the share before the
                                                 purchase or the possibility
                                                          of purchase

         The above value of the share will be determined by using the average of
         ten  consecutive  prices quoted on the Paris Bourse for same day trades
         chosen among the twenty  preceding the purchase or the  possibility  of
         purchase.

         Any  subsequent  adjustments  will be  calculated  on the  basis of the
         immediately  preceding  adjusted rights rounded to one hundredth of one
         share as mentioned above.

      ADJUSTMENT OF THE NUMBER OF SHARES

      In all the cases mentioned in  sub-paragraphs  a, b, c, d and e above, the
      number of  underlying  shares  through  the  exercise  of options  will be
      adjusted so that, for each  beneficiary,  he/she will receive a new number
      of shares  (rounded up if  necessary to the next whole share) for the same
      total subscription price corresponding to the options before adjustment.

9. SOCIAL SECURITY AND TAX TREATMENT OF OPTIONS

   The social  security and tax treatment  applicable  to Stock Options  depends
   upon the country where you are tax resident.

<PAGE>

   Depending on countries, the regulations governing Stock Options may have some
   social security and/or tax  consequences at the time of the options grant, at
   the time of the exercise of the options, at the time of sale of the shares.

   A note will be sent to you,  explaining the social security and tax treatment
   of options that  currently  applies in the country where you are tax resident
   at the time of the options grant.

   It will be necessary for you to obtain  up-to-date  information on the social
   security and tax  treatment  applicable  in the country where you will be tax
   resident at the time when you exercise  your options and at the time when you
   sell your shares.

   For purposes of United States law, these options are "nonqualified options".

   For purposes of United  Kingdom  law,  this plan is an  "unapproved  employee
   share scheme".

   For purposes of Australian law, this plan is a "qualifying plan".

10.  INSIDER TRADING REGULATIONS

   Article L. 465-1 of the CODE MONETAIRE ET FINANCIER and  Regulation  90-08 of
   the "Commission  des Operations de Bourse"  ("MANQUEMENT  D'INITIE")  provide
   criminal  sanctions and fines for any person who, having access to privileged
   information  on the  perspectives  or situation of a listed company or on the
   perspective of evolution of its quoted securities,  as a consequence of their
   position or function,  effect or permit another to effect, either directly or
   indirectly,  a stock  market  transaction  before the  information  is in the
   public knowledge.

   According  to  the  current   regulations   and   practices,   a  "PRIVILEGED
   INFORMATION"  is a non  public  information,  precise  (but  not  necessarily
   certain) which,  if publicly known,  could have an incidence on the quotation
   of the  security  concerned.  It can be related to the  knowledge of external
   growth, disposals or restructuring and, more generally, to any fact which can
   result in a fluctuation of the security quotation.

   These regulations, which apply in any case to the sale of shares by employees
   and  directors,  aim at ensuring the  transparency  of the market through the
   equal treatment of all investors with respect to information.

   As a consequence, you will find attached :

   o  Article L. 465-1 of the CODE MONETAIRE ET FINANCIER,  defining the "DELIT
      D'INITIE",  which  constitutes a criminal  infraction to be dealt with by
      the Court ;

   o  Regulation  90-08 of the  "Commission  des  Operations  de  Bourse"  (COB)
      prohibiting   the  use  of  "privileged   information"   whose   violation
      constitutes  a  "MANQUEMENT  D'INITIE"  which  exposes  its  author  to an
      administrative procedure (fines) from the COB.

   It is  important  to note  that  the same act can be  sanctioned  under  both
   infractions.

   Furthermore,   other   regulations   prohibiting   the  use  of   "privileged
   information",  and more generally  concerning  insider trading,  may exist in
   countries other than France. It is your responsibility to ensure that you are

<PAGE>

   fully aware of and comply  with such  regulations  applicable  in the country
   where you are resident at the time you exercise your options and/or sale your
   shares.

<PAGE>

               ARTICLE L.465-1 OF THE CODE MONETAIRE ET FINANCIER

EST PUNI DE DEUX ANS  D'EMPRISONNEMENT  ET D'UNE AMENDE DE 10 MILLIONS DE FRANCS
DONT LE MONTANT  PEUT ETRE  PORTE  AU-DELA DE CE  CHIFFRE,  JUSQU'AU  DECUPLE DU
MONTANT  DU  PROFIT  EVENTUELLEMENT  REALISE,  SANS  QUE  L'AMENDE  PUISSE  ETRE
INFERIEURE  A CE MEME  PROFIT,  LE  FAIT,  POUR  LES  DIRIGEANTS  D'UNE  SOCIETE
MENTIONNEE  A L'ARTICLE  L.225-108  DU CODE DE  COMMERCE  ET POUR LES  PERSONNES
DISPOSANT,  A L'OCCASION DE L'EXERCICE DE LEUR PROFESSION OU DE LEURS FONCTIONS,
D'INFORMATIONS  PRIVILEGIEES  SUR LES PERSPECTIVES OU LA SITUATION D'UN EMETTEUR
DONT LES TITRES SONT NEGOCIES SUR UN MARCHE  REGLEMENTE OU SUR LES  PERSPECTIVES
D'EVOLUTION  D'UN  INSTRUMENT  FINANCIER  ADMIS  SUR UN  MARCHE  REGLEMENTE,  DE
REALISER OU DE  PERMETTRE  SCIEMMENT  DE REALISER,  SOIT  DIRECTEMENT,  SOIT PAR
PERSONNE  INTERPOSEE,  UNE OU  PLUSIEURS  OPERATIONS  AVANT  QUE LE  PUBLIC  AIT
CONNAISSANCE DE CES INFORMATIONS.

EST PUNI DE SIX MOIS  D'EMPRISONNEMENT  ET DE 100.000 F D'AMENDE  LE FAIT,  POUR
TOUTE PERSONNE  DISPOSANT  DANS  L'EXERCICE DE SA PROFESSION OU DE SES FONCTIONS
D'UNE INFORMATION PRIVILEGIEE SUR LES PERSPECTIVES OU LA SITUATION D'UN EMETTEUR
DONT LES TITRES SONT NEGOCIES SUR UN MARCHE  REGLEMENTE,  DE LA COMMUNIQUER A UN
TIERS EN DEHORS DU CADRE NORMAL DE SA PROFESSION OU DE SES FONCTIONS.

EST PUNI DES PEINES PREVUES AU PREMIER ALINEA LE FAIT, POUR TOUTE  PERSONNE,  DE
REPANDRE  SCIEMMENT  DANS LE  PUBLIC  PAR DES VOIES ET  MOYENS  QUELCONQUES  DES
INFORMATIONS  FAUSSES OU TROMPEUSES  SUR LES  PERSPECTIVES  OU LA SITUATION D'UN
EMETTEUR  DONT LES TITRES  SONT  NEGOCIES  SUR UN MARCHE  REGLEMENTE  OU SUR LES
PERSPECTIVES   D'EVOLUTION  D'UN  INSTRUMENT   FINANCIER  ADMIS  SUR  UN  MARCHE
REGLEMENTE, DE NATURE A AGIR SUR LES COURS.

<PAGE>

         REGULATION NO 90-08 OF THE COMMISSION DES OPERATIONS DE BOURSE
              RELATIF A L'UTILISATION D'UNE INFORMATION PRIVILEGIEE

ART. 1. AU REGARD DU PRESENT REGLEMENT :

-  LE TERME "PERSONNE" DESIGNE UNE PERSONNE PHYSIQUE OU UNE PERSONNE MORALE ;

-  LE TERME "MARCHE" DESIGNE L'ENSEMBLE DES TRANSACTIONS PORTANT SUR DES VALEURS
   MOBILIERES, DES CONTRATS A TERME NEGOCIABLES OU DES PRODUITS FINANCIERS ADMIS
   AUX  NEGOCIATIONS  PAR LE  CONSEIL  DES  BOURSES  DE VALEURS OU LE CONSEIL DU
   MARCHE A TERME ;

-  LE TERME  "EMETTEUR"  DESIGNE UNE PERSONNE  MORALE DONT LES TITRES SONT ADMIS
   AUX NEGOCIATIONS SUR LA COTE OFFICIELLE OU SUR LA COTE DU SECOND MARCHE D'UNE
   BOURSE DE VALEURS ;

-  LE TERME  "INFORMATION  PRIVILEGIEE"  SIGNIFIE UNE  INFORMATION NON PUBLIQUE,
   PRECISE,  CONCERNANT  UN OU PLUSIEURS  EMETTEURS,  UNE OU  PLUSIEURS  VALEURS
   MOBILIERES,  UN OU PLUSIEURS  CONTRATS A TERME  NEGOCIABLES,  UN OU PLUSIEURS
   PRODUITS FINANCIERS COTES, QUI, SI ELLE ETAIT RENDUE PUBLIQUE, POURRAIT AVOIR
   UNE INCIDENCE SUR LE COURS DE LA VALEUR,  DU CONTRAT OU DU PRODUIT  FINANCIER
   CONCERNE.

LES   DISPOSITIONS   DU  PRESENT   REGLEMENT  SONT  EGALEMENT   APPLICABLES  AUX
NEGOCIATIONS SUR LE MARCHE HORS COTE.

ART. 2. LES PERSONNES  DISPOSANT D'UNE INFORMATION  PRIVILEGIEE A RAISON DE LEUR
QUALITE DE MEMBRES DES ORGANES  D'ADMINISTRATION,  DE DIRECTION, DE SURVEILLANCE
D'UN  EMETTEUR,  OU A RAISON DES  FONCTIONS  QU'ELLES  EXERCENT AU SEIN D'UN TEL
EMETTEUR  DOIVENT  S'ABSTENIR  D'EXPLOITER,  POUR  COMPTE  PROPRE OU POUR COMPTE
D'AUTRUI,  UNE TELLE  INFORMATION  SUR LE  MARCHE,  SOIT  DIRECTEMENT,  SOIT PAR
PERSONNE  INTERPOSEE,  EN ACHETANT OU EN VENDANT DES TITRES DE CET EMETTEUR,  OU
DES PRODUITS FINANCIERS LIES A CE TITRE.

LES PERSONNES MENTIONNEES A L'ALINEA PRECEDENT DOIVENT S'ABSTENIR DE COMMUNIQUER
L'INFORMATION  PRIVILEGIEE  A DES FINS  AUTRES  OU POUR UNE  ACTIVITE  AUTRE QUE
CELLES A RAISON DESQUELLES ELLE EST DETENUE.

ART. 3. LES PERSONNES  DISPOSANT  D'UNE  INFORMATION  PRIVILEGIEE A RAISON DE LA
PREPARATION  ET  DE  L'EXECUTION  D'UNE  OPERATION  FINANCIERE  NE  DOIVENT  PAS
EXPLOITER, POUR COMPTE PROPRE OU POUR COMPTE D'AUTRUI, UNE TELLE INFORMATION SUR
LE MARCHE NI LA  COMMUNIQUER  A DES FINS AUTRES OU POUR UNE  ACTIVITE  AUTRE QUE
CELLES A RAISON DESQUELLES ELLE EST DETENUE.

ART. 4. LES PERSONNES AUXQUELLES A ETE COMMUNIQUEE UNE INFORMATION PRIVILEGIEE A
L'OCCASION DE L'EXERCICE DE LEURS  PROFESSIONS OU DE LEURS  FONCTIONS NE DOIVENT
PAS EXPLOITER, POUR COMPTE PROPRE OU POUR COMPTE D'AUTRUI, UNE TELLE INFORMATION
SUR LE MARCHE OU LA COMMUNIQUER A DES FINS AUTRES OU POUR UNE ACTIVITE AUTRE QUE
CELLES A RAISON DESQUELLES ELLE A ETE COMMUNIQUEE.

ART. 5. TOUTE PERSONNE QUI, EN  CONNAISSANCE  DE CAUSE,  POSSEDE UNE INFORMATION
PRIVILEGIEE PROVENANT DIRECTEMENT OU INDIRECTEMENT D'UNE PERSONNE MENTIONNEE AUX
ARTICLES  2, 3 ET 4 DU PRESENT  REGLEMENT,  NE DOIT PAS  EXPLOITER,  POUR COMPTE
PROPRE OU POUR COMPTE D'AUTRUI, UNE TELLE INFORMATION SUR LE MARCHE.

ART. 6. LES  EMETTEURS  DONT LES  TITRES  SE  NEGOCIENT  SUR  UN  MARCHE  ET LES
PERSONNES  MENTIONNEES  A L'ARTICLE  19 DE LA LOI N 88-70 DU 22 JANVIER 1988 SUR

<PAGE>

LES  BOURSES DE  VALEURS  SONT TENUS DE  PRENDRE  TOUTES  MESURES  UTILES EN VUE
D'EVITER   L'UTILISATION   ABUSIVE  ET  LA  CIRCULATION   INDUE   D'INFORMATIONS
PRIVILEGIEES.

ART. 7. LES DISPOSITIONS DU PRESENT REGLEMENT SONT APPLICABLES AUX DIRIGEANTS DE
L'EMETTEUR OU DE LA PERSONNE MORALE CONCERNES.

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