Document:

EX-10.19

 

Exhibit 10.19

IPC ACQUISITION CORP.

NONQUALIFIED STOCK OPTION AGREEMENT

         THIS AGREEMENT, made as of the    h day of    (the “Grant Date”),
between IPC Acquisition Corp. (the “Company”), and    (the
“Optionee”).

         WHEREAS, the Company has adopted the IPC Acquisition Corp. 2002 Stock
Option Plan as amended and restated (the “Plan”) in order to provide additional
incentive to certain employees, officers, consultants and directors of the
Company and its Subsidiaries; and

         WHEREAS, the Committee responsible for administration of the Plan has
determined to grant an option to the Optionee as provided herein;

         NOW, THEREFORE, the parties hereto agree as follows, subject to the
approval of the stockholders of the Company in accordance with the final
regulations promulgated under Section 280G of the Code:

         1. Grant of Option.

               1.1 The Company hereby grants to the Optionee the right and option (the
“Option”) to purchase all or any part of an aggregate of    whole Shares
subject to, and in accordance with, the terms and conditions set forth in this
Agreement and the Plan.

               1.2 The Option is not intended to qualify as an “incentive stock option”
within the meaning of Section 422 of the Code.

               1.3 This Agreement shall be construed in accordance and consistent with,
and subject to, the Plan (which is incorporated herein by this reference) and,
except as otherwise expressly set forth herein, the capitalized terms used in
this Agreement shall have the definitions set forth in the Plan.

         2. Purchase Price.

               The price at which the Optionee shall be entitled to purchase Shares upon
the exercise of the Option shall be $  per Share.

         3. Duration of Option.

               The Option shall be exercisable to the extent and in the manner provided
herein for a period of ten (10) years from the Grant Date; provided, however,
that the Option may be earlier terminated as set forth herein.

 

 

         4. Vesting and Exercisability of Option.

               Subject to the terms and conditions of this Agreement and the Plan, the
Option shall become vested and exercisable with respect to 25% of the total
number of Shares covered by the Option on each of the first four anniversaries
of the Grant Date. Notwithstanding anything contained in this Agreement to the
contrary, upon the occurrence of an Exit Event, the Option, to the extent then
outstanding, shall become fully vested and exercisable.

         5. Manner of Exercise and Payment.

               5.1 Subject to the terms and conditions of this Agreement and the Plan,
the Option may be exercised by written notice delivered in person or by mail to
the Secretary of the Company, at its principal executive offices. Such notice
shall state that the Optionee is electing to exercise the Option and the number
of Shares in respect of which the Option is being exercised and shall be signed
by the person or persons exercising the Option. If requested by the Committee,
such person or persons shall (i) deliver this Agreement to the Secretary of the
Company who shall endorse thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to exercise the
Option.

               5.2 The notice of exercise described in Section 5.1 hereof shall be
accompanied by a cash payment in an amount equal to the full purchase price for
the Shares in respect of which the Option is being exercised.

               5.3 Upon receipt of notice of exercise and full payment for the Shares in
respect of which the Option is being exercised, the Company shall, subject to
Section 17 of the Plan, take such action as may be necessary to effect the
transfer to the Optionee of the number of Shares as to which such exercise was
effective.

               5.4 The Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any Shares subject to the Option
until (i) the Option shall have been exercised pursuant to the terms of this
Agreement and the Optionee shall have paid the full purchase price for the
number of Shares in respect of which the Option was exercised and has made
arrangements acceptable to the Company for the payment of all applicable
Withholding Taxes, (ii) the Company shall have issued and delivered the Shares
to the Optionee and (iii) the Optionee’s name shall have been entered as a
shareholder of record on the books of the Company, whereupon the Optionee shall
have full voting and other ownership rights with respect to such Shares.

         6. Termination of Option. Each Option shall terminate on the date which
is the tenth anniversary of the Grant Date, unless terminated earlier as
follows:

               6.1 If the employment of the Optionee is terminated for any reason other
than the death or Disability of the Optionee or for Cause, the portion of the
Option that is not then vested and exercisable shall immediately terminate. To
the extent the Option is vested

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and exercisable as of the date of such termination of employment, the Option
shall remain exercisable for a period of one hundred and eighty (180) days
following such termination of employment, after which time the Option shall
automatically terminate in full.

               6.2 If the employment of the Optionee is terminated by reason of the death
or Disability of the Optionee, the Option shall become immediately vested and
exercisable with respect to an additional number of Shares equal to fifty
percent (50%) of the Shares, if any, subject to the then unvested portion of
the Option. Any portion of the Option that is not vested and exercisable after
giving effect to the immediately preceding sentence shall immediately
terminate. To the extent the Option is or becomes vested on the date of such
termination of employment by reason of the death or Disability of the Optionee,
it shall remain exercisable for one year following such termination of
employment, after which time the Option shall automatically terminate in full.

               6.3 If the employment of the Optionee is terminated for Cause, (i) the
Option shall immediately terminate in full whether or not the Option is then
vested and exercisable and (ii) the Company shall have the right to purchase
from the Optionee and the Optionee shall be required to sell to the Company, at
the election of the Company at any time following such termination of
employment, any of the Shares acquired pursuant to the Option at a per share
purchase price equal to the lesser of (x) the Fair Market Value of a Share at
the time of such purchase by the Company, or (y) the exercise price set forth
in Section 2 above.

         7. Effect of Change in Control.

               Upon a Change In Control the Option shall become vested and exercisable
with respect to an additional number of Shares equal to fifty (50%) of the
Shares, if any, subject to the then unvested portion of the Option immediately
prior to the Change in Control. In addition to the foregoing, notwithstanding
anything contained in Section 6 of this Agreement to the contrary, in the event
the Optionee’s employment is terminated by the Company for any reason other
than Cause or Disability within one (1) year following a Change in Control, the
Option shall immediately become fully vested and exercisable and remain
exercisable following such termination for one hundred and eighty (180) days.

         8. Non-Transferability of Option.

               The Option shall not be Sold, transferred or otherwise disposed of other
than by will or by the laws of descent and distribution. During the lifetime
of the Optionee the Option shall be exercisable only by the Optionee.

         9. No Right to Continued Employment.

               Nothing in this Agreement or the Plan shall be interpreted or construed to
confer upon the Optionee any right with respect to continuance of employment by
the Company,

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nor shall this Agreement or the Plan interfere in any way with the right of the
Company to terminate the Optionee’s employment at any time.

         10. Withholding of Taxes.

               The Company shall have the right to deduct from any distribution of cash
to the Optionee an amount equal to the federal, state and local income taxes
and other amounts as may be required by law to be withheld (the “Withholding
Taxes”) with respect to the Option. If the Optionee is entitled to receive
Shares upon exercise of the Option, the Optionee shall make arrangements
acceptable to the Company for the payment of the Withholding Taxes prior to the
issuance of such Shares.

         11. Optionee Covenants.

               11.1 In consideration of the acquisition of Shares hereunder, the Optionee
agrees that the Optionee will not, during the Optionee’s employment with the
Company or any of its subsidiaries or any entity that becomes a parent of the
Company following the date hereof (a “Future Parent”) and for one year
thereafter (the “Non-Competition Term”), directly or indirectly, own, manage,
operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner with,
including but not limited to holding any position as a shareholder, director,
officer, consultant, independent contractor, employee, partner, or investor in,
any Restricted Enterprise (as defined below); provided that in no event shall
ownership of less than 1% of the outstanding equity securities of any issuer
whose securities are registered under the Exchange Act, standing alone, be
prohibited by this Section 11. For purposes of this Agreement, the term
“Restricted Enterprise” shall mean any person, corporation, partnership or
other entity that is engaged, directly or indirectly, in (a) the design,
manufacture, installation, servicing, consultation and other professional
services and applications of Turret Systems (as defined below); (b) the design
and implementation of the in-building cabling and infrastructure necessary for
customers do business; (c) the design, provisioning, installation or servicing
of telecommunications services for trading floors; or (d) managed services in
connection with trading organizations as provided by the Employer during the
Employee’s employment with the Employer, in each case in the United States or
in any other geographic location where the Employer or any of its affiliates do
business. For purposes of this Agreement, the term “Turret Systems” shall mean
telecommunications equipment and software to enable communications (including
voice, video and data) primarily among traders, counterparties and associated
support personnel. Following termination of the Optionee’s employment with all
member of the Company Group, upon request of the Company, the Optionee shall
notify the Company of the Optionee’s then current employment status.
Notwithstanding anything to the contrary contained herein, in the event of the
involuntary termination of the Optionee’s employment with the Company and its
subsidiaries for any reason other than Cause, the Non-Competition Term shall
end upon the earlier of (i) one year from the date of such termination and (ii)
the date on which the cash severance benefits to which the Optionee is
eligible, as determined by the Company, whether or not such benefits are
accepted by

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the Optionee, would cease to be paid if accepted; provided, however, that
in the event the Optionee is not eligible for any cash severance benefits, the
Non-Competition Term shall terminate on the date of the Optionee’s termination
of employment. For purposes of the immediately preceding sentence, any
severance payable in a lump sum shall be deemed paid over a number of weeks
equal to the quotient of the amount of such lump-sum severance payment divided
by the Optionee’s weekly salary.

               11.2 In consideration of the acquisition of Shares hereunder, the Optionee
agrees that during the Non-Competition Term, the Optionee shall not, and shall
not cause any other person to, interfere with or harm, or attempt to interfere
with or harm, the relationship of any member of the Company Group, or endeavor
to entice away from any member of the Company Group, or hire, any person who at
any time during the Optionee’s employment with any member of the Company Group
was an employee or customer of any member of the Company Group, or otherwise
had a material business relationship with any member of the Company Group;
provided, however, that the foregoing provision will not prevent the Optionee
from hiring any such person (i) who contacts the Optionee on his or her own
initiative without any direct or indirect solicitation or encouragement from
the Optionee (it being understood that a bona fide public advertisement for
employment placed by the Optionee and not specifically targeted at such persons
shall not constitute direct or indirect solicitation or encouragement) or (ii)
who has been terminated by any member of the Company Group.

               11.3 The Optionee agrees and understands that in the Optionee’s position
with the Company, the Optionee has been and will be exposed to and has and will
receive information relating to the confidential affairs of the Company, its
subsidiaries and affiliates, including but not limited to technical
information, intellectual property, business and marketing plans, strategies,
customer information, other information concerning the products, promotions,
development, financing, expansion plans, business policies and practices of the
Company, its subsidiaries and affiliates, and other forms of information
considered by the Company to be confidential and in the nature of trade secrets
(“Confidential Information”). Notwithstanding anything contained herein to the
contrary, Confidential Information shall not include information that is now
publicly available or that subsequently becomes publicly available other than
as a direct or indirect result of a breach of this Agreement. The Optionee
agrees that the Optionee will not disclose such Confidential Information,
either directly or indirectly, to any third person or entity without the prior
written consent of the Company. This confidentiality covenant has no temporal,
geographical or territorial restriction. Upon termination of the Optionee’s
employment with the Company and its subsidiaries the Optionee will promptly
supply to the Company all property, keys, notes, memoranda, writings, lists,
files, reports, customer lists, correspondence, tapes, disks, cards, surveys,
maps, logs, machines, technical data or any other tangible product or document
which has been produced by, received by or otherwise submitted to the Optionee
in the course or otherwise as a result o the Optionee’s employment with the
Company or its subsidiaries.

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               11.4 The Optionee agrees that any breach of the terms of this Section 11
would result in irreparable injury and damage to the Company Group for which
the Company Group would have no adequate remedy at law; the Optionee therefore
also agrees that in the event of said breach or any threat of breach, one or
more members of the Company Group, as applicable, shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by the Optionee and/or any and all
persons and/or entities acting for and/or with the Optionee, without having to
prove damages, in addition to any other remedies to which the members of the
Company Group may be entitled at law or in equity. The terms of this Section
11 shall not prevent the members of the Company Group from pursuing any other
available remedies for any breach or threatened breach hereof, including but
not limited to the recovery of damages from the Optionee. The Optionee and the
Company further agree that the provisions of the covenants contained in this
Section 11 are reasonable and necessary to protect the businesses of the
Company Group because of the Optionee’s access to confidential information and
his material participation in the operation of such businesses. Should a
court, arbitrator or other similar authority determine, however, that any
provision of the covenants contained in this Section 11 are not reasonable or
valid, either in period of time, geographical area, or otherwise, the parties
hereto agree that such covenants should be interpreted and enforced to the
maximum extent to which such court or arbitrator deems reasonable or valid.

               The existence of any claim or cause of action by the Optionee against one
or more members of the Company Group, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants contained in this Section 11.

         12. Restrictions on Sales of Shares by Optionees

               12.1 No Optionee shall Sell any Shares acquired upon exercise of the
Option prior to the earlier of (i) three (3) years from the Grant Date and (ii)
one hundred eighty (180) days following an IPO, other than to a Permitted
Transferee or where such Sale is first approved by the Board, or is made
pursuant to Section 12 or 13.4 of the Plan. In addition, to the extent
applicable, before the Optionee may Sell Shares acquired upon exercise of the
Option, the Shares must first be offered to the Company in accordance with
Section 14 of the Plan.

               12.2 For any transfer to a Permitted Transferee to be effective hereunder,
the Permitted Transferee shall agree in writing to be bound by all the terms of
this Agreement and the Plan applicable to the Optionee as if the Permitted
Transferee originally had been a party hereto; and provided, further, that all
of the partners of any Permitted Transferee that is a partnership shall agree
in writing not to transfer any partnership interests they then own or may
hereafter acquire in the partnership Permitted Transferee except to a Permitted
Transferee that has made the same agreement in writing to the Company, so long
as the partnership Permitted Transferee shall own any Shares. Any reference
herein to the Optionee shall be to the

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Permitted Transferee from and after the date the transfer is effected in
accordance with this Section 12.

               12.3 Any Sale or attempted Sale of Shares in violation of any provision of
this Agreement shall be void, and the Company shall not record such Sale on its
books or treat any purported transferee of such Shares as the owner of such
Shares for any purpose.

               12.4 Each stock certificate representing Shares issuable upon the exercise
of the Option shall bear a legend in substantially the following form:

THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR ANY STATE SECURITIES OR BLUE
SKY LAWS AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE
ASSIGNED EXCEPT (1) PURSUANT TO A
REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES THAT IS EFFECTIVE UNDER THE ACT OR
(2) PURSUANT TO ANY AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT RELATING TO THE
DISPOSITION OF SECURITIES AND (3) IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES
AND BLUE SKY LAWS.

THE SECURITIES REPRESENTED
HEREBY ARE SUBJECT TO THE PROVISIONS OF THE
IPC ACQUISITION CORP. 2002 STOCK OPTION PLAN
AS AMENDED AND RESTATED (THE “PLAN”) AND A
NONQUALIFIED STOCK OPTION AGREEMENT (THE
“AGREEMENT”) DATED AS OF    , WHICH
INCLUDES CERTAIN RESTRICTIONS ON TRANSFER.
COMPLETE AND CORRECT COPIES OF THE PLAN AND
THIS AGREEMENT ARE AVAILABLE FOR INSPECTION
AT THE PRINCIPAL OFFICE OF THE COMPANY AND
WILL BE FURNISHED UPON WRITTEN REQUEST AND
WITHOUT CHARGE.

         13. Optionee Bound by the Plan.

               The Optionee hereby acknowledges receipt of a copy of the Plan and agrees
to be bound by all the terms and provisions thereof.

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         14. Modification of Agreement.

               This Agreement may be modified, amended, suspended or terminated, and any
terms or conditions may be waived, but only by a written instrument executed by
the parties hereto.

         15. Severability.

               Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.

         16. Governing Law.

               The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware, without
giving effect to the conflicts of laws principles thereof.

         17. Jurisdiction; Consent to Service of Process.

               Each of the parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York state
court or federal court of the United States of America sitting in the Southern
District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or the transactions
it contemplates, or for recognition or enforcement of any judgment. Each of
the parties hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York state court or, to the extent permitted by law, in such federal court.
The consent of such parties to the jurisdiction of a New York state court
shall not preclude the right of any party to remove such action to the United
States District Court for the Southern District of New York, or other United
States District Court as may be permitted by applicable law, should such
removal be permitted under applicable law. Each of the parties agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

         18. Binding Effect.

               This Agreement shall inure to the benefit of and shall be binding upon the
parties hereto and their respective heirs, legal representatives, successors
and assigns. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by Purchaser without the prior written
consent of the Company.

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         19. Resolution of Disputes.

               Any dispute or disagreement which may arise under, or as a result of, or
in any way relate to, the interpretation, construction or application of this
Agreement shall be determined by the Committee. Any determination made by the
Committee hereunder shall be final, binding and conclusive on the Optionee and
Company for all purposes.

	 	 	 	 	 
	 	 	IPC ACQUISITION CORP.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	OPTIONEE
	 
	 	 	 	 
	 	 	

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Exhibit 4.3

APPENDIX 1

RULES AND REGULATIONS

FOR THE AVENTIS STOCK

OPTION

PLAN 2003

Grant of December 2, 2003

I. GENERAL PRINCIPLES AND PURPOSE FOR AVENTIS STOCK OPTION PLAN

     A stock option plan is a system that enables its beneficiaries to
subscribe for new shares in their company (or in the parent company of their
group) during a certain period, at a price fixed at the opening of the plan and
that remains fixed during the whole of this period.

     The purpose of Aventis stock option plan 2003 is to foster and promote the
long-term success of Aventis Group and increase shareholder value by motivating
superior performance by means of performance-related incentives and by
encouraging and providing for the acquisition of an ownership interest in
Aventis Group by employees. The people concerned can therefore choose to be
fully associated to the running of their company and benefit from capital gains
if the share price progresses favourably.

     Stock option plans of Aventis are governed by the French law and notably
by Articles L 225-177 to L 225-185 of the Commercial Law concerning business
corporations.

     On the basis of the authorization and the powers which have been given to
it by the Company’s shareholders meeting, the Aventis Management Board has
decided on the creation of the present Aventis stock option plan 2003 and has
laid down the conditions within the framework of the legal provisions mentioned
above. The Management Board can adapt these conditions, notably in the case of
changes in the regulations relative to the stock options.

II. DEFINITIONS

     Whenever used herein, the following terms shall have the respective
meanings set forth below:

     “Aventis” means Aventis or the Company, as French holding company for an
international group in the global life sciences industry.

     “Aventis Group” means the Company together with any company, partnership
or other group of economic interest or legal entity where at least 10% of the
capital or voting rights is held directly or indirectly by the Company, on the
date of exercise.

     “Beneficiary” means any Employee of the Aventis Group designated by the
Management Board to receive options.

     “Change in control,” means exclusively the occurrence of any of the
following events:

	(a)	 	carrying out a takeover bid or a public offer of exchange.

 

 

	(b)	 	the direct or indirect acquisition of an interest allowing a
new shareholder to hold at least 20% of the voting rights in the
shareholders’ meeting, or to increase his/her previous interest so
as to hold at least 20% of the voting rights in the shareholders’
meeting.
	 
	(c)	 	the demerger, the contribution or transferral of significant
corporate assets of the Company, which necessitate a shareholders’
meeting of the Company.
	 
	(d)	 	the direct or indirect intervention of a rival company in the
management of the Company.
	 
	(e)	 	the merger-absorption by the Company of a rival company
involving the arrival of shareholders holding over 20% of the voting
rights of the company resulting from the merger, and the
merger-absorption of the Company by a rival company involving the
arrival of new shareholders holding over 20% of the voting rights of
the company resulting from the merger.

     “Company” means Aventis, a French company, and any successor thereto.

     “Employee” means any employee of the Company or of Aventis Group.

     “Management Board” means the Management Board of directors of Aventis.

     “Option” means the right to subscribe share(s) at a stated price for a
specified period of time.

     “Period of restriction” means the period during which the Management Board
can suspend the right for employees to exercise the options.

     “Share” means the common share of the Company, par value € 3.82 per
share.

     “Stock Option Plan” means the Aventis stock option plan 2003.

     Gender and Number: Except when otherwise indicated by the context,
words in the masculine gender used in the Stock Option Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.

III. DESCRIPTION OF THE AVENTIS STOCK OPTION PLAN

Optionees

     The Management Board has laid down the list of beneficiaries of the Stock
Option Plan.

Number of shares

     The maximum number of shares each beneficiary may apply for is given on
the individual letter addressed by the Chairman, or his duly designated
representative.

Share subscription price

     The Management Board has set the subscription price on the basis of the
average price (on the basis of the closing prices) quoted during the last
twenty days trading on the Paris stock exchange prior to the Management Board
decision in accordance with the legal and statutory provisions in force.

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     It will remain fixed during the entire Stock Option Plan subject to its
adjustment by the Management Board according to the terms and conditions set
out in these regulations.

Duration of the options

     The options are granted irrevocably for a duration of 10 years from the
day they are allotted by the Management Board.

     Options that have not been exercised at the end of the 10-year period will
be declared null and void. No extensions will be granted.

     The options will not be exercisable within the first three years. However,
the beneficiaries deemed to be resident in France for tax purposes will be
entitled to exercise their options only after a four-year period from the date
of the grant, unless they keep the shares on the asset register until the end
of the said four-year period, and except if this exercising before four years
no longer leads to the payment of social security contributions by the Company
on the capital gains made by the beneficiaries following a change in the French
regulations in force.

     The rights resulting from the options granted are non-transferable.

Adjusting the subscription price and the number of shares

     Should the Company carry out any of the following financial operations
before the options have expired, the subscription price of the shares and the
number of shares that can be subscribed for by each beneficiary will be
adjusted by the Management Board under the following conditions:

	1.	 	In the case of the issue, reserved for the shareholders, of shares to be subscribed in cash, or convertible or exchangeable
bonds or bond warrants, the subscription price of the shares under
option will be reduced by an amount equal to the product of this
price through the ratio between the value of the subscription right
and the value of the share before removal of this right.

     The ratio will be calculated as follows:

	•	 	The value of the share before removal of the subscription right will be equal to the average of twenty
consecutive opening prices chosen from the forty trading days
preceding the opening day of the issue.
	 
	•	 	The value of the subscription right will be the
theoretical value calculated according to the number of new shares issued to which an existing share gives entitlement,
the issue price of these new shares and the value of the
share before removal of the subscription right.

	2.	 	In the case of an increase in capital through incorporation
of reserves, profit or premiums and distribution of bonus shares,
the subscription price of the shares under option will be adjusted
by the application of a coefficient equal to the ratio between the
number of old shares and the number of shares existing after the
operation.
	 
	3.	 	In the case of distribution of reserves into cash or into
portfolio securities, the subscription price of the shares under
option will be reduced by an amount equal to the product of this
price multiplied by the ratio between the amount per share of the
distribution and the value of the share before distribution.

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     For the calculation of this ratio, if the Company shares and the
securities distributed are allowed in transactions on a regulated market, the
value of the securities distributed and the value of the share before
distribution will be equal to the average of the first prices quoted during the
thirty trading days of the stock exchange prior to the start of the
distribution.

     If the shares of the Company or the securities distributed are not allowed
in transactions on a regulated market, the Management Board will fix the values
upon review of the auditors’ special report.

	4.	 	In the case of a reduction of capital due to losses.
	 
	•	 	If the reduction focuses on the number of shares, the
subscription price will be adjusted by appropriating to it a
coefficient equal to the ratio between the number of old shares and
the number of shares remaining after reduction.
	 
	•	 	If the reduction focuses on the nominal value of the shares, there will
be no adjustment.

     In all the cases mentioned above, an adjustment in the number of shares
under option will be made so that the total subscription prices remain
constant. The number adjusted will however be rounded up to the higher figure.

Change of Control

     The ‘Change of Control’ will be considered as ‘effective’ from:

	(a)	 	the date of publication in the official list of the notice of
the result of the takeover bid by Euronext Paris, in the case of a
takeover bid or a public offer of exchange.
	 
	(b)	 	the date of the notification to the Company of the crossing
of the threshold level having taken the interest of a shareholder to
at least 20% of the voting rights in the Company, in the case of
entry into the capital of a new shareholder holding at least 20% of
the voting rights in the shareholders’ meeting or the increase in
the previous interest of a new shareholder taking his/her interest
to at least 20% of the voting rights in the shareholders’ meeting.
	 
	(c)	 	the date of the general meeting approving the demerger,
transferral or contribution of the principal assets of the Company
or the merger, in the case of demerger, contribution or transfer of
the principal assets of the Company or merger.
	 
	(d)	 	the date of the general meeting appointing the new management
and administration structure, in the case of the direct or indirect
intervention of a rival company in the management and administration
structure of the Company.

     In the case of ‘Change of Control’:

	1.	 	The Company will do its best to ensure sufficient liquidity
allowing the options to be exercised under normal conditions.
	 
	2.	 	If the Aventis shares ceased to be quoted on a regulated
market, it would be requested of the company responsible for the
‘Change of Control’ to take over the existing patrimonial
commitments with regard to the beneficiaries and as a consequence to
implement one of the following solutions:

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	•	 	either to undertake to buy back from the
beneficiaries the shares obtained following the exercise of
their options, on the date when they will present them, this
date obligatorily being during the exercise period initially
decided for the options. In the case where the Company is
subject to a procedure of obligatory withdrawal, the shares
obtained by the beneficiaries must obligatorily be presented
for repurchase following the exercise of the options.
	 
	 	 	The price of the repurchase will be equal to that of the
Aventis share on the date when the Change of Control becomes
effective or on the first date of quotation following this
date, and would vary both upwards and downwards between this
date and the date of the request for repurchase, according
to the evolution of the price of the share of the Company
which is the beneficiary of the ‘Change of Control’ over the
same period.

	•	 	or to grant the beneficiaries, in exchange for their old
options, new options.

	 	 	If these commitments are not carried out, the resulting loss to
the beneficiaries will be estimated by an expert designated by the
two parties, or if no agreement can be found, by the President of
the Paris Tribunal de Commerce (commercial court), who will give a
ruling on the petition of the more diligent party.
	 
	 	 	The amount decided would be paid by the Company, or by any company
that it will substitute for or that will substitute for it.
	 
	 	 	To decide this loss, the expert will take into account the price
of the share on the date when the Change of Control becomes
effective or on the first date of quotation following this change
and the ‘time value’ still left to run until the final date for
the exercise of the considered options taking into account all the
existing corporate or tax incidences.

IV. EXERCISE OF THE OPTIONS

Exercising conditions

     The exercise of the options by an optionee is subject to the condition
that he/she is actively employed by, or has a corporate mandate with, the
Company or one of the Companies of the Aventis Group on the date of the
exercise, unless otherwise decided by the Management Board in exceptional
cases.

     By Company of the Aventis Group, it is meant any company or group of
economic interests where at least 10% of the capital or voting rights is held
directly or indirectly by the Company, on the date of exercise.

     Notwithstanding the provisions of the preceding paragraphs:

	•	 	In the case of (i) resignation, (ii) lay-off, redundancy or
other termination at the employer’s initiative (except for serious
professional misconduct), (iii) expiration of a limited duration
work contract or (iv) revocation of a corporate mandate (except for
serious professional misconduct), the options can, whatever the
case, be exercised for a maximum period of 6 months from the date of
departure from the employing company (in the case of resignation or
termination), the date of expiration of the work contract or the
date of the revocation, subject to their being exercisable on such
date of departure,

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	 	 	expiration or revocation. Options that are not exercisable on such
date of departure, expiration or revocation will be lost.
	 
	•	 	If the prior formal approval of the Management Board is
obtained, in the case of lay-off, redundancy or other termination at
the employer’s initiative resulting from a collective headcount
reduction scheme (except in the case of serious professional
misconduct), the options can be exercised for a period of 12 months
from the effective date of the termination or from the Opening Day
of the Exercise Period of the options if this date is later,
provided that this period cannot exceed the termination date of the
options. Opening Day of the Exercise Period means it is the day from
which the options are exercisable as stipulated in the paragraph
“Duration of the options”.
	 
	•	 	However, if a lay-off, redundancy or other termination at the
employer’s initiative (except for serious professional misconduct),
expiration of a work contract or revocation (except for serious
professional misconduct) takes place within eighteen months
following a Change of Control of the Company, the options can be
exercised until the expiration of the plan under the same conditions
as if the optionee were still employed or held a corporate mandate.
	 
	•	 	In the case of dismissal or revocation for serious
professional misconduct, the departure from the employing company
automatically cancels those options not yet exercised with effect
from the date of notification of such dismissal or revocation.
	 
	•	 	In the case of the transfer of a Company of the Aventis Group
or an activity of a Company of the Aventis Group to a company where
Aventis does not hold directly or indirectly at least 10% of the
capital or voting rights, or in the case of transfer by flotation,
the options can be exercised until the expiration of the plan under
the same conditions as if the optionee were still employed or held a
corporate mandate.
	 
	•	 	In the case of the death of the optionee, the heirs who wish
to exercise the options must do so under the conditions fixed by
French law, which at the moment stipulate that the options are
exercisable for a period of six months from the date of death.
	 
	•	 	Except in the case of serious professional misconduct, the
options can be exercised until the expiration of the plan under the
same conditions as if the optionee were still employed or held a
corporate mandate, in the following cases:
	 
	•	 	Disability,
	 
	•	 	Employee or holder of a corporate mandate, aged 55 or more,
retiring at the employer’s initiative or taking early retirement at
the employer’s initiative,
	 
	•	 	Employee or holder of a corporate mandate, aged 55 or more
and having at least 10 years of seniority in the Aventis Group,
retiring,
	 
	•	 	Lay-off, redundancy or other termination at the employer’s
initiative (except for serious professional misconduct) of an
employee aged 55 or more,
	 
	•	 	Revocation or early termination of the corporate mandate
(except for serious professional misconduct) of a mandate holder
aged 55 or more.

Period of restriction

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     The Management Board can suspend the right to exercise the options if
necessary, notably when trading on Aventis capital requires the exact and prior
knowledge of the number of shares that make up the capital or in the case of
one of the financial operations leading to an adjustment being carried out.

     In these cases, the Company will inform the beneficiaries of the
suspension date and the date when the options can be exercised again. Such a
suspension cannot extend the exercise period beyond the original 10-year
period.

     In order to reduce the risk of unintentional insider trading, the
Management Board can also suspend the right to exercise the options temporarily
during identified “Black-Out Periods”, which are periods of time when
significant confidential information is circulating within the company. This
includes the approximately 30-day period between the end of each fiscal year or
quarter and the public announcement of earnings for that year or quarter.
During a “Black-Out period”, employees who are considered likely to be aware of
such confidential information are blocked from exercising stock options until
the “black-out period” expires.

Methods of the exercise of the options

     The exercise of the options is at the discretion of the beneficiaries.

     The options can be exercised partially or in totality.

     To exercise an option, the beneficiaries must apply to the Plan Manager
whose details will have been provided.

     Costs incurred in exercising an option by the Plan Manager will be born by
the beneficiaries.

V. CHARACTERISTICS OF SUBSCRIBED SHARES

Form and delivery of stocks

     Shares subscribed for by beneficiaries who are French residents must take
the registered form. If this is not the case, their holders will lose the
benefit of the special tax system for stock options.

     Unless instructions to the contrary are received from the beneficiaries,
the stocks will be registered in an individual account opened in the Plan
Manager’s books.

Interest

     The new shares will be created with coupon attached and will be
immediately entitled to the same dividend as the other shares which make up the
capital of Aventis, subject to having been subscribed during the fiscal year
for which the first dividend will be paid to them.

     Shares subscribed between the first day of the fiscal year and the date of
distribution of the dividend in that year in respect of the previous fiscal
year will not give entitlement to the dividend relating to this previous fiscal
year and will be subject to a specific quotation on the market of the Paris
Bourse until the date of distribution of the said dividend.

VI. TRANSFER OF SHARES

     Subject to the period inherent in preliminary formalities for the
quotation on the stock market of new shares and possibly the application of a
tax system which is less favourable in the case of non-compliance

-7-

 

with legal conditions concerning time of tenure and form, the shares acquired
following the exercise of options can be sold immediately.

     To carry out this sale, the beneficiaries must address a selling order to
the Plan Manager, in accordance with the model sent by the latter.

     Requests to exercise options will be recorded on a register timed and
dated, which will be held by each Plan Manager.

VII MANAGEMENT OF THE PLAN

     The administrative management of the Stock Option Plan has been entrusted
to banks selected by Aventis (each one a ‘Plan Manager’). The beneficiaries
will be informed of the details of the Plan Manager who they can contact for
any information.

     Aventis reserves the right to entrust to a new bank the administrative
management of the stock option plan, after prior information to the
beneficiaries.

VIII MISCELLANEOUS

     As some beneficiaries are not French residents, the Management Board
could, depending on the conditions imposed by certain countries, with regard to
the exercise of options and the subsequent transfer of options, modify certain
provisions of the plan concerning beneficiaries working in these countries,
without these modifications making the plan more favourable for these
beneficiaries (apart from aspects relating to the tax systems of these
countries).

     Nothing in the Plan shall interfere or limit in any way the right of the
employer to terminate any beneficiary’s employment at any time, nor confer upon
any beneficiary any right to continue in employ of their company. No
beneficiary shall have a right to be selected as a beneficiary, or, having been
so selected, to receive any future options.

     Securities offered to persons who are not residents or citizens of the
United States of America have not been and will not be registered under the
U.S. Securities Act of 1933, as amended (the “Act”) and may not be offered or
sold in the United States unless registered under the Act or an exemption from
registration is available.

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RULES AND REGULATIONS FOR

AVENTIS STOCK SUBSCRIPTION OPTION

GRANT of December 2, 2003

ANNEX

	 	 	 	 	 
	Authorization of the Option Plan

	 	:
	 	General Shareholders Meeting of May
14, 2002.
	 
	 	 	 	 
	Decision and date of grant

	 	:
	 	Management Board of December 2, 2003
	 
	 	 	 	 
	Number of options allotted

	 	:
	 	10 232 797
	 
	 	 	 	 
	Reference price (average price
quoted from November 4, 2003 to
December 1, 2003)

	 	:
	 	€ 47.52
	 
	 	 	 	 
	Exercise price

	 	:
	 	€ 47.52
	 
	 	 	 	 
	Vesting date

	 	:
	 	December 3, 2006 except for French
tax residents (December 3, 2007 for
French tax residents)
	 
	 	 	 	 
	Exercise period

	 	:
	 	From December 3, 2006 through
December 2, 2013 inclusive (From
December 3, 2007 through December
2, 2013, inclusive for French tax
residents)

-9-

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