Exhibit 10.2

 

ABBOTT LABORATORIES
1991 INCENTIVE STOCK PROGRAM
(as amended and restated through the

1st Amendment December 12, 2003)

 

1.                                       PURPOSE. The purpose of the Abbott
Laboratories 1991 Incentive Stock Program (the “Program”) is to attract and
retain outstanding individuals as directors, officers and other employees of
Abbott Laboratories (the “Company”) and its subsidiaries, and to furnish
incentives to such persons by providing such persons opportunities to acquire
common shares of the Company, or monetary payments based on the value of such
shares or financial performance of the Company, or both, on advantageous terms
as herein provided.

 

2.                                       ADMINISTRATION. The Program will be
administered by a committee (the “Committee”) of at least two persons which
shall be either the Compensation Committee of the Board of Directors of the
Company (the “Board of Directors”) or such other committee comprised entirely of
“disinterested persons” as defined in Rule 16b-3 of the Securities and Exchange
Commission as the Board of Directors may from time to time designate. The
Committee shall interpret the Program, prescribe, amend and rescind rules and
regulations relating thereto and make all other determinations necessary or
advisable for the administration of the Program. A majority of the members of
the Committee shall constitute a quorum and all determinations of the Committee
shall be made by a majority of its members. Any determination of the Committee
under the Program may be made without notice of meeting of the Committee by a
writing signed by a majority of the Committee members.

 

3.                                       PARTICIPANTS. Participants in the
Program will consist of such officers and other employees of the Company and its
subsidiaries as the Committee in its sole discretions may designate from time to
time to receive Benefits hereunder. The Committee’s designation of a participant
in any year shall not require the Committee to designate such person to receive
a Benefit in any other year. The Committee shall consider such factors as it
deems pertinent in selecting participants and in determining the type and amount
of their respective Benefits, including without limitation (i) the financial
condition of the Company; (ii) anticipated profits for the current or future
years; (iii) contributions of participants to the profitability and development
of the Company; and (iv) other compensation provided to participants.
Non-Employee Directors shall also be participants in the Program solely for
purposes of receiving Restricted Stock Awards under paragraph 13. The term
“Non-Employee Director” shall mean a member of the Board of Directors who is not
a full-time employee of the Company or any of its subsidiaries.

 

4.                                       TYPES OF BENEFITS. Benefits under the
Program may be granted in any one or a combination of (a) Incentive Stock
Options; (b) Non-qualified Stock Options; (c) Stock Appreciation Rights; (d)
Limited Stock Appreciation Rights; (e)

 

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Restricted Stock Awards; (f) Performance Units; and (g) Foreign Qualified
Benefits, all as described below and pursuant to the Plans set forth in
paragraphs 6-12 hereof.

 

5.                                       SHARES RESERVED UNDER THE PROGRAM.
There is hereby reserved for issuance under the Program an aggregate of Five
Million (5,000,000) common shares, which may be newly issued or treasury shares.
The shares hereby reserved are in addition to the shares previously reserved
under the Company’s 1977 Incentive Stock Plan, 1981 Incentive Stock Program and
1986 Incentive Stock Program (the “Prior Stock Option Plans”). Any common shares
reserved for issuance under the Prior Stock Option Plans in excess of the number
of shares as to which options or other Benefits have been awarded on the date of
shareholder approval of this Program, plus any such shares as to which options
or other Benefits granted under the Prior Stock Option Plans may lapse, expire,
terminate or be canceled after such date, shall also be reserved and available
for issuance in connection with Benefits under this Program. All of such shares
may, but need not, be issued pursuant to the exercise of the Incentive Stock
Options.

 

If there is a lapse, expiration, termination or cancellation of any Benefit
granted hereunder without the issuance of shares or payment of cash thereunder,
or if shares are issued under any Benefit and thereafter are reacquired by the
Company pursuant to rights reserved upon the Issuance thereof, the shares
subject to or reserved for such Benefit may again be used for new options,
rights of awards or any sort authorized under this Program; provided, however,
that in no event may the number of common shares issued under this Program
exceed the total number of shares reserved for issuance hereunder.

 

6.                                       INCENTIVE STOCK OPTION PLAN. Incentive
Stock Options will consist of options to purchase common shares at purchase
prices not less than One Hundred percent (100%) of the Fair Market Value of such
common shares on the date of grant. Incentive Stock Options will be exercisable
over not more than ten (10) years after the date of grant. In the event of
termination of employment for any reason other than retirement, disability or
death, the right of the optionee to exercise an Incentive Stock Option shall
terminate upon the earlier of the end of the original term of the option or
three (3) months after the optionee’s last day of work for the Company and its
subsidiaries. In the event of termination of employment due to retirement or
disability, or if the optionee should die while employed, the right of the
optionee or his or her successor in interest to exercise an Incentive Stock
Option shall terminate upon the earlier of the end of the original term of the
option or sixty (60) months after the date of such retirement, disability or
death. If the optionee should die within three (3) months after termination of
employment for any reason other than retirement or disability, the right of his
or her successor in interest to exercise an Incentive Stock Option shall
terminate upon the earlier of the end of the original term of the option or
three (3) months after the date of such death. If the optionee should die within
sixty (60) months after termination of employment due to retirement or
disability, the right of his or her successor in interest to exercise an
Incentive Stock Option shall terminate upon the later of sixty (60) months after
the date of such retirement or disability or six (6) months after the date of
such death, but not later than the end of the original term of the option. The
aggregate fair market value (determined as of the time the Option is granted) of
the

 

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common shares with respect to which Incentive Stock Options are exercisable for
the first time by any individual during any calendar year (under all option
plans of the Company and its subsidiary corporations) shall not exceed $100,000.
An Incentive Stock Option granted to a participant who is subject to Section 16
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) may be
exercised only after six (6) months from its grant date (unless otherwise
permitted under Rule 16b-3 of the Securities and Exchange Commission).

 

7.                                       NON-QUALIFIED STOCK OPTION PLAN.
Non-qualified Stock Options will consist of options to purchase common shares at
purchase prices not less than One Hundred percent (100%) of the Fair Market
Value of such common shares on the date of grant. Non-qualified Stock Options
will be exercisable over not more than ten (10) years after the date of grant.
In the event of termination of employment for any reason other than retirement,
disability or death, the right of the optionee to exercise a Non-qualified Stock
Option shall terminate upon the earlier of the end of the original term of the
option or three (3) months after the optionee’s last day of work for the Company
and its subsidiaries. In the event of termination of employment due to
retirement or disability or if the optionee should die while employed, the right
of the optionee or his or her successor in interest to exercise a Non-qualified
Stock Option shall terminate upon the earlier of the end of the original term of
the option or sixty (60) months after the date of such retirement, disability or
death. If the optionee should die within three (3) months after termination of
employment for any reason other than retirement or disability, the right of his
or her successor in interest to exercise a Non-qualified Stock Option shall
terminate upon the earlier of the end of the original term of the option or
three (3) months after the date of such death. If the optionee should die within
sixty (60) months after termination of employment due to retirement or
disability, the right of his or her successor in interest to exercise a
Non-qualified Stock Option shall terminate upon the later of sixty (60) months
after the date of such retirement or disability or six (6) months after the date
of such death, but not later than the end of the original term of the option. A
Non-qualified Stock Option granted to a participant who is subject to Section 16
of the Exchange Act may be exercised only after six (6) months from its grant
date (unless otherwise permitted under Rule 16b-3 of the Securities and Exchange
Commission).

 

8.                                       STOCK APPRECIATION RIGHTS PLAN. The
Committee may, in its discretion, grant a Stock Appreciation Right to the holder
of any stock option granted hereunder or under the Prior Stock Option Plans.
Such Stock Appreciation Rights shall be subject to such terms and conditions
consistent with the Program as the Committee shall impose from time to time,
including the following:

 

(a)                                  A Stock Appreciation Right may be granted
with respect to a stock option at the time of its grant or at any time
thereafter up to six (6) months prior to its expiration.

 

(b)                                 Stock Appreciation Rights will permit the
holder to surrender any related stock option or portion thereof which is then
exercisable

 

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and to elect to receive in exchange therefor cash in an amount equal to:

 

(i)                 The excess of the Fair Market Value on the date of such
election of one common share over the option price multiplied by

 

(ii)              The number of shares covered by such option or portion thereof
which is so surrendered.

 

(c)                                  A Stock Appreciation Right granted to a
participant who is subject to Section 16 of the Exchange Act may be exercised
only after six (6) months from its grant date (unless otherwise permitted under
Rule 16b-3 of the Securities and Exchange Commission).

 

(d)                                 The Committee shall have the discretion to
satisfy a participant’s right to receive the amount of cash determined under
subparagraph (b) hereof, in whole or in part, by the delivery of common shares
valued as of the date of the participant’s election.

 

(e)                                  A Stock Appreciation Right may be granted
to a participant regardless of whether such participant has been granted a
Limited Stock Appreciation Right with respect to the same stock option. However,
a Stock Appreciation Right may not be exercised during any period that a Limited
Stock Appreciation Right with respect to the same stock option may be exercised.

 

(f)                                    In the event of the exercise of a Stock
Appreciation Right, the number of shares reserved for issuance shall be reduced
by the number of shares covered by the stock option or portion thereof
surrendered.

 

9.                                       LIMITED STOCK APPRECIATION RIGHTS PLAN.
The Committee may, in its discretion, grant a Limited Stock Appreciation Right
to the holder of any stock option granted hereunder or under the Prior Stock
Option Plans. Such Limited Stock Appreciation Rights shall be subject to such
terms and conditions consistent with the Program as the Committee shall impose
from time to time, including the following:

 

(a)                                  A Limited Stock Appreciation Right may be
granted with respect to a stock option at the time of its grant or at any time
thereafter up to six (6) months prior to its expiration.

 

(b)                                 A Limited Stock Appreciation Right will
permit the holder to surrender any related stock option or portion thereof which
is then exercisable and to receive in exchange therefor cash in an amount equal
to:

 

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(i)                 The excess of the Fair Market Value on the date of such
election of one common share over the option price multiplied by

 

(ii)              The number of shares covered by such option or portion thereof
which is so surrendered.

 

(c)                                  A Limited Stock Appreciation Right granted
to a participant who is subject to Section 16 of the Exchange Act may be
exercised only after six (6) months from its grant date (unless otherwise
permitted under Rule 16b-3 of the Securities and Exchange Commission) and only
during the sixty (60) day period commencing with the day following the date of a
Change In Control.

 

(d)                                 A Limited Stock Appreciation Right may be
granted to a participant regardless of whether such participant has been granted
a Stock Appreciation Right with respect to the same stock option.

 

(e)                                  In the event of the exercise of a Limited
Stock Appreciation Right, the number of shares reserved for issuance hereunder
shall be reduced by the number of shares covered by the stock option or portion
thereof surrendered.

 

10.                                 RESTRICTED STOCK AWARDS PLAN. Restricted
Stock Awards will consist of common shares transferred to participants without
other payment therefor as additional compensation for their services to the
Company or one of its subsidiaries. Restricted Stock Awards shall be subject to
such terms and conditions as the Committee determines appropriate, including,
without limitations, restrictions on the sale or other disposition of such
shares and rights of the Company to reacquire such shares upon termination of
the participant’s employment within specified periods. Subject to such other
restrictions as are imposed by the Committee, the common shares covered by a
Restricted Stock Award granted to a participant who is subject to Section 16 of
the Exchange Act may be sold or otherwise disposed of only after six (6) months
from the grant date of the award (unless otherwise permitted under Rule 16b-3 of
the Securities and Exchange Commission).

 

11.                                 PERFORMANCE UNITS PLAN. Performance Units
shall consist of monetary units granted to participants which may be earned in
whole or in part if the Company achieves certain goals established by the
Committee over a designated period of time, but not in any event more than five
(5) years. The goals established by the Committee may include earnings per
share, return on shareholder equity, return on average total capital employed,
and/or such other goals as may be established by the Committee in its
discretion. In the event the minimum corporate goal established by the Committee
is not achieved at the conclusion of a period, no amount shall be paid to or
vested in the participant. In the event the maximum corporate goal is achieved,
One Hundred percent (100%) of the monetary value of the Performance Units shall
be paid to or vested in the participants. Partial achievement of the maximum
goal may result in a

 

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payment or vesting corresponding to the degree of achievement. Payment of an
award earned may be in cash or in common shares or in a combination of both, and
may be made when earned, or vested and deferred, as the Committee in its sole
discretion determines. Deferred awards shall earn interest on the terms and at a
rate determined by the Committee. The number of shares reserved for issuance
hereunder shall be reduced by the largest whole number obtained by dividing
monetary value of the units at the commencement of the performance period by the
market value of a common share at such time, provided that such number of shares
may again become available for issuance under this Program as is provided in
Paragraph 5 hereof.

 

12.                                 FOREIGN QUALIFIED BENEFITS. Benefits under
the Program may be granted to such employees of the Company and its subsidiaries
who are residing in foreign jurisdictions as the Committee in its sole
discretion may determine from time to time. The Committee may adopt such
supplements to the Program as may be necessary to comply with the applicable
laws of such foreign jurisdictions and to afford participants favorable
treatment under such laws; provided, however, that no Benefit shall be granted
under any such supplement with terms or conditions which are inconsistent with
the provisions as set forth under the Program.

 

13.                                 RESTRICTED STOCK AWARDS FOR NON-EMPLOYEE
DIRECTORS.

 

(a)                                  Each person elected a Non-Employee Director
at the annual shareholders meeting in 1991, 1992, 1993, 1994 and 1995 shall
receive a Restricted Stock Award on that date covering a number of common shares
with a fair market value on the date of the award closest to, but not in excess
of, Twenty Thousand Dollars ($20,000).

 

(b)                                 ISSUANCE OF CERTIFICATES. As soon as
practicable following the date of the award the Company shall issue certificates
(“Certificates”) to the Non-Employee Director receiving the award, representing
the number of common shares covered by the award. At the discretion of the
Company, the Certificates shall bear legends describing the restrictions on such
shares imposed by this paragraph 13.

 

(c)                                  RIGHTS. Upon issuance of the Certificates,
the directors in whose names they are registered shall, subject to the
restrictions of this paragraph 13, have all of the rights of a shareholder with
respect to the shares represented by the Certificates, including the right to
vote such shares and receive cash dividends and other distributions thereon.

 

(d)                                 RESTRICTED PERIOD. The shares covered by
awards granted under this paragraph 13 may not be sold or otherwise disposed of
within six (6) months following their grant date (unless otherwise

 

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permitted under Rule 16b-3 of the Securities and Exchange Commission) and in
addition shall be subject to the restrictions of this paragraph 13 for a period
(the “Restricted Period”) commencing with the date of the award and ending on
the earliest of the following events:

 

(i)                 The date the director terminates or retires from the Board;

 

(ii)              The date the director dies; or

 

(iii)           The date of occurrence of a Change in Control (as defined in
paragraph 19(c)).

 

(e)                                  RESTRICTIONS. All shares covered by awards
granted under this paragraph 13 shall be subject to the following restrictions
during the Restricted Period:

 

(i)                 The shares may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of.

 

(ii)              Any additional common shares of the Company or other
securities or property issued with respect to shares covered by awards granted
under this paragraph 13 as a result of any stock dividend, stock split or
reorganization, shall be subject to the restrictions and other provisions of
this paragraph 13.

 

(iii)           A director shall not be entitled to receive any shares prior to
completion of all actions deemed appropriate by the Company to comply with
federal or state securities laws and stock exchange requirements.

 

(f)                                    Except in the event of conflict, all
provisions of the Program shall apply to this paragraph 13. In the event of any
conflict between the provisions of the Program and this paragraph 13, this
paragraph 13 shall control. Those provisions of paragraph 16 which authorize the
Committee to declare outstanding restricted stock awards to be vested and to
amend or modify the terms of Benefits shall not apply to awards granted under
this paragraph 13.

 

14.                                 NONTRANSFERABILITY. Each stock option and
stock appreciation right granted under this Program shall not be transferable
other than by will or the laws of descent and distribution, and shall be
exercisable, during the participant’s lifetime, only by the participant or the
participant’s guardian or legal representative. A participant’s interest in a
Performance Unit shall not be transferable until payment or delivery of the
award is made.

 

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15.                                 OTHER PROVISIONS. The award of any Benefit
under the Program may also be subject to other provisions (whether or not
applicable to the Benefit awarded to any other participant) as the Committee
determines appropriate, including, without limitation, provisions for the
purchase of common shares under stock options in installments, provisions for
the payment of the purchase price of shares under stock options by delivery of
other common shares of the Company having a then market value equal to the
purchase price of such shares, restrictions on resale or other disposition, such
provisions as may be appropriate to comply with federal or state securities laws
and stock exchange requirements and understandings or conditions as to the
participant’s employment in addition to those specifically provided for under
the Program.

 

The Committee may, in its discretion, permit payment of the purchase price of
shares under stock options by delivery of a properly executed exercise notice
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds to pay the purchase price. To
facilitate the foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.

 

The Committee may, in its discretion and subject to such rules as it may adopt,
permit a participant to pay all or a portion of the federal, state and local
taxes, including FICA withholding tax, arising in connection with the following
transactions: (a) the exercise of a Non-qualified Stock Option; (b) the lapse of
restrictions on common shares received as a Restricted Stock Award; or (c) the
receipt or exercise of any other Benefit; by electing (i) to have the Company
withhold common shares, (ii) to tender back common shares received in connection
with such Benefit or (iii) to deliver other previously acquired common shares of
the Company having a fair market value approximately equal to the amount to be
withheld.

 

16.                                 TERM OF PROGRAM AND AMENDMENT MODIFICATION,
CANCELLATION OR ACCELERATION OF BENEFITS. No Benefit shall be granted more than
five (5) years after the date of the approval of this Program by the
shareholders; provided, however, that the terms and conditions applicable to any
Benefits granted prior to such date may at any time be amended, modified or
canceled by mutual agreement between the Committee and the participant or such
other persons as may then have an interest therein, so long as any amendment or
modification does not increase the number of common shares issuable under this
Program; and provided further, that the Committee may, at any time and in its
sole discretion, declare any or all stock options and stock appreciation rights
then outstanding under this Program or the Prior Stock Option Plans to be
exercisable, any or all then outstanding Restricted Stock Awards to be vested,
and any or all then outstanding Performance Units to have been earned, whether
or not such options, rights, awards or units are then otherwise exercisable,
vested or earned.

 

17.                                 AMENDMENT TO PRIOR STOCK OPTION PLANS. No
options or other Benefits shall be granted under the Prior Stock Option Plans on
or after the date of shareholder approval of this Program.

 

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18.                                 TAXES. The Company shall be entitled to
withhold the amount of any tax attributable to any amount payable or shares
deliverable under the Program after giving the person entitled to receive such
amount or shares notice as far in advance as practicable, and the Company may
defer making payment or delivery if any such tax may be pending unless and until
indemnified to its satisfaction.

 

19.                                 DEFINITIONS.

 

(a)                                  FAIR MARKET VALUE. Except as provided
below, the Fair Market Value of the Company’s common shares shall be determined
by such methods or procedures as shall be established by the Committee; provided
that, in the case of any Limited Stock Appreciation Right (other than a right
related to an Incentive Stock Option), the Fair Market Value shall be the higher
of:

 

(i)                 The highest daily closing price of the Company’s common
shares during the sixty (60) day period following the Change in Control; or

 

(ii)              The highest gross price paid or to be paid for the Company’s
common shares in any of the transactions described in paragraphs 19(c)(i) and
19(c)(ii).

 

(b)                                 SUBSIDIARY. The term “subsidiary” for all
purposes other than the Incentive Stock Option Plan described in paragraph 6,
shall mean any corporation, partnership, joint venture or business trust, fifty
percent (50%) or more of the control of which is owned, directly or indirectly,
by the Company. For Incentive Stock Option Plan purposes the term “subsidiary”
shall be defined as provided in Internal Revenue Code Section 425(f).

 

(c)                                  CHANGE IN CONTROL. A “Change in Control”
shall be deemed to have occurred on the earliest of the following dates:

 

(i)                 the date any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 20% or more of the combined
voting power of the Company’s then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a transaction described
in clause (a) of paragraph (iii) below; or

 

(ii)              the date the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals who,
on the date hereof, constitute the Board of Directors and any new director
(other than a

 

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director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board of Directors or nomination for election by
the Company’s shareholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended; or

 

(iii)           the date on which there is consummated a merger or consolidation
of the Company or any direct or indirect subsidiary of the Company with any
other corporation or other entity, other than (a) a merger or consolidation (I)
immediately following which the individuals who comprise the Board of Directors
immediately prior thereto constitute at least a majority of the Board of
Directors of the Company, the entity surviving such merger or consolidation or,
if the Company or the entity surviving such merger or consolidation is then a
subsidiary, the ultimate parent thereof and (II) which results in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities Beneficially Owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 20% or more of the combined
voting power of the Company’s then outstanding securities; or

 

(iv)          the date the shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all
of the Company’s

 

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assets, other than a sale or disposition by the Company of all or substantially
all of the Company’s assets to an entity, at least 50% of the combined voting
power of the voting securities of which are owned by shareholders of the
Company, in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

 

For purposes of this Program: “Affiliate” shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the Exchange Act; “Beneficial Owner”
shall have the meaning set forth in Rule 13d-3 under the Exchange Act; and
“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

 

(d)                                 DISABILITY. The term “disability” for all
purposes of the Program shall mean the participant’s disability as defined in
subsection 4.1(a) of the Abbott Laboratories Extended Disability Plan for twelve
(12) consecutive months.

 

20.                                 ADJUSTMENT PROVISIONS.

 

(a)                                  If the Company shall at any time change the
number of issued common shares without new consideration to the Company (such as
by stock dividends or stock splits), the total number of shares

 

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reserved for issuance under this Program and the number of shares covered by
each outstanding Benefit and the purchase price of such shares shall be adjusted
so that the aggregate consideration payable to the Company and the value of each
such Benefit shall not be changed.  Subject to paragraph 20(c), the Committee
shall also have the right to provide for the continuation of Benefits or for
other equitable adjustments after changes in the Company or in the common shares
resulting from reorganization, sale, merger, consolidation, spin-off or similar
occurrence.

 

(b)                                 Subject to paragraph 20(c), without
affecting number of shares otherwise reserved or available hereunder, the
Committee may authorize the issuance or assumption of Benefits in connection
with any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate.

 

(c)                                  Notwithstanding any other provision of this
Program or the Prior Stock Option Plans including the terms of any Benefit
granted hereunder, if the outstanding common shares of the Company shall be
combined, or be changed into, or exchanged for, another kind of stock of the
Company, into securities of another corporation, or into property (including
cash) whether through recapitalization, reorganization, sale, merger,
consolidation, spin-off, business combination or a similar transaction (a
“Transaction”), the Company shall cause its successor, acquiror (or ultimate
parent of any successor or acquiror), as applicable, to assume each stock
option, Stock Appreciation Right and Limited Stock Appreciation Right
outstanding immediately prior to the Transaction (or to cause new options or
rights to be substituted therefor).  Pursuant to such assumed or substituted
option or rights, participants shall thereafter be entitled to receive, upon due
exercise of any portion of the option or right, (a) in the event of a
Transaction in which the outstanding common shares of the Company are combined,
or changed into, or exchanged for, solely another kind of stock of the Company
or securities of another corporation (disregarding, for this purpose, cash paid
in lieu of fractional shares), the securities which that person would have been
entitled to receive for common shares acquired through exercise of the same
portion of such option or right immediately prior to the effective date of such
Transaction, and (b) in the event of a Transaction in which the outstanding
common shares of the Company are changed into, or exchanged for, property
(including cash) other than solely stock of the Company or securities of another
corporation (disregarding, for this purpose, cash paid in lieu of fractional
shares), securities the fair market value of which immediately following the
effective date of such Transaction (as determined by the Committee) equals

 

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the fair market value (as determined by the Committee) of the property which
that person would have been entitled to receive for common shares acquired
through exercise of the same portion of such option or right immediately prior
to the effective date of such Transaction.  In each case such assumed or
substituted option or right shall continue to be subject to the same terms and
conditions (including, without limitation, with respect to any right to receive
“replacement options” upon option exercise) to which it was subject immediately
prior to the Transaction.

 

Notwithstanding the immediately preceding paragraph, upon a Transaction in which
the outstanding common shares of the Company are changed into, or exchanged for,
property (including cash) other than solely stock of the Company or securities
of another corporation (disregarding, for this purpose, cash paid in lieu of
fractional shares) and which constitutes a Change in Control, each participant
may elect to receive, immediately following such Transaction in exchange for
cancellation of any stock option (other than an Incentive Stock Option granted
prior to June 20, 2003), Stock Appreciation Right or Limited Appreciation Right
held by such participant immediately prior to the Transaction, a cash payment,
with respect to each common share subject to such option or right, equal to the
difference between the value of consideration (as determined by the Committee)
received by the shareholders for a common share of the Company in the
Transaction, less any applicable purchase price.

 

(d)                                 Notwithstanding any other provision of this
Program or the Prior Stock Option Plans including the terms of any Benefit
granted hereunder, upon the occurrence of a Change in Control:

 

(i)                 All stock options then outstanding under this Program or the
Prior Stock Option Plans shall become fully exercisable as of the date of the
Change in Control, whether or not then otherwise exercisable;

 

(ii)              All Stock Appreciation Rights and Limited Stock Appreciation
Rights then outstanding shall become fully exercisable as of the date of the
Change in Control, whether or not then otherwise exercisable;

 

(iii)           All terms and conditions of all Restricted Stock Awards then
outstanding shall be deemed satisfied as of the date of the Change in Control;
and

 

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(iv)          All Performance Units then outstanding shall be deemed to have
been fully earned and to be immediately payable, in cash, as of the date of the
Change in Control.

 

21.                                 AMENDMENT AND TERMINATION OF PROGRAM. The
Board of Directors may amend the Program from time to time or terminate the
Program at any time, but no such action shall reduce the then existing amount of
any participant’s Benefit or adversely change the terms and conditions thereof
without the participant’s consent. Paragraph 13 of the Program may not be
amended more frequently than once every six months other than to comport with
changes in the Internal Revenue Code of 1986, as amended, or the rules
thereunder, and no amendment of the Program shall result in any Committee member
losing his or her status as a “disinterested person” as defined in Rule 16b-3 of
the Securities and Exchange Commission with respect to any employee benefit plan
of the Company or result in the Program losing its status as a protected plan
under said Rule 16b-3.

 

22.                                 EFFECTIVE DATE. The Program was originally
adopted by the Board of Directors on February 8, 1991.

 

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