Document:

exv10w5

 

EXHIBIT 10.5

EAGLE MATERIALS INC.

INCENTIVE PLAN

DIRECTOR RESTRICTED STOCK UNIT AGREEMENT

          This restricted stock unit agreement (the “Restricted Stock Unit
Agreement” or “Agreement”) entered into between Eagle Materials Inc., a
Delaware corporation (the “Company”), and
                   (the “Grantee”), a
director of the Company, with respect to a right (the
“Award”) of                    units
(“Restricted Stock Units”) representing shares of Common Stock (as defined in
the Eagle Materials Inc. Incentive Plan (the “Plan”)) granted to the Grantee
under the Plan on
                   (the “Award Date”), such number of units
subject to adjustment as provided in the Plan, and further subject to the
following terms and conditions:

          1. Relationship to Plan.

          This Award is subject to all of the terms, conditions and provisions of
the Plan and administrative interpretations thereunder, if any, which have been
adopted by the Company’s Compensation Committee (“Committee”) and are in effect
on the date hereof. Except as defined herein, capitalized terms shall have the
same meanings ascribed to them under the Plan. For the purposes of this
Restricted Stock Unit Agreement:

          (a) “Restricted Period” means the period commencing on the Award Date and
ending on the date that the Restricted Stock Units become fully payable in
accordance with Section 2.

          (b) “Retirement” means termination of service on the Board at the
Company’s mandatory retirement age in accordance with the Company’s Director
Retirement Policy or earlier on such terms and conditions as approved by the
Committee.

          2. Payment.

          (a) The Restricted Stock Units shall become payable as soon as
administratively possible following the earlier of (i) Grantee’s Retirement or
(ii) Grantee’s death.

          (b) Change in Control. This Award shall become fully payable without
regard to the limitations set forth in subparagraph (a) above, provided that
the Grantee has served as a Director since the Award Date, upon the occurrence
of a Change in Control (as defined in Exhibit A to this Agreement) unless
either (i) the Committee determines that the terms of the transaction giving
rise to the Change in Control provide that the Award is to be replaced within a
reasonable time after the Change in Control with an award of equivalent value
of shares of the surviving parent corporation or (ii) the Award is to be
settled in cash in accordance with the last sentence of this subparagraph (b).
Upon a Change in Control, pursuant to Section 16 of the Plan, the Company may,
in its discretion, settle the Award by a cash payment that the Committee shall
determine in its sole discretion is equal to the fair market value of the Award
on the date of such event.

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          3. Forfeiture of Award.

          Except as provided in any other agreement between the Grantee and the
Company, if the Grantee’s service terminates other than by reason of
Retirement, death or Change in Control, all Restricted Stock Units, and all
Dividend Equivalent Amounts (as defined in Section 4) attributable thereto, as
of the termination date shall be forfeited.

          4. Dividend Equivalent Payments.

          During the period of time between the Award Date and the earlier of the
date the Restricted Stock Units paid or are settled, the Restricted Stock Units
will be evidenced by book entry registration. As of each date that dividends
are paid with respect to Common Stock, the Grantee shall have a number of
additional Restricted Stock Units credited to his account with respect to such
dividends. The additional Restricted Stock Units credited with respect to such
dividends shall be determined by having a Fair Market Value equal to the amount
of the dividend paid per share of Common Stock as of such dividend payment date
multiplied by the number of Restricted Stock Units credited to the Grantee’s
account immediately prior to such dividend payment date and divided by the Fair
Market Value of the Common Stock on such dividend payment date.

          5. Timing and Form of Payment.

          The Grantee may be given the opportunity to timely elect to receive the
Award pursuant to an election form, and subject to such terms and conditions
set forth in such form as prescribed by the Committee (“Election Form”). The
Grantee may timely elect to further defer receipt of the Award in such time and
manner, if any, as prescribed by the Committee in its sole and absolute
discretion.

          Notwithstanding anything herein to the contrary including the Grantee’s
election pursuant to an Election Form, the Company reserves the right to pay
the value of the vested Restricted Stock Units, to the extent not yet paid, to
the Grantee in the form of shares of Common Stock or an equivalent cash payment
at any time following vesting of the Award.

          6. Delivery of Shares.

          The Company shall not be obligated to deliver any shares of Common Stock
if counsel to the Company determines that such sale or delivery would violate
any applicable law or any rule or regulations of any governmental authority or
any rule or regulation of, or agreement of the Company with, any securities
exchange or association upon which the Common Stock is listed or quoted. The
Company shall in no event be obligated to take any affirmative action in order
to cause the delivery of shares of Common Stock to comply with any such law,
rule, regulations or agreement.

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          7. Notices.

          Notice or other communication to the Company with respect to this Award
must be made in the following manner, using such forms as the Company may from
time to time provide:

          (a) by electronic means as designated by the Committee;

          (b) by registered or certified United States mail, postage prepaid, to
Eagle Materials Inc., Attention: Secretary, 3811 Turtle Creek Blvd., Suite
1100, Dallas, Texas 75219; or

          (c) by hand delivery or otherwise to Eagle Materials Inc., Attention:
Secretary, 3811 Turtle Creek Blvd., Suite 1100, Dallas, Texas 75219.

          Notwithstanding the foregoing, in the event that the address of the
Company is changed, any such notice shall instead be made pursuant to the
foregoing provisions at the Company’s current address.

          Any notices provided for in this Restricted Stock Unit Agreement or in the
Plan shall be given in writing or by such electronic means, as permitted by the
Committee, and shall be deemed effectively delivered or given upon receipt or,
in the case of notices delivered by the Company to the Grantee, five days after
deposit in the United States mail, postage prepaid, addressed to the Grantee at
the address specified at the end of this Agreement or at such other address as
the Grantee hereafter designates by written notice to the Company.

          8. Assignment of Award.

          Except as otherwise permitted by the Committee, the Grantee’s rights under
the Plan and this Restricted Stock Unit Agreement are personal; no assignment
or transfer of the Grantee’s rights under and interest in this Award may be
made by the Grantee other than by will, by beneficiary designation, by the laws
of descent and distribution or by a qualified domestic relations order; and
this Award is payable only to the Grantee during his lifetime.

          After the death of the Grantee, payment of the Award shall be permitted
only to the Grantee’s executor or the personal representative of the Grantee’s
estate (or by his assignee, in the event of a permitted assignment) and only to
the extent that the Award was payable on the date of the Grantee’s death.

          9. Stock Certificates.

          Certificates representing the Common Stock issued pursuant to the Award
will bear all legends required by law and necessary or advisable to effectuate
the provisions of the Plan and this Award. The Company may place a “stop
transfer” order against shares of the Common Stock issued pursuant to this
Award until all restrictions and conditions set forth in the Plan or this
Agreement and in the legends referred to in this Section 9 have been complied
with.

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          10. Shareholder Rights.

          The Grantee shall have no rights of a shareholder with respect to shares
of Common Stock subject to the Award unless and until such time as the Award
has been paid pursuant to Section 5 and shares of Common Stock have been
transferred to the Grantee.

          11. Successors and Assigns.

          This Agreement shall bind and inure to the benefit of and be enforceable
by the Grantee, the Company and their respective permitted successors and
assigns (including personal representatives, heirs and legatees), except that
the Grantee may not assign any rights or obligations under this Agreement
except to the extent and in the manner expressly permitted herein.

          12. No Service Guaranteed.

          No provision of this Restricted Stock Unit Agreement shall confer any
right upon the Grantee to continued service with the Company.

          13. Governing Law.

          This Restricted Stock Unit Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Texas.

          14. Amendment.

          This Agreement cannot be modified, altered or amended except by an
agreement, in writing, signed by both the Company and the Grantee.

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	 	 	 	 	EAGLE MATERIALS INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	By:	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	

	

	 	 	 	 	 	    Name:	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	
	 	 	 	 	 	 
	

	 	 	 	 	 	    Title:	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	
	 	 	 	 	 	 

          The Grantee hereby accepts the foregoing Restricted Stock Unit Agreement,
subject to the terms and provisions of the Plan and administrative
interpretations thereof referred to above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	OPTIONEE:
	 
	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	

	

	 	 	 	 	 	[name]	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Grantee’s Address:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	
	 	 	 	 
	 	 	 	 							
											
	

	 	 	 	 	 	
	 	 	 	 
	 	 	 	 							
	

	 	 	 	 	 	
	 	 	 	 

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Exhibit A

Change in Control

          For the purpose of this Agreement, a “Change of Control” shall mean the
occurrence of any of the following events:

          (a) The acquisition by any Person of beneficial ownership of securities of
the Company (including any such acquisition of beneficial ownership deemed to
have occurred pursuant to Rule 13d-5 under the Exchange Act) if, immediately
thereafter, such Person is the beneficial owner of (i) 50% or more of the
total number of outstanding shares of any single class of Company Common Stock
or (ii) 40% or more of the total number of outstanding shares of all classes of
Company Common Stock, unless such acquisition is made (a) directly from the
Company in a transaction approved by a majority of the members of the Incumbent
Board or (b) by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company;

          (b) Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (or who is otherwise designated
as a member of the Incumbent Board by such a vote) shall be considered as
though such individual were a member of the Incumbent Board, except that any
such individual shall not be considered a member of the Incumbent Board if his
or her initial assumption of office occurs as a result of either an actual or
threatened election contest (as such term is used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;

          (c) The consummation of a Business Combination, unless, immediately
following such Business Combination, (i) more than 50% of both the total number
of then outstanding shares of common stock of the parent corporation resulting
from such Business Combination and the combined voting power of the then
outstanding voting securities of such parent corporation entitled to vote
generally in the election of directors will be (or is) then beneficially owned,
directly or indirectly, by all or substantially all of the Persons who were the
beneficial owners, respectively, of the outstanding shares of Company Common
Stock immediately prior to such Business Combination in substantially the same
proportions as their ownership immediately prior to such Business Combination
of the outstanding shares of Company Common Stock, (ii) no Person (other than
any employee benefit plan (or related trust) of the Company or any corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 40% or more of the total number of then outstanding shares of
common stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors and (iii)
at least a majority of the members of the board of directors of the parent
corporation resulting from such Business Combination were members of the
Incumbent Board immediately prior to the consummation of such Business
Combination; or

A-1

 

          (d) Approval by the Board and the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) a Major Asset
Disposition (or, if there is no such approval by shareholders, consummation of
such Major Asset Disposition) unless, immediately following such Major Asset
Disposition, (A) Persons that were beneficial owners of the outstanding shares
of Company Common Stock immediately prior to such Major Asset Disposition
beneficially own, directly or indirectly, more than 50% of the total number of
then outstanding shares of common stock and the combined voting power of the
then outstanding shares of voting stock of the Company (if it continues to
exist) and of the Acquiring Entity in substantially the same proportions as
their ownership immediately prior to such Major Asset Disposition of the
outstanding shares of Company Common Stock; (B) no Person (other than any
employee benefit plan (or related trust) of the Company or such entity)
beneficially owns, directly or indirectly, 40% or more of the then outstanding
shares of common stock or the combined voting power of the then outstanding
voting securities of the Company (if it continues to exist) and of the
Acquiring Entity entitled to vote generally in the election of directors and
(C) at least a majority of the members of the Board of the Company (if it
continues to exist) and of the Acquiring Entity were members of the Incumbent
Board at the time of the execution of the initial agreement or action of the
Board providing for such Major Asset Disposition.

          For purposes of the foregoing,

     (i) the term “Person” means an individual, entity or
group;

     (ii) the term “group” is used as it is defined for
purposes of Section 13(d)(3) of the Exchange Act;

     (iii) the terms “beneficial owner”, “beneficially
ownership” and “beneficially own” are used as defined for
purposes of Rule 13d-3 under the Exchange Act;

     (iv) the term “Business Combination” means (x) a
merger, consolidation or share exchange involving the
Company or its stock or (y) an acquisition by the Company,
directly or through one or more subsidiaries, of another
entity or its stock or assets;

     (v) the term “Company Common Stock” shall mean the
Common Stock, par value $.01 per share, of the Company and
the Class B Common Stock, par value $.01 per share, of the
Company (or, if the content requires, shall mean either such
class);

     (vi) the term “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

     (vii) the phrase “parent corporation resulting from a
Business Combination” means the Company if its stock is not
acquired or converted in the Business Combination and
otherwise means the entity which as a result of such
Business Combination owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries;

A-2

 

     (viii) the term “Major Asset Disposition” means the
sale or other disposition in one transaction or a series of
related transactions of 50% or more of the assets of the
Company and its subsidiaries on a consolidated basis; and
any specified percentage or portion of the assets of the
Company shall be based on fair market value, as determined
by a majority of the members of the Incumbent Board;

     (ix) the term “Acquiring Entity” means the entity that
acquires the largest portion of the assets sold or otherwise
disposed of in a Major Asset Disposition (or the entity, if
any, that owns a majority of the outstanding voting stock of
such acquiring entity entitled to vote generally in the
election of directors or members of a comparable governing
body); and

     (x) the phrase “substantially the same proportions,”
when used with reference to ownership interests in the
parent corporation resulting from a Business Combination or
in an Acquiring Entity, means substantially in proportion to
the number of shares of Company Common Stock beneficially
owned by the applicable Persons immediately prior to the
Business Combination or Major Asset Disposition, but is not
to be construed in such a manner as to require that the same
ratio or number of shares of such parent corporation or
Acquiring Entity be issued, paid or delivered in exchange
for or in respect of the shares of each class of Company
Common Stock.

A-3<PAGE>

                                                                    EXHIBIT 4.5

CUSIP NO.: 375766 AN2                            PRINCIPAL AMOUNT:  $300,000,000

REGISTERED NO. 001
                              THE GILLETTE COMPANY

                           3.80% Senior Note due 2009

[x]   Check this box if the Note is a Global Note.
      Applicable if the Note is a Global Note:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

      This Note is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of Cede & Co., or such
other nominee of The Depository Trust Company, a New York corporation, or any
successor depositary ("Depositary"), as requested by an authorized
representative of the Depositary. This Note may not be exchanged in whole or in
part for a security registered, and no transfer of this security in whole or in
part may be registered, in the name of any person other than the Depositary or a
nominee thereof, except in the limited circumstances described in the Indenture.
Every security authenticated and delivered upon registration of, transfer of, or
in exchange for, or in lieu of, this Note will be a Global Security subject to
the foregoing, except in such limited circumstances.

ORIGINAL ISSUE DATE:  INTEREST RATE:  3.80% per    SINKING FUND:  N/A
August 30, 2004       annum.

                                                   YIELD TO MATURITY: N/A
                      INTEREST PAYMENT DATES:
STATED MATURITY:      March 15 and September       DEPOSITARY:  The Depository
September 15, 2009    15 of each year,             Trust Company
                      commencing March 15, 2005.
<PAGE>

      THE GILLETTE COMPANY, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company," which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
Principal Amount set forth on the face of this Note on the Stated Maturity set
forth on the face of this Note, upon the presentation and surrender hereof at
the principal corporate trust office of J.P. Morgan Trust Company, National
Association, or its successor in trust (the "Trustee") or such other office as
the Trustee has designated in writing, and to pay interest on the unpaid
principal balance hereof at a rate per annum equal to the Interest Rate set
forth on the face of this Note from, and including, the Original Issue Date set
forth on the face of this Note until the principal hereof is paid or duly made
available for payment.

      Interest will be payable in arrears on the Interest Payment Dates to the
Person in whose name this Note is registered at the close of business on the
related "Regular Record Date", which is the first day (whether or not a Business
Day) of the calendar month in which the related Interest Payment Date occurs.

      Interest on this Note will be computed on the basis of a year of 360 days
consisting of twelve 30-day months. Except for the effect of any adjustment in
the Interest Payment Date as provided in the following paragraph, the amount of
interest payable for any period shorter or longer than a full six-month period
for which interest is computed will be computed on the basis of 30-day months,
except that, during any partial month, interest will be computed on the basis of
the actual number of days elapsed in such month.

      If any Interest Payment Date or the Stated Maturity would otherwise be a
day that is not a Business Day, the payment required to be made on or at such
Interest Payment Date or the Stated Maturity will be made on the next succeeding
Business Day, and no interest will accrue on such payment for the period from
and after such Interest Payment Date or the Stated Maturity to the date of such
payment on the next succeeding Business Day, in each case with the same force
and effect as if made on such date.

      Payment of the principal of and any such interest on this Note shall be
made in immediately available funds at the office or agency of the Company
maintained for that purpose in the City of New York in the State of New York, or
during any time the Company shall fail to maintain such office or agency, the
Corporate Trust Office of the Trustee (in either case, which shall constitute
the Place of Payment under the Indenture), in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.

      Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

                                       2
<PAGE>

      IN WITNESS WHEREOF, THE GILLETTE COMPANY has caused this instrument to be
duly executed.

Dated: August 30, 2004

TRUSTEE'S CERTIFICATE                 THE GILLETTE COMPANY
OF AUTHENTICATION

This is one of the Securities
of the series designated              By: ______________________________________
therein referred By:                  Name: Gail F. Sullivan
to in the within-mentioned            Title: Vice President and Treasurer
Indenture.

J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION,
As Trustee
                                      Attested to:

                                      By: _____________________________________
By: _____________________________     Name: William J. Mostyn, III
         Authorized Officer           Title: Corporate Secretary

                                       3
<PAGE>

                                (REVERSE OF NOTE)

                              THE GILLETTE COMPANY

                           3.80% Senior Note due 2009

      This Note is one of a duly authorized series of debt securities (herein
called, the "Securities") of the Company, issued and to be issued under an
Indenture dated as of April 11, 2002, as amended and supplemented by the Fourth
Supplemental Indenture, dated as of November 8, 2002 (as such has been or shall
be amended or supplemented, the "Indenture"), between the Company and J.P.
Morgan Trust Company, National Association, successor to Bank One, N.A., as
trustee (the "Trustee", which term includes any successor Trustee under the
Indenture), to which Indenture reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the Securities of the series designated as "3.80% Senior Notes due 2009"
(herein called the "Notes").

                         NO REDEMPTION; NO SINKING FUND

      The Notes will not be subject to redemption prior to the Stated Maturity.
The Notes are not entitled to the benefit of any sinking fund or analogous
provision.

                              TRANSFER OR EXCHANGE

      As provided in the Indenture and subject to certain limitations herein and
therein set forth, the transfer of this Note is registerable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in any place where the principal of and interest on
this Note are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of like tenor, of authorized denominations and
for the same aggregate principal amount will be issued to the designated
transferee or transferees.

      The Notes are issuable only in registered form without coupons and only in
minimum denominations of $2,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations herein
and therein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes and of like tenor and of a different authorized denomination, as
requested by the Holder surrendering the same.

      No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

                                       4
<PAGE>

      Prior to due presentment of this Note for registration of transfer, the
Company or the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                OTHER PROVISIONS

      If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of this Note may be declared, or shall become, due and
payable in the manner and with the effect provided in the Indenture.

      Subject to the conditions of Article 13 of the Indenture, the Notes shall
be defeasible pursuant to Section 1302 of the Indenture.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of not less than a majority in principal
amount of the Securities of each series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. To the extent permitted by law, any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note. For certain purposes, and with certain exceptions, set forth in the
Indenture, the Company and the Trustee may amend the Indenture or the Notes
without the consent of any Holders of the Notes.

      No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.

      All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

      This Note shall be governed by and construed in accordance with the laws
of The State of New York.

                                       5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

  TEN COM          -- as tenants in common
  TEN ENT          -- as tenants by the entireties
  JT TEN           -- as joint tenants with right of survivorship and not as
                           tenants in common
  CUST             -- as Custodian
  U/G/M/A          -- Uniform Gift to Minors Act

      Additional abbreviations may also be used though not in the above list.

                                       6
<PAGE>

                                 ASSIGNMENT FORM

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

Please Insert Social Security or
Other Identifying Number of Assignee

_____________________________________

_____________________________________

________________________________________________________________________________

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

________________________________________________________________________________

________________________________________________________________________________

the within Security of THE GILLETTE COMPANY and does hereby irrevocably

constitute and appoint _________________________________________________________

attorney to transfer said Security on the books of the Company, with full power

of substitution in the premises.

 Dated: ______________________         _________________________________________

                                       _________________________________________

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatsoever.

                                       7

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