1971 Stock Option Plan

1971 Stock Option Plan

  THE GILLETTE COMPANY
                             1971 STOCK OPTION PLAN
                   (with amendments adopted through June 2001)


       1.PURPOSE. The purpose of the 1971 Stock Option Plan (hereinafter
referred to as the "Plan") is to provide a special incentive to selected key
salaried employees of The Gillette Company (hereinafter referred to as the
"Company") and of its subsidiaries and to the non-employee members of the Board
of Directors of the Company to promote the Company's business. The Plan is
designed to accomplish this purpose by offering such employees and non-employee
directors a favorable opportunity to purchase shares of the common stock of the
Company so that they will share in the success of the Company's business. For
purposes of the Plan a subsidiary is any corporation in which the Company owns,
directly or indirectly, stock possessing fifty percent or more of the total
combined voting power of all classes of stock or over which the Company has
effective operating control.

       2.ADMINISTRATION. The Plan shall be administered by the Personnel
Committee heretofore established by the Board of Directors of the Company, no
member of which shall be an employee of the Company or of any subsidiary. The
Committee shall have authority, not inconsistently with the Plan, (a) to
determine which of the key salaried employees of the Company and its
subsidiaries shall be granted options; (b) to determine whether the options
granted to any employees shall be incentive stock options within the meaning of
the Internal Revenue Code or non-qualified stock options or both; provided,
however, that with respect to options granted after December 31, 1986, in no
event shall the fair market value of the stock (determined at the time of grant
of the options) subject to incentive stock options within the meaning of the
Internal Revenue Code which first became exercisable by any employee in any
calendar year exceed $100,000 (and, to the extent such fair market value exceeds
$100,000, the later granted options shall be treated as non-qualified stock
options); (c) to determine the time or times when options shall be granted to
employees and the number of shares of common stock to be subject to each such
option provided, however, subject to adjustment as provided in Section 9 of the
Plan, in no event shall any employee be granted options covering more than
1,250,000 shares of common stock in any calendar year; (d) with respect to
options granted to employees, to determine the option price of the shares
subject to each option and the method of payment of such price; (e) with respect
to options granted to employees, to determine the time or times when each option
becomes exercisable and the duration of the exercise period; (f) to prescribe
the form or forms of the instruments evidencing any options granted under the
Plan and of any other instruments required under the Plan and to change such
forms from time to time; (g) to make all determinations as to the terms of any
sales of common stock of the Company to employees under Section 8 of the Plan;
(h) to adopt, amend and rescind rules and regulations for the administration of
the Plan and the options and for its own acts and proceedings; and (i) to decide
all questions and settle all controversies and disputes which may arise in
connection with the Plan. All decisions, determinations and interpretations of
the Committee shall be binding on all parties concerned.

       3.PARTICIPANTS. The participants in the Plan shall be such key salaried
employees of the Company or of any of its subsidiaries, whether or not also
officers or directors, as may be selected from time to time by the Committee in
its discretion, subject to the provisions of Section 8 of the Plan. In addition,
each non-employee director shall be a participant in the Plan. In any grant of
options after the initial grant, or any sale made under Section 8 of the Plan
after the initial sale, employees who were previously granted options or sold
shares under the Plan may be included or excluded.

       4.LIMITATIONS. No option shall be granted under the Plan and no sale
shall be made under Section 8 of the Plan after April 21, 2005, but options
theretofore granted may extend beyond that date. Subject to adjustment as
provided in Section 9 of the Plan, the number of shares of common stock of the
Company, which may be delivered under the Plan, shall not exceed 198,800,000 in
the aggregate. To the extent that any option granted under the Plan shall expire
or terminate unexercised or for any reason become unexercisable as to any shares
subject thereto, such shares shall thereafter be available for further grants
under the Plan, within the limit specified above.

       5.STOCK TO BE DELIVERED. Stock to be delivered under the Plan may
constitute an original issue of authorized stock or may consist of previously
issued stock acquired by the Company, as shall be determined by the Board of
Directors. The Board of Directors and the proper officers of the Company shall
take any appropriate action required for such delivery.

       6.TERMS AND CONDITIONS OF OPTIONS GRANTED TO EMPLOYEES. All options
granted to either non-employee directors or employees shall be subject to
Paragraphs (3) and (4) of Section 6(c) below. All options granted to employees
under the Plan shall be subject to all the following additional terms and
conditions (except as provided in Sections 7 and 8 of the Plan) and to such
other terms and conditions as the Committee shall determine to be appropriate to
accomplish the purposes of the Plan:

         (a) Option Price. The option price under each option shall be
     determined by the Committee and shall be not less than l00 percent of the
     fair market value per share at the time the option is granted. If the
     Committee so directs, an option may provide that if an employee Participant
     who was an employee participant at the time of the grant of the option and
     who is not an officer or director of the Company at the time of any
     exercise of the option, he shall not be required to make payment in cash or
     equivalent at that time for the shares acquired on such exercise, but may
     at his election pay the purchase price for such shares by making a payment
     in cash or equivalent of not less than five percent of such price and
     entering into an agreement, in a form prescribed by the Committee,
     providing for payment of the balance of such price, with interest at a
     specified rate, but not less than four percent, over a period not to exceed
     five years and containing such other provisions as the Committee in its
     discretion determines. In addition, if the Committee so directs, an option
     may provide for a guarantee by the Company of repayment of amounts borrowed
     by the Participant in order to exercise the option, provided he is not an
     officer or director of the Company at the time of such borrowing, or may
     provide that the Company may make a loan, guarantee, or otherwise provide
     assistance as the Committee deems appropriate to enable the Participant to
     exercise the option, provided that no such loan, guarantee, or other
     assistance shall be made without approval of the Board of Directors as
     required by law.

         (b)  Period of Options. 
              -----------------
               The period of an option shall not exceed ten years from the date
               of grant.

         (c)  Exercise of Option.
              ------------------

              (1) Each option held by a participant other than a non-employee
         director should be made exercisable at such time or times, whether or
         not in installments, as the Committee shall prescribe at the time the
         option is granted. In the case of an option held by a participant other
         than a non-employee director which is not immediately exercisable in
         full, the Committee may at any time accelerate the time at which all or
         any part of the option may be exercised.

              (2) Options intended to be incentive stock options, as defined in
         the Internal Revenue Code, shall contain and be subject to such
         provisions relating to the exercise and other matters as are required
         of incentive stock options under the applicable provisions of the
         Internal Revenue Code and Treasury Regulations, as from time to time in
         effect, and the Secretary of the Committee shall inform optionees of
         such provisions.

              (3) Payment for Delivery of Shares. Upon exercise of any option,
         payment in full in the form of cash or a certified bank, or cashier's
         check or, with the approval of the Secretary of the Committee, in whole
         or part Common stock of the Company at fair market value, which for
         this purpose shall be the closing price on the business day preceding
         the date of exercise, shall be made at the time of such exercise for
         all shares then being purchased thereunder, except in the case of an
         exercise to which the provisions of the second sentence of Section 6(a)
         above are applicable.

              The purchase price payable by any person, other than a
         non-employee director, who is not a citizen or resident of the United
         States of America and who is an employee of a foreign subsidiary at the
         time payment is due shall, if the Committee so directs, be paid to such
         subsidiary in the currency of the country in which such subsidiary is
         located, computed at such exchange rate as the Committee may direct.
         The amount of each such payment may, in the discretion of the
         Committee, be accounted for on the books of such subsidiary as a
         contribution to its capital by the Company. The Company shall not be
         obligated to deliver any shares unless and until, in the opinion of the
         Company's counsel, all applicable federal and state laws and
         regulations have been complied with, nor, in the event the outstanding
         common stock is at the time listed upon any stock exchange, unless and
         until the shares to be delivered have been listed or authorized to be
         added to the list upon official notice of issuance upon such exchange,
         nor unless or until all other legal matters in connection with the
         issuance and delivery of shares have been approved by the Company's
         counsel. Without limiting the generality of the foregoing, the Company
         may require from the Participant such investment representation or such
         agreement, if any, as counsel for the Company may consider necessary in
         order to comply with the Securities Act of 1933 and may require that
         the Participant agree that any sale of the shares will be made only on
         the New York Stock Exchange or in such other manner as is permitted by
         the Committee and that he will notify the Company when he makes any
         disposition of the shares whether by sale, gift, or otherwise. The
         Company shall use its best efforts to effect any such compliance and
         listing, and the Participant shall take any action reasonably requested
         by the Company in such connection. A Participant shall have the rights
         of a shareholder only as to shares actually acquired by him under the
         Plan.

              (4)(a) Notwithstanding any other provision of this Plan, upon the
         occurrence of a Change of Control, as hereinafter defined, all
         outstanding options held by employee Participants and non-employee
         directors which are not yet exercisable shall become immediately
         exercisable and all the rights and benefits relating to such options
         including, but not limited to, periods during which such options may be
         exercised shall become fixed and not subject to change or revocation by
         the Company except as otherwise provided under Section 6(i).

              (b) Notwithstanding the provisions of Section 6(f), in the event
         that, within two years of a Change of Control, the employment of an
         employee Participant is terminated by the Company for any reason other
         than for Cause, or the employee Participant terminates employment for
         Good Reason, or the service as a director of a non-employee director is
         terminated, the applicable exercise period for all options, other than
         options granted prior to June 21, 2001 and designated as incentive
         stock options hereunder, then held by him shall be a period of two
         years from the date of termination; provided, however, that in no event
         shall any option be exercisable beyond ten years from its date of
         grant.

              (c) A Change of Control shall mean the occurrence of any of the
                  following events:

                  (1) The acquisition by any individual, entity or group (within
              the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
              Exchange Act of 1934, as amended (the "Exchange Act")) (a
              "Person") of beneficial ownership (within the meaning of Rule
              13d-3 promulgated under the Exchange Act) of 20% or more of either
              (A) the then-outstanding shares of common stock of the Company
              (the "Outstanding Company Common Stock") or (B) the combined
              voting power of the then-outstanding voting securities of the
              Company entitled to vote generally in the election of directors
              (the "Outstanding Company Voting Securities"); provided, however,
              that, for purposes of this Paragraph (1), the following
              acquisitions shall not constitute a Change of Control: (i) any
              acquisition directly from the Company, (ii) any acquisition by the
              Company, (iii) any acquisition by any employee benefit plan (or
              related trust) sponsored or maintained by the Company or any of
              its subsidiaries or (iv) any acquisition by any corporation
              pursuant to a transaction that complies with clauses (A), (B) and
              (C) of Paragraph (3) below;

                  (2) Individuals who, as of December 16, 1999, constitute the
              Board of Directors (the "Board") of the Company (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 shall be considered as though such
              individual were a member of the Incumbent Board, but excluding,
              for this purpose, any such individual whose initial assumption of
              office occurs as a result of an actual or threatened election
              contest with respect to the election or removal of directors or
              other actual or threatened solicitation of proxies or consents by
              or on behalf of a Person other than the Board;

                  (3) Consummation of a reorganization, merger, consolidation or
              sale or other disposition of all or substantially all of the
              assets of the Company (a "Business Combination"), in each case,
              unless, following such Business Combination, (A) all or
              substantially all of the individuals and entities that were the
              beneficial owners of the Outstanding Company Common Stock and the
              Outstanding Company Voting Securities immediately prior to such
              Business Combination beneficially own, directly or indirectly,
              more than 60% of the then-outstanding shares of common stock and
              the combined voting power of the then-outstanding voting
              securities entitled to vote generally in the election of
              directors, as the case may be, of the corporation resulting from
              such Business Combination (including, without limitation, a
              corporation that, as a result of such transaction, owns the
              Company or all or substantially all of the Company's assets either
              directly or through one or more subsidiaries) in substantially the
              same proportions as their ownership immediately prior to such
              Business Combination of the Outstanding Company Common Stock and
              the Outstanding Company Voting Securities, as the case may be, (B)
              no Person (excluding any corporation resulting from such Business
              Combination or any employee benefit plan (or related trust) of the
              Company or such corporation resulting from such Business
              Combination) beneficially owns, directly or indirectly, 20% or
              more of, respectively, the 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, except to the extent that such ownership existed
              prior to the Business Combination, and (C) at least a majority of
              the members of the board of directors of the corporation resulting
              from such Business Combination were members of the Incumbent Board
              at the time of the execution of the initial agreement or of the
              action of the Board providing for such Business Combination; or

                  (4) Approval by the stockholders of the Company of a complete
                      liquidation or dissolution of the Company.

              (d) For the purposes of the Plan, unless otherwise provided under
         the terms of an employment agreement with the Company or any of its
         subsidiaries, in which case the definition contained therein shall
         control, an employee Participant shall be treated as terminating his
         employment for "Good Reason" if he does so as a direct result of:

                  (i) the assignment to the Participant of any duties materially
              inconsistent in any respect with the Participant's position
              (including status, offices, titles and reporting requirements),
              authority, duties or responsibilities as in effect immediately
              prior to the Change of Control, or any other action by the Company
              or its subsidiaries that results in a diminution in such position,
              authority, duties or responsibilities, excluding for this purpose
              an isolated, insubstantial and inadvertent action not taken in bad
              faith and that is promptly remedied by the Company and/or the
              subsidiary;

                  (ii) a decrease in the Participant's compensation, other than
              an isolated, insubstantial and inadvertent failure not occurring
              in bad faith and that is promptly remedied by the Company and/or
              the subsidiary; or

                  (iii) the Company's or the subsidiary's requiring the
              Participant to be based at any office or location other than (A)
              the office or where the Participant was based and performed
              services immediately prior to the Change of Control or (B) any
              other location less than 35 miles from such office, or the
              Company's or the subsidiary's requiring the Participant to travel
              on business to a substantially greater extent than required
              immediately prior to the Change of Control.

         (d)  Nontransferability of Options.
              -----------------------------

              (1) Except as provided in Paragraphs (2) and (3) below, no option
         may be transferred by a Participant otherwise than by will or the laws
         of descent and distribution, and during the Participant's lifetime the
         option may be exercised only by him.

              (2) In the case of options other than (i) those options designated
         as incentive stock options or (ii) those options excluded from the
         application of this Paragraph pursuant to a Schedule to this Plan, the
         Committee in its sole and exclusive discretion may provide in the
         option agreement covering an option granted hereunder (either at the
         time of grant or, with the consent of the Participant, at any time
         thereafter) that the Participant may transfer by gift all or any part
         of such option to (x) his spouse, child, grandchild or other "family
         member" (as such term is defined for purposes of applicable securities
         and tax laws), to a trust having only family members as beneficiaries
         or to a partnership or company having only family members as partners
         or owners, or (y) a charitable organization described in Section
         501(c)(3) of the Internal Revenue Code. Any options so transferred
         shall remain subject to the otherwise applicable terms of the option
         agreement and this Plan, and also shall be subject to such terms and
         conditions as the Committee may prescribe. Subsequent transfers of
         options shall be permitted under this Paragraph only to the extent, and
         subject to the rules, prescribed by the Committee.

              (3) A Participant may transfer all or any part of an option
         granted hereunder to a former spouse pursuant to the terms of a
         qualified domestic relations order. Any options so transferred shall
         remain subject to the otherwise applicable terms of the option
         agreement and this Plan. No subsequent transfers of options shall be
         permitted under this Paragraph.

         (e) Nontransferability of Shares. If the Committee so determines, an
     option granted to an employee may provide that, without prior consent of
     the Committee, shares acquired by exercise of the option shall not be
     transferred, sold, pledged or otherwise disposed of within a period not to
     exceed one year from the date the shares are transferred to the Participant
     upon his exercise of the option or prior to the satisfaction of all
     indebtedness with respect thereto, if later.

         (f) Termination of Employment. The provisions of this Subsection (f)
     shall govern in the event of the termination of a Participant's employment
     with the Company and its subsidiaries. If the employment of an employee
     Participant terminates for any reason other than his death, he may (unless
     discharged for Cause as hereinafter defined) thereafter exercise his option
     as provided below:

                  (i) If such termination of employment is voluntary on the part
              of the employee Participant, he may exercise his option only
              within 30 days after the date of termination of his employment
              (unless a longer period not in excess of three months is allowed
              by the Committee).

                  (ii) If such termination of employment is involuntary on the
              part of the employee Participant, he may exercise his option only
              within three months after the date of termination of his
              employment.

                  (iii) If such termination of employment is on account of the
              employee Participant's total and permanent disability, he may
              exercise his option only within one year after the date of
              termination of his employment.

                  (iv) If such termination of employment is on account of the
              employee Participant's retirement (as defined below), he may
              exercise (I) any option granted prior to January 1, 1994, other
              than an option designated as an incentive stock option hereunder,
              within a period not to exceed two years after his retirement date,
              (II) any option granted after December 31, 1993 and prior to April
              17, 1997, other than an option designated an incentive stock
              option hereunder, within a period not to exceed three years after
              his retirement date, (III) any option granted prior to April 17,
              1997 and designated an incentive stock option hereunder within a
              period not to exceed three months after his retirement date, and
              (IV) any option granted after April 16, 1997 within a period not
              to exceed five years after his retirement date, provided that such
              option shall cease to qualify as an incentive stock option under
              the Internal Revenue Code if not exercised within three months
              after his retirement date. For the purposes of his Plan, an
              employee Participant's termination of employment is on account of
              "retirement" if either (A) at the time the Participant leaves the
              employ of the Company and its subsidiaries, the Participant
              qualifies for an early or normal retirement pension under the
              terms of a retirement plan maintained by or to which the Company
              or any subsidiary contributes for the benefit of the Participant,
              (B) the Participant leaves the employ of a subsidiary that does
              not maintain or contribute to a retirement plan for the benefit of
              the Participant, and at such time the Participant would have
              qualified for an early or normal retirement pension under the
              terms of The Gillette Company Retirement Plan had the individual
              been a participant of that plan, or (C) solely in the case of a
              Company-initiated termination of employment (other than for
              Cause), at the time the Participant leaves the employ of the
              Company and its subsidiaries, the sum of Participant's attained
              age and years of service (each measured in full and partial years)
              totals at least 80. An employee Participant's "retirement date",
              as used in this paragraph, means the first day the Participant is
              no longer on the active payroll of the Company or any subsidiary
              following the Participant's retirement.

              Notwithstanding the above, in no event, may any Participant
         exercise any option (i) which was not exercisable on the date he ceased
         to be an employee, except in the case of options granted at least one
         year prior to Participant's cessation of employment on account of
         retirement or total and permanent disability, or (ii) after the
         expiration of the option period. For the purposes of this Subsection
         (f), a Participant's employment shall not be considered terminated in
         the case of a sick leave or other bona fide leave of absence approved
         by the Company or a subsidiary in conformance with the applicable
         provisions of the Internal Revenue Code of Treasury Regulations, or in
         the case of a transfer to the employment of a subsidiary or to the
         employment of the Company.

              If an employee Participant is discharged for Cause, as hereinafter
         defined, all his options shall immediately be cancelled effective as of
         the date of termination of his employment. For the purposes of the
         Plan, unless otherwise provided under the terms of an employment
         agreement with the Company or any of its subsidiaries, in which case
         the definition contained therein shall control, a discharge for "Cause"
         shall have occurred where a Participant is terminated because of:

                  (A) the Participant's continued failure to perform
              substantially his duties with the Company or any of its
              subsidiaries (other than any such failure resulting from
              incapacity due to physical or mental illness), after a written
              demand for performance is delivered to Participant by an officer
              or a senior manager of the Company or the subsidiary which
              identifies the manner in which the Board or the elected officer or
              manager believes that Participant has not performed his duties;

                  (B) the Participant's engaging in illegal conduct or gross
              misconduct which is materially and demonstrably injurious to the
              Company or the subsidiary; or

                  (C) the Participant's conviction of a felony or a plea of nolo
              contendere by Participant with respect thereto.

         (g) Death. If a Participant dies while holding an option which had been
     granted at least one year prior to the date of death, then at any time or
     times within one year after his death (or with respect to employee
     Participants such further period as the Committee may allow) such option
     may be exercised, as to all or any of the shares covered by such option, by
     his executor or administrator of the person or persons to whom the option
     is transferred by will or the applicable laws of descent and distribution,
     and except as so exercised the option shall expire after the expiration of
     such period. In no event, however, may any option be exercised after the
     expiration of the option period.

         (h) Deferral Election. In accordance with such rules and procedures as
     the Committee may prescribe from time to time, if provided by the
     Committee, in its sole and exclusive discretion, in the option agreement
     covering an option granted hereunder, a Participant may elect to defer the
     delivery of the shares acquired upon the exercise of the option; provided
     that such election may not be made with respect to any incentive stock
     option or any option transferred pursuant to the provisions of Section 6(d)
     above. The Participant's deferral election must be made at least six months
     prior to the date such option is exercised or at such other time as the
     Committee may specify. Payment of the option exercise price must be made in
     the form of shares of common stock which the Participant has held for at
     least six months. Deferral elections will be allowed only for option
     exercises that occur while the Participant is an active employee of the
     Company and its subsidiaries or is actively serving as a non-employee
     director, as the case may be. Any election to defer the delivery of the
     stock shall be irrevocable as long as the Participant remains an employee
     of the Company and its subsidiaries or a non-employee director, as the case
     may be.

         Upon the exercise of an option as to which a deferral election has been
     made in accordance with this Subsection (h), the Company shall credit to a
     bookkeeping account a number of deferred stock units equal to the number of
     shares that otherwise would have been delivered to the Participant. During
     the period of deferral, the deferred stock units shall accrue dividends at
     the rate paid upon the Company's common stock, which dividend equivalents
     shall be credited in the form of additional deferred stock units. Deferred
     stock units shall be distributed in shares of common stock (with cash
     payment in lieu of any fractional share) upon the Participant's termination
     of employment with the Company and its subsidiaries or following the date
     the Participant's membership on the Board of Directors ceases, as the case
     may be, or if the Participant's termination is on account of retirement, at
     such other date or dates as may be approved by the Committee over a period
     extending no later than 10 years following such termination date.

         The Committee may, in its sole discretion, allow for the early
     distribution of an employee Participant's deferred stock units in the event
     of an immediate and heavy financial hardship or in the event of the death
     or disability of the Participant. Distribution on account of financial
     hardship shall be limited to the amount necessary to satisfy the hardship.
     In addition, the Committee in its discretion may direct the distribution of
     an employee Participant's deferred stock units if it believes such action
     is in the best interest of the Company. Deferred stock units shall not be
     assigned or alienated by any Participant, and shall not be subject to
     attachment, garnishment, encumbrance, pledge or charge of any nature.

         (i) Additional Conditions of Option Awards. Unless otherwise provided
     pursuant to an employment agreement between an employee Participant and the
     Company, the following additional provisions shall govern options awarded
     under the Plan.

              (1) With respect to any option granted prior to June 21, 2001, and
         to any option granted on June 21, 2001 under The Gillette U.K. Approved
         Stock Option Plan ("2001 UK approved option"), the Committee may, in
         its sole discretion, cancel any such option at or any time after the
         date of termination of an employee Participant's employment (and prior
         to the expiration of the exercise periods specified above), if it deems
         such action to be in the best interests of the Company.

              (2) With respect to any option granted on or after June 21, 2001
         (other than any 2001 UK approved option) ("covered option"), the
         following terms and conditions shall apply:

                  (a) Unless otherwise provided pursuant to a termination
              settlement agreement with the Company or any of its subsidiaries,
              while the Participant is employed by the Company and for a period
              of eighteen (18) months after the termination or cessation of such
              employment for any reason, the Participant shall not directly or
              indirectly:

                      (i) as an employee, consultant, independent contractor,
                  officer, director, individual proprietor, investor, partner,
                  stockholder, agent, principal, joint venturer, or in any other
                  capacity whatsoever (other than as the holder of not more than
                  one percent of the combined voting power of the outstanding
                  stock of a publicly held corporation or company), be employed,
                  work, consult, advise, assist, or engage in any activity
                  regarding any business, product, service or other matter
                  which: (A) is substantially similar to or competes with any
                  business, product, service or other matter regarding which the
                  Participant worked for the Company, or any of its
                  subsidiaries, during the three (3) years prior to
                  Participant's termination of employment; or (B) concerns
                  subject matters about which Participant gained proprietary
                  information of the Company, or any of its subsidiaries, during
                  the three (3) year period prior to the Participant's
                  termination of employment;

                      (ii) either alone or in association with others, solicit,
                  divert or take away, or attempt to divert or to take away, the
                  business or patronage of any of the clients, customers or
                  accounts, or prospective clients, customers or accounts, of
                  the Company which were contacted, solicited or served,
                  directly or indirectly, by Participant while employed by the
                  Company; or

                      (iii) either alone or in association with others: (A)
                  solicit or encourage any employee or independent contractor of
                  the Company to terminate his/her relationship with the
                  Company; or (B) recruit, hire or solicit for employment or for
                  engagement as an independent contractor, any person who is or
                  was employed by the Company at any time during the
                  Participant's employment with the Company; provided, that this
                  Paragraph (iii) shall not apply to such person whose
                  employment with the Company has been terminated for a period
                  of six months or longer.

                  (b) The Participant shall not disclose or use at any time any
              secret or confidential information or knowledge obtained or
              acquired by the Participant during, after, or by reason of,
              employment with the Company or any of its subsidiaries, as
              provided under applicable law and any and all agreements between
              the Participant and the Company or any of its subsidiaries
              regarding Participant's employment with the Company or the
              subsidiary.

                  (c) In accordance with any and all agreements between the
              Participant and the Company or any of its subsidiaries regarding
              the Participant's employment, the Participant shall disclose
              promptly and transfer and assign to the Company all improvements
              and inventions in certain fields made or conceived by the
              Participant during employment with the Company or the subsidiary
              and within the prescribed periods thereafter.

                  (d) To the extent permitted by law, the Participant shall not
              make, publish or state, or cause to be made, published or stated,
              any defamatory or disparaging statement, writing or communication
              pertaining to the character, reputation, business practices,
              competence or conduct of the Company, its subsidiaries,
              shareholders, directors, officers, employees, agents,
              representatives or successors.

              (3) The geographic scope of the provisions of Paragraph (2)(a)
         above shall extend to anywhere the Company or any of its subsidiaries
         is doing business, has done business or intends to do business.

              (4) If any restriction set forth in Paragraph (2)(a) above is
         found by any court of competent jurisdiction to be unenforceable
         because it extends for too long a period of time or over too great a
         range of activities or in too broad a geographic area, it shall be
         interpreted to extend only over the maximum period of time, range of
         activities or geographic area as to which it may be enforceable.

              (5) In the event of a Change of Control, the restrictions
         contained in Paragraphs (2)(a)(i), (2)(a)(iii) and (2)(d) above shall
         cease and the Participant shall no longer be bound by the obligations
         thereunder.

              (6) If the Company reasonably determines that a Participant has
         materially violated any of the Participant's obligations under
         Paragraph (2) above, or if a Participant is terminated for Cause, then,
         in addition to any other remedies at law or in equity it may have, the
         Company shall have the following rights and remedies:

                  (a) The Company may cancel any and all covered options granted
              to the Participant, including grants that according to their terms
              are vested, effective as of the date on which such violation began
              (the "Violation Date"); and

                  (b) The Company may demand the return of any gain realized by
              the Participant as a result of the Participant's exercise of any
              covered option during the period commencing one year prior to the
              Participant's termination of employment and continuing through the
              Violation Date. Upon demand, the Participant shall pay to the
              Company the amount of any gain realized or payment received as a
              result of such exercises. At the option of the Company, such
              payment shall be made by returning to the Company the number of
              shares of common stock of the Company which the Participant
              received in connection with such exercise (with the Company then
              refunding the option price paid by the Participant), or in cash in
              the amount of the gain realized. If after such demand the
              Participant fails to return said shares or amounts, the Company
              shall have the right to offset said amounts against any amounts,
              including compensation, owed to the Participant by the Company or
              to commence judicial proceedings against the Participant to
              recover said shares or amounts.

              (7) The non-competition restrictions set forth in Paragraph (2)(a)
         supersede any non-competition restrictions of less than eighteen (18)
         months in duration set forth in any agreement between a Participant and
         the Company or any subsidiary or predecessor.

       7.REPLACEMENT OPTIONS. The Company may grant options under the Plan on
terms differing from those provided for in Section 6 of the Plan where such
options are granted in substitution for options held by employees of other
corporations who concurrently become employees of the Company or a subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or subsidiary, or the acquisition by the Company or a subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute options be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.

       Notwithstanding anything contained in this Plan, the Committee shall have
authority, with respect to any options granted or to be granted to employees or
outstanding installment Purchase Agreements of participants other than
non-employee directors under this Plan, to extend the time for payment of any
and all installments, to modify the amount of any installment, to amend
outstanding option certificates to provide for installment payments or to take
any other action which it may, in its discretion, deem necessary, provided that:
(1) interest on the unpaid balance under any outstanding Purchase Agreement at
the rate of at least four percent (4%) per annum shall continue to be due and
payable quarterly during the period of any deferral of payment; (2) all such
installment Purchase Agreements and unexercised options, shall at all times be
in accordance with the applicable provisions of Regulation G of the Board of
Governors of the Federal Reserve System, as from time to time amended, and with
all other applicable legal requirements; (3) no such action by the Committee
shall jeopardize the status of stock options as incentive stock options under
the Internal Revenue Code.

       8.FOREIGN EMPLOYEES. The Company may grant options under the Plan on
terms differing from those provided for in Section 6 of the Plan where such
options are granted to employee Participants who are not citizens or residents
of the United States of America if the Committee determines that such different
terms are appropriate in view of the circumstances of such Participants,
provided, however, that such options shall not be inconsistent with the
provisions of Section 6(a) or Section 6(b) of the Plan.

       In addition, if the Committee determines that options are inappropriate
for any key salaried employees who are not citizens or residents of the United
States of America, whether because of the tax laws of the foreign countries in
which such employees are residents or for other reasons, the Board of Directors
may authorize special arrangements for the sale of shares of common stock of the
Company to such employees, whether by the Company, or a subsidiary, or other
person. Such arrangements may, if approved by the Board of Directors, include
the establishment of a trust by the foreign subsidiary, which is the employer of
the key salaried employees, designated by such subsidiary, to whom the shares
are to be sold. Such arrangements shall provide for a purchase price of not less
than the fair market value of the stock at the date of sale and a maximum annual
grant per participant of options to purchase 1,250,000 shares of common stock
and may provide that the purchase price be paid over a period of not more than
ten years, with or without interest, and that such employees have the right,
with or without payment of a specified premium, to require the seller of the
shares to repurchase such shares at the same price, subject to specified
conditions. Such arrangements may also include provisions deemed appropriate as
to acceleration or prepayment of the balance of the purchase price, restrictions
on the transfer of the shares by the employee, representations or agreements by
the employee about his investment purposes and other miscellaneous matters.

       9.CHANGES IN STOCK. In the event of a stock dividend, split-up or
combinations of shares, recapitalization or merger in which the Company is the
surviving corporation, or other similar capital change, the number and kind of
shares of stock or securities of the Company to be subject to the Plan and to
options then outstanding or to be granted thereunder, the maximum number of
shares or securities which may be issued or sold under the Plan, the maximum
annual grant for each participant, the automatic annual grant for each
non-employee director, the option price and other relevant provisions shall be
appropriately adjusted by the Board of Directors of the Company, whose
determination shall be binding on all persons. In the event of a consolidation
or a merger in which the Company is not the surviving corporation or which
results in the acquisition of substantially all the Company's outstanding stock
by a single person or entity or by a group of persons and/or entities acting in
concert, or in the event of complete liquidation of the Company, all outstanding
options shall thereupon terminate, provided that (i) at least twenty days prior
to the effective date of any such consolidation or merger, the Board of
Directors shall with respect to employee participants either (a) make all
outstanding options immediately exercisable, or (b) arrange to have the
surviving corporation grant replacement options to the employee Participants and
(ii) in the case of option grants to non-employee directors, all outstanding
options not otherwise exercisable shall become exercisable on the twentieth day
prior to the effective date of the merger.

       10.        EMPLOYMENT RIGHTS. 
                  -----------------
                  The adoption of the Plan does not confer upon any employee of
                  the Company or a subsidiary any right to continued employment
                  with the Company or a subsidiary, as the case may be, nor does
                  it interfere in any way with the right of the Company or a
                  subsidiary to terminate the employment of any of its
                  employees at any time.
  

       11. AMENDMENT OF PLAN OR OPTIONS. The Board of Directors of the Company,
or the Personnel Committee of the Board of Directors if and to the extent
authorized, may at any time or times amend the Plan or amend any outstanding
option or options or arrangements established under Section 8 of the Plan for
the purpose of satisfying the requirements of any changes in applicable laws or
regulations or for any other purpose which may at the time be permitted by law,
provided that (except to the extent required or permitted under Section 9 of the
Plan and, with respect to clauses (b) and (f) below, except to the extent
required or permitted under Section 7 of the Plan) no such amendment shall,
without the approval of the stockholders of the Company, (a) increase the
maximum number of shares available under the Plan or the maximum annual grant
per participant other than as permitted under Section 9 of the Plan, (b) reduce
the minimum option price of options thereafter to be granted below the price
provided for in Section 6(a) of the Plan, except that the Plan may be amended to
provide that the minimum option price of non-qualified stock options thereafter
to be granted to employees may be not less than 95% of the fair market value at
the date of grant if the Board determines that such amendment is necessary for
tax reasons to carry out the objectives of the Plan, (c) reduce the price at
which shares of common stock of the Company may be sold under Section 8 of the
Plan below the price provided for in said Section 8, (d) reduce the option price
of outstanding options, (e) extend the time within which options may be granted,
or (f) extend the period of an outstanding option beyond ten years from the date
of grant; and further provided no such amendment shall adversely affect the
rights of any Participant (without his consent) under any option theretofore
granted or other contractual arrangements theretofore entered into or after a
Change of Control deprive any Participant of any right or benefit which became
operative in the event of a Change of Control.

       12. TERMS AND CONDITIONS OF OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS.
Effective at the close of business on the second business day after the 1992
Annual Meeting of Shareholders of the Company and on the second business day
after each Annual Meeting thereafter, each non-employee director shall be
automatically granted a non-incentive stock option to purchase 4,000 shares of
the common stock of the Company under the generally applicable provisions of the
Plan and upon the following specific terms and conditions:

         (a) Option Price. The option price under each option shall be the fair
     market value on the date of grant, which for this purpose is defined as the
     average between the high and the low price of the common stock as reported
     by the New York Stock Exchange.

         (b)  Option Period. 
              -------------
              The period of an option shall be ten years from the date of grant.


         (c) Option Exercisability. Each option granted prior to 2001 shall
     become exercisable in full on the earlier of the first Annual Meeting
     following the date of grant or the first anniversary of the date of grant,
     except as otherwise provided under Paragraph (4) of Section 6(c) of the
     Plan. Each option granted after 2000 shall become exercisable ratably over
     a three year period (1,333 after one year, an additional 1,333 after two
     years and the remaining 1,334 after three years) on the earlier of the
     Annual Meeting or the anniversary of the date of grant in each such year,
     except as otherwise provided under Paragraph (4) of Section 6(c) of the
     Plan.

         (d) Exercise Period. Any option, otherwise exercisable, may be
     exercised during the period a non-employee director remains a member of the
     Board of Directors and for a period of three months following the date a
     non-employee director ceases to be a director; provided that, in the case
     where the non-employee director either has attained age 65 or has served as
     a non-employee director for at least five years when membership on the
     Board of Directors ends, that non-employee director's options shall be
     exercisable for a period of two years with respect to options granted
     before 1994, three years for options granted after 1993 and before 2001 and
     five years for options granted after 2000, each such period commencing on
     the date membership on the Board of Directors ceases.

         If a non-employee director dies while a member of the Board of
     Directors, or following the date membership on the Board of Directors
     ceases while an option remains exercisable in accordance with the preceding
     paragraph, then at any time or times within one year after that
     non-employee director's death that non-employee director's option may be
     exercised in accordance with the provisions of Section 6(g) of the Plan. In
     no event shall any option be exercised after the expiration of the option
     period.


June 21, 2001