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EXHIBIT 4.3
JOHNSON & JOHNSON
2000 STOCK OPTION PLAN
(EFFECTIVE APRIL 19, 2000)
1. PURPOSE
The purpose of the Johnson & Johnson 2000 Stock Option Plan (the "Plan") is
to promote the interests of Johnson & Johnson (the "Company") by ensuring
continuity of management and increased incentive on the part of officers and
executive employees responsible for major contributions to effective management,
through facilitating their acquisition of an equity interest in the Company on
reasonable terms.
2. ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the Board
of Directors (the "Committee"). The Committee shall consist of not less than
three directors. No person shall be eligible to continue to serve as a member of
such Committee unless such person is a "Non-Employee Director" within the
meaning of Rule 16b-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended, and an "outside director" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"). Committee members shall not be eligible to participate
in the Plan while members of the Committee. The Committee shall have the power
to select optionees, to establish the number of shares and other terms
applicable to each such option, to construe the provisions of the Plan, and to
adopt rules and regulations governing the administration of the Plan.
The Board of Directors, within its discretion, shall have authority to
amend the Plan and the terms of any option issued hereunder without the
necessity of obtaining further approval of the shareowners, unless such approval
is required by law. Notwithstanding the foregoing, except for any stock split,
adjustment or other change in the corporate structure or shares of the Company
as contemplated under Section 6(A)(v) hereof, the Company shall neither lower
the exercise price of any option granted under the Plan nor grant any option
hereunder in replacement of an option which had previously been granted at a
higher exercise price, without the approval of the shareowners.
3. ELIGIBILITY
Those eligible to participate in the Plan will be selected by the Committee
from the following:
(1) Directors who are employees of the Company or its domestic
subsidiaries (excluding members from time to time of the Committee).
(2) Officers and other key employees of the Company and its domestic
subsidiaries.
(3) Key employees of subsidiaries outside the United States.
(4) Key employees of a joint venture operation of the Company or its
subsidiaries and key employees of joint venture partners who are assigned
to such a joint venture.
In all cases, optionees shall be selected on the basis of demonstrated
ability to contribute substantially to the effective management or financial
performance of the Company or its subsidiaries.
In no event shall an option be granted to any individual who, immediately
after such option is granted, is considered to own stock possessing more than
10% of the combined voting power of all classes of stock of Johnson & Johnson or
any of its subsidiaries within the meaning of Section 422 of the Internal
Revenue Code.
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4. ALLOTMENT OF SHARES
The amount of Common Stock of the Company (par value $1.00 per share) that
may be made subject to grants of options under the Plan in any calendar year
shall not exceed an amount equal to 1.6 percent of the issued shares of the
Company's Common Stock (including Treasury Shares) on January 1 of such year,
plus (i) the number of shares that were available for grants in the previous
year under the Plan but were not made subject to a grant in such previous year
and (ii) the number of shares that were covered by options granted under the
Plan which options lapsed, expired or terminated in the previous year without
being exercised. Notwithstanding the foregoing, no more than 75 million shares
in the aggregate shall be available for issuance as incentive stock options
under the Plan.
The total number of shares which may be awarded under the Plan to any
optionee in any one year shall not exceed the lesser of (x) 5% of the total
shares allotted to the Plan for such year and (y) 2 million shares. The
Committee may, in its discretion, issue upon exercise of any option Treasury
Shares or authorized but unissued shares.
5. EFFECTIVE DATE AND TERM OF PLAN
The Plan, if approved by the shareowners of the Company, shall become
effective on April 19, 2000. No option shall be granted pursuant to this Plan
later than April 18, 2005, but the rights of optionees under options theretofore
granted to them will not be affected, and all unexpired options will continue in
force and operation thereafter, except as such options may lapse or be
terminated in accordance with their terms and conditions.
6. TERMS AND CONDITIONS
A. ALL OPTIONS
The following shall apply to all options granted under the Plan:
(i) Option Price
The option price per share for each stock option shall be
determined by the Committee and shall not be less than the fair market
value on the date the option is granted. The fair market value shall be
determined as prescribed by the Internal Revenue Code and Regulations.
(ii) Time of Exercise of Option
The Committee shall establish the time or times within the option
period when the stock option may be exercised in whole or in such parts
as may be specified from time to time by the Committee. With respect to
an optionee whose employment has terminated by reason of death,
disability or retirement, the Committee may in its discretion
accelerate the time or times when any particular stock option held by
said optionee may be so exercised so that such time or times are
earlier than those originally provided in said option. In all cases
exercise of a stock option shall be subject to the provisions of
Section 6B(ii) or 6C(iii), as the case may be. The Committee shall
determine, either at the time of grant or later, whether and to what
extent and under what circumstances, the delivery of shares issuable in
connection with the exercise of a non-qualified option may be deferred
at the election of the optionee.
(iii) Payment
The entire option price may be paid at the time the option is
exercised. When an option is exercised prior to termination of
employment, the Committee shall have the discretion to arrange for the
payment of such price, in whole or in part, in installments. In such
cases, the Committee shall obtain such evidence of the optionee's
obligation, establish such interest rate and require such security as
it may deem appropriate for the adequate protection of the Company.
(iv) Non-Transferability of Option
Unless otherwise specified by the Committee to the contrary, an
option by its terms shall not be transferable by the optionee otherwise
than by will or by the laws of descent and distribution and shall be
exercisable during the optionee's lifetime only by the optionee. The
Committee may, in the
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manner established by the Committee, provide for the transfer, without
payment of consideration, of a non-qualified option by an optionee to a
member of the optionee's immediate family or to a trust or partnership
whose beneficiaries are members of the optionee's immediate family. In
such case, the option shall be exercisable only by such transferee. For
purposes of this provision, an optionee's "immediate family" shall mean
the holder's spouse, children and grandchildren.
(v) Adjustment in Event of Recapitalization of the Company
In the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of
the Company, the Board of Directors shall make such adjustment as it
may deem equitably required in the number and kind of shares authorized
by and for the Plan, the number and kind of shares covered by the
options granted, the number of shares which may be awarded to an
optionee in any one year, and the option price.
(vi) Rights after Termination of Employment
(1) In the event of termination of employment due to any cause
other than death, disability or retirement, rights to exercise the
stock option shall cease, except for those which have accrued to and
including the "date of termination" (as defined below), unless the
Committee shall otherwise specify. These rights shall remain
exercisable for a period of three (3) months after the date of
termination, or such longer period (not to exceed three (3) years) as
the Committee shall provide.
(2) In the event of termination of employment due to death or
disability, rights to exercise the stock option shall cease, except for
those which have accrued to and including the date of termination,
unless the Committee shall otherwise specify. These rights shall remain
exercisable for a period of three (3) years or such longer period (not
to exceed the term of the option) as the Committee shall provide.
Notwithstanding the above, in the event such termination of
employment due to death or disability occurs with optionee having at
least ten (10) years of service, any unexercised or unexercisable
portion of the stock option may be exercised in whole or in part during
the remaining term of the option at such times and to the extent the
optionee could have exercised such stock option had the optionee's
employment not terminated.
(3) In the event of retirement (unrelated to termination for cause,
as defined below, which shall be governed by the provisions of (1)
above) rights to exercise the stock option shall cease, except for
those which have accrued to and including the date of termination,
unless the Committee shall otherwise specify. These rights shall remain
exercisable for a period of three (3) years, or such longer period (not
to exceed the term of the option) as the Committee shall provide,
provided, however, that in the event the optionee is "employed by a
competitor" (as defined below) within two (2) years from the date of
such retirement, no rights may be exercisable beyond a date which is
three (3) months after the commencement of such employment with a
competitor.
Notwithstanding the above, in the event such retirement (unrelated
to termination for cause which shall be governed by the provisions of
(1) above) occurs with optionee having at least ten (10) years of
service, any unexercised or unexercisable portions of the stock option
may be exercised in whole or in part during the remaining term of the
stock option at such times and to the extent the optionee could have
exercised such stock option had the optionee's employment not
terminated, provided, however, that in the event the optionee is
employed by a competitor within two (2) years from the date of such
retirement, (i) any unexercisable portion of the stock option shall
terminate immediately and (ii) no rights may be exercisable beyond a
date which is three (3) months after the commencement of such
employment with a competitor.
(4) No stock option shall, in any event, be exercised after the
expiration of 10 years from the date such option is granted, or such
earlier date as may be specified in the option. In addition, any stock
option granted within six (6) months of termination of employment due
to any cause whatsoever shall be void unless the Committee shall
otherwise provide.
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(5) As used in the Plan:
(i) The term "termination for cause" shall mean optionee's
termination by the Company or any of its subsidiaries in connection
with the violation of any federal or state law, dishonesty, the
willful and deliberate failure on the part of an optionee to perform
his/her employment duties in any material respect or such other
events, including the existence of a conflict of interest, as the
Management Compensation Committee may determine. Such committee shall
have the sole discretion to determine whether a "termination for
cause" exists, and its determination shall be final.
(ii) The term "employed by a competitor" shall mean the
optionee's engaging in any activity or providing services, whether as
director, employee, advisor, consultant or otherwise, for any
corporation or other entity which is a competitor of the Company or
any of its subsidiaries. The Management Compensation Committee shall
have the sole discretion to determine if an optionee is "employed by
a competitor", and its determination shall be final.
(iii) The term "date of termination" shall mean the last date on
which the optionee was in an active employment status. Specifically,
in the event an optionee is covered by a severance agreement or
arrangement, the "date of termination" shall be the last day date of
active employment, not the date corresponding to the end of the
severance period.
B. NON-QUALIFIED STOCK OPTIONS
The Committee may, in its discretion, grant options under the Plan
which, in whole or in part, do not qualify as incentive stock options
under Section 422 of the Internal Revenue Code. In addition to the
terms and conditions set forth in Section 6A above, the following terms
and conditions shall govern any option (or portion thereof) to the
extent that it does not so qualify.
(i) Form of Payment
Payment of the option price of any option (or portion thereof) not
qualifying as an incentive stock option shall be made in cash or, in
the discretion of the Committee, in the Common Stock of the Company
valued at its fair market value (as the same shall be determined by the
Committee), or a combination of such Common Stock and cash. Where
payment of the option price is to be made with Common Stock acquired
under a Company compensation plan (within the meaning of Opinion No. 25
of the Accounting Principles Board), such Common Stock will not be
accepted as payment unless the optionee has beneficially owned such
Common Stock for at least six months (increased to one year if such
Common Stock was acquired under an incentive stock option) prior to
such payment.
(ii) Period of Option
The exercise period of each non-qualified stock option by its terms
shall not be more than l0 years from the date the option is granted as
specified by the Committee.
C. INCENTIVE STOCK OPTIONS
The Committee may, in its discretion, grant options under the Plan
which qualify in whole or in part as incentive stock options under
Section 422 of the Internal Revenue Code. In addition to the terms and
conditions set forth in Section 6A above, the following terms and
conditions shall govern any option (or portion thereof) to the extent
that it so qualifies:
(i) Maximum Fair Market Value of Incentive Stock Options
The aggregate fair market value (determined as of the time such
option is granted) of the Common Stock for which any optionee may have
stock options which first become vested in any calendar year (under all
incentive stock option plans of the Company and its subsidiaries) shall
not exceed $100,000.
(ii) Form of Payment
Payment of the option price for incentive stock options shall be made
in cash or in the Common Stock of the Company valued at its fair market
value (as the same shall be determined by the Committee), or a
combination of such Common Stock and cash. Where payment of the option
price
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is to be made with Common Stock acquired under a Company compensation
plan (within the meaning of Opinion No. 25 of the Accounting Principles
Board), such Common Stock will not be accepted as payment unless the
optionee has beneficially owned such Common Stock for at least six
months (increased to one year if such Common Stock was acquired under
an incentive stock option) prior to such payment.
(iii) Period of Option
The exercise period of each incentive stock option by its terms
shall not be more than l0 years from the date the option is granted as
specified by the Committee.
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