Exhibit 10(a)
JOHNSON & JOHNSON
STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
(Effective as of January 1, 1997)
1. Purpose. The purpose of the Stock Option Plan for Non-Employee
Directors of Johnson & Johnson (the "Plan") is to provide certain compensation
to eligible directors of Johnson & Johnson (the "Company") and to encourage the
highest level of director performance by providing such directors with an
interest in the Company's success and progress by granting them non-qualified
options ("Options") to purchase shares of the Company's Common Stock ("Common
Stock").
2. Administration. The Plan shall be administered by the Compensation
Committee or any successor thereto (the "Committee") of the Company's Board of
Directors (the "Board"). Questions involving eligibility for grants of Options,
entitlement to Options or the operation of the Plan shall be referred to the
Committee. All determinations of the Committee shall be conclusive. The
Committee may obtain such advice or assistance as it deems appropriate from
persons not serving on the Committee.
3. Eligibility and Grants. To be eligible to participate in the Plan, a
director must not be an officer or employee of the Company or any of its
subsidiaries or affiliates. On the first trading day of each calendar year, each
eligible director shall automatically be granted an Option to purchase 1,100
shares of Common Stock. Such amount may be increased or decreased by the
Committee in November or December of each year to reflect the competitive
environment with respect to director compensation. Each eligible director to
whom Options are granted is hereinafter referred to as a "Participant." Each
grant of Options shall be evidenced by a written agreement duly executed and
delivered by or on behalf of the Company and the Participant.
4. Shares Available. Subject to adjustment as provided in Section 10,
the maximum aggregate number of shares of Common Stock which shall be available
under the Plan for the issuance upon the exercise of Options is 150,000 shares.
5. Term of Options. Each Option granted under the Plan shall have a
term of ten years from the date of grant, subject to earlier termination as
provided in Section 8(b).
6. Option Price. Options are priced at 100% of the fair market value of
the Common Stock on the date of grant. Such price shall be subject to adjustment
as provided in Section 10. The fair market value of a share of Common Stock
shall be the average of the highest and lowest sales prices of the Common Stock
as reported on the New York Stock Exchange Composite Tape ("Fair Market Value").
7. Exercise of Options. (a) Each Option shall become 100% exercisable
at the earliest of the completion of a Participant's Board service or on a date
which is one year after the date of grant.
(b) An Option may be exercised at any time or from time to time, as to
any or all full shares of Common Stock as to which the Option is then
exercisable; provided, however, that any such exercise shall be for at least 100
shares of Common Stock or, if less, the total number of shares of Common Stock
as to which the Option is then exercisable.
(c) The purchase price of the Common Stock as to which an Option is
exercised shall be paid in full at the time of exercise; payment may be made in
cash or in shares of Common Stock valued at Fair Market Value.
8. Completion of Directorship. (a) Completion. If a Participant
completes his/her service as a non-employee director of the Company for any
reason (other than death), the Participant's Options may be exercised at any
time during the remainder of the Option term.
(b) Death. In the event of Participant's death, regardless of whether
Participant is still serving as a director, the Option may be exercised, subject
to the provisions of Section 5, within three (3) years after death by
Participant's estate or by any person who acquires such option inheritance or
devices. Thereafter, such rights shall lapse.
9. Regulatory Compliance and Listing. The issuance or delivery of any
shares of Common Stock upon the exercise of Options may be postponed by the
Company for such period as may be required to comply with any applicable
requirements under the Federal securities laws, any applicable listing
requirements of any national securities exchange and requirements under any
other law or regulation applicable to the issuance or delivery of such shares,
and the Company shall not be obligated to issue or deliver any shares of Common
Stock if the issuance or delivery of such shares shall constitute a violation of
any provision of any law or of any regulation of any governmental authority or
any national securities exchange.
10. Adjustment in Event of Changes in Capitalization. In the event of a
recapitalization, stock split, stock dividend, combination or exchange of
shares, merger, consolidation, rights offering, separation, reorganization or
liquidation, or any other change in the corporate structure or shares of the
Company, the number of shares of Common Stock that may be awarded as Options or
that are subject to outstanding Option grants, and the option price per share
under outstanding Options, shall be adjusted automatically to prevent dilution
or enlargement of rights.
11. Termination or Amendment of the Plan. The Board may at any time
terminate the Plan and may from time to time alter or amend the Plan or any part
thereof (including any amendment deemed necessary to ensure that the Company may
comply with any regulatory requirement referred to in Section 9), provided that,
unless otherwise required by law, the rights of a Participant with respect to
Options granted prior to such termination, alteration or amendment may not be
impaired without the consent of such Participant.
12. Miscellaneous. (a) Nothing in the Plan shall be deemed to create
any obligation on the part of the Board to nominate any director for reelection
by the Company's shareholders.
(b) The Company shall have the right to require, prior to the issuance
or delivery of any Common Stock upon the exercise of Options, payment by the
Participant of any taxes required by law with respect to the issuance or
delivery of such shares. Such amount may be paid in cash, in shares of Common
Stock previously owned by the Participant (based on the Fair Market Value), or a
combination of cash and shares of Common Stock.
(c) The shares of Common Stock to be issued upon the exercise of
Options under the Plan shall, unless otherwise determined by the Committee, be
shares which have been or may be reacquired by the Company.
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