This table contains information about stock option grants we made to the named executives in 2000:

Option Grants in 2000

1. We granted these non-qualified stock options on February 28, 2000 as part of our annual award program. Each option has an exercise price per share equal to the fair market value per common share on the grant date. The options also have the restoration feature described in note (2) below. Executive officers may transfer them to certain family members and entities that these family members control. Holders may exercise one-third of their options after two years, two-thirds after three years, and the full grant after four years, subject to award requirements. All outstanding stock options may also become exercisable upon death, disability termination, retirement or a change in control of the Company as we describe on pages 36-39.

2. These are restoration options that we granted when participants exercised stock options that were outstanding for at least five years. The number of restoration option shares we granted equals the number of shares that the holder delivered to us as payment of the exercise price of the original option plus the number of shares withheld to pay tax withholding. The exercise price of the restoration option is the fair market value of a Company common share on the date of its grant. The holder of a restoration option may exercise it after six months from the grant date (but no later than the original stock option’s expiration date) if the holder is in compliance with our stock ownership guidelines. For Mr. Golub, this date is October 6, 2000. For Mr. Chenault this date is October 7, 2000. For Mr. Kelly this date is February 21, 2001. For Mr. Linen this date is December 14, 2000.

3. We granted these nonqualified stock options on February 28, 2000 as special retention awards. These awards have the standard stock option provisions except holders may exercise one-third of their options after four years, two-thirds after five years, and the full grant after six years, subject to vesting and other requirements.

4. We granted these nonqualified stock options on July 24, 2000 as promotional awards. The awards have the standard stock option provisions.

5. These numbers show hypothetical values under a variation of the Black-Scholes option pricing model. This model is a complicated mathematical formula that makes assumptions about stock option features. A number of these assumptions do not apply to the options we grant to our executive officers and other employees. In particular, the model assumes that holders can exercise stock options immediately and freely transfer them. For these reasons, we caution that the values we show in the table are theoretical and may not reflect the amounts that option holders will realize. Whether an option holder realizes value and how much this value is will depend on what our share price is relative to the exercise price. We developed the assumptions listed below and Black-Scholes values with assistance from an independent consulting firm. They are consistent with the assumptions we used to report stock option valuations in our 2000 Annual Report to Shareholders.

   Assumptions for Valuing the February 2000 Grants:
   

   • The exercise price is the same as our share price on the grant date.
     
   • A five-year life for each option. This is the typical amount of time that passes before holders of our options exercise them.
     
   • Expected dividend yield of 1.1%. This reflects the historical average yield for the most recent 60 months prior to the grant date.
     
   • Expected stock price volatility of 29%. This reflects the most recent volatility for the month end stock prices of the Company’s common shares for the 60 months prior to the grant date.
     
   • A risk-free rate of return of 6.7%. This reflects the return an investor could expect in a risk-free investment with the same grant and expiration date as our stock options. This is the yield on a zero-coupon five-year bond on the option grant date.

   Assumptions for Valuing Restoration, Promotional and Special Options:

   The values shown for the restoration, promotional and special stock options are based on the same model except that the assumptions reflect:
   

   • A five-year life for promotional stock option awards; a six-year life for the special stock option awards; and the remaining term for the restoration stock option awards.
     
   • A risk-free rate of return ranging from 6.0% to 6.7%.

This table contains information about stock option exercises by the named executives during 2000 and unexercised options and stock appreciation rights they held at the end of 2000:

Aggregated Option Exercises in 2000 and
Year-End 2000 Options/SAR Values

1. We base this value on the $54.94 closing price of our common shares on the New York Stock Exchange on December 29, 2000.

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